Charge Creation

This query is : Resolved

Nagamani (Querist)
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04 March 2020 Hi,

We have a cash credit with HDFC bank which is secured against Fixed Deposits and book debts. The HDFC has created two line items with MCA and they are stating "Charge is based on security : its different for book debts and FD . so your total charge is limited to given limits only . " But I am claming this is wrong because it is showing two times , hence it looks the limit is double.

Please let me know is the bank correct
Regards
Nagamani

Jatin Bajaj

Jatin Bajaj (Expert)
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05 March 2020 As per the provisions of section 77 of the Companies Act 2013, Charge is created on each and every asset of the Company and FD being the asset, so charge shall be created and charge shall separately be created for book debts of the Company as the Fixed deposit is only for a certain time or perpetuity but charge on book debts is created over the period of time subject to the terms and conditions stipulated in the loan agreement or hypothecation deed as the case may be.

Nagamani

Nagamani (Querist)
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05 March 2020 Thanks.. i understand the provision.. but if an outsider sees the MCA website it looks the company has double the limit than actually what we have. Below is what is showing in MCA.. but we have only 6 cr limit. 4 is cash credit and 2 is bill discounting

Fixed Deposits / Cash Deposits 60000000 31/08/2019 - OPEN
Book debts; Floating charge 40000000 18/08/2015 20/11/2019 OPEN

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