Charges u/s 125 of the companies act 1956

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 December 2011 The Company has created charge on its Current Assets with one bank. Now the company is created charge on all the current assets with another bank without obtaining NOC from the first charge holder.

What will be status and stand of the new charge holder who is not aware of the fact

Jiten Gupta

Jiten Gupta (Expert)

23 December 2011 If the Charge is required to be registered by filing Form 8 or 10 then and same has been filed then it is deemed notice to the Public and company is no more require to make known to the charge holder.
But the charge is completely valid against both the charge holders but is invalid against Liquidator and other creditors. If charge is registered then charge holder gets priority in repayment of amount secured as compared to charge which is not registered. But it is noted here that this rule is apllied only in the cases where charge is required to be registered under section 125 (4).
The status of charge is valid against the company.

Jiten Gupta

Jiten Gupta (Expert)

23 December 2011 For More clarification:-
Please let me know what are the current assets on which charge has been created or
specify whether charge is required to be registered or Not as per Section 125(4)?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now