Form 8 filled without pari passu letter attached to it.

This query is : Resolved

Nishant (Querist)
Follow

19 May 2009 Dear Experts,

We as a banker were required to create security on following terms:

"First charge by way of hypothecation on plant and machinary ranking pari passu with other term loan lenders.

We had executed Deed of Hypothecation with the borrower however at the time of executing the said deed, pari passu letter from the other term loan lenders were not obtained for ceding of charge in our bank favour. Pending the stated pari passu letter from the other term loan lenders we filled the form 8 with ROC for charge registration and attached deed of hypothecation in form 8 as executed by the borrower in our banks favour. We correctly mentioned the nature and extent of charge as described above however did not attach pari passu letter with the form 8 as the same was not avavilable with us at that time. Interestingly ROC did not raise any objection on the same and registered the charge. Later on after one year of charge registration other term loan lenders issued letter ceding first pari passu charge in our banks favour. Now the question is:
1. Whether the charge registered earlier without attaching pari passu letter while filling form 8 is a valid one and in case of default committed by borrower the same would be enforceable in the court of law.
or
2. we should again file form 8 (Perhaps modification of charge) attaching pari passu letter as received from the other banker. However this would require CLB approval for condonation of delay beyond 30 days.

Please clarify.

M Prabhakar Menon

M Prabhakar Menon (Expert)
Follow

19 May 2009 Is there a reference to the paripasu letter in the hypothecation agreement? in which case there is no need to file Form 8 seperately to include the parpassu letter, however by way of abundant caution it is better to file a modification in Form 8 quoting the earlier charge ID for continuity

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

19 May 2009 Seems the 2nd option suggested by you may be taken up.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
Follow

19 May 2009 Also, if in the column of "Nature and Operation of Charge" Pari-passu charge was mentioned, no need even to modify the charge or else the charge needs to be modified.

Ankur Garg

Ankur Garg (Expert)
Follow

20 May 2009 Agree with Mr. Nitin.

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

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

BABUSHANKAR BASAPPA

DURGA TANDEL

R.Prashanth

swaminathan

CA Rahul Patwardhan

Subscribe Now

Form 8 filled without pari passu letter attached to it.

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA