DEAR ALL,
MY CLEINT IS A PRIVATE LIMITED COMPANY HAVING CAR SHOWROOM. AS PER REQUIREMENT THIS COMPANY OWNED TEST DRIVE CARS OF EVERY MODEL WHICH WAS PURCHASE ON FINANCE FROM BANK.
NOW IT IS COMPURSORY TO CREATE CHARGE ON HYPOTHECATION OF MOTOR CAR U/S 77 OF COMPANIES ACT 2013?
KINDLY REPLY
Since the defenition of charge under Section 2(16) under CA, 2013 means an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage. Therefore, you are required to create charge on hypothecation of motor vehicle in favour of lender.
What if the lender not insist party to create a charge in the said vehicle?
Whether penal provision of non-creation of charge will be applicable?
As per the Act, it is the duty of every Company creating a charge to file the charge form with ROC within 30 days of its creation. If not, Charge holder can file the form after 31st day of creation.
If the Company is not able to file the charge form with ROC within 30 days of its creation. Then the ROC, may on an application made by the Company allow such registration to be made within a period of 300 days of such creation on payment of such additional fees.
If the Company is not able to file the Charge form within 300 days of its creation, it shall file an application with Central Govt to seek the extension of time in accordance with the provisions of Section 87 of the Companies Act, 2013.
If any Company contravenes any provison of this Chapter, the Company shall be punishable with fine which shall not be less than Rs. 1,00,000/- but which may extend to Rs. 10,00,000/- and every officer of the Company who is in default shall be punishable with imprisonment for a term which may extend to 6 months or with fine which shall not be less than Rs. 25,000 but which may extend to Rs. 1,00,000/- or with both.
THANKS
FOR THE REPLY
CAclubindia
