Every person creating charge shall file form CHG-1 within 30 days of such creation.
However extension for filing can granted by the ROC to the extent of:
300 days for charge created prior to 21.01.2019(commencement of ordinance). Further extension of 6 months can be granted in this case on payment of additional fees as may be prescribed.
60 days on charge created on or after 21.01.2019(commencement of ordinance). Further extension of 60 days can be granted if application is made and additional fees is paid to ROC.
Certain charges shall not be registered, if consulted with RBI.
If creation of charge or modification of charge is not file within the period of 30 days a supported by a declaration from the company signed by its company secretary or a director that such belated filing shall not adversely affect the rights of any other intervening creditors of the company.
ROC shall issue certificate of registration of charge in CHG-2.
ROC shall issue certificate of modification of charge in CHG-3.
EFFECT OF NON-REGISTRATION OF CHARGE:
No charge to be taken into consideration by liquidator or creditor unless duly registered with ROC and certificate thereto is provided by ROC
However, registration does not prejudice contract or obligation to repay money secured by charge.
REGISTRATION OF CHARGES U/S 81 & 85:
Registrar shall maintain a register of Charges for every company and shall keep it open for inspection by any person on payment of prescribed fees.
Company shall maintain a register of charges in form CHG-7 along with instruments created charges at its registered office and keep it open for inspection during business hours by members or creditors of the company without fees.
SATISFACTION OF CHARGES U/S 82 & 83:
A company or charge holder shall within a period of three hundred days from the date of the payment or satisfaction in full of any charge registered give intimation of the same to the Registrar in Form No.CHG-4 along with the fee.
In case of delayed filing ROC shall issue a show cause notice to company for such delay within 14 days of such receipt.
Where the Registrar enters a memorandum of satisfaction of charge in full in pursuance of section 82 or 83, he shall issue a certificate of registration of satisfaction of charge in Form No.CHG-5.
ROC may consider for non filing of CHG-4 for making entries in register of charge if it is proved through documents that:
the debt for which the charge was given has been paid or satisfied in whole or in part; or
part of the property or undertaking charged has been released from the charge or has ceased to form part of the company’s property or undertaking,
The Registrar shall inform the affected parties within thirty days of making theentry in the register of charges.
PUNISHMENT FOR CONTRAVENTION U/S 86:
If any company contravenes any provision of this Chapter, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to ten lakh rupees
Every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.
If any person wilfully furnishes any false or incorrect information or knowingly suppresses any material information, required to be registered in accordance with the provisions of section 77, he shall be liable for action under section 447.
CONDONATION OF DELAY:
In case form CHG-1/ CHG-4 is not filed within prescribed time, it has to be filed after condonation of delay.
Such application shall be made through form CHG-8 with prescribed fees.
However once order in this regard is passed, the same is required to be filed in form INC-28.
The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. Compliance Calendar LLP and the Author of this Article do not constitute any sort of professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove. Compliance Calendar LLP shall not be responsible for any loss or damage in any circumstances whatsoever.