REGISTRATION OF CHARGES RULES


In an earlier post we have discussed Chapter VI of the Companies Act 2014, which deals with registration of charges. The Companies (Registration of Charges) Rules 2014 discusses procedural aspect.

For registration of charge as provided in subsection (1) of Section 77, Section 78 and Section 79, the particulars of the charge together with a copy of the instrument, if any, creating or modifying the charge in Form CHG – 1 (for other than Debentures) or Form CHG – 9 (for debentures), as the case may be, duly signed by the company and the charge holder and filed with the Registrar within a period of thirty days of the date of creation or modification of charge along with the fee. [Rule 3(1) of the Companies (Registration of Charges) Rules 2014]

If the particulars of a charge are not filed within the aforesaid period, but filed within a period of three hundred days of the date of such creation or modification, the additional fee shall be levied. [Rule 3(2) of the Companies (Registration of Charges) Rules 2014]

If the company fails to register the particulars of the charge with the Registrar within the period of thirty days of its creation or modification, the particulars of the charge together with a copy of the instrument, if any, creating or modifying such charge may be filed by the charge-holder, in Form CHG – 1 or Form CHG – 9, as the case may be, duly signed along with fee. [Rule 3(3) of the Companies (Registration of Charges) Rules 2014]

A copy of every instrument evidencing any creation or modification of charge and required to be filed with the Registrar in pursuance of Section 77, 78 or 79 shall be verified as follows-

(a) where the instrument or deed relates solely to the property situated outside India, the copy shall be verified by a certificate issued either under the seal of the company, or under the hand of any director or company secretary of the company or an authorised officer of the charge holder or under the hand of some person other than the company who is interested in the mortgage or charge;

(b) where the instrument or deed relates, whether wholly or partly, to the property situated in India, the copy shall be verified by a certificate issued under the hand of any director or company secretary of the company or an authorised officer of the charge holder. [Rule 3(4) of the Companies (Registration of Charges) Rules 2014]

Condonation of delay by Registrar

The Registrar may, on being satisfied that the company had sufficient cause for not filing the particulars and instrument of charge, if any, within a period of thirty days of the date of creation of the charge, allow the registration of the same after thirty days but within a period of three hundred days of the date of such creation of charge or modification of charge on payment of additional fee. [Rule 4(1) of the Companies (Registration of Charges) Rules 2014]

The application for delay shall be made in Form CHG – 1 and supported by a declaration from the company signed by its secretary or director that such belated filing shall not adversely affect rights of any other intervening creditors of the company. [Rule 4(2) of the Companies (Registration of Charges) Rules 2014]

Application of rules in certain matters

The provisions of rule 4 shall apply, mutatis mutandis, to the registration of charge on any property acquired subject to such charge and modification of charge under Section 79 of the Act. [Rule 5 of the Companies (Registration of Charges) Rules 2014]

 

Certificate of registration

Where a charge is registered with the Registrar under sub-section (1) of Section 77 or section 78, he shall issue a certificate of registration of such charge in Form CHG – 2. [Rule 6(1) of the Companies (Registration of Charges) Rules 2014]

Where the particulars of modification of charge is registered under section 79, the Registrar shall issue a certificate of modification of charge in Form CHG – 3. [Rule 6 of the Companies (Registration of Charges) Rules 2014]

The certificate issued by the Registrar under sub-rule (1) and sub-rule (2) shall be conclusive evidence that the requirements of Chapter VI of the Act and the rules made thereunder as to registration of creation or modification of charge, as the case may be, have been complied with. [Rule 6 of the Companies (Registration of Charges) Rules 2014]

 

Register of charges to be kept by the Registrar

The particulars of charges maintained on the Ministry of Corporate Affairs portal (www.mca.gov.in/MCA21) shall be deemed to be the register of charges for the purposes of Section 81 of the Act. [Rule 7(1) of the Companies (Registration of Charges) Rules 2014]

The register shall be open to inspection by any person on payment of fee. [Rule 7(2) of the Companies (Registration of Charges) Rules 2014]

 

Satisfaction of charge

A company shall within a period of thirty days from the date of the payment or satisfaction in full of any charge registered under Chapter VI, give intimation of the same to the Registrar in Form CHG – 4 along with the fee. [Rule 8(1) of the Companies (Registration of Charges) Rules 2014]

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 CHG – 5. [Rule 8(2) of the Companies (Registration of Charges) Rules 2014]

Intimation of appointment of Receiver or Manager

The notice of appointment or cessation of a receiver of, or of a person to manage, the property, subject to charge, of a company shall be filed with the Registrar in Form CHG – 6 along with fee. [Rule 9 of the Companies (Registration of Charges) Rules 2014]

 

Company’s register of charges Every company shall keep at its registered office a register of charges in Form CHG – 7 and enter therein particulars of all the charges registered with the Registrar on any of the property, assets or undertaking of the company and the particulars of any property acquired subject to a charge as well as particulars of any modification of a charge and satisfaction of charge. [Rule 10(1) of the Companies (Registration of Charges) Rules 2014]

The entries in the register of charges maintained by the company shall be made forthwith after the creation, modification or satisfaction of charge, as the case may be. [Rule 10(2) of the Companies (Registration of Charges) Rules 2014]

Entries in the register shall be authenticated by a director or the secretary of the company or any other person authorised by the Board for the purpose. [Rule 10(3) of the Companies (Registration of Charges) Rules 2014]

The register of charges shall be preserved permanently and the instrument creating a charge or modification thereon shall be preserved for a period of eight years from the date of satisfaction of charge by the company. [Rule 10(4) of the Companies (Registration of Charges) Rules 2014]

 

Register open for inspection

The register of charges and the instrument of charges kept by the company shall be open for inspection –

(a) by any member or creditor of the company without fees;

(b) by any other person on payment of fee. [Rule 11 of the Companies (Registration of Charges) Rules 2014]

 

Condonation of delay and rectification of register of charges

Where the instrument creating or modifying a charge is not filed within a period of three hundred days from the date of its creation (including acquisition of a property subject to a charge) or modification and where the satisfaction of the charge is not filed within thirty days from the date on which such payment of satisfaction, the Registrar shall not register the same unless the delay is condoned by the Central Government. [Rule 12(1) of the Companies (Registration of Charges) Rules 2014]

The application for condonation of delay and for such other matters covered in sub-clause (a),(b) and (c) of clause (i) of sub-section (1) of Section 87 of the Act shall be filed with the Central Government in Form CHG – 8 along with the fee. [Rule 12(2) of the Companies (Registration of Charges) Rules 2014]

The order passed by the Central Government under sub-section (1) of section 87 of the Act shall be required to be filed with the Registrar in Form INC – 28 along with the fee as per the conditions stipulated in the said order. [Rule 12(3) of the Companies (Registration of Charges) Rules 2014]

Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.

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4 responses to “REGISTRATION OF CHARGES RULES

  1. Pingback: Index of Companies Law Posts - Krantikari Post

  2. Pingback: Index of Companies Law Posts | AishMGhrana

  3. Pingback: AMENDMENT IN CHARGES RULES | AishMGhrana

  4. CHAITANYA KUMAR SHARMA

    Dear Sir,
    Please can you clear, that whether company have to submite petition document as earlier act required, before CG(RD), if yes.
    Than please arrange me draft copy of petition documents… please.

    Like

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