Time period for registration of Charge
For registration of Charges, the particulars of the Charge together with a copy of the instrument, if any, creating or modifying the Charge in Form No.CHG-1 duly signed by the Company and the Charge holder shall be filed with the Registrar within a period of thirty days of the date of creation or modification of Charge along with the fee.
If the particulars of a Charge are not filed as above, such creation or modification shall be filed in Form No. CHG-1 within 120 days from the date of creation of Charge by paying additional / advalorem fees as above.
The effect of registration and non-registration of Charge
Upon registration of Charge it is considered as a deemed notice for all the stakeholders of the Company and outsiders. Further, as discussed earlier a register of Charge needs to be maintained by the Company and the register is open for inspection upon payment of prescribed fee. Hence it becomes publicly available.
The non-registration is however punishable with heavy penalty at Rupees five Lakh and for every officer in default the fine shall be Rupees fifty thousand.
Further the unregistered Charge would not be taken into account during liquidation by the liquidator. However, this does not prejudice any contract or obligation for the repayment of the money secured by a Charge.
Certificate of registration of Charge
Post registration of Charge with the Registrar, Registrar issues a certificate of registration of Charge in Form No.CHG-2 to the Company and to the person in whose favour the Charge is created. Such certificate is the conclusive evidence that the requirements of Chapter VI of the Act (Registration of Charges) and the rules made there under are complied with.
Modification of Charge
Any modification of Charge also needs to be registered; the process is same as Charge creation. However, post registration of modification of Charge the registrar issues the certificate of registration in Form CHG-3.
Satisfaction of Charges
According to section 82 read with the Rules, the Company shall give intimation to the Registrar for satisfaction in full of any Charge, i.e. the closure of the Charge within a period of 30 days from such satisfaction in Form No.CHG-4 along with the fees.
The Registrar may, on an application by the Company or the Charge holder, allow such intimation of payment or satisfaction to be made within a period of three hundred days of such payment or satisfaction on payment of such additional fees as may be prescribed.
On receipt of such intimation, the Registrar provides a notice to the holder of the Charge calling a show cause within such time not exceeding 14 days, as to why such satisfaction in full should not be recorded. If no cause is shown, by Charge holder, the Registrar orders that a memorandum of satisfaction shall be entered in the register of Charges and the same is intimated to the Company.