Date: 30th April 2025

LIVE VIRTUAL CLASSES

BOARD OF STUDIES, ICAI

CA INTERMEDIATE
TOPIC NAME – REGISTRATION OF CHARGES
PAPER 2: CORPORATE AND OTHER LAWS”

Faculty Name: CA HARLEEN KAUR

CHAPTER OVERVIEW

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
2
DEFINITION OF CHARGE
Section 2(16) of the Companies Act, 2013 defines “charge” as
❑ an interest or lien
❑ created on the property or assets of a company or any of its undertakings or both
❑ It is created as Security for repayment of loan
❑ Charge includes Mortgage

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
3
TYPES OF CHARGE
Types of Charge

Fixed Charge Floating Charge

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
4
FIXED CHARGE
▪ A ‘Fixed Charge’ is a charge on specific assets of the borrowing company.
▪ These assets are of permanent nature like land and building, machinery, office
premises, etc. Further, these assets are identified at the time of creation of charge.
▪A fixed charge is usually created by way of mortgage or by deposit of title deeds.
▪ When a charge is created on such assets, the charge remains ‘fixed’ and the
borrowing company is not permitted to sell such assets during the period of charge
though it may use them.
▪ Assets under fixed charge can be sold only with the permission or consent of the
charge-holder.
▪ A fixed charge is vacated when the money borrowed against the assets subject to
fixed charge is repaid in full.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
5
FLOATING CHARGE
• A ‘Floating Charge’ is created on assets or a class of assets which are of
fluctuating or changing in nature- like raw material, stock-in-trade, debtors, etc.
• It is a charge upon assets both present and future.
• The assets under floating charge keep on changing because the borrowing
company is permitted to use them for trading or producing final goods for sale.
Crystallization of a Floating Charge:
When the creditor enforces the security due to the breach of terms and
conditions of floating charge or the company goes into liquidation, the floating
charge will become a fixed charge on all the assets available on that date. This is
called crystallization of a floating charge.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
6
DUTY TO REGISTER CHARGES, ETC. [SECTION 77]
Registration of Charges:
❖ It shall be the duty of every company creating a charge within or outside India, on its property or assets
or any of its undertakings, whether tangible or otherwise, and situated in or outside India,
❖ To register the particulars of the charge signed by the company and the charge-holder together with the
instruments, creating such charge in such form,
[Form CHG-1 (for other than debentures or Form CHG-9 (in case of debentures)]
❖ on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days
of its creation.

Following charges need to be registered:

1. Charge created within India or outside India.
2. Charge created on property or assets which is situated within India or outside India.
3. Charge on tangible assets such as land and buildings, machinery, intangible asset such as patent,
copyright or trademark or financial assets like investment in shares or debentures.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
7
DUTY TO REGISTER CHARGES, ETC. [SECTION 77]
Verification of Instrument of Charge:
A copy of every instrument creating (or modifying) any charge and required to be filed with the
Registrar, shall be verified as follows:
❑ Where the instrument or deed relates solely to the property situated outside India, the copy
shall be verified by a certificate issued either-
a) under the seal, if any, of the company, or
b) under the hand of any director or company secretary of the company, or an authorised officer
of the charge-holder, or
c) under the hand of some person other than the company who is interested in the mortgage or
charge;
❑ Where the instrument or deed relates to the property situated in India (whether wholly or
partly), 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.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
8
 DUTY TO REGISTER CHARGES, ETC. [SECTION 77]
Extension of Time Limit:
The original period within which a charge needs to be registered from the date of creation of charge is 30 days.
In respect of extension of time limit for registration of charges, following provisions are applicable:

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
9
DUTY TO REGISTER CHARGES, ETC. [SECTION 77]
Procedure for Extension of Time Limit:
The company is required to make an application to the Registrar in the prescribed form [CHG-1 (for other
than debentures) or in Form CHG-9 (for debentures)] for seeking extension of time. The said application
needs to be 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.

Issue of Certificate of Registration:

Where a charge or modification is duly registered by the Registrar of Companies, a Certificate of
Registration/Modification shall be issued by the Registrar in the prescribed form [Certificate in Form No.
CHG-2 shall be issued for fresh registration of charge (Where a charge is registered with the Registrar under
section 77(1) or section 78) and Certificate in Form No. CHG-3 shall be issued for modification of charge.
(Rule 6)]. The certificate so issued by the Registrar shall be conclusive evidence that the requirements of
Chapter VI of the Companies Act, 2013 and the Rules made thereunder as to registration of creation of
charge or modification of charge have been complied with.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
10
CONSEQUENCES OF NON-REGISTRATION OF
CHARGE [SECTION 77 (3) & (4)]
❖ Notwithstanding anything contained in any other law for the time
being in force, no charge created by a company shall be taken into
account by the liquidator (appointed under the Companies Act, 2013
or the Insolvency and Bankruptcy Code, 2016) or any other creditor
unless it is duly registered under sub-section (1) and a certificate of
registration of such charge is given by the Registrar under sub-section
(2).
❖ Nothing in sub-section (3) shall prejudice any contract or obligation
for the repayment of the money secured by a charge.
❖ Another important consequence of non-registration or delayed
registration is that the charge-holder loses priority.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
11
APPLICATION FOR REGISTRATION OF CHARGE
BY CHARGE-HOLDER [SECTION 78]

Recovery of fees:
In case, registration is effected on an application made by the holder of charge, such person shall be entitled to recover from the
company the amount of any fees or additional fees paid by him to the Registrar for the purpose of registration of charge.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
12
ACQUISITION OF PROPERTY SUBJECT TO CHARGE
AND MODIFICATION OF CHARGE [SECTION 79]
The provisions of section 77 relating to registration of charges shall, so far as may be, apply :
a. To a company acquiring any property subject to a charge within the meaning of that
section; or
b. To any modification in the terms or conditions or the extent or operation of any charge
registered under that section.
‘Modification’ includes variation in any of the terms and conditions of the agreement
including change in rate of interest which may be by mutual agreement or by operation of
law.
The provisions contained in section 77 relating to registration of charge shall, as far as may
be, apply in both the above situations.
Issue of Certificate of Modification:
As per Rule 6, 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.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
13
Question and Answers

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 14

Question 1
How will a copy of an instrument evidencing creation of charge and
required to be filed with the Registrar be verified?

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
15
Answer 1
A copy of every instrument evidencing any creation or modification of charge and
required to be filed with the Registrar shall be verified as follows:
a) in case property is situated outside India: 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, if any, 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) in case property is situated in India (whether wholly or partly): where the
instrument or deed relates to the property situated in India (whether wholly or partly),
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.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
16
Question 2
Briefly explain the provisions enforced by the Companies
(Amendment) Second Ordinance, 2019 when a charge created
before 02-11-2018 is not registered within the prescribed period of
thirty days as provided in Section 77 (1)?

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
17
Answer 2
As per section 77(1) of the companies Act, 2013 every company creating a charge:

a) within or outside India,

b) on its property or assets or any of its undertakings,

c) whether tangible or otherwise, and

d) situated in or outside India, is required to register the particular of the charge with the registrar within
thirty days of its creation.

In case the charge was created before 02-11-2018 and it was not registered within the prescribed period of
thirty of its creation, clause (a) of the first Proviso to Section 77 (1) states that the Registrar may, on an
application by the company, allow such registration to be made within a period of 300 days of such
creation.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 18

Question 3
Define the term "charge" and also explain what is the punishment
for default with respect to registration of charge as per the
provisions of the Companies Act, 2013.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
19
Answer 3
The term charge has been defined in section 2 (16) of the Companies Act, 2013 as 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.

According to section 86 of the Companies Act, 2013, if any company is in default in complying with any of
the provisions of this Chapter, the company shall be liable to a penalty of five lakh rupees and every officer
of the company who is in default shall be liable to a penalty of fifty thousand rupees.

Further, if any person willfully furnishes any false or incorrect information or knowingly suppresses any
material information which is required to be registered under section 77, he shall be liable for action under
section 447 (punishment for fraud).

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 20

Question 4
Renuka Soaps and Detergents Limited realised on 2nd May, 2019 that
particulars of charge created on 12th March, 2019 in favour of a Bank were
not registered with the Registrar of Companies. What procedure should the
company follow to get the charge registered? Would the procedure be
different if the company realised its mistake of not registering the charge on
7th June, 2019 instead of 2nd May, 2019? Explain with reference to the
relevant provisions of the Companies Act, 2013.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
21
Answer 4
Relevant Provisions- The charge in the present case was created after 02-11-2018 (i.e. the date of
commencement of the Companies (Amendment) Second Ordinance, 2019) to which another set of
provisions is applicable. These provisions are different from a case where the charge was created before
02-11-2018.

Initially, the prescribed particulars of the charge together with the instrument, if any, by which the charge
is created or evidenced, or a copy thereof, duly verified by a certificate, are to be filed with the Registrar
within 30 days of its creation. [Section 77 (1)].

In this case particulars of charge were not filed within the prescribed period of 30 days.

However, the Registrar is empowered under clause (b) of first proviso to section 77 (1) to extend the period
of 30 days by another 30 days (i.e., sixty days from the date of creation) on payment of prescribed
additional fee.
5 May 2025

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 22

Answer 4
Analysis - Taking advantage of this provision, Renuka Soaps and Detergents Limited should immediately file
the particulars of charge with the Registrar after satisfying him through making an application that it had
sufficient cause for not filing the particulars of charge within 30 days of its creation.

If the company realises its mistake of not registering the charge on 7th June, 2019 instead of 2nd May,
2019, it shall be noted that a period of sixty days has already expired from the date of creation of charge.
However, Clause (b) of Second Proviso to Section 77 (1) provides another opportunity for registration of
charge by granting a further period of sixty days but the company is required to pay ad valorem fees. Since
the first sixty days from creation of charge have expired on 11th May, 2019, Renuka Soaps and Detergents
Limited can still get the charge registered within a further period of sixty days from 11th May, 2019 after
paying the prescribed ad valorem fees.

Conclusion- The company is required to make an application to the Registrar in this respect giving sufficient
cause for non-registration of charge.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 23

Question 5
True or false

(i) The Registrar of Companies is not bound to issue notice to the holder of charge, if the company gives
intimation of satisfaction of charge in the specified form and signed by the holder of charge.

(ii) The Registrar of Companies may allow the company or holder of charge to file intimation within a
period of 300 days of the satisfaction of charge on payment of fee and additional fees as may be
prescribed.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 24

Answer 5
i) According to the proviso to section 82(2) of the Companies Act, 2013, no notice shall be required to be sent, in
case the intimation to the Registrar in this regard is in the specified form and signed by the holder of charge.
Hence, the given statement is True.

(ii) As per section 77 of the Companies Act, 2013, it shall be duty of the company creating a charge within or
outside India, on its property or assets or any of its undertakings, whether tangible or otherwise and situated in
or outside India, to register the particulars of the charge signed by the company and the charge holder together
with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as
may be prescribed, with the registrar within 30 days of creation. The Registrar may, on an application by the
company, allow such registration to be made within a period of 300 days of such creation on payment of such
additional fees as may be prescribed.

According to clause (a) of the Second Proviso to Section 77 (1), if the registration is not made within the extended
period of 300 days, it shall be made within six months 02/11/2018 on payment of prescribed additional fees. It is
provided that different fees may be prescribed for different classes of companies. Hence, the given statement is
True.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 25

Question 6
Perfect Limited Company raised the secured deposit of 100 crores an 30th June, 2021 from the public on
interest @ 12% p.a. repayable after 3 years. The charges has been created within prescribed time in favour
of trustee of depositors against the deposit taking following assets of the company as security:
Land and Building Rs. 60 crores

Plant and Machinery Rs. 20 crores

Factory Shed Rs. 20 crores

Trade Mark Rs. 20 crores

Goodwill Rs. 25 crores

Explain the validity of charges created with reference to Companies (Acceptance of Deposit) Rules, 2014

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 26

 Answer 6
As per second proviso to Section 76(1) of the Companies Act, 2013, every company which accepts secured deposits from the
public shall within 30 days of such acceptance, create a charge on its assets. The amount of charge shall not be less than the
amount of deposits accepted. The charge shall be created in favour of the deposit holders in accordance with the prescribed
rules.

In respect of creation of security, Rule 6 of the Companies (Acceptance of Deposit) Rule, 2014, states that the company accepting
secured deposits shall create security by way of charge on its tangible assets only.

The other notable points are:

• The company cannot create charge on intangible assets (i.e., goodwill, trade-marks, etc.).
• Total value of security should not be less than the amount of deposits accepted and interest payable thereon.
• The market value of assets subject to charge shall be assessed by a registered valuer.
• The security shall be created in favour of a trustee for the depositors on specific movable and immovable property of the
company.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 27

Answer 6
In the given question :-
Particulars Amount (in *)
Total value of security (value of assets on which charge can 60+20+20 [Land and Building, Plant & machinery and
be created) Factory Shed] = 100 crore

Total deposits accepted and interest payable thereon 100+ [(100*12%)*3 years] = 136 crore

Since, the total value of security is less than the amount of deposits accepted and interest payable
thereon, hence the charge is not validly created.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 28

Question 7
Krish (Private) Limited on 7th May 2022 obtained * 25 lakhs working capital loan by offering its Stock and
Accounts Receivables as security and * 5 Lakhs adhoc overdraft on the personal guarantee of a Director of
Krish (Private) Limited, from a financial institution. Is the company required to create charge for working
capital loan and adhoc overdraft in accordance with the provisions of the Companies Act, 2013?

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 29

Answer 7
As per the provisions of section 2(16) of the Companies Act, 2013, "charge" 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 mortgage.

Whenever a company borrows money by way of loans including term loans or working capital loans from financial
institutions or banks or any other persons, by offering its property or assets, as security a charge is created on
such property or assets in favour of the lender. Such a charge is compulsorily registrable under the provisions of
the Companies Act, 2013 in accordance with Chapter VI and the rules made in this regard.

Thus, when Krish (Private) Limited obtains working capital loans from financial institutions by offering stock and
Accounts Receivables as security, it is required to create a charge on such property or assets in favour of the
lender.

Hence, for Rs. 25 Lakh working capital loan, it is required to create a charge on it. Krish (Private) Limited is not
required to create a charge for Rs. 5 Lakh adhoc overdraft on the personal guarantee of a director. Since, charge is
always created on the property or assets of a company and personal guarantee of director is not a property or
asset of company.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 30

Question 8
Bows Limited is required to create a charge on one of its assets. However, the above charge could not be
registered within the required period of 30 days. State the provisions related to extension of time and
procedure for registration of charges, in case when the charge was not registered within 30 days of its
creation.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 31

Answer 8
As per the provisions of Section 77 of the Companies Act, 2013, in case the charge was not registered
within 30 days of creation of the charge, the Registrar may, on an application by the company, allow such
registration to be made within a period of 60 days of such creation (i.e. another 30 days are granted after
the expiry of original 30 days), on payment of additional fees as prescribed.

Procedure for Extension of Time Limit: For seeking extension of time, the company is required to make an
application to the Registrar in the prescribed form. It should be 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.

The application so made must satisfy the Registrar that the company had sufficient cause for not filing the
particulars and the instrument of charge, if any, within the original period of thirty days. Only then he will
allow registration of charge within the extended period. Further, requisite additional fee or advalorem fee,
as applicable, must also be paid.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 32

Question 9
Star Ltd. is having its establishment in Canada. It obtained a loan there creating a charge on the assets of
the foreign establishment. The company received a notice from the Registrar of Companies for not filing
the particulars of charge created by the company on the property or assets situated outside India. The
company wants to defend the notice on the ground that it shall not be the duty of the company to register
the particulars of the charge created on the assets not located in India. Do you agree with the stand taken
by the Star Ltd.? Give your answer with respect to the provisions of the Companies Act, 2013.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 33

Answer 9
According to section 77 of the Companies Act, 2013, it shall be duty of the company creating a charge within or
outside India, on its property or assets or any of its undertakings, whether tangible or otherwise and situated in
or outside India, to register the particulars of the charge. Thus, charge may be created within India or outside
India. Also, the subject-matter of the charge i.e., the property or assets or any of the company's undertakings,
may be situated within India or outside India.

In the given question, the company has obtained a loan by creating a charge on the assets of the foreign
establishment.

As per the above provisions, it is the duty of the company creating a charge within or outside India, on its
property or assets or any of its undertakings, whether tangible or otherwise and whether situated in or outside
India, to register the particulars of the charge.

Hence, the stand taken by Star Ltd. not to register the particulars of charge created on the assets located outside
India is not correct.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 34

QUESTION
Mr Antriksh entered into an agreement for purchasing a commercial property in Delhi belonging to NRT Ltd.
At the time of registration, Mr Antriksh comes to know that the title deed of the company is not free and the
company expresses its inability to get the title deed transferred in the name of Mr Antriksh saying that he
ought to have had the knowledge of charge created on the property of the company. Explain with the help
of 'Notice of a charge', whether the contention of NRT LTD. is correct?

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 35

ANSWER
Notice of Charge: According to section 80 of the Companies Act, 2013, where any charge on any property or
assets of a company or any of its undertakings is registered under section 77 of the Companies Act, 2013,
any person acquiring such property, assets, undertakings or part thereof or any share or interest therein
shall be deemed to have notice of the charge from the date of such registration.

Thus, the section clarifies that if any person acquires a property, assets or undertaking for which a charge is
already registered, it would be deemed that he has complete knowledge of charge from the date the charge
is registered.

Thus, the contention of NRT Ltd. is correct.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 36

QUESTION
DN Limited hypothecated its plant to a Nationalised Bank and availed a term loan. The Company registered
the charge with the Registrar of Companies. The Company settled the term loan in full, The Company
requested the Bank to issue a letter confirming the settlement of the term loan. The Bank did not respond to
the request. State the relevant provisions of the Companies Act, 2013 to register the satisfaction of charge in
the above circumstance. State the time frame up to which the Registrar of Companies may allow the
Company to intimate satisfaction of charges.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 37

ANSWER
Intimation regarding Satisfaction of Charge

Section 82 of the Companies Act, 2013, requires a company to give intimation of payment or satisfaction in
full of any charge earlier registered, to the Registrar in the prescribed form. The intimation needs to be given
within a period of 30 days from the date of such payment or satisfaction.

Extended period of intimation: Proviso to Section 82 (1) extends the period of intimation from thirty days to
three hundred days. Accordingly, it is provided that 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 300 days
of such payment or satisfaction on payment of prescribed additional fees

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 38

MCQ 1
Question 1 [Section 2(16)]

An interest or lien created on the property or assets of a company or any of its undertakings or both as
security is known as:

(a) Debt

(b) Charge

(c) Liability

(d) Hypothecation

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 39

ANSWER
Answer 1

(b)

Summary: "Charge" is defined as 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.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 40

MCQ 2
Any person acquiring property, on which charge is registered under section 77, shall be deemed to have
notice of the charge from:

(a) the expiry of thirty days of such charge

(b) the date of application for registration of the charge

(c) the date of acquiring the property

(d) the date of such registration

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 41

ANSWER
Answer 2

(d)

Summary: Any person acquiring property, assets or undertakings of the company on which charge is
registered u/s 77 shall be deemed to have notice of the charge from the date of such registration

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 42

MCQ 3
A charge was created by C Limited on its office premises to secure a term loan of Rs.1 cr. availed from Next
Bank Limited through an instrument of charge executed by both parties on 16th Feb, 2019. Inadvertently,
the, co. could not get the charge registered with concerned RoC within first statutory period permitted by
law and default was made known to it by lending banker with a stern warning to take immediate steps for
rectification. Latest date within which co. must register the charge to avoid paying ad valorem fees is:

(a) 27th April, 2019

(b) 17th April, 2019

(c) 2nd May, 2019

(d) 16th June, 2019

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 43

ANSWER
Answer 3

(b)

Summary: When charge created on or after 2-11-2019 but no registration made within 30 days, ROC on
application by Co. allow registration within 60 days of such creation + payment of additional fees

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 44

MCQ 4
The registrar shall keep a register of charges which shall be open to inspection by

(a) the company

(b) the charge holder

(c) holder on payment of fee:

(d) any person

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 45

ANSWER
Answer 4

(d)

Summary: The register shall be open for inspection during business hours by any member or creditor
without any payment of fees; or by any other person on payment of such fees as may be prescribed

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 46

MCQ 5
The instrument creating a charge or modification thereon shall be preserved for a period of from the date of
satisfaction of charge by the company.

(a) 5 years

(b) 7

(c) 8

(d) 15

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 47

ANSWER
Answer 5

(c)

Summary: As per Sec 82 of Co. Act 2013, on Payment/ Satisfaction of Charge the company shall preserve the
Instrument creating charge / modification for 8 years from the satisfaction of the charge.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 48

DEEMED NOTICE OF CHARGE [SECTION 80]
Where any charge on any property or assets of a
company or any of its undertakings is registered
under section 77, any person acquiring such
property, assets, undertakings or part thereof or
any share or interest therein shall be deemed to
have notice of the charge from the date of such
registration.
© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF
5 May 2025 INDIA
49
REGISTER OF CHARGES TO BE KEPT BY REGISTRAR
[SECTION 81]
1. The Registrar shall, in respect of every company, keep a register
containing particulars of the charges registered in such form and in
such manner as may be prescribed.
2. Rule 7 (1) states that the particulars of charges maintained on the
Ministry of Corporate Affairs portal shall be deemed to be the
register of charges for the purposes of Section 81.
3. The register shall be open to inspection by any person on payment
of such fees as may be prescribed for each inspection.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
50
 COMPANY‘S REGISTER OF CHARGES [SECTION 85]
1. Every company shall keep at its registered office a register of charges in form CHG-7 in such manner as may be
prescribed which shall include therein all charges affecting assets of the company or any of its undertakings.

Provided that a copy of the instrument creating the charge shall also be kept at the registered office of the
company along with the register of charges.

2. The register of charges and instrument of charges, kept under sub-section (1) shall be open for inspection during
business hours—
(a) by any member or creditor without any payment of fees; or
(b) by any other person on payment of such fees as may be prescribed,
subject to such reasonable restrictions as the company may, by its articles, impose.

3. Provisions of Rule 10 are as under:

oThe company shall enter in the Register particulars of all the charges registered with the Registrar on any of its
property, assets or undertakings 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.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
51
 COMPANY‘S REGISTER OF CHARGES [SECTION 85]
o the entries in the Register shall be made forthwith after the creation, modification
or satisfaction of charge, as the case may be.
o the entries in the Register shall be authenticated by a director or the secretary of
the company or any other person authorised by the Board

Preservation of Register:
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.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
52
 COMPANY TO REPORT SATISFACTION OF
CHARGE [SECTION 82]
1) Intimation regarding Satisfaction of Charge:
A company shall give intimation to the Registrar in the form CHG-4 within 30 days of such payment or satisfaction.
Extended period of intimation:
It is provided that 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 prescribed additional fees.
2) Notice to the Holder of Charge by the Registrar:
On receipt of intimation under section (1), the Registrar shall cause a notice to be sent to the holder of the charge
calling upon him to show cause within such time as specified in the notice but not exceeding 14 days, as to why
payment or satisfaction in full should not be recorded.
If no cause is shown by the charge-holder:- The Registrar shall order entering of a memorandum of satisfaction in the
register of charges kept by him and accordingly, he shall inform the company of having done so.
However, no notice is required to be sent, in case the intimation to the Registrar in this regard is in the specified
form and signed by the holder of charge.
If any cause is shown by the charge-holder:- The Registrar shall record a note to that effect in the register of charges
and inform the company.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
53
COMPANY TO REPORT SATISFACTION OF CHARGE
[SECTION 82]
3) Issue of Certificate:
As per Rule 8 (2), in case the Registrar enters a memorandum of satisfaction of
charge in full, he shall issue a certificate of registration of satisfaction of charge
in Form No. CHG-5.
4) Preservation of Records:
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.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
54
5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 55
POWER OF REGISTRAR TO MAKE ENTRIES OF SATISFACTION AND
RELEASE IN ABSENCE OF INTIMATION FROM COMPANY [SECTION 83]

The Registrar may, on evidence being given to his satisfaction with respect to any
registered charge,—
(a) that the debt for which the charge was given has been paid or satisfied
(b) part of the property or undertaking charged has been released or ceased to form part
thereof, it may enter in the register of charges:
• a memorandum of satisfaction in whole or in part, or
• the fact that part of the property or undertaking has been released or ceased to form
part
notwithstanding the fact that no intimation has been received by him from the company.
Information to affected parties: The Registrar shall inform the affected parties within thirty
days of making the entry in the register of charges.
Issue of Certificate: Registrar enters a memorandum of satisfaction of charge in full, he
shall issue a certificate of registration of satisfaction of charge in Form No. CHG-5.
© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF
5 May 2025 INDIA
56
INTIMATION OF APPOINTMENT OF RECEIVER OR
MANAGER [SECTION 84]
Section 84 of the Companies Act, 2013 deals with the appointment of a receiver or manager
and of giving intimation thereof to the company and the Registrar.
Accordingly,
• if any person obtains an order for the appointment of a receiver or a person to manage the
property which is subject to a charge, or
• if any person appoints such receiver or person under any power contained in any instrument,
he shall give notice of such appointment to the company and the Registrar along with a copy of
the order or instrument within 30 days from the passing of the order or making of the
appointment.
In turn, the Registrar shall, on payment of the prescribed fees, register particulars of the
receiver, person or instrument in the register of charges.

On ceasing to hold such appointment, the person appointed as above shall give a notice to that
effect to the company and the Registrar shall register such notice (Form CHG-6).

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
57
PUNISHMENT FOR CONTRAVENTION [SECTION 86]
➢ If any company is in default in complying with any of the provisions of
this Chapter, the company shall be liable to a penalty of five lakh rupees
and every officer of the company who is in default shall be liable to a
penalty of fifty thousand rupees.
➢ If any person wilfully furnishes:
• any false or incorrect information; or
• knowingly suppresses any material information;
which is required to be registered under section 77, he shall be liable for
action under section 447.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
58
RECTIFICATION BY CENTRAL GOVERNMENT IN
REGISTER OF CHARGES [SECTION 87]
The Central Government to order rectification of Register of Charges in
the following cases of default:
(i) when there was omission in giving intimation to the Registrar with
respect to payment or satisfaction of charge within the specified time;
(ii) when there was omission or mis- statement of any particulars in any
filing previously made to the Registrar. Such filing may relate to any
charge or any modification of charge or with respect to any
memorandum of satisfaction or other entry made under Section 82
(Company to report satisfaction of charge) or Section 83 (Power of
Registrar to make entries of satisfaction and release).

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
59
RECTIFICATION BY CENTRAL GOVERNMENT IN
REGISTER OF CHARGES [SECTION 87]
Before directing that the ‘time for giving the intimation of payment or
satisfaction shall be extended’ or the ‘omission or mis- statement shall be
rectified’, the Central Government needs to be satisfied that such default was
accidental or due to inadvertence or because of some other sufficient cause
or it did not prejudice the position of creditors or shareholders.
The application in Form CHG-8 shall be filed by the company or any interested
person.
The order of rectification shall be made by the Central Government on such
terms and conditions as it deems just and expedient.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
60
QUESTION
Beauty Limited obtained a working capital loan from a Nationalized Bank against the hypothecation of Stocks
& Accounts receivable of the Company. An instrument creating the charge was duly signed by the Company
and the Bank. The Company is not willing to register the charges with the Registrar of Companies. In the
light of the provisions, if the Companies Act, 2013, discuss:

(1) Is there any provision empowering the Nationalized Bank (charge holder) to get the charges registered?

(2) When can the Registrar refuse to register the charges the present scenario?

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
61
ANSWER
(1) Registration by charge holder: Section 78 of the Companies Act, 2013, empowers the holder of charge to
get the charge registered in case the company creating the charge on its property fails to do so. Accordingly,
if a charge is created, the company is primarily responsible for registering the charge however it fails to do
so within the prescribed period of 30 days [as provided in section 77 (1)], the person in whose favour the
charge is created (i.e. charge-holder) may apply to the Registrar for registration of the charge along with the
instrument of charge within the prescribed time, form and manner. In light of above provisions, the
Nationalized Bank can get the charges registered.

(2) Registrars refuse to register the charges: However, the Registrar shall not allow such registration by the
charge-holder if the company itself registers the charge or shows sufficient cause why such charge should
not be registered

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
62
Question

DN Limited hypothecated its plant to a Nationalised Bank and availed a term loan. The Company registered
the charge with the Registrar of Companies. The Company settled the term loan in full, The Company
requested the Bank to issue a letter confirming the settlement of the term loan. The Bank did not respond to
the request. State the relevant provisions of the Companies Act, 2013 to register the satisfaction of charge in
the above circumstance. State the time frame up to which the Registrar of Companies may allow the
Company to intimate satisfaction of charges.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
63
ANSWER
Intimation regarding Satisfaction of Charge

Section 82 of the Companies Act, 2013, requires a company to give intimation of payment or satisfaction in
full of any charge earlier registered, to the Registrar in the prescribed form. The intimation needs to be given
within a period of 30 days from the date of such payment or satisfaction.

Extended period of intimation: Proviso to Section 82 (1) extends the period of intimation from thirty days to
three hundred days. Accordingly, it is provided that 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 300 days
of such payment or satisfaction on payment of prescribed additional fees

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
64
QUESTION
ABC Limited created a charge in favour of OK Bank. The charge was duly registered. Later, the Bank
enhanced the facility by another Rs 20 crores. Due to inadvertence, this modification in the original charge
was not registered. Advise the company as to the course of action to be pursued in this regard.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
65
ANSWER
The company is advised to immediately file an application for rectification of the Register of Charges in Form
No CHG-8 to the Central Government under Section 87 of the Companies Act, 2013

Section 87 of the Act of 2013 and Rule 12 empowers the Central Government to order rectification of
Register of Charges in the following cases of default:

a. when there was omission in giving intimation to the Registrar with respect to payment or satisfaction of
charge within the specified time;

b. when there was omission or mis-statement of any particulars in any filing previously made to the
Registrar. Such filing may relate to any charge or any modification of charge or with respect to any
memorandum of satisfaction or other entry made under Section 82 (Company to report satisfaction of
charge) or Section 83 (Power of Registrar to make entries of satisfaction and release).

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
66
QUESTION
Ranjit acquired a property from ABC Limited which was mortgaged to OK Bank. He settled the dues to Ok
Bank in full and the same was registered with the sub-registrar who has noted that the mortgage has been
settled. But neither the company nor OK Bank has filed particulars of satisfaction of charge with the
Registrar of Companies. Can Mr. Ranjit approach the Registrar and seek any relief in this regard? Discuss this
matter in the light of the provisions of the Companies Act, 2013.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
67
ANSWER
Section 83 of the Companies Act, 2013 provides powers to the registrar to make entries with respect to the satisfaction and release
of charges where no intimation has been received by him from the company.

Accordingly, with respect to any registered charge if an evidence is shown to the satisfaction of Registrar that the debt secured by
charge has been paid or satisfied in whole or in part or that the 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, then he may enter in the register of charges
a memorandum of satisfaction that:

• the debt has been satisfied in whole or in part; or

• the part of the property or undertaking has been released from the charge or has ceased to form part of the company's property
or undertaking.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

5 May 2025 INDIA
68
ANSWER
This power can be exercised by the Registrar despite the fact that no intimation has been received
by him from the company. Information to affected parties: The Registrar shall inform the affected
parties within 30 days of making the entry in the register of charges. Issue of certificate: As per
rule 8 (2), in case the registrar enters a memorandum of satisfaction of charge in full, he shall
issue a certificate of registration of satisfaction of charge in form no. CHG-5.

Therefore, Mr. Ranjit can approach the Registrar and show evidence to his satisfaction that the
charge has been duly settled and satisfied and request the Registrar to enter a memorandum of
satisfaction noting the release of charge.

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 69

5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 70
5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 71
5 May 2025 © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA 72