MCA extends time to file forms for Creation or modification of charges

Relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013.

As per the MCA Circular No. General Circular No. 23/2020 dated 17^th June, 2020, the Central Government in exercise of its powers under Section 460 read with Section 403 of the Act and the Companies (Registration Offices and Fees) Rules, 2014 (Fees Rules) has decided to introduce a Scheme, namely “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013” for the purpose of condoning the delay in filing certain forms related to creation/ modification of charges.

As per the provision of Section 77 of the Companies Act, 2013 for Form No. CHG-1 and Form No. CHG-9 relating to Creation and Modification of Charge is required to be file in maximum 120 days from the date of Creation or Modification.

Highlights of this scheme:  

i. This scheme is effective from 17.06.2020.

ii. As per this Circular the scheme shall be applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 (both referred as ‘form’ or ‘forms’) by a company or a charge holder, where the date of creation / modification of charge:

(a) is before 01.03.2020, but the timeline for filing such form had not expired under section 77 of the Act as on 01.03.2020, or

Explanation: It means charge crated/ modified before 01.03.2020 but as on 01.03.2020 the timeline of filing such form i.e. 120 days as per provision of Section 77 had not expired.  In other words we can say that, the charge created or modified before 01.11.2019 is not eligible for this scheme.

(b) falls on any date between 01.03.2020 to 30.09.2020 (both dates inclusive).

Explanation: This scheme is also applicable to charge created or modified between 01.03.2020 to 30.09.2020. 

iii. Relaxation of time:

(a) In case a form is filed in respect of a situation covered under sub-para (ii)(a) above, the period beginning from 01.03.2020 and ending on 30.09.2020 shall not be reckoned for the purpose of counting the number of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after 29.02.2020 shall be reckoned as 01.10.2020 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

(b) In case a form is filed in respect of a situation covered under sub-para (ii)(b) above, the period beginning from the date of creation/ modification of charge to 30.09.2020 shall not be reckoned for the purpose of counting of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after the date of creation / modification of charge shall be reckoned as 01.10.2020 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

iv. Applicable Fees:

(a) In regard to sub-para (iii)(a) above, if the form is filed on or before 30.09.2020, the fees payable as on 29.02.2020 under the Fees Rules for the said form shall be charged. If the form is filed thereafter, the applicable fees shall be charged under the Fees Rules after adding the number of days beginning from 01.10.2020 and, ending on the date of filing plus the time period lapsed from the date of the creation of charge till 29.02.2020.

Explanation:

• • If form is file between 01.03.2020 to 30.09.2020 then fee applicable on such form as on 29.02.2020 is required to be pay till 30.09.2020.
    

• • If form is file after 30.09.2020, then 01.10.2020, shall be consider as next day after 29.02.2020, for the purpose of fees payable and the fees shall be charged beginning from 01.10.2020 and ending on the date of filing plus the time period lapsed from the date of the creation of charge till 29.02.2020.

(b) In regard to sub-para (iii)(b) above, if the form is filed before 30.09.2020, normal fees shall be payable under the Fees Rules. If the form is filed thereafter, the first day after the date of creation/modification of charge shall be reckoned as 01.10.2020 and the number of days till the date of filing of the form shall be counted accordingly for the purposes of payment of fees under the Fees Rules.

Explanation:

• • If the form is filed before 30.09.2020, normal fees shall be payable.
    

• • If form is file after 30.09.2020, then 01.10.2020 shall be considered as 1^st day for the purpose of fees payable on form. In other words in this situation, 1^st day of creation/ modification of charge shall be 01.10.2020.
    

v. The Scheme shall not apply, in case:

(a) The forms i.e.CHG-1 and CHG-9 had already been filed before the date of issue of this Circular i.e. 17.06.2020.

(b) The timeline for filing the form has already expired under section 77 or section 78 of the Act prior to 01.03.2020.

(c) The timeline for filing the form expires at a future date, despite exclusion of the time provided in sub-para (iii) above.

(d) Filing of Form CHG-4 for satisfaction of charges.