[Ref: General Circular No. 23/2020 dated 17th June, 2020 and General Circular No. 32/2020 dated 28th September, 2020]

The Ministry of Corporate Affairs (MCA), vide General Circular No. 12/2020, dated 30/03/2020, has come out with a Companies Fresh Start Scheme, 2020 (CFSS-2020) for providing relaxation in time for several forms. Later on, in view of large-scale disruption caused by COVID-19 Pandemic, MCA vide General Circular No. 30/ 2020 dated 28th September, 2020 has extended the CFSS-2020 till 31st December, 2020. However, the benefit of waiver of additional fees, under the CFSS-2020, was not extended to the charge related documents.

Therefore, 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, vide MCA General Circular No. 23/2020 dated 17th June, 2020 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.

MCA has mentioned in their General Circular No. 23/2020 dated 17th June, 2020 that on account of the pandemic caused by the COVID-19, representations have been received in this Ministry, requesting that the timelines related to filing of certain charge related forms may be suitably relaxed so as to provide a window of compliance for the registration of charges.

This Scheme, namely “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013” is 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

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

However, the time period of the said Scheme is going to expire on 30.09.2020. Therefore, MCA has decided to extend the said Scheme till 31.12.2020. MCA vide General Circular No. 32/2020 dated 28th September, 2020 has extended the said Scheme till 31st December, 2020 providing that-

“the figures “30.09.2020″ and “01.10.2020” wherever they appear in the General Circular No. 23/2020 dated 17th June, 2020 shall be substituted with figures “31.12.2020” and “01.01.2021” respectively.”

Applicability of the MCA General Circular No. 23/2020 dated 17th June, 2020

As per the provision of Section 77 of the Companies Act, 2013 (‘the Act’) 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 [30 days (Normal Fee) + 30 days (Additional Fee) + 60 days (Advalorem Fee)] from the date of Creation or Modification.

As per the MCA General Circular No. 23/2020 dated 17 June, 2020, the scheme namely “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013” 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

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

MCA has divided the scheme in two parts-

1. PART I: Form No. CHG-1 and Form No. CHG-9 of which creation date 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 i.e. 120 days has not been expired).

2. PART II: Form No. CHG-1 and Form No. CHG-9 of which creation date falls on any date between 03.2020 to 30.09.2020 (both dates inclusive).

Relaxation of Time- provided by MCA General Circular No. 23/2020 dated 17th June, 2020

Some relaxation has been provided, in respect of time period, by the said General Circular to count time period for filling of Form No. CHG-l and Form No. CHG-9 by a charge holder or a company. The same are as under-

A. In case of PART-I 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.

Analysis:

(a) 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.

(b) Moreover, if the form is not filed within such period (i.e. 01.03.2020 to 30.09.2020), 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 of PART-II 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.

Analysis:

(a) 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.

(b) If the form is not filed within such period (i.e. 01.03.2020 to 30.09.2020), 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.

Applicable Fee- as per MCA General Circular No. 23/2020 dated 17th June, 2020

A. In case of PART-I 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.

Analysis:

a) 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 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.

b) If form filed thereafter i.e. after 30.09.2020 – 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.

B. In case of PART-II 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.

Analysis:

a) If the form is filed on or before 30.09.2020 – Normal fees under the Fees Rules for the said form shall be charged.

b) If form filed thereafter i.e. after 30.09.2020 – 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.

Non-Applicability of the MCA General Circular No. 23/2020 dated 17th June, 2020

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

(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 para (Relaxation of Time) above.

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

Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.

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