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

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. 07/2021 dated 3rd May, 2021 to provide “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.

The Ministry of Corporate Affairs (MCA) has mentioned in their General Circular No. 07/2021 dated 3rd May, 2021 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 Circular, namely “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 01.04.2021, but the timeline for filing such form had not expired under section 77 of the Act as on 01.04.2021, or

(b) falls on any date between 01.04.2021 to 31.05.2021 (both dates inclusive).

Applicability of the MCA General Circular No. 07/2021 dated 3rd May, 2021.

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. 07/2021 dated 3rd May, 2021, this circular namely “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 01.04.2021, but the timeline for filing such form had not expired under section 77 of the Act as on 01.04.2021, or

(b) falls on any date between 01.04.2021 to 31.05.2021 (both dates inclusive).

MCA has divided this circular in two parts i.e. relaxation has been provided, in respect of time period and fees applicable for filing of Form CHG 1 and Form CHG 9 depending upon two time periods.

A. PART I: Form No. CHG-1 and Form No. CHG-9 of which creation date is before 01.04.2021 (but the timeline for filing such form had not expired under section 77 of the Act as on 01.04.2021 i.e. 120 days has not been expired).

B. PART II: Form No. CHG-1 and Form No. CHG-9 of which creation date falls on any date between 04.2021 to 31.05.2021 (both dates inclusive). 

1. ‘Relaxation of Time’- provided by MCA General Circular No. 07/2021 dated 3rd May, 2021

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 (i.e. creation date is before 01.04.2021):

The period beginning from 01.04.2021 and ending on 31.05.2021 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 31.03.2021 shall be reckoned as 01.06.2021 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 01.04.2021 and ending on 31.05.2021 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. 01.04.2021 to 31.05.2021), the first day after 31.03.2021 shall be reckoned as 01.06.2021 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.

For instance: If the Form CHG 1 is or Form CHG 9 is filed after 31-05-2021, then the days between 01-04-2021 to 31-05-2021 shall not be counted for the calculation of 120 days [30 days (Normal Fee) + 30 days (Additional Fee) + 60 days (Advalorem Fee) as the case may be].

Creation date (before 01.04.2021) Filing date (between 01.04.2021 to 31.05.2021) Filing date (after 31.05.2021) Calculation of days
15.03.2021 Filed on 24.04.2021 Total days due 16

(Period from 01.04.2021 to 24.04.2021 will not count)

10.03.2021 Filed on 17.05.2021 Total days due 21

(Period from 01.04.2021 to 17.05.2021 will not count)

01.02.2021 Filed on 28.06.2021 Total days due 87

(Period from 01.04.2021 to 31.05.2021 will not count)

B. In case of PART-II above (i.e. creation date falls on any date between 01.04.2021 to 31.05.2021):

The period beginning from the date of creation/modification of charge to 31.05.2021 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 01.06.2021 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 31.05.2021 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. 01.04.2021 to 31.05.2021), the first day after the date of creation / modification of charge shall be reckoned as 01.06.2021 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. 07/2021 dated 3rd May, 2021.

A. In case of PART-I above (i.e. creation date is before 01.04.2021):

If the form is filed on or before 31.05.2021, the fees payable as on 31.03.2021 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 01.06.2021 and ending on the date of filing plus the time period lapsed from the date of the creation of charge till 31.03.2021.

Analysis:

a) If the form is filed on or before 31.05.2021the fees payable as on 31.03.2021 under the Fees Rules for the said form shall be charged.

b) If form filed thereafter i.e. after 31.05.2021the applicable fees shall be charged under the Fees Rules after adding the number of days beginning from 01.06.2021 and, ending on the date of filing plus the time period lapsed from the date of the creation of charge till 31.03.2021.

B. In case of PART-II above (i.e. creation date falls on any date between 01.04.2021 to 31.05.2021):

If the form is filed before 31.05.2021, 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 01.06.2021 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 31.05.2021Normal fees under the Fees Rules for the said form shall be charged.

b) If form filed thereafter i.e. after 31.05.2021the First day after the date of creation/modification of charge shall be reckoned as 01.06.2021 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.

For instance: Applicable fee in case of Charge Form filed on different date.

Creation date (before 01.04.2021) Filing date (between 01.04.2021 to 31.05.2021) Filing date (after 31.05.2021) Calculation of days Fees
15.03.2021 Filed on 24.04.2021 Total days due 16

(Period from 01.04.2021 to 24.04.2021 will not count)

Fee as on 31.03.2021 i.e. Normal fee (upto 30 days)
10.03.2021 Filed on 17.05.2021 Total days due 21

(Period from 01.04.2021 to 17.05.2021 will not count)

Fee as on 31.03.2021 i.e. Normal fee (upto 30 days)
01.02.2021 Filed on 28.06.2021 Total days due 87

(Period from 01.04.2021 to 31.05.2021 will not count)

30 days (Normal Fee) + 30 days (Additional Fee) + 60 days (Advalorem Fee)

Non-Applicability of the MCA General Circular No. 07/2021 dated 3rd May, 2021.

(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 01.04.2021.

(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.

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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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One Comment

  1. Prashant Verma says:

    The Enquire Fee section of the Site is not updaed confusing everyone. Any idea by then this updation will be circular.

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