Creation/ modification of charge are one of crucial activity for Loan from Bank/ financial institutions etc. When Companies Act, 2013 introduced at that time Charge satisfaction form required to be submitted with ROC within 30 days of satisfaction otherwise Company have to file application of compounding with Regional Director. However, by Companies Amendment Act, 2017 this limit of 30 days increased up to 300 days as balanced with Creation/ modification of Charge.
However, Companies (Amendment) Ordinance, 2018 have changed the period for Creation/Modification of Charge with tighter time based norms;
Section Involved: Section 77 Duty to Register Charge
i. BEFORE ORDINANCE: As per Section 77 of Companies Act, 2013, Company have to create charge with the Registrar within 30 days of creation of Charge.
Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of Three Hundred Days of such creation on payment of such additional fees as may be prescribed:
Condonation: Provided further that if registration is not made within a period of three hundred days of such creation, “the company shall seek extension of time in accordance with section 87”
2. AFTER ORDINANCE: As per Section 77 of Companies Act, 2013, Company have to create charge with the Registrar within 30 days of creation of Charge.
Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of Sixty Days of such creation on payment of such additional fees as may be prescribed.
MCA has divided Additional fees in two Parts on basis of dates: For the charges created or modified on or after the 2nd November, 2018
The following additional fees or advalorem fees, as the case may be, shall be payable up to 31st July, 2019, by all companies:-
| S. No. | Period of delay | Additional/Advalorem Fees applicable |
| 1. | Up to 30 days | 2 times of normal fees |
| 2. | More than 30 days and up to 60 days | 4 times of normal fees |
| 3. | More than 60 days and up to 90 days | 6 times of normal fees |
The following additional fees or advalorem fees as the case may be, shall be payable with effect from 1st August, 2019
| S. No. | Period of delay | Small Companies and One Person Company | Other than Small Companies and One Person Company |
| 1. | Up to 30 days | 3 times of normal fees | 6 times of normal fees |
In place of Condonation: Provided further that if the registration is not made within the period specified—
The Registrar may, on an application, allow such registration to be made within a further period of Sixty Days after payment of such ADVALOREM fees as may be prescribed
Quick Bites:
CHARGE CREATED/MODIFIED BEFORE ORDINANCE
i. If Charge is CREATED BEFORE DATE OF ORDINANCE i.e. 02.11.2018 in such case filling shall be according to new provisions or old provisions?
As per Act before ordinance or after ordinance both states that company shall file form for registration of charge within 30 days of creation.
In case company fails to file the same within 30 days of Registration and date of creation of charge is before 02.11.2018 in that case:
Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed.
Provided further that if the registration is not made within the period specified i.e. 300 days from such creation then the registration of the charge shall be made within six months from the date of commencement of the Companies (Amendment) Ordinance, 2018, i.e. 01st May, 2019 on payment of such additional fees as may be prescribed and different fees may be prescribed for different classes of companies.
FEES:
charges created or modified before the 2nd November, 2018, and allowed to be filed within a period of three hundred days of such creation or six months from the 2nd November, 2018, as the case may be, the following additional fees shall be payable:-
| S. No. | Period of delay | Additional Fee applicable |
| 1. | Up to 30 days | 2 times of normal fees |
| 2. | More than 30 days and up to 60 days | 4 times of normal fees |
| 3. | More than 60 days and up to 90 days | 6 times of normal fees |
| 4. | More than 90 days and up to 180 days | 10 times of normal fees |
| 5. | More than 180 day | 12 times of normal fees |
Note: Thus, one can opine that as per ordinance there is no way for Condonation for creation/ modification of charge under companies act after 02.11.2018.
After 02.11.2018 form can be file as per prescribed time with such additional fees plus ADVALOREM as may be prescribed.
ii. If Charge is created after date of Ordinance i.e. 02.11.2018 in such case what shall be time period for filing of form for registration of charge with ROC.
If charge is created after 02.11.2018 in such case following shall be period for filing of charge form with ROC.
| STAGE | PARTICULAR | TIME PERIOD | Days | FEES |
| i. | Registration of Charge with ROC | Within 30 days of Creation | 0+30 | Normal Fees |
| ii. | If Fails to file with in 30, days | within a period of 60 days of such creation | 0+30+30
= 60 |
Normal Fees + Additional Fees |
| iii. | If Fails to file with in 60, days | Registrar may, on an application, allow such registration to be made within a further period of sixty days | 0+30+30+60
= 120 |
Normal Fees + Additional Fees +Advalorem Fees |
iii. As per question no. II if company fails to file form for creation/ modification of charge within 120 days of creation of charge. In such case whether company can file application for Condonation to Regional Director u/s 87.
As per Ordinance, 2018 there is modification in Section 87 of Companies Act, 2018.
| Before Ordinance | After Ordinance |
| The Central Government on being satisfied that—
(i) (a) the omission to file with the Registrar the particulars of any charge created by a company or any charge subject to which any property has been acquired by a company or any modification of such charge; or |
The Central Government on being satisfied that —
(a) the omission to give intimation to the Registrar of the payment or satisfaction of a charge, within the time required under this Chapter; or
|
Note: After ordinance i.e. 02.11.2018 clause relating to Condonation of delay in creation/ modification of charge has been removed from Section 87.
Thus, one can opine that as per question no. II if company fails to file e-form CH-1 for creation / modification of charge within 120 from creation of charge then there is no way under Companies act for filing of such form with ROC.
iv. If Charge is satisfied before/ after date of Ordinance i.e. 02.11.2018 in such case what shall be time period for filing of form for satisfaction of charge of charge with ROC.
If charge is satisfied even before or after 02.11.2018 in such case following shall be period for filing of e-form CHG-4 for satisfaction of charge with ROC.
| STAGE | PARTICULAR | TIME PERIOD | Days | FEES |
| i. | Satisfaction of Charge with ROC | Within 30 days of Satisfaction | 0+30
= 30 |
Normal Fees |
| ii. | If Fails to file with in 30, days | within a period of 300 days of such satisfaction | 0+30+270
= 300 |
Normal Fees + Additional Fees |
| iii. | If Fails to file with in 300, days | Filing of form with RD for satisfaction of Charge | 0+30+270+—-
= —— |
Normal Fees + Additional Fees +Condonation fees |
Note: Provisions for Condonation of delay in satisfaction of charge is still there in act even after ordinance.
(Republished with amendments)
Author Bio
We have created charge before one year, now my question is can we modify that charge by reducing amount after one year?
Charge is created in 2016, co filed form in oct 2018, now my question is , should co file petition for condonation of delay or not
today the charge documents are 70 days old and when trying to file charge, it is showing additional advolerum fee of 5 lacs.- how come ? the secured limits are 223 crores
If the charge creation was done in 2017 but form filling was not done then what is the remedy for filling of CHG-1 in current period of 2019 . As we are unable to upload the form and the pop up is showing that charge created on or before 06.07.18 shall be allowed to be filled only till 01.05.2019 only .
Can you please explain me how advalerom fee is calculated ?
Also will the registrar accept the form CHG-1 filing after 60 days ?
Thanks