• SECTION 77 OF THE COMPANIES ACT 2013 READ WITH THE RULES MADE THEREUNDER says that the charge created by the company on any of its assets whether tangible or intangible assets, located in India or outside India shall be registered by the company or the charge holder within 30 days of creation or modification in FORM NO. CHG-1 (for other than debentures) or FORM NO. CHG-9 (for debentures including rectification).
  • Steps Particulars Time period Applicable fees
Steps Particulars Time Period Applicable Fees
1st step Registration of charge within 30 days of creation/modification 30 days Normal fess
2nd step If fails to file within 30 days, then upon registration of charge within 60 days of creation/modification =30+30 days Normal plus additional fees
3rd step If fails to file within 60 days, then upon registration of charge within 120 days of creation/modification =30+30+60days Normal plus additional plus advalorem fees
  • After 120 days lapse of charge creation/modification, no condonation is available and the default is punishable under the act
  • Overview: “Scheme For Relaxation Of Time For Filing Forms Related To Creation Or Modification Of Charges Under The Companies Act, 2013”
  • Applicability of scheme- the scheme shall be applicable in respect of filing of form no. CHG-1 and form no. CHG-9 by a company or a charge holder, where the date of creation / modification of charge:
  • 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
  • Falls on any date between 01. 03.2020 to 30. 09.2020 (both dates inclusive).
  • Who are benefited?
  • The scheme benefit is available to each and every company or chargeholder for charge created on any company’s assets, under the given relaxation timeline on charge related forms of creation or modification but not for satisfaction fillings.
  • What is the benefit?
  • This scheme is benefited into two ways:
  • I. The charge is created/ modified before 01.03.2020 and the period of 120 days has not lapsed from the date of creation/ modification of charge as on 29-02-2020
  • II. The charge is created or modified during the period starting from 01.03.2020 to 30.09.2020. (Inclusive of both the dates)
  • In case of first aspect the CHG-1 and CHG-9 form can be filed during the period of 01.03.2020-30.09.2020 without any additional days being reckoned for count of 120 days and at applicable fees as on 29.02.2020,
  • In case of second aspect the CHG-1 and CHG-9 form can be filed during the period of 01.03.2020-30.09.2020 without any days being reckoned for count of 120 days and at normal fees.
  • Thus, the huge fees payable can be prevented and the default punishable can be prevented on failure to register charge within 120 days (no condonation after expiry of 120 days). However, upon expiry of the period of grant relaxation, the 120 days count will be reckoned from 01.10.2020 onwards.
  • When from the benefit is implemented?
  • The benefit is available from 01st March 2020 to 30th September 2020 vide General Circular No. 23/2O2O dated 17/06/2020.
  • Why is the relaxation provided?
  • Relaxation provision- for the purpose of condoning the delay in filing form CHG-1 and CHG-9 related to creation/ modification of charges.
  • On account of pandemic covid-19, The Companies Fresh Start Scheme, 2020 was laid out in the general circular no. 12/2020, dated 30.03.2020, the benefit of waiver of additional fees was not extended to the charge related documents. Therefore, MCA provided for window of compliance in filing of charge related documents as well.
  • Where is the benefit not applicable?
  • Below are the areas where benefit is not applicable:
  • For charge forms already filed
  • The period of 120 days expired on 29.02.2020
  • For satisfaction of charge “CHG-4”
  • No relaxation for charge forms filed after 30.09.2020
  • Disclaimer: The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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Qualification: CS
Company: Prashant Srivastav & Associate
Location: HOWRAH, West Bengal, IN
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May 2021