SCHEME FOR RELAXATION OF TIME FOR FILING FORMS RELATED TO CREATION OR MODIFICATION OF CHARGES UNDER THE COMPANIES ACT, 2013.
> Why this Scheme introduced by Ministry??
1. Ministry of Corporate Affairs has given the benefits from additional fees to various forms under Companies Fresh Start Scheme (CFSS) vide General Circular No. 12 / 2020, dated 30.03.2020, however the benefits were not extended to the charge related documents viz. CHG-1, CHG-9.
2. On account of COVID-19 pandemic and impact of it on the operations of Companies, many Companies which fails to file the Charge creations or modification forms still faced with financial hurdles of making payment.
3. Therefore, Ministry of Corporate Affairs vide circular General Circular No. 23/2020 dated June 17,2020 came up with relaxation of time and fees as well for filing of forms CHG-1/CHG-9 for creation as well as modification of Charge.
> The Scheme shall be called as Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013.
> Applicability: The Scheme is applicable in respect of filing of Form No. CHG-l and Form No. CHG-9 after due date given in Section 77 and Section 78 respectively in the Companies Act, 2013.
Timeline in Section 77 for Charge creation/modification: It shall be the duty of every Company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the Company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation:
Provided that the Registrar may, on an application by the Company, allow such registration to be made:
a. in case of charges created before the commencement of the Companies (Amendment) Ordinance, 2019, within a period of three hundred days of such creation; or
b. in case of charges created on or after the commencement of the Companies (Amendment) Ordinance, 2019, within a period of sixty 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:
(a) in clause (a) to the first proviso, the registration of the charge shall be made within six months from the date of commencement of the Companies (Amendment) Ordinance, 2019, on payment of such additional fees as may be prescribed and different fees may be prescribed for different classes of Companies;
(b) in clause (b) to the first proviso, 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.
Timeline in Section 78 for Charge creation/modification: Where a Company fails to register the charge within the period of thirty days referred to in sub-section (1) of section 77, without prejudice to its liability in respect of any offence under this Chapter, the person in whose favour the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed …….
> The Scheme is bifurcated into two (2) timeline as follows:
|S.No.||Date of Creation / Modification|
|Before 01.03.2020 and timeline of (30 days+ 60 days+60 days) not expired||Between 01.03.2020 to 30.09.2020 (both dates inclusive).|
|1.||The period begins from 01.03.2020 and ends on 30.09.2020 will not be counted under Section 77/78 respectively.||The forms can be filed with normal fees irrespective of fact that due date expired.|
|2.||If form filed after 30.09.2020, then the date of Actual creation till 29.02.2020 will be counted and the period start from 01.10.020 till the actual date of filing will be added to the days calculated till 29-02-2020.||The first day after the creation of charge will be counted from 01.10.2020 and accordingly the days given in Section 77/78 will be calculated.|
|3.||Fees: Fees calculation will start from Actual date of creation/modification of Charge till 29.02.2020 and if form filed after 30.09.2020, then from 01.10.2020 till actual date of filing||Fees: Any charge created between 01.03.2020 to 30.09.2020 (both day inclusive), there will be no fees irrespective of no. of days given in Section 77 and 78.|
1. ABC Limited created charge on November 01, 2019 and filed CHG-1 on November 20, 2020, then fees calculation as under:
Normal Fees: till 01.12.2019
Additional Fees: till 31.12.2019.
Ad-valorem Fees: till 29.02.2020.
However due to this Scheme date 01.03.2020 will not be counted for Ad-valorem calculation and in this case, Company will have to apply for condonation of delay.
2. Charge modification date: 01.02.2020:
Normal Fees: till 02.03.2020
Additional Fees: till 31.10.2020
Advalorem fees: till 30.12.2020
(*) Period 01.03.2020 – 30.09.2020 will not be counted and fees meter will start from 01.10.2020
3. Charge Creation date: 29.02.2020:
ABC Limited created charge on March 02, 2020, then fees calculation is as under:
Normal Fees: till 30.09.2020
2. First day after the date of creation /modification of charge will be counted from 01.10.2020 as per Section 77/78.
Normal Fees: till 30.10 2020.
Additional Fees: Till 30.11.2020.
Ad-valorem Fees: Till 29.01.2021.
a. Due to COVID-19 & consequent Lock -down, Companies are facing financial issues also, therefore it’s a support giving moratorium period of around 7 months to Companies to complete its filings with comparatively fees.
b. Companies can complete all its due filings.
c. Interest of Lender will be protected, due to creation of charge on Assets.
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.
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.