Due to resurgence of Covid- 19 pandemic and after considering requests received from Stakeholders Ministry of Corporate Affairs (‘MCA’) has decided to allow relaxation of time and condone the delay in filing of forms related to creation and modification of charges that are required to filed under Companies Act, 2013 (‘ACT’), pursuant to General Circular No. 07/2021 dated 3rd May, 2021.
In order to understand the relaxations provided by MCA in a better way we will first look into various provisions/definitions related to charge under the Act: –
Definition of Charge
As per 2(16) of Companies Act, 2013 “charge” means an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage;
APPLICABILITY AND RELAXATIONS
Section 77 of the Act mandates the company to file a form relating to the creation or modification of charge (i.e., Form No. CHG-1 and Form No. CHG-9) within a maximum of 120 days from the date of creation/modification of charge, as the case may be. With this circular, MCA is providing relaxation of time to Companies or Charge holder for condoning the delay in filing certain forms related to creation/ modification of charges under section 77 of the Act.
A. Date of Creation or Modification of charge is before 1st April, 2021 but the timeline for filing such form i.e., 120 days had not been expired under section 77 of the Act as on 1st April, 2021 than the period beginning from 1st April, 2021 and ending on 31st May, 2021 shall not be reckoned for the purpose of counting the number of days under Section 77 or Section 78 of the Act. If the form is not filed within such period, the first day after the 31st March, 2021 shall be reckoned as 1st June, 2021 for counting of number of days as per section 77 and 78 of the Act.
If the charge is created/modified on 30th January, 2021 then the last date for filing the related form as per this circular will be 29th July, 2021
Calculation of Days
|30th January, 2021 – 31st March, 2021||61 days|
|1st June, 2021- 29th July, 2021||59 days|
B. Date of Creation or Modification of charge falls between 1stApril, 2021 to 31st May, 2021 (Both dates inclusive), the period beginning from the date of creation/modification of charge to 31st May, 2021 shall not be reckoned for the purpose of counting the number of days under Section 77 or Section 78 of the Act. If the form is not filed within such period, the first day after the date of creation/modification of charge shall be reckoned as 1st June, 2021 for counting of number of days within which the form is required to be as per section 77 and 78 of the Act.
If the charge is created/modified on 20th April, 2021 then the last date for filing the related form as per this circular will be 28th September, 2021.
SCHEDULE OF FEES WITH EXAMPLE (Period from 1st May, 2021 to 30th June, 2021 is excluded)
|Particulars||Date of Creation/ modification of Charge||Due Date for filing the form as per the Circular||Normal Fees
|Normal Plus Additional Fees
|Normal Plus Additional Fees Plus Ad Valorem Fees
|Case A: Creation or Modification of Charge before 31st March, 2021||30th January, 2021||29th July, 2021||Upto 28th February, 2021||Filed after 28th February, 2021 but Upto 30th March, 2021||Filed after 30th March, 2021 but Upto 29th July, 2021|
|Case B: Creation or Modification of Charge between 1st April, 2021 to 31st May, 2021 (both dates inclusive).||20th April, 2021||28th September, 2021||Upto 30th June, 2021||Filed after 30th June, 2021 but Upto 30th July, 2021||Filed after 30th July, 2021 but Upto 28th September, 2021|
THE CIRCULAR SHALL NOT APPLY IN THE FOLLOWING CASE:
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and information available at the time of preparation of this document. Utmost care has been taken to ensure the accuracy, completeness, and reliability of the information provided but In no event the author shall be responsible for any direct or indirect, special or incidental damage resulting from or arising out of or in connection with the use of the information provided in the article.