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CA Intermediate · Corporate and Other Laws · Registration of Charges

Ananya Ltd. repaid in full a loan secured by a charge registered with the Registrar. The lender gave a letter of satisfaction, but the company did not inform the Registrar. What is the correct legal position under the Companies Act, 2013?

The company must file intimation of payment or satisfaction of the charge with the Registrar within the prescribed time, and the Registrar then records satisfaction on the register. The charge is not removed automatically on repayment, and no Tribunal order is required in the ordinary case.

  1. AThe charge is automatically removed from the register on repayment, so no filing is needed
  2. BThe company must file intimation of satisfaction of charge with the Registrar within the prescribed time, and the Registrar can then enter satisfaction in the registerCorrect
  3. COnly the lender can ever file satisfaction, and the company cannot
  4. DSatisfaction is recorded only by an NCLT order in every case

Explanation

Payment or satisfaction of a charge must be intimated to the Registrar in the prescribed form within the prescribed time, after which the Registrar records satisfaction. The charge does not vanish automatically from the register, so the first option is wrong. Tribunal orders are not mandatory in the normal course.

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