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CA Intermediate · Corporate and Other Laws · Registration of Charges

Meenakshi Foods Ltd. paid off its entire secured loan to a bank, which held a registered charge on its assets. Which statement correctly describes what the company must do under the Companies Act, 2013?

The company must file intimation of payment or satisfaction of the charge with the Registrar in the prescribed form within 30 days of the payment. Until that is done the register continues to show the charge as outstanding, so it does not lapse automatically.

  1. ANothing, as the charge lapses automatically after payment
  2. BFile intimation of satisfaction of the charge in the prescribed form with the Registrar within 30 days of paymentCorrect
  3. CFile intimation of satisfaction within 6 months, failing which the charge is deemed satisfied
  4. DApply to the National Company Law Tribunal for a certificate of satisfaction

Explanation

On payment in full, the company must file intimation of satisfaction with the Registrar within 30 days from the date of payment. The Registrar then issues a notice to the charge holder and, if no objection is received, records the satisfaction. Option A is wrong since the register would continue to show the charge.

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