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CA Intermediate · Corporate and Other Laws · Registration of Charges

Mehta Auto Components Ltd. has an existing charge on its plant in favour of Bank A, registered with the Registrar. The company later modifies the terms of the loan by increasing the amount secured by the charge. Which is the correct position under the Companies Act, 2013?

A modification of a registered charge, such as increasing the secured amount, must be notified to the Registrar in the prescribed form within 30 days of the modification. The prior registration does not remove this duty, because the register must show the charge's current terms.

  1. AParticulars of the modification must be filed with the Registrar in the prescribed form within 30 days of the modificationCorrect
  2. BNo filing is needed because the charge was already registered
  3. CA fresh charge certificate is needed only if the amount is decreased
  4. DModification is filed with SEBI and not with the Registrar

Explanation

Any modification of a registered charge, such as a change in the amount secured or the terms, must be filed with the Registrar within 30 days of the modification. The idea that a registered charge needs no further filing is wrong, since the register must reflect current terms.

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