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CA Intermediate · Corporate and Other Laws · Registration of Charges

Mehta Pharma Ltd. borrowed Rs. 5 crore from a bank and created a charge on its plant. The loan was fully repaid on 15 June, but the company did not file any intimation of satisfaction of the charge. On 20 August the company's CFO asks what the position is. Which statement is correct as per the Companies Act, 2013?

The company must file notice of payment or satisfaction of the charge with the Registrar within 30 days of repayment. The Registrar may allow a further 300 days if sufficient cause is shown. The charge does not disappear from the register automatically on repayment, so filing is necessary.

  1. ANo filing is needed because the charge ends automatically on repayment
  2. BThe company must give notice of satisfaction of the charge to the Registrar within 30 days of payment, and the Registrar may allow a further 300 daysCorrect
  3. COnly the bank, not the company, may file the satisfaction, within 6 months
  4. DThe company must file satisfaction within 7 days, with no extension allowed

Explanation

Section 82 requires the company to file intimation of payment or satisfaction in full of any charge within 30 days from the date of such payment or satisfaction, and the Registrar may allow a further 300 days on sufficient cause. Option A is wrong because the register continues to show the charge until satisfaction is filed. Options C and D state incorrect periods and parties.

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