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CS Executive · Company Law and Practice · Charges

Mehta Realty Ltd. created a charge on a plot on 5 May 2026. Before it was registered, Mr. Rao acquired a right over the same plot. The charge was later registered. Under the Section 77(1) provisos, what is the effect of the subsequent registration on Mr. Rao's right?

Mr. Rao's right is not prejudiced. Section 77(1) provides that subsequent registration of a charge shall not prejudice any right acquired in respect of the property before the charge is actually registered, so registration does not operate retrospectively to defeat intervening rights.

  1. AIt does not prejudice the right Mr. Rao acquired before the charge was actually registeredCorrect
  2. BIt extinguishes Mr. Rao's right from the date of creation of the charge
  3. CIt makes Mr. Rao's right void if registration is made within thirty days
  4. DIt gives the charge-holder priority only if the Registrar is informed by Mr. Rao

Explanation

One proviso to Section 77(1) states that any subsequent registration of a charge shall not prejudice any right acquired in respect of the property before the charge is actually registered. Hence registration is not retrospective against Mr. Rao.

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