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CA Intermediate · Corporate and Other Laws · Registration of Charges

Sundaram Textiles Ltd. created a charge on its factory land in favour of Indian Bank on 1 March to secure a term loan. The company did not file the particulars of the charge with the Registrar within the normal 30-day period. What is the legal position regarding the Registrar's power to allow late registration?

The Registrar may permit registration within 270 days after the initial 30-day period on payment of additional fees, if the company satisfies him that it had sufficient cause for the delay. The Tribunal is not needed for this window, and holding title deeds does not exempt the charge from registration.

  1. AThe Registrar may allow registration within a further period of 270 days on payment of additional fees, if sufficient cause is shownCorrect
  2. BThe Registrar can allow registration only up to 30 more days, after which the charge becomes void automatically
  3. CThe Registrar has no power; only the National Company Law Tribunal can allow late filing in every case
  4. DThe charge need not be registered if the lender holds the title deeds of the land

Explanation

Particulars of a charge must be filed within 30 days of creation. If this is missed, the Registrar may allow filing within a further 270 days on payment of additional fees, provided the company shows sufficient cause. Option B understates the extended period. Option C is wrong because the Registrar has this power for the 270-day window. Option D is wrong because holding title deeds does not remove the registration requirement.

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