Skip to content

CA Intermediate · Corporate and Other Laws · Registration of Charges

Sunrise Textiles Pvt Ltd, a company registered in Surat, creates a mortgage on its factory land in favour of Bank of Baroda on 10 March. Neither the company nor the bank files particulars of the charge with the Registrar within 30 days. Which of the following is the correct position under the Companies Act, 2013?

A charge not filed within 30 days can still be registered within a further 300 days from creation on payment of additional fees. After that period, the delay must be condoned by the Central Government. Registration is mandatory, and the loan does not automatically become repayable.

  1. AThe charge is void automatically and the loan becomes immediately repayable
  2. BThe charge can be registered within a further period of 300 days from creation on payment of additional fees, after which the Registrar cannot accept it without Central Government condonationCorrect
  3. CThe charge can be registered at any time later on payment of a fixed penalty
  4. DRegistration is optional for a mortgage of immovable property, so no action is needed

Explanation

Particulars must be filed within 30 days of creation. If missed, the Registrar may allow filing within a further 300 days on payment of additional fees. Beyond that, condonation of delay by the Central Government is needed. Option A is wrong because the loan is not automatically recalled, though the charge is not effective against the liquidator and creditors until registered.

Did you get it right without looking?

One question tells you little. A timed set on Registration of Charges shows your real accuracy, how long you take and where you lose marks.

Practise Registration of ChargesFree diagnostic mock

More Registration of Charges questions