What is the “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013”

The Central Government in exercise of its powers under section 460 read with section 4O3 of the Act and therefore the Companies (Registration Offices and Fees) Rules, 2014 (Fees Rules) has decided to introduce a Scheme, namely “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013” for the aim of condoning the delay in filing certain forms related to creation/ modification of charges.

As per section 77 of the companies Act,2013 “It shall be the duty of every company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation.

The companies registered under Companies Act,2013 are required to file forms related to creation or modification of charges within the timelines provided in section 77 of the companies Act, 2O13 (Act), i.e. a complete of 120 days of the creation or modification of charge. In case, the company fails to register the charge within the period of thirty days mentioned in sub-section ( 1) of section 77, the charge holder may file the form related to creation or modification of charges under section 78 of the Act, within the overall timelines for filing of such form under section 77.

On account of the COVID-19 pandemic, representations are received from the Ministry, requesting that the timelines related to the filing of certain charge related forms could also be suitably relaxed so on provide a window of compliance for the registration of charges. Under the companies fresh start Scheme, 2O2O as laid out in the overall Circular No. 12 / 2O2O, dated 3O.O3.2O2O, the advantage of waiver of additional fees wasn’t extended to the charge related documents. Therefore, it has been suggested that some dispensation could also be provided for filing of charge related documents also.

The Applicability of the scheme are as under: –

(1.) The scheme shall come into effect from the date of 17th June, 2020.
(2.) The scheme shall be applicable in respect of the filing of Form No. CHG-1 and Form No. CHG-9 by a company or a charge holder, where the date of creation/modification of charge:-

  • (a) is before 01/03/2020, but the timeline for filing such form had not expired under section 77 of the Act as on 01/03/2020, or
  • (b) falls on any date between 01/03/2020 to 30/09/2020 (both dates inclusive).

Time Relaxation:-

(3.)(a) In case a form is filed in respect of a situation covered under sub-para (2.)(a) above, the period beginning from 01/03/2020 and ending on 3O/O9/2O2O shall not be reckoned for the purpose of counting the number of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after 29/O2/2O2O shall be reckoned as 01/10/2020 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

(3.)(b) In case a form is filed in respect of a situation covered under sub-para (2.)(b) above, the period beginning from the date of creation/ modification of charge to 30/09/2020 shall not be reckoned for the purpose of counting of days under section 77 or section 78 of the Act. In case, the form is not filed within such period, the first day after the date of creation/modification of charge shall be reckoned as 01/10/2020 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

Fees Applicable:-

(a) In regard to sub-para (3.)(a) above, if the form is filed on or before 3O/O9/2O2O, the fees payable as on 29/02/2020 under the Fees Rules for the said form shall be charged. If the form is filed thereafter, the applicable fees shall be charged under the Fees Rules after adding the number of days beginning from 01/10/2O2O and, ending on the date of filing plus the time period lapsed from the date of the creation of charge till 29/O2/2O2O.

(b) In regard to sub-para (3.)(b) above, if the form is filed before 30/09/2020, normal fees shall be payable under the Fees Rules. If the form is filed thereafter, the First day after the date of creation/modification of charge shall be reckoned as 01/10/2020, and the number of days till the date of filing of the form shall be counted accordingly for the purposes of payment of fees under the Fees Rules.

The Scheme shall not apply in the following cases:-

  • The forms i.e. CHG-1 and CHG-9 had already been filed before the date of the issue of this Circular.
  • The timeline for filing the form has already expired under section 77 or section 78 of the Act prior to 01.03.2O2O.
  • The timeline for filing the form expires at a future date, despite the exclusion of the time provided in sub-para (3) above.
  • Filing of Form CHG-4 for the satisfaction of charges.

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