In a Circular dated 17th June, 2020 the Ministry of Corporate Affairs (“MCA”) has rolled out the “Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013” (“Scheme”).
The scheme has been introduced with the purpose of condoning the delay in filing certain forms related to creation/modification of charges and has become effective immediately.
Applicability:
The Scheme is applicable in respect of filing Form CHG-1 and Form CHG-9 by a company or charge holder where the date of creation/modification of charge :
| Situation | Relaxation of time | Applicable Fees |
| 1. Is before 1st March, 2020 but the timeline for filing such form had not expired under *Section 77 of the Companies Act (“Act”) as on 1st March, 2020 | The period beginning from 1st March, 2020 and ending on 30th September, 2020 will 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 29th February, 2020 will be reckoned as 1st October, 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.
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If the form is filed on or before 30th September, 2020, the fees payable as on 29th February, 2020 under the Fees Rules for the said form shall be charged.
If the form is filed thereafter, the applicable fees will be charged under the Fees Rules after adding the number of days beginning from 1st October, 2020 and, ending on the date of filing plus the time period lapsed from the date of the creation of charge till 29th February, 2020 |
| 2. Falls on any date between 1st March, 2020 to 30th September, 2020 (both dates inclusive)
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The period beginning from the date of creation/ modification of charge to 30th September, 2020 will 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 1st October, 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.
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If the form is filed before 30th September, 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 will be reckoned as 1st October, 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 will not apply in the following cases:
- The forms i.e.CHG-1 and CHG-9 had already been filed before the date of issue of this Circular.
- The timeline for filing the form has already expired under section 77 or section 78 of the Act prior to 1st March, 2020.
- The timeline for filing the form expires at a future date, despite exclusion of the time provided under the “applicability” of the Scheme.
- Filing of Form CHG-4 for satisfaction of charges.
Background:
The companies are required to file forms related to creation or modification of charges within the timelines provided in section 77 of the Act i.e. a total 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 referred to in sub-section ( 1) of section 77 , the charge holder may file the form related to creation or modification of charges under section 78.
In light of the pandemic, MCA has received representations requesting that the timelines related to filing of certain charge related forms may be suitably relaxed so as to provide a window of compliance for the registration of charges. Further, under the Companies Fresh Start Scheme, 2020 the benefit of waiver of additional fees was not extended to the charge related documents.
Therefore, the present Scheme has been introduced.
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* Section 77 of the Companies Act deals with Registration of charges
** Section 78 of the Companies Act deals with Application for Registration of Charge
Source: Ministry of Corporate Affairs
