registration of charge to protect creditor

charge

application for registration of charge

date of notice of charge

duty to register charge

satisfaction of charge

meaning od charge

punishment/rectification in register of charges

charge

created on assets/property/area(undertaking)

cretaed on security for repayment of loan

interest/lien(right to take possession and sell it if loan nt repaid)

includes mortgage( immovable prop. as security for repayment of loan)

types

fixed-identity of asest will not change

floating-identity of asest will change

fixed-eg, car, L&B

charge on specific assets of borrowing co.

asets identified at time of creation of charge

charge fixed+ cant sell assets

sold only with permission of chrageholder

fixed charge vacated- money fully paid

floating charge-nature changing-eg.stock

created on assets- fluctuating/changing nature/eg, RM, stock,debtors

assets dealth with oridinary course of business

buyer gets it free of charge

at liquidation- floating becomes fixed for all assets

crystallisation of floating charge- when becomes fixed

modification of charge

duty to register charge

every co. to register with ROC

assets in or o/s india

movable/immovable

tangible/others

non registration consequemnces?- both current and future creditor will be affected. so that loan is not taken mre than once on same prop/stock. charge will become void among liquidators/other creditors but debt remains payable. but security is lost. liquidation meeting- secured creditors(banks..) unseured cres-newspaper vendor, milkman.. show registration charge certificate by ROC. 1st secured then unsecured crs.

particulars of charge

copy of instrument creating charge

verification

subject to change

modification-change terms/consitions- any variation-rate change- charge to be registered

earlier vacated/ new charge by amalgamating co.

application by chargeholder

certification for registration of chane/modification

consequences of non registration of charge

examples for modification of charge

pari pasu(equal)- 1st charge-same property again, 2nd charge. pune aambey valley prop 15acres, loan from bank1=10cr, 2nd bank=5cr, same prop, 1st bank1, bank2 will get their money in propertion when land sold.

change in rate of interest(fixed charge)

agreement for increase/decrease limits eg, o/d (1cr to 2cr/ 1cr to 50lacs)

change in repayment of loans(term loan-long term loans)

vary terms/conditions of existing charge

partial release of charge on assets eg, 3 assets charged 50% - 1 sell

certifiacate by registrar

conclusive evidence

no charge taken into assets

charge to become void agt liquidators

secured creditor losses his security/priority

if co. fails, then charge registration by chargeholder-recover expenses fr co.

co. give reasons why not to be registered

registrar not allow registration

if objection received

regsuter in 14D

if no objection fr co received

registrar give notice to co.

chargeholder apply to register

co fails in 30D

reguster charge

registration of charge= deemed notice

verify if assets under charge

suffers loss, cant claim later

person ereciving assets to give notice

creation of chrage not important, registraryion of charge very important+creates priority

public document

subsequent charge

power of registrar to note satisfaction

intimation of appointment

satisfaction of charge-payment/discharge of liab./discharge of security by partial discharge but debt still there.

registrar send notice to chargeholder

cause is shown

if no intimation, in 30D on fees

if no cause, registrar shall register

co give intimation to registrar in 30D

notice to co.+regstration +copy of oredr in 30D from order/appt.

person appts.

appt. order to manage property s.t. change

rectification by CG

ommission in giving intimation+registrartion

ommission/ mis-statmenet of any particulars to registrar

stuck to ground,immivable=mortgage

movable=pledge

individual has unlimited liab. hence all personal asssets can also be sold

but co. bs is its assets liab. should know if any assets there is a charge

only additional charge(difference) to be registered. original 1cr+ new 3cr= total 4cr

be earky, register within time. 1st/2nd, whoever registers 1st, his charge will be priority.