Relaxation Of Time & Fees For Filing Charge Forms

Introduction: MCA has via its circular dated 17 June, 2020 issued a ‘Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013’ (“Scheme”) for the purpose of condoning the delay in filing certain forms related to creation/modification of charges. This circular is an extended clarification to the Companies Fresh Start Scheme as laid out in the MCA General Circular No.12/2020 dated 30 March 2020, where the benefit of waiver of additional fees was not extended to charge forms. The benefit is now being extended to charge creation and modification forms with effect from 17 June 2020.

Existing Regulations: Companies are required to file charge creation or modification forms within the timelines specified in Section 77 of the Companies Act, 2013 (“Act”) i.e. within a total of 120 days from the date of creation or modification of the charge, after paying all the additional and advalorem fees prescribed under the Act.

Detail of Relaxations Announced:

  1. Relaxation in Timeline: This 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
    • is before 01 March 2020, but the timeline for filing such form had not expired under Section 77 of the Act as on 01 March 2020 – in this case, the period from 01 March 2020 to 30 September 2020 shall not be counted for the purpose of calculating the number of days within which form is required to be filed under Section 77 of the Act i.e. the first day to be counted after 29 February 2020 shall be 01 October 2020.

Or

    •  falls on any date between 01 March 2020 to 30 September 2020 (both dates inclusive) – in this case the period beginning the date of creation/modification of charge till the 30 September 2020 shall not be counted for the purpose of calculating the number of days within which form is required to be filed under Section 77 of the Act i.e. the first day to be counted after the date of creation/modification shall be 01 October 2020.
  1. Relaxation in Fee: The relaxation in fee for both the above scenarios is as below, respectively for Clauses Ia. and Ib.:
    1.  in this case :
      1.  if the form is filed on or before 30 September 2020, the normal fees payable as on 29 February 2020 shall be applicable.
      2. if the form is filed after 30 September 2020, the fees shall be charged after adding up the number of days beginning 01 October 2020 and ending on the date of filing of form plus the time period lapsed from the date of creation of charge till 29 February 2020
    2.  in this case:
      1. if the form is filed before 30 September 2020, normal fees shall be payable
      2. if the form is filed after 30 September 2020, the fees shall be charged for the period counted from the 01 October 2020 till the date of filing the form.

Exception to the Scheme: This Scheme shall not be applicable in the following cases:

  1. where the forms have already been filed before 17 June 2020 i.e. date of the circular
  2. where the timeline for filing the forms have already expired prior to 01 March 2020
  3. where the timeline for filing the form expires at a future date
  4. for filing charge satisfaction form i.e. Form CHG-4

Points to Note:

  1. This Scheme shall be applicable from the date of issue of the MCA General Circular No.23/2020 i.e. 17 June 2020
  2. This Scheme is applicable only to charge creation forms i.e. Form CHG-1 and Form CHG-9.

Link to Circular:

http://www.mca.gov.in/Ministry/pdf/Circular23_17062020.pdf

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