Section 77: Duty to register charges, etc
This section requires companies to register charges on their property or assets with the Registrar within a specified time frame.
The section, clause by clause
What the section says
In plain terms
(1)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:
Every company must register the details of any charge it creates on its property or assets within 30 days, and the Registrar may allow late registration in certain cases, including within 300 days for charges created before the commencement of the Companies (Amendment) Act, 2019, or within 60 days for charges created on or after the commencement of the Companies (Amendment) Act, 2019, with additional fees.
proviso5[Provided that the Registrar may, on an application by the company, allow such registration to be made—
(1)(a)in case of charges created before the commencement of the Companies (Amendment) Act, 2019, within a period of three hundred days of such creation; or (b) in case of charges created on or after the commencement of the Companies (Amendment) Act, 2019, within a period of sixty days of such creation, on payment of such additional fees as may be prescribed:
provisoProvided further that if the registration is not made within the period specified—
(1)(a)in clause (a) to the first proviso, the registration of the charges shall be made within six months from the date of commencement of the Companies (Amendment) Act, 2019, on payment of such additional fees as may be prescribed and different fees may be prescribed for different classes of companies;
(1)(b)in clause (b) to the first proviso, the Registrar may, on an application, allow such registration to be made within a further period of sixty days after payment of such ad valorem fees as may be prescribed.] Provided also that any subsequent registration of a charge shall not prejudice any right acquired in respect of any property before the charge is actually registered:
proviso1[Provided also that this section shall not apply to such charges as may be prescribed in consultation with the Reserve Bank of India.]
(2)Where a charge is registered with the Registrar under sub-section (1), he shall issue a certificate of registration of such charge in such form and in such manner as may be prescribed to the company and, as the case may be, to the person in whose favour the charge is created.
When a charge is registered, the Registrar will issue a certificate of registration to the company and the person the charge is in favour of.
(3)Notwithstanding anything contained in any other law for the time being in force, no charge created by a company shall be taken into account by the liquidator 2[appointed under this Act or the Insolvency and Bankruptcy Code, 2016 (31 of 2016), as the case may be,] or any other creditor unless it is duly registered under sub-section (1) and a certificate of registration of such charge is given by the Registrar under sub- section (2).
A liquidator or creditor cannot consider a charge created by a company unless it is registered and a certificate of registration is given by the Registrar.
(4)Nothing in sub-section (3) shall prejudice any contract or obligation for the repayment of the money secured by a charge.
This rule does not affect any contract or obligation to repay money secured by a charge.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Ins. by Act 21 of 2015, s. 8 (w.e.f. 29-5-2015).
- 2. Subs. by Act 1 of 2018, s. 17, for “one crore rupees” (w.e.f. 9-2-2018).
- 3. Subs. by s. 17, ibid., for “seven years or with fine” (w.e.f. 9-2-2018).
- 4. The words “or with both” omitted by s. 17, ibid. (w.e.f. 9-2-2018).
- 5. Subs. by Act 22 of 2019, s. 11, for first and second provisos (w.e.f. 2-11-2018).
- 1. The proviso ins. by Act 1 of 2018, s. 18 (w.e.f. 7-5-2018).
- 2. Ins. by Act 31 of 2016, s. 255 and the Eleventh Schedule (w.e.f. 15-11-2016).
- 3. Subs. by Act 1 of 2018, s. 19, for “register the charge within the period specified in section 77” (w.e.f. 7-5-2018).
Referred to by
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.