Section 87 of Companies Act, 2013 – Rectification by Central Government in Register of Charges

  • Updated Till : November 12, 2018

SECTION 87. RECTIFICATION BY CENTRAL GOVERNMENT IN REGISTER OF CHARGES

[Effective from 1st April, 2014]

[The Central Government on being satisfied that —

(a) the omission to give intimation to the Registrar of the payment or satisfaction of a charge, within the time required under this Chapter; or

(b) the omission or misstatement of any particulars with respect to any such charge or modification or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83,

was accidental or due to inadvertence or some other sufficient cause or it is not of a nature to prejudice the position of creditors or shareholders of the company, it may, on the application of the company or any person interested and on such terms and conditions as the Central Government deems just and expedient, direct that the time for the giving of intimation of payment or satisfaction shall be extended or, as the case may require, that the omission or misstatement shall be rectified.][5]

Applicable Rules

Companies (Registration of Charges) Rules, 2014

[Effective from 1st April, 2014]

Rule 12. Condonation of delay and rectification of register of charges.—(1) Where the instrument creating or modifying a charge is not filed within a period of three hundred days from the date of its creation (including acquisition of a property subject to a charge) or modification and where the satisfaction of the charge is not filed [4] [within a period of three hundred days] from the date on which such payment of satisfaction, the Registrar shall not register the same unless the delay is condoned by the Central Government.

(2) The application for condonation of delay and for such other matters covered in sub-clause (a), (b) and (c) of clause (i) of sub-section (1) of section 87 of the Act shall be filed with the Central Government in Form No. CHG-8 along with the fee.

(3) The order passed by the Central Government under sub-section (1) of section 87 of the Act shall be required to be filed with the Registrar in Form No. INC.28 along with the fee as per the conditions stipulated in the said order.

[1] Powers of Central Government delegated to Regional Directors vide Notification No. No. S.O. 4090(E) dated 19th December, 2016

[2] Powers of Central Government delegated to Regional Directors vide Notification No. No. S.O. 4090(E) dated 19th December, 2016

[3] Powers of Central Government delegated to Regional Directors vide Notification No. No. S.O. 4090(E) dated 19th December, 2016

[4] Substituted for the words “within thirty days” by Companies (Registration of Charges) Amendment Rules, 2018 vide Notification F No. 1/10/ 2013-CL-V dated 5th July, 2018 effective from 15th August, 2018.

[5] Substituted by The Companies (Amendment) Ordinance , 2018 dated 2nd November, 2018. Prior to substitution it read as under:-

“(1) The [Central Government][1] on being satisfied that—

(i) (a) the omission to file with the Registrar the particulars of any charge created by a company or any charge subject to which any property has been acquired by a company or any modification of such charge; or

(b) the omission to register any charge within the time required under this Chapter or the omission to give intimation to the Registrar of the payment or the satisfaction of a charge, within the time required under this Chapter; or

(c) the omission or mis-statement of any particular with respect to any such charge or modification or with respect to any memorandum of satisfaction or other entry made in pursuance of section 82 or section 83, was accidental or due to inadvertence or some other sufficient cause or it is not of a nature to prejudice the position of creditors or shareholders of the company; or

(ii) on any other grounds, it is just and equitable to grant relief,

it may on the application of the company or any person interested and on such terms and conditions as it may seem to the [Central Government][2] just and expedient, direct that the time for the filing of the particulars or for the registration of the charge or for the giving of intimation of payment or satisfaction shall be extended or, as the case may require, that the omission or mis-statement shall be rectified.

(2) Where the [Central Government][3]extends the time for the registration of a charge, the order shall not prejudice any rights acquired in respect of the property concerned before the charge is actually registered.”

 

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