Application for Registration of Charge by Charge-Holder [Section 78]
# Application by Charge-Holder for Registration [Section 78]
## When does Section 78 apply?
The primary duty to register a charge lies on the company under Section 77. However, if the company fails to register the charge within the original period of 30 days, the charge-holder is empowered to apply to the ROC for registration.
## Procedure
1. Charge-holder files application to the ROC for registration of the charge, along with the instrument of charge.
2. ROC gives notice to the company, asking it to show cause why the charge should not be registered on the charge-holder's application.
3. The company must respond within 14 days of receiving the notice.
## ROC's Decision
### When ROC allows registration
If no objection is received from the company within 14 days, the ROC may allow registration on the application of the charge-holder.
### When ROC shall NOT allow registration
The ROC must refuse if:
The company itself registers the charge, OR
The company shows sufficient cause as to why the charge should not be registered.
## Recovery of Fees by Charge-Holder
If the registration is effected on the charge-holder's application, he is entitled to recover the fees or additional fees paid by him to the ROC from the company.
## Why this Section Exists
A charge-holder has a direct interest in registration — without it, his security is void against the liquidator/creditors. Section 78 protects him from a defaulting or negligent company.
Worked example
### Example 1
Example — Charge-Holder's Application
Bank B sanctions a loan of ₹5 crore to N Ltd. on 1st April 2026 against a charge on its machinery. N Ltd. fails to register the charge within 30 days.
Bank B may apply to the ROC under Section 78 for registration along with the instrument of charge.
ROC sends notice to N Ltd. and waits 14 days for objection.
N Ltd. neither registers the charge nor shows sufficient cause — ROC allows registration on Bank B's application.
Bank B is entitled to recover the fees paid to ROC from N Ltd.
N Ltd. still remains liable to penalty under Section 86 for its initial default.
⚠️ Common exam mistakes
Assuming Section 78 is the first option for a charge-holder — he may apply only after the company fails to register within 30 days.
Forgetting that company's own registration during the notice period stops the charge-holder's application.
Overlooking that the company remains liable for punishment under Section 86 even after the charge-holder registers — the default is not cured.
Ignoring the 14-day notice period — ROC must give the company this opportunity before acting on the charge-holder's application.
Bare-Act text Section 78 · Companies Act, 2013 · click to expand
Section 78 — Where a company fails to register the charge within the period of thirty days referred to in sub-section (1) of section 77, without prejudice to its liability in respect of any offence under this Chapter, the charge-holder may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed and the Registrar may, on such application, within a period of fourteen days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees, as may be prescribed: Provided that where registration is effected on application of the charge-holder, such charge-holder shall be entitled to recover from the company the amount of any fees or additional fees paid by him to the Registrar for the purpose of registration of charge.