# Duty of Company to Register Charges (Sec. 77, 78, 79)

## 1. Who Must Register the Charge?

### A. The Company [Sec. 77]

Every company creating a charge has the duty to register particulars of every charge created on:

Its property, assets, or undertakings.
Whether tangible or intangible.
Whether located in India or outside India.
Even charges created by deposit of title deeds must be registered.

### B. The Charge-Holder [Sec. 78]

If the company fails to register within 30 days, the charge-holder may register the charge.

### C. The Purchaser [Sec. 79]

If a company purchases property with an existing charge, the purchasing company must register the charge in its own name with the ROC.

## 2. Form and Documents for Filing

File Form CHG-1 (or Form CHG-9 for debentures) with the ROC.
Attach a copy of the instrument creating the charge (if any).
The instrument must be duly signed by both the company and the charge-holder.
Pay the prescribed fee.
Filing window: Within 30 days of creation of charge.

## 3. Verification of Instrument of Charge

### Property Situated Outside India

The copy must be verified by a certificate issued:

Under the company's seal (if any), OR
Signed by a director, CS, or authorised officer of the charge-holder, OR
Signed by any other person interested in the mortgage/charge but not the company.

### Property Situated in India (Wholly/Partly)

Verified by a certificate signed by:

A Director, OR
Company Secretary, OR
Authorised officer of the charge-holder.

### Special Note for Insolvency Cases

Forms CHG-1, CHG-4, CHG-8, CHG-9 must be signed by the Insolvency Resolution Professional / Resolution Professional / Liquidator for companies under resolution or liquidation.

## 4. Time Limits for Registration

### A. Charges Created BEFORE 02-11-2018

Stage	Limit
Not registered in 30 days	ROC may allow within 300 days from creation
Not registered in 300 days	Within 6 months from 02-11-2018 with additional fees

### B. Charges Created ON or AFTER 02-11-2018

Stage	Limit
Not registered in 30 days	ROC may allow within 60 days (additional 30 days) with additional fees
Not registered in 60 days	ROC may allow further 60 days with ad valorem fees

> Maximum window for new-regime charges = 30 + 30 + 60 = 120 days from creation.

## 5. Procedure for Extension

1. Apply to the ROC for extension.

2. Application must include a declaration signed by the CS or a Director stating that belated filing will not affect the rights of intervening creditors.

3. ROC grants extension only if satisfied with the reasonableness of delay.

4. Pay applicable additional fee / ad valorem fee.

## 6. Certificate of Registration

Upon registration, Form CHG-2 (Certificate of Registration) issued by ROC.
This certificate is CONCLUSIVE EVIDENCE that all requirements of Chapter VI have been satisfied.

## 7. Effect of Late Registration

A charge registered within the extended period does not affect rights acquired over the property before actual registration.
Registration is a legal formality — the charge itself remains valid even if registered late.
However, failure may deprive the creditor of legal priority over other registered charges.

## 8. Consequences of Non-Registration

Unregistered charges are not recognised by the liquidator or other creditors.
The contractual obligation to repay is NOT affected (repayment duty survives).
The charge-holder loses priority in case of insolvency or competing claims.

## 9. Exemptions [Sec. 77]

Sec. 77 does NOT apply to:

Charges prescribed in consultation with the RBI.
Example: Charges created by banking companies under Sec. 17(4)(d) of the RBI Act, 1934.

## 10. Charge-Holder's Right to Register (Sec. 78 — Quick Summary)

If the company defaults in registration within 30 days, the charge-holder may apply.
The ROC issues notice to the company for a hearing before registration.

Worked example

### Example 1

Example — Time Limit (New Regime):

ABC Ltd. created a charge on 1st March 2026. It fails to file within 30 days. By when can it still register?

Solution:

Original 30 days from 1-Mar → 31-Mar-2026.
ROC may allow 30 additional days (i.e., up to 60 days from creation) on additional fees → 30-Apr-2026.
If still not registered, further 60 days allowed on ad valorem fees → 29-Jun-2026 (i.e., 120 days from creation).
Beyond 120 days, registration is barred (without condonation under Sec. 87).

### Example 2

Example — Charge-Holder's Right:

XYZ Bank lent ₹10 crore to PQR Ltd. secured by hypothecation of stock. PQR fails to register the charge within 30 days.

Analysis: Under Sec. 78, XYZ Bank (charge-holder) may itself apply to the ROC for registration along with the instrument of charge. The ROC will give notice to PQR Ltd. before registering. This protects the lender's priority.

### Example 3

Example — Conclusive Evidence:

When ROC issues a CHG-2 Certificate to LMN Ltd. for a registered charge, can other creditors later challenge it on procedural grounds?

Analysis: No. The certificate is conclusive evidence that all requirements of Chapter VI have been complied with. Procedural challenges would not lie.

⚠️ Common exam mistakes

Forgetting the post-02-11-2018 limits — students continue applying the old 300-day rule.
Confusing CHG-1 (Registration form) with CHG-2 (Certificate) and CHG-9 (Debenture-related).
Believing late registration validates rights against intervening creditors — it does NOT.
Thinking non-registration cancels the loan obligation — it does NOT; only the security is unenforceable in liquidation.
Missing that even charge by deposit of title deeds (often informal) MUST be registered.
Ignoring the requirement that for property in India, only Director / CS / authorised officer of charge-holder can verify — 'any interested person' is permitted only for foreign property.
Overlooking the special signing rule for companies under insolvency — IRP/RP/Liquidator must sign CHG forms.

Bare-Act text Sections 77, 78, 79 · Companies Act, 2013 · click to expand

Section 77(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. Section 77(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 appointed under this Act or the Insolvency and Bankruptcy Code, 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).

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