Duty of Company to Register Charges with ROC [Section 77]
# Duty to Register Charges [Section 77]
## Who must register and what?
It is the duty of every company creating a charge on its property, assets, or undertaking — whether tangible or intangible, situated in or outside India — to register the particulars of the charge with the Registrar of Companies (ROC).
Filing must include a copy of the instrument creating the charge, signed by both the company and the charge holder.
Form used:
Form CHG-1 — for charges generally.
Form CHG-9 — for debentures.
## Timeline for Registration (Charges Created on/after 02.11.2018)
The Act provides a structured ladder of deadlines:
Stage
Time Limit
Conditions
Original period
Within 30 days of creation
Normal fees
First extension
Within 60 days of creation (further 30 days)
Application to ROC + declaration signed by CS/director that delay will not adversely affect other creditors' rights; ROC must be satisfied of sufficient cause; additional fees
Second extension
Within further 60 days
Application by company; ad-valorem fees
If a charge is not registered even within the further extended period, it cannot be registered under Section 77.
## Verification of Instrument
The instrument creating or modifying the charge must be verified as follows:
Property Situated
Verification Required
Wholly or partly in India
Copy verified by certificate under the hand of a director / CS / authorised officer of the charge holder
Solely outside India
Copy verified by certificate under the seal of the company, OR under the hand of a director/CS, authorised officer of the charge holder, or any other person interested in the charge
## Certificate of Registration
On successful registration, the ROC issues a Certificate of Registration in Form CHG-2 — this is conclusive evidence that all requirements of the Chapter and Rules have been complied with.
## Consequences of Non-Registration [Section 77(3) & (4)]
If a charge is not registered:
The charge becomes void against the liquidator and any creditor — i.e., it is not taken into account at the time of winding-up.
The charge-holder is treated as an unsecured creditor.
The charge-holder loses priority over other creditors.
The company and officers become liable for punishment under Section 86.
### What survives
The debt itself remains valid and may be enforced through courts — non-registration does not affect the company's obligation to repay.
Only the security is lost.
Subsequent registration cannot prejudice rights acquired on the asset before such registration.
Worked example
### Example 1
Example — Timeline of Registration
M Ltd. creates a charge on its building in favour of Bank Y on 1st January 2026.
Best case: File CHG-1 by 31st January 2026 (within 30 days) with normal fees.
If missed: File by 2nd March 2026 (within 60 days from creation) with additional fees and a declaration that delay will not adversely affect other creditors' rights — ROC must be satisfied of sufficient cause.
If still missed: File by 1st May 2026 (further 60 days) with ad-valorem fees.
If still not filed: Charge cannot be registered under Section 77 — the charge becomes void against the liquidator and creditors, and Bank Y becomes an unsecured creditor.
### Example 2
Example — Debt Survives Even if Security Fails
ABC Ltd. borrows ₹10 crore from L Ltd. against a charge on its plant. The charge is not registered with ROC.
L Ltd. cannot enforce its security in a winding-up — treated as unsecured creditor.
BUT L Ltd. can still sue ABC Ltd. for repayment — the debt itself is valid and enforceable through courts.
⚠️ Common exam mistakes
Believing non-registration cancels the debt — only the security is lost; the debt remains enforceable.
Forgetting that intangible assets and assets situated outside India are also covered.
Treating the 60-day extension as automatic — it requires an application + declaration + ROC's satisfaction of sufficient cause with additional fees.
Confusing forms: CHG-1 is for general charges; CHG-9 for debentures; CHG-2 is the certificate issued by the ROC.
Thinking the certificate of registration can be challenged — it is conclusive evidence of compliance with Chapter VI and the rules.
Believing subsequent registration of a delayed charge can override rights of parties who already acquired interests in the asset — it cannot.
Bare-Act text Section 77 · 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. Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of sixty days of such creation, on payment of such additional fees as may be prescribed. Provided further that if the registration is not made within the period of sixty days, 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.
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 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).
Section 77(4) — Nothing in sub-section (3) shall prejudice any contract or obligation for the repayment of the money secured by a charge.