# Section 78 — Application for Registration by Charge-Holder

## When Does Section 78 Apply?

Where a company fails to register the charge within 30 days of creation, the charge-holder may step in to protect his security.

## Procedure

1. Charge-holder applies to the ROC for registration of charge in the prescribed form, along with the instrument creating the charge.

2. ROC issues notice to the company asking why the charge should not be registered.

3. The company has 14 days to reply showing cause.

4. If the company does not show sufficient cause, the ROC may register the charge.

5. The charge-holder is entitled to recover from the company the fees paid for registration.

## Flow Diagram

```

Company fails to register within 30 days

│

▼

Charge-holder applies to ROC (with instrument)

│

▼

ROC sends notice to Company → 14 days to reply

│

┌────────┴────────┐

▼ ▼

Company shows Company fails to show

sufficient cause sufficient cause

│ │

▼ ▼

ROC shall NOT ROC may register the charge;

```

## Key Points

This is a safety net for the charge-holder.
The company is given an opportunity of being heard before adverse action.
The right to recover fees ensures the charge-holder is not financially prejudiced.

Worked example

### Example 1

Example: XYZ Ltd. created a charge on 1st March 2026 in favour of SBI but failed to register it within 30 days. On 10th April 2026, SBI applied to the ROC under Sec. 78. The ROC issued notice to XYZ; XYZ failed to reply within 14 days. ROC registered the charge. SBI can recover the registration fees from XYZ.

⚠️ Common exam mistakes

Thinking the charge-holder can apply at any time — the section operates after the company's 30-day period lapses.
Forgetting the 14-day notice period to the company before ROC takes action.
Missing that the charge-holder is entitled to recover fees from the company.

Bare-Act text Section 78 · Companies Act, 2013 · click to expand

Where a company fails to register the charge within the period specified in section 77, without prejudice to its liability in respect of any offence under this Chapter, the person in whose favour the charge is created 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, allow such registration on payment of such fees, as may be prescribed: Provided that where registration is effected on application of the person in whose favour the charge is created, that person 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.

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Section 78 — Application by Charge-Holder for Registration

Worked example

⚠️ Common exam mistakes