Mca Relaxation Of Time To File Forms For Creation Or Modification Of Charge

Because of the difficulties being faced by the stakeholders due to the resurgence of the COVID-19 pandemic, the Ministry of Corporate Affairs (MCA) has allowed the Relaxation of time to file forms for creation or modification of

charges. MCA vide it's General Circular no 07/2021 dated 3rd May 2021, has provided relaxation of time for filing forms related to creation or modification of charges (i.e., Form No. CHG-1 and Form No. CHG-9) under the Companies Act, 2013.

Synopsis of Notification

Provisions of section 77 of the Companies Act, 2013 mandates the company to file a form relating to the creation or modification of charge (i.e., Form No. CHG-1 and Form No. CHG-9) within a maximum of 120 days from the date of creation of charge or modification of charge, as the case may be. With this circular, MCA is providing relaxation of time to Companies or Charge holder for condoning the delay in filing certain forms related to creation/ modification of charges under section 77 of the Companies Act, 2013 (Act)

Relaxation of time for filing forms related to creation or modification of charges

Relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 is a

scheme introduced by the Ministry of Corporate Affairs to condone the delay in filing certain forms related to creation/ modification of charges particularly due to the difficulties being faced by COVID-19 pandemic

Law Governing the Form No. CHG-1 and Form No. CHG-9

Under section 77 & 78 of the Companies Act, 2013, the companies or the charge holders are required to file forms related to the creation or modification of charges within the timelines as provided, i.e. a total of 120 days of the creation or modification of charge. In case, the company fails to register the charge within the period of thirty days referred to in sub-section (1) of section 77, the charge holder may file the form related to the creation or modification of charges under section 78 of the Act, within the overall timelines for filing of such form under section 77.

Applicability of Relaxation

The Circular shall be applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 by a company or a charge holder, as per the date of creation/modification of charge. The Scheme does not apply to the following forms relating to charges:

CHG-4 - Particulars for the satisfaction of charge thereof
CHG-6 - Notice of appointment or cessation of receiver or Manager

The Time period for applicability of the relaxation

The relaxation is applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 by a company or a charge holder, where the date of creation/modification of charge is before 01.04.2021, but the timeline for filing such form has not expired u/s 77 of the Act as on 01.04.2021

The relaxation is applicable in respect of filing of Form No. CHG-1 and Form No. CHG-9 by a company or a charge holder falls on any date between 01.04.2021 to 31.05.2021 (both dates inclusive)

Conditions to count the number of days under section 77 & 78

Relaxation is provided and if the date of creation/modification of charge is before 01.04.2021 but the time limit of 120 days has not expired

In such a case, the period beginning from 01.04.2021 and ending on 31.05.2021 shall not be taken into consideration to count the number of days under section 77 or section 78 of the Act.
Further, in case, the form is not filed within such period, the first day after 31.03.2021 shall be reckoned as 01.06.2021 to count the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

Relaxation is provided and where the date of creation/modification of charge is between 01.04.2021 to 31.05.2021 (both dates inclusive)

In such a case, the period beginning from the date of creation/ modification of charge to 31.05.2021 shall not be taken into consideration for counting days under section 77 or section 78 of the Act.
Further, in case the form is not filed within such period, the first day after the date of creation/modification of charge shall be reckoned as 01.06.2021 to count the number of days within which the form is required to be filed under section 77 or section 78 of the Act.

Applicable Fee for creation/modification of charges

The following fee will be charged, if the date of creation/modification of charge is before 01.04.2021 and the timeline for filing such form had not been expired under section 77 of the Act as on 01.04.2021 Under such circumstances, there are two criteria's for Fee:

If the form is filed on or before 31.05.2021, the fees payable as of 31.03.2021 under the Fees Rules for the said form shall be
Further, if the form is filed thereafter, fees shall be paid after adding the number of days beginning from 01.06.2021 till the date of filing plus the time period elapsed from the date of the creation of charge till 03.2021.

The following fee shall be charged where the date of creation/modification of charge falls on any date between 01.04.2021 to 31.05.2021? (both dates inclusive) Under such circumstances, there are two criteria's for Fee:

If the form is filed on or before 05.2021, normal fees under the Fees Rules for the said form shall be charged.
Further, if the form is filed thereafter, the first day after the date of creation/modification of charge shall be reckoned as 06.2021, and the number of days till the date of filing of the form shall be counted accordingly for payment of fees under the Fees Rules.

Cases excluded under the Scheme

The Scheme is not applicable under the mentioned circumstances:-

The forms e.CHG-1 and CHG-9 had already been filed before the date of issue of this Circular.
The timeline for filing the form has already expired under section 77 or section 78 of the Act before 01.04.2021.
The timeline for filing the form expires at a future date, despite the exclusion of the time provided
Filing of Form CHG-4 for the satisfaction of charges
Filing of Form CHG-6 for Notice of appointment or cessation of receiver or Managed

The official notification pertaining to the Mca Relaxation Of Time To File Forms For Creation Or Modification Of Charge is attached for reference:

Open PDF in new tab

Back to Learn

Frequently Asked Questions

Common questions about MCA Charge Filing Time Relaxation for Companies 2021.

The objective of MCA's General Circular No. 07/2021 is to provide relaxation of time to companies or charge holders for filing forms related to the creation or modification of charges under Section 77 of the Companies Act, 2013, due to the difficulties faced by stakeholders during the resurgence of the COVID-19 pandemic.

The relaxation scheme is applicable for filing Form No. CHG-1 and Form No. CHG-9, which are related to the creation or modification of charges under the Companies Act, 2013.

The relaxation is applicable for filing Form No. CHG-1 and Form No. CHG-9 where the date of creation/modification of charge is before 01.04.2021, but the timeline for filing such form has not expired under Section 77 of the Act as on 01.04.2021. It is also applicable where the date of creation/modification of charge falls between 01.04.2021 to 31.05.2021 (both dates inclusive).

If the date of creation/modification of charge is before 01.04.2021, and the timeline of 120 days has not expired, the period from 01.04.2021 to 31.05.2021 will not be counted for calculating the number of days under Sections 77 and 78. If the date of creation/modification falls between 01.04.2021 to 31.05.2021, the period from the date of creation/modification to 31.05.2021 will not be counted.

If the form is filed on or before 31.05.2021, and the date of creation/modification of charge is before 01.04.2021, the fees payable as on 31.03.2021 under the Fees Rules for the said form shall be charged. If the form is filed after 31.05.2021, additional fees based on the number of days from 01.06.2021 till the date of filing, plus the time period elapsed from the date of charge creation till 31.03.2021, will be applicable.

Yes, the scheme is not applicable if the forms e.CHG-1 and CHG-9 had already been filed before the circular's date, if the timeline for filing the form had already expired under Section 77 or 78 before 01.04.2021, if the timeline for filing the form expires at a future date despite the exclusion of time provided, and for filing Form CHG-4 and Form CHG-6.

Form No. CHG-1 and Form No. CHG-9 are related to the creation or modification of charges under the Companies Act, 2013. They are required to be filed by companies or charge holders within a maximum of 120 days from the date of creation or modification of charge.

The relaxation scheme introduced by MCA is significant as it provides relief to companies and charge holders facing difficulties in filing forms related to the creation or modification of charges due to the challenges posed by the COVID-19 pandemic. It allows them to file the forms with relaxed timelines and fees, ensuring compliance with the legal requirements.

The relaxation scheme helps companies and charge holders by providing them with an extended timeline to file Form No. CHG-1 and Form No. CHG-9, without attracting penalties or additional fees for the specified period. This allows them to comply with the legal requirements while managing the challenges posed by the COVID-19 pandemic.

Yes, the circular mentions specific deadlines for filing the forms under the relaxation scheme. If the form is filed on or before 31.05.2021, and the date of creation/modification of charge is before 01.04.2021, the fees payable as on 31.03.2021 under the Fees Rules for the said form shall be charged. If the form is filed after 31.05.2021, additional fees based on the number of days from 01.06.2021 till the date of filing, plus the time period elapsed from the date of charge creation till 31.03.2021, will be applicable.