Relaxation of Time to File Forms for Creation or Modification of Charge

Considering the difficulties that are 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 the time limit to file forms for creation or modification of

charges

. MCA vide its General Circular no 07/2021 dated 30th June 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 With this circular, MCA is providing

relaxation

of time to Companies or Charge holders for condoning the delay in filing certain forms related to creation/ modification of charges under section 77 of the Companies Act, 2013 (Act)

Form No. CHG-1 and Form No. CHG-9

As per section 77 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 30 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.

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 under section 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 31.07.2021 (both dates inclusive)

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

Conditions to Count the Number of Days under Section 77 & 78

Relaxation will be provided in case of 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 31.07.2021 shall not be taken into consideration to count the number of days under section 77 or section 78 of the Companies Act.
Further, in case, the form is not filed within such period, the first day after 31.03.2021 shall be reckoned as 01.08.2021 to count the number of days within which the form is required to be filed under section 77 or section 78 of the Companies Act.

Relaxation is provided and where the date of creation/modification of charge is between 01.04.2021 to 31.07.2021 (both dates inclusive)

In such a case, the period beginning from the date of creation/ modification of charge to 31.07.2021 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 01.08.2021 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 31.07.2021, the fees payable as of 31.03.2021 under the Fees Rules for the said form shall be charged
Further, if the form is filed thereafter, fees shall be paid after adding the number of days beginning from 01.08.2021 till the date of filing plus the time period elapsed from the date of the creation of charge till 31. 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 31.07.2021. (both dates inclusive) Under such circumstances, there are two criteria’s for Fee:

If the form is filed on or before 31.07.2021, 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 01.08.2021, 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.

Forms Excluded for the Relaxations

The Relaxation of Time to File Forms for Creation or Modification of Charge is not applicable for the following forms.

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 about the MCA Relaxation of Time to File Forms for Creation or Modification of Charge is attached for reference:

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Frequently Asked Questions

Common questions about MCA Relaxation for Charge Creation & Modification Forms.

The purpose of the relaxation is to provide relief to companies and charge holders who are facing difficulties in filing forms related to the creation or modification of charges (Form No. CHG-1 and Form No. CHG-9) due to the resurgence of the COVID-19 pandemic. The relaxation allows for an extension of the time limit to file these forms.

The relaxation 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 cases where the date of creation/modification of charge is before April 1, 2021, but the timeline for filing the forms had not expired under Section 77 of the Companies Act as on April 1, 2021. It is also applicable for cases where the date of creation/modification of charge falls between April 1, 2021, and July 31, 2021 (both dates inclusive).

If the date of creation/modification of charge is before April 1, 2021, the period from April 1, 2021, to July 31, 2021, will not be considered for counting the number of days under Section 77 or Section 78. Similarly, if the date of creation/modification of charge is between April 1, 2021, and July 31, 2021, the period from the date of creation/modification to July 31, 2021, will not be considered for counting days.

If the form is filed on or before July 31, 2021, and the date of creation/modification of charge is before April 1, 2021, the fees payable as of March 31, 2021, under the Fees Rules for the said form shall be charged. If the form is filed after July 31, 2021, fees shall be paid after adding the number of days beginning from August 1, 2021, till the date of filing, plus the time period elapsed from the date of the creation of charge till March 31, 2021.

Yes, the relaxation is not applicable for forms CHG-4 (Particulars for the satisfaction of charge) and CHG-6 (Notice of appointment or cessation of receiver or Manager). It is also not applicable if the forms CHG-1 and CHG-9 had already been filed before the date of issue of this circular or if the timeline for filing the forms had already expired under Section 77 or Section 78 of the Act before April 1, 2021.

The relaxation has been provided by the Ministry of Corporate Affairs (MCA) to address the difficulties faced by stakeholders, such as companies and charge holders, due to the resurgence of the COVID-19 pandemic. It aims to provide relief and an extension of the time limit to file forms related to the creation or modification of charges.

Yes, the relaxation is applicable to all companies and charge holders who need to file Form No. CHG-1 and Form No. CHG-9, subject to the conditions and timelines specified in the circular.

The relaxation provides specific guidelines for calculating the fees payable for filing Form No. CHG-1 and Form No. CHG-9 during and after the relaxation period. The fees are based on factors such as the date of creation/modification of charge and the date of filing the form.

Yes, the relaxation is applicable for cases where the date of creation/modification of charge falls between April 1, 2021, and July 31, 2021 (both dates inclusive). For cases where the date of creation/modification of charge is before April 1, 2021, the relaxation is applicable if the timeline for filing the forms had not expired under Section 77 of the Companies Act as on April 1, 2021.