Chapter 6: Registration of Charges - Test 3: answer key

Question 1 · 2 marks · Chapter 6: Registration of Charges · medium

Scenario. Sankalp Pharma Ltd. (SPL) had availed a term loan of ₹8 crore from Ujjivan Bank Ltd. on 1st April 2025, secured by a charge on its factory land and building. The charge was duly registered with the Registrar of Companies (ROC) on 25th April 2025. SPL repaid the entire loan on 15th January 2026. However, due to an internal oversight following the resignation of its Chief Financial Officer, the company failed to file the intimation of satisfaction in Form CHG-4 within the prescribed period of 30 days. On 20th March 2026, the ROC, upon receiving information from the bank, issued a notice to Ujjivan Bank Ltd. asking why the satisfaction should not be recorded. Ujjivan Bank confirmed the repayment and signed the intimation form. The ROC then recorded the satisfaction and issued a certificate in Form CHG-5. Meanwhile, SPL also realised that it had not maintained the register of charges at its registered office for the financial year 2025-26. A director, Mr. Ravi, sought to inspect the register, but the company refused inspection, stating that the register was maintained by the ROC and not required to be kept by the company. The company also failed to preserve the instrument creating the charge, claiming that once the charge was satisfied, there was no need to retain the instrument.

In the case of Sankalp Pharma Ltd., the company failed to file Form CHG-4 within 30 days of repayment. What is the correct legal position regarding the ROC's power to extend the time for filing intimation of satisfaction?

1. The ROC can extend the time up to 300 days from the date of payment or satisfaction on payment of prescribed additional fees. (correct answer)
2. The ROC can extend the time up to 60 days from the date of payment or satisfaction on payment of ad valorem fees.
3. The ROC has no power to extend the time; the company must apply to the Central Government under Section 87.
4. The ROC can extend the time up to 180 days from the date of payment or satisfaction without any additional fees.

Answer: A — The ROC can extend the time up to 300 days from the date of payment or satisfaction on payment of prescribed additional fees.

Explanation. The proviso to Section 82(1) empowers the Registrar to allow intimation of payment or satisfaction to be made within a period of 300 days of such payment or satisfaction on payment of prescribed additional fees. Option (a) correctly states this. Option (b) confuses the extension period with the 60-day period applicable to registration of charges. Option (c) is incorrect; the ROC has the power to extend up to 300 days. Option (d) invents a 180-day period not found in the statute.

Where it goes wrong. Students may confuse the 300-day extension for satisfaction with the 60-day extension for registration of charge.

Authority. Section 82(1) of the Companies Act, 2013 (proviso)

Question 2 · 2 marks · Chapter 6: Registration of Charges · hard

The ROC issued a notice to Ujjivan Bank Ltd. asking why the satisfaction should not be recorded. However, the bank had signed the intimation form. Was the ROC required to issue such a notice?

1. Yes, the ROC must always issue a notice to the charge-holder before recording satisfaction.
2. No, if the intimation is in the specified form and signed by the charge-holder, no notice is required. (correct answer)
3. Yes, but the notice period must not exceed 7 days.
4. No, the ROC can record satisfaction without any intimation from the company or the charge-holder.

Answer: B — No, if the intimation is in the specified form and signed by the charge-holder, no notice is required.

Explanation. Section 82(1) provides that no notice is required to be sent to the charge-holder if the intimation to the Registrar is in the specified form and signed by the holder of the charge. Since the bank signed the intimation form, the ROC was not required to issue a show-cause notice. Option (b) is correct. Option (a) is too broad. Option (c) invents a 7-day period. Option (d) is incorrect; intimation is required from either the company or the charge-holder.

Where it goes wrong. Students may think a show-cause notice is mandatory in all cases, ignoring the exception for signed intimation.

Authority. Section 82(1) of the Companies Act, 2013

Question 3 · 2 marks · Chapter 6: Registration of Charges · medium

The ROC recorded the satisfaction and issued a certificate in Form CHG-5. What is the evidentiary value of this certificate?

1. It is conclusive evidence that the requirements of Chapter VI regarding registration of satisfaction have been complied with. (correct answer)
2. It is merely prima facie evidence and can be rebutted by the company at any time.
3. It has no evidentiary value unless ratified by the Tribunal.
4. It is conclusive evidence only for the original charge, not for satisfaction.

Answer: A — It is conclusive evidence that the requirements of Chapter VI regarding registration of satisfaction have been complied with.

Explanation. Rule 8(2) provides that where the Registrar enters a memorandum of satisfaction of charge in full, he shall issue a certificate of registration of satisfaction of charge in Form CHG-5. The certificate is conclusive evidence that the requirements of Chapter VI and the rules made thereunder as to registration of satisfaction have been complied with. Option (a) is correct. Options (b), (c), and (d) understate or misstate the conclusive evidentiary value.

Where it goes wrong. Students may think the certificate is only prima facie evidence or requires judicial ratification.

Authority. Rule 8(2) of the Companies (Registration of Charges) Rules, 2014

Question 4 · 2 marks · Chapter 6: Registration of Charges · hard

SPL refused to allow director Mr. Ravi to inspect the register of charges, claiming it was maintained by the ROC. Is the company's refusal valid, and what is the correct position regarding the company's register of charges?

1. Yes, because the register of charges is maintained only by the ROC under Section 81.
2. No, but the company is required to keep the register only at the ROC's office.
3. Yes, because directors have no right to inspect the register of charges.
4. No, every company must keep a register of charges at its registered office in Form CHG-7, and it must be open for inspection by any director during business hours. (correct answer)

Answer: D — No, every company must keep a register of charges at its registered office in Form CHG-7, and it must be open for inspection by any director during business hours.

Explanation. Section 85(1) requires every company to keep a register of charges in Form CHG-7 at its registered office. Section 128(3) and Section 85(2) provide for inspection rights. Directors can inspect during business hours. The company's refusal is invalid. Option (d) correctly states the law. Option (a) is wrong; the ROC maintains a separate register under Section 81. Option (b) is incorrect; the company's register must be at its registered office. Option (c) is false.

Where it goes wrong. Students may confuse the ROC's register under Section 81 with the company's register under Section 85.

Authority. Section 85 of the Companies Act, 2013; Rule 10 of the Companies (Registration of Charges) Rules, 2014

Question 5 · 2 marks · Chapter 6: Registration of Charges · medium

Scenario. Vikram Steels Ltd. (VSL) had created a charge on its plant and machinery in favour of PNB Bank for a loan of ₹12 crore, duly registered on 10th March 2025. On 1st May 2026, due to continuous default, PNB Bank appointed Mr. Suresh as Receiver of the charged property under the power contained in the loan agreement. The bank informed VSL about the appointment on 25th May 2026 and filed the notice with the ROC on 30th May 2026. Mr. Suresh ceased to act as Receiver on 1st October 2026, but neither the bank nor Mr. Suresh filed any notice of cessation with the ROC or the company. Meanwhile, VSL's Company Secretary maintained a register of charges in Form CHG-7, but it was kept at the company's branch office in Pune instead of the registered office in Mumbai. A shareholder, Ms. Kavita, requested to inspect the register and the instruments of charge. The company allowed her to inspect the register but refused access to the instruments of charge, claiming they were confidential and contained proprietary information. The company also contended that since the receiver had been appointed, the register of charges need not be updated until the receiver ceased to act.

PNB Bank appointed Mr. Suresh as Receiver on 1st May 2026. It informed VSL on 25th May 2026 and filed the notice with the ROC on 30th May 2026. Did the bank comply with the statutory timeline under Section 84?

1. Yes, because the notice was given to the company and the ROC within 30 days from the date of appointment. (correct answer)
2. No, because the notice should have been given within 15 days.
3. No, because the notice should have been given only to the ROC, not the company.
4. Yes, but only because the ROC accepted the late filing.

Answer: A — Yes, because the notice was given to the company and the ROC within 30 days from the date of appointment.

Explanation. Section 84(1) requires the person appointing the receiver to give notice of the appointment to the company and the Registrar within 30 days from the date of appointment, along with a copy of the order or instrument. The appointment was on 1st May 2026; notice to the company on 25th May (24 days) and to the ROC on 30th May (29 days) are both within 30 days. Option (a) is correct. Option (b) invents a 15-day period. Option (c) is wrong; both the company and ROC must be notified. Option (d) is irrelevant.

Where it goes wrong. Students may think only the ROC needs to be notified, or may miscount the 30-day period.

Authority. Section 84(1) of the Companies Act, 2013

Question 6 · 2 marks · Chapter 6: Registration of Charges · hard

Mr. Suresh ceased to act as Receiver on 1st October 2026, but no notice of cessation was filed. What is the legal requirement upon cessation of a receiver's appointment?

1. No notice is required because the receiver's appointment automatically lapses.
2. The company must file a notice of cessation within 30 days.
3. The person appointed as receiver must give notice of cessation to the company and the ROC, and the ROC shall register such notice. (correct answer)
4. The charge-holder must apply to the Tribunal for recording cessation.

Answer: C — The person appointed as receiver must give notice of cessation to the company and the ROC, and the ROC shall register such notice.

Explanation. Section 84(2) provides that any person appointed as receiver or manager shall, on ceasing to hold such appointment, give notice to the company and the Registrar, and the Registrar shall register such notice. Option (c) correctly states the law. Option (a) is wrong; notice is mandatory. Option (b) incorrectly places the obligation on the company. Option (d) is not required; no Tribunal involvement.

Where it goes wrong. Students may think the company is responsible for filing cessation, or that no notice is needed.

Authority. Section 84(2) of the Companies Act, 2013

Question 7 · 2 marks · Chapter 6: Registration of Charges · medium

VSL kept its register of charges in Form CHG-7 at its branch office in Pune instead of the registered office in Mumbai. Is this compliant with Section 85?

1. Yes, because the register can be kept at any place where the company carries on business.
2. Yes, because the branch office is in India and the register is accessible.
3. No, the register of charges must be kept at the registered office of the company. (correct answer)
4. No, the register must be kept at the ROC's office.

Answer: C — No, the register of charges must be kept at the registered office of the company.

Explanation. Section 85(1) mandates that every company shall keep a register of charges in the prescribed form and manner at its registered office. Keeping it at a branch office is not compliant. Option (c) is correct. Options (a) and (b) incorrectly permit other locations. Option (d) confuses the company's register with the ROC's register under Section 81.

Where it goes wrong. Students may think the register can be kept at any business location or with the ROC.

Authority. Section 85(1) of the Companies Act, 2013

Question 8 · 2 marks · Chapter 6: Registration of Charges · hard

Ms. Kavita, a shareholder, was allowed to inspect the register but refused access to the instruments of charge. Is the company's refusal valid under Section 85?

1. Yes, because instruments of charge are confidential and cannot be inspected by shareholders.
2. Yes, because only the ROC can inspect instruments of charge.
3. No, but only creditors can inspect instruments of charge, not shareholders.
4. No, the register of charges and the instruments of charge shall be open for inspection during business hours by any member or creditor without payment of fees. (correct answer)

Answer: D — No, the register of charges and the instruments of charge shall be open for inspection during business hours by any member or creditor without payment of fees.

Explanation. Section 85(2) provides that the register of charges and the instrument of charges shall be open for inspection during business hours by any member or creditor without payment of fees, and by any other person on payment of prescribed fees. Ms. Kavita, as a member, has the right to inspect both. Option (d) is correct. Options (a), (b), and (c) wrongly restrict the inspection right.

Where it goes wrong. Students may think instruments of charge are confidential or that only creditors can inspect them.

Authority. Section 85(2) of the Companies Act, 2013

Question 9 · 2 marks · Chapter 6: Registration of Charges · medium

Scenario. Nirman Infra Ltd. (NIL) had created a charge on its land in favour of L&T Finance Ltd. for a loan of ₹15 crore, registered on 5th May 2025. The loan was repaid in full on 1st February 2026. The company failed to file the satisfaction within 30 days, and even after the extended period of 300 days (which expired on 28th November 2026), the filing was not done. The charge-holder also did not file any intimation. On 15th March 2027, NIL realised the omission and decided to apply to the Central Government for condonation of delay under Section 87 in Form CHG-8. The company's application stated that the delay was accidental due to the resignation of the CFO and the subsequent transition. Meanwhile, a creditor, Mr. Mehta, objected to the application, claiming that the delay had prejudiced his rights as he had lent money to NIL in June 2026 believing the charge was still subsisting. The ROC had not initiated any penalty proceedings yet. The Central Government is considering the application and is unsure whether it can direct extension of time for satisfaction of charge beyond the 300-day period.

NIL failed to file the satisfaction within 30 days and even beyond 300 days. It applied to the Central Government under Section 87 in Form CHG-8. Can the Central Government direct extension of time for satisfaction of charge beyond 300 days?

1. Yes, Section 87 and Rule 12 empower the Central Government to direct extension of time for satisfaction of charge if the filing is not made within 300 days, on being satisfied that the default was accidental or due to inadvertence. (correct answer)
2. No, the 300-day period is the absolute maximum, and the Central Government cannot extend it.
3. Yes, but only if the charge-holder consents to the extension.
4. No, only the Tribunal can extend the time beyond 300 days.

Answer: A — Yes, Section 87 and Rule 12 empower the Central Government to direct extension of time for satisfaction of charge if the filing is not made within 300 days, on being satisfied that the default was accidental or due to inadvertence.

Explanation. Section 87 read with Rule 12 empowers the Central Government to direct extension of time for satisfaction of charge if the filing is not made within 300 days, provided it is satisfied that the default was accidental or due to inadvertence or some other sufficient cause, and did not prejudice creditors or shareholders. Option (a) is correct. Option (b) is wrong; the Central Government can extend. Option (c) is not a statutory requirement. Option (d) is incorrect; no Tribunal involvement.

Where it goes wrong. Students may think the 300-day period is absolute or that only the Tribunal can grant relief.

Authority. Section 87 of the Companies Act, 2013; Rule 12 of the Companies (Registration of Charges) Rules, 2014

Question 10 · 2 marks · Chapter 6: Registration of Charges · hard

Mr. Mehta, a creditor, objected to NIL's application under Section 87, claiming that the delay had prejudiced his rights as he had lent money in June 2026 believing the charge was still subsisting. How should the Central Government consider this objection?

1. The objection is irrelevant because Section 87 does not consider prejudice to creditors.
2. The Central Government must be satisfied that the default did not prejudice the position of creditors or shareholders before directing rectification or extension. (correct answer)
3. The objection automatically bars any relief under Section 87.
4. The objection can be ignored if the company pays a penalty under Section 86.

Answer: B — The Central Government must be satisfied that the default did not prejudice the position of creditors or shareholders before directing rectification or extension.

Explanation. Section 87 requires the Central Government to be satisfied that the default was accidental or due to inadvertence or some other sufficient cause, or that it did not prejudice the position of creditors or shareholders. Mr. Mehta's objection is directly relevant to this test. Option (b) is correct. Option (a) is wrong. Option (c) is too absolute; the objection is a factor, not an automatic bar. Option (d) is incorrect; penalty does not override the prejudice test.

Where it goes wrong. Students may overlook the statutory condition that the default must not prejudice creditors or shareholders.

Authority. Section 87 of the Companies Act, 2013

Question 11 · 2 marks · Chapter 6: Registration of Charges · medium

NIL failed to comply with Section 82 by not filing the intimation of satisfaction. What is the penalty under Section 86 for such default?

1. The company is liable to a penalty of ₹1 lakh and every officer in default to ₹10,000.
2. The company is liable to a penalty of ₹2 lakh and every officer in default to ₹25,000.
3. The company is liable to a penalty of ₹5 lakh and every officer in default to ₹50,000. (correct answer)
4. The company is liable to a penalty of ₹10 lakh and every officer in default to ₹1 lakh.

Answer: C — The company is liable to a penalty of ₹5 lakh and every officer in default to ₹50,000.

Explanation. Section 86(1) provides that if any company is in default in complying with any of the provisions of Chapter VI, the company shall be liable to a penalty of ₹5 lakh and every officer of the company who is in default shall be liable to a penalty of ₹50,000. Option (c) is correct. The other options state incorrect amounts.

Where it goes wrong. Students may misremember the penalty amounts or confuse them with penalties under other chapters.

Authority. Section 86(1) of the Companies Act, 2013

Question 12 · 2 marks · Chapter 6: Registration of Charges · hard

The ROC has not yet initiated penalty proceedings against NIL. If NIL wilfully furnishes false information in its application under Section 87, what is the consequence?

1. The application is rejected, but no further action is taken.
2. The company is liable to a penalty of ₹1 lakh under Section 86(1).
3. The directors are liable to imprisonment only.
4. The person shall be liable for action under Section 447 for fraud, as per Section 86(2). (correct answer)

Answer: D — The person shall be liable for action under Section 447 for fraud, as per Section 86(2).

Explanation. Section 86(2) provides that if any person wilfully furnishes any false or incorrect information or knowingly suppresses any material information required to be registered under Section 77, he shall be liable for action under Section 447 (punishment for fraud). Option (d) is correct. Option (a) is incomplete. Option (b) is incorrect; Section 86(1) covers general default, not fraud. Option (c) is wrong; Section 447 includes imprisonment and fine.

Where it goes wrong. Students may not realise that false information attracts the severe fraud provisions under Section 447.

Authority. Section 86(2) of the Companies Act, 2013

Question 13 · 2 marks · Chapter 6: Registration of Charges · medium

Scenario. A company repaid a loan on 1st March 2026 and filed Form CHG-4 on 20th May 2026. The ROC accepted the filing after collecting additional fees. The filing was made within 300 days. Is the ROC's acceptance valid?

A company repaid a loan on 1st March 2026 and filed Form CHG-4 on 20th May 2026. The ROC accepted the filing after collecting additional fees. The filing was made within 300 days. Is the ROC's acceptance valid?

1. Yes, because the ROC can allow intimation of satisfaction within 300 days on payment of additional fees. (correct answer)
2. No, because the filing was beyond 30 days and hence void.
3. No, because the company should have applied to the Central Government.
4. Yes, but only if the charge-holder consented.

Answer: A — Yes, because the ROC can allow intimation of satisfaction within 300 days on payment of additional fees.

Explanation. The proviso to Section 82(1) allows the ROC to permit intimation of satisfaction within 300 days of payment on payment of additional fees. The filing on 20th May 2026 is within 300 days of 1st March 2026. Option (a) is correct. Option (b) is wrong. Option (c) is incorrect; Central Government approval is only needed beyond 300 days. Option (d) is not a statutory requirement.

Where it goes wrong. Students may think any delay beyond 30 days is fatal or requires Central Government approval.

Authority. Section 82(1) of the Companies Act, 2013 (proviso)

Question 14 · 2 marks · Chapter 6: Registration of Charges · hard

Scenario. The ROC issued a show-cause notice to a charge-holder under Section 82(1) on 1st July 2026. What is the maximum time the charge-holder has to show cause?

The ROC issued a show-cause notice to a charge-holder under Section 82(1) on 1st July 2026. What is the maximum time the charge-holder has to show cause?

1. 7 days from the date of notice.
2. 14 days from the date of notice. (correct answer)
3. 30 days from the date of notice.
4. 45 days from the date of notice.

Answer: B — 14 days from the date of notice.

Explanation. Section 82(1) provides that the Registrar shall cause a notice to be sent to the charge-holder calling upon him to show cause within such time as specified in the notice but not exceeding 14 days, as to why payment or satisfaction in full should not be recorded. Option (b) is correct. The other options are not the statutory maximum.

Where it goes wrong. Students may confuse the 14-day period with the 30-day or 7-day periods used elsewhere in the chapter.

Authority. Section 82(1) of the Companies Act, 2013

Question 15 · 2 marks · Chapter 6: Registration of Charges · medium

Scenario. A company registered a charge in 2018. The charge was satisfied in 2024. For how long must the company preserve the instrument creating the charge and the register of charges?

A company registered a charge in 2018. The charge was satisfied in 2024. For how long must the company preserve the instrument creating the charge and the register of charges?

1. The register must be preserved for 8 years, and the instrument for 5 years from satisfaction.
2. Both must be preserved for 10 years from the date of charge creation.
3. The register must be preserved permanently, and the instrument for 8 years from the date of satisfaction of charge. (correct answer)
4. Both must be preserved for 8 years from the date of satisfaction.

Answer: C — The register must be preserved permanently, and the instrument for 8 years from the date of satisfaction of charge.

Explanation. Rule 10(4) provides that the register of charges shall be preserved permanently, and the instrument creating a charge or modification thereon shall be preserved for a period of 8 years from the date of satisfaction of charge. Option (c) correctly states this. Options (a), (b), and (d) misstate the preservation periods.

Where it goes wrong. Students may apply the same preservation period to both the register and the instrument, or confuse the starting point.

Authority. Rule 10(4) of the Companies (Registration of Charges) Rules, 2014

Question 16 · 2 marks · Chapter 6: Registration of Charges · hard

Scenario. Mr. Rao, a member of a company, requested to inspect the register of charges maintained by the company. The company demanded a fee. Is the company's demand valid?

Mr. Rao, a member of a company, requested to inspect the register of charges maintained by the company. The company demanded a fee. Is the company's demand valid?

1. Yes, because inspection is always subject to payment of fees.
2. Yes, but only if the fee is prescribed by the ROC.
3. No, because only directors can inspect the register.
4. No, members and creditors can inspect the register without payment of fees; only other persons must pay the prescribed fee. (correct answer)

Answer: D — No, members and creditors can inspect the register without payment of fees; only other persons must pay the prescribed fee.

Explanation. Section 85(2) provides that the register of charges and the instrument of charges shall be open for inspection during business hours by any member or creditor without payment of fees, and by any other person on payment of prescribed fees. Mr. Rao, as a member, is entitled to free inspection. Option (d) is correct. Options (a) and (b) are wrong because members are exempt from fees. Option (c) is incorrect.

Where it goes wrong. Students may think all inspections require a fee, ignoring the exemption for members and creditors.

Authority. Section 85(2) of the Companies Act, 2013

Question 17 · 2 marks · Chapter 6: Registration of Charges · medium

Scenario. A bank appointed a receiver over a charged property on 1st June 2026. The bank filed a notice with the ROC in Form CHG-6 on 25th June 2026. Is the filing valid?

A bank appointed a receiver over a charged property on 1st June 2026. The bank filed a notice with the ROC in Form CHG-6 on 25th June 2026. Is the filing valid?

1. Yes, because the notice was filed within 30 days of the appointment. (correct answer)
2. No, because Form CHG-6 is not the prescribed form for appointment of receiver.
3. No, because the notice must be filed within 15 days.
4. Yes, but only if the company also consented to the appointment.

Answer: A — Yes, because the notice was filed within 30 days of the appointment.

Explanation. Section 84(1) requires notice of appointment of a receiver to be given to the company and the Registrar within 30 days. Rule 9 prescribes Form CHG-6 for this purpose. The filing on 25th June 2026 is within 30 days of 1st June 2026. Option (a) is correct. Option (b) is wrong; CHG-6 is the correct form. Option (c) invents a 15-day period. Option (d) is not a requirement.

Where it goes wrong. Students may doubt the form number or the timeline for receiver appointment notices.

Authority. Section 84(1) of the Companies Act, 2013; Rule 9 of the Companies (Registration of Charges) Rules, 2014

Question 18 · 2 marks · Chapter 6: Registration of Charges · hard

Scenario. A company omitted to give intimation of satisfaction of charge within the prescribed time. It wants to apply to the Central Government for rectification of the register. Which form should it use?

A company omitted to give intimation of satisfaction of charge within the prescribed time. It wants to apply to the Central Government for rectification of the register. Which form should it use?

1. Form CHG-4
2. Form CHG-8 (correct answer)
3. Form CHG-5
4. Form CHG-7

Answer: B — Form CHG-8

Explanation. Section 87 read with Rule 12 requires an application for rectification of the register of charges to be made in Form CHG-8. Option (b) is correct. Option (a) CHG-4 is for intimation of satisfaction. Option (c) CHG-5 is the certificate of satisfaction. Option (d) CHG-7 is the company's register of charges.

Where it goes wrong. Students may confuse the various CHG forms and their purposes.

Authority. Section 87 of the Companies Act, 2013; Rule 12 of the Companies (Registration of Charges) Rules, 2014

Question 19 · 2 marks · Chapter 6: Registration of Charges · hard

Scenario. A company filed an application under Section 87 for condonation of delay in filing satisfaction of charge. The Central Government is satisfied that the default was accidental and did not prejudice creditors. What order can the Central Government pass?

A company filed an application under Section 87 for condonation of delay in filing satisfaction of charge. The Central Government is satisfied that the default was accidental and did not prejudice creditors. What order can the Central Government pass?

1. It can only impose a penalty on the company.
2. It can direct the ROC to register the satisfaction without any further fee.
3. It can direct rectification of the omission or misstatement and extend the time for giving intimation of satisfaction. (correct answer)
4. It can direct the company to file a fresh charge.

Answer: C — It can direct rectification of the omission or misstatement and extend the time for giving intimation of satisfaction.

Explanation. Section 87 empowers the Central Government to direct rectification of the omission or misstatement and to extend the time for giving intimation of payment or satisfaction. Option (c) correctly states the relief. Option (a) is incomplete; penalty is separate under Section 86. Option (b) is not the statutory language. Option (d) is incorrect; no fresh charge is required.

Where it goes wrong. Students may think Section 87 only allows penalty waiver or fresh registration.

Authority. Section 87 of the Companies Act, 2013; Rule 12 of the Companies (Registration of Charges) Rules, 2014

Question 20 · 2 marks · Chapter 6: Registration of Charges · medium

Scenario. A company's register of charges was destroyed in a fire. The company wants to reconstruct it. Which of the following is correct regarding the company's obligation to maintain the register?

A company's register of charges was destroyed in a fire. The company wants to reconstruct it. Which of the following is correct regarding the company's obligation to maintain the register?

1. The company is absolved of the obligation because the destruction was beyond its control.
2. The company must inform the ROC and obtain permission before reconstructing the register.
3. The company can maintain the register in electronic form only.
4. The company must reconstruct the register of charges in Form CHG-7 and continue to preserve it permanently. (correct answer)

Answer: D — The company must reconstruct the register of charges in Form CHG-7 and continue to preserve it permanently.

Explanation. Section 85 requires every company to keep a register of charges in Form CHG-7. Rule 10(4) requires it to be preserved permanently. If destroyed, the company must reconstruct it. Option (d) is correct. Option (a) is wrong; the obligation continues. Option (b) is not a statutory requirement. Option (c) is incorrect; electronic form is permitted but not mandatory.

Where it goes wrong. Students may think destruction absolves the company or that ROC permission is needed for reconstruction.

Authority. Section 85 of the Companies Act, 2013; Rule 10 of the Companies (Registration of Charges) Rules, 2014