MCA formulates scheme for relaxation of time for filing forms related to creation or modification of charges

The Ministry of Corporate Affairs vide general circular no. 23/2020 dated June 17, 2020 has introduced the ‘Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013’ (“Scheme”) in order to relax the timeline for making necessary filings for registration of creation or modification of charge on account of the COVID-19 pandemic. The key provisions of the Scheme are as follows Applicability The Scheme shall be applicable for filing of Form CHG-1 and Form CHG-9 (“Charge Forms”) by a company/ charge holder, where the date of creation/modification of charge is before March 1, 2020, provided the time period for filing such form under the Companies Act, 2013 (“Companies Act”) had not expired as on March 1, 2020; or falls on any date between March 1, 2020 and September 30, 2020 (both dates inclusive). The Scheme shall not apply in the following cases where the Charge Forms have already been filed before June 17, 2020; where the timeline for filing the Charge Forms under the Companies Act had expired prior to March 1, 2020; where the timeline for filing the Charge Forms will expire at a future date after September 30, 2020; and for filing Form CHG-4 for satisfaction of charges. Relaxation of time In case the date of creation/modification of charge is before March 1, 2020 and the time period for filing the Charge Forms has not expired, the period between March 1, 2020 and September 30, 2020 shall not be reckoned for the purpose of calculation of the time period under sections 77 and 78 of the Companies Act for filing such Charge Forms. In case the date of creation/modification of charge falls on any date between March 1, 2020 and September 30, 2020, the period beginning from the date of creation/modification of charge to September 30, 2020 shall not be reckoned for the purpose of calculation of the time period under sections 77 and 78 of the Companies Act for filing such Charge Forms. Applicable fees In case the date of creation/modification of charge is before March 1, 2020 and the time period for filing the Charge Forms has not expired, the fees payable as on February 29, 2020 shall be charged in case such Charge Forms are filed on or before September 30, 2020. If such Charge Forms are filed after September 30, 2020, the applicable fees as per the Companies (Registration Offices and Fees) Rules, 2014 (“Fees Rules”) shall be chargeable after adding the number of days between October 1, 2020 and the date of filing such Charge Forms, and the time period lapsed from the date of creation/modification of charge till February 29, 2020. In case the date of creation/modification of charge falls on any date between March 1, 2020 and September 30, 2020, the normal fees under the Fees Rules shall be charged if the Charge Forms are filed on or before September 30, 2020. If such Charge Forms are filed after September 30, 2020, the first day after the date of creation/modification of charge shall be reckoned as October 1, 2020 for the purpose of payment of fees under the Fees Rules. This update has been contributed by Aastha (Partner) and Kartik Jigyasi (Associate).