Satisfaction of Charges
Updated: Oct 14, 2022
According to section 82 read with the Rules, the company shall give intimation to the Registrar of the payment or satisfaction in full of any charge within thirty days from the date of such payment or satisfaction in Form No.CHG-4 along with the fee. Where the satisfaction of the charge is not filed within thirty days from the date on which such payment of satisfaction, the Registrar shall not register the same unless the delay is condoned by the Central Government.
The Registrar shall issue a notice to the charge holder, calling for a show cause within fourteen days of receipt of such intimation, as to why payment or satisfaction in full should not be recorded as notified to the Registrar. If the holder of the charge fails to demonstrate cause, the Registrar shall order that a note of satisfaction is entered in the register of charges kept by the Registrar under section 81 and that the firm be notified. If the cause is established, the registrar shall make a note in the register of charges to that effect and notify the firm.
However, the aforesaid notice shall not be sent, in case of intimation to the registrar is in a specified form and is signed by the holder of charge.
Power of Registrar to Make Entries of Satisfaction in absence of intimation from the company:
There may be times when a company may fail to send intimation of satisfaction of charge to the Registrar but according to section 83 of the Act, the registrar may enter in the register of charges memorandum of satisfaction on receipt of evidence to his satisfaction that –
(a) The debt for which the charge was given has been paid or satisfied in whole or in part; or
(b) Part of the property or undertaking charged has been released from the charge or has ceased to form part of the company’s property or undertaking.
The Registrar shall inform affected parties within thirty days of making the entry in the registrar of charges.
Certificate of registration of satisfaction of charge: Where the Registrar enters a memorandum of satisfaction of charge in full in pursuance of section 82 or 83, he shall issue a certificate of registration of satisfaction of charge in Form No.CHG-5.