The Institute of Chartered Accountants of India (ICAI) released the Frequently Asked Questions (FAQs) on Circular regarding Relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 issued by the Ministry of Corporate Affairs on May 3, 2021.
The ICAI has clarified that 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 for the purpose of condoning the delay in filing certain forms related to creation/ modification of charges particularly due to the difficulties being faced by COVID-19 pandemic.
The objective of the said circular is to provide relaxation of time to Companies or Charge holders for condoning the delay in filing certain forms related to the creation/ modification of charges under section 77 of the Companies Act, 2013 (Act).
It is noteworthy that this scheme is not permanent. It is a one-time waiver that has been allowed to Companies to file their forms related to the creation or modification of charges.
The ICAI while addressing the question that for which Forms, the aforesaid Circular is applicable said that 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. However, this is not applicable on CHG-4 i.e. Particulars for the satisfaction of charge thereof, and CHG-6 i.e. Notice of appointment or cessation of receiver or Manager.
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 or 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 or falls on any date between 01.04.2021 to 31.07.2021 (both dates inclusive).
In the case where the date of creation/modification of charge is before 01.04.2021 but the time limit of 120 days has not expired, then the period beginning from 01.04.2021 and ending on 31.07.2021 shall not be taken into consideration for the purpose of counting 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 01.08.2021 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.
In case, where the date of creation/modification of charge is between 01.04.2021 to 31.07.2021 (both dates inclusive), then the period beginning from the date of creation/ modification of charge to 31.07.2021 shall not be taken into consideration for the purpose of counting of days under section 77 or section 78 of the Act.
Further, in case the form is not filed within such a period, the first day after the date of creation/modification of charge shall be reckoned as 01.08.2021 for the purpose of counting the number of days within which the form is required to be filed under section 77 or section 78 of the Act.
The Scheme is not applicable under various circumstances namely the forms i.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 prior to 01.04.2021; the timeline for filing the form expires at a future date, despite the exclusion of the time provided above; Filing of Form CHG-4 for the satisfaction of charges; and Filing of Form CHG-6 for Notice of appointment or cessation of receiver or Manager.
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