Section 125 - Certain charges to be void against liquidator or creditors unless registered. - Companies Act, 1956

Certain charges to be void against liquidator or creditors unless registered. 125. (1) Subject to the provisions of this part, every charge created on or after the 1st day of April, 1914, by a company and being a charge to which this section applies shall, so far as any security on the company's property or undertaking is conferred thereby, be void against the liquidator and any creditor of the company, unless the prescribed particulars [1] of the charge, together with the instrument, if any, by which the charge is created or evidenced, or a copy thereof verified in the prescribed manner, are filed with the Registrar for registration in the manner required by this Act within [2] [thirty] days after the date of its creation: [3] [ Provided that the Registrar may allow the particulars and instrument or copy as aforesaid to be filed within thirty days next following the expiry of the said period of thirty days on payment of such additional fee not exceeding ten times the amount of fee specified in Schedule X as the Registrar may determine, if the company satisfies the Registrar that it had sufficient cause for not filing the particulars and instrument or copy within that period.] (2) Nothing in sub-section (1) shall prejudice any contract or obligation for the repayment of the money secured by the charge. (3) When a charge becomes void under this section, the money secured thereby shall immediately become payable. (4) This section applies to the following charges: (a) a charge for the purpose of securing any issue of debentures; (b) a charge on uncalled share capital of the company; (c) a charge on any immovable property, wherever situate, or any interest therein; (d) a charge on any book debts of the company; (e) a charge, not being a pledge, on any movable property of the company; (f) a floating charge on the undertaking or any property of the company including stock-in-trade; (g) a charge on calls made but not paid; (h) a charge on a ship or any share in a ship; (i) a charge on goodwill, on a patent or a licence under a patent, on a trade mark, or on a copyright or a licence under a copyright. (5) In the case of a charge created out of India and comprising solely property situate outside India, [4] [thirty] days after the date on which the instrument creating or evidencing the charge or a copy thereof could, in due course of post and if despatched with due diligence, have been received in India, shall be substituted for [5] [thirty] days after the date of the creation of the charge, as the time within which the particulars and instrument or copy are to be filed with the Registrar. (6) Where a charge is created in India but comprises property outside India, the instrument creating or purporting to create the charge under this section or a copy thereof verified in the prescribed manner, may be filed for registration, notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situate. (7) Where a negotiable instrument has been given to secure the payment of any book debts of a company, the deposit of the instrument for the purpose of securing an advance to the company shall not, for the purposes of this section, be treated as a charge on those book debts. (8) The holding of debentures entitling the holder to a charge on immovable property shall not, for the purposes of this section, be deemed to be an interest in immovable property. --------------------------------- Notes:- [1] See rule 6 and e-Form 8, Companies (Central Government's) General Rules and Forms, 1956 for creation or modification of charge. For particulars for registration of charges for debentures e-form 10. [2] Substituted by the Companies (Amendment) Act, 1965, Act 31 of 1965, section 62 and Schedule for "twenty-one" w.e.f. 15-10-1965. [3] Substituted by the Companies (Amendment) Act, 1988, section 18, w.e.f. 15-6-1988 for the proviso which read as follows: " Provided that the Registrar may allow the particulars and instrument or copy as afore said to be filed within seven days next following the expiry of the said period of thirty days if the company satisfies the Registrar that it had sufficient cause for not filing the particulars and instrument or copy within that period." [4] Substituted by the Companies (Amendment) Act, 1965, Act 31 of 1965, section 62 and Schedule for "twenty-one" w.e.f. 15-10-1965. [5] Substituted by the Companies (Amendment) Act, 1965, Act 31 of 1965, section 62 and Schedule for "twenty-one" w.e.f. 15-10-1965.