2023 (4) TMI 82 - HC - Companies Law

Delay in filing of CHG-4 form - due to the death of the Founder-Director, there was a delay, in filing form - sufficient cause for delay present or not - Sections 82 of Companies Act read with Rule 8(1) of the Companies (Registration of Charges) Rules 2014 - HELD THAT - Under Sections 82 of the Act read with Rule 8(1) of the Companies (Registration of Charges) Rules 2014, there exists an obligation on the Company to record satisfaction of charge within a period of 30 days from the date of such payment - A perusal of the order of the Hon ble Supreme Court in In Re Suo Motu 2022 (1) TMI 385 - SC ORDER clearly shows that the entire period between 15th March, 2020 till 28th February, 2022 was excluded from computation of limitation. In the present case, the usual period of limitation is thirty days. Thus, a period of thirty days would be added from 28th February 2022, meaning thereby that the limitation would have expired only on 28th March 2022 - The filing of the Form in the present case has been made on 28th November, 2022 which would be a total delay of eight months. The observations of the Madhya Pradesh High Court in M/S. SHALINI PLASTIC PRIVATE LIMITED THROUGH SHRI KAPIL ATLASIYA VERSUS UNION OF INDIA, REGISTRAR OF COMPANIES MADHYA PRADESH 2018 (7) TMI 2301 - MADHYA PRADESH HIGH COURT are also relevant in the present case, wherein the Court observed that In the present case the petitioner has disclosed that delay had taken place because there was change in entire management of the company, therefore, the default had taken place for the bonafide reason. Keeping in mind orders passed by the ld. Supreme Court as also the order of the ld. Single Judge of Madhya Pradesh, the delay cannot be held to be deliberate. The demise of the Founder-Director due to COVID-19 is a genuine cause for the delay. The costs are accordingly reduced to 25,000/- qua each of the charges. Thus, the total costs payable by the Petitioner would be Rs.50,000/-. Petition allowed in part.

Summary

Issues:
The judgment challenges two impugned orders passed by the ROC imposing costs on the Petitioner for delay in filing particulars of the charge under Sections 77(1) and 87 of the Companies Act, 2013.

Details:
The Petitioner, a company, had obtained loans from ICICI Bank, repaid them, and filed charges with the ROC. Due to the death of the founder/director, there was a delay in filing the required form, resulting in costs imposed by the ROC.

The Petitioner's counsel argued that the delay was not deliberate, given the unforeseen circumstances of the founder/director's death. They cited Supreme Court and Madhya Pradesh High Court orders where costs were reduced under similar circumstances.

The Respondent-ROC contended that the delay was admitted, justifying the imposition of costs on both charges.

The Court referred to relevant provisions of the Companies Act, highlighting the obligation on companies to report satisfaction of charges within 30 days. It also mentioned Section 87, granting power to the Central Government to extend filing time under certain conditions.

Referring to the Supreme Court order excluding the period from March 2020 to February 2022 from limitation calculations, the Court noted that the limitation would have expired in March 2022, whereas the form was filed in November 2022, resulting in an eight-month delay.

Citing the Madhya Pradesh High Court case, the Court emphasized that delays due to genuine reasons should be considered, leading to a reduction in costs. Considering the founder-director's demise due to COVID-19 as a genuine cause, the Court reduced the costs to Rs. 50,000 in total.

In conclusion, the Court disposed of the petition, modifying the impugned orders and directing the Petitioner to deposit the reduced costs within four weeks.