Charges - Modification of ‑ Whether transfer or assignment of rights by charge‑holder amounts to modification - Companies Law - Letter : No. 8/50(135)/60‑PR,

Letter : No. 8/50(135)/60 ‑ PR, dated 12 ‑ 8 ‑ 1960. Subject:- Charges - Modification of ‑ Whether transfer or assignment of rights by charge ‑ holder amounts to modification A question has been raised as to whether the transfer or assignment of his rights by the charge‑holder would amount to modification of charge within the meaning of section 135, requiring the filing of a return by the company to the Registrar of Companies in Form No. 141 accompanied by the prescribed filing fee. The question has been examined in this Department in all its aspects. It is considered that whenever a charge is assigned in favour of another person, the assignee becomes the de jure charge‑holder. Such charge would, therefore, amount to a modification of charge requiring registration under section 135. This conclusion is supported by the accepted practice of making the names of the parties in a contract as the relevant terms of the contract. Moreover, under section 130, one of the particulars to be entered by the Registrar in the register of charges (Form No. 13) on payment of the prescribed fee by the company is about the persons entitled to the charge. Hence, if the particulars regarding the assignee of the charge are not duly entered by the Registrar in the register of charges on the transfer of rights by the original charge-holder, the creditors or shareholders, inspecting such register, would not be able to know who the present charge‑holders are. The registration of this modification of share should, therefore, be effected by the company concerned in Form No. 141 on payment of the prescribed filing fee.