Charges - Registration/Modification of ‑ Solution to certain problems arising out of registration/modification of charges provided - Companies Law - No. 8/39(125)/59‑PR,

Circular : No. 8/39(125)/59 ‑ PR, dated 24 ‑ 11 ‑ 1959. Subject:- Charges - Registration/Modification of ‑ Solution to certain problems arising out of registration/modification of charges provided After a company has filed particulars of the charge relating to a property in Form No. 8, occasions arose subsequently when it becomes uncertain as to whether particulars of the fresh charge in Form No. 8 or those of the modifications of the earlier charge in Form No. 14 should be filed. Such occasions are likely to fall within one or more of the categories stated below, the mortgagor company and the mortgagee remaining the same. 1. Loan is raised by charging property ‑ This is the simplest case where particulars of the charge in Form No. 14 are required to be filed. 2. Nature of the charge created in (1) above is changed or modified without raising any additional loan, viz., from equitable mortgage of property A to one of the regular legal mortgage, etc. ‑ This is also a case falling under section 135 and, as such, particulars of the charge in Form No. 14 are required to be filed. 3. Without changing or modifying the nature of the charge or raising fresh loan, the other terms and conditions or the extent or operation of the charge created as per (1) above is changed or modified ‑ This is also a simple case falling under section 135 and, as such, particulars of the modification in Form No. 14 are required to be filed. 4. Additional loan is raised against re ‑ mortgage or further charge of the property A, the further charge not to rank pari passu with the prior charge ‑ Section 135 does not appear to come into play here as the terms and conditions or the extent or operation of the prior charge are not modified and, therefore, particulars of the further charge only are required to be filed in Form No. 8. 5. Additional loan against re ‑ mortgage or further charge of property A is raised with the condition that the further charge will rank pari passu with the old one ‑ Section 135 is attracted in this case since the extent of the prior charge is modified and as such particulars of the modification in Form No. 14 are required to be filed. 6. In respect of loan already taken, further security is given by charging property B ‑ Only section 135 is attracted and Form No. 14 is required to be filed. 7. In respect of the loan already taken, property B charged with option to the mortgagee to proceed against A or B or A and B, simultaneously ‑ Only section 135 is attracted and Form No. 14 is only required to be filed. 8. Additional loan is taken against mortgage or charge of property B without referring to the loan already taken by charging property - This falls under section 125 and, such particulars of the fresh charge in Form No. 8 are required to be filed. 9. Additional loan is raised and it is stipulated that the entire amount of the loan, including the loan already raised, will be secured against property A already charged and the mortgage of charge of property B ‑ Section 125 is attracted in respect of the charge or mortgage of property B and, as such, particulars thereof, in Form No. 8, are required to be filed. Since the extent of the charge against property A is modified, section 135 is also attracted, and, as such, particulars of modification in Form No. 14 are required to be filed.