A company takes a ₹2 crore term loan. The bank gets a hypothecation charge over plant and receivables, the money lands, operations roll on, and nobody files CHG-1. Four months later a buyer's diligence team pulls the charge index and finds the security was never registered. It is past 120 days. The charge can no longer be registered at all, and in a liquidation that secured lender ranks alongside unsecured creditors.
A charge must be registered in Form CHG-1 within 30 days of creation, with paid extensions to 60 and 120 days — and for charges created on or after 2 November 2018, after day 120 it cannot be registered at all.
The bottom line
Who: every company that creates or modifies a charge on its assets, except debenture charges, which use CHG-9. The charge holder can also file, under Section 78.
By when: 30 days from creation. Still possible to day 60 with an extra fee, and to day 120 with an ad valorem fee. After 120 days it cannot be filed.
Miss it: the charge is void against the liquidator and other creditors under Section 77(3), plus a penalty under Section 86 of up to ₹5 lakh on the company and ₹50,000 on each officer in default.
What a charge is, and what registration does
A charge is a security interest a company creates over its assets to back a debt — a mortgage, hypothecation, pledge or lien. Section 2(16) defines it broadly enough to cover almost any arrangement letting a lender claim an asset on default.
CHG-1, under Section 77 with Rule 3 of the Companies (Registration of Charges) Rules, 2014, puts that charge on the public record. Registration does two things: it gives the lender legal priority over the charged asset, and it puts the world on notice, since any future buyer or lender is deemed to know about it. The certificate the Registrar issues in Form CHG-2 is conclusive evidence that the charge is validly registered.
Skip the filing and the debt does not vanish. The company still owes the money. What vanishes is the security, and an unregistered charge is worthless at exactly the moment it was meant to matter.
The real deadline
There is one deadline and two extensions, each more expensive than the last.
| Window | When | What it costs |
|---|---|---|
| Normal | Within 30 days of creation | Normal fee only |
| Additional fee | Day 31 to day 60 | Normal fee + additional fee (3× for small companies/OPCs, 6× for others) |
| Ad valorem | Day 61 to day 120 | Normal + additional + ad valorem fee on the charge amount |
| Closed | After day 120 | Cannot be filed — no condonation |
Treat it as 30 days rather than 120. The extensions exist, they cost real money, and the ad valorem fee scales with the loan. Day 120 is an absolute outer wall under the proviso to Section 77(1) for any charge created on or after 2 November 2018.
Day 121
For charges created on or after 2 November 2018 there is no rescue. The MCA portal blocks the filing, and there is no CHG-8 condonation route to reopen it.
Section 77(3) then does the damage: an unregistered charge is void against the liquidator and any other creditor of the company. The lender keeps a contractual right to be repaid and loses the security that made the loan secured. In a winding up they join the back of the queue.
Section 86 adds a fine of up to ₹5 lakh on the company and up to ₹50,000 on every officer in default. Wilfully filing false charge particulars exposes the signatories to action for fraud under Section 447, which is a different order of problem.
The 300-day and six-month windows that still appear in older articles applied only to charges created before 2 November 2018. They are no help with anything current.
Who files, and the rest of the CHG family
The company should file. If it does not within 30 days, Section 78 lets the lender file instead and recover the fees from the company. Lenders increasingly do exactly that, so "we will get to it" often means the bank files first and sends you the bill.
| Form | Used for |
|---|---|
| CHG-1 | Creating or modifying a charge (other than debentures) |
| CHG-9 | Creating or modifying a charge for debentures |
| CHG-4 | Satisfaction of a charge (loan fully repaid) |
| CHG-2 / CHG-3 | Certificate of registration / of modification (issued by ROC) |
| CHG-7 | Register of charges the company keeps internally |
Satisfaction has its own trap. When a loan is fully repaid, file CHG-4 within 30 days under Section 82 and Rule 8. Unlike creation, satisfaction has a softer backstop — the Registrar can allow it up to 300 days on application — but the safe rule is the same, and get the lender's no-dues certificate on file while somebody still remembers the loan.
What being late costs
The normal fee is small: ₹200 to ₹600 based on share capital, and ₹6,000 for a foreign company. The pain sits in the multipliers.
| Delay | Additional fee | Ad valorem fee |
|---|---|---|
| Day 31–60 | 3× (small co/OPC) or 6× (others) | — |
| Day 61–120 | (additional fee continues) | 0.025% of the charge, max ₹1 lakh (small co/OPC); 0.05%, max ₹5 lakh (others) |
The ad valorem layer is what makes a late charge filing genuinely expensive. A multi-crore loan can attract the full ₹1 lakh or ₹5 lakh cap purely to get on record late.
CERSAI is a separate registry
Registration with the Registrar is not the only filing. Security interests over immovable property, and certain movables, generally also need recording with CERSAI under the SARFAESI framework — a separate portal, a separate deadline.
Companies that file CHG-1 diligently still trip on this, because they assume one registration covers both. It does not. Track them as two tasks against the same loan.
A worked example
A private company that is not a small company creates a hypothecation charge on 1 June for a ₹2 crore facility. The normal fee on its capital is ₹600.
- Filed by 1 July, within 30 days: ₹600.
- Filed on 20 July, around day 49: ₹600 plus a 6× additional fee of ₹3,600, so ₹4,200.
- Filed on 10 September, around day 101: ₹600 plus ₹3,600 plus ad valorem at 0.05% of ₹2 crore, which hits ₹1,00,000 — about ₹1,04,200.
- Filed on 5 October, day 126: not possible. The charge is unregistered and void against creditors. No fee, and a worthless security.
The lesson sits in the gap between the first line and the last: an afternoon's work against a permanent hole in the lender's collateral.
Common mistakes
- Counting from the sanction letter or the disbursement rather than the date the charge instrument was executed. The 30 days runs from creation.
- Treating 120 days as the deadline. It is the outer wall, and the ad valorem fee plus the no-condonation cliff make late filing an expensive habit.
- Forgetting CERSAI. The Registrar and CERSAI are separate registries.
- Missing modifications. A change in the charged assets, the secured amount or the terms is a modification needing its own CHG-1 within 30 days.
- Ignoring satisfaction. A discharged charge left open on the index muddies every future diligence exercise.
A working routine
- The moment a charge instrument is signed, diarise the 30-day deadline from that date.
- Gather the certified copy of the instrument, and for joint charges all charge-holder details.
- File CHG-1, or CHG-9 for debentures, signed by the company and the charge holder.
- Collect the Certificate of Registration in CHG-2 and file it.
- Make the entry in your internal Register of Charges in CHG-7.
- Complete the separate CERSAI filing where applicable.
- On repayment, get the no-dues certificate and file CHG-4 within 30 days.
Frequently asked questions
Is CHG-1 needed for an unsecured loan? No. CHG-1 registers a charge, meaning a security interest over assets. A genuinely unsecured loan creates no charge, though it may still be reported in DPT-3.
Can the bank file instead of the company? Yes. Under Section 78, if the company does not register within 30 days the charge holder may file and recover the fee from the company.
What if I miss the 120-day window? For charges created on or after 2 November 2018 you cannot file at all. The charge stays unregistered and is void against the liquidator and other creditors, with no condonation route.
Does modifying an existing charge need a fresh filing? Yes. A modification is filed in CHG-1 within its own 30-day window.
How long do I keep the charge instrument? The company must preserve it for 8 years from the date of satisfaction.
Does registering with the Registrar cover CERSAI? No. They are separate registries with separate filings.
Primary sources
- Sections 77 to 87, Companies Act, 2013, on registration, modification and satisfaction of charges
- Rules 3 and 8, Companies (Registration of Charges) Rules, 2014
- Section 86 for penalties and Section 447 for fraud
- Companies (Registration of Offices and Fees) Rules, 2014, for the fee slabs