Charge registration for car loan

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Querist : Anonymous

Querist : Anonymous (Querist)

17 October 2011 IS IT MANDATORY TO REGISTER A CHARGE WITH ROC FOR CAR LOAN TAKEN BY A PVT. LTD. COMPANY

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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17 October 2011 Hypothecation of vehicle ,by way of endorsement in the RC book,is also a pledge of the vehicle.Hence charge creation is not mandatory in view of the exception contained in section 125(4)(e) of the companies Act,1956.

CA Neha Jain

CA Neha Jain (Expert)
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17 October 2011 By plain reading of the section for charges it can be concluded that the registration of charge on vehicle should be created.

But, in practical cases, I have never seen any company creating the charge nor any enquiry from MCA in this respect.

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