29 September 2014
while sanctioning working limit, the rate of interest has been fixed at a specified percentage above the bank rate as notified by RBI. There was a change in interest rate due to RBI notification issued later. The bank insisted on filing a return of modification of charges. Is the stand of bank correct ? discuss in light of provisions of companies act , 1956.
As per section 79 of the companies act , provisions of section 77 relating to registration of charge shall apply to Any modifications in the terms or conditions or the extent or operation of any charge is required to be registered under that section.
Modification of a charge, means any change, variation, alteration, addition, deletion, etc., affecting the terms, conditions, extent or operation of the charge already created,, viz.:-
a. Modification of Terms subject to which a charge was created; b. Modification of Conditions on which a charge was created; c. Modification of Loan amount or a credit facility; d. Inclusion of additional asset (s) in the property already charged; e. Inclusion of different type of loan or credit facility within the overall limit; f. Addition of other creditor(s) as chargeholder with/without any additional loan; g. Modification in the chargeable rate of interest; h. Modification in the nature of security in respect of a charge already created; i. Creation of new charge ranking pari passu with an earlier charge; j. Assignment of a charge; k. Deposit of additional title deeds in respect of the same property; l. Further charge for the same amount of loan or credit facility by way of m. additional security on different property; n. Modification of Extent (scope) of the charge; o. Modification of Operation (the state of being operative) of the charge; or p. Change in any respect relating to the charge as a result of change in law, etc.
CAclubindia
