Registration of charge

This query is : Resolved

ARUN KUMAR MAITRA (Querist)
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25 August 2012 A company has obtained car loan against hypothecation of the said vehicle.The Bank has executed a Loan Agreement and RC was endorsed in its favour.However, no Hypothecqation - Deed was executed.The Bank is insisting the company to arrange for registration of the charge?Can it be filed in the absence of the Hypothecation Deed?

Guest

Guest (Expert)

25 August 2012 Yes, it can be filed in the absence of hypo deed. You have to attach loan agreement to form 8 and get form 8 digitally signed by banker.

Digital signature by banker itself on the form is conclusive of creation of charge.

ARUN KUMAR MAITRA

ARUN KUMAR MAITRA (Querist)
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27 August 2012 Dear Neha,

Thanks for your valuable comments.But in the instant case,there is no reference of hypothecation in the Loan Agreement received by us from the Bank.Moreover,I have further examined the exact legal position as to whether there is any requirement for registration with the MCA for obtaining car loan against hypothecation of the vehicle.In this connection ,clarrification given in reference book is given below:

Hypothecation being a kind of pledge is exempt from registration vide section 125(4)(c) of the Companies Act,1956 [Ref: Clarification given in Ramaiya's Guide to Companies Act,1956 in page 1809 in 2010 [17th] edition as well as CLB's Circular No. 8(6)/125/60-PR dated 7th July,1960].

With Best Wishes,

C.A.A.K.Maitra

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Guest

Guest (Expert)

27 August 2012 I agree with you sir.

But many ROC are insisting for creating charge for car loan / vehicle loan.

Earlier I also didnt used to file form 8 for car loan but now due to persuasion of ROC officials, I am filling the same to avoid any embarrassment later on. Since then we have to move to CLB for condonation of delay.

With Regards,

Neha

ARUN KUMAR MAITRA

ARUN KUMAR MAITRA (Querist)
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28 August 2012 Dear Neha,

I fully agree with you.Until and unless a specific clarification in the matter is given by the McA,to be on the safe side, it is better to file the prescribed Return with them.But my difficulty is that in the instant case,neither there is any mention of hypothecation of the vehicle in the loan agreement nor the bank has yet executed any separate hypothecation -deed.Any way, I am taking up the matter with our bankerto resolve the issue.