In charge if not registered the loan amt becomes immediately payable. what is the meaning of immediately payable.
CA Ketan Waghela
(Partner at Elite Educare)
(356 Points)
Replied 13 December 2011
Non-registration would not prejudice any contract or obligation for payment of money secured by the charge and where the charge becomes void for registration, the debt secured becomes immediately payable. Also a charge on becoming void, no right if lien can be claimed on the documents of title as they were only ancillary to the charge and were delivered in pursuant to the charge.
If a registerable charge is not registered, the transaction does not become void or debt does not become irrecoverable but the security created by the charge or mortgage becomes void against liquidator and creditors.
It is mandatory for a company to file the particulars of charge and failure to do so or contravene the provisions of section 125 are punishable under sectio142 with fine extending up to rupees Five Hundred for every day of default.
Please refer to: ANTIFRICTION BEARING CORPORATION LTD V. STATE OF MAHARASTRA (1999) 20 SCL, 373 (Bom)
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