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Charges

Pooja M (CS) (103 Points)

21 September 2017

A company had a charge with ABC Bank for Rs.250 crores. Now the Company has transferred that charge to XYZ Bank for Rs.320 crores.

Can the Company file for modification of charge and also change the Bank details?

Or will it need to file two forms first for satisfaction to close the charge for ABC Bank and then for creation of charge for XYZ Bank ?

Please clarify

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3 Replies

Jinendra Jain (19 Points)
Replied 21 September 2017

As per my view we need to satisfy the charge with ABC and create a new charge for xyz

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Sudhir Todkar (CS Professional) (1021 Points)
Replied 21 September 2017

In my opinion modifications can be done in terms and conditions (like change in Interest rate or Due date of payment) which was created at the time of creation of charge.

But here in the above case company changing the charge holder.

In order to close the first creation of charge we should satisfy it and create a new charge in the name of XYZ.

If you want to close the first charge directly then ABC Bank should response to registrar stating that no payment is due from your company all principal and interest amount has been paid without any default.