An unregistered charge shall be void against the liquidator and other creditors of the company.

According to Section 77 of the Companies Act, 2013, all types of charges created by a company are to be registered with the Registrar of Companies (ROC). Where they are non-compliant and are not filed with the Registrar of Companies for registration, the charge shall be void as against the liquidator and any other creditor of the company. In the case of ONGC Ltd v. Official Liquidators of Ambica Mills Co Ltd (2006) , the ONGC had not been able to point out whether the so called charge, on the basis of which it was claiming preference as a secured creditor, was registered or not. It was held that in the light of this failure, ONGC could not be treated as a secured creditor in view of specific provisions of section 125 of Companies Act, 1956 and the statutory requirement under the said section. This does not, however, mean that the charge is altogether void and the debt is not recoverable. So long as the company does not go into liquidation, the charge is good and may be enforced. Void against the liquidator means that the liquidator, on winding up of the company, can ignore the charge for the purpose of ascertaining the priority of payment and can treat the concerned creditor as an unsecured creditor. The property will be treated as free of charge i.e. the creditor cannot sell the property to recover its dues. Void against any other creditors of the company means that if any subsequent charge is created on the same property and the earlier charge is not registered, the earlier charge would have no consequence and the latter charge if registered would enjoy priority over the earlier charge. In other words, the latter charge holder can have the property sold in order to recover its money. Thus, non-filing of particulars of a charge as required under Section 77 of the Companies Act, 2013 does not invalidate the charge against the company as a going concern. It is void only against the liquidator and the creditors at the time of liquidation. The company itself cannot have a cause of action arising out of non-registration.