Rigid Limited during an Internal Audit in March 2019 noticed the following: (a) A charge for the mortgage of company's lands in Chennai created on 1 st October 2018 in favour of the company's Bankers against a term loan

As per section 77 of the Companies Act, 2013, as amended by the Companies (Amendment) Second Ordinance, 2019 w.e.f. 02.11.2018: (a) Charge created before 02.11.2018: The registration of the charge is to be done within a time limit of 30 days from the date of creation of the charge, upon payment of normal fees. If not registered within the said period of 30 days, a further period of 270 days, beyond such initial 30 days, is allowed to the registrar to accept registration of the charge upon payment of additional fee as may be prescribed. If a company fails to register the creation of charge, even within the above 300 days from the date of creation of the charge, the ROC may register the charge, within a further time of 6 months from the commencement of the ordinance i.e., 02.11.2018, on an application from the company, subject to payment of additional fee as may be prescribed. In this case, Rigid Ltd has created charge on 01.10.2018 i.e. before commencement of Companies (Amendment) Second Ordinance, 2019. Since six months from commencement of the said ordinance falls due on 2 nd May 2019, and 300 days from the creation of the charge falls due on 27.07.2019, the company should get the charge registered within 300 days i.e. latest by 27.07.2019 with payment of additional fee. In case the company doesn't get the charge registered before 27.07.2019, the company and its every officer in default shall be liable for a penalty under section 86 of the Companies Act, 2013. (b) Charge created on or after 02.11.2018: In terms of Section 77(1) of the Act, as amended by Companies (Amendment) Second Ordinance 2019, in respect of a charge created on or after 02.11.2018, the registration is required to be done within a time limit of 30 days from the date of creation of charge, upon payment of normal fee. A further period of 30 days, beyond the initial period of 30 days is allowed upon payment of additional fee as may be prescribed. However, if the company still fails to register within the above 60 days from the date of creation of charge, a further period of 60 days is allowed subject to payment of such advalorem fee as may be prescribed. Accordingly, the charge created on 05.11.2018 should have been registered by Rigid Ltd with payment of advalorem fees by 05 th day of March, 2019 i.e. 120 days from the creation of the charge. As the company has failed to register the charge within the overall maximum period of 120 days from the date of creation of charge, as prescribed under Section 77(1) of the Act, the company and its every officer in default, shall be liable for penalty prescribed under Section 86 of the Act.