Satisfaction of Charges Section 82: Form CHG-4 & Section 87 Guide

Executive Overview

In the statutory ecosystem of Indian corporate finance and banking law, the public disclosure of debt encumbrances on corporate assets is an essential prerequisite for credit transparency, commercial solvency, and creditor protection. Codified under Chapter VI (Sections 77 to 87) of the Companies Act, 2013, read with the Companies (Registration of Charges) Rules, 2014, every company creating, modifying, or satisfying a security interest on its assets or undertaking is legally bound to register these transactional milestones on the master database maintained by the Ministry of Corporate Affairs (MCA). While Section 77 governs the creation of charges, Section 82 and Section 83 govern the formal Satisfaction of Charges, ensuring that once a loan, term facility, or working capital consortium borrowing is repaid in full, the encumbrance is legally extinguished on public corporate records.

The operational execution of charge satisfaction is governed by strict statutory timelines. Under Section 82(1), a company must intimate the Registrar of Companies (ROC) of the payment or satisfaction in full of any registered charge within thirty (30) days from the date of such payment or satisfaction by filing electronic Form CHG-4. The statute provides an extended window: under the proviso to Section 82(1) read with Rule 8, the Registrar may allow the filing to be made within three hundred (300) days from the date of payment upon payment of additional statutory fees. However, if the company fails to file Form CHG-4 within the 300-day outer ceiling, the Registrar's administrative powers are permanently divested. The company is forced to undergo a formal quasi-judicial condonation proceeding before the Regional Director (RD) under Section 87 by filing Form CHG-8.

Failing to satisfy charges on the MCA-21 portal inflicts severe commercial harm: commercial banks and non-banking financial companies (NBFCs) conducting title searches on the index of charges will flag the company as encumbered, halting new credit disbursements, obstructing real estate property sales, and triggering qualifications in Secretarial Audit Reports under Section 204. Furthermore, under Section 86, failure to file satisfaction within statutory timelines attracts heavy monetary penalties on both the company and defaulting officers. Modern corporate treasury and secretarial departments deploy integrated compliance software like assureOffice to eliminate these bottlenecks. Modules like assurePractice track bank No-Dues Certificates (NOC), manage 30-day and 300-day Form CHG-4 countdowns, draft Section 87 condonation petitions, and maintain digital Registers of Charges in Form CHG-7, while assureFinancials reconciles bank loan closures with balance sheet disclosures under Ind AS 107. This guide provides an exhaustive, practitioner-grade exploration of Sections 82, 83, and 87, detailing procedural mechanics, Form CHG-5 notices, Regional Director condonations, and audit defense strategies.

Comparative Framework: Creation (Sec 77) vs Modification (Sec 79) vs Satisfaction (Sec 82/83)

Corporate legal advisors and company secretaries must clearly delineate the statutory triggers, documentation, forms, and condonation authorities across the three stages of the charge lifecycle under the Companies Act, 2013. The comparative table below outlines the core legal distinctions.

Statutory Dimension	Creation of Charge (Section 77)	Modification of Charge (Section 79)	Satisfaction of Charge (Section 82 / 83)
Statutory Objective	Registering security interest / encumbrance created on corporate assets.	Recording changes in loan terms, interest rates, security pool, or consortium.	Extinguishing and releasing security interest upon full repayment of debt.
Governing Form	Form CHG-1 (or Form CHG-9 for debentures).	Form CHG-1 (or Form CHG-9 for debentures).	Form CHG-4 (Full satisfaction of charge).
Initial Filing Deadline	Within 30 days of creation of charge.	Within 30 days of modification of charge.	Within 30 days of full payment or satisfaction of debt.
Extended ROC Window	Up to 60 days (with addl. fee) + further 60 days (ad-valorem fee).	Up to 60 days (with addl. fee) + further 60 days (ad-valorem fee).	Up to 300 days from date of satisfaction (with additional fees).
Condonation Beyond Outer Limit	Power shifts to Regional Director (RD) u/s 87 (Form CHG-8).	Power shifts to Regional Director (RD) u/s 87 (Form CHG-8).	Power shifts to Regional Director (RD) u/s 87 (Form CHG-8).
Certificate Issued by ROC	Certificate of Registration of Charge in Form CHG-2.	Certificate of Registration of Modification in Form CHG-3.	Certificate of Registration of Satisfaction in Form CHG-5.
Notice to Charge-Holder	Not applicable (bank executes form).	Not applicable (bank executes form).	Notice in Form CHG-5 (14 days) if bank has not signed Form CHG-4.
Suo-Motu Power of ROC	No suo-motu creation power.	No suo-motu modification power.	YES. Section 83 empowers ROC to record satisfaction suo-motu on evidence.
Statutory Register Entry	Recorded in Register of Charges in Form CHG-7.	Recorded in Register of Charges in Form CHG-7.	Memorandum of satisfaction recorded in Form CHG-7 permanently.

Detailed Statutory Architecture & Procedural Mechanics

1. The Company's Statutory Duty under Section 82(1)

Section 82(1) of the Companies Act, 2013 establishes the statutory mandate for intimating the extinguishment of debts:

"A company shall give intimation to the Registrar in the prescribed form, of the payment or satisfaction in full of any charge registered under this Chapter within a period of thirty days from the date of such payment or satisfaction."

Key legal principles of Section 82(1) include:

Full Satisfaction Only: Form CHG-4 applies strictly to the payment or satisfaction in full of a debt. Partial repayment of a term loan does not constitute satisfaction; partial release of specific collateral while the underlying facility continues must be filed as a Modification of Charge in Form CHG-1 under Section 79.
The Trigger Date: The 30-day statutory clock does not commence on the date the bank issues its internal sanction letter; it commences on the actual date on which the debt was paid or satisfied in full (typically the date of the final electronic fund transfer or debt settlement).

2. The 300-Day Condonation Framework under Section 82(1) Proviso

Under the proviso to Section 82(1) read with Rule 8(1) of the Charges Rules, where the company fails to intimate the satisfaction within thirty days, the Registrar possesses statutory power to condone the delay:

"Provided that the Registrar may, on an application by the company or the charge holder, allow such intimation of payment or satisfaction to be made within a period of three hundred days from the date of such payment or satisfaction on payment of such additional fees as may be prescribed."

The Two-Tier Filing Windows under Section 82:

Tier 1 (Day 1 to Day 30): Form CHG-4 filed with standard statutory filing fee (based on nominal share capital under the Companies (Registration Offices and Fees) Rules, 2014).
Tier 2 (Day 31 to Day 300): Form CHG-4 filed with additional statutory fees (ranging from 2x to 12x of standard fees depending on delay). The delay is regularized directly by the Registrar without requiring an order from the Regional Director.

3. Section 83: Powers of Registrar to Make Entries of Satisfaction Suo-Motu

Section 83 empowers the Registrar to record satisfaction in the absence of an intimation from the company. Under Section 83(1), the Registrar may, on evidence being given to his satisfaction with respect to any registered charge:

That the debt with respect to which the charge was given has been paid or satisfied in whole or in part; or
That part of the property or undertaking charged has been released from the charge or has ceased to form part of the company's property or undertaking,

enter in the Register of Charges a memorandum of satisfaction, notwithstanding that no intimation has been received by him from the company. Under Section 83(2), the Registrar must inform the affected parties within thirty (30) days of making the entry. This power is frequently invoked by scheduled commercial banks following loan assignments, asset reconstruction company (ARC) settlements, or corporate restructuring schemes.

4. The Form CHG-5 Show Cause Notice Mechanism

Under Section 82(2) and Rule 8(2), the statutory procedure for processing Form CHG-4 depends on whether the charge-holder (bank/lender) co-signs the application:

Where Form CHG-4 is Signed by Both Company and Bank: The digital signature of the authorized bank official is affixed on Form CHG-4 alongside the Bank No-Dues Certificate (NOC). The ROC processes the form immediately without issuing any show cause notice, generating the Certificate of Satisfaction in Form CHG-5.
Where Form CHG-4 is Signed ONLY by the Company: Under Section 82(2), where the bank does not digitally co-sign Form CHG-4, the Registrar is statutorily mandated to serve a show cause notice in Form CHG-5 to the charge-holder, calling upon the lender to show cause within a specified time not exceeding fourteen (14) days why payment or satisfaction in full should not be recorded.
- If the charge-holder shows cause and files an objection, the Registrar shall record a note to that effect in the register and inform the company.
- If no cause is shown by the bank within 14 days, the Registrar shall enter the satisfaction in the Register of Charges and issue the certificate in Form CHG-5.

5. Regional Director Condonation under Section 87 (Form CHG-8)

Where a company fails to file Form CHG-4 within the maximum outer ceiling of three hundred (300) days, the ROC is barred by law from accepting the form. The company must seek a formal condonation of delay from the Regional Director (RD) under Section 87:

Under Section 87(b), the Central Government (powers delegated to Regional Directors) on being satisfied that the omission to give intimation to the Registrar of the payment or satisfaction of a charge within the time required was accidental or due to inadvertence or some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders, may, on the application of the company or any person interested, direct that the time for the giving of intimation of payment or satisfaction shall be extended.

The Section 87 Condonation Procedure:

File a comprehensive petition before the jurisdictional Regional Director in Form CHG-8, accompanied by an affidavit verifying the petition, a certified copy of the bank No-Dues Certificate, audited financial statements proving debt repayment, and a fee of ₹2,000.
The RD issues a notice to the ROC calling for an inspection report.
Following a personal hearing, the Regional Director passes a speaking order condoning the delay and directing the company to file Form CHG-4 within a specified period (typically 30 days from the order).
The company files the certified copy of the RD order with the ROC in Form INC-28 within thirty (30) days, following which Form CHG-4 is successfully uploaded and approved.

6. Statutory Register of Charges: Form CHG-7

Under Section 85(1) read with Rule 10, every company must maintain at its registered office a Register of Charges in Form CHG-7. The register must contain particulars of every charge created, modified, and satisfied, together with a copy of the deed creating or modifying the charge. Entries regarding the satisfaction of charges must be authenticated by a director or company secretary. Under Section 85(2), the Register of Charges and copies of instruments creating charges shall be preserved permanently by the company.

7. Penal Liabilities under Section 86

Failure to intimate charge satisfaction within statutory timelines exposes corporate management to severe civil penalties adjudicated under Section 454:

Penalty on Company: Liable to a penalty of five lakh rupees (₹5,00,000) under Section 86(1).
Penalty on Defaulting Officers: Every officer of the company who is in default is liable to a penalty of fifty thousand rupees (₹50,000).
False Statements (Section 448): If any person willfully makes a false statement or conceals material facts in Form CHG-4 or the supporting Bank NOC, such person is punishable for criminal fraud under Section 447, attracting non-compoundable imprisonment from six months to ten years and fine.

7 In-Depth Practical Case Studies & Numerical Illustrations

Case Study 1: Repayment of Working Capital Consortium Loan (Form CHG-4 within 30 Days)

Context & Facts: Bharat Heavy Electricals Ltd maintained a consortium working capital cash credit facility of ₹25,00,00,000 (₹25 Crore) secured by a hypothecation charge on current assets and book debts, registered with the ROC in 2021. On 15th January 2025, Bharat Heavy repaid the outstanding liability of ₹25 Crore in full using internal accruals and terminated the consortium facility. On 20th January 2025, the lead bank (State Bank of India) issued a formal No-Dues Certificate (NOC) confirming full satisfaction of the debt and releasing all hypothecated assets. The company secretary initiated filing procedures on 25th January 2025.

Step-by-Step Statutory Execution under Section 82(1):

Determination of Statutory Timeline:
- Date of Full Payment / Satisfaction: 15th January 2025.
- Statutory 30-Day Due Date: 14th February 2025.
Documentation Assembly:
- Bank No-Dues Certificate on SBI letterhead signed by Assistant General Manager.
- Board Resolution passed under Section 179(3) noting the full repayment and authorizing the company secretary to execute Form CHG-4.
- Updated draft Register of Charges in Form CHG-7.
Filing Form CHG-4: On 28th January 2025 (Day 13 from satisfaction), Form CHG-4 is filed on the MCA-21 portal. The form is digitally signed by both the Managing Director of Bharat Heavy and the authorized AGM of SBI.
Statutory Outcome: Because Form CHG-4 is co-signed by the charge-holder, the ROC approves the form without issuing Form CHG-5, immediately generating the Certificate of Registration of Satisfaction in Form CHG-5 on 2nd February 2025. The index of charges is updated on the MCA master database to reflect zero open charges. The certificate is archived in assurePractice.

Case Study 2: Filing Form CHG-4 after 120 Days (Within the 300-Day ROC Window)

Context & Facts: Zenon Auto Ancillaries Ltd repaid an equipment term loan of ₹2,00,00,000 (₹2 Crore) to an NBFC on 1st May 2024. The company received the bank NOC on 15th May 2024. Due to an internal restructuring of the secretarial team, Form CHG-4 was not filed within the initial 30 days (deadline: 31st May 2024). On 15th September 2024 (137 days from satisfaction), the new company secretary discovered the omission while conducting a corporate governance audit.

Statutory Condonation & Fee Calculation under Rule 8:

Parameter	Statutory Timeline	Actual Status in Case Study	Fee Multiplier Applicable
Date of Satisfaction	1st May 2024	1st May 2024	—
30-Day Base Deadline	31st May 2024	Missed	Standard Fee (₹600 for co. with capital > ₹1 Cr)
300-Day Outer Ceiling	25th February 2025	Filed on 15th Sept 2024 (137 days elapsed)	Within 300-Day ROC Jurisdiction
Delay Period	107 days beyond 30 days	Falls in 90-180 days bracket	6x Standard Fee Multiplier
Total Statutory Fee	Standard Fee + Additional Fee	₹600 + (6 * ₹600) = ₹600 + ₹3,600	₹4,200 Total ROC Filing Fee

Because the filing occurred on Day 137 (well within the 300-day limit), no petition before the Regional Director is required. The ROC regularizes the delay under the proviso to Section 82(1) upon payment of ₹4,200, approving Form CHG-4 and issuing Form CHG-5. Zenon automates these filing fee schedules in assurePractice.

Case Study 3: Delay Exceeding 300 Days: Section 87 Condonation Petition before the Regional Director

Context & Facts: Horizon Textile Mills Ltd repaid a term loan of ₹5,00,00,000 (₹5 Crore) to Punjab National Bank on 10th January 2023. PNB issued the No-Dues Certificate on 25th January 2023. The secretarial department misplaced the file during an office relocation. The 300-day window expired on 6th November 2023. In August 2024 (after 580 days), Horizon applied for a fresh working capital facility of ₹12 Crore from HDFC Bank. HDFC Bank's legal counsel conducted an MCA charge search and rejected the application due to the active ₹5 Crore PNB charge appearing on the portal.

Procedure for Securing RD Condonation under Section 87 (Form CHG-8):

Statutory Divestment of ROC: Because the delay exceeds 300 days, the ROC has zero statutory power to accept Form CHG-4. Only the Regional Director (RD) possesses jurisdiction under Section 87.
Filing Petition in Form CHG-8: On 20th August 2024, Horizon files Form CHG-8 before the Regional Director (Western Region), Mumbai:
- Attach formal affidavit sworn by the Managing Director explaining that the omission was "accidental and due to inadvertence" resulting from corporate office relocation.
- Attach verified copy of PNB's No-Dues Certificate and audited balance sheets proving that no debt was outstanding as on 31st March 2023 and 31st March 2024.
- Attach averment confirming that condonation will not prejudice the rights of any creditors or shareholders.
RD Hearing & Speaking Order: On 25th September 2024, the Regional Director hears the petition and passes an order condoning the delay, directing the company to file Form CHG-4 within thirty days upon payment of administrative costs of ₹25,000 to the Central Government.
Filing Form INC-28 & Form CHG-4: Horizon files the certified RD order in Form INC-28 on 5th October 2024. The MCA portal unlocks the charge ID. Horizon immediately files Form CHG-4 on 8th October 2024, securing Form CHG-5 satisfaction. HDFC Bank disburses the fresh ₹12 Crore credit line. The petition workflow is executed via assurePractice.

Case Study 4: ROC Invocation of Section 83 to Record Suo-Motu Satisfaction

Context & Facts: In Apex Infrastructure Ltd, a secured term loan of ₹15,00,00,000 (₹15 Crore) was assigned by a defaulting bank to an Asset Reconstruction Company (ARC). Following a corporate debt settlement under Section 83 of the Companies Act, the ARC executed a formal Deed of Release releasing all industrial land mortgages on 12th February 2024. The promoters of Apex Infrastructure were engaged in an internal boardroom conflict and refused to convene a Board meeting or authorize any director to sign Form CHG-4. The ARC petitioned the Registrar of Companies directly, submitting the registered Deed of Release and bank settlement receipts.

Statutory Analysis under Section 83:

Under Section 83(1), the Registrar has explicit statutory power to enter a memorandum of satisfaction on evidence being given to his satisfaction that the debt has been satisfied in whole, notwithstanding that no intimation has been received from the company.
The ROC verifies the registered Deed of Release, issues a formal notice to Apex Infrastructure granting 14 days to object, and upon receiving no valid legal objection, enters the satisfaction suo-motu into the Register of Charges.
Under Section 83(2), the ROC issues a formal memorandum of satisfaction to all parties on 20th March 2024, releasing the land from encumbrance. The notice is tracked in assureNotice.

Case Study 5: The Form CHG-5 14-Day Notice Mechanism (Resolving Bank Objections)

Context & Facts: Skyline Realty Developers Ltd repaid an overdraft facility of ₹3,00,00,000 to a private sector bank. Due to a commercial dispute regarding ₹4,50,000 of disputed penal interest charges, the bank refused to digitally co-sign Form CHG-4. Skyline Realty uploaded Form CHG-4 on the MCA portal with the digital signature of its Managing Director alone, attaching bank statements proving that the entire principal loan and regular interest had been credited to the bank.

Procedural Sequence under Section 82(2) & Form CHG-5 Notice:

Issuance of Form CHG-5 Show Cause Notice: Because the charge-holder did not sign Form CHG-4, the Registrar issues an official show cause notice in Form CHG-5 to the bank on 10th June 2024, granting fourteen (14) days to show cause why satisfaction should not be recorded.
Bank Objection: On 20th June 2024 (Day 10), the bank files a written objection with the ROC, asserting that the debt is not satisfied in full due to unpaid penal interest of ₹4,50,000.
Rejection of Form CHG-4: Under Section 82(2), where the charge-holder shows cause and files a valid objection, the Registrar cannot record satisfaction. The ROC informs Skyline Realty and rejects Form CHG-4.
Commercial Resolution: Skyline Realty enters into a settlement agreement with the bank, paying a negotiated sum of ₹2,00,000 in full and final settlement. The bank issues a clean NOC and co-signs a fresh Form CHG-4, securing immediate approval. The dispute docket is managed via assureNotice.

Case Study 6: Penal Adjudication under Section 86 for Chronic Failure to File Form CHG-4

Context & Facts: Metro Engineering Works Pvt Ltd repaid a term loan of ₹80,00,000 to an NBFC in March 2020. The company never filed Form CHG-4. In October 2024 (4.5 years later), during an inquiry under Section 206, the Registrar discovered that the company had shown zero bank borrowings in its balance sheets since 2020, but the ₹80 Lakh charge remained active on the MCA index of charges.

Adjudication Proceedings under Section 454 & Section 86:

The ROC issues an adjudication notice under Section 454 for non-compliance with Section 82.
Statutory Penalties under Section 86(1):
- Penalty on Company (Metro Engineering): ₹5,00,000 (Five Lakh Rupees).
- Penalty on Every Defaulting Officer: ₹50,000 each on two directors (Total: ₹1,00,000).
Adjudication Order: The Adjudicating Officer passes a formal order imposing ₹6,00,000 in aggregate penalties and directs the company to file a Section 87 petition before the Regional Director to regularize the charge within 60 days. The penalty is accounted for in assureFinancials.

Case Study 7: Impact of Un-Satisfied Open Charges on Corporate Credit Due Diligence

Context & Facts: Radiant Energy Solutions Ltd finalized a term sheet for a private equity investment of ₹100,00,00,000 (₹100 Crore). During legal due diligence, the investor's legal counsel extracted the Search Report on Charges from the MCA portal. The search revealed four historical open charges totaling ₹18 Crore registered between 2012 and 2018 in favor of banks that had merged or been dissolved, even though the underlying debts had been repaid years ago.

Remediation Strategy to Clear Title:

Condition Precedent (CP): The investor's term sheet included a mandatory CP requiring all four historical charges to be formally satisfied and cleared from the MCA portal prior to capital infusion.
Acquiring Archival NOCs: Radiant retrieves legacy loan closure letters and approaches the successor amalgamated banks to secure fresh digital No-Dues Certificates.
Filing Section 87 Petitions: Because all four charges exceeded 300 days of delay, Radiant files four consolidated petitions in Form CHG-8 before the Regional Director.
Restoration & Closure: The Regional Director grants condonation. Radiant files Form INC-28 and Form CHG-4 for all four charges, securing Form CHG-5 certificates. The index of charges is completely sanitized, satisfying the investor CP and unlocking the ₹100 Crore equity round. Radiant coordinates this transaction via assurePractice.

10-Step Charge Satisfaction & Secretarial Audit Verification Framework

To eliminate open charge discrepancies on the MCA portal, prevent heavy Section 86 penalties, and satisfy Secretarial Audit mandates under Section 204, company secretaries and corporate finance controllers must execute the following 10-step verification protocol.

Stage	Procedural Mandate	Statutory Citation	Critical Operational Risk / Secretarial Trap	assureOffice Workflow Integration
Step 1	Debt Closure & NOC Procurement	Section 82(1)	Relying on informal emails; failing to secure formal signed Bank No-Dues Certificate.	Archive bank satisfaction NOCs in assurePractice repository.
Step 2	Limitation Period Verification	Section 82(1) Proviso	Missing the 30-day base deadline; incurring additional filing fees under Rule 8.	Set automated 15, 20, and 25-day satisfaction alerts in assureNotice.
Step 3	Board Approval Protocol	Section 179(3) & SS-1	Executing Form CHG-4 without formal Board resolution noting debt settlement.	Draft board resolutions noting debt satisfaction via assurePractice.
Step 4	Bank Digital Signature Acquisition	Rule 8(2) Charges Rules	Filing without bank digital signature; triggering 14-day Form CHG-5 notice delays.	Coordinate bank DSC signing workflows in assurePractice.
Step 5	Form CHG-4 E-Filing	Rule 8(1) & Form CHG-4	Filing after 300 days; form rejected automatically by MCA-21 portal.	Generate pre-validated Form CHG-4 XML dockets via assurePractice.
Step 6	Form CHG-5 Notice Monitoring	Section 82(2) & Rule 8	Overlooking bank objections filed during 14-day notice period; form cancelled.	Monitor MCA portal objection tracking via assureNotice.
Step 7	Form CHG-5 Certificate Ingestion	Section 82(3) & Form CHG-5	Failing to download and verify signed Form CHG-5 Certificate of Satisfaction.	Verify index of charges update and download Form CHG-5 in assureNotice.
Step 8	Section 87 RD Condonation Filing	Section 87 & Form CHG-8	Failing to approach Regional Director when delay exceeds 300 days; open charge trap.	Draft Section 87 condonation petitions inside assurePractice.
Step 9	Form INC-28 Order Registration	Rule 12 Charges Rules	Failing to file certified RD order in Form INC-28 within 30 days of receipt.	Track Form INC-28 filing timelines via assurePractice.
Step 10	Register of Charges Update	Section 85 & Form CHG-7	Failing to enter satisfaction details in Form CHG-7; permanent statutory register breach.	Update permanent digital Form CHG-7 registers in assurePractice.

Integrating assureOffice Ecosystem for Corporate Finance Governance

Maintaining institutional compliance across multi-bank consortium facilities, loan settlements, and corporate encumbrance registries demands continuous synchronization between banking ledgers, corporate secretarial workflows, and regulatory filings. The assureOffice suite equips corporate finance departments and legal counsels with comprehensive tools:

assurePractice: Operates as the central corporate secretarial charge governance platform. It automates 30-day and 300-day Form CHG-4 countdowns, generates Board resolutions under Section 179(3), drafts Section 87 condonation petitions before the Regional Director (Form CHG-8), coordinates bank DSC signatures, and maintains permanent digital Registers of Charges in Form CHG-7.
assureFinancials: Automates financial statement engineering, reconciling bank loan payoffs against general ledgers, tracking debt covenant extinguishments, and ensuring accurate balance sheet disclosures under Ind AS 107 and Schedule III.
assureNotice: Centralizes regulatory correspondence from the Ministry of Corporate Affairs, Registrar of Companies, and Regional Directors, tracking Form CHG-5 14-day bank show cause notices, Section 206 inquiry communications, and Section 86 adjudication orders.
assureTax: Harmonizes corporate debt satisfaction with tax reporting, verifying that interest deductions on settled loans are accurately reconciled in Tax Audit Form 3CD Clause 26.

16 Practical Practitioner FAQs with Authoritative Answers

1. What is the statutory time limit for filing Form CHG-4 for satisfaction of charge?

Under Section 82(1), a company must intimate the payment or satisfaction in full of any charge in Form CHG-4 within thirty (30) days from the date of such payment or satisfaction.

2. What is the extended time limit allowed by the Registrar under Section 82?

Under the proviso to Section 82(1) read with Rule 8, the Registrar may allow the filing to be made within a period of three hundred (300) days from the date of satisfaction upon payment of additional fees.

3. What authority has the power to condone delay beyond 300 days?

Where delay exceeds 300 days, the power shifts exclusively to the Regional Director (RD) under Section 87 of the Companies Act, 2013 by filing Form CHG-8.

4. Does partial repayment of a loan require filing Form CHG-4?

No. Form CHG-4 applies strictly to the payment or satisfaction IN FULL of a charge. Partial repayments or release of specific collateral must be filed as a Modification of Charge in Form CHG-1 under Section 79.

5. What form is issued by the ROC certifying the satisfaction of a charge?

The Registrar issues a Certificate of Registration of Satisfaction of Charge in Form CHG-5 under Rule 8(3).

6. What is the Form CHG-5 Show Cause Notice mechanism under Section 82(2)?

Where Form CHG-4 is not digitally co-signed by the charge-holder, the Registrar issues a notice in Form CHG-5 to the bank, granting fourteen (14) days to show cause why satisfaction should not be recorded.

7. What happens if the bank objects within the 14-day Form CHG-5 notice window?

Under Section 82(2), if the bank files an objection within 14 days, the Registrar records a note to that effect in the register and informs the company, rejecting Form CHG-4.

8. What is the power of the Registrar under Section 83?

Section 83 empowers the Registrar to record a memorandum of satisfaction suo-motu based on evidence of debt repayment or property release, even if no intimation is received from the company.

9. What form is filed before the Regional Director for condonation of delay under Section 87?

The company files an application for condonation of delay in Form CHG-8 along with supporting affidavits, bank NOCs, and audited financial statements.

10. Within how many days must the Regional Director's condonation order be filed with the ROC?

The company must file a certified copy of the Regional Director's order with the ROC in Form INC-28 within thirty (30) days from the date of receipt of the order.

11. In what form must a company maintain its statutory Register of Charges?

Under Section 85 read with Rule 10, every company must maintain a Register of Charges at its registered office in Form CHG-7.

12. For how long must the Register of Charges in Form CHG-7 be preserved?

Under Section 85(2), the Register of Charges and copies of all instruments creating or modifying charges must be preserved permanently by the company.

13. What is the penalty on a company under Section 86 for failure to satisfy a charge?

Under Section 86(1), the company is liable to a penalty of five lakh rupees (₹5,00,000).

14. What is the penalty on defaulting officers under Section 86?

Every officer of the company who is in default is liable to a penalty of fifty thousand rupees (₹50,000).

15. Can an open charge on the MCA portal block fresh corporate bank borrowings?

Yes. Commercial banks conducting pre-disbursement due diligence require an unencumbered search report. An un-satisfied charge appearing on the portal will block fresh credit sanction.

16. What document must be attached to Form CHG-4 as proof of debt satisfaction?

The company must attach the formal, signed No-Dues Certificate (NOC) or Letter of Satisfaction issued by the charge-holder bank on its official letterhead.