CHARGES ON OMNIBUS COUNTER GUARANTEE

[Pranjul Shukla]

Dear,

please tell me whether it is required to create charges on omnibus counter guarantee given to bank for guarantee given by bank in favour of Company. I think no. what are your opinions? my company's bank created charge on it and filed Form-8 under CA 1956.
thanks in advance

Regards
Pranjul Shukla

[Govinda Patil]

What  ? Company has created charge on bank guarantee ? How and why. Usually charges are created for  fund based facilities which are secured by  assets of the  company. In this case, what is the underlying asset on which charge  is  created ?On top of it  you are  stating that  bank wants to create charge on counter guarantee .. Has Company paid  stamp duty on the guarantee  or counter guarantee.

Even in case  of corporate guarantee charge  is not  created .

Pl discuss with your banker once again and also study the  provisions of  Companies Act 2013.

[Pranjul Shukla]

Sir, actually it is matter of CA 1956, in 2010 to secure the fund based facilities(LC, BG) provided by the Bank and in addition to security already given, the bank demands for omnibus counter guarantee for which the company has given such Counter guarantee. Actually the matter is that the bank has not created any charge on any property of the company, but it has filed with mca form-8 for charges. I know charges are not created on omnibus counter guarantee, and bank also has not created it, but bank has filed the form-8 with mca. I think i should approach bank for NOC and should file form for satisfaction of the same.
Thank you.

On Tuesday, March 20, 2018 at 5:47:32 PM UTC+5:30, Pranjul Shukla wrote:

[Govinda Patil]

Mr.Shukla

Whether it is CA 1956 or CA 2013, basics of  charge have not undergone any change.  Even the text of the provisions  is almost similar. 

LC and BG can never be fund based facilities. 

You  have mentioned that  Company has  given  counter guarantee. There is no  charge  on any property  but has filed Form 8

Please study  form  8 which should throw light   as  the security  provided /value   etc are available therein. 

There seems to be absurdity  when you say that bank  has not created it  but bank has filed form  8

Creation of charge  is not done by  Form 8 . Form  8 only registers the charge  in the books  maintained by ROC.

Charge creation document  is usually hypo deed/mortgage  deed etc.

As you rightly said, study Form  8, approach Bank , convince them and get NOC and file CHG 4

thank s

Govinda K Patil

Practising Company Secretary

B-2/1, Kailash Housing Society

Shastrinagar,Kothrud

Pune  411029

Cell: 9823231660

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