Query Regarding CHG-1 Filing for Bank Loan Against Mortgage Property of Director
Shrinivas Gandewar
Dear Professionals,
In our company, we obtain bank loans secured against the mortgage property of the Director. The loan comprises two components: a Cash Credit (CC) facility and a Bank Guarantee.
My query is whether we need to file CHG-1 to register the charge.
Section 77(1) of the Companies Act, 2013 clearly states that: "It shall be the duty of every company creating a charge, whether within or outside India, on its property, assets, or any of its undertakings..."
Given this provision, I would appreciate clarification on whether the charge needs to be registered by filing CHG-1, particularly in the case of a loan secured against the property of a Director.
Thank you for your guidance.
CA Kishore D.L.S.
Reference:
It's only My Opinion :
- No need to file CHG-1 with ROC.
- However, board resolution and proper documentation for loan approval should be maintained for compliance purposes.
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Shri G
Thank you so much for your guidance.
Vinod Kumar Agarwal
Anirudh Tanwar
Cash Credit is typically secured by a charge on current assets, such as debtors and stock (if it's a trading or manufacturing company). On the other hand, a Bank Guarantee is generally secured by property or other assets to mitigate risk of the Bank. In your case, the property provided by the director serves as collateral security and does not need to be mentioned in the CHG-1.
You may want to review the facility documents to confirm if they cover the company's current assets. If so, you will need to file the CHG-1. Otherwise, filing the charge form may not be necessary.
Should you have any doubts, feel free to call me at 8268649291.
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