We keep on receiving queries time and again as to whether Hypothecation of Motor Vehicle can be termed as “charge” and whether this charge is required to be registered?
With the notification of Section 77 Companies Act, 2013, old provisions relating to charge contained in section 125 of the 1956, Act has changed completely. Section 77(1) of the Act has simply changed the list that was provided in the Companies Act, 1956 and requires registration of each and every charge created on the assets of the Company whether tangible or otherwise, and situated in or outside India.
Also, E-Form CHG- 1(Form for registration of charges) contains an option of registering hypothecation of motor vehicle in Field 8(a).
Even MGT-14 is required to be filed with ROC for the Board Resolution passed for this event. (in terms of clause (f) ofSection 179 sub-section 3).