Best Limited initially created a charge in favor of LKJ Bank for a financial facility. This charge was duly registered. A few months later, LKJ Bank…

CA Intermediate · Corporate and Other Laws · MTP · January 2025
Best Limited initially created a charge in favor of LKJ Bank for a financial facility. This charge was duly registered. A few months later, LKJ Bank enhanced the credit facility by an additional 40 crore. However, due to an oversight, Best Limited failed to register the modification to the original charge with the Registrar of Companies. The company has now realized this error and is concerned about the potential impact on its records and compliance. As per the provisions of the Companies Act, 2013, what steps should Best Limited take to correct the situation regarding the unregistered modification of the charge?
(A) Ignore the oversight since the original charge was registered.
(B) Re-register only the original charge with the updated facility amount.
(C) File an application with the Central Government for rectification of the Register of Charges.
(D) Contact LKJ Bank to withdraw the enhanced facility until the registration is completed.

Suggested Answer and Working Notes:

Correct Answer: Option (C)

File an application with the Central Government for rectification of the Register of Charges.

Topics: Registration of Charges

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