Procedure - satisfaction of existing Charge

1)      Ensure that in respect of charges created by you and registered under {Section 125} full payment on account of principal and interest has been made and ‘No dues certificate’ has been obtained from the charge holder.

2)      File with the concerned ROC an intimation in {E form no 17 } with the following attachments

            No dues certificate from the charge holder.
           Other optional attachments { resolution }

3)      Check in respect of the following :

Ø  Charge Creation Identification number

Ø  Particulars of charge holder

Ø  Particulars of creation of original charge and subsequent modification in  case any carried out.

Ø  Date of satisfaction of charge in full.

4)      Ensure that the e-form is digitally signed by the authorised signatory of the banker along with the authorised signatory of the company (Managing Director or director or secretary) and certified by PCS or PCA.

5)      Make the payment of requisite fees prescribed by the Companies { Schedule X of Companies Act }

IMPORTANT NOTE
Sub-sections (2) to (5) of section 138 lay down the procedure to be followed by the Registrar on receipt of intimation of satisfaction of a charge. The provisions are mandatory and the Registrar must follow them. A notice is required to be given by the Registrar to the charge-holder calling upon him to show cause within a time not exceeding 14 days why the intimation of satisfaction be not taken on record. If no cause is shown, the Registrar will take it on record; if cause is shown, the Registrar shall record a note to that effect in the register and shall inform the company about this. These provisions obviously seek to protect the interest of the charge-holder since an intimation of satisfaction given by the company and acted upon by the Registrar may be incorrect or fraudulent and, if so, it would be prejudicial to the interests of the charge-holder. 



It may be noticed that no time limit has been prescribed for the Registrar to give a show cause notice to the charge-holder. However, the Department of Company Affairs expects the Registrars to issue the notice 'as early as possible and in any case within a week after the receipt of an intimation of satisfaction of charge from the Company so that the unnecessary delay in registering the memorandum of satisfaction of a charge is avoided'

A company is required to "give intimation to the Registrar of the satisfaction" within 30 days from the date of satisfaction. It is a unilateral act of the party. 

The Department is of the view that the period of 30 days under section 138, in cases where banks are involved, will be counted from the date of the issue of the bank's letter to companies intimating them about the satisfaction of the charge under section 138.