Chapter VI - Registration of Charges
Section 78
Section 78: application for registration of charge by the charge holder
If the company does not register a charge within the thirty days in section 77(1), the person in whose favour it is created may apply to the Registrar, who acts within fourteen days after notice to the company.
On this page
Need advice on Section 78?
This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Where a company fails to register the charge within the period of thirty days referred to in sub-section (1) of section 77 without prejudice to its liability in respect of any offence under this Chapter, the person in whose favour the charge is created may apply to the Registrar for registration of the charge along with the instrument created for the charge, within such time and in such form and manner as may be prescribed and the Registrar may, on such application, within a period of fourteen days after giving notice to the company, unless the company itself registers the charge or shows sufficient cause why such charge should not be registered, allow such registration on payment of such fees, as may be prescribed: Provided that where registration is effected on application of the person in whose favour the charge is created, that person shall be entitled to recover from the company the amount of any fees or additional fees paid by him to the Registrar for the purpose of registration of charge.
Introduction
Section 78 protects lenders and other charge holders. The company remains liable for any offence, but the charge holder can itself apply for registration with the charge instrument.
The reference to the thirty-day period in section 77(1) was substituted by the Companies (Amendment) Act, 2017, section 19, in force from 7 May 2018 under S.O. 1833(E).
Key takeaways
Trigger
The company has failed to register the charge within thirty days of creation under section 77(1).
Registrar’s process
Within fourteen days after notice to the company, the Registrar may allow registration unless the company registers it or shows sufficient cause.
Fee recovery
A charge holder who pays fees or additional fees can recover them from the company.
When the charge holder can act
Section 78 applies where the company has not registered the charge within the thirty days referred to in section 77(1). The application goes to the Registrar with the charge instrument, within the time and in the form and manner prescribed by the Companies (Registration of Charges) Rules, 2014.
- India Code — consolidated Companies Act, 2013 (current text and commencement note)
- Gazette of India — S.O. 902(E), 26 March 2014 (commencement from 1 April 2014)
- Gazette of India — Companies (Amendment) Act, 2017 (1 of 2018)
- Gazette of India — S.O. 1833(E), 7 May 2018 (commencement of ss. 18 and 19 of Act 1 of 2018)
What the Registrar does
The Registrar gives notice to the company. Within fourteen days, unless the company itself registers the charge or shows sufficient cause why it should not be registered, the Registrar may allow registration on payment of the prescribed fees.
Recovering costs
Under the proviso, a charge holder who obtains registration can recover from the company any fees or additional fees paid to the Registrar. The company’s own liability for defaults under Chapter VI, including the section 86 penalty, is unaffected.
Practical preparation
Diarise day thirty after charge creation; check the company’s filing status; prepare the application with the charge instrument; track the Registrar’s notice and fourteen-day window; claim reimbursement of fees.
Practical checklist
Do
- Lenders should monitor charge filing after every sanction or modification.
- Keep the executed charge instrument ready for an application.
Avoid
- Do not assume the company has filed simply because the loan is disbursed.
- Do not treat charge-holder registration as curing the company’s own default.
Illustrative example
Hypothetical: lender registers a hypothecation
A borrower company has not filed a charge thirty-five days after hypothecating stock to a lender.
Apply
The lender applies to the Registrar with the hypothecation deed.
Notice
The Registrar notifies the company, which neither files nor shows cause.
Register
The Registrar allows registration and the lender claims back its fees.
Outcome
- The charge is registered, and the lender’s fees become recoverable from the company.
Glossary
- Charge
- An interest or lien created on company property or assets as security, including a mortgage, as defined in section 2(16).
- Charge holder
- The person in whose favour a charge is created.
Frequently asked questions
Can a bank register a charge if the borrower company does not?
Yes. The person in whose favour the charge is created may apply to the Registrar under section 78.
Who bears the fees?
The charge holder pays them on application but is entitled to recover them from the company.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026