According to Section 77 of the Companies Act, 1956, all types
of charges created by a company are to be registeredby the ROC, where
they are non-compliant and are are not filed with the Registrar of
Companies for registration, it shall be void as against the liquidator
and any other creditor of the company. This does not, however, mean
that the charge is altogether void and the debt is not recoverable. So
long as the company does not go into liquidation, the charge is good
and may be enforced.
Void against the liquidator means that the liquidator on winding
up of the company can ignore the charge and can treat the concerned
creditor as unsecured creditor. The property will be treated as free of
charge i.e. the creditor cannot sell the property to recover its dues.
Void against any creditor of the company means that if any
subsequent charge is created on the same property and the earlier charge
is not registered, the earlier charge would have no consequence and the
latter charge if registered would enjoy priority. In other words, the
latter charge holder can have the property sold in order to recover its
Thus, non-filing of particulars of a charge does not invalidate
the charge against the company as a going concern. It is void only
against the liquidator and the creditors at the time of liquidation. The
company itself cannot have a cause of action arising out of nonregistration.