ORDER
1. Swaraj Mazda Limited has filed this petition on March 23, 1990, for condonation of delay and extension of time under Section 141 of the Companies Act, 1956. This petition came up for final hearing and disposal before this Bench on August 30, 1991.
2. The case of the petitioner, as disclosed in the petition is that the petitioner-company had entered into seven bridge loan agreements with various financial institutions which were all satisfied on October 16, 1985, except in favour of LIC which was satisfied on December 26, 1985, on the execution of the final loan agreements. Satisfaction of the charge regarding the Industrial Finance Corporation of India was filed immediately on receipt of the communication, viz., confirmation of satisfaction of charge in this regard from the IFCI arid being in time, has also been taken on record. The forms for satisfaction of charges were not filed in respect of other institutions due to non-receipt of confirmation of satisfaction of charge from those institutions. On a query in December, 1986, from the Registrar of Companies regarding the filing of the satisfaction of charges with regard to other financial institutions, the company subsequently filed the relevant form on 13th January, 1987, without enclosing therein the relevant confirmation of satisfaction of charge from the financial institutions. The Registrar of Companies informed the company regarding late filing of the satisfaction of charges and advised the company to approach the Company Law Board Bench for seeking condonation of delay ; hence this petition.
3. Learned counsel, Sh. M. G. Ramachandran, advocate, who appeared on behalf of the company, argued that the petitioner-company has relied on letter
No. 3(141)17/78, dated August 17, 1978, as corrected by letter No. 8/10(25)77, dated September 20, 1978, from the Department of Company Affairs which states that, in the reckoning of period of 30 days under Section 138 in cases where banks are involved, it will be counted from the date of the issue of the bank’s letter to the companies intimating them about the satisfaction of the charge. Learned counsel contended that the petitioner-company had taken the view that the view of the Department of Company Affairs applied to financial institutions as well. Sh. K. L, Khambaj, Registrar of Companies, Punjab, Himachal pradesh and Chandigarh, Jalandhar, confirmed that as per their practice they go by the view of the Department with regard to charges in favour of banks but not in respect of financial institutions.
4. I have given my careful thought to the arguments advanced by learned counsel. From a perusal of Section 138 of the Companies Act, 1956, it is clear that the company shall give intimation to the concerned Registrar of the payment or satisfaction in full of any charge relating to the company and requiring registration under this part, within thirty days from the date of such payment or satisfaction, and the Registrar shall, on receipt of such intimation, cause a notice to be sent to the holder of the charge, calling upon him to show cause within a period not exceeding fourteen days as may be specified in such notice as to why payment or satisfaction should not be recorded as intimated.
5. It is worthy of note that Section 138(1) does contemplate that the intimation may be given without a supporting letter from the financial institutions/banks in case the same is not available. This is the reason why subsection (2) of the same section contemplates the sending of a notice by the Registrar of Companies to the chargeholder. I am of the view that the provisions of Section 138 of the Companies Act leave no scope for interpretation of the date of such payment or satisfaction to be shifted from the actual date of payment or satisfaction. Hence a proper compliance with Section 138 would necessarily mean that intimation should be given within 30 days of actual payment or satisfaction to the Registrar of Companies who in turn will obtain confirmation from the chargeholder “within 14 days about the full satisfaction or payment”. The intimation, however, may be without a supporting letter if the same is not available. It is precisely for this reason that the Registrar of Companies, under Section 138, Sub-section (2), is required to send a notice to the holder of the charge to show cause as to why such payment or satisfaction should not be recorded. In view of this safety provision under Section 138, Sub-section (2) of the Companies Act, the company should have given the intimation to the Registrar of Companies within 30 days of the actual payment or satisfaction. The company, however, has refrained from intimating
in view of the circular of the Department of Company Affairs, Government of India, which appears to be out of tune with Section 138 of the Act.
6. In view of the above, this Bench hereby orders that the delay in filing the five Forms No. 17 satisfied on October 16, 1985, and in one Form No. 17 (particulars are as given in annexure A) satisfied on January 24, 1986, is condoned and the time for filing the same is hereby extended up to January 13, 1987, as prayed for. The petitioner-company shall file a certified copy of this order pursuant to Rule 38(3) of the Company Law Board (Bench) Rules, 1975, within sixty days from the date of this order with the concerned Registrar of Companies who shall take the relevant documents on record immediately thereafter.
7. In view of the special circumstances in this case and keeping in view the fact that the company has genuinely relied on the Department’s view and has acted immediately on receiving intimation from the Registrar of Companies, there is no order as to costs.
