Under the Companies Act, 2013, Section 82 mandates that a company must intimate the Registrar of Companies (ROC) regarding the payment or satisfaction in full of any registered charge within 30 days of such satisfaction using Form CHG-4.
If a company fails to comply with this requirement, it faces severe consequences, and the statutory auditor has a well-defined role to play under the Act and auditing standards
If the company defaults on filing Form CHG-4 within the prescribed timelines (including extended timelines up to 300 days with additional fees, after which a Central Government/Regional Director condonation is required via Form CHG-8), the penalties are governed by Section 86(1)
For the Company: A flat penalty of ₹5,00,000.
For Every Officer in Default: A flat penalty of ₹50,000 (which must be paid from their personal income/sources)
A statutory auditor cannot ignore an unfiled satisfaction of charge. Since bank statements or No Objection Certificates (NOCs) will show that a loan has been fully paid, but the MCA index of charges still shows it as "open," the auditor has specific reporting duties.
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