Where a company fails to register the charge within the period specified in 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.
Legal Commentary & Landmark Judgments: Section 78
Section 78 provides a critical statutory fallback mechanism empowering the charge-holder or lender to unilaterally apply for the registration of a corporate charge in Form CHG-1 or CHG-9 when the borrowing company fails to register the encumbrance within the initial thirty-day window.
Financial institutions and debenture trustees must track the 30-day post-execution window. If the corporate borrower neglects to provide the RoC filing challan by the 31st day, immediately file Form CHG-1 under Section 78 with a certified copy of the deed of hypothecation or mortgage. Do not wait for borrower cooperation, as unperfected charges risk invalidation under Section 77 in subsequent Section 7 or 9 IBC insolvency proceedings.