The Company's Ordinance, 1984

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PART VII -- REGISTRATION OF MORTGAGES, CHARGES, ETC.

121. Certain mortgages and charges to be void if not registered.- (1) Every mortgage, charge or other interest created after the commencement of this Ordinance by a company and being either-
(a) a mortgage or charge for the purpose of securing any issue of debentures; or
(b) a mortgage or charge on uncalled share capital of the company, or
(c) a mortgage or charge on any immovable property wherever situate, or any interest therein; or
(d) a mortgage or charge on any book debts of the company, or
(e) a mortgage or charge, not being a pledge, on any movable property of the company; or
(f) a floating charge on the undertaking or property, of the company, including stock-in-trade; or
(g) a mortgage or charge on a ship or any share in a ship; or
(h) a mortgage or charge on goodwill, on a patent or licence under a patent, on a trade mark, or on a copyright or a licence under a copyright; or
(i) a mortgage or charge or other interest based on agreement for the issue of any instrument in the nature of redeemable capital; or
(j) a mortgage or charge or interest based on a musharika agreement; or
(k) a mortgage or charge or other interest based on a hire-purchase or leasing agreement for acquisition of fixed assets;
shall, so far as any security on the company's property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the mortgage or charge, together with a copy of the instrument, if any, verified in the prescribed manner, by which the mortgage or charge is created or evidenced are filed with the registrar for registration in manner required by this Ordinance within twenty-one days after the date of its creation, but without prejudice to any contract or obligation for repayment of the money thereby secured, and when a mortgage or charge becomes void under this section money secured thereby shall immediately become payable:

Provided that-
(i) in case of a mortgage or charge created out of Pakistan comprising solely property situate outside Pakistan, twenty-one days after the date on which the instrument or copy could, in due course of post, and if dispatched with due diligence, have been received in Pakistan shall be substituted for twenty-one days after the date of the creation of the mortgage or charge as the time within which the particulars and instrument or copy are to be filed with the registrar; and

(ii) where mortgage or charge is created in Pakistan but comprises property outside Pakistan, the instrument creating or purporting to create the mortgage or charge and a copy thereof verified in prescribed manner may be filed for registration notwithstanding that further proceedings may be necessary to make the mortgage or charge valid or effectual according to the law of the country in which the property is situate; and
(iii)where a negotiable instrument has been given to secure the payment of any book debts of a company, the deposit of the instrument for the purpose of securing an advance to the company shall not for purpose of this subsection be treated as a mortgage or charge on those book debts; and
(iv) holding of debentures entitling the holder to a charge on immovable property shall not be deemed to be an interest in immovable property.

(2) Where any mortgage or charge on any property of a company required to be registered under subsection (I) has been so registered, any person acquiring such property or any part thereof, or any share or interest therein, shall be deemed to have notice of the said mortgage or charge as from the date of such registration.

122. Registration of charges on properties acquired subject to charge.-- (1) Where a company registered in Pakistan acquires any property, which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge, together with a copy, certified in the prescribed manner to be a correct copy of the instrument, if any, by which the charge was created or is evidenced, to be delivered to the registrar for registration in the manner required by this Ordinance within twenty-one days after the date on which the acquisition is completed:

Provided that, if the property is situate and the charge was created outside Pakistan, twenty-one days after the date on which the copy of the instrument could in due course of post, and if dispatched with due diligence, have been received in Pakistan shall be substituted for twenty-one days after the completion of the acquisition as the time within which the particulars and the copy of the instrument are to be delivered to the registrar.

(2) If default is made in complying with this section, the company and every, officer of the company who is knowingly and wilfully in default shall be liable to a fine of two thousand rupees.

123. Particulars in case of series of debentures entitling holders pari passu.-- Where a series of debentures containing, or giving by reference to any other instrument, any charge to the benefit of which the debenture-holders of that series are entitled pair passu is created by a company, it shall be sufficient for the purposes of section 12 1 if these are filed with the registrar within twenty-one days after the execution of the deed containing the charge or if there is no such deed, after the execution of any debentures of the series, the following particulars, namely--
(a) the total amount secured by the whole series;
(b) the dates of the resolutions authorizing the issue of the series and the date of the covering deed, if any, by which the security is created or defined;
(c) a general description of the property charged; and
(d) the names of the trustees, if any, for the debenture-holders;
together with a copy of the deed verified in the prescribed manner containing the charge, or if there is no such deed, one of the debentures of the series, and the registrar shall, on payment of the prescribed fee, enter those particulars in the register:

Provided that, where more than one issue is made of debentures in the series, there shall be filed with the registrar for entry in the register particulars of the date and amount of each issue, but an omission to do this shall not affect the validity of the debentures issued.

124. Particulars in case of commission, etc. on debentures.-- Where any commission, allowance or discount has been paid or made either directly or indirectly by the company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any such debentures, the particulars required to be filed for registration under sections 121 and 123 shall include particulars as to the amount or rate per cent. of the commission, discount or allowance so paid or made, but an omission to do this shall not affect the validity of the debentures issued:

Provided that the deposit of any debentures as security for any debt of the company shall not for the purposes of this section be treated as issue of the debentures at a discount.

125. Register of mortgages and charges.-- (1) The registrar shall keep, with respect to each company, a register in the prescribed form of all mortgages and charges created by the company and requiring registration under section 121 or section 122 and shall, on payment of the prescribed fee, enter in the register, with respect to every such mortgage, or charge, the date of creation, the amount secured by it, short particulars of the property mortgaged or charged, and the names of the mortgagees or persons entitled to the charge.

(2) A register kept m pursuance of subsection (1) shall be open to inspection by any person on payment of the prescribed fee.

126. Index to register of mortgages and charges.-- The registrar shall keep a chronological index, in the prescribed form and with the prescribed particulars, of the mortgages or charges registered with him trader this Ordinance.

127. Certificate of registration.-- The registrar shall give a certificate under his hand of the registration of any mortgage or charge registered in pursuance of section 121, stating amount thereby secured, and the certificate shall be conclusive evidence that requirements of sections 121 to 125 as to registration have been complied with.

128. Endorsement of certificate of registration on debenture or certificate of debenture stock.-- The company shall cause a copy of every certificate of registration given under section 127 to be endorsed on every debenture or certificate of debenture stock which is issued by the company and the payment of which is secured by the mortgage or charge so registered:

Provided that nothing in this section shall be construed as requiring a company to cause a certificate of registration of any mortgage or charge so given to be endorsed on any debenture or certificate of debenture stock which has been issued by the company before the mortgage or charge was created.

129. Duty of company and right of interested party as regards registration.-- (1) It shall be the duty of a company to file with the registrar for registrations prescribed particulars of every mortgage or charge created by the company and of the issue of debentures of a series, requiring registration under section 121, but registration of any such mortgage or charge may be effected on the application of any person interested therein.

(2) Where the registration is effected on the application of some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him to the registrar on the registration.

(3) Whenever the terms or conditions or extent or operation of any mortgage or charge registered under subsection (I) are modified, it shall be the duty of the company to send to the registrar the particulars of such modification together with a copy of the instrument evidencing such modification verified in the prescribed manner, and the provisions of subsection (1) as to registration of mortgage or charge shall apply to such modification of the mortgage or charge as aforesaid.

130. Copy of instrument creating mortgage or charge to be kept at registered office.-- Every company shall cause a copy of every. instrument creating any mortgage or charge requiring registration under section 121 and of every instrument evidencing modification of the terms or conditions thereof, to be kept at the registered office of the company:

Provided that, in the case of a series of uniform debentures, a copy of one such debenture shall be sufficient.

131. Rectification of register of mortgages.-- (1) The [Commission], on being satisfied that the omission to register a mortgage or charge within the time required by section 121, or that the omission or misstatement of any particular with respect to any such mortgage or charge, or the omission to give intimation to the registrar of the payment or satisfaction of a debt for which a charge or mortgage was created, was accidental or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and, on such terms and conditions as seem to the [Commission] just and expedient, order that the time for registration be extended, or, as the case may be, that the omission or misstatement be rectified, and may make such order as to the costs of the application as it thinks fit.

(2) A certified copy of the order of the [Commission] passed under subsection (1) shall be filed with the registrar within twenty-one days of the date of such order by the company or the person on .whose application it is passed.

(3) Where the [Commission] extends the time for the registration of a mortgage or charge, the order shall not prejudice any rights acquired in respect of the property concerned prior to the time when the mortgage or charge is actually registered.

132. Registration of payment or satisfaction of mortgages and charges.-- (1) It shall be the duty of a company to give intimation to the registrar of the payment or satisfaction, in full, of any charge or mortgage created by the company and requiting registration under sections 121 and 122 within twenty-one days from the date of the payment or satisfaction, in full, thereof.

(2) The registrar shall on receipt of such intimation cause a notice to be sent to the holder of the charge or mortgage calling upon him to show cause, within a time, not exceeding fourteen days, to be fixed by such notice, why the payment or satisfaction of the charge or mortgage should not be recorded.

(3) The registrar shall, if no cause is shown, order that a memorandum of satisfaction be entered in the register and shall if required furnish the company with a copy thereof.

(4) Where cause is shown, the registrar shall record a note to that effect in the register, and shall inform the company that he has done so.

(5) Nothing in this section shall be deemed to affect the powers of the registrar to make an entry in the register of charges under section 133 otherwise than on receipt of an intimation from the company.

133. Power of registrar to make entries of satisfaction and release in absence of intimation from company.-- The registrar may, on evidence being given to his satisfaction with respect to any registered charge-

(a) that the debt for which the charge was given has been paid or satisfied in whole or in part, or

(b) that part of the property or undertaking charged has been released from the charge or has ceased to form part of the company property or undertaking, enter in the register of mortgages and charges a memorandum of satisfaction in whole or in part, or of the fact that part of the property or undertaking has been released from the charge or has ceased to form part of the company's properly or undertaking, as the case may be, notwithstanding the fact that no intimation has been received by him from the company.

134. Penalties.-- (1) If any company makes default in filing with the registrar for registration the particulars--
(a) of any mortgage or charge created by the company or any modification thereof or;
(b) of the payment or satisfaction of a debt in respect of which a mortgage or charge has been registered under section 121 or section 122; or
(c) the issues of debentures of a series,

requiring registration with the registrar under the foregoing provisions of this Ordinance, then, unless the registration has been effected within the prescribed period on the application of some other person, the company, and every officer of the company or other person who is knowingly a party to the default, shall-
(i) be liable to a fine not exceeding one hundred rupees for every day during which the default in filing of the particulars of satisfaction of a mortgage or charge continues; and
(ii) be liable to a fine not exceeding five hundred rupees for every day during which the default in filling of the particulars of mortgage or charge or of debentures continues.

(2) Subject as aforesaid, if any company makes default in complying with any of the requirements of this Ordinance as to the registration with the registrar of any mortgage or charge created by the company, or any modification thereof, the company, and every officer if the company who knowingly and wilfully authorises or permits the default, shall, without prejudice to any other liability., be liable to a fine not exceeding five thousand rupees and to a further, fine not exceeding one hundred rupees for every. day after the first during which the default continues.

(3) If any person knowingly and wilfully authorises or permits the delivery of any debentures or certificate or debenture stock requiring registration with the registrar under the foregoing provisions of this Ordinance without a copy of the certificate of registration being endorsed upon it, he shall, without prejudice to any other liability, be liable to a fine not exceeding two thousand rupees.

135. Company’s register of mortgages.-- (1) Every company shall keep a register of mortgages and enter therein all mortgages and charges specifically affecting property, of the company and all floating charges on the undertaking or on any property of the company, giving in each case a short description of the property mortgaged or charged, the amount of the mortgage or charge and, except in the case of securities to bearer, the names of the mortgagees or persons entitled thereto.

(2) If any officer of the company knowingly and wilfully authorises or permits the omission of any entry required to be made in pursuance of subsection (1), he shall be liable to a fine not exceeding two thousand rupees.

136. Right to inspect copies of instruments creating mortgages and charges and company’s register of mortgages.-- (1) The copies kept at the registered office of the company in pursuance of section 13 0 of instruments creating any mortgage or charge or modification of the terms and conditions thereof requiring registration under this Ordinance with the registrar, and the register of mortgages and charges kept in pursuance of section 135 shall be open at all reasonable times to the inspection of any creditor or member of the company without fee, and the register of mortgages shall also be open to the inspection of any other person on payment of such fee, not exceeding the amount prescribed for each inspection, as the company may fix.

(2) If inspection of the said copies or register is refused, the company shall be liable to a fine not exceeding five hundred rupees and a further fine not exceeding fifty rupees for every day after the first during which the refusal continues, and every officer of the company who knowingly authorises or permits the refusal shall incur the like penalty, and in addition to the above penalty, the registrar may by order compel an immediate inspection of the copies or register.

RECEIVERS AND MANAGERS

137. Registration of appointment of receiver or managers.-- (1) If any person obtains an order for the appointment of a receiver of, or a person to manage, the property of a company, or appoints such a receiver or person under any powers contained in any instrument, he shall, within fifteen days from the date of the order or of the appointment under the powers contained in the is instrument, file notice of the fact with the registrar, and the registrar shall, on payment of the prescribed fee, enter the fact in the register of mortgages and charges.

(2) If any person makes default in complying with the requirements of subsection (1), he shall be liable to a fine not exceeding two hundred rupees for every day during which the default continues.

138. Filing of accounts of receiver or manager.-- (1) Every receiver of the property of a company who has been appointed under the powers contained in any instrument, and who has taken possession, shall within thirty days of expiry of every six months while he remains in possession, and also within thirty days on ceasing to act as receiver, file with the registrar an abstract in the fifteen days of ceasing to act as receiver, file with the registrar an abstract in the prescribed from of his receipts and payments during the period to which the abstract relates, and shall also, within fifteen days of ceasing to act as receiver, file with the registrar notice to that effect, and the registrar shall enter the notice in the register of mortgages and charges.

(2) Where a receiver of the property of a company has been appointed, every invoice, order for goods, or business letter issued by or on behalf of the company, or the receiver of the company, being a document on or in which the name of the company appears, shall contain a statement that a receiver has been appointed.

(3) If default is made in complying with the requirements of subsection (1) or subsection (2), the company and every director or other officer :of the company and every receiver who knowingly and wilfully authorises or permits the default, shall be liable to a fine not exceeding two thousand rupees and, in the case of a continuing default, to a further fine not exceeding one hundred rupees for every day after the first during which the default continues.

(4) The provisions of subsections (1), (2) and (3) shall apply. to any person appointed to manage the property of a company under any powers contained in an instrument in the same manner as they apply to a receiver so appointed.

139. Disqualification for appointment as receiver or manager.-- The following shall not be appointed under any powers contained in an instrument as a receiver or manager of the property of a company, namely:
(a) a minor;
(b) a person who is of unsound mind and stands so declared by a competent Court;
(c) a body corporate;
(d) a director of the company;
(e) an undischarged insolvent unless he is granted leave by the Court by which he has been adjudged an insolvent; or
(f) a person disqualified by a Court from being concerned with or taking part in the management of a company in any other way, unless he is granted leave by the Court.

140. Application to Court.-- (1) A receiver or manager of the property of a company appointed under the powers contained in any instrument may apply to the Court for directions in relation to any particular matter arising in connection with the performance of his functions, and on any such application the Court may give such direction, or may make such order declaring the rights of persons before the Court, or otherwise, as the Court thinks just.

(2) A receiver or manager of the property of a company appointed as aforesaid shall, to the same extent as if he had been appointed by order of a Court, be personally liable on any contract entered into by him in the performance of his functions, except in so far as the contract otherwise provides, and entitled in respect of that liability to indemnity out of the assets; but nothing this sub-section shall be deemed to limit any right to indemnity which he would have apart from the subsection or to limit his liability on constracts entered into without authority or to confer any right to indemnity in respect of that liability.

141. Power of Court to fix remuneration, etc., of receiver or manager.-- (1) The Court may, on an application made to it by the receiver or manager of the property, by order fix the amount to be paid by way of remuneration to any person who, under the power contained in an instrument, has been appointed as receiver or manager of the property. of the company:

Provided that the amount of remuneration shall not exceed such limits as may be prescribed.

(2) The power of the Court under sub-section (1) shall, where no previous order has been made with respect thereto-
(a) extend to fixing the remuneration for any period before the making of the order or the application therefor;
(b) be exercisable notwithstanding that the receiver or manager had died or ceased to act before the making of the order or the application therefor; and
(c) where the receiver or manager has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that so fixed for that period, extend to requiring him or his representative to account for the excess or such part thereof as may be specified in the order:

Provided that the power conferred by clause (c) shall not be exercised as respects any period before the making of the application or the order unless in the opinion of the Court there are special circumstances making it proper for the power to be so exercised.

(3) The Court may from time to time, on an application made either by the liquidator or by the receiver or manager or by the registrar, vary or amend an order made under sub section (I) and issue directions to the receiver respecting his duties and functions or any other matter as it may deem expedient:

Provided that an order made under subsection (I) shall not be varied so as to increase the amount of remuneration payable to any person.

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