'Horizon Corp' creates a charge on its heavy machinery in favour of a lender but intentionally never registers

Question

'Horizon Corp' creates a charge on its heavy machinery in favour of a lender but intentionally never registers it with the Registrar to avoid fees. Two years later, Horizon Corp goes into liquidation. The lender claims priority over the machinery's sale proceeds, arguing their original signed contract proves the debt. Under Section 77 of the Companies Act, 2013, how will the Company Liquidator treat this specific claim?

Examoogle · Accepted Answer

The correct answer is Option D: It is invalid against the liquidator but the underlying contractual debt remains safely intact. Practice and solve "'Horizon Corp' creates a charge on its heavy machinery in favour of a lender but intentionally never..." for Part 5 Domain Knowledge - CIL MT Company Secretary 2026. The correct answer is Option D: It is invalid against the liquidator but the underlying contractual debt remains safely intact. Detailed step-by-step solution, conceptual clarity, and formulas on Examoogle.

Step-by-Step Solution & Concepts:
Practice and solve "'Horizon Corp' creates a charge on its heavy machinery in favour of a lender but intentionally never..." for Part 5 Domain Knowledge - CIL MT Company Secretary 2026. The correct answer is Option D: It is invalid against the liquidator but the underlying contractual debt remains safely intact. Detailed step-by-step solution, conceptual clarity, and formulas on Examoogle.

Examoogle · Answer

Option A: It is fully valid as the original written contract legally supersedes registration requirements

Examoogle · Answer

Option B: It is fully invalid as unregistered charges dissolve all prior contractual obligations entirely

Examoogle · Answer

Option C: It is fully valid against the liquidator as the charge was executed prior to winding process

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