Ch # 7.

Mortgages and Charges Page 235

1. The Companies Act 2017 requires certain charges (including mortgage and pledge) that must be
registered. Choose the one which is not required to be registered.
(a) a floating charge on the undertaking or property of the company, including stock-in-trade
(b) a mortgage or charge on book debts of the company
(c) promissory note given to secure the payment of any book debts of a company
(d) a charge on goodwill or on any intellectual property

2. A charge was created on the property of KLM Limited on 30 June 2021. What is the latest date by
which such charge must be registered?
(a) 7 July 2021
(b) 30 July 2021
(c) 15 July 2021
(d) 31 July 2021

3. A charge was created in UAE on the property situated in UAE belonging to JKL Limited on 30 June
2021. The documents posted from UAE to Pakistan take 3 days in ordinary course of post. What is
the latest date by which such charge must be registered?
(a) 30 July 2021
(b) 2 August 2021
(c) 8 August 2021
(d) 15 August 2021

4. If a charge is not registered:

(a) The relevant loan need not be repaid at all.
(b) The mortgage or charge would be void against the liquidator and creditors of the company.
(c) The mortgage or charge would be valid against the liquidator of the company.
(d) The mortgage or charge would be valid against the creditors of the company.

5. Which of the following is correct with respect to duty or right as to registration of mortgages and
charges?
(a) Only the borrowing company can file the mortgage or charge for registration and shall bear
the cost of registration.
(b) Only the charge-holder can file the mortgage or charge for registration and shall bear the cost
of registration.
(c) Either the borrowing company or the charge-holder can file the mortgage or charge for
registration and such company or charge-holder, as the case may be, shall bear the cost of
registration.
(d) Either the borrowing company or the charge-holder can file the mortgage or charge for
registration and borrowing company shall bear the cost of registration.

6. A company shall give intimation of the payment or satisfaction in full, of any mortgage or charge to
the registrar in the manner specified, within a period of:
(a) 15 days from the date of such payment or satisfaction.
(b) 30 days from the date of such payment or satisfaction.
(c) 30 days from the date of passing the special resolution.
(d) 15 days from the date of passing the special resolution.
Ch # 7. Mortgages and Charges Page 236

7. Which of the following is incorrect in relation to satisfaction of mortgages and charges?

(a) The registrar may record the satisfaction of charge even when no intimation has been received
by him from the company.
(b) The registrar shall send notice to charge-holder to show cause as to why the satisfaction of
charge may not be recorded as intimated to him regardless of whether a no-objection
certificate on behalf of holder is furnished by the company with the intimation.
(c) If no cause is shown by charge-holder of the mortgage or charge, the registrar shall accept the
memorandum of satisfaction and make an entry in the register of charges kept by him.
(d) If any cause is shown by charge-holder, the registrar shall record a note to that effect in the
register of charges and shall inform the company.

8. The Commission shall grant relief on being satisfied that the omission or misstatement in
registration of mortgages and charges:
(a) is not of a nature to prejudice the position of creditors or shareholders of the company.
(b) was accidental or due to inadvertence or to some other sufficient cause.
(c) on grounds it is just and equitable to do so.
(d) Any one or more of above.

9. In relation to rectification or registration of mortgages and charges, the Commission, on such terms
and conditions as seem to the Commission just and expedient, may order:
(a) that the omission or misstatement be rectified.
(b) that the time for filing the required particulars be extended.
(c) as to the costs of the application as it thinks fit.
(d) Any one or more of above.

10. A company did not maintain proper register of mortgages and charges and a charge registered with
the registrar was omitted from the register maintained by the company. Which of the following is
not a consequence thereof:
(a) The charge shall become void against the liquidator and creditors of the company.
(b) Such violation shall be an offence punishable under the Act.
(c) Any officer in default shall be liable to penalty of level 1 on the standard scale.
(d) None of the above options is correct as all of above are consequences according to Companies
Act, 2017.

11. Charcoal Limited (CL) has purchased plant and machinery for Rs. 100 million from Fuchsia
(Private) Limited (FPL). Following information in this respect are available:
will be made to FPL on 15 March 2022 by obtaining a bank loan. The loan will be
secured against mortgage of CL’s factory building.

charge over CL’s inventory and pledge of CL’s ordinary shares of one of the directors.
Which of the following securities are required to be registered with the registrar?
(a) Mortgage over CL’s factory building and pledge of CL’s ordinary shares
(b) Mortgage over CL’s factory building and charge over CL’s inventory
(c) Mortgage over CL’s factory building only
(d) Mortgage over CL’s factory building, pledge of CL’s ordinary shares and charge over CL’s
inventory

12. Which of the following statements is correct regarding inspection of a company’s register of
mortgages and charges?
(a) Only a member or a creditor of the company can inspect without fee
(b) Any member of the company can inspect without fee and any other person including creditors
can inspect on payment of such fee as fixed by the company
Ch # 7. Mortgages and Charges Page 237

(c) Anyone can inspect on payment of such fee as fixed by the company
(d) Any member or creditor of the company can inspect without fee and any other person can
inspect on payment of such fee as fixed by the company
13. The registrar has not received any intimation of satisfaction of charges from the company. He may
still enter in the register of mortgages and charges a memorandum of satisfaction with respect to
the registered charge only when:
(a) concerned bank informed to the registrar
(b) the final payment of debt has been made
(c) the registrar has the knowledge that the payment of debt has been made
(d) the registrar himself has the evidence that the debt has been paid
14. Lavender Limited has granted long term loan of Rs. 10 million to its chief operating officer, against
which he has deposited a negotiable instrument as security.
Which of the following statements is correct regarding registration of above security under the
Companies Act, 2017?
(a) Negotiable instrument is not considered as a security for the purpose of mortgage or charge
and does not require registration
(b) Negotiable instrument above Rs. 10 million is required to be registered as mortgage or charge
(c) Negotiable instrument upto Rs. 10 million is not required to be registered as mortgage or
charge
(d) Negotiable instrument is acceptable as security; hence, it is required to be registered as
mortgage or charge
15. On 8 September 2022, Quince Limited (QL) paid the final instalment of long term loan obtained
from Coconut Bank Limited. Identify the last date by which QL shall intimate to the registrar about
the payment in full of the mortgage created and registered under the Companies Act, 2017.
(a) 23 September 2022
(b) 7 October 2022
(c) 23 October 2022
(d) 7 November 2022
16. Charcoal Limited (CL) has purchased plant and machinery for Rs. 100 million from Fuchsia
(Private) Limited (FPL). Following information in this respect are available:
§ 50% payment will be made to FPL on 15 March 2022 by obtaining a bank loan. The loan will
be secured against mortgage of CL’s factory building.
§ The balance will be paid in four equal quarterly instalments which will be secured through the
charge over CL’s inventory and pledge of CL’s ordinary shares of one of the directors.
Which of the following securities are required to be registered with the registrar?
(a) Mortgage over CL’s factory building and pledge of CL’s ordinary shares
(b) Mortgage over CL’s factory building and charge over CL’s inventory
(c) Mortgage over CL’s factory building only
(d) Mortgage over CL’s factory building, pledge of CL’s ordinary shares and charge over CL’s
inventory
17. Which of the following statements is correct regarding inspection of a company’s register of
mortgages and charges?
(a) Only a member or a creditor of the company can inspect without fee
(b) Any member of the company can inspect without fee and any other person including creditors
can inspect on payment of such fee as fixed by the company
(c) Anyone can inspect on payment of such fee as fixed by the company
(d) Any member or creditor of the company can inspect without fee and any other person can
inspect on payment of such fee as fixed by the company
Ch # 7. Mortgages and Charges Page 238

Sr. No. Answer

1 C
2 B
3 B
4 B
5 D
6 B
7 B
8 D
9 D
10 A
11 B
12 D
13 D
14 A
15 B
16 B
17 D