Registration of mortgage with central registry-sarfaesi act


I have the following Questions regarding Registration of Mortgage by Bank with Central Registry constituted under SARFAESI Act, 2002.

1. Is it compulsory for a Co-operative Bank to register details of properties mortgaged with it on or after 31st March, 2011 with the above authority?

2. The said rules contain provision for condoning delay up to 30 days in registration of the mortgage. What if the delay is beyond 30 days? Is there any procedure to register details of mortgages after 60 days (30 days' time limit + 30 days' condonation)?

3. What if there is no provision enabling filing of details after 30 days?

Kindly reply ASAP and thaking in advance

Regards

 
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Advocate

If the bank wanted to proceed under SARFAESI, then only registration in Central Registry is compulsory.  If they opt other modes of recovery , eg. for filing suit in Court, such registration is not necessary.  Amendments to the SARFAESI Act was submitted in the Parliament, which includes matters concerning registration.  But we have to wait till the bill is passed.

 
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As of now Banks are registering property details with CERSAI as soon as the deposit of title deed is made. The site is to be revamped soon. Let us hope the procedures are simplified after revamp.
 
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It is not correct that banks only register with CERSAI only if they want to proceed under SARFAESI since the registration has to be done within 30 days of deposit of title deeds for securing a loan.

 
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Advocate

Registration of security interest in Central Registry is applicable under SARFAESI Act only. If the banker do not wish to invoke the provisions of SARFAESI Act, then such registration is unnecessary and hence waste.  Assume bank had granted loan of Rs.1 crore as agricultural loan/commercial loan, against security of agricultural property, then registration in Central Registry is waste, since enforcement of security interest in Agrl. properties, is exempted, please note.  Even otherwise, the bank can decide the mode of recovery, in case of need.

 
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Banks do register mortgage by deposit of title deeds of immovable property with CERSAI. The very first page of the form for uploading the details in CERSAI asks you to create charge and in the drop down menu of 'Asset Type' there is only one option namely "Immovable Property". It does not differentiate agricultural property. In the page of uploading descripttion of property also, the term 'agricultural property' is not found. A financial asset includes any beneficial interest in property whether movable or immovable in the Sarfaesi Act. What I understood from CERSAI is that it is only meant to keep a register of all mortgages by deposit of title deeds. And no where we can find the definition of the term 'agricultural land', 'agricultural property', 'agricultural purpose' in the legislation. CERSAI is not meant for the purpose of enforcement of security interest. It is only a platform for compulsory registration of all mortgages with banks and Co-operative banks of immovable property. Section 31[i] which excludes the provisions of Sarfaesi Act to agricultural land is only meant in the case of Enforcement of security interest. In such case the bank can have other options. Even if an agricultural loan is granted for agricultural purpose and mortgage of agricultural land is there CERSAI has to be done as registration of mortgages is compulsory. Dont get confused by registration in CERSAI with Enforcement under Sarfaesi. Even in future the legislation strictly forms a specific provision in that regard, first it has to define what is agricultural land and there also must be a mechanism to know whether it is used for agricultural purpose. Then also in the future after availing loan it can be converted for other purpose. So it doesnt mean that bank cannot initiate SARFAESI Action only because at the time of granting the loan the land was agricultural and it was not registered with CERSAI.

 
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Advocate

Although I do not agree with the above comment, I am not for any disputes in this regard.

 
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The portal is very slow and users find it very difficult to feed the data. The portal managers should provide upload format exce/csv, for uploading bulk records

 
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Advocate

The extended time for registering security interest in Central Registry is getting over  by 31-03-2012.  Regarding the necessity of registration in Central Registry, each one is interpreting in his/her own way, since the law is not settled yet, on this point. Bankers also are in the dark.

 
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The time is extended till June 30, 2012.

 
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