LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More



The govt. of India has notified the setting up of The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) with effect from 31.03.2011. Consequent thereupon, now it is mandatory for the secured creditor to register charges e.g. Equitable mortgages, hypothecation, assignment etc. with the Central Registry within 30 days from creation of charge. A delay of further 30 days is allowed subject to payment of penalty. However, if the default still persisted then no charge shall be registered and harsh consequences including jail term has to follow.


However, there is no explanation/provision for rectification of default in the SARFAESIA, 2002, though the  Act provides for penalty of rs. 5000 for each day's delay till the default "is rectified".


Any one having any idea as to the aforesaid issue may please contribute to the issue.




 3 Replies

RAJU O.F., (Advocate)     17 May 2011

As per the original scheme of the Act, 6 months period was provided so as to enable the banks/FIs to register the security interests of the existing loans.  Even now the notification is silent about existing loans.  Act provisions and Rules are made unfortunately, by persons having no idea about the realities and also the agony of the actual borrowers. Loans in crores are easily available to crooks, who take loans with intention not to make any repayment.  Recently I came across a case in which loan amount was 15 lakhs. Manager who sanctioned the loan took 5 lakhs, his agent (consultant) took 3 lakhs and the borrower got balance 7 lakhs. All the three happily enjoyed.  Security was duplicate copy of property documents, original of which was already mortgaged to another bank and loan in crores was availed.  The second bank filed OA in DRT; obtained ex-parte decree.  By this time, first bank already sold the properties under SARFAESI, for a small value.  In effect all are happy, except genuine borrowers in need.

TVD Rajkumar (Advocate)     24 May 2011

Mr. Swagat

Not exactly getting your query...could you elaborate please...  

RAJU O.F., (Advocate)     24 May 2011

SARFAESI (Central Registry) Rules, 2011 can be referred in Company Cases Vol.16 page 85...

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register