Section 20 of the SARFAESI Act, 2002: Central Registry
Chapter IV of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 establishes the legal framework for a Central Registry recording securitisation, asset reconstruction and security-interest transactions. Section 20 deals with the establishment, offices and legal relationship of that Registry to other registration laws.
Section 20: Statutory provisions
Chapter IV - Central Registry
(1) The Central Government may, by notification, set up or cause to be set up from such date as it may specify in such notification, a registry to be known as the Central Registry with its own seal for the purposes of registration of transaction of securitisation and reconstruction of financial assets and creation of security interest under this Act.
(2) The head office of the Central Registry shall be at such place as the Central Government may specify and for the purpose of facilitating registration of transactions referred to in sub-section (1), there may be established at such other places as the Central Government may think fit, branch offices of the Central Registry.
(3) The Central Government may, by notification, define the territorial limits within which an office of the Central Registry may exercise its functions.
(4) The provisions of this Act pertaining to the Central Registry shall be in addition to and not in derogation of any of the provisions contained in the Registration Act, 1908 (16 of 1908), the Companies Act, 1956 (1 of 1956), the Merchant Shipping Act, 1958 (44 of 1958), the Patents Act, 1970 (39 of 1970), the Motor Vehicles Act, 1988 (59 of 1988), and the Designs Act, 2000 (16 of 2000) or any other law requiring registration of charges and shall not affect the priority of charges or validity thereof under those Acts or laws.
Legislative context: The statutory reference to the Companies Act, 1956 reflects the wording of this provision; company charge registration is now principally governed by the Companies Act, 2013, subject to its transitional and saving provisions. The Motor Vehicles Act, 1988 is Act 59 of 1988.
What is the Central Registry?
The Central Registry is the statutory record-keeping system for specified financial transactions and interests in secured property. It supports the recording and search of security interests and helps lenders, purchasers and other interested persons identify recorded encumbrances. Its operational framework is commonly associated with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI).
Meaning of Section 20, sub-section by sub-section
Sub-section (1): Establishment by notification
The Central Government is empowered to establish or cause the establishment of the Registry through a notification. Its purposes include recording securitisation transactions, reconstruction of financial assets and creation of security interests. A security interest generally refers to a legally recognised right, title or interest in property created in favour of a secured creditor to secure repayment or performance of an obligation, subject to the statutory definition and exclusions in Section 2 of the Act.
Sub-section (2): Head office and branch offices
The Government may specify the Registry's head office and establish branch offices to facilitate registration. The existence of a central electronic platform does not alter the statutory power to prescribe its administrative structure.
Sub-section (3): Territorial jurisdiction
By notification, the Central Government may prescribe the geographical limits within which particular Registry offices exercise their functions.
Sub-section (4): Other registration laws continue to apply
Central Registry provisions supplement rather than automatically replace registration and charge-recording requirements under other laws. Registration under the SARFAESI framework should not be assumed to dispense with separate requirements applicable to deeds, companies, ships, vehicles, patents, designs or other assets. The priority and validity of competing interests must be assessed with all relevant laws, including subsequent SARFAESI provisions, in view.
Related registration provisions under the SARFAESI Act
Section 20A enables integration of other registration systems with the Central Registry, subject to statutory conditions and notifications. Section 20B concerns delegation of powers to the Reserve Bank, while Section 21 concerns appointment of the Central Registrar and supporting officers. Section 22 deals with the register, Section 23 with filing transactions, Section 24 with modifications, and Section 25 with satisfaction of security interests.
Section 26B deals with registration by secured and other creditors; Section 26C addresses the effect of registration; and Sections 26D and 26E address enforcement eligibility and priority of secured creditors, subject to their respective statutory conditions and applicable law.
Why registration matters
Accurate and timely filing of creation, modification and satisfaction of security interests improves transparency and helps establish the legal status of secured transactions. Before relying on a registry search, parties should also check title records, other relevant public registries, transaction documents and applicable priority rules. A registry search alone is not conclusive proof of clear title.
Official sources and portals
- India Code - central legislation and amendments
- Gazette of India - notifications and rules
- CERSAI - Central Registry portal
- Ministry of Corporate Affairs - company charge registration
For a specific transaction, verify the current Act, the Security Interest (Central Registry) Rules, 2011, applicable notifications and filing requirements on official portals.