Section 23 of the SARFAESI Act: Filing of Securitisation, Reconstruction and Security Interests

Section 23 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 governs filing particulars of transactions of securitisation, asset reconstruction and creation of security interest with the Central Registrar. It forms part of Chapter IV, which establishes the Central Registry and regulates the maintenance and registration of records concerning secured transactions.

Section 23(1): Filing particulars with the Central Registrar

The statutory provision requires filing the particulars of every transaction of securitisation, asset reconstruction or creation of security interest with the Central Registrar in the manner and on payment of the fee prescribed by the applicable rules. A filing records the relevant transaction within the statutory registration system; the precise information, forms and fees depend on the governing rules and the nature of the transaction.

Securitisation generally concerns acquisition of financial assets by an asset reconstruction company through the statutory arrangements described in the Act. Asset reconstruction refers to measures undertaken for realisation of financial assets in accordance with the Act. A security interest is an interest, right or title in property created in favour of a secured creditor to secure repayment or performance of a financial obligation, subject to the statutory definition and exclusions in Section 2.

Proviso: Existing or subsisting transactions

The proviso to Section 23(1) authorises the Central Government, by notification, to require registration of transactions of securitisation, asset reconstruction or creation of security interest subsisting on or before establishment of the Central Registry, within the notified or prescribed period and on payment of prescribed fees. Its application depends on the relevant notification and rules; it should not be treated as an unconditional new deadline for all historical transactions.

Section 23(2): Registration of different security interests

The Central Government may, by notification, require registration with the Central Registry of transactions relating to different types of security interest created over different kinds of property. This enables the statutory registration framework to extend to categories of property and secured transactions identified by the Government.

Section 23(3): Prescribed forms and fees

The Central Government may prescribe, by rules, the forms for registration of different types of security interest and the fees chargeable for such registration. Parties should check the applicable Security Interest (Central Registry) Rules, 2011, as amended, and current official filing instructions rather than assume that a single form or fee applies to every transaction.

How Section 23 operates in practice

1. Identify the transaction: determine whether it involves securitisation, asset reconstruction or creation of a security interest and whether any applicable notification or exemption affects the filing.
2. Identify the property and parties: compile the particulars of the secured creditor, borrower, security provider, financial asset and secured property required by the relevant form.
3. Use the applicable registration process: file the particulars through the authorised Central Registry system, including CERSAI where applicable, and pay the prescribed fee.
4. Maintain accurate records: retain filing acknowledgements and subsequently report modifications or satisfaction when required under Section 24 or Section 25.

Relationship with Sections 20, 22, 26B, 26D and 26E

Section 20 establishes the Central Registry, while Section 22 concerns the Central Register and its maintenance, including electronic records. Section 26B contains additional provisions on registration by secured and other creditors. Sections 26D and 26E address the consequences of registration for enforcement and priority, subject to their terms and other applicable laws. Filing under Section 23 should therefore be understood in the context of these connected provisions.

Legislative history and amendments

Section 23 was renumbered as sub-section (1) by Section 17 of Act 44 of 2016, effective 1 September 2016; that amendment also omitted certain earlier words and inserted sub-sections (2) and (3). The proviso concerning subsisting transactions was inserted by Section 8 of Act 1 of 2013, effective 15 May 2013. The word "further" in that proviso was omitted by the 2016 amendment. Earlier textual omissions reflected in annotated editions should not be mistaken for current operative requirements.

Official law and registration resources

Consult India Code for the SARFAESI Act and amendments, the Gazette of India for notifications and rules, and CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India) for the registry and operational filing guidance. The current form, fee, time limit and registration requirements should be verified against the relevant rules and notifications for the transaction.

This article provides general statutory information. Registration requirements, exemptions, fees and legal effects depend on the current law and the facts of the particular transaction.