CERSAI (CENTRAL REGISTRY) has been established under section 20 of the

SARFAESI Act, 2002.

The Objective of CERSAI is to prevent fraud loans cases involving multipler lending
from different banks on the same immovable property.

Section 23 of the SARFAESI Act requires for filing of transactions of securitisation,

reconstruction and creation of security interest:-

The particulars of every transaction of securitisation, asset reconstruction or creation of

security interest shall be filed, with the Central Registrar in the manner and on payment
of such fee as may be prescribed, within thirty days after the date of such transaction or
creation of security, by the securitisation company or reconstruction company or the
secured creditor, as the case may be:
PROVIDED that the Central Registrar may allow the filing of the particulars of such
transaction or creation of security interest within thirty days next following the expiry of
the said period of thirty days on payment of such additional fee not exceeding ten times
the amount of such fee.

This process has again been reiterated in Rule 5 of the SARFAESI (Central Registry) Rules 2011
that each financial institution has to register a security transaction with central registry system
within thirty days of the creation of charge / securitization.

The 2016 amendment to the CERSAI Rules 2011 has made it necessary for all the financial
institutions/lenders/creditors to file for the registration of the charge/transaction of any type in
respective forms.

The Amendment to Rule 4 of 2011 Rules (which was earlier only for equitable mortgage):-

(2A). Particulars of creation, modification or satisfaction of security interest in immovable

property by mortgage other than mortgage by deposit of title deeds shall be filed in Form I or
Form II, as the case may be, and shall be authenticated by a person specified in the Form for
such purpose by use of a valid digital signature.
(2B). Similar Rule for interest in hypothecation of plant and machinery, stocks, debt including
book debt or receivables.

(2C). Similar Rule for interest in intangible assets, being knowhow, patent, copyright, trade
mark, licence, franchise or any other business or commercial right of similar nature.

(2D). Similar Rule for interest in any under construction residential or commercial building or a
part thereof by an agreement or instrument other than by mortgage.

THE EFFECT AFTER AMENDMENT:- Now creation of interest/charge in any of the above
transactions requires to be registered within 30 days with CERSAI.

The Amendment to the Rule 5 of the 2011 Rules

(b) In rule 5, sub-rule (1), ---

(ii) after the second proviso, the following provisos shall be inserted, namely:- Provided also
that particulars of all subsisting transactions under sub-rule (2A) to (2D) of rule 4 shall be filed
by the secured creditors with the Central Registry on or before such date as may be specified by
the Central Government and no fee shall be payable on such filing till the said date.

Provided also that particulars of all subsisting transactions filed with the Central Registry after
the date so specified shall be chargeable with such fee, specified in the Table under rule 7.

THE EFFECT AFTER AMENDMENT: The proviso to Rule 5 has been added in line with the
amendment to Rule 4.
Other Important Provision of SARFAESI ACT:

Section 23. Filing of transactions of securitisation, reconstruction and creation of security

Interest.

Section 24. Modification of security interest registered under this Act

Section 25. Securitisation company or reconstruction company or secured creditor to report

satisfaction of security interest.

PUNISHMENT FOR NON-COMPLIANCE (under SARFAESI ACT)

Section 27. Penalties.If a default is made

(a) in filing under section 23, the particulars of every transaction of any securitisation or asset
reconstruction or security interest created by a securitisation company or reconstruction company
or secured creditor; or

(b) in sending under section 24, the particulars of the modification referred to in that section; or

(c) in giving intimation under section 25,

Every company and every officer of the company or the secured creditor and every officer of
the secured creditor who is in default shall be punishable with fine which may extend to five
thousand rupees for every day during which the default continues.

Section 29:- Offences. if any person contravenes or attempts to contravene or abets the
contravention of the provisions of this Act or of any rules made thereunder, he shall be
punishable with imprisonment for a term which may extend to one year, or with fine, or with
both.