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Section 20: Central Registry establishment

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 • Official Statutory Text & Practice Guide

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Act 2002
Section 19 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 21

Legal Commentary & Landmark Judgments: Section 20

Section 20 of the SARFAESI Act, 2002 mandates the establishment of the Central Registry (CERSAI) by the Central Government to maintain a unified national electronic record of securitisation, asset reconstruction, and security interest creation.

  • Establishment of Central Registry (CERSAI): Mandates the Central Government to establish the Central Registry of Securitisation Asset Reconstruction and Security Interests of India (CERSAI) with its head office at New Delhi.
  • Electronic Registry Infrastructure: Creates a unified national digital database to record transactions of securitisation, asset reconstruction, and creation of security interests over properties.
  • Public Transparency Object: Designed to eradicate fraudulent multi-mortgages on the same asset and establish transparent constructive notice nationwide.
Key Landmark Precedents:
  • State Bank of India v. Santosh Gupta (2017) 2 SCC 538: The Supreme Court highlighted that Chapter IV (Sections 20 to 26E) establishes a uniform national electronic register of encumbrances to prevent fraudulent multiple mortgages over the same immovable property.
  • Canara Bank v. State of Kerala (2020) 2 KLJ 525 (Ker HC): The Kerala High Court held that the Central Registry established under Section 20 was conceived to prevent mortgage frauds and establish transparent priority among competing secured creditors and statutory claimants.
Courtroom Practice & Strategic Litigation Guidance:

Emphasize CERSAI registration as a condition precedent for claiming priority over subsequent transferees, court attachments, and state tax claims; verify that registration was completed electronically within statutory timelines.

Section 19 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 21