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Section 23: Filing of transactions of securitisation, asset reconstruction and creation of security interest

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

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2002
Section 22 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 24

Legal Commentary & Landmark Judgments: Section 23

Section 23 of the SARFAESI Act, 2002 establishes the mandatory statutory requirement and strict timelines for secured creditors and ARCs to file particulars of every securitisation, asset reconstruction, and creation of security interest with the Central Registry.

  • Mandatory 30-Day Filing Rule: Particulars of every security interest creation must be electronically filed with CERSAI within thirty days of the transaction.
  • Statutory Condonation Window: The Central Registrar is empowered to condone delay up to an additional thirty days upon payment of prescribed late fees.
  • Priority Consequence: Failure to register within statutory timelines deprives the secured creditor of the priority benefits conferred under Section 26E over subsequent encumbrances.
Key Landmark Precedents:
  • Punjab National Bank v. Union of India (2022) 7 SCC 260: The Supreme Court ruled that under Chapter IV r/w Section 26E, the secured creditor who first registers the security interest under Section 23 enjoys absolute first priority over all subsequent attachments, including government revenue attachments.
  • State Bank of India v. State of Maharashtra, 2020 SCC OnLine Bom 4190: The Bombay High Court held that failure to register security interest under Section 23 deprives the secured creditor of the statutory priority conferred by Section 26E over sales tax and VAT dues.
Courtroom Practice & Strategic Litigation Guidance:

Immediately upon deposit of title deeds (equitable mortgage) or execution of simple mortgage, ensure filing of CERSAI registration within 30 days under Section 23. In default, file a formal condonation application within the second 30-day window; failure to register can prove fatal in priority disputes against tax authorities.

Section 22 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 24