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Section 25: Secured creditor to report satisfaction of security interest

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

Statutory Regulation
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Competent Court / Tribunal
Act 2002
Section 24 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 26

Legal Commentary & Landmark Judgments: Section 25

Section 25 of the SARFAESI Act, 2002 mandates that secured creditors must promptly report the full payment or satisfaction of any registered security interest to the Central Registry within thirty days of debt discharge.

  • Mandatory 30-Day Satisfaction Intimation: The secured creditor must give intimation of payment or satisfaction in full to the Central Registrar within thirty days of debt clearance.
  • Notice and Verification Procedure: If satisfaction is reported by the borrower or third party, the Central Registrar issues a show-cause notice to the secured creditor before recording satisfaction.
  • Certificate of Satisfaction: The Central Registrar enters a memorandum of satisfaction on the register and issues a certified copy to the borrower.
Key Landmark Precedents:
  • R. Sugantha v. Canara Bank, 2021 SCC OnLine Mad 5382: The Madras High Court held that where the borrower pays the entire OTS amount or settled debt, the bank's refusal to file satisfaction under Section 25 and return title deeds warrants imposition of exemplary costs and writ mandamus.
  • State Bank of India v. Authorized Officer, 2019 SCC OnLine Mad 18274: The Madras High Court observed that banks are under a strict statutory duty under Section 25 to report satisfaction and release the CERSAI charge upon full debt clearance; failure constitutes deficiency of service and abuse of statutory power.
Courtroom Practice & Strategic Litigation Guidance:

Following full payment or successful OTS, issue a formal demand to the bank to report satisfaction under Section 25 and issue a 'No Objection Certificate' (NOC) and CERSAI satisfaction certificate; if bank delays beyond 30 days, file Section 17 SA or writ petition for discharge and return of original title deeds.

Section 24 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 26