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Section 39: Certain provisions of this Act to apply after Central Registry is set up or cause to be set up

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 38 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 40

Legal Commentary & Landmark Judgments: Section 39

Section 39 of the SARFAESI Act, 2002 establishes the transitional statutory mechanism for the phased operationalization of the Central Registry provisions under Chapter IV through Central Government notifications.

  • Phased Implementation Framework: Certain provisions relating to the Central Registry come into effect only after the Central Registry is formally set up.
  • Protection of Transitional Transactions: Preserves the legal validity of security interests and transactions created during the period prior to full digital CERSAI operationalization.
  • Executive Notification Trigger: Empowers the Central Government to notify effective dates for registry mandates across different categories of financial assets.
Key Landmark Precedents:
  • Punjab National Bank v. Union of India (2022) 7 SCC 260: The Supreme Court traced the progressive operationalization of Chapter IV under Section 39, leading up to the 2016 introduction of Chapter IVA and Section 26E establishing priority of secured creditors.
  • Canara Bank v. State of Kerala (2020) 2 KLJ 525 (Ker HC): The Kerala High Court noted the statutory progression from Section 39 notifications to full digital CERSAI operations governing all mortgages nationwide.
Courtroom Practice & Strategic Litigation Guidance:

When examining legacy mortgages created before CERSAI was notified, verify the notification date under Section 39 to establish whether electronic filing was mandatory at the time of creation or modification of the security interest.

Section 38 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 40