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Section 8: Exemption from registration of security receipts

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 7 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 9

Legal Commentary & Landmark Judgments: Section 8

Section 8 of the SARFAESI Act, 2002 grants a categorical statutory exemption from compulsory registration under the Registration Act, 1908 for Security Receipts issued by Asset Reconstruction Companies or transfers thereof.

  • Statutory Exemption from Compulsory Registration: Expressly overrides Section 17(1)(b) and (c) of the Registration Act, 1908; Security Receipts creating an undivided beneficial interest in immovable property require no registration.
  • Secondary Market Liquidity: Facilitates seamless transfer, assignment, and trading of Security Receipts among Qualified Buyers without registration bottlenecks or local stamp delays.
  • Preservation of Beneficial Interest: Protects the undivided beneficial ownership of institutional investors in the underlying mortgaged estate without formal conveyance instruments.
Key Landmark Precedents:
  • Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2012) 1 SCC 656: The Supreme Court noted that while immovable property transfers ordinarily require compulsory registration under Section 17 of the Registration Act, express statutory non-obstante clauses enacted by Parliament (such as Section 8 SARFAESI) override general registration mandates.
  • Kotak Mahindra Bank Ltd. v. ARCIL, 2011 SCC OnLine DRAT Del 112: The DRAT Delhi held that Section 8 provides a complete statutory shield exempting security receipts and trust certificates from registration; borrowers cannot challenge the validity of recovery proceedings on the ground of non-registration.
Courtroom Practice & Strategic Litigation Guidance:

In DRT litigation, swiftly dismiss debtor applications asserting that ARC trust deeds or Security Receipts are inadmissible in evidence under Section 49 of the Registration Act by invoking the clear statutory exemption in Section 8.

Section 7 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 9