SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST (CENTRAL REGISTRY) AMENDMENT RULES, 2016

The Central Government introduced the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) Amendment Rules, 2016 (hereinafter referred as ‘Amendment Rules, 2016’) on January 22, 2016.
The aforementioned Amendment Rules, 2016 make the registration of Registered Mortgage mandatory with Central Registry of Securitisation Assets and Reconstruction and Security India (hereinafter referred as ‘CERSAI’).
Requirement of Registration before the date of Amendment Rules, 2016
Banks and financial institutions were required to register equitable mortgages with CERSAI pursuant to Section 23, 24 and 25 of the SARFAESI Act read with Rule 4(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) Rules, 2011 (hereinafter referred to as ‘Rules, 2011’). It is pertinent to note that as per the Rules, 2011, the secured creditors were required to file particulars of only equitable mortgages with CERSAI and filing of registered mortgage was exempted.
Amendment Rules, 2016 w.e.f._January 22, 2016:
Amendment Rules, 2016 made it mandatory to register the particulars of registered mortgages under Rule 4 Sub Rule 2(A). The amendment has been enforced with an aim of preventing frauds relating to multiple lending against the security of the same property as well as the fraudulent sale of property without disclosing the security interest created over such property.
Post the enforcement of these Amendment Rules, 2016, the following provisions shall be applicable to the banks and financial institutions in respect of registration of mortgage created over immovable properties and movable properties:
“Sub Rule 2(A)- Particulars of creation, modification or satisfaction of security interest in immovable property by mortgage other than mortgage by deposit of title deeds shall be filed in Form I or Form II, as the case may be, and shall be authenticated by a person specified in the Form for such purpose by use of a valid digital signature.
Sub Rule 2(B)- Particulars of creation, modification or satisfaction of security interest in hypothecation of plant and machinery, stocks, debt including book debt or receivables, whether existing or future shall be filed in Form I or Form II, as the case may be, and shall be authenticated by a person specified in the Form for such purpose by use of a valid digital signature.
Sub Rule 2(C)- Particulars of creation, modification or satisfaction of security interest in intangible assets, being knowhow, patent, copyright, trade mark, licence, franchise or any other business or commercial right of similar nature, shall be filed in Form I or Form II, as the case may be, and shall be authenticated by a person specified in the Form for such purpose by use of a valid digital signature.
Sub Rule 2(D)- Particulars of creation, modification or satisfaction of security interest in any under construction residential or commercial building or a part thereof by an agreement or instrument other than by mortgage, shall be filed in Form I or Form II, as the case may be, and shall be authenticated by a person specified in the Form for such purpose by use of a valid digital signature.”
Rule 5 provides that the time limit for registration of such securities, shall be 30 days from the date of transaction wherein no fee shall be payable on such filing.
In cases where there is a delay, the Central Registrar shall allow the filing for registration but with payment of an additional fee upon an application being made in this regard.
Retrospective Effect
According to the Amendment Rules, 2016, a third proviso has been added to Rule 5, sub rule (1) stating
“Provided also that particulars of all subsisting transactions under sub-rule (2A) to (2D) of rule 4 shall be filed by the secured creditors with the Central Registry on or before such date as may be specified by the Central Government and no fee shall be payable on such filing till the said date.
Provided also that particulars of all subsisting transactions filed with the Central registry after the date so specified shall be chargeable with such fee, specified in the Table under rule 7.
Explanation- For the purpose of the third & fourth provisos, the term, “subsisting transactions” shall mean all those transactions which subsisted before the coming into force of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Central Registry) Amendment Rules, 2016.”
The registration of subsisting transactions has been enforced from January 22, 2016 and it is to be understood that no final date has been provided for the registration of such transactions.

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