SARFAESI ACT 2002

Dear client,

Under the SARFAESI Act, 2002, when a property is sold through public auction by a secured creditor after taking possession under Section 13(4), the purchaser is conferred with absolute rights over the secured asset. Rule 9(6) of the Security Interest (Enforcement) Rules, 2002 clearly states that once the sale is confirmed and the sale certificate is issued, the sale becomes absolute and the purchaser is deemed to have acquired all rights, title, and interest of the secured creditor in the secured asset. Therefore, no further conveyance or consent from any other party is required for registration purposes.

Furthermore, Section 35 of the SARFAESI Act provides the overriding effect of the Act over any other inconsistent law. It states that the provisions of the SARFAESI Act shall prevail notwithstanding anything contrary contained in any other legislation in force. As such, any requirement imposed by the Sub-Registrar to obtain a No Objection Certificate (NOC) from a second charge holder, when the auction is conducted by the first charge holder under SARFAESI, is not legally sustainable if it conflicts with the rights conferred under the Act.

In your case, since you have purchased the property through a valid SARFAESI auction conducted by the primary lender and have received a sale certificate, the registrar cannot insist upon a NOC from the second charge holder merely for the purpose of registering the sale. You are not denying the existence of the second charge, and your acceptance of the property along with that encumbrance does not affect the legality of the sale or the registration process.

Therefore, you may inform the registrar in writing, citing Rule 9(6) of the Security Interest (Enforcement) Rules, 2002 and Section 35 of the SARFAESI Act, 2002, and assert that the sale certificate issued by the bank is a valid and sufficient instrument for the purpose of registration under law. If the registrar still refuses, you may approach the District Registrar or file a writ petition before the High Court seeking directions to complete the registration process.

Dear Sir,
It is not so easy because you have purchased the property which is in litigation and having first charge and second charge. If you are ready to clear second charge then only you will get property in your name. Further, your vendor that is First Banker must facilitate you to get register the property in your name by clearing the dues of Second Bank.