Sale deed vs certificate of sale
suba
(Querist) 24 July 2013
This query is : Resolved
I paid money to a bank for property at an auction. I am told I will not get a sale deed but only a certificate of sale to be registered. I am apprehensive that that are not willing to give ma a sale deed. what should I do? thanks
malipeddi jaggarao
(Expert) 25 July 2013
The transfer of title to the property for the su ccessful bidder in the auction conducted byFinancial Institution invoking SARFAESI Act is governed by the following Sections of the Act:
Issue of security by raising of receipts or funds by securitisation company
or reconstruction company
(1) Without prejudice to the provisions contained in the Companies Act, 1956 (1 of
1956), Securities Contracts (Regulation) Act, 1956 (42 of 1956), and the Securities and
Exchange Board of India Act, 1992 (15 of 1992), any securitisation company or
reconstruction company, may, after acquisition of any financial asset under sub-section (1) of
section 5, offer security receipts to qualified institutional buyers (other than by offer to public)
for subscription in accordance with the provisions of those Acts.
(2) A securitisation company or reconstruction company may raise funds from the
qualified institutional buyers by formulating schemes for acquiring financial assets and shall
keep and maintain separate and distinct accounts in respect of each such scheme for every
financial asset acquired out of investments made by a qualified institutional buyer and ensure
that realisations of such financial asset is held and applied towards redemption of
investments and payment of returns assured on such investments under the relevant
scheme.
(2A)(a)The scheme for the purpose of offering security receipts under sub-section (1)
or raising funds under sub-section (2), may be in the nature of a trust to be
managed by the securitisation company or reconstruction company, and the
securitisation company or reconstruction company shall hold the assets so
acquired or the funds so raised for acquiring the assets, in trust for the
benefit of the qualified institutional buyers holding the security receipts or
from whom the funds are raised.
(b) The provisions of the Indian Trust Act, 1882 (2 of 1882) shall, except insofar
as they are inconsistent with the provisions of this Act, apply with respect to
the trust referred to in clause (a) above.
(3) In the event of non-realisation under sub-section (2) of financial assets, the
qualified institutional buyers of a securitisation company or reconstruction company, holding
security receipts of not less than seventy-five per cent of the total value of the security
receipts issued under a scheme by such company, shall be entitled to call a meeting of all the
qualified institutional buyers and every resolution passed in such meeting shall be binding on
the company.
(4) The qualified institutional buyers shall, at a meeting called under sub-section (3),
follow the same procedure, as nearly as possible as is followed at meetings of the board of
directors of the securitisation company or reconstruction company, as the case may be.
8. Exemption from registration of security receipt
Notwithstanding anything contained in sub-section (1) of section 17 of the
Registration Act, 1908 (16 of 1908),--
(a) any security receipt issued by the securitisation company or reconstruction
company, as the case may be, under sub-section (1) of section 7, and not
creating, declaring, assigning, limiting or extinguishing any right, title or
interest, to or in immovable property except insofar as it entitles the holder of
the security receipt to an undivided interest afforded by a registered
instrument; or
(b) any transfer of security receipts, shall not require compulsory registration.
Hence if the Bank follows the above procedure for transferring title to you, you need not have to worry. No Sale deed can executed for the property acquired under the above Act.
malipeddi jaggarao
(Expert) 25 July 2013
The transfer of title to the property for the successful bidder in the auction conducted by Financial Institution invoking SARFAESI Act is governed by the following Sections of the Act:
Issue of security by raising of receipts or funds by securitisation company
or reconstruction company
(1) Without prejudice to the provisions contained in the Companies Act, 1956 (1 of
1956), Securities Contracts (Regulation) Act, 1956 (42 of 1956), and the Securities and
Exchange Board of India Act, 1992 (15 of 1992), any securitisation company or
reconstruction company, may, after acquisition of any financial asset under sub-section (1) of
section 5, offer security receipts to qualified institutional buyers (other than by offer to public)
for subscription in accordance with the provisions of those Acts.
(2) A securitisation company or reconstruction company may raise funds from the
qualified institutional buyers by formulating schemes for acquiring financial assets and shall
keep and maintain separate and distinct accounts in respect of each such scheme for every
financial asset acquired out of investments made by a qualified institutional buyer and ensure
that realisations of such financial asset is held and applied towards redemption of
investments and payment of returns assured on such investments under the relevant
scheme.
(2A)(a)The scheme for the purpose of offering security receipts under sub-section (1)
or raising funds under sub-section (2), may be in the nature of a trust to be
managed by the securitisation company or reconstruction company, and the
securitisation company or reconstruction company shall hold the assets so
acquired or the funds so raised for acquiring the assets, in trust for the
benefit of the qualified institutional buyers holding the security receipts or
from whom the funds are raised.
(b) The provisions of the Indian Trust Act, 1882 (2 of 1882) shall, except insofar
as they are inconsistent with the provisions of this Act, apply with respect to
the trust referred to in clause (a) above.
(3) In the event of non-realisation under sub-section (2) of financial assets, the
qualified institutional buyers of a securitisation company or reconstruction company, holding
security receipts of not less than seventy-five per cent of the total value of the security
receipts issued under a scheme by such company, shall be entitled to call a meeting of all the
qualified institutional buyers and every resolution passed in such meeting shall be binding on
the company.
(4) The qualified institutional buyers shall, at a meeting called under sub-section (3),
follow the same procedure, as nearly as possible as is followed at meetings of the board of
directors of the securitisation company or reconstruction company, as the case may be.
8. Exemption from registration of security receipt
Notwithstanding anything contained in sub-section (1) of section 17 of the
Registration Act, 1908 (16 of 1908),--
(a) any security receipt issued by the securitisation company or reconstruction
company, as the case may be, under sub-section (1) of section 7, and not
creating, declaring, assigning, limiting or extinguishing any right, title or
interest, to or in immovable property except insofar as it entitles the holder of
the security receipt to an undivided interest afforded by a registered
instrument; or
(b) any transfer of security receipts, shall not require compulsory registration.
Hence if the Bank follows the above procedure for transferring title to you, you need not have to worry. No Sale deed can executed for the property acquired under the above Act.
Sri Vijayan.A
(Expert) 25 July 2013
The sale deed is not necessary, if the Bank is invoking the provisions of SARFAESI Act.
But the sale certificate is to be registered.
K.K.Ganguly
(Expert) 09 August 2013
1. Bank will issue Sale certificate as per SARFAESI Act,2002 which you can register. This is perfectly O.K.,
2. Bank will not execute and register any Sale Deed,
3. Make sure to collect the original mother deed of the property which was mortgaged to the selling Bank.
