Legal Question in Banking Law in India

A Bank has not registered charge of the registered mortgage property with the registrar of companies under sec 125 of the Companies Act 1956 and has taken possession of the said property under SARFAESI Act 2002 and now proceeded to Sale the property under the SARFAESI Act 2002 by private treaty sale. such sale will be legally valid and the buyer will get the title of the property moreover the in case of winding up what will be the position of the secured creditor.


Asked on 9/20/09, 7:58 am

4 Answers from Attorneys
J. Radhakrishnan independent Practice

As long as there is no winding up petition pending, bank can sell the property charged to it notwithstanding its being not registered under Sec.125 of the companies Act. The charge is binding on the company. Once sale takes place in enforcement of such charge when there is no winding up petition pending, the authorized officer of the bank effecting sale of the property can pass a good title to the purchaser. Later winding up proceedings will have no consequence on the same.

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Answered on 9/20/09, 9:38 am
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

duplicate question. already answered.

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Answered on 9/21/09, 4:53 pm
Pravin Vaidya Independent

I agree with Shri Sudershan Goel

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Answered on 10/12/09, 12:30 am
Seshadri Srinivasan www.lawconcern.com

The charge created in favour of the Bank is both statutory and prior. Therefore it is able to sell the property without intervention of Company Court.

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Answered on 10/16/09, 12:00 am


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