What is the sale certificate under the SARFAESI Act? How do I register a sale certificate?

Sale certificate is issued by banks or financial institutions when the property is sold in public auction to recover the outstanding loan amount under the SARFAESI Act.


The abbreviation of SARFAESI is Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest

The SARFAESI Act empowers financial institutions to recover outstanding loan due from borrowers by selling their assets.

For your better understanding, let me explain the SARFAESI Act with a real-life example, we changed the names in example to conceal the identity:

Mr.Abdul Ahmed and Ms.Jennifer were working for a multinational company in Bangalore.

This couple fall in love and got married against family wishes in a small gathering.

After marriage, Ms.Jennifer changed her name to Mrs.Jennifer Ahmed.

Within 6 months of the marriage, this couple purchased a 3BHK flat in Bangalore, the flat measuring 1355 square feet super build-up area. Below is the image of sale deed


The sale consideration is Rs. 32,34,200/-, we encircled the sale consideration in below sale deed


Both the husband and wife were working for an MNC with hefty salaries in hand, State Bank of India had sanctioned the loan value of Rs. 32,94,000/- which is more than the sale consideration of Rs. 32,34,200/-. This means, 100% funded through loan without any downpayment.

Below is the image of MODT, we encircled the loan value


In June 2019 (after a year of flat purchase): for some reason, Mr.Abdul Ahmed and Mrs.Jennifer Ahmed opened the fresh loan of Rs. 31,00,000 from Bajaj Housing Finance Limited (BHFL)

As on July 2019, the SBI loan outstanding was Rs.25 lakh, Mr.Abdul Ahmed & Mrs.Jennifer Ahmed rolled Rs. 25 lakh from BHFL to SBI to close the existing loan in SBI. The balance Rs.6 Lakh kept for personal expenses.

Below is the image of discharge deed from SBI


Mr.Abdul Ahmed and Mrs.Jennifer Ahmed collected the title documents from SBI and deposited the same in BHFL

In Jan 2021, the marriage was in bad shape due to disagreement in relationship. So the couple obtained a divorce and separated.

Mr.Abdul Ahmed moved out of the flat and he disconnected communication with his ex-wife Ms.Jennifer and BHFL as well

Ms.Jennifer continued to stay in the flat with her child, she stopped paying the EMIs. (Ms. Jennifer can afford to pay the EMI but she thinks that if she pays the EMI, down the line 10 years later, her Ex-husband Mr.Abdul may claim the ownership so she intentionally stopped paying the EMI)

Since the borrowers defaulted EMI payments for 90 days, the BHFL marked their loan account as non-performing asset

In July 2021, BHFL sent the demand notice to borrowers via speed post for recovery of loan assert of Rs. 34,66,330/-. Below is the image of demand notice