26B. Registration by secured creditors and other creditors.—(1) The Central Government may by
notification, extend the provisions of Chapter IV relating to Central Registry to all creditors other than
secured creditors as defined in clause (zd) of sub-section (1) of section 2, for creation, modification or
satisfaction of any security interest over any property of the borrower for the purpose of securing due
repayment of any financial assistance granted by such creditor to the borrower.
(2) From the date of notification under sub-section (1), any creditor including the secured creditor
may file particulars of transactions of creation, modification or satisfaction of any security interest with
the Central Registry in such form and manner as may be prescribed.
(3) A creditor other than the secured creditor filing particulars of transactions of creation,
modification and satisfaction of security interest over properties created in its favour shall not be entitled
to exercise any right of enforcement of securities under this Act.
(4) Every authority or officer of the Central Government or any State Government or local authority,
entrusted with the function of recovery of tax or other Government dues and for issuing any order for
attachment of any property of any person liable to pay the tax or Government dues, shall file with the
Central Registry such attachment order with particulars of the assessee and details of tax or other
Government dues from such date as may be notified by the Central Government, in such form and manner
as may be prescribed.
(5) If any person, having any claim against any borrower, obtains orders for attachment of property
from any court or other authority empowered to issue attachment order, such person may file particulars
of such attachment orders with Central Registry in such form and manner on payment of such fee as may
be prescribed.
26C. Effect of the registration of transactions, etc.—(1) Without prejudice to the provisions
contained in any other law, for the time being in force, any registration of transactions of creation,
modification or satisfaction of security interest by a secured creditor or other creditor or filing of
attachment orders under this Chapter shall be deemed to constitute a public notice from the date and time
of filing of particulars of such transaction with the Central Registry for creation, modification or
satisfaction of such security interest or attachment order, as the case may be.
(2) Where security interest or attachment order upon any property in favour of the secured creditor or
any other creditor are filed for the purpose of registration under the provisions of Chapter IV and this
Chapter, the claim of such secured creditor or other creditor holding attachment order shall have priority
over any subsequent security interest created upon such property and any transfer by way of sale, lease or
assignment or licence of such property or attachment order subsequent to such registration, shall be
subject to such claim:
Provided that nothing contained in this sub-section shall apply to transactions carried on by the
borrower in the ordinary course of business.
1. Ins. by Act 44 of 2016, s. 18 (w.e.f. 24-1-2020).
31
26D. Right of enforcement of securities.—Notwithstanding anything contained in any other law for
the time being in force, from the date of commencement of the provisions of this Chapter, no secured
creditor shall be entitled to exercise the rights of enforcement of securities under Chapter III unless the
security interest created in its favour by the borrower has been registered with the Central Registry.
26E. Priority to secured creditors.—Notwithstanding anything contained in any other law for the
time being in force, after the registration of security interest, the debts due to any secured creditor shall be
paid in priority over all other debts and all revenues, taxes, cesses and other rates payable to the Central
Government or State Government or local authority.
Explanation.—For the purposes of this section, it is hereby clarified that on or after the
commencement of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), in cases where insolvency or
bankruptcy proceedings are pending in respect of secured assets of the borrower, priority to secured
creditors in payment of debt shall be subject to the provisions of that Code.]