The public registers a creditor can search, how to approach bank accounts through the court and how to read the results.
A decree against a debtor with no known assets is difficult to enforce. Searches of the public registers, carried out before the suit and again before execution, show what the debtor owns, what is already charged to others and where the debtor's interests lie. They support an application for attachment, they inform the decision to sue, and they guide a settlement. This note describes the registers commonly used. It is general information, not advice on a particular search.
Registers of security interests
- CERSAI. The Central Registry of Securitisation Asset Reconstruction and Security Interest holds records of security interests created in favour of banks, financial institutions and certain other lenders, including mortgages of immovable property (including by deposit of title deeds), hypothecation of movables and the assignment of receivables. Any person may search the register on payment of a fee. A search shows whether an asset is already charged, and to whom.
- The Registrar of Companies. A company must register a charge under Section 77 of the Companies Act, 2013. The Ministry of Corporate Affairs portal lists the charges registered by each company, with the amount and the holder, and whether they have been satisfied.
A search of both registers gives a view of the borrower's secured debt. It tells a creditor how much equity may remain in a secured asset after the secured lenders are paid.
Immovable property
The registers of the sub-registrar hold the registered deeds of sale, mortgage, gift and lease. A search of the index by the debtor's name or by the property reveals transactions, and an encumbrance certificate for a property lists the registered dealings over a period. State land records portals show the recorded owners and sometimes the mutation entries and the liabilities. A creditor should check not only for properties in the debtor's name but for transfers made after the debt arose, which may be open to challenge as fraudulent.
Movable and other assets
- Vehicles. The registration records show the registered owner and any hypothecation noted in favour of a lender.
- Intellectual property. The Trade Marks Registry, the Patent Office and the Copyright Office record the proprietor of registered rights.
- Shares. Holdings in listed and unlisted companies appear in company filings, and the shareholdings of a listed company's promoters in its public disclosures. The details of a demat account can be obtained from the depository only through legal process.
- Receivables. The debtor's customers, found from contracts and public tenders, owe it money that can be attached in their hands.
Bank accounts
The balance in a debtor's bank account is not a public record. A creditor who knows the bank, from a cheque, a payment received or a contract, can ask the court to order the bank to disclose the account details, or to attach the account. After a decree, Order XXI Rule 41 allows the court to require the judgment debtor to disclose assets on oath, and Rule 46 allows attachment of debts due to the judgment debtor, including bank balances. Before the decree, an application for attachment under Order XXXVIII Rule 5 requires the evidence of intention to dispose of property that the note on attachment before judgment explains.
Reading the results
- List each asset with the source, the date of the search and the identity of the owner.
- Note any charge, and estimate the value left after it.
- Check for transfers made to relatives or related companies after the debt arose.
- Rank the assets by how easily they can be attached and sold.
Searches should be repeated before execution, because assets move. A dated record of each search also shows the court that the application rests on diligence.
This note is general information on the law at the date of publication. It is not legal advice, and it should not be relied on without advice on the facts of a particular matter.
