Equitable vs Registered Mortgage, and How to Search CERSAI
Auction Dunia · Law and portal facts checked as of · 7 min read
The short answer
Most bank home loans are secured by an equitable mortgage — the borrower deposits the title deeds with the bank — and because no mortgage deed is registered, it usually does not appear in the encumbrance certificate. Banks record these mortgages instead with CERSAI, the central registry, which anyone can search. A CERSAI search shows charges filed by regulated lenders; it cannot show a private loan against the same deeds, so it narrows the question of other mortgages without closing it.
Key points
- A mortgage by deposit of title deeds is created by handing the original deeds to the lender with intent to create security; no registered deed is needed (Transfer of Property Act s.58(f)).
- The encumbrance certificate lists registered documents only, so an equitable mortgage is normally absent from it unless a document recording it was registered.
- CERSAI is the central registry under the SARFAESI Act (s.20); a lender cannot use SARFAESI enforcement unless its security interest is registered there (s.26D).
- A public CERSAI search shows filings by banks and other regulated lenders. It does not show private or hand loans, and it depends on how the lender entered the property details.
- Registration gives the bank priority over government dues (s.26E), but not over a statutory first charge such as provident fund dues (Jalgaon District Central Co-operative Bank, Supreme Court, 2025), and it is subject to insolvency law.
Two ways a property is mortgaged
A registered mortgage is a written mortgage deed, stamped and registered at the sub-registrar’s office. Where the money secured is one hundred rupees or more, the Transfer of Property Act allows a mortgage, other than one by deposit of title deeds, to be made only by a registered instrument (s.59).
The exception is the mortgage by deposit of title deeds, often called an equitable mortgage (s.58(f)). The borrower delivers the original title documents to the lender, “with intent to create a security thereon”, in Calcutta, Madras, Bombay or any other town the state government notifies. The deposit itself creates the mortgage. Banks commonly record it in a memorandum of deposit of title deeds (MODTD), but the mortgage does not depend on a registered deed.
For a home loan in Bengaluru or Hyderabad, the equitable mortgage is the usual form in practice. It is quicker and cheaper for the borrower than a registered mortgage deed, which is why so many of the properties that reach a SARFAESI auction were secured this way.
Why the encumbrance certificate may not show it
An encumbrance certificate (EC) is a list of documents registered at the sub-registrar against a property for the years searched: sales, gifts, partitions, registered mortgages, longer leases. It is a register of registered documents, and nothing else (Registration Act 1908 s.17).
An equitable mortgage is created by a deposit, not a registered document, so it normally does not appear. If the lender registered a document recording the deposit, the EC may carry it; if not, the EC can be entirely blank on a property that has been mortgaged for years. A Nil EC — a certificate that finds no transactions — says nothing was registered in the period. It does not say no one has the deeds.
The question behind the paperwork
With an equitable mortgage, the security is the original deeds. Who holds them now — the auctioning bank, another lender, or a private creditor — is the practical question the EC cannot answer.
What CERSAI is and why the bank must register
CERSAI — the Central Registry of Securitisation Asset Reconstruction and Security Interest of India — is the registry set up under SARFAESI Act s.20. Lenders file the particulars of each security interest created in their favour (s.23). Registration is treated as public notice from the date and time of filing (s.26C(1)).
For a bank auction, the key rule is s.26D: no secured creditor may use the SARFAESI enforcement powers in Chapter III unless the security interest created in its favour has been registered with the Central Registry. A missing CERSAI registration is therefore a ground on which the sale itself can be challenged before the Debts Recovery Tribunal, not just a paperwork gap.
Registration also carries priority. After registration, the secured creditor’s debt is paid ahead of other debts and of government revenues, taxes, cesses and rates (s.26E), a provision in force since 24 January 2020 (as recorded in Jalgaon District Central Co-operative Bank v. State of Maharashtra, Supreme Court, 2025).
How a buyer searches CERSAI
- 1
Open the public search
On cersai.org.in, the Public Search menu offers an asset-based search, a borrower-based search and an AOR-based search, and a route to download the search report.
cersai.org.in, as of 19 Oct 2026
- 2
Search by the property, then by the owner
Enter the property details as they appear in the sale notice and the title deeds — survey or municipal number, locality, flat number. Then search the owner’s name as well, in each spelling the documents use.
- 3
Pay the search fee and save the report
A small fee is charged per search; the current amount is on the portal’s fee page. Save the report: it is dated, and the date is part of the finding.
- 4
Read every entry
Look for the auctioning bank’s own filing, its date, and any other lender’s charge on the same property. A second entry is a question for the advocate before EMD, not a conclusion.
- 5
If the owner is a company, check the company charges too
Charges created by a company are also registered with the Registrar of Companies and visible through the MCA portal.
mca.gov.in
What a CERSAI search cannot show
- Private or hand loans. A relative, a moneylender or a business associate who took the deeds as security files nothing with CERSAI.
- Charges that were never filed, filed late, or filed against older records — common for security created before lenders routinely filed.
- Entries keyed differently. A search matches what the lender typed; a changed survey number, a new municipal number or a misspelled name can produce no match.
- Anything filed after the date of your search.
Put together: the EC catches registered mortgages, CERSAI catches most institutional equitable mortgages, and neither catches a private loan against deposited deeds. The mortgage type and the CERSAI search are one of the six points of our check; like the others, it holds as of the day it was run.
The bank’s priority has limits
Section 26E is often summarised as “the bank comes first”. The Supreme Court has qualified that. A statutory first charge — in that case provident fund dues under the Employees’ Provident Funds Act — ranks above the s.26E priority, because “a priority cannot be equated with a first charge”; the sale proceeds went first to the provident fund dues (Jalgaon District Central Co-operative Bank, Supreme Court, 2025).
Section 26E is also expressly subject to the Insolvency and Bankruptcy Code (s.26E, Explanation). If the borrower or the mortgagor is a company in an insolvency process, the moratorium can stop the SARFAESI sale itself (Indian Overseas Bank v. RCM Infrastructure, Supreme Court, 2022) — the litigation sweep covers how to check for that, and our Red Flag File on the insolvency filing before the sale certificate shows the pattern.
These rulings decide who is paid first from the sale money. Whether a dues-holder can pursue the property in the buyer’s hands is a separate question that turns on the notice and on the dues themselves; see the guide to “as is where is”.
What the auction route cannot promise
- No public search can rule out a private loan secured by deposit of the original deeds; CERSAI and the EC both miss it.
- A CERSAI or EC search is good only to its date; a charge or attachment filed afterwards will not appear.
- The bank’s s.26E priority does not displace a statutory first charge, and it yields to insolvency proceedings.
- If the bank’s own security interest was not registered when it enforced, the sale can be challenged under s.17; a buyer cannot cure that defect.
Questions buyers ask
Sources
Statutes, rules and judgments first. Checked as of 19 October 2026; the law and portal practice change, so confirm against the source before relying on a detail.
- StatuteSARFAESI Act, 2002 — ss.20, 23, 26B–26E (Chapter IVA)
- StatuteTransfer of Property Act, 1882 — ss.58(f), 59
- JudgmentJalgaon District Central Co-operative Bank v. State of Maharashtra, Supreme Court, 20 Nov 2025 (2025 INSC 1335)
- JudgmentKotak Mahindra Bank v. Girnar Corrugators, Supreme Court, 5 Jan 2023
- JudgmentIndian Overseas Bank v. RCM Infrastructure Ltd, Supreme Court, 18 May 2022
- Official portalCERSAI — public search (asset, borrower and AOR based)
- Official portalMinistry of Corporate Affairs — company charges
- SecondaryBar & Bench — Registration of equitable mortgage: the lender’s conundrum
This guide explains the law and the process in general terms. It is not advice on any specific property; that belongs in a due diligence report on the property itself.
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