Section 13(6) of the SARFAESI Act deals with the legal effect of a transfer of secured assets made by the secured creditor (or the manager on its behalf) after taking possession. What right does the transferee receive?

Section 13(6) provides that any transfer of a secured asset after taking possession or takeover of management by the secured creditor (or by the manager on behalf of the secured creditor) under Section 13(4) shall vest in the transferee 'all rights in, or in relation to, the secured asset transferred as if the transfer had been made by the owner of such secured asset.' This is a crucial provision that gives the purchaser at an enforcement sale a clean, indefeasible title equivalent to that of the owner - removing any cloud arising from the fact that the seller was the bank/creditor and not the legal owner. This clean title provision is essential for creating a viable market for distressed asset sales under SARFAESI.