(2018)2 SCeJ 1704

SUPREME COURT OF INDIA

23 October, 2018

Auction purchaser – Court auction - The purchaser can not get a higher right, title or interest in the property than what vested with the seller - Ultimately the purchaser takes the risk, if he purchases the property which does not belong to the judgment debtor - The purchaser at an auction sale takes the property subject to all the defects of title, and the doctrine of caveat emptor (let the purchaser beware) applies to such a purchaser -  Therefore, even assuming that the court auction sale was held in respect of the entire property, it cannot be said that such sale was valid to the entire extent - At most, it can be said that it was valid to the extent of the property which was owned by the judgment debtor i.e. C - C was the judgment debtor, at most only his share in the property could be sold and it is not open for the purchaser to contend that he purchased the entire property though only 50% of the property belonged to the judgment debtor-C - By virtue of auction sale, the purchaser would get only the share vested with C inasmuch as C alone was the judgment debtor - The property which is not owned by the judgment debtor could not be sold at all and therefore, even assuming that the sale certificate is wrongly issued in respect of the entire property, the same does not bind the plaintiffs inasmuch they continued to be the owner of 50% of the whole of the property. (2018)2 SCeJ 1704

• Auction purchaser  - Sale not set aside  - Held that since the auction purchaser has already paid the full amount of sale consideration and is in possession of the property in question for more than about 8 years - For equity and good conscience,  do not intend to interfere with his possession. Held, that we cannot brush aside the fact that respondent Nos.4, 6 & 7 filed a claim petition before the Recovery Officer on 4th January, 2007 claiming their share of balance of sale proceedings after adjustment of the dues of the Central Bank which shows that the parties to the dispute have accepted the award passed by the Lok Adalat. It appears to us that the High Court did not consider the said facts and further it has escaped from the mind of the High Court that the auction purchaser has purchased the auctioned property for sale consideration of Rs.3.27 crores and 25% of the sale consideration was duly paid on 5th October, 2006 and furthermore on 19th October, 2006, the balance amount of sale consideration was duly paid by the auction purchaser. We have further noted that the sale was confirmed on 15th November, 2006. The sale certificate was also issued in favour of the auction purchaser after paying the requisite stamp duty and registration fees which, as pointed out to us on behalf of the auction purchaser, to the tune of Rs.30,73,800/-. It is also not in dispute that auction purchaser was put in possession of the property and is still in possession of the property since the sale certificate was issued and registration was made in his favour. It is submitted on behalf of the auction purchaser that he has purchased the property by availing private borrowing for the said property and he is paying nearly Rs.5 lakhs per month as interest. Therefore, in our opinion, the equity and good conscience also has to play a role in the matter in question on the given facts and after considering the conduct of the respondents in the matter. In these circumstances, we feel that it would not be proper for us at this stage to set aside the sale, as has been done by the High Court without taking into consideration all these facts. (2016)3 P.L.R.SC 542
•         Auction Purchaser - "As is where is basis" - Calling upon the petitioner, an auction purchaser, to pay all statutory dues and any other dues on the property, expenses relating to stamp duty, Registration Charges, Conveyance, Lawyer's Fees etc. as per the conditions of the auction notice - Property is being sold on "As is where is basis" and "As is what is basis" - There was specific condition that all statutory dues payable and "other dues" will be paid by the auction purchaser - When condition in the advertisement was specific that all dues shall be payable by the auction purchaser - The dues of the HSIIDC have "first charge" even in terms of communication - Cannot dispute the claim of enhanced compensation - Haryana State Industrial and Infrastructure Development Corporation.    (177) P.L.R. 

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