IMPORTANT POINT
Seller is bound to disclose any buyer any material defect in property of which buyer is not aware and which buyer could not ordinarily discover.

JUDGMENT :

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Kerala at Ernakulam in RFA No.379 of 2014 by which the High Court has allowed the said appeal preferred by respondent no.1 herein – Bank and has quashed and set aside the judgment and decree passed by the learned Trial Court dated 31.01.2014 in OS No.630 of 2012 directing the Bank to pay to the plaintiff a sum of Rs.58,10,000/with interest at the rate of 12% per annum from the date of suit till realization, the original plaintiff has preferred the present appeal.

2. That the defendant Bank secured the property in Survey No.48/1 in Tirur Taluk, Tanur Village in exercise of powers under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (hereinafter referred to as ‘SARFAESI Act, 2002’)

2.1 That the Bank secured the possession and thereafter by notice for auction dated 23.01.2007 the secured asset admeasuring 54 cents was put to auction. The appellant – original plaintiff after inspection of the property submitted the quotation for sale of 54 cents of land and offered Rs.32,05,000/. It appears that in the quotation the original plaintiff specifically stated that the offer of Rs.32,05,000/is subject to the condition that absolute ownership and vacant possession of full extent of property without encumbrances is handed over. However, by communication dated 05.03.2007, the Bank replied that as in the invitation to the public for tenders, it is stated that the property would be sold in “as is where is” and “as is what is” condition, the original plaintiff may confirm that he is ready and willing to offer the bid and take the property in the present condition. It appears that vide communication dated 08.03.2007, the original plaintiff reiterated that she is ready to purchase the property only if, absolute ownership, vacant possession and full enjoyment of 54 cents of land, free from all encumbrances is given, otherwise, she is not ready to purchase the property, if the Bank is not able to assign absolute ownership, vacant possession and full enjoyment of the property admeasuring 54 cents.

2.2 It appears that thereafter the Bank took the possession of the property pursuant to the order passed by the CJM, Manjeri in an application under Section 14 of the SARFAESI Act. That thereafter the plaintiff paid a total sale consideration in the month of October, 2007. That thereafter the Tehsildar submitted the report dated 21.11.2007 submitting that the actual measurement of the land is 39.60 cents and that the debtor had already transferred 14.40 cents out of land admeasuring 54 cents prior to the creation of the mortgage with the Bank. Despite the above the Bank issued the sale certificate for 54 cents dated 21.11.2007 and handed over the possession of the secured property admeasuring 39.60 cents only however, the sale consideration is issued for 54 cents. That thereafter the sale deed on the basis of the sale certificate was actually executed in favour of the plaintiff only on 01.10.2010 for 54 cents. That thereafter the plaintiff instituted the suit for recovery of damages/compensation with respect to 14.40 cents. It was the case of the plaintiff that as the plaintiff paid a total sale consideration for 54 cents of the land and even the sale certificate and the sale deed was executed for 54 cents the plaintiff has been handed over the possession of 39.60 cents of the land only and therefore the plaintiff is entitled to the damages/compensation with respect to the 14.40 cents which was less than the area for which the plaintiff paid the amount i.e. 54 cents. It was the case on behalf of the plaintiff that it was the duty of the bank when accepted the total sale consideration for 54 cents, to hand over the peaceful and vacant possession of the land admeasuring 54 cents. It was also the case on behalf of the plaintiff that as the bank was aware of the t