IMPORTANT POINT
The specific and stringent conditions of an auction sale notice, the waiver of statutory rights by the purchaser, and the inapplicability of precedent in determining the legal position under the SARFAESI Act.

JUDGMENT :

T.S. Sivagnanam, J.

1. The second and third respondents in WPA 2445 of 2023 are the appellants. The first respondent herein was the writ petitioner. The facts leading to the filing of the writ petition are noted hereunder:-

2. The appellant bank exercised their power under the provision of the SARFAESI Act, 2002 and issued a tender cum auction notice 13.06.2022 for enforcement of the secured asset which is an immovable property at their reserved price of Rs. 8,27,38,000/-. The tender cum auction sale notice was published in terms of the provisions of the Act. The respondent writ petitioner participated in the auction and submitted a letter dated 17.06.2022 agreeing to abide by the terms and conditions of the tender cum auction notice. The auction was held on 29.06.2022 and the writ petitioner was declared as a successful bidder and upon deposit of the bid amount, sale certificate dated 30.06.2022 was issued The respondent writ petitioner issued a legal notice to the appellant bank dated 15.11.2022 calling upon them to reimburse a sum of Rs. 20,94,065/-which they have paid to clear the dues payable to the Kolkata Municipal Corporation, the third respondent in this appeal.

3. The appellant by reply notice dated 14.12.2022 refused to comply with the demand by stating that the sale notice for sale of the secured assets is “as is where is”, “as is what is” and “whatever is” basis and that the writ petitioner participated in the auction unconditionally agreeing with the terms and conditions contained in the tender cum auction notice and the reimbursement claimed is not feasible of compliance. In the reply notice the relevant clauses in the tender cum auction notice was referred to. Upon receiving the reply, the first respondent filed the writ petition. The learned Single Bench by the impugned order has allowed the writ petition.

4. The argument of the writ petitioner before the learned Single Bench was largely by referring to the decision of the Hon’ble Division Bench of this court in Corporation Bank and Another Versus Dr. Jayesh Kumar Jha, (2019) SCC Online Cal 2279 wherein the court held that Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002 hereinafter referred to as the Rules deal with stage anterior to the issuance of the sale certificate and delivery of possession; Rule 9(8) cast a duty upon the authorised officer to deliver the property to the purchaser free from encumbrances requiring the purchaser to deposit money for discharging the encumbrances and the Rule of “Caveat Emptor” is to be replaced by “Caveat Venditor” and when a property is put to sale, the bank is under a statutory obligation to sell the secured assets with clear title free from any encumbrances. The appellant bank resisted the argument by submitting that the judgment has to be read in the context of the facts which gave rise thereto and that the relevant clauses of the auction sale notice in the present case are much more specific and direct than the facts which fell for consideration before the Division Bench. By reiterating the contention that the property will be sold on “as is where is” basis and “whatever there is” basis clearly indicates that the bank had no further liability after the sale was concluded to pay the property tax due in respect of the property. Further it was argued that although there cannot be any estoppel against the statute, there may very well be cases where a person relinquishes or waives his statutory rights. In the present case, the writ petitioner entered into the sale knowing full well that the authorised officer or bank could not be held responsible for any charge or property tax or any dues to the Government or anybody with regard to the property. That the writ petitioner signed an acknowledgement of the said terms and conditions and thus relinquished his statutory rights if any. Therefore, the writ petitioner cannot resile from such relinquishment or waiver and reiterate its claims with regard to arrear