Buyers in auctions sold on 'AS IS WHERE IS BASIS' have a duty to inspect the property before bidding, and the consequences of not resolving ambiguities in legal documents.

PRADEEP NANDRAJOG, J.

1. We have heard the petitioner who appears in person as also learned counsel for the respondents.

2. OA No.249/2001 filed by respondent No.1 against Kashmiri Lal Babbar, carrying on business as sole proprietor of M/s.Chinu Plast (the principal debtor) and Vilas Babbar, who was the guarantor and had created an equitable mortgage of the first floor of the property I-4 and 5, Laxmi Nagar, Main Bazar, Delhi was allowed and to recover the dues the mortgaged property was put to auction.

3. The sale proclamation dated March 04, 2005 settled by the Recovery Officer DRT-I clearly indicated that the sale was on AS IS WHERE IS BASIS. Under the caption SCHEDULE OF PROPERTY, the property put up for auction was described as under:-

“Residential building (first floor) on a plot measuring 66½ square yards having a covered area of 598.50 square feet is available at I-4-5, Laxmi Nagar, Main Bazar, Delhi-110092.”

4. The auction was scheduled for April 28, 2005 but was adjourned to facilitate the prospective bidders to inspect the property. The auction was thereafter conducted and petitioner was declared the highest bidder and his bid was accepted.

5. The order confirming the sale, as per form No.ITCP-18 under Rule 63(i) of the Second Schedule of the Income Tax Act 1961, was issued recording that the bid amount in sum of Rs.6 lacs has been received for sale of the property specified in the order of confirmation dated August 10, 2005, in exact language as that of the sale proclamation.

6. Vacant physical possession of the first floor was handed over to the petitioner and we note that the built-up area of the first floor handed over to him was on 44½ square yards land.

7. After two years and nine months the petitioner awoke from the slumber and filed an application before the Recovery Officer praying that he should be put into possession of remaining 22 square yards of the built-up area on the first floor. Respondent No.2 claimed title to said built-up portion on the first floor.

8. Vide order dated February 04, 2009 the Recovery Officer dismissed the application filed by the petitioner recording that on April 28, 2005 the auction had been postponed to facilitate the prospective bidders to inspect the property and the prospective bidders had inspected the property. The Recovery Officer opined that there was malice in the act of the petitioner to raise the issue after nearly three years. That when proceedings subsequent to the auction were finalized and it was recorded that the mortgaged property has been given possession of and the file could be consigned to the record room, the petitioner did not protest.

9. Appeal filed by the petitioner before the Debts Recovery Tribunal was dismissed on February 28, 2013, recording further fact that respondent No.2 had acquired title to 22 square yards of the property on August 22, 1993. Further appeal by the petitioner to the Debts Recovery Appellate Tribunal was dismissed vide impugned order dated December 11, 2014. Another additional reason has been recorded by the Debts Recovery Appellate Tribunal, being that the mortgaged property was not the entire first floor on the plot of land comprising 66½ square yards on the plot bearing Municipal No.I/4-5, Main Bazar, Laxmi Nagar, New Delhi.

10. Now, the admitted position is that the auction notice dated March 04, 2005 did describe the property put up for auction as : Residential building (first floor) on a plot measuring 66½ square yards having a covered area of 598.50 square feet is available at I-4-5, Laxmi Nagar, Main Bazar, Delhi-110092. But at the same time indicated to the prospective bidders that the sale was on AS IS WHERE IS BASIS. Further admitted position is that on April 28, 2005 the auction had been postponed to facilitate the prospective bidders to inspect the property and the prospective bidders had inspected the property and by said period of time respondent No.2 was in actual physical possession of a part of the bu