A seller in a property auction must disclose encumbrances; failure to do so can lead to liability, but changed circumstances may alter obligations.

JUDGMENT

Vipin Sanghi, J. (Oral)--This Letters Patent Appeal is directed against the judgment dated 24.07.2019 passed by the learned Single Judge in W.P.(C.) No.3984/2018 preferred by the respondent No.1. By the impugned judgment, the learned Single Judge allowed the said writ petition and held that the respondent No.1/writ petitioner was entitled to refund of the sale amount of Rs.1,33,45,000/-. The learned Single Judge also directed that the respondent No.1 shall be entitled to refund of the expenditure incurred by her on e-stamp duty to the tune of Rs.5,30,800/- and a further amount of Rs.1,33,700/- towards the registration charges in respect of the sale certificate/deed. Respondent No.1 had raised a certain bill to contend that she had incurred expenditure on renovation of the property in question and, in respect thereof, the appellant bank was directed to appoint a valuer from its panel to assess the value of the work carried out by the respondent No.1 for renovation of the property in question within eight weeks. The learned Single Judge directed that the amount valued shall be paid to the respondent No.1/writ petitioner within two weeks of such valuation. The aforesaid amounts of Rs.1,33,45,000/-, Rs.5,30,800/- and Rs.1,33,700/- directed to be refunded to the respondent No.1 were to carry interest @ 7% per annum computed from the date when the amounts were paid by the respondent No.1 pursuant to the auction purchase, till the date of refund.

2. The background in which the aforesaid reliefs were sought by the respondent No.1/writ petitioner, and came to be granted to her, may now be noticed.

3. On 08.08.2017, a public notification for e-auction was published by the appellant/Allahabad Bank in the newspaper containing a list of properties to be made available for auction on 28.08.2017 under the SARFAESI Act, 2002. The list of properties included property No. 40/53, First Floor, Chittranjan Park, New Delhi admeasuring 160 sq. yards. The respondent No.1 participated in the said bidding process in respect of the said property and gave a bid for Rs.1,33,45,000/- which was accepted by the appellant and a Sale Certificate was issued in her favour on 04.09.2017. The respondent No.1 claimed that she took a loan of Rs.1 Crore carrying interest @ 12% per annum from the ICICI Bank in order to pay the sale consideration. Admittedly, the respondent No.1 was placed in actual vacant physical possession of the said property by the appellant Allahabad Bank after receipt of the entire consideration.

4. Respondent No.1 claimed that since the property was not in a good condition, she spent Rs.13 Lakhs for renovation so as to make the said property habitable. She also deposited Rs.5,30,800/- as e-stamp duty for registration of the Sale Certificate with the office of the Sub-Registrar, Mehrauli, New Delhi, apart from an amount of Rs.1,33,700/- towards registration charges for registration of the Sale Certificate and completion of all the formalities in the office of the Sub-Registrar, Delhi.

5. Respondent No.1 claimed that she was shocked when, on 04.01.2018, the Sub-Registrar refused to release the Sale Certificate/Deed to her on the ground that the Economic Offences Wing (EOW), Crime Branch had issued a restraint order to the Sub-Registrar, not to transfer the said property. On inquiry, she learnt that one FIR bearing No. 0296/2014 dated 10