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IN THE HIGH COURT OF KERALA AT ERNAKULAM
T.R. Ravi, J
Asian Steel Traders, represented by its Proprietor, M.A. Khadar Mohideen – Appellant
Versus
Official Liquidator, High Court of Kerala – Respondent
ORDER :
(T.R. Ravi, J.)
The prayer in this application is to set aside the sale conducted under Annexure A tender notification, to set aside the rejection of the request as per Annexure I, and for a direction to the Official Liquidator to refund the amounts deposited by the applicant towards sale consideration as per Annexure E.
2. The 1st respondent issued Annexure A notification inviting sealed tenders for purchasing Copper Ingots (5670 KG) belonging to M/s.Premier Cable Company Ltd. (in liquidation), kept in the main office building of UCO Bank, Chennai Main Branch, Tambu Chetty Street, Chennai, on an “as is where is and whatever there is” condition. The 1st respondent had also specified the terms and conditions of sale of movable assets of the Company in Company Petition No.2 of 1996, published on 1.6.2022, a true copy of which has been produced as Annexure B. The applicant participated in the tender and was the successful bidder. He deposited the entire sale consideration. Annexure C is the temporary receipt issued on 22.6.2022, evidencing the remittance of the amount. Annexure D is the communication dated 22.7.2022 issued by the Official Liquidator to the applicant, and Annexure
The principle of Caveat Emptor does not protect sellers from liability for latent defects, especially when goods do not match the auction description.
Auction purchasers are liable for outstanding property tax under statutory first charge, with obligations for pre-acquisition dues as part of 'as is where is' sale terms.
Important Point : The court established that auction terms can create a contract contrary to the obligations under Section 55(1)(a) of the Transfer of Property Act, emphasizing buyer diligence.
Confirmed auction sales cannot be set aside for alleged inadequacy of price or lack of publicity without proof of fraud or substantial injury.
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 SARF....
The court clarified that the 'As is where is' auction terms do not absolve the seller from disclosing known encumbrances, but purchasers must conduct due diligence and accept contractual liabilities.
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