IMPORTANT POINT
SARFAESI – Auction Purchaser has no obligation to discharge liability of previous owner outstanding as charge over property

Ajay Kumar Mittal, J.

1. Prayer in this petition filed under Articles 226/227 of the Constitution of India is for issuance of a writ in the nature of mandamus directing respondent No.2 to register the sale deed of the property i.e. land measuring 8 Bigha, 10 Biswa, Khata No. 28/56, Khasra No. 407(6-5), 410(6-5) i.e. 17/25th share of 12 Bigha, 10 Biswa land situated inside Village Kumbra, Tehsil Amloh, Mandi Gobindgarh, District Fatehgarh Sahib, in favour of petitioner as it has purchased the said property in the e-auction held on 28.02.2017 from the respondent-bank under Section 13(9) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, “SARFAESI Act”).

2. A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. A public sale notice dated 09.02.2017 was published in the newspaper “Rozana Spokesman” for the sale of the land of M/s Mata Multi Metals, Tehsil Amloh, District Fatehgarh Sahib as detailed above. The petitioner being interested to purchase the said land approached the bank respondent No.3 and sought information regarding the property being e-auctioned. The respondent bank gave the entire information regarding the land put on sale and assured the petitioner that the property was free from all types of encumbrances and charges. It was also intimated by the bank that the petitioner could participate in the e-auction which was going to be held on 28.02.2017 to purchase the property. It was further informed to the petitioner that sale deed of the land shall be registered in favour of the auction purchaser immediately after depositing the sale amount. The petitioner agreed to purchase the said property. It deposited the earnest money of Rs. 22,50,000/- on 23.02.3017 as per the terms and conditions of the e-auction. On 28.02.2017, the petitioner participated in the e-auction and purchased the property in question after giving highest bid of Rs. 2,25,25,000/-. The respondent bank issued the sale confirmation letter to the petitioner on 28.02.2017 and advised it to deposit 25 % amount immediately and remaining amount of sale amount as per the requisite terms and conditions. The petitioner immediately deposited 25 % i.e. Rs. 56,31,250/-. On 07.03.2017, the petitioner was further directed to deposit Rs. 1.08 lakhs as TDS @ 1% in respect of the land and building of Rs. 1.08 crore which was also deposited by the petitioner. After purchasing the property in question, it came to the knowledge of the petitioner from the office of Sub-Registrar that a sum of Rs. 5,79,000/- of the Excise and Taxation department was pending towards the previous owner of the property i.e. M/s Mata Multi Metals and entry in this regard was also mentioned in the revenue record. It was further informed to the petitioner by the office of the respondent No.2 that the sale deed of the property could not be registered in its favour unless the entry mentioned in the jamabandi was not removed from the revenue record by depositing the payment of Rs. 5,79,000/- to the Excise and Taxation department. The petitioner immediately approached the respondent bank and informed regarding the said entry of recovery of Central Excise and Taxation department dues of previous owner. The authorized officer of the bank informed the petitioner that the property had been sold to it under the SARFAESI Act which was mortgaged with the bank and was free from all kinds of encumbrances and charges. The petitioner on the assurance of the respondent bank had deposited the entire sale consideration of Rs. 2,25,25,000/- with the bank. The respondent bank issued the sale certificate to the petitioner under Rule 9(6) of the Security Interest (Enforcement) Rules, 2002 (in short, “the Rules”) wherein it was specifically mentioned that the sale of the scheduled property was made free from all encumbrances known to the secured creditor. The petitioner purchased the e-stam