Secured creditors have a mandatory statutory duty to conduct due diligence and transparently disclose all material encumbrances or title defects, including the undivided status of property, during an auction; failure to do so allows the auction to be cancelled and entitles the purchaser to a full refund.

JUDGMENT :

RAI CHATTOPADHYAY, J.

1. The writ petitioner is the auction purchaser of the property admeasuring about three Kathas, situated at Mouza-Bongpur, Telipukur More Bypass, G.T. Road. Police Station - Sreepalli, District - Burdwan. He has been granted the final ‘sale-certificate’ by the Bank, dated 24^th March, 2016 in which the Bank has acknowledged receipt of the sale price in full, from the petitioner and declared to hand over and deliver the possession of the said property to the writ petitioner. It has further declared that the sale was made free from all encumbrances.

2. The petitioner alleges that despite him meeting with the all necessary expenditure on account of the purchase price and having paid to the Bank a total sum of Rs. 7,40,000/- as consideration and despite he being provided with the ‘sale certificate’ as above, the respondent/Bank has never delivered to him possession of the property free from encumbrances, as it was obliged to do in terms of the provisions of law. Hence, being aggrieved the writ petitioner has come before this Court to pray for the relief inter alia that the Bank may be directed to hand him over the peaceful vacant possession of the purchased property or refund him the consideration money, earlier deposited with the Bank.

3. Mr. Biswarup Biswas, learned advocate for the writ petitioner has submitted that it is the statutory duty and obligation of the respondent/Bank to deliver possession of the property purchased by the writ petitioner being successful in the auction process. He says by relying on an information sheet obtained from the website of the Directorate of Land Records and Surveys, West Bengal, that the schedule property sold in auction by the Bank to the petitioner is an undivided and undemarcated part of larger plot of land measuring 0.66 decimal, within the said Mouza. He has further submitted that in the entire process starting from publication of notice, the Bank has never disclosed the said fact. Also that it is therefore impossible to deliver absolute title and possession of an undivided piece of land by the Bank, to the petitioner/purchaser. In that case Mr. Biswas, learned advocate has submitted that the petitioner seeks redress of refund of the consideration money, earlier paid by him to the Bank, as the auction purchase by his client is not in a stage to be duly executed.

4. Mr. Biswas, learned advocate has anticipated and defended the point that the writ petition may not be maintainable, by referring to a judgment of Hon’ble Division Bench of Madras High Court [in S. Sanmuganathan Vs. The Authorized Officer Indian Overseas Bank Asset Recovery Management Branch , 2017 SCC OnLine Mad 1549]. The following portion of the judgment has been relied on:

“3. It is the grievance of the petitioner that at the time of auction and in the public notice, the Bank took a position that the Bank is in possession of the property and assured that physical possession will be delivered to him. Since the physical possession was not given by the Bank, the petitioner requested the Bank to refund the money. Thereafter, a reminder was sent on 21.05.2014. On 03.06.2014, the Bank gave a reply that they would initiate necessary proceedings under SARFAESI Act and deliver vacant possession. The officer in-charge of the bank was in regular touch with the writ petitioner. The writ petitioner waited endlessly with a hope that