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2014 (8) TMI 1208 - HC - Indian LawsSeeking discharge their obligation in terms of the provisions of SARFAESI Act of handing over possession of a secured asset to the petitioners which had been put up for sale by auction and has since been purchased by them - bid money received and sale certificate issued, but possession not transferred - HELD THAT:- There cannot be any doubt that in relation to a property [which is a secured asset within the meaning of section 2(zc) of the SARFAESI Act and is put up for auction for recovery of the secured debt of the secured creditor in terms of the provisions thereof] occupied by persons either in the capacity of an owner or as a tenant or as a lessee, such occupation would amount to an intrusion on the property and if it is for the auction purchaser to get rid of those occupants after the sale is effected to have vacant physical possession thereof according to law, the value that such property would fetch in auction is likely to be lesser compared to a situation where the selfsame property is put up for auction, free of occupants. In the event a public auction of an immovable property is conducted on as-iswhere- is-basis, a prospective purchaser would not in the normal run of events participate in the auction without utilising the opportunity of inspection of the property. He would bid in the auction bearing in mind the existing situation, position and condition of the property. If the property is encumbrance free (includes the nonoccupancy factor) and amenities attached thereto are to his liking, most certainly he would offer a higher amount. The offer would most certainly be on the lower side, should the property be encumbered (occupied) or suffer from any disadvantages. In case the property is not to his liking, he is free not to participate in the auction. Once with open eyes he participates in the auction, he cannot expect a better deal that he was not assured of on the day he offered his bid - If an encumbrance exists, say the secured creditor has only been in symbolic possession with the borrowers in actual possession of the secured asset, and the prospective purchaser bids with full knowledge of such encumbrance, it is not open to him after the sale certificate is issued to contend that it carries with it the duty of the secured creditor to put him in actual possession of the secured asset. There is no reason as to why the principle of 'caveat-emptor' shall not apply in such a situation. The respondents do not owe a duty to hand over vacant and peaceful physical possession of the secured asset to the petitioners and making a direction in this behalf does not arise - Petition dismissed.
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