TMI Blog2016 (6) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion and bid opening date, when the bidders were requested to increase the bid offer and they informed that they cannot do so because infrastructure in the industrial area was not conducive and additionally the highest bidder would have to pay to the government authorities, before the title would be transferred in their name, and they estimated the final costs to the highest bidder to be within the range of ₹ 2.25 to ₹ 2.5 crores. - W.P.(C) 2089/2015 - - - Dated:- 9-5-2016 - MR. PRADEEP NANDRAJOG AND MS. MUKTA GUPTA, JJ. FOR THE PETITIONER : Ms.Maninder Acharya, Sr.Advocate instructed by Mr.Ajay Kohli, Ms.Bhumika Kapoor, Ms.Aditi Mohan, Mr.A.Pandey, Ms.Rythma Kaul, Advocates FOR THE RESPONDENT : Mr.Sanjeev Sagar, Mr.Karan Bhardwaj, Advocate PRADEEP NANDRAJOG, J. 1. Perpetual lease-hold rights in Plot No.4 and 5 ad-measuring 7000 sq.metres, Phase-4, Industrial Area, Gwalthi, District Bilaspur, (Himachal Pradesh) belonging to the State of Himachal Pradesh were granted by the State of Himachal Pradesh in favour of M/s Pilot Technologies (India) Ltd. on September 19, 2007. As per the grant, the lessor had the right to recover upto 50% unearned incre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 190 lakh ₹ 19 lakh The property is being sold on AS IS WHERE IS BASIS AND WHATEVER THERE IS BASIS. 4. The bidders had to submit the offer as per tender documents and as would be noted hereinafter certain disclaimer were put and certain cautioned were incorporated in the tender documents. 5. The petitioner was the highest bidder and deposited 25% of the bid amount. Bid amount being ₹ 2 crores, ₹ 50 lacs were deposited on June 24, 2011. Bid was accepted on June 27, 2011 and within the time stipulated balance ₹ 1.5 crores was paid by the petitioner on July 11, 2011. On July 13, 2011 the petitioner asked for a sale certificate to be issued and possession handed over to it. 6. The lessee company filed SA No.311/2011 raising a grievance to the valuation report, the notice inviting bids and questioning the sale. The said petition was listed before DRT-III on July 14, 2011 when, in the presence of counsel for SIDBI a consent order was passed noting that counsel for the lessor stated that the lessor had a buyer who would pay a better amount. Re-notifying the matter on August 11, 2011 SIDBI was directed to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets/property advertised for sale. SIDBI does not undertake any responsibility to procure any permission/licence etc. in respect of the property/assets offered for sale or for settlement of any dues whatsoever in respect of the said property/assets. 9. Learned DRT further noted that the bidders were called upon to increase the bids in response whereto the bidders in one voice said that Gwalthi Industrial Area had very few working units and the industrial environment was bleak. They also said that about ₹ 12 lacs have to be paid to the competent authority for change of ownership and ultimately the final price which the bidders would have to pay would be in the range of ₹ 2.25 to ₹ 2.5 crores. Highlighting that when a sale is on As is Where is Basis it was the duty of a bidder to ascertain title to the property, whether there were encumbrances thereon as also the physical measurements and the site condition, the application was dismissed by learned DRT vide order dated April 30, 2012. 10. Petitioner s appeal was dismissed vide impugned order dated December 10, 2014 by learned DRAT holding that the application filed before learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the borrower wherein intending sale was challenged, it was permissible for the purchaser to file an application and there was no necessity to take resort to a substantive remedy. 14. We thus decide the merits of the dispute. 15. As per clause (a) to the proviso to sub-Rule (6) of Rule 8 of the Security Interest (Enforcement) Rules, 2002 an encumbrance known to the secured creditor on a property has to be indicated in the public notice inviting bids. Now, a lease-hold title is not an encumbrance. To encumber means to impede or burden. Stroud s Judicial Dictionary of Words and Phrases in the 5th Edition defines encumbrance as : a claim, lien or liability attached to a property . A lease-hold tenure is a title as is a free-hold tenure. The only difference is that the latter gives the freedom to deal with the immovable property and the former gives a restricted right to deal with the immovable property. Thus, by not informing the bidders that the title to be transferred would be a lease-hold tenure, there is no violation of the proviso to sub-Rule (6) of Rule 8 of the Security Interest (Enforcement) Rules, 2002. It needs to be highlighted that it was not conveyed to the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to the post tender submission and bid opening date, when the bidders were requested to increase the bid offer and they informed that they cannot do so because infrastructure in the industrial area was not conducive and additionally the highest bidder would have to pay to the government authorities, before the title would be transferred in their name, and they estimated the final costs to the highest bidder to be within the range of ₹ 2.25 to ₹ 2.5 crores. 18. Thus, keeping in view the position of law concerning the obligation of a purchaser when a property is put up for sale on As is Where is Basis coupled with the various clauses of the tender documents which we have noted hereinabove no case is made out to interfere with the impugned order dated October 12, 2014 as regards the final destination reached by the order on this issue. 19. The other argument advanced was that the perpetual lease-deed in favour of the lessee had a negative covenant of no sale being permissible without the consent of the lessor and since consent of the lessor was not obtained, the sale is vitiated. 20. As we have noted in paragraph 2 above, the lessor granted the permission to m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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