Thomas Chacko vs Sri. Mahesh Kumar on 8 July, 2020
Hon'ble Division Bench of Madras High Court in (V.Sridhar
v. The Authorized Officer) in judgment dated 23.1.2018 in W.P.
(C) No.16579/2016 held thus:
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V.Sridhar vs The Authorized Officer on 23 January, 2018
Pr.Thangamshiri vs The Chief Manager
In this context, it is relevant to refer to the judgement of this Court in V.
Sridhar v. The Authorized Officer [AIR 2018 Mad 87]. In that case, the earnest
money was forfeited due to non-payment of 75% of the sale auction consideration, as
the bank could not handover the possession of the property free of encumbrances
due to ongoing civil suits filed by the tenants of the said property. The respondent
bank invoked the ‘as is where is basis’ or ‘as is what is’ condition, contending that the
pendency of litigations concerning the property does not in any way affect the sale of
the property. Placing reliance on earlier judgments, the Division Bench reiterated that
the mere inclusion of ‘as is where is basis’ or ‘as is what is’ condition does not
exonerate the banks from disclosing any encumbrances on the property, and directed
the bank to refund the amount. For better appreciation, the relevant paragraph is
extracted hereunder:
Pr.Thangamshiri vs The Chief Manager
In this context, it is relevant to refer to the judgement of this Court in V.
Sridhar v. The Authorized Officer [AIR 2018 Mad 87]. In that case, the earnest
money was forfeited due to non-payment of 75% of the sale auction consideration, as
the bank could not handover the possession of the property free of encumbrances
due to ongoing civil suits filed by the tenants of the said property. The respondent
bank invoked the ‘as is where is basis’ or ‘as is what is’ condition, contending that the
pendency of litigations concerning the property does not in any way affect the sale of
the property. Placing reliance on earlier judgments, the Division Bench reiterated that
the mere inclusion of ‘as is where is basis’ or ‘as is what is’ condition does not
exonerate the banks from disclosing any encumbrances on the property, and directed
the bank to refund the amount. For better appreciation, the relevant paragraph is
extracted hereunder:
Ku Chih Choi vs Central Bank Of India & Ors on 19 January, 2023
In V. Sridhar vs. Authorized Officer, Indian Bank, Chennai; AIR
2018 Madras 87, the words "as is where is basis" and "as is what is
8
basis" were held against the Bank in a situation where the Bank did not
make any representation relating to the encumbrances and statutory
liabilities of the property. The Court held that the Bank cannot resile
from its obligation in handing over the possession of the property to the
auction purchaser. Both the aforesaid cases fit squarely in the
circumstances of the present case particularly where the respondent
Bank made a specific assertion that it is in possession of the property
and that the property is free from all encumbrances.
Vemana Chenchu Murali, vs State Bank Of India on 14 March, 2019
8. Relying upon Rule 8(6) of the Security Interest (Enforcement)
Rules, 2002, and a decision of the Division Bench of the Madras
High Court in V.SRIDHAR v. AUTGHORIZED OFFICER, INDIAN
BANK1, it is contended by the learned Counsel for the petitioner
1
2018 (1) Writ Law Reporter, 145
3 VRS,J & PKR,J
WP.5310/2019
that the impugned sale notice is in gross violation of the statutory
prescription.
1