Auction purchaser bears encumbrance risk under caveat emptor; earnest money deposit not refundable after confirmed bid.

A purchaser at a court-approved auction was held to take the property subject to statutory and other liabilities under the sale terms, and the principle of caveat emptor applied. The Court noted that the bid had already been confirmed when the issue arose, and that the auction purchaser assumed the risk of later-discovered encumbrances. Non-disclosure of the sales tax attachment was not treated as fraud, and no mutual mistake was shown to vitiate the concluded sale. On that basis, the earnest money deposit was not refundable and no interference was warranted.

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Issues: Whether the successful bidder was entitled to refund of the earnest money deposit on the ground that the auctioned property had been attached for sales tax arrears and that this fact was not disclosed before confirmation of the bid.

Analysis: The confirmation of the bid had already taken place, and the respondents had acted under section 29 of the State Financial Corporations Act, 1951 in bringing the properties for sale. The sale terms required the purchaser to bear the statutory and other liabilities attached to the property, and the principle of caveat emptor applied. The Court also relied on the rule that a purchaser at an auction sale buys with knowledge of the risk involved and cannot claim refund merely because a later-discovered encumbrance makes the bargain less advantageous. Non-disclosure of the sales tax attachment was not treated as fraud, and the case did not establish a mutual mistake vitiating the concluded auction sale.

Conclusion: The petitioner was not entitled to refund of the earnest money deposit, and no interference was called for.

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