Auctioned movable assets: failure to deliver possession and pre-handover theft justified refund and cancellation of sale certificate.

A purchaser of auctioned movable assets was entitled to refund and cancellation of the sale certificate where the secured creditor failed to deliver possession and the assets had suffered theft and diminution before handover. The court noted that under the Security Interest (Enforcement) Rules, 2002, possession and sale certificate operate together, and the seller must convey the goods in the condition agreed. An "as is where is" clause protected only against discrepancies visible on inspection; it did not justify delivery of materially altered assets. Because the secured creditor retained control and could not deliver the specific goods sold, the purchaser was entitled to restitution.

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Issues: Whether the petitioner was entitled to refund of the bid amount and cancellation of the sale certificate when the secured creditor failed to hand over possession of the auctioned movable assets and the assets had undergone theft and diminution before delivery.

Analysis: The movable assets were specific goods, and the contract as well as the statutory scheme under the Security Interest (Enforcement) Rules, 2002 required delivery of possession in conjunction with issuance of the sale certificate. Although the bid was accepted and the sale certificate was issued, possession had not been handed over, and the secured creditor continued to retain control of the assets. The clause selling the assets on an "as is where is" basis only protected the seller against discrepancies between description and site condition at the time of inspection; it did not permit delivery of materially different assets from those inspected. Since theft and removal of components had occurred before possession was delivered, the seller was unable to convey the assets in the condition agreed upon.

Conclusion: The petitioner was entitled to refund of the amount paid, and the sale certificate was liable to be cancelled.

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