As-is-where-is sale does not excuse demarcation where property must be identified before conveyance and possession.

A secured creditor selling property under the SARFAESI Act on an "as is where is basis" must still ensure that the asset is identifiable and capable of conveyance. The expression does not excuse the creditor from obtaining demarcation where the property cannot be located on the ground. If the bank has itself sought demarcation from the Revenue Authorities, it should pursue that process before executing the sale deed and delivering possession. The bidder should not suffer for lapses by the bank or the authorities, although the creditor remains entitled to interest on any unpaid balance. Equitable relief may therefore be made conditional on timely payment, demarcation, conveyance, and possession.

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Issues: Whether, in an auction sale under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the secured creditor was bound to get the auctioned property demarcated and to execute the sale deed and hand over possession to the highest bidder despite the sale notice describing the property as being sold on an "as is where is basis".

Analysis: The expression "as is where is basis" was held not to mean that the property need not be identifiable or may be non-existent on the spot. It only signifies that whatever condition exists at the site will be transferred in that same condition. Where the property cannot be located or identified without demarcation, a sale deed cannot be executed and possession cannot be delivered. Since the bank itself had repeatedly sought demarcation from the Revenue Authorities, it was held that the bank ought to have pursued the demarcation proceedings. The bidder was held entitled not to suffer for lapses of the bank or the Revenue Authorities. At the same time, the bank was also entitled not to lose interest on the unpaid balance.

Conclusion: The bank was directed to get the property demarcated and thereafter execute the sale deed and hand over possession on receipt of the balance consideration with interest. The petitioner was directed to deposit the balance amount with interest within the stipulated time, failing which the amount already paid would stand forfeited.

Final Conclusion: The petition was allowed by granting equitable relief to the highest bidder, subject to payment of the balance sale consideration with interest and completion of demarcation and conveyance by the bank within the prescribed time.

Ratio Decidendi: A secured creditor selling property on an "as is where is basis" must still ensure that the property is identifiable and capable of conveyance and possession, and cannot rely on that expression to avoid demarcation where identification of the property is necessary.

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