TaxTMI 
TaxTMI 
2016 (6) TMI 901
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....er the perpetual lease-deed was executed, the competent authority of the State of Himachal Pradesh conveyed approval for the property to be mortgaged, but wrote in the letter that the plot demise in perpetuity cannot be sold without the prior permission of the lessor; a condition which we find conflicts with the right conferred in favour of the mortgagee inasmuch as if the mortgagee cannot enforce the mortgage by requiring the mortgaged property to be sold, where would there be a mortgage? We shall dwell on this aspect a little later. 3. The property was mortgaged to SIDBI for a loan sanctioned which was utilized to construct an industrial shed and purchase machinery, and there was default in the return of loan. SIDBI proceeded under SARFAESI Act, 2002. It issued a notice contemplated by sub-Section (2) of Section 13 of SARFAESI Act, 2002. The outstanding amount claimed in the notice did not come under dispute. SIDBI took possession of the mortgaged asset, and issued a public notice for sale of the property which reads as under:- "NOTICE FOR SALE OF ASSETS TENDERS CUM AUCTION In exercise of powers contained in the "Securitisation and Reconstruction of Financial Assets and ....
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....hal Pradesh raised a demand towards unearned increase and other outstanding dues payable by the lessee. It was pleaded that said fact of there being an encumbrance on the property was not disclosed in the notice. 8. Learned DRT dismissed the application noting that to the prospective bidders the terms of the auction sale, vide clauses 8, 9, 13 and 14 (and in respect of which we may note that though not in the public notice, but in the tender documents as per which the bid had to be submitted the various clauses governing the sale were listed), informed the bidders as under:- 8 Liability of the purchaser The purchaser shall have to pay the statutory/government/other dues, if any, in respect of the assets/property advertised for sale. SIDBI does not undertake any responsibility to procure any permission/license 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 Forfeiture of EMD For bidders not complying with the terms and conditions specified in the Tender-cum-auction documents, the EMD amount shall be forfeited. 13. Time and manner of payment The successful tenderer ....
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....or by holding public auction, the secured creditor shall cause a public notice in two leading newspapers one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include,- (a) The description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor; (b) The secured debt for recovery of which the property is to be sold; (c) Reserve price, below which the property may not be sold; (d) Time and place of public auction or the time after which sale by any other mode shall be completed; (e) Depositing earnest money as may be stipulated by the secured creditor; (f) Any other thing which the authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property." 12. With reference to clause (a) and (f) of the proviso, learned Senior Counsel for the petitioner urged that description of the immovable property sold including the details of the encumbrances known to the secured creditor as also any other thing which is material for a purchaser to know in order to judge the nature and value of the property have ....
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....in para 14 whereof it was observed :- "15. .................. It is for the intending purchaser to satisfy himself in all respects as to the title, encumbrances and so forth of the immovable property that he proposes to purchase. He cannot after having purchased the property on such terms then claim diminution in the price on the ground of defect in title or description of the property..............." 16. Learned Senior Counsel for the petitioner had relied upon the decisions reported as (2010) 4 CTC 627 Jai Logistics rep. Vs. Authorized Officer, Syndicate Bank, 2013 (101) 291 Smt.Rekha Sahu vs. UCO Bank & Ors. and 2010 (6) CTC 635 Chemstar Chemicals and Intermediates vs. The Commercial Tax Officer, to urge that the sale is vitiated. The first authority is by a Division Bench of the Madras High Court in which it was held that an encumbrance must be disclosed if a property is proceeded against by a secured creditor under SARFAESI Act, 2002, the second is a decision by a Division Bench of the Allahabad High Court, taking the same view and the third is a decision by a learned Single Judge of Madras High Court taking the same view. 17. What were the terms of the tender documen....