SARFAESI Act | Bank Can Auction Property With Encumbrances But Bidders Must Be Informed, 'As Is Where Is' Clause Not Sufficient: JKL High Court
The Jammu and Kashmir and Ladakh High Court recently ruled that a Bank can auction the property even with encumbrances attached to property under the SARFAESI Act but it is incumbent upon the Bank to disclose the encumbrances and litigations attached to the property to all the persons who want to participate in the same and to the successful bidder. A bench comprising Justice Sindhu Sharma observed, "By including a clause of" as is where is‟ it would not be sufficient for respondent bank from disclosing encumbrances or handing over the property to the petitioner". The observations came on a petition whereby the petitioner sought direction to the respondent PNB Bank to put him into physical possession of the property being a double storey commercial building at Narwal Jammu. In his plea the petitioner submitted that the Bank had issued an e-auction sale notice in the newspaper as per SARFAESI Act with respect to auction of Double Storey Commercial Building at Narwal Jammu. Respondent further submitted that the physical possession of the property was delivered to the petitioner free from all encumbrances on the strength of sale certificate, as such, they had discharged their duties.
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