Whether auction sale can be set aside for suppression of material facts?

 Admittedly, the facts noticed hereinabove were not
disclosed to the intending bidders in the E-auction notice
dated 01.03.2016. A bidder would not intend to buy litigation with the
property, which may ensue between the Bank and the Housing Board.
The petitioner has specifically pleaded that on 24.04.2016 he filed an
application for providing a copy of NOC/permission, if any, granted by
the Housing Board for sale of the property in question. The averments
in paragraph no. 18 of the writ petition has been reiterated in
paragraph no. 5(o) of the memorandum of the instant appeal, however,
this assertion has not been controverted by the respondent-Bank. The
Bank has taken a position that there was no pleading in the writ
petition to the effect that while preparing for deposit of the balance bid
amount the petitioner came to know about the aforesaid illegality,
however, in view of the pleadings in the writ petition, particularly in
paragraph no. 18, the defects in the sale notice cannot be ignored.
There is no warrant of the proposition that illegality which would go to
the root of the auction sale must have been discovered by an auction
purchaser during the auction sale and a fact which would vitiate the
auction sale, if discovered subsequently, cannot be taken note of.
Knowledge to the petitioner about nature of the property put on auction
sale, even after the concluded sale, can be looked into to examine the
legality of the sale notice and the auction sale. The fact that the sale
notice was issued on “as is where is basis”, “as it is where it is
basis” and “whatever there is basis”, would not attach legality to the
auction sale inasmuch as, knowledge of the defect in property cannot
be imputed to an intending purchaser. Such covenants cannot
overcome the fatal defect in auction notice and the auction conducted
by suppressing vital informations must be held illegal.
16. The Bank was under a duty to disclose all relevant
facts including, the fact that the property put on auction sale was a
lease-hold property and it belongs to the Housing Board. This is a
basic requirement of fair play in action and more so, in case of a Public
Sector Bank. The auction sale which proceeded on a
misrepresentation to the intending bidders is definitely illegal and is
liable to be quashed. The terms and conditions of an illegal auction
sale cannot be enforced by the respondent-Bank, and accordingly
Clause-13 of E-auction notice which provides forfeiture of the amount
deposited by successful bidder in the event of failure to deposit the bid
amount within the stipulated time cannot be resorted to by the
respondent-Bank to forfeit EMD and 25% of the bid amount deposited
by the appellant. Dismissal of the writ petition on the ground that the
appellant-writ petitioner himself invoked jurisdiction of this Court
seeking a direction upon the Bank to confirm the sale and issue Sale
Certificate, is not justified. The writ petition was decided without
affording an opportunity to the Housing Board to file its response, as is
apparent from the proceeding in W.P.(C) No.2181 of 2016, which was10.
disposed of on the very first day of hearing. In view of the objection
raised by the Housing Board to the auction sale of its property, the
direction issued by the Writ Court to the respondent Bank to take steps
for execution of lease in the name of the appellant is also rendered
erroneous. Considering the aforesaid facts, we are of the opinion that
the impugned order dated 26.04.2016 passed in W.P.(C) No.2181 of
2016 suffers from serious error in law.
 IN THE HIGH COURT OF JHARKHAND AT RANCHI
 L.P.A. No. 220 of 2016

Kumar Rohit, 
 V
Allahabad Bank, 
CORAM:  MR. JUSTICE VIRENDER SINGH, CHIEF JUSTICE
  MR. JUSTICE SHREE CHANDRASHEKHAR

 Dated:26th July, 2016.
Citation: AIR 2017 Jharkh 65

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When it is not permissible for bank to forfeit amount deposited by successful bidder in Auction sale?

 Another issue which was debated during the course of
hearing of the instant Letters Patent Appeal, is whether forfeiture of the
amount deposited by the appellant would amount to unjust enrichment
of the respondent-Bank. The learned Senior counsel for the appellant
contended that in the subsequent auction vide E-auction notice
published in the Newspaper on 07.05.2016 the borrower himself has
paid all dues to the Bank, which issued “No Dues Certificate” to the
borrower vide letter dated 23.06.2016 and therefore, appropriation of
Rs.31,25,000/- deposited by the appellant would be unjust retention of
the said amount by the Bank amounting to unjust enrichment.
Mr. P.A.S. Pati, the learned counsel for the respondent-Bank, however,
contended that on account of failure of the appellant to deposit the
balance bid amount, the auction failed and the Bank was constrained
to re-auction the property. The amount deposited by the appellant has
to be forfeited in terms of the conditions attached to E-auction notice
dated 01.03.2016, and if, the Courts interfere with the matters like the
present one, no auction would ever be concluded.
18. The Contract Act, 1872 recognizes the principle of
unjust enrichment in Section 72. This principle is infact foundation
for the law governing restitution. The retention of money or property of
another against the principle of justice, equity and good conscience
has been held by the Courts “unjust enrichment”. On admitted facts,
forfeiture of the amount deposited by the successful bidder, for sale of
a property which the respondent-Bank could not have sold in auction
sale without prior approval of the Housing Board and after realizing its
dues from the borrower, would certainly amount to unjust enrichment.
The respondent-Bank cannot legally retain EMD and 25% of the bid
amount deposited by the appellant.

 IN THE HIGH COURT OF JHARKHAND AT RANCHI
 L.P.A. No. 220 of 2016

Kumar Rohit, 
 V
Allahabad Bank, 
CORAM:  MR. JUSTICE VIRENDER SINGH, CHIEF JUSTICE
  MR. JUSTICE SHREE CHANDRASHEKHAR

 Dated:26th July, 2016.
Citation: AIR 2017 Jharkh 65

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Basic concept of expression "As is where is basis"?

Properties of the borrower were taken into possession by the Bank followed by auction notices for sale of the properties in question calling upon the bids from the interested purchasers. Pursuant to completion of bidding process, part deposit was made by the successful bidder out of total consideration amount with the Bank and bank was requested to get the properties auctioned demarcated so that sale deed may be executed in favour of the successful bidder after receiving balance consideration and physical possession thereof could also be handed over. Several requests were made to the concerned authority to demarcate the properties auctioned so that Bank may

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