LI Network
Published on: 30 January, 2024 at 13:00 IST
The Delhi High Court has emphasized that the ‘as is where is’ clause should not have a blanket application and must lead to a just and equitable outcome, especially to prevent its misuse that could exploit buyers.
Justice Purushaindra Kumar Kaurav cautioned that such clauses, if misused, have the potential to become tools for unscrupulous sellers, leading to the exploitation of buyers.
The Court made these observations while hearing a case where the petitioner sought a writ of mandamus for the refund of INR 5,38,72,536 paid for the auction of a property in New Delhi.
The petitioner argued that despite the ‘as is where is’ clause, the bank, as the seller, should have ensured that the property was free from legal issues and encumbrances.
The Court held that an ‘as is where is’ clause should be construed pragmatically, and the buyer cannot be held responsible if the seller actively conceals foundational facts.
The judgment stated that the bank could not use the ‘as is where is’ clause to evade its responsibilities, especially when it failed to disclose all encumbrances and pending litigations attached to the property during the auction.
As a result, the court directed the bank to refund the stamp duty and house property tax paid by the petitioner, emphasizing that the bank cannot shirk away the responsibility to pay interest on the deposited amount by the petitioner.
Case Title: M/s Kalyani (India) Private Limited vs Punjab National Bank & Anr.
