What does “as is where is” mean in a bank auction?

The property is sold in its present condition and legal position, and the bank takes no responsibility for liabilities beyond what it discloses. The Supreme Court has held it puts every bidder on notice of dues such as service charges, electricity dues and local taxes (K.C. Ninan, 2023).

Does a bank auction property come with clear title?

Not necessarily. The buyer receives the rights “as if the transfer had been made by the owner” (s.13(6)) — the borrower’s title, with any defects in it. Title is checked through the deeds and records before bidding.

Will I have to pay the previous owner’s electricity bill?

Possibly. Where the state’s conditions of supply allow it, a power company can recover a previous owner’s arrears from an auction buyer (K.C. Ninan, 2023); in an earlier case the sale notice had also disclosed the dues (Srigdhaa Beverages, 2020). Ask the power company for the outstanding amount before bidding.

What does “free from encumbrances known to the secured creditor” on the sale certificate mean?

That the bank is not aware of other encumbrances, or has had the known ones discharged (Rule 9(9)–(10)). It is a statement about the bank’s knowledge, not a certificate that none exist.

Does the bank’s claim come before tax and other government dues?

Generally yes, once its security is registered with CERSAI (s.26E), subject to insolvency proceedings. But a statutory first charge, such as provident fund dues, ranks ahead of it (Jalgaon District Central Co-operative Bank, Supreme Court, 2025).

The law and the process

“As Is Where Is, As Is What Is”: What a Bank’s Sale Notice Does and Does Not Promise

Auction Dunia · Law and portal facts checked as of 19 October 2026 · 9 min read

The short answer

“As is where is, as is what is and whatever there is” means the bank sells the property in the state it is in, with whatever title and liabilities come with it, and promises nothing beyond what the law and the notice require it to disclose. The buyer receives the borrower’s title, no better (SARFAESI Act s.13(6)), and the Supreme Court has held that the phrase puts every bidder on notice of dues such as electricity arrears and local taxes. That is why the records are checked before EMD.

Key points

The buyer steps into the borrower’s shoes: the sale passes the rights “as if the transfer had been made by the owner” (SARFAESI Act s.13(6)).
What the bank must disclose is the encumbrances known to it (Rule 8(7)(a)); the sale certificate states whether the sale is free of encumbrances known to the bank, or not (Rule 9(10)).
“Known to the bank” is narrow. Dues the bank did not know of, or that the notice puts on the purchaser, can survive the sale.
Electricity arrears can be recovered from an auction buyer where the state’s conditions of supply provide for it (K.C. Ninan, SC 2023); in an earlier case the sale notice had also disclosed the dues (Srigdhaa Beverages, SC 2020).
The bank’s statutory priority over government dues (s.26E) is not absolute: a statutory first charge such as provident fund dues ranks ahead of it (Jalgaon District Central Co-operative Bank, SC 2025).

What the phrase means

Almost every SARFAESI sale notice says the property is sold “as is where is, as is what is and whatever there is”, often adding “without recourse”. Read together, the words mean the bank is selling the property in its present physical condition, at its present location, with whatever legal position attaches to it, and that the buyer cannot later come back to the bank because something turned out to be different.

The Supreme Court put it directly: the expression means “every intending bidder is put on notice that the seller does not undertake responsibility in respect of the property offered for sale with regard to any liability for the payment of dues, like service charges, electricity dues for power connection, and taxes of the local authorities” (K.C. Ninan v. Kerala State Electricity Board, Supreme Court, 2023).

This is not the bank being evasive. An Authorised Officer — the bank official who conducts the sale — enforces a security; the bank was the lender, not the owner, and cannot warrant what it never held. The phrase states that position in contract terms.

What the bank does commit to

The phrase does not leave the bank with no obligations. The Rules impose four that sit underneath it.

1
Disclose the encumbrances it knows of
The sale terms must describe the property “including the encumbrances known to the secured creditor”. An encumbrance is any claim on the property other than ownership: a mortgage, an attachment, a lease, a charge for dues.
Rule 8(7)(a)
2
Disclose other material terms
Anything the Authorised Officer considers necessary for a buyer to judge the nature and value of the property.
Rule 8(7)(f)
3
Deliver free of known encumbrances
Where the property is encumbered, the officer may let the buyer deposit the money to discharge it, and then must deliver the property free from encumbrances known to the bank.
Rule 9(7)–(9)
4
Say so on the certificate
The sale certificate must state specifically whether the buyer purchased free from encumbrances known to the bank, or not.
Rule 9(10); Appendix V

Each of these is limited by the same three words: known to the bank. Rule 9(9) is about delivery of the property; it does not convert the bank’s knowledge into a promise that nothing else exists.

What it does not promise

Title first. When the bank sells after taking possession, the sale vests in the buyer all rights in the property “as if the transfer had been made by the owner” (SARFAESI Act s.13(6)). If the borrower’s title was defective — a break in the chain of ownership, a co-owner who never joined the mortgage, land that could not lawfully be transferred — the buyer takes that defect with the property. A bank as seller does not make a title clean.

Then what the bank did not know. An attachment the bank never saw, a pending civil suit over the land, unpaid property tax, society maintenance arrears: none of these is excluded by the sale merely because the notice did not list them. Our Red Flag File on the attachment that was there first shows how that pattern appears in the papers. Many notices also say expressly that statutory dues, taxes and charges are the purchaser’s, and ask bidders to make their own enquiries. Where the notice says that, the buyer has agreed to it by bidding.

Finally, the physical position. “As is where is” covers the state of the building and who is in it. A notice that records symbolic possession — the bank’s notice served and published, the occupant still there — is not a promise of vacant possession by any date.

Electricity and other dues that can follow the property

Electricity arrears are where courts have tested the phrase most. In a SARFAESI sale in Telangana, the notice specifically mentioned the electricity dues and the sale was on “as is where is, whatever there is and without recourse” terms. The Supreme Court held the buyer liable for the previous owner’s arrears, because those dues were statutory under the power company’s conditions of supply, not a private debt the buyer could ignore (Telangana State Southern Power Distribution Co. v. Srigdhaa Beverages, Supreme Court, 2020).

Three years later a larger bench confirmed that a power company may recover a previous owner’s arrears from a new owner, including an auction purchaser, where the state’s conditions of supply provide for it (K.C. Ninan, Supreme Court, 2023). Whether that applies to a property in Bengaluru or Hyderabad therefore turns on the relevant state regulator’s supply code and on what the notice disclosed — a question to answer before bidding, by asking the power company what is outstanding.

For property tax, water charges and society maintenance, no Supreme Court ruling specific to SARFAESI buyers has been found; the answer depends on the municipal law, the association’s bye-laws and the notice. In Bengaluru, the Greater Bengaluru Governance Act makes unpaid property tax a first charge on the property (s.155). In practice, a municipal office may decline to change the name on its record until tax is paid, whoever is legally liable. Treat each as a cost to find out, not to assume away; our guide to dues that travel with the property sets out how to check each one before you bid.

The bank’s priority is not absolute

Since 24 January 2020, a bank whose security interest is registered with CERSAI — the central registry of security interests — is paid ahead of other debts and ahead of taxes and other dues owed to the government or a local authority, subject to insolvency proceedings (SARFAESI Act s.26E). This is sometimes read as meaning a bank sale wipes the slate clean. It does not.

In 2025 the Supreme Court held that a statutory first charge — there, provident fund dues under the Employees’ Provident Funds Act — ranks above the bank’s s.26E priority, because “a priority cannot be equated with a first charge”. The bank could proceed with the auction, but the provident fund dues were to be paid first from the proceeds (Jalgaon District Central Co-operative Bank v. State of Maharashtra, Supreme Court, 2025).

That case decides who is paid first out of the sale money. Whether a dues-holder can pursue the property in the buyer’s hands is a separate question, which turns on whether the due is a charge on the property and on the notice’s terms. Neither question is answered by the words “bank auction”.

Why the checking happens before EMD

Read together, s.13(6), Rule 8(7)(a) and the “as is where is” clause move the risk of anything undisclosed onto the buyer. Once you have bid and won, the 25% deposit, including your EMD, is due the same day or by the next working day (Rule 9(3)), and missing the balance deadline forfeits it (Rule 9(5)). A problem found after the auction is found with your own money already committed.

Title: the chain of ownership back through the deeds, read by an advocate.
Encumbrances: the encumbrance certificate, a CERSAI search, and a litigation sweep across civil courts, the DRT, the NCLT and the High Court.
Dues: written statements from the power company, the water board, the municipal office and the association.
Possession: a site visit, and the possession type stated in the notice.
The notice itself: its encumbrance line and its clause on who bears dues.

The line to read twice

Where a notice says encumbrances are “not known to the bank”, it is describing the bank’s knowledge, not the property. The sale certificate will say the same thing in the same words (Rule 9(10)).

What the auction route cannot promise

The buyer receives the borrower’s title and no better (s.13(6)); the bank does not warrant title.
Dues the bank did not know of, or that the notice puts on the purchaser, can be demanded from the buyer after the sale.
“As is where is” includes the occupation position: symbolic possession can mean a Section 14 process with no fixed handover date.
Even the bank’s statutory priority over government dues yields to a statutory first charge such as provident fund dues.

Questions buyers ask

Sources

Statutes, rules and judgments first. Checked as of 19 October 2026; the law and portal practice change, so confirm against the source before relying on a detail.

This guide explains the law and the process in general terms. It is not advice on any specific property; that belongs in a due diligence report on the property itself.

A specific property in mind?

Tell us what you are buying it for, and we will tell you what needs checking before you pay EMD.

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