Do I have to pay the previous owner’s property tax after a bank auction?

Possibly. In Bengaluru, property tax is a first charge on the building and land (Greater Bengaluru Governance Act s.155), and the record will not move to you while arrears remain. Get the arrears figure from the corporation before the EMD and count it as cost.

Can BESCOM or TGSPDCL ask me to clear old electricity dues?

Where the state’s conditions of supply provide for it, yes: 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 figure before bidding.

Am I liable for unpaid apartment maintenance after an auction purchase?

Under the Karnataka Apartment Ownership Act, a purchaser is jointly liable with the vendor for unpaid common expenses, but not beyond a written statement from the association that they relied on (s.20). Ask the association for that statement before the EMD.

Does “free from encumbrances known to the secured creditor” mean there are no dues?

No. It describes the bank’s knowledge (Rule 9(10)), not the property. Dues the bank did not know of, or that the notice puts on the purchaser, can still follow the property.

Do provident fund dues of the borrower become my liability?

The Supreme Court’s 2025 ruling that provident fund dues rank ahead of the bank decides who is paid first from the sale money (Jalgaon District Central Co-operative Bank). Whether any claim can be pursued against the property after the sale is a separate question for your advocate.

Title and due diligence

Dues That Travel With the Property: Tax, Power, Water and Society

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

The short answer

Some of the previous owner’s dues can be recovered from you after a bank auction: electricity arrears where the state’s conditions of supply allow it, property tax because municipal law makes it a charge on the building, and apartment maintenance where the law or the bye-laws say so. The bank discloses only the dues it knows of, and most sale notices put statutory dues on the buyer. So the arrears figures are collected in writing before the EMD and counted as part of the cost.

Key points

“As is where is” puts every bidder on notice of dues such as service charges, electricity dues and local taxes (K.C. Ninan v. Kerala State Electricity Board, Supreme Court, 2023).
Electricity arrears disclosed in the notice were held recoverable from a SARFAESI buyer in Telangana (Srigdhaa Beverages, Supreme Court, 2020); the answer turns on the state’s conditions of supply.
In Bengaluru, property tax is “a first charge” on the building and land (Greater Bengaluru Governance Act, 2024 s.155); in Hyderabad, plan on arrears being cleared before the record moves to you.
Under the Karnataka Apartment Ownership Act, an apartment’s purchaser is jointly liable with the vendor for unpaid common expenses, unless they relied on a written statement from the association (s.20).
Provident fund dues ranking ahead of the bank (Jalgaon District Central Co-operative Bank, Supreme Court, 2025) decide who is paid first from the sale money; they are not, by that ruling, a bill to the buyer.

Why a due can follow the property

A bank selling under SARFAESI is a lender enforcing a security, not an owner. It must describe the property “including the encumbrances known to the secured creditor” (Security Interest (Enforcement) Rules, Rule 8(7)(a)), and the sale certificate says whether the sale is free of encumbrances known to it (Rule 9(10)). Both are limited to what the bank knows.

Most notices then add a clause putting statutory dues, taxes and outgoings, existing and future, on the successful bidder, and sell “as is where is”. The Supreme Court has said what that phrase does: every intending bidder is “put on notice that the seller does not undertake responsibility” for 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).

Whether a particular due can be demanded from you then depends on two things: the law behind the due (does it make the arrears a charge on the property, or a condition of service to whoever occupies it?) and the words of the notice you bid on. Each of the four common dues answers those questions differently.

Electricity: the settled case

In a SARFAESI sale of a unit near Hyderabad, the notice 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 dues that are statutory under the Electricity Act and the conditions of supply are not a private debt the buyer can ignore (Telangana State Southern Power Distribution Co. v. Srigdhaa Beverages, Supreme Court, 2020).

Three years later a three-judge bench confirmed the wider rule: a power company may recover a previous owner’s arrears from a new owner, including an auction purchaser, where the conditions of supply framed by the state regulator provide for it (K.C. Ninan, Supreme Court, 2023). For Bengaluru that means BESCOM and the Karnataka regulator’s supply code; for Hyderabad, TGSPDCL and the Telangana regulator’s. The name-transfer steps after the win are covered in the electricity guide.

Property tax: a charge on the building

Bengaluru’s municipal law says it directly: the property tax on buildings and lands, subject to prior payment of any land revenue, is “a first charge upon the said buildings or lands” (Greater Bengaluru Governance Act, 2024 s.155). A charge is a claim that attaches to the property itself, not just to the person who owed the tax, so it can be enforced against the property in a new owner’s hands. The Karnataka Municipal Corporations Act, 1976 has the same wording for other city corporations (s.111).

The Bengaluru Act also keeps a former owner who failed to report a transfer liable until it is recorded, without affecting the corporation’s charge (s.149(4)). In practice, the corporation will not move the e-Khata or the tax record into your name while arrears sit on the property’s PID. Our guide to Bengaluru property tax explains the instalments, the rebate and the name change.

In Hyderabad, the area was reorganised in February 2026 into the GHMC, Cyberabad and Malkajgiri corporations, and the property-tax rules are being revised, as reported. Municipal laws commonly treat property tax as a charge on the property, and mutation desks commonly ask for arrears on the PTIN to be cleared before the name changes. Plan on that, whoever is legally liable.

Water charges and the apartment association

No Supreme Court ruling specific to water arrears and SARFAESI buyers was found for this guide. The Ninan principle on service charges applies, and the practical position is the same as for tax: BWSSB in Bengaluru and HMWSSB in Hyderabad transfer a connection on application, and old arrears on the connection are a question you want answered before you bid, not at the counter.

Apartments are where the statute is clearest. Where a building has been brought under the Karnataka Apartment Ownership Act, 1972, unpaid shares of common expenses are a charge on the apartment, ranking behind only government and municipal taxes and a first mortgage (s.19). On a sale, the purchaser is jointly and severally liable with the vendor for unpaid assessments up to the sale, with a right to recover from the vendor (s.20(1)).

The same section gives the buyer a protection: a purchaser who asks the association for a statement of the unpaid amount, and relies on it, is not liable for more than the statement shows (s.20(2)). The Act makes no separate rule for an auction sale. In Hyderabad, apartment associations run under the Telangana Apartments Act, 1987 and their own bye-laws; read the bye-laws on transfer and arrears.

First charges and the sale money: a separate question

Once its security is registered with CERSAI, the bank is paid from the sale money ahead of other debts and of taxes owed to the government or a local authority, subject to insolvency proceedings (SARFAESI Act s.26E). That priority is not absolute. In 2025 the Supreme Court held that provident fund dues, which the Employees’ Provident Funds Act makes a first charge, rank above it: “a priority cannot be equated with a first charge”, so those dues were to be paid first from the proceeds (Jalgaon District Central Co-operative Bank v. State of Maharashtra, Supreme Court, 2025).

Read that ruling for what it decides: the order in which creditors are paid out of the price. It does not, by itself, make a provident fund claim the buyer’s bill. Whether any dues-holder can pursue the property after the sale is the earlier question in this guide — is the due a charge on the property, and what did the notice say.

Getting the arrears figures before the EMD

The EMD is part of the 25% deposit you pay from your own money by the next working day after the win (Rule 9(3)). Every figure below is collected before that money moves, in writing, and dated.

Due	Bengaluru	Hyderabad	What to ask for
Property tax	Bengaluru City Corporations property-tax portal (by PID), and the ward office	GHMC, Cyberabad or Malkajgiri corporation (by PTIN), and the circle office	Arrears, penalty and interest to date
Electricity	BESCOM sub-division office (by RR number)	TGSPDCL office (by the service number on the bill)	Outstanding arrears and whether supply is disconnected
Water	BWSSB sub-division	HMWSSB (by CAN)	Arrears on the connection
Association	Association secretary or managing committee	Association secretary or managing committee	A signed statement of unpaid maintenance (in Karnataka, the s.20(2) statement)
The bank	Authorised Officer	Authorised Officer	In writing, the dues known to the bank and the notice clause on who bears them

Count them as cost

Add every disclosed or quoted arrear to the all-in cost alongside stamp duty and fees. Dues are paid from your own funds; they are not part of a home loan, and a lender’s sanction comes only after the win.

What the auction route cannot promise

The bank discloses only the dues known to it; arrears it did not know of can still be demanded after the sale.
Whether a power company can recover old arrears from you turns on the state’s conditions of supply, which the auction cannot change.
An arrears figure is correct only on the date it is given; tax, charges and maintenance keep accruing until the property is in your name and possession.
How a court would apply the apartment-ownership and municipal provisions to a particular SARFAESI sale is not settled by any ruling found for this guide.

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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