It all boils down to how much you're getting it for.
Find out what's the depreciation strategy implemented in the company. In a few companies I know of, after keeping the car for 4 years you can pay 20% of the car's invoice price and 'buy it off' (@20% linear depreciation per year) - that'll make it around 3 lakh rupees which is a steal..you can throw the car in the market and get twice the amount.
However if it will be auctioned in the conventional way, it might not be that good an idea.
Do not pay anything over 5 lakh rupees for that car IMHO.
P.S. An engine swap costs around 35k including labor charges, so don't let the ''awesome'' condition of the engine be a decisive factor when buying a honda.