Lawstreet Journal

Bombay High Court Rejects Lockdown Plea, Allows for Auction of Prime Property for Recovery of Loan Dues

Lawstreet Journal 5 Jun 2020 8:18pm

Image courtesy: Lawstreet Journal Judiciary Bombay High Court Rejects Lockdown Plea, Allows for Auction of Prime Property for Recovery of Loan Dues

The Bombay High Court turned down the attempt to stall the sale of a prime bungalow, spread over around 25, 000 square feet, at the Cuffe Parade for the recovery of the dues of a financial institution. On Friday, 29th May 2020, a division bench consisting of Justice Nitin Jamdar and Justice NR Borkar refused to grant any interim relief to the owner of the bungalow. 

Apart from challenging the notice issued on 15th April 2020, for the sale of the property, the owner also challenged the validity of a notification issued by the Union Finance Ministry on 9th November 2016, which exempted the borrower from the requirement of consent of the sale of the asset by private treaty. On behalf of the lender, it was claimed that, by taking advantage of the pan- India lockdown due to coronavirus, the property was massively undervalued and transferred illegally via a private treaty. The petitioner's counsel pointed out that, for auction selling, the property was priced at Rs. 158 crores in August 2018, but the price has now been brought down to Rs. 75 crores.

Citing that the alleged default occurred in March 2019, but the financer waited almost a year, the counsel said that no prejudice would be caused if the sale remained until the lockdown had been lifted. He claimed that if a public sale is conducted after the lockout has been lifted, a higher price can be charged for the property that would favor the financial institution as well. The financial… Continue Reading...

Tagged: Lockdown  
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