Bombay High Court quashes Debts Recovery Tribunal order blocking sale registration
Change
The Bombay High Court quashed a Debts Recovery Tribunal order that had put registration of a sale certificate on hold, allowing Union Bank of India to proceed with auction-based recovery of a mortgaged south Mumbai property tied to a Rs 6.25 crore credit facility.
Why it matters
The ruling removes a procedural route debtors and guarantors have used to trigger insolvency moratoriums and stall enforcement under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. It constrains the ability of defaulting borrowers to obtain indefinite delays in auction completions and property registration through collateral insolvency filings.
Implications
- • Secured creditors' recovery teams at banks should resume possession and registration procedures for auctioned assets when the sale certificate predates an insolvency filing.
- • Debts Recovery Tribunal judges and registries must verify the timing and effect of sale certificates before treating later insolvency petitions as triggering an automatic moratorium.
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