HC rebuffs attempt to stall sale of prime Cuffe Parade bungalowUpdated: Jun 01, 2020 18:02 IST
The Bombay high court (HC) has rebuffed an attempt to stall sale of a prime bungalow, spread over around 25,000 square feet, at Cuffe Parade for recovery of dues of a financial institution. A bench of justice Nitin Jamdar and justice NR Borkar on Friday refused to grant any interim relief to the owner of the bungalow.
Apart from challenging the notice issued on April 15 for sale of the property, the owner had also challenged validity of a notification issued by Union finance ministry on November 9, 2016 dispensing the requirement of consent of the borrower for the sale of the asset by private treaty. It was argued on the owner’s behalf that by taking advantage of the nationwide lockdown, the property was grossly undervalued and was being secretly sold by private treaty.
The petitioner’s counsel pointed out that for auction sale the property was valued at ₹158 crore in August 2018, but now the valuation has been brought down to ₹75 crore. Citing that the alleged default occurred in March 2019, but the financer waited for almost a year, the counsel said no prejudice will be caused if the sale was stayed till the lockdown if lifted. He submitted that if a public auction is held after lifting of the lockdown, a better price can be fetched for the property which will benefit the financial institution as well.
The financial institution opposed the plea contending that artificial cause of action was created to invoke jurisdiction of the high court just to avoid payment of 25℅ of the amount required to file an appeal with the Debt Recovery Appellate Tribunal.
The court was further informed that a notice dated February 17, 2020 had fixed the reserve price for the property at ₹82 crore, which has been brought down to ₹75 crore after imposition of lockdown.
The bench found substance in the contentions of the financial institution that the value of the property was successively brought down after no response was received to auction notices and that no advantage was taken of the lockdown to bring down the reserve price for the property.
“There is merit in the contention that the petitioner’s sole attempt is to somehow stop the sale of the property, as the petitioner has not tried to bring any buyer or to make a statement before the Debt Recovery Tribunal or to this court that the petitioner will deposit a certain amount or will bring a buyer. The Debt Recovery Tribunal has rightly noted this conduct of the petitioner,” said the bench. “In this factual position, we do not find that the attempt to sell the property by private treaty is malafide,” it added.