#auction stay

Andhra Pradesh High Court mandates Debt Recovery Tribunal to adjudicate a borrower's challenge to NPA classification before proceeding with auction, reinforcing that erroneous NPA declarations cannot be ignored. The ruling stays auction finalization until the DRT decides the pending application within three weeks, protecting borrowers from coercive recovery based on flawed asset classification.

The Himachal Pradesh High Court stayed a bank's auction of a disabled borrower's land, ruling that rigid contractual enforcement cannot override constitutional guarantees of procedural fairness and dignity. The court directed the bank to consider the borrower's repayment proposal, reinforcing that disability and financial incapacity must be factored into recovery proceedings under the SARFAESI Act.

The Bombay High Court, Nagpur Bench, ruled that under Section 84 of the Multi-State Co-operative Societies Act, 2002, a co-operative society must initiate arbitration before auctioning mortgaged collateral to recover defaulted loans. The court stayed the auction notice issued by Buldhana Urban Co-operative Credit Society, emphasizing procedural compliance and protecting borrowers' rights against unilateral enforcement actions.