In Brief
A bank initiated recovery proceedings against a borrower (Vaishnavi Hatcheries Company Limited) for default on a secured loan, mortgaging four properties. After proclaiming the auction and fixing an upset price, the borrower obtained a court stay on the very date set for the auction. When the stay was lifted after more than seven days, the bank held the auction without issuing a fresh proclamation. The borrower later challenged the auction in the High Court, which set it aside on the ground that a fresh proclamation was mandatory under the rules. The Supreme Court reversed the High Court, holding that when an auction is adjourned due to a court-ordered stay obtained by the borrower, the stay period must be excluded when determining whether a fresh proclamation is required. The borrower also failed to use statutory remedies available within the prescribed timeframe and had not paid any part of the debt. The Court upheld the sale, finding the borrower's conduct was an abuse of process designed to delay recovery."
The lawyer headnote and full judgment text are available to registered users.