Karnataka HC stays Auction of Properties by Banks until Lockdown is Revoked

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The Karnataka High Court allowed an interim application and stayed the auction of properties by banks during the 21-day Coronavirus lockdown period while entertaining a bunch of writ petitions.

The Court held that those activities which are not included in the exceptions provided by the state government in its order imposing the lockdown – including the holding of an auction of attached properties by banks – will constitute a violation of the order.

“Prima facie, this Court was of the opinion that any activity by any of the Departments beyond the exceptions provided under the Government Order dated 23.03.2020, including the holding of auctions by Banks, would constitute a violation of the Government Order entailing prosecution.”

Karnataka High Court Justice G Narendar stated that the government, in its March 23 order, had missed out few activities from the scope of the lockdown.

The petitioners submitted that despite the current circumstances, Canara Bank has been receiving bids from various parties. Along with that, it was also submitted that e-auctions were being conducted and surprisingly the Government Order would not deter the banks from proceeding further.

Karnataka High Court, Auction of PropertiesThe Advocate for the Government submitted that even the state government was, prima facie, of the opinion that all actions undertook, which are not specifically exempted under the Government Order of March 23, would be in breach of the provisions of the order.

Thus, the Karnataka High Court decided to grant interim relief to the petitioners and stayed the bank auctions until the restrictions imposed under the Government Order are revoked.

The Court also stated,

“It is hoped that the respondents and similarly situated organizations, Institutions, statutory bodies, authorities would do well to pay heed to the appeal by the State administration and try to implement it in letter and spirit.”


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