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Karnataka HC Stays Auction Of Properties By Banks During The 21-Day Lock Down Period

Mustafa Plumber
31 March 2020 8:01 AM GMT
Karnataka HC Stays Auction Of Properties By Banks During The 21-Day Lock Down Period
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Observing that "Prima facie, this court is 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," the Karnataka High Court has stayed for three weeks the process of auction and e-auction of mortgaged properties, during the 21-day lock-down period.

Justice G Narendar, gave the direction on March 24, while hearing a petition filed by C.M. Shanthakumar and others, who were aggrieved by the action of the respondent banks which wanted to auction their properties. It was contended by them that the government has excluded certain activities and in respect of Banks, only excluded activity is Bank teller services and operation of ATMs. If that be so, if proposed auctions are permitted to be held, it would amount to violation of the Government Order.

Moreover, there is inability to avail of the alternate remedy in view of the prevailing situation and the strict implementation of the Government Order, whereby, the operations of various departments and movement of individuals has been severely curtailed. Despite the prevailing circumstances, the banker has been receiving bids from various interested parties and bank managers have informed that e-auction are being conducted and that the Government Order would not deter them from proceeding further.

The court said "A fervent appeal is repeatedly made by the Hon'ble Prime Minister, Chief Minister and the State administration, requesting citizens to refrain from coming out of the house with the object of promoting social distancing, which is seen as a measure to prevent the spread of contagious virus, namely, COVID – 19 and the actions of the respondents has only driven the litigants to move out of the confines of their houses in order to seek redressal at the hands of the Courts. 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."

The Government Advocate submitted that the State administration is also of the prima facie opinion that all actions, which are not specifically exempted under the Government Order dated 23.03.2020 would be in breach of the provisions of the Act and would entail prosecution.

Justice Narendar, said "This Court is of the opinion that the proposed auctions require to be averted till the restrictions imposed under the Government Order are revoked. Accordingly, there shall be stay of proposed auctions.

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