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Monday, 24 October 2011

Sale of mortgaged property must be transparent : Bombay H.C.

The Bombay high court has set aside the order of the Mumbai Debt Recovery Appellate Tribunal in the sale of the Mysore unit of Jay Electric Wire Corporation, now closed, and asked the recovery officer to issue public advertisements inviting fresh bids. The earlier sale was challenged by the employees’ union, Central Bank of India and Standard Chartered Bank, who were secured creditors. According to them, the sale did not fetch fair market value and was vitiated by irregularities. Allowing their writ petitions, the court observed that “it is necessary that the sale process must be conducted with transparency and in accordance with law. In the present case, we find that the element of transparency was completely lacking. The grounds which weighed with the appellate tribunal are misconceived. Its conclusion that there was no material irregularity is specious.”

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