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Auction purchaser retains property inspite of invalid sale

The Supreme Court, last week, came to the rescue of a purchaser of mortgaged property which was auctioned for recovery of debt and which he had held in possession for eight years while the disputes were going on. In this case, Central Bank of India vs C L Vimla, her sons took a loan from a bank to start business which failed. The bank started recovery proceedings and this started a series of litigation in the debt recovery tribunal, the Karnataka High Court and Lok Adalat. Meanwhile, the property was auctioned and the purchaser paid the value in full. However, litigation continued and the high court held the sale invalid stating that the purchaser was party to the negligence of the recovery officer. Setting aside the high court ruling, Supreme Court observed that since the purchaser paid the amount in full in a bona fide manner and suffered for a long time, "equity and good conscience" demanded that his possession should not be disturbed at this stage.

 Article referred: http://www.business-standard.com/article/opinion/excise-duty-at-point-of-sale-sc-115050300727_1.html

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