Bombay High Court blocks misuse of insolvency moratorium to stall secured-creditor recovery
Court allows continuation of auction sale despite insolvency filing
Change
The Bombay High Court quashed a DRT order that had stalled registration of an auction sale under a claimed insolvency moratorium.
Why it matters
The ruling clarifies that insolvency filings cannot retroactively halt completed enforcement steps, limiting use of moratoriums to block creditor recovery.
Implications
- — Borrowers cannot use moratorium to delay completed sales — recovery enforcement strengthened
- — Secured creditors can proceed with registration — execution certainty improves
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