The Himachal Pradesh High Court, reaffirming established precedent, has held that when a borrower or their successor has not repaid any portion of an availed loan for an extended period, the Court will not grant relief against the creditor’s public auction of the mortgaged property. The decision is binding on subordinate courts and clarifies the strict approach in instances of absolute and prolonged default, specifically affecting recovery proceedings in banking and cooperative sectors.
Summary
| Category | Data |
|---|---|
| Case Name | CWP/16298/2025 of JIYA LAL Vs THE MD HPSCARDBL AND OTHERS |
| CNR | HPHC010637302025 |
| Date of Registration | 14-10-2025 |
| Decision Date | 15-10-2025 |
| Disposal Nature | Disposed Off |
| Judgment Author | Hon’ble Mr. Justice Ajay Mohan Goel |
| Court | High Court of Himachal Pradesh |
| Bench | Single Judge Bench |
| Precedent Value | Binding within Himachal Pradesh; persuasive for other jurisdictions |
| Type of Law |
|
| Questions of Law | Whether judicial relief can be granted against a public auction of secured property when the borrower and successor have failed to repay any part of the outstanding loan for several years. |
| Ratio Decidendi |
The Court held that no indulgence or equitable relief is warranted in favour of a borrower/successor who has not repaid a single penny of the loan since its availing, even after the borrower’s death. The bank’s decision to auction mortgaged property for recovery is justified in such circumstances. The Court further clarified that the aggrieved party is not precluded from participating in the auction process itself. There is no scope for judicial intervention solely on grounds of hardship where conduct displays absolute default. |
| Facts as Summarised by the Court | The petitioner challenged a public auction notice concerning his property, issued by the Cooperative Agriculture & Rural Development Bank on grounds of non-repayment of a loan of Rs. 5,00,000 availed by his late father in 2009. No repayment had been made till the decision date. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the State of Himachal Pradesh |
| Persuasive For | Other High Courts, financial institutions, and judicial forums outside Himachal Pradesh |
What’s New / What Lawyers Should Note
- Expressly clarifies that prolonged and complete non-repayment of a loan, even after the death of the original borrower, disqualifies successors from seeking writ jurisdiction relief against auction of mortgaged property.
- Reiterates the minimal scope for judicial intervention where the default is absolute and unrectified for years.
- Lawyers should advise clients that mere hardship or passage of time does not suffice for court protection against creditor’s statutory recovery mechanisms.
- Petitioners are still permitted to participate in the auction sale as per law.
Summary of Legal Reasoning
- The Court took into account the undisputed factual situation—namely, that neither the original borrower (petitioner’s deceased father) nor the petitioner had repaid any portion of the loan since 2009.
- Noted that the property was subjected to public auction only after complete default, and the borrower’s death did not alter this position.
- On these facts, the Court refused to exercise its writ jurisdiction for granting any relief or indulgence to the petitioner.
- The possibility for the petitioner to participate in the auction was preserved, balancing fairness with enforcement.
- No reliance on external authorities or special statutory interpretations was deemed necessary—decision was based on clear facts and settled law regarding complete default on financial obligations.
Arguments by the Parties
Petitioner
- Challenged the public auction notice dated 08.10.2025, seeking to quash auction proceedings over his land on the ground of non-repayment.
- Sought judicial protection against auction of specified property.
Respondent (Bank)
- Asserted that loan of Rs. 5,00,000 was availed by the petitioner’s father in 2009, and not even a single penny has been repaid.
- Supported the auction process as a justified recovery measure following extended default.
Factual Background
The petitioner’s late father availed a loan of Rs. 5,00,000 from the Himachal Pradesh State Cooperative Agriculture & Rural Development Bank in 2009, securing it with immovable property. Following the borrower’s death in 2017, neither the petitioner nor his father during his lifetime repaid any portion of the loan. As a result, the bank issued a public auction notice dated 08.10.2025 for the secured property, leading to this writ petition challenging the auction.
Statutory Analysis
- The judgment centers on the established legal principle that writ courts do not intervene to restrain the enforcement of statutory recovery actions—such as auction of mortgaged property—when there is undisputed and prolonged default on a loan.
- No specific statutory sections were analyzed beyond the general recognition of the lender’s right to recover unpaid dues through secured creditor remedies.
Procedural Innovations
No new procedural innovations or directions were issued; the standard procedure for notice, hearing, and disposal of the writ petition was followed.
Alert Indicators
- ✔ Precedent Followed – The decision affirms established principles regarding judicial intervention in recovery proceedings following borrower default.