Mumbai, Dec. 15 -- The Bombay High Court has ruled that a secured creditor cannot continue with a SARFAESI sale once an interim moratorium under the Insolvency and Bankruptcy Code (IBC) comes into effect.

SARFAESI sale barred after interim moratorium

In a December 10 order, a Division Bench of Justices R.I. Chagla and Farhan P. Dubash held that once an interim moratorium under Section 96 of the IBC begins, all debt-related proceedings must stop. The Court said the secured creditor could not continue SARFAESI action or accept payments after the moratorium took effect.

Background: Auction of borrower's flat

The case arose from a writ petition by Arrow Business Development Consultants, the highest bidder in a Union Bank e-auction on May ...