The property is being auctioned under 8(6) sarfeasi rule. however the civil dispute is going on in civil court over the same property.
what will happen to the civil court matter in such a case?
will the civil court case remain pending or dismissed?
When a property is being auctioned under the Sarfaesi Act's Section 8(6) while a civil dispute is ongoing in a civil court regarding the same property, it leads to a complex legal scenario.
The Sarfaesi Act empowers banks and financial institutions to auction off properties to recover outstanding dues without court intervention. However, when there's a concurrent civil dispute, the situation becomes intricate. The civil court retains its authority to adjudicate on matters related to the property despite the Sarfaesi action.
Typically, the civil court case won't be automatically dismissed due to the Sarfaesi proceedings. The civil court will continue to address the dispute unless it issues a specific order or injunction recognizing the Sarfaesi action or directs a stay on the proceedings.
The civil court may consider various aspects:
1. The court might grant a stay on its proceedings until the Sarfaesi auction is completed or make specific orders regarding the property's status during the auction process.
2. Both processes could continue simultaneously. The civil court might resolve the dispute based on its merits, irrespective of the Sarfaesi auction's outcome.
3. The civil court's decision could affect the rights and claims of parties involved in the Sarfaesi auction.
Ultimately, the interaction between the Sarfaesi Act and civil court proceedings requires careful legal consideration. The civil court might adapt its actions based on the progress and outcome of the Sarfaesi auction or issue directives to protect the interests of all parties involved.
