The Court said even if the auction takes place before the next hearing, it can be revoked, if required.
Two employees of Bhabha Atomic Research Centre (BARC) moved the Bombay High Court seeking to stop the auction of the bungalow.
The sprawling bungalow, Mehrangir, located in posh Malabar Hill in south Mumbai, is slated to go under the hammer on June 18.
The petition was mentioned before the bench of Chief Justice Mohit Shah and Justice M S Sonak which posted the hearing for June 23 but refused to grant a stay on the auction.
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BARC Employees Prakash Worlikar and Ram Dhuri, who are members of the National Federation of Atomic Energy Employees (NFAEE), have sought court's direction to NCPA to stop the auction.
The petitioners also pleaded that the bungalow should be kept in tact by the state or the central government and house a nuclear exhibition centre or museum.
The employees have even approached Ratan Tata, Chairman Emeritus of the Tata group, to save the landmark three-storey bungalow from going under the hammer.
They have also started an online campaign to garner public support and prevent the auction.