* Company Law Board says Uninor cannot proceed with auction
* Telenor to appeal ruling in higher courts
* Minority partner Unitech sought to stop sale (Recasts lead, adds details from order, Uninor comment)
NEW DELHI, Aug 9 (Reuters) - The minority partner of Telenor's Indian unit blocked a bid by the Norwegian mobile phone carrier to buy out assets and rebuild the joint venture which is being stripped of its operating licence.
The Company Law Board, a quasi-judicial body that rules on company disputes, on Thursday upheld a challenge by Indian property company Unitech Ltd against an auction of assets in Uninor, the mobile phone joint venture of which it owns one third.
Uninor, 67 percent-owned by Telenor, said it would appeal the ruling.
Telenor and Unitech have fallen out after the Supreme Court ordered the government to withdraw the licence of Uninor and other mobile operators following a scandal-tainted sale in 2008.
Telenor has blamed Unitech for losing the licence, accusing it of "fraud and misrepresentation."
Uninor had invited potential bidders to express interest by Aug. 8 and said Telenor was willing to bid in the auction.
The asset auction was seen as a move by Telenor to buy out Unitech and rebuild the business.
The Company Law Board (CLB) last week asked Uninor not to proceed with the auction until a further order, which Uninor had challenged at the Delhi High Court.
The Delhi High Court had allowed it to receive interests from potential bidders, pending a final order from the Company Law Board.
"Since the CLB order has now been pronounced, we are able to comprehensively move our arguments towards Uninor's asset auctions to the higher courts," Uninor said in a statement.
Telenor and Unitech did not immediately comment after the Company Law Board order.
Uninor is among eight mobile carriers in India that are set to lose a total of 122 regional operating permits.
Telenor has said it will either leave India or buy out Unitech and take the business into a new entity with a new partner to seek fresh operating permits.
Unitech has contested Telenor's moves and has said it has veto rights over any asset transfer. (Reporting by Suchitra Mohanty; Writing by Devidutta Tripathy; Editing by David Cowell)