Order Sheet

IN THE HIGH COURT OF SINDH KARACHI

Suit No.1375 of 2008

Date	Order with signature of Judge

Mr. Naseer Ahmed, Advocate for the plaintiff.

            Mr. Suleman Huda, Advocate for defendant No.1.

Mr. Muhammad Yasin Azad, Advocate for defendant No.3

Date of hearing : 08.10.2015.

O R D E R

NADEEM AKHTAR, J. – The plaintiff has filed this Suit for declaration, cancellation and permanent injunction against the defendants. His case, as averred in the plaint, is that he is the lawful tenant in respect of godown premises bearing No.G-1, measuring 858 sq. ft., situated in building known as ‘Ramchand and Karamchand Building’, constructed on Plot No.1/3 RB-9/20, DS No.III-A-197, Arambagh, Karachi (‘the suit tenement’), which was acquired by him 35 years back on pugri from its previous owner. About 20 years back, the building was purchased by defendant No.2 from its previous owner. As this change in the ownership of the building was duly intimated to the plaintiff, he started paying rent in respect of the suit tenement to the new owner / defendant No.2. In April 2006, he came to know that some tenements of the building were being auctioned by Banking Court No.III at Karachi in Execution Application No.01/2005 filed by the defendant No.1-bank for satisfaction of the decree passed in its favour in Suit No.73/2003. It transpired that defendant No.2 had mortgaged with defendant No.1 some tenements of the building ; namely, tenement Nos. G/1, G/2, G/3 and 1/3 (‘the mortgaged tenements’) as security for repayment of the loan obtained by her.

2.         In the above execution proceedings before the Banking Court, the plaintiff, as an objector, filed an application under Order XXI Rule 58 CPC read with Sections 15 and 19 of the Financial Institutions (Recovery of Finances) Ordinance of 2001, as well as a stay application. The plaintiff also submitted a bid for purchasing the suit tenement in auction. Vide order dated 19.08.2006 (annexure ‘C’ to the plaint), the learned Banking Court dismissed both the above applications filed by the plaintiff on merits, declined the bid submitted by him in respect of the suit tenement, accepted the bid of the auction purchaser in respect of the mortgaged tenements and confirmed the sale thereof in his favour, directed the Nazir to issue sale certificate in favour of the said auction purchaser and to hand over possession of the mortgaged tenements to him. The above order was challenged by the plaintiff before the learned Division Bench of this Court in First Appeal No.69 of 2006, which was allowed vide order dated 07.03.2008 (annexure ‘D/1’ to the plaint), but only to the extent of handing over possession of the suit tenement by the plaintiff to the auction purchaser. Since the remaining part of the aforesaid order dated 19.08.2006 passed by the learned Banking Court was not disturbed in the plaintiff’s said appeal, the auction / sale of the suit tenement in favour of the auction purchaser attained finality long ago.

3.         In this background and in view of the above facts averred in the plaint, the plaintiff filed this Suit on 29.09.2008 after disposal of his above appeal. He has prayed as under :

“a)       Grant declaration to the effect that the Title documents executed in favour of Defendant No.3 in respect of the suit property is (!) null and void document as the same has been managed by the Defendants in a fraudulent manner.

b)         Grant declaration to the effect that the act of the Defendant Bank whereby the higher bid of the Plaintiff regarding the purchase of the suit property, was declined is illegal, unjust, arbitrary and malafide in as much as the Defendant Bank sustained financial losses in not accepting the higher bid of the Plaintiff.

c)         To declare that the Defendants No.2 & 3 being the employer and servant have fraudulently managed, with the connivance of the bank officials, to get the suit property transferred into the name of Defendant No.3.

d)         To cancel the Title Documents / Sale Deed executed in favour of the Defendant No.3 regarding the property in question being executed malafidely in a fraudulent manner.

e)         To restrain the Defendants, their agents, servants, employees, officials and/or any other person or persons claiming through or under them from creating any third party interest over the suit property.

f)          To declare that since the Plaintiff had made the offer of higher and un-conditional bid, the Plaintiff was/is entitled to purchase the suit property in the said auction.

g)         To declare that since the Plaintiff is an old tenant in the major portion of the suit property and since has acquired the same on payment of huge “Pugri” amount the Plaintiff had/has a right to be given preference in auction proceedings.

h)         Pass any other/further/additional relief or reliefs which this Hon’ble Court deems fit and proper under the circumstances of the case.

i)          Cost of the suit.”

4.         On 28.09.2015 when this Suit was listed for hearing of applications, examination of parties and settlement of issues, the following order was passed by me in the presence of the learned counsel for the parties :

“ In this Suit, the plaintiff has sought declaration that the title documents executed in favour of defendant No.3 in respect of the suit property are null and void. It is an admitted position that the plaintiff does not have any title in the suit property. Learned counsel for the plaintiff is put on notice to satisfy the Court on the next date about the maintainability of this Suit as it is my tentative view that the declaration sought by the plaintiff is barred under Section 42 of the Specific Relief Act, 1877, as he does not have any legal character or right in respect of the suit property. Learned counsel undertakes to assist the Court on this point on the next date. At his request, adjourned to 08.10.2015 at 11:00 a.m.”

5.         In compliance of the above order, learned counsel for the plaintiff made his submissions on 08.10.2015 on the question of maintainability of the Suit. By reiterating the contents of the plaint, he contended that the plaintiff has vested right, title and interest in the suit tenement in view of a huge amount of pugri paid by him to the previous owner in consideration of acquiring possession, and also because of his uninterrupted possession for the past about four decades. He further contended that payment of pugri by the plaintiff and his possession are not disputed by any of the defendants. According to him, the suit tenement could not be mortgaged by defendant No.2 with defendant No.1 in view of the above, and not only such mortgage, but the entire proceedings before the Banking Court were also collusive, fraudulent, malafide and illegal ; and as such, the auction purchaser did not acquire any right, title or interest in the suit tenement. He also contended that all the above actions were taken by the defendants in order to deprive the plaintiff from his vested rights in the suit tenement. On my query, the learned counsel conceded that the ownership of the suit tenement was never transferred in favour of the plaintiff and except for the pugri claimed by him, no other amount was paid by him to the previous owner. He further conceded that throughout the period of his possession, the plaintiff paid rent for the suit tenement, initially to the previous owner and then to defendant No.2.

6.         To determine whether the prayers made by the plaintiff can be granted to him or not, and in order to appreciate the submissions made by his learned counsel, I have carefully examined the plaint. In paragraphs 1, 6, 7(a) and 11 of the plaint, the plaintiff has admitted that he is the “lawful tenant” in respect of the suit tenement. In paragraph 2, he has admitted that he is paying rent for the suit tenement. He has also admitted in paragraph 3 that he filed applications in execution proceedings before the Banking Court “to protect his tenancy rights”. In paragraphs 10 and 11, he has stated that he was ready and willing to purchase the suit tenement on as-is-where-is-basis for which he submitted an unconditional bid, and preference should have been given to him as purchaser. In paragraph 12, he has alleged that cause of action for filing this Suit accrued to him inter alia when his offer for purchasing the suit tenement was declined. In prayers (b), (f) and (g) made in the plaint, he has prayed for declarations that he was entitled to purchase the suit tenement in auction ; preference ought to have been given to him in auction proceedings as he is an “old tenant” of the suit tenement ; and, the defendant-bank’s act of declining his higher bid was illegal, unjust, arbitrary and malafide.

7.         The statements, averments, allegations and prayers made in the plaint clearly show that it is an admitted position that the plaintiff has filed this Suit as a tenant of defendant No.2 in respect of the suit tenement ; he attempted to purchase the suit tenement in auction proceedings before the Banking Court, but did not succeed as his offer was rejected by the said Court ; the suit tenement along with other mortgaged tenements was sold in the said auction proceedings to defendant No.3, and such sale was made absolute by the Banking Court ; the order of the Banking Court, though challenged by the plaintiff, attained finality long ago to the extent of sale of the suit tenement in favour of defendant No.3 ; the title of defendant No.3 in relation to the suit tenement is still subsisting ; and, the plaintiff never acquired ownership rights in the suit tenement. It is admittedly not the case of the plaintiff that the owner of the suit tenement had agreed to sell the same to him, or there was any agreement in this behalf. In view of the above admitted position, the plaintiff does not have any legal character or right in respect of the suit tenement. The Suit is, therefore, barred under Section 42 of the Specific Relief Act, 1877, and consequently also under Section 56 of the said Act. I am also of the view that the plaint does not disclose any cause of action for filing this Suit in respect of the suit tenement.

8.         As noted above, the suit tenement was sold to defendant No.3 in execution proceedings under the Financial Institutions (Recovery of Finances) Ordinance XLVI of 2001, and the said sale was not only made absolute by the Banking Court, but was also maintained by the learned Division Bench of this Court in the appeal filed by the present plaintiff under the said Ordinance. It is my considered view that sale of mortgaged property by Banking Court and or the title of the purchaser of such property, cannot be called in question in a civil Suit. This Suit is, therefore, barred under the said Ordinance.

9.         After having failed in purchasing the suit tenement in execution proceedings before the Banking Court and also in appeal before the learned Division Bench of this Court, the plaintiff is in fact seeking setting aside and cancellation of sale of the suit tenement in favour of defendant No.3. As the said sale was made absolute and the order to this effect attained finality long ago, this Suit is barred under Order XXI Rule 92 CPC. The Suit is also barred under the principles of res judicata as the issue of sale of the suit tenement in favour of defendant No.3 has already been decided conclusively by a competent Court in previous proceedings in the presence of the present plaintiff and defendants.

10.       From the above discussion, I have come to the conclusion that the plaint is liable to be rejected under Order VII Rule 11 CPC as it does not disclose any cause of action, and also as from the statements made in the plaint the Suit is clearly barred under Sections 42 and 56 of the Specific Relief Act, 1877, Section 11 and Order XXI Rule 92 CPC, and the Financial Institutions (Recovery of Finances) Ordinance XLVI of 2001.

11.       Foregoing are the reasons of the short order announced by me on 08.10.2015, whereby the plaint was rejected with costs of Rs.25,000.00, and consequently all pending applications were dismissed. The amount of costs shall be deposited by the plaintiff with the Nazir of this Court in the account of High Court Employees’ Benevolent Fund.

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               J U D G E