ORDER SHEET
IN THE HIGH COURT OF SINDH AT KARACHI
First Appeal No. 51 of 2007
Present:
Mr. Justice Khilji Arif Hussain
Mr. Justice Arshad Siraj Memon
1. For Katcha Peshi.
2. For Orders on CMA 1926/07 (Stay Application).
15/04/2009
Mr. Munawwar Ghani advocate for the appellant.
Mr. Sultan A. Allana advocate for respondent No.2
Mr. Arshad Hussain advocate for respondent No.3.
KHILJI ARIF HUSSAIN, J: Respondent Bank filed suit for recovery of Rs.25,76,042/44 in the Banking Tribunal No.1. The suit was decreed on 17.07.1994. Respondent Bank then filed Execution No.148/97 later on withdrew the said application with permission to file fresh execution application. In pursuance thereof respondent Bank filed Execution No.44 of 2001 for attachment and sale of mortgaged property. After filing the execution, property in question was put for auction. The auction purchaser deposited auction amount and on 04-09-2007 Sale Certificate was issued in favour of Respondent No.3
Heard Mr. Munawwar Ghani learned advocate for the appellant, Mr. Sultan A. Allana learned advocate for respondent No.2, and Mr. Faisal Kamal learned advocate for respondent No.3 filed synopsis on behalf of the said respondent.
Mr. Munawwar Ghani learned advocate for the appellant argued that attachment order was issued on 22.05.2002, property was attached on 27.02.2003. On 08.06.2005 matter was adjourned for submission of statement under order 21 Rule 66 CPC. As on 23.11.2005 decree-holder submitted statement under order 21 Rule 66 CPC along with photocopy of valuation certificate the learned Banking Court ordered that statement under order 21 rule 66 CPC be kept on record and order of sale proclamation be issued in accordance with law. Nazir of the Banking Court received bid in a sum of Rs.8,00,000/- (Rupess Eight Lacs only) which was rejected by the learned Banking Court on 30.01.2006 On 27.05. 2006 order to call fresh offer of the immovable mortgaged property and order sale proclamation be issued on cost. On 07.09.2006 learned Banking Court again ordered to issue sale proclamation. On 14.09.2006 application by the decree-holder under section 151 CPC was granted in which respondent Bank prayed to break open the lock to prepare the inventory and deployed the Chowkidar to safe guard the property. On 08.05.2007 Nazir submitted bid for a sum of Rs.22,65,000/-. Matter was adjourned to 09.05.2007 when notice was ordered to be issued to the first bidder and DH as well. On 29.05.2007 respondent bank filed objection on the proposed conditional offer of bid. The learned Banking Court then directed to issue sale proclamation of mortgage property. On 29.05.2007 and 14.07,2007 Nazir submitted report that in auction proceedings he received highest bid of Rs.22,68,000/- and matter was then again adjourned to 11th August 2007. On 15.08.2007 Banking Court confirmed the auction after the auction purchaser deposited balance amount with a direction to the Nazir to issue sale certificate in favour of the auction purchaser and handover physical possession of the same.
Learned advocate for the appellant argued that no notice under rule 66 of order 21 CPC was served upon the JD and on this ground the sale is liable to be set aside. It was contended by the learned advocate that the Banking Court sold the property at throwaway price and further sale was conducted at Court premises instead of at property in question. It was further contended by the learned counsel that in the notice of sale description of the property was not properly given. In support of his contention learned counsel relied upon the case of Nuhammad Hussain vs. Muslim Commercial Bank, 2044 AC 789, Riasat Muhammad Irfan Ahmed vs. Allied Bank Limited, 2008 CLD 1281, Messrs Chawla Internationl vs. Habib Bank Limited and others, 2003 CLD 956
On the other hand, Mr. Sultan A. Allana learned advocate for respondent No.2, argued that sale certificate was already issued by the Court, property was put in auction in exercise of power under Banking Ordinance 2001, and objection after the confirmation of sale and issuance of sale certificate by the judgment debtor’s application was not maintainable.
Mr. Faisal Kamal, learned counsel for respondent No.3, has filed his written synopsis. As per said synopsis after the purchase third party interest has had been created. Learned counsel relied upon the case of Ghulm Abbas vs. Zohra Bibi and another PLD 1972 SC 337, Mst. Asma Zafarul Hassan vs. Messrs United Bank Ltd., 1981 SCMR 108,Hudaybia Textile Mills Ltd. and others vs. Allied Bank of Pakistan Ltd and others , PLD 1987 SC 512,
We have taken into consideration respective arguments advanced by the learned advocates, perused the record. From perusal of record, it appears that on 28.09.2001 appellant submitted an application under Section 15 of Banking Companies (Recovery of Loans, Advances, Credits & Finances) At, 1997, with a prayer to allow him to pay balance amount in easy installment by May 2002 and in the meanwhile to stay auction proceedings. The Application was dismissed for non-prosecution. The appellant submitted an application under Order 21 Rules 89, 90 and 151 CPC on 28.04.2008 to set aside the sale of the above property which was sold to the auction purchased respondent No.3. This application was filed by JD after about seven months of issuance of sale certificate. The Application under Order 21 rule 89 & 90 CPC was filed by the appellant much after the filing of the appeal, and no order has been passed the learned Banking Court on it.
After filing of the execution application since JD appellant could not be served in ordinary course, notice of execution application was served upon JD through publication of notice in newspaper Daily ‘Jang’ and Daily “News”. Notice was also issued to the respondents through courier service. Notice of attachment was also issued in respect of mortgaged property in Daily “News” dated 22.02.2005 and Daily “Jang” dated 22.02. 2005. Despite Publication of notice about the attachment of the mortgaged property in terms of order the 21 rule 53 in newspaper the appellant/ JD did file objection.
After publication of notice of execution proceedings, the appellant JD filed an application to allow to pay the decretal amount in installment on 28-.09.2001 but thereafter disappeared resulting application was dismissed for non-prosecution.
The notices were again published for attachment of the property on 22.02.2005 but appellant JD did not care to appear and to file objection the sale notice. Despite publication of notice of sale of the property in two leading newspapers the appellant JD failed to appear to file objection or express his willingness to pay the decretal amount. The sale notice of the mortgaged property was then published in Daily Dawn and Daily Jang of 01.04-2006, 18.10.2006, 13.01.2007, and 04.06.2007 but appellant/JD did not appear before the learned Banking Court. After confirmation of the sale and deposit of entire auction amount, sale certificate was issued in favour of respondent No.3 on 04.09.2007 with a direction that the possession of subject property was handed over on 14.09.2007. Auction was conducted on 14.07.2007 and bid was subsequently approved on 15.08.2007. In appeal appellant submitted that appellant is ready and willing to pay the decretal amount and to pay the auction purchaser all the sale price. Notice was ordered to be issued to the respondent for 03.10.2007. Till date appellant has not deposited decretal amount and further 5 per cent of sale price as offered on 20.09.2007.
An application to set aside the sale can be filed under Rule 89 of Order 21 CPC but such application is maintainable on deposit of sum equal to 5 percent of the purchased money and payment to the decree-holder the amount specified in the proclamation for recovery of which sale was ordered.
Any person who is interested or his interest is likely to be effected by sale can apply to set aside the sale on the ground of its irregularity or fraud under Rule 90 of Order 21 CPC. In this matter the appellant JD is seeking to set aside the sale on the ground of its irregularity as notice under Rule 66 of Order 21 has not been served upon him but such application cannot be entertained unless applicant deposited such amount not existing 20 per cent of sum realised at the sale or furnished such security as Court may direct. To file an application under Rule 89 or 90 of Order 21 CPC can be filed within 30 days under Article 166 of the Limitation Act. Appellant admittedly failed to file such application before the Banking Court. In terms of Section 19(2) of the Financial Institutions (Recovery of Finances) Ordinance 2001 the decree of the Banking Court is required to be executed in accordance with provision of Code of Civil Procedure or in such a manner as Banking Court may at the of request the DH consider appropriate. The discretion has been given to the Banking Court that in appropriate matter Banking Court can order to execute the decree in a manner not provided in CPC.
As regards the principle laid down in the case of Muhammad Hussain vs. M/s. Muslim Commercial Bank Ltd., 2004 AC 789, the property was put to auction, without settlement of terms and conditions of sale. The Judgment debtor filed objection on the date fixed for settlement of terms and conditions of sale, but order could not be passed for three consecutive dates, as the Presiding Officer was on leave, and on 12/10/2001 notice was ordered to be issued to DH for 12.11.2001. On 12.1.2001, it was informed that mortgaged property has been auctioned on 13.10.2001, when objection of the JD were pending & terms and conditions of sale were not settled by the Court, under these circumstances sale was set aside. Whereas in the instance case, appellant/JD was served with the notice of application of Order 21 Rule 54 CPC by publication in newspaper. Instead of filing objection, the appellant filed application to allow to pay decreetal amount in installment. After filing the application, appellant disappeared, the Banking Court after adjourning the matter, dismissed the application for non-prosecution. The order of attachment of mortgaged property was again published in two leading Newspapers, but appellant did not turn up. The DH filed statement under Order 21 Rule 66 CPC in compliance to order of Court to issue sale proclamation. The Sale notice were published more than one time in different newspapers but appellant did not appear to file any objection, till offer was accepted by the Court. Even after acceptance of offer by the Banking Court, the appellant has not filed application under order 21 Rule 89 or 90 CPC. In the instance case it cannot be said appellant had no notice of sale, as notices were issued through all modes and after appearing in Court he disappeared. The notices of attachment and sale were published in newspapers, but appellant without any cause not appeared in Court or filed his objection.
The principal laid down in the case of Muhammad Hussain (supra) not applicable to the facts of this matter,
In the case of M/s. Chawla International vs. Habib Bank Limited, 2003 CLD 956, a Division Bench of this Court reproduce a passage from the case of Ghulam Abbas vs. Zohra Bibi, PLD 1972 SC 337, where it was observed:
“Indeed, it would appear that the view of the Courts has consistently been that the non-compliance with the provision of the Code of Civil Procedure, with regard to the proclamation of sale. Its publication and conduct of the sale in execution, are only material irregularities but not illegalities which render the sale in disregard of those provisions a nullity."
For the foregoing reasons, listed appeal has no merits and accordingly dismissed in limine.
We would like to observe that observation made hereinabove should not come in any way while deciding the application under Order 21 Rule 89 & 90 CPC filed by the appellant before the Banking Court on which till date no order has been passed.
JUDGR
JUDGE
First Appeal 51-2007