ORDER SHEET

HIGH COURT OF SINDH, KARACHI

 


Execution No.84 of 2011  

 


   Date                     Order with signature of Judge

 

1.For hearing of CMA No.376 of 2012

2.For hearing of CMA No.377 of 2012

 

 

M/s. NIB Bank Ltd……………………………Decree Holder

 

Versus

 

 

Apollo Textile Mills Ltd & others…...Judgment Debtor

 

 

Date of hearing 14.12.2012

 

M/s.Yawar Faruqui & Irfan Memon, Advocates for Decree Holder.

 

M/s.Mian Raza Rabbani, Zeeshan Abdullah & Sajid Ansari, Advocates for the Judgment Debtor Nos.1 & 2

 

Mr.Naveed-ul-Haq, Advocate for the Bank of Punjab.

 

Mr.S.Nauman Zahid Ali, Advocate for Standard Chartered Bank Ltd.

 

----------

 

Muhammad Ali Mazhar, J.  This order will dispose of two Misc. Applications filed by the Judgment Debtor Nos.1 and 2 under Order 21 Rule 65, 66 & 85 CPC read with Section 151 CPC for setting aside the auction notice published on 3.5.2012 and another application moved by the same J.Ds under Order 39 Rule 1 and 2 CPC for the suspension of auction proceedings.

 

2.     The brief facts are that the Decree Holder filed a suit against the J.Ds for recovery under Section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001. The suit was decreed vide judgment dated 30.7.2011. The plaintiff has filed this execution application which was placed for orders before learned Single Judge of this Court on 1.2.2012. Since the execution was found to have been filed within one year of passing decree, therefore, learned Single Judge dispensed with the notice and allowed the execution application as prayed. Learned Official Assignee of this court for execution of the decree initiated proceedings for sale/auction of land, plant and machinery of Judgment Debtor No.1 and issued public notices in the daily Jang Karachi & Lahore, Nawa-e-Waqt Lahore and Dawn Karachi on 20.6.2012 with the following terms and conditions:-

 

 

Land with Building & Machinery

of Apollo Textile Mills Ltd.

at Muzaffargarh for Sale

 

 

“Separate offers are invited ‘As is where is basis’ for the sale of following properties, for satisfaction of decretal amount of Rs.319,046,577/- plus cost of fund thereon, being in Execution No.84 of 2011 (NIB Bank Limited Versus M/s.Apollo Textile Mills Limited and others)

 

(i)                Land bearing Khata No.05, Khatoni Nos.41 to 42, admeasuring 196 kanals, 09 Marlas or thereabout, situated at Jasilwahin, Jhang Road, Tehsil and District Muzaffargarh, Punjab along with building constructed thereon.

 

 

(ii)           Hypothecated machinery and equipment details as under:

 

S.No.  List Of Machinery & Equipment                 Quantity

1……….

2……….   

………...
…………

20.……..

 

CONDITIONS

 

 

 (i) Separate offers be accompanied with 10% of the offered amount in the shape of Pay Order in favour of “Official Assignee of Karachi” and copy of CNIC to reach the undersigned on 23.07.2012 at 1.30 P.M. which will be received (opened) immediately upon receipt in presence of the parties who wish to be present.

 

(ii)  The undersigned may cancel the offers without assigning any reason or call bidders for negotiation and improvement of offers.

 

(iii)  All offers are subject to confirmation of High Court of Sindh, Karachi.

 

(iv)  Balance of the purchase price shall be deposited within 15 days from the date of acceptance of offer, failing which earnest money shall stand forfeited.

 

(v)  The highest/lowest bidder cannot withdraw his offer before acceptance of bid.

 

(vi) All dues, taxes, and outstanding on the properties shall be paid by the purchaser.

 

(vii) Inspection of properties on 10.07.2012 from 10.00 A.M. to 2.30 P.M. Further information may be obtained from the undersigned. Telephone No. 021-99203129.

 

 

OFFICIAL ASSIGNEE OF KARACHI

1ST FLOOR, OLD ANNEXE BUILDING

HIGH COURT OF SINDH, KARACHI”

                                   

 

3. The Judgment Debtor Nos.1 and 2 have impugned the public notice on the ground that the terms and conditions of auction issued by the Official Assignee are contrary and in violation of various Rules of Order 21 CPC. During pendency of this application it was further prayed that the auction proceedings which were likely to be held on 23.7.2012 be stayed.

 

4. Mian Raza Rabbani, learned counsel for Judgment Debtor Nos.1 and 2 argued that though the suit was decreed against J.Ds but Special H.C.A. No.144/2011 is pending adjudication in this court. It was further averred that the J.Ds have also filed the Suit No.B-77 of 2008 which is pending in this court at evidence stage. Learned counsel argued that vide order dated 1.2.2012 this court allowed the execution application without issuing any notice to the J.Ds and as a consequence thereof the attachment of sale of J.Ds properties were also ordered to be auctioned through Official Assignee. Learned counsel argued that while drawing up the proclamation of sale/auction and the proceedings ancillary and incidental thereto, the Official Assignee ignored Rules 64, 65, 66, 84 and 85 of Order 21 CPC which are mandatory in nature and the same should have been complied with and its non-compliance has vitiated the entire auction notice and proceedings. The Official Assignee has committed material irregularity in drawing up the proclamation of sale and published the same in the newspapers.  It was further contended that the powers and functions of Official Assignee described in Sindh Chief Court Rules (O.S) does not confer any power to Official Assignee to draw up the proclamation of sale. He further argued that mandatory notice was not issued to the J.Ds for settling the terms and drawing up the proclamation of sale under Rule 66 of Order 21 CPC. No reserve price was mentioned in the proclamation which was also required to be mentioned. No fresh valuation of the factory, machinery and land under auction was conducted. Learned counsel further argued that prior permission as required under law for advertising the proclamation of sale in the newspapers was not obtained from this court as envisaged under Rule 67 (2) of Order 21 CPC read with Rule 339 of Sindh Chief Court Rules (O.S). Learned counsel also attacked proclamation on the ground that Rule 84 of Order 21 CPC clearly stipulates 25% of the payment shall be made at the time when a person is declared to be purchaser, while remaining 75% amount will be deposited by the buyer in court within 15 days from the sale/auction, while according to Official Assignee the terms and conditions mentioned in clause 4 of the proclamation the time starts to run from the date of acceptance of sale, which is contrary to the mandatory provision. Learned counsel further argued that besides various other anomalies in the terms and conditions mentioned in the proclamation of sale, it also did not disclose the encumbrances of other financial institutions on the attached properties which is required to be disclosed under Rule 66 (2) (c) of Order 21 CPC. In this regard learned counsel very rightly pointed out that in the very same execution application two interveners i.e. Standard Chartered Bank Ltd. and Bank of Punjab Ltd. filed their two separate applications in which they prayed that the sale proceeds of JDs assets should be distributed amongst the financial institutions on pro rata basis in accordance with their mortgaged and current charges. These two applications i.e. CMA Nos.386 and 400 of 2012 were fixed for hearing on 14.12.2012 when the learned counsel for the Decree Holder clearly stated that if these financial institutions have any claim against J.Ds they may approach to the Official Assignee for further proceedings and in view of this statement both the applications were disposed of.

 

5.  It was further averred that the Sindh Chief Court Rules (O.S) defines powers and functions of Nazir, Official Liquidator and Official Assignee and the court may call them to conduct the auction but not to draw up the proclamation of sale, which can only be drawn up  by the court. Under Rule 66 of Order 21 CPC the proclamation is required to be drawn up after notice to the Decree Holder and Judgment Debtors and even under Sub-Rule 4 of Rule 66 of Order 21 the court for the purposes of ascertaining the matter to be specified in the proclamation of sale may summon any person. According to learned counsel the logic entrusting functions of drawing up proclamation by the court is that the proclamation is the essential and the basic documents on which the structure of the subsequent auction/sale is to be built upon. Learned counsel referred to Section 4 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which provides that the provisions of the Ordinance shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. He further referred to Section 19 (2) of the Ordinance  2001 which provides that decree of banking court shall be executed in accordance with C.P.C or in such manner as Banking Court may at the request of Decree Holder consider appropriate including recovery as arrears of land revenue. In this regard he argued that though Banking Court may exercise its discretion but once the law/procedure has been so chosen by the court then it is bound to follow it and cannot divert from one law to another in the same proceedings and since in this case the court followed the procedure provided in CPC and also issued proclamation of sale in the same manner then no departure can be taken place and the basic and mandatory provisions of law while issuing proclamation should have been followed as provided under various Rules of Order  21 CPC. In support of his arguments learned counsel referred to following case law:

 

(1)    2011 CLD 280 (Muhammad Amin alias Jaloo v. Judge Banking Court and others).  Plea raised by judgment-debtor was that valuable property was auctioned without fixing any reserve price by Executing Court. Validity. Provisions of Order XXI Rule 66 CPC were mandatory in nature and without fulfilling basic requirements, if some auction had taken place that would not be considered to have been lawfully made. Intention of law was to fix reserve price in proclamation to safeguard  rights of judgment debtor. Order passed by executing court was set-aside and auction proceedings were declared illegal and without lawful authority.

 

(2)    2003 CLD 1693 (Muhammad Hassan v. M/s. Muslim Commercial Bank Ltd. & others). The provisions of Rule 66, Order XXI, CPC are mandatory in nature and without setting  and causing a proclamation of intended sale in terms of said Rule by the Court itself, no sale shall be considered to have been lawfully made. The word ‘cause’ appearing in Rule 66, Order XXI CPC requires a specific order of Court, which produces the effect of drawing the proclamation envisaging the terms and conditions of sale. Thus, includes the settlement of conditions etc. by Court itself or to approve those filed by parties after hearing them.

 

(3) PLD 2009 552 (Khursheed Begum & others v. Inam-ur-Rehman Khan & others).  Court auctioneer, without any authority, rather against the provision of Order XXI, Rule 85, CPC of his own had fixed 30 days’ time for the payment of the balance consideration, which otherwise was required to be paid in terms of Order XXI Rule 85, CPC within a period of 15 days and court had overlooked the same without any logical reason. Sale was set aside on the ground of material irregularity and fraud in this regard. Role of the Court auctioneer had been highlighted, which was not above board. Court auctioneer was held to be bound to return the entire fee which he had received, within a period of one month.

 

(4) PLD 2010 S.C. 993 (Muhammad Attique v. Jami Limited & others). Executing Court, under Section 19(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, has to choose mode of execution in accordance with the provisions of CPC or any other law for the time being in force or in such manner as the Banking Court may at the request of decree holder consider appropriate. Once the Executing Court has chosen the mode provided in CPC, then it cannot be permitted to divert that mode at subsequent stage without conscious application of mind.

 

(5) PLD 1993 Lahore 706 [Brig. (rtd.) Mazhar-ul-Haq & another v. Muslim Commercial Bank Ltd., Islamabad]. Under Order XXI Rule 66, CPC, it was duty of the Court to cause to be made a proclamation of sale. Such proclamation had to be drawn after notice to the judgment debtor. Further, the proclamation should include everything considered a material by the Court, to enable a purchaser to know the nature and value of the property.

 

(6) 1994 1 S.C.C 131 (Desh Bandhu Gupta v. N.I. Anand & Rajinder Singh). The proclamation should include the estimate if any, given by either judgment debtor or decree-holder or both the parties, service of notice on judgment debtor under Order 21 Rule 66(2), unless waived by appearance or remained ex parte, is a fundamental step in the procedure of the court in execution. Judgment debtor should have an opportunity to give his estimate of property. In Gajandhar Prasad v. Babu Bhakta Ratan, court after noticing the conflict of judicial opinion among the High Courts, held that a review of the authorities as well as the amendments to Rule 66(2)(e) make it abundantly clear that the court, when stating the estimated value of the property to be sold, must not accept merely the ipse dixit of one side.

 

(7) 2007 YLR 126 (Mirza Munawar Baig & others v. Bank Alfalah Limited & others). No notice was issued to the judgment-debtors before the terms of sale were drawn up. The absence of the mandatory notice to the judgment-debtors under Order XXI, Rule 66 CPC is by itself, sufficient for allowing this appeal and setting aside the Court auction. If any authority is required for this conclusion, reference may be made to the case titled Muhammad Hassan v. Messrs. Muslim Commercial Bank Ltd. through Branch Manager and 3 others 2003 CLD 1693.

 

(8) 2003 CLD 1318 (M/s.Ripple Jewelers (Pvt.) Ltd. v. First Woman Bank ). Sale by public auction without issuing notices to judgment-debtors. Before calling upon Court Auctioneer to conduct auction, duty of Executing Court was to have satisfied itself that its order had been implemented and mandatory notice had been issued to judgment-debtors. Such contravention of provisions of Order XXI, Rule 66 CPC by Executing Court had vitiated entire proceedings including sale, which was nullity in eyes of law.

 

(9) 2011 CLD 1683 (M/s.Spinghar Textile Mills Ltd. & another  v. United Bank Ltd. & another). Rule 66 would reveal that it is not mandatory for the Banking Judge to state its own value of the property being auctioned in the proclamation,  which is more common referred to as the “reserve price”. However, it is mandatory that the value so determined by the parties, i.e. the decree holder and the judgment debtor, is to be stated in the proclamation, as the word “shall” has been stated therein. The rationale behind stating the said value in the proclamation is to ensure full disclosure to the prospective bidders.

 

(10) 2000 CLC 863 (Mrs.Aziz Fatima & others v. Mrs.Rehana Chughtai & others). Contention by the appellants was that as no reserve price was fixed in the proclamation by the Executing Court, auction proceedings were illegal and were liable to be set aside. Validity. Such omission had rendered the proclamation to be illegal. Even if there was no objection from either side, still it was the duty of the Executing Court to conduct the auction in accordance with law, which had not been done.

 

(11) 2001 CLC 126 (Mrs.Shahida Saleem & another v. Habib Credit & Exchange Bank Ltd. & others). Neither requisite notice was issued to the judgment-debtor nor the reserve price of the property was settled. Where the property was sold in complete disregard of rules and in questionable circumstances, even suo motu action for setting aside the sale would be justified. High Court directed for re-auction of mortgaged property strictly under the rules.

 

(12) 2011 SCMR 1675 (Mst.Nadia Malik  v. M/s.Makki Chemical Industries Pvt. Ltd.). Under Rules 84 and 85 an auction purchaser shall deposit 25% of the auction amount immediately on being declared as highest bidder and the balance amount of 75% shall be deposited within 15 days of the auction. In the present case, the sale was confirmed on 29.04.2002 on which date the appellant had deposited 25% of the auction amount. The default in deposit of the balance amount was violative of the mandatory conditions provided under the proclamation, which language was barrowed from the mandatory provisions of the Order XXI of the CPC. Failure to deposit the balance amount of 75% of auction money within 15 days by the appellant renders the sale/auction proceedings nullity.

 

(13) AIR 1996 S.C 2781 (Balram v. Ilam Singh and others). The requirement of Rule 85 of Order 21 that full amount of purchase money must be paid by the purchaser at execution sale within 15 days from the date of sale, is mandatory. Failure to deposit full sale price as per rule 85 cannot be averted on plea that the shortfall in the deposit was occasioned by a mistake of the Court in the calculation of the amount.

 

(14)  AIR 1954 S.C. 349 (Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed Sayed Mahmad). The provisions of Order 21 Rules 84, 85 and 86 requiring the deposit of 25 per cent of the purchase money immediately, on the person being declared as a purchaser and balance within 15 days of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity.

 

(15)  AIR 1926 (Madras) 755 (Appu v.  Achuta Menon and others). It is for the court to settle the proclamation of sale and it could not delegate that power to the Commissioner appointed by it. Order 21 Rule 66 directs that when any property is ordered to be sold by public auction in execution of a decree the Court shall cause a proclamation of the intended sale to be made in the language of such Court and that such proclamation shall be drawn up after notice to the decree-holder and the judgment-debtor and shall state the time and place of sale and specify as fairly and accurately as possible the property to be sold and a number of other things. It was further held that if the proclamation was not settled by the Court the sale would be invalid.

 

(16)  PLD 2010 S.C. 38 (Shahid Ali v. Mrs. Aziz Fatima and others). A review of the authorities, cited at the Bar as well as study of the relevant provisions including Rule 66 of Order XXI C.P.C, it is amply clear that in a suit when the situation to sell the property arises, the court, as a rule, must ask the parties concerned to state before it estimated price of the property which in their opinion is likely to be fetched and although it is not essential for a Court to give its own estimate in the order but in drawing publication, having regard to the express provision of Rule 66 of Order XXI C.P.C. the court while passing an order must take into consideration all the material facts, which are necessary for a purchaser to know in forming an opinion regarding valuation of the property.

 

(17)  2012 CLC 498 (Muhammad Ahmed Sheikh v.  J.S. Bank Limited). Cognizance of a matter taken by court under one procedure. Effect. Proceedings once commenced under such procedure would be finalized thereunder. No pick and choose authority would be available in law to court in law.

 

 

6. Mr.Yawar Farooqui, learned counsel for the Decree Holder argued that both the applications are misconceived. Though judgment debtors have filed appeal in this court but no stay is operating against the judgment and decree.  So far as the Suit No.B-77 of 2008 is concerned the learned counsel argued that mere pendency of the appeal and above suit has no adverse effect on this execution application.  He further argued that at the time of issuance of proclamation of sale all formalities as required to be fulfilled were followed by the Official Assignee. There is no violation of Rules 65, 66 and 85 of Order 21 CPC. It was further averred that the proclamation is lawful and the notice was also issued by the Official Assignee. It was further contended that the Judgment Debtors in their application have failed to disclose any irregularity or illegality in the proclamation of sale. Learned counsel further argued that since execution application was filed within one year of passing decree, therefore, this court rightly dispensed with issuance of notice and rightly allowed the application as prayed. Learned counsel further pointed out an order dated 1.6.2012 which shows that an urgent motion was moved with the prayer that CMA No.299/2012 be fixed in court. Learned counsel further referred to CMA No.299/2012 which was moved by the decree holder for attachment and implementation of the Order dated 1.2.2012 be carried out by the Official Assignee. Learned Single Judge of this court ordered that let this execution application also be placed before Official Assignee for execution proceedings to be carried out in the same manner as earlier done in the other execution. In the supporting affidavit of CMA No.299/2012 the decree holder stated that this court already ordered the Official Assignee in the case of Soneri Bank Ltd. to value the assets of the Judgment Debtors, which was carried out by the Official Assignee, therefore, the sale of leased machinery of the decree holder be effected through the office of the Official Assignee to fulfill the decretal amount and remaining decretal amount if any may be recovered from sale consideration of other assets of the judgment debtors  which have a pari passu charge. Learned counsel further argued that though the appeal is pending but no decretal amount was deposited in the court so there is no stay. Learned counsel also referred to  Section 19 (2) of the Financial Institutions (Recovery of Finances) Ordinance 2001 and argued that in view of this express provision, the decree holder had already availed an option which is clearly reflecting from the order dated 1.6.2012 in which on the request of the decree holder this court ordered that let this execution be placed before Official Assignee for execution proceedings to be carried out in the same manner as earlier in the other execution application. In support of his arguments he relied upon the following case law:-

 

(1) 2012 CLC 545 (Feroz Abdul Karim v. Muslim Commercial Bank Ltd.). It is settled position in law that where special provision is applicable, general provision do not apply (see 1993 MLD 1550, 2002 YLR 3712 and PLD 2008 Karachi 25).

 

(2) 2012 SCMR 669 (Capt.(rtd) Nayyar Islam v. Judge, Accountability Court No.III). It is by now a settled principle of interpretation of statutes that the provisions of special law exclude the application of general law in the context in which the former provision has been enacted.

 

(3)  1998 PTD 2809 [Commissioner of Income-Tax v. D.P.S.(I.) (Pvt.) Ltd.]. When the intention of the legislator is very clear and, when there is no doubt in gathering such an intention by a clear and unambiguous reading of the provisions of law, importing extraneous considerations or giving reasons which were not wholly germane to the points involved is not permissible under the law.

 

(4) 2012 YLR 805 (Ibrar Hussain v. State). Standard of proofing the case under special law is different, because Special Law is read as a whole while comparing with general law, as Special Law excludes the provisions of general law.

 

7.     Learned Official Assignee has also filed his reply in which he stated that the execution application was allowed by this court and on 1.6.2012, the execution application was forwarded to him for further proceedings. He issued notice to the Decree Holder and the Judgment Debtors for making compliance of the order of this court. The letter sent to the Judgment Debtor Nos.1 to 3 returned unserved with report that they left their addresses two years back. It was further stated in the reply that the Executive Vice President of Decree Holder appeared and submitted draft of sale notice and also requested in writing that the same notice may be published in newspapers without mentioning reserve price hence, Official Assignee invited offer on “as is where is basis”  for the sale of mortgaged and hypothecated properties. The Official Assignee further submits in his reply that the Decree Holder and Judgment Debtors may be directed to appear before him for drawing up sale proclamation for its re-advertisement in the newspaper.

 

 

8. Heard the arguments. Since the matter directly pertains to the execution of decree and it is also a fact that appeal is pending but no stay order is operating and the objections filed by the judgment debtor through instant application may not be considered objections to the execution application as such, but they have only questioned the auction proceedings initiated in view of public notice issued by the learned Official Assignee, therefore, in order to decide the controversy, it would be most expedient and appropriate to first discuss the applicability and implication of Section 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001, which is related to the execution of decree and sale with or without intervention of the Banking Court. This provision stipulates that upon pronouncement of the judgment and decree the suit shall automatically stand converted into the execution proceedings and sub-section (2) makes it clear that the decree shall be executed in accordance with the provisions of CPC or other law for the time being in force or in such a manner as the Banking Court may at the request of decree holder consider appropriate including the recovery as arrears of land revenue.

 

9.     There is a distinction between sub-section (2) and sub- section (3) of Section 19. In case of mortgage, pledge or hypothecated property, sub-section (3)  authorizes the financial institutions to sell or cause the same to  be sold with or without the intervention of the Banking Court either by public auction or by inviting seal tenders and appropriate the proceeds towards total or partial satisfaction of the decree and the decree passed by Banking Court shall constitute and confer sufficient power and authority for the financial institutions to sell or cause the sale of mortgaged, pledged or hypothecated property together with transfer  of marketable title and no further order of the Banking Court shall be required for this purpose. It is clear from sub-section (2) of  Section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 that execution proceedings before the Banking Court normally commenced under the provisions of CPC but at the same time, the decree holder has been given a right to request the Banking Court for execution of decree in such a manner as it considers appropriate. While exercising its civil jurisdiction the Banking Court has to follow the procedure laid down in  regard to the suits in the CPC except to the extent any contrary  provision is made in the special enactment. Executing court is well within its right to adopt any mode for execution of decree and it has discretion to execute the decree either in view of CPC or in any other mode, which the court may deem fit. On one hand it has the function of executing court to execute the decree, but on the other hand it is also the duty of court to protect the rights of judgment debtor which should not be jeopardized. For the execution of decree appropriate price should be fetched through sale of properties and properties of judgment debtor should not be sold at throwaway price.

 

10.   This question is still open to debate as to which option the decree holder has exercised keeping in view the provision of Section 19(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001. There is no specific prayer or request of the decree holder is available on record which may suffice to demonstrate in which manner the decree holder prayed for the execution. Though in paragraph 12 of the execution application the decree holder required the assistance of the court for attachment and sale of the mortgaged properties of the judgment debtor and the hypothecated properties mentioned in the execution application but there is nothing available on record that any particular mode of assistance was opted other than the procedure mentioned in the CPC. On 1.2.2012 this court observed that the execution application has been filed within one year of passing the decree therefore, the notice was dispensed with and the execution application was allowed and the order dated 1.6.2012 shows that on urgent motion the execution application was placed before learned Single Judge and the learned counsel for the decree holder argued that another execution application is pending before the Official Assignee, therefore, this execution application be also placed before the Official Assignee for execution proceeding to be carried out in the same manner as earlier in the other execution. Neither this order reflects in which mode and manner the earlier execution application was being carried out nor it is mentioned that the Official Assignee would execute the decree in any other mode not provided in CPC nor the counsel for the decree holder argued before the court to point out that execution application referred to in the order is being proceeded in any other mode than the provisions of CPC which was allowed by the Court to proceed at the request of decree holder which was considered appropriate. On the contrary, the Official Assignee in his reply stated that he issued notice to the decree holder and the judgment debtor, but the letter sent to the judgment debtor Nos.1 to 3 was returned unserved. Representative of decree holder appeared and submitted draft of sale notice without mentioning the reserve price. Official Assignee further submitted that the decree holder and judgment debtor may be directed to appear before him for drawing up sale proclamation for its re-advertisement in the newspaper, which shows that he opted the procedure provided in CPC for auctioning the properties. Once the provision of  Order 21 CPC are opted and invoked then there is no question or lawful justification to depart or decamp from the express provisions of CPC relating to the auction proceedings, and issuance of public notice of sale through newspapers. One more important aspect which is also relevant to point out that the decree holder in this execution application filed CMA No.299/2012 for attachment of sale of judgment debtors’ properties and in the supporting affidavit he referred to decree of the Suit No.B-59 of 2008. It was further stated that Official Assignee has carried out the valuation of assets of the judgment debtor and it is imperative that the leased machinery of the decree holder be separated and sale may be effected through Official Assignee and remaining decretal amount may be recovered from the sale consideration of other assets of the judgment debtors, which have pari passu charge. In fact this application was disposed of vide order dated 1.6.2012, though it was not fixed for orders on that date. Even this application does not show that the decree holder opted any other procedure or mode or manner of execution except that the property be sold out through Official Assignee. Learned counsel for the judgment debtor invited my attention to various provisions of Order 21 CPC as well as Sindh Chief Court Rules, which are obviously related to the auction, requirement of public notice of auction, drawing up the proclamation of sale and powers and jurisdiction of Official Assignee.

 

11.   Order 21 Rule 64 CPC provides that any court executing the decree may order that any property attached by it as may seem necessary to satisfy the decree shall be sold and proceeds of sale shall be paid to the party entitled under the decree. While Rule 65 of the same Order provides that every sale in execution of decree shall be conducted  by an officer of the court or by such other person as the court may appoint shall be made by public auction in the manner prescribed. Rule 66 of Order 21 on which much emphasis was made by the learned counsel for the judgment debtor pertains to proclamation of sale by public auction, which is reproduced as under:-

 

“66.  Proclamation of sales by public auction.—(1) Where any property is ordered to be sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended sale to be made in the language of such Court.

 

(2)    Such proclamation shall be drawn up after notice to the decree holder and the judgment debtor and shall state the time and place of sale, and specify as fairly and accurately as possible.

 

(a)         the property to be sold;

 

(b)        the revenue assessed upon the estate or part of the estate, where the property to be sold  is an interest in an estate or in part of an estate paying revenue to the Government.

 

 

(c)         any encumbrance to which the property is liable;

 

(d)    the amount for the recovery of which the sale is ordered; and

 

(e)    every other thing which the Court considers material for a purchaser to know in order to judge the nature and value of the property.

 

 

(3) Every application for an order for sale under this rule shall be  accompanied by a statement signed and verified in the manner hereinbefore prescribed for the signing and verification of pleadings and containing, so far as they are known to or can be ascertained by the person making the verification, the matters required by sub-rule (2) to be specified in the proclamation.

 

(4) For the purpose of ascertaining the matters to be specified in the proclamation, the Court may summon any person whom it thinks necessary to summon and may examine him in respect to any such matters and require him to produce any document in his possession or power relating thereto”.

 

 

After proclamation of sale and property auction, the onward procedure is provided under Rule 84 which envisages that on every sale of property the person declared to be the purchaser shall pay immediately after such declaration a deposit of 25% and the amount of his purchase money to the person conducting the sale and in default of such deposit the property shall be re-sold. While Rule 85 stipulates that full amount of purchase money payable shall be paid by the purchaser into court before court closes on the 15th day from the sale of property. Rule 14 of Sindh Chief Court Rules (O.S) is related to the disposal of applications by Registrar (O.S). In sub-rule 28, the Registrar (O.S) has power to dispose of application for the issue of proclamation of sale and for direction as to the publication but under Order 21 Rule 66 for the public auction in execution of decree, the court shall cause a proclamation of the intended sale to be made in the language of such court.

 

12.   Rule 339 of Sindh Chief Court Rules (O.S) articulates that whenever the sale of land or of a house or houses or immoveable property is ordered, the Nazir shall with the permission of the court advertise such sale in a newspaper as may be ordered by the Registrar (O.S).

 

13. Rule 689 to 718 of Sindh Chief Court Rules (O.S) enunciate and explicate the function and powers of Official Assignee. The purpose of referring aforesaid rules is to show that Official Assignee has no powers to draw up a proclamation or even no specific power is mentioned under which he can auction the property but in my view the court can appoint him for auction and sale of property subject to Rule 65 of the Order 21 CPC.

 

14.   The learned counsel for the judgment debtor referred to plethora of legal precedents  and after minute examination of the law cited at bar, the following propositions of law are deducible:-

 

(a) Once the Executing Court has chosen the mode provided in CPC, then it cannot be permitted to divert that mode at subsequent stage without conscious application of mind.

 

(b) Cognizance of a matter taken by court under one procedure. Proceedings once commenced under such procedure would be finalized thereunder. No pick and choose authority would be available in law to court in law.

 

(c) Provisions of Order XXI Rule 66 CPC are mandatory in nature and without fulfilling basic requirements, if auction is taken place it would not be considered to have been lawfully made.

 

(d) The absence of the mandatory notice to the judgment-debtors under Order XXI, Rule 66 CPC is by itself, sufficient for setting aside the Court auction. Before calling upon Court Auctioneer to conduct auction, duty of Executing Court was to have satisfied itself that mandatory notice had been issued to judgment-debtors. Such contravention of provisions of Order XXI, Rule 66 CPC by Executing Court had vitiated entire proceedings including sale, which was nullity in eyes of law.

 

(e) The word ‘cause’ appearing in Rule 66, Order XXI CPC requires a specific order of Court, which produces the effect of drawing the proclamation envisaging the terms and conditions of sale. Thus, includes the settlement of conditions etc. by Court itself or to approve those filed by parties after hearing them. It is duty of the Court to cause to be made a proclamation of sale. Such proclamation must be drawn after notice to the judgment debtor.

 

(f) Intention of law was to fix reserve price in proclamation to safeguard  rights of judgment debtor. Court auctioneer, without any authority, rather against the provision of Order XXI, Rule 85, CPC fixed 30 days’ time for the payment of the balance consideration, which otherwise was required to be paid in terms of Order XXI Rule 85, CPC within a period of 15 days. No reserve price of the property was settled. Where the property was sold in complete disregard of rules and in questionable circumstances, even suo motu action for setting aside the sale would be justified.

 

(g) The proclamation should include the estimate if any, given by either judgment debtor or decree-holder or both the parties.

 

(h) It is mandatory that the value so determined by the parties, i.e. the decree holder and the judgment debtor, is to be stated in the proclamation, as the word “shall” has been stated therein.       The rationale behind stating the said value in the proclamation is to ensure full disclosure to the prospective bidders.

 

(i) No reserve price was fixed in the proclamation by the Executing Court, auction proceedings were illegal and were liable to be set aside. Such omission had rendered the proclamation to be illegal.

 

(j) Under Rule 84 of Order 21 CPC, an auction purchaser shall deposit 25% of the auction amount immediately on being declared as highest bidder. While the requirement of Rule 85 of Order 21 that full amount of purchase money must be paid by the purchaser within 15 days from the date of sale, is mandatory. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity.

 

 

15.   After minutely examining the facts and circumstances of the case it is clear that this court though referred to this execution application for execution to the Official Assignee in the same manner in which another execution application of Soneri Bank was being executed against the same judgment debtor but the fact remains that for the purposes of execution of decree, the Official Assignee has adopted the procedure provided under CPC for executing the decree. There is nothing on record to show that the decree holder had ever approached this court to execute the decree in the manner other than the procedure provided under the CPC. For all intents and purposes, the procedure provided under Order 21 CPC for the proclamation of sale and or drawing up proclamation and other terms and conditions required to be incorporated in the proclamation of sale are applicable. It is also clear beyond any shadow of doubt that the Official Assignee failed to incorporate material particulars in the proclamation of sale of auction and it is an admitted position that the representative of the decree holder submitted a draft of proclamation of sale to the Official Assignee. Keeping in view the guiding principles which are deducible and expounded in the aforesaid dictums, the proclamation of sale is not sustainable unless all necessary ingredients and particulars are incorporated. Under Rule 65 of Order 21 CPC it is clearly mentioned that every sale in execution of decree shall be conducted by an officer of the court or by such other person as the court may appoint in his behalf. There is no hard and fast rule that the court may not appoint Official Assignee for the purpose of conducting sale. Even otherwise it does not cause any hurt or injury to the judgment debtors if this court has directed the Official Assignee to execute the decree.

 

16. By all means, the crucial point and or burning question is whether the Official Assignee while exercising power of court auctioneer has complied with necessary provisions and procedure envisaged in C.P.C or not. To all intents and purposes, at the time of drawing up the proclamation of sale, Order 21 Rule 66, 84 and 85 should have been kept in mind. In the present form of proclamation neither it was drawn up after notice to the judgment debtors nor are any encumbrances mentioned to which the property is liable nor any reserve price is mentioned. It is an admitted fact that the draft of proclamation was submitted by the representative of decree holder and he also requested to the Official Assignee not to mention any reserve price and same draft of proclamation was issued for publication.

 

17.   The bottom line of the discussion is that the Official Assignee has not drawn up proclamation of sale in accordance with Rules 66, 84 and 85 of Order 21 CPC which vitiated the auction proceedings and rendered the proclamation of sale illegal. Learned counsel for the decree holder referred to the case law in which the court held that the provisions of special law exclude the application of general law. There is no cavil to this well settled proposition of law, but I would like to reiterate that nothing is demonstrated from the barebones of the matter that the decree holder ever requested this court to opt any other mode and method for execution other than CPC and merely making a request that Official Assignee be allowed to execute the decree in the same manner in which he is executing another execution application does not suffice to show that the Official Assignee has adopted any other method outside and beyond the purview of CPC.

 

18.   The whys and whereforces lead me to the conclusion that the auction proceedings are not sustainable taking into consideration the impugned proclamation of sale. However in order to accelerate and expedite the auction proceedings, the learned Official Assignee is directed to set down fresh draft of proclamation of sale in terms of Order 21 Rule 66, 84 and 85 C.P.C. The decree holder and judgment debtors are already in attendance hence their representatives are directed to appear before the Official Assignee within one week for setting down the terms and conditions of proclamation of sale without any further notice and the Official Assignee shall submit the draft of proclamation of sale within ten days in court, so that this court may cause the proclamation and envisage the terms and conditions of the intended sale. Both the applications are disposed of in the above terms.

 

 

Karachi:-                                                         Judge

Dated.2.4.2013