Order Sheet

IN THE HIGH COURT OF SINDH KARACHI

First Appeal No. 08 of 2011

_______________________________________________________________

Date Order with signature of Judge

Present :

1. Mr. Justice Nadeem Akhtar

2. Mr. Justice Aftab Ahmed Gorar

1. For re-hearing :

2. For hearing of Misc. No.141/2011 :

Dates of hearing : 13.09.2013, 17.09.2013 & 27.09.2013.

Appellant : S.M.E. Leasing Limited, through

Mr. Abdul Shakoor Advocate.

Respondent No.1 : M/S Hilton Pakistan (Pvt.) Ltd., called absent.

Respondent No.2 : Muhammad Saleem Rafi, called absent.

Respondent No.3 : Muhammad Arshad, called absent.

Respondent No.4 : Mrs. Iqbal Mand, called absent.

Respondent No.5 : Sabir Ali Qureshi, through Mr. Khaleeq

Ahmed Advocate.

……………

O R D E R

NADEEM AKHTAR, J. – This First Appeal has been filed by the appellant under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance XLVI of 2001, against the order passed on 24.12.2010 by the learned Banking Court No.V, Karachi, in Execution Application No.16/2007, whereby the application filed by the objector / respondent No.5 under Order XXI Rule 58 CPC was allowed, and the earlier order of attachment of immovable property was recalled.

2. The relevant facts of the case are that the appellant, which is a financial institution, filed Suit No.353/2006 against the first four respondents for recovery of Rs.3,755,178/-, which was decreed in the sum of Rs.3,230,602/- with costs vide judgment and decree dated 26.03.2007 and 03.04.2007, respectively. The appellant filed Execution Application No.16/2007 for execution of the said decree. As the judgment debtors did not oppose the Execution Application, writ of attachment and sale proclamation were issued in respect of the purportedly mortgaged immovable property ; namely, Plot No.C-9, Block-12, KDA Scheme 16, F.B. Area, Karachi, (‘the said property’). Thereafter, the said property was ordered to be sold by way of auction through the Nazir of the executing court. Before the said property could be sold, an objector, the present respondent No.5, claiming to be the owner of the said property, filed an application before the executing court under Order XXI Rule 58 CPC, praying that his claim be investigated and the order of attachment of the said property be vacated.

3. In his aforesaid application, it was claimed by respondent No.5 that he was the owner of the said property by virtue of a registered sale deed executed in his favour by respondent No.4 on 27.02.1999, and registered in his favour on 04.03.1999 by the Sub-Registrar concerned. It was stated by him in his said application that, before purchasing the said property, he invited objections through public notice ; in pursuance of the registered sale deed in his favour, the said property was mutated in his name by KDA ; all the original title documents of the said property were in his possession, and the possession of the said property was also with him ; he never applied for or obtained any permission to create mortgage, nor did he mortgage the said property with the appellant ; and, he came to know about the decree and the order of attachment when the writ of attachment was pasted by the bailiff at the said property.

4. Counter affidavit was filed by the appellant in reply to the aforesaid application filed by respondent No.5, wherein the assertions and claim made by respondent No.5 were denied. It was asserted by the appellant that respondent No.4 was the real owner of the said property ; she created an equitable mortgage in respect thereof in favour of the appellant by executing a memorandum of deposit of title deeds ; she deposited all the original title documents with the appellant, which were in possession of the appellant ; and, the alleged sale in favour of respondent No.5 was bogus, as it was effected through a general power of attorney having forged signature of respondent No.4. On the basis of the above assertions, the claim and ownership of respondent No.5 was vehemently denied.

5. Respondent No.5 examined himself in support of his claim / objections, and produced the originals of the indenture of lease, registered sale deed, mutation order, registered general power of attorney, and copy of the public notice. He was cross examined by the appellant’s learned counsel, and in his cross-examination, he reiterated his claim / objections. The appellant examined his authorized officer to oppose the claim / objections of respondent No.5, who produced the originals of allotment order, indenture of sub-lease, irrevocable general power of attorney, possession order, acknowledgement of possession, letter of lien, memorandum of deposit of title deeds, and search certificate. The appellant’s witness was cross examined by the learned counsel for respondent No.5. On respondent No.5’s application, the Sub-Registrar concerned was summoned with the consent of the appellant. The Sub-Registrar produced from his record the originals of the indenture of sub-lease in respect of the said property, and the sale deed executed in respect thereof in favour of respondent No.5 by the respondent No.4’s attorney.

6. After examining the evidence on record and hearing the learned counsel for the parties, it was observed by the learned executing court that the Sub-Registrar had verified the original indenture of sub-lease, and the registration of sale deed in favour of respondent No.5 produced by respondent No.5. On the basis of the above observation, it was held by the learned executing court that respondent No.5 had proved himself to be the bonafide purchaser of the said property.

7. Learned counsel for the appellant submitted that the fact that all the original title documents were in possession of the appellant along with the memorandum of deposit of title deeds duly executed by respondent No.4 / mortgagor / owner, was sufficient to prove that an equitable mortgage in respect of the said property was created in favour of the appellant by respondent No.4 by depositing the said original title documents. He further submitted that the purported signatures of respondent No.4 on the alleged general power of attorney produced by respondent No.5, were forged and fabricated. He contended that as the alleged sale deed was admittedly executed in favour of respondent No.5 on the basis of a forged and fabricated power of attorney, no right, title or interest in the said property passed in favour of respondent No.5. It was urged that since there was a decree in favour of the appellant on the basis of a subsisting memorandum of deposit of title deeds, the application filed by respondent No.5 ought to have been dismissed.

8. In his reply, the learned counsel for respondent No.5 submitted that respondent No.5 had produced all the title documents in original, and the general power of attorney as well as the sale deed produced by him, were registered documents. He pointed out that the general power of attorney executed by respondent No.4 was executed and registered on 17.04.1996, and the sale deed executed by the respondent No.4’s attorney in favour of respondent No.5 was executed on 27.02.1999 and was registered on 04.03.1999. He submitted that both the said documents, being registered documents, were to be presumed in law as genuine. He further pointed out that till this date, both the said registered documents are subsisting with full force, as no proceedings for their cancellation have been initiated. The learned counsel submitted that a simple memorandum of deposit of title deeds or an unregistered mortgage, cannot prevail over the registered document / sale deed in favour of respondent No.5. He strongly supported the impugned order, and prayed for the dismissal of this appeal.

9. After hearing the learned counsel at length on 13.09.2013, we had directed the appellant and respondent No.5 to produce their respective documents in original before this Court on 17.09.2013. Accordingly, both the parties produced their respective original documents before us. We were surprised to note that the original indenture of lease in respect of the said property, was produced by both the parties. Other documents were also produced by them, and respondent No.5 produced the registered power of attorney executed by respondent No.4 as well as the registered sale deed executed by her attorney in favour of respondent No.5. A perusal of the impugned order shows that, during investigation of the claim / objections of respondent No.5 when the Sub-Registrar was being examined, it did not come on record through him as to which of the indentures of lease produced by both the parties, was genuine, and whether or not the purported general power of attorney executed by respondent No.4, was genuine and registered. An observation was made in the impugned order by the learned executing court that the power of attorney produced by respondent No.5 as Exhibit 1/5 was irrevocable and was duly registered on 17.04.1996, but such fact did not come on record through the Sub-Registrar.

10. Since the entire controversy, and the title to the said property claimed by respondent No.5, depends upon the general power of attorney executed in respect of the said property by respondent No.4, we are of the opinion that the learned executing court ought to have examined the genuineness of not only the said power of attorney, but also that of the indentures of lease produced by both the parties. Without ascertaining the above, the claim / objections of respondent No.5 could not be decided completely and effectually.

11. Consequently, without going into the merits or demerits of the case, the impugned order is set aside, and the matter is remanded back to the learned executing court for deciding the application filed by respondent No.5 under Order XXI Rule 58 CPC afresh in the light of our above observations and findings. The parties shall be allowed full opportunity of adducing evidence and hearing in accordance with law. In case any document produced by any of the parties is found by the learned executing court to be suspicious, forged, fabricated, manipulated or bogus, the same may be impounded under Order XIII Rule 8 CPC. The application shall be decided by the learned executing court as expeditiously as possible, preferably within sixty (60) days. Till the disposal of the said application, status quo shall be maintained in respect of the said property.

Judge

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*First Appeal 08-2011.doc/Big Orders DB/Court Work/Desktop/ARK*