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Petitioner: Husnain Cotex Ltd. etc VS Respondent: Waseem Sana etc
Court Name: Lahore High Court Judge(s): Muhammad Farrukh Irfan Khan, Ch. Muhammad Iqbal Title: Husnain Cotex Ltd. etc vs Waseem Sana etc Case No.: Writ Petition No.22158 of 2009 Date of Judgment:2018-06-28 Reported As: 2018 LHC 1434, 2022 PCTLR 126 Result: Petition dismissed
Judgment CH. MUHAMMAD IQBAL, J:- Through this single judgment, we intend to decide the instant writ petition along with Writ Petition Nos. 13685/2016 & 13686/2016 as common questions of law and facts are involved therein. 2. In this writ petition, the petitioners have challenged the validity of judgment dated 10.07.2009 passed by the learned Cooperative Judge whereby petition of respondents No.1 & 2 was allowed and order dated 28.06.2007 passed by Chairman, Punjab Cooperatives Board for Liquidation, Lahore was set aside. 3. Brief facts of the case are that in the year 1989, Pakistan Development Cooperative Corporation (hereinafter called as Corporation) was registered under Cooperative Societies Act, 1925. That the said Cooperative Society purchased land measuring 1674 Kanals & 6-Marlas, situated in the Revenue Estate of Top Kalial & Kaliam Mughal, G.T Road, Rawat, Rawalpindi and launched a Housing Project under the name and style of Quaid City Housing Project (hereinafter called as Housing Society). Respondents No.1 to 7 along-wit h 300 other persons purchased plots in the said society in the year 1989 @ Rs.1,50,000/- per Kanal. The Corporation statedly spent more than 20 million rupees on the development of the scheme. The said Cooperative Society was taken over by Punjab Cooperatives Board for Liquidation as defunct Society under the Punjab Undesirable Cooperative Societies (Dissolution) Act, 1993 (hereinafter called as Act, 1993). The said land was put to auction by the Board and on 09.06.2003, first advertisement was issued in daily newspaper by fixing the reserve price of land @ Rs.71,000/- per Kanal and first date for bidding was fixed as 23.06.2003. Petitioner Husnain Cotex Ltd. remained the highest bidder and the sale was confirmed in its favour by the Punjab Cooperatives Board of Liquidation in its meeting held on 21.08.2003 but on the multiple complaints of the members of the society NAB probed the matter and on the intervention of the NAB authorities sale was set aside on 22.08.2003. The second advertisement was made in daily `Din' on 04.10.2003 and in Daily `Jang' on 05.10.2003 for auction of the said property by fixing 21.10.2003 as the date of auction. Petitioner again participated in auction proceedings and declared successful as the sole bidder. The Punjab Cooperatives Board for Liquidation approved the bid of Husnain Cotex Limited on 30.10.2003
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and approval letter was issued on 18.11.2003 with the assessment of total price of the land as Rs.127,224,000/- (127.224-Million) and terminus date for making payment of total auction price was conveyed to the petitioners as 17.12.2003. Respondents filed a complaint/petition No.7-C of 2004 before the learned Cooperative Judge challenging the auction of Quaid City Housing Project. The learned Cooperative Judge entertained the said complaint/petition and granted status quo order on 05.03.2004. Despite the injunctive order the Punjab Cooperatives Board for Liquidation during pendency of petition approved sale deed in favour of the petitioners on 21.12.2004. Finally, Cooperative pending Petition No.7-C of 2004 was also disposed of on 09.05.2005 by the Cooperative Judge who remanded the matter to the Chairman, Punjab Cooperatives Board for Liquidation for fresh decision. In post-remand proceedings, a proclamation was issued by PCBL in the Daily Newspaper Jang ? requiring the allottees of Quaid City Housing Project to appear on 18 August, 2005 and submit their respective objections in writing before the Chairm an. Accordingly , a petition was moved before Cooperative Board on 18.06.2005 by M/s Waseem Sana and others, the bonafide purchasers of plots in Quaid City Housing Project, Rawalpindi challenging the auction of land measuring 1674-Kanals in favour of petitioner No.1 owned by the Quaid City Housing Society . The Chairman, Punjab Cooperatives Board for Liquidation vide order dated 28.06.2007 again decided the matter in favour of the petitioners. The above said order of the Chairman was challenged by the respondents through petition No.156-C of 2007 titled Waseem Sana etc., vs Punjab Cooperatives Board for Liquidation before the learned Cooperative Judge who after adjudication set aside the auction as well as the order of the Chairman PCBL, vide judgment dated 10.07.2009. Hence, this writ petition. 4. Learned counsel for the petitioners submits that impugned judgment is contrar y to the facts and law; that the petitioners participated in the bidding process and being the highest bidder purchased the suit land; that there is no evidence that roads were already constru cted; that the suit land is Banjar and no development works were done within the scheme by the society/Quaid City Housing Project except only a single road leading from the scheme to the main road; that price Rs.76,000/- per kanal in October 2003 was a fair offer but the learned Cooperative Judge has not considered the aspect that the land is Banjar Qadeem and no development work was carried out at site; that land of the society is randomly scattered in multiple small parcels which is not beneficial for any other land developing company etc. and no department of the Government including the Army Foundation or NESPAK, were willing to purchase the said land; that the petitioners are bonafide auction purchasers of the land and the Chairman, Punjab Cooperative Board for Liquidation through well-reasoned order dismissed the prayer/objections of the respondents and rightly maintained the sale through auction in favour of the petitioners whereas the learned Cooperative Judge has not considered the document appended with the petition and without perusing the documentary evidence set aside the auction confirmed in favour of the petitioners, as such, judgment of the learned Cooperative Judge suffers from perversities and illegalities which is not sustainable in the eye of law. Further submits that non-fixing of reserve price is merely an immaterial irregularity which cannot be considered as a valid ground to nullify the sanctity of auction as such the impugned judgment dated 10.07.2009 is without jurisdiction, lawful authority and is violative of the legally vested rights of the petitioners. They prayed for setting aside of the same. Reliance was placed on the cases reported as 2008 CLD 449, 2005 CLD 169, 2004 SCMR 1956 , 2012 SCMR 455, 2007 SCMR 1054 , PLD 2016 SC 229,2010 CLC 1503 , 2007 SCMR 1813 & PLD 2006 SC 538. 5. Mr. Khalid Ishaque learned counsel appearing on behalf of the respondent/PCBL submitted that reserve price of the project intended to be auctioned was not fixed which lacuna invalidates bidding process; that non-mentioning of reserve price of land makes the determination of call deposit impossible as the bank draft is to be received on the basis of total price of the land; that against all other properties meant for auctio n through same advertisement reserve price was clearly mentioned; that in the absence of determination of the reserve price the auction process gathers no sanctity in the eyes of law which itself was based on malafide, collusiveness and fraud and any superstructure built on fraud has to crumble down. Reliance is placed on the cases reported as PLD 2014 SC 283, 2013 SCMR 1419 , PLD 2018 SC 91 , PLD 2013 Sindh 430 . Further submits that the petitioners did not deposit the remaining balance amount within the stipulated period. As per advertisement the bidding took place on 21.10.2003, Board approved the bid on 30.10.2003 and approval letterth
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issued on 18.11.2003, as such, 25% amount was to be deposited within seven days commencing from 18.11.2003 ending on 25.11.2003; that before public ation only Rs.2,67,89,700/- were deposited on 21.10.2003, which itself constituted default on the part of the petitioners and 25% amount was deposited till 17.12.2003 whereas the rest of amount was not deposited within the stipulated period of 7 days as such non-deposit of the rest of the amount frustrated the very bid/auction. Reliance was placed on the case reported as 2011 SCMR 1675 . Further submits that property of the society taken over by the PCBL was a public property and it was requirement of law that the same should be disposed of (sold) through transparent manner to fetch the maximum price of the land in complete exclusion of any collusiveness in order to avoid grant of any undue favour to the auction purchaser . Reliance is placed on the cases reported as 2012 SCMR 773, PLD 2010 SC 759, PLD 2010 Lhr 605, 2014 YLR 2571 , PLD 2010 Lhr 510. The learned counsel further submitted that no authenticity or fairness is attached to such auction proceedings which are illegal, tainted with malafide and result of element of cartelization and fraud. Moreover , the then Chairman PCBL (Brig.) Muhammad Farooq Maan and other officials have been found involved in multifarious transactions brimmed with corrupt practices/corruption, nepotism, favouritism and deliberated misuse of authority which also vitiate the sanctity of auction process. Reliance is placed on the cases reported as 2016 SCMR 670 and 2018 SCMR 76. Finally , he submitted that the learned Cooperative Judge has rightly passe d impugned judgment and no illegality has been committed, therefore, the instant writ petition deserves dismissal. 6. We have heard the arguments of the learned counsels for the parties at some length and gone through the record with their able assistance. 7. Admittedly, land measuring1674 Kanals & 6-Marlas, situated in the Revenue Estate of Top Kalial & Kaliam Mughal, G.T Road, Rawat, Rawalpindi was owned by Pakistan Development Cooperative Corporation. The said corporation planned and launched a Housing Project named as Quaid City. In response to advertisement for the above project respondents No.1 to 7 as well as approximately 300 persons became member of the society and they purchased the plots @ Rs.1,50,000/- Per Kanal in the year 1989 and the Cooperative Corporation constructed structural metallic road within the precinct of the scheme. In the year 2002, Pakistan Development Cooperative Corporation was taken over as defunct society by PCBL to protect and safeguard the interest/rights of the members. Section 7 of the Punjab Undesirable Co-operative Societies (Dissolution) Act, 1993 explains powers of Cooperative Board to take over the properties of the defunct society whereas under Section 7 (m), the Cooperative Board is placed under obligation to manage and develop the properties of the Undesirable Co- operative Society by formulating development schemes with or without the collaboration of the state development agencies and assess market value of the assets/properties etc. under Section 7 (n) before their final disposal. For ready reference, Section 7 (m) and (n) are reproduced as under:- (m) develop the properties of an Undesirable Co-operative Society and for that purpose to formulate and execute development schemes with or without the collaboration of the official development agencies and dispose of assets and properties; (n) assess the market value of properties and assets of an Undesirable Co-operative Society for their disposal. But unfortunately without resorting to above-provision of law the liquidation Board in a hasty manner floated a publication dated 09.06.2003 putting the land of defunct society for sale through auction by fixing reserve price as Rs.71,000/- per Kanal, auction was conducted, petitioner as the sole bidder was declared successful and ultimately the sale of the land was confirmed in favour of Husnain Cotex Limited. Against the above auction and sale members of the society agitated the matter at different foras, ultimately said sale was set aside on 22.08.2003 on Intervention of NAB whereafter PCBL floated a second advertisement in daily `Din' (on 04.10.2003) and in daily `Jang ' (on 05.10.2003) for auction of the suit land and bidding date was fixed as 21.10.20 03. Punjab Cooperatives Board for Liquidation again approved bid of Husnain Cotex on 30.10.2003 and also issued confirmation of auction/approval letter on 18.11.2003. Total price of auctioned land was calcu lated as Rs.127,224,000/- and terminus date for making total payment was fixed as 17.12.2003. One Waseem Sana along with other member filed Complaint No.7-C of 2004 before Hon?ble Cooperative Judge who accepted the petition on 09.05.2005 and by setting aside the auction remanded the matter to the Chairman PCBL for decision in accordance with law within a period of 60 days and also directed that till the completion of the proceedings/inquiry the status of the land in
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question shall not be changed either by the PCBL or aforementioned purchaser . For ready reference relevant part of the said order is reproduced as under:- 4. Since that exercise is not possible before this Court in these proceedings, I will remit the matter to the Chairman PCBL, for a decision in accordance with law at the earliest either by himself or through an employees of the Board having judicial experience not below the status of a District Judge as principal civil court of original jurisdiction. That exercise must be completed within 60 days from today irrespective of the fact that anyone or more of the parties do not cooperate or try to linger on the matter. Till the completion of the proceedings and announcement of order which must happen within the aforesaid period, the status of the land in question will not be changed either by the PCBL or the aforesaid purchaser. In pursuance of the above direction the then Chairman PCBL afforded hearing to parties and dismissed the applications of Waseem Sana etc.,/respondents vide order dated 28.06.2007 by maintaining the earlier order of approval/confirmation of the sale. For ready reference, relevant part of the said order is reproduced as under:- 22. Vide my findings in issue No.2, the auction of land by the Liquidation Board has been conducted in quite transparent manners, after the publication in the prominent newspapers of the country . None from the petitioners turned up at the occasion. Their plea that they had no notice of the auction, keeping in view the publication twice in the newspaper as discussed above, is devoid of any force. If they were interested they could have offered the price for the purchase of land collectively or otherwise individually. The auction was duly scrutinized by the NAB Authorities and was approved by the Liquidation Board comprising of responsible officers of the Provincial Government. So auction in question was conducted in quite lawful manner. Besides other reasons one of the reasons to maintain the auction is, that at present as many as 103 allottees from the Quaid City have already been compensated against their claims. This is also a fact that QCHP is subsidiary of the main Cooperative Society i.e. PDCCC and was raised with the funds of the members of the society. As such the transfer of management to its members is neither practicable under the law, nor is possible under the circumstances of the case. For the aforesaid reasons the applications of the petitioners merit dismissal and are dismissed accordingly. Against the said order , Petition No.156-C of 2007 was filed by Waseem Sana etc., and the Hon?ble Cooperative Judge set aside the auction as well as order dated 28.06.2007 and directed the Board to prepare the scheme for securing ends of justice by looking after the interests of the allottees and also ensure that the land be utilized for the same purpose. For ready reference, relevant portion of the said order is reproduced as under:- 13. As a result of the above discussion, impugned order dated 28.06.2007 is hereby set aside while allowing the application moved by the affectees/petitioners and the Board is directed to prepare the scheme for securing ends of justice by looking after the interests of the allottees and to ensure that the land is utilized for the same purpose. The allottees will be inducted in their portions of land and development work will be made at the site after collecting money from the allottees and while selling the assets of the said defunct society. The petitioners shall bear the expenses and also offer the Board for depositing the amount to carry on the scheme for establishment of the said society. Firstly board was under obligation to develop the properties of the Co-operative Society by formulating a development scheme with or without the collaboration of the officials of other land development agencies and after accomplishment of the object, adjust the members according to their entitlement upon the plots whereafter the left out assets/property was to be disposed of after assessing the market value but the Board has made no bonafide endeavor to formulate or execute any development scheme and in hasty manner proceeded to dispose of the properties owned by individuals of the public without following the relevant law and procedure and doled the property at previous auction price in deliberate inter se collusion with the petitioners. 8. The main controversy for adjudication and determination by this Court is as to whether the land of the society was auctioned as per law. In this regard Order 21 Rule 66 CPC furnished ample guidance. For ready reference, Order XXI Rule 66 CPC 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.
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(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 incumbrance 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. By conjunctive reading of Order 21 Rule 66 and Section 7 of the PCBL Act, 1993 it emerges out that the evaluation, assessment of price of the property under auction is mandatory in nature and its conspicuous mentioning in the proclamation is also a fundamental requirement of the law. A perusal of the very clipping of proclamation reveals that the reserve price of all the other properties is manifestly described therein expect the land in question which act of the PCBL rendered the entire process of auction doubtful, based on malafide, fraud, cartelization and collusiveness. The Board without carrying out due process, determination of market value of the land, obtaining a report about the development work conducted on the land and application of judicial mind accepted the offer even without determining the amount of call deposit. 9. As the core controversy is revolving around the legalities of the auction proceedings it would be quite appropriate to have microscopic examination of the entire process of auction. The most significant document in this regard is the very advertisement as well as the terms and conditions of the auction. The terms and conditions written in the advertisement are as under:- {{URDU TEXT}} Learned counsel for the petitioners argued that the provisions of CPC are not applicable in the proceedings of the Board. Suffice it to say that admittedly no specific parameters/process is mentioned in the Act of 1993 for conduct of auction but undeniably the hall mark principles of fairness, transparency, justness, equity and rationality are to be followed and the provisions of CPC are clearly based on above principles. Further, admittedly any provision of the Act specifically does not exclude the adherence of the principles of CPC and every authority or tribunal has inherent jurisdiction to perform its function in transparent manner adopting the principle of natural justice to eradicate the element of collusiveness and fraud as well as to protect the rights of the parties. Moreover, Civil Procedure Code is a Comprehensive Law on the subject and its provisions are made applicable to all the civil proceedings in the absence of any such provision in the statute itself. Reliance is placed on the cases reported as Muhammad Siddiq & Another Vs Zawar Hussain Abidi & Others (PLJ 1976 SC 493) & Syed Anjum Zafar & 8 Others Vs Syed Abbas Ali Shah & 6 Others (2000 SCMR 59). From bare perusal of the publication, it is revealed that reserve price of all the other properties has expressly been mentioned but surprisingly the reserve price of the land in question has deliberately neither been evaluated nor disclosed in the advertisement and this material deficiency is considered enough to undo the very process of auction. No reason has been advanced for non-mentioning the reserve price which leads to the irresistible conclusion of the existence of collusivity , unfair oblique aims of the auctioning agency as well as the petitioners, as such, the superstructure built on the said publication/auction proceedings will have to fall. Reliance is placed on the case of Rehmatullah & Others Vs. Saleh Khan & Others (2007 SCMR 729). Moreover , from the perusal of terms and conditions reproduced above, it was mandatory for the purchaser to deposit the bank draft or pay order of the
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call deposit, according to reserve price of the property but in this case as the reserve price was missing, on what basis the auction purchaser of his own could make assessment of the price of the property in order to deposit the bank draft/amount of call deposit. More over non-determining of the reserve price is a grave illegality which undermined the sanctity of the conducted auction which otherwise was based on malafides and fraud. Reliance is placed on the case reported as National Bank of Pakistan & 117 Others Vs SAF Textile Mills Ltd. & Another (PLD 2014 SC 283 ). For ready reference, relevant portion is reproduced as under:- "As a supplement to the aforesaid, it may be noted that no doubt, some rudimentary procedure for conducting such sales is provided in subsection(4) of section 15 of the Ordinance of 2001 but yet again the time honoured and well entrenched principle of fixation of a "reserve price" is conspicuous by its absence. It is now well settled law that even where the sale is conducted by the Court a "reserve price" is essential and the absence thereof may be fatal. In another case reported as Messrs Lanvin Traders, Karachi Vs Presiding Officer , Banking Court No.2, Karachi & Others (2013 SCMR 1419 ), it has been observed as under:- "Agreed that the expression "reserve price" does not find mention in the relevant rule but the words used in the rule pointedly hint thereto. A sale, in its absence, is apt to give walkover to maneuverers to fix any price of their choice. A sale thus effected is no sale in the eye of law especially when the number of bidders is meager, which, indeed is close to nill. A superstructure of sale built on such a shaky infrastructure cannot sustain itself. Neither the buttress of limitation nor the ministerial nature of the rule can prevent it from a fall". "Crux of what has been discussed above is that clever maneuvering forcing way for disposal of a property in execution of a decree for a paltry sum has to be guarded against and jealously so with all the care and circumspection so that it may go for a sum it deserves. The judgments rendered in case of "Messrs Majid and Sons and another -v. National Bank of Pakistan through Manager and another" "Messrs Magi Chemicals Industries v. Habib Bank" Appu alias Subramania Patter v. O. Achuta Menon and others" "Mir Wali Khan and another v. Manager Agricultural Development Bank of Pakistan Muzaffargarh and another" (supra)…
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