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Petitioner: UNITED BANK LIMITED VS Respondent: Messrs HYDERABAD ELECTRONIC INDUSTRIES LTD. and others
Court Name: Sindh High Court Judge(s): Aziz-ur-Rehman Title:UNITED BANK LIMITED vs Messrs HYDERABAD ELECTRONIC INDUSTRIES
LTD. and others Case No.: Ex. No, 47 of 1997 Date of Judgment: 2017-01-02 Reported As: 2017 CLD 1340 Result: Order accordingly Judgment ORDER AZIZ-UR-REHMAN, J.---By means of this application under section 151, C.P.C. [C.M.A. No,161/2016], the 'Auction Purchaser' viz. Mr. Muhammad Ikhlaq Memon is seeking direction to the Nazir of this Court for handing over possession of the 'subject properties' to the 'Auction Purchaser' and for to undertake also the exercise of mutation thereof in the name of 'Auction Purchaser'. In opposition of C.M.A. No,161 of 2016, one Mst. Maqbool Ghani wd/o Zakria Ghani [Judgment-debtor No,3] in her own capacity and as an attorney of others has filed a detailed 'counter-affidavit', wherein, she has not only vehemently and specifically denied the contents of C.M.A. No,161 of 2016 [filed by auction purchaser] but also has seriously controverted the averments and assertions made therein as being wrong and incorrect. Likewise, the Decree-holder Bank [Now NBP which has taken over/acquired the aforesaid proceedings from UBL through CIRC], has also filed a detailed 'counter-affidavit', wherein, NBP-Decree-holder Bank besides, controverting the contents of C.M.A. No,161 of 2016, has prayed that the said application filed in a 'disposed off' Execution Application No,47 of 1997, cannot be entertained, as the Judgment-debtors, have now fully satisfied the 'Final Decree' dated 08.06.1996 passed in Banking Suit No,1870 of 1993. For proper understanding the dispute as being raised, I would like to refer to some of the relevant facts which run as follows:- 2. Messrs UBL filed a Suit No,1870/1993 [UBL v. Hyderabad Electronic Industries Ltd. and others] for recovery of Rs,12,23,07,698.53 under the then Banking Tribunal Ordinance,1984. The said suit was decreed on 08.06.1994 by Banking Tribunal for Karachi and Sukkur at Karachi in favour of the Plaintiff Bank for Rs,86,411,808/- with future 'mark-up' from the date of decree till realization at the latest rate prescribed by the State Bank of Pakistan. Besides, the defendants were also made liable to pay 'mark-up' for 210 days of 'cushion period' on the outstanding amount and proportionate costs. A 'final decree' for sale of the mortgaged properties was also granted. The details of 'mortgaged properties' are given herein-below:-
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i. All that piece and parcel of land bearing Plot No,F-1, Block-IV, admeasuring 2372 sq.yds., or thereabout situated in Lessor Improvement Scheme No,1, Karachi belonging to Judgment-debtor No,2. ii. All that piece and parcel of land bearing Plot No,F-2, Block-IV, admeasuring 1089 sq.yds, or thereabout Improvement Scheme No,7, District Karachi belonging to Judgment-debtor No,3. iii. All that piece and parcel of land bearing Plot No,F-2/I, Block IV-V, admeasuring 1127.28 sq.yds, or thereabout situated in KDA Scheme No,7, Bahadurabad, Karachi belonging to Judgment-debtor No, 4. iv. All that piece and parcel of land bearing Plot No,F-243, within the jurisdiction of. SITE Police, SITE Survey Sheet No,35P/1- 35L/13, admeasuring 2.00 acres, situated at Sindh Industrial Trading Estate Area of Trans Lyaril Quarters, Karachi belonging to Judgment-debtor No,11. v. Bearing No,94-SITE Survey Sheet No,42-43, Survey Sheet No,359/1 and 35L/13 admeasuring 1.97 Acres Sindh Industrial Trade Estate Area of Trans Lyari Quarters, Karachi belonging to Judgment-debtor No, 1. 3. The defendants/Judgment-debtors despite passing of judgment and decree dated 08.06.1994, nevertheless, failed and/or avoided to pay the 'decretal amount' to the Decree-holder bank. Consequently, the Decree-holder Bank was constrained to file the above Execution Application on 12.09.1994 [Old Execution No,05 of 1995-New Execution No,47 of 19971, before the then Banking Tribunal-I for Karachi and Sukkur at Karachi. 4. The Banking Tribunal at Karachi, on 21.08.1995 issued 'writ of attachment'. The 'writ of attachment', as is evident from order 24.10.1995, was also served. The Judgment-debtors, it appears, inter alia had also filed an Application under section 12(2), C.P.C. Being found as objections to the Execution, the Judgment-debtors were directed vide Order dated 17.03.1996 to deposit the decretal amount in cash or to furnish Bank Guarantee for the decretal amount within a period of 02 weeks, as required under Order XXI, Rule 23-A, C.P.C., i,e, prior to the consideration of the 'objections'. The Judgment-debtors, however, failed and/or avoided to comply with order dated 17.03.1996 and subsequent order dated 10.04.1996 whereby, time was extended up-to 13.05.1996. Notwithstanding, extension of time Judgment-debtors, nonetheless, failed to do the needful. Under such circumstances, 'sale proclamation' in respect of mortgaged properties i,e, referred to and mentioned at Serial Nos,1 to iii hereinabove, was issued vide order dated 13.05.1996. 5. Upon transfer of the Execution Application to this Court, learned Single Judge of this Court, acting as a Banking Court under the provisions of the Banking Companies Recovery of Loans, Advances, Credits and Finances Act XV of 1997 [In short RLAC&F Act of 1997], issued notice under section 7(6) of Act XV of 1997 to Judgment-debtors, Later on, vide order dated 8.10.1998, Nazir of this Court was directed to invite 'sealed bids' through advertisement in 'daily newspapers' in respect of the 'mortgaged properties'. 6. The sale proclamation, thereafter, was published in the Daily Newspapers i,e, 'Jang', 'Dawn' and 'Mina' , Karachi, thrice on 15.5.1999, 24.7.2000 and 24.10.2000, but no one come forward to submit his offer before the Nazir of this Court. The Nazir of this Court thereafter, submitted his report dated 22.11.2000, whereupon, the Court by order dated 11.12.2000 again directed the Nazir of this Court to make further efforts for sale of the mortgaged properties. 7. Fresh 'sale proclamation' thereafter, was published in Daily Newspapers on 26.1.2001 i,e, for the fourth time. The Nazir of this Court after completion of 'auction process' made a reference dated 14.2.2001 to the Court. Per said report of Nazir, Mr. Muhammad Ikhlaq Memon, was the only bidder who had made an offer dated 13.2.2001 and was willing to purchase all the 03 properties i,e, property Nos,i, ii and iii for Rs,1,19,78,600, Rs,55,53,900 and Rs,57,47,700/- respectively. The 3 pay orders of 'Auction Purchaser' for amounts i,e, Rs,11,97,860/-, Rs,2,55,390/- and Rs,5,74,770/- were also attached with Nazir' Reference dated 14.02.2001. The Hon'ble Court by order dated 26.2.2001, accepted the negotiated offers of the 'Auction Purchaser' viz. Mr. Muhammad Ikhlaq Memon, however, only after when, the auction purchaser raised his offer from Rs, 2,32,80,280/- to Rs, 2,41,00,000/- with break-up as follows:- S.No.Description Amount [Rs.] i. Property No. 11,21,00,000
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ii. Property No. 259,00,000 Iii. Property No. 361,00,000 Total 2,41,00,000 8.The sale of the 3 'subject properties' in favour of the auction purchaser, it is significant to note, was free from all encumbrances, dues, liens, charges, litigation, disputes, mortgages, utility dues, such as, electricity, gas, telephone, water and sewerage, property tax, Income Tax and all other Federal and Provincial Government dues. The auction Purchaser, thereafter,, was directed to deposit the 'balance sale price' of the 'subject immovable properties' with Nazir of this Court with one month time w,e,f, 26.02.2001. Upon deposit, Nazir was directed to take further action in accordance with law. The deposit of 'balance amount' by the 'Auction Purchaser' is evident from order dated 09.04.2001. 9.Nevertheless, order dated 26.02.2001 was impugned/challenged by judgment-debtors in Special High Court Appeal No,94 of 2001 [Zakria Ghani and others v. UBL and others]. On 12.04.2001, when the said Special HCA No,94 of 2001, came-up before the Division Bench of this Court, then while, issuing notice to the Respondents for 25.04.2001 till then, further proceedings were stayed. The 'ad-interim order' dated 12.04.2001 reads as follows:- "12.04.2001. Mr. Abul Inam, Advocate for the Appellant. 1. Granted. 2. Mr. Ameer Hani Muslim Advocate is present in Court and waives notice on behalf of Respondent No,9. Mr. Abul Inam undertakes to provide copies to Mr. Ameer Hani Muslim today and also record the address of the Respondent No,9 in the memo of appeal in red ink. Issue notice to the Respondents Nos,1 to 8 for 25.04.2001. Let notice also be served through courier. 3. Notice as above. Till that date no further proceedings pursuant to the impugned order shall be taken." 10.The Spl. H.C.A. No, 94 of 2001 IZakria Ghani and others v. UBL and others], that is to say, much after deposit of the entire 'sale consideration' in compliance with Court's order dated 26.02.2001 passed in Execution No, 47 of 1997 by Single Bench of this Court, when again came-up before the 'Division Bench' of this Court then, a consent order of 31.05.2001, was passed. The relevant part of Order dated 31.05.2001, passed by a learned Division Bench of this Court in Spl. H.C.A. No,94 of 2001 [Zakria Ghani and others v. UBL and others], reads as follows:- " pursuant to the order of the Court dated 25.05.2001 notice to the appellant was apparently served but it seems that he is detained in civil prison and has not been produced in Court. It may be added that the fact of his detention was not known to the Court while passing the earlier order. Mr. Abbas Ali has requested for adjournment on the ground that Mr. Abul Inam, learned counsel for the appellant is out of country and we do appreciate that in view of his detention in prison, it would be difficult for the appellant to make alternate arrangement therefore, an order directing his personal appearance might not serve any useful purpose. Mr. Mansoorul Arfin however, argued that the existing state of affairs was operating to the prejudice of the Respondent No,9 in as much as whereas he had deposited the entire sale consideration of about Rs,25 million. Further process towards finalization of the sale in his favour has been held up. He further states that he is unable to suggest that the money deposited be kept in profit bearing securities as the Respondent No,9 considered the same to be interest and does not accept the same.He has therefore, suggested that without prejudice to the Respondent's claim he may be allowed to withdraw his 90% of the amount deposited which, in case he succeeds would be redeposit. Mr. Haider Raza Naqvi, learned counsel for the respondent No,1 has no objection to the same as regards the interest of the appellant we are satisfied that the same will not be prejudiced in as much as in case the appellant succeeds the Respondent No,9 could conceivably claim any interest in the property. Mr. Abbas Ali also accepts this position and accords his consent to the Court.
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In view of the above, we would direct the after retaining the amount of 10% the remaining amount deposited by the Respondent No,9 be refunded to him. It is made clear that this is without prejudice to his right and that in case he succeeds he will redeposit such amount within one week from the date of the order. In the event of failure to deposit the amount of 10% shall stand forfeited. [Underlining is mine]. C.M.A. No,782/2000 stands disposed of in terms of the above and further proceedings for the sale are stayed." 11. The above mentioned Spl. H.C.A. No,94 of 2001 filed by judgment-debtors /Zakria Ghani and others v. UBL and others] under section 21 of the then Banking Companies [Recovery of Loans, Advances, Credits and Finances] Act, 1997 was heard and decided by a Hon'ble Division Bench of this Court vide judgment dated 07.03.2002. Being relevant, 'Para-14' therefrom is reproduced hereinbelow: "14. As regards the acquisition of vested rights in the Respondent No,9, the relevant provisions of Order XXI, C.P.C. indicate different stages at which specific orders are required to be passed by the executing Court. Under Rule 84 a person is to be declared as the purchaser of the property and thereafter he is required to deposit 25% of the consideration at one stage and the remaining 75% at another. Thereafter applications for setting aside the sale are to be considered and after disposal of such applications an order confirming the sale is required to be passed under Rule 92. Admittedly no order accepting the order [offer] of the Respondent No,9 and declaring as a purchaser was passed prior to the impugned order and Mr. Mansoor-ul Afrin candidly conceded that the order ought to be treated as one under Rule 84 and the observations regarding confirmation of the sale were unwarranted. Indeed the order dated 09.04.2001 itself shows that the sale had yet to be confirmed. In the circumstances, we are clearly of the opinion that no confirmation of sale in favour of the Respondent No,9 had actually taken place and therefore, it could not be asserted that he had acquired rights in the property. For foregoing reasons, we are of the opinion that even if the strict requirements of Order XXI, C.P.C. had to be deviated from the interest of justice demanded that when a higher offer was brought to the notice of the Court, it should not have proceeded to confirm the sale in favour of the Respondent No,9. For these reasons, we would allow this appeal and set aside the impugned order and direct that the properties be resold in accordance with law. Parties to bear their own costs." [Underlining is mine]. 12.The 'Auction Purchaser' viz. Muhammad Ikhlaq Memon [Respondent No,9 in H.C.A. No,94 of 2001], feeling aggrieved himself by judgment dated 07.03.2002 passed by a Hon'ble Division Bench of this Court in Spl. H.C.A. No,94 of 2001 [Zakria Ghani and others v. UBL and others], filed a Civil Appeal No,670 of 2002 [Muhammad Ikhlaq Memon v. Zakria Ghani and others] before the Hon'ble Supreme Court of Pakistan. The Hon'ble apex Court while, issuing notice for 29th March, 2005, on C.M.A. No,661 of 2005 filed in Civil Appeal No,670 of 2002 till then, status quo was ordered to be maintained. 13.The said Civil Appeal No,670 of 2002 was finally decided by Hon'ble Supreme Court of Pakistan vide its' judgment dated 27.05.2005 whereby, Civil appeal No, 670 of 2002 [Muhammad Ikhlaq Memon v. Zakria Ghani and others], was allowed and the 'impugned judgment' of Division Bench of this Court passed in Spl. H.C.A. No,94 of 2001 [Zakria Ghani and others v. Messrs UBL and others] dated 07.03.2002 was set-aside. Apart from setting aside of judgment dated 07.03.2002, the three orders dated 26.02.2001, 27.03.2001 and 09.04.2001, passed in Execution No,47 of 1997 [Messrs UBL v. Messrs Hyderabad Electronics Industries Ltd. and others] were held as 'valid orders'. Paras 19, 20 and 21 from the said judgment of Hon'ble Supreme Court of Pakistan dated 07.03.2002 read as follows:- 19.The negotiated offer made by the appellant having been accepted by the Banking Court, the appellant had acquired legal rights and interests in the properties purchased by him. In Janak Raj's case [AIR 1967 SC 6081, it was held that once payment of the sale price by the auction-purchaser in compliance with the orders of the Court had been made, it was the duty of the Court to confirm the sale as required by Order XXI, Rule 92, C.P.C. Even where the Court fails to pass an order of confirmation that could not lead to deprivation of right of auction-purchaser or cause prejudice to him. In such a case, it could be deemed that the sale stood confirmed and would be deemed to have become absolute in title by virtue of section 65, C.P.C. which would relate back to the date of sale. In the cases of Hudabia Textile Mills [Supra], the legal rights and interest of auction- purchaser were recognized which could not be defected.
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20.In our view the impugned judgment by the learned Division Bench of the High Court of Sindh suffers from errors of law and fact, as pointed out above, and therefore the same is not sustainable at law. 21.For the forgoing reasons, this appeal is allowed with costs throughout. Consequently, the impugned judgment dated 07.03.2002, passed by a learned Division Bench of the High Court of Sindh at Karachi in Special High Court Appeal No,94 of 2001 is set aside. The orders date 26.02.2001, 27.03.2001 and 09.04.2001 passed by a learned Single Judge in Chambers are held to he valid." [Underlining is mine]. 14. At this juncture, order dated 26.02.2001 which was also upheld by the Hon'ble Supreme Court of Pakistan through its' judgment dated 07.03.2001_ is also reproduced:- "26.02.2001 Mr. Hyder Raza Naqvi, Advocate for decree holder. Mr. Saraj Ahmed Khan, Advocate for judgment debtors Nos,1 and 3. Mr. Ikhlaq Memon, bidder, is also present in person. (1)Adjourned. (2)Nazir's reference dated 14-02-2001 is on record whereby it is stated that three properties were set for sale. The property bearing Plot No,F-1, Block-IV, K.D.A. Scheme No,7, Karachi measuring 2372.66 square yards was offered at a price of Rs,1,19,78,600/-. The second property bearing No,F2, Block-IV, K.D.A. Scheme No,7, Karachi measuring 1089.76 square yards has been offered for purchase at the sum of Rs,55,53,900/- and the third property bearing Plot No,F-2/1, Block-IV and V, K.D.A. Scheme No,7, Bahadurabad, Karachi measuring 1127.28 square yards with building and shops, wall and fittings and fixtures etc. was offered for a value of Rs,57,47,700/- the value of the first property per the report dated 22-11-2000 was Rs,1,18,60,000/- whereas in regards to the second property was 60,00,000/- and as for the third, Rs,56,35,000/-. As regards the second property, the value that has now been received is lesser than the previous value. Otherwise the value now being offered for the other two properties is slightly higher. Mr. Ikhlaque Memon who has offered for the properties seeks to increase the value of the property No,1 to Rs,1,21,00,000/-, for the second one also to Rs,59,00,000/- and the third one to Rs,61,00,000/-. Mr. Hyder Raza Nagvi states that the bank wishes that another publication for sale may be made so that the properties could fetch additional price. The direction for the purpose of sale was earlier made on 11-09-2000 and the report was filed on 22-11-2000. Another order was passed on 11-12-2000 in which, it is asserted that the properties are located in a prime area of Karachi and further efforts could be made to sell the properties requested. Sale notices were issued in respect of the said properties and only one offer was received for sale free from all encumbrances, dues, liens, charges, litigation, disputes, mortgages, utility dues such as electricity, gas, telephone, water and sewerage, property tax, income tax and all other Federal and Provincial Government dues. Mr. Ikhlaq Memon has in Court raised the value of all the three properties beyond that was offered in the reference dated 15-02-2001 of the Nazir. I would, therefore, confirm the sale of the raised sale price in respect of Plot No,F-1, Block-IV, KDA Scheme No,7, Karachi measuring 2372.66 square yards for sale to said Mr. Ikhlaque Memon at Rs,1,21,00,000/-, Plot No,F-2, Block-IV, K.D.A. Scheme No,7. Karachi measuring 1089.76 square yards at Rs,61,00,000/- and Plot No,F-2/1, Block-IV and V, .K.D.A. Scheme No,7, Bahadurabad, Karachi measuring 1127.28 square yards at Rs,59,00,000/-. The aforesaid sale shall be free from all encumbrances, dues, liens, charges, litigation, disputes, mortgages, utility dues such as electricity, gas, telephone, water and sewerage, property tax, income tax and all other Federal and Provincial Government dues. Let the sale price of the said three properties be deposited with the Nazir within one month from today. Upon deposit, further action shall be taken by the Nazir in accordance with law. The Nazir's reference dated 14-02-2001 is accordingly disposed of." [Underlining is mine]. 15.It is significant to note, under order dated 27.03.2001 the 'Auction Purchaser' viz. Muhammad Ikhlaq Memon was directed to take steps in terms of Rule 85 of Order XXI, C.P.C. The auction purchaser, upon acceptance of offer and in compliance with order dated 27.03.2001, deposited the entire balance amount. This factum of deposit is quite evident from order dated 09.04.2009. Besides, under order dated 09.04.2001, Nazir of
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this Court was also directed to take steps for confirmation of the sale. 16.Corporate and Industrial Restructuring Corporation [In short CIRC] [upon transfer/acquiring the execution proceedings etc. from Messrs UBL] in its' capacity as a Decree-holder Corporation and Judgment-debtors feeling aggrieved themselves by the judgment of Hon'ble Supreme Court of Pakistan dated 07.03.2001 passed in Civil Appeal No,670 of 2002 [Muhammad Akhlaq Memon v. Zakria Ghani and others] filed two Civil Review Petitions, one each i,e, [i]. CRP No, 375 of 2005 [CIRC v. Muhammad Ikhlaq Memon and others] and [ii]. CRP No,383 of 2005 [Zakria Ghani and others v. Muhammad Ikhlaq Memon and others]. On 16.06.2006, when the above Civil Review Petitions came-up before the Hon'ble Supreme Court of Pakistan then, the following order was passed:- "16.06.2006 Mr. Muhammad Akram Sheikh, Sr. ASC and Mr. M. A. Zaidi, learned AOR for the Petitioners in CRP No,383/2005 have moved an application for adjournment of this petition to a date after summer vacations on the ground that the learned Sr. ASC is indisposed having severe vertigo. 2.At this stage, the learned counsel for Petitioners in C.R.P. No,375/2005 prays for giant of interim relief on the grounds, inter alia that it would create legal complications, by giving rise to multiplicity of proceedings, in a protracted litigation, if the status quo as to the possession of the auctioned property was not ordered. 3.In this view of the matter, both the cases are adjourned to a date in the third week of September, 2006. Till then, subject to notice, status quo as regards possession of the property in dispute shall be maintained. [Underlining is mine]. 17. During pendency of the aforesaid two CRPs and operation of the 'status quo order' passed in CRP No,375 of 20Q5 [CIRC v. Muhammad Akhlaq Memon and others], on 27.01.2015 when, Criminal Accountability Appeal No,39 of 2002 [Zakria Ghani and another v. The State] filed under section 32 of NAB Ordinance, 1999 against judgment dated 13.02.2002 passed by the Accountability Court No,1 of Karachi whereby, the appellants therein were convicted in Accountability Reference No,26 of 2000, came-up before the Hon'ble Division Bench of this Court then, the following order was passed:- "27.01.2015 Mr. Abdul Hafeez Lakho, for Appellant. Mr. Saleem Akhtar Buriro, Additional P.G. Mr. Noor Muhammad Dayo, ADPG, NAB. Mst. Maqboola Ghani widow of Zakaria Ghani, Appellant No,l. Mr. Ghulam Mustafa Memon, Relationship Manger, National Bank of Pakistan. On the last date of hearing Mr. Abdul. Hafeez Lakho has stated that there was plea bargain between the principal accused and the Chairman, National Bank of Pakistan ("NBP"), entire amount has been paid and since both the accused have been 'expired, therefore, their legal heirs have right to contest the appeal as the sentence also imposed fiscal penalty. Today Mr. Noor Muhammad Dayo has filed objection where it has been stated that the plea bargain between Appellants and the Financial Institution was stuck wherein the Financial Institution agreed to accept a sum of Rs,118.34 million as full and final settlement, which was accepted by the Chairman, NBP on 13.04.2006. It is further stated that a sum of Rs,70.673 Million on one stretch and Rs,47.712 Million in the second stretch were paid to the NBP and such plea bargain was accepted. Both the learned counsel jointly state that this appeal be disposed of as both the Appellants have expired and so far as the penalty aspect is concerned it is no more in the field as the entire amount has been paid to the Financial Institution and such plea bargain has been accepted by the Chairman, NBP. The Officer from NBP present states that the amount settled between Appellants and NBP in the sum of Rs,118.34 Million was duly approved by the Board of the NBP. In view of this position, the settlement is approved and the appeal is abated." [Underlining is mine]. 18.Like-wise in another Accountability Appeal No,40 of 2002 [Zakria Ghani v. The State] filed under section 32 of NAB Ordinance 1999 against judgment dated 13.5.2002 passed by Accountability Court No,1 of Karachi in
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Accountability Reference No,4/2000 whereby, the Appellant was also convicted on 17.4.2015, came-up before Division Bench of this Court, then the following order was passed:- "27.04.2015 Mr. Abdul Hafeez Lakho, for Appellant. Mr. Noor Muhammad Day, ADPG, NAB. Mr. Rizwan Ahmed Siddiqui,…
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