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Official Citation: 2024 IHC 159310
Court / Jurisdiction: Islamabad High Court
Parties: MCB Bank Limited vs Malik Abdul Rehman through legal heirs.
Ruling Summary: This decision was rendered by the Islamabad High Court, officially reported as 2024 IHC 159310. In this matter between MCB Bank Limited and Malik Abdul Rehman through legal heirs., the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Islamabad High Court (Honourable Mr. Justice Miangul Hassan Aurangzeb) AUTHOR JUDGE: Honourable Mr. Justice Miangul Hassan Aurangzeb DECISION DATE: 14-FEB-2024 CASE NO: First Appeal Against Order-114-2023 CITATION: 2024 IHC 159310 PARTIES: MCB Bank Limited VS Malik Abdul Rehman through legal heirs. LAW / SECTION: - SUBJECT: Against Order, REMARKS: FAO: Section 22 Appeal under Financial Institutions (Recovery of Finances) Ordinance, 2001, against order dated 21.06.2023 passed by learned Judge Banking Courts, Islamabad. ============================================================ ORDER SHEET IN THE ISLAMABAD HIGH COURT, ISLAMABAD JUDICIAL DEPARTMENT
F.A.O.No.114 of 2023 MCB Bank Limited Versus Malik Abdul Rehman through his legal heirs
S. No. of order/ proceedings Date of order/ Proceedings Order with signature of Judge and that of parties or counsel where necessary.
Through the instant appeal, th e appellant, MCB Ban k Limited, impugns order dated 21.06.2023 passed by the learned Judge Banking Court, Islamabad, whereby the appellant was directed to return Rs.1,565,392/ - by depositing the said amount in the Court for further transmission to the respondents. 2. The reco rd shows that the suit for recovery of Rs.12,553,530/ - filed by the appellant against the predecessor of the respondent s was decreed vide judgment and decree dated 18.02.2009 to the extent of Rs.11,878,654/ - along with cost of suit and cost of funds with e ffect from the date of default i.e., 01.06.2008 at the rate prescribed by State Bank of Pakistan. During the execution proceedings, the mortgaged propert ies were auctioned through the process of the Court on 17.12.2019. The respondents’ objections to the auction proceedings were dismissed vide order dated 21.02.2020 but they were given the option to deposit a sum equivalent to the highest bid of Rs.18,300,000/- for the auction to be set -aside. Failure of the respondents to deposit the said amount resulted in the auction being confirmed and a sale certificate was directed to be issued to the auction purchaser vide order dated 01. 14.02.2024 Raja Muqsi t Nawaz Khan, Advocate for the appellant. Mr. Akhlaq Ahmad Bhatti, Advocate for the respondents. 2 F.A.O.No.114/2023
13.03.2020. On 12.03.2020, o ne of the respondents namely Shagufta Rehman filed an application under Section 12(2) of the Code of Civil Procedure, 1908 ( “C.P.C.”). Vide order dated 07.05.2020, the appellant was allowed to withdraw Rs.18,300,000/- deposited by the auction purchaser. 3. On 21.05.2020, the appellant filed an application for the attachment of Rs.45,00,000/ - taking the plea t hat the decree had not been satisfied with the payment of Rs.18,300,000/ -, and that a total amount of Rs.2,437,315/ - was still outstanding. In paragraph 4 of the said application, a break -up of the a ppellant’s charges was provided which shows that an amoun t of Rs.1,65,000/- were to be paid as execution charges and Rs.1,355,392/ - as possession charges till May 2020 and Rs.45,000/ - as professional fee . The cumulative amount of these three components come to Rs.1,565,392/-. 4. Order dated 16.09.2022 shows tha t an amount Rs.4,575,000/ - had been deposited by the respondents in the Court. Out of this amount, the Court ordered for Rs.2,437,315/ - to be withdrawn by the appellant so that the decree is fully satisfied. It is not disputed that the said amount was also withdrawn by the appellant. Subsequently, an application was filed on behalf of the respondents for recall of the order dated 16.09.2022 to the extent of Rs.1,565,392/ - so that the said amount is paid back to the respondents. This application has been all owed by the learned Judge Banking Court through the impugned order dated 21.06.2023. 5. The justification given by the learned Judge Banking Court for directing the appellant to return Rs.1,565,392/- was that a Court cannot go beyond 3 F.A.O.No.114/2023
the decree, and that t he bank could not be given an amount which was not decreed in its favour. 6. Learned counsel for the appellant submits that execution and possession charges are incidental charges to the debt, and that since the suit was decreed with costs, the bank was justified in claiming Rs.45,000/- as professional fee. 7. Although this appeal was at motion stage but Mr. A khlaq Ahmad Bhatti, Advocate, who was on watching brief, tendered appearance for the respondents. A notice under Order XLII I, Rule 3 of C.P.C. has al ready been issued to the respondents. He submitted that execution and possession charges could not be considered to be a part of the decree dated 18.02.2009; that vide the said decree, the appellant’s suit was decreed for Rs.11,878,654/ - along with cost of funds and cost of suit only; that in the said decree, there was no mention as to execution and possession charges; that the impugned order dated 21.06.2023 does not suffer from any legal infirmity since the learned Banking Court simply corrected its own e arlier order dated 16.09.2022; and that the learned Banking Court has correctly held that an executing Court could not go beyond the decree. 8. We have heard the contentions of the learned counsel for the contesting parties and have perused the record wit h their able assistance. 9. Perusal of the decree dated 18.02.2009 shows that the appellant’s suit was decreed with costs of suit. Therefore, the learned Banking Court did not commit any illegality by requiring the respondents to deposit R s.45,000/- as professional fee, which is a reasonable amount. 4 F.A.O.No.114/2023
10. As regards the execution and possession charges, perusal of the order dated 16.09.2022 shows that the learned Judge Banking Court has considered the execution charges and possession charges as part of “cos t of funds and cost of suit.” In the application dated 21.05.2020 filed by the appellant, the cost of funds is a separate component from ex ecution and possession charges. Be that as it may, even if it is assumed that execution charges and possession charge s do not constitute a part of cost s of funds or cost of suit, the decree holder in execution proceedings is entitled to be paid its costs associated with the execution proceedings. In the case of Edwin COE LLP Vs. Naseim Ahmed Sarfraz (2020 CLC 1064), it has been held inter alia that for the purposes of Section 35 of C.P.C., costs are to be determined at each stage involving legal proceedings and ought to be granted by the Court before which the proceedings are pending. An execution proceeding is a crucial stage of legal proceedings for which costs can be granted to the decree holder. Where an executing Court awards costs of execution to the decree holder, it is not going beyond a decree even where a suit is decreed with no order as to costs. However, an executing Court has to pass a specific order for costs. Such order is to be based on actual costs incurred by the decree holder in taking steps for the decree to be satisfied. The documents on the record do not show that the Court made any attempt to ascertai n the actual costs pertaining to the execution and possession charges. In other words, before ordering the respondents that the amount mentioned by the appellant in its application dated 21.05.2020 is to be deducted from the amount deposited by the respondents or before ordering 5 F.A.O.No.114/2023
the appellant to return the amount deducted and paid to the appellant as execution and possession charges, the learned executing Court made no effort to determine as to whether such amount was indeed incurred by the appellant as exe cution and possession charges. 11. In view of the above, the instant appeal is allowed; the impugned order dated 21.06.202 3 is set-aside; and t he mat ter is remanded to the learned Judge Banking Court with the direction to determine as to whether the amoun t paid to the appellant as execution and possession charges would be treated as costs associated with the execution of the decree dated 18.02.2009 and whether the amount paid to the appellant as execution and possession charges was indeed incurred by it during the process of execution.
(ARBAB MUHAMMAD TAHIR) (MIANGUL HASSAN AURANGZEB) JUDGE JUDGE
Sultan