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Petitioner: Abdul Jabbar Shahid, etc. VS Respondent: National Bank Pakistan, etc.
Court Name: Lahore High Court Judge(s): Shahid Waheed, Muhammad Sohail Iqbal Bhatti Title: Abdul Jabbar Shahid, etc. vs National Bank Pakistan, etc. Case No.: FAO. No.311 of 1995 Date of Judgment:2015-04-15 Reported As: PLD 2019 Lahore 76, 2015 LHC 2255 Result: N/A
Judgment SHAHID WAHEED,J. This judgment will govern FAO. No.311 of 1995, FAO.No.312 of 1995 and FAO. No.290 of 1995 as common questions of law and facts are involved therein. 2. Challenge in all said three appeals is to the order dated 8.11.1995 whereby the then learned Banking Tribunal rejected the objections to the sale filed by the decree holder and judgment debtors No.1 and 2 and confirmed the sale of the property No.23-E Main Market, Gulberg-II, Lahore, measuring 1-kanal 6-marlas 25 square feet in favour of the Auction Purchaser, Malik Muhammad Ashraf-respondent No.5. 3. All said three appeals have arisen in the background that on 19.4.1994 the National Bank of Pakistan filed a suit for recovery of Rs.11,309,003 against M/s. Camslid Equipment & Mohsin Rafique (appellants in FAO. No.290 of 1995 and judgment debtors No.1 and 2), Abdul Jabbar Shahad, Razia Sultan and Abdul Shakoor (appellants in FAO. No.311 of 1995 and judgment debtors No.5 to 7) and some other persons. The suit was decreed by the then learned Banking Tribunal (since defunct) vide judgment and decree dated 19.4.1994. The decree-holder bank on 31.5.1994 filed an application for execution of the said decree along with an inventory of the property to be attached. Learned Banking Tribunal on 4.7.1994 issued notices under Order XXI Rule 52 C.P.C to the judgment debtors for the attachment of the properties mentioned in the inventory (Fard Taleeqa). One of the properties which was attached by the learned Banking Tribunal was property No.23-E Main Market, Gulberg-II Lahore, measuring 1-kanal 6 marla 25 square feet. The said property was ordered to be sold by public auction in execution of the decree dated 19.4.1994. Thus, on 1.9.1994 notices under
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Order XXI Rule 66 C.P.C were issued to the judgment debtors for their attendance before the learned Banking Tribunal on 7.9.1994 so that they might participate in the proceedings for finalizing the terms and conditions of sale. On 7.9.1994 the judgment-debtors were not in attendance. However, the case was adjourned to 13.9.1994 as the learned Chairman of the Banking Tribunal was on leave. The learned Banking Tribunal on the next date of hearing in the absence of the judgment- debtors approved the terms of sale vide order dated 13.9.1994. Through the said order Mr. Zahid Hamid, Advocate, was appointed as Court Auctioneer to conduct the sale of the attached property by public auction in accordance with law after observing necessary formalities. The Court Auctioneer fixed 30.11.1994 as the date to conduct sale of the attached property by public auction. In the meantime Abdul Jabbar Shahid, etc (appellants in FAO. No.311 of 1995 and judgment debtors No.5 to 7) moved this Court through W.P.No.14110 of 1994. The said petition came up for hearing before the learned Full Bench of this Court on 28.11.1994 and in C.M. No.2 of 1994 following order was passed: "The decree impugned in the writ petition is for an amount of Rs.1,13,09,003/- Abdul Jabbar Shahid petitioner No.1, who is present in person, when questioned, admitted that an amount of Rs.99,00000/- (Ninety nine laces only) was obtained as loan originally. He says that petitioners are ready to deposit the said entire amount within six months from today in three instalments. He says that first instalment of an amount of Rs.33,00,000/- (Rupees thirty three lacs only) shall be deposited within three months from today, the second instalment within 1 % months thereafter, and the last instalment within further 1 % months after the payment of the said second instalment. In view of this undertaking, the execution of the decree against property bearing no. SXXA-23-E, Main Market, Gulberg-II, Lahore, of the petitioners, shall remain stayed, subject to the petitioners depositing an amount of Rs.33,00,000/- (Rupees thirty there lacs only) within three months from today and another instalment of an amount of Rs.33,00,000/- (Rupees thirty three lacs only) within 1 % months thereafter and the last instalment of Rs.33,00,000/- (Rupees thirty three lacs only) within 1 % months after the expiry of the period for payment of the second instalment. The auction of the said property of the petitioners, which is scheduled to be held on 30.11.1994, shall be withheld. In case the petitioners fail to deposit any of the instalments, the entire decretal amount shall become recoverable and execution may proceed. " 4. On 29.11.1994 the decree holder bank filed an application before learned Banking Tribunal for permission to take part in auction proceedings and bid for the attached property on the ground that it was adjoining to its branch. This application was accordingly allowed vide order dated 29.11.1994. However, the auction proceedings for sale of the attached property could not take place on 30.11.1994 due to restraining order dated 28.11.1994 passed by this Court in W.P.No.14110 of 1994. This fact finds support from the auction report dated 12.12.1994 of the Court Auctioneer. 5. Subsequently, the decree holder bank informed learned Banking Tribunal that not a single installment had been deposited by the judgment debtors within the period fixed by this Court in W.P.No.14110 of 1994 vide order dated 28.11.1994 and, therefore, made a request for continuation of the execution proceedings. This request was allowed and Robkar was issued to the Court Auctioneer to go ahead with the auction of the attached property in accordance with the fresh schedule to be fixed by him. The Court Auctioneer accordingly fixed 28.6.1995 as the date to conduct proceedings for sale of the attached property. On the date of auction, i.e. 28.6.1995 Mohsin Rafique (appellant No.2 in FAO. No.290 of 1995 and judgment debtor No.2) filed a petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, i.e. W.P.No.8082 of 1995 before this Court for the stay of auction proceedings. The said petition was disposed of vide following
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order dated 28.6.1995. Mr. Azmat Saeed, Advocate " Learned counsel for the petitioner says that petitioner undertakes to deposit the entire decretal amount of Rs.1,13,2,000/- upto 1.10.1995. The property of the petitioner is scheduled to be auctioned today. The auction of the said property shall take place but the same shall not be confirmed before 1.10.1995. In case the petitioner deposits the entire decretal amount as undertaken by him on or before 1.10.1995 the auction shall not be confirmed and in case he fails to deposit the said amount or any part thereof before the said date the auction may be confirmed. Disposed of. " Sd/- (MUNIR A. SHEIKH) JUDGE 6. In compliance with order dated 28.6.1995 passed by this Court in W.P.No.8082 of 1995 the auction of the attached property took place. The Court Auctioneer on 6.7.1995 submitted auction report No.2 wherein it was disclosed that the auction proceedings were closed with the declaration that Malik Muhammad Ashraf was the highest bidder with a bid of Rs.6,100,000/-. The Court Auctioneer in his report also made the following observations: "That the valuation of the property carried out by the decree-holder bank in 1991 was Rs.1.15 crore. It appears that the intending bidders were put off, by the likely delay in acceptance/confirmation of the highest bid as a result of the order of the High Court dated 28.6.1995 mentioned in the letter of Mr. Azmat Saeed, Advocate. The property can be auctioned for higher amount in case the judgment debtor/petitioner does not deposit the decretal amount by the date mentioned in High Court's order viz 1.10.l995." 7. The decree holder bank on 31.7.1995 filed objections in respect of auction held on 28.6.1995. Subsequently, on 4.10.1995 the decree holder bank and judgment debtors filed a joint application under section 151 C.P.C before the learned Banking Tribunal with a request to adjourn the execution proceedings sine die on the ground that the judgment debtors had agreed to undertake to pay 30% of the decretal amount within 30 days; and, that the balance amount of 70% within a period of 60 days thereafter. The said application came up for hearing before the learned Banking Tribunal on 10.10.1995. On the said date the auction purchaser also filed an application seeking permission to deposit 25% of the sale proceed amounting to Rs.6,100,000/- in the Tribunal. The auction purchaser, however, objected to the above said joint application and sought time to file reply thereto. This request was allowed vide order dated 10.10.1995 and the auction purchaser was directed to deposit Rs.15,25,000/- in the Tribunal. Later on, judgment debtor Nos. 1 and 2 (i.e appellants of FAO No.290 of 1995) also filed an application under section 151 C.P.C for rejection of bid. Along with said application the judgment debtors No.1 and 2 also filed an application under section 5 of the Limitation Act, 1908. Finally, the objections to the sale of the attached property filed by the decree holder bank and judgment debtors were rejected by the learned Banking Tribunal, Lahore, vide order dated 8.11.1995 and sale in favour of the auction purchaser was confirmed.
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8. The appellants, feeling anguished by the order dated 8.11.1995, filed the above stated three appeal i.e FAO. No.290 of 1995, FAO. No.311 of 1995 and FAO. No.312 of 1995 before this Court. 9. During pendency of above said three appeals before this Court, the Court Auctioneer filed two applications before the learned Banking Tribunal, Lahore. First application was for possession of the suit property; and, second application was for issuance of sale certificate. On 16.11.1995 the judgment debtors No.1 and 2 moved two application, one under section 12 (2) read with section 151 C.P.C wherein fraud was alleged in the sale of attached property; and, another application under Order 41 rule 5 C.P.C. The learned Chairman of the Banking Tribunal (Rana Aish Bahadur Khan) thought it proper not to hear the case for personal reasons and on 21.11.1995 he adjourned the case to 4.12.1995 and wrote a letter to the Ministry of Law and Justice, Government of Pakistan for transfer of the case. In pursuance of said request the case was transferred to the learned Banking Tribunal- IV, Lahore, vide notification dated 30.11.1995. The learned Chairman, Banking Tribunal-IV, Lahore, (Mr. Mohammad Aslam Nagi) vide order dated 8.2.1996 accepted the application of the auction purchaser for issuance of court sale certificate and rejected the other applications of the judgment-debtors. 10. On 10.2.2005 the said three appeals i.e. FAO. No.290 of 1995, FAO. No.311 of 1995 and FAO. No.312 of 1995 came up for hearing before this Court. All three appeals were disposed of in following terms: i) the impugned order dated 8.11.95 is set aside. ii) a sum of Rs.93,64,406/- (as tabulated above), out of the total amount of Rs.1,23,70,000/- which stands deposited with the Deputy Registrar of this Court in the shape of pay orders/cheques, shall be paid to the decree holder bank through its general attorney/duly authorized person of the Bank by the Deputy Registrar (Judl) of this Court, after observing all the legal formalities. iii) a sum of Rs.30,00,000/- shall be paid to auction purchaser, namely Malik Muhammad Ashraf by the Deputy registrar (Judl) of this Court, after due identification and after observing all the legal formalities. iv) the decree dated 19.4.1994 stands satisfied. v) No order as to costs." 11. The auction purchaser assailed the above said judgment dated 10.2.2005, which was announced on 28.7.2005, before the Hon'ble Supreme Court in Civil Appeals No.1102 to 1104 of 2005. The said appeals were allowed with the consent of the parties vide order dated 11.3.2014 and judgment dated 28.7.2005 of this Court was set aside and resultantly the case was remanded to this Court for a decision on merit within a period of four months. 12. It is contended on behalf of the decree holder bank and judgment debtors that the auction proceedings for sale of the attached property were not conducted in accordance with law; that proclamation of sale of the attached property was not inconformity with the mandatory provisions of law as it did not contain the requisite information qua the attached property; that the reserve price was not mentioned in the proclamation of sale of the attached property and due to this fact the property was sold at throw away price; that the attached property was got mortgaged in
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favour of the decree holder bank in 1991 and at that point of time the attached property was valued at Rs.11.05 million and despite this fact the sale of the property was confirmed at Rs.6,100,000/-; that the property is situated in the Main Market, Gulberg-II, Lahore, which is one the most expensive commercial area in the city of Lahore and its worth now is more than 200.00 million; that the decree holder bank and judgment debtors were unanimous that the price for which the property was disposed of was extremely low and, therefore, auction could not be confirmed; learned Banking Tribunal erred in law by not giving consideration to the factum that only one bidder took part in the auction and none else came forward to bid and this was sufficient to establish fraud played in the auction proceedings; and, that the impugned order suffers from misapplication of provisions of law. In support of above said contentions reliance is placed on the cases of Messrs Lanvin Traders, Karachi v Presiding Officer Banking Court-II Karachi and others (2013 SCMR 1419), Messrs Nice 'N" Easy Fashion (Pvt) Ltd and others v Allied Bank of Pakistan and another (2014 CLD 1404) and National Bank of Pakistan and 117 others v Saf Textile Mills Ltd and another (PLD 2014 S.C 283). 13. On the other hand, learned counsel for auction purchaser has vehemently opposed the afore- stated contentions. He submitted that there was no allegation of fraud or misrepresentation against the auction purchaser and the Court Auctioneer; that auction proceedings were conducted strictly in accordance with law and there was no irregularity therein and, thus, the sale was rightly confirmed; and, that the objection petitions filed by the judgment debtors were time barred. In support of his contentions reliance is placed on the cases of Vannisami Thevar and another v Periayaswa mi Thevar and another (AIR 1917 Madras 176), Sm. Bhabasundari Dassi v Gopeswa r Auddy and others (AIR 1941 Calcutta 159), Al Hassan Feeds through Syed Abbas Hassan Shah and another v United Bank Ltd and 6 others (PLD 2004 S.C 144), Muhammad Ikhaq Memon v Zakaria Ghani and others (PLD 2005 S.C 819) and Mst. Anwar Sultan through L.Rs v Bank Al-falah Ltd and others (2014 SCMR 1222). 14. The arguments canvassed by the learned counsel for the parties give rise to three questions. Firstly as to whether the proceedings for sale of the attached property through public auction were conducted in accordance with law; secondly, as to whether the objections filed by the decree holder bank and judgment debtors were within time; and thirdly, as to whether the sale could be confirmed by the learned Banking Tribunal. 15. The fate of all these appeals hinges upon the findings of the first question as to whether the proceedings for sale of the attached property through public auction were conducted in accordance with law. In order to find out the answer to this question, it is essential to examine each step of the proceedings of the sale of attached property through public auction. According to Order XXI Rule 66 C.P.C 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; and, such proclamation shall be drawn up after notice to the decree holder and judgment debtor. It means the first step in the sale of attached property by public auction is a proclamation of sale which is to be drawn up after notice to the decree holder and judgment debtor. The learned executing Court being conscious of this mandatory provision of law vide order dated 10.7.1994 issued notices under Order XXI Rule 66 C.P.C to the judgment debtors for their attendance on 7.9.1994. The said notices as per provisions of Order XLVIII Rule 2 CPC were required to be served in the manner provided by Order V C.P.C (See Parasurama Odavar Appadurai Chetty and others (AIR 1970 Madras 271). The notices under Order XXI Rule 66 C.P.C along with terms of sale were served on the judgment debtors by affixation and this fact is evident from the report of the
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bailiff/ process server which is to the following effect: {{URUD TEXT}} It was the duty of the Banking Tribunal or the Executing Court to satisfy itself that all conditions of service of notice were complied with. It goes without saying that a Court or Tribunal entrusted with the duty to determine valuable rights of the parties is required to act with proper application of mind to the matter. It is unfortunate that the Banking Tribunal in this respect had acted in the exercise of its jurisdiction illegally or with material irregularity. The above cited report unfolds that the service of notices under Order XXI Rule 66 C.P.C were not properly served for the reasons that: (i) the bailiff or process server in his report had not stated that it was not possible to effect personal service of the notices upon the judgment debtors under Rules 10, 12 and 16 of Order V C.P.C; (ii) the process server was requried to use all due and reasonable diligence to find out the judgment debtors. He should have taken pains to find out the judgment debtors by going again and again where the judgment debtors were likely to be present and to make enquiry about their whereabouts and follow them. All the efforts so made by the process server should have been stated in the report. On the contrary the report of the process server is silent about his efforts; (iii) the report is silent about the time and identity of the property; (iv) the report was not supported by an affidavit and thus it was incumbent upon the Executing Court to examine the bailiff or process server and to satisfy itself that the conditions of Order V Rule 17 had been fulfilled. The afore-stated requirements with regard to service by affixation have been interpreted in the cases of Tota v Badri Pershad (AIR 1930 Lahore 192), Tripura Modern Bank Ltd v Bansen and Co (AIR 1952 Calcutta 781), Syed Iqbal Hussain v Mst. Sarwari Begum (PLD 1967 Lahore 1138), Siraj Din v Mst. Iqbal Begum (PLD 1968 Lahore 639), Abdul Salam v Mrs. Tahira Zaidi (1984 C.L.C 2855), Syed Muhammad Anwar Advocate v Sheikh Abdul Haq (1985 SCMR 1228), Mst. Salima Khatoon v M. Anzar Hussain (1989 C.L.C 691), Syed Mazhar Ali Shah v Shah Muhammad (1990 MLD 1070), Muhammad Amin v Karachi Building Control Authority (1992 C.L.C 691), Mst. Zubeda Begum v M/s. Long Life Builders (1995 C.L.C 1290), Zulfiqar v Muhammad Jan (2002 C.L.C 932), Messrs Mahmood Brothers through Mahmood Ahmed and another v National Bank of Pakistan through Manager another (2004 C.L.D 771); Muhammad Asghar and others v Qamar Din (PLD 2005 Lahore 240). In the light of above it would be construed that notices under Order XXI Rule 66 C.P.C were not properly served upon the judgment debtors. Thus without due service of notice under Order XXI Rule 66 CPC the learned Executing Court/Banking Tribunal could not proceed further in the sale of attached property through public auction. This aspect of the matter was not considered by the learned Banking Tribunal and it illegally approved the terms of sale. This was a material irregularity which vitiates the sale for the simple reason that where mandatory conditions for exercise of jurisdiction are not fulfilled by following requisite procedure, the subsequent proceedings become illegal. In this regard reference may be made to the cases of Balwant Rai Kumar v Smt. Amriti Kaur (AIR 1961 Punjab 495), Brig (Retd) Mazhar ul Haq and another v M/s. Muslim Commercial Bank Limited, Islamabad and another (PLD 1993 Lahore 706) and Mst. Zainab Bibi v Allied Bank of Pakistan Limited and others (2003 YLR 3274). 16. There was another irregularity in the sale of the attached property through public auction. According to Order XXI Rule 66 C.P.C and principle laid down in the cases of Appu alias Subramania Patter v O. Achuta Menon and others (AIR 1926 Madras 755) and Muhammad Hassan v Messrs Muslim Commercial Bank Ltd. Through Branch Manager and 3 others (2003 C.L.D 1693) a proclamation of sale was to be drawn up by the Executing Court itself after hearing the parties. In the case on hands this requirement of law was not complied with. This fact is evident from different
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orders of the learned Banking Tribunal, Lahore. The learned Banking Tribunal on 10.7.1994 passed an order for issuance of notices under Order XXI Rule 66 C.P.C. In compliance with the said order, on 1.9.1994 notices under Order XXI Rule 66 C.P.C were issued to the judgment debtors for their attendance before the learned Banking Tribunal so that they might participate in the proceedings for approval of following terms and conditions of the sale of attached property: {{URDU TEXT}} The above said conditions were approved by the learned Banking Tribunal vide order dated 13.9.1994 which reads as under: "Present: Counsel for the decree holder. Notice u/o 21 rule 66 CPC along with the terms of sale has been served on the judgment debtors concerned by "Chaspangi" as they were not available to accept service but none of them has turned up with any objections. The terms of sale are, therefore, approved. Consequently, Mr. Zahid Hamid Advocate, is appointed as the court auctioneer to conduct the sale of the attached property by public auction in accordance with law after observing necessary formalities. A sum of Rs.5000/- to be deposited by the decree holder within 10 days shall initially be paid to the court auctioneer by way of expenses of sale. For auction report now to come up on 7.11.94. Sd/- Chairman" (underlining is for emphasis) Consequent upon the above said order the auction was to be held on 30.11.1994 but the same could not take place due to restraining order dated 28.11.1994 passed by this Court in W.P.No.14110 of 1994 and, thus, the auction was postponed. Subsequently, the decree holder bank requested the learned Banking Tribunal/Executing Court to take further steps in the auction of the attached property as judgment debtors had not complied with order dated 28.11.1994 passed in W.P.No.14110 of 1994. This request was acceded to vide order dated 26.4.1995 which reads as under: "Present: Mr. Muhammad Iqbal Manager of the concerned branch of the decree holder bank. He says that not a single instalment was deposited by the judgment debtors within period fixed by the Honourable High Court by order dated 28.11.94. The objection petitions have already been withdrawn, hence the execution proceedings are to continue. The court auctioneer be issued robkar to go ahead with the auction of the attached property now in accordance with fresh schedule to be fixed by him. For auction report to come up on 26.6.95 Sd/-
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Chairman" (underlining is for emphasis) The above cited order shows that the learned Banking Tribunal just issued Robkar to the Court Auctioneer for taking further steps for auction of the attached property in accordance with fresh schedule to be fixed by him. Subsequent proceedings of the learned Banking Tribunal reveals that the Court Auctioneer never presented the schedule for auction or proposed proclamation of the sale before the learned Banking Tribunal for approval. The Court Auctioneer on his own prepared the schedule and proclamation of sale and conducted the sale of the attached property at public auction. This was a material irregularity and shows dereliction of duty on the part of the learned Banking Tribunal. The learned Banking Tribunal or Executing Court could neither delegate powers to Court Auctioneer to draw terms and conditions of sale nor Court Auctioneer, on his own, could issue proclamation of sale. Thus, publication of notice of sale by Court Auctioneer was an unauthorized act and of no legal consequence and resultantly the sale would be treated as void. 17. It is now well settled that the proclamation of sale should contain the following facts: a) the time and place of sale; b) description of property to be sold; c) 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; d) any incumbrance to which the…
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