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Official Citation: 2025 CLD 2016
Court / Jurisdiction: Supreme Court of Pakistan
Year of Decision: 2015
Decision Date: 2015-12-31
Ruling Summary: This decision was rendered by the Supreme Court of Pakistan on 2015-12-31, officially reported as 2025 CLD 2016. In this matter between the Petitioner and the Respondent, 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.
Case cited as CLD 2025 2016
Court Name: Supreme Court of Pakistan Judge(s):Khilji Arif Hussain, Anwar Zaheer Jamali, Mian Saqib Nisar, Amir Hani
JUDGMENT
Reported As: 2016 CLD 2025, 2016 SCP 85, PLD 2016 Supreme Court 995 Result: Appeal dismissed Judgment JUDGMENT ' MIAN SAQIB NISAR, J.---Vide order dated 10.6.2014 a bench of this Court requested the Hon'ble Chief Justice of Pakistan for the constitution of a larger bench in order to reconcile two apparently conflicting judgments of this Court reported as Muhammad Attique v. Jami Limited and others (PLD 2010 SC 993) and Mst. Asma Zafarul Hassan v. M/s. United Bank Ltd. And another (1981 SCM R 108). 2. In order to decide this appeal, a comprehensive narration of the facts is required:- respondent No,1/bank (decree holder) filed a suit on 30.5.1994 for recovery of finances granted to respondent No,2/customer, for whom Rana Muhammad Aslam, the predecessor-in-interest of respondents Nos.3(i) to (vi) (judgment debtor), stood surety having mortgaged his property bearing No,S-57-R- 32-E, 5-Temple Road, Lahore measuring approximately 12 marlas 86 square feet (lower portion of a double storeyed residential house; hereinafter referred to as the 'property'). A decree for the recovery of Rs,600,871.10/- was passed (along with Rs,15,167/- as costs) under section 6 of the Banking Tribunals Ordinance, 1984 (1984 Ordinance) in favour of the decree holder and against the judgment debtor on 20.3.1995 which (decree) has attained finality. Subsequently, the decree holder filed an execution petition under section 11 of the 1984 Ordinance and a court auctioneer was appointed on 24.10.1995 to conduct the sale of the mortgaged property. In this order it is unequivocally mentioned that though section 11(3) of the 1984 Ordinance enables a decree holder to sell mortgaged property itself without intervention of the Banking Tribunal, but in the instant case the decree holder sought execution of the mortgaged property through the Tribunal. The first auction was held, in which the predecessor-in-interest of the appellants, Liaqat Ali Mujahid (auction purchaser), was the highest bidder, with a bid of Rs,226,000/- (which was deposited by
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him with the Executing Court). The judgment debtor filed an objection petition challenging the auction to the auction purchaser on the ground that the value of the property had been assessed by the surveyor of the decree holder as Rs,950,000/- at the time of provision of finance to respondent No,2. The objection petition was accepted by the Tribunal vide order dated 27.11.1996. A fresh proclamation of sale was issued, a reserve price of Rs,600,000/- was fixed and the second auction was held on 12.1.1997 which failed. Subsequently, the auction purchaser offered to raise his bid from Rs,226,000/- to Rs,400,000/-. Meanwhile, the Banking Companies (Recovery of. Loans, Advances, Credits and Finances) Ordinance, 1997 (1997 Ordinance) was promulgated on 4.2.1997 and the Banking Tribunals constituted under the 1984 Ordinance were abolished vide notification dated 11.2.1997 after which the execution petition stood transferred to the Banking Court constituted under the 1997 Ordinance as is manifest from the order dated 27.2.1997 of the newly constituted Banking Court (note:- the Ordinance of 1997 was replaced by the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (1997 Act) which came into force on 31.5.1997). On 8.5.1997 the Banking Court rejected the auction purchaser's offer to raise his bid for the reason that his revised offer was still below the assessed value of the property and the reserve price, .Which (offer) was neither acceptable to the judgment debtor nor the decree holder. Through the same order, upon the request of the decree holder, the Banking Court allowed the former to sell the mortgaged property by public auction or private treaty, subject to confirmation by the court. The relevant part of the order reads as under:- "In reply to the application, the decree holder has sought permission to sell the mortgaged property itself and the law permits the same. The decree holder is, therefore, permitted to sell the mortgaged property either by way of public auction or through private treaty but the proceedings would be subject to confirmation by this court. ' For report of sale and filing of the sale proceedings by the decree holder now to come up on 10.6.97." (Emphasis supplied) ' There are numerous dates on which the Court awaited the report of the court auctioneer for the sale of the property through auction and one of the orders even suggests that the Banking Court approved the draft proclamation of sale in terms of Order XXI, Rule 66 of the Code of Civil Procedure, 1908 (C.P. C.) subsequent to which the third auction took place on 7.9.1998. During the proceedings the counsel for the decree holder had been appearing but no one appeared on behalf of the judgment debtor of the case. The order dated 23.9.1998 reveals that the auction purchaser, whose previous offer of Rs,400,000/- was not accepted by the Banking Court, when present in the Court improved his offer to the tune of Rs,6,16,038/- which (offer) was accepted by the decree holder. However the Court ordered:- "Now it is to be seen whether auction is to be confirmed for the above referred amount or the property is to be re-auctioned." ' The Court adjourned the matter to 2.10.1998 and upon an application filed by the court auctioneer claiming fee, issued notice to the decree holder. No notice was issued to the judgment debtor. Such sale was confirmed by the Banking Court vide order dated 2.10.1998 and the file was consigned to the record room. The relevant part of the above order reads as follows:- "Whereas the auction purchaser has purchased the property mentioned in 'Fard Taliq' for a sum of Rs,6,16,038/- as a result of private negotiation with the decree holder, therefore, the same is confirmed in favour of the auction purchaser Mr. Liaqat . Ali Mujahid. He be issued sale certificate on his application subject to payment of remaining price deducting 1/4th amount already deposited till 15.11.98." (Emphasis supplied)
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' On 7.12.1998 seemingly on an application by the auction purchaser, the file was resurrected and the following order was passed:- "Pursuant to my order dated 18.11.98 on the application referred to above, the file has been put up before me today. ' The auction purchaser Mr. Liaqat Ali Mujahid has sought the Sale Certificate being the highest bidder of property No, S-57 R-32 E situated at 5-Temple Road, Lahore. The report of the Nazir shows that the purchase price of Rs,622,038/- has been deposited by the auction purchaser in out of which Rs,616,038/- has been given to the decree holder bank and now remaining Rs,6000/- are lying in this court which are to be disbursed to the judgment debtor being the excess amount from the decretal amount. Sale Certificate be issued to Mr. Liaqat Ali Mujahid the auction purchaser in accordance with law. ' File be consigned to the record room as before." ' The sale certificate was issued on 8.12.1998. Thereafter the auction purchaser moved an application seeking possession of the purchased property and for that purpose, a Commission was appointed by the Banking Court vide order dated 19.4.1999 and eventually the possession was delivered to the auction purchaser. The judgment debtor filed an application under Order XXI, Rule 90 of the C.P.C. On 15.4.1999 challenging the sale of the property in favour of the auction purchaser and he was directed to deposit 20% of the sale price i,e, Rs,123,200/- with the Banking Court before 16.7.1999 which was so done on 8.7.1999. Vide order dated 20.9.1999 the application under Order XXI, Rule 90 of the C.P.C. Filed by the judgment debtor was dismissed on the grounds that (i) he had been participating in the proceedings throughout, (ii) the judgment debtor previously filed objections which were disallowed by the Banking Court, (iii) some earlier attempts were made to sell the property but none came forward except the auction purchaser, (iv) the decree holder and the auction purchaser mutually negotiated the sale of the property and as a result the decree holder agreed to the disposal of the property at Rs,616,038/- as is evident from the order dated 23.9.1998. The Banking Court finally adjudged that the property has been rightly sold through private negotiation. The plea taken up by the respondent that he was unaware of the execution proceedings was discarded as he was held to be participating in the proceedings; besides the property was sold on 29.3.1998, whereas the objection petition was moved on 15.4.1999 which was barred by time and no application for condonation of delay was filed. Thus the application under Order XXI, Rule 90 of the C.P.C. Was dismissed both on merits as also on the ground of limitation. Aggrieved of the above, the judgment debtor assailed this order in appeal and the learned Appellate Court whilst accepting the same (appeal) came to the conclusion that once having resorted to selling the property through public auction as per the provisions of Order XXI of the C.P.C., the same could not be sold through private negotiation and thus the Banking Court had committed an illegality. Thereafter, the auction purchaser filed an appeal before this Court which has culminated into the instant opinion. 3. Learned counsel for the appellants by relying upon the judgments reported as Muhammad Attique (supra) and Asma Zafarul Hassan (supra) argued that there is no bar upon the Executing Court against selling the property through private treaty/negotiation. He submitted that initially the auction procedure for the purposes of sale of the property as envisaged by Order XXI, C.P.C. Was adopted, but due to numerous failed attempts, the Banking Court was authorized to permit sale to take place through private treaty between the decree holder and the auction purchaser and to subsequently confirm such sale. He submitted that the view set out by the learned High Court that the sale could not be made otherwise than in accordance with Order XXI, C.P.C. Is violative of the judgments cited above, and since the decree was passed prior to enactment of the 1997 Act therefore its execution would be governed by the 1984 Act, section 11(3) whereof allowed for sale by private treaty; and if it is the 1997 Act which is to govern the execution process, even then sale by
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private treaty is permissible under the law as the same is amply covered by the phrase "in such other manner as the Banking Court may deem fit" as set out in section 18(1) of the said Act. Learned counsel submitted that there was conscious application of mind by the learned Tribunal, as no bidders came forth as a result of which the numerous attempts at auction failed, it was well within the jurisdiction of the Tribunal and in the interests of justice to allow for sale by private treaty. He further argued that the judgment debtor had participated in the execution proceedings throughout and was well aware that the property could not be sold through auction. When the auction purchaser moved an application to the Court seeking permission for sale of the property through private negotiation, the judgment debtor was not required to be issued any notice, rather it was a matter between the decree holder and the auction purchaser on the one hand and the learned Executing Court on the other. He also contended that the objection petition was filed beyond the period of thirty days and was thus rightly discarded by the learned Court as being barred by time. 4. Conversely, learned counsel for the respondents has led us to various orders of the Banking Tribunal/Court and argued that no notice had been issued to the judgment debtor whose property was to be sold through private treaty, rather a notice was issued to the decree holder when the auction purchaser applied for sale of the property through private treaty. In this manner the judgment debtor had been condemned unheard and therefore the entire process of the private sale in favour of the auction purchaser stands vitiated. He also submitted that once the process and procedure of auction under the C.P.C. Was resorted to for the disposal of a mortgaged property thereafter the Court did not have the jurisdiction to deviate therefrom and take a different course. Reliance in this regard has been placed on the cases reported as Muhammad Rafiq v. United Bank Limited and another (2005 CLD 1162), National Bank of Pakistan and 117 others v. SAF Textile Mills Ltd. And another (PLD 2014 SC 283) and Muhammad Attique (supra). 5. Heard. The propositions which have emerged for the purposes of the present appeal are:- (i) What was the law applicable on 8.5.1997, 23.9.1998 and 2.10.1998, when the Banking Court allowed the property to be sold by the bank through private treaty, the offer of the appellant was accepted by the bank and the confirmation of the private sale in favour of the appellant respectively, and what is the effect of such law on the facts and circumstances of the present case; (ii) Whether the order dated 8.5.1997 passed by the Banking Tribunal was superseded by the Banking Court vide its order dated 10.6.1997 and if so, to what effect; (iii) Whether under the 1984 Ordinance or the 1997 Ordinance/Act both being special laws, the Banking Tribunal/Court in execution proceedings, could adopt any procedure it deemed fit for the sale of the mortgaged property other than the one (the procedure) prescribed by the two laws mentioned above; (iv) Having once adopted a mode of execution as set out in the C.P.C., can a court deviate therefrom; (v) With respect to the merits of the case, does the sale achieve validity on the touchstone of either of the special laws; (vi) To reconcile the two apparently conflicting judgments of this Court identified in paragraph No,1 of this opinion, i,e, Muhammad Attique (supra) and Asma Zafarul Hassan (supra). ' In order to resolve the propositions at hand, it is instructive to reproduce the relevant provisions from the 1984 Ordinance, 1997 Ordinance and 1997 Act:- 1984 Ordinance "11. Execution of decree. - The Banking Tribunal shall, on the written application of the decree- holder, forthwith order execution of the decree or order and where the decree or order pertains to money recover the amount covered, by the decree or order, as the case may be, as arrears of land revenue or in such other manner as may be applied for by the decree-holder, in
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accordance with the provisions of the Code of Civil Procedure, 1908 (Act V of 1908), or any other law for the time being in force: (Emphasis supplied) ' Provided...................................... (2) (3) Notwithstanding anything contained in this Ordinance, where a banking company holds any property belonging to the judgment-debtor as security, it may sell the same without intervention of Court either by public auction or private treaty to any person, and appropriate the proceeds thereof according to law towards total or partial satisfaction of the decree: ' Provided that proper account of the proceeds shall be filed with the Banking Tribunal not later than thirty days from the date of such satisfaction: ' Provided further that, where the Banking company wishes to sell the property by private treaty, it shall, before concluding the sale, give to the judgment-debtor, by a notice, the option to purchase or redeem it, as the case may be, at the same price within such time as the banking company may specify in such notice. (4) (5) 1997 Ordinance 7. Powers of Banking Courts.- (1) .......... (6) All proceedings, including proceedings following the filing of an arbitration award and proceedings for the execution of a decree within the jurisdiction of a Banking Court, pending in any Special Court constituted under the Banking Companies (Recovery of Loans) Ordinance, 1979 (XIX 1979), any Banking Tribunal constituted under the Banking Tribunals Ordinance, 1984 (LVIII of 1984) or any other Court including a High Court shall stand transferred to the Banking Court having jurisdiction. On transfer of proceedings under this subsection, a Banking Court shall require the attendance of the parties through notice issued in accordance with the procedure for service of summons or notice laid down in subsection (2) of section 9. (7) In respect of proceedings transferred to a Banking Court under subsection (6) the Banking Court shall proceed from the stage at which the proceedings have been transferred and shall not be bound to recall and rehear any witness who has given evidence before the transfer, and may act on the evidence already recorded or produced before the Court or Tribunal from which the proceedings have been transferred. (Emphasis supplied) 12. Execution of Decree.---(1) The Banking Court shall, on the written or oral application of the decree-holder, forthwith order execution of the decree or order and, where the decree or order pertains to money, may direct, that the amount covered by the decree or order, as the case may be, shall be recovered as arrears of land revenue in accordance with the provisions of the Code of Civil Procedure, 1908, or any other law for the time being in force or in such other manner as the Banking Court may deem fit. (2) Subject to subsection (3), where a banking company is a mortgagee of any property belonging to the judgment-debtor, it may, sell such property without the intervention of the Banking Court either by public auction or by private treaty to any person or purchase such property on its own account and appropriate the proceeds thereof towards total or partial satisfaction of the decree. (3) Where the judgment debtor or any person acting on his behalf does not voluntarily give possession of the mortgaged property sold or sought to be sold or purchased or sought to be purchased or purchased by the banking company under subsection (2), the Banking Court on the application of the Banking Company or the purchaser shall put the Banking Company or, as the
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case may be, the purchaser in possession of the mortgaged property in accordance with the provisions of Order XXI of the Code of Civil Procedure. (4) (5) Where the banking company wishes to sell the property by private treaty or to purchase it on its own account it shall, before concluding the sale give to the judgment debtor an option by a notice in writing for purchasing or redeeming such property at the price at which the banking company proposes to sell or purchase within such period as the banking company may specify in such notice which shall not, in any case, be less than seven days. (6) .. (7) (8) 23. Repeal.---The Banking Companies (Recovery of Loans) Ordinance 1979 (XIX of 1979), and Banking Tribunals Ordinance, 1984 (LVIII of 1984) are hereby repealed. 1997 Act "7. Powers of Banking Courts. - (1) (6) All proceedings, including proceedings following the filing of any arbitration award and proceedings for the execution of a decree within the jurisdiction of a Banking Court, pending in any Special Court constituted under the Banking Companies (Recovery of Loans) Ordinance, 1979 (XIX 1979), or under the Banking Companies (Recovery of Loans, Advance, Credits and Finances) Ordinance, 1997 (XXV of 1997), or any Banking Tribunal under the Banking Tribunals Ordinance, 1984 (LVIII of 1984), or any other Court including a High Court shall stand transferred to, or be deemed to be transferred to the Banking Court having jurisdiction. On transfer of proceedings under this subsection, a Banking Court shall require the attendance of the parties through notices issued in accordance with the procedure for service of summons or notice laid down in subsection (3) of section 9. (7) In respect of proceedings transferred to a Banking Court under subsection (6) the Banking Court shall proceed from the stage which the proceedings had reached immediately prior to the transfer and shall not be bound to recall and re-hear any witness and may act on the evidence already recorded or produced before the Court or Tribunal from which the proceedings were transferred. (Emphasis supplied) 18. Execution of Decree.- (1) The Banking Court shall, on the written application of the decree- holder, forthwith order execution of the decree or order at any time seven days after the passing of the decree or order and, where the decree or order pertains to money, may direct that the amount covered by the decree or order, as the case may be, shall be recovered in accordance with the provisions of the Code of Civil Procedure, 1908, or any other law for the time being in force or in such other manner as the Banking Court may deem fit: (Emphasis supplied) ' Provided that the Banking Court may, at the time of passing a final decree pass an order of the nature contemplated by subsection (1) of section 16 to the extent of the decretal amount. (2) Subject to subsection (3), in cases of pledged or mortgaged property a banking company may sell the same with or without the intervention of the Banking Court either by public auction or by inviting sealed tenders and appropriate the proceeds thereof towards total or partial satisfaction of the decree. (3) ........................................... (4) ........................................... (5) Where the banking company wishes to sell a property by inviting sealed tenders, it shall, invite offers through advertisements in one English and one Urdu newspaper which are circulated widely in the city in which the sale is to take place giving not less than thirty days time for submitting
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offers. The sealed tenders shall be opened in the presence of the tenderers or their representatives or such of them as attend: ' Provided that before concluding the sale the judgment-debtor shall be given an opportunity to purchase the property at a matching price to be paid in cash within a period of thirty days. (6) ........................................... 28. Repeal.- (1) The Banking Companies (Recovery of Loans) Ordinance, 1979 (XIX of 1979), the Banking Tribunals Ordinance, 1984 (LVIII of 1984), and the Banking Companies (Recovery' of Loans, Advances, Credits and Finances) Ordinance, 1997 (XXV of 1997), are hereby repealed. (2) " 6. With respect to the first proposition we may reiterate the following: a decree for the recovery of a certain amount was passed in this case under Section 6 of the 1984 Ordinance and an execution petition was filed under Section 11 of the said Ordinance. During the pendency of the execution proceedings, the 1997 Ordinance was promulgated on 4.2.1997 and the Banking Tribunals constituted under the 1984 Ordinance were abolished vide notification dated 11.2.1997 after which the execution petition stood transferred to the Banking Court constituted under the 1997 Ordinance. The 1997 Ordinance was replaced by the 1997 Act which (Act) came into force on 31.5.1997. The 1997 Ordinance was promulgated on 4.2.1997 and by virtue of Article 89(2)(a)(ii) of the Constitution of the Islamic Republic of Pakistan, 1973 (the Constitution), it was to stand repealed at the expiration of 120 days of its promulgation, i,e, on 3.6.1997. However before the expiry of 120 days, the 1997 Ordinance was laid before Parliament under Article 89(3)(b) of the Constitution and culminated into the 1997 Act which was promulgated on 31.5.1997, i,e, the day it received the President's assent. The 1997 Act repealed the 1997 and 1984 Ordinances (the latter of which already stood repealed under the 1997 Ordinance). 7. Accordingly, the 1984 Ordinance stood irrevocably repealed on 4.2.1997 by virtue of the 1997 Ordinance, ergo for all legal intents and purposes, the 1984 Ordinance ceased to have effect on the said date. The fact that there was no saving clause in the 1997 Ordinance (and none in the 1997 Act either) to the effect that all proceedings, rights or liabilities under the 1984 Ordinance would continue to be governed by the latter Ordinance lends credence to this interpretation. Instead there was only a transfer provision in the form of section 7(6) of the 1997 Ordinance (and the 1997 Act), providing that all proceedings, including proceedings for the execution of a decree within the jurisdiction of a Banking Court, pending in any Banking Tribunal constituted under the 1984 Ordinance (and the 1997 Ordinance) shall stand transferred to the Banking Court having jurisdiction under the 1997 Ordinance (and the 1997 Act). 8. In any event, it is indeed settled law, in line with section 6 of the General Clauses Act, 1897, that any act done or any action taken or purported to have been done or taken under or in pursuance of the repealed Act, shall in so far as it is not inconsistent with the provisions of new Act, be deemed to have been done or taken under the corresponding provisions of the new Act. A litigant…
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