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Petitioner: IFTIKHAR AHMED VS Respondent: MY BANK LTD. through President and 4 others
Court Name: Sindh High Court Judge(s): Khalid Ali Z. Qazi Title: IFTIKHAR AHMED vs MY BANK LTD. through President and 4 others Case No.: Suit No,1329 of 2008 Date of Judgment:2008-12-01 Reported As: 2009 CLD 374 Result: Application allowed
Judgment ORDER ' KHALID ALI Z. QAZI, J.--- C.M.A. No,9196 of 2008. This is an application under Order XXXIX, Rule 1 and 2, C.P.C. Read with section 151, C.P.C. Filed by the plaintiff, with prayer that restraining the defendants Nos.1 to 4 and their agents, servants, employees, attorneys or any other person acting on their behalf not to create any their party interest over the suit property viz; flats Nos.401 and 404 Al- Madina Arcade Clifton Karachi and defendant No,5 may be restrained not to register or execute any documents in respect of the suit property till disposal of the suit. 2. Brief facts requisite for disposal of this application are that Flats Nos.401 and 404, located at 4th floor of building known as Al-Madina Arcade, Block-5, Clifton, Karachi, were purchased by plaintiff from the owner by virtue of registered indenture of sub-leases Nos. 114 dated 9-1-2004, M.F. Roll No,3281 dated 30-1-2004, Photo Registrar Karachi and 113 dated 9-1-2004, M.F. Roll No, 3281 dated 30-1-2004, photo Registrar Karachi, executed before the Sub-Registrar, T-Division-li(B), Clifton Town, Karachi, the defendant No,5. It is further stated by the learned counsel for the plaintiff that it was assured by the previous owner to the plaintiff when the said flats were purchased that there is no lien, claim, any dues of any person or department or even pending any litigation in any Court of law on such assurance the said flats were purchased by the plaintiff. 2-A. It is further stated that plaintiff was shocked when he came to know about filing of C.P. No,2015 of 2002 the neighbours of plaintiff before this Honourable Court wherein it was alleged that the said flats of plaintiff were constructed by the owner on 4th floor in violation of the approved Site plan. In view of the amnesty offered by the KBCA to the general public for regularization of the buildings constructed in violation of site plan/laws but on payment of certain fees, plaintiff immediately
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approached the KBCA for regularization of his flats and the KBCA entertained his request and recovered the prescribed fee for submission of the revised site plan. 3. It is contended by the learned counsel that plaintiff had no knowledge about any restraining order granted by the Honourable High Court in C. P. No,2015 of 2002 and he was surprised when his flats were sealed/attached by the Nazir of this Court and on the request of plaintiff he was impleaded as respondent No,7 in the said petition, by the Court and that petition is pending before this Honourable Court. In view of false, fraudulent and bogus claim of defendant No,1 in respect of the said flats of plaintiff, his request for desealing of the flats could not be finalized and is pending before the Court. 4. Learned counsel urged that it is very pertinent to note that defendant No,1, has filed the photo copies of the following documents, in C.P. No,2015 of 2002, before the ,Court except the sub-leases in favour of plaintiff, the other documents do not contain the signatures of plaintiff. The defendant No,1 has filed a copy of Suit No,37 of 2006 filed by Mr. Abdul Qadir Jhangra (defendant No,2) in C.P. No,2015 of 2002 in this. Court which also contains false and fabricated signature of plaintiff as the plaintiff had neither any knowledge of such suit nor he signed thereon. 5. It is further contended by the learned counsel for the plaintiff that. Defendant No,1 has filed Memorandums of Deposit of title deeds in C.P. No, 2015 of 2002, purporting to have been signed by plaintiff but the plaintiff has informed to defendant No,1 through legal notice (Annexure-A) that his signatures thereon are false and fabricated as neither he had executed such documents in favour of defendant No,1 nor signed thereon. The so-called notices filed by defendant No,1 (Annexure-A) in Court, purported to have been issued to plaintiff containing address of the flats which are sealed and under the control of this Court and beyond the control of plaintiff who resides in Bungalow No,208, Unit No,II, Latifabad at Hyderabad, the plaintiff had no knowledge of such notices and the same were not served upon him. 6. That plaintiff has seen the false and forged documents filed by defendant No,1 in the Honourable High Court of Sindh and has come to the conclusion that defendant No,1 in collusion with Abdul Qadir Jhangra (defendant No,2) has drawn the loan and defrauded the Bank which is a serious offence under the Banking Laws including other laws of land in violation of the laws and directions/orders of the State Bank of Pakistan. Defendant No,1 in collusion with Abdul Qadir Jhangra (defendant No,2) has tried to usurp plaintiffs flats by preparing the false and fabricated documents and showing fictitious auction for sale of his flats, despite the fact that the flats were sealed by the Nazir of this Court in C.P. No,2015 of 2002. 7. It is further contended that being a family friend of plaintiff, although the Sub-leases of flats were lying with defendant No,2 but plaintiff never authorized defendant No,2 to deposit the same with defendant No, 1. 8. It is contended that on coming to know about the illegal action of defendant No,1, the plaintiff has held several meetings with the authorities of defendant No,1 and on the very first meeting, they/defendant No,1 assured plaintiff that they will look into the matter and return to him the original documents which were handed over to them by defendant No,2 after fixing the responsibility upon the officials involved. However, later on they did not take any action and also refused to return the documents on 19-8-2008. Learned counsel stated that for comparing the writing/signature itself or send these documents to hand writing expert for comparing the signatures of plaintiff. Bare look at the controversial writing and signatures can expose the forgery, fabrication and fraud. 9. Learned counsel submitted that it is also pertinent to note that afore-mentioned illegal acts were done by defendant No,1 and defendant No,2 collusively and without knowledge of plaintiff during the period when these flats were under the control of the Court of Sindh and defendants Nos.1 and 2 have disregarded the authority of the Court and committed contempt of Court. Learned counsel
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stated that defendants may be permanently restrained jointly and severally not to create any interest over the suit property. 10. Learned counsel for the plaintiff has relied upon on the following case-law:-- (i) PLD 2004 Karachi 304 (ii) PLD 1970 SC 180 (iii) 2001 CLC 1825 (iv) PLD 1990 Karachi 1 11. In reply to the contention of the learned counsel for the plaintiffs Mr. Aziz-ur-Rehman learned counsel for the defendant No,1 contended that plaintiff is not any more the owner of the 2 flats in question as he having mortgaged the same in favour of defendant No,1 Bank through deposit of title deeds and plaintiff had executed two separate Memoranda of Deposit of Title Deeds copies of which are available at pages 225 and 227 of the Court file. Copies of the registered indentures of Sub-Leases regarding the 2 apartments which were in favour of the plaintiff and which were both dated 24-12-2003 are at pages 35 to 47 and at pages 77 to 87 of the Court file. 12. Learned counsel stated that it is incorrect defendant No,1 Bank is trying to usurp the plaintiffs two flats. Defendant No,2 had obtained financial facilities from defendant No,1 and inter alia arranged equitable mortgages by the plaintiff with regard to the said flats in question. Defendant No,1 Bank had validly sent legal notices under section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in respect of the said 2 flats. Thereafter the bids given by defendants Nos. 3 and 4 with regard to one flat each having numbers 401 and 404 were accepted by defendant No,1 Bank. The present plaintiff Mr. Iftikhar Ahmed and 7 others proceeded to file Suit No,B-37 of 2006 on 18-5- 2006 against present defendant No,1. Bank showing the Bank as the sole defendant. In the said suit, the 8 plaintiffs had filed an application for injunction which was given C.M.A. No,3878 of 2006 claiming that auctioning/ transferring/selling of the properties mentioned in the publication of My Bank Ltd. Dated 8-5-2006 be prohibited. 13. Learned counsel urged that the auctions of the said 2 flats bearing numbers 401 and 404 were carried out without the intervention of the Court, after following the procedure under section 15 of the Ordinance of 2001 and the flats remain sold to defendants Nos. 3 and 4. 14. Mr. Qamar Ahmed Shaikh learned counsel for the defendants Nos.3 and 4 had adopted the arguments of Mr. Azizur-Rehman Advocate for the defendant No,1, he further submitted that under section 56 of the Specific Relief Act right of the plaintiff has been extinguished after seal of the property by the Nazir therefore, under section 42 of the Specific Relief Act, the plaintiff cannot claim himself owner of the flats in question since possession with the Nazir though title of the plaintiff has been extinguished. 15. Contention of Mr. Qamar Ahmed Shaikh Advocate has no force, the title documents are still in the name of the plaintiff he is entitled and prima facie it appears on perusal of record that auction proceeding admitted by the ' Bank without intervention of the Court appears to be in violation of mandatory provisions of law. Three notices issued by the defendant No,1 to plaintiff on seal premises are itself not sustainable under the law and prima fade it appears that the auction proceedings are based on foundation of the notice issued under section 15(2) of the Ordinance, 2001. The super structure constructed thereon is liable to be demolished. 16. Learned counsel for the defendants has relied upon on the following case-laws:-- (i) 2007 CLD 349 (ii) 2007 CLD 232 (iii) 1993 CLC 1316 (iv) 1990 CLC 1473 (v) 2006 CLD 18 (vi) 2003 CLD 931
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(vii) 2004 CLD 112 (viii) 2003 CLD 367 (ix) 1998 CLD 1718 (x) 2003 CLD 867 (xi) 2007 SCMR 373 17. In exercising right of rebuttal learned counsel for the plaintiff urged that plaintiff has a prima facie good case and balance of convenience lies in his favour as admittedly plaintiff is lawfully owner of the demised flats and neither he stood guarantee of defendant No,2 for the repayment of loan amount to the defendant No,1 nor he executed memorandum of deposit of title deeds dated 16-2-2005 and 17-3-2005 and alleged. It is categorically asserted that the alleged Memorandum of deposit of title deeds are manifestly forged, fabricated collusive documents containing plaintiffs forged signatures having been manufactured by the defendants Nos.1 and 2 in collusion with each other with mala fide intention to usurp his valuable property/flats in question and as such subsequent sale of my demised flats by the defendant No,1 to defendants Nos.3 and 4 on the strength of forged/fabricated documents i,e, memorandum of deposit of title deeds is also unlawful, void ab initio having no legal effect and is not binding on me besides the defendants Nos.3 and 4 stood in the shoes of defendant No,1 have no locus standi to object to my application under Order XXXIX, Rules 1 and 2, under section 151, C.P.C. 18. Learned counsel for the plaintiff contended that the alleged documents i,e, Memorandum of deposit of title deeds dated 16-2-2005 and 17-3-2005 along with plaintiffs signatures appeared on sub-leased, Identity Card and Passport etc. May please be sent to the honest and independent handwriting expert and ring of truth will come out for the resolution of the pertinent issues involved in the suit under reference. It is further stated that admittedly the defendants Nos. 3 and 4 have not categorically denied the contents/ averments of application under Order XXXIX, Rules 1 and 2 read with section 151, C.P.C. And plaint as well which would be deemed to have been admitted by the defendants Nos.3 and 4 and as such plaintiff is entitled to relief of injunction as prayed in the interest of justice under the circumstances otherwise multiplicity of proceedings will arise and there would be no end of litigation. 19. I have heard the arguments and perused the record. 20. On perusal of the record I find that present suit has been filed on different cause of action and earlier Suit No,B-37 of 2006 was filed in respect of recovery of excess paid amount of Rs,53,421,606 Rendition of Accounts, Damages of Rs,350 million and Consequential Reliefs under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 while the present suit has filed on separate cause of action in respect of Flat Nos. 401 and 404 situated on 4th Floor alMadina Arcade, Block-5, Clifton Karachi. It is the case of the plaintiff that he is owner of the above flats and without his consent or authority the defendants have prepared forged documents and advances loan to defendant No,2 against the said flat without his authority/knowledge. It is further allegation that bank has also through a fictitious auction has sold the said flats of the plaintiff to its dummy/own people the defendants Nos.3 and 4 in a very low/throwaway price. It is further the contention of the plaintiff that neighbour of the premises raised objection over the construction of flats on 4th floor and filed C. P. No,D-2015 of 2002 in High Court and on the order of the High Court both the flats of the plaintiff are sealed by the Nazir of this Court in the year 2004 and his flats since then are under the control of Nazir of High Court. It is further the case of the plaintiff that he never stood guarantee of defendant No,2 for the repayment of loan amount to the defendant No,1 and never executed memorandum of deposit of title deeds dated 16-2-2005 and 17-3-2005. It is further asserted that the alleged memorandum of deposit of title deeds are manifestly forged, fabricated collusive documents containing his forged signatures having been manufactured by the defendants Nos. 1 and 2 in collusion with each other with mala fide intention to usurp my valuable property/flats in
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question and as such subsequent sale of demised flats by the defendant No,1 to defendants Nos. 3 and 4 on the strength of forged/fabricated documents i,e, memorandum of deposit of title deeds is also unlawful void ab initio having no legal effect and is not binding on the plaintiff besides the defendants Nos. 3 and 4 stood in the shoes of defendant No,1 have no locus standi to object to my application under Order XXXIX, Rules 1 and 2, C.P.C. It is further the case of the plaintiff that issue involved in this suit under reference is quite distinct from the issue involved in the C. P. No,D-2015 of 2002 and Suit No,B-37 of 2006 and as such the issue involved in suit under reference has no nexus with the issue involved in the said C.P. And the earlier suit. It is further the case of the plaintiff that he has neither filed Suit No,B-37 of 2006 against bank as plaintiff No,3 nor he signed the plaint of the suit nor engaged the counsel nor signed vakalatnama and the signatures appeared on the plaint before verification clause and on Vakalatnama are forged have been manufactured by the defendant No,2, besides plaintiff have no knowledge of H.C.A. No,B-430 of 2006 which was dismissed in limine wherein plaintiff was made respondent No,3 by the defendant No,2. It is the case of the plaintiff that all this forgery came into his knowledge on receipt of objections filed by defendant No,1 in C.P. No,D-2015 of 2002 wherein he submitted his counter affidavit which has not yet been responded by the defendants Nos. 1 and 2. 21. It appears on perusal of record that the plaintiff properties documents were deposited with the defendant No,1 without his knowledge for creation of mortgage with the defendant No, 1. It is the argument of Mr. Aziz-ur-Rehman Advocate for the defendant No,1 that this Court has no jurisdiction and plaint is liable to be rejected while the plaintiff case is that neither he is "customer" as finance never extended to him by the defendant No,1 and he was nor "surety" or "indemnifier" and no finance under section 2(d) Ordinance, 2001 was provided to plaintiff therefore, suit under section 9, C.P.C. Is maintainable. All these legal questions raised by the learned counsel for the defendant can be resolved by the Court in trial Court. Legal question for maintainability of the suit may be settled as an issue while framing the issues by this Court. 22. The crucial question which requires consideration is whether the defendant No,1 have properly served the notices upon the plaintiff as contemplated under subsections (2), (4) and (10) of section 15 of the Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001) section 15 of Ordinance XLVI of 2001 is reproduced for conveniences as under:-- 15. Sale of mortgaged property.--(1) In this section, unless there is anything repugnant in the subject of context,- (a) "mortgage" means the transfer of an interest in specific immovable property for the purpose of securing the payment of the mortgage money or the performance of an obligation which may give rise to a pecuniary liability; (b) "mortgage money" means any finance or other amounts relating to a finance, - penalties, damages, charges or pecuniary liabilities, payment of which is secured for the time being by the document by which the mortgage is effected or evidenced, including any mortgage deed or memorandum or deposit of title deeds; and (c) "mortgaged property" means immovable property mortgaged to a financial institution. (2) In case of default in payment by customer, the financial institution may send a notice on the mortgagor demanding payment of the mortgage money outstanding within fourteen days from service of the notice, and failing payment of the amount within due date, it shall send a second notice of demand for payment of the amount within fourteen days. In case the customer on the due date given in the second notice sent, continues to default in payment, financial institution shall serve a final notice on the mortgagor demanding the payment of the mortgage money outstanding within thirty days from service of the final notice on the customer. (3) When a financial institution serves a notice of demand, all the powers of the mortgagor in regard to recovery of rents and profits from the final mortgaged property shall stand transferred to
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the financial institution until such notice is withdrawn and it shall be the duty of the mortgagor to pay all rents and profits from the mortgaged property to the financial institution: Provided that where the mortgaged property is in the possession of any tenant or occupier other than the mortgagor, it shall be the duty of such tenant or occupier, on receipt of notice in this behalf from the financial institution, to pay the rent or lease money or other consideration agreed with the mortgagor to the financial institution. (4) Where a mortgagor fails to pay the amount as demanded within the period prescribed under subsection (2), and after the due date given in the final notice has expired, the financial institution may, without the intervention of any Court, sell the mortgaged property or any part thereof by public action and appropriate the proceeds thereof towards total or partial satisfaction of the outstanding mortgage money: ' Provided that before exercise of its powers under this subsection, the financial institution shall cause to be published a notice in one reputable English daily newspaper with wide circulation and one Urdu daily newspaper in the Province in which the mortgaged property is situated, specifying particulars of the mortgaged property, including name and address of the mortgagor, details of the mortgaged property, amount of outstanding mortgage money, and indicating the intention on the financial institution to sell the mortgaged property. The financial institution shall also send such notices to all persons who, to the knowledge of the financial institution, have an interest in the mortgaged property as mortgagees. (5) The financial institution shall be entitled, in its discretion to participate in the public auction, and to purchase the mortgaged property at the highest bid obtained in the public auction. (6) Where the mortgagor or his agent or servant or any person put in possession by the mortgagor or on account of the mortgagor does not voluntarily give possession of the mortgaged property sought to be sold or sought to be purchased or purchased by the financial institution, a Banking Court on application of the financial institution or purchaser shall put the financial institution or purchaser, as the case may be, in possession of the mortgaged property in any manner deemed fit by it: ' Provided that the Banking Court may not order eviction of a person who is in occupation of the mortgaged property or any part thereof under a bona fide lease, except on expiry of the period of the lease, or on payment of such compensation as may be agreed between the parties or as may be determined to be reasonable by the Banking Court. ' Explanation.---Where the lease is created after the date of the mortgage and it appears to the Banking Court that the lease was created so as to adversely affect the value of the mortgaged property or to prejudice the rights and remedies of the financial institution, it shall be presumed that the lease is not bona fide, unless provide otherwise. (7) For purposes of execution and registration of the sale-deed in respect of the mortgaged property, the financial institution shall be deemed to be the duly authorized attorney of the mortgagor and a sale-deed executed and presented for registration by duly authorized attorneys of the financial institution shall be accepted for such purposes by the Registrar and sub-Registrar under the Registration Act, 1908 (XVI of 1908). (8) Upon execution and registration of the sale-deed of the mortgaged property in favour of the purchaser all rights in such mortgaged property shall vest in the purchaser free from all encumbrances and the mortgagor shall be divested of any right, title and interest in the mortgaged property. (9) Net sale proceeds of the mortgaged property, after deducting all expenses of sale or expenses incurred in any attempted sale, shall be distributed ratably amongst all mortgagees in accordance with their respective rights and priorities in the mortgaged property. Any surplus left, after paying in full all the dues of mortgagees, shall be paid to the mortgagor.
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(10) A financial institution which has sold mortgaged property in exercise of powers conferred herein shall file proper accounts of the sale proceeds in a Banking Court within thirty days of the sale. (11) All disputes relating to the sale of the mortgaged property under this section including disputes amongst mortgagees in respect of distribution of the sale proceeds, shall be decided by the Banking Court. (12) Neither the banking Court nor the High Court shall grant an injunction restraining the sale or proposed sale of mortgaged property unless.--- (a) It is satisfied that no mortgage in respect of the immovable property has been created; or (b) All moneys secured by mortgage of the mortgaged property have been paid; or (c) The mortgagor or objector deposits in the Banking Court in cash the outstanding mortgage money. (13) The rights and remedies provided under this section are in addition to, and not in lieu of, any other rights or remedies a financial institution may have under this Ordinance. (14) The provisions contained in this section shall have effect notwithstanding anything contained in this Ordinance. 23. On bare reading of section 15 of the Ordinance XLVI 2001 provides that subsection .(2) of section 15 requires that in case of default in payment by customer, the financial institution may send a notice of mortgagor demanding payment of mortgaged money outstanding within due date, a second notice of demand for payment of the amount within 14 days from the service of the notice and on failing to pay the amount within 14 days has to be served. If the mortgagor fails to pay the amount after service of second notice, then financial institution has to serve a financial notice on the mortgagor demanding payment of mortgaged money outstanding within 30 days from the service of the financial notice. Upon the service of the final notice the financial institution acquires right to recover the rent and profit from the mortgaged property till the time notice is withdrawn and to sell the mortgaged property without the intervention of Court by public auction. From reading the above…
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