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Petitioner: HABIB BANK LIMITED VS Respondent: Messrs PAK CLOTH DYING AND PRINTING WORKS and 6 others
Court Name: Sindh High Court Judge(s): Rasheed A. Rizvi Title:HABIB BANK LIMITED vs Messrs PAK CLOTH DYING AND PRINTING WORKS and
6 others Case No.:Execution Application No,76 of 1988, Civil Miscellaneous Applications Nos.2534 of 1997 and 557 of 1998 Date of Judgment:1984-09-03 Reported As: 1999 CLC 374 Result: Order accordingly Judgment ORDER These are two applications; the first application is filed by the auction purchaser namely Raja Gohar Rehman under section 47 of the Code of Civil Procedure, 1908, (C.P.C.) read with section 151, C.P.C. (C.M.A. 2534 of 1997) for recovery of Rs,40,00,000 from judgment-debtor No,1 in an execution matter where, admittedly the decree stands satisfied in view of the following facts. The suit bearing No,604 of 1983 was filed by the decree-holder against the judgment-debtor No,1 and its six other Directors which was decreed by this Court vide judgment, dated 3rd September, 1984 for total amount of Rs,36,61,324.24 with cost and future interest @ 13% per annum with quarterly rest. As a result of execution of the decree, all movable and immovable properties of J.D.I. were auctioned for a total sum of Rs,13,000,000 (Rupees thirteen million only) which was purchased by the present auction-. Purchaser/applicant. Out of this amount, a total sum of Rs,9,630,858 was paid to the decree-holder in full and final satisfaction of the decree which is being partly challenged by the J.D. No,1. A total sum of Rs,3,379,142 was lying with the Nazir of this Court but some more payments were subsequently made to K.E.S.C. and Sui Southern Gas Co. A report was called from the Nazir to ascertain the position of present balance after payments which reads as follows:-- "It is respectfully submitted that a sum of Rs,1,30,00,000 (Rupees one crore thirty lac only) was deposited by auction-purchaser towards sale proceeds of mortgage property viz. Messrs Pak Cloth Dying and Printing Works Limited, out of which a sum of Rs,1,30,000 had been paid towards Nazir's fee as per Court's order, dated 23-2-1995 and 22-3-1995 and outstanding dues against the
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abovesaid property, as well as Government dues are also paid vide order, dated 15-8-1995 detail mention below-- 1 K. E. S . C . Rs,61,772 2 Sui Gas Rs,1,66,509 3 Excise and Taxation Rs,49,660 4 S. Industrial Trading EstateRs,3,545 5 Telephone Rs,26 208 Total Rs, 3 ,07 , 694 It is further submitted that a sum of Rs,96, 30,858.52 was paid to decree-holder in terms of Court's order, dated 10-12-1995. At present a balance of Rs,29, 36,447.48 (Rupees twenty-nine laces thirty-six thousand four hundred forty-seven paisa forty-eight only) is lying vide L.P. No,424/95-96." The claim of the auction-purchaser is that his bid was accepted by this Court on 31-1-1994 and after depositing the entire sale price, the auction was finally confirmed by this Court on 31-5-1994; that on 1-6-1994, the J.D. No,1 filed C.M.A. No,833 of 1994 in the instant proceedings and obtained stay against the Nazir to proceed further in the auction matter; that subsequently, on 18-8-1994, J.D. No,1 filed H.C.A. 27 of 1994 in which a learned Division Bench of this Court ordered maintenance of the stay order granted by this Court which continued till 10-4-1995 when the said appeal was dismissed; that again, on 13-4-1995 a petition seeking leave to appeal was filed by the J.D. No,1 before the Honorable Supreme Court, where again stay was granted which continued till 25-4-1995 when the petition seeking leave to appeal was dismissed. It is claimed by the auction-purchaser that since he was entitled to the delivery of the physical possession of the auctioned property on 30-5-1994 and was restrained by injunction orders granted by this Court and the Appellate Court which remained in operation till 30-4-1995 when finally possession was delivered to him, he is entitled to all benefits, rents and others profits arising therefrom. Therefore, he has lodged a claim of Rs,40 lacs with 13% interest per annum for the following benefits and profits which were denied by the judgment-debtor:-- "2(a)Received rent amounting to Rs,4,50,000 (Rupees four lac fifty thousand only) for fifteen months from tenant Messrs S.A. Najeeb in terms of agreement, dated 1-7-1984 I@ Rs,30,000 p.m. (photo copy of attested copy of agreement hereto annexed and marked as "Al" to "A4"). (b) Received Rs,22,50,000 as earnings from the contractors who Were running the production unit of the property @ Rs .1,50 ,000 p.m. net payable to J.Ds. (3) It is further submitted that J.Ds. have caused financial loss amounting to Rs,13 lacs to the innocent auction-purchaser by their illegal action. Details of loss are as under:-- (i) J.Ds. managed to remove some machines listed in the inventory prepared by the official assistance and duly attested by them as per Supreme Court order, dated 12-4-1995 and 13-4-1995. Value of the missing machines works out to Rs,10 lacs. Value of the missing calendar of Pak origin provided by J.Ds. vide Annexure "T" filed with the application vide C.M.A. No,1360 of 1997, dated 2-7- 1997. Minimum value of Rs,1,50,000 has been taken for other missing machines. (Copies of the Honourable Supreme Court order, dated 12-4-1995 and 13-4-1995, inventory, officials assignee report regarding missing machines hereto annexed and marked as Annexures "B1" and "B2", "C1" to "C3" and "D1" to "D2" respectively). (ii)Part of the property was illegally rented out to Messrs S.A. Najeeb. J.D's. letter, dated 26-2-1983 in reply to S.I.T.E. letter, dated 20-3-1983 regarding removal of illegal sub-letting gives testimony to the said fact. Moreover, property being industrial could not be used for commercial purpose. Because of the said illegality, auction-purchaser has paid Rs,3 lacs to the tenant before this
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honourable Court. (Copies of letter, dated 26-2-1983 and dated 20-3-1983 annexed and marked as Annexures "E" and "F" respectively). (4) It is submitted that it is settled principle of law that auction-purchaser is entitled to mesne profits which accrued for the period between 27-1-1994 to 30-4-1995 (15 months) and cannot be subjected to financial loss for a fault exclusively attributable to J.Ds." J.D. has filed counter-affidavit to the above claim of the auction-purchaser denying each and every part of the claim. In addition to the legal plea as to the limitation and the competency of the agent, the J.D. has also filed another application bearing C.M.A. No,557 of 1998 praying that his five applications which were dismissed earlier by this Court for non-prosecution, be restored. On 24-3- 1998, some five applications filed by J.D. No,1 were dismissed for non-prosecution. Amongst the said applications, C.M.A. No,1359 of 1997 was under Order XXXIX, Rules 1 and 2, C.P.C. seeking injunction against auction-purchaser from selling or in any manner disposing of excess area and the construction site delivered to the auction-purchaser. C.M.A. 1036 of 1997 was filed under section 47, C.P.C. by J.D. No,1 through which claim against auction-purchaser was lodged for Rs,34,000,000. C.M.A. No,1665 of 1997 is an application filed under section 151, C.P.C. for withdrawal of excess amount lying with the Nazir. C.M.A. 1666 of 1997 was again filed by the J.D. against the decree- holder for recovery of Rs,2,85,112 which was paid in excess of the decretal amount and the last application C.M.A. 1774 of 1997 seeks withdrawal of security money of J.D. No,1 lying with the Sui Southern Gas Co. It is prayed by the J.D. No,1 that order, dated 25-3-1998 be recalled/reviewed and all these applications be restored to their original numbers. I have heard Mr. Abdul Wajid Wyne, Advocate for the auction-purchaser and Mr. Syed Sami Ahmed Tirmizi, Advocate for J.D. No,1. The first point which requires consideration is whether the instant application of the auction-purchaser is within time. It is not disputed that such applications are covered by Article 181 of the Schedule I to the Limitation Act, 1908 which provides a period of three years for filing any application for which no period of limitation is provided in the schedule or section 47 of the C.P.C. According to this Article the time will start running when the right to apply accrues. (See Sardar Abdul Majid Khan Lashari v. The Asio African Co. Ltd. 1972 SCMR 236. According to Mr. Sami Ahmed Tirmizi, the time will commence from 31-5-1994 when the auction was confirmed and, therefore, the time expired on 30-5-1997 while the instant application was filed on 16-12-1997 after a lapse of seven months. On the other hand, Mr. Wajid Wyne has submitted that the time will run from 30-5-1995 when physical possession of the property in question was delivered to the auction-purchaser. It was argued by him that the time from 1-6-1994 when the petition seeking leave to appeal was dismissed by the Honourable Supreme Court is to be excluded. He has placed reliance on the case Maulvi Abdul Qayyum v. Syed Ali Asghar Shah and 5 others 1992 SCMR 241. Mr. Tirmizi has also placed reliance on the same authority. the ratio laid down in this authority is based on the rule of merger. It is a settled law that where an appeal is preferred against the original decree and where a final order has been passed by the Appellate Authority, the decree of the Court of first instance merges in the decree of the Appellate Court and, therefore, it is date of decree of Appellate Court from which the time will run for filing an execution application. In the instant case, the question of merger of a decree does not arise as rightly argued by Mr. Sami Ahmed Tirmizi. However, the auction-purchaser could derive benefit from the provisions of section 15 of the Limitation Act, 1908 where it is provided that in computing the period of limitation prescribed for any suit or execution application, the time during which institution of suit or execution application was stayed by an injunction order, shall be excluded. In the instant case, auction purchaser was put in a disadvantageous position on account of orders issued by the Court of Law, and if such time is not excluded, it will amount to abuse of process of Court and to allow the J.D. to take undue advantage of its own position. I am fortified in my view by the rule laid down by a Division Bench of Lahore High Court in The Rawalpindi Central Cooperative Bank Ltd., Rawalpindi v.
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Raja Muhammad Riaz Khan PLD 1966 (W.P.) Lah. 912 and Jai Berham and others v. Kedar Nath Marwari and others AIR 1922 P.0 269. In the case of Abdul Rashid v. Abdul Salam and others 1991 SCMR 2012, it was held by a Full Bench of Honorable Supreme Court while considering appeal arising out of an order passed by the Executing Court, that an error committed by Court could not be utilized for the benefit of person taking advantage of such error. In the instant case, the physical possession of the auctioned property was not delivered to the auction-purchaser till 30-5-1995 due to stay obtained by the judgment-debtor, where after the auction-purchaser came to know about the facts as alleged in the Application (C.M.A. 2534 of 1997) and in its supporting affidavit. It is 30th May, 1995 which gives right, if any, to the auction-purchaser to maintain this application. In this view of the matter, if the period for calculation of time limit is taken from 25-4-1995 or 30-5- 1995, the instant application would be within time. I, therefore, over-rule the objections of the J.D. and hold that the instant application is within time. In so far as the merits of the auction-purchaser's application as well as of the other applications of the J.D. are concerned, Mr. Sami Ahmed has referred to the following cases:-- (a) Merla Ramanna v. Nallaparaju and others AIR 1956 SC 87, (b) Proteiva Sundari Debi v. Saradha Charan Goho (Vol. 38 CWN 996 (1933), (c) Jainulabidin Sahib v. Krishna Chettiar (41) MLJ 120 (1921), (d) The Rawalpindi Central Cooperative Bank Ltd., Rawalpindi v. Raja Muhammad Riaz Khan PLD 1966 (W.P.) Lah. 912. It is very shocking to note that both the learned counsel have mainly relied upon the authorities from the Indian Jurisdiction. It was stated by them that there is no authority from the Pakistani Jurisdiction in respect of the controversies involved in these execution proceedings. Mr. Abdul Wajid Wyne, counsel for the auction-purchaser has referred to the following cases:-- (i) Vehindramutho Pillar v. Maya Nadan and others AIR 1920 Mad. 324, (ii) Hari Shridhar Prabhu Desi v. Sakharam Padmanna Magdum AIR 1923 Born. 391, (iii) (Seth) Moti Lal Hirabhai and others v. Bai Mani AIR 1925 PC 86, (iv) Sham Singh and others v. Vir Dhan and others AIR (29) 1942 Lah. 102, (v) T.S. Ramanatha Ayyar v. S. Abdul Salam Sahib AIR (32) 1945 Mad. 179, and (vi) Harnandrai v. Debidutt AIR 1973 SC. 2423. In the case of Merla Ramanna (cited at (a) above) it was held by a Full Bench of Indian Supreme Court, after referring to the case of Marret v. M.I.K. Shirazi & Sons AIR 1930 PC 86 that where a sale in execution of a decree is impugned on the ground that it is not warranted by the terms thereof, that question could be agitated, when it arises between the parties to the decree only by an application under section 47, C.P.C. and not in a separate suit. The case of Protiva Sundari Debi (cited at (b) above) is not relevant as in that case the controversy involved was quite different than the facts of the instant case. In the case of Jainulabdin (cited at (c) above) it was held, inter alia, by a Division Bench of Madras High Court, while hearing second appeal against the decree of the District Judge that a claim by the J.D. in a mortgaged decree, for the recovery of properties alleged to have been wrongly delivered in execution to the Court purchaser, comes within section 47 of the C.P.C., even though the purchaser was a stranger to the suit. It was further held, after following the decision of the Privy Council in Prosing Kumar Sanyal v. Kali Das Sanyal ILR 19 Cal. 683 that the remedy of the judgment-debtor, in such circumstances, is by an application under section 47, C.P.C. and not by a suit. In the last case the Rawalpindi Central Cooperative Bank Ltd (cited at (d) above) one of the question before a learned Division Bench of the Lahore High Court was whether an order of restitution can be passed under section 144/151, C.P.C. read with section 47, C.P.C. in an execution application, the said question was answered in the following manner:-- "The expression 'relating to execution, discharge or satisfaction of the decree' has not been defined by the Legislature perhaps to leave the scope and applicability of the section to be flexible. The
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section is so framed as to prohibit any separate suit for relief being granted which will interfere with the conduct of execution proceedings by the Court executing the decree. The section has to be interpreted liberally as the underlying principle of the section is that all such questions relating to the execution which falls within the purview of execution, discharge or satisfaction of the decree and arising between the parties or their representatives should be determined in the execution proceedings. In this case it cannot be denied that it is a dispute relating to the execution of decree before it was satisfied. The decree-holder has disregarded the conditions about the execution imposed by the Court who passed the decree and made an adjustment in part to the satisfaction of the decree, therefore, it is a question arising between the parties to the suit and falls within the purview of section 47, C.P.C. The words 'all questions arising between the parties to the suit" should be construed so as to relate to or to affect the rights of the parties to the suit. It will also mean and include all questions which could properly arise or which could have properly been raised in an execution proceeding. The appellant cannot oust the jurisdiction of the Court by saying that it is an act of the appellant and not of the Court and, therefore, the respondent judgment-debtor should be made to suffer the torture of a separate suit. Now, reverting to the case cited by Mr. Abdul Wajid Wyne, in the first case Veyindramuthu Pillar (cited at (i) above) it was held that auction-purchaser of a property sold in an execution is a legal representative of the plaintiff and is covered by section 47, C.P.C. The case of Hari Shridhar Prabhu Desi (cited at (ii) above) and (Seth) Motilal Hirabhai (cited at (iii) above) are not relevant for the just decision of these applications. In the case of Sham Singh (cited at (iv) above) the rule laid down by a Full Bench of Lahore High Court was that during the period between sale and confirmation of a property sold as a result of auction, the auction purchaser acquires substantial interest, which rule for the present controversy is a relevant rule and supports the contention of the auction-purchaser. The question of wastage was considered by a Division Bench of Madras High Court in the case Ramnatha Ayyar (cited at (v) above) where it was held that "the Court in executing a decree, is entitled to go into such matters as waste committed, whichever side has happened to be in possession since the decree sought to be executed". In the case of Harnandrai (cited at (vi) above) one of the questions raised before a Full Bench of Indian Supreme Court was whether after an auction/sale in execution of a decree, a decree-holder/auction purchaser can move the executing Court for delivery of vacant possession of an immovable property or whether he has to file a separate suit to get that possession. Reference was made to section 47 of the Indian C.P.C. which was answered in the following words:-- "Section 47 in our view should be construed liberally. As far back in 1892 (1892) 19 Ind. App. 166 (PC) the Privy Council spoke strongly in favour of putting a liberal construction on section 244 of the Code of Civil Procedure of 1882 which corresponded to present section 47 of the Code of 1908. The Privy Council reiterated this in Ganapathy v. Krishnamachariar, 45 Ind App 54 (AIR 1917 PC 121). If a liberal construction be put upon section 47 it is difficult to understand why a decree-holder who has been a party to the decree will shed his character as such party merely upon purchasing the property in execution of his decree with the permission of the Court. There is no reason why he should not retain his character of a party to the suit until the delivery of possession to him of the property purchased by him. Having regard to this consideration, if any question is raised by the judgment-debtor at the time of delivery of possession concerning the nature of the rights purchased and if the judgment-debtor offers any resistance to delivery of possession the question must be one which in our view relates to the execution, discharge and satisfaction of the decree and arises between the parties to the suit." One of the objects of section 47, C.P.C. is to enable the Court to follow all legally possible measures to implement and execute its own judgments, orders and decrees. The provisions of Para. II (sections 36-74) and Order 21, C.P.C. are meant to provide speedy relief to the parties or their
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representatives to the suit to resolve all questions pertaining to the execution, discharge or satisfaction of the decree by the Executing Court and not through cumbersome proceedings of a separate suit. I am fortified in my view by the rule laid down in Haji Abdul Wali Khan and another v. Muhammad Hanif 1991 SCMR 2457 at 2469, where Honorable Supreme Court while considering section 17 of the West Pakistan Urban Rent Restriction Ordinance, 1959 along with sections 36 and 47 of the C.P.C. observed that:-- ".... It is in this context that the Legislature has empowered the Court executing the decree to determine all questions relating to execution, discharge or satisfaction of the decree and not by a separate suit. It has been held that the object of this section was to save unnecessary expense and delay; and to afford relief finally, cheaply and speedily without the necessity of a fresh suit. However, that section deals with questions that arise between the parties to the suit in which the decree under execution, was passed..." In India, section 47 of their C.P.C. was amended in the year 1976 through which subsection (2) to section 47 was omitted and two explanations ii(a) and (b) were added. By virtue of such amendment, a purchaser, for the purpose of section 47, was held to be a party to the suit in which the decree was passed. In explanation (ii)(b) all questions relating to the delivery of possession of a property sold in an auction to the purchaser or his representative were termed to be questions relating to the execution, discharge or satisfaction of the decree within the meaning of section 47 of the Indian C.P.C. It is right time for our Legislatures also to update the provisions of section 47 and other relevant provisions for the execution of judgments, decrees and orders to make it more effective and workable with a view to conclude all questions pertaining to the execution of the decree within shortest time before the same Court. More than hundred years ago, it was observed by the Privy Council that the real difficulties of a litigant in India begin after he had obtained a decree in his favour. Such impression is to be repelled and be wiped out. In order to make the above observations more purposeful, the provisions of section 47 of the Pakistan C.P.C. and Indian C.P.C. are reproduced as follows:-- Section 47 of Pakistani C.P.C. "47. Questions to be determined by the Court executing decree. --- (1) All questions arising between the parties to the suit in which the decree was passed, or their representatives and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit. (2) The Court may, subject to any objection as to limitation or jurisdiction, treat a proceeding under the section as a suit or a suit as a proceeding and may, if necessary, order payment of any additional court-fees. (3) Where a question arises as to whether any person is or is not the representative of a party, such question shall, for the purpose of this section, be determined by the Court. Explanation.-- For the purposes of this section, a plaintiff whose suit has been dismissed and a defendant against whom a suit has been dismissed, are parties to the suit." Section 47 of the Indian C.P.C. "47. Questions to be determined by the Court executing decree.--- (1) All questions arising between the parties to the suit in which the decree was passed, or their representatives and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit. (2) Deleted in the year 1976. (3) Where a question arises as to whether any person is or is not the representative of a party, such question shall, for the purpose of this section, be determined by the Court. Explanation I.--- For the purposes of this section, a plaintiff whose suit has been dismissed and a defendant against whom a suit has been dismissed, are parties to the suit.
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Explanation II.--- (a) For the purposes of this section, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree is passed; and (b) all questions relating to the delivery of possession of such property to such purchaser or his representative shall be deemed to be questions relating to the execution, discharge or satisfaction of the decree within the meaning of this section..." In the instant case, the judgment-debtor No,1 claims excess amount allegedly paid to the decree- holder as a result of a sale of his movable and immovable properties and at the same time is also claiming return of the excess amount lying with the Nazir. On the other hand, auction-purchaser claims all such rights, claims and privileges for which he was entitled for the period as mentioned above. The applications of which the J.D. No,1 is seeking restoration were earlier dismissed for non- prosecution on 9-12-1997. Subsequently, on 3-3-1998, these applications were restored to their original numbers despite opposition from Mr. Abdul Wajid Wyne. Again, on 24-3-1998, these applications were dismissed at about 10-30 a.m., since Mr. Sami Ahmed Tirmizi again failed to appear before the Court. Again, he has come through C.M.A. 557 of 1998 seeking restoration of the same and in support has filed his personal affidavit. I am always slow and reluctant in not restoring a suit or application where a counsel has filed his personal affidavit. Despite the fact that auction- purchaser has filed his counter-affidavit denying the averments of the supporting affidavit filed by Mr. Sami Ahmed Tirmizi, Advocate,…
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