2004 PLP 1136 (CLD)

FAQIR MUHAMMAD KHOKHAR, J.

The petitioner seeks leave to appeal, under Article 185(3) of the Constitution of Islamic Republic of Pakistan, 1973, against judgment and decree dated 19-11-2001, passed by a learned Division Bench of the Lahore High Court, Lahore, in R.F.A. No. 158 of 1990.

2. The dispute pertains to House No. 102, Babar Block, New Garden Town, Lahore. The respondent No.2, Union bank of Middle East, Limited instituted a suit before Special Court, Banking under the provisions of the Banking Companies (Recovery of Loans) Ordinance, 1979 (No.XIX of 1979) (hereinafter referred to as the Ordinance), against the respondents Nos. 1 and 3, for recovery of Rs.14,43,

369. The suit was decreed by the Special Court Banking, by judgment and decree dated 31-7-1982. In the course of execution of the decree, the suit property was attached on 19-9-1982. One Izzat Khalil filed an objection petition claiming therein that the respondent No. 1 had executed an agreement dated 7-9-1982, for sale of the suit property in his favour. The execution proceedings stood transferred to the High Court by operation of law. The objection petition of Izzat Khalil was dismissed by the High Court, by order dated 15-10-1985. The suit property was sold on 18-12-1985, by way of public auction in favour of the respondent No.4 being the highest bidder. In the meantime, the petitioner also intervened by filing an objection petition C.M. No. 164-B of 1985 in Execution Petition No.22-B of 1983. He claimed therein that the judgment-debtor, by agreements dated 7-9-1979 and 12-4-1982 had agreed to sell the suit property to him for a consideration of Rs.10,50,000 out of which a sum of Rs.7,00,000 had already been paid. On 17-5-1986, the learned counsel for the petitioner withdrew the objection petition from the High Court on the ground that the petitioner had filed a civil suit, in the Civil Court, Lahore, for specific performance of sale agreements in which an injunctive order against the deliver v of the possession of the suit property had already been passed. The sale of the suit property through public auction was confirmed on 8-7-1986 by the High Court in favour of the auction-purchaser and sale certificate was issued accordingly. Thereafter, the respondent No.4, being auction-purchaser filed application C.M. No.8-B of 1986 in the High Court for delivery of vacant possession of the suit property. The said application was disposed of with the direction that, subject to any order that might be passed by any competent Court, the possession of the auctioned property be delivered to the auction-purchaser.

3. The application of the petitioner for temporary injunction was dismissed by the Civil Judge, Lahore, by order dated 5-11-1986. The respondents Nos.2 and 4 filed their separate written statements in which the contents of the plaint were denied and objections were taken, inter alia, as to the maintainability of the suit and the bar of jurisdiction to entertain and try the suit. The respondent No.4 also filed an amended written statement on 28- 7 -1990. The trial Court framed necessary issues on the divergent pleadings of the parties and recorded statement of Akhter Ali Qazlibash, Advocate, P. W.1, on 12-10-1989. Thereafter, the respondent No.4 filed an application dated 27-1-1990 seeking rejection of plaint under Order VII rule 11, C.P.C. on the ground that the suit was barred by law. The trial Court, by order dated 6-10-1990, rejected the plaint. The petitioner preferred R.F.A. No. 158 of 1990 thereagainst, which was dismissed, by a learned Division Bench of the Lahore High Court, by the impugned judgment and decree dated 19-11-2001. Hence this petition for leave to appeal.

4. The learned counsel for the petitioner argued that the proceedings taken, orders made and decree passed by the Special Court, Banking against the respondents Nos. 1 and 3 for recovery of loan would not bar a civil suit by the petitioner for specific performance of agreements to sell. The physical possession of the suit property delivered by the respondent No. 1 to the petitioner was protected by the provisions of section 53-A of the Transfer of Property Act, 1882 (hereinafter referred to as the Act, of 1882) as held in the case of Mohiuddin Molla v. the Province of East Pakistan and others PLD 1962 SC 119 and Fazla v. Mehr Din and 2 others 1997 SCMR

837. It was submitted that where an auction-purchaser had notice of an agreement to sell, third person was entitled to file a suit for possession on the basis of his right as the remedy of such person was not confined to application under rule 100, Order XXI, C.P.C. It was next contended in view of law laid down in the cases of Muhammad Tufail v. Abdul Ghafoor PLD 1958 SC 201; Pakistan Industrial Credit and Investment Corporation Limited Peshawar Cantt. and others v. Government of Pakistan through Collector Customs, Customs House, Jamrud Road, Peshawar and others 2002 SCMR 496, an order passed by a Special Court (Banking) even though presided over by a High Court Judge would not be binding on the civil Court if it was not in conformity with the provisions of the Ordinance. Therefore, as provided by section 3 of the Ordinance, the civil Court had plenary jurisdiction to entertain and determine the suit of the petitioner for specific performance of agreement in respect of the suit property. It was lastly contended that the learned Judges of the High Court in chambers did not take into consideration the legal aspects of the case in proper perspective.

5. On the other hand, the learned counsel for the auction -purchaser (the respondent No.4) argued that the petitioner had himself invoked the jurisdiction of the High Court by filing objection petition C.M. No. 164-B of 1985 before confirmation of sale and withdrew the same on 8-7-1986. Therefore, the sale of the suit property in favour of the auction-purchaser was confirmed by the High Court. The learned counsel submitted that in view of the provisions of sections 3, 6(4), 8(2) and 11 of the Ordinance of 1979, the jurisdiction of the civil Court was barred to entertain the suit of the petitioner. The only remedy open to the petitioner was by way of filing an objection petition before the High Court which he had availed. The learned counsel relied on the case of Hudaybia Textile Mills Ltd. etc. v. Allied Bank of Pakistan Ltd. etc. PLD 1987 SC 512 in support of contention that once the High Court had made up its mind to execute the decree by sale of public auction in terms of C.P.C., then all the provisions of Order XXI, C.P.C. would be attracted including the filing of objections by the petitioners under Order XXI, rule 100, C.P.C. Therefore, independent civil suit by the petitioner was not competent in view of rule 103 of Order XXI, C.P.C.

6. We have heard the learned counsel for the parties at length. In our view, the petitioner could not acquire a better title over the suit property than the judgment-debtor (the respondent No. 1) under whom he was claiming his inchoate rights. The protection of section 53-A of Act, 1882, was not available to the petitioner against the respondent No.4, who was an auction-purchaser of the suit property which was sold to him by the High Court in execution of a decree. The respondent No.4, had nothing to do with the judgment-debtor and was not claiming his rights through or under him. The judgment-debtor (the respondent No.1) was no more an owner of the suit property which had been auctioned in favour of the respondent No.4. In these circumstances, the suit for specific performance of the agreements filed by the petitioner in respect of the suit property was rightly held by the High Court to be barred by law. Needless to say that section 53-A of the Act, 1882, creates an estoppel between a transferor and a transferee of an immovable property. It does not bind a third party who does not claim under either of them. This question was examined in a number of cases. In S.N. Banerji and another AIR 1941 PC 128, the Privy Council observed that section 53-A of the Act did not operate to create a form of transfer of property which was exempt from registration. It created no real right. It merely created rights of estoppel between the proposed transferee and transferor which had no operation against third persons not claiming under those persons. A somewhat similar view was also taken in the cases of the P&T Cooperative Housing Society Ltd., Karachi v. Ch. Manzoor Ahmed Sahi PLD 1961 Karachi 53; Yeditha Satyanarayanamurty and others v. Tadi Subrahmanyam and others AIR 1959 Andhre Pradesh 534 (D.B.); and Stuart & Co. v. C. Mackertich AIR 1963 Calcutta 198 (D.B). In the case of Shamim Akhter v. Muhammad Rasheed PLD 1989 SC 575, this Court held that the part performance under section 53-A of the Act, 1882, conferred upon the transferee the privilege of invoking the doctrine embodied therein only as a shield against any invasion of his rights by the transferor or person claiming under him.

7. By the provisions of sections 2(f) and 6(1)(a) of the Ordinance, as they stood at the relevant time, the High Court in exercise of its original civil jurisdiction was vested with all the powers of a civil Court under the Code of Civil Procedure, 1908, in respect of a case in which the outstanding amount of the loan exceeded one million rupees. Subsection (4) of section 6 expressly provided that no Court other than a Special Court would have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Special Court extended under the Ordinance, including a decision as to the execution of a decree passed by a Special Court. It was further provided that all proceedings, including the proceedings for the execution of a decree within the jurisdiction of a Special Court, by whatever Court passed, pending in any Court would stand transferred to the Special Court. By virtue of section 8(3) of the Ordinance, as it originally existed, a Special Court was required, on the application of the decree holder, to pass an order for execution of the decree as arrears of land revenue or such other manner as it might deem fit. Therefore, there was nothing to prevent the Special Court to follow the procedure provided by the C.P.C. in appropriate cases, for execution of the decree.

8. Section 3 of the Ordinance provides that the provisions of the Ordinance shall be in addition to and, save as hereafter expressly provided, not in derogation of any other law for the time being in force. The impact of section 3 of the Ordinance was examined by this Court in some cases. In the case of Industrial Development Bank Limited v. Messrs Nadeem Flour Mills and others 1981 SCMR 143, an application was filed in the original side of the High Court of Sindh under section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961, for attachment and sale of the mills on account of default of payment of loan. The High Court of Sindh returned the plaint for presentation before the proper forum. It was held by this Court that the application filed by the banking company in the High Court stood transferred to the Special Court on the plain language of section 6 of the Ordinance. It would defeat the very object of the Ordinance if the litigants were permitted to institute or to continue parallel proceedings before various forums in respect of a matter which could be determined by the Special Court, Banking. In the case of Mst. Yasmeen Nighat and others v. National Bank of Pakistan and others PLD 1988 SC 391 it was held that even the pending proceedings in all the suits falling within the ambit of the Ordinance would stand transferred to the Special Court. In Muhammad Ayub Butt v. Allied' Bank of Pakistan Limited PLD 1981 SC 359, a Bank instituted civil suits before the Civil Court for recovery of different sums of loans alongowith applications for permission to the sale of goods which were lying as security. In the meantime, the Ordinance was promulgated. Therefore, all the pending cases were transferred to the Special Court. A guarantor of the loan submitted applications before the Special Court for dismissal of the suits on the ground that there had been illegal conversion of the pledged goods on the part of the Allied Bank of Pakistan by selling them without permission of the Court. The Special Court banking dismissed all the applications. The guarantor filed revision petitions under section 115, C.P.C. which were dismissed by the Peshawar High Court on the ground that finality was attached to the orders of the Special Court under section 11 of the Ordinance and the revision petitions were not competent. It was held by this Court that the provisions of the Civil Procedure Code would continue to apply unless its application was excluded by the provisions of the Ordinance. It was further held that section 3 of the Ordinance, did not allow the High Court to exercise revisional jurisdiction vested in it under section 115 of the Code of Civil Procedure in respect of an order made by a Special Court under the special law and in case of inconsistency between the provisions of the Ordinance and those of civil laws, the former would prevail. Section 4 C.P.C. itself provides that in the absence of any specific provision to the contrary nothing in the Code shall be deemed to limit or otherwise affect any special or local law in force or any special jurisdiction or power conferred on any special forum or procedure prescribed by or under any other law for the time being in force. Undoubtedly, a Special Court is a Court with special procedure and by virtue of sections 11 and 12 of the Ordinance, the revisional jurisdiction of the High Court was not exercisable qua the orders of the Special Court. In Hudaybia Textile Mills Ltd. etc. (supra), it was observed that while trying a suit under the Ordinance, the Special Court was to follow the procedure laid down in the Code of Civil Procedure except to the extent where the application of C.P.C. was excluded by the provisions of the Ordinance. As the High Court was already an established Court and not the creature of the special enactment, the procedure ordinarily governing the trial of the suits would regulate the proceedings including the general right of appeal from its decisions unless contrary intention was expressed by the Ordinance. It was held that the equitable principles underlying the provisions of the C.P.C. could be invoked where a sale had been effected. This Court also took notice of the provisions of Order XXI, rule 92, C.P.C. and held that once a sale had been effected, a third party interest intervened which could not be disregarded. In the case of Pakistan Fisheries Ltd. v. United Bank Limited PLD 1993 SC 109, this Court while construing the provisions of section 13 of the Ordinance, held that provisions of C.P.C. which were not in conflict with the Ordinance could well be enforced by the Special Court and that the High Court while acting as a Special Court exercised its original civil jurisdiction.

9. In the present case, the suit property was auctioned by the High Court in favour of the respondent No.4. The petitioner himself had filed objection petition on the basis of his alleged agreements to sell in respect of the suit property. The same was dismissed by the High Court as withdrawn and the judicial sale of the suit property was confirmed in favour of the respondent No.4 by following the procedure as laid down in C.P.C. In the facts and circumstances of the case it could not be said that the petitioner could not seek his remedy before the High Court in terms of Order XXI, C.P.C. The provisions of Rule 103 ibid were amended by the Law Reforms Ordinance, 1972, whereby it was provided that all questions arising as to the title, right or interest, or possession of immovable property between the applicants 'under rules 97 and 100 and the opposite party, would be adjudged upon and determined by the Court, and no separate suit would lie for the determination of any such matter. At the same time a corresponding amendment was also introduced in Order XLIII, rule 1 (ii) C. P. C. whereby an order under rule 103, C.P.C. was made appealable. The object of these provisions was to avoid multiplicity of litigation and to confer exclusive jurisdiction on the Executing Court to decide the objections in respect of the execution of decree. The case of Mohiuddin Molla (supra) is distinguishable from the facts of the present case. In the case of Sheikh Ghulam Nabi etc. v. Ejaz Ghani and others 1982 SCMR 650 it was held that, under rule 103, Order XXI, C.P.C., a party aggrieved by an order made by the Executing Court, could not institute a suit as it could bring an appeal under clause (ii) of rule 1 of Order XLIII, C.P.C. The provisions of section 3 of the Ordinance were not intended to permit a party to file a separate civil suit in disregard to the provisions of rule 103 of Order XXI, C.P.C. and to frustrate the execution of decree passed by the Special Court (Banking). The petitioner could have pursued his objection petition before the Special Court to its logical conclusion. He was not entitled to institute a separate suit as his objections could be looked into by the Special Court. Needless to mention that the suit property had already been mortgaged by the respondent No. 1 with the bank. In our view, the impugned judgment passed by the High Court does not suffer from any legal infirmity so as to warrant interference by this Court. Even otherwise, this is not a fit case for grant of leave to appeal.

8. For the foregoing reasons, we do not find any merit in this petition which is dismissed and leave to appeal is refused accordingly. M.B.A./A-57/S Leave refused.