2018 PLP 911 (CLD)

Through the instant First Appeal Against Order, filed under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the "Ordinance"), the Appellant seeks setting aside of the order dated 28.02.2018, passed by the Banking Court, Sargodha whereby his application under section 12(2) Civil Procedure Code, 1908 (C.P.C.) for setting aside ex parte judgment and decree was dismissed.

2. Learned counsel for the Appellant submitted that the Banking Court has not taken into consideration the true facts and circumstances of the case while dismissing the application of the Appellant; that the impugned order is against law and facts; that the application for setting aside ex parte judgment and decree was filed under section 12(2), C.P.C. fulfilling all the pre-requisites; that the ex parte judgment and decree has been obtained on the basis of fraud and misrepresentation, as such liable to be set aside. Learned counsel further contended that the Appellant has been condemned unheard, as such the impugned order deserves setting aside.

3. We have heard the arguments and perused the record.

4. The main contention of the Appellant is that he purchased the disputed shop from the Respondent No.3 and in this regard an agreement to sell was reduced into writing on 22.03.2013 and physical possession was also delivered to him in pursuance of said agreement to sell. To prove his claim the Appellant has basically relied upon the agreement to sell allegedly executed between the Appellant and the Respondent No.3. It is settled law that an unregistered agreement to sell is invalid and ineffective to claim right or title in immovable property based on such agreement. The transfer of right or interest in the immovable property would take place only on execution of a regular registered sale deed and by mere agreement to sell, immovable property by terms settled therein, by itself would not create interest or extinguish right or title in the immovable property. As such, the Banking Court has rightly observed in the impugned order that the said agreement is not registered as per the requirements of law and that too does not create any right or title unless the same is registered. Furthermore, prior to purchasing the disputed shop, it was well within the knowledge of the Appellant that the disputed shop is mortgaged in favour of the Bank in lieu of some loan and the Bank has rights over the said property and therefore; it should be the signatory of the alleged agreement to sell. The said document does not show that the Bank either has been made party to the agreement to sell or it is signatory of the same.

5. Moreover, it is well settled principle that if fraud is alleged in an application filed under section 12(2) of the C.P.C., its necessary ingredients must be pleaded, so as to subsequently prove the same. Accordingly, general and bald allegations of fraud and misrepresentation, could not form basis to upset a decree, otherwise validly passed by a Court of competent jurisdiction. From the material made available with this file, no case for interference in the impugned order is made out. The Appellant has failed to prove the fraud and misrepresentation by the Respondent Bank for obtaining ex parte judgment and decree against him. It is evident from the record that the ex parte judgment and decree was passed on the basis of banking documents appended with the plaint including the finance agreement. In Ireno Wahab v. Lahore Diocesan Trust, (2016 CLC Note 85) this Court held that Applicant was required to prove that fraud and misrepresentation was procured during proceedings in the court; that alleged fraud was due to false statement and concealment of facts and that judgment was obtained on the basis of forged documents and decree was collusively obtained. The Applicant had not proved the ingredients of fraud and misrepresentation. Reliance is placed on Mst. Nasir Khatoon's case (2003 SCMR 1050) and Dadabhav Cement's case (PLD 2002 SC 500).

6. We agree with the findings of the Banking Court which rightly dismissed the application for setting aside of ex parte judgment and decree filed by the Appellant and do not see any illegality or perversity in the impugned order which has been passed strictly in accordance with law, as such does not warrant any interference by us. Consequently, the Appeal in hand, being devoid of any merit is hereby dismissed in limine. ZC/M-62/L Appeal dismissed.