2013 PLP 801 (CLD)

MUHAMMAD AZIM KHAN AFRIDI, J.

Appellant, a financial institute, instituted a civil suit for recovery of Rs.4,23,22,926.06 against respondents in Banking Court Rawalpindi in the year 2008 which, after due process, was decreed vide judgment dated 3-9-2009 for an amount of Rs.2,63,67,105.85 with costs of fund and suit. During execution proceedings orders for sale of mortgaged properties and assets of the respondents were passed, in pursuance whereof court auctioneer vide order dated 12-3-2010 was appointed who conducted the auction proceedings for sale of the mortgaged property of respondents under the orders of the Court. On completion of auction proceedings report was submitted to Court on 7-9-2010 whereafter notice to judgment debtors for filing objections on sale was issued and, in response thereto, objection petition was submitted under Order XXI, Rule 90, C.P.C. which was answered by the appellant in due course. During the said proceedings respondent No.2 submitted an application under the proviso of section 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, hereinafter referred to as Ordinance which was contested by the appellant and after hearing the parties the application was accepted vide impugned order dated 17-2-2011 and appellant was directed to file undertaking under the proviso of section 19(7) of the Ordinance.

2. Learned counsel for the appellant has argued that the impugned order dated 17-2-2011 was incorrect on both counts i.e. factual and legal and was suffering from serious illegalities and irregularities. That the same was neither a speaking order nor the outcome of application of judicial mind. That the judgment debtor has failed to satisfy the decree as he has failed to pay even a single penny. That the said proviso was not at all applicable to the case of the appellant. That the same was not readable in isolation of other provisions of section 19 of the Ordinance. That the judgment debtor could not be termed as an aggrieved party within the meaning of the said proviso. That the impugned order is the result of misinterpretation of law and therefore liable to be set aside.

3. Reliance was placed on case-law reported as 2008 CLD 449 (Lahore) and 2007 CLD 1511 (Karachi).

4. On the other hand, learned counsel for the respondents argued that the impugned order was passed by the learned Banking Court after due consideration of relevant provisions of law. That special law would always override general law. That the appeal was mala fide as the same was instituted to justify the delay as the given time of 15 days has already elapsed. That the impugned order, being legal and lawful, warrants no interference.

5. We have heard arguments of learned counsel for the parties and perused the record.

6. Factual aspect of the case for the purpose of decision in appeal is that the auction proceedings conducted by the Court auctioneer for auction of the mortgaged property and sale thereof to auction purchaser have been objected to by the judgment debtor and, through separate application dated 9-12-2010, prayed for submission of the said undertaking by the appellant.

7. Points requiring determination are as to whether, in the circumstance of the case, the appellant was obliged to furnish the undertaking as ordered by the learned Banking Judge in the view of proviso to subsection (7) of section 19 of the Ordinance or that the learned Banking Judge was to decide the objections of judgment debtor irrespective of submission of any such undertaking.

8. Order XXI, Rule 90 provides that where any immovable property has been sold in execution of a decree the decree holder, or any person entitled to share in a rateable distribution of assets or whose interests are affected by the sale, may apply to the Court to set aside the sale on the ground of material irregularity or fraud in publishing or conducting it. A proviso has been added to the said rule according to which no sale is liable to be set aside on the ground of irregularity or fraud unless the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud. It has further been added that such application be entertainable subject to deposit of amount not exceeding twenty per cent of the sum realized at the sale or subject to furnishing such security as the Court may direct.

9. Section 19 of the Ordinance prescribes procedure for execution of decree and sale with or without intervention of Banking Court. According to section 19(2) the decree of the Banking Court is executable in accordance with the provisions of the Code of Civil Procedure, 1908 or any other law for the time being enforce or in such manner as the Banking Court may at request of the decree holder considers it appropriate, including recovery as arrears of land revenue.

10. Section 19(7) of the said Ordinance provides that notwithstanding anything contained in the Code of Civil Procedure, 1908 or any other law for the time being enforce the Banking Court is to follow summery procedure for the purpose of investigation of claims and objections in respect of attachment or sale of any property and shall complete such investigation within 30 days of filing of the claim or objections and if the claim or objections are found to be mala fide or filed merely to delay the sale of property it shall impose a penalty upto 20% of the sale price of the property. The Banking Court is also authorized to proceed with the sale of mortgaged or pledged or hypothecated property if in its opinion the interest of justice so require.

11. According to the proviso added to subsection (7) of section 19, it is prescribed that the financial institution is to give a written undertaking that in the event the objections are found to be valid, or are sustained, it shall in addition to compensating the aggrieved party by payment of such amount as may be adjudged by the Banking Court also pay a penalty upto 20% of the sale proceeds and such amount shall be recoverable from the financial institution in the same manner as in executor of decrees.

12. The proviso added to section 19(7) clearly indicates of written undertaking to be given by the financial institution in the mode and manners laid down therein and as such, the impugned order, being in harmony with section 19 as well as terms of the said proviso, is therefore found valid and in consonance with law and the same would therefore merit no interference.

13. In the light of the above, we find no force in the instant appeal, The same is, therefore, dismissed leaving the parties to bear their own costs. KMZ/71/ISL. Appeal dismissed.