2004 PLP 195 (CLD)

"Old cases will not be adjourned except with prior adjustment and with counsel of opposite counsel." The learned counsel of respondent No.2 did not get the case adjusted in the terms of aforesaid note. Despite repeated calls, nobody entered appearance on behalf of respondent No.2 in such situation, I have no other alternative except to proceed against respondent No.2 as ex parte and decide the controversy between the parties on merit as per principle laid down by the Honourable Supreme Court in "Muhammad Haleem and others v. H. Muhammad Naim and others" PLD 1969 SC 270.

5. I have given my anxious consideration to the contentions of the learned counsel of parties and perused the record.

6. The observation of the Banking Court in order dated 16‑10‑1998 to restrain the petitioner not to sell the mortgaged property, is not in accordance with the mandatory provisions of section 18(2) and (3) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, therefore, the observation is not sustainable in the eye of law. The relevant provisions of aforesaid Act i.e. section 15(2), (3), (4), (5), (6), (7), (8) and section 18(2) and (3) and aforesaid Ordinance are reproduced hereunder:‑‑ (2) In case of default in payment by a customer, the financial institution may send a notice on the mortgagor demanding payment of the mortgage money outstanding within fourteen days from the 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, continuous 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 rent and profit, from the final mortgaged property shall stand transferred to the financial institution until such notice is withdrawn and it shall be the duty of the mortgagor to pay all rents and profits from the mortgaged property to the financial institution: Provided that where the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 expired the financial institution may without the intervention of any Court, sell the mortgaged property or any part thereof by public auction 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 of 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 mortgages. (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 publication. (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 reasonably by the Banking Court. (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. (2) Subject to subsection (3), in cases of pledged or mortgaged property a banking company may sell the same with or without the intervention of the Banking Court either by public auction or by inviting sealed tenders and appropriate the proceeds thereof towards total or partial satisfaction of the decree. (3) Where the judgment‑debtor or any person acting on his behalf does not voluntarily give possession of the mortgaged property sold, or sought to be sold, by the Banking Company under subsection (2), the Banking Court on the application of the Banking Company, or the purchaser shall put the Banking Company or; as the case may be, the purchaser, in possession of the mortgaged property in any manner deemed fit by it. Mere reading of the aforesaid provisions of law that observation of the Banking Court is not in accordance with the provisions of law, therefore, the observation and order dated 16‑10‑1998 of the Banking Court is set aside. It is pertinent to mention here that order dated 16‑10‑1998 to the extent that the application filed by respondent No.2 under section 12(2), C.P.C. dismissed by the learned Banking Court, would remain in the field. It is settled principle of law that when the basic order is without lawful authority, then superstructure shall fall on the ground automatically, as per principle laid down by the Division Bench of the Court and by the Honourable Supreme Court in the following judgments:‑‑ "Crescent Sugar Mills Ltd. v. Central Board of Revenue" PLD 1982 Lahore 1. "Abdul Aziz, Lahore v. District Magistrate, Lahore PLD 1958 SC (Pak.) 104.

6. In view of what has been discussed above, the aforesaid order dated 16‑10‑1998 and order dated 20‑11‑1998 are set aside as the learned counsel of respondent No.2 did not enter appearance despite repeated calls, therefore, in the interest of justice and fair play, the case is remanded to the Banking Court to the extent to decide the case afresh qua observations made by the Banking Court in the impugned orders, after providing proper hearing to all the concerned. Parties are directed to appear before the learned Banking Court concerned on 5‑11‑2003, who is directed to decide the controversy qua observations only within 3 months and execution petition shall be deemed to be pending adjudication before the learned Banking Court and the Court shall proceed in accordance with law. With these observations, the writ petition is disposed of. H.B.T./U‑66/L Order accordingly.