2023 PLP 1551 (CLD)

RAHEEL KAMRAN, J.

Through the instant appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the appellant has assailed the order dated 29.07.2020 passed by learned Judge Banking Court-V, Lahore whereby the objection petition filed by the appellants/judgment debtors has been dismissed.

2. Facts in brief are that the respondent-Bank filed a suit for recovery of Rs.42,738,259.44 along with costs and cost of funds against the appellants which was decreed ex parte on 11.06.2015 to the sum of Rs.39,781,338.41. Learned executing court, vide order dated 09.01.2016 appointed two court auctioneers and directed for submission of valuation report and issuance of notices under rule 66 of Order XXI of the Code of Civil Procedure, 1908 ("C.P.C."). On 26.01.2016, the auction schedule was filed, which was approved by the learned executing court. On gaining knowledge of the same, the appellants filed an application for setting aside the ex parte judgment and decree, which was dismissed vide order dated 28.06.2016 and approved the fresh auction schedule. The order dated 26.09.2016 recorded that property was auctioned on 08.09.2016 in favour of the respondent-Bank. The appellants filed objection petition on 08.10.2016, which was dismissed vide order dated 13.03.2017. Feeling aggrieved, the appellants instituted E.F.A. No.19253 of 2017 in this Court. The same was allowed and the matter was remanded to the learned Banking Court for decision afresh. The learned Executing Court finally dismissed the objection petition of the appellants vide order dated 29.07.2020 impugned herein.

3. Learned counsel for the appellants contends that the learned executing court clearly erred in law and misread the record while holding that the objection petition filed by the appellants was barred by one day. In this regard, he clarifies that the objection petition was filed on behalf of the appellants on 30th day i.e. on 08.10.2016 against the disputed auction allegedly conducted on 08.09.2016. He maintains that the auction proceedings were not held in accordance with law and were liable to be set aside; that no reserve price was determined by the Court; that wide publicity to the auction of the property given to attract buyers; that the court auctioneers were not present at the site at the time of auction and 114th of the bid amount was not deposited within the time prescribed under law.

4. Learned counsel for the respondent-Bank, on the other hand, has supported the impugned order.

5. Arguments heard. Available record perused.

6. Article 166 of the Limitation Act, 1908 provides 30 days period of limitation for filing of application seeking setting aside a sale in execution of a decree which begins to run from the date of sale. It is settled law that in execution proceedings involving court auctioneer of immoveable property, the sale becomes complete when a bid is accepted by the court and for the purpose of Article 166 of the Limitation Act, 1908 time starts to run from the date the highest offer is accepted by the court. Reliance in this regard is placed on judgments of the Hon'ble Supreme Court of Pakistan in the cases of Muhammad Attique v. Jami Limited and others (PLD 2019 SC 993) and Muhammad Jawed v. First Women Bank (2021 CLD 39 Supreme Court). The objection petition filed by the appellants was, therefore, not barred by limitation. Even otherwise, the objection petition was filed on 08.10.2016 i.e. 30th day of the auction held on 08.09.2016, the impugned order of learned executing court on this score is clearly erroneous and not sustainable in the law.

7. It is case of the appellants that at no point of time the reserve price of Rs.10,81,71,850/-. was added to the auction schedule by the Court itself, as required under Rule 66 of Order XXI of C.P.C., which was a mandatory requirement. Although we have noticed on perusal of the record that the reserve price in this case was fixed as such when proposed by the court auctioneers and that too on the basis of an evaluation report prepared almost three years prior to the approval of the proclamation, however, such plea of the appellant, we are afraid, cannot be entertained at this stage for it is settled law that objection regarding reserve price could not be taken by the judgment debtor after the auction is held. The duty to raise such an objection at the initial stage is cast on the judgment debtor. Reliance in this regard is placed on judgment of the Hon'ble Supreme Court of Pakistan in the case of Habib and Company v. Muslim Commercial Bank Limited (2019 SCMR 1453).

8. As regards plea of the appellant that neither the court auctioneers reached nor conducted any proceedings of auction at the property and that on the basis of fake and so called auction proceedings the decree holder bank has been declared successful bidder, the same has been turned down by the learned Executing Court for the reason that such ground was not supported from the auction report or from any other document. We cannot agree with the findings of the learned Court below for the reason that the allegation, which was supported by an affidavit in support of the objection petition, required factual inquiry and proper determination particularly when the decree holder bank was declared sole successful bidder. Such a serious allegation could not be brushed aside on the basis of auction report. Reliance in this regard is placed on judgment of the Hon'ble Supreme Court in the case of Mir Wali Khan and another v. Manager, Agricultural Development Bank of Pakistan, Muzaffargarh and another (PLD 2003 SC 500). Needless to observe here that to ensure transparency in the auction proceedings, through the Lahore High Court Amendment dated 15.08.2018, a duty has been cast upon the Court Auctioneer in sub-rule (2)(ii) of Rule 67 of Order XXI of C.P.C. to cause video recording of the auction proceedings while ensuring transparent and fair bidding process of the public auction and the costs of such video recording shall be deemed to be costs of the sale.

9. From the perusal of record it is manifest that none other than the decree holder participated in the auction held on 08.09.2016 in order to purchase the property subject matter of the auction against the reserve price i.e. Rs.10,81,71,850/-. Rule 67 of Order XXI of C.P.C., prior to the Lahore High Court Amendment dated 15.08.2018, conferred authority upon the executing Court to direct that proclamation of auction shall be published in the official gazette or in a local newspaper or both and the cost of such publication shall be deemed to be costs of the sale. The purpose behind the enactment of Rules 54 and 67 of Order XXI of C.P.C. is to give wide publicity to the sale of the property so that maximum number of people may turn up to participate in it and give bids that match the price the property deserves. Although Rule 67(2) ibid is directory, however, it has been held by the Hon'ble Supreme Court of Pakistan in the case of Muhammad Attique v. Jami Limited and others (2015 SCMR 148) that failure to comply with such provision cannot be brushed aside without due application of mind and the Court has to undo a sale if such failure causes injustice. To ensure wide publicity, the Lahore High Court Amendment has substituted sub-rule (2) of Rule 67 of the C.P.C. to make it mandatory for the Court to order proclamation to be published in at least one widely circulated national daily newspaper in every case where the reserve price fixed by the Court exceeds rupees two million, and the costs of such publication are deemed to be costs of the sale. In the instant case where the reserve price of the property was fixed at Rs.10,81,71,850/-, we are of the opinion that to ensure proper publicity, the learned Court below ought to have exercised authority vested in it under Rule 67(2) of C.P.C. to order proclamation to be published in at least one widely circulated daily newspaper and failure to do so has caused injustice to the judgment debtors which is evident from the fact that none other than the decree holder participated in the auction held on 08.09.2016 and it provided a convenient walkover to the decree holder to purchase the property at the reserve price.

10. For the foregoing reasons, we allow this appeal, set aside the impugned order dated 29.07.2020 as well as sale of property through auction proceedings dated 08.09.2016 and the matter is remanded to the Executing Court to proceed with execution of the decree against the appellants in accordance with law. MH/Z-9/L Case remanded.