2007 PLP 1013 (CLD)

MUHAMMAD NAWAZ ABBASI, J.

This petition is directed against the judgment dated 13-12-2005, passed by the High Court of Sindh, at Karachi, whereby the appeal filed by the petitioners under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, has been "dismissed.

2. The facts of the case in small compass giving rise to this petition are that petitioner No.1, is a partnership, firm whereas petitioners Nos.2 to 4, hereinafter called the petitioner, are its partners. The respondent-Bank, on the request of petitioners, sanctioned three different loans in US dollars vide sanction letter dated 9-4-1995 and an additional loan facility to the tune of 120,000 US dollars was sanctioned vide letter dated 21-5-1995. The bank also advanced two other loan facilities to the petitioner vide sanction letter dated 21-6-1995 and they having made partial payment of the loans, executed certain documents in respect of SOD special loan. The petitioners Nos.2 to 4, in addition to the furnishing of personal guarantee to the Bank also deposited the documents of title of plot measuring 1000 sq. meters and on failure of the petitioners to repay the loan as per schedule. of payment, the Bank filed a Suit No.498 of 1997 in the Banking Court No.II at Karachi for recovery of the outstanding amount of loan. The suit was decreed vide judgment dated 10-11-2000 which was further maintained by the High Court of Sindh, at Karachi, in appeal filed by the petitioners vide impugned judgment, hence the petitioners have filed the present petition before this Court.

3. The operative part of the judgment of the High Court is reproduced hereinbelow:-- "It is now settled proposition of law that once a bid has been accepted, and no objections are filed within given time, as held in 2005 SCMR 1237 the auction is to be deemed to have been confirmed under Order XXI, rule 65, C.P.C. It is also settled that the Courts cannot be turned into auction house. Procedure adopted by the Banking Court, in our humble estimation, did not suffer from any illegality or perversity of the nature as urged in the instant appeal. Even the bid has been sanctified in HCA No.13 of 2004, coupled with the fact that the appellant had already withdrawn his bid amount prior to filing of this appeal and had not disclosed such fact. Even the bid made before this Court as per' (CMA No.1590 of 2005) under section 151, C.P.C. in the sum of. Rs:1,10,00,000 (Rupees One Crore Ten Lacs only) is in respect of two properties namely residential property subject-matter of instant appeal and so also for the factory in Export Processing Zone, where as bid in respect of bungalow of 1000 square yards at Gulshan-e-Iqbal has been confirmed for 72,00,000 in the year 2004. Accordingly, we do not find any merit in this Appeal, which is dismissed. Let the account deposited by the appellants be refunded forthwith on proper verification and identification."

4. Learned counsel for the petitioners has contended that on disposal of the appeal by the High Court in the first round, learned Banking Court vide order dated 4-2-2004 before confirmation of sale had given three days time to the judgment-debtor to offer a better price whereupon instead of petitioners, one Allah Rakha on his behalf having offered higher price in the matching bid deposited the requisite percentage of the bid money but learned Banking Judge without taking into consideration the bid offered by said Allah Rakha and the first right of petitioner to purchase the property, confirmed the auction in favour of auction purchaser in violation of Order XXI, rile 65, C.P.C. which was further upheld by the High Court.

5. Learned counsel for the auction purchaser, respondent No.2 herein, has submitted that on confirmation of sale, possession of the property, was delivered to the auction purchaser and placing reliance on Mohib Textile Mills Ltd. v. National Bank of Pakistan 2005 SCMR 1237 and Muhammad Ikhlaq Memon v. Zakaria Ghani PLD 2005 SC 819, contended that in view of the provisions of section 18 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 the procedure provided in Order XXI, rule 65, C.P.C. may not be strictly applicable. In short, he argued that High Court has rightly dismissed the appeal of petitioners and no substantial question of law of public importance is involved in this petition for interference of this Court.

6. The careful examination of the record would show that after disposal of the earlier appeal of the petitioners by the High Court, they made another attempt to get the auction set aside on the ground that in the matching bid which was held with permission of the Banking Court higher price was offered, therefore, confirmation of sale in favour of respondent No.2 was not fair and emphasized that failure of the Banking Court to follow the procedure for sale of the property under Order XXI, rule 65, C.P.C. would invalidate the whole proceedings of auction. This may be pointed out that the procedure provided under Order XXI, rule 65, C.P.C. may not be strictly applicable in respect of execution of a decree passed by a Banking Court in preference to the procedure provided under section 18 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 which is a special law and the provisions of section 18 of the Ordinance having overriding effect, would have been essentially followed by the Banking Court for the purpose of execution of decree passed wider the ibid Ordinance except in a matter which is not covered by the special provision referred to above, the Banking Court may follow the procedure provided under Order XXI, rule 65, C.P.C. and thus the contention of the learned counsel that the procedure of Order XXI, rule 65, C.P.C. was to be followed for the purpose of execution of a decree passed by the Banking Court, has no substance. The Banking Court had allowed three days time to the petitioners for better offer in the matching bid but they did not avail the opportunity rather one. Allah Rakhh, participating in the matching bid offered higher price and thus the bid offered by a third person would have no legal effect as he had no 'locus standi to participate in the matching bid and petitioner, on the basis of matching bid offered by a stranger to the proceedings, could not claim first right of purchase and maintain the appeal before the High Court or. this petition before this Court.

7. In the light of foregoing reasons, we do not find any substance in this petition and same is accordingly dismissed. Leave is refused. M.H./I-8/SC Petition dismissed.