2006 PLP 242 (CLD)

MUHAMMAD NAWAZ BHATTI, J.

The Bank of Punjab, Nusrat Road Branch, Multan Cantt. (hereinafter called respondent No.1/decree-holder) instituted a suit through its Manager against the appellant and respondents Nos.2 to 4 (Judgment-debtors) for recovery of Rs.51,42,276.50. and the same was decreed by the learned Judge Banking Court, Multan, vide judgment and decree dated 21-11-2001. Respondent No.1 sought permission to sell the mortgaged factory through auction. This prayer was granted by the learned Judge Banking Court, Multan/Executing Court vide order dated 13-6-2002. Thereafter said mortgaged property was put to auction on 17-7-2002 but no person appeared to participate in the auction, therefore, next date for auction was fixed as 9-9-2002, on which date needful could not be done and next date for auction was fixed as 16-9-2002 on which date respondent No.5 alone (allegedly participated in the auction) and offered Rs.32,00,000 for the purchase of the said mortgaged property and the Manager of the respondent-Bank requested for confirmation of the sale at this price. In the meanwhile appellant moved an objection petition resisting the confirmation of the said sale but the learned Judge Banking Court vide its order dated 28-7-2004 dismissed the same and the auction report with reference to the said sale was confirmed and "the bank was allowed to conduct the proceedings incidental to the auction of the property".

2. This F.A.O. calls in question the aforesaid order.

3. Arguments heard. Record perused.

4. On a Court question as to whether any publicity (in any form) was made for auction of the said mortgaged property on 16-9-2002, the learned counsel for the respondent-Bank concedes that no publicity whatsoever was made in this regard. On a further Court question as to what for the proceedings of auction dated 17-7-2002 and 9-9-2002 were not brought on the file of the learned executing Court as well as this Court to show that auction on these two dates could not be held for some cogent reasons/justification, learned counsel remained unable to respond. We further asked as to whether the same could be produced even today, learned counsel replied in negative and the said learned counsel also could not deny that the reserve price for the said mortgaged property was Rs.40,00,000.

5. For what has been stated above, we are of the view that the alleged auction dated 16-9-2002 was not conducted by the respondent-Bank in accordance with the settled principles of law, justice and equity, hence confirmation of the same vide the impugned order of the learned executing Court/Banking Court cannot be blessed with sanctity and the same is hereby set aside.

6. We have also noticed that respondent No.5 (Auction-Purchaser of the property in question) had already deposited Rs.32,00,000 (amount of his bid) in September, 2002. He claims to have purchased the said property in good faith and he remained deprived of fruits of the said amount till today and he had repeatedly asked respondent No.1 to return this amount along with the profit thereon but no response was made by the respondent-Bank (this position is also acknowledged by the learned counsel for the respondent-Bank). This being so respondent-Bank does not appear to have acted in a bona fide manner in the matter in hand, therefore, we direct that respondent No.5/Auction-purchaser shall be paid back Rs.32,00,000 plus 20% of the same or the due mark-up/ interest thereupon till today (whichever is higher) within one month from today. The appellant/judgment-debtors are also directed to deposit the decretal amount in the context of the decree dated 21-11-2001, passed by the learned trial Court within one month from today, failing which respondent-Bank shall be at liberty to sell mortgaged property with or without intervention of the Court with reference to section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

7. The instant appeal stands accepted in the above terms, leaving the parties to bear their own costs. M.H./N-2/L???????????????????????????????????????????????????????????????????????????????????????? Appeal allowed.