2008 PLP 823 (CLD)

SYED ASGHAR HAIDER, J.

Respondents Nos.2 to 6 availed a loan facility from the respondent No.1 (Bank) by mortgaging their properties. The stated respondents failed to liquidate their liability and thus became defaulters. The respondent No.1 filed a suit for recovery of Rs. 18,588,648.48 against them. The same was decreed. Later an execution petition was filed, pursuant to which the mortgaged property was directed to be sold. After dismissal of a number of applications in the execution petition, finally the property was put to auction but the same was challenged. While deciding this application the learned Banking Court held that the property is commercial in nature and its price of Rs.51,600,000 is well below the normal sale price in the market, the same was not confirmed. It, however, was directed that auction-purchaser shall be returned the bid money forthwith and the judgment-debtor Amjad Hussain Jafri shall pay 5% of purchase price to auction-purchaser in terms of Order XXI, Rule 89, C.P.C. as well as mark-up, at the rate of 5% per annum, as the purchase money remained blocked for more than one year. The appellant was granted a month's time to do the needful. The imposition of 5% of purchase money and the mark-up at the rate of 5% per annum, has been challenged in the present appeal.

2. The learned counsel for the appellant contended that the provisions of Order XXI, Rule 89, C.P.C. are explicit and clear. Rule 89 stipulates that the auction-purchaser shall be entitled to 5% of the purchase money as compensation, however, it, in no way, empowers the Court to award the mark-up at the rate of 5% arbitrarily without sound reasons, purchase money at 5% is also not payable as the auction was set aside by the Court itself, on the ground, that price fetched was inadequate and less than the market value, therefore, the appellant, in no manner, can be penalized for this action. To fortify his contention the learned counsel relied on "Baga Muhammad Khan v. Kh. Zafar Iqbal" 2007 CLC 1693.

3. The learned counsel for the respondent-auction -purchaser submitted that he deposited a huge amount, pursuant to the auction which remained blocked for more than one year and, therefore, he is entitled to some compensation. To fortify his contentions, the learned counsel relies on the provisions of Order XXI, Rule 93 wherein the Court has been bestowed upon the authority to award mark-up as well, and because in the instant matter the auction-purchaser has suffered due to no fault of his, therefore, he is entitled to the same.

4. The learned counsel for the respondent-Bank has, by and large, supported the argument made by the learned counsel for the contesting respondent.

5. We have heard the learned counsel for the parties and perused the impugned order.

6. It goes without saying that the impugned order clearly holds that the property was commercial in nature and was sold away at a throwaway price of Rs.51,600,000 whereas the market value per kanal is around Rs.25 million. (The judgment--debtor Amjad Hussain Jafri had absolutely no role in this entire exercise). Thus it is borne out from the record that the property was sold at a lesser price which fact was acknowledged by the learned Banking Court itself, the auction was not confirmed. In these circumstances the imposition of any penalty in shape of interest upon the judgment-debtor is not only unreasonable but is also unwarranted. Therefore, we disallow the same. As far as the return of bid money is concerned, the same has already been returned to the auction-purchaser and he did not raise any objection at the stated time in this context, therefore, he accepted it is fait accompli. Further the condition is contained in Order XXI, Rule 89-A, C.P.C. qua payment of compensation to the purchaser equivalent to 5% of purchase money is restricted to a decree-holder, only. In the present matter this demand has been raised by the auction-purchaser. Therefore, he is not entitled to this benefit as well.

7. Therefore, the award of purchase money equivalent to 5% and mark-up to the extent of 5% is set aside and the appeal allowed to this extent. No order as to costs. H.B.T./A-22/L Appeal allowed.