2005 PLP 384 (CLD)

Shahid Ikram Siddiqui for Appellant. Nemo for Respondents. Date of hearing: 14th January, 2004. MIAN SAQIB NISAR, J.‑‑‑Briefly stated the facts of the case are that, the appellant‑Bank brought a suit, for recovery against respondent No.1 for an amount of Rs.12,48,767 and claimed in the suit that, the respondent has also equitably mortgaged property with the plaintiff- Bank through deposit of title documents. The suit in favour of the plaintiff‑Bank was decreed on 3‑8‑1999 for an amount of Rs.7,99,260.43. For the satisfaction of the decree, the mortgaged property, mentioned in "Fard Taliqa" filed along with the execution application, was directed to be put to auction; when Muhammad Amjad, Muhammad Abdullah and Imtiaz Hussain respondents Nos.1, 2 and 3 respectively, filed objections claiming that, respondents Nos. 1 and 2 had purchased two Shops Nos.2 and 3 respectively vide registered sale‑deeds on 13‑1‑1998 from the judgment debtor, whereas Imtiaz Hussain respondent No.3, has purchased the house vide sale‑deed dated 5‑6‑2000. Thus, on account of being the "bona fide purchasers" their rights are protected; they accordingly sought the detachment of the properties and excluding those from the auction. The learned Banking Court, vide impugned order dated 31‑10‑2001, has allowed the objections and held as under:‑‑ "The properties are released from the attachment under Order XXI, Rule 60, C.P.C. The decree‑holder shall file fresh "Fard Taliqa" containing the properties/ assets of the judgment‑debtor."

2. Learned counsel for the appellant by relying upon Mst. Nasiban Bibi v. The Australasia Bank, Lahore 1970 SCMR 657, Mrs. Tehmina Bashir v. Abdul Rauf and another 1995 CLC 973, Tarachand Mondal and others v. Hazari Shaikh and another PLD 1967 Dacca 203, Shukri and 3 others v: Ch. Muhammad Shafi Zaffar and 2 others PLD 1975 Lahore 619 and Habib Bank Limited v. Ajma Corporation 2000 CLC 1425, has argued that, once the property has been mortgaged, even by an equitable mode, as is admitted position in the present case, such property remains under the charge and no subsequent purchaser can claim the protection of "Bona fide Purchaser", which amounts to frustrating the charge. It is also stated that the judgment relied upon by the learned Banking Court reported as Rehman Shah v. Muhammad Shah and others 1974 SCMR 255 is distinguishable on its own facts and had no application.

3. The respondents have been proceeded ex parte vide order dated 8‑12‑2003.

4. We have heard the learned counsel for the parties and find that, the ratio of the judgments, cited by the learned counsel for the appellant, fully supports his contention; obviously once the property has been mortgaged, even though, it can be transferred, but such alienation shall be subject to the charge of mortgage. The person purchasing the property, cannot take the advantage of the "equitable rule" by avoiding the charge and, claiming the transfer to be free from encumbrance. Admittedly, the property in question was equitably mortgaged on 11‑4‑1996 and the properties have been purchased by the respondents/objectors much thereafter. Resultantly, they cannot frustrate and defeat the mortgage rights of the appellant‑Bank on the ground of being "Bona fide Purchasers".

5. As regards the judgment reported as 1974 SCMR 255 is concerned, it is distinguishable, particularly for the reason that, in the aforementioned matter, there was no fact to put the purchase to the notice of the earlier transfer. But in the present matter, the title documents were not with the seller, which fact was sufficient to hold that, the respondents were buying the property subject to the risk of the mortgage. In the light of above, the impugned order is set aside and the learned Court below is directed to execute the decree against the mortgaged property, as has been requested/ prayed for by the appellant‑Bank originally. This appeal is accordingly allowed. M.H./C‑2/L Appeal allowed.