2009 PLP 140 (CLD)

SH. AZMAT SAEED, J.

This appeal is directed against the order dated 14-3-2006 whereby the objection petition filed by respondent No.6 was accepted.

2. Precisely the relevant facts necessary for adjudication of the lis at hand are that the appellant-Bank filed a suit for recovery before the Banking Court alleging therein that respondent No.1 had obtained a facility of finance from the appellant-Bank in the year 1986 which was inter alia secured by mortgage of the property in dispute. Said mortgage was effected through mortgage deed registered on 31-1-1987 and the said finance was also secured through the personal guarantee of respondent No.2. Suit which was filed on 29-4-2002 was decreed ex parte on 31-7-2002 and eventually execution proceedings commenced and during the course of said proceedings, the property in dispute was put to auction and on 16-7-2005 respondent No.3 was declared as the successful bidder. Thereafter, the respondent No.6 filed objection petition claiming to be the bona fide purchaser of the property in dispute. It appears that respondent No.1 executed a general power of attorney on 26-9-1989 in favour of respondent No.4 who on the basis of said registered general power of attorney executed the gift-deed in favour of his wife-respondent No.5 on 11-11-1989. Said respondent No.5 apparently sold the property to respondent No.6 vide the sale-deed dated 2-9-2004.

3. On the basis of the aforesaid documents respondent No.6 claimed to be the bona fide purchaser. Objection petition was resisted and the evidence which was brought on the record from which it transpired that in the revenue record, respondent No.1 has been shown as the owner of the property in dispute. It was the case of the objector that there was a registered document in his favour and that in the revenue record, the mortgage was not incorporated and that he had fulfilled his obligation by examining the revenue record where respondent No.1 is shown as the owner.

4. Relying upon the aforesaid facts and the contentions, the Judge of the Banking Court seized of the matter, accepted the objection petition and set aside the sale in favour of the auction-purchaser by way of the impugned order. Hence, this FAO.

5. Learned counsel for the appellant contends that in the facts and circumstances of the case, respondent No.6 was not a bona fide purchaser, there was a registered mortgage deed in favour of the Bank on the basis of which decree had been obtained. The original title deeds of respondent No.1 are still in the custody of the appellant-Bank. Adds that mere examining the Revenue Record does not satisfy the condition for the bona fide purchaser. Further contends that impugned order is in direct conflict and violation of the consistent view of superior Courts including the Apex Court in this behalf. Whereas, the learned counsel for the auction-purchaser has supported the contentions raised by the learned counsel for the appellant. However, the learned counsel for respondent No.6 has contended that in the revenue record, respondent No.1 had been shown as the owner. A search was carried out and nothing was revealed with reference to the rights of the appellant, hence, respondent No.6 was the bona fide purchaser.

6. Counsel for the parties have been heard and the record appended herewith perused.

7. As a general principle if any immovable property is under a charge or mortgage and subsequently alienated, the charge and mortgage would follow the transfer except in the case of bona fide purchaser without notice of such charge or mortgage. It is a settled law that before the equitable defence of bona fide purchaser under section 41 of the Transfer of Property Act can be accepted: It must be established that such purchaser has exercised due care and diligence in ascertaining the clean vendible title of his transfer. It is equally settled law that search and reliance solely of the revenue record is not sufficient to attract section 41 of the Transfer of the Property Act. Reference in this behalf has been made to the judgment reported as Maulana Riaz-ul-Hasan v. Muhammad Ayyub Khan and another 1991 SCMR 2513; Citi Bank N.A. through Branch Manager v. Munir Ahmad Gill and 2 others 2000 YLR 2938. Furthermore, any person who acquires property without obtaining the title deed of the original transferor cannot also be said to have exercised due care and caution so as to enable him to take the defence of a bona fide purchaser as is evident from the judgment reported as Mst. Nasiban Bibi v. The Australasia Bank Lahore and others 1970 SCMR 657; Citi Bank N.A. through Branch Manager v. Munir Ahmad Gill and 2 others 2000 YLR 2938 and Muhammad Anwar Khan v. Habib Bank Ltd. and 4 others 2005 CLD 165.

8. It is also a settled law that in the absence of searching in the office of the Sub-Registrar of Documents no person can claim to be a bona fide purchaser as has been held in the case reported as 2002 CLD 1090 Major Muhammad Tariq v. Citi Bank Housing Finance Company Ltd. through Manager and Maulana Riaz-ul-Hasan v. Muhammad Ayyub Khan and another 1991 SCMR 2513.

9. Perusal of the order impugned reveals that learned Judge of the Banking Court solely relied upon the factum that mortgage was not reflected in the revenue record which had been allegedly secured by the respondent No.6. This view taken by the learned Judge of the Banking Court is diametrically opposed and contradicted the settled view of the Apex Court and this Court supra.

10. Furthermore, in the instant case in the revenue record the property stood in the name of respondent No.1 whose original documents of title are admittedly with the Appellant- Bank. Evidently, the learned Judge of Banking Court has ignored this vital aspect of the matter and acted contrary to the settled law laid down by the Apex Court and this Court enumerated ibid.

11. Needless to mention that in the instant case admittedly there is a registered mortgage deed in favour of the appellant-Bank. Had a search been carried out in the office of the Sub Registrar of Documents, the factum of the registered mortgage would have been revealed. The Banking Court totally ignored this aspect of the matter and embarked upon adjudicating the application in a manner contrary to the settled law as laid down by the Apex Court and this Court indicated above.

12. In view of the foregoing facts and reasons, by accepting this appeal we set aside the order impugned with costs. M.B.A./H-23/L Appeal allowed.