2015 PLP 938 (CLD)

AAMER FAROOQ, J.

The instant Intra Court Appeal is directed against order dated 3-12-2014, passed by the learned Single Judge of this Court exercising Jurisdiction under Financial Institutions (Recovery of Finances) Ordinance, 2001 (the Ordinance).

2. A compromise decree was passed in C.S. No.8/2010 under Banking Jurisdiction on 7-4-2011. After default on part of the appellant in payment of the decretal amount, the respondent/bank instituted execution proceedings (E.P. No.1/2012 in C.S. No.8/2010). The appellant in the referred execution proceedings raised objections that the decree cannot be executed, inter alia, on the ground that there were reciprocal obligations which have not been fulfilled by the respondent/bank. The referred objections were dismissed vide impugned order dated 3-12-2014 and warrants of possession were ordered to be issued with respect to the mortgaged properties, under section 15(6) of the Ordinance.

3. Learned counsel for the appellant submitted that the case was fixed on 28-11-2014 but was left over and again it was fixed on 3-12-2014, however, in the cause list it was mentioned as cancelled being wrongly fixed. On 23-12-2014, the Bailiff of this Court along with the police officials visited the house of the appellant and demanded the possession of house No.197, street No.22, sector F 11/2, Islamabad. The learned counsel submitted next that he did not attend the Court on the ground that he was informed that the cause list had been cancelled. The appellant has been condemned unheard and that once the Banking Court has adopted a procedure in execution proceedings, it cannot switch to another.

4. Learned counsel for the respondent/bank defended the impugned order and has shown the cause list for 3-12-2014 which shows that the cases that were cancelled, as wrongly fixed, were other than the execution proceedings in the present matter. The learned counsel further submitted that the appellant is playing 'hide and seek' in order to delay the execution of compromise decree passed in favour of the Bank.

5. The compromise decree was passed on 7-4-2011 and since then despite the pendency of the execution proceedings, the respondents/bank has not borne the fruits of the above mentioned decree. The examination of order sheet in the execution proceedings indicates that the appellant/judgment debtor is delaying the adjudication of the case under one pretext or the other. The main contention raised by the appellant, in the present appeal, is that he did not appear in the case as the same was cancelled. The cause list for the above mentioned date indicates that the case was not cancelled. Even otherwise, the appellant in grounds of appeal has not challenged the decision on the objection petition vide impugned order. In so far as the terms of the sale are concerned they are still to be settled by the learned Executing Court and the appellant can appear in the execution proceedings and can have the same settled in his presence as provided in Order XXI, Rule 66, C.P.C. and raise objections thereto, if need be. In so far as the issue of possession of the mortgaged property(ies) is concerned, the application for the same was filed on 12-7-2012 by respondent bank. On 28-2-2013, fresh notices were ordered to be issued to the judgment debtor/appellant. On 25-3-2013, the representative of the appellant appeared and sought time for engaging the counsel. On 27-6-2013, the judgment debtor/appellant appeared, in person and since then he is delaying the adjudication of the case. Even on the dates that judgment debtor/appellant or his counsel is present, an adjournment has been sought for on one reason or the other. Appellant, at this stage, cannot plead ignorance regarding pendency of the application under section 15(6) of the Ordinance ibid. On 3-12-2014, execution petition was fixed along with all the pending matters. There is no provision in Code of Civil Procedure, 1908 which is same or similar to section 15(6) of the Ordinance i.e. allowing the Decree Holder/ Mortgagor to seek possession prior to the sale/auction of the mortgaged property. Section 19(2) of the Ordinance provides for the manner in which a decree passed by the Banking Court may be executed. The referred section reads as follows: 19(2): "The decree of the Banking Court shall be executed in accordance with the provisions of the Civil Procedure Code, 1908 (Act V of 1908) or any other law for the time being in force or any such manner as the Banking Court may at the request of the Decree Holder consider appropriate, including recovery as arrears of land revenue."

6. Under section 19(5) of the Ordinance ibid the provisions of subsections (5), (6), (7), (8), (9), (10), (11) and (12) of section 15 are to apply mutatis mutandis to sales of mortgaged, pledged or hypothecated property by a financial institution in exercise of its powers conferred by subsection (3). Under section 19(3) of the Ordinance a financial institution may sell a mortgaged property with or without intervention of the Court. The application of provisions/subsections of section 15 of the Ordinance apply to cases where the mortgaged property is sold by the financial institution without the intervention of the Court inasmuch as the bare reading of the referred subsections show that they empower the financial institution to seek possession of the mortgaged property and to transfer the same by the financial institution without the intervention of the Banking Court. However, subsection (6) of section 15 can be regarded as exception and can be held to be applicable even in cases of sale of mortgaged property with the intervention of the Banking Court. In this behalf since section 19(3) allows the financial institution to sell the mortgaged property with or without intervention of the Court and subsection (5) of section 19 makes the above mentioned subsections of section 15 applicable to sale by financial institutions under section 19(3), therefore, the logical conclusion is that section 15(6) is applicable even in the case where sale of the mortgaged property is with the intervention of the Banking Court. There is some case-law to the effect that in execution proceedings, before the Banking Court, if one procedure is adopted by the financial institution then the same is to be followed and cannot be deviated from, reliance is placed in case titled "Muhammad Hussain v. IDBP" (2014 MLD 192). In this behalf it is observed that by putting the decree holder in possession of the mortgaged property under section 15(6) of the Ordinance, prior to its auction by the Banking Court in accordance with the procedure laid down in Code of Civil Procedure, 1908, the same does not tantamount to following two different procedures. Section 7(2) of the Ordinance provides that Banking Court shall follow procedure laid down in Code of Civil Procedure, 1908 in respect of matters for which the procedure is not provided in the Ordinance as observed above. Section 19(3) provides for sale with or without the intervention of the Court and if it is with the intervention of the Court the mortgaged property can be sold/auctioned in accordance with the procedure provided in Cod of Civil Procedure, 1908 and the decree holder/mortgagee bank can be put in possession of the mortgaged property even prior to the sale/auction.

7. In view of above, the appeal being devoid of merits is dismissed. KMZ/30/Isl. Appeal dismissed.