2003 PLP 571 (CLD)

Date of hearing: 14th November, 2002. MIAN SAQIB NISAR, J.‑‑‑The property bearing NO.SX.VII‑99/R‑B, comprising of the superstructure in the shape of bungalows and the land underneath measuring 4 Kanals situated at Shah Jamal, Lahore belong to the appellants/judgment‑debtors, has been allegedly put to auction on 29‑4‑2002; the respondent No.3 is stated to be the highest bidder offering an amount of Rs.79,75,000 in whose favour, the learned Executive Court, has confirmed the sale by rejecting the objections of the appellants vide order dated 10‑8‑2002. Hence this appeal.

2. Briefly stated the facts of the case are that Habib Bank Ltd. filed a suit inter alia against the appellants, which was allowed to the tune of Rs.66,28,137 vide judgment and decree dated 9‑6‑1998. The property mentioned above, being the mortgaged property, in the execution proceedings, was directed to be sold through auction; the terms and conditions of the auction were drawn by the Court vide order dated 21‑7‑1998; the reserve auction price of the property was initially fixed as Rs.8 millions, which was subsequently reduced to 7.5 million by the Court. Mr. Arshad Manzoor Ahmad Khan was appointed as the Court‑Auctioneer (the officer).

3. Some attempts were earlier made to sell the property through auction, but for various reasons, the object could not be achieved. Ultimately, as per order of the Court; the date of the auction was fixed as 22‑4‑2002, according to the schedule of the auction, which was approved by the Court, the proclamation was to be affixed in the Court premises on 4‑4‑2002; and at the site on 6‑4‑2002, the time of the auction was mentioned therein, but the place of auction is not specified. There is no cavil between the parties that the proclamation was accordingly affixed. The Court ‑had required the officer to submit his report on 26‑4‑2002. From the proceedings of the Court dated 26‑4‑2002, it seems that the report was submitted the same day. It is mentioned in paragraph No.3 of the report that "the auction, was fixed on 22‑4‑2002. Because of my illness could not conduct the auction proceedings therefore, auction is postponed for one week now the next date of auction is fixed for 29‑4‑2002". On the above, the learned executing Court, passed the order as below:‑‑ "Present: Counsel for the D.H. and Court Auctioneer. The latter filed interim report stating that the property could not be auctioned on 22‑4‑2002 on account of his illness and now would conduct the auction on 29‑4‑2002 that is within week of the previous auction. Allowed. Report be filed on 2‑5‑2002."

4. In view of the above, the Court Auctioneer allegedly conducted the auction on 29‑4‑2002 and Mst. Nadia Malik, respondent, No‑3 (the purchaser) being the highest bidder offering Rs.79,50,000, has succeeded in the bid; the Court Auctioneer claims to have received 1/4th of the auction price from the purchaser, the same day through the cheque issued by her attorney, whereas the purchaser was obliged to make the deposit of remaining 3/4th within fifteen days as per condition of auction and .also mandatorily required by Order 21, rule 85, Civil Procedure Code. However, respondent No.3 could not make the deposit of the 3/4th within the requisite period of time, rather she on 13‑5‑2002, moved an application stating in paragraph No‑3, that "the remainder 3/4 was required to be deposited within 15 days but due to the prevalent circumstances of Karachi City, a heavy payment of the petitioner struck there and it has become difficult for the petitioner to make the payment of entire 3/4th remainder". In paragraph No. 4, it is stated that "the petitioner is bona fide purchaser and to show her bona fide she is depositing Rs.3.000 million in this august Court today and undertake to deposit the remaining amount within 10 days from today". It was thus requested to the Court to accept the payment. of Rs.3.000 million and for the remaining balance, auction money to extend the time. This application came up before the Court the same day arid the Court passed the following order on this application:‑‑ From the order dated 14‑5‑2002, which is not in the main order sheet, but on the side of the application, it transpires that notice was issued to the parties for 29‑5‑2002, however, the Court directed. Case was adjourned to 29‑5‑2002. From the record, it seems that the respondent had made the deposit of the auction price in the following break‑up:‑‑ Rs. 19,93,750 on 29‑4‑2002 through cheque to the Court Auctioneer. Rs.30,00,000 was deposited on 14‑5‑2002 through pay order. Rs.30,00,000 on 23‑5‑2002. Anyhow, before the sale could be confirmed by the Court, the appellants filed the objections to the auction in terms of section 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and other enabling, provisions of law on 24‑5‑2002. It is specifically mentioned in the grounds of the objection petition that no auction was held/conducted by the officer at site on 29‑4‑2002; the auction proceedings are fictitious and fraudulent. It is also stated in ground‑B, that no one including the Court Auctioneer, the bank staff had come to the site on 22‑4‑2002 and the auction was not validly postponed entire proceedings in this behalf are fabricated; the purchaser has not deposited the balance 3/4th of the auction money within 15 days of the alleged auction dated i.e. 29‑4‑2002, therefore, the auction proceedings stand vitiated. The decree‑holder and the purchaser filed replies to the objections. Reply of the respondent/decree‑holder Habib Bank is absolutely evasive and does not specifically meet the allegations contained in the objection petition. The purchaser also in her reply, while responding to ground, has not specifically denied the averments made therein about the deposit of 3/4th it is stated to. have been made in accordance with law. Anyhow, the learned Banking Court through the impugned order has dismissed the objection of the appellants; confirmed the sale in favour of the purchaser, who has also obtained the possession. Hence this appeal.

5. Learned counsel for the appellant has reiterated the objections mentioned in the objection petition, with an addition that the venue/place of the auction in the orders of the Court and the proclamation has not been mentioned therefore, the sale conducted is the result of material irregularity:

6. Mr. Shahid Karim, counsel for the purchaser, only has argued the matter from the respondent's side and the counsel for the other respondents have adopted his arguments. It is submitted by him that according to section 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which is a special law, the application of general law, enunciated in the Civil Procedure Code, for the auction of the immovable property in execution of the decree has been excluded, thus the appellants are precluded to challenge the sale on the basis of the provisions of Civil Procedure Code. On merits, he has defended the impugned order, as also the action of the officer in adjourning the sale from 22‑4‑2002 to 29‑4‑2002; it is additionally submitted that such postponement was affirmed by the Court on 26‑4‑2002, and would therefore, be deemed as the adjournment by the Court itself; for the late deposit of 3/4th of the auction price, it is stated that as the Court had extended the time and the respondent has made the payment within the time granted to it, therefore, provisions of Order 21, rule 85 are not attracted.

8. We have heard learned counsel for the parties. The question whether under section 19(7) of the Act, the objection petition filed by the appellants, on the grounds taken therein, is incompetent, suffice it to say that on account of the non obstante clause of subsection (7) to which reference has been made by Mr. Karim to support his plea, it is only the summary procedure which has been permitted to be followed by the Court while determining the issues/claims/objection with regard to sale etc. But it is not well founded to argue that the objections to the very conduct of sale as being violative of the mandatory provisions of Order 21, Civil Procedure Code, have been dispensed with. We would like to elucidate this point and hold that it is only for the purpose of the adjudication of the issues mentioned in this subsection, that the lengthy procedure, provided in the Civil Procedure Code, for such determination has been given up. Because under the Civil Procedure Code, certain objections to the sale and the B issues relate thereto are treated as akin to a suit and tried in that manner. Under the above special law the Court has been empowered to decide the objections etc. on the basis of the material before it, which may include the affidavits, etc. without going in the regular trial. However the relevant substantive law part contained in Civil Procedure Code, for the sale of immovable property continues to be attracted; this is specially so in view of sections 7(a), 7(2) and 19(2) of the Ordinance, whereby the provisions of Civil Procedure Code have been made applicable to all the nature of the proceedings before the Banking Court, and the decree has to be executed in accordance with the provisions of Civil Procedure Code, except where there is some other law on the subject or a different manner is adopted by the Court. But this is not the position in the present case. Therefore, we are of the firm view that any sale conducted and made absolute in violation of rules provided in Civil Procedure Code can be validly challenged on the basis thereof.

9. Settling the above legal position, the propositions now to be resolved are, whether the sale/auction was legally adjourned for 29‑4‑2002 and if so whether it was factually conducted on that date?

10. Order 21, rule 69, Civil Procedure Code, deals with the adjournment of the sale. The date when fixed by the Court for that purpose can either be adjourned by the Court or by the officer conducting the sale. Obviously, before the auction proceedings are finally concluded by the officer, the Court in its discretion at any point of time, can adjourn the sale even without assigning any reasons. But where this power is to be exercised by the officer, it cannot be equated with power of the Court. Rather, the officer can only adjourn the sale, when he is physically present at the site of auction and either it is not possible to commence the proceedings or during the course of auction, a situation arises in which it becomes impossible to conduct or carry the sale, however, the officer unlike the Court has to give the reasons justifying the adjournment because such decision could be challenged before the Court. In the present case, it has not been proved on the record by the respondents, that the adjournment on 22‑4‑2002 was made by the officer, through a reasoned order, as is the requirement of rule 69, Civil Procedure Code on the date and the time of auction, at the site. No proof, which may have been in.‑the form of affidavits of the officer or the bank official or any other person which in the light of the summary procedure, under section 19(7) of the Ordinance, was permissible, was brought on the record, that the adjournment was made by the officer physically being present at the site and he fell seriously ill, that the postponement became imperative. Conversely when the appellants in their objection petition specifically stated that the officer did not visit the site on 22‑4‑2002, the reply of both the sets of the respondents is evasive, which is no denial in law and would mean that the officer did no come to the site on 22‑4‑2002. Even otherwise, Mr. Shahia Karim, the counsel for the purchaser on the last date of hearing, when specifically questioned by the Court, stated that the officer could not go to the site because of‑ his serious indisposition. Today he has tried to shift his position by arguing that the officer should be summoned to verify the position. We do not find ourselves inclined to hold any inquiry, because if the officer was present at the site and the adjournment was made, the respondents should have proved this fact, but the needful is not done. Otherwise, from the interim report filed by the officer, it seems that he was allegedly so seriously ill and could not go to the site, therefore, the question of his adjourning the sale in terms of rule 69, Civil Procedure Code, does not arise for which his physical presence at the site was sine, qua non. 10‑A. Mr. Shahid Karim, confronted with, the above, has argued that because the postponement made by the officer, has been affirmed by the Court on 26‑4‑2002, therefore, the adjournment should be deemed to have been made by the Court. We find a fundamental flaw in the argument; an adjournment/ postponement of the event is always before the happening of the event, but if for any reason‑ the happening of the event has lapsed or frustrated, that Court by the fiction of adjournment cannot postpone the event, which has not occasioned. In other words the Court vide rule 69, Civil Procedure Code has no ex post facto power to adjourn a sale, which otherwise, could not take place on account of the alleged illness of the, officer, therefore, any order of the Court dated 26‑4‑2002, affirming the postponement shall be illegal and without jurisdiction. We are unable to subscribe to the view of the respondent's counsel, that even after the lapse of 22‑4‑2002, the Court retrospectively could on 26‑4‑2002, either adjourn the sale or endorse the postponement made by the officer. If this plea is accepted; it would amount to locking of the door of the stable after the mare has left". Which is never the intention of the Legislature behind Order 21, rule 69, Civil Procedure Code. Therefore, when the adjournment of the sale from 22‑4‑2002 to 29‑4‑2002, was absolutely illegal. without jurisdiction, resultantly, any sale allegedly conducted on the said date, shall be invalid and of no legal consequences and effect.

11. Examining the other question, if the sale was factually conducted by the officer at the site on 26‑4‑2002, suffice it to say, that from the present record and by following the rule of summary procedure, mentioned in section 19(2), the sale seems to .be fictitious, for the reasons that the officer was so ill on 22‑4‑2002 that he could not visit the site, but from the proclamation, which is printed by a printing press, the same has been pasted at the site on 23‑4‑2002, this seems most improbable; though according to the terms and conditions, approved by the Court, the proclamation was to be also the Court premises, but according to the proclamation for 29‑4‑2002, this is conspicuously missing; whereas in the earlier proclamation the date of affixation at the Court, premises was specifically mentioned; no auction proceedings have been placed on the record; no attendance sheet of the decree‑holder, the judgment‑debtor, the participants, who allegedly came to the site on 29‑4‑2002. has been brought on the record; there is no affidavit of any, of the persons, who allegedly participated in the auction proceedings; no notice has been appended by the officer with his report, about the notice sent to the appellant regarding postponement of the sale from 22‑4‑2002 to 29‑4‑2002. All the above factors taken in totality, a valid conclusion can be drawn that for certain oblique reasons, without going to the site, the officer invalidly adjourned the sale from 22‑4‑2002 to 29‑4‑2002; there is no independent proof, whether the proclamation for 29‑4‑2002, was re affixed at this site on 23‑4‑2002 and any notice was issued to the judgment‑debtor for that date; the officer personally visited the site and conducted the sale on 29‑4‑2002. Above all, there is no mention in the proclamation about the venue, were the sale has to be conducted. We are unable to agree with learned counsel for the appellant that in absence of specific mention of any other place, it should be presumed that the auction shall be conducted at the site of the property to be auctioned. Rather, according to Order 21, rule 66, the place of sale must be specifically mentioned and the failure to do so, shall be material irregularity, vitiating the sale.

12. In the light of what has been stated above, we have come to an irresistible conclusion that sale allegedly conducted on 29‑4‑2002, has not been transparent and genuine and there is great shadow of fictitiousness and manipulation involved, thus on account of above, coupled with the other two main reasons, given by us in the judgment; this sale cannot be sustained.

13. Now attending to another crucial aspect of the matter; as mentioned earlier, respondent No.3, was required under the terms and conditions, of sale to make deposit of 3/4th within fifteen days on the date of auction. Instead of making the payment, she on 13‑5‑2002, moved an application seeking permission to deposit three million rupees and for the remaining, sought extension of time; the Court without giving notice to the judgment‑debtor and by completely ignoring the mandatory provisions of Order 21, rule 85, extended the time for the balance payment for about a month. This obviously was an order which was absolutely illegal and without jurisdiction for the reason that the Court under section 148 can only extend such time, which has been fixed by the Court itself. But where G time for doing an act, has been determined and fixed by the law, the Court has no power or authority to extend such time. The provisions of Order 21, rule 85, which are mandatory in nature, provides that the full payment of the auction price by the purchaser, shall be paid before the close of 15th day from the sale of the property, resultantly, being a mandate of law, learned Court has no authority to enlarge the time.

14. The argument of learned counsel for respondent No.3, that because the Court had enlarged the time on 14‑5‑2002, and if the application had been refused in terms of rule 85, the purchaser would have made arrangement to make the deposit and thus in the above situation, the purchaser on account of act of the Court, cannot be prejudiced. We are afraid, this argument has no substance, because every person is required to know the low. Thus respondent No.3, should have known that full payment has to be made within fifteen days and her application by itself was absolutely unfounded and misconceived, it was an abortive attempt to circumvent the provisions of rule

85. The rule that no one shall be prejudiced on account of an act of the Court, would only be applicable in those cases. where the Court has the authority to pass the order but the order is erroneous, however, where the Court lacks the authority and absolutely has no jurisdiction, notwithstanding such order having been passed by the Court, a person cannot take premium of such void order on the principle mentioned above. In the light of what has been aforementioned, we allow this appeal, set aside the impugned order, accept the objection of the appellant and set aside the sale made in favour of respondent No.3. However, as respondent No.3, has already deposited the entire amount, which has been shared by respondent/Bank and another creditor bank of judgment‑debtor, therefore, respondent No.3, shall be entitled to withdraw such amount from the banks. Moreover, respondent No.3, shall also be entitled to seek refund of the stamp duty paid for the purpose of execution of sale‑deed in her favour. M.B.A./M‑1593/L Appeal allowed