1995 PLP 1895 (MLD)

This is an application on behalf of M/s. C.M. Sarwar and Muhammad Sharif Khokhar, Advocates, who were appointed as Court Auctioneers for payment of their commission in accordance with the rules.

2. The relevant facts are that the appellant filed a suit for recovery of Rs.42,05,177.55 as on 1st September, 1976. The suit was originally filed in the Court of the Senior Civil Judge but on the promulgation of the Banking Companies (Recovery of Loans) Ordinance, 1979, the same was transferred to the learned Special Judge (Banking), Lahore, who decreed the same on 20‑1‑1981. The appellant, thereafter initiated execution proceedings. The property of the judgment‑debtors was attached. The same was ordered to be put to suction and applicants were appointed as Court Auctioneers. The property of the judgment‑debtors was accordingly, auctioned on 6‑1‑1994. The highest bid of Rs.1,71,50,000 was offered by one Javed Akhtar, who proceeded to deposit 1/4th of the bid with the fall of the hammer. The applicants submitted the report, which came up for consideration before our learned brother Malik Muhammad Qayyum, J., Special Judge (Banking), Lahore and bill of the applicants was forwarded to the decree‑holder Bank for earlier payment.

3. The Court Auctioneers through this application have complained that despite the order of our learned brother, their bills remained unpaid. It is clarified that heirs of the judgment‑debtors moved an objection petition to the effect that the execution was barred by limitation. The objection petition was accepted vide order, dated 14‑7‑1994 and the execution petition was dismissed. It is maintained that the appellants conducted the proceedings strictly in accordance with law and the directions of the execution Court and till today no party has disputed the auction proceedings, therefore, they are entitled to payment of their commission immediately.

4. On the other hand, the learned counsel for the decree‑holder Bank argued that since the auction was not confirmed, therefore, the applicants are not entitled to their commission. It is added that the objection petition was accepted and the execution petition of the Bank was dismissed as being out of time vide order, dated 14‑7‑1994 which has been assailed in the titled appeal. It is added that the charges of Court Auctioneers are paid in accordance with Rule 22, Chapter 12‑L, High Court Rules and Orders Volume I. It is submitted that in accordance with clause (i) of Rule 22 of the Court Auctioneers are not entitled to any charges as the auction has been set aside.

5. We have given our anxious consideration to the arguments of the learned counsel for the parties and gone through the record and relevant provisions of the High Court Rules and Orders. It is worthwhile to refer to Rule 22, Chapter 12‑L, High Court Rules and Orders, Volume‑I which reads as under:‑‑‑ "22.‑‑‑(i) No commission shall be paid on the proceeds of sales set aside for a material irregularity in publishing or conducting the sale. The commission on the proceeds of a sale set aside for any other cause shall be paid by the person at whose instance and for whose benefit the sale is set aside and the Court Auctioneer shall be entitled to his share of such commission. (ii) If a sale is set aside the purchase money shall be refunded in full to the auction‑purchaser unless it is set aside at his instance and for his benefit in which event the commission due under paragraph 21 shall be deducted from the sum to be refunded. (iii) Where a sale is set aside after the commission has been paid to the Court Auctioneer, the Court shall recover it from him and shall refund it to the auction‑purchaser if he is entitled to the refund of the whole of the purchase money. In such cases the Government share of the commission shall also be refunded. (iv) In cases in which auction sales are ordered, but not completed or do not take place at all, the Court Auctioneers shall be paid only his actual expenses, provided that if there has been, in the opinion of the Court, clear negligence on the part of the auctioneer (e.g. failure to advertise, leading to absence of bidders) he will not be entitled to any compensation. The amount of actual expenses if held due under this rule will be determined by the Court and shall be paid by the decree holder or the judgment‑debtor as the Court may direct."

6. It is clear from clause (i) that no commission is to be paid on the sale proceeds if the auction is set aside for material irregularity in publishing or conducting the sale while in the other cases the commission on the proceeds of sale set aside for any other cause would be paid by the person at whose instance and for whose benefit the sale is set aside by the Court. Now in the present case the admitted position is that none of the parties up-to-date has objected to the conduct of the auction by the applicants in any manner, whatsoever. Therefore, it is evident that they are entitled to their charges.

7. The only question for determination is as to who should pay their charges? In this case the objectors did not challenge the auction proceedings but they objected to the competency of the execution petition which was upheld. This way, neither anyone challenged the auction proceedings nor the same were directly set aside: The auction proceedings became infructuous, in view of the objection petition, and were dismissed being barred by limitation. Therefore, the objectors can also not be saddled with the liability. We are mindful of the fact that the Rules do not cater precisely for this situation. At the same time it is clear from the Rules that the applicants are entitled to payment. Therefore, the decree‑holder, who initiated the execution proceedings and for whose benefit the property of the judgment‑debtors was put to auction has to pay the bill of the Court Auctioneers. Moreso, when our warned brother Malik Muhammad Qayyum, J., has already directed for payment. That order was not challenged in any forum and the same has become final and holds field.

8. The proposition can be looked from another angle. The commission of the applicants is in any case part of the costs of execution. Therefore, if the execution petition is dismissed, the decree‑holder can be burdened with costs. It was held in the case Bullen v. Ansley and Smith (1807) 6 Esp,111) that "the sheriff can recover notwithstanding that the judgment and all subsequent proceedings have been set aside". While in the case of Madeley v. Greenwood (1897) 42 Sol Jo 34 it was held that "when sale is stopped, the person at whose instance it is stopped is not necessarily the person liable. It was held that "when an exception is withdrawn, satisfied or stopped, the sheriff is entitled, as against the person issuing the execution or the person at whose instance the sale is stopped, to the same fees as if the execution had been completed. Similarly, in the case Pirie v. Stewart (1899) 2 IR 546 it was held that "Where the execution is withdrawn by the execution creditor, the sheriff is entitled to the bailiffs fees and possession money". The present case is almost parallel to this. It is to be remembered that wrongful execution are normally void ab initio.

9. Before, parting with the order we would like to point out that Rule 22 requires amendment in this behalf so as to cater for this situation where after the appointment of the auctioneers execution petition is dismissed then the decree‑holder should pay the commission or the actual expenses incurred by the Court Auctioneers, as the case may be.

10. The upshot of the above discussion is that this application is accepted and the Bank is directed to pay the charges of the Court Auctioneers by 31‑7‑1995. AA./U‑41/L Order accordingly.