2012 PLP 1654 (CLD)

IBAD-UR-REHMAN LODHI, J.

This is an appeal calling in question order dated 22-2-2010 passed by the learned Judge Banking Court-III, Lahore whereby objection petition filed by appellant under the provisions of section 47 read with Order XXI, Rule 90, C.P.C. was rejected.

2. The facts relevant for the purpose of present appeal are that the appellant obtained a financial assistance from the respondent Bank but defaulted in payment of the monthly installments which resulted in putting to auction the mortgaged property abutting Cavalry Road, Lahore with a measurement of 3-Kanal. The Bank in an advertisement published in daily "Jang" in its edition of 31-1-2008 got published a public notice intimating the Public at Large, the fact of putting the property to open auction and a reserve price of Rs.3,83,61,458 was fixed.

3. The suit filed by the Bank for recovery was decreed by the learned Banking Court on 7-3-2009 for recovery of sum of Rs.1,95,36,

969. This decree passed by the learned Judge Banking Court was not challenged by any side.

4. The Court Auctioneer appointed by the Court for conducting the auction proceedings determined the sale reserve price as Rs.3,18,00,000.

5. The first attempt for auction failed when on 22-6-2009, no bidder was attracted at the site to participate in the auction proceedings but ultimately as per the record the auction was conducted and on 4-8-2009 the property was sold in auction by the Court Auctioneer in favour of auction purchaser against his offer of Rs.3,19,00,000.

6. The appellant at that juncture, by pleading acquiring the knowledge of the act of putting her property to open auction as on 10-8-2009, approached the learned Banking Court by means of a petition under section 47 read with provisions of Order XXI, Rule 90, C.P.C., challenging the auction proceedings and seeking the sale to be set aside on the grounds of irregularities and fraud as was committed in her estimation by the Court Auctioneer, the Banking Staff and the Auction Purchaser.

7. The learned Judge Banking Court on 22-2-2010 after getting the reply to the said petition from bank and auction purchaser, rejected the objection petition and simultaneously confirmed the sale. Sale certificate, however, was not issued when in the present proceedings a restraint order was passed on 16-3-2010.

8. Learned counsel for the Bank and Auction Purchaser have vehemently argued that mere inadequacy of price by itself is not a sufficient ground for interference by the Court.

9. We have heard the learned counsel for the parties at length and have perused the record with their able assistance.

10. We have noticed that the reserve price which in the year 2008 was determined by the Bank itself as Rs.3,83,61,456 was reduced after period of one year by a sum of over Rs.64,00,000 and it was done by mischievous act of decree holder Bank.

11. We have further noticed that on 4-8-2009 when the property was put to auction, the proceedings according to report of Court Auctioneer were conducted in the evening time particularly after closure of banks but the manner in which the auction purchaser was allowed to participate in the proceedings and when the bid was closed at Rs.3,19,00,000, the auction purchaser without any delay of a moment, immediately brought out from his pocket a Pay Order for a sum of Rs.79,75,000 being 1/4th of bid amount, it shows the pre-determination at least in the minds of Court Auctioneer and the auction purchaser that both were in prior knowledge as to at what rate the highest bid will be finalized and what would be 1/4th of the bid amount and the same exact amount, in shape of already prepared Pay Order, was already in possession of the auction purchaser which Pay Order was naturally prepared prior to the participation of auction purchaser in the auction proceedings. This shows the collusiveness of the persons interested whereby the appellant was deprived of the actual value of her property.

12. We have also seen the proceedings carried out by the Court Auctioneer at the site which speaks volume about the manner and conduct in which such proceedings were carried out. In the attendance sheet prepared by the Court Auctioneer shown to have been prepared on 4-8-2009. It is shown that in addition to Fawad Jehanzeb, the ultimate highest bidder, who too was represented through his agent, there was only one other person who was attending the proceedings in his personal capacity whereas the other persons again were shown represented through some agents. In the bid sheet it is but obvious that only Fawad Jehanzeb and Muhammad Saleem Qadri participated in the competition and first bid was offered by Fawad Jehanzeb the auction purchaser to the tune of Rs.3,18,50,000 and with an increase of Rs.25,000, the other bid of Rs.3,18,75,000 was offered by the only other person Muhammad Saleem Qadri and then the final bid of Rs.3,19,00,000 was offered by the auction purchaser Fawad Jehanzeb, who was declared successful bidder.

13. The learned Judge Banking Court while confirming the sale on 22-2-2010 has conveniently ignored the fact that earlier at least a year back the decree holder Bank itself determined the value of the property much more than to what the property was put to auction in the proceedings and objections raised by the appellant before it are not considered in an appropriate manner and a sale which was result of such tainted proceedings should not have been confirmed. The material irregularities in conducting the sale have not been taken into consideration by the learned Judge Banking Court. This Court in case titled Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another (PLD 1993 Lahore 706) has held that if the inadequacy of price was by reason of fraud and material irregularity, it would provide a ground for setting aside the decree as also the sale in execution of such decree.

14. The learned Banking Court has only obtained replies to the objection petition from the decree holder Bank and auction purchaser which practice in negation of Law laid down by the Hon'ble Supreme Court of Pakistan in Mir Wali Khan and another v. Manager, Agricultural Development Bank of Pakistan, Muzaffargarh and another (PLD 2003 Supreme Court 500), wherein it was held that the dismissal of application under Order XXI, Rule 90, C.P.C. without recording evidence of parties was not justified and it was further held that without recording evidence of the parties and by recording of findings based on such evidence adduced by the parties, the Banking Court should not have been proceeded to reject the objection petition.

15. The result is that the appeal is accepted, objection petition filed by the appellant before the learned Judge Banking Court-III, Lahore is allowed and the sale as a result of auction dated 4-8-2009 in favour of respondent No.2/the auction purchaser, is set aside. The order dated 22-2-2010 passed by the learned Banking Court is also set aside. The learned Judge Banking Court will proceed afresh for putting the property to open auction after determination of the actual market price of property. KMZ/Q-4/L Appeal allowed.