2007 PLP 625 (CLD)

JAWWAD S. KHAWAJA, J.

Ghulam Shabbir petitioner impugns the order dated 23-2-2006 passed by the learned Judge Banking Court-IV, Lahore, whereby . an application filed by him under Order VI, rule 17, C.P.C. seeking amendment of an objection petition filed by him under section 19(17) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, has been dismissed.

2. In order to understand the matter in contention before us, it is necessary to set out, briefly, the facts leading upto the filing of the present petition. The respondent-Bank obtained a decree against respondents Nos.2 to 5 (judgment-debtors) dated 8-9-1998 from the learned Banking Court. The property, which is subject-matter of the present proceedings, is a factory comprising of land measuring 4 Kanals and 5 Marlas with structures, etc. thereon located on Defence Road, Lahore. This property was originally owned by the judgment-debtor Madina Towel Industries (Pvt.) Limited (respondent No.2) and had been mortgaged in favour of the respondent-Bank. The property in dispute is covered by the decree dated 8-9-1998 passed in favour of the respondent-Bank. The property was, however, conveyed by respondent No.2 in favour of respondent No.4 from whom the petitioner purchased the same for Rs.80,00,000 vide registered sale-deed dated 15-4-2004, On 7-9-2004, the respondent-Bank filed petition for execution of the aforesaid decree.

3. In execution of the decree, the learned Banking court ordered auction of the property in dispute. The auction was ordered to be held on 12-12-2005. According to the petitioner, he came to know of the proposed auction on 11-12-2005, which was a Sunday, and immediately filed an objection petition against the same on 12-12-2005. The learned Court sought a .reply to the same. The said application was, however, dismissed on 20-12-2005 for the reason that in view of the auction purported to have been held on 20-12-2005, the objection petition was not pressed. On the very same day i.e. 20-12-2005, the petitioner filed another objection petition. The Court adjourned the same for reply and arguments. The petitioner, thereafter, on 6-2-2006 filed an application under Order VI, rule 17, C.P.C. seeking permission to amend his objection petition. Through this application, the petitioner sought to add the following as additional grounds of objection against the auction:- "One day before the auction i.e. on Sunday (11-12-2005) for the first time a notice for auction was affixed on the premises owned and possessed by the petitioner. The petitioner approached this Honourable Court on 12-12-2005 for the stay of auction. This Honourable Court after hearing the arguments observed 'that as the auction was going to be held that day i.e. 12-12-2005, the petitioner had a right to challenge the confirmation of sale, if held. So the Honourable Court advised the petitioner to withdraw his application and file an objection petition if auction takes place. The counsel for the petitioner, in these circumstances withdrew his application on 12-12-2005. Hence the present application before this Honourable Court. (i) That on 12-12-2005 nobody came on spot and no auction took place at site. The petitioner was surprised to see the auction report according to which five persons took part in the auction and the property worth more than Rs.10.00 million was stated to be auctioned for a sum' of Rs.3.505 million only. All the persons who took part in the alleged auction proceedings .are closely related to each other. (ii) That neither any notice for auction was pasted outside the Court premises nor at the spot as mentioned in the schedule approved by this Honourable Court. As per Order XXI there must be 15 days gap between the affixation of notice and the date of auction whereas that gap is not present in the alleged auction proceedings. (k) That the description of the property as mentioned in the schedule is wrong which is clearly violation of Order XXI, rule. 66 of C.P.C. and thus the auction is nullity in the eye of law. (l) That the petitioner purchased this property and is also in possession of the previous sale-deed. The petitioner before purchase of the property checked the Revenue Record and other Government Departments but there was no bar/charge of any kind on the property. Hence the petitioner purchased the property free from all encumbrances and he is a bona fide purchaser. The petitioner is protected under section 41 of the Transfer of Property Act. It is relevant to mention here that the petitioner works abroad and he purchased this property from his hard earned savings. The petitioner will suffer irreparable loss and injury if the property purchased by him is snatched from him for no fault of him. In fact Khalil Ibrahim and Muhammad Ibrahim in connivance with bank officials has committed fraud with the present petitioner and the petitioner reserve's his right to initiate civil as well as criminal proceedings against the culprits, It is also pertinent to mention here that no charge of any kind exists on the property in the Revenue Record till today."

4. At this juncture, it may be added that respondent No.6 herein, namely, Abdul Quddoos purportedly participated in the auction dated 12-12-2005 and made the highest bid for the disputed property in the sum of Rs.35,00,000.

5. The petitioner's objection petition was dismissed by the learned Banking Court for reasons, which appear to be untenable and also somewhat inconsistent. The concluding paragraph of the impugned order dated 23-2-2006, which reflects the reasoning of the teamed Banking Court, is, for ease to reference, reproduced as under: "The reading of the said provision of law shows that it pertains amendment in the pleadings. The petitioner could have taken all the pleas in his original objection petition. The instant application was filed, when arguments on objection petition were heard and the case was fixed for orders. The record shows that the petitioner also filed objection petition earlier, which was dismissed on 20-12-2005 as having not been pressed. The proposed amendment does not appear to be necessary, as real question in controversy between the parties can be determined without allowing the same. Further more, if the proposed amendment is allowed then it will unnecessary cause delay in the disposal of the matter. The application is, therefore, dismissed."

6. The mere fact that the application under Order VI, rule 17, C.P.C. was filed on the date on which the objection petition was to be decided, cannot per se, be a reason for dismissing the application. Here it may be added that serious allegations have been levelled in respect of the Court auction. If found true, these allegations would merit serious consideration and may justify the acceptance of the petitioner's objection petition. The allegations made by the petitioner need to be probed in order to ensure that the petitioner is not deprived of his rights on the basis of an auction report which may be untrue.

7. The second reason given in the impugned order for dismissing the petitioner's application viz. that an earlier objection petition filed by the petitioner was dismissed on 20-12-2005, also has no merit. The earlier application, as noted above, was not pressed because events had unfolded subsequently including the disputed auction and the filing of the Court Auctioneer's report, which were assailed in the second objection petition, which was filed on 20-12-2005. According to learned counsel for the petitioner, the Court Auctioneer's report was submitted in Court on that very date. In this view of the matter, the dismissal of the earlier objection petition has little bearing on the second objection petition or on the application seeking amendment thereof.

8. The third reason given by the learned Banking Court is also untenable. The grounds of objection sought to be added to the objection petition are of a serious nature and' need to be considered by the learned Banking Court. We, therefore, are unable to understand as to how the factual controversy, which necessarily arises from the allegations made in the amendment application, can be determined without allowing amendment in the objection petition.

9. Lastly, any possible delay in the adjudication of the objection petition cannot override the principal obligation of the Court to ensure that matters pertaining to the valuable property rights of parties are properly adjudicated. In the present case, as noted above, the petitioner purchased the disputed property of a consideration of Rs.80,00,

000. His allegation is that the property is worth more than rupees one crore but has been sold through a fictitious auction for a meagre sum of Rs.35,00,

000. He has a valid and subsisting interest in the property which he is entitled to assert and protect even if the property is encumbered and is liable to be brought to sale in execution of the decree dated 8-9-1998.

10. Learned counsel for the respondent auction-purchaser at this stage argued that the respondent had purchased the property which was mortgaged in favour of the respondent-Bank, after the date of the decree against the judgment-debtor. On this basis he argued that the objection petition has no merit. This may be the case. We are, however, not called upon to adjudicate the petitioner's objection petition. Needless to say the learned Banking Court shall consider the aforesaid submissions and any other arguments which may be advanced on behalf of the auction-purchaser against the acceptance of the petitioner's objection petition.

11. In the foregoing circumstances, we find that the reasons given by the learned Banking Court for dismissing the petitioner's application are not sustainable. The impugned order dated 23-2-2006 being without lawful basis is, therefore, set aside and the application filed by the petitioner under Order VI, rule 17, C.P.C. is allowed. The learned Banking Court shall proceed to decide the objection petition in accordance with law. M.H./G-12/L Petition allowed.