2008 PLP 723 (CLD)

HAFIZ TARIQ NASIM, J.

The backdrop of this appeal is that a decree for a sum of Rs. 46,29,221.71 including mark-up and costs were passed against the appellant as well as respondents Nos.2, 3 and 4 and in favour of Muslim Commercial Bank, respondent No.1 on 25-8-2005.

2. The appellant was a guarantor of respondent No.2, he mortgaged his property/Shop No.4, Ground Floor, Imtiaz Plaza, Shahra-e-Quaid-e-Azam, Lahore, whereas respondents Nos.3 and 4 also mortgaged their property/Shop No.25, Ground Floor, Gulberg Plaza Liberty Market, Lahore.

3. Respondent No.1 initiated execution proceedings against the appellant and respondents Nos.2, 3 and 4.

4. Respondents Nos.5 and 6, who were appointed as Court Auctioneers filed the schedule of auction including the properties belonging to the appellant and, fixed 25-7-2006 for auction of both the properties. The appellant filed an objection petition before the Banking Court contending that the property belonging to the appellant be excluded from the auction schedule. However, the objection petition was dismissed vide order dated 14-7-2006.

5. The Court-Auctioneers submitted auction report dated 25-2-2007 contending that the property belonging to respondents Nos.3 and 4 could not be auctioned but the property belonging to the appellant was auctioned for a sum of Rs.100,25,000 in favour of one Muhammad Tariq, who has deposited the 1/4th of the auction price at the spot. The appellant filed an objection petition against the auction dated 25-6-2006 but as the auction-purchaser failed to deposit the remaining the 3/4th of the bid price within time so the learned Banking Court forfeited the 1/4th amount deposited by the auction purchaser, so the objection petition filed by the appellant became infructuous.

6. On 10-10-2006 the Executing Court ordered re-auctioning of the properties and to file fresh auction schedule. On 30-11-2006 the Court-Auctioneers submitted auction report explaining that the property belonging to the respondents Nos.3 and 4 could not be auctioned due to non-participation of bidders. The property belonging to the appellant was auctioned in favour of Rizwan Ahmad Chaudhry, respondent No.7 for a bid of Rs.95,00,000.

7. The appellant tiled an objection petition against the auction dated 27-11-2006 but the same was dismissed and auction of property belonging to the appellant in favour of respondent No.7 was confirmed through the impugned order dated 8-2-2007.

8. The learned counsel for the appellant argued the case at length, submits that the learned executing court did not consider the important points raised, no issue was framed, no evidence was recorded, which has caused the serious prejudice to the appellant's case.

9. Further submits that the very inclusion of the appellant's property in the auction held on 27-11-2006 was illegal, particularly when the respondents Nos.3 and 4's property was available for auction and the decree could be satisfied if the property of respondents Nos.3 and 4, who are the actual borrowers was auctioned. Further submits that the appellant's properties value is more than Rupees Two Crore and has been sold at a much lower value and that too without any notice to the appellant and without any advertisement in the newspapers.

10. The learned counsel for the respondent No.1 supported the impugned judgment on the ground that the decree was passed not only against the respondents Nos.3 and 4 rather the same was also passed against the present appellant and it is a well settled principle of law that the liability of guarantor is co-extensive with that of principle debtor.

11. Argument heard. Record perused,

12. During the argument the learned counsel for the appellant levelled certain allegations against the Court-Auctioneers. Suffice it to say that before the learned Executing Court the correctness of averments made in the objection petition were denied and it is much clear, from the record that the Court-Auctioneers were present at the spot at the time of auction proceedings accompanied by the Bank officials for the auction of properties. All possible attempts were made by the auctioneers for the Bale of properties belonging to respondents Nos.3 and

4. However, no one participated in the auction of properties belonging to the respondents Nos.3 and

4. So far the auction of present appellant's property is concerned, at the time of auction the appellant was present at the spot with the Court-Auctioneer as well as representatives of the bank, where the prospective bidder paid the surety amount of Rs.1,00,000 in presence of the' appellant, the auction was conducted and the highest bid was accepted in his presence.

13. Rizwan Ahmad Chaudhary, respondent No 7 the successful bidder deposited 25% of the bid money at the spot c and even the said bidder deposited the balance of 3/4th bid money in the court within the stipulated time.

14. In our view the satisfaction of the decree against a customer of a Bank should be through the sale/auctioning of properties of the customer/principal debtor primarily if thereafter the decree is not satisfied, the properties of the guarantors be sold. However, in the present case, the properties n belonging to respondents Nos.3 and 4, who are the borrowers were put up for auction by the Court-Auctioneers but no one turned up for the auction of their properties. Therefore, property belonging to the appellant was put to auction, which is legal, as liability is co-extensive qua principal debtor and surety, thus there is no illegality on this count.

15. The Court-Auctioneer took all reasonable steps for auctioning the properties belonging to respondents Nos.3 and 4 but no one participated in the auction of those properties as mentioned above, the Court-Auctioneers were left with no other alternative but to sell the property of the appellant for the satisfaction of the decretal amount. As the Court-Auctioneers tried their level best for the satisfaction of decree through the proposed auction of properties of principal debtor i.e. respondents Nos.3 and 4 and no one came forward to purchase the same, hence the Auctioneers were left with no option, except to sell the property of the guarantor, who had mortgaged it with the Bank for securing the loan in question, Thus no illegality was committed by the Court-Auctioneers the impugned order of the learned Executing Court is therefore unexceptionable. Resultantly the appeal is dismissed. H.BT./M-65/L Appeal dismissed.