2004 PLP 319 (MLD)

‑‑‑‑ Expression "Free from all encumbrances "‑‑‑Meaning and import. I.D.B.P. v. Messrs Maida Limited 1989 CLC 1431; UBL v. Messrs Akbar Cotton Mills Limited and another 1993 CLC 150 and 1994 SCMR 2248 ref. Abdul Haleem Siddiqui for Applicant Amanullah Khan and Jaffer Siyal for the Respondent Date of hearing: 19th December, 2002. Application under section 47 read with section 151 C.P.C. has been filed by the auction purchaser. In this the auction purchaser has prayed that there were certain dues of HESCO, WASA, Hyderabad Development Authority, Pakistan Telecommunication Company Limited, Sui Southern Company and Excise Taxation Officers Property Tax-I. Hyderabad against the mortgaged property prior to the purchase of the same by the auction purchaser. According to the auction purchaser he had purchased the property free from all encumbrances and the liability is of the decree‑holder. He has given details of the amount which are being demanded and it is claimed that it has to be paid by the decree- holder. Alongwith the application an affidavit has been filed wherein the auction purchaser has claimed that they are prepared to purchase the property subject to property being free from all encumbrances. This offer was conveyed by a letter dated 13‑9‑2000. According to the auction purchaser the offer was confirmed by the order dated 8‑11‑2000. Eventually Sale Certificate was issued in favour of the auction purchaser. After taking over the possession the auction purchaser came to be aware that there were dues which have not been paid. He requested the decree holder to make payment but the decree‑holder did not respond. Eventually an application was filed in this Court. A counter affidavit has been filed to this application where all the averments made in the affidavit have been denied. According to the bank the sale was on as "is where is" basis and therefore, the liability was of the auction purchaser. A rejoinder has also been filed and eventually the parties appeared before me and argued the matter. Both the counsel have drawn my attention to the order dated 22‑1‑2001 passed by Anwar Mansoor Ahmed Khan, J., as he then was wherein paragraphs 3 of the order it has been observed that let Nazir of this Court issue Sale Certificate in accordance with law and subject to payment of all duties, charges and Government dues that may be paid by the auction purchaser. The interpretation so given by this observation is that the dues were to be paid by the auction purchaser. On the other hand the auction purchaser has relied on the case of I.D.B.P. v. Messrs Maida Limited 1989 CLC 1431, in this case it was observed that the offer was subject to it being free from all encumbrances. The offer was accepted with the consent of the decree- holder. The decree‑holder cannot then contend that the arrears should not be paid out of the sale proceeds. In the case of UBL v. Messrs Akbar Cotton Mills Limited and another, 1993 CLC 1560, the word meaning and scope of encumbrance has been discussed. Electricity charges were also considered to be encumbrance. Hence from the sale proceeds electricity charges were paid. The case of IDBP v. Messrs Maida Limited was also taken up by the Hon'ble Supreme Court of Pakistan where a Full Bench had observed that the auction purchaser cannot be expected to pay, claims which were not his responsibilities. This was reported in 1994 SCMR 2248. The auction purchaser who was not aware of the liabilities on the property cannot be expected to clear such liabilities after purchasing the property. Whether an order was passed calling upon the auction purchaser to pay the Utility Bills or not the fact remains that the decree‑holder is expected and should pay all the utility charges as is, observed from the citation quoted above in similar disputes raised earlier. It is clear that the Courts have maintained a consistent view that the concept of free from all encumbrances means that when the purchaser purchased the commodity then he expects that it shall be given to him without there being any liability attached. The decree‑holder shall clear all the liabilities. The application in view of the above. H.B.T./U-36/K Application allowed.