2005 PLP 1827 (CLC)

This civil revision has been filed to challenge the order, dated 27-5-2004 whereby objection petition filed by the petitioners under Order XXI, read with sections 47/48, C.P.C. filed in execution proceedings qua a decree for recovery of Rs. 11,37,069 dated 2-1-2003 passed by learned Additional District Judge, Chishtian, was dismissed in the following terms:-- "The property sold in the open auction against Rs. 15,00,000 and all the proceedings conducted by the Court auctioneer have been looked into and found conducted properly and in accordance with law as such auction sale and auction proceedings are confirmed under Order XXI, rule 92, C.P.C. A certificate to purchaser Mahmood Ahmad Bhatti specifying the property sold is granted. The amount against which the property has been sold by way of auction Rs. 15,00,000 have been deposited with the Court as provided under Order XXI, rule 94, C.P.C. and a delivery certificate is also to be issued. The amount decreed in the judgment is to be paid to the decree-holder subject to receipt and identification."

2. The facts relevant for the decision of this civil revision are that Al-Faisal Corporation respondent No.2 filed a suit for recovery of Rs. 11,37,069 on the basis of cheques in summary jurisdiction under Order XXXVII, C.P.C. against the petitioners, respondent No.3, and Muhammad Afzal and Muhammad Saleem in the Court of learned Additional District Judge, Chishtian on 21-11-2001. Along with plaint, an application under Order XXXVIII, rule 4, C.P.C. for attachment of defendant's property before decree was also filed. On 6-12-2001 on behalf of respondent No.3 (defendant No.1) and Muhammad Afzal (defendant No.4 before the trial Court), an application for grant of leave appear and defend the suit was made which came up on 11-12-2001 and the learned trial Court directed that reply to said application be filed and the remaining defendants be also summoned for 21-1-2002. On 21-1-2002 as the learned Presiding Officer was on leave, hence the matter was adjourned to 24-1-2002, on which date due to non-service of defendants Nos.2, 3, 5 and 6 they were ordered to be served through affixation for 6-2-2002. On 6-2-2002 although defendants Nos.2, 3, 5 and 6 were reported to be served through affixation but the Court in order to satisfy itself about the service of these defendants, directed that they be served through publication in daily "Hairat", Multan for 18-2-2002. On 18-2-2002 defendants Nos.1 and 4 appeared through their counsel whereas answering defendants Nos.3, 5, 6 were also represented through their counsel Ch. Muhammad Azhar Khalid, Advocate and application for leave to appear and defend the suit was also filed on their behalf. However, on 18-2-2002 as the learned Presiding Officer was on leave the matter was adjourned to 28-2-2002, on which date the learned trial Court after recording the presence of defendants Nos. 1, 3, 4, 5 and 6 ordered that as respondent No.2 despite service through proclamation had not turned up, hence he be proceeded against ex parte. On the same day i.e. 28-2-2002 learned counsel for the plaintiff got recorded the following statement: -- Keeping in view the above mentioned statement of the learned counsel, the learned trial Court vide order dated 28-2-2002 dismissed plaintiff's application under Order XXXVIII, rule 4, C.P.C. as withdrawn and granted leave to appear and defend the suit to the defendants present in Court subject to their furnishing security equal to the value of the suit amount and adjourned the case to 7-3-2002 for submission of the surety bond. In terms of order, dated 28-2-2002 one Muhammad Ashraf son of Fazal Muhammad Caste Arain resident of Chak No. 132-M Tehsil Chishtian submitted surety bond on behalf of above mentioned defendants before the learned trial Court which was received and accepted by the learned trial Court on 6-3-2002 after proper verification. However, later on said Muhammad Ashraf moved an application on 18-3-2002 before the trial Court submitting that as Muhammad Afzal, Manzoor Ahmad, Sharif and Salim had got the surety bond submitted in Court from him by misrepresentation and fraud, he therefore, did not want to continue as surety and thus., he be allowed to withdraw his surety bond. This application filed by Muhammad Ashraf was allowed by the learned trial Court on 18-3-2002 whereby he was discharged as surety and the defendants were directed to furnish fresh surety bond. On 27-3-2002 defendants sought further extension for complying with the order, dated 18-3-2002 and as said application was not contested by 'the plaintiff, hence defendants were allowed further time for filing of surety bonds in terms of earlier order. On 3-4-2002 on behalf of defendants Nos. 1, 2, 3, 5 and 6 an application was moved through their learned counsel Ch. Muhammad Azhar Khalid, Advocate with the request that as they could not arrange for fresh surety, hence the property detail of which was mentioned in para.4 of the said application, be attached as a security for grant of leave to appear and defend the suit and the learned trial Court in the presence of learned counsel for the plaintiff as well as defendants allowed the said application after giving full detail of the property in. the said order and directed attachment of the same to be considered as surety for leave to appear and defend in terms of Order XXXVIII, rule 5, C.P.C. and it was further directed that necessary intimation be sent to the Revenue Authorities for entries to this effect to be made in the relevant Khata Jaat of the Jamabandi and defendants were directed to file written statements on the next date of hearing i.e. 10-4-2002. On this date the defendants filed their written statements, issues were framed and the suit was adjourned for recording, of plaintiff's evidence which ultimately concluded on 12-6-2002 and the suit was then adjourned for recording of the defendants. After completion of evidence of the parties the learned trial Court vide judgment dated 2-1-2003 decreed the plaintiff's suit against Al-Miraj Sultan Cotton Ginning and Pressing Factory defendant No.1 only and dismissed the suit to the extent of remaining defendants in terms of its findings on Issue No.1 ; by which the defendants Nos.2 to 6 were ordered to be deleted from the suit. It appears that no appeal was filed against the above mentioned judgment and decree, which therefore, attained finality.

3. Consequently, execution petition was filed by Al-Faisal Corporation against Al-Miraj Sultan Cotton Ginning and Pressing Factory present respondent No.3 on 13-572003. Since vide order, dated 3-4-2002 passed by the learned trial Court during pendency of the suit, the property fully detailed in the, said order already stood attached under Order XXXVIII, rule 5, C.P.C. hence, the learned Executing Court vide order dated 22-7-2003 directed that the same be sold through public auction in terms of Order XXI, rule 64, C.P.C. and for effecting sale Mr: Muhammad Yousaf Ramay, Advocate was appointed as Court Auctioneer who was directed to proceed in accordance with law by taking steps including proclamation in the newspaper as well as through notice at the spot and pasting of notice on Court premises on or before 24-3-2003. The said Court Auctioneer was further directed to hold auction and submit his report on 26-9-2003. Pursuant to the above mentioned order, the auction ass conducted and report by the Court Auctioneer was submitted in Court on 26-9-2003 but in the meanwhile some party had approached this Court by, way of filing Civil Revision No.231 of 2003 and obtained stay order, hence, the auction could not be confirmed by the Court and matter was postponed to 21-10-2003 for awaiting the order by this Court and as the matter could not be decided by this Court hence, the Executing Court kept on adjourning the proceedings on different dates till 27-3-2004 when the Executing Court directed that as the stay order issued by this Court stood vacated hence, the matter be fixed on 9-4-2004 for further proceedings. In the meanwhile, an objection petition was filed by present respondent No.3 through Muhammad Afzal on 15-10-2003 seeking annulment of execution proceedings dated 20-9-2003. This objection petition was contested by the decree-holder but was dismissed on 27-5-2004, against' which no appeal/revision was filed. However, the matter did not end here, another objection petition was filed by one Abdul Hamid on 6-9-2003 seeking annulment of order of auction. Yet third objection petition was also filed by Mushtaq, Manzoor Saleem and Sharif present petitioners on 16-10-2003 under Order XXI read with sections 47/48, C.P.C. against the said auction. Both these objection petitions were contested by the decree-holder namely Al-Faisal Corporation respondent No.2 as well as by the successful bidder respondent No.1 and the learned Executing Court through single order, dated 27-5-2004 dismissed both these objection petitions in terms mentioned above. Against the order of C rejection of both these objection petitions, Abdul Hameed, objector has not filed any appeal/revision, etc. but Mushtaq and others have come up in this civil revision to call in question the legality and validity of the said order.

4. Messrs Haji Muhammad Asghar and Aziz-ur-Rehman Khan, Advocates appearing on behalf of the petitioners have assailed the validity and legality of the order, dated 27-5-2004 passed by learned Additional District Judge/Executing Court by raising the following questions of law and facts:-- (i) That the learned Executing Court has given no specific findings about the status of the petitioners i.e. whether their property was sold either as judgment-debtor or surety; (ii) That after dismissal of the suit by the trial Court against the petitioners in terms of its findings on Issue No. 1, the undertaking given by the petitioners by way of application dated 3-4-2002 made through Ch. Muhammad Azhar Khalid, Advocate in terms of order, dated 3-4-2002 did not enure for the benefit of judgment-debtor and in consequence thereof the property got attached by the petitioners could not be sold for the satisfaction of decree as surety and the order, dated 3-4-2002 stood automatically terminated/recalled with the dismissal of the suit by the trial Court to the extent of the petitioners in terms of its findings on Issue No. 1; (iii) That in case if the liability of the petitioners for the purposes of satisfaction of decree was to be considered as surety, it was mandatory for the Executing Court to have issued notice to the petitioners in terms of proviso to section 145, C.P.C.; (iv) That before putting the property of the petitioners to auction, mandatory requirements of Order XXI, rule 66, C.P.C. were not complied with; and (v) That above illegality was sufficient to vitiate the entire proceedings conducted by the Executing Court as well as the Court Auctioneer while conducting auction proceedings. In support of their above contentions, Darned counsel have placed reliance on Order XXI, Order XXVIII, rule 4 and 5, section 145, C.P.C. and the case-law Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank. Limited, Islamabad and another PLD 1998 Lah. 706 (D.B.); Muhammad Hussain v. Muslim Commercial Bank Ltd. 2003 CLD 1693 (Lahore D.B.); Messrs S.P.R.L. Rehman Brothers v. Judge, Banking Court No.II, Lahore and another 2000 MLD 1957; Sheikh Rahim-ud-Din v. Murli Dhar and others AIR 1938 Lah. 593; Maula Bakhsh v. Allah Ditta AIR 1935 Lah. 145 and Karimbhai v. Hatimbhai PLD 1994 Kar. 311.

5. On the other hand, Mr. Ijaz Ahmad Ansari, Advocate appearing on behalf of respondent No.1/successful bidder, while strongly refuting the above mentioned contentions of the learned counsel for the petitioners and supporting the impugned order, argued:-- (i) That it is abundantly proved from the record that vide application dated 34-2004 and in terms of the order of the Executing Court of the same date, the petitioners gave their undertaking in unequivocal terms to stand surety unconditionally for the performance of the decree to be passed by the Court, hence, the said decree issued by the learned trial Court against the petitioners could be and was validly executed against them and their property was validly sold through open auction in terms of section 145, C.P.C. (ii) That dismissal of the suit to the extent of the petitioners did not absolve them from the undertaking given by them on 3-4-2004 and accepted by the learned trial Court vide order dated 3-4-2004 as the said application was moved by all the defendants jointly including the petitioners through their learned counsel namely Ch. Muhammad Azhar Khalid, Advocate, who throughout had been their counsel and had not only signed the said application but also the written statement along with Manzoor, Sharif etc. petitioners; (iii) That the petitioners after dismissal of the suit against them never moved the learned trial Court or agitated for the release of their property attached earlier by the order of the trial Court dated 3-4-2004 and thus, after its sale in favour of the successful bidder the respondent No. 1, the petitioners were estopped from claiming that they were owners of the property in dispute and same could neither be subject to execution nor could be sold in execution of the said decree; (iv) That if any irregularity/non-fulfilment of requirement of Order XXI, Rule 66, C.P.C. was committed either by the Executing Court or by the Court Autioneer, the same being not mandatory was not fatal to the sale and on this score alone the sale in favour of respondent No.1 could neither be challenged nor set aside, especially when on similar grounds earlier objection petitions filed by Muhammad Afzal one of the brothers of the petitioners and also the judgment-debtor Abdul Hamid were dismissed by the learned Executing Court on 27-5-2004. In support of his contentions the learned counsel for respondent No.1 has placed reliance on the case of Ghulam Abbas v. Zohra Bibi and others PLD 1972 SC 337; Messrs Masoom Industries and others v. Habib Bank Limited and another 2005 SCMR 746 and also Rafique Hazquel Masih v. Bank Alfalah Ltd, and others 2005 SCMR 72.

6. Ch. Ijaz Ahmad, Advocate representing the decree-holder/ respondent No.2 besides adopting the arguments of learned counsel for the successful bidder, submitted that entire execution proceedings were conducted legally, properly and do not suffer from any jurisdictional defect, hence, the objection petition of the petitioners was rightly dismissed by the learned Executing Court.

7. The record has been perused and the above mentioned arguments of the learned counsel for the parties have been considered in minute details with reference to the case-law cited by the respective parties.

8. A perusal of record, consideration of arguments and also the case-law lead me to conclude that decision of this Civil Revision hinges upon the determination of following two important points:-- (A) After decision of the suit especially in the light of findings of learned trial Court on issue No.1 deleting the name of the petitioner, what was the status of petitioner's property they offered in terms of the Court order, dated 3-4-2003 read with their application of the same date whether they were liable to satisfy the decree as judgment-debtors or sureties? (B) Whether the Executing Court as well as the Court Auctioneer conducted the auction proceedings properly and in accordance with provisions of Order XXI, rules 66, 67 and 69, C.P.C.?

9. The answer to point No.A is not difficult. With the passage of decree against Al-Miraj Cotton Ginning and Pressing Factory and dismissal of suit to the extent of remaining defendants including the petitioners in terms of its findings on Issue No. 1, the petitioners were no more liable as the judgment-debtors and this status of the petitioners is almost not disputed at all. However, in terms of Court order dated 3-4-2002 as well as application moved by the petitioners on 3-4-2002 through Ch. Muhammad Azhar Javed, Advocate, it is abundantly clear that petitioners stood surety for the performance of the decree to be passed in the suit and in that capacity they got the property attached. Perusal of order dated 3-4-2002 as well as the said application leave no doubt about the liability of the petitioners as surety and this order is binding on them because on the basis of this order all the defendants were granted leave to appear and defend the suit. There is therefore, no force in the contention of learned counsel for the petitioners that through applications dated 3-4-2002 the petitioners offered their property as defendants only for leave to appear and defend it and the said order was also to this effect and by the dismissal of the suit to their extent not only the said application but also the order of the trial Court dated 3-4-2002 lost its legal effect and they were no more .liable for the performance of decree passed against respondents No.3/defendant No.1 only. Learned counsel for the petitioners while arguing so, lost sight of the legal effect of order, dated 3-4-2002 in the light of provisions of section 128 of the Contract Act. In the case Rafique Hazquel Masih v. Bank Alfalah Ltd. and others 2005 SCMR 72 the Honourable Supreme Court in unequivocal terms held that:-- (I) The Guarantor having given undertaking regarding guarantee, he could not wriggle out of the same and avoid his liability; (II) Unless it is provided otherwise by the contract, liability or the surety under section 128 of the Contract Act is co-extensive with that of the principle debtor. I am, therefore, satisfied that petitioners did stand surety and gave undertaking for the performance of the decree irrespective of their being defendants/judgment-debtors in terms of Court order dated 3-4-2002 read with application moved by them and by the passing of the decree their status as surety neither did come to an end nor they could avoid any liability either by taking benefit of deletion of their name by the learned trial Court in terms of its findings on Issue No.1 or by taking the plea that their liability as surety in terms of Order XXVIII, rule 5, C.P.C. stood automatically terminated with the decision of the suit. While arguing so, the learned counsel for the petitioners has ignored the language of section 145, C.P.C., which clearly talks of the liability of the surety to continue till the decree is performed or satisfied.

10. However, there is another very important aspect with regard to the liability of the petitioners. It is provided in expressed terms by proviso to section 145, C.P.C. that while proceeding against the property of the surety the Court is bound to give notice to the surety but in the instant case, learned Executing Court before proceeding with the property of the petitioners being surety did not opt to issue any notice to them and straightaway proceeded to order auction of their property after giving notice to the judgment-debtor only, which is violative of the above mentioned provisions of section 145, C.P.C. It was held by this Court in Maula Bakhsh v. Allah Ditta AIR 1935 Lah. 145; Firm Nanak Chand Ramji Das v. Ibrahim and another AIR 1937 Lah. 772 and Sheikh Rahim- ud-Din v. Murli Dhar and others AIR 1938 Lah. 593 that before proceeding further with the property of the surety; he, is entitled to be given notice in terms of section 145, C.P.C. The file of the execution proceedings indicates that the decree-holder filed execution petition on 13-5-2003, on which date the learned Executing Court directed that notice for 30-5-2003 be issued to the judgment-debtor for the payment of the decretal amount and on 30-5-2003 it was ordered that as the judgment-debtor had not appeared, hence notice for 21-6-2003 be issued to Halqa Patwari. On 21-6-2003 as the Patwari could not be served due to non-issuance of notice, the matter was adjourned to 15-7-2003 and then to 19-7-2003 when the learned Presiding Officer/Executing Court was on leave hence the matter was adjourned to 22-7-2003. The order-sheet of the learned Executing Court dated 22-7-2003 is silent about the presence of Halga Patwari on the said date and the learned Executing Court directed auction of the property by appointing Court Auctioneer directing him to make proclamation in the newspaper, flash of notice at the spot and on Court premises on or before 24-8-2003. The Auctioneer was further directed to submit his report on 26-9-2003. Nowhere, from the date of institution of the execution proceedings till the 24-8-2003 it was directed that petitioners/surety be also given notice. The learned counsel for decree-holder or the successful bidder have not been able to controvert the above mentioned proceedings conducted by the learned F Executing Court and I am, therefore, satisfied that all the proceedings against petitioners/surety were conducted without any notice as well as in violation of provisions of section 145, C.P.C. Resultantly, the order of the Executing Court dated 22-7-2003 directing auction of the property through Court Auctioneer is declared to be without lawful authority and of no legal effect.

11. After declaring the order of the Executing Court dated 22-7-2003 as without lawful authority and of no legal effect, I do not think there is any necessity to dilate upon the above mentioned point (B) as the matter can easily be remanded to the Executing Court for proceedings with the execution proceedings afresh. However, in order to avoid multiplicity of proceedings I proceed to decide the second point as well in the light of record, the contentions of the parties and the case-law relied upon by the learned counsel for the parties. Learned counsel for the petitioners raised voice against the manner in which the auction was conducted by referring to the provisions of Order XXI, rules 66, 67 and 69, C.P.C. and has vehemently argued that as all the auction proceedings were conducted in violation of above mentioned provisions of law, hence, the impugned order, dated 27-5-2004 confirming the auction proceedings and issuing certificate of sale is not sustainable at all. Further argues that as provisions of Order XXI, rule 66, C.P.C. are mandatory in nature, hence it was obligatory for the Court as well as Court Auctioneer to strictly adhere to these provisions and violation of same could neither be condoned nor ignored while confirming the auction. Their contention is that in terms of Order XXI, rule 66, C.P.C. although the Court Auctioneer had to make proclamation and he did make such proclamation but in an essence, the said proclamation must have some object or knowing the same to the public-at-large. In the instant case the proclamation was made in some unknown newspapers namely "Hairat, Multan" which has neither any circulation in public nor its place of publication is known to anybody. It is further contended that even neither the Court determined the reserve price nor the Court Auctioneer determined and published the salve in the proclamation and that valuable property comprising of 66 Kanals, 16 Marlas agricultural land with residential Ihata of 7 Marlas, 7 Sarsai was put to auction at a nominal price of Rs. 15 lacs. Learned counsel therefore, argued that neither the learned Executing Court nor the Court Auctioneer caused the said proclamation drawn after notice to the petitioners and also after including the particulars required by Order XXI, rule 66, C.P.C. It is concluded by the learned counsel that entire proceedings conducted by the Court Auctioneer were not sustainable being violative or mandatory provisions of law mentioned above. To strengthen their arguments, learned counsel have placed reliance on Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1998 Lah. 706 (D.B.) and Muhammad Hussain v. Muslim Commercial Bank Ltd. 2003 CLD 1693 (Lahore D.B.).

12. On the other hand, learned counsel appearing on behalf of successful bidder has argued that as the property of the petitioners already stood attached, hence they were not entitled to any notice for the same of property in terms of section 145, C.P.C. Learned counsel further argued that as held by the Honourable Supreme Court of Pakistan in Ghulam Abbas v. Zohra Bibi and others PLD 1972 SC 337 and Messrs Masoom Industries and others v. Habib Bank Limited and another 2005 SCMR 746, any irregularity in holding of auction or violation of any provision of Order XXI, C.P.C. would neither vitiate the auction proceedings nor render the sale certificate defective. I am afraid this contention of the learned counsel has any force, for the simple reason that in the instant case non-compliance of provisions of Order XXI, rules 66, 67 and 68, C.P.C. have caused substantial injury to the petitioners, inasmuch as without disclosing the reserve price valuable property has been auctioned for a nominal price of Rs.15 lass. True the Honourable Supreme Court in Ghulam Abbas v. Zohra Bibi and others PLD 1972 SC 337 held that non-compliance with the provisions of Orders of C.P.C. with regard to proclamation for sale; its publication and the conduct of sale in execution proceedings are only material irregularities but not illegalities which render the sale in disregard of those provisions a nullity. However, in the same judgment the Honourable Supreme Court held that if the sale has caused substantial injury because of the irregularities then the Court can look into its validity and set aside the same. Similarly the judgment of Honourable Supreme Court in 2005 SCMR 746 relied upon by the learned counsel does not support his case because before the Honourable Supreme Court in this judgment, the question was with regard to only date of proclamation and not the fulfilment of requirement of Order XXI, rule 66, C.P.C. I am, therefore, satisfied that not only the order dated 22-7-2003 was illegal and without lawful authority having been passed without notices to the petitioner but also all the subsequent proceedings taken by the Court as well as the Court Auctioneer are not sustainable having been conducted in violation of provisions of Order XXI, rules, 66, 67 and 68, C.P.C. and also the case-law declared by this Court in Muhammad Hussain v. Muslim Commercial Bank Ltd. 2003 CLD 1693 (Lahore D.B.) as well as Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1998 Lah. 706 (D.B.).

13. The crux of above discussion is that this civil revision is accepted, the impugned order dated 27-5-2004 is set aside and the order dated 22-7-2003 and all subsequent proceedings conducted by the Executing Court as well as Court Auctioneer are declared as without lawful authority and of no legal effect including the issuance of sale certificate. The case is, therefore, remanded to the learned Executing Court for proceeding with execution proceedings filed by the decree-holder by treating the petitioners as surety in terms of order., dated 3-4-2002 and application submitted by them on the same date. The Executing Court shall proceed with the matter after issuing notice to the petitioners under section 145, C.P.C. and then will proceed with the sale of the property of the petitioners as surety, strictly in accordance with law.

14. Before parting with this judgment, I would like to point out that one Abdul Latif filed C.M. No.1002 of 2005 praying that he be impleaded as party in the civil revision, as the learned Executing Court had kept objection petition filed by him in abeyance. Since the matter is being remanded to the learned trial Court, hence, no order is called for in the said C.M. filed by Abdul Latif and it is directed that if any objection petition filed by Abdul Latif applicant is pending before the Executing Court the same shall also be decided along with objection petitions of the petitioners. Record be returned immediately. H.B.T./M-1127/L Revision accepted.