Auction of property

2020 CLC 179 KARACHI-HIGH-COURT-SINDH Judicial Precedent

O. XXI, Rr. 84, 85, 89, 90 & 91 & S. 65Partition of immovable propertyExecution petitionAuction of propertyRequirements

Executing Court passed order for holding fresh auction but Appellate Court set aside the same with the direction to complete sale proceedings in favour of auction purchaser

Contention of petitioners-decree holders was that they were ready to purchase the shares of other legal heirs but Court Auctioneer had not mentioned the said offer in his auction report

Validity

Offer of legal heirs in the matter of inheritance should be given preference over the offer of third party subject to the ability to match the highest bidder

Judgment-debtors and decree-holders did not extend their consent in favour of auction purchaser rather they themselves had shown their intention to purchase the subject property for higher amount than the offered amount of auction purchaser

Court or officer holding the sale, if authorized in this regard, had discretion to decline the acceptance of highest bid if offered price was either inadequate and/or otherwise the property under auction/sale had the potential to fetch more price than the offered one

Executing Court was aware with regard to location of the subject property and its market value

Submission of bid did not mature into a contract until and unless same was accepted

Nazir of the Court who was sent execution petition was not competent to accept or refuse any bid

Nazir of the court, in the present case, had acted as an agent of the seller but ex-facie he was not vested with the power either to accept or refuse any of the offers received by him and offer was placed before the Executing Court

Deposit of 25% of the bid amount was subject to its realization

Auction purchaser could not claim any legal/vested right in the subject property mere on the basis of deposit of 25% of the bid amount

No right/title in the auctioned property should be deemed to be created/transferred in favour of any bidder unless bid was forwarded to and accepted by the Court

Once sale was accepted and balance 75% of the bid amount was deposited within fifteen days then such bid would be deemed to have been confirmed automatically if otherwise no order for confirmation of sale was passed

Ownership right in the auctioned property would be deemed as vested in the successful bidder from the date when auction was held

Mere participation in the auction proceedings and floating a highest bid by an auction purchaser did not clothe him with any right in the property being auctioned

Auction purchaser on the basis of his highest bid could not claim any right and/or had any locus standi to challenge the order passed for re-auction/sale of property by the Executing Court until and unless such offer of auction purchase was accepted

Offer of auction purchaser had been rejected in the present case and he could not ask for deposit of balance of 75% amount

Provisions of Order XXI, Rr. 84 & 85, C.P.C. were mandatory in nature and on non-compliance thereof property under auction/sale was liable to be re-sold forthwith

Appellate Court had failed to appreciate that subject property belonged to the legal heirs of deceased

Executing Court was not only to act as custodian of legal heirs but it had power either to accept or reject any of the bids whether it was lowest or highest

Appellate Court had wrongly exercised jurisdiction after rejection of highest offer/bid of auction purchaser by the Executing Court and committed illegality and irregularity while passing the impugned order

Impugned order passed by the Appellate Court was set aside and Nazir of the Court was directed to conduct sale of subject property afresh and parties were allowed to participate in the same

Constitutional petition was allowed, in circumstances.

2019 CLC 146 KARACHI-HIGH-COURT-SINDH Judicial Precedent

O. XXI, Rr. 89 & 26Execution petitionAuction of propertyObjectionsSuit seeking declaration that proceedings before Executing Court were illegalScopeObjection was raised that the property to be auctioned was never allotted to the judgment-debtorExecuting Court dismissed the objection petitionValidityPetitioner was not owner of suit shop to be auctioned by the Executing CourtExecuting Court could not consider any document or orders passed in any other suit subsequently filed by the objectorSimilar controversy could not be raised through another civil suit with regard to the same propertyObjector could seek relief in a separate suit

Civil Court could neither declare proceedings of Executing Court as illegal nor regulate the property involved in the execution proceedings

Judgment and decree of one civil Court could not be nullified by another

Official Assignee (Nazir) had neither issued any notice to any of the judgment-debtor before inspection of property to be auctioned nor he appeared to have been physically present at the inspection

Report of Nazir did not disclose as to how and who identified suit shop to the inspection team

Proceedings in civil suit filed subsequently could not have any bearing on the orders of Executing Court

Applicant had no right to retain possession nor any order of civil Court passed in other civil suit would have effect of setting aside any of the orders of Executing Court for auction and possession to auction purchaser

Auction of suit shop was lawful and auction purchaser was entitled for possession being lawful owner under authority of Court order/decree

Official Assignee (Nazir) was directed to take possession of suit shop and hand over its possession to the auction purchaser

Revision was dismissed in circumstances.

2017 CLCN 185 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Art.199Constitutional petitionAuction of propertyExtension of contract

Petitioner obtained contract in an open auction for a Rest House for a period of one year and after the completion of the same he applied for extension of contract which was not considered

Contention of petitioner was that authorities wanted to give contract to a person of their own choice

Validity

Property in question was owned by government department which originally belonged to the public/State

State being a virtual entity exercised its authority through the public functionaries

Public functionary was bound to protect and preserve transparency and to ensure the maximum gain for the public exchequer whenever a right belonging to the public/State was going to be alienated

Equal opportunity to all potential competitors should be extended who were intended to acquire property under contract on lease and license

Public functionaries deriving authority from or under the law were required to act justly, fairly, equitably, reasonably, without any element of discrimination and squarely within the parameters of law

No obligatory clause for extension of said contract for any further period existed in the agreement

Authorities had adopted just, fair and a proper procedure/course by issuing auction notice through publication in newspapers to ensure transparency and maximum gain

Petitioner was not entitled for any special privilege or preferential treatment and he should come in competition by participating auction proceedings if he intended to take subject property on contract

No unjustified and arbitrary action or event that had happened at an earlier time could be given perpetuity

Two wrongs did not make a right

Constitutional petition was dismissed in limine.

2015 CLD 320 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 19(1)(7) & 27Civil Procedure Code (V of 1908), O.XXI, R.66Suit for recoveryAuction of propertyReduction of reserve price by banking courtSuit was decreed and decree was converted into executionBanking Court, on the application of court auctioneer reduced the reserve priceObjection petition was dismissedDefendant contended that Banking Court had no power to review its judgmentValidityDefendant did not appear before Banking Court despite issuance of noticeDefendant having admitted the appearance of lawyer on his behalf could not claim that proceedings were ex parteNeither fixation nor reduction in reserve price of property for auction was challenged by defendantReduction of reserve price did not fall within the scope of "reviewing" or "recalling the order"Impugned order did not affect right of any party

Appeal was dismissed.

2015 YLR 1749 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 2, 3 & 4Civil Procedure Code (V of 1908), O. XX, R. 18 (2)Constitution of Pakistan, Art. 199Constitutional petitionSuit for partitionProperty not capable of convenient divisionAuction of propertyScope

Nothing was on record to show that plaintiff had ever acceded to the valuation of joint property as assessed by the local commissioner

Plaintiff did not agree to the value of suit property as assessed by the local commission i.e. Rs.25,00,000 rather he offered to purchase the same for a sum of Rs. 50,00,000 but defendants did not agree to his offer

Court had inherent jurisdiction to adopt such means as might be equitable including sale of joint property when same was not capable of convenient division

Such order of sale had to be executed as a decree

Trial Court had rightly exercised jurisdiction for putting the joint property onto sale through auction as parties could not agree on the valuation of the same

Defendants had right to apply the Trial Court for leave to purchase the plaintiff's share which would be determined by the said court

No jurisdictional error or legal infirmity had been pointed out in the impugned order

Constitutional petition was dismissed in circumstances.

2015 CLD 1849 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 9, 19, 22 & 27State Bank of Pakistan, BPD Circular No.29 dated 15-10-2002Suit for declaration and injunctionAuction of property

Plaintiff company filed application for restraining defendant Bank from auctioning its property to recover outstanding amount in pursuance of decree passed in an earlier suit

Plea raised by plaintiff company was with regard to applicability of State Bank of Pakistan, BPD Circular No.29 dated 15-10-2002

Validity

Enforcement of BPD Circular No.29 by individual Banks to their respective customers was in fact the prerogative of Banks and it was for them to decide whether such debt outstanding against customer was a lost debt or recoverable in terms of assets mortgaged with them

State Bank of Pakistan, BPD Circular No.29 was binding once the Bank reached to a decision that such debt was not recoverable or a lost category and then procedure and perameters as laid down therein were to be adopted as a binding parameter but prima facie not in terms of its mandatory application

Judgment. and decree passed in earlier suit could not be made subservient to the outcome of present suit in terms of Ss. 22 & 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Any mode whereby consent decree passed in earlier suit was sought to be deferred, modified, altered and reviewed was violative of law

­Application was dismissed in circumstances.

2012 SCMR 748 SUPREME-COURT Judicial Precedent

S. 19Constitution of Pakistan, Art. 185(3)Execution proceedingsAuction of propertyDeposit of decretal amount by judgment debtor in Supreme Court in pursuance of its interim order

Acceptance of judgment-debtor's appeal by Supreme Court setting aside such auction and allowing auction purchaser to withdraw such amount

Application by auction purchaser for refund of such amount with compensatory interest

Validity

Such amount deposited by judgment debtor was lying in current account of Supreme Court bearing no interest/mark-up thereon

Plea of compound interest or future interest raised by auction purchaser was not tenable as same was beyond stipulation contained in such order of the Supreme Court

Application was disposed of in circumstances.

2012 CLD 1071 SUPREME-COURT Judicial Precedent

S. 19Constitution of Pakistan, Art. 185(3)Execution proceedingsAuction of propertyDeposit of decretal amount by judgment debtor in Supreme Court in pursuance of its interim order

Acceptance of judgment-debtor's appeal by Supreme Court setting aside such auction and allowing auction purchaser to withdraw such amount

Application by auction purchaser for refund of such amount with compensatory interest

Validity

Such amount deposited by judgment debtor was lying in current account of Supreme Court bearing no interest/mark-up thereon

Plea of compound interest or future interest raised by auction purchaser was not tenable as same was beyond stipulation contained in such order of the Supreme Court

Application was disposed of in circumstances.

2009 CLD 1383 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S. 15Auction of propertyProcess of selling the property to satisfy the decree had gone much ahead

No relief at a belated stage could be granted to the objector.

2007 YLR 2772 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 57 & 69(4)Civil procedure Code (V of 1908), O.XXXI, Rr. 61 & 66MortgageAuction of property

Money received by mortgagee, arising from sale, after discharge of prior encumbrances, after payment into court under S.57 of Transfer of Property Act, 1882 of a sum to meet prior encumbrances, would, in the absence of a contract to the contrary, be held by him in trust to be applied by him; firstly, in payment of all costs, charges and expenses, properly incurred by him as incidental to the sale or any attempted sale; and secondly in discharge of the mortgage-money and costs and other money, if any due under the mortgage

Residue Of the money so received would be paid to person entitled to the mortgaged property or authorized to give receipts for the proceeds of the sale thereof

If mortgaged property was offered and sold under the orders of the court, auction purchaser would acquire clean and unencumbered right and title in the property, unless such charge, lien or encumbrance was notified in the sale proclamation as required under Rr.61 and 66 of O.XXI, C. P. P.C.

Held, auction purchaser had acquired right in the property free from all encumbrances, specifically notified in sale proclamation.