Auction proceedings

Record revealed that in order to execute the judgment and decree passed by the Banking Court ,auction was conducted for the sale of mortgaged property

Appellants filed Objection Petition under O. XXI, R. 90 of the Civil Procedure Code, 1908 (C.P.C.) against the auction proceedings

The Executing Court directed Appellants to deposit 50% of the sale proceeds as a condition precedent for the Objection Petition to be heard on merits, failing which, the same would be dismissed on said sole ground

Held: Appellants failed to make the required deposit ; consequently, the Objection Petition was dismissed through the impugned order

The condition to deposit the amount under O. XXI, R. 90, C.P.C. is mandatory when the Executing Court specifically requires such deposit and warns of consequences of non-deposit

No illegality, infirmity or jurisdictional defect in the impugned Order had been noticed

Appeal was dismissed, in circumstances.

Appeal was filed against dismissal of objection to auction and confirmation of auction sale of mortgaged property ('the auction sale in question')

Submission of the appellant was that auction sale in question was carried out in terms of originally framed S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance, 2001') before said section was re-enacted pursuant to the decision of Supreme Court in the case of National Bank of Pakistan v. SAF Textile Mills Ltd. and another reported as PLD 2014 Supreme Court 283 ('the SAF Textile Mills Case'), which provision of law was held ultra vires in the Constitution; that auction sale the present case was not immune from the effect of the 'SAF Textile Mills' Case'

Validity

Auction sale in question was carried out under the originally framed S. 15 of the Ordinance, 2001, which was declared ultra vires vide decision of 'SAF Textile Mills Ltd.' case, in which, evidently, Supreme Court had neither invoked nor applied the doctrine of prospective overruling - protecting past and closed transactions [auctions conducted in terms of S. 15 of the Ordinance, 2001] while declaring the law unconstitutional

Even otherwise, auction conducted did not become a past and closed transaction in wake of pendency of present appeal (pending since 2013 ) , against the order of dismissal of objections and confirmation of sale

High Court set-aside the order of confirmation of auction sale in question (dated 04.09.2013), being not sustainable, declaring the same as illegal ; the appellant was at liberty to initiate proceedings seeking restitution/reversal of the actions enforced and steps taken pursuant to the order of confirmation of auction sale

Appeal was allowed accordingly.

Appeal was filed against dismissal of objection to auction and confirmation of auction sale of mortgaged property ('the auction sale in question')

Validity

Acceptance of single bid in an auction sale, without any competitive bid, is antithesis to the claim and concept of public auction(s)

High / Appellate Court set-aside the order of confirmation of auction sale in question ( dated 04.09.2013), being not sustainable, declaring the same as illegal ; the appellant was at liberty to initiate proceedings seeking restitution/reversal of the actions enforced and steps taken pursuant to the order of confirmation of auction sale

Appeal was allowed accordingly.

Appeal was filed against dismissal of objection to auction and confirmation of auction sale of mortgaged property ('the auction sale in question)

Whether the auction sale in question could claim protection in terms of S. 15 of the Ordinance, 2001

Held, that S. 15 of the Ordinance, 2001 was amended through Financial Institutions (Recovery of Finances) Amendment Act, 2016, which also promulgated Financial Institutions (Recovery of Finances) Rules, 2018 ('the Rules, 2018')

Rule 3(c) (iv) of the Rules, 2018, permits considering single bids, subject to certain conditions

However, R.3(c) (iv) of the Rules, 2018 extends no protection to auction sale in question, as R. 3(c)(iv) of the Rules, 2018 was declared ultra vires in terms of the majority decision in the case of Muhammad Shoaib Arshad and another v. Federation of Pakistan through Secretary and 4 others reported as 2020 CLD 638

High / Appellate Court set-aside the order of confirmation of auction sale in question (dated 04.09.2013), being not sustainable, declaring the same as illegal ; the appellant was at liberty to initiate proceedings seeking restitution/reversal of the actions enforced and steps taken pursuant to the order of confirmation of auction sale

Appeal was allowed accordingly.

Petitioner / auction purchaser was bound to deposit remaining 80% amount within 07-days after the auction which he failed to do

Non-compliance of such mandatory provision entailed penal consequences

Deposit of remaining 80% amount within the period stipulated by Trial Court was of no use to petitioner / auction purchaser

No Court can deviate from mandatory provision of law, as act of Court derives force from the statute

When statute had not provided any leniency in such regard then Trial Court could not give any relaxation

Lower Appellate Court rightly allowed appeals of respondents

High Court in exercise of revisional jurisdiction declined to interfere in judgment passed by Lower Appellate Court, as petitioner / auction purchaser was unable to point out any illegality, irregularity or jurisdictional defect in judgment passed by Lower Appellate Court, which had been passed in accordance with law after due appreciation of the law on the subject

Revision was dismissed, in circumstances.

Where the goods have been auctioned by the customs authorities at almost half of the total value of goods, serious doubts arise upon the sanctity of the auction and the entire process which led to such auction

When it is clear that good have been sold for less than its declared value, the Court would not be denuded of its jurisdiction to set aside such sale/auction on account of inadequacy of price alone

When auction proceedings are tainted with serious lapses causing prejudice to the owner of goods, the Courts can always take notice of it.

Petitioner (one of the legal heirs) filed objections on the report submitted by the Court Auctioneer, but the same was dismissed on account of petitioner's failure to deposit the 20% (twenty percent) of the sum realized at the sale

Petitioner preferred an appeal against the said order before the High Court which also met the fate of dismissal

Plea of petitioner was that his objection application was made under Order XXI, Rule 84 of the Code of Civil Procedure, 1908 ("C.P.C.") but it was decided within the limits of Order XXI, Rule 90

Validity

Such plea of petitioner was not tenable in eyes of law

It is clear from a bare reading of Order XXI, Rule 84, C.P.C. that the purchaser is required by law to immediately pay twenty-five percent of purchase money and there is no word that suggests objections to auction proceedings may be filed by the owner/legal heirs of the owner of the subject property under this rule

Moreover, petitioner in this case, was not a purchaser but his predecessors in interest were the owner of the subject property, hence, he could not have invoked Order XXI, Rule 84, C.P.C.

Trial Court deemed the objections filed by petitioner as an application under Order XXI, Rule 90, C.P.C.

Trial Court directed the petitioner to deposit twenty percent of the sale proceeds but he failed to do so

Neither he made any application for an extension of time nor showed any willingness to deposit such an amount

Trial Court has rightly observed that there had been an inordinate delay in the execution of the decree and six years had already elapsed

Petition was dismissed and leave to appeal was refused.

Sale may be set aside on the grounds of material irregularity or fraud under Order XXI, Rule 90, C.P.C. wherein the applicant has to establish substantial injury sustained by him owing to such material irregularity or fraud in the sale by public auction

Additionally, applicant has to comply with the second proviso to this rule by depositing twenty percent of the sum realized at the sale

Rationale behind the second proviso is to discourage frivolous objections frustrating the execution of the decree.

When car was not found for attachment, the petitioner was directed to produce said vehicle, failing which, Robkar was directed by the Executing Court to be issued to the concerned In-charge Anti Car Lifting Cell for locating whereabouts of said car and to take over possession thereof

Later, not only concerned SHO was directed to produce said car, but warrants of attachment of another owned car were also issued

Petitioner / judgment-debtor agitated the mode and procedure adopted by the Executing Court for satisfaction of the decree

Validity

Conduct of the petitioner was very much relevant in the controversy in hand

Decree involved maintenance allowance of petitioner's own kids and pertained to the year 2012 but he had not bothered to satisfy the same on his own, rather he had been consistenly made efforts to frustrate execution proceedings to avoid satisfaction thereof

Petitioner time and again choose to set in field tactics to handicap proceedings conducted for auction of his immoveable property and had not even hesitated to put up every effort for bringing even custody of his attached vehicles in absolute disguise

Thereafter, the Executing Court initiated process for attachment and auction of his aforementioned immoveable property and vehicles

Said circumstances existing in the present case lead to an irresistible conclusion that the petitioner was capable of satisfying the subject decree, but he deliberately and intentionally was avoiding to do so, forcing even his own kids to starve

Person showing such a callous attitude, in particular, towards discharge of his parental obligation was not entitled for any discretionary relief and so was the case with a person who himself was not ready to follow and comply with the law

Executing Court was justified to pass the orders which were rightly maintained by the Appellate Court

Constitutional petition was dismissed, in circumstances.

Appellant / Judgment-debtor assailed orders passed by the Banking/Executing Court, whereby application under O.XXI, R. 89 of the Civil Procedure Code, 1908, filed by the appellant was dismissed and on the same day the sale of mortgaged property was confirmed

Ground taken by the appellant was that he had deposited (5% of the purchased) amount deposited by the purchaser

Validity

Though record (photostat copy of the Pay Order annexed by the appellant) reflected that he had deposited 5% amount, however, there was no explanation regarding the non-deposit of the decretal amount( specified in the proclamation of sale) by the appellant, which, as per the second condition of R.89 (b) of O.XXI, C.P.C., he /appellant( being person applying to set-aside sale) should have deposited for payment to the decree-holder

No case of interference by the appellate /High court was made out

Appeal, filed by the judgment-debtor, was dismissed, in circumstances.

Appellant / Judgment-debtor assailed orders passed by the Banking /Executing Court, whereby application under O. XXI, R. 89 of the Civil Procedure Code, 1908, filed by the appellant was dismissed and on the same day the sale of mortgaged property was confirmed

Contention of the appellant was that the auction proceedings were orchestrated without consideration of the actual market value or price of the property

Validity

Order XXI, R. 90, C.P.C, provides a legal avenue for the annulment of an auction / sale on the grounds of fraud or material irregularity

Conversely, O. XXI, R. 89, C.P.C, offers the judgment-debtor an alternative recourse to circumvent a sale post its valid execution ;this rule endows the judgment debtor with a final opportunity post-auction to have the sale rescinded upon payment of the decretal amount and an additional sum as compensation for the auction purchaser

In light of these provisions, these remedies are mutually exclusive

Once the appellant had embarked on a course of action in accordance with O.XXI R.89, C.P.C, it was not permissible for the appellant to assert that the auction proceedings were conducted without soliciting the actual market of the mortgaged property

Thus, the contention of the appellant was incongruous with the chosen course of action and was, therefore, untenable under the stipulations of O.XXI, R.89 of the Civil Procedure Code, 1908

No case of interference by the appellate /High court was made out

Appeal, filed by the judgment-debtor, was dismissed, in circumstances.

Appellant / Judgment-debtor assailed orders passed by the Banking/ Executing Court, whereby application under O.XXI, R.89 of the Civil Procedure Code, 1908, filed by the appellant was dismissed and on the same day the sale of mortgaged property was confirmed

Validity

Records revealed that the Executing Court had scheduled the sale of the mortgaged property on seven separate occasions, yet no one stepped forward to participate in the auction

It was only on the eighth attempt that the auction proceedings were successfully conducted

On said occasion, only respondent made an appearance and offered the highest bid

Said bid was accepted by the Court and respondent was consequently declared the successful bidder

Subsequent to said declaration, respondent fulfilled his obligation by depositing the remaining 75% of the bid amount, leading to the confirmation of the sale

As a result of said proceedings, a vested right had been conferred upon the auction-purchaser / respondent

Said right, once established, could not be disturbed or invalidated, thereby solidifying respondent's position as the lawful owner of the property-in-question

No case of interference by the appellate / High Court was made out

Appeal, filed by the judgment-debtor, was dismissed, in circumstances.

Order XXI, R. 89 of the Civil Procedure Code, 1908, stipulates and allows any person who either owns the property or holds an interest in it by virtue of a title acquired before the sale to apply to have the sale set aside; this is contingent on such person depositing a certain amount in the Court

First condition for setting aside the sale is that the person must deposit a sum equal to five per cent of the purchase money for payment to the purchaser/successful bidder

Second condition is that the person must deposit an amount for payment to the decree-holder

Such amount is specified in the proclamation of sale for the recovery of which the sale is ordered

However, any amount received by the decree -holder since the date of the proclamation of sale is deducted from such/said amount

There is also a restriction that if a person has applied under O. XXI, R. 90 of the Civil Procedure Code, 1908, to set aside the sale of his immovable property, he cannot make or prosecute an application under this rule unless he withdraws his application under Rule 90; this R. also does not relieve the judgment-debtor from any liability he may have in respect of costs and interest not covered by the proclamation of sale.

Appellant / Judgment-debtor assailed orders passed by the Banking/Executing Court, whereby application under O.XXI, R. 89 of the Civil Procedure Code, 1908, filed by the appellant was dismissed and on the same day the sale of mortgaged property was confirmed

Ground taken by the appellant was that he had deposited (5% of the purchased) amount deposited by the purchaser

Validity

Though record (photostat copy of the Pay Order annexed by the appellant) reflected that he had deposited 5% amount, however, there was no explanation regarding the non-deposit of the decretal amount( specified in the proclamation of sale) by the appellant, which, as per the second condition of R.89 (b) of O.XXI C.P.C., he /appellant( being person applying to set-aside sale) should have deposited for payment to the decree-holder

No case of interference by the appellate /High court was made out

Appeal, filed by the judgment-debtor, was dismissed, in circumstances.

Appellant/Judgment-debtor assailed orders passed by the Banking/ Executing Court, whereby application under O.XXI, R.89 of the Civil Procedure Code, 1908, filed by the appellant was dismissed and on the same day the sale of mortgaged property was confirmed

Validity

Records revealed that the Executing Court had scheduled thesale of the mortgaged property on seven separate occasions, yet no one stepped forward to participate in the auction

It was only on the eighth attempt that the auction proceedings were successfully conducted

On said occasion, only respondent made an appearance and offered the highest bid

Said bid was accepted by the Court and respondent was consequently declared the successful bidder

Subsequent to said declaration, respondent fulfilled his obligation by depositing the remaining 75% of the bid amount, leading to the confirmation of the sale

As a result of said proceedings, a vested right had been conferred upon the auction-purchaser / respondent

Said right, once established, could not be disturbed or invalidated, thereby solidifying respondent's position as the lawful owner of the property-in-question

No case of interference by the appellate/ High court was made out

Appeal, filed by the judgment-debtor, was dismissed, in circumstances.

Order XXI, R. 89 of the Civil Procedure Code, 1908, stipulates and allows any person who either owns the property or holds an interest in it by virtue of a title acquired before the sale to apply to have the sale set aside; this is contingent on such person depositing a certain amount in the Court

First condition for setting aside the sale is that the person must deposit a sum equal to five per cent of the purchase money for payment to the purchaser/successful bidder

Second condition is that the person must deposit an amount for payment to the decree-holder

Such amount is specified in the proclamation of sale for the recovery of which the sale is ordered

However, any amount received by the decree -holder since the date of the proclamation of sale is deducted from such/said amount

There is also a restriction that if a person has applied under O. XXI, R. 90 of the Civil Procedure Code, 1908, to set aside the sale of his immovable property, he cannot make or prosecute an application under this rule unless he withdraws his application under Rule 90; this R. also does not relieve the judgment-debtor from any liability he may have in respect of costs and interest not covered by the proclamation of sale.

Appellant / Judgment-debtor assailed orders passed by the Banking /Executing Court, whereby application under O. XXI, R. 89 of the Civil Procedure Code, 1908, filed by the appellant was dismissed and on the same day the sale of mortgaged property was confirmed

Contention of the appellant was that the auction proceedings were orchestrated without consideration of the actualmarket value or price of the property

Validity

Order XXI, R. 90, C.P.C, provides a legal avenue for the annulment of an auction sale on the grounds of fraud or material irregularity

Conversely, O. XXI, R. 89, C.P.C, offers the judgment-debtor an alternative recourse to circumvent a sale post its valid execution ;this rule endows the judgment debtor with a final opportunity post-auction to have the sale rescinded upon payment of the decretal amount and an additional sum as compensation for the auction purchaser

In light of these provisions, these remedies are mutually exclusive

Once the appellant had embarked on a course of action in accordance with O.XXI R.89, C.P.C, it was not permissible for the appellant to assert that the auction proceedings were conducted without soliciting the actual market of the mortgaged property

Thus, the contention of the appellant was incongruous with the chosen course of action and was, therefore, untenable under the stipulations of O.XXI, R.89 of the Civil Procedure Code, 1908

No case of interference by the appellate /High court was made out

Appeal, filed by the judgment-debtor, was dismissed, in circumstances.

Judgment debtor in question was alive at the time of the compromise decree as well as the finalization of the sale of his share in the mortgaged property

Said judgment debtor did not challenge any of the actions taken in the proceedings leading to the decree and its realization in favour of the respondent decree holder Bank until his death on 08.10.2006

However, on 08.12.2007 his heirs i.e. respondents filed an application under Order XXI, Rule 90 of the C.P.C. alleging fraud in the passing of the decree and the sale carried out there-under

Held, that whereas the respondents disputed the compromise decree they brought no grievance against it before the Supreme Court

Moreover, the respondents' objections fail to disclose particulars of any fraud, illegality or irregularity alleged against the co-judgment-debtors one of whom was the petitioner before the Court

Present matter pertained to a decree passed in 1981 and satisfied in 2001 by sale of the shares of all nine co-owners of the mortgaged property accomplished through their compromise with the decree holder Bank

Predecessor of the respondents never challenged the decree nor the execution of the decree during his life time; he was aware of the proceedings because he was the Managing Director of the company that had committed default in repayment of loans to the respondent decree holder Bank

Decree was ultimately settled through contribution by all the judgment debtors, namely, the nine co-owners of the mortgaged property sold under the decree to settle the liability of the judgment debtor company

Respondents and their predecessor waited for six years to challenge in 2007 the sale of the mortgaged property effected in 2001

No explanation for the delay occasioned had been given by the respondents

Respondents belatedly approached the executing Court in 2007 to incompetently dispute the consent decree passed by the Supreme Court in the year 2000 before the wrong forum

In any event, the said objections failed to disclose any fraud committed by the other judgment debtors including the petitioner and decree holder Bank

Petition for leave to appeal was converted into appeal and allowed.

Judgment debtor in question was alive at the time of the compromise decree as well as the finalization of the sale of his share in the mortgaged property

Said judgment debtor did not challenge any of the actions taken in the proceedings leading to the decree and its realization in favour of the respondent decree holder Bank until his death on 08.10.2006

However, on 08.12.2007 his heirs i.e. respondents filed an application under Order XXI, Rule 90 of the C.P.C. alleging fraud in the passing of the decree and the sale carried out there-under

Held, that whereas the respondents disputed the compromise decree they brought no grievance against it before the Supreme Court

Moreover, the respondents' objections fail to disclose particulars of any fraud, illegality or irregularity alleged against the co-judgment-debtors one of whom was the petitioner before the Court

Present matter pertained to a decree passed in 1981 and satisfied in 2001 by sale of the shares of all nine co-owners of the mortgaged property accomplished through their compromise with the decree holder Bank

Predecessor of the respondents never challenged the decree nor the execution of the decree during his life time; he was aware of the proceedings because he was the Managing Director of the company that had committed default in repayment of loans to the respondent decree holder Bank

Decree was ultimately settled through contribution by all the judgment debtors, namely, the nine co-owners of the mortgaged property sold under the decree to settle the liability of the judgment debtor company

Respondents and their predecessor waited for six years to challenge in 2007 the sale of the mortgaged property effected in 2001

No explanation for the delay occasioned had been given by the respondents

Respondents belatedly approached the executing Court in 2007 to incompetently dispute the consent decree passed by the Supreme Court in the year 2000 before the wrong forum

In any event, the said objections failed to disclose any fraud committed by the other judgment debtors including the petitioner and decree holder Bank

Petition for leave to appeal was converted into appeal and allowed.

Plaintiffs and the defendant (possessor) were declared co-sharer/co-owners of the ancestral property (suit-house) by the Trail Court; and the defendant(judgment-debtor/ possessor) was directed to either buy the shares of plaintiffs or let them sell the house

Executing Court, however, auctioned suit-house to the highest bidder whereas the judgment-debtor/ possessor had showed his willingness to purchase suit-house by way of filing objections

Executing Court over-ruled said objections, against which order the judgment-debtor/possessor filed revision but the order was maintained

Contention of the petitioner (judgment-debtor/possessor) was that auction proceedings were carried out against the provisions of law, inter alia, without giving notice and hearing him (and even other co-sharers/decree-holders), the suit-property had been auctioned

Validity

It was the mandate of R. 66(2) of Order XXI of the Civil Procedure Code, ('C.P.C., 1908') that a proclamation of sale was to be drawn up by the Executing Court itself after prior notice to the decree-holder and the judgment-debtor

Sale by public auction without issuing notice to decree-holder and judgment-debtor would vitiate the proceedings

Said Rule also mandated that where situation to sell the property through auction had arisen, the Court as a rule must ask the parties to state the estimated price of the property, which in their opinion was likely to be fetched

Fixing reserve price in the proclamation was also mandatory, in absence whereof auction was illegal

In the present case, the proclamation was also not affixed on the Court Notice Board, which adversely affected the transparency of the auction proceedings

Impugned order passed by the executing Court was silent with regard to deposit of the balance amount of 75% by the auction purchaser within 15 days of the auction as mandated under R. 85 of O. XXI of the C.P.C, 1908

Rejoinder to objection filed by the respondent (auction-purchaser) and an application for depositing of the balance amount revealed that he had not deposited the balance within 15 days, while auction had taken place almost a month ago

Payment of the balance amount within 15 days of sale, was mandatory and upon non-compliance with said provisions there was no sale at all

Executing Court neither accepted the bid of the respondent (auction-purchaser) nor confirmed the sale as provided under R. 92 of O. XXI of C.P.C, 1908, thus it could not be said a vested right occurred in favour of the auction purchaser

In light of said illegalities coupled with non-deposit of balance sale amount of 75% by the respondent (auction purchaser) within stipulated time of the sale/auction, absence of confirmation of the sale in the impugned orders had rendered the auction proceedings in deviation of the mandatory provision of O. XXI, Rr. 54(2), 66, 85, 86 & 92, C.P.C.

High Court set-aside the impugned judgments and orders passed by both the Courts below and allowed the objection filed by the petitioner (judgment-debtor/ possessor), subject to full deposit auction/ sale money and deposit of sum equal to 5% of the purchase money

High Court directed that offer observing all other formalities the house-in-question shall be transferred in favour of the petitioner

Constitutional petition was allowed, in circumstances.

Afghan importer (company) imported a consignment of certain miscellaneous goods for transit to Afghanistan, but the containers were seized and confiscated after contraband goods (foreign origin liquor) was recovered from them (containers)

Customs Appellate Tribunal ('Tribunal') set-aside confiscating orders and passed judgment that said transit goods be restored to importer/company ('owner') unconditionally for dispatch in transit to Afghanistan

However, when the owner of goods applied for the recovery/restoration of goods, it transpired to him that said goods were sold by the Department; and it was refunded only 17% of sale proceeds (auction amount) on the ground that the owner was only entitled to said amount after deduction of leviable taxes

During second round of litigation, the Tribunal finally passed order in favour of owner of goods by holding that the seized goods were neither liable to confiscation nor any taxes / duties were payable on the same and that the goods should be restored to the owner or entire sale proceeds be recovered without payment/deduction of any taxes/duties for its onward transportation to Afghanistan

Petitioner / Department filed reference against the order of the Tribunal contending that from the auction proceeds, first the duties/taxes should be deducted and thereafter the remaining amount would be payable to the owner of the goods (i.e. respondent)

Validity

Under the mandate of S.129 of the Customs Act, 1969 ('the Act, 1969') the transit of goods across Pakistan to foreign territory, when reaches Pakistan is not subject to incidence of taxation

Fiscal statute normally contain two provisions; charging provisions imposing the charge to tax and machinery provisions providing the machinery for quantification of tax and levy/collection of tax so imposed

Charging provisions are construed strictly while machinery provisions of the statute are not generally subject to a rigorous construction

Good-in-question were liable to confiscation as S. 201(2)(c) of the Customs Act, 1969, envisaged that the goods if sold under any provision of the Act, 1969, the sale-proceeds would be subject to certain statutory deduction (custom-duty and taxes) payable to the Federal Government

Words "payable to Federal Government" occurring in S.201(2)(c) of the Act, 1969 meant that the said deduction had been subject to the incidence of taxation under the charging section of relevant fiscal Statutes i.e. Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Customs Act, 1969

Thus, provision of S. 201(2)(c) of the Act, 1969 would be applicable to the amount of sale proceeds only when, under charging provision of a Statute, any taxes/duties were payable to the Federal Government

Similarly, S. 169(5) of the Act, 1969 only referred to the deduction of taxes as provided under S.201(2)(c) of the Act, 1969, whereas S. 201(2)(c) of the Act 1969 applied only when tax was charged and payable to Federal Government under any fiscal statute against any goods which were sold during the adjudication proceedings

Impugned order was rightly passed by the competent forum (Tribunal) which had attained finality

Reference filed by the Customs Department was dismissed, in circumstances.

Auction in question was held on 15-02-2021 and application under O. XXI, R. 89, C.P.C. was filed on 5-04-2021, whereas sale was confirmed by Banking Court on 23-4-2021

No order was passed by Banking Court before 23-4-2021 whereby bid of respondent was expressly accepted by Court

Order dated 23-4-2021 contained that for the purpose of limitation, Executing Court held that sale was to have taken place on 15-2-2021 i.e. date of fall of hammer and not acceptance of the offer, such finding was contrary to legal position in O. XXI, R. 89, C.P.C.

High Court set aside order passed by Executing Court and period of 30 days limitation prescribed under Art. 166 of First Schedule to Limitation Act, 1908 was to run from date of sale i.e. 23-4-2021

High Court remanded the matter to Executing Court for objection application to be decided afresh

Appeal was allowed accordingly.

If any occurred irregularity was noticed by Executing Court, it must have discussed its impact, effect or substantial injury caused by judgment debtor

In order to succeed it was mandatory for judgment debtor to satisfy the Court on merits that the sale should be set aside on the ground of material irregularity, or fraud in publishing or conducting it

Judgment debtor was to satisfy the Court that he had sustained substantial injury by reason thereof

Mere an irregularity, even if material should not suffice unless it could be shown that material loss had been caused

No such irregularity was committed by Court Auctioneer which had caused substantial injury to judgment debtor

High Court set aside the order passed by Executing Court and confirmed sale in favour of auction purchaser

Appeal was allowed, in circumstances.

Discretion of court was limited only to the extent of amount of security to be deposited (i.e. not exceeding 20%).

Held, that objection petition was not maintainable from its inception and any later deposit of money could not be used to argue otherwise.

Duty to raise such an objection at the initial stages was cast on the judgment debtor.

Supreme Court observed that the law laid down in the judgment reported as Hudaybia Textile Mills v. Allied Bank of Pakistan Ltd. (PLD 1987 SC 512) in light of O.XXI, R.92 of the C.P.C., was designed to protect the interests of the third-party once a sale had been validly made and to ensure that a valid sale in execution was not made invalid to the prejudice of the auction purchaser because the decree was later reversed.

Question before High Court was whether auction proceedings could be compelled to continue if during pendency of same, decretal amount was deposited by judgment-debtor

Held, that very concept of execution proceedings was to give effect to a decree and such proceedings subsisted until said decree was satisfied and an array of methods were employed to execute a decree including, without limitation, auction of property securing the debt

Realization of such security was warranted only in event that judgment-debtor was unable or unwilling to satisfy decree by other means and in event a decree was satisfied, by or on behalf of judgment-debtor, there would exist no justification to perpetuate execution proceedings for discharge of debt

No reason existed to compel continuation of execution proceedings once a judgment debtor was no longer at default.

Bid in an auction was only an offer and it conferred no benefit unless it culminated into issuance of confirmation of sale and confirmation of sale could not merely be claimed as of right

Submission of bid does not vest the bidder with any proprietary rights in a property

Where no confirmation of sale had ever been issued and consequently no sale certificate had been issued, in such a case no rights were created in favour of an auction participant with respect to a mortgaged property that was the subject-matter of auction proceedings.

Objection petition regarding non-serving of notice at address outside Pakistan and not following other legal requirements necessary for the auction

Paper book of present case contained copies of notices that were sent in the execution proceedings to the petitioner/judgment debtor at the address on which she was served when summons was issued in the suit

Said notices included notice for attachment of the mortgaged property, notice for settling the terms of proclamation of sale and notice for sale of the mortgaged property

Thereafter, auction notice was also published in two leading newspapers

Petitioner's address in the suit was her residence in city "K" of Pakistan on which the summons was served and she also filed her leave to defend the said application, thus, it was the petitioner's obligation to place on record her new address for any future service on her, if at all such service was required by law, which she did not do

Advocate who represented the petitioner and other judgment debtors in the suit also continued to appear before the Banking Court even after conversion of suit into execution proceedings that finally culminated in the sale of the mortgaged property

Hence, the petitioner could not feign ignorance about the periodical developments that took place in the proceedings

Question of non-service to the petitioner did not arise at all

Petition for leave to appeal was dismissed accordingly.

Valid sale in execution would not become invalid to the prejudice of the auction purchaser because the decree had (subsequently) been wiped out or reversed

Language of O. XXI, R. 92, C.P.C. stipulated that the sale would become absolute once the order for its confirmation had been made by the Executing Court.

Without such a deposit the objection application filed by the judgment debtor under O. XXI, R. 90, C.P.C. was not maintainable.

Duty to raise such an objection at the initial stages was cast on the judgment debtor.

Till such time that confirmation was granted by the Court, powers available to the Court under O. XXI, Rr. 89 & 90, C.P.C. could always be exercised after hearing all concerned parties and in accordance with law.

Court had the power to set aside any auction if the same was proved to have been conducted in an unlawful or irregular manner or the property had been sold at a throw away price.

In a situation where a property was sold for less than its value, by availing the benefit of O.XXI, R. 89, C.P.C., the judgment debtor or any other person holding interest in such property may challenge the sale and retrieve the property from the purchaser by depositing the purchase price together with 5% of such price in Court

Subject land, in the present case, measuring 25 acres was sold for a paltry sum of Rs. 2.6 Million which translated into Rs.96,635 per acre

Said amount was not only less than the actual market value of the land, but was also substantially less than the Deputy Commissioner (DC) rate which was in the sum of Rs.6,06,400/- per acre

Calculated as per criteria of DC rate and not considering the real market value of the land, the value of 25 acres came to Rs.15,160,000

No plausible or reasonable explanation was provided for the huge difference between the value represented by the auction price and the real market value

Land in question was indeed sold at a throw away price causing substantial injury and loss to the judgment debtor

Further, there was evidence on record that the auction proceedings were not conducted at the spot

Such fact casted serious doubts upon the sanctity of the auction and the entire process which led to such auction

Upon coming to the conclusion that a property had been sold for less than its market value, the Court was not denuded of its jurisdiction to set aside such sale on account of inadequacy of price alone

Record indicated that the executing court never confirmed the auction, therefore, no vested right had accrued in favour of the auction purchaser

Petition for leave to appeal was dismissed in circumstances.

Objection petition regarding non-serving of notice at address outside Pakistan and not following other legal requirements necessary for the auction

Paper book of present case contained copies of notices that were sent in the execution proceedings to the petitioner/judgment debtor at the address on which she was served when summons was issued in the suit

Said notices included notice for attachment of the mortgaged property, notice for settling the terms of proclamation of sale and notice for sale of the mortgaged property

Thereafter, auction notice was also published in two leading newspapers

Petitioner's address in the suit was her residence in city "K" of Pakistan on which the summons was served and she also filed her leave to defend the said application, thus, it was the petitioner's obligation to place on record her new address for any future service on her, if at all such service was required by law, which she did not do

Advocate who represented the petitioner and other judgment debtors in the suit also continued to appear before the Banking Court even after conversion of suit into execution proceedings that finally culminated in the sale of the mortgaged property

Hence, the petitioner could not feign ignorance about the periodical developments that took place in the proceedings

Question of non-service to the petitioner did not arise at all

Petition for leave to appeal was dismissed accordingly.

Petitioners had not even challenged the action of authorities whereby they had been refused pre-qualification, rather they had prayed for issuance of directions to the authorities to allow them to participate in the bidding process

Held, subject-matter being question of public interest, relating to construction of road, therefore, grant of injunction in such like matters would be more inconvenient for public at large and less inconvenient for the petitioners

Constitutional petition was dismissed in circumstances.

Nothing on record indicated that auction was widely publicized through advertisement in the newspapers and affixation of the proclamation/notices on and in the vicinity of the property to be auctioned and on the notice board of the Court house

Subject property was valuable agricultural property and could have attracted many buyers, had it been properly advertised, but the notice of auction was only published in an unknown newspaper, that too a day before the auction, because of which only three persons participated in the auction proceedings

Perusal of notice of auction showed that the same did not take place at the location of the property which was sought to be sold

On the contrary, the auction was held in the premises of the Bank, i.e. the decree holder, which by itself made it highly suspect

Evaluation report prepared by an approved firm of Engineers and Architects was placed on record which showed that the property was valued much in excess of the amount paid by the auction purchaser

Subject property was sold at a throwaway price in an auction which did not prima facie appear to be fair, transparent and above board

Serious legal and procedural errors were committed at all stages of the execution proceedings which had caused serious miscarriage of justice

Supreme Court remanded the case to the Executing Court (Banking Court) with the directions that a fresh auction shall be conducted in accordance with law; that the auction purchaser shall have the right to participate in the fresh auction and he shall also be given the right of first refusal if he matched the highest bid; that in the event the auction purchaser did not wish to participate in the fresh auction or exercise his right of first refusal, the Bank shall refund to him the entire amount paid by him together with mark up at the rate fixed by the State Bank from the date of the auction till the amount was refunded to him, and that the Bank shall also have the right to claim cost of funds in accordance with the judgment and decree passed by the Banking Court

Appeal was allowed accordingly.

Nothing on record indicated that auction was widely publicized through advertisement in the newspapers and affixation of the proclamation/notices on and in the vicinity of the property to be auctioned and on the notice board of the Court house

Subject property was valuable agricultural property and could have attracted many buyers, had it been properly advertised, but the notice of auction was only published in an unknown newspaper, that too a day before the auction, because of which only three persons participated in the auction proceedings

Perusal of notice of auction showed that the same did not take place at the location of the property which was sought to be auctioned

On the contrary, the auction was held in the premises of the Bank, i.e. the decree holder, which by itself made it highly suspect

Evaluation report prepared by an approved firm of Engineers and Architects was placed on record which showed that the property was valued much in excess of the amount paid by the auction purchaser

Subject property was sold at a throwaway price in an auction which did not prima facie appear to be fair, transparent and above board

Serious legal and procedural errors were committed at all stages of the execution proceedings which had caused serious miscarriage of justice

Supreme Court remanded the case to the Executing Court (Banking Court) with the directions that a fresh auction shall be conducted in accordance with law; that the auction purchaser shall have the right to participate in the fresh auction and he shall also be given the right of first refusal if he matched the highest bid; that in the event the auction purchaser did not wish to participate in the fresh auction or exercise his right of first refusal, the Bank shall refund to him the entire amount paid by him together with mark up at the rate fixed by the State Bank from the date of the auction till the amount was refunded to him, and that the Bank shall also have the right to claim cost of funds in accordance with the judgment and decree passed by the Banking Court

Appeal was allowed accordingly.

Judgment debtor filed objections against auction proceedings, on the ground that no venue of auction was mentioned in the press publication

Objections filed by judgment-debtor were dismissed by Executing Court

By not specifying venue of auction by Executing Court, non-service of notice on the judgment debtor 15 days before publication of proclamation of sale, non-affixation of notice/proclamation at the Court premises of Banking Court and mortgaged property, not strictly adhering to schedule prepared by Executing Court for sale of mortgaged property by Court Auctioneer were inherit defects in auction proceedings

Mandatory provisions of O. XXI, Rr. 66(2) & 68, C.P.C. were offended/violated and serious prejudice was caused to judgment debtor and his rights had been adversely affected

High Court accepted objection petition filed by judgment-debtor and set aside auction proceedings

Appeal was allowed in circumstances.

Jurisdiction of Revisional Court would be wider in case of illegalities and material irregularities and in such circumstances bar of limitation could not be pleaded

Impugned judgment passed by the Appellate Court could not sustain

Trial Court while rejecting the application under O. VII, R. 11, C.P.C. had ignored the provisions of Ss. 32 & 35 of Punjab Privatization Board Act, 2010

Impugned orders passed by the courts below were set aside being illegal and unlawful

Suit pending before the Civil Court stood transferred to the High Court

District Judge was directed to make arrangement for transmission of record of the suit to the High Court

Constitutional petition was allowed in circumstances.

Defendants intending to keep the property with them directed to deposit the share amount of plaintiff within a period of six months failing which auction proceedings in favour of auction purchaser should stand restored

Auction purchaser would be at liberty to withdraw/collect his amount from the Nazir

Application to keep the property by the defendants was accepted in circumstances.

Not incumbent upon government to always accept the highest bid but then it was responsibility of government to come and satisfy that award to person other than the highest bidder had been done in a fair and diaphanous manner

In absence of such satisfaction acceptance of such offer and sought to be substantiated could amount to arbitrariness and exercise of discretion unfairly

Act of fixing three different dates for open auction in question was bewildering in nature and the same should not have been done as it had gone against the mandate of open auction

Reason assigned for postponing auction for two dates did not find any mention in auction notice and could not have been done

Alleged award of contract to defendant was an attempt to frustrate status quo order passed earlier as record did not justify that any award was made in reality

High Court set aside the auction proceedings as well as award of contract allegedly given to defendant

High Court directed the authorities to re-auction rights for collection of royalty on coal and to take back possession if handed over to defendant

Application was disposed of accordingly.

Petitioner participated in auction proceedings by accepting stipulated terms and conditions duly written in auction proclamation wherein authorities reserved their right to accept or reject the bid

Exercise of discretion by relevant authority was not amenable to interference in Constitutional jurisdiction unless the same was arbitrary, fanciful or violative of any of the fundamental rights

Relevant authority had exercised its discretion as conferred by law

Auction in favour of petitioner was not approved, therefore, petitioner did not acquire any vested right in the land and had no locus standi to ask for its transfer

Action of relevant authority was not arbitrary, fanciful or violative of any of the fundamental rights requiring interference in Constitutional jurisdiction

High Court declined to interfere in the matter

Petition was dismissed in circumstances.

Appellants were aggrieved of order passed by Executing Court dismissing objections filed against auction of mortgaged property

Validity

Time period for making application under either of Rr. 89 & 92, O.XXI, C.P.C. was 30 days from the date of sale and limitation prescribed under Art. 166 of Limitation Act, 1908, was attracted

Provisions of O. XXI, R. 92(2), C.P.C. affirmed that in case of application under O. XXI, R. 89, C.P.C. deposit was to be made within 30 days from the date of sale

Both the methods of challenging sale under O. XXI, Rr. 89 & 92, C.P.C., could not be invoked simultaneously

Provision of O. XXI, R. 89(2), C.P.C. provided that where a person applied under O. XXI, R. 90, C.P.C., to set aside sale of his immovable property then he would lose his entitlement to make application under O. XXI, R. 89, C.P.C., unless the application under O. XXI, R. 90, C.P.C. was withdrawn

Remedy under O.XXI, R. 89, C.P.C. could only be availed within thirty days of the sale

Appellants did not file any application under O. XXI, R. 89, C.P.C. within the prescribed period of limitation

Sale was confirmed in favour of auction purchasers and sale certificate had also been issued; as bona fide purchasers their interests were also intervened and needed to be protected

Sanctity and stability of judicial sale was also required to be upheld

High Court declined to interfere in the order passed by Executing Court

Appeal was dismissed in circumstances.

Contentions of judgment-debtor were, inter alia, that no notice under O. XXI, R. 66, C.P.C. was served to the judgment debtors; that the property was wrongly described in the proclamation and that the auction proceedings were conducted fraudulently

Held, that contention of judgment-debtors that no notice under O. XXI, R. 66, C.P.C. were issued to them was not tenable inasmuch that the property was admitted to be auctioned in the past but the same could not materialized and the fact that it was ordered again to be auctioned did not require fresh issuance of notice under O. XXI, R. 66, C.P.C.

Where judgment-debtors were aware of auction proceedings, they could not challenge the auction on grounds that notice was sent to them on incorrect address, as notice, in the present case, was also published in the newspaper

Contention that the property was wrongly described was also not tenable as the bidders made their bids at the site of the property which was to be auctioned, therefore, they knew that the said property was a building with fixtures and the bids were made accordingly therefore no prejudice had been caused to the judgment-debtors

Said property had been auctioned at more than the reserved price and the auction report indicated that bidders actively participated in the process

High Court observed that it was the prerogative of the decree-holder to have any or all of the mortgaged properties sold in the execution of the decree

No illegality existed in the impugned order

Appeal was dismissed, in circumstances.

Bank, after giving notice to borrower, directly auctioned property in question under S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Earlier, co-owners had filed objection against auction of property, which objection was dismissed by Banking Court and had attained finality

Subsequently, respondent filed objection petition under O. XXI, R. 89, C.P.C., on the ground of being one of the co-owners

Banking Court allowed objection petition and set aside auction of whole property

Validity

Property which was auctioned by bank, was mortgaged by various individuals including co-owners

Objection petition against auction proceedings in favour of appellant was earlier challenged by co-owners and the same was dismissed by Banking Court and appeal was withdrawn, therefore, auction to the extent of co-owners had already attained finality

Such aspect of the matter was not taken into account by Banking Court while deciding objection petition of respondent and auction proceedings in respect of entire property were set aside

Banking Court was bound to decide fate of auction proceedings only to the extent of objection petitioner

High Court set aside the order passed by Banking Court and remanded the matter to Banking Court for decision afresh to the extent of share of appellant in suit property

Appeal was allowed accordingly.

Judgment-debtor filed application under O.XXI, R.89 C.P.C. for permission to deposit auction price, which application was allowed by Lower Appellate Court

Validity

Executing Court did not comply with mandatory provisions of O.XXI, R.66, C.P.C., therefore, entire superstructure of sale and issuance of sale certificate was dashed to ground

Basic concept of O.XXI, R.89, C.P.C. was to provide opportunity to judgment-debtor which was the only means of avoiding a sale after it had been carried out

Provisions of O.XXI, R.89, C.P.C. afforded last chance to judgment-debtor after auction had taken place to get the sale set aside on payment of decretal amount

Lower Appellate Court had passed a beneficial order in favour of auction-purchaser while allowing mark-up at the rate of 7% per annum from the date of deposit of purchase money along with 5% of purchase price as provided under O.XXI, R.89, C.P.C.

No jurisdictional error or material irregularity was found in the judgment passed by Lower Appellate Court

Revision was dismissed in circumstances.

Highest bidder (applicant) was declared as the successful bidder and deposited part of the auction price with the Municipal Administration

Shop in question was in possession of a tenant and he challenged the auction proceedings through a Constitutional petition, which was dismissed

Tenant challenged auction proceedings again by filing a second writ petition, arraying an unsuccessful bidder (respondent) as the only party and obtained a consent order fraudulently from the High Court, in the absence of the highest bidder

Contentions of highest bidder were that Auction Committee had recommended confirmation of auction in his favour and he had already deposited part of the auction price; that he was not made a party to the second writ petition intentionally; that unsuccessful bidder in collusion with the tenant and Municipal Administration procured consent order from the High Court by practising fraud, and that representative of Municipal Administration had collusively made a statement before the Court that bid made by unsuccessful bidder was the highest

Validity

Tenant in spite of dismissal of his first writ petition filed present (second) writ petition without impleading highest bidder as a party and without disclosing his first writ petition

Representative of Municipal Administration stated that due to some typographical mistake his consent was recorded by the High Court as a result of which tenant obtained the consent order

Even if it was admitted that representative of Municipal Administration had not made the consenting statement in Court, question remained as to why on receipt of impugned order of High Court, the Municipal Administration had not filed an application for setting aside the same

Municipal Administration fraudulently issued the letter, wherein bid of unsuccessful bidder was declared as the highest

Recommendations of Auction Committee had not been confirmed or rejected and Municipal Administration had not taken any action for the loss to the Government Exchequer caused due to the fact that shop in question was lying sealed and Municipal Administration was suffering loss of rent

Application under S.12(2), C.P.C. was allowed, impugned order of High Court was set aside, writ petition of tenant was dismissed with costs of Rs.500,000 for minimizing the loss to the Government Exchequer, and application of unsuccessful bidder was also dismissed with costs of Rs.200,000

High Court also issued directions to concerned authority to initiate proceedings against the Municipal Administration and other concerned officials who were instrumental in causing loss to the Government Exchequer.