' MIAN HAMID FAROOQ, J.---This single judgment shall decide the present appeal (F.A.O. No,155 of 1998) and, the connected cases (F.A.O. No,155 of 2000, E.F.A. No,189 of 2001 and Writ Petition No,19655 of 2000) as common questions of law and facts are involved in all these cases and they have arisen out of common litigation.
2. The facts leading to the filing of this multiple litigation are that a decree for a sum of Rs,65,75,796 was passed against one Hussain Mumtaz, favouring United Bank, vide judgment and decree dated 4-11-1989, by the learned Banking Court at Karachi, which, was , admittedly, not called in question by the judgment-debtor by way of filing the appeal, thus, the same attained finality. Said Hussain Mumtaz died and respondents Nos,2 to 8 were impleaded in the litigation in the capacity of his legal heirs, In the year 1992, the decree-holder Bank filed an execution petition before the Honourable Sindh High Court at Karachi and pursuant to its transfer, the execution proceedings commenced at Lahore by this Court, in exercise of its civil original jurisdiction, however, subsequently, with the change of pecuniary jurisdiction, the execution proceedings were transferred to the learned Banking Court. In the aforenoted execution proceedings, Raja Riaz Ahmad, (appellant in all the appeals) confronted with the auction of property, filed an objection petition claiming himself to be the bona fide purchaser of the mortgaged property, i,e, bungalow, constructed on a piece of land measuring 12 Kanals, 13 Marlas and 75 sq. Ft bearing No,45, Main Gulberg (hereinafter called the mortgaged property). Precisely, the claim of Raja Riaz Ahmad was that he had purchased the mortgaged property from the judgment-debtor on the basis of an agreement to sell dated 25-1-1983, for a total consideration of Rs,47,00,000, out of which a sum of Rs,5,00,000 was received by Hussain Mumtaz as earnest money and that as the said vendor could not clear the charge on the mortgaged property, therefore, another agreement dated 3-8-1983, was executed between the parties, through which another sum of Rs,5,00,000 was received by the vendor and the possession of the mortgaged property was delivered to Raja Riaz Ahmad Khan. The case of the appellant is that out of total consideration price, he has paid a sum of Rs,17,00,000 to the vendor and is in possession of the property, thus, he has become the owner of the mortgaged property. The said objection petition was resisted by the decree-holder and ultimately dismissed by the then Banking Court vide order dated 8-7-1998, which order has been called in question by the aforenoted objector by way of filing an appeal, (F.A.O. No,155 of 1998).
3. Consequent to the above, the decree-holder bank filed an application under section 18 of Act XV of 1997, before the learned Executing Court, with the prayer that the possession of the mortgaged property may be ordered to be handed over to the bank, which application was accepted by the Banking Court, vide order dated 6-6-2000. Pursuant to that, the learned Executing Court, on an application filed by the decree-holder Bank, directed for the breaking open the locks and doors of the property vide order dated 9-6-2000. These two orders dated 6-6-2000 and 9-6-2000, have been called in question by said Raja Riaz Ahmad by way of filing another appeal (F.A.O. No,155 of 2000) wherein, on 27-6-2000, status quo order was granted. In the said appeal, this Court, on 10-7- 2000, directed the appellant/objector (Raja Riaz Ahmad) to deposit a sum of Rs, 15 million uptil 31- 7-2000, which amount was, admittedly, not deposited by the appellant, resultantly, the respondent-Bank filed an application (C.M. N9.7-C of 2000) in the said appeal for the vacation of order dated 27-6-2000, which application was allowed, on 7-8-2000, and the decree-holder was permitted to carry out the execution proceedings. Thereafter the possession of the mortgaged property was delivered to the decree-holder bank through the process of Court and the same is still with the respondent-Bank.
4. The appellant, later on, filed an application under Order XXI, rules 99, 100 and 101, Civil Procedure Code for recalling of order dated 6-6-2000, passed by the learned Banking Court, submitting therein that he has filed an appeal, which is still pending; that the order of dispossession is illegal and void and that he is ready to deposit the amount. The said application was resisted by the decree-holder bank and ultimately the learned Banking Court, after finding that the Banking Court has no powers of review, dismissed the said application and simultaneously issued the directions to the police authorities for the due execution of warrants of arrest through a composite order dated 9-8-2000. Raja Riaz Ahmad had called in question the said order by way of filing the Constitutional petition (Writ Petition Nb.19655 of 2000).
5. Later on decree-holder bank filed an application seeking permission from the Banking Court to sell the property,. Under the provisions of section 18(2) of Banking Companies (Recovery of Loans, Advances, Credits , and Finances) Act, 1997, the Banking Court allowed the said application, vide order dated 5-2-2001, and accorded the requisite permission to the decree-holder bank, which order has again been assailed by Raja Riaz Ahmad by way of filing an appeal (E.F.A. No,189 of 2001), wherein this Court, on 26-3-2001, stayed the further proceedings and restrained the sale of the property. The mortgaged property was, however, put to auction, wherein one Shahid Hussain was declared the highest bidder, as his highest bid of Rs,40 million was accepted vide order dated 12- 4-2002/ 13-4-2002. He paid a sum of Rs,1 million immediately, a sum of Rs,10 million, being 25% of the auction price, was deposited by him, on 22-4-2002, and the balance was to be deposited within one month from the acceptance of the bid. Admittedly, uptil now, Shahid Hussain has deposited a sum of Rs,11 million , whereas the rest of the amount of Rs,29 million is still to be paid.
According to the auction-purchaser, as per the information received by him, the mortgaged property was sold, when the injunctive order was operative, therefore, he became apprehensive and as such did not deposit the rest of the amount of Rs,29 million. Now, Shahid Hussain has filed different applications in this appeal and his claim is that he is no more interested in purchasing the property and the bank be directed to refund 11 million rupees to him.
6. Respondents Nos,2 to 8, legal heirs of Hussain Mumtaz, judgment-debtor, have not entered appearance in these cases, hence, they are proceeded ex parte.
7. In the above perspective now we would decide the aforenoted cases one by one.
F.A.O. No,155 of 1998
8. Mr. Noor Muhammad Chandia, Advocate, in support of the present appeal, while relying upon section 53-A of the Transfer of Property Act, has submitted that at the time of filing of the objection petition, the appellant was in possession of the property in question in part performance of the agreement to sell, therefore, his possession is protected under the law. However, he has admitted that now the possession of the mortgaged property has been delivered to the decree-holder bank under the orders of the Court. Conversely, the learned counsel for the respondent-Bank has submitted that under the facts and circumstances of the case, an application under Order XXI, rule 58, Civil Procedure Code was not maintainable; that the said application was filed beyond a period of one year from the date of filing of the execution application and that mere agreement to sell does not create any right, title or interest in the property, therefore, no claim of the appellant could be entertained against the decree-holder Bank qua the mortgaged property.
9. Admittedly, the property was mortgaged by the alleged vendor/judgment-debtor, in favour of the respondent-Bank, as a security for a financial facility obtained by him and the same could not be redeemed even uptil now. The said property still stands mortgaged in favour of the decree- holder Bank and the same is the only security in the hands of the bank for the realization of the decretal amount. There is no cavil to the proposition that the mortgage travels with the property and not the person. Even if the alleged agreement to sell is taken to be genuine and enforceable, the appellant choose to purchase the mortgaged property and accepted the same with all its encumbrances. Undisputedly, outstanding decretal amount is a clear charge over the mortgaged property and the same has to be recovered through the sale/auction of the mortgaged property.
Furthermore, even according to the stance of the appellant, the parties did not obtain any permission from the decree-holder at the time of entering into alleged agreement to sell.
Admittedly, the appellant was in the knowleag? About the creation of mortgage of the said property in favour of the respondent-Bank. The appellant has himself admitted, in the present appeal, that at the time of execution of the agreement to sell, it was agreed that the vendor will get the charge cleared from the bank and then the sale-deed would be executed. Above findings of ours are fortified by the judgment rendered by the learned Division Bench of this Court in a case reported as Major Muhammad Tariq v. Citibank Housing Finance Company Ltd. Through Manager (2002 CLD 1090), wherein it has been held that the mortgage of immovable property, being a charge against the property, would go with the same even if the property in question had been alienated. It has further been held in the aforenoted judgment of Major Muhammad Tariq that the appellant had purchased the suit property from the original owner, whereas the property was already mortgaged with the bank and, thus, the appellant has alternate remedy to file a suit against the original owners and the appellant has no remedy against the respondent-Bank and, in this respect, reliance was placed on Muhammad Ibrahim v. Secretary, Government of Pakistan and others (PLD 1993 Karachi 478).
10. In view of the above, we are of the view that the first contention raised by the learned counsel and his reliance on section 53-A of the Transfer of Property Act is misdirected, untenable and dispelled.
11. It is the case of the appellant that he has filed a suit for specific performance of the alleged agreement, which is still pending and, admittedly, no injunction was granted by the Civil Courts despite the fact that the said plea of section 53-A of the Transfer of Property Act was taken before the Civil Courts. Undoubtedly, the Civil Courts could have controlled the question of possession till the decision of the suit, but even the Civil Courts did not deem fit to grant the injunction in favour of the appellant.
12. There is no cavil to the proposition that mere agreement to sell does not create any right, title or interest of the person, qua the property in question, claiming to be the beneficiary of such an agreement except to clothe with a right to file a suit for specific performance of an agreement.
Section 54 of the Transfer of Property Act provides in clear terms that a contract of sale does not of itself, create any interest or charge on such property.
13. Section 53 of the Transfer of Property Act provides that every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. The only exception created under the said provision of law is that the rights of the transferee in good faith and for consideration shall not be impaired. Applying the said provision of law, in the present case, we find that during the subsistence of the mortgage and most probably during the pendency of the suit, the alleged agreement to sell was entered into between the parties. It prima facie establishes that the said agreement was entered into only to defeat and delay the claim of UBL, which is, undoubtedly, still a creditor. We do not find any document, placed on record by the appellant, to show that the said transfer of the property was in good faith and for consideration. We have refrained ourselves from giving any finding on the validity and enforcibility of the said agreement to sell, as those findings may prejudice the case of the appellant in the suit for specific performance, because in the said suit the agreement to sell must be a pivotal question to be decided by the Civil Courts.
14. As noted above, the disputed property was mortgaged, the decree, under execution, was passed on the basis of the said mortgage and the learned Executing Court did not pass any attachment order regarding the said mortgaged property, as the same was not necessary under the law. Now the question arises as to whether the provisions of Order XXI, rule 58, Civil Procedure Code, whereunder the appellant filed the application, apply to the sale of the mortgaged property.
While dilating upon the said proposition of law, Sindh High Court in a case reported as Australasia Bank Ltd. v. Messrs Juma Khan Agha Javed Corporation and others (PLD 1976 Karachi 414) has held as under:- "A plain reading of this rule shows that the provisions thereof are applicable only in case the property is attached in execution of a decree but not to sale of mortgaged property in execution of a decree for sale of mortgaged property, for a mortgaged decree contains, as it ought to contain, a direction for sale of the mortgaged property, the proceedings under such a decree by attachment is unnecessary. In the present case property has not been attached and this fact is not now in dispute. The law on this question is well-settled. However, if any precedent is required for the above view, a number of cases can be referred to, particularly the following:--
(1) Mahabir Prashad Singh v. Nogendra Nath Mandal AIR 1921 Cal.
479.
(2) Kundan Lal v. Allah Bakhsh AIR 1932 Lahore 618.
(3) Balijepalli Ramakotl Suryanarayana Tanodar and others v. Kampalli Ramchandrudu and others AIR 1932 Mad.
716.
(4) Hafiz Mohomed Ibrahim v, Bhagwan Das AIR 1935 All.
897."
' Division Bench of the same High Court, while following the dictum laid down in the aforenoted judgment of Australasia Bank, has held in Kishwar Jehan and 2 others \v. The Muslim Commercial Bank Ltd. (1988 MLD 596) that the objection to the sale of mortgaged property under the provision of Order XXI, rule 58, Civil Procedure Code would not be competent as the said provisions would not apply to a sale of mortgaged property in execution of the decree. '
' In the above perspective, we are of the view that the learned counsel for the respondent is right in contending that as the property was mortgaged in this case, therefore. No objection petition under Order XXI, rule 58, Civil Procedure Code was maintainable in law. We while respectfully following the law declared in the said judgment, hold that the provisions of Order XXI, rule 58, Civil Procedure Code are not at all attracted in the present case and, the objection petition was rightly dismissed by the learned Banking Court.
15. There is another aspect of the case, which cannot be ignored at this juncture, that the possession of the mortgaged property had lawfully been taken over by the decree-holder Bank under the orders of the Banking Court and the Bank is still in possession of the said property. We are of the view that the present appeal, the primary object of which was to protect the possession of the appellant qua the property in question, has itself become infructuous and on this count too cannot be allowed.
' In the above backdrop and for the reasons and conclusions hereinbefore given we are of the firm view that the present appeal is devoid of any merits, thus, the Fame is dismissed.
' F.A.O. No,155 of 2000
16. Learned counsel for the appellant has contended that although pursuant to orders dated 6-6- 2000, 9-6-2000 and 8-9-2000, passed by the learned Banking Court, the possession of the mortgaged property was taken over by the decree-holder Bank and it is in possession of the same for the last almost 2 years, yet by accepting this appeal the possession may be restored to the appellant. On the other hand the learned counsel for the respondent, while relying upon section 18(3) of Act XV of 1997, has contended that the possesion of the mortgaged property was rightly and lawfully delivered to the decree-holder Bank by the Banking Court in exercise of powers under the said provision of law and that no exception could be taken to the impugned orders at this stage.
17. In the light of the arguments of the learned counsel for the parties, we have examined the provisions of section 18(3) of Act XV of 1997, and find that the learned Banking Court has been empowered to order for the delivery of possession to the decree-holder. According to the said provision, when an application is made by a Banking Court complaining therein that the judgment-debtor does not voluntarily give possession of the mortgaged property sold, or sought to be sold by the Banking Company, then the Banking Court shall put the Banking Company in possession of the mortgaged property. While placing the said provisions of law in juxtaposition with the facts and circumstances of the present case, we find that the learned Banking Court has not committed any illegality in ordering for the handing over of the possession of the mortgaged property to the decree-holder. Even the learned counsel could not point out any legal infirmity in the impugned orders, which, to our mind, were rightly passed in view of the facts and circumstances of the case and in accordance with law on the subject. It has been held in Agha Attaullah v. Presiding Officer, Banking Court and others (2002 CLD 1550) that where the judgment- debtor or any person claiming through the judgment-debtor does not voluntarily give possession of the property, the Banking Court has the power to put the Banking Court or the purchaser of the premises in possession of the mortgaged property in any manner deemed fit by it.
18. Even otherwise the impugned orders have been implemented and taken effect, consequent thereto the possession of the mortgaged property has since long been delivered to the decree- holder Bank, who is in possession of the same. In view whereof, to our mind, the present appeal has also become infructuous and, thus, the same cannot be allowed on this count too.
19. In the above prespective, we have examined the impugned orders and find that the learned Banking Court, while passing the said orders, did not commit any illegality and the orders are just, legal and unexceptionable, thus, we are not inclined to interfere in those orders, which are hereby maintained.
' Upshot of the above discussion is that the present appeal is devoid of merits, thus, the same is also dismissed. W.P. No,19655 of 2000
20. Upon the examination of the contents of the present petition, we find that this Constitutional petition has been filed on the similar grounds, which are taken in the aforesaid appeal (F.A.O.
No,155 of 2000) with the additional prayer that the order dated 8-9-2000, may be declared as illegal, without jurisdiction and lawful authority. Record manifests that through the filing of this petition, the petitioner has challenged orders dated 6-6-2000 and 8-9-2000. It may be noted that the order dated 6-6-2000, was also challenged by the petitioner in the aforenoted appeal, which has been dismissed by this Court, today, in view of the findings recorded in the preceding paras. It has been held that the orders passed by the learned Banking Court for the delivery of possession of the mortgaged property are legal and not open to exception by the petitioner.
' As regards order dated 8-9-2000, we find that the same has been passed in accordance with law as, admittedly, in view of section 27 of Act XV of 1997, the learned Banking Court has no powers of review or recalling of order passed by it. The main thrust of the applicant was directed against the order dated 6-6-2000, passed by the learned Banking Court, which on the one hand was challenged through the filing of the appeal (F.A.O. No,155 of 2000) and on the other hand, the application for the recalling of the same was filed before the learned Banking Court, which remedies, to our mind, could not be resorted to by the petitioner simultaneously. The learned Banking Court, even otherwise, was not competent to recall the order during the pendency of the appeal before this Court.
' In the above perspective and for the reasons recorded for the dismissal of appeal (F.A.O.No,155 of 2000), the present petition has no merits, moreso, when, as noted above, the said order has been' implemented and the decree-holder is in possession of the mortgaged property since long.
' Present petition has no force, thus, the same is also dismissed with no orders as to costs.
E.F.A.No,189 of 2001
21. In the backdrop of this case, after hearing the learned counsel for the parties and upon the examination of the record, to our mind, the following questions have arisen for determination by this Court in the present appeal:--
(i) Whether order dated 5-2-2001, whereby the learned Banking Court granted permission to the decree-holder to sell the property of its own accord, is sustainable?
(ii) Whether the respondent-Bank could have sold/auctioned the property in view of the issuance of the injunctive order dated 26-3-2001, by this Court, and what would be the affect of such sale?
(iii) What is the effect of the sale, held in favour of Shahid Hussain, who has deposited a sum of Rs,11 million and now is not interested in the purchase of the property, but pressing for the refund of his amount?
22. As regards the impugned order dated 5-2-2001, upon the examination of the provisions of section 18(2) of Act XV of 1997, we find that the decree-holder is empowered and competent to sell the pledged or mortgaged property, with or without the intervention of the Banking Court, either by public auction or by inviting seal tenders, and to receive the sale proceeds towards the satisfaction of the decree. 'It manifests that, through the introduction of the said provisions of law, Banking Companies have been allowed to sell the pledged or mortgaged properties of their own accord and the discretion has been conferred upon such Banking Companies to sell those properties either with the intervention of the Banking Court or through a public auction. Confronted with the said provisions of law, the learned counsel for the appellant could not point out any legal infirmity in the impugned order.
23. We have also examined the impugned order and find that the learned Banking Court, after going through the enormous case-law on the subject and hearing the parties,, has passed just, legal and fair order, thereby allowing the respondent-Bank to sell the mortgaged property in exercise of their option to sell the property of their own accord; to which no exception can be taken by the appellant. We are of the view that the learned Banking Court, while accepting the application filed by the decree-holder, did not commit any illegality so as to warrant interference by this Court and we are not inclined to interfere in the impugned order, thus the same is maintained.
24. Now adverting to the next question, as to whether the respondent-Bank could have sold the property through auction in presence of the injunctive order. Both the learned counsel have addressed arguments on this aspect of the case at a considerable length. According to the learned counsel of Shahid Hussain, respondent-Bank could not have sold the property, as the injunctive order was a complete bar to the auction of the property and now after the passage of time Shahid Hussain is no more interested in the purchase of the property, therefore, the amount deposited by him may be refunded to him: Conversely, the stance of the learned counsel for the respondent is that as the injunctive order has ceased to exist after the expiry of period of six 'months, therefore, the Bank was empowered to sell the property through public auction or direct negotiations, even without asking for the vacation of the injunctive order. We have noticed that Raja Riaz Ahmad has also filed a contempt petition (Crl. Org. No,136/C/2002 in E.F.A. No,189 of 2001) praying for initiation of contempt proceedings against the functionaries of the decree-holder Bank on the ground that they have sold the mortgaged property during the subsistence of the injunctive order. We are certain that the controversy involved herein is the same, which is subject-matter of the aforesaid contempt petition. To our mind if any findings are rendered by this Court on the aforenoted controversy, that would definitely prejudice the interest of either of the parties, in the aforenoted contempt case, thus, we have refrained ourselves from commenting upon this issue, as we are not inclined to decide this controversy in these petitions.
25. Coming to the third issue. The only question involved herein is, as to whether Shahid Hussain is entitled to the refund of Rs,11 million, which was deposited by him for the purchase of the property, as he is now no more interested in the purchase of the property. The learned counsel for the respondent-Bank has not seriously contested this issue. Admittedly, the said amount was deposited by Shahid Hussain with the respondent-Bank for the purchase of the mortgaged property. Undoubtedly, the respondent-Bank is in possession of the said property since long, it is within its right to resell the property for the satisfaction of the decree and it is expected that it can fetch more price, as the value of the property must have appreciated with the passage of time. If the auction-purchaser is not interested in the purchase of the property for some reason in addition to that the property was sold during the operation of the injunctive order, then he could not, of course, be pestered for the purchase of the property. In these circumstances, we are of the view that the interest of both the parties would adequately be safeguarded, if respondent-Bank is directed to refund a sum of Rs,11 million to Shahid Hussain. Although the auction-purchaser has prayed for the payment of mark-up on the said deposited amount by the Bank, yet in the present set of circumstances, we are not inclined to grant that relief. The last question is answered in the manner that the respondent-Bank shall return the amount of Rs,11 million to Shahid Hussain, auction-purchaser, within a period of one month from today, however, the auction-purchaser is not entitled to any mark-up or profit as claimed by him.
' Upshot of the above discussion is that all the applications, filed by Shahid Hussain, stand disposed of with the above directions and the main appeal, filed by Raja Riaz Ahmad, is hereby dismissed being devoid of any merits.
26. The accumulative effect of the above discussion, reasons and findings, is that the three appeals and one Constitutional petition, filed by the appellant (Raja Riaz Ahmad) are dismissed, while applications filed by Shahid Hussain stand disposed of with certain directions, as noted above, to the respondent-Bank. No order as to costs.