' TANVIR BASHIR ANSARI, J.---Respondent No,1 Habib Bank Limited filed a suit for the recovery of Rs,8,55,922 along with the mark-up against the appellants on 27-7-1999. The said suit culminated in a consent decree dated 11-11-1999 passed by the Banking Court, Sialkot whereby the appellants/ defendants were directed to pay a sum of Rs,8,55,000 along with mark-up in 20 equal instalments uptil 10-7-2001. A salient condition of the said consent decree was that in the event of default in payment of anyone instalment, the entire balanced amount shall be payable forthwith.
2. The appellants failed to comply with the aforementioned decree. The decree-holder/respondent No,1 filed execution petition on 19-5-2000.
3. At the time of allowing the finance facility to the appellants, land measuring 280 Marlas (14 Kanals) out of Khasras Nos.1149, 1150 and 1164 village Ratta Tehsil Pasrur was mortgaged vide mortgage deed dated 10-10-1996 in favour of respondent No,1.
4. For the purpose of execution proceedings, respondent No, 1 /decree-holder submitted Fard Taleeqa under Order 21, rule 12, C.P.C. Wherein the aforementioned 280 Marlas were sought to be attached in satisfaction of the decree. This property could not be auctioned on 21-9-2000 which was the date of auction fixed by the Court-Auctioneer. The decree-holder filed an application under Order 21, rule 54, C.P.C. Wherein it was prayed that it was necessary to put to auction additional land belonging to the judgment-debtors which was adjoining the aforementioned mortgaged property. It was requested that such additional land measuring 14 Kanals, 18 Marlas owned by the judgment-debtors be attached to satisfy the Court's decree. This application was allowed on 4-6-2002 and an amended Fard Taleeqa was filed in the Court. According to this document, land measuring 30 Kanals described therein was sought to be attached along with all construction, furniture and fittings present thereupon.
5. The Judge Banking Court fixed 16-7-2003 as date of auction which was to be conducted by Syed Iqbal Hassan Bokhari, Advocate/Court-Auctioneer. The reserved price for the auction was fixed at Rs,8,00,000.
6. According to the report dated 21-7-2003 of the Court-Auctioneer, the proceedings for auction were taken in hand on 16-7-2003 in the presence of the representative of the decreeholder/Bank.
Three persons participated in the auction proceedings. Surprisingly, however, the representative of the decree-holder commenced the auction from Rs,7,00,000 only as against the reserved price of Rs,8,00,000 specified by the Judge Banking Court. The Court-Auctioneer objected. It is categorically stated by the Court-Auctioneer in his report that the representative of the Bank in collusion with Mian Arif Mehmood (respondent No,2) concluded the bid at Rs,8,32,000 which bid was also objected to by, the Court-Auctioneer. More importantly, it was stated in the report that 1/4 of even this bid amount was not deposited by respondent No,2 with the Court-Auctioneer. It was concluded that final bid as aforementioned was not acceptable to the Court-Auctioneer.
6-A. Despite the aforementioned, respondent No,2 considering himself to be a successful auction- purchaser moved an application before the Banking Court for issuance of a sale certificate upon the strength of two receipts of payment, one dated 16-7-2003 in the sum of Rs,2,08,000 and the other dated 30-7-2003 in the sum of Rs,6,24,000. These receipts were regarding the payment through the Habib Bank Limited. It was contended that as the said receipts represent the total bid amount of Rs,8,32,000, the auction-purchaser was entitled to the issuance of the sale certificate.
Upon this application, the case was initially fixed for 2-10-2003. However, despite this order on the file, the case was once again taken up on the same date viz. 25-8-2003 and considering that the entire bid money has been deposited and that as there were no objections against the sale from the judgment-debtors, it was ordered that the sale certificate be issued.
7. The sale certificate was issued on 27-8-2003 in favour of Mian Arif Siddque and brothers whereby all the land which was covered under two Fard Taleeqas, both of mortgaged property as well as the property attached later on was confirmed in favour of Mian Arif Siddique and brothers.
8. It further transpires from the record that on 25-8-2003, the judgment-debtors filed an application wherein it was stated that they may be allowed to sell the mortgaged property so that the decretal amount is paid in satisfaction of the decree. Notice of this application was issued by the Judge Banking Court to the decree-holder as well as the auction-purchaser for 8-9-2003.
9. Respondent No, 2 made a further application on 11-9-2003 wherein it was stated that as the attached property was purchased by Mian Arif Mahmood and his brother Mian Tariq Mahmood (respondent No,3), the sale certificate be amended accordingly. The Judge Banking Court undertook some inquiry and passed an order on 18-9-2003 wherein he found justification in ordering. That actually it was Mian Arif Mahmood and Mian Tariq Mahmood who were the auction- purchasers. The amended sale certificate was issued without much ado on 23-9-2003 wherein the names of Mian Arif Mahmood and Mian Tariq Mahmood were incorporated instead of Mian Arif Siddique and brothers.
10. The instant appeal has been filed by the judgment-debtors on 22-9-2003 against the order dated 25-8.-2003 passed by the Judge Banking Court confirming the sale as mentioned hereinbefore. Initially only the decree-holder viz. H.B.L. Arrayed as a respondent.
11. The appeal came up for hearing on 15-10-2003 when the learned counsel appearing for the respondent/decree-holder stated that he would not defend the impugned order and shall have no objection if the same is set aside with the direction to the Judge Banking Court to proceed with the matter in accordance with law. The appeal was thus, disposed of in these terms on 15-10-2003.
12. Mian Arif Mahmood and Mian Tariq Mahmood thereafter filed a petition under section 12(2), C.P.C. Seeking setting aside of the order dated 15-10-2003 passed by this Court on the ground that they were not impleaded as parties in the appeal and that the order has been obtained through collusion between the judgment-debtors and the decree-holder/Bank without hearing the said petitioners.
13. This petition under section 12(2), C.P.C. Came up for hearing before us on 15-9-2004. The learned counsel for the appellants stated that the appellants have no objection to the acceptance of the said application, the setting aside of the order dated 15-10-2003 passed by this Court and to the appeal to be heard on merits. The petitioners of the application under section 12(2), C.P.C. Were ordered to be impleaded as respondents Nos.2 and 3 on 15-9-2004.
14. Mr. Atir Mahmood, Advocate for the appellants has made detail submissions in the light of the afore-stated factual background. The learned counsel has raised the following grounds in support of the appeal:--
(i) that in view of the report of the Court-Auctioneer dated 21-7-2003, no valid auction had taken place. In fact, it was specifically concluded by the Court-Auctioneer that he does not approve the auction bid for the reasons mentioned in his report. Reference is made to Order 21, rule 84, C.P.C. To submit that as 25% of the purchase money was not admittedly paid to the Officer or other person conducting the sale, no sale was concluded on 16-7-2003;
(ii) that the deposit through bank receipts is not proper payment in accordance with law;
(iii) that the receipt in the sum of Rs,2,08,000 representing 25% of the purchase money was not deposited on 16-7-2003. In fact, there is obvious tampering of the record which to the naked eye shows that the figure 17 has been altered to figure 16;
(iv) that the property which was initially mortgaged vide mortgaged deed dated 10-?0-1996 was sufficient to satisfy the decretal amount and for this purpose the appellants had moved an application on 25-8-2003 whereupon the Judge Banking Court had also issued a notice for 8-9- 2003 to the decree-holder and the alleged auction-purchasers. It is submitted that there was no occasion for attachment of any additional property under Order 21, rule 54, C.P.C. And that the permission granted by the Judge Banking Court on 4-6-2003 to file an amended Fard Taleeqa was without lawful authority.
(v) that having acknowledged the application of the appellants as mentioned in ground (iv) above, the Judge Banking Court in total violation of legal norms and disregard of the report of the Court-Auct leer proceeded to confirm the sale vide the impugned -der dated 25-8-2003.
(vi) that the consequent sale certificate issued in the name of Mian Arif Siddique and brothers is without any legal backing as there was no record to suggest as to who other than Mian Arif Siddique had participated in the auction;
(vii) that upon an application purportedly made for the correction of the sale certificate, Judge Banking Court states to have conducted some inquiry which culminated in his order dated 18-9- 2003, according to which, again for inexplicable reasons, the sale certificate was amended and besides the name of Mian Arif Mehmud, Mian Tariq Mahmood was also included; and
(viii) that no sale can be conducted other than an Officer of the Court or by such other person as the Court may appoint. As earlier stated, such an Officer (Court-Auctioneer) never conducted or concluded the sale.
14. Conversely, Ch. Khurshid Ahmad, Advocate for respondents Nos.2 and 3 has resisted the appeal with vehemence. At the very outset, it is submitted that the appeal is not competent as admittedly no objections were filed by the appellants before the confirmation of sale and such objections having not been filed, no appeal against the confirmation of sale is maintainable. It is further submitted that the auction-purchasers were impleaded as a party after the expiry of the period of limitation and thus, the appeal is liable to be dismissed as time-barred as against respondents Nos.2 and 3. On merits, it is contended that the conduct of the appellants/judgment-debtors has been mala fide and contumacious as after allowing a consent decree to be passed against them as for back as 11-11-1999 and undertaking to pay the decretal amount by way of instalments, the appellants had deliberately defaulted in the payment of the instalments which constrained the decree-holder to file execution petition.
15. Arguments have been heard and record perused.
16. There is no dispute that an Officer appointed for conducting the sale under Order 21, rule 65, C.P.C. Was Syed Iqbal Hassan Bokhari, Advocate/Court-Auctioneer. His report dated 21-7-2003 is available on the record. He has clearly mentioned therein that the conduct of the Bank representative and Mian Arif Mahmood, respondent No,2 herein were in collusion with each other.
He has specifically stated in his report that although the reserved price for the auction was Rs,8,00,000 yet the representative of the Bank insisted to commence the bid from Rs,7,00,000. It is further stated that although upon the objection of the Court-Auctioneer, the bid started from Rs,8,00,000 yet the bid was concluded at Rs,8,32,000 as a result of collusion between the Bank representative and respondent No,2. It is further evident from the report that the Court-Auctioneer did not accept the final bid as made during the auction proceedings. The record of the Judge Banking Court shows that this report of the Court-Auctioneer was filed in Court on 21-7-2003 whereafter the case was adjourned to 25-8-2003 for further proceedings. Ironically, on this very date, respondent No,2 made an application to the Judge Banking Court praying for the issuance of a sale certificate. After having initially adjourned the proceedings to 2-1Q-2003, the case was again taken up on the same date viz. 25-8-2003 and despite the fact that the report of the Court- Auctioneer was present before the Court, the Judge Banking Court proceeded to confirm the sale which to our mind is not only illegal and void but is also a result of questionable conduct in exercise of his jurisdiction. We further find that an application was filed by the appellants on the same date viz. 25-8-2003 wherein it was prayed that permission for sale of the mortgaged property be granted so that the decree could be satisfied. Notice on this application was issued by the Judge Banking Court on 25-8-2003 for 8-9-2003 to the decree-holder as well as the auction-purchaser.
In pursuance of the impugned order dated 25-8-2003 whereby the sale was confirmed, sale certificate was promptly issued on 27-8-2003 in favour of Mian Arif Siddique and brothers. Upon further application by respondent No,1 for correction of the sale certificate, an amended sale certificate was issued on 23-9-2003 wherein Mian Arif Mahmood and Mian Tariq Mahmood (respondents Nos.2 and 3) were shown as the auction-purchasers. The record also shows some inquiry proceedings were undertaken by the Judge Banking Court in this behalf but on detail scrutiny, it is found that the confirmation of sale and the consequent issuance of the sale certificate were completely devoid of force and in utter disregard of the relevant provision of law made applicable to execution. We are also satisfied that no payment of 25% of the purchase money was made on 16-7-2003 to the Officer conducting the sale. The receipt placed on the record makes it manifest that the deposit if at all was made in Habib Bank Limited and not to the Court-Auctioneer. Even the date given on the said receipt is not at all confidence-inspiring and shows interpolation to the naked eye. We are at a complete loss to understand as to how in the face of such material on the record the Judge Banking Court could ever come to the conclusion that the sale had been concluded whereupon he proceeded to confirm the same.
17. We are not impressed by the contention raised on behalf of respondents Nos.2 and 3 that the appeal was not competent as no objection against the auction were filed by the appellants. As we have observed hereinbefore, no sale was ever concluded through the auction. This being the case, there was no occasion for the appellants to have filed any objections before the Banking Court. The objection to the competency of the appeal on this ground is repelled.
18. The next contention that as respondents Nos:2 and 3 have been impleaded after the limitation, the appeal is liable to be dismissed against the said respondents is also devoid of force.
19. A perusal of the record would show that as per the report of the Court-Auctioneer, respondent No,1 did not deposit 25% of the purchase money and thus, acquired no right under Order 21, rule 84, C.P.C. The consequence of default of such deposit is that the property was liable to be re-sold forthwith. It is also borne out from the record that the highest bid offered during the course of auction was not accepted by the Court-Auctioneer. Thus, respondent No,1 cannot be deemed to be a person declared to be the purchaser. It is true that in such a situation the appeal was originally filed against the Habib Bank Limited (decree-holder). However, on 15-10-2003, learned counsel appearing for the decree-holder stated that he would not defend the impugned order which may be set aside. The impugned order dated 25-8-2003 was thus, set aside. The implication of the said statement by the learned counsel for respondent No,1 is that the impugned order was treated as void. Respondents Nos.2 and 3 filed an application under section 12(2), C.P.C. Against the aforesaid order dated 15-10-2003. It was during the course of said proceedings that respondents Nos.2 and 3 were added as respondents. In these circumstances, the impleadment of respondents Nos.2 and 3 while disposing of their application under section 12(2), C.P.C. Would have no adverse effect upon the appeal qua the question of limitation. It is also noted that the original sale certificate issued on 27-8-2003 mentions the beneficiary of the sale as Mian Arif Siddique and brothers. Neither respondent No,2 nor respondent No,3 as now described figure anywhere in the said sale certificate.
The names of there respondents were entered for the first time in the amended sale certificate issued on 23-9-2003. When the present appeal was filed on 22-9-2003, respondents Nos.2 and 3 as now described were nowhere in the field.
20. The confirmation of sale is also bad for the reason that as neither the 25% of the purchase money nor the balance was paid in accordance with the provisions of Order 21, rule 84, if the payment is not made within the period as mandatorily provided by the above quoted provision, the defaulting purchaser shall forfeit all claims to the property. We place reliance for this proposition upon the rule pronounced in the cases of Manilal Mohanlal and others v. Sardar Syed Ahmad and another (AIR 1954 SC 349) and Brig. (Retd.) Mazhar-ul-Haq and another v. The Muslim Commercial Bank and another (PLD 1993 Lahore 706) wherein their Lordships have held that a defaulting purchaser forfeits all claims to the property and that non-deposit of the purchase money would render the sale void.
21. In view of the foregoing, we accept this appeal and set aside the order dated 25-8-2003.
Consequently, the sale certificate are also declared to be without lawful authority.
22. We have taken strong exception to the conduct of the respondents in the manner they have conducted the proceedings before the Judge Banking Court which is strongly deprecated. The manner in which the proceedings have been processed by the Judge Banking Court also leaves much to be desired. We are pained to no limit in observing that the entire proceedings detailed above are nothing but a travesty of law and justice. We therefore, burden respondents Nos.2 and 3 with special costs of Rs,50,000 payable to the appellants. The sale proceedings shall be conducted by the learned Executing Court in the light of the observation made hereinbefore in accordance with law.