MIAN SAQIB NISAR, J.--- Through the impugned order dated 3.2.2003, the learned Executing Court/Banking Court No. II, Lahore, has dismissed the application of the appellant moved under Section 73, CPC for the reteable distribution of the auction/sale proceeds of the property bearing No. 19-Main Gulberg, Lahore, which belonged to the common judgment-debtors of both the contesting parties, and had been sold by the Court on 20.11.1999, in the execution of /the decree passed in favour of the respondent No. 1, Trust Leasing Corporation Ltd. Hence this appeal.
2. Briefly stated the facts of the case are that, the present appellant on 23.6.1998, brought a suit for the recovery of an amount of Rs. 8,12,88,790/- against M/s. Regent Dying and Finishing (Pvt.) Ltd., M.
Asif Saigol, Abid Saigol (hereinafter called the Saigol Brothers), Kamran Zali and M/s. Mohib Textile Mills Limited, before the Modaraba Tribunal under the Modaraba Companies and Modarabas (Flotation and Control) Ordinance, 1980, and the property of the Saigol Brothers bearing No. 19- Main Gulberg, Lahore, was got attached before the judgment on 15.7.1998. Ultimately, the suit as claimed, was decreed against the defendants on 10.12.1998, and in order to recover the decretal amount, the appellant filed the ,execution petition before the Modaraba Tribunal on 21.12.1998. It may be pertinent to state here that, the Modaraba Tribunal and the Banking Court No. II, were being presided over by the same learned Judge.
3. The other relevant facts are, that respondent No. 1 on 26.6.1998; filed a suit for the recovery inter alia against the Saigol Brothers, who were sued as the guarantors for the loan granted by respondent No. 1 to Mohib Exports Limited. This suit was decreed by the learned Banking Court No. II on 15.1.1999 to the extent of Rs. 35,06,940/-. In this case too, the learned Banking Court had attached before the judgment, the same property i.e. 19-Main Gulberg, on the request/application of the respondent No. 1, vide order dated 15.7.1998.
4. The respondent No. 1, for the satisfaction Qf this decree in its favour, applied for the execution and the property i.e. 19-Main Gulberg, Lahore, was sold for a sum of Rs. 21 million through the Court auction held on 20.11.1999. The sale proceeds of the. Auction to the extent of 25% were received by the Court th'e same day, whereas 75% were deposited by the auction purchaser on 4.12.1999. The auction was however, not confirmed by the Court, constraining the auction-purchaser, to come in appeal before this Court, which was accepted and the matter was remanded. Thereafter, by dismissing the objections of the judgment-debtors and the third party vide order dated 21.12.2002, the sale has been confirmed. Against this order, the judgment-debtors and the third party have come in appeals i.e. EFA No. 8/2003 and EFA No. 12/2003, which are yet pending in this Court.
5. On 1.4.2000, the appellant brought an application under Section 73/, CPC before-the Banking Court No. II, seeking the rateable distribution of the sale proceeds received on account of the auction of the property bearing No. 19-Main Gulberg, Lahore, on the basis of its decree dated 10.12.1998. This application has been rejected by the Court, forming the following view:- "Auction of property 19-Main Gulberg, Lahore was held on 20.11.1999 in execution application titled Trust Leasing Corporation v. Mohib Exports to satisfy decree dated 15.10.1999. -Auction proceeds were received by this Court on 15.12)1999. Petitioner Trust Modarba filed this application for rateable distribution on 1.4.2000. Before 1.4.2000 no execution application filed by Trust Modaraba was pending before the Banking Court. It may be mentioned that execution application filed by petitioner Trust Modaraba for execution of decree dated 10.12.1998 prior to 5.12.1999 was pending before Punjab Modaraba Tribunal which is u/S. 24 of the Modaraba Companies and Modarabas (Flotation and Control) Ordinance, 1980. However, it is correct that Judge of Banking Court No. II, Lahore is also holding the charge of Chairman, Punjab Modaraba Tribunal.
For this purpose following case-laws are relevant:--
(1) 2002 CLC 1
(2) PLD 1959 Dacca 939
(3) 1991 MLD (Kar.) 2301 Petitioner Trust Modaraba does not fulfil the condition as required u/S. 73, CPC for rateable distribution of sale proceeds. Accordingly r see no force in the application and the same is hereby dismissed."
6. Before proceeding with the matter further, we find it expedient to mention here that, Mr. Najam- ul-Hassan Kazmi, learned counsel for respondent No. 1 has pointed out that, besides the decree dated 15.1.1999, passed in favour of respondent No. 1, these are further four decrees in its favour, which have been passed by the Banking Courts and the guarantors/judgment-debtors in both these matters, are also the guarantors/judgment-debtors of those cases and, therefore, for the satisfaction of the such decrees as well, on the principle of rateable distribution, the respondent No. 1 is entitled to realize the money from the sale proceeds of 19-Main Gulberg, Lahore.
7. Sh. Naseer Ahmad, learned 'counsel for the appellant, by relying upon the provisions of Sections 63 and 73 of the Civil Procedure Code has argued, that the issue about the "rateable distribution", as required by the law, shall be decided by the Court, which receives or realizes the property "rateably distributable"; as in the present case, the Modaraba Tribunal as also the Banking Court No. II, are presided over by the same Judge, therefore, notwithstanding that the amount was received by the Banking Court in the execution process of the decree of respondent No. 1, but admittedly during the pendency of the execution application of the appellant with the same forum, resultantly, it makes no difference, if the specific application under Section 73, CPC was moved after the amount has been realized. Rather the execution application itself should have been treated to be the application for rateable distribution under Section 73, CPC, specifically for the reason, that the property 19-Main Gulberg, Lahore, was attached in favour of the appellant as also the respondent No. 1 the same day. Therefore, the refusal of the learned Court below to grant the requisite relief to the appellant for the reasoning mentioned in the impugned order (reproduced under paragraph No. 6), is absolutely erroneous and illegal. In support of his contentions, the learned counsel has relied upon Simla Banking and Industrial Co. Ltd., Lahore v. Indo Swiss Trading Co. Ltd., Calcutta and another (1938 Lah. 754) and Jagdish Chand v. Bhim Sain and others (AIR 1980 Delhi 283).
8. Syed Najam-ul-Hassan Kazmi, learned counsel for respondent No. 1 has submitted, that for the purposes of granting the relief under Section 73, CPC, six essential conditions must be fulfilled, and these are: (i) Where assets are held by a Court, (ii) more than one person, obtained the money decree, (iii) decree should be against the same judgment-debtors, (iv) all the decree- holders/claimants for rateable distribution applied to the Court for the 'execution, (v) application for distribution must be filed before the receipt of the assets, (vi) execution application should be before the Court holding assets/proceeds. It is submitted by Mr. Kazmi, that according to the view of the Honourable Supreme Court of Pakistan expressed in Pakistan Industrial Credit and Investment Corporation Limited, Peshawar Cantt. And others v. Government of Pakistan through Collector Customs, Customs House, Jamrud Road, Peshawar and others (2002 SCMR 496) and the dictums reported as PICIC v. Allied Textile Mills Ltd. (1991 MLD 2301), Dwarldas v. Ghasiram (AIR 1921 Nagpur 5), S.M. Thakkar v. M/s. A.K. Hazra 8e Sons and others (AIR 1979 Patna 38), SM. Rajlakshmi Dassi v. Bonomali Sen and others (AIR 1955 Calcutta 573), Vishunbhotla Ramayya v. Sajja Namayya and others (AIR 1943 Madras 165), the rateable distribution cannot be granted, if any one of the above conditions is not fulfilled. As the application of the appellant u/S. 73, CPC was belatedly filed, after the receipt of the assets by the Banking Court, therefore, it does not satisfy the requirement of the condition No. (v) ibid. He by relying upon S. Rajilakshmi Dassa v. Bonotnali Son and others (AIR 1955 Calcutta 573), Balaji v. Gopal (AIR 1929 Nagpur 148) and Moidin Rowthan v.
Dakshyani Amma and another (AIR 1941 Madras 125), has also argued that the filing of the execution application in the Court holding the assets is a pre-condition for invoking Section 73, CPC; which is lacking in this case.
9. We have heard the learned counsel for the parties. According to the plain language of Section 63, CPC, which purely is a procedural provision, it provides one and the only forum, which shall be competent and exclusively empowered to determine all the questions/claims and the objections about the property of a common judgment-debtor, which in the execution of more than one decrees, has been attached by the different Courts. Such forum, it is envisaged shall exclusively have the jurisdiction to determine the claims, objections etc., filed by whosoever, arising out of or connected with the attached property; the ,sale of the property; the realization or the receipt of the property by the Court. Thus, spirit and the purpose embodied in this section, is obvious and is objected to preclude and avoid the conflicting decisions over the divergent claims and the objections filed by various persons, qua the same property, which is under attachment of the different Courts.
The rationale and logic behind the above provision is, to obviate any 'predicament and an anomalous situation, which may arise, if different Courts start taking cognizance of the claims or the objections, and their decisions, in equity, may result into grave prejudice and injustice to the others having rights or interest in the same attached property. The section, therefore, enunciates the preference of 'one Court overall other Courts. The first in the category is the Court of highest grade, and if there is none, and all the Courts are of equal jurisdiction, the Court which has first attached the same property of the common judgment-debtor.
10. It may be relevant to mention here that, Section 63, CPC has an independent application and when so applied, notwithstanding its reference to Section 73, CPC, it inter aria, covers the matters falling within the purview of Section 47, CPC or Order 21, Rule 100, CPC etc. But additionally this provision is supplemental to Section 73, CPC, and when the question about the "rateable distribution" of the attached property/assets in terms of the said section arises, the forum for the adjudication thereof shall undoubtedly be the one, which is envisaged by Section 63, CPC.
11. Now the proposition may arise, if any specific application under Section 73, CPC, shall be moved before "the forum" for obtaining the rateable distribution, suffice it to say that, the 'question has been examined and answered in the judgment 'reported as Silma Banking and Industrial Co. Ltd., Lahore v.'lndo Swiss Trading Co. Ltd., Calcutta and another (AIR 1938 Lah. 754), which holds as under:- "Section 73 is to be read together with S. 63. Where the property of judgment-debtor has been attached by two Courts of ,the same grade but the property has been sold by one of them, the proceeds so received shall be deemed to have been received by it on behalf of all the Courts in which there have been attachments in execution of the decrees, prior to the actual receipt of the assets, and the decree-holders in all such Courts are entitled to rateable distribution under S. 73. In such cases no application for execution is necessary to be made to the Court which held the assets, before the receipt of the assets."
12. In our view, the above is the most apt and correct resolution of the issue, and there can be no cudgel with the proposition that, if the property has been attached by two or more Courts, having the same grade and is sold by one of them, while the execution application was pending before the other. The assets sold and the price received, for all intents and purposes, shall be held for the purposes of the other Court, in which, the property was attached at the time of the receipt of the assets. This question has also been considered in Jagdish Chand v. Bhim Sain and others (AIR 1980 Delhi 283), and the following answer was provided:- "The law can now be stated as follows. If there are more than one execution directed against the same judgment-debtor and attachment has been effected qua the same assets in question by more than one Court, and the funds are received by one of those Courts, in accordance with Section 63 of the Code, the decree-holders can only get realization from that Court and are entitled to get rateable distribution, notwithstanding the fact that the execution applications are not in the same Court at the time, when the assets are received by the Court in which, they are actually received. In all other cases, if executions are pending in different Courts; other decree- holders are not entitled to get rateable distribution unless they got their execution applications transferred to the Court which physically receives the assets, before the same are received "
13. We have not, been convinced to form a view different than the afore-mentioned two dictums, particularly the Lahore judgment\and also find no force in the arguments of the respondent's' side, that as the application of the appellant under Section 73, CPC was moved after the property i.e. 19- Main Gulberg, Lahore, was sold and the auction price was received by the Court, therefore, such application should not be considered in consonance of Section 73, CPC and thus, it was liable to be dismissed, and has rightly been so done by the learned Court below. Rather as elaborated in the preceding para, we find and hold, that the execution application of the appellant with the Modaraba Tribunal, for all intents and purposes, be deemed to be an application under Section 73, CPC. And as the property has been sold by the Banking Court No. II, it shall be the Court, holding the assets, which are sold and the money has been received, for all other Courts, where the same property has been attached and/or any execution application is pending against the same judgment-debtor for the satisfaction of the decrees against them.
14. Amplifying the above, it may be stated that the proposition would have been very simple, if the attachment orders passed by the Modaraba Tribunal and the Banking Court, were of different dates, because to our mind, both of the forums are of equal jurisdiction, exercising their civil authority, but 'under the special statutes. However, predicament seems that the attachment orders have been passed oy both the forums, the same day, therefore, either of the two Courts was competent for the sale of the assets. And now when the property has been sold by the Banking Court No. II, whatever money, as the auction price has been received, shall be deemed to have been received for and on behalf of the Modaraba Tribunal for the benefit of the appellant as well.
Resultantly, notwithstanding any specific application under Section 73, CPC, when before the disbursement of the amount to the respondent, the Banking Court was informed, that there is another decree, which is in favour of the appellant, and its execution is pending before the same Court though in a different jurisdiction, the Banking Court should have proceeded to consider that execution application to be one for rateable distribution under Section ibid. For granting requisite relief to the appellant.
15. It may be relevant to mention here that, neither the Court below has held nor Mr. Najam-ul- Hassan Kazmi, Advocate has been able to show us that, except one condition, i.e. That the application by the appellant specifically under Section 73, 'CPC has been moved after the auction price was received in the Banking Court, the appellant fails to fulfil any other condition of the section.
In the light of above, we are constrained to hold, that the appellant was entitled to the rateable distribution of the sale proceeds alongwith respondent No. 1 for the decree mentioned above.
16. At this juncture, Mr. Najam-ul-Hassan Kazmi, learned counsel for respondent No. 1 has submitted, that there are four other decrees passed by the Banking Court No. II in favour of respondent No. 1 and in all these cases, the property bearing No. 19-Main Gulberg, Lahore was attached under Order 38, Rule 5, CPC and even before the sale proceeds were received by the Banking Court on account of the auction of the property. It is thus, submitted that all these decrees should also be considered by the Banking Court No. II, the Execution Court, at the time of the "rateable distribution", alongwith the request of the appellant. This obviously is a valid and genuine request, therefore, the Court is directed to act accordingly.
17. Mr. Kazmi has further requested, that there are two other decrees which are passed by this Court, inter alia, against the Saigal Brothers and the execution petitions are pending before this Court. However, he has conceded that in these cases, there is no attachment order either before the judgment or after the execution have been filed. It is but submitted, that these decrees should also be taken into account by the Banking Court No. II at the time of "rateable distribution". We have considered this request. The legal position seems to be, that the said decrees cannot be transferred to the Banking Court No. II, because the Banking Court or the Modaraba Tribunal undoubtedly are lower in grade than the High Court, even while exercising its jurisdiction as Banking Court under the special law. For the other eventuality, if the executions pending before the Modaraba Tribunal or the Banking Court, should be transferred to the High court, suffice it to say that, this is not possible for the reason that, in the proceedings before the High Court, 19-Main Gulberg, Lahore has not been attached, therefore, Section 63, CPC shall not be applicable.
18. Anyhow, we have analyzed the above request, and as has been apprised by Mr. Kazmi, which has not been contradicted by the appellant's counsel, that the respondent No. 1 has obtained these two decrees before the sale of the property in question, and had also filed the execution applications before the sale proceeds were received by the Banking Court No. II, Lahore, and filed the execution application before the appropriate forum, prior to the receipt of the sale proceeds.
Thus, we find that the respondent No. 1 in these decrees as well, has earned a right for rateable distribution, in terms of Section 73, CPC, on the basis of the equitable principle embodied and embedded in the said section. Therefore, the said respondent in such situation, pending its execution applications before this Court, can move separate application under Section 73, CPC to the Banking Court No. II, which shall be considered for "rateable distribution" in the light of the law, laid down above.
In view of whatever has been discussed above, by allowing this appeal, the impugned order is set aside, with the direction to the Banking Court No. II, Lahore, to decide the question about the rateable distribution of the sale proceeds of the property bearing No. 19-Main Gulberg, Lahore, in accordance with the law, laid down in this judgment. No order as to costs.
Execution First /Case Remanded.