' MUHAMMAD JEHANGIR ARSHAD, J.---This appeal calls in question the order dated 15-12-2003 passed by learned Judge Banking Court, Lahore, whereby Objection petition filed by Sh. Nasrullah Mushtaq respondent No,2 challenging the sale of Property bearing No,13-C/1 situated at M.M. Alam Road, Gulberg-III, Lahore through auction held on 7-7-2001 in favour of Qurat-ul-Aen respondent No,3 for a sum of Rs,40,00,000, was allowed and by setting aside the sale, the said property was ordered to be released under Order XXI, rule 60, C.P.C.
2. The relevant facts forming background of instant F.A.O. Are that Bank of Punjab appellant-Bank filed a suit for the recovery of Rs,41,17,477 against respondent No,1 on 21-10-1997 before the Banking Court at Lahore. The respondent No,1 filed a petition for leave to defend the suit, which was however, dismissed in default on 9-6-1998 and a decree for the recovery of said amount with costs, was passed on the said date against the respondent No,1 with the direction that appellant- Bank would be entitled to the benefit of section 15 of Act XV of 1997. It was further directed that, if the decretal amount was not paid within the stipulated period. The same would be recovered by the sale of pledged shares and if still any amount remains unpaid the same would be recovered from the other properties and assets of the defendant/ respondent No,1 as well as from his person as permissible in law. Since the respondent No,1 failed to honour the decree, the appellant-Bank therefore, filed execution proceedings and in consequence thereof, the above-mentioned property was ordered to be sold through open auction by the learned Banking Court on 26-4-2001. Finally, the said property was put to auction on 7-7-2001, which was completed in favour of respondent No,3 in the sum of Rs,40,00,000, as mentioned above.
3. Raja Aamir Khan respondent No,1 filed an Objection petition before the Banking Court being under Order XXI, rules 58 and 62, C.P.C. Raising objections against the said auction/sale on various grounds including, having purchased the suit property by sale-deed though executed on 23-12- 1998 yet registered on 29-8-2000 hence, being a bona fide purchaser, the sale of said property was liable to be cancelled having taken place in his absence, without any notice and against his proprietary rights. The objection petition was contested by the appellant-Bank as well as the auction-purchaser respondent No,3. However, the learned Judge Banking Court-V1, Lahore vide order dated 15-12-2003 accepted the said objection petition of respondent No,1 and by setting aside the sale in favour of respondent No,3, directed release of property under Order XXI, rule 60, C.P.C., with a further direction to return the auction money to respondent No,3 along with 5% within one month from the passing of said order dated 15-12-2003. It is the said order of the learned Judge Banking Cour Lahore which has now been assailed through this F.A.O. By the appellant-Bank.
4. It has been argued by the learned counsel for the appellant that the learned Judge Banking Court acted illegally and with material irregularity by passing the impugned order and setting aside the auction of the property by declaring respondent No,2 as a bona fide purchaser of the said property having purchased that property through registered sale-deed, though executed on 23-12-1998 yet registered on 29-8-2000, without considering the fact that said transfer in favour of respondent No,2 was effected after passing of the decree on 9-6-1998, collusively and that the learned Banking Court was wrong in holding that the sale-deed was executed on 23-12-1998 whereas in fact it was a mere agreement to sell on the basis of which the sale-deed was executed on 29-8-2000 and that it is an established principle of law that any interest acquired by any person during the pendency of lis, with or without notice about such pendency, does not create any right/title in favour of transferee in terms of section 52 of the Transfer of Property Act and finally that all such points required determination after framing of issues and recording of evidence and not to be decided in a summary manner, as has been done by the learned Judge Banking Court through the impugned order.
5. Mr. Salman Haider Jaferri, Advocate appearing on behalf of the auction-purchaser respondent No,3, besides adopting the arguments of learned counsel for the appellant, further added that the findings of learned Judge Banking Court holding respondent No,2 as a bona fide purchaser are patently wrong, inasmuch as, the learned Judge Banking Court misconstrued the alleged agreement to sell between respondents Nos.1 and 2 dated 23-12-1998 as sale-deed, by making the same effective from 23-12-1998 although registered on 29-8-2000 per force of section 47 of the Registration Act but ignored the fact that the deed dated 23-12-1998 was admittedly an agreement to sell which neither required registration nor create any right/title between the parties, unless incorporated in a properly executed sale-deed and since the sale-deed was executed and registered on 29-8-2000, hence on the basis of same, the sale through auction in favour of respondent No,3 could not be set aside.
6. Mr. Noman Qureshi, Advocate representing respondents Nos.1 and 2, in reply to the above arguments, contended that the property in question was never attached, hence the same could neither be sold through auction nor the auction in dispute could be declared a valid auction in the eyes of law and that in the absence of any legal order of attachment, sale in favour of respondent No,2 was validly made by respondent No,
1. His further contention is that respondent No,2 purchased the property from respondent No,1 without the knowledge of the decree dated 9-6-1998, hence the respondent No,2 has rightly been declared as a bona fide purchaser of the same by the learned Judge Banking Court through the impugned order.
7. We have considered the arguments of learned counsel for the parties and have also gone through the available record with their assistance.
8. The impugned order of the learned Judge Banking Court suffers from a patent misassumption of fact about the nature of deed executed on 23-12-1998, which was registered on 29-8-2000, After declaring the said document dated 23-12-1998 as an agreement, we do not feel any material on record as to how the learned Banking Court in the same breath held the same as sale-deed being effective from 23-12-1998 although registered on 29-8-2000. The original document either dated 23-12-1998 or 29-8-2000 has not been placed on record. However, it is an admitted fact that only an agreement was executed on 23-12-1998 which was neither compulsorily registrable nor was registered at all. The provisions of section 47 of the Registration Act, relied upon by the learned Judge Banking are meant for compulsorily registrable documents, hence the sale-deed registered on 29-8-2000 cannot , prima facie, be considered as operative from 23-12-1998.
9. Similarly, we have not been able to understand as to how the learned Judge Banking Court has declared respondent No,2 as a bona fide purchaser on mere assertions. The principle of bona fide purchaser is based on the provision contained in section 41 of the Transfer of Property Act, 1882 and for claiming protection under the said provision, one has to prove the following ingredients as held by the Honourable Supreme Court of Pakistan in "Kanwal Nain and 3 others v. Fateh Khan and others" PLD 1983 Supreme Court 53 and nor on oral assertions:--
(i) transferor is the ostensible owner;
(ii) he is so by the consent, express or implied, of real owner;
(iii) the transfer is for consideration; and
(iv) the transferee had acted in good faith taking reasonable care to ascertain that the transferor had power to transfer.
For the determination of above factors, recording of evidence was essential. The learned Judge Banking Court while passing the impugned order also failed to take into consideration the provisions of section 52 of the Transfer of Property Act barring any transfer of property during the pendency of lis. In this case, admittedly, the decree was passed by the Banking Court in favour of appellant-Bank on 9-6-1998, against which decree no appeal was filed by respondent No,1 and the execution proceedings were started by the Bank on 19-10-1998. Along with execution proceedings, Fard Taliqa was also annexed which showed 1/3rd shares of respondent No,1 in the house i,e, 13-C/1, M.M Alam Road, Gulberg-III, Lahore and during the pendency of said execution proceedings, the document dated 23-12-1998 was executed, which has been declared effective by the learned Judge Banking Court, without noticing its legal effect in terms of section 52 of the Transfer of Property Act relating to transfer of property during pendency of lis.
10. Finally, the locus standi of respondent No,2 as an objector has also not been determined by the learned Judge Banking Court in its true legal perspective. We are therefore, satisfied that the judgment recorded by the learned Judge Banking Court while accepting the objection petition of respondent No,2 and setting aside the sale through auction in favour of respondent No,3, is not sustainable and the same is accordingly set aside on acceptance of this F.A.O. The matter is remanded to the learned Judge Banking Court with the direction to decide the same afresh, after framing of issues arising out of objection petition reply filed by the appellant-Bank as well as respondent No,3 and also recording of evidence. No order as to costs.