SYED JAMSHED ALI, J.--- This appeal is by the auction purchaser. His grievance is against non- confirmation of sale in his favour. The facts of the case are noted hereunder.
2. On 2.8.1994, learned Banking Tribunal passed an ex parte decree in the sum of Rs. 1,83,886/- with costs amounting to Rs. 15,569/-, totaling/to Rs. 1,99,453/-, against Noor Muhammad, the predecesor-in-interest of respondents No. 1 to 9. His application for setting aside the said decree was dismissed vide order dated 8.3.1995. He then approached this Court in W.P. No. 9725-95 and vide order dated 30.7.1995 execution of the decree was stayed.
Meanwhile on 22.7.1995, the property of the judgment-debtor i.e. Agricultural land measuring 70 Kanals and 9 Marla (in two revenue estates) was put to auction. The appellant was the highest bidder in the sum of Rs. 2,20,000/. In the said writ petition and 606 connected petitions various provisions of Banking Tribunals Ordinance (LVIII of 1984) were assailed. These writ petitions were decided by a Full Bench of this Court on 21.7.1996. This.Judgment is reported as Messrs Chenab Cement Product (Pvt.) Ltd. And others vs. Banking Tribunal, Lahore and others (PLD 1996 Lah. 672).
Section 4, section 6(6) as amended by Finance Act, (No. VII 1990), first proviso to section 9 of Ordinance No. LVIII 1984 and the notifications appointing Presiding Officers of the Banking Tribunals issued, under the said Ordinance were declared as unconstitutional, without lawful authority and accordingly, quashed. It was, however, observed that the said judgment shall not affect cases past and closed or invalidate the judgments/decrees, orders, fines or sentences or proceedings which have become final. Accordingly, it was directed that the cases pending before the Banking Tribunals shall stand transferred to the respective Banking Courts or this Court, depending on the amount involved in those cases.
2 After the aforesaid decision of the Full Bench, the appellant made an application to the Banking Court on 24.4.1997 for restoration of the execution petition, confirmation of sale in his favour and issuance of a sale certificate. On 12.6.1998, the widow of the judgment-debtor made an application under Rule 89 of Order XXI of the Code of Civil Procedure for setting aside the sale.
3. The case of the interveners (C.M.No. 1114/2003) is that they had also made an application before the learned Banking Court on 31.7.1995, for setting aside the sale. They assert that no auction was at all held and the sale was surreptitiously confirmed in favour of the appellant, who had not even participated in the auction.
4. The two applications, one moved by the widow of the judgment-debtor and the other moved by the appellant, were disposed of by a single order dated 6.4.2000. The learned executing Court declined to confirm the sale on the ground that the sale consideration was inadequate and, therefore, mandatory provisions of "Rules 66, 106 and 110" were violated. The objection of the auction-purchaser that the application under Rule 89 of Order XXI of the Code of Civil Procedure was beyond the prescribed period of limitation was brushed aside on the same ground.
Accordingly, while the application under Order XXI Rule, 89 of the Code of Civil Procedure was allowed, the application moved by the appellant was dismissed. The said order has been assailed in this appeal. The objections of the interveners were, however, left undecided.
5. The learned counsel for the appellant contends that against the sale made on 22.7.1995, an application under Rule 89 of Order XXI CPC was filed on 12.6.1998. Limitation for the said application was governed by Article 166 of the Limitation Act which is 30 days. It was thus, beyond the prescribed period of limitation. He also invited our attention to the date of the decision of the W.P.
No. 9725-95 which is 21.7.1996 and asserted that even from the said date, the said application was made beyond 30 days. He maintains that deposit of 5% of the auction price as compensation to auction purchaser and the amount given in the proclamation is mandatory to maintain an application under Rule 89 of Order XXI of the Code of Civil Procedure and in the absence of compliance of the aforesaid provision, the said application could not have even been entertained and ultimately granted as was done by the impugned order. He further submits that in the said application it was not even alleged that the sale consideration, for which the property was sold, was inadequate. He further submits that mere inadequacy of sale consideration is not a ground to set aside the sale unless the element of fraud or any irregularity in publishing' or conducting the sale was established. In support C.L.R. of his submissions reliance is being placed on Lutfer Rehman vs. Mst. Tahera Khatun and others (PLD 1961 Dacca 303), Hudaybia Textile Mills Ltd. And others vs. Allied Bank of Pakistan Ltd. And others (PLD 1987 SC 512) and National Bank of Pakistan vs. Economic Office Machines & Equipment and 8 others (1990 M LD 258).
6. The learned counsel for the appellant has further contended that remedies under Rules 89 and 90 of Order XXI of the Code of Civil Procedure are distinct remedies. While remedy under Rule 89 is available as of right, the remedy under Rule 90 is dependent on establishment of certain facts vitiating the sale. The learned executing Court, while setting aside the sale imported the grounds mentioned in Rule 90 which could not have been done. Reliance was placed on Sub-Rule (2) of Rule 89 to contend that a. Condition precedent to move an application under Rule 90 is withdrawal of petition filed under Rule 89. He next contended that the learned Trial Court allowed a period of two months to clear the liability of the Bank and to deposit 5% of the bid money but even that direction of the Court was not complied with.
7. The learned counsel for respondents No. 1 to 9 maintains that the application of the appellant was contested by Noor Muhammad by a written reply filed on 17.6.1997. He had raised a number of objections to the conduct of sale including fraud and inadequacy of sale consideration, but his objections were not decided. He could not pursue the matter and died. He maintains that the bid sheet does not even contain the signatures of the auction purchaser, although the signatures of five other persons and representative of the decree holder were obtained by the Court auctioneer on the bid sheet.
8. It is next contended that the sale was in violation of Rule 68 of Order XXI of Code of Civil Procedure. The proclamation for sale on 22.7.1995 did not indicate the date of issue, nor it was identified by the Court auctioneer in his report. He also invited our attention to the said proclamation purportedly (issued for 22.7.1995) and pointed out that the date in the aforesaid proclamation was written in ink in handwriting although it was otherwise a printed matter and in the bid proceedings, the amount of Rs. 74,000/- and Rs. 146,000/- were inserted later on.
9. As far as the deposit of the bid money is concerned, he has placed reliance on Mir Wali Khan and another vs. Manager Agricultural Development Bank of Pakistan, Muzaffargarh and another (PLD 2003 S.C. 500), to contend that the total principal amount of Rs. 1,43,000/- had already been deposited. As to the non-compliance of the direction of the executing Court, he maintains that 5% of the sale price i.e. Rs. 11,000/- was deposited on 13.4.2000 within the time allowed by the Court.
Photocopy of the challan was also produced.
10. He contended that the so-called auction proceedings were fake and fraudulent and thus, nullity.
He maintained that the objection of the intervenors were not in any case decided. He lastly contended that the order for sale was passed by the Banking Tribunal which was a nullity. The said order could not be said to be a past and closed transaction because further action under the said order was required to be taken.
11. We have considered the submissions made by the learned counsel for the parties and have carefully perused the record. The execution petition in this case was filed by the decree-holder on 19.10.1994, warrant of attachment for sale of the agricultural land of the judgment-debtor measuring 9 kanals 1 marla in Mauza Budhpur and 61 kanals and 8 marlas in Chak Rehan, alongwith a Tractor, was directed to be issued vide order dated 24.10.1994 and the order for sale was passed on 23.4.1995. The first auction was scheduled for 10.6.1995 on which date the judgment- debtor requested for time to liquidate his liability but on account of his failure to do so a fresh order for sale was passed on 28.6.1995. Perusal of the record shows that on 15.7.1995 notices were addressed to the judgment-debtor and the decree-holder for sale on 22.7.1995 on which date the auction was statedly held. The appellant was the highest bidder for an amount of Rs. 2,20,000/-.
The appellant deposited 1/3rd (Rs. 74,000/-) with the Court auctioneer and was directed to deposit the amount of Rs. 1,46,000/- till 7.8.1995 in the Banking Tribunal. The report was accordingly, submitted by the auction purchaser on 1.8.1995.
12. The proclamation for sale on 22.7.1995 does not indicate the date of its issue. However, the notices on the record to the judgment-debtor and decree-holder were issued on 15.7.1995.
Therefore, the provision of Rule 68 of Order XXI was prima facie violated which amounts to an illegality. Rule 68 aforesaid prohibits a sale, except with the consent in writing of the judgment- debtor, before a period of 15 days (High Court Lahore Amendment) from the date on which the proclamation was affixed on the Court House of which there is no evidence. The term in which the aforesaid Rule is worded 'makes it mandatory and non-compliance thereof entails serious consequences.
13. Perusal of the bid sheet shows that attendance of 16 persons were marked out of which Muhammad Yaqoob, Muhammad Afzal, Liaqat Ali, Farooq Khan and Khalid Mehmood, statedly participated. Signatures of Muhammad Yaqoob and Muhammad Afzal, the two bidders, appear on the bid sheet alongwith the Manager of A.D.B.P., Gujranwala, Said Muhammad, Chowkidar, Muhammad Sharif and one Abdul Rehman. However, the signatures/thumb-impression of Liaqat Ali are conspicuously missing from the bid sheet which makes the presence of the appellant at the time of auction doubtful particularly when at least the signatures of two bidders, as noted above, were taken on the bid sheet. The learned counsel for the appellant explained that signatures of the appellant were not required on the bid sheet. To our mind this explanation, in the circumstances of the case, is not sufficient and was required to be inquired into. In our view, it is necessary to obtain the signatures of the highest bidder on the bid sheet because in case of resale on account of purchaser's default, he is not only liable to pay all expenses attending resale but also the deficiency in the sale price on resale as provided in Rule 71 of Order XXI. The learned counsel, however, referred the Rule 64 of Order XXI which provides that on failure of the person declared to be the purchaser the property shall be resold and the deposit of 25% shall stand forfeited. The two provisions have to be read together. While Rule 84 contemplates sale, Rule 71 provides for resale and if the purchaser defaults and the property is resold, deficiency in price could not be recovered from him unless it could be shown that he was the. Purchaser. In the absence of signatures the purchaser could come forward with the plea that it was somebody else who had made the bid.
However, for the order proposed to be made we do not consider it necessary to further dilate on this issue.
14. Perusal of the bid shed further shows that the figures "URDU" and Rs. 146,000/- prima facie appear to be a latter insertion as the aforesaid two figures are in bolder ink than the entire body of the auction proceedings. The word "URDU" after "74" also appears to be in a different hand writing because every where else in the bid sheet the Court auctioneer has written this word as "URDU" while after the figure "74, it was written as "URDU". This fact also raises doubts about the genuineness and validity of the auction proceedings. There was an allegation by the intervenors in their objection petition moved under Order XXI, Rule 90, that, in fact, no auction was held at the spot. The inadequacy of the sale consideration, may not, by itself, be a sole reason to set aside a sale but viewed in the facts and circumstances of the case we have noted, warrants a proper inquiry.
15. Another material feature of the case to be noted is that in W.P. No. 9725-95, filed by the judgment-debtor execution proceedings were stayed by order dated 30.7.1995 of this Court while amount of Rs. 1,46,000/- was deposited by the appellant on 6.8.1995. No sale can be said to have taken place unless the remaining amount was deposited by the auction purchaser. The deposit of the balance sale price to complete the sale in favour of the appellant was one of the steps in the execution proceedings and the question which was required to be determined was the effect of the aforesaid order dated 30.7.1995, of this Court.
16. The question which attracted our attention was the proceedings in which all the aforesaid facts could be inquired into be the learned executing Court. Although the learned executing Court declined to confirm the sale yet the impugned order does not proceed on correct legal premises because the learned executing Court pressed on inadequacy of the sale consideration on the basis of provisions of Rule 66, 106 and 110 of Order XXI. This ground was not germane to an application under Rule 89 because under the said Rule if 5% of the purchase money and the amount mentioned in the proclamation is deposited, the Court cannot confirm the sale. Such an application by the judgment-debtor lies as of right.
17. There is a merit in the contention of the learned counsel for the appellant that the two applications under Rules 89 and 90 cannot proceed simultaneously because sub-Rule (2) of Rule 89 provides that when a person applies under Rule 90, he will have to withdraw his application under Rule 89. Therefore, the impugned order could not be passed on the application under Rule 89 on the ground on which it is based.
18. It may also be observed that a pre requisite to maintain an application under Rule 89 are the two deposits referred to therein and Mst. Noor Fatima, while, making the application under Rule 89, did not comply with the aforesaid Rule. Further, such an application was maintainable within 30 days, in accordance with Article 166 of the Limitation Act, from the date of sale and even if time is computed from 21:7.1996, (the date of decision of the full Bench of this Court referred to above), the application was beyond the prescribed period of limitation.
19. We have also noted that while holding that Rule 66, 106 and 110 of Order XXI were violated, in this case, the learned executing Court was influenced by the judgment of Allahabad, High Court in Ram Parasad vs. Shiva Kumar (AIR 1932 Allahabad 55), Rules 106 & 110 were inserted in Order XXI by way of Allahabad High Court amendment. As far as this Court is concerned, Rules 106 and 110 do not exist in Order XXI. The impugned order is not, therefore, sustainable. However, the matter does not end here.
20. Rule 90 of Order XXI does not prescribe any particular form of.Filing objections to the sale. In the written reply submitted on 17.6.1997 by the judgment-debtor, a specific plea was raised that the auction was not conducted in accordance with law. It was tainted with male fide and was predetermined. The objection of the learned counsel for the appellant was that this reply could not be treated as an application under Rule 90 for two reasons. Firstly, that it was beyond 30 days prescribed by Article 166 of the Limitation Act and secondly the condition of deposit of 20% of the sale price or to furnish the security was not complied with.
21. The question as to whether all applications by a judgment-debtor for setting aside a Court sale are governed by Article 166 of the Limitation Act has been subject-matter of a number of judgments of the superior Courts. The first objection will be examined after attending to the second objection of the learned counsel for the app?Ilant.
22. The decretal amount including costs in this case was Rs. 1,99,455/-, 20% of the said amount comets to Rs. 39,891/-. Perusal of the order dated 30.7.1995 in W.P. No. 9725/95 shows that according to the statement of accounts an amount of Rs. 69,761/- had already been repaid while an amount of Rs. 73,239/-, was directed to be deposited within 2 months to make it Rs. 1,43,000/- i.e. The principal amount of loan. The said amount of Rs. 73,239/-,according to the learned counsel for respondents No. 1 to 9, was deposited. Thus, a total amount of Rs. 1,43,000/- had already been deposited leaving a balance of Rs. 56,455/- out of the decretal amount and the costs. Thus, the deposit with the decree-holder Bank already exceeded 20% of the decretal amount. In such a situation, the Rule laid down by the Honourable Supreme Court of Pakistan in Mir Wali Khan (supra) was fully attracted.
23. As far as the first objection is concerned, we may' at the outset, observe that the question of confirmation of sale only arises in case of a valid sale. Although, the provisions of Rule 92 as worded, provided no option to the Court but to confirm a sale in case no objections are filed under Rules 89, 90 and 91 and if filed, have been dismissed. Rule 92, to our mind, does not exclude the duty of the Court to satisfy itself that the sale conducted by the Court auctioneer was bona fide and in accordance with law. Reference may be made to a D.B. Judgment o this Court in Brig. (Rtd.)
Mazhar-ul-Haq and another vs. M.C.B.. Ltd. Islamabad (PLD '1993 Lahore 706). In the said case an ex-parte decree was passed against the defendants in a Banking suit and in execution of the said decree, the mortgaged property was sold on 21.12.1984. On 17.9.1986, the judgment-debtors filed an application under Order XXXVII, Rule 4 of the C.P.C. Read with Order IX Rule 13. Another application was moved under Order XXI, Rule 90 for setting aside the sale. The applications were dismissed.
Two separate appeals were filed before this Court which were allowed. In the said case the Court sale was effected after C.L.R. publication of the notice in the newspaper. This Court noted a number of illegalities and irregularities in the passing of the ex-parte decree and the sale including non-issue of the proclamation and violation of the provisions of Rules 66,67 and 68 of Order XXI. Inadequacy of sale consideration was also taken notice of. The case of Hudayia Textile Mills (supra) was also noted and it was observed that it dealt with an application under Rule 89 of Order XXI. In paragraph 30 of the judgment, this Court observed:--- "While confirming the sale the Court is expected to apply its judicial mind to the nature and location of the property and the bid offered for it on its sale through auction. The difference in the price fetched through auction and the one by private sale is not unknown. But when the auction price is too low, the Court mechanically accords approval to the sale, without considering that the offer is too low and the property could clearly fetch a far more higher price, both the elements of material irregularity and injury to the judgment-debtor would be present in the case." ............ In para 33, it was observed as follows: "We are mindful of the laudable rule of giving protection to an innocent 3rd party succeeding at the Court sale, but this rule cannot be stretched too far that the possibility to do justice to a judgment- debtor deprived of his valuable property and condemned unheard, is practically shut out." it was further observed that in case of fraud and collusion, Section 18 of the Limitation Act was attracted, and application under Order XXI, Rule 90 could not be thrown away as barred by time.
Further, that "if confirmation of sale is got through fraud, an objection can be raised even after confirmation and the confirmation of sale cannot be used as shield for the fraud by which it has been induced to make the sale."
24. We have also taken notice of the provisions of Section 47 of the Code of Civil Procedure. An application under Order XXI, Rule 90 raises a question as to the execution, discharge and satisfaction f a decree and even a separate suit is barred. Therefore, if the executing Court feels a difficulty to deal with an application under Rule 90, such an application could be treated as falling under Section 47 of the Code of Civil Procedure for which no specific limitation is provided for. This course, to our mind, may be necessary in a case to remove patent injustice. Here, in this case not only the objections of the judgment-debtor to the sale were on the record, the interveners also asserted that they intended to participate in the auction but no auction was, in fact, held. With the facts borne out from the record and the undecided objections of the judgment-debtor and the intervenors, the duty of the Court to examine whether the sale had lawfully been made was clearly attracted to do justice in the case even if the application under Rule 89 of Order XXI of the Code of Civil Procedure filed by the widow of the judgment-debtor was not maintainable.
25. We have able to lay our hands on some judgments in which the question as to the scope of the powers of the Court applicability of Article 166 of the Limitation Act and Order XXI, Rule 90 of the Code of Civil Procedure came under consideration of the superior Courts. The first case we will like to refer is Ram Chandar and another vs. Sarupa (AIR 1939 Lahore 113). In the said case the question was whether the Court had the jurisdiction to sell a property exempt under Section 60 (I)(c). The judgment-debtor in the said case, had filed two applications. One under Order XXI, Rule 90 and the other under Section 60 of the Code of Civil Procedure. The executing Court dismissed the application under Order XXI Rule 90. After noting a number of judgments, this Court held: "that the Court has power to take notice of any objection under Section 47 of the Code of Civil Procedure relating to property until the sale of the property is confirmed as it is not till then the sale becomes absolute and title passes"
It was further observed: "This argument is based on the reading of 0. 21 R. 92 to the effect when the objections under Order 21 Rule 90 are dismissed, the sale shall be confirmed. But Section 47 is completely independent of the provisions of Order 21 relating to the procedure which is the govern the sale of property, and it seems to us that Order 21, Rule 92 presupposes that there is no objection outstanding under Section 47 of the code. When such an objection is made it is the duty of the Court first to decide it; especially when the objection is that the Court has no jurisdiction to sell the property .....
(underlining is ours)
26. Although in the said case exemption from sale of a house was claimed on the basis of Section 60 of the Code of Civil Procedure yet we are of the view that the principle enunciated emphasizes the duty of the Court td satisfy itself that the sale was validly made and was free from any illegality or taint of fraud or collusion.
27. In Bhan Kumar Chand and another vs. Lachmi Kanta Rai (AIR 1941 Patna 566), the question involved was whether the property sold in execution of a decree could be sold within the terms of the decree. The observation made in the case was that Article 166 applies to avoidable sales but where the sale is nullity, it even does not require to be formally set aside, it would be a question under Section 47 of Code of Civil Procedure and in that case Article 181 of the Limitation Act will apply. We are of the opinion that in case no sale is conducted or a mandatory provision of law is violated or the sale is collusive and fraudulent, it will be a nullity and such an objection can be inquired into under Section 47 of the Code of Civil Procedure in dependently of Rule 90 of Order XXI. We have noticed that one of the grounds in Rule 90 is fraud in publishing or conducting a sale. It, however, presupposes that a sale was in fact conducted and if it is proved to the contrary Rule 90 will not apply.
28. In the case of Kandaswa mi vs. Narasimha Aiyar (AIR 1952 Madras 582), the said Court went on to the extent of observing that an objection against a sale is between the judgment-debtor on the one hand, decree-holder and the auction purchaser on the other and can, therefore, falls under Section 47 of the Civil Procedure Code. It was observed:--- "It is the duty of the Court when it comes to know before the sale is confirmed that a fraud has been perpetrated in bringing about the sale to refuse to confirm the sale."
29. We have also noted that the decree-holder, while applying for execution also misled the Court inasmuch as that according to the statement of accounts an amount of Rs. 69,761/- had already been paid while proclamation was issued for the entire decretal amount i.e. Rs. 1,83,886/-. Another amount of Rs. 73,239/- is claimed to have been paid before the confirmation of sale. Thus a total amount of Rs. 143,000/- had already been paid leaving a balance of Rs. 56,455/- out of the total decretal amount. Because of the interim order of this Court no further proceedings in execution could be taken, the subsequent event i.e. Deposit an amount of Rs. 73,239/- was a material subsequent events, which to our mind was also relevant in the peculiar circumstances of the case whether confirmation of sale of the two properties of the judgment-debtor was warranted.
30. In Nand Lal vs. Mst Siddiquan (AIR 1957 Allahabad 558), the observation made by the said Court was that Rule 90 applies only when there is a valid sale and unless it was so there can be no confirmation of any invalid sale even if it is so made it will continue to remain invalid sale.
31. In Mst. Noor Jehan Begum vs. Haji Hussain Bakhsh, (PLD 1966 SC 375), a mortgage decree was involved but the property sold was not mortgaged. The objections to the sale were allowed by the learned executing Court but this Court interfered on the ground that the objections were filed beyond the period prescribed by Article 166 of the Limitation Act. The Honourable Supreme Court of Pakistan held that the said article does not include an application under Section 47 of the Civil Procedure Code and the following observations were made:--- "There is an alternative basis however for the interpretation of this Article, namely, that the words "setting aside" may refer only to a case where the sale is valid till it is set aside and they may have no application to a case where a party simply seeks a declaration that the sale is null and void and of no effect. Even if the words "set aside" be used in the application the real relief granted may be only a declaration. When a sale is without jurisdiction and therefore, a nullity, Article 166 can be excluded even on the ground that the application is not for setting aside a sale."
32. We will also like to observe that rules of procedure are intended to foster justice, technicalities, unless these offer insurmountable hurdles, cannot be permitted to operate as a tyrant master. And, to avoid failure of justice and multiplicity of litigation, one type of proceedings could be converted into another type of proceedings. In this case, in the peculiar facts and circumstances, we are of the view that the objections of the judgment-debtor made in reply to the application of the appellant seeking confirmation of the sale should have been inquired into by the learned executing Court.
33. For what has been stated above, our conclusions are as under:-
(a) The application by the widow of the judgment-debtor under Order XXI, Rule 89, of the Civil Procedure Code, was not maintainable without complying with the two conditions of the Rule 89 of Order XXI which are mandatory. This application was barred by time and is dismissed
(b) The impugned judgment which set aside the sale could not have been passed by the learned executing Court without holding an inquiry;
(c) The reply submitted by the judgment-debtor will be treated an application under Order XXI, Rule 90 read with Section 47 of the Civil Procedure Code.
34. Accordingly, this appeal is accepted. The impugned order of the learned executing Court is set aside and the case is remanded to it for a fresh decision of the objections of the judgment-debtor to the sale in accordance with law. Since the amount already deposited by the respondents with the decree-holder exceeds 20% of the decretal amount, no further deposit or security would be required. The learned executing Court shall decide the objections and the question of confirmation of sale after allowing the parties an opportunity to produce evidence and that nothing in the judgment shall prejudice either party. No order as to costs.
C.M. No. 114-2003.
35. Since nobody appears for the applicants, this application is dismissed for non-prosecution.
FAO accepted Case resounded.