' ALI SAIN DINO METLO, J.---Impugned in these appeals is the order dated 17-12-2005 passed by a learned single Judge of this Court exercising banking jurisdiction in execution proceedings bearing Nos.88 of 1999 and 42 of 2002, setting aside sale of judgment-debtor's assets to the appellant on 6-11-2002, on the ground that the appellant had failed to deposit the balance 75% amount of the purchase money within time and that the parties i,e, the creditors (including the decree-holders) and the judgment-debtor were interested to settle their dispute under the State Bank of Pakistan's BPD Circular No,29.
2. Briefly, the facts are that Messrs. Kiran Sugar Mills, a limited company, persistently failed to repay its loans obtained from various lenders, including Bankers Equity Ltd., Zarai Tarqiati Bank, Allied Bank, Habib Bank Ltd., and United Bank Ltd., on account of which they (lenders) filed suits for recovery, which were decreed, and some were still pending. In Execution Applications Nos.88 and 139 of 1999 (new No,42 of 2002) filed by Habib Bank Ltd. And United Bank Ltd. For the execution of decrees passed in their favour, sealed tenders were invited, through press, for the sale of judgment-debtor's assets. Only four tenders were received, which were opened on 27-8-2002, but the offers of Rs,175.00 million made by Messrs. Chawla International, Rs,150.00 million each made by Messrs. Elahi Electronics and Messrs. Regent Services (Pvt.) Ltd., and Rs,800.00 million (on condition of payment in instalments extending over a period of 10 years) of Messrs. Indus Sugar Mills Ltd., being inadequate, were not accepted and with the object of fetching more price, the Official Assignee, who was authorized to conduct the sale, was directed to hold negotiations with the tenderers or any other person interested in buying. After a good deal of negotiations, extending over a period of more than one and a half month, he finally succeeded to have the highest offer of Rs,457.50 million from appellant Euro-Plus Mons-Belgium (a foreign company), which, at the time of its acceptance by the Court on 6-11-2002, was raised to Rs,460.00 million. The other offers, which were not accepted,' were of Messrs Bhitai Traders for Rs,455.00 million, Chawla International for Rs,253.00 million, Regent Services for Rs,250.00 million, and Indus Sugar Mills for Rs, .000.00 million (on condition of payment in instalments extending over a period of 16 years). The offer of Indus Sugar Mills, though highest for rupees one billion, was not accepted because of the condition of payment in instalments extending over a very long period of 16 years. The appellant was directed to deposit 25% of the amount within one week, which was deposited, and the remainder 75% within 15 days, which could not be deposited as the order was stayed before the due date and the stay continued till the matter was remanded by the Honourable Supreme Court for fresh decision.
3. The acceptance of appellant's offer was challenged by the judgment-debtor, as well as by two of the unsuccessful offers, viz.; Messrs Indus Sugar Mills (through their Managing Director Bashir Ahmed), and Messrs Chawla International in intra-Court appeals bearing H.C.As. Nos.284, 295 and 292 of 2002, respectively. The appeals were, however, dismissed the first two on 29-11-2002 by a common judgment and the third one on 13-12-2002.
4. The judgment-debtor and only one of the offerers, namely Messrs Chawla International challenged the judgments, passed in the intra-Court appeals, by way of filing Civil Petitions for Leave to Appeal bearing Nos.1113-K of 2002 and 29 of 2003 in the Honourable Supreme Court of Pakistan, which, by its order dated 9-9-2004, was pleased, with the consent of the parties, to remand the matter to the Banking Court for fresh decision leaving the parties free to raise all such objections and contentions which they had taken before the apex Court and 'any other question in accordance with law before the Banking Judge.' As mentioned above the learned Single Judge (exercising banking jurisdiction), under the impugned order, while overruling judgment-debtor's of about non-fixation of upset price in the alleged violation of rule 66(e) of Order XXI of the Code of Civil Procedure, 1908 (hereinafter referred to as the Code) and inadequacy of consideration and that of Messrs Chawla International, regarding appellant's non-participation in the process of sealed tenders as well as regarding the mode of sale by negotiation, set aside the sale on the grounds:--
(a) that the appellant had failed to deposit the 75% of the purchase money within the period prescribed by rule 85 of Order XXI of the Code; and
(b) that the decree-holders were willing to settle the matter with the judgment-debtor under State Bank's Circular No,29.
5. While setting aside the sale made to the appellant, the offer of Messrs Chawla International, was also not accepted but it (Chawla International) has not filed appeal and thus not challenged the decision and in this way all the other purchasers, who had taken part in the sealed tenders and the negotiations, have left the arena.
6. Mr. S. Ali Bin Adam Jafri, learned counsel for the appellant, argued that there was no default on the part of the appellant in the payment of purchase money as an amount more than its 25% was deposited within one week and the remainder 75% could not be deposited due to the stay granted by this Court before the due date, which continued till the stay was granted by the Honourable Supreme Court, which continued till the matter was remanded for fresh decision. He further argued that appellant's offer, being the highest, was rightly accepted and that after the acceptance of offer, the parties i,e, the decree-holders and the judgment-debtor could not be allowed to settle their dispute and thereby deprive he appellant of his right to purchase the property, particularly when the appellant had deposited a substantial amount equal to 25% of the purchase money under the order of the Court.
7. Mr. Itizaz Ahsan, learned counsel for the judgment-debtor, supported the impugned order on the grounds mentioned in it and further contended that violation of mandatory provisions of rules 65, 66(e) and 67 of Order XXI of the Code by not mentioning the upset price in the notice inviting tenders vitiated the entire proceedings. According to him, appellant's offer, being very low, was not acceptable.
8. The objections regarding non-mention of upset price in the notice;. The mode of sale, and the inadequacy of consideration were rightly overruled by the learned single Judge and we entirely agree with him that the Court, in its endeavour to fetch maximum price, had made all possible efforts and was right in cancelling the tenders and adopting the procedure of negotiations as a result of which a reasonable offer of Rs,460.00 million was finally received from the appellant as against the highest tender of Messrs Chawla International for Rs,175.00 million. However, we are unable to subscribe to his view that the appellant, by not depositing the remainder 75% of the purchase money within 15 days, had violated the mandatory provisions of rule 85 of Order XXI of the Code, and that the sale was liable to be set aside on that ground. In this regard it may be mentioned that strictly speaking rule 85 ibid, which pertains to sale by way of public auction. Is not applicable in the present case which is of sale by negotiations. There is lot of difference between sale by public auction and sale by negotiations or by inviting sealed tenders. The atmosphere of public competition created on spot in public auction tempting bidders to raise bids is lacking in other modes. Nevertheless, the Court, as held in the case of Asma Zafar-ul-Hassan v. United Bank Ltd. And another 1981 SCM R 108, may deviate from such mode (of public auction) and adopt any other procedure to serve the ends of justice. Besides, the very statute i,e, the Financial Institutions (Recovery of Finances) Ordinance, 2001, under its section 19(2), provided that the Banking Court shall sell judgment-debtor's property in accordance with the provisions of the Code or any other law for the time being in force or in such manner as the Banking Court may, at the request of the decree-holder, consider appropriate. Therefore, the provisions of the Code, which are for sale by A public auction, cannot be applied to 'other modes of sale so as to entail penal consequences of their non-compliance.
9. In absence of statutory provisions regulating sale by negotiation or by inviting sealed tenders, the Court may adopt any fair procedure which may be akin to the equitable principles underlying the provisions of the Code, but that would not make the provision of the Code applicable in the strict sense inasmuch as adoption of a principle underlying a statutory provision and applicability of the statutory provisions cannot be placed at same footing. The former is by choice, while the latter involves an element of compulsion. One is adopted by Court in its discretion and the other is followed by the force of the statute itself.
10. The procedure adopted by the Court in cancelling the tenders and selling the property by negotiations cannot be treated as unfair. Firstly, none of the parties including the judgment-debtor had raised any objection before the Official Assignee, an officer authorized to conduct the proceedings of sale. Secondly, good efforts were made to achieve the object of fetching the maximum price. The tenders were rightly cancelled as the highest tender of Messrs Chawla International for Rs,175.00 million in cash down was too inadequate and the tender of Messrs Indus Sugar Mills for Rs,800.00 million with condition of making payment in instalments extending over a very long period of 10 years and that too without adequate security was not feasible. After cancelling the tenders, the Court, by way of negotiations, succeeded to fetch Rs,460.00 million as against the highest tender of Rs,175.00 million. It was a reasonably fair price and the Court had done no wrong in accepting it. The record shows that during the hearing of Intra-Court appeal filed by the judgment-debtor i,e, H.C.A. No,284 of 2002, the judgment-debtor, on being specifically asked, had shown its inability to bring any matching offer. We are informed that the settlement between the parties i,e, the judgment-debtor and the creditors, including the decree-holders, under the State Bank's Circular No,29 is also arrived at Rs,460.00 million to be paid by the judgment-debtor in instalments. In such circumstances, it cannot be said that proper efforts were not made or that the procedure adopted was not fair.
11. At the time of accepting the offer of the appellants on 6-11-2002, a direction was given for making payment equal to 25% of the offer within one week thereof and the remainder 75% within 15 days without specifying the consequences of default so as to make the appellant cautious of treating the condition as mandatory. Moreover, the appellant paid Rs,108.00 million on 12-11-2002 in addition to Euros 52,725 and Euros 475,170 already deposited on 21-9-2002 and 25-9-2002, and in this way the total amount deposited by the appellants up to 12-11-2002 was equal to a little more than 25% of the offer. As regards the balance, the order was stayed on 15-11-2002 in H.C.A. No,295 of 2002, and despite dismissal of appeals on 29-11-2002 the order was allowed to remain suspended for a period of one week during which petitions for leave to appeal were filed in the Honourable Supreme Court and on 4-12-2002 an order was passed for maintaining status quo which continued till 9-9-2004 when the order of accepting appellant's offer was set aside and the matter was remanded to the Banking Court for fresh decision. It is, thus, clear that the order providing for the deposit of money within 15 days was suspended before the expiry of the period and continued to remain so till it was set aside by the Honourable Supreme Court and, therefore, the appellant cannot be said to have violated the order and committed default in making the payment. Besides, the Court was also competent to extend the time prescribed by it particularly when matter was still pending before it. For all these reasons, we are of clear view that the sale was not liable to be set aside on ground (a) supra.
12. The contention of Messrs Chawla International that the appellant, who had not filed sealed tender within the advertised due date, could not be allowed to compete, is not acceptable inasmuch as the Court, finding the tenders inadequate, was fully competent to cancel them and make efforts to fetch maximum price. The offer did not create any right in its favour particularly when the same, on account of being inadequate was not accepted.
13. Learned counsel for the decree-holders and CIRC, while admitting the settlement under State Bank's Circular No,29, contended that they had no objection if the assets of the judgment-debtor were sold to the appellant because the sale proceeds would then be utilized for fulfilment of the settlement.
14. Reverting to the ground of willingness of the parties i,e, the judgment-debtor and the decree- holders for settlement in the light of State Bank's Circular No,29, it may be mentioned that firstly, the circular had a statutory force and secondly, when the decree-holders were also willing for a settlement with the judgment-debtor (and on being given a chance they have reportedly settled the matter) it was fair to afford them a chance to do so. But at the same time the purchaser i,e, the appellant also needed to be compensated. It will be highly unjust to push the appellant out without any fault on its part. In case the judgment-debtor wants to save its property from being sold, it must compensate the purchaser. Order XXI, rule 89 of the Code also provides for compensation for the purchaser at the rate of 5% of the purchase money. Since the appellant had not deposited the entire purchase money, it will be just and fair to compensate the appellant at the rate of 5% of the amount deposited by it. Accordingly, the judgment-debtor (respondent No,1) is directed to deposit 5% of the amount deposited by the appellant, within one month hereof to be paid to the appellant.
The amount deposited by the appellant was invested by the Official Assignee, which shall also be returned to it along with the profit. In case the judgment-debtor fails to deposit the amount within the above mentioned period of one month, the appellant shall deposit the balance amount of the purchase money within 15 days thereof and the sale shall be confirmed in its name. In view of the divided success of the parties, they are left to bear their own costs and the appeals are disposed of in the above terms.