' The appellant/objector, through the present appeal, under section 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 (Ordinance 2001), has called in question order dated 11-6- 2005, whereby the learned Judge Banking Court dismissed its objection petition.
2. Briefly stated facts of the case are that during the process of execution of decree for recovery of Rs,47,23,005, passed against respondents Nos.2 to 4 by the learned Judge Banking Court, vide judgment and decree dated 6-12-2003, when the properties bearing Nos.123-C and 126-C (properties) were put to sale, the appellant filed the objection petition, under section 19(7) of the Ordinance, 2001, inter alia, pleading that Property No,126-C was leased by the appellant to respondents No,2; under clause 3 of the re-lease deed, respondent No,2 was not competent to mortgage the properties in favour of any person; it had illegally mortgaged the properties on the basis of a forged NOC and that the properties cannot be sold in execution of the decree as despite the lease deed, ownership rights qua the properties still vest with the appellant. The objection petition was resisted by the respondent No,1 through its reply and besides raising legal objections, it was maintained that the properties-were legally mortgaged, as NOC was issued by the appellant, which was produced by the partners of respondent No,1 i,e, respondents Nos.3 and 4 at the time of execution of mortgage deed. The learned Judge Banking Court, in the ultimate analysis, proceeded to dismiss the objection petition, vide impugned order dated 11-6-2005, hence the present appeal.
3. Learned counsel for the appellant contends that respondent No,2, being the lessee, had no lawful authority either to mortgage or to create any charge over the leased properties, owned by the appellant and even during subsistence of lease, ownership of the properties vests with the appellant. Learned counsel while referring to the affidavit and statement of Khalid Mehmood But (Deputy Director of the appellant) recorded by learned Judge Banking Court, has added that the NOC produced by respondents Nos.2 to 4 was a forged document. He has referred to the cases reported as Ghulam Rasul and others v. Muhammad Anwar and others 1969 SCM R 254 and Mst.
Nawab Bibi v. Mst. Rafiq Bano PLD 1971 SC 481. Conversely, the learned counsel for respondent No,1 submits that respondent No,2 obtained the financial facilities from the respondent-Bank and to secure the same, it mortgaged the properties through its partners through a registered mortgage deed. He has further submitted that the appellant issued NOC, accorded permission to respondent No,2 to mortgage the properties and the mortgage was valid and lawful, therefore, the properties could be sold in execution of decree passed against respondents Nos.2 to 4.
4. We have heard the learned counsel and examined the available record. Undeniably, the appellant is the owner of the properties and Plot No,126-C(a) was leased to respondent No,2. Re- lease deed, certified copy of which is on record, is admittedly executed by the appellant in favour of respondent No,2, which shows that the Plot No,126-C(a) was leased to it for 99 years. Clause 3 of re-lease deed states that the lessee shall not transfer the mortgage or part with the possession of mortgaged property, however, the lessees may mortgage lessee's right of IDBP to get loans. Clause 3 further states that the lessee will obtain prior written consent of the lessor before mortgaging lessee's right in favour of any lending institution except I.D.B.P. It appears appropriate to reproduce Clause 3 of the re-lease deed, which reads as follows:-- "3. The lessee shall not transfer assign, mortgage, create any security over his rights in or underlet or part with the possession of the demised property or any machinery building or structure thereon or part thereof in any manner whatsoever: ' Provided that the lessee may mortgage the lessee's rights with I.D.B.P. To get loans for Industrial purpose. However, lessor will have the right to determine the lease and to take over possession of the demised property in case of a default in the payment of rents and other charges of and in respect of the demised property or on default of any other condition of this deed, after giving notice to the mortgagee in interest if any. In case of lending institutions other than the I.D.B.P. The lessee will obtain prior written consent of the lesser before mortgaging the lessee's rights. The consent shall not be withheld unreasonably and shall be presumed to have been accorded in case the lessee is not apprised in writing of its refusal within a period of sixty days from the date of receipt, of his request by the lessor."
' The parties do not appear to be at variance on this clause too, because before mortgaging the properties, respondent No,2 produced NOC to respondent No,1, on the basis of which the properties seemed to have been mortgaged. The case of the respondent-Bank is that as the appellant issued no objection certificate dated 5-11-1996, therefore, the properties were validly and legally mortgaged. The stance of the appellant is that the said letter is a forged one and in fact the same was issued in favour of UBL, which was manipulated and forged by respondent No,2 so as to create a mortgage in favour of the appellant. Without going into the controversy as to whether the alleged NOC dated 5-11-1996 is a forged or a genuine document, perusal whereof amply manifests that respondent No,2 was allowed to mortgage lessee's rights of Plot No,126-C/A in favour of MCB. The contents of letter dated 5-11-1996 are reproduced below:-- "Ref. No,PSIC/SIES/126-C(a)295 Sialkot: 5th Nov. 1996 To Whom it May Concern ' The Punjab Small Industries Corporation have no objection if Messrs Continental Enterprises, SIE-I, Sialkot mortgage their lessees rights of Plot No,126-C(a) with other assets created thereon the said plot with Messrs Muslim Commercial Bank Limited, SIE Branch, Sialkot in order to avail the loan.
' However, this will not prejudice the PSIC other rights over the Project.
(Sd.)
Deputy Director, PSIC, SIE, Sialkot.
Date 8-7-1998" (Underlining is ours).
' Even if it be taken that the said certificate is genuine, it flows therefrom that the respondent No,2 was only entitled and competent to mortgage its rights in the property, which undeniably were restricted to lease hold rights in the said properties. In the present set of circumstances, we are of view that even according to the said letter respondent No,2 could only mortgage the lease hold rights, that too only in respect of Plot No,126-C/A with MCB, and it was not authorized and empowered to mortgage the property/plot itself. It appears that the functionaries of the respondent-Bank, at that point of time, were negligent, sleepy and indolent, as they neither inquired from the appellant qua the veracity of said NOC, which later on, was pleaded by the appellant as a forged document, nor they minutely examined the contents of the said letter. The respondent-Bank should have been vigilant and cautious at the time of granting financial facility against mortgage of the properties, as they were dealing with public money and taxpayer's amount. It is more than evident even from the bare perusal of aforenoted disputed no objection certificate that respondent No,2 was allowed to mortgage its rights in the property, which as noted above, were confined to rise hold rights. The respondent No,2 on the basis of lease de under no stretch of imagination could claim ownership of the property. The Bank's functionaries should have thoroughly read the contents of the alleged NOC inasmuch as we find from the photocopy of said NOC that it bears two dates as the latter is dated 5-11-1996, while at the bottom, 8-7-1998 has been written. Under the circumstances, the respondent-Bank had to suffer and stands deprived of amounts due to acts and omissions of its functionaries, who did not take proper care at the time of granting financial facility to respondent No,2. We are of the view that respondent No,2 was not empowered to mortgage the properties, as the properties vest with the appellant and the same was, statedly, mortgaged in favour of the respondent by an unauthorized person, to which no exception was taken by the respondent-Bank at the relevant time. We feel that properties could not be sold in execution of the decree passed against respondents Nos.2 to 4. Learned counsel for the appellant, however, concedes that the lease hold rights vested in respondent No,2, could have been mortgaged in favour of respondent-Bank, which is now within its rights to sell the lease hold rights.
5. In the above perspective, we have examined the impugned order and find that the same is not sustainable in law and it does require interference by this Courtnt We are persuaded to set it aside.
6. In view of the above, the present appeal is allowed and the impugned order is set aside with no order as to costs. Resultantly appellant's objection petition stands accepted and the properties stand released from attachment. Needless to add that the respondent-Bank can sell the lease hold rights in Property No,126-C(A) in execution of the decree.