MAQBOOL BAQAR, J.---Through the above appeals, the appellants, have assailed order dated 1-3- 2002, whereby a learned single Judge of this court dismissed the various applications filed by the appellants in execution proceedings bearing No.19 of 1996 and ordered forfeiture of the respective amounts of security deposited by the appellants.
1. The relevant facts of the case, in brief, are that in the aforesaid execution proceedings, filed by respondent No.3 for enforcement of an ex parte money decree dated 10-1-1991, obtained by the said respondent against respondent No.2, the former obtained an order for attachment of a property, being a factory known as Messrs. Hamraaz Textile Mills (Pvt.) Ltd., Plot No.455, Site, Karachi with all the machinery, equipments, tools, fixtures, stocks etc. Fixed and stored therein. Such attachment order was passed on 29-9-1997. On 19-9-1998, a learned single Judge of this court appointed the Nazir of this court as a Commissioner to hold auction of the attached property.
However, since no bid was received through such exercise, by order dated 4-10-1999, the Nazir was directed to invite sealed bids for the sale of the property. By order dated 20-12-1999, the offer of Rs.35,00,000 submitted by respondent No.1, being the highest, was accepted and the Nazir was directed to finalise the transaction in accordance with the Rules. The respondent No.1, although deposited, along with his offer an amount of Rs.3,50,000. Being ten per cent of the amount offered by him, the balance ninety per cent amount, being Rs.31,50,000, was however deposited by him in the shape of a pay order dated 13-1-2000, which pay order was encashed on 19-1-2000.
2. Upon a Nazir's reference the learned single Judge, by order dated 9-2-2000, directed the Nazir to hand over possession of the property to respondent No.
1. In pursuance of the aforesaid order, the Nazir, with the assistance of Police force, took over possession of the property from the appellants and delivered it to respondent No.1 on 15-2-2000.
Through an interim order, passed by a learned single Judge on the appellant's /intervener's applications on 16-2-2000, the Nazir was directed to post Security Guards at the property and to ensure that nothing is removed therefrom. By order dated 24-2-2000, the learned single Judge directed the, Nazir to remove the Security Guards from the premises in question and to restore the possession thereof to the appellant/intervenor upon their furnishing security in the sum of Rs.50,000 each and allowed them to conduct their business from the sheds in their occupation and to sell/dispose of their products and stock in trade. The appellants in turn were required to file an undertaking with the Nazir to the effect that they shall not remove any machinery and equipment from the premises without permission of the Court, and that any violation of the said order shalt be treated as a contempt of court.
3. On 29-5-2000, the learned single Judge appointed Official Assignee to ascertain/verify the appellant's claim regarding their ownership of the machinery lying in the premises. Through his report dated 5-7-2000, the Official Assignee verified the facts that the machinery belong to the appellants. In the 'meanwhile, the aforesaid judgment and decree was assailed by the respondent No.2, through an application under section 12(2), C.P.C. (J.M. No.7 of 2000). By order dated 20-8- 2001, a learned single Judge, granted the application and set aside the judgment and decree.
4. On 1-3-2001 the respondent No.1, filed an application under Order XXXIX, rule 7, C.P.C., inter alia, seeking forfeiture of the amounts of security furnished by the appellants, and to initiate contempt proceedings against the appellants. It was alleged that the appellants/intervenor, in violation of the order dated 24-2-2000 and the undertaking furnished by .Them in pursuance of the said order, have removed the, machinery from the factory in question, without permission of the Court.
5. Mr. Mansoorul Arfin, the learned counsel for the appellants submitted that the impugned order is illegal and erroneous and is liable to be set aside. He submitted that in the first place, the property was not liable to be attached or sold, as at no point in time it belonged to respondent No.2, the judgment-debtor, and was in fact owned by one Muhammad Yousaf, the sole proprietor of Aftab Industries. The property was, on 10-3-1990, 'sold by Muhammad Yousaf to Messrs Hamraaz Textile Mills (Pvt.) Ltd., the respondent No:4, for a consideration of Rs. 10,00,000, vide agreement dated 10- 3-1990, on which date Muhammad Yousaf delivered possession of the property to respondent No.4.
The learned counsel in support of his assertion referred to the aforesaid agreement, Annexure A-12 to the memo. Of H.C.A. No.87 of 200, filed by the respondent No.4, in terms whereof Aftab Industries, the proprietary concern of Muhammad Yousaf, agreed to transfer the said property in favour of respondent No.4, against a total sale consideration of Rs.10,00,000, which payment was acknowledged, therein. It has also been recorded in the agreement that Messrs Aftab Industries has handed over vacant and peaceful physical possession of the said property to respondent No.4 after receipt of the entire sale consideration amount. The learned counsel also referred to a search certificate dated 29-5-1991, issued by Sindh Industrial Trading Estate (SITE), (Annexure-C to the memos of the present appeals) ,which shows that on the date of its issuance, the property stood in the name of Aftab Industries, a sole proprietary concern of Muhammad Yousaf and further that a request for transfer of the property in the name of respondent No.4 was pending with SITE. He also referred to letter dated 10-3-1990 from Aftab Industries to respondent No.4, (Annexure A-14 to the memo. In H.C.A. No.87 of 2002), acknowledging the fact that possession of the property has been delivered to respondent No.4 in terms of the agreement dated. 10-3-1990 and that Aftab Industries has no right and interest in the said property. He also referred to the letter dated 6-6-1990, (annexure A to the memo. In H.C.A. No.87 of 2002) whereby respondent No.4 forwarded the aforesaid agreement, to SITE and requested them to transfer the property in their name. The letter bears acknowledgement of receipt of the original agreement by SITE.
6. Mr. Arfin submitted that the judgment debtor has obtained orders for attachment and sale of the property by fraud and misrepresentation, knowing fully well that the property was owned by respondent No.4 and was never owned by the judgment debtor. Regarding the machinery. In question, the learned counsel submitted that in order to verify the appellant's claim that the machinery attached and sold in the execution, proceedings belongs to them, a learned single Judge of this Court was pleased to appoint the Official Assignee to investigate the claim and submit his report and the Official Assignee after conducting a thorough inquiry and on the basis of title documents pertaining to the said machinery and the report of Surveyors, Messrs Joseph and Lobo, (who provided technical assistance to the Official Assignee, in pursuance of the Court order) confirmed that the machinery belongs to the appellants. The learned counsel contended that in view of the Official Assignee's report, there remains absolutely no doubt that the machinery belongs to the appellants and more so, for the reasons that none else has either claimed the machinery or submitted any documents contrary to the claim of the appellants.
7. He submitted that the fact that the factory premises/building is owned by respondent No.4 is also evident from the agreement of licence dated 8-7-1999 executed between respondent No.4 and Messrs Venus Corporation, which document was submitted by one Furrukh Saleem along with his application in the execution proceedings, (C.M.A. No.1839 of 2000), in terms of which document respondent No.4 granted licence to Messrs Venus Corporation to store their goods and to sublet the property. He also referred to the copy of the Partnership Deed dated 8-7-1999 submitted along with the aforesaid application, which shows that respondent No.2, the judgment debtor was one of the partners of Messrs Venus Corporation and submitted that the judgment debtor has been dealing with the appellants in his capacity as a partner of Messrs Venus Corporation, the tenant/licencee of respondent No.4. He submitted that in view 'of the foregoing, the position that emerged before the executing Court was that neither the property bearing No.455, SITE, Karachi nor the machinery, equipment and moveables, therein were owned by respondent No.2, the judgment debtor, and that the same belonged to respondent No.4, and the appellants respectively, and therefore, the attachment and sale of the said properties was without jurisdiction and void. In support of his above contention, Mr. Arfin relied on the judgments in the cases of S.M. Jakati and another v. S.M. Borkar and othets AIR 1959 SC 282; Kedar Nath Goenka v. Munshi Ram Narain Lal and others AIR 1935 Privy Council 139) and Chengalraya Reddy and others v. Kollapuri Reddi AIR 1930 Madras 12.
8. He submitted that even otherwise, in consequence of the order dated 20-8-2001 passed in J.M.
No.7 of 2000, (whereby the judgment and decree, in pursuance whereof, the property was attached and sold, was set aside), not only the attachment of the property stood withdrawn but its sale also became a nullity and the execution proceedings came to an end and thus the Executing Court had no jurisdiction to pass any further orders, as such, the order for returning the machinery, and forfeiture of the security amount is illegal, without jurisdiction and void.
9. Mr. Arlin further contended that the impugned sale became a nullity and was completely wiped out also for the reason that respondent No.1, the auction purchaser, failed to deposit the balance 90% of the purchaser price within 15 days from the date of acceptance of his offer, as essentially required in terms of rule 85 of Order XXI, C.P.C. He submitted that the respondent No.1's offer for purchase of the property was accepted on 20-12-1999 and in terms of rule 85 he was required to deposit the balance sale consideration amount by the 4th of January, 2000, however, in default of such mandatory requirement he admittedly did not deposit the amount at least until 13-1-2000 and deposited the amount vide Pay Order dated 13-1-2000, which pay order was encashed and credited on 19-1-2000 i.e. After a lapse of at least nine days time and as such, the amount of Rs.3,50,000 deposited by respondent No.1 along with his offer, became liable to forfeiture, as required in terms of Rule 86. In support of his contention, the learned counsel relied on the judgments in the cases of Messrs S.P.R. L. Rehman Brother and another v. Judge, Banking Court No.II, Lahore 2000 MLD 1957; Dawood Flour Mills and other v. National Bank of Pakistan 1999 MLD 3205; Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lahore 706; National Bank of Pakistan v. Messrs Nasir In,dustries and others PLD 1981 Kar.
720.
10. The learned counsel also submitted that since none of the appellants was a party, to the proceedings between the decree holder and the judgment debtor and they came to know of the impugned execution proceedings only on 15-2-2000, when they were forcefully dispossessed from their respective tenements, they approached the executing Court the very next day, through an application under Order I, Rule 10, C.P.C. (C.M.A. No.353 of 2000) for joining the proceedings in order to secure their lawful interest in the matter; whereupon the executing Court directed the Nazir to post guards at the factory premises and to ensure that nothing is removed, therefrom, and further directed him not to pay the sale proceeds to the decree holder till further orders and upon application under Order XXI, rule 90, C.P.C. Filed on behalf of the appellants on 21-2-2000 (C.M.As.
Nos.411, 412 and 413 of 2000), the executing court vide order dated 24-2-2000 restored the possession of their respective tenements of the appellants till final disposal of the aforesaid applications.
11. Regarding the removal of machinery he submitted that its true that through the last mentioned order the appellants were restrained from removing the machinery from the factory premises however, since by order dated 20-2-2001, not only the judgment and decree dated 10-1-1991, was set aside but an application under Order I, rule 10, C.P.C., filed by respondent No.1 for joining the proceeding in J.M. No.7 of 2000, on the ground that any order in the said proceeding is likely to effect the rights acquired by him in relation to the property, was also dismissed on the ground that description of the property in question as mentioned by the respondent No.3, in the execution application itself shows that the property does not stand in the name of the judgment debtor but stands in the name of some other person, and since when at the time of announcement of the aforesaid order the counsel for the appellants referred to the pendency of the appellants various applications in the execution proceedings which were being fixed along with J.M. No.7 of 2000; the leanied Court observed that in view of the setting aside of the decree, natural consequences will follow and further in view of the fact that on an earlier date i.e. 1-2-2001 when J.M. No.7 of 2000 and the appellants applications in execution proceedings were fixed for hearing and the appellants counsel requested the learned Court that the said applications may be taken up first, all the parties had agreed that in the event J.M. No.7 of 2000 is granted, there would not no necessity of hearing the said applications, and more so, in view 'of the order dated 21-12-2001, whereby a Division Bench of this Court, dismissed the respondent No.l's appeal against the order dated 24-2-2001, (whereby the appellants' possession was restored), for non-prosecution, but with an observation that since during the pendency of the appeal, the decree on the basis whereof the property was put on sale has already been set aside, the appeal has become 'infructuous, the appellants were led to believe that the applications stood disposed of in their favour and the attachment stood removed and they were thus entitled to remove their machinery, the appellants did so. He submitted that the above facts pertaining to the proceedings in J.M. No.7 of 2000, were deposed by the appellants, in their counter -affidavits to the respondent No.l's application under section 51 read with Order XXXIX, rule 7, C.P.C. (C.M.A. No.1071 of 2001), however, no rejoinders were filed in rebuttal thereof.
12. Concluding his arguments, Mr. Arfin submitted that since the attachment and sale of the properties of the appellants and respondent No.4 were without jurisdiction and had even otherwise become a nullity as a consequence of setting aside of the judgment and decree dated 10-1-1991 and also on account of non-compliance by the respondent No.1, the auctidn purchaser, of the mandatory requirements of Rule 85 and since, on account of the above, the execution proceedings came to an end and consequently all interim orders also stood vacated, there was no justification for ordering forfeiture of the security deposited by the appellants, and that too in favour of the respondent No.4, who had no interest in/or any lawful claim over such machinery and prayed that the above appeals be allowed and the impugned order be set aside.
13. On the other hand, Mr. Mushtaq Memon, the learned counsel for the auction purchaser; the respondent No.1, submitted that the respondent No.1 being a bona fide purchaser, having paid the entire 'price of the property has acquired proprietary rights therein and the sale in his favour cannot be set aside. He submitted that at the time the property was put to sale and the respondent No. l's offer was accepted by the Court and upto the date when possession was delivered to him after making full payment of the sale price the judgment and decree dated 10-1- 1991, in pursuance whereof the property was sold, was in the field and the subsequent setting aside thereof cannot have any bearing on the sale, or the respondent No. l's right and title over the property. He submitted that the Courts have drawn a clear distinction between a bona fide purchaser for consideration in Court sale and the case where the Decree Holder has himself purchased the property. In support of his contention he relied on the judgments in the cases of:--
(1) Hudaybia Textile Mills Ltd. And others v. Allied Bank of Pakistan Ltd. And others PLD 1987 SC 512;
(2) Hassan Din v. Hafiz Abdus Salam and others PLD 1991 SC 65;
(3) Mian Muhammad Abdul Khaliq v. M. Abdul Jabbar Khan and others PLD 1953. Lahore 147;
(4) Janak Raj v. Gurdial Singh and another AIR 1967 SC 608;
(5) H.S. Siddappa v. Lakshmamma and another AIR 1965 Mysore 313;
(6) Chota Nagpur Banking Association v. C.T.M. Smith and another AIR (30) 1943 Patna 325;
(7) Sorimuthu Pillai and others v. Muthukrishna Pillai AIR 1933 Madras 598:
(8) Jaibhadar Jha v. Matukdari Jha AIR 1923 Patna 525;
(9) Muhammad Yaqoob v. P.L.R.M. Firm and others AIR 1932 Rangoon 17;
(10) Piari Lal v. Hanif-un-Nissa Bibi and another ILR 38 Allahabad 240;
(11) Zain-ul-Abdin Khan v. Muhammad Asghar All Khan AIR 10 Allahabad 166;
(12) Nawab Zain-ul-Abdin Khan v. Muhammad Asghar Ali Khan and others 15 of A 12 (Privy Council);
(13) Shivlal Bhagvan v. Shambhu Prasad Parvatishankar and another ILR 29 Bombay 435
14. Regarding the question of default and its consequence, Mr. Memon submitted that the respondent No.3 has deposited the balance amount of the purchase price within 15 days of the letter dated 29-12-1999, whereby the Nazir of this Court informed the said respondent about acceptance of his offer and requested him to deposit the balance purchase price. Such deposit was made vide pay order dated 13-1-2000, within 15 days of the said letter and thus there has been no delay on the part of the respondent No.3. He submitted that even otherwise the requirement of deposit of the balance amount of the purchase price within 15 days of the acceptance of the offer as envisaged by rules 85 of Order XXI of C.P.C. Is not mandatory and the Courts are not bereft of the power to extend time for such deposit. In support of his contention, the learned counsel relied on the judgments in the cases of Al-Hassan Feeds and another v. United Bank Ltd. And 6 others 2004 CLD 275 and Messrs Chawla International v. Habib Bank Limited 2003 CLD 956.
15. Regarding the ownership of the property, Mr. Memon submitted that contrary to the appellant's claim the property in fact belonged to respondent No.2, the Judgment Debtor, who evidently was in possession of the property and has been dealing with its affairs throughout. He referred to the photo copies of the various tenancy/lease agreements executed by the judgment-debtor in favour of the various tenants in respect of the property in question, annexed to the counter affidavit of respondent No.
1. The learned counsel submitted that the Search Certificate relied upon by the appellants also show that the property does not stand in the name of respondent No.4 but stands in the name of Messrs Aftab Industries, which is a sole proprietary concern of one Muhammad Yousaf and that a request for transferring the property in favour of the wife and two sons of the judgment debtor was pending. The learned counsel contended that the respondent No.4 cannot claim title in the property in question merely on the basis of agreement of transfer of rights to lease (annexure A-12 to H.C.A. No.87 of 2002), which agreement; in terms of section 54 of the Transfer of Property Act, does not create any interest in the property in favour of respondent No.4 and that even otherwise respondent No.4 and the judgment debtor cannot be said to be different parties as all the three Director, of the respondent No.4 are the family members of the judgment debtor being his aforesaid wife and sons.
16. The learned counsel further submitted that the applications filed by the appellants were barred by limitation and were liable to be dismissed on that ground also. He pointed out that the impugned attachment was ordered on 29-9-1997 and was effected by way of pasting on the factory premises and the impugned sale was ordered on 20-12-1999, however, the appellants filed C.M.A. No.353 of 2000,' under Order I, rule 10, C.P.C. On 16-2-2000 and C.M.As. Nos.411, 412 and 413 of 2000, under Order XXI, rule 90 on 21-2-2000, whereas the appellants Shaukat Nadeem and S.M.
Nadeem Rail, filed C.M.As. Nos.415 and 417 of 2000 under Order xxi, rule 90 and Order 'MIX, rules 1 and 2 on 22-2-2000, all much beyond the prescribed period of thirty (30) days. As regards the forfeiture of the security amounts deposited by the appellants, he submitted that since the machinery was removed by the appellants in violation of the Court order and in breach of their undertakings, the securities which were furnished to ensure faithful compliance with the Court's order and adherence to the undertaking were justly ordered to be forfeited to the auction purchaser, who in the facts and circumstances of the case are now the rightful owner thereof.
17. Heard the learned counsel for the parties at length and perused the record of the case thoroughly. It is an admitted position that the ex parte decree and judgment in pursuance whereof the property in question was sold, has been set aside vide order dated 20-2-2001 passed on respondent No.2's application under section 12(2), C.P.C. (J.M.
No.7 of 2000). However, we find ourselves unable to uphold the contention that such would result in nullifying the impugned sale, in view of the explicit pronouncement of the Honourable. Supreme Court in Hassan Din v. Hafiz Abdus Salam and others to the following effect:- The upshot of the above discussion of law on the subject is that in setting aside of an ex parte decree, notice to the decree holder as on record is sufficient. Such setting aside of the decree does not affect the auction/sale of the property in execution of the ex parte decree, nor does it affect the Auction Purchaser. This general principle, however, is subordinate to another principle that where the Auction. Purchaser happens to be the decree holder himself, as in this case, then the protection available to a bona fide third party AuctionPurchaser, is not available to decree holder on the mere ground that a Court auction had taken place and necessary certificate has been issued."
To the same effect is the judgment in the case of Mian Abdul Khalid v. M. Abdul .Jabbar Khan and others PLD 1953 Lahore 147,, expressed in the following words:- "Once a sale has validly taken place in execution proceedings, confirmation of the sale cannot be withheld merely on the ground that the decree has been wiped out or reversed in the meantime. A consideration of the language of section 65, C.P.C., as compared with the provisions of section 316 of the old Code, supports this proposition. In such a case, therefore, the Court is under a duty to confirm 'the sale under Order XXI, rule 92, C.P.C. Unless objections have been successfully taken under rules 89 to 91 of that Order."
In the case of Janak Raj v. Gurdial' Singh and another AIR 1967 SC 608, the Supreme Court of India whilst, dealing With a similar Situation held as under:- "For the reasons already given and the decisions noticed, it must be held that the appellant- Auction Purchaser was entitled to a confirmation of the sale notwithstanding the fact that after the holding of the sale the decree had been set aside. The policy of the, Legislature seems to be that unless a stranger Auction Purchaser is protected against the vicissitudes of the fortunes of the suit, sales in execution would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modified."
In the case of Chota Nagpur Banking Association v. C.T.M. Smith and another AIR (30) 1943. Patna 325, the Patna High Court whilst dealing with the question of restitution in an identical situation held as under:- 'Civil P.C. (1908), S.144, Rule of restitution is to be relaxed in favour of stranger purchaser. But purchaser must be bona fide purchaser and not with knowledge that decree set aside was being challenged.'
Section 144 embodies a well-established rule of equity that on the reversal of a decree the party against whom the wrong decree is passed should, as far as possible, be placed in the same position which he would have occupied but for such decree, because it is the duty of the court to act rightly ,and fairly according to the circumstances towards all the parties involved and to remove as far as possible the consequence of a wrong or unjust decree. This rule may be relaxed in those cases where it conflicts with another rule. Of equity, namely, that a bona fide purchaser for value should not be allowed to suffer on account of the mistakes or irregularities committed by a Court of law, but it should not be relaxed in favour of a party who had due notice of the fact that the decree in execution of which he was proceeding to purchase the property was liable to challenge and had been challenged because he cannot be deemed, to hate acted with due care and caution if in spite of such notice he proceeded to purchase the property. The purchaser is however entitled to claim a refund of the sale proceeds withdrawn by the decree holder with interest from the date of his dispossession. It is true that a stranger to the decree is not bound to inquire into the merits of the decree holder's claim or into the validity of the decree and therefore, ordinarily the presumption is that such a person is unaware of these matters, but where there is clear and cogent evidence that he was fully aware of the merits of the controversy in regard to the property purchased by him and was also aware that the validity of the decree was under challenge, there is no room for that presumption. However, the instant case is not merely of setting aside of the decree under section 12(2), C.P.C. But in an appeal filed against the order passed under section 12(2), C.P.C., a Division Bench of this Court has been pleased to reject the plaint and therefore, the position here is different from the above referred cases. CLD
18. Furthermore and as evident from the very Search Certificate dated 9-5-1991, issued by Sindh Industrial Trading Estate and relied upon by respondent No.3 for obtaining orders for attachment and sale of the property, the property was not owned by the judgment debtor and stood in the name of one Muhammad Yousaf, the proprietor of Messrs Aftab Industries. No material has been submitted by either of the respondents to show that the property in question, at any point in time, was 'owned by the judgment debtor. As regards the photocopies of the tenancy/lease agreements filed by respondent No.1, the auction purchasers along with his counter affidavit to the memo. Of appeal as Annexures R/12 to R/20. It may be noted R/12 to R/15, R/19 and R/20, which are of the year 1999, have been executed between Messrs Venus Corporation and the various tenants, in respect of the factory premises and has been signed by the judgment debtor on behalf of Messrs Venus Corporation, which firm, as noted earlier is/was in turn a tenant/licensee of respondent No.4, and the judgment-debtor is a partner of the said firm and R/13 and R/18 which are of the year 1996 have been signed by the judgment debtors on behalf of Bena Trader. Similarly, R/16 and R/17 which are of the years 1991 and 1995 have been signed by him on behalf of Voha Export (Pvt.) Ltd., whereas the lease agreement R-14, executed between the judgment debtor and one of the appellants, namely Zahida Begum, describes the former merely as a licensor in respect of sheds constructed on 3450 sq. Fts. Of the plot in question and not as an owner of any portion of the said plot/property. Even the executing Court in its order dated 17-2-2000 has observed that the order of attachment of the property was obtained by respondent No.3, the decree holder on the basis of incomplete, unverified and vague facts and without providing proper assistance to the Court. As regards the contention of the learned counsel for the auction purchaser that the Director of respondent No.4 company, which company claims to have purchased the said property from Muhammad Yousaf, the previous owner, in March, 1990, are sons and a wife of the judgment debtor, the respondent No.2, it would suffice to say that the respondent No.4 company is a separate entity distinct from its Director and no shareholders/or Director of a company can be said to be the owner of any particular piece of a property in which the company has an interest. Such distinction has to be clearly observed between the company as a legal entity and its rights on the one hand and individually share holders and their right on the other, as such, it cannot be said that the property in question is owned by its share holders or Directors. Even otherwise, the property owned by a wife and sons of a judgment debtor, or for that matter of any person cannot be said to be a property of such person. Following cases may be referred to in this regard:-- Mohan Singh Oberoi v. Rai Bahadur Jodha Omal Kuthalla PLD 1961 SC 6; The Eastern Federal Union Insurance Company v. State Life Insurance Corporation of Pakistan 1987 CLC 1408 and EBM Company Ltd. v. Domanion Bank AIR 1937 PC 279.
19. In any event, since, admittedly, the appellants were tenants in respect of the property, and the machinery installed therein, as noted above, is evidently owned by them, there was absolutely no question of such machinery being attached or sold and of the appellants being dispossessed through the impugned proceedings and as such, the orders of attachment and sale of the machinery in question and the consequential dispossession of the appellants was absolutely illegal, wholly without jurisdiction and void and is not even required to be set aside. In S.M. Jakati and another v. S.M. Borkar and others, AIR 1959 SC 282, the Supreme Court of India held that the Court has no jurisdiction to sell the property of persons 'not parties to the proceedings or properly represented on the record' and such sale is therefore, without jurisdiction and null and void. Similar view was expressed by the Madras High Court in Chengalraya Reddy and others v. Kollapuri Reddi AIR 1930 Madras 12, in the following words:-- "Where a person is not one against whom any decree has been passed or order capable of execution has been made, a Court has no jurisdiction to sell his property in execution of the decree.
And if a sale takes place, the sale is ultra vires and void being in excess of Court's jurisdiction, the jurisdiction of the Court being limited to execute the decree against a person against whom only the decree has been passed. It was further, held that the sale need not be set aside. A void sale in execution need not be set aside the period of limitation (comparatively shorter) prescribed by Article 166 would not. Apply, but general period of three years prescribed by Article 181 would apply and that right to apply accrues to a person within meaning of Article 181 as soon as he is aggrieved by disturbance to his possession of land; and so long as he is in possession it does not matter to him what orders of excess sales or excess deliveries are passed behind his back.'
To the same affect is Kedar Nath Goenka v. Munshi Ram Narain Lal and others (AIR 1935 Privy Council 139).
The respondent No.1 cannot, therefore, seek to enforce any right in respect of either of the factory premises or the machinery in question on the basis of the impugned sale.
20. It is also an admitted position that the respondent No.l's offer for purchase of the property in question was accepted by the Executing Court on 20-12-1999 and that along with such offer respondent No.3 deposited an amount of Rs.3,50,000 being 10 per cent of the offer, however, the balance sale consideration amount was deposited by him vide pay order dated 13-1-2000 which, was encashed and credited in the relevant Account on 19-1-2000, whereas in terms of Rule 85 of Order XXI, C.P.C., he was required to deposit the balance sale consideration amount within 15 days from the date of acceptance of his offer which fell due on 4-1-2000, the auction-purchaser, having defaulted in complying with the provisions of rule 85, cannot escape the consequence as envisaged by rule 86, which requires that in the event of default in depositing the full amount of purchaser price within 15 days from the sale of the property, the Court may, after defraying the expenses of the sale, forfeit to the Government, the initial deposit, and shall resale the property and further that the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold. From the consequences as provided for by Rule 86 there remains no doubt that as soon as, the auction purchaser defaults in depositing the balance purchased price, as required by rule 85, the sale stands completely wiped out and became a nullity and is not even required to be set aside. The fact that the amount was deposited within fifteen days of the letter from the Nazir, would not wipe out the default, as it was the bounded duty of the auction purchaser to make the deposit within fifteen days of the acceptance of his offer and no demand was required to be made in that regard. In the case of Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lahore 706, a Division Bench of the Lahore High Court held that in law 3/4th of the sale price should have been deposited by Auction Purchaser in Court within 15 days of sale and non-deposit of such amount within the requisite time would render the sale void.
Similar view was expressed by a Division Bench of the Lahore High Court in the case of Messrs Dawood Flour Mills and others v. National Bank of Pakistan 1999 MLD 3205.
In the case of National Bank of Pakistan v. Messrs Nasir Industries and others 1982 CLC 388 his Lordship Saeed-uzZaman Siddiqui, (as he then was) held as follows:- "In my humble opinion the above review of case law shows that the provision with regard to the payment of 75 per cent of the balance purchase money contained in rule 85 of Order XXI, C.P.C. Is mandatory in nature and hot merely directory and that non-compliance thereof renders a ple void and the Court is under an obligation in such circumstances to order for re-sale of the property in terms of Order XXI, rule 86, C.P.C. I am further of the view that non-payment of balance 75% of the purchase money in terms of the provisions of Order XXI, rule 85, C.P.C. Cannot be described as an irregularity in connection with the 'publishing and conducting of the sale' so as to attract the provisions of Order XXI, rule 90, C.P.C. The effect of non-compliance of the provision of Order XXI, rule 85, C.P.C. On an auction sale, in my view is that the sale is rendered void and the Court is bound to order for resale of the property in terms of Order XXI, rule 86, C.P.C. And, therefore, it is not necessary that there should be an application for re-sale of the property to the Court either by the decree holder or the Judgment Debtor. I am also of the view that the Court has no power either under section 148 or section 151, C.P.C. To extend the time fixed under the rules for payment of the balance of the sale price. The maxim that the act of the Court prejudice no man, in my humble view, apply on to those cases where it is shown in the first place that the party, who acted bonafidely on the order. Of Court was in no way responsible for passing of that order and secondly the party was in a position to meet his obligations under the law but non-compliance resulted due to the orders of the Court. Objections to the validity of such an order of the Court will also be not entertained in . These circumstances if the party objecting to its validity had acquiesced into it."
It was further held that the Court clearly was not possessed of any power to enlarge the time fixed under the rules.
In the case of Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed and another AIR 1954 SC 349 the Supreme Court of India held as follows:-- "The provisions of Order XXI, rules 84, 85 and 86 requiring the deposit of 25 per cent of the purchase money immediately, on the person being declared as purchaser, such person not being a decree holder, and the payment of the balance within 15 days of the sale, are mandatory and upon non- compliance with these provisions, there is no sale at all. The rules do not contemplate that there can be any sale in favour of a stranger purchaser without depositing 25 per cent of the purchase money in the first instance and the balance within 15 days. When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Nonpayment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to re-sell the property (rule 86) in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law."
21. The judgment of the Honourable Supreme Court in the case of Al,Hassan Feeds and another v.
United Bank Ltd. And 6 others 2004 CLD .27,5, relied upon by Mr. Memon is clearly distinguishable from the facts of the present case. In the above cited case 1/4th of the auction money was deposited in Court, however, for the balance 3/4th amount the auction purchaser through an application dated 29-9-1998 (i.e. Before expiry of the prescribed period of 15 days) sought extension of time by 60 days and the decree-holder-Bank' consented to such deposit being made by 26-10-1998. However, since the judgment debtor did not consent to the above extension and instead prayed for setting aside of the sale, the Executing Court, though issued a show cause notice to the auction purchaser regarding forfeiture of the initial amount deposited by him, but 'allowed him to deposit the balance amount subject to further orders after notice to the other parties and the auction purchasers deposited the amount on 26-10-1998. On 11-1-1999 the judgment debtors were allowed to deposit the decretal amount along with five per cent of the auction money for setting aside the sale but they failed to make such deposit and instead requested for one month's time for depositing Rs.1,00,000 and some more time for the balance amount and the case was adjourned to 28-1-1999. On which date, none appeared on behalf of the judgment debtors, and the auction was thus confirmed. However, in the present case, neither was any extension granted by the executing Court for depositing the balance amount nor did the judgment debtor agreed to deposit the decretal amount and/or five per cent of the sale price for setting aside of the sale nor, indeed, was there any question of his defaulting in making such payment and as such, the above cited case is of no avail to the auction-purchaser, the respondent No.1.
So also are the facts Messrs Chawla International v. Habib Bank Limited 2003 CLD 956 relied upon by Mr. Memon, distinguishable from the present case as in the reported case the Court had granted one week's time to the Auction Purchaser to deposit the initial 15% amount of the purchase price and the deposit was made within such period,' whereas regarding the deposit of the balance purchase price the learned Division Bench refrained from making any order as the controversy was before the Honourable Supreme Court.
22. As regards the question of limitation, in the first place, it may be noted that since the attachment and sale of the properties, as noted above, was without jurisdiction and void ab initio and since even otherwise in consequence of the default committed by the auction purchaser in depositing the balance purchase price, the purported sale was rendered a nullity. Such attachment and/or sale was not even required to be set aside and thus no application in that regard was required to be moved. Secondly, since the appellants were not parties to the proceedings between the judgment debtors and the decree holder nor were they aware of the judgment and decree, for enforcement whereof the execution proceedings were initiated by the decree holder, or of any orders passed by the executing H Court till the date they were dispossessed by the Nazir of this Court i.e. 15-2-2000, there was no question of their approaching the Executing Court, any time earlier than 15-2-2000 and since the attachment and sale of the property and the order for taking over possession of the property was void. The period of limitation available to the appellants was three years from the date of their dispossession, whereas, C.M.A.
No.353 of 2000 under Order I, rule 10, C.P.C. Was filed by the appellants before the Executing Court on 16-2-2000 and C.M.As. Nos. 411,' 412 and 413 of 2000, under Order XXI, rule 90, C.P.C., were filed or behalf of the appellants on 21-2-2000 and C.M.As. Nos.415 and 417 of 2000, under Order XXXIX, rules 1 and 2, C.P.C., and under Order XXI, rule 90, C.P.C., on behalf of Shaukat Nadeem and S.M. Nadeem Rafi, were filed on 22-2- 2000, well within the prescribed period of limitation. Reliance in this regard is placed on Haji Hussain Haji Dawood and others v. M.Y. Kherati 2002 SCMR 343; National Electric Company of Pakistan v. Allied Bank of Pakistan Ltd. 1991 CLC 192; National B'ank of Pakistan v. Nasir Industries 1982 CLC 388 and Chengalraya Reddy and others v. Kollapuri Reddi AIR 1930 Madras 12.
23. It is, indeed true that the possession of their respective tenements was reverted back to the appellants on the condition that they shall not remove the machinery therefrom, and such restoration was subject to their furnishing security in the sum of Rs.50,000 each, along with an undertaking to the effect that they shall not remove any machinery from the tenements. However, in view of the fact that the attachment and sale of the machinery in question, as discussed earlier, was wholly without jurisdiction and was even otherwise rendered void, and the appellants, as discussed in para 11 supra, removed the machinery under a bona fide impression that the setting aside of judgment and decree has resulted in termination of the proceedings before the executing Court and that all orders including the order dated 24-4-2000 stood vacated, the order of forfeiture of the entire amount of security, we feel is too harsh, and keeping in view the dictum of the Honourable Supreme Court in S.M. Yousaf v. S.K. Rahim and others PLD 1969 Supreme Court 77 to the effect that jurisdiction of superior Courts to take action for contempt of their own authority is to be jealously guarded but sparingly exercised and that where the conduct of a person, apparently defying orders of the Court, leaves room for doubt with regard to his intention and belief and it is possible that he acted either mistakenly or on wrong but honest notions about his rights, the benefit of doubt should ungrudgingly be given to him, modify the same by ordering that the securities be forfeited to the extent of Rs.5,000 (Rupees five thousand) each, such forfeiture shall be in favour of the Government as respondent No.1, the auction purchaser, in the circumstances of the case, is not entitled to the same. The appeals stand, disposed of in the foregoing terms.