1. MAQBOOL BAQAR, J.---Through the present order I propose to dispose of the various objections raised by Messrs Kiran Sugar Mills, the judgment-debtor in the above two execution applications, and by Messrs Chawla International inter alia against the publication and the conduct of sale of the judgment-debtor's Sugar Mill's and acceptance of the offer of Messrs Euro-Plus (Mons- Belgium) in the said execution proceedings filed by Habib Bank Limited and United Bank Limited respectively, for recovery of the amounts, in respect of the decrees passed in favour of the said two banks, against Messrs Kiran Sugar Mills Limited and its guarantors. The relevant facts of the case, in brief, are that by order dated 8-5-2000 a learned Single Judge of this Court exercising Banking Court jurisdiction in the above proceedings appointed official assignee as Commissioner to attach and sale the judgment-debtor's Sugar Mills. The official assignee in compliance of the said order invited sealed tenders for the purchase of the said Mills, through publication in various daily newspapers of English and Urdu languages. Such publication was made on 26-7-2002. In terms of the publication sealed tenders were to be submitted before the official assignee on 27-8-2002. In response the official assignee received the following offers on 27-8-2002:--- Sr. No. Name of Bidder Previous Offer
(i) Messrs Chawla InternationalRs. 17.50 Crore
(ii) Messrs Ellahi Electronic Rs.15.00 Crore
(iii) Messrs Regent Services (Pvt.) Ltd.Rs. 15.00 Crore
(iv) Messrs Indus Sugar Mills Ltd.Rs.80.00 Crore The offer at Sr. No.(iv) was subject to the following conditions:- (i) Rs.5.00 Crore shall be deposited after acceptance of the offer with a grace period of two years. (ii) Balance payment shall he made in 8 years.
2. In his endeavour to seek improvements in the aforesaid offers the official assignee held meeting/negotiations with the aforesaid bidders on 2-9-2002, 5-9-2002, 7-9-2002 and 10-9-2002 which resulted in the following improvements:--- Sr.No. Name of Bidder Previous Offer Improved Offer
(i) Messrs Chawla International.Rs.17.50 Crore Rs.25.30 Crore
(ii) Messrs Ellahi ElectronicsRs. 15.00 Crore Rs.25.25 Crore
(iii) Messrs Regent Services(Pvt.) Ltd.Rs.15.00 Crore Rs.18.00 Crore
(iv) Messrs Indus Sugar Mills Ltd.Rs.80.00 Crore No improvement and no variation in the mode of payment.
3. Through reference dated 17-9-2002, the official assignee submitted the offers pf Messrs Chawla International in the sum of Rs.25.30 crores (Cash within 30-days) and that of Indus Sugar Mills Limited of Rs.80 Crores with the afore-noted conditions, for decision by the Court. The offers were however not accepted by the learned Banking Judge, who by order dated.
4. 23-9-2002 directed the official assignee to negotiate with Messrs Chawla International or any other party interested in buying the property and to submit a fresh reference. On 21-9-2002 the learned official assignee received an offer of Rs.30 Crores from Messrs Euro Plus (Mons-Belgium). On 1-10- 2002 the official assignee called a meeting of the original bidders wherein he also invited the representative of Messrs Euro Plus to persuade the bidders to improve their offer. The meeting was also attended by a fresh entrant, namely, Bhittai Traders. The aforesaid meeting, resulted in the following improvements.
5. Sr.No. Name of Bidder Previous Offer Improved Offer
(i) Messrs Euro-Plus (Mons Belgium)Rs.30.00 Crore Rs.40.00 Crore
(ii) Messrs Bhittai Traders Rs.30.10 Crore Rs.39.55 Crore
(iii) Messrs. Chawla International.Rs.25.30 Crore No improvement
(iv) Messrs Regent Services(Pvt.) Ltd.Rs.25.00 Absent
(v) Messrs Indus Sugar Mills Ltd.Rs.80.00 Crore Rs.80 Crore plus Rs.15.90 Crore towards settlement of certain liabilities of the Judgment- debtor company.
6. Messrs Indus Sugar Mills had however agreed to pay the amount . In instalments staggered for a period of eight years. Subsequently Indus Sugar Mills Ltd. Through their Advocate submitted a revised offer of Rs.100.00 Crores, as detailed hereinafter. Through reference dated 7-10-2002 the official assignee sought orders of the learned Banking Judge for acceptance or otherwise of the following bids/offers.
7. (i)
8. Messrs Euro Plus (Mons Belgium) which offer includes dues of WAPDA Rs.15,15,300 and PTCL for Rs.4,14,704M Rs.40.00 Crore
(ii) Messrs Indus Sugar Mills Ltd.Rs.100.00 Crore (on instalments basis) plus Rs.15.90 Crore (on Instalments basis).
9. The amount of Rs.100 Crore to be paid in the following instalments:-
(a) Rs.5.00 Crore after acceptance of offer.
(o) Balance amount in the yearly instalments as under:-- 1st year Rs.2.00 Crore 2nd year Rs.2.00 Crore 3rd year Rs.3.00 Crore 4th year Rs.4.00 Crore 5th year Rs.4.00 Crore 6th year Rs.4.00 Crore 7th year Rs.5.00 Crore 8th year Rs.5.00 Crore 9th year Rs.6.00 Crore 10th year Rs.6.00 Crore 11th year Rs.7.00 Crore 12th year Rs.7.00 Crore 13th year Rs.8.00 Crore 14th year Rs.8.00 Crore 15th year Rs.12.5 Crore 16th year Rs.12.5 Crore
(c) Rs.2.2 Crore out of the amount of Rs.15.90 Crore to be paid to growers and Rs.13.7 Crore towards Government dues within 3 years.
(d) Security for the above mentioned amount in the shape of agricultural land approx. Valuing Rs.10.00 Crore only. By order dated 14-10-2002 the learned Banking Judge sought further improvements in the offers, in compliance whereof the official assignee held a meeting with the prospective buyers which resulted in the following improvements:--- Sr.No. Name of Bidder Previous Offer Improved Offer
(i) Messrs Euro- Plus(Mons Belgium).Rs.40.00 Crore Rs.45.75 Crore
(ii) Messrs Bhittai TradersRs.41.00 Crore Rs.45.50 Crore
(iii) Messrs. Chawla International.Rs.25.30 Crore Absent
(iv) Messrs Indus Sugar Mills Ltd.Rs. 100.00 Crore No improvement.
10. No variations in the mode of payment.
11. The official assignee through his reference dated 15-10-2005 submitted the above position before the learned Banking Judge for acceptance or otherwise of the aforenoted offers of Messrs Euro Plus (Mons-Belgium) and Indus Sugar Mills Limited. On 15-10-2002 the judgment-debtor' filed objections to the aforesaid reference. By order dated 6-11-2002 the Learned Banking Judge rejected the said objections and with the consent of the decree-holder bank and of CIRC, (which corporation has taken over the non-performing assets of United Bank Limited), accepted the offer of Messrs Euro Plus (Mons-Belgium) in the sum of Rs.46.00 crores. The aforesaid order was assailed by the judgment-debtor ant Messrs Indus Sugar Mills Limited, before a Division Bench of this Court through HCA No.284 of 2002 and HCA 295 of 2002, respectively. Whereas Messrs Chawla International also assailed the said order through HCA No.292 of 2002. The first two appeals were dismissed by judgment dated 29-11-2002 whereas HCA No.292 of 2002 was dismissed vide judgment dated 13-12-2002. Against the aforesaid judgments separate C.P.L.As. Bearing Nos.1113-K of 2002 and 29 of 2003 were filed by the Judgment-debtor and Messrs Chawla International before the Honourable Supreme Court of Pakistan.
12. Mr. Abid Zuberi, Advocate who appeared for the judgment-debtors, in the above C.P.L.A. Made the following submissions before the Honourable Supreme Court:--
(1) Learned Banking Judge got the assets of the petitioner-company auctioned without fixing upset price (reserved price), in violation of the provisions of Order XXI, Rule 66(e), C.P.C., rendering the whole process of the auction illegal. Reliance was placed by him on the judgments reported as PLD 1972 SC 337; PLD 1993 Lahore 706; AIR 1973 SC 2593; 2000 CLC 63.
(2) That the offer of Euro-plus (Mons Belgium), in the sum of Rs.46 Crore, was not liable to be accepted, being very low as the property under sale was evaluated by the evaluators, approved by the State Bank and appointed by BEL, at Rs.796 million and its forced sale value was so determined at Rs.606 million.
15. Mr. Abdul Hafeez Pirzada, appearing for Messrs Chawla International in Civil Petition No.29 of 2003, urged the following grounds before the Honourable Supreme Court:-
(a) The petitioner was the highest bidder in the auction held in pursuance of the proclamation of sale, therefore, it had a legitimate expectation of the acceptance of its bid by the Court which has been denied to it illegally, in violation of law and consistence practice of the Court as such impugned order, calls for interference by this Court.
(b) In the second round, in deference to the wishes of the Court, the petitioner increased its bid and was again the highest bidder amongst the bidders in the auction, therefore, legitimate expectations was reinforced for acceptance of its bid.
(c) Assuming, without conceding, that if petitioner's bid ought to have been rejected by the Honourable High Court, it could have been done by passing a speaking order and then it was mandatory upon the Court to issue fresh proclamation and order re-auction of the property in view of the judgments reported in (PLD 1993 Lahore 706 and 2000 CLC 863), but the learned High Court had not adhered to the principles noted in these judgments as a result whereof injustice has been caused to petitioner.
(d) That respondent Euro-Plus (Mons-Belgium) did not participate in the auction and only after the recommendation of the official assignee for consideration and acceptance of the bid, it made oral offer on telephone that it was willing to offer 30 Crores. Such offer could not be even considered by the learned Single Judge.
(e) The learned High Court committed jurisdictional error in abdicating its authority and inviting the official assignee to sell the property by negotiation not confining to bidders but to all ensnares, as such this action on the part of the High Court is totally illegal.
(f) Assuming, without conceding, that the Euro-plus (Mons Belgium) could make an offer then it was mandatory for it to deposit 25% of the offer immediately under the bidding conditions, and as per the requirement of Order XXI, rule 84, C.P.C., and the balance was payable within the 15 days of the acceptance of the offer as per the mandate of Order XXI, rule 85, C.P.C. Unless these provisions have been complied with, the offer made by Euro-plus is null and void. AIR 1954 SC 349; PLD 1953 Lahore 83; PLD 1977 Lahore 542 and 1982 CLC 388 Karachi.
(g) The original Court/learned Single Judge acted illegally in accepting the offer of Euro-Plus (Mons-Belgium) and confirming the sale on the same day and also in directing handing over of the property to the offeror, ahead of the payment of the full price in violation of Rule 351 of the Sindh Chief Court Rules.
(h) Petitioner being the highest bidder in the auction and without prejudice to the rights as contended above, had the right to match the offer made by Euro-Plus (Mons-Belgium). Such offer was made before the Division Bench of the High Court, rather it was improved but the High Court declined to exercise jurisdiction. In reply of above arguments, Messrs Malik Muhammad Qayyum, and Mushtaq Memon, the learned counsel appearing for Messrs Euro-Plus (Mons-Belgium) contended before the Honourable Supreme Court as under:--
(i) Neither the proclamation was issued by the Court nor sale was made under the C.P.C., therefore, all arguments raised by the learned counsel for petitioner are irrelevant.
(ii) Respondent Euro-Plus (Mons-Belgium) faithfully abided by the terms of the public notice published in the Newspapers dated 26th July, 2002.
(iii) Petitioner having acquiesced the procedure and having participated in the proceedings for sale is estopped to say that sale should be made in another manner or some additional provisions should be added in the sale publication.
(iv) Even assuming that C.P.C. Apply, there is no prohibition in the C.P.C. Or in any other law requiring that if an auction was held, no subsequent negotiation can take place.
(v) Condition relating to deposit of 10% of the, offer before making bid and 25% of the offer after the bid are all procedural matters and deviation therefrom do not render the proceedings of sale illegal or void. Euro-Plus had deposited 10% along with offer. 25% additionally was deposited within the time allowed by the executing Court and the remaining amount could not be deposited on account of stay order issued firstly by the Sindh High Court and then by the Honourable Supreme Court.
(vi) Euro-Plus had not made any offer on telephone but given his offer in writing on 21st September 2002, which fact finds mention in the order passed by the learned Single Judge.
(vii) The date fixed for receipt of sealed bids is extendable by the Court and it was done, vide .
13. Order dated 23rd September 2002, therefore, it is incorrect to say that offer made by the respondent Euro-Plus (Mons-Belgium) was belated.
(viii) The Court was under no obligation as per law and as per the terms of proclamation inviting bids to accept the highest offer, therefore, even if the offer made by petitioner (Messrs Chawla International) was highest, it does not acquire any right to be agitating before any Court.
(ix) All, efforts made by the Court are permissible under the law and also it is required by the Court to make all efforts to have the bid price enhanced, therefore, any order passed or proceedings taken by the Court for achieving this object, would not be interfered by this Court.
(x) That ample time and opportunity was given to Messrs Chawla International to match their bid with that of Euro-Plus (Mons-Belgium)'s bid but they failed, rather refused to do so, therefore, the offer made by Messrs Chawla, before the Honourable Supreme Court, cannot be accepted.
(xi) That in any case, these petitions are premature inasmuch as the learned Division Bench of the High Court in the impugned order has observed that the sale in favour of respondent Euro-Plus (Mons-Belgium) has not been confirmed and matter is still open before the learned executing Court where all such pleas can be raised.
(xii) The property under sale was a mortgaged property for which special procedure has been provided under the Banking Laws."
14. The above two petitions were disposed of by the Honourable Supreme Court, through a common order, passed with the consent of the counsel for the parties on 9 9-2004, thereby permitting the parties to raise before the Banking Judge the aforenoted objections/contentions or any other question, in accordance with law. Pursuant to the aforesaid order of the Honourable Supreme Court, the aforenoted execution applications were taken up for hearing of the various objections/submissions of the parties. During the course of arguments Mr. Aitzaz Ahsan, the learned counsel for the judgment-debtors submitted that in terms or Order XXI, Rule 66(e), C.P.C. It was imperative upon the Banking Court to have determined reserved price of the - judgment- debtor's property and indicated the same in the sale proclamation however, in violation of the said mandatory provision, no reserve price was either determined or mentioned in the sale proclamation, thus rendering the whole exercise illegal. He further contended that as a result of non-determination and non-declaration of the reserve price the judgment-debtor has been gravely prejudiced as the price of Rs.46 Crore offered by Euro Plus is grossly inadequate. He submitted that even the evaluators appointed by Bankers Equity Ltd. Who are the lead Banker of the consortium that granted finances to the judgment-debtor have evaluated the value of the property in question at Rs.796,836,611 and has declared the forced sale value thereof to be Rs.6,045,788 which is far in excess of the offer made by Euro-Plus. The learned counsel submitted that the judgment-debtor is genuinely interested, and has a right that his assets are sold at a realistic price so that the major amount of his liability may be paid off. The learned counsel further submitted that the offer made by Euro-Plus was not liable even to be considered, firstly for the reason that Euro did not submit their bids within the time as prescribed by the sale proclamation dated 26-7-2002 and made their offer as late as on 21-9- 2002, and that too without depositing 10% per cent .Of their offer, as they, along with their offer of Rs.30 Crores, only deposited Euros 52725, which amount is equivalent to Pak Rupees 30,00,000 which is merely one per cent of the amount offered. He further contended that since the highest offer obtained by the official assignee in pursuance of the sale proclamation was inadequate and was rejected by the Banking Court, the Court ought to have ordered re-auction of the property, and by allowing the official assignee to negotiate with the original bidders and also with Euro-Plus for enhancement of the price the Banking Court has committed gross illegality. He submitted that at best negotiations could have been allowed with the bidders who had submitted their bids in conformity with the sale proclamation. He submitted that the Banking Judge has committed jurisdictional error in abdicating his authority by permitting the official assignee to sale the property through negotiations not confining to the bidder but all ensnares. The learned counsel submitted that Euro-Plus not only failed to deposit 10% of the bid amount as prescribed by the sale proclamation but has also failed to deposit the balance 75% of the bid amount as directed by the Court and also mandated by Rule 85 of Order )0(I, C.P.C., thereby nullifying the entire transaction, and thus it was imperative for the Court to have ordered re-auction of the property as mandated by Rule 86 of Order XXI, C.P.C. Mr. Ehsan contended that even otherwise, the Court should not have accepted the offer and ought to have provided an opportunity to the judgment-debtor to resolve the issues pertaining to settlement of its debts with the decree-holder and other banks under the State Bank, BPD Circular No.29, as the Judgment-debtor has applied to the banks, within the prescribed time and not only the matter was pending before the State Bank Committee constituted under the said scheme/circular for resolution oct cases pertaining thereto, but the judgment-debtor company fully meats the eligibility criteria for availing the incentives under the said circular. He further contended that it is now well-settled that State Bank of Pakistan, BCD Circular 29, has a statutory force and the judgment-debtor company having been declared eligible to avail the same and having applied thereunder within the prescribed time, the mandate as contained in the circular ought to have been honoured in favour of the judgment-debtor company, the Company having acquired a legal and vested right for settlement of its liabilities in terms of the circular. In support of his contention the learned counsel relied on the judgments in the following cases:-- Messrs SPRL Rehman Brothers v. Banking Court No.II Lahore 2000 MLD 1957, whereby a learned Single Judge of the Lahore High Court proceeded to set aside the sale conducted and confirmed by a Banking Court, even after issuance of sale certificate to the auction-purchaser, on the ground that the auction was conducted in a hasty manner and without following the legal requirement in letter and spirit. It was observed that property of more than crores was sold away for an amount of Rs.40 Lacs and that the auction-purchaser did not deposit 1/4th of the bid money at the spot as required under the law and that even the auction proceedings as well as auction report submitted by the Court's auctioneer did not inspire confidence. In the case of Messrs Naqi Chemical Industries (Pvt.) Ltd. v. Habib Bank Limited 2003 CLD 571 a Division Bench of the Lahore High Court proceeded to set aside the sale conducted by a Banking Court, as being violative of the mandatory provision of Order XXI C.P.C. As the auction was not conducted by the Court auctioneer at site and on the prescribed date. It was held that in terms of Rule 69 of Order XXI, C.P.C. The date of auction fixed by the Court can either be adjourned by the Court or the Court auctioneer conducting the sale and then the Court auctioneer can only adjourn the sale when he is physically present at the site. It was further held that the failure of auction-purchaser to deposit 3/4th of the amount within 15 days as per terms and conditions of sale and the extension of time in that regard by the Banking Court, without giving notice to the judgment-debtor, by Completely ignoring the mandatory provision of Order XXI, rule 68, C.P.C., was absolutely illegal and without jurisdiction, as extension of time under section 148, C.P.C. Can only be granted by the Court where such time had been fixed by the Court itself but when time for doing an act had been determined and fixed by law the Court had no power or authority to extend such time and that Order XXI, rule 85, C.P.C., compliance whereof is mandatory provides that full payment of the . Auction price by the purchaser shall be made before the close of 15th day from the sale of the property such being a mandate of law Court had no jurisdiction to enlarge the time. It was further held that the rule that no one shall be prejudiced on account of an act of Court would only be applicable in the cases where Court had authority to pass the order but the order was erroneous. However, where the Court lacked the authority to extend the time beyond such limit as prescribed by Rule 85, notwithstanding such extension by the Court, a party cannot put a premium on a void order. In the case of Muhammad Hassan v. Messrs Muslim Commercial Bank Ltd. 2003 CLD 1693 a Division Bench of the Lahore High Court held that a Court cannot delegate the powers to settle the terms and conditions of sale and to draw the sale proclamation to an officer appointed by it for conducting the sale and that the settlement and drawing of sale proclamation should be done after notice to the judgment-debtor.
15. It was further held that the notice to sale without disclosing the accurate and adequate description of property was materially irregular With regard to the mode of execution of a decree it was held that under section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 the Banking Court has power to execute a decree in any manner as the Banking Court considers fit but such power can be exercised where there is a request by the decree-holder and the Court by application of conscious mind comes to the conclusion that the decree cannot be executed by applying general rules as provided in the C.P.C., and further where there was no speaking order passed in terms of section 19 of the above Ofdinance and the Court issued notice to the judgment- debtor under Order XXI, Rule 66, C.P.C. Then it would be deemed that the Court had intended to execute the decree according to the provisions of Civil Procedure Code rather than under special law. In the case of Hydaybia Textile Mills Ltd. v. Allied Bank of Pakistan Ltd. PLD 1987 SC 512 the Honourable Supreme Court held, that the Banking Court in the matter of judicial sale, is vested with vide discretion to choose any mode of execution of the decree, it cannot however, refuse confirmation of sale on any ground which it chooses. It was further held that once a Court had made up its mind to execute a decree by attachment and sale by public auction, as long as the order so directing is in the field, the discretion vested in it under section 8(3) of the Ordinance stood exhausted and a particular course of proceedings was brought into motion which had to culminate in a result contemplated by legal principles, and this course could not be diverted on the assumption that the executing Court had discretion to choose any mode of execution. In the premises the question of confirmation was to be regulated either by Civil Procedure Code or equitable principles under the provisions thereof or on general principles. With regard to the judicial discretion it was held that such discretion vested by statutory provision cannot be construed in such a manner as it will arm the Court with arbitrary powers and would inevitably destroy the public confidence in the stability in the judicial arrangements. Similar view was expressed by a Division Bench of the Lahore High Court in the case of Ch. Abdul Majeed v. Sadaqat Seed Malik 2002 CLD 463, where sale had been confirmed and sale certificate had been ordered to be issued, in the following words: "Once the Banking Court had opted to execute decree in the manner prescribed in Civil Procedure Code, 1908 more particularly in accordance with the provisions of Order XXI, C.P.C.
16. Thereof the discretion vested in the Banking Court by virtue of section 8(3) of the Banking Companies (Recovery of Loans) Ordinance, 1979 to adopt any mode or procedure for execution of its decree stood exhausted. In the case of Messrs Shandia Saleem and another v. Habib Credit and Exchange Limited and 4 others 2001 CLC 126, where no reserve price of the property was fixed and the same was auctioned at much lower price without issuing the requisite notice to the judgment- debtor it was held that the provisions of Order XXI, rule 66, C.P.C. Were violated. The property was sold at throw away price without making serious efforts to sale the same at the prevailing market price and the auction proCeedings were set aside with the direction to re-auction the mortgaged property strictly under the rules. In the case of Brig. (Retd.) Maqbool Hag v. Messrs Muslim Commercial Bank Ltd. PLD 1993 Lahore 706. A Division Bench of the Lahore High Court proceeded to set aside an ex parte decree and orders passed in the execution of such decree, including sale of immovable property, and confirmation of such sale, as having been effected through fraud and misrepresentation. The decree was set aside on the ground that the same was obtained by the plaintiff-Bank by suppressing the correct address of the defendants, whereas the execution proceedings were declared a nullity, inter alia for the reasons that no-preliminary decree as required by Order XXXIV, Rule 2, C.P.C., was passed by the Court and it instead treated the impugned decree as a final decree and_the defendant was thus deprived the opportunity to pay of the decretal amount and to avoid the Court sale. In addition to the foregoing the Court auctioneer, instead of auctioning the immovable property of the defendant/Judgment-debtor as was directed by the Court, auctioned a very valuable commercial property situated in the heart of the capital city, at a throwaway price, and such sale was affected without any notice to the defendant/Judgmentdebtor. It was in the above background, that the Court held that it is the duty of the executing Court to conduct the auction in accordance with law which had not been done. It was further held that in case of conflict between the provisions of Civil Procedure Code 1908 and the Banking Companies (Recovery of Loans) Ordinance, 1984 the latter would prevail and that where the Special Banking Court chooses to adopt provisions of Civil Procedure Code 1908 for sale of immovable property in execution of a decree, correctness of orders passed by such Court in conducting sale of the property in question would have to be necessarily adjudged on the touchstone of the Civil Procedure Code, 1908 and that the Special Banking Court could not pick and choose the provisions of Civil Procedure Code, 1908 and that where gross violation of provisions of Civil Procedure Code, 1908 was identified by the aggrieved party the Special Banking Court could not take refuge in the provisions of Banking Companies (Recovery of Loans) Ordinance, 1984, to say that it was not bound to follow provisions of C.P.C. It was further held that non-compliance with the provisions of Order XXI, rules, 66, 67 and 68, C.P.C. Would render the sale a nullity and that 3/4th of the sale price should have been deposited by the auction-purchaser in Court within 15 days of sale and that non-deposit of such amount within the requisite time would render sale void. Messrs Abdul Hafeez Pirzada and Afzal Siddiqui, Counsel for the Messrs Chawla International submitted that since their client was the highest bidder in the auction held in pursuance of the proclamation of sale, they, therefore, had legitiniate expectation of the acceptance of their bid by the Court, which has been denied to them illegally in violation of law. They submitted that even in the second round, in deference to the Court direction, Messrs Chawla increased their bid and were again the highest bidders amongst the bidders in the auction, therefore, their legitimate expectation were reinforced for acceptance of their bid. The learned' counsel submitted that the order accepting Euro's bid by the Court was violative of the mandatory requirements of rules 65, 66 and 67 as well as rules 84 and 85 of Order XXI, C.P.C. The learned counsel submitted that rule 65 contemplates that, unless otherwise prescribed, every sale made in execution of a decree is to be made through public auction. They submitted that admittedly, the procedure of sale by way of public auction had commenced when sealed bids were invited and thereafter the Court or the official assignee could not resort to the method of sale through the private negotiation and even in case the Court was not satisfied with the offer received, it ought to have ordered re- auction and if at all, negotiation could only be held with the original bidders and not through inviting fresh offers. They contended that non-disclosure of reserved price in the sale proclamation is violative of Rule 66 of Order XXI, C.P.C. And such illegality by itself vitiates the sale. It was contended that failure of Euro Plus to deposit 25 per cent of the sale price immediately upon acceptance of their offer and the balance 75 per cent within fifteen days thereafter rendered the sale void. Mr. Pirzada further contended that once the Banking Court has decided to follow the method provided by Civil Procedure Code in the execution proceedings it could not pick and choose certain provisions and ignore the other. In support of his arguments, learned counsel placed reliance upon a Division Bench judgment of the Lahore High Court in Brigadier (Retd.)
17. Mazharul Haq and others v. Muslim Commercial Bank Ltd. (supra). He referred to Rule 85 and in support of his contentions that the failure of Euro Plus to deposit 25 per cent of the sale consideration immediately upon acceptance of the bid and subsequent failure to deposit the remaining amount within fifteen days of such acceptance completely vitiated the purported sale, relied upon the judgments in the cases of National Bank of Pakistan v. Nasir Industries (supra), Sayed Brothers v. District Council Lyallpur (supra) and Manilal Mohanlal Sha v. Sardar Sayed Ahmed (supra).
18. On the other hand Mr. Adam Bin Jaffri, learned counsel for the auction-purchaser, Messrs Euro-Plus (Mons Belgium) submitted that neither the proclamation, issued by the Court, nor the sale was made under the Civil Procedure Code and therefore, reliance of Mr. Aitzaz Ahsan on the various provisions of C.P.C. Is wholly irrelevant and inconsequential. He submitted that in the first place none compliance of the various Rule including Rule 66 of Order XXI, C.P.C., per se does not vitiate a sale and moreso in case of a Banking Court's decree secondly, absolutely no prejudice has been caused to the judgment-debtor on account of non-disclosure of the reserved price in the sale proclamation as the bid submitted by the Messrs EuroPlus is more than the forced sale value of the property in question, as its, forced sale value as determined by an evaluators approved by the State Bank of Pakistan, in October 2002 was Rs.6,060,457, 88 and BPRD Circular No.9 issued by the State Bank of Pakistan, specifying prudential regulations/ guidelines for banks and NB's, stipulates that where a sick mill remained closed for more than one year after its valuation, the forced sale value shall be reduced by 50 per cent whereas the judgment-debtor's Mill has remained closed since last about seven years and thus its forced sale value comes to Rs.303 million only. The learned counsel further submitted that although in terms of C.P.C. And the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, no notice of the execution application was required to be served on the judgment-debtor and moreso for the reason that the execution applications have been filed within one year from the passing of the decrees, however, all efforts were made by the Banking Court to have the judgment-debtors served and they were ultimately served through publication in the Daily Dawn on 14th April, 2000 and appearance was entered on their behalf by Mr. Nadeem Asghar Siddiqui, Advocate on 6-5-2002, i.e. Two days before the date when official assignee was appointed by this Court to sell the judgment-debtor company's Sugar Mill and about more than two and a half months before the official assignee caused the sale proclamation to be published in the newspapers on 26-7-2002 but the judgment-debtor neither submitted their valuation or the terms of sale, nor objected to the contents of the proclamation or the manner and mode of the sale conducted by the official assignee, any time before filing objections- to the reference dated 15-10-2002, whereby the official assignee submitted the ultimate offer of Euro-Plus and Indus Sugar Mills for approval, before the Court and it was despite the fact that the order dated 23-9-2002, whereby the learned Banking Judge authorized the official assignee to negotiate with Messrs Chawla International and Messrs Indus Sugar Mills Ltd. Or with any other party interested in buying the property, was passed in presence of Mr. Abid Zuberi Advocate who was then appearing for the judgment-debtors. He also referred to the order dated 25-10-2002 whereby the learned Banking Judge allowed the judgment-debtor to bring a better offer for the purchase of the property and submitted that even a Division Bench of this Court, while hearing the appeals filed by the judgment-debtor and Messrs Indus Sugar Mills Ltd. Provided an opportunity to the judgment- debtor even to match the offer of Messrs Euro Plus but the judgment-debtor showed their inability to do so. He submitted that the price of Rs.46 Crores offered by Euro-Plus and accepted by the Banking Court was achieved/obtained by the official assignee after vigorous and relentless efforts, as initially the highest offer received by the official assignee in pursuance of the proclamation was merely in the sum of Rs.17.50 Crores. Mr. Jafri submitted that the judgment-debtors having acquiesced with the impugned proceedings/exercise and having failed even to match the price offered by Euro-Plus are now estopped from raising any objections to the acceptance of such offer. He contended that in terms of the Banking Law, the Banking Court, in the interest of the parties and in order to obtain the maximum price of the assets being sold, can adopt any procedure and the law does not require the Court to adhere to various Rules prescribed under Order XXI, C.P.C. With regard to the deposit of the bid amount, Mr. Jafri submitted that along with their bid, submitted on 21-9-2002, Euro-Plus, deposited a sum of 52,725 Euros equivalent to Pak Rupees 30,58,050 and on 25-9-2002 deposited a further amount of 4,75,170 Euros equivalent to Pak Rupees 27,559,860 .And in compliance of the order dated 6-11-2002, whereby the Court accepted Euro's bid of Rs.46 Crores, and directed it to deposit 25% of the total bid amount within one week of the date of the said order and the balance amount within fifteen days of the order, it deposited an amount of Rs.10,80,00,000 on 12-11-2002 and insofar as the question of deposit of the balance amount is concerned the same could not be deposited because of order dated 15-11-2005, passed on H.C.A. No.284 of 2002, whereby a Division Bench of this Court restrained the Official Assignee from proceeding any further in the matter, which order remained in force upto 29-11-2002, on which date the Division Bench dismissed the above High Court Appeal, but on the request of the judgment-debtor ordered status quo in the matter for one week, as the judgment-debtors proposed to approach the Honourable Supreme Court and by order dated 4-12-2002, passed in the petitions, filed by the judgment-debtor and on behalf of Indus Sugar Mills, the Honourable Supreme Court directed the Official Assignee to maintain status quo in the matter, which order continued upto 9-9-2004, on which date the Honourable Supreme Court was pleased to remand the matter to this Court for hearing the objection/contention of the parties, and as such, according to Mr. Adam Jafri there has been no default on the part of Euro. Mr. Adam Jafri strongly controverted the assertion of Mr. Aitzaz Ahsan that the judgment-debtor is eligible to avail the incentive scheme under State Bank, BPD Circular 29, and/or that they ought to have been allowed to avail the same. He contended that the Scheme had expired long back, even otherwise, the said Circular/Scheme is not applicable to CIRC, who have taken over the non-performing assets of the Decree-holder Bank in Execution No.42 of 2002 and the incentive scheme launched by CIRC also expired on 30-6-2003. The learned counsel in support of his contentions relied on judgment in the following cases.
19. In the case of Mst. Asma Zafarul Hassan v. Messrs United Bank Ltd. And another 1981 SCMR 108 the Honourable Supreme Court held as follows:- "9. In the light of these observations the High Court was correct in holding that the petitioner had failed to prove substantial loss in case there was violation in the publication of the proclamation such as the failure to publicise it by the beat of the drum and the other irregularities, if at all they were committed.
10. The learned counsel next contended that there was no order of the Court for inviting private offers for sale but this contention looses sight of the fact that the Court, by accepting the reference of the Nazir had given its tacit consent to it, which eminently reflects that the mode of public auction had become impracticable and, therefore, in the ends of justice this was the only course open for the sale of the property in execution of the decree. The objection thus being technical has no substance. Further, if the petitioner had any objection to this mode of sale then she should have objected to it, but having remained absent she must be deemed to have waived her right to do so.
11. The learned counsel vehemently urged that the property could not be sold otherwise than by auction. For this proposition, he placed reliance on rule 65, Order MG, C.P.C. And rule 351 of the Chief Court Rules (Original Side). These provisions do prescribe the mode of disposal by public auction but neither of them -expressly or by necessary implication prohibit any other mode of disposal.
20. Therefore, if the Court had deviated from this mode of disposal to serve the ends of justice, no exception can be taken to it. In Narsing Das v. Mangal Dnbey (1883) 5 All, 163 Mahmood, J. observed:--- "Courts are not to act upon the principle that every procedure is to be taken as prohibited unless it is expressly provided for by the Code but on the converse principle that every procedure is to be understood as permissible till it is shown to be prohibited by the law. As a matter of general principle prohibition cannot be presumed."
12. This principle is now well accepted and as the prime object of the procedural law is to advance the cause of justice, the Court can, under its inherent power, adopt a different mode in the absence of any prohibition to that effect. This contention is also without substance."
21. In the case of Ghulam Abbas v. Zuhra Bibi and another PLD 1972 SC 337, the Honourable Supreme Court held as follows:-- "No doubt, this gives the judgment-debtor a valuable right, but there is no evidence at all to show that the judgment-debtor in the present case, ever tendered any amount to the officer conducting the sale, or paid any amount into the Court which ordered the sale, or asked for the postponement of the sale for this purpose. This complaint of the violation of his right could have been lodged, if it was genuine, at the time of the auction but this was not done even when the appellant on the first postponement of the sale waived the issuance of a fresh proclamation. He must have been aware of its contents then. Before a violation of a right can be alleged it must be shown that the right was asserted and denied. To assert this right, at least, the amount which the judgment-debtor considered to be the correct amount, should have been tendered to the officer conducting the sale. This was never done, nor is there any evidence on the record to show that the judgment- debtor was ever in a position to procure this amount. No violation of the right has, therefore, taken place, about which any legitimate complaint can be made at this stage. This is clearly an afterthought."
22. In the case of Captain-PQ Chemical Industries (Pvt.) Ltd. v. Messrs A.W. Brothers and others 2004 SCMR 1956 it was held as under:-- "There is no cavil with the proposition that auction proceedings should be transparent and every possible effort be made to fetch the maxim price closer to market value. The prime object of inviting tender is to provide equal opportunity to all the prospective bidders which was never frustrated by accepting the highest bid. It is worth-mentioning here at this juncture that the offer was also given to the petitioner by the Court concerned to purchase the property in question by giving a matching offer, which was, not responded. The learned Advocate Supreme Court on behalf of petitioner was asked pointedly as to whether he was prepared to purchase the properties "A" and "B" in equivalent amount paid by the respondents but the offer was not accepted for the reason that it was beyond their financial competency. The petitioner was only interested to purchase the property and shown inclination to do so but the bifurcation of property "B" from "A" would cause serious prejudice against the respondents by whom an amount of Rs.36 Crore was paid and would have also detrimental effect on the interest of judgment-debtor and the question of satisfaction of decree would have not arisen. It cannot be done at this stage merely for the reason that a bid was floated by the petitioner. As mentioned hereinabove by floating of bid no legal right whatsoever accrued in favour of petitioner. The Court in such-like eventualities is required to safeguard preliminarily the interest of judgment-debtor and further to see that auction proceedings have been conducted in a fair and transparent manner and no bar whatsoever has been imposed on the Court if some beneficial devices evolved to get maximum price and to achieve the said purpose. The Court may make any amendment, deletion, insertion or change in the advertisement qua auction."
23. In the case of S.A. Sundararajan v. A.P.V. Rajendran 1982 PSC 1293, the Honourable Supreme Court of India held that the requirements which were not complied with in the case when settling the sale proclamation were intended for the benefit of the appellant and could be waived by him. They were not matters which went to the root of the Court's jurisdiction nor constituted the foundation or authority for the proceeding nor involved public interest. Clearly, they were mere irregularities and cannot be described as errors which render the sale void. In the case of Messrs United Bank Ltd.
24. Karachi v. Mst. Asma Zafarul Hassan 1980 CLC 565, it was held that in a fit case the Court is competent under its inherent powers to accept a private offer after due notice to parties when satisfied as to offer being reasonable and that the Court is competent to take all steps to execute its own mandate and orders and such powers flows from its jurisdiction. It was further held that the Court is not competent to set aside a sale under Order XXI, rule 92, on the ground of inadequacy of sale price.
25. Ahmed and another PLD 1989 SC 146, where it was held:-- "-Maxim: "Actus Curiae neminem gravabit" (an act of the Court shall prejudice no man)---Failure of Court to specify in its auction notices period within which balance of the sale price had to be paid-non-compliance of provisions of 0.)OCE, R.85 by the party will attract the principle that an act of Court shall prejudice no man. Thus, where a non-compliance with the mandatory provisions of a law occurs by complying with the direction of the Court, which is not in conformity with the law, the party complying therewith is not to be penalized. Indeed the law becomes flexible to absorb such abnormalities and treat the infractions as harmless. Where the directions issued while administering the law have been followed, but it is found that the authority itself had acted in deviation of the law in some particulars, the party acting in accordance with such directions is not held to be blame worthy."
26. Mr. A.I. Chundrigar, learned counsel appearing for CIRC submitted that the judgment-debtor cannot seeks settlement of its liabilities towards CIRC under the State Bank Circular 29 as the same has been issued in-respect of banks and non-banking financial institutions and does not relate to CIRC which even otherwise, not being a Banking Company, does not fall under the Regulatory domain of the State Bank of Pakistan. He further submitted that the incentive scheme launched by CIRC which provided a one time opportunity for amicable settlement of non-performing assets in line with SBP, BPD Circular 29 dated 15-10-2002 has expired on 30-6-2003 and as such the concessions/incentive as provided thereunder are no more available to the judgment debtors. He submitted that in terms of para-12 of BPD Circular 29 the borrower has to make at least 10 per cent cash down payment and the remaining amount may be paid in instalments on quarterly basis within a maximum period of three years whereas under section 35 of the CIRC Ordinance, 2000 the corporation shall have the life of six years from the date of commencement of the said Ordinance which may be extended further by the Federal Government by law. The corporation may be wound up by the order of the Federal Government in such manner as it may direct or under the orders of the competent Court. The learned counsel. Submits that in view of section 35 CIRC has only one year left out of six years of its life as prescribed by law and it is not possible to grant three years to the judgment-debtor to pay is debts. The learned counsel in support of his contention that BPD Circular 29 is not applicable to CIRC has relied on an unreported order of the Lahore High Court passed in UBL v.
27. Zahid Hamid Chaudhry in Execution No.7-B of 2003.
28. On the other hand in a judgment passed by a learned Single Judge of this Court in the case of Tanya Knitwear (Pvt.) Ltd. v. UBL and another 2005 CLD 114 and relied upon by Mr. Aitzaz Ahsan, it was held as follows:-- "The contention of Mr. Rizwan Ahmed Siddiqui that the State Bank Circulars are not applicable to the defendant, in view of the provisions of section 19 of the CIRC Ordinance, has no merit as the same have been specifically made applicable by virtue of section 10(1) and other provisions of the Ordinance. The law is to be interpreted harmoniously. Section 19 is not an isolated section it is incorporated in the CIRC Ordinance which is to be read in conjunction with the other sections in a manner that the other provisions are not rendered redundant or ineffective. The conclusion is that while the CIRC may not act as Banking Company for carrying on its business, the provisions applicable to the borrowers from the respective banks continue to remain in force. The language of the statute being plain and unambiguous and dealing with the assets in the specified manner has to be interpreted in a manner so as to give effect to section 19 as well as other sections of the statute including section 10(1) of the Ordinance as held in the case of Muhammad Haroon v. The Crown PLD 1951 FC 118 and Inspector-General of Police v. Mushtaq Ahmed Warriach PLD 1985 SC 159.
29. It is manifestly clear that the CIRC _has invited for settlement against the non-performing assets in the line with State Bank of Pakistan Circular No.29 dated 15-10-2002. Once the policy is announced and this fact is advertised through public notice all subsequent matters have to be dealt inline with the circular. The question of pick and choose does not arise with regard to the respective clauses of the circular is to be applied in its entirety. Mr. Rizwan Ahmed Siddiqui on being pointed out candidly conceded to this position. He pointed out that the only controversy that now remains to be thrashed out is the entitlement of plaintiff to avail the benefit under the scheme of CIRC and the reference to valuer. This brings the matter to the second point as to the appointment of the valuer. In view of the above discussion this matter does not call for any further examination.
30. It has also been admitted that there are valuers on the panel of CIRC who are also listed on the panel of vlauers maintained by Pakistan Banks Association (PBA). BPD Circular No.29 specifically provides for the manner of selection of vlauers. Accordingly for the aforesaid reasons order dated 17-9-2003 is modified to this extent. It was further held that:- "The time for approaching and availing benefit under the "CIRC Settlement Scheme" has already expired, however, such controversy is not attached in the present matter as the plaintiff has taken the steps necessary to avail the benefit under Circular No.29 within time prior to expiry of the date for availing such facility. The plaintiff has shown his bona fide intention by placing sufficient matter on record and by depositing 10% amount with the Nazir of this Court. The scheme framed by the CIRC specifically refers to action in line with the said Circular No.29. This being the position the case of the delay is not attributable to the plaintiff who is to be dealt with in similar manner and in accordance with the same guidelines whether the application is made to the bank or CIRC both parties to the present suit. For these reasons the plaintiff cannot be deprived of the benefit under the Scheme framed by CIRC."
31. I have heard the learned counsel extensively, and have given anxious consideration to their arguments. With regard to the contention of the counsel for the judgment-debtor company and Messrs Chawla International that the publication and conduct of the impugned sale was violative of the mandate of rules 65, 66 and 67 of Order XXI, C.P.C., as reserved price was not mentioned in the sale proclamation and the Banking Court having rejected the earlier bids as being inadequate, ought to have ordered re-auction, and by not doing so, and instead, allowing the Official Assignee to negotiate, enhancement of the bid amount not only with the original bidders but also with any party who' may be interested in purchasing the Mills, has not only violated the mandate of law but has committed a jurisdictional error by abdicating its authority to the Official Assignee. It is crucial to note that, although the judgment-debtors were duly served before the appointment of Official Assignee as Commissioner to sell the property, and appearance had been entered on behalf of the judgment-debtor company, before passing of such order, neither the company submitted valuation of its assets nor it objected to non-disclosure of reserved price of its Mills in the sale proclamation. It was at least on two occasions that the Court rejected the offers made by various bidders and directed the Official Assignee to seek improvement in the bid amounts, but no objection was then raised by the judgment-debtors, or by Messrs Chawla. They also did not object to the order dated 23-9-2002 whereby the Official Assignee was directed to negotiate the sale of the property with Messrs Chawla International and Indus Sugar Mills or any other party interested in buying the property, although the order was passed in presence of the learned counsel for the judgment-debtor company and Messrs Chawla International. Similarly, Messrs Chawla International has not only submitted its bid in response to the sale proclamation in question without any reservation and/or raising any objection with regard to Li e sale proclamation or otherwise but also participated in the meetings held by the Official Assignee on 2-9-2002, 5 9- 2002, 7-9-2002 and 10-9-2002 and enhanced their bid of Rs.17.50 Crores to Rs.25.30 Crores. Messrs Chawla International in pursuance of the order dated 23-9-2002 again participated in the meeting held by the Official Assignee for enhancement of the offers. They however, failed to enhance their offer and it was only on 14-10-2002 that the counsel for Messrs Chawla International, for the first time objected to the offer made by Messrs Euro-Plus being considered and thus the judgment- debtor company and Messrs Chawla International having acquiesced to the proceedings conducted and exercise undertaken in relation to the sale of the property are estopped from raising any objection to that extent. Furthermore, absolutely no prejudice has been caused to the judgment-debtor company as the sale proclamation under objection, contained adequate description and particulars regarding the property and as a result of the various orders passed by the Court and efforts made by the official Assignee by holding negotiation with the original bidders and the subsequent entrant including Messrs Euro Plus. The offer for the purchase of the property has been enhanced from Rs.17.50 Crores, offered by Messrs Chawla International to Rs.46 Crores, ultimately offered by Messrs Euro-Plus, and accepted by the Court. The offer of Messrs Euro-Plus, was accepted by the Court only after Messrs Chawla International failed to match the same, they rather legged far behind and the judgment-debtor company despite, being allowed by the Court, through order dated 25-10-2002, to bring a better offer failed to do so. They even failed to match the bid/offer of Messrs Euro-Plus, when so allowed by a Division Bench of this Court, while hearing their appeal against the acceptance of Euro's bid/offer and therefore, it does not lie in their mouth to say that the Mill has been sold at an inadequate price. Even otherwise, it is now well-settled that the inadequacy of price, per se is no ground for setting aside a sale. In the case of Mst. Asma Zafarul Hassan (supra), the Honourable Supreme Court while dealing with the objection that the property could not be sold otherwise than by auction as prescribed by rule 65 of Order XXI, C.P.C.
32. And Rule 351 of the Chief Court Rules (0.S), held that these provisions do prescribe the mode of disposal by public auction but neither of them expressly or by necessary implication prohibit any other mode of disposal. Therefore, if the Court had deviated from this mode of disposal to serve the ends of justice, no exception can be taken to it. It was further held that the Court is competent, under its inherent powers, to accept after due notice to party, when satisfied as to offer being reasonable and that .The Court is competent to take all steps to execute its own mandate and orders. In the case of Captain-PQ Chemical Industries (supra) our Honourable Supreme Court held that by floating of bid no legal right whatsoever accrued in favour of petitioner. The Court in such like eventualities is required to safeguard preliminarily the interest of judgment-debtor and further to see that auction proceedings have been conducted in a fair and transparent manner and no bar whatsoever has been imposed on the Court if some beneficial devices evolved to get maximum price and to achieve the said purpose. The Court may make any amendment, deletion, insertion or change in the advertisement qua auction. In the case of S.A. Sundararajan (supra), the Honourable Supreme Court of India has held that the requirements which were not complied with in the case when settling the sale proclamation were intended for the benefit of the appellant and could be waived by him. They were not matters which went to the root of the Court's jurisdiction nor constituted the foundation or authority for the proceeding nor involved public interest. Clearly, they were mere irregularities and cannot be described as errors which render the sale void.
33. Whereas the judgments relied upon by Mr. Aitzaz Ahsan and Messrs Abdul Hafeez Pirzada and Afzal Siddiqui have been passed in the circumstances which were clearly distinguishable from the facts of the present case and more importantly the Supremo Court judgments referred above were not noticed in the said judgment and are therefore, of no avail to the judgment-debtor company or Messrs Chawla International in this case. In view of the foregoing and following the principle laid down by the Honourable Supreme Court, I do not find any force in the above noted objections raised on behalf of the judgment-debtor company and Messrs Chawla International.
34. Having rejected, the objections based on rules 65, 66 and 67 of Order XXI, C.P.C. 1 shall now deal with the question of violation of Rules 84 and 85 of Order XXI, C.P.C. It was contended that Messrs EUro-Plus having failed to deposit 10% of their bid of Rs.30 Crores, along with their bid submitted on 21-9-2002, as required in terms of the sale proclamation, and having further failed to deposit 25% of the sale price immediately upon acceptance of their offer and the remaining 75% within 15 days.
35. Thereafter, Euro's offer has been rendered a nullity. Insofar as the question of deposit of the 10% of the bid amount along with the bid is concerned, it is true that instead of depositing such amount Messrs Euro-Plus had only deposited a sum of Euro's - 52725, equivalent to Pak Rs.3058050, which come to only 10% of their bid amount of Rs.30 Crores. They have however, on 25-9-2002 deposited a further amount of Euro's 4,75,170, equivalent to Pak Rs.27,55,98,60 on 25-9-2002, and by order dated 6-11-2002 the Court while accepting their bid of Rs.46 Crores, directed them to deposit 25% of the total bid within one week and the balance within 15 days from date of the order. The order was partly complied by Euro-Plus by depositing a sum of Rs.108,000,000 on 12-11-2002, which is slightly above 25% of the bid amount. However Euro-Plus failed to deposit the balance amount. The earlier two deposits made by Euro-Plus on 21-9-2002 and 25-9-2002 in the sum of equivalent to Pak Rs.30,58050 and Rs.27559860, having been accepted by the Court while accepting/approving their offer and Euro-plus having deposited a further amount of Rs.10,80,00,000 on 12-11-2002 i.e. Within the time prescribed by the Court, they cannot now be penalized for the violation of the mandate of Rule 84, as they have faithfully complied with the Court's order, and as laid down by the Honourable Supreme Court in the case of Rasheed Ehsan (supra), the Maxim: "Actus Curiae neminem gravabit", come to their rescue. Regarding the non-deposit of the balance amount within 15 days, from the date their offer was accepted by the Court, Mr. All Bin Adam Jafri submitted that Europlus would have deposited he balance amount within the time prescribed by the Court, however, they could not do so as a Division Bench of this Court, by order dated 15-11-2002, passed in the appeal filed by 11 judgment- debtor company, restrained the Official Assignee from proceedings further in the matter, which order continued up to 29-11-2002, when the above appeal was dismissed, with a direction to maintain status quo in the matter for one week, as the judgment-debtor company proposed to approach the Honourable Supreme Court in the matter, and by order dated 4-12-2002 passed by the Honourable Supreme Court in the petition filed by the judgment-debtor company, the lonourable Supreme Court directed the Official Assignee to maintain status quo which order continued till the disposal of the petition by the Honourable Supreme Court on 9-9-2004. However, Mr. All Bin Adam Jafri could not submit any justification for non-deposit of the balance amount after the disposal of the above petitions on 9-9-2004. Neither did EuroPlus deposit any amount after 9-9-2004, nor did they apply for extension of time for depositing the amount, although the judgment-debtor company and Messrs. Chawla International have throughout been raising objections regarding Euro's noncompliance of the mandate of Rules 84 and 85.
36. It is now well-settled that the provisions with regard to the payment of 75% of balance purchase money contained in rule 85 is mandatory and not merely directory and that noncompliance of such provisions renders the sale void and in such circumstances the Court is under obligation to re-sale the property in terms of Rule 86.
37. In the case of Feroze Din Faiz v. Chaman Lal and others PLD 1953 Lahore 83, it was held that the sale in execution of a decree does not require to be set aside if the purchaser fails to pay the full amount of purchase-money within fifteen days. It is void and the Court is required to re-sell the property. The only option which the Court can exercise relates to the forfeiture of the one-fourth deposit and that Rule 86 does not say that there should be an application for a resale. If the execution is pending, it is the duty of the Court to hold another sale.
38. In the National Bank of Pakistan v. Messrs Nasir Industries, Karachi and others 1982 CLC 388 Karachi, it was held that provision with regard to payment of 75% of balance purchase money contained in R85 is mandatory and not merely directory. That non-compliance of such provision renders the sale void and further that the Court is under obligation in such circumstances to order resale of property in terms of R.86: Non-payment of balance of purchase money is not an irregularity in connection with publishing and conducting of the sale so as to attract provisions of R.90 and Court is itself bound to order for resale and is not empowered under section 148 or 151 of Civil Procedure Code, 1908 to extend time fixed under rules for payment of balance of sale price. In the case of Sayed Brothers, Lahore v. District Council, Lyalipur and another PLD 1977 Lahore 542, it was held that provisions of Rules 85 and 86 are mandatory and waiver of such provisions is possible only when decree-holder and judgment-debtor both agreed to extension of time and that waiver in such case amounts to agreeing to old sale being treated as a new sale. It was further held that Order passed by Court without notice to judgment-debtor and decree-holder, without giving them opportunity of being heard-and contrary to provisions of rules 85 and 86 cannot bind judgment- debtor and decree-holder nor can attract principle that party should not be prejudiced for acts of Court nor can question of waiver arise in circumstances. And that, even on supposition that Court could pass order deferring deposit till after decision of objection petition of another claimant or that auction-purchaser could not be penalized for action of Court, such order is hit by principle of reasonable time and auction-purchaser is clearly duty bound to make deposit of purchase money within reasonable time. In the case of Balram v. Ilam Singh AIR 1996 SC 2781, it was held as follows:- "The requirement of rule 85 of Order XXI that full amount of purchase money must be paid by the purchaser at execution sale within fifteen days from the date of the sale, is mandatory. Its non-compliance renders the sale proceedings a complete nullity requiring the executing Court to proceed under rule 86 and property has to be resold unless the judgment-debtor satisfies the decree by making the payment before the resale.
39. Failure to deposit purchase money as per rule 85 is not a mere material irregularity in the sale so as to attract rule 90 of Order XXI. The consequence of the execution sale becoming nullity on failure to deposit full sale price as per Rule 85 cannot be averted on plea that the shortfall in the deposit was occasioned by a mistake of the Court in the calculation of the amount, of which the purchaser-decree-holder was entitled to claim set off under rule 72.
40. In the case of Manilal Mohanlal Sha and others v. Sardar Sayed Ahmed Sayed Mahmad and another AIR 1954 SC 349, it was held that:- "The provision 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 a purchaser, such person not being a decree-holder and the payment of the balance within fifteen days of the sale, are mandatory an 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 fifteen 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 effect that the Court is bound to resell 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. 16 Ca1.33 Overruled; Remark in AIR 1931 Lahore 15, not approved."
41. The judgment of the Honourable Supreme Court relied by Mr. Jafri in the case of Al-Hassan Feeds v.
42. United Bank Ltd. And 6 others 2004 CLD 275, is clearly distinguishable from the facts and circumstances of the present case. In the above cited case leave to appeal was refused to the judgment-debtor against the order of the executing Court confirming the sale, as the auction-purchaser, after having initially depositing 25% of the auction money in Court, had deposited 75% within the time extended by the Court. Such extension was granted to the auction-purchaser subject to the consideration of the judgmentdebtor/petitioners' objections regarding the auction-purchaser's failure to deposit the amount as directed by the Court earlier, and upon being proposed that if the petitioner was willing to deposit the decretal amount along with 5% of the auction price to the auction-purchaser, the decree-holder Bank as well as the auction-purchaser will have no objection to the auction proceedings being set aside.
43. The judgment-debtor/petitioner, though agreed to pay such amount, but only failed to do so but within the time sought by him for the purpose, but neither the judgment-debtor/petitioner nor his counsel appeared before the Court on the subsequent dates as such the Court dismissed the objection petition and confirmed the sale. The Honourable Supreme Court held that the sale was properly confirmed and dismissed the petition. In view of the above discussion, and the mandatory requirements of rules 85 and 86 of Order XXI, C.P.C. I have no other choice but to set aside the impugned sale proceedings. Now reverting to the question as to whether the judgment debtors are entitled to avail the incentive scheme launched under State Bank PBD Circular 29, or the CIRC Scheme launched and announced by the said corporation through a public notice/advertisement in the newspaper. The decree-holder in Execution No.88 of 1999, Messrs Habib Bank Ltd. Has not controverted or objected to the judgment-debtor company's claim in that regard. Habib Bank Ltd.
44. Has in fact concurred with the other lender banks for a settlement with the Judgment-debtor as envisaged in the said circular. The State Bank Committee has also declared the company to be eligible to avail the incentive scheme. In fact, as would be evident from the review of the relevant correspondence between the parties in that regard, CIRC not only invited the judgment-debtor company for a settlement under the incentive scheme launched by the corporation, but the judgment-debtor's case for such settlement was under active consideration of the CIRC and CIRC had shown reluctance to such settlement only on account of pendency of the dispute regarding the acceptance of EuroPlus's bid, before the Honourable Supreme Court of Pakistan. I have perused the correspondence between the judgment-debtor company and CIRC brought on record and reference to a few letters would be relevant to the present issues. In pursuance of the incentive scheme launched by CIRC in line with BPD Circular 29, CIRC, through letter dated 29-5-2003, offered to the judgment-debtor company to avail the benefits provided thereunder. In response whereof the judgment-debtor company has, through their counsel, vide letter dated 29-5-2003, expressed their keenness to settle their liability with CIRC in line with BPD Circular No.29 and requested CIRC to provide to them a copy for the forced sale valuation carried out by the banks to enable them to avail the benefits under the scheme. CIRC by letter dated 6-6-2003 scheduled a meeting with the Managing Director of the respondent- Company on 19-6-2003, and by letter dated 6-6-2003 the judgment-debtor company communicated its acceptance of the offer made by CIRC. By letter dated 17-9-2003 National Accountability Bureau in response to a letter from CIRC, conveyed to the corporation that the bureau has no objection if the judgment-debtor company settles its liability with the consortium of lender banks under Circular No.29 or with CIRC under its scheme. CIRC by letter dated 15-8-2003 addressed to the Chief Executive of Bankers Equity Limited, has expressed its concurrence with the instance of BEL, that since the controversy regarding the acceptance of Euro's bid is pending adjudication before the Honourable Supreme Court, the creditors should not consider any proposal floated by the judgment-debtor company till such time the question is resolved by the Honourable Supreme Court. Such opinion was expressed by BEL in its letter dated 11-8-2003 addressed to CIRC.
45. Similar view was expressed by the Creditor Banks and CIRC in their meeting held on 25-8-2003, and through their letter dated 9-11-2003, the State Bank Committee for resolution of cases, declared that the judgment-debtor company meets eligibility criteria for availing the benefits under the aforesaid circular, but stated that since the case is pending before the Honourable Supreme Court the committee has decided not to intervene in the matter so that the law may take its own course. From the above, it is clear that the judgment-debtor company has promptly responded to CIRC's offer for settlement in line with the BPD Circular No.29 and the matter was under process, however, it was because of the pendency of the petitions filed by the judgment- debtor company and Messrs Chawla International before the Honourable Supreme Court that the CIRC, and the other bankers, including Habib Bank Limited decided not to proceed in the matter any further, till decision of the petition by the Honourable Supreme Court. Insofar as Habib Bank Limited and other creditors are concerned, as noted earlier, they have no objection to the judgment-debtor company settling its liabilities towards them in terms of the circular. CIRC being a statutory corporation is also bound to honour its scheme and to allow the judgment-debtor company for settlement in terms thereof, moreso for the reason that it . Has earlier deferred the matter till decision of the petitions by the Honourable Supreme Court.
46. With regard to the contention of Mr. Chundrigar that L only less than one year is left before the corporation would be wound up, it may be noted that, as rightly held by the Lahore High Court in the aforenoted unreported order passed in Execution No.7-B of 2003, the expression "remaining amount may be paid in instalments within a maximum period of three years" contained in para.12 of BPD Circular No.29 clearly shows that the period of three years is discretionary with the Bank and is not mandatory and even otherwise the period of three years is the out limit and not a minimum limit and therefore, unless the life of ,CIRC is extended as provided by section 35 of the Corporate and Industrial Restructuring Ordinance, 2000, a settlement can be arrived at between the parties providing for payment within the time, left with the corporation. In view of the foregoing discussion, the impugned sale is set aside. The judgment-debtor company may approach the decree-holder Bank and CIRC for settlement of their respective dues in terms as envisaged in SBP BPD Circular 29 and the CIRC Scheme and in case such settlement is reached, binding and conclusive agreement(s) shall be executed between the judgment-debtor company and the decree holders, within fifteen days, in case either no settlement is reached, or agreement (s) is/are executed, the Official Assignee shall issue fresh proclamation for the sale of the judgment-debtor company's mills, after seeking approval of the proposed proclamation from the Court. The learned Official Assignee is directed to refund to Messrs Euro-Plus (Mons-Belgium), the amount it deposited in the above two execution applications.