1. FAISAL ARAB, J.---The appellant owns a residential property bearing Plot No.B-11 admeasuring 483 square yards in Sector-IV, Ahsanabad Cooperative Housing Society Limited, Ahsanabad Town, KDA Scheme No.33, Karachi. This property was mortgaged by the appellant with respondent No,l-Bank as security for the financial facility that was obtained by respondent No.2. On account of default in repayments, the respondent No.1-Bank filed recovery suit being Suit No.93 of 2001 in the Banking Court No.1, Karachi. This suit was not contested with the result that an ex parte judgment and decree dated 30-5-2002 was passed against the appellant and respondent No.2. The respondent No.1-Bank then filed Execution Application No.64 of 2002 before the Banking Court and obtained orders for sale of appellant's mortgaged property through public auction. The property .Was put to auction on 18-5-2005 and the highest bid of respondent No.4 was accepted by the Banking Court. The respondent No.4 was then directed to deposit the balance sale consideration which ,he did on 27-7-2005. Subsequently on 24-11-2005 the respondent No.4 filed application under Order XXI, Rule 92, C.P.C. Seeking confirmation of sale in his favour.
2. It appears that on 13-8-2005 the appellant approached the respondent No.1-Bank and showed her willingness to repay part of the decretal amount in lieu of the release of her property. The respondent No.1-Bank accepted her offer, received certain payments and moved the Banking Court for withdrawal of execution application against the appellant. All this was done when respondent No.4's offer was accepted by the Court and the entire consideration was deposited in Court. Only application, for confirmation of sale was pending. The appellant on her part however, did not move any application before the Banking Court either under Rule 89 or under Rule 90 of.
3. Order XXI, C.P.C. For setting aside of sale that had already taken place in favour of respondent No.4.
4. The Banking Court rejected the plea of respondent No..1-Bank for withdrawal of execution proceedings against the appellant and confirmed the sale in favour of respondent No.4 vide order dated 18-10-2006.
5. In the present appeal, the appellant has challenged Banking Court's order dated 18-10-2006 on the ground that when the appellant and the respondent No.1-Bank had agreed between themselves to satisfy latter's claim against the former the Banking Court ought to have allowed the withdrawal of the execution proceedings against the appellant instead of confirming the sale of her property in favour of respondent No.4. Another ground that has also been taken in this appeal is inadequacy of sale consideration realized for appellant's property through Court sale. We are of the view that once a property is sold by Court in Execution proceedings, the same could be nullified only on the basis of circumstances envisaged by Rules 89 and 90 of Order XXI, C.P.C. Mere arrangement reached between the decree-holder and the judgment-debtor after such sale could not be considered as sufficient enough to set aside the sale as by then third party rights have intervened.
6. Irrespective of the fact that sale has been confirmed by Court or not under Rule 92 of Order XXI, C.P.C., nullifying Court sales whenever judgment-debtor comes to some arrangement with decree- holder would shatter the confidence of the people in the stability of sales made through Courts. A Court sale should only be set aside when equitable grounds for nullifying it exist in favour of the person who owns or hold any interest in the property sold. These equitable grounds have already been provided by law under the provisions of Rules 89 and 90 of Order XXI, C.P.C. And we shall briefly discuss such rules. Rule 89 entitles the person, who owns or has acquired any proprietary interest in the property, which is being sold by Court in execution proceedings, to seek recall of the order of sale within 30 days of such sale upon deposit of 5% of the purchase money for payment to the auction-purchaser. Such provision if invoked within stipulated time is sufficient enough to avoid Court sale as this gives the successful bidder 5% of the purchase money as compensation for denying him the right .To buy the property. Rule 90 on the other hand also entitles a person whose interests in the property sold by Court in execution have been affected on account of any material irregularity or fraud in the conduct of the sale proceedings or the price that was procured was inadequate and did not commensurate with the value of the property. This rule covers situation where the owner of the property under sale was either not aware of the sale of his property or his property ought not to have been put to sale in the first, place. Therefore, in order to seek recall of the sale conducted in execution proceedings, it is necessary that one of the grounds provided in the above referred two rules of Order XXI, C.P.C. Are available to a person who owns or holds any interest in the property. In absence of any application by an aggrieved person on any of the grounds mentioned in the said rules or the rejection of such application if moved by an aggrieved person would result in creation of proprietary interest in the property sold in favour of the auction- purchaser and he as of right would be entitled to get an order of confirmation of sale from Court. In the present case, the appellant herself did not move any application for recall of the sale before the Banking Court on any ground thereby losing the opportunity to question the sale in favour of respondent No.4 forever. Merely because' decree-holder-Bank sought recall of the sale before the Banking Court is not sufficient for setting aside the sale. The aggrieved person was the appellant and she should have moved the Banking Court and within stipulated time. The respondent No.4 on his part paid the entire sale consideration, waited for time for filing of objections if any from any quarter to pass and then filed the application seeking confirmation of sale. In absence of applications under Rules 89 and 90 of Order XXI, C.P.C. No case for setting aside the sale could be made out. In the case of Hudaybia Textile Mills Limited v. Allied Bank of Pakistan Limited reported in PLD 1987 SC 512 and relied upon by the counsel for respondent No.4 in support of his case, the grounds for setting aside Court sale have been discussed by the Supreme Court in much detail. It is worth while to reproduce hereunder the relevant discussion made in the said judgment which is at pages 525-528, paragraphs 13 to 15:--
13. Having regard to these principles we may now advert to the facts of present case. The sole ground that prevailed with the learned Single Judge to set aside the sale and refuse confirmation was the fact that the decree had been adjusted or satisfied to the satisfaction of the decree- holder. There was no objection raised, nor in any such objection being pressed before us, that there was any fraud or irregularity in the conduct of the auction, or the price offered by the auction- purchaser was inadequate. There is no doubt that the Executing Court had discretion to choose the mode of execution as it deemed fit but it cannot be denied that the Court by its order dated 3rd July, 1985, clearly and unequivocally directed that the attached property be put to sale through public auction. The perusal of the various orders passed by the Executing Court also clearly show that the Court had adopted the procedure provided in Order XXI, C.P.C. For the sale through public auction of the property attached. Even the terms and conditions of the auction were expressly determined in accordance with Order XXI, rule 66, C.P.C. Further in his order dated 5th June 1986, whereby the learned Single Judge finally refused to confirm the sale, it is conceded that the judgment-debtor had to deposit the 5% of the purchase money and the decretal amount which are the requirements of the Order XXI, rule 89, C.P.C. The difficulty was overcome by taking the view that such deposits were not the essence of the proceedings. This view is not based on any recognized principle of law. On the contrary even if the Civil Procedure Code is not attracted by its own force in any procedural matter before a Court seized of proceedings of a civil nature, the equitable principles underlying the provisions of the said Code can be invoked in such proceedings. But in any case the Court had made up its mind to resort to execution by way of attachment and sale through public auction.
7. Under section 6(1) (a) read with section 3.Of the Ordinance the Court was competent to adopt the procedure provided in Order XXI, C.P.C. For purposes of the execution of the decree in regard to sale by auction. It has the same powers as a Civil Court under the C.P.C. In section 51 of the C.P.C. One of the modes of execution of the decree is by attachment and sale or by sale without attachment of any property.
14. Therefore, the question is whether even if the technicalities of Order XXI, rule 89 were not attracted, the Court was justified in refusing to confirm the sale on the ground that the decree was satisfied after the sale and before the confirmation of the sale; or even if the provisions of Rule 92 of Order XXI, C.P.C. Were not directly applicable, the Court rightly refused confirmation on the aforesaid ground. In Nanhelal and another v. Umrao Singh AIR 1931 PC 33, the question of law had arisen whether on adjustment between the decree holder and the judgment-debtor come to at any time before the confirmation of an execution sale, would nullify the decree taking away the very foundation of the Court's power to execute the decree viz., the existence of the decree capable of execution. Their Lordship resolved this question in the following manner: "In the first place, Order XXI, rule 2, which provides for certification of an adjustment come to out of Court, clearly contemplates a stage in the execution proceedings when the matter lies only between the judgment-debtor and the decree-holder and when no other interests have come into being when once a sale has been effected, a third party's interest intervenes, and there is nothing in this rule to suggest that it is to be disregarded. The only means by which the judgment-debtor can get rid of a sale, which has been duly carried out, are those embodied in rule 89 viz. By depositing in Court the amount for the recovery of which the property was sold, together with 5 per cent on the purchase money which goes to the purchaser as statutory compensation, and this remedy can only be pursued within 30 days of the sale; see Article 166, Sch., Lim. Act, 1908. That this is so is in their Lordships opinion, clear under the wording of rule 92, which provides that in such a case (i.e. Where the sale has been duly carried out), if no application is made under rule 89.-- "The Court shall make an order confirming the sale and thereupon the sale shall become absolute."
8. Although the aforesaid decision turns on the provisions of the C.P.C. The general principle laid down therein that once a sale has been effected a third party interest intervenes which cannot be disregarded would be applicable in the present case. It cannot, therefore, be argued that the auction-purchaser had no interest whatsoever before confirmation of the sale and the Court could disregard the same by merely looking at the arrangement made between, the decree-holder and the judgment-debtor about 'tht satisfaction of the decree. In Mian Muhammad Abdul Khaliq v. M.
9. Abdul Jabbar Khan and others PLD 1953 Lah. 147, similar view was taken and ii was held that confirmation of sale cannot be withheld merely on the ground that the decree was wiped out or reversed before confirmation of the sale.
15. But apart from the above another vital principle is involved.. In the American Jurisprudence (2nd Edition) volume 47, Article 178 at page 440, the general principles governing the discretion to grant or refuse confirmation of a judicial sale are discussed. It has been observed:-- "Although in some jurisdictions a more restrictive rule is followed in cases where it is urged that confirmation should be refused on the sole ground that an advance or upset bit has been received, the confirmation of or refusal to confirm, judicial sales, as a general rule, rests largely within the discretion of the trial Court, and such determinations ordinarily will not be reviewed except for manifest abuse of such discretion. The discretion to be exercised is not arbitrary, however, but should be one which is sound and equitable in view of all the circumstances. The Court must act in the interest of fairness and prudence, and with a just regard to the rights of all concerned and the stability of judicial sales. Thus, if the sale was fairly conducted and the property sold for a reasonable and fair value under the circumstances, the Court is ordinarily required in the exercise of its judicial discretion to confirm the sale."
10. In Article 179 on page 441 further observations as regards the policy of law in respect of judicial sales have been made as under:-- "Nevertheless, the policy of the law does not require Courts to scrutinize the proceedings of a judicial sale with a view to defeat them, but on the contrary, every reasonable intendment will be made in their favour, so as to secure, if it can be done consistently with legal rules, the object which they are intended to accomplish. As a consequence, in order to maintain confidence in the stability of judicial sales, Courts have adopted the wise policy that confirmation will not: be refused except for substantial reasons, and that in the absence of fraud or misconduct, the highest bidder will ordinarily be accepted as the purchaser of the property offered for sale." The above passages from the American Jurisprudence clearly point out the dominant principle of law in such cases, namely, the stability of judicial sales. In this context the argument that since the Court was vested with the wide discretion to choose any mode of execution of the decree, it can likewise refuse confirmation of the sale on any ground it chooses is without substance. Judicial discretion vested by statutory provisions 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 of the judicial sales as pointed out by the American jurisprudence. Therefore, on facts as well a s on principle the learned Single Judge went wrong in refusing confirmation on the ground that after the sale the decree had been satisfied. Even otherwise once the Court had made up its mind to execute the decree by attachment and sale by public auction, as long as the order so directing was in the field, the discretion vesting 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 the C.P.C. Or equitable principles under the provisions thereof or on general principles as pointed out above. From any angle the refusal of confirmation by the learned Single Judge is unsustainable and the auction-purchaser was entitled, in the circumstances of the case to the confirmation of the auction sale.......
11. The above cited case of the Honourable Supreme Court is applicable on all fours to the present case. Whereas the cases reported as Farida v. Sanjida 2000 SCMR 1264; Navalkha & Sons v.
12. Ramaya Das AIR 1970 SC 2037; Captain PQ Chemical Industries (Pvt.) Limited v. A.W. Brothers 2004 SCMR 1956; Magi Chemicals Industries v. Habib Bank Limited 2003 CLD 571 and Muhammad Ikhlaq Memon v. Zakaria Ghani PLD 2005 SC 819 = 2005 CLD 1589 and Shahida Saleem v. Habib Credit and Exchange Bank Limited 2001 CLC 126, which have been cited by appellant's counsel are not relevant in the facts and circumstances of this case as in these cases the questions involved were either with regard to inadequacy of the price procured through auction or irregularities committed in the auction proceedings. In the present case the appellant did not even question the sale before the Banking Court what to speak of possessing any plausible ground for setting it aside. Furthermore, the sale in the present case took place as far back as 18-7-2005 and pursuant thereto the auction- purchaser deposited the entire sale consideration before the Banking Court. The appellant, who as per her own showing came to know about the sale on 13-8-2005, did nothing and allowed the time for moving applications under Rules 89 and 90 of Order XXI, C.P.C. To go by, thereby losing all opportunities to question the impugned sale. The appellant cannot at this belated stage be allowed for the first time to challenge the sale in this appeal. In the case of Muhammad Ikhlaq Memon v. Zakaria Ghani reported in PLD 2005 SC 819 = 2005 CLD 1589, which was cited by the appellant's Advocate himself, it was held by the Honourable Supreme Court that where no application was moved for setting aside sale under Order XXI, rule 89, C.P.C. By depositing 5% of the purchase money for payment to auction-purchaser or no objection was taken under Order Rule 90, C.P.C., there is acquiescence to the mode and the manner in which the property is sold by the Court. This case clearly applies to the appellant's case as she took no legal step for seeking setting aside of the sale from 13-8-2005 until filing of this appeal on 18-11-2006 i.e. For more than 15 months. The respondent No.4, who paid the entire sale consideration in July, 2005 cannot now he deprived of the property sold to him through Court sale.
13. In view of the above discussion, no case for interference with the impugned order is made out and therefore, this appeal is dismissed in limine.