' ANWAR. ZAHEER JAMALI, C.J.---These two appeals challenging the common order dated 10-2- 2009, passed by the Banking Court No,III at Karachi, in Execution application No,56 of 2002 (Suit No,B-82 of 2000), involving similar questions of law and facts, are being disposed of by this single judgment.
2. Precisely, the grievance agitated in these appeals is about the illegal confirmation of sale of plot No,106/1, situated at Mouza Baroot, Tehsil Hub, District Lasbella, Balochistan, in favour of auction purchaser Mr. Zaheer-ur-Hassan Rizvi, in the sum of Rs,68,80,000 in terms of his earlier offer, which was accepted by the Banking Court on 23-11-2004.
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3.The relevant facts, which may be necessary to understand the background of such controversy, are that Suit No,B-82 of 2000, instituted by Messer's National Bank of Pakistan against Messrs Bio Chemical (Pvt.) Limited and others was decreed in their favour on 9-3-2001. Thereafter, for the execution of the Decree. Execution application No,56 of 2002 was filed before the Banking Court.
During such proceedings proclamation of sale of Plot No,106/1, situated at Mouza Baroot, Tehsil Hub, District Lasbella, Balochistan, through public auction was published in newspapers on 8-8-2003. In response to it, public auction of mortgaged property referred to above was held on 13-9-2003, but not accepted by the court as per order dated 30th October, 2003, being on the lower side. After completion of formalities once again, public auction for the sale of mortgaged property was held on 23-11-2004, wherein respondent Zaheer-ul-Hassan Rizvi had given the highest offer of Rs,68,80,000. This offer was accepted by the Court with directions to the successful bidder to pay the remaining sum within 15 days. However, before the sale could be confirmed by the court one Shoukat Memon, who was one of the unsuccessful bidder, enhanced his offer to Rs,70,50,000, which was rejected by the executing Court. Again, before the sale could be confirmed on 17-12-2004 Messrs BRR International Madoraba and Messrs First General Leasing Madoraba 'moved separate applications under section 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred to as Ordinance, 2001) read with Order XXI, Rule 58, C.P.C. For repossession of leased assets lying in the mortgaged property, while such proceedings were still pending before the Executing Court on 11-4-2005, Messrs Bela Lubricant Limited, the appellant in Ist. Appeal No,6 of 2009 also moved an application under the same provisions of the Ordinance, 2001 and C.P.C., which application was dismissed by the Banking Court vide its order dated 11-7-2005 with the observation that if the applicant Messrs Bela Lubricant Limited are desirous to make any settlement with the Decree Holder (NBP) they can do the same outside the Court. It appears that during the pendency of such proceedings on 17-7-2006 the appellant Messrs Bela Lubricant Limited had also filed a suit for specific performance before the Court of Senior Civil Judge, Hub, Balochistan in respect of the mortgaged property, subject matter of Execution application No,56 of 2002, which was decreed on 29-12-2006. The auction purchaser Mr. Zaheer-ul-Hassan Rizvi, when learnt about such ex parte decree and pendency of Execution application No,3 of 2006 before the Court of Senor Civil Judge, Hub, Balochistan, filed an application under section 12(2), C.P.C. In the said matter, which is now stated to be subject matter of an appeal due to its dismissal by the lower court. As it looks like, the matter did not end up here as after passing of the order dated 11-7-2005.
The appellant Messrs Bela Lubricant Limited also negotiated with the decree-holder Bank for the purchase of auctioned property at a higher price of Rs, 100,60,000 vide their letter dated 24-3-2008, which offer was accepted by the decree-holder Bank vide its letter dated 22-4-2008. When the auction purchaser resisted such clandestine deal between the two appellants to defeat his claim, the Decree Holder N.B.P, vide its statement dated 26-4-2008 made yet another offer in favour of auction purchaser for sale of the mortgaged property to him on the equal enhanced offer of Rs,100,60,000 as made by appellant Messrs Bela Lubricant Limited in their private negotiations with the decree holder Bank. Faced with this situation' vide their application dated 28-4-2008, the auction purchaser Mr. Zaheer-ul-Hassan Rizvi, without prejudice to this rights as auction purchaser, enhanced his bid to Rs,100,60,000 with the additional payment of Rs,31,80,000 through pay order, which was accepted by the Banking Court with the consent of decree-holder Bank.
4. This order of the Banking Court gave cause of grievance to the appellant Messrs Bela Lubricant Limited, who, therefore, challenged the two orders dated 24-4-2008 and 29-4-2008 before the High Court vide Ist. Appeal No,22 of 2008. After hearing the arguments of the parties' counsel, this appeal was allowed vide order dated 21-1-2009 with the following observations contained in paragraph 8 of the said order:-- "In view of the above, we allow this appeal in the terms that the order dated 29-4-2008 as regards the acceptance of bid of respondent No,2 is set aside with direction to the Banking Court to proceed further with the mater strictly in accordance with law and dispose of the execution application within a period of two weeks from the date of communication of this order. R & Ps be sent immediately to the Banking Court where parties are directed to appear on 28-1-2009."
5. It is after such order of remand passed by this court that the Banking Court has passed the impugned order dated 10-2-2009, thereby confirming the sale of mortgaged property in favour of 'Mr. Zaheer-ul-Hassan Rizvi in the sum of Rs, 68.80.000.
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6.Mr. Pervaiz Khan Tanoli, learned counsel for the appellant Messrs Bela Lubricant Limited has strongly criticized the impugned order of the Banking Court mainly on the plea that the Banking Court, being custodian of the mortgaged property while conducting its auction proceedings, could not have confirmed its sale for a meagre sum of Rs,68,80,000 when already two valid offers, one given by the respondent No,5 in the sum of Rs,11 Millions and other given by the appellant Messrs Bela Lubricant Limited in the sum of Rs,13 Millions were available before it. He further submitted that the Banking Court was so much pleased with the auction purchaser Zaheer-ulHassan Rizvi that even his enhanced offer in the sum of Rs,100,60,000 made on 28-4-2008 and consented by the Decree Holder Bank was ignored with the courtesy that the extra sum of Rs,31,80,000 deposited by him was also ordered to be returned to him, on the pretext that the court room cannot be made auction house. He contended that indeed the Court room cannot be converted into an auction house but at the same time as held in various judgments of the Honourable Supreme Court before confirmation of sale option was available with the Banking Court to reject the much lower offer in order to protect the interests of the holder of mortgaged property/judgment-debtors and the decree-holder, who were entitled to get maximum return of the mortgaged property so as to either reduce the maximum claim of the decree-holder against them or even to have some remaining amount out of sale proceeds after the satisfaction of decree as the case may be. Making reference to the earlier order of this court dated 21-1-2009 in Ist. Appeal No,22 of 2008 Mr. Tanoli urged that it seems ridiculous and shocking that how the Banking Court has misinterpreted the order of remand by accepting the reduced offer of auction purchaser in the sum of Rs,68,80,000 though by this order even his higher offer of Rs,100,60,000 was rejected by the High Court, obviously for the reason that the mortgaged property which was being sold through public auction must fetch maximum price for the benefit of the decree-holder as well as judgment-debtor. In the same context he further argued that it is an inconceivable proposition that the appellate Court will remand the case to the Banking Court in order to ignore the higher offer of the auction-purchaser Zaheer-ul-Hassan Rizvi in the sum of Rs,100,60,000 and to accommodate him by acceptance of his lower offer in the sum of Rs,68,80,000. Precisely, in between the lines, Mr. Tanoli intended to argue that the impugned order for acceptance of bid of Mr. Zaheer-ul-Hassan Rizvi in the sum of Rs,68,80,000 smacks foul play. Moreso as this was done even against the consent of the decree-holder Bank and without even giving notice to the judgment-debtors. In the end in support of his submissions Mr. Tanoli made reference to the following judgments:--
(1) Afzal Maqsood Butt v. Banking Court No,2 Lahore and 8 others PLD 2005 SC 470;
(2) Settlement Commissioner, Multan and Bahawalpur Divisions, Multan and others 1974 SCM R 337;
(3) Rehmat Ali and 2 others v. The Revenue Board, West Pakistan Lahore and another 1973 SCM R 342-,
(4) Ch. Muhammad Ashraf v. Punjab Privatization Board through Secretary Government of Punjab and another 2002 M LD 550;
(5) Sheikh Muhammad Rafiq and others v. United Bank Limited and others 1997 SCM R 1149;
7. Mr. Tasawwar Ali Hashmi learned counsel for appellant/decree-holder N.B.P in Ist. Appeal No,8 of 2009 and for respondent No,1 in the other connected Ist. Appeal No,6 of 2009, also strongly criticized the conduct of the Presiding Officer of the Banking Court at the time of passing of the impugned order in favour of the auction-purchaser Zaheer-ulHassan Rizvi. For this purpose he made specific reference to his written synopsis of arguments filed before the Banking Court on 4-2-2009, which besides reference to the relevant facts of the case also contained summary of the relevant case law cited by him, which reads thus:-- 1974 SCM R 337: ' Shed., Shop, auction of. Successful bidder, before auction is confirmed, has no locus standi to challenge cancellation of auction.
' A mere right to bid does not give a right to a person to oppose the transfer of the property to another person under the relevant law. A mere bid at an auction if the bid is subject to confirmation, does not create any contractual right until the bid is confirmed. It is in the discretion of the auctioneer to confirm or not to confirm it. A person who was a successful bidder at the auction cannot claim to be a person aggrieved by the order of cancellation of the auction.
1973 SCM R 342: ' Constitution of Pakistan 1962, Art.98 Writ. Grow more Food Scheme. Auction-Conditions of auction authorizing higher authorities to confirm auction of State land, at their discretion. Authorities not confirming auction. Persons giving highest bid, held, did not acquire any valid title to property so, as to give them right to invoke writ jurisdiction.
2004 SCM R 1956: ' O.XXI, R-65. Auction sale. Mere floating of the bid whether it is the highest or the lowest, does not create a legal right in favour of the bidder, hence the question of its infringement does not arise.
PLD 2005 SC 470: (c) Auction....
' Bid in auction. Status and effect. Bid in auction is only an offer and without confirmation of sale, it does not create any right in the property in favour of successful bidder. Confirmation of sale cannot be claimed as of right.
2002 M LD 550 (Lahore):
(a) Contract Act (IX of 1872).
' Ss.2 and 188. Auction. Auction proceedings. Subject to confirmation---Highest bid Legal right, accrual of--Validity---By giving highest bid which was not accepted, no legal right to grant of contract was accrued in favour of the highest bidder as the auction was subject to confirmation.
Bid made at auction is in the nature of offer which does not mature into contract at all till its acceptance. Auctioneer acts as agent of the seller and if he has authority to accept the bid, concluded contract comes into being the moment bid is accepted either by the words of mouth or by any other method. Where the auctioneer is not vested with the power to accept the bid which is with another person or authority the contract only comes into being when the bid is accepted by that authorized person.
8. Reiterating his submissions, Mr. Hashmi submitted that if the Banking Court had bothered to go through the relevant provisions of section 19(2) of the Ordinance, 2001, it would have been clear to it that in the Banking suits and execution proceedings before the Banking Court, the decree-holder has been given special privilege/upper hand in the matter and/or mode of execution of decree which, inter alia, enables it to seek execution of decree by making request to the Banking Court in such manner as considered by it appropriate. Emphasizing upon the language of subsection (2) of section 19, he submitted that acceptance/confirmation of bid through impugned order in favour of respondent auction-purchaser Zaheer-ul-Hassan Rizvi in the sum of Rs,68,80,000 was out of question when the decree-holder has floated written offer in favour of auction-purchaser vide its statement dated 26-4-2008 for sale of mortgaged property to him in the sum of Rs,100,60,000, which was also accepted by the auction-purchaser through his application dated 28-4-2008 and subsequently consented by the decree-holder Bank. Making reference to the remand order dated 21-1-2009 passed by this Court in Ist. Appeal No,22 of 2008 Mr. Hashmi argued that the spirit of such order was simply this much that till the sale was not confirmed by the Banking Court in favour of any party interested in buying the mortgaged property in question. Banking Court shall endeavor to fetch maximum sale price of the mortgaged property for the benefit of decree-holder Bank and the judgment-debtors. However, the Banking Court by using stock phrase "Court cannot be turned into auction house" done away with the mortgaged property in favour of auction-purchaser Zaheer-ul-Hassan Rizvi in a very suspicious manner.
9. In reply to the above submission of the two learned counsel for the appellants without much disputing the factual aspects of the case, Mr. Shaikh F.M. Javed Advocate for the auction purchaser Zaheer-ul-Hassan Rizvi contended that for no fault on his part, despite the deposit of substantial sum of Rs,68,80,000 with the Banking Court in the year, 2004 his client is running pillar to post for getting the final entitlement of the mortgaged property in his favour. The manner in which this issue has been tackled and prolonged by the Banking Court for last four years has completely shaken the public confidence on sale of property through Court proceedings. Making his submissions with reference to the statement of the decree holder/Bank dated 26-4-2008 offering for the sale of mortgaged property to his client at an enhanced offer of Rs,100,60,000 and its prompt response by him (auction-purchaser) on 28-4-2008, learned counsel submitted that though the auction-purchaser has accepted such proposal of the decree-holder Bank and has also deposited the differential amount of Rs,31,80,000 in the Banking Court but such offer was without prejudice to his rights as an auction purchaser during the auction proceedings held on 23- 11-2004 which was accepted by the Court on the same day. He therefore, argued that the question of consideration of higher offer of the auction-purchaser could have arisen only in a situation when his earlier bid in the sum of Rs,68,80,000 was rejected by the Banking Court for some valid reason which was not done so far at any point of time during the proceeding in the Execution application right from the year, 2004 till the passing of impugned order. Learned counsel when confronted with the difference in the legal position of highest offer; acceptance of highest offer and confirmation of sale did not dispute that in terms of Order MCI, Rule 92, C.P.C., a specific order is required to be passed for confirmation of sale in favour of auction-purchaser to confer legal rights in the auctioned property in his favour. But relying upon the judgment of the Honourable Supreme Court of Pakistan in the case of PLD 2005 SC 819, he urged that acceptance of highest bid and deposit of whole bid money by the auction-purchaser has made him entitled for ownership of the auctioned property as it was the duty of the Court to confirm the sale as required under Order XXI, Rule 92, C.P.C. , and such right cannot be denied to the auction purchaser even in a situation, where the Court has failed to pass an order for confirmation of sale which would be otherwise deemed to have been confirmed by virtue of section 65, C.P.C. To add force to his submissions that the impugned order in favour of the auction-purchaser Zaheer-ul-Hassan Rizvi is perfectly legal which should be protected in order to restore public confidence in the sale of the properties through Court proceedings. Mr. Shaikh F.M. Javed placed reliance on the following cases:--
(1) Hudaybia Textile Mills Ltd. v. Allied Bank of Pakistan and others PLD 1987 SC 512;
(2) Muhammad Ikhlaq Memon v. Zakria Ghani and others PLD 2005 SC 819;
(3) Messrs Irisma International Karachi and others v. United Bank Ltd. Karachi and another 2007 SCM R 1271;
(4) Captain PQ Chemical Industries (Pvt.) Ltd. v. Messrs A.W. Brothers and others 2004 SCM R 1956;
(5) Mrs. Yasmeen Yaqoob v. Messrs Allied Bank of Pakistan and others 2007 CLD 1511;
(6) Messrs Askari & Company and 2 others v. Muslim Commercial Bank Ltd. And another 2009 CLC 371;
(7) United Bank Limited v. Messrs A.Z. Hashmi (Pvt.) Ltd. 2000 CLC 1438;
(8) Askari Commercial Bank Ltd. v. Zafar Ahmed and others 2008 CLD 800.
10. In the famous case of Hudaybia Textile Mills Limited, which was a case under Banking Companies (Recovery of Loans) Ordinance, 1979, discussing the status of auction-purchaser, it was observed that before confirmation of sale, Court cannot disregard his interest by merely looking at the arrangement made between the decree-holder and the judgment-debtor about the satisfaction of the decree. Further it was emphasized that the judicial discretion vested by statutory provisions cannot be construed by the Court in such a manner as it will arm it with arbitrary powers and would inevitably destroy the public confidence in the stability of the judicial sales. In the case of Muhammad Ikhlaq Memon, which was a case under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 making reference to the provisions of Order XXI, Rule 92 and section 65, C.P.C. It was observed that once payment of the sale price by the auction- purchaser is made in compliance of the orders of the Court, it was the duty of the Court to confirm the sale as required under Order XXI, Rule, 92, C.P.C. It was further observed that even where the Court had failed to pass an order of confirmation of sale that would not lead to deprivation of right of auction-purchaser or cause prejudice to him and in such a case, it would be deemed that the sale stood confirmed and purchaser would be deemed to have become absolute in his title by virtue of section 65, C.P.C. In the case of Messrs Irisma International Karachi, it was observed that a third person would have no legal right or locus standi to participate in the matching of bid and on the basis of matching bid offered by a stranger, he could not claim first right of purchase and maintain appeal before the High Court on that ground. In the case of Captain PQ Chemical Industries (Pvt.) Limited, also relied by Mr. Hashmi, discussing the provisions of Order XXI Rule 65 and 90. It was observed that for conducting sale through auction it was the duty of the Court to ensure transparency in such proceedings and to make all possible efforts to fetch the maximum price closer to the market value. It was further observed that mere floating of the bid whether it is the highest or the lowest does not create a legal right in favour of the bidder. In the case of Mrs. Yasmeen Yaqoob, a Division Bench of this Court squarely placing reliance on the case of Muhammad Ikhlaq Memon (supra), had observed that in the absence of an application by an aggrieved person on any of the grounds mentioned in the said rules (under Order XXI, Rule 90) 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, therefore, he would be entitled to get an order of confirmation of sale from the Court in the case of Messrs Askari and Company, question of limitation for filing of an application under Order XXI, Rule 89, C.P.C. Was examined and it was held that such application could be filed within 30 days from the date of sale.
It was further observed that confirmed sale cannot be cancelled/set aside at the instance of decree-holder or the judgment-debtor who might be willing to settle their dispute in or out of Court on certain terms. In case of United Bank Limited, similar view was reiterated by a Division Bench of this Court that confirmed transaction of sale could neither be withheld nor could be disturbed merely to accommodate the decree-holder and the judgment-debtor to negotiate for a settlement in the matter. In the last case of Askari Commercial Bank Limited, a Single Judge of Lahore High Court relying upon the judgment in the case of Hudaybia Textile Mills (supra) has observed that the bid which was presented before the Nazir after the close of the auction has no legal value and cannot be considered as the same was violative of the right acquired by the auction-purchaser. It was further observed that frequently entertaining such request after close of the sale was seriously affecting the working as well as sanctity of the auction by Court and following of such practice will result in loosing the sanctity of the sale through Court.
11. Learned counsel for the auction purchaser Mr. Shaikh F.M. Javed when confronted with the question of availability of two other higher offers before the Banking Court for over a year; one in the sum of Rs,11 Millions and other of Rs,13 Millions respectively given by respondent No,5 and the appellant in 1st. Appeal No,6 of 2009, did not dispute this fact but argued that following the ratio of judgments referred by him as cited above the impugned order confirming sale of mortgaged property in favour of his client in the sum of Rs,68,80,000 may not be disturbed. Regarding higher offer of his client in the sum of Rs,100,60,000 Mr. F.M. Javed submitted that since his earlier offer has been accepted by the Banking Court, therefore, second offer is non-existent in law rather it has vanished in view of the order dated 21-1-2009 passed by the High Court in Ist. Appeal No,22 of 2008.
12. We have carefully considered the arguments of learned counsel as briefly reproduced above and perused the cases cited by them at the Bar. The facts that on 23-11-2004 when open public auction of mortgaged property was held for the second time. Mr. Zaheer-ul-Hassan Rizvi auction- purchaser has given the highest offer in the sum of Rs,68,80,000 such offer was accepted by the Banking Court on the same day with directions for deposit of remaining amount within 15 days: Subsequent enhanced offer of one Mr. Shoukat All in the sum of Rs,70,50,000 was made on 15-12- 2004: filing of Miscellaneous Applications under section 19(7) of the Ordinance, 2001 read with Order XXI, Rule 90, C.P.C. By some other parties and by the appellant Messrs Bela Lubricant Limited on 2- 6-2005; its disposal by the Banking Court vide order dated 11-7-2005 with the observations that decree-holder was permitted to negotiate for settlement with Messrs Bela Lubricant Limited outside the Court; other civil litigation in respect of mortgaged property initiated by appellant Messrs Bela Lubricant Limited before the Court of Senior Civil Judge, Hub Balochistan; passing of ex parte judgment and decree in the suit in respect of mortgaged property; filing of application under section 12(2), C.P.C. By the auction-purchaser in the said proceedings; receipt of subsequent offer of Rs,130,00,000 from Messrs Bela Lubricant Limited for the purchase of mortgaged property; receipt of yet another offer in the sum of Rs,110,00,000 from Mr. Shoukat Usman in respect of mortgaged property; offer of the decree-holder Bank for sale of mortgaged property to the auction-purchaser in the sum of Rs,100,60,000 vide statement dated 26-4-2008; its acceptance by him vide application dated 28-4-2008 without prejudice to his rights as auction-purchaser; acceptance of higher bid in the sum of Rs,100,60,000 of the auction-purchaser by the Banking Court vide its letter dated 29-4-2008; filing of 1st. Appeal No,22 of 2008 by the appellant Messrs Bela Lubricant Limited against before the High Court such order; passing of remand order dated 21-1-2009 by this Court in the terms reproduced above; and thereafter passing of the impugned order in favour of the auction-purchaser Zaheerul-Hassan Rizvi are admitted/ undisputed facts of the case. In this background of the matter, in these appeals the moot point for consideration before us is that whether law permitted and it was just, equitable, fair and proper for the Banking Court that it had accepted the bid of Rs, 68,80,000 given by the auction-purchaser in November, 2004, while examining the question of confirmation of sale in the year, 2009 when before it already the Executing Court had two other offers at much higher sum and even the auction-purchaser had enhanced his offer from Rs,68,80,000 to Rs,100,60,000 and even deposited such sum with the Banking Court.
13. In order to dilate upon this crucial point it will be useful to reproduce here under the relevant provision of law i,e, section 19(1) and (2) of the Ordinance, 2001:-- "19. Execution of decree and sale with or without intervention of Banking Court. (1) upon pronouncement of judgment and decree by a Banking Court, the suit shall automatically stand converted into execution proceedings without the need to file a separate application and no fresh notice need be issued to the judgment-debtor in this regard. Particulars of the mortgaged, pledged or hypothecated property and other assets of the judgment-debtor shall be filed by the decree-holder for consideration of the Banking Court and the case will be heard by the Banking Court for execution of its decree on the expiry of 30 days from the date of pronouncement of judgment and decree: ' Provided that if the record of the suit is summoned at any stage by the High Court for purposes of hearing an appeal under section 22 or otherwise, copies of the decree and other property documents shall be retained by the Banking Court for purposes of continuing the execution proceedings.
(2) The decree of the Banking Court shall be executed in accordance with the provisions of the Code of Civil Procedure, 1908 (Act V of 1908) or any other law for the time being in force or in such manner as the Banking Court may at the request of the decree-holder consider appropriate, including recovery as arrears of land revenue.
Explanation: The term assets or properties in subsection shall include any assets and properties acquired benami in the name of an ostensible owner."
(2) ......
(4)...........
(5)...........
(6)..........
(7) .....
14. A plain reading of section 19(2) (ibid) reveals that though the execution proceedings before the Banking Court are to be normally regulated under the provisions of the Code of Civil Procedure, 1908 or any other law for the time being in force, but at the same time the Decree holder has been given a special privilege to request the Banking Court for enforcement and execution of the decree in such manner as it considers appropriate. Not only this but even under subsection (3) to section 19 the power for sale of the mortgaged property without intervention of the court has been conferred to the decree-holder bank, which option could be exercised by the decree-holder after passing of judgment and decree in his favour. Indeed, in the present case such option was not exercised by the Decree holder Bank but by invoking the special provision seeking execution of decree in the manner decree holder considers it appropriate, a statement dated 26-4-2008 was submitted before the court, calling upon the auction purchaser for enhancement of his bid from Rs,68,80,000 to Rs,100,60,000 which offer was also promptly accepted by the auction purchaser. It was on the basis of such mutual understanding between the auction purchaser and the decree holder bank in terms of subsection (2) of section 19 that earlier sale of the mortgaged-property was confirmed in favour of the auction purchaser vide order dated 29-4-2008. Such order of the Banking Court was, however, set aside by this court vide its order dated 21-1-2009 in 1st. Appeal No,22 of 2008 mainly for the reason that one of the participant of the proceedings was not afforded any opportunity for contesting such offer and that another higher offer in the sum of Rs,13 Millions, worth consideration was available before the Banking Court at that time.
15. This being the position, it does not appeal to reason that instead of following the spirit of such order of appellate court, Banking Court will go to the extent of accepting a much lesser offer of Rs,68,80,000 by merely making sweeping observations that the Court cannot be turned into auction house least realizing that at the same time it was the basic duty of the Banking Court to have ensured maximum sale proceeds of the mortgaged property for the benefit of the decree holder and the judgment-debtors whose property was being sold. As held in the case of Hudaybia Textile Mills (supra) it is only after the stage of confirmation of sale that even the judgment-debtors and decree-holder are debarred from negotiating compromise on any other terms, to the prejudice of the auction-purchaser otherwise mere extension of highest offer or its acceptance has not conferred any substantive legal right in favour of the auction-purchaser as held in several cases quoted above.
16.Even otherwise, it is a matter of common knowledge and prudence that when three different parties are present/available before the Banking Court without any disqualification to purchase the mortgaged property at the highest price and the sale of the property has not yet been confirmed in favour of any earlier bidder why the Court would reject higher offer without any cogent reason. Thereby depriving the decree holder and the judgment-debtor/owner of the mortgaged property from its maximum price. From the plethora of case law cited by the learned counsel, as discussed above, it is evident that there is consistency in the view of the superior Courts that before confirmation of sale. The auction-purchaser has no locus standi to challenge the cancellation of auction; mere floating of bid may be highest one does not create any legal right in favour of the bidder without confirmation of bid and the highest bid only remains an offer. Further the ratio of above judgments reveals that the confirmation of sale in terms of Order XXI, Rule 92, C.P.C. Is a mandatory requirement which in one sense gives cutoff time for transformation of legal rights in favour of the auction-purchaser. Here a reference to Rule 93 of Order XXI will also be relevant which lays down that under Rule 92 (ibid), the Executing Court has ample power to set aside the sale of any immovable property and in such case repayment of purchase money is to be made to the purchaser of the property with or without interest as the Court may direct in this regard. In the present case, we are convinced that after the offer of the decree-holder Bank contained in their statement dated 26-4-2008 which was accepted by the auction-purchaser vide his application dated 28-4-2008 his earlier offer of lesser sum of Rs,68,80,000, despite higher offer having been made without prejudice to his right as auction-purchaser has either disappeared or merged into such higher offer. Therefore, under no stretch of imagination Banking Court was justified in obliging the auction-purchaser with the acceptance of his bid in the sum of Rs,68,80,000 and further ordering refund of the excess sum of Rs,31,80,000 deposited by him as per his application dated 28-4-2008. It is also pertinent to mention here that even the case of Muhammad Ikhlaque Memon (supra) strongly relied by Mr. Shaikh F.M. Javed Advocate for the auction- purchaser is of no help to the case of auction-purchaser as the clear language of subsection (2) of section 19 of the Ordinance, 2001 have virtually diluted its whole effect after the submission of another higher offer by the auction purchaser in the sum of Rs,100,60,000 on 28-4-2008 which was in conformity to the spirit of such provision of law which lays down that the decree-holder may request the Banking court for execution of Decree in such manner as it considers appropriate. In the same context it will not be out of place to mention here that the earlier Banking Companies Act, 1997 which stood repealed on promulgation of Ordinance, 2001 did not contain any parallel provision to section 19(2), as discussed above. The submission of Mr. Tanoli in the context of the order of this Court dated 21-1-2009 in 1st. Appeal No,22 of 2008 that such order was passed by the High Court in the spirit to ensure maximum price of the mortgaged property from the person interested in buying it, is also not without force as otherwise the grievance of the appellant that they were not afforded opportunity of hearing before the Banking Court could have been redressed by affording them an opportunity of hearing in the matter before the High Court. It is also pertinent to mention here that the Banking Court has not assigned single reasons for non-acceptance of the available highest offer of Rs,13 Millions made by the appellant Messrs Bela Lubricant Limited which per statement of learned Decree Holder Bank Mr. Tasawwar Ali Hashmi was very-much acceptable to them.
17. In view, of the above discussion, we hold that the impugned order dated 10-2-2008 is illegal, irrational and arbitrary, thus it is liable to be set aside, ordered accordingly. The case is once again remanded to the Banking Court with the direction that keeping intact, the highest offers of Messrs Bela Lubricant Limited in the sum of Rs,13 Millions other offer of Mr. Shoukat Usman respondent No,5 in the sum of Rs,11 Millions and the higher offer of auction-purchaser Zaheer-ul-Hassan Rizvi in the sum of Rs,100,60,000, the Court shall once again give all three of them an opportunity to submit their enhanced written sealed offer, if any, before it at one and the same time to be fixed by it within one month. Such sealed offers shall be opened by the court then and there, and to be considered for acceptance and confirmation of sale of mortgaged property in accordance with law. But before that the decree-holder and judgment-debtors may also be put to notice of such offers. With these observations, the two appeals are allowed and disposed