' CH. EJAZ YOUSAF, J. --- This petition for leave to appeal is directed against the judgment dated 4- 6-2008 passed by a learned Division Bench of the Islamabad High Court, Islamabad, whereby, RFA No,142 of 2004 filed by the respondents Nos.1 to 6 was allowed and the order dated 17-5-2004 of the Banking Court was set aside.
2. Facts of the case, in brief, are that respondent No,7, Allied Bank of Pakistan, filed a suit for recovery of Rs,99,126,216 against respondents Nos.1 to 6 which was decreed by the Banking Court (Lahore High Court, Lahore), vide order dated 14-9-1999 on the basis of compromise. As per terms of the compromise the respondents Nos.1 to 6 accepted the suit amount of Rs,99,126,216 along with mark-up @ 17% per annum, till the realization of entire amount. The repayment schedule, in instalments, was also agreed upon, according to which the last instalment was due in May, 2006 and the total amount as per the schedule stood at Rs,148,978,080. The respondents Nos.1 to 6 (judgment debtors) paid only 1st instalment and made default afterwards, therefore, the whole outstanding amount became payable in lump-sum as per clause 4 of the compromise deed. The Bank moved an application to the Court on 4-7-2002 for execution of the decree and recovery of Rs,151,988,858 with future mark-up, through the sale of three properties namely:-
(1) Property No,27-B, known as "Asas Plaza" situated at Rehmanabad, Main Murree Road, Rawalpindi. (Property No,1)
(ii) Plot No,1, Asghar Mall Scheme, Rawalpindi (Property No,2)
(iii) Project bearing Plots Nos.149 to 154 and 169 to 174, situated at industrial Area, Sector 1-9, Islamabad, along with Machinery, etc (Property No,3).
' The notices were issued to the respondents/judgment debtors under Order, XXI, Rule, 66 C.P.C. But the same could not be served. ' The properties were auctioned thrice but it could not be confirmed for lack of reasonable price.
3. The Court on 20-8-2002 ordered for auction of the property No,3 and also allowed the respondent No,1 (judgment-debtor) to sell the properties Nos.1 and 2, privately, and to deposit the sale proceed with the decree-holder Bank for adjustment against the outstanding amount. Since the respondent No,1 failed to sell the said properties within time, therefore, respondent No,7, Bank, on 18-2-2004, moved an application (C.M. No,12 of 2004) seeking permission to sell the property No,1 to Raja Zulfiqar Hussain for Rs,26,500,000 and the property No,2 to one Khalid Mehmood for Rs,6,000,000. Respondents Nos. 1-6 contested the application and the Court directed the respondents to deposit a sum of Rs,6,000,000 in Court till 15-3-2004 in respect of Property No,2 and a sum of Rs,25,500,000 till 17-5-2004 in respect of the ,Property No,
1. Since an amount of Rs,6,000,000 was paid by the judgment-debtor, therefore, the property No,2 was released to them, however, their failure to deposit the amount for Property No,2 within the prescribed time, culminated in issuance of sale certificate in favour of Zulfiqar Hussain, on 14-7-2004 by order of the Court. The order dated 14-7-2004 was challenged but the same was upheld upto this Court in C.A.
No,474 of 2006 vide order dated 26-2-2007.
4. Meanwhile on 12-4-2002 respondent No,7, Bank, moved an application for consideration and approval of two bids; one of Rs,172,500,000 made by the present petitioner with part payment of Rs,2,500,000 to the Bank through cheque dated 2-4-2004, and the other of Rs,164,500,000 made- by Messrs Mumtaz ud Din Feroze and Associates, regarding the purchase of property No,3. The Court vide order dated 13-4-2004 issued notices to respondents Nos.1 to 6 and also directed for publication of the offers in three newspapers, namely, "the Dawn", "the News" and "the Business Recorder" to invite any possible objections from the public. In compliance with the said order publications were made by respondent No,7 in the above said newspapers as well as in daily "Jang" on 30-4-2004. In addition, the respondents Nos.1 to 6 also got published a separate notice in daily "Jang" dated 21-4-2004, calling upon the general public to make a better offer than the above said offers. After publication of the offers, the Court accepted and approved the offer made by the present petitioner vide order dated 17-5-2004 with the direction to pay 50% of the remaining price through pay order within three months and to furnish a Bank guarantee for the payment of balance amount within next three months. The respondents/judgment debtors challenged the said order in RFA No,142 of 2004 which was allowed vide the impugned judgment and while setting aside order dated 17-5-2004, the Court directed for re-auction of the said property No,3 through invitation of offers in sealed covers, hence this petition.
5. Agha Tariq Mehmood, learned counsel for the petitioner has contended that in execution of the decree property in dispute was put to auction thrice under order of the Banking Court but it could not fetch offer beyond Rs,8 Crore 30 Lac. As the forced sale value of the project was fixed at Rs,164,000,000 by the approved Evaluator of the Pakistan Banking Association (State Bank of Pakistan), therefore as a result of efforts made by the Bank two offers were received and the offer made by the petitioner being the highest i,e, in the sum of Rs,172,500,000 was, after inviting objections through publication, accepted. He added that the respondents Nos.1 to 6 had appeared before the Court and moved an application i,e, C.M.No,27-B/2004 in C.M.No,336 of 2004 in Execution Application No,5 of 2002 in C.O.S. No,3 of 1999 thereby praying for extension of time for deposit of amount regarding property No, 1 (Asas Plaza), mainly on the ground that the respondent-Bank had filed C. M. No,336-C of 2004. He stated that though the respondents/ judgment-debtors had had full knowledge regarding the above proceedings, yet, they in order to frustrate the execution proceedings, as per plan did not challenge the same at the relevant time because they were cognizant of the fact that the property could not fetch a better price but as the proceedings attained finality they came out with the plea that the proceedings were carried out at their back.
He maintained that the auction proceedings having attained finality, the respondents, by their conduct, were estopped to challenge the same. He added that order dated 17-5-2004 has been set aside by the learned Division Bench of the Islamabad High Court, primarily for the reason that since the proceedings were taken at the back of the respondents Nos.1-6 and they were not afforded opportunity of showing cause, therefore, it was liable to be set aside, which observation, is factually incorrect. Learned counsel further stated that the judgment debtors had full knowledge regarding proceedings in the execution application and finalization of sale in favour of the petitioner because earlier in CPLA No,474 of 2006, the judgment-debtor had taken the stand that "since the main project was sold, and the subject-decree, under execution, was satisfied therefore the proceedings pertaining to the other properties i,e, "Asas Plaza" were liable to be declared redundant and of no consequence.
6. Syed Zafar Ali Shah, learned counsel for the respondents Nos.1 to 6/J.Ds, on the other hand has urged that although the Banking Court was competent to execute the decree in the manner it considered appropriate, but once the Court had decided to execute the decree under the provisions of the C.P.C. It could not have switched on to another mode. He maintained that earlier the learned Single Judge vide order dated 9-9-2003 had directed re-auction of the property and that order was still holding the field when without any conscious application of mind orders dated 13-4-2004 and 17-5-2004 in absence of the respondents, were passed in C.M.No,336 of 2004 and the Bank at first was allowed to dispose of the property through negotiation and thereafter sale in favour of the petitioner was affirmed.
7. Raja Muhammad Akram, learned Sr. A.S.C. Appearing on behalf of respondent No,7 Allied Bank of Pakistan, has submitted that numerous efforts were made by the executing Court to sell the property in question but all remained unfruitful. Since all the bids made earlier were below the reserved price, therefore, the Bank through constant efforts and with great difficulty was able to procure two offers over and above the reserved price and the petitioner's offer being the highest was accepted. He maintained that since the respondents Nos.1 to 6/judgment-debtors were fully aware of the proceedings as they too, were making efforts to procure a better offer and they were also at liberty to get the property redeemed by makihg a better offer and one of the properties in fact was released to them therefore, the plea that they had no knowledge of the proceedings was an afterthought. He maintained that the judgment-debtor had had otherwise, option to challenge the sale by having a recourse to Order XX, Rule 90, C.P.C. To get the same set aside but it was deliberately and purposely not availed.
8. We have given our anxious consideration to the respective contentions of the learned counsel for the parties and have also perused the record of the case, minutely, with their assistance.
9. Perusal of the impugned judgment reveals that sale in favour of the petitioner has been set aside by the learned Court below primarily for the reasons, firstly, that in pursuance of the publication made in the newspapers since sufficient details regarding offers made by Messrs Javed Iqbal and Associates and the petitioner were not given and the mode/schedule of payment proposed by them was not described so as to let know the public regarding the transaction, therefore it was bad; and secondly, that three extensions were granted to the auction-purchaser without any notice to the respondents Nos.1 to 6 and without any opportunity of showing cause to them; and that the transaction publication was not made with the consent of the judgment- debtors/respondents Nos.1 to 6, therefore the sale in favour of the petitioner was not sustainable.
10. It would be pertinent to mention there that as per available record the subject property was put to auction thrice; firstly, on 1-10-2002 when the bid received was for Rs,3 crore only; secondly, on 19- 12-2002 and the bid received was Rs,2 crore 50 lac; and thirdly on 31-7-2003 and the highest bid received was Rs,8 crore 30 lac. Since all the bids were well below the reserved sale price, i,e, Rs,16 crore 40 lac fixed by the approved Evaluator of the Pakistan Banking Association (State Bank of Pakistan), therefore, the decree-holder Bank made efforts to obtain better offer and it bore fruit when two offers, one made by Messrs Javed Iqbal and Associates in the sum of Rs,16 crore 25 lac; and the other by Messrs Mumtaz-ud-Din Feroze, the present petitioner, in the sum of Rs,17 crore 25 lac, were received. In the circumstances C. M. No,336-G of 2004 in Execution Petition No,5 of 20p2 was moved before the Court praying therein, inter alia, that since the petitioner's offer was the highest, therefore, it may be accepted. Despite that the Banking Court, vide its order dated 13-4- 2004, apparently in search of better offer, ordered the respondent No,7 to cause publication of these offers, in sufficient details, in daily the Dawn, the News and the Business Recorder for a date to be fixed in the second week of May, 2004. The publication was accordingly made in the aforesaid newspapers and also in daily Jhang dated 30-4-2004 whereby the public at large was called upon to make a better offer. It would be advantageous to have a glance at the said publication which reads as follows":-- "International The News Friday, April 30, 2004 Allied Bank of Pakistan Public Notice Execution Application No,5 of 2002 in the matter of Allied Bank of Pakistan Limited, 1-9, Islamabad versus Fazal Vegetable Ghee Mills Limited and others Pending in the Lahore High Court, Rawalpindi Bench, Rawalpindi ' It is notified for information of all concerned that for the sale of Assets of Fazal Vegetable Ghee Mills Limited, 1-9, Islamabad, the following two offers have been received.
(i) For Rs,17,25,00,000
(ii) For Rs, 16,45,00,000
(2) The above two offers made have been filed in the Lahore High Court, Rawalpindi Bench, Rawalpindi. The Honourable High Court has issued notices to all concerned. Any person, who is interested in giving a better offer, may do so by putting the same in the Lahore High Court, Rawalpindi Bench, Rawalpindi. If any party wants to inspect the Mills or Assets, or needs any other information in this behalf, it should contact the undersigned for the purpose.
(3) The case is now fixed before the Lahore High Court, Rawalpindi Bench, Rawalpindi for 17-5-2004 and this advertisement is being given with the permission/ direction of the High Court.
' Shah Hassan Saeed A.V.P./Chief Manager Allied Bank of Pakistan Limited 1-9, Islamabad. Tel No,051-4438363 and 4432039" Underlining is ours.
11. It appears that since no body came forwarded to make a better offer for the project property, which was ordered to be sold thrice earlier and the respondent-Bank was also satisfied that the property in question cannot fetch a better price than offered by the petitioner, therefore, the Court vide order dated 17-5-2004 confirmed the sale. Record does not indicate that any better offer over and above the offer made by the petitioner in the sum of Rs,172,500,000 was made by any body at that point of time.
12. It would also be not out of place to mention here that on 13-5-2004, just four days prior to confirmation of sale of the property in question i,e, on 17-5-2004 in favour of the petitioner, the judgment-debtors moved an application i,e, C.M. No,27-B of 2004 in C.M. No,336 of 2004 in Execution Application No,5 of 2002 in C.M. No,3 of 1999 thereby praying for extension of time for deposit of amount regarding property No,1 (Asas Plaza), mainly on the ground that the respondent-Bank had filed C.M.No,336-C of 2004 whereby the sale of property in question for Rs,172,500,000 was confirmed, therefore, it could have by no stretch of imagination been concluded that the judgment debtors were unaware of the proceedings. Order passed by the High Court on 14-3-2006 copy whereof is available at page 69 of the Paper Book is explicit in this regard.
13. It has also come on record that the respondents Nos.1 to 6/judgment-debtors had themselves got published a separate notice in daily "Jang" dated 21-4-2004, calling upon the general public to make a better offer than the above said offers. The said publication is reproduced herein below:- {{URDU TEXT}} ' Perusal of the above indicates that the publication in question did not contain formal information regarding the offers received for the sale of the property in question but by means thereof public at large was invited to make a better offer over and above the bid made by the petitioner which shows that the judgment debtors were definitely in knowledge of the proceedings and had they any intention to match the bid or challenge the same, it could have been conveniently done.
14. It would be pertinent to mention here that when C.M. No,336 of 2004 filed by the petitioner was taken up by the Court on 13-4-2004, it i,e, the Court not only ordered for causing of the publication in the newspapers but also directed for issuance of notice to the respondents Nos.1 to 6, judgment debtors for a date to be fixed in 2nd week of May, 2004. It is not apparent on record as to whether the judgment debtors in pursuance of above notice appeared before the Court or not, but the fact remains that after publication of notice was there any occasion for them to stay away?
15. As to the contention that the Banking Court execution of the decree once adhering to the procedure prescribed by Civil Procedure Code could not have switched over to any other mode, it may be pointed out here that since by virtue of section 18(2) of the Banking Companies (Recoveries of Loans, Advances, Credits and Finances), Act (XV of 1997) (hereinafter referred to as the Act XV of 1997), the Banking Court is at liberty to recover the amount covered by a decree, on the application of the decree-holder, in accordance with the provisions of the Code of Civil Procedure, 1908 or any other law or in such other manner as it may deem fit, therefore, consideration and approval of offer made by the petitioner, by the Court, in our view, was neither illegal nor unjustified particularly when all efforts made previously, including those made by the decree-holder and even by the judgment debtors, had failed to procure a better offer than Rs,85,000,000, hence approval of the offer made by the petitioner, which was more than eight crore over and above the highest offer received was just and proper. In the case of Mst. Asma Zafarul Hassan v. Messrs United Bank Ltd. And another 1981 SCMR 108 twice the publication was made for auction of property but no one appeared each time. Finding that the mode of sale had become impracticable Nazir submitted a reference stating that through his personal efforts he had obtained an offer of Rs,3,25,000. Notice was served on the counsel for parties. On such date counsel for petitioner remained absent while counsel for decree-holder appeared and gave his consent to the acceptance of the offer. The Court accepted the offer. The judgment-debtor challenged the auction. It was held that since no substantial loss was proved to have occurred to the judgment- debtor by failure to publicise proclamation by beat of drum and on account of other alleged irregularities, therefore, the sale cannot be set aside. It was further held that since the provisions of law do not prohibit any other mode by the public auction, therefore, the Court can under its inherent power adopt a different mode to advance cause of justice. In the case of Muhammad Ikhlaq Memon v. Zakria Ghani and others PLD 2005 SC 819, it was laid down by this Court that a Banking Court, in an appropriate case, may make a departure from the provisions of C.P.C. For executing the decree and subsection (2) of section 18 of the Act XV of 1997, permits the Court to do so. Further, in the case of Hudaybia Textile Mills Ltd. And others v. Allied Bank of Pakistan Ltd. And others PLD 1987 SC 512, it was laid down that wherever the provisions of the Ordinance are repugnant to the provisions of the C.P.C., the former will override the latter. It was also held in the above cited case that once a sale has been effected a third party interest intervenes which cannot be disregarded. In the case of Ghulam Abbas v. Zohra Bibi and another PLD 1972 SC 337 while observing that departure from the provisions of C.P.C. Was mere irregularity it was held that a sale cannot be set aside unless direct evidence of substantial injury from such irregularity is given. It was further laid down therein that if there was any doubt as to the correctness of the above view then it is laid at rest by the proviso to Rule 90 of Order, XXI of the Code of Civil Procedure which clearly prescribes that no sale shall be set aside on the ground of irregularity or fraud unless upon the facts proved the Court is satisfied that the appellant has sustained substantial injury by reason of such irregularity or fraud. In the absence of proof of any such substantial injury no sale, therefore, can be set aside. In the case of Janak Rai v. Gurdial Singh AIR 1967 SC 608 sale was confirmed in favour of the appellant who was stranger to the suit being the auction-purchaser of the judgment-debtors' immovable property in execution of an ex parte money decree in terms of Order, XXI Rule,92 of C.P.C. Despite the fact that a sale could have been set aside in terms of Rules, 89, 90 and 91 of Order XXI, C.P.C., it was opined that Court was bound to confirm the sale when no application in terms of Rule 92 was made or when such application was made and disallowed.
' It would be pertinent to mention here that in the instant case too, no application in terms of rule 92 of Order XXI, C.P.C. Was filed.
16. In the wake of above, it thus follows that non-compliance with the provisions of C.P.C. With regard to the proclamation of sale, its publication and the conduct of sale in execution, are only material (sic) irregularities and cannot be termed or B regarded as illegalities thereby rendering the sale a nullity. Objection after completion of sale shall not, therefore, ordinarily be allowed except on very limited grounds like fraud, etc. Otherwise no auction sale will ever be completed. In this view we, in addition to the cases cited above, are fortified by the judgments in the cases reported as (i) Mian Muhammad Abdul Khaliq v. M. Abdul Jabbar Khan and others PLD 1953 Lah.147 and (ii) Nanhelal and another v. Umrao Sindh AIR 1931 PC 33. Further, a distinction has to be drawn between the decree-holder who came into purchase under his own decree and a bona fide purchaser who came in and got the sale in execution of a decree to which he was not a party. In a case where third party is a bona fide auction-purchaser, his interest in sale of auction has to be protected.
17. Another fact which cannot be lost sight of is that as per statement made by the learned counsel for the petitioner after taking possessing of the project property, the entire machinery along with the superstructure have been removed and land beneath, which is on lease from C.D.A., is left only, therefore question arises as to whether the property in question as it now stands can be re- auctioned? What could be the answer? Is obvious.
18. Upshot of the above discussion is that this petition is converted into appeal and allowed, the impugned judgment dated 4-6-2008 passed by the Islamabad High Court in R.F.A. No,142 of 2004 is set aside and the order dated 17-5-2004 passed by the Banking Court in Execution Application No,5 of 2002 is restored. No order is as to costs.