' S. A. NUSRAT, J.-This petition has been brought to challenge the auction of the petitioner's property, standing on Plot No, 122-R, Block 2, P. E. C. H. S., Karachi, which was held by the respondent- Corporation on 19th June 1976 for non-payment of a sum of Rs, 2,781.60 on account of water and conservancy charges.
2. The petitioner's case is that she is the owner of the property having purchased the same from one S. A. Mannan through his Attorney S. M. Badar under a registered sale deed dated 1st August, 1963. The property however, was auctioned by the respondent No. 1 (hereinafter referred to as "the Corpor tion") as belonging to one S. M. Sardar. The property was admittedly under requisition by the Government ever since 1969 and was not in the occupation of the petitioner. Initially a notice of demand for Rs, 2,775.60 addressed to S. M. Sardar, was issued by the Corporation on 12th November 1975. It was followed by a final notice of demand dated 27th November 1975 requiring payment of the said amount within three days from the receipt thereof. As allegedly there was no response to the said notices, the Corporation issued an order of attachment as provided under rule 8 (1) of the West Pakistan Municipal Committees (Recovery of Taxes) Rules, 1962, on 4th February 1976.
Thereafter a warrant for the recovery of the tax amount was issued on 2nd March, 1976 and lastly an auction notice, which is undated, was issued fixing the time and date of auction as 19th June 1976 at 10 a.m. According to the endorsement on the margin, the said notice was allegedly pasted at the site on 30th April, 1976. The auction was advertised in "Daily War in its issue of 10th June, 1976.
The respondent No, 2 purchased the said property as the highest bidder for Rs, 75,000. Later the auction was confirmed in his favour on 8th September, 1976 by the Administrator of the Corporation. The respondent No, 2 paid 25 per cent of the purchase price at the time of auction and the balance amount of Rs, 56,250 was paid on 23rd October, 1976, after the confirmation of the sale.
3. In spite of the fact that a photostat copy of the sale deed showing its registration in favour of the petitioner on 1st August 1976 was produced on behalf of the petitioner, the fact regarding the execution and registration of the same was disputed on behalf of the second respondent. The learned counsel for the second respondent produced a search certificate dated 15th April, 1978 issued by the Sub-Registrar 'T' Division III, Karachi, showing no entry with regard to registration of any sale deed in favour of the petitioner. It, therefore, became necessary to summon the relevant register Item the office of the Sub-Registrar, Karachi, as also the record from the office of the Sub- Registrar, 'T' Division, who had issued the search certificate. The respondent No. 1 was also directed to produce its record in order to show as to how the property was sold by showing its ownership in the name of S. M. Sardar. The representative of the Sub-Registrar accordingly appeared before us and produced the register showing that the sale deed in question was registered on 1st August, 1963 at Serial No, 5638 at pages 149 to 154, Volume 992 of Book No, I Additional in favour of the petitioner. The said representative, on being questioned with regard to the search certificate, stated that the same was issued wrongly without referring to the register brought by him. In the face of this evidence the learned counsel for the respondent No, 2 did not press his objection with regard to the genuineness of the sale-deed and thus there is no dispute that the auctioned property belonged to the petitioner right from 1st August, 1963. The record produced on behalf of the respondent Corporation further revealed that the notices of demands were not properly served on any one. Except for the auction notice, the rest did not bear any endorsement regarding service.
The auction notice had an endorsement showing that it was pasted, as the same was refused.
However, no mention was made as to who had refused to accept the notice nor it was witnessed by any one before whom it was pasted. The warrant for the recovery of taxes was borne on the file of the respondent-Corporation in original and one Hanif Shamsi, Warrant-Executing Officer, who was present in the Court with the learned counsel for the Corporation, stated that he had gone to serve the same and had simply shown it to somebody who was allegedly a tenant of the property.
It was further revealed from the Bid Sheet of the auction that only for persons had participated in the auction and while the full address of the respondent No, 2 was given, the addresses of the remaining three persons were so vague that none of them could be contacted on such addresses.
' Mr. Muslim Naqvi, learned Legal Adviser to the Corporation, was asked by us to explain as to how the disputed property was shown to belong to S. M. Sardar. He stated that this may have been done on the basis of information received from the Excise and Taxation Department as the taxes were to be shared between the Corporation and the Excise and Taxation Department. He, however, could not support this allegation also by production of any documentary evidence and it was admitted by him candidly that this assertion was based on the presumption that the name of S. M.
Sardar had come to be correctly mentioned in the "Jamabandi" Register of the K. M. C. As against this. The learned counsel for the petitioned-invited or attention to the certified copy of a letter dated 27th June, 1977, written by the respondent No 2 to the Assessing Authority, I Division, Karachi, requesting for the mutation of his name in the records of the Taxation Authority by substituting the name of the petitioner Farah Diba. This goes to show that the property stood in the name of the petitioner as otherwise there was no occasion for the respondent No, 2 to have asked for substitution of his name in place of the petitioner. The manner in which the name of S. M. Sardar came to be mentioned in the records of the Corporation has thus remained shrouded in mystery and no explanation, much less any satisfactory explanation, was offered on behalf of the Corporation. The auction of the property in the name of S. M. Sarda r and the manner in which the demand notices etc.. Were purportedly served in the name of this fictitious period and the property was put to auction, all go to show that the officials of the Corporation had acted resklessly and negligently in the matter without following any legal procedure. The action of the respondent Corporation in putting the property to auction, in the circumstances, cannot be sustained.
4. The auction also suffers from other patent legal infirmities, as were pointed out by Mr. Mohd. Ali Sayeed, learned counsel for the C petitioner. The method of auction is provided in the West Pakistan Municipal Committees (Recovery of Taxes) Rules, 1962 (hereinafter referred to as "the Rules"). According to the sub-rule (5) of rule 10, the auction purchaser is required to pay 25 per cent of the purchase price on the success of auction and the balance within 15 days. The respondent No, 2 admittedly paid the balance amount of the purchase price amounting to Rs, 56,250 on 23rd October 1976, much beyond the prescribed period of 15 days. The rule provides that in case of default of payment of the balance amount within 15 days, the property is to be resold. In the instant case the auction was confirmed on 8th September, 1976, even before the payment of entire purchase price. Thus it is clear that the provisions of sub-rule (5) of rule 10 of the Rules were not complied with. While b considering the provisions of Order XI, rule 85, C. P. C. Which are somewhat similar to the provisions contained in the rule 10(5), the Lahore High Court in the case of Bashir Ahmad v. Rashid Ehsan and 6 others (1) has held that non-payment of purchase money in time resulted in rendering the sale a nullity. Furthermore, according to rule 8 of the Rules, a property which is attached for the recovery of taxes, is to remain under attachment for a period of three years from the date of attachment and during this period the Municipality was authorised to realize rents and profits and adjust the same towards the amount recoverable from the defaulter. The rule, therefore, did not provide for peremptory sale of the attached property. The meager tax amount of Rs, 2,781.60 was not such as could not have been recovered from the rent of the property which was in occupation of a tenant. The auction of the property was, therefore, patently illegal.
5. The upshot of the above discussion is, that the petition is allowed with costs and the auction of the petitioner's property, held by the respondent No. 1 on 19th June, 1976, and its confirmation dated 8th September 1976, in favour of the respondent No, 2, are declared to be without lawful authority and void.
6. Mr. Waheed Farooqi, learned counsel for the second respondent requested for issuing a direction to the Corporation for immediate refund of the purchase price. Although we are not unmindful of the fact that a large sum of money of the second respondent has remained blocked for a considerable tinge, but no direction can be issued on behalf of the one co-respondent to another co-respondent. However, it is clarified that since the auction has also been set aside on account of not only legal but procedural and factual defects as well, the Corporation will not be entitled to forefeet 25 per cent of the auction money in terms of sub-rule (5) of rule 10 of the Rules and the respondent No, 2 will undoubtedly have the right to ask for the refund of the full sale price paid by him. We were also assured on behalf of the Corporation, which was also represented by its Assessor and Collector, that such request, when made, will receive prompt attention. {{FOOT NOTE}}
(1) PLD 1979 Lab. 116 {{FOOT NOTE}}