' UAZ AHMAD CHAUDHRY, J.---Through this petition under section 11 of the Punjab Undesirable Cooperative Societies (Dissolution) Act, 1993, the petitioners have challenged the order dated 28- 6-2007 passed by the Chairman, Punjab Cooperatives Board for Liquidation, Lahore.
2. The facts giving rise to this petition are that the petitioners and respondents Nos.2 to 6 along with 300 persons had purchased plots in Qaid City Rawalpindi a Housing Project founded in the year 1989 at the rate of Rs,1,50,000 per kanal and the project had been sponsored by Pakistan Development Cooperative Corporation. The aforesaid Cooperative Society was thereafter declared undesirable and the same vested in the Punjab Liquidation Board by virtue of the Punjab Undesirable-Cooperative Societies (Dissolution) Act, 1993. Number of affectees of Quaid City Housing Project, Rawalpindi had filed a petition under section 7(e) ibid before the then Cooperative Judge. Then a proclamation was got issued in the Daily Newspaper' Jang' requiring the allottees of Quaid City Housing Project to appear on 18th August, 2005 and to put in their objection in writing before the Chairman. Accordingly a petition was moved on 18-6-2005 by M/s Waseem, Sana etc. While stating therein that they were owners of the plots in Quaid City Housing Project, Rawalpindi and were acting as coordinators for the affectees. They filed a petition before the then Cooperative Judge challenging the auction of 1674 kanals of land owned by the Quaid City Housing Society, which was sold to M/s Hussain Cotex Limited and during the pendancy of Petition No, 7-C of 2004, the Cooperative Judge summoned the purchaser vide order dated 22-6-2004 but he did not turn up and the then Cooperative Judge vide order dated 9-5-2005 directed that a detailed enquiry should be held in the matter and during the pendancy of the enquiry to be so held the status of the land was not be changed either by the Cooperative Board or by the purchasers. The said application was filed by the affectees in which they claimed that Quaid City Rawalpindi had been founded in the year 1989 and plots were sold to 300 persons @ Rs,1,50,000 per kanal including the development charges and within two years the Society was developed and the roads were laid down and as per record relating to the enquiry over two crore rupees were spent on the development of the scheme. The affectees had moved several applications to the NAB Authorities as well as the Liquidation Board in this regard. The Army Welfare Society had shown its willingness vide application dated 10-11-2003 and offered to pay reasonable high rates than the existing deal to purchase the aforementioned land, but despite the offer, the land had been sold at the rate of Rs,76,000 per kanal to Messrs Hussain Cotex Limited, who is respondent in this case. The petitioners came to know about the sale of land through advertisement, which was published in daily Jang on 5-10-2003. According to the terms, after the receipt of bid, bidding was to be held amongst three higher bidders, which in this case was not complied with though it was claimed that price of the land was more than 20.00 lacs per kanal, but auction of the land has been made at a very low rate in a ridiculous and mala fide manner at the rate of Rs,76,000 per kanal.
3. It is claimed by the petitioners that they were ready to deposit Rs,76,000 per kanal with PCBL with an undertaking not to demand any compensation for the payment made to the Cooperative Society. If this offer of the affectees was accepted the entire liability of the C.F.C. Would stand satisfied and would result into substantial saving for the Liquidation Board. It was also stated in the application that in fact 339 persons were allotted plots originally in the society and if the sale to M/s Hussain Cotex Ltd. Was not cancelled hundreds of people would be deprived of the valuable property and assets. It was also claimed that sale has been made collusively by the functionaries of the Board. The matter was taken up by the Liquidation Board and Chairman decided the issues through the order which is impugned in this petition.
4. Learned counsel for the petitioners contends that price of the plots was fixed at Rs,1,50,000 per kanal in the year 1989, but the land had been sold to the respondents at throw away price of Rs, 76,000 per kanal in the year, 2003 without making any serious effort to sell it at prevailing market price; that under Order XXI Rule 66 of C.P.C. Procedure has been laid down for holding auction and reserve price has to be fixed, but in the case in hand when the auction was made in favour of the respondents reserve price was not fixed; relies upon 2000 CLC 863 to contend that when there was no reserve price such auction was declared as illegal even though nobody had raised objection at the time of auction in the court. Also relies upon 2001 CLC 126 and relevant portion is at page 130, that C.P.C. Has to be followed by the PCBL and section 141, C.P.C. Is applicable not only in suits but also in other proceedings; that after payment of the price the Cooperative Society had already spent more than Rs,2, crores for construction of roads; that the petitioners and other affectees are ready to pay the total amount deposited by the respondents and are also ready to pay the development charges if the land is not sold and the members are allowed to run the society.
5. On the other hand, learned counsel for PCBL opposes this petition on the ground that the land had been auctioned at one stage while then the matter was taken up by NAB and on 28-6-2007, the order was passed that out of 279 allottees claims of 103 allottees have already been settled.
6. Learned counsel for auction-purchaser/respondent No, 7 contends that case was remanded and the order of the Chairman, Punjab Liquidation Board is sustainable as it is well reasoned and justifiable; that price was not low and after 1-1/2 years of sale of the land, another sale deed in the same vicinity had been executed for an amount of Rs, 85,000 per kanal; that on the query that whether he was ready to accept the offer of the petitioners who are ready to pay the total amount to him which he had already deposited; he stated that he was not ready to accept this offer as he had already spent the huge amount on the project which fact has been denied by the petitioners claiming that vide order dated 5-3-2004 status quo order was passed by the then Cooperative Judge and the said auction was set aside and no working has been done by the respondents; that the auction has been made according to law and 103 allottees have already received back their amounts and the order may be sustained and the petition may be dismissed.
7. I have heard the learned counsel for the parties and also perused the impugned order as well as the documents attached with this petition.
8. The Pakistan Development Cooperative Corporation along with the other Societies had been declared undesirable and to secure the interest of the creditors Punjab Undesirable Cooperative Societies (Dissolution) Act, . 1993 had been passed and the Punjab Liquidation Board appointed its Liquidators with certain powers under the above-said Act in order to unearth the properties and to take possession of the said properties. Even section 16 ibid provided that all suits or proceedings pending before any court or authority against the Undesirable Co-operative Society in respect of its assets and liabilities shall stand abated on the appointment of the Liquidator while fresh proceedings against such a society might be initiated before the Cooperative Judge within 60 days of such abatement. The Punjab Liquidation Board was only empowered to dispose of the matters pertaining to the Undesirable Co-operative Societies and even to cancel the agreements.
This power was granted only in order to secure the interest of the creditors and also to take into possession the hidden properties of the Undesirable Cooperative Societies and to collect the money for paying off the claims of the creditors as there was apprehension that their deposits and properties would be misappropriated or sold at lower rates through collusive deals. However, the Punjab Liquidation Board was vested with the powers to secure interests of the creditors. On the other hand it has been observed by this court as a Cooperative Judge from the litigation pending before it that on certain occasions some of the responsible officials of the Board had sold the properties on cheaper rates to give benefit to the persons of their choice while the properties in possession of other persons who had even purchased the same validly were declared disputed and the Board had taken into possession said properties and they converted every thing in favour of the Board. Moreover, if individuals had participated in the bid and deposited huge amounts, in some cases their amounts were withheld or forfeited on lame excuses. These acts of the officials of Board have thrown the private persons in unnecessary litigation, which is to be curb out.
9. The present case is the worst example of misuse of authority by the officials of the Board, who had not bothered to deprive 339 poor persons who had purchased plots, paid total amounts to the Undesirable Society, the roads were already constructed and the said Undesirable Society had already spent more than 2 crores for the development of the said scheme, but instead of watching the interest of the affectees of the said society the said land was auctioned in favour of the respondents at the rate of Rs, 76,000 per kanal in a clandestine manner by ignoring that Undesirable Society had already received Rs, 1,50,000 per Kanal from each of the allottee for the said land and roads were already constructed. Moreover, the reserve price was also not fixed before the auction of the land, which was necessary under Order XXI Rule 66, C.P.C. The proceedings have to be conducted according to the procedure provided under CPC as has provided under section 141, C.P.C. The land had been sold on cheaper rates of Rs,76,000 per kanal after 5 years of sale by the Society in the year 1983-89 at the rate of Rs,1,50,000 per kanal when the prices had already raised to a reasonable extent.
10. The affectees had gone pillar to post and they had also moved applications to the NAB Authorities, but nobody had taken into consideration their grievance. Lastly they had approached this Court and the case was remanded but unfortunately the same Chairman who had already sold the said property on cheaper rates was there, who again decided the same of course in favour of the party to whom he had already sold the said land. It will be relevant to point out here that already two criminal cases have been registered against the said Chairman and application was moved by the petitioners to the Anti-Corruption Department for registration of the case in the present deal by him. This is sorry state of affairs on the part of the Punjab Liquidation Board.
11. I have considered all the arguments of learned counsel for the parties and perused the documents appended with this petition. It is crystal clear that through an underhand deal the property had been sold on cheaper rates and 339 affectees who had already deposited the amounts in the year 1989 and some development works had already been done at the spot were deprived of their properties by the Board, which has been established to save their rights. It has been offered by the learned counsel for the petitioners that the affectees are ready and willing to pay off the amounts deposited by the respondents at the rate of Rs, 76,000 per kanal whereas they had already paid some amounts in excess as well, but this offer is not acceptable to the learned counsel for the respondents on the ground that some construction work has already been done and huge amount has been spent thereon. This claim is falsified as a petition was filed after the auction and the then Cooperative Judge in the earlier petition had issued status quo order, vide order dated 5-3-2004 and subsequently auction was set aside and the case was remanded back to the PCBL, which shows that till today from 5-3-2004 not a single penny could be spent by the respondents.
12. In the above circumstances, when the auction is found to have been conducted in a clandestine manner and serious objections have been raised, D the deal with Messrs Hussain Cotex Ltd. Is not sustainable in the eyes of law. The learned counsel for the petitioners has rightly relied upon 2001 CLC 126 [Karachi] Mrs. Shahida Saleem and another v. Habib Credit and Exchange Bank Limited and 4 others, and the relevant portion is reproduced as under:- "It has been agitated before us that the property worth Rs,70,00,000 (seventy lacs) approximately was auctioned to the only bidder for Rs, 27,00,000 (Twenty-seven lacs) and this was done in contravention of provision of Order XXI, Rule 66. Rule 66(2) is as under:--
(1) ..
(2) Such proclamation shall be drawn up after notice to the decree-holder and the judgment- debtor and shall state the time and place of sale, and specify as fairly and accurately as possible- -
(a) The property to be sold;
(b) The revenue assessed upon the estate or part of the estate, where the property to be sold is an interest in an estate or in part of an estate paying revenue to the Government;
(c) Any incumbrance to which the property is liable;
(d) The amount for the recovery of which the sale is ordered; and
(e) Every other thing which the Court considers material for a particular to know in order to judge the nature and value of the property."
' It is apparent that neither the requisite notice was issued to the appellant nor the reserved price of the property settled with the result that no one know what was the value of the property and without determining this the offer of the respondent No,5 purchaser was accepted who, perhaps, was the only person present at the time of auction, for, the appellant has vehemently denied that there were other purchasers too. It is worth noting that it was the first attempt for the sale of the property and, therefore, if there were no sufficient number of bidders available at the site, the auction could have conveniently been postponed. In the circumstances, we consider that the provisions of Rule 66 were grossly violated and the grievance of the appellant that the property in question was sold at throw away price without making serious efforts to sell it at prevailing market price cannot be ignored. The contention on behalf of respondent No, 5 that the appellant No, 1 has no interest in the property as the property was owned by appellant No, 2 alone, cannot be given much consideration, for the appellant No, 1 was in occupation of the property and as the wife of the appellant No,2 her interest could seriously be affected if the property was to be sold at a price much lower than the market price, but, that apart in such .Cases where the property is sold in complete disregard of the rules and under questionable circumstances, even suo mom action for setting aside the sale would be justified. In case decree has not been satisfied, the mortgaged property may be re-auctioned but this time the rules may strictly be complied with. The appeal is allowed and stands disposed of ' Similarly, reliance is placed on 2000 CLC 863 [Lahore] Mrs. Aziz Fatima and 3 others v. Mrs. Rehana Chuqhtai and 3 others, and the relevant portion is reproduced as under:- "10. However, we find that the plea of the appellants about illegality of the auction notice due to non-mentioning of the value of the property sought to be auctioned, carried weight. There is no cavil with the proposition that it is the duty of the Court to ensure under Order XXI, Rule 66, C.P.C.
That the proclamation of the auction must include everything considered as material by the Court, to enable a purchaser to know the nature and value of the property. To achieve this purpose of fixation of the reserve price is necessary in the proclamation so that the rights of the judgment- debtor are properly safeguarded and the bid starts from that figure. Such price had to be fixed after objective consideration of the relevant material which is produced before the Court by holding a summary inquiry and summoning and examining of any person possessing of necessary information as provided by Order XXI, Rule 66 (4), C.P.C. Non-disclosure of the reserve price of property in the proclamation would render the same liable to be struck down. If any authority is needed see. Brig. (Retd) Mazhar-ul-Haq and another vs. Messrs Muslim. Commercial Bank Limited, Islamabad and another PLD 1993 Lah.
706."
13. As a result of the above discussion, impugned order dated 28-6-2007 is hereby set aside while allowing the application moved by the affectees/petitioners and the Board is directed to prepare the scheme for securing ends of justice by looking after the interests of the allottees and to ensure that the land is utilized for the same purpose. The allottees will be inducted in their portions of land and development work will be made at the site after collecting money from the allottees and while selling the assets of the said defunct society. The petitioners shall bear the expenses and also offer the Board for depositing the amount to carry on the scheme for establishment of the said society.