1. KHILJI ARIF HUSSAIN, J. - Aggrieved by the order dated 4.10.2007 passed in J. Miscellaneous 31 of 1993 whereby learned Single Judge dismissed an application under Section 64 read with 151, C.P.C.
2. Filed by the appellant/petitioner to declare private alienation of property GF-1, Building No. 1-A, Sea view Apartment void, illegal, and unlawful appellants preferred this appeal.
3. Brief facts for the purpose of deciding appeal are that the appellants Banking Company filed an application under Section 39 of the Industrial Development Bank of Pakistan Ordinance, 1961 (hereinafter referred to as Ordinance 1961) for recovery of Rs. 27,983,270.86 against the respondents. The respondent No. 1 is the principal borrower. The respondent No. 5 mortgaged factory premises and agricultural land whereas respondent; Nos. 2 to 4 gave their guarantees for repayment of loan used and utilized by the respondent No. 1, and disclosed their properties while giving guarantees.
4. The appellant filed an application under Section 39 of the Ordinance 1961 which was listed for hearing before the learned Single Judge who vide his order dated 26.5.1993 ordered that the properties of the respondents mentioned in Paras 28 & 29 of the petition be attached and issued notice to respondents as required under Section 39(6) of the Ordinance, 1961, as to why the order of attachment ad- interim should not be made absolute. Despite service of notice respondents failed to appear and vide order dated 7.12.1988 petition was disposed of granting main application as prayed, and learned Single Judge while disposing of main the order of attachment and order for ale of the properties mentioned in Paras 28 & 29 of the petition. After granting of main petition making absolute order of attachment, the properties of the respondents as mentioned in Paras 28 & 29 were put to auction and factory premises was disposed of by the learned O/A but it appears that respondent No. 4 by a registered sale-deed dated 16.3.2001 disposed of Flat No. G.F.1, Building 1 A, sea View Apartments, Phase-V, D.H.A. a property disclosed by the guarantor to respondent No. 7.
5. The appellant field an application under Section 64 read with Section 151, C.P.C., registered as C.M.A.
6. No. 465 of 2006, with a prayer to declare private alienation of immovable property Flat No. G. F.1, Building 1A, Sea View Apartments, Phase-V, D.H.A. (hereinafter referred to as "property in question") as void as the property was in the custodian legis of this Court for the satisfaction of the debt of the respondent which till date is due and payable, with a further prayer to restrain purchaser respondent No. 7 creating third party interest.
7. After hearing the parties learned Single Judge vide his order dated 4.10.2007 dismissed the application with costs.
8. Heard Mr. Aziz-ur-Rehman learned counsel for the appellants. Respondents though served and called remained absent.
9. Learned counsel for the appellants contended that after order of attachment passed on 7.12.1988 in respect of the property mentioned in Paras 28 and 29 on 26th March, 1993 transfer of the property by the respondent No. 4 in favour of respondent No. 7 by a registered sale-deed, is void transaction entered into between the parties to avoid huge outstanding dues of the appellant. Learned counsel for the appellants drew our attention to Vakalatnama filed by a Senior Advocate of this Court on behalf of the respondents Nos. 2, 3 and 4 on 18th August, 1993, in support of his contention that the order of attachment was served upon the respondents. Learned Advocate further contended that appellants filed an application under Order V, Rule 20, C. P.C. For service of notice and attachment order, by publication of notice of attachment in newspaper besides service through normal modes.
10. Notices were published in newspaper on, 20.10.1998 that the property in question viz. Flat No. G.F.1, Building 1A, Sea View Apartments, Phase-V, D. H.A. Has been attached by the Court. Despite having notice of attachment, publication notice in newspaper respondent No. 4 in collusion with respondent No. 7 alienate the property with intent to obstruct recovery proceedings. It was argued by the learned counsel for the appellants that requirement of Rule 54 of Order XXI, C.P.C. Was substantially complied by the appellants and finding of the learned Judge that since the property in question was not under mortgage and requirement of Rule 54, Order XXI, C.P.C. Was not complied with, the transfer in favour of respondent No. 7 cannot be declared as void transaction is not in accordance with law and record.
11. We have taken into consideration arguments advanced by the learned counsel for the appellants, perused the record carefully. It appears that the appellants filed an application under Section 39 of the I.D.B.P. Ordinance, 1961, being special law, providing speedy remedy to the appellant Bank for recovery of its outstanding dues and for attachment of the properties mortgaged by the alongwith the properties not only owned by the borrower/customer but also by person liable for the payment of the. Loan including guarantors.
12. We would like to mention here that respondent No: 1 Company had its office in the property in question. The appellants in Para 28 gave details of the mortgaged properties where as in Para-29 appellants stated that respondent No. 1 being private limited company and respondents Nos. 2 to 4 are sitting directors and guarantors of the loan and financial assistance which were. Sanctioned and disbursed the properties under mortgaged owned by the respondents are not sufficient to meet the claim of the petitioner it is therefore necessary to attach the properties of respondents Nos. 2 and 4 and disclosed the properties owned by the guarantors/respondents Nos. 2 and 4.
13. It is interesting to note that in compliance of the Court order dated 26.5.1993 O/A prepared inventories of the assets moveable or immovable in presence of respondent No. 4. Respondent No. 4 as well-conversant with the facts that order of attachment has been passed by this Court restraining the respondents by way of attachment not to alienate the properties mentioned in Paras 28 and 29 of the application under Section 39 of the Ordinance, >1961 and notice of attachment was served upon the respondent No. 4. It further appears from record that bailiff affixed the order of attachment on the property in question on 20.1.2004, which is one of the requirements of Order XXI, Rule 54, C.P.C. Notice was also published in newspaper in daily 'JANG' dated 6.11.2002 in which it was specifically mentioned that the property in question is under attachment. The learned Single Judge apparently for want of proper assistance referred in impugned order referring para-28 of the application on in which mortgage properties owned by respondent was No. 5 was disclosed and held that there is no mention of the property of the objector as mortgaged property owned by the respondents. The appellants never pleaded that the property in question was mortgaged with them but pleaded that value of mortgaged properties is not sufficient, to meet the outstanding dues and the properties owned by Respondents Nos. 5 & 4 may also be attached which is permissible under Section 39 of the I.D.B.P. Ordinance 1961.
14. In order to appreciate the question involved. We should like to reproduce Section 39 of the I.D.B.P.
15. Ordinance, 1961, which read as under:- "Special provisions for enforcement of claims by the Bank.- [(1) Where the Bank becomes entitled to require the immediate payment of any 'loan by reason of the breach of any condition by agreement between the Bank and an industrial concern to which the loan has been granted or; any person liable for industrial concern to which any loan has been granted or any person thereof or in compliance with the notice under Section 38, an officer of the Bank, generally or specifically authorized by the Board in this behalf, may apply to the District Judge within the local limits of whose jurisdiction the concern carries on the whole or a part of its business, or the office or branch of the Bank from which the loan was disbursed is situated, for one or more of the following relief, namely:] [(a) an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the bank as security of the loan and any other properties, disclosed or undisclosed, of the industrial concern or the properties, disclosed or undisclosed, of persons liable for the repayment of the loan, including guarantors; or
(b) an order for the transfer of the management of the industrial concern to the Bank or its nominee, provided that when such management is so transferred to the Bank, the Bank shall be deemed to be the agent of the industrial concern and shall manage the industrial concern on its behalf and all actions taken by the Bank on such transfer shall be deemed to be those of the industrial concern; or]
(c) an injunction ad interim where there is apprehension that machinery or equipment may be removed from the premises of the Xoncern without the permission of the Board.
16. Clause (a) to (c) of Section 39 of the Ordinance 1961 was inserted by Ordinance IV of 1981. Sub- section (a) of Section 39 provided not only for an order for attachment/sale of the property pledged, mortgaged, hypotheticated or assigned to the bank as security for the loan but also for an order of attachment/sale of any other property disclosed or undisclosed of persons liable for the repayment of the loan, including guarantors.
17. From bare reading of Section 39(a) of Ord. 1961 it appears that an order of attachment or sale the industrial concerned or the properties disclosed or undisclosed of persons liable for repayment loan including guarantors can be passed. There is no ambiguity in Section 39 of Ordinance, 1961.
18. The term "including" whenever used by the legislature it always mean that legislature intended to enlarge the meaning of word occurring in the body of statute. The respondents Nos. 2 to 4 are Directors of the Private Limited Company, they gave their personal guarantees and disclosed assets owned by them including the property in question and as such attachment order was rightly passed by this Court being the properties owned by the guarantors in exercise of powers under Section 39 of the Ordinance, 1961.
19. Before substitution of clause (1)(a) of Section 39 the Court can pass an order for attachment or for sale of properties only pledged, hypothecated, mortgaged or assigned to the bank as security for loan whereas by substitution the said clause (a) by Ordinance IV of 1981 bank can "ask for an order of sale in respect of property mortgaged hypothecated whether disclosed or undisclosed owned by the industrial concern or by person liable for payment of loan including guarantors.
20. For the foregoing reasons we are of the view that order of attachment of property in. Question was rightly passed.
21. Now, we will deal with the question whether the requirements of Order XXI, Rule 54, C.P.C. Was duly complied with or not.
22. Sub-section (10) of Section 39 of read as under: "(10) An order under this section for the attachment or sale of property shall be carried into effect as far as may be (underline is mine) in the manner provided in the Code of Civil Procedure, 1908 (Act V of 1908), for the attachment or sale of the property in execution of a decree as if the Bank were the decree-holder."
23. Order XXI, Rule 54, C.P.C. Required that an order of attachment shall be proclaimed at some place on or adjacent to such property:-
(i) By beat of drum or other customary mode.
(ii) A copy of the order shall be affixed on the conspicuous part of the property.
(iii) Then upon the conspicuous part of Courthouse and also.
(iv) Where the property is land paying revenue to the government in the office of the Collector of the district in which the land is situated.
24. Condition No. (iv) is not attracted to the matter in hand.
25. The Sub-section (10) of Section 39 of Ordinance 1961 provided that an order under Section 39 for attachment or sale of property shall be carried into effect "as far as may be" in the manner provided in C.P.C.
26. In case of Muhammad Sadiq v. Dr. Sabira Sultana 2003 CLC 1, while relying upon the case of Syed Ashad Ali Sadiq v. Pakistan International Airlines Corporation and another, 1992 CLC 1323, the Hon'ble Supreme Court in the case of Ghulam Abbas v. Zohra Bibi PLD 1972 SC 337 held that auction by publication in newspaper of sale by beating of drum not fatal to sale. The provision of Rule 54, Order XXI is/are not mandatory and what is required is substantial compliance of it.
27. From the record it appears that respondent No. 4 had a notice of attachment of order passed by this Court in the year 1993 as he was personally present when Official Assignee visited the factory premises for the purpose of preparing inventories of machineries, equipment lying there. Senior Advocate of this Court filed Vakalatnama on behalf of respondents Nos. 2, 3 & 4 on 18th August, 1993. On 20.1.1994 bailiff affixed the order of attachment of the property Flat No. G.F.1, Building 1A, Sea View Apartments, Phase-V, D.H.A., Karachi.
28. As regards condition No. (i) the purpose of "by beat of drum" or other customary mode, in our opinion requirement of "by beat of drum" satisfied if order of attachment is published in newspaper as the object was to make known to general public about the order of attachment passed by the Court and to put them on notice before the deal with the same and in the instant case attachment notice was duly published well before the alienation of property in newspaper and condition (i) substantially satisfied.
29. As regards condition No. (ii) requirement of the copy of the order to attachment be affixed on a conspicuous part of the property in question. As per bailiff report dated 20.1.2994 copy of the attachment order was affixed on a conspicuous part of the property in question and this condition/requirement of Order XXI, Rule 54, C.P.C. Was also complied with.
30. As regards condition No. (iii) from the Additional Registrar (O.S.) diary dated 12.11.1991, it appears that notice of attachment affixed on Court notice board on 11.11.1991 and condition/requirement No.
(iii) also stands satisfied.
31. In the case of Dhan Singh and another v. Baboo Ram and others , AIR 129081 Allahabad 1, it was held:- "An attachment before judgment remains valid till the date of dismissal of the suit but ceases to have effect after the date when the suit is dismissed. Hence when the attachment before the judgment is valid prior to the dismissal of the suit, any transfer made in contravention of the order of attachment before the judgment would therefore, be void."
32. In the case of Abdul Sattar and others v.. Sh. Muhammad Zaki & 4 others, 1999 YLR 865, it was held:- Provisions of Section 64, C.P.C. Do not contemplate that such sale is void ab initio but only provided that such sale is voidable to the extent of interest of the attaching creditor.
33. The object of Section 64, C.P.C. Is to prevent fraud on the creditor/decree-holder and to secure in fact the rights of the attaching creditor against the attached property by prohibiting private alienation pending attachment.
34. For the reasons stated hereinabove impugned order 4.10.2007 is set aside, and application under Sections 64 & 151, C.P.C. Being C.M.A. No. 465/2006 is granted as prayed.