' AMIR HANI MUSLIM, J.---Through this direct appeal, the appellant has challenged the judgment of the Lahore High Court, by which it has set aside the sale of the property in dispute confirmed in favour of the appellant, by the executing court, accepting the objections of the private respondents.
2. Habib Bank Ltd. Filed a suit against the respondents for recovery of an amount of Rs,66,28,137, which suit was decreed by the Banking Court, vide its judgment dated 9-6-1998. The appellant is the auction purchaser. In order to satisfy the decree of an amount of Rs,66,28,137, the executing Court put the mortgage property on auction as per terms and conditions of the auction drawn by the order dated 21-7-1998. It is claimed by the appellant that the property exclusively belongs to Makki Chemicals. On 31-11-2001, the executing Court ordered auction of the mortgaged property fixing the reserve price at Rs, 8 millions.. No bid was received on the said date and the auction was postponed to 13-3-2001 when the parties present on site did not give bid. The executing court reduced the reserve price from Rs,8 million to Rs,7.5 million and date of auction was fixed on 22-4- 2002. According to the schedule approved by the Court, the proclamation was to be affixed on the Court notice board on 4-4-2002 and at the site on 6-4-2002, the time of the auction was mentioned therein but the place of auction, however, was not specified.
3. There is no dispute that the proclamation was accordingly affixed. The-executing court required the officer to submit the report on 26-4-2002. The report was submitted by the officer on 26-4- 2002. In para 3 of the report, it was mentioned that "the auction was fixed on 22-4-2002. Because of my illness, I could not conduct the auction proceedings, therefore, the auction is postponed for one week and the next date of auction is fixed on 29-4-2002."
4. On the above report, the executing court passed the following order:- "Present: Counsel for the D.H. And court auctioneer.
' The latter filed interim report stating that the property could not be auctioned on 22-4-2002 on account of his illness and now would conduct the auction on 29-4-2002 that is within week of the previous auction. Allowed. Report be filed on 2-5-2002."
5. On 29-4-2006, the appellant claims, that auction was held and she gave the highest bid of Rs, 79,75,000. According to the appellant, 1/4th of the bid amount was paid through cheque by her attorney on the same day, however, the balance amount could not be paid by the appellant within 15 days as per the condition of auction and instead on 13-5-2002 the appellant made an application for extension of time for deposit of the balance auction amount. In her application she has stated that:-- "the remainder 3/4 was required to be deposited within 15 days but due to the prevalent circumstances of Karachi city, a heavy payment of the petitioner struck there and it has become difficult for the petitioner to make the payment of entire 3/ 4th remainder. In paragraph No,4, it is stated that "the petitioner is bona fide purchaser and to show her bona fide she is depositing Rs,3.000 million in this august court today and undertakes to deposit the remaining amount within 10 days from today." It was thus requested to the court to accept the payment of Rs,3.00 million and for the remaining balance, auction money to extend the time. This application came up before the court the same day and the court passed the following order on this application:- {{ URDU TEXT }} ' From the order dated 14-5-2002, which is not in the main order sheet, but on the side of the application, it transpires that notice was issued to the parties for 295-2002, however, the court directed case was adjourned to 29-5-2002. From the record, it seems that the respondent had made the deposit of the auction price in the following break up:- Rs,19,93750 on 29-4-2002 through cheque to the court auctioneer. Rs,30,000,00 was deposited on 14-5-2002 through pay order. Rs,30,000,00 on 23-5-2002.
6. On 24-5-2002 the private respondents filed objections under section 19(7) of the Financial Institutions (Recovery of Finances) Ordinance 2001, in which it was specifically pleaded that no auction was held on 29-4-2002; "the auction proceedings are fictitious and fraudulent. It was also stated in ground-B, that no one including the court auctioneer, the bank staff had come to the site on 22-4-2002 and the auction was not validly postponed, entire proceedings in this behalf were fabricated; the purchaser has not deposited the balance 3/4th of the auction money within 15 days of the alleged auction dated i.e. 29-4-2002. Therefore, the auction proceedings stood vitiated. The decree holder and the purchaser filed replies to the objections. Reply of the respondent/ decree holder Habib Bank was absolutely evasive and did not specifically meet the allegations contained in the objection petition. The appellant also in her reply, while responding to grounds B, has not specifically denied the averments made therein about the deposit of 3/4th after the lapse of the stipulated period in terms of Order XXI, Rule 85, C.P.C. However, the learned Banking Court has dismissed the objection of the appellants; confirmed the sale in favour of the appellant, who has also obtained the possession in the intervening period.
7. Against dismissal of the objection petition, the private respondents preferred E.F.A.No,690 of 2002 before the learned Lahore High Court whereas Mst. Ruqqia Rahzes filed separate appeal, inter alia, on the ground that the sale, by way of auction, was violative of the provisions of Order XXI of the C.P.C. The learned Lahore High Court, by the impugned judgment has allowed the appeal of the private-respondents against which the present direct appeal has been preferred.
8. It is contended by the learned counsel for the appellant that the appeal preferred by the private respondents before the Lahore High Court was not competent as they did not implead Mst. Ruqqia Rahzez as party. His next contention was that the objection filed by Mst. Ruqqia Rahzes were dismissed by the executing court against which she had preferred separate appeal before the.
Lahore High Court which was subsequently withdrawn by her. It is further contended that the respondents did not deposit the 20% of the amount in terms of provisions of Order XXI, Rule 90, therefore, the executing court, in addition to the reasons incorporated in the order confirming the sale, was justified to dismiss the objection petitions of the private respondents for want of deposit of the required amount, which fact was not taken note of by the learned High Court while allowing the appeals of the respondents. He lastly submitted that provisions of Order XXI, Rule are not applicable to the Banking Court for the purpose of executing the decree as it can adopt any other procedure for executing the banking decree. The learned counsel in support of his submission has relied upon the cases reported as Pakistan Industrial Credit and Investment Corporation Ltd.
Peshawar Cantt. v. Govt. Of Pakistan through Collector Customs, Customs House, Jamrod Road (2002 CLD 1), Muhammad Ikhlao Memon v. Zakaria Ghani and others v. Banking Court No,2 Lahore and others (PLD 2005 SC 819), Al-Hassan Feeds and others v. UBL Jinnah Road Abbottabad (2004 CLD 275), Messrs Tawakkal Export Corporation v. Messrs Muslim Commercial Bank Ltd. And others (1998 M LD 866), Messrs International Laboratories Ltd. v. Employees Union and another (PLD 1982 SC 46), Mst. Murad Begum v. Muhammad Ratio (PLD 1974 SC 322), Madan Gopal and others v. Maram Bepari and others (PLD 1969 SC 617) and (2010 SCM R 827).
9. As against this, the learned counsel for the private respondents while supporting the impugned judgment has contended that the auction was fake. He submitted that the record reflects that even the appellant was not present at the time when the highest bid was given instead one Nisar was present on her behalf, who was stranger to the proceedings. His next contention was that the venue of the auction was not specified in the proclamation. He further contended that the executing court in violation of the mandatory provisions of Order XXI, Rules 85 and 86. C.P.C., had extended the time for deposit of balance amount of auction money which Rule 85 of the C.P.C.
Does not permit. He has placed reliance upon the judgments from Indian jurisdiction in the cases reported as Manilal Mohanlal Shah and others v. Sardar Saved Ahmed Saved Mahmad and others (AIR 1954 SC 349) and Balram son of Basha Ram v. Ilam Singh and others (AIR 1996 SC 278). The learned counsel for the respondents next contended that the entire liability was paid by the respondents to the Banks and there was no outstanding liability of the banks, which could warrant continuance of execution proceedings. He has relied on the case of Afzal Maosood Butt v. Banking, Court No,2 Lahore and others (PLD 2005 SC 470).
10. We have heard learned counsel for the parties and have perused the record. We would like to first take up the issue as to whether provisions of Order XXI, Rule 85, C.P.C. Apply to the banking courts in execution proceedings. The language of section 19(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred to as the Ordinance), reads as follows:-- "(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."
11. The aforesaid subsection stipulates three modes authorizing the banking court to execute its decree. The first mode empowers a banking court to execute a decree by applying the provisions of C.P.C. The second mode provides that a banking court can execute a decree in the manner provided under any other law for the time being in force and the third mode provides that at request of the decree-holder, a banking court may adopt any procedure for execution of a decree which it deems appropriate. The word 'or' used twice in subsection (2) of section 19 of the Ordinance which has to be read disjunctively classify three modes for execution of the decree. In the case in hand, the executing court has adopted the procedure for executing the decree as provided under C.P.C., which fact is manifested from the proclamations issued, at times, by it. In clause 2 of the proclamations, it is provided that the highest bidder shall deposit 25% of the auction money immediately on conclusion of the auction. Clause 4 of the proclamations provides that the remaining 75% of the auction money shall be deposited in court within 15 days from the date of auction, failing which the executing court can forfeit the amount of auction money deposited on the conclusion of the auction. These conditions are in fact borrowed from the provisions of Order XXI, Rules 84, 85 and 86, C.P.C. In other words, the executing court had chosen to adopt the procedure provided under the C.P.C. For executing the decree. There is nothing on record to show that the decree-holder had ever approached the banking court to execute the decree in the manner other than the one provided under the C.P.C. Therefore, the argument of the learned counsel for the appellant on the issue of application of the provisions of C.P.C. By the executing court are without substance.
12. The next question before this Court is whether the executing Court while following the provisions of Order XXI, Rules 84 and 85 C.P.C., was competent to extend time beyond 15 days for deposit of balance 75% of the amount of the auction money. The answer in this behalf would be in negative.
The time for deposit of amount is provided under -Order XXI, Rule 85, C.P.C. Under Rule 85 an auction purchaser shall deposit 25% of the auction amount immediately on being declared as highest bidder and the balance amount of 75% shall be deposited within 15 days of the auction. In the present case, the sale was confirmed on 29-4-2002 on which date the appellant had deposited 25% of the auction amount. In terms of Order XXI, Rule 85, C.P.C., the appellant was required to deposit the balance amount of Rs,6.00 million by 13-5-2002. Admittedly, this amount was not deposited by the said date and record reveals that an application for extension of time was made by the appellant on 13-5-2002 and on 14-5-2002 an amount of 3.00 million was deposited and for the balance amount of 3 million further time of 10 days was sought. The appellant as has already been observed earlier has deposited Rs, 19,93,750 on 29-4-2002, which was 25% of the auction price whereas Rs,3.00 million was deposited on 14-5-2002 after a lapse of 15 days, the stipulated time, and the remaining 3.00 million on 23-5-2002. The default in deposit of the balance amount was violative of the mandatory conditions provided under the proclamation, which language was borrowed from the mandatory provisions of the Order XXI of the C.P.C. Failure to deposit the balance amount of 75% of auction money within 15 days by the appellant renders the sale/auction proceedings nullity. The language of Order XXI, Rules 84 and 85, C.P.C. Are mandatory in nature. If the balance amount of auction price is not paid within the stipulated period of 15 days, the court has the discretion to forfeit the deposit and order re-sale of the property. In addition to forfeiture, the defaulted purchaser forfeits all claims to the property. The conditions contained in the proclamation provide all such details. It has provided that a party who is declared as highest bidder, shall immediately deposit 25% of the sale price and remaining 75% of the sale price would be deposited within 15 days. Violation of these conditions would not empower the executing court to extend time for deposit of balance amount unilaterally.
13. The appellant admittedly has violated the mandatory conditions and the contention of the learned counsel for the appellant that the court in its discretion can extend time to the appellant for deposit of balance amount of 75% of the sale price after the lapse of 15 days by virtue of subsection (2) of section 19 of the Ordinance, does not appeal to reason. The executing court can adopt any procedure for executing decree under banking law but this power of the _ court has a rider that it would be subject to the written request of the decree-holder, which request has never been E made in the case in hand. The case in hand is fully covered by the judgment of this Court in the case of Afzal Maasood Butt v. Banking Court No,2, Lahore and others reported as (PLD 2005 SC 470) wherein this court has held that nonpayment of 75% balance auction amount within 15 days in violation of provisions of Order XXI, Rule 85, C.P.C. Would render the sale nullity and the executing court is bound to order re-sell of the property in terms of Order XXI, Rule 86, C.P.C. Moreover, the case of the respondents is supported by the judgments of the Indian Supreme Court in the cases reported as Manilal Mohanlal Shah and others v. Sardar Saved Ahmed Saved Mahmad and others (AIR 1954 SC 349) and Balram son of Basha Ram v. Ilam Singh and others (AIR 1996 SC 278), wherein it has been held that provisions of Order XXI, Rules 84, 85 and 86, C.P.C. Are mandatory in nature and violation of the same would render the sale nullity.
14. The next contention of the learned counsel for the appellant that the sale was confirmed by the Court on 29-4-2002 and payment of entire amount was made by 23-5-2002, and therefore the private respondents had no right to object to such sale. We have gone through the objections filed before the executing court, the memo of the appeal of the High Court and the impugned judgment of the learned High Court and have noticed that the objections raised were weighty. Their first objection was that the sale itself was fake, inter alia, on the ground that no auction was conducted by the officer at the site on 26-4-2002, proclamation was not affixed/pasted at the court notice board and there was no proclamation for sale issued on 29-4-2002. It was further averred by the private respondents that neither the minutes of auction proceedings were placed on record nor the attendance sheet of decree holder, judgment debtor or the persons who were alleged to have been present on the site were brought on record. Neither the affidavit of the participants in the auction proceeding held on 29-4-2002 were filed nor the notice of the officer with his report regarding postponement of sale from 22-4-2002 to 29-4-2002 have been brought on record. Even the proclamations issued, at times, do not mention the venue for the auction/sale.
15. The specific objections of the respondent were not met with nor any plausible explanation has been offered by the appellant either before the learned High Court or before this Court. It appears from the record that the sale/auction proceedings were not conducted transparently G and were fake. In the absence of record of sale/auction proceedings referred to hereinabove, the learned High Court has rightly held that the sale in favour of the appellant was not transparent. This finding on this issue by the learned High Court was justified in the given circumstances. The very sale in favour of the appellant was violative of the provisions of Order XXI, Rule 85, C.P.C., being nullity can always be challenged by any interested party H irrespective of the fact that it was confirmed by the executing court.
16. The next issue is non-deposit of amount of 20% in terms of Order XXI, Rule 90, C.P.C. By the private respondents at the time of filing of the objections to the sale. The sale in favour of auction purchaser must reflect transparency. The objections raised by the private respondents were not only based on the quantum of reserved price, but were based on the issues which showed that the sale/auction proceedings were being conducted in the manner to extend favour to the appellant.
All provisions of law including the provisions of Order XXI, Rule 90, C.P.C. Are to be read with exception. Any law without exception is a bad law. In the case in hand, the appellant had taken his time to deposit the balance sale consideration in violation of the mandatory provisions of Order XXI, Rule 85, C.P.C., The belated application for extension in time for deposit of balance amount was wrongly entertained by the executing Court that too without notice. The record of the auction proceedings of 22-4-2002 and 29-4-2002 has neither produced before the executing court nor before the learned High Court to show that the actual auction proceedings were conducted by the officer. The amount of 25 % was deposited by the appellant through pay order on 29-4-2002 after the conclusion of auction proceedings, whereas the record shows that auction proceedings were concluded at 5-10 p.m., as per report of the court auctioneer. How come the appellant paid 25% of the auction amount by a pay order after the conclusion of the auction proceedings as by that time banks are closed. Moreover in the absence of fixation of proclamation on the court notice board, auction proceedings could not be held to be transparent. No venue of auction has been mentioned in the proclamations, which is violative of the provisions of Order XXI, Rules 54(2) and 69, C.P.C.
17. In the face of the afore-said illegalities coupled with the non-deposit of the balance sale amount of 75% within 15 days renders the sale culminating from such auction proceedings as nullity. The issue of non-deposit of amount of 20% by the private respondents in exceptional circumstances can be condoned when the auction has been conducted in deviation of the mandatory provisions of Order XXI, Rules 54(2), 69, 85 and 86, C.P.C. And the executing court, in law, has erroneously confirmed the sale. The object of deposit of 20% of amount by a person objecting to sale under Rule 90 of Order XXI is meant to ensure that the objections are made by bona fide person and the rule is not misused to frustrate the sale, however, it could not be applied to the advantage of the appellant to have premium over his default. The judgments cited by the learned counsel for the appellants are distinguishable on facts and have no application to the case in hand.
18. During arguments, we were informed by the learned counsel for the respondents that pursuant to the orders passed by this Court on 9-12-2002 and 12-12-2002, the respondents have paid to the bank their entire liability and nothing is outstanding against them. This statement has not been objected to by the learned counsel for the appellant. If the entire liability of the respondents has been paid, the execution proceedings have come to an end as the decree has been satisfied. The order passed by this Court on 12-12-2002 or any other order granting interim relief to the appellant in these proceedings is recalled.
' For the aforesaid reasons, we dismiss this appeal along with all the applications including the compromise application.