QAISER RASHID KHAN, J.---Aggrieved from the judgment and order dated 12-2-2011 passed by the learned Judge Banking Court, Hazara Division Abbottabad whereby the request of the appellant to be handed over the physical possession of the auctioned/purchased land under section 15(6) of the Financial Institutions (Recovery of Finances) Ordinance XLVI of 2001 was declined, the same has been questioned through this appeal.
2. Succinctly stated facts of the case are that the respondent Sajjad Ahmad had availed of certain, finance facility from the appeLlant/Bank and in lieu thereof, land measuring 4 kanals, 15 marlas situated in mauza Dalola Abbottabad comprising khasra Nos.45217/1675/1676/ 1304/5169/1700 and 1619/2 was mortgaged in favour of the bank. On the failure of the respondent to repay the outstanding amount 'according to the terms and conditions of the agreement deed and becoming defaulter, the appellant/bank after fulfilling the required legal formalities put the mortgaged land of the respondent to open auction under section 15(2) of the Financial Institutions (Recovery of Finances) Ordinance XLVI of 2001 which 'was ultimately purchased by the appellant/bank vide mutation No,-16481 dated 16-11-2010. The appellant then moved an application before the learned Banking Court Abbottabad under section 15(6) of the Ordinance ibid for the delivery of its physical possession but could not succeed as the application was dismissed through judgment/order dated 12-2-2011. Hence this appeal.
3. Learned counsel for the appellant argued that the purchase of land by the appellant has attained finality as it has not been challenged by the respondent before any higher forum. He submitted that under section 15(6) of the aforesaid Ordinance, the learned lower court was legally bound to have delivered the physical possession of the auctioned/purchased land to the appellant. The learned counsel, therefore, urged that the impugned order. Is not sustainable under the law and is liable to be declared null and void and the appellant be handed over the physical possession of the purchased land.
4. The learned counsel for the respondent defended the impugned judgment and order on the ground that it suffers from no legal infirmity. He contended that the mandatory requirements of section 15 of the aforesaid Ordinance 2001 were not complied with by the appellant/bank before putting the mortgaged land to sale. He, therefore, urged that no interference is required in the impugned judgment and order of the learned court below and the appeal merits dismissal.
5. Arguments heard and record perused.
6. It needs no reiteration that section 15 of the Ordinance ibid caters to a situation where the Financial Institutions may without the intervention of the court put the mortgage property of a defaulter to sale, albeit with certain pre-conditions. Subsection (2) of section 15 of the Ordinance ibid provides as under:-- "In case of default in payment by a customer, the financial institution may send a notice on the mortgagor demanding payment of the mortgage money outstanding within fourteen days from service of the notice and failing payment of the amount within due date, it shall send a second notice of demand for payment of the amount within fourteen days. In case the customer on the due date given in the second notice sent continuous institution to default in payment, financial a final notice on the shall mortgager demanding the payment of Mortgage money outstanding within thirty days from service of the final notice on the customer"
8. Similarly, subsection (4) of the said Ordinance provides as follows:-- "Where a mortgager fails to pay the amount as demanded within the period prescribed under subsection (2) and after the due date given in the final notice has expired, the financial institution may, without the Intervention of any court, sell the mortgaged property or any part thereof by 'public auction and appropriate the proceeds thereof towards total or partial satisfaction of he outstanding mortgage money: ' Provided that before exercise of its powers under this subsection, the financial institution shall cause to be published a notice in one reputable English daily newspaper with wide circulation and one Urdu daily newspaper in the. Province in which the mortgaged property is situated, specifying particulars of the mortgaged property, including name and address of the mortgagor, details of the mortgaged property, amount of outstanding mortgage money and indicating the intention of the financial institution to sell the mortgaged property. The financial institution shall also send such notices to all persons who to the knowledge of the financial institution have an interest in the mortgaged property as mortgagees."
9. However, in the present case, without complying with the provisions of subsection (2) of section 15 of the aforesaid Ordinance, by sending the three notices to the respondent/defaulter and without complying with the provisions of subsection (4) of section 15 of the Ordinance ibid, a notice was published in an Urdu daily only. Thus where the statute has given a certain leverage to the financial institution, viz: its defaulters to put the mortgage property to A auction, without the intervention of the court, simultaneously a responsibility has also been cast on them to show strict compliance to the mandatory provisions of law and not to dispose of the valuable properties of the mortgagors as per their whims, sweet will and unbridled discretion. Any departure from the statutory provisions would vitiate the whole proceedings carried out in such cases by the financial institutions.
10. In the case of Rashid Ahmad v. State reported in PLD 1972 Supreme Court 271, the honourable apex Court has held as under:-- "If a mandatory condition for the exercise of a jurisdiction before a court, tribunal or authority is not fulfilled, then the entire proceedings .Which follow become illegal and suffer from want of jurisdiction. Any order.Passed in continuation of these proceedings in appeal or revision equally suffer from illegality and are without jurisdiction"
' Reliance in this respect may also advantageously be placed on the case of Izhar Alam Farooqi Advocate v. Sheikh Abdul Sattar Lasi and others, reported in 2008 SCM R 240.
11. We have carefully gleaned the available record of the case and are firm in our view that the appellant-bank in total disregard to the mandatory provisions of law illegally and unjustifiably purchased the property of the respondent in a clandestine and surreptitious manner which is, prima facie, nullity in the eye of law and is held so accordingly.
12. For the reasons stated above, the appeal being bereft of any merit is hereby dismissed.