SALMAN HAMID, J. - Muhammad Hafiz, son of Atta Muhammad (the Appellant) filed present First Appeal under the provisions of Section 22 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 (2001 Ordinance), after Order dated 09.07.2011 (Impugned Order) was passed by the Judge, Banking Court No. 1, Karachi (Respondent No. 1) in Execution Application No. 86 of 2008 (emanated from Banking Suit No. 836 of 2008) whereby applications moved by the Appellant under Section 12(2), Order I, Rule 10 and Order XXXIX, Rules 1 and 2, Civil Procedure Code, 1908 (the Applications) were dismissed.
2- Background of the case/appeal, gathered from its file and from the file of Civil Suit No. 1488 of 2010 - Mr. Muhammad Hafiz v. Province of Sind & others (Civil Suit) in a nutshell are that the.
Respondents No. 3 and 4 approached Respondent No. 2 for Home Purchase Finance Facility (Finance Facility) for purchase of Flats No. 5 and 6, merged into a single unit, third floor, Motiwala Centre, Plot No. C-23-C, Survey No. 26, Khayaban-e-Sehar, Phase VII, Defence Housing Authority, Karachi (the Property). This request of the Respondents 3 and 4 was acceded to by the Respondent No. 2 and in terms of Offer Letter No. IBD/UTK/0058, dated 23.08.2005, Finance Facility of Rs.
5,700,000A payable in 20 years (240 instalments) was granted. Necessary security documents to secure the Finance Facility were executed between the Respondents 3 and 4 and the Respondent No. 2, which amongst others also included Agreement to Create Mortgage and Memorandum of Deposit of Title Document, both dated 24.08.2005, whereby the Property was mortgaged with the Respondent No. 2.
3. It seems that default was made in repayment of the Finance Facility by the Respondents No. 3 and 4 and Suit No. 836 of 2008 (Banking Suit) against them before the Respondent No. 1 by Respondent No. 2 was filed. After service application under Section 10 of 2001 Ordinance, on 02.08.2008 (available as Annexure 'B' to CMA No. 11895 of 2010 - preferred by the. Respondent No. 2 in Civil Suit) was made by Respondents No. 3 and 4. A perusal of this application would show that the claim of the Respondent No. 2, as raised in their Banking Suit was acknowledged and accepted by the Respondents No. 3 and 4, except that it was categorized exaggerated.
4. It appears that Application under Order XXIII, Rule 3, CPC was filed in Banking Suit on or about 10.11.2008 on which Order of the instant was passed by the Respondent No. 1, whereby the Banking Suit was decreed for a sum of Rs. 5,079,359/- and cost of fund at the latest rate notified by the State Bank of Pakistan from 01.01.2008 till the realization of entire decreed amount and in default of making payment, the respondent No. 2 was competent and entitled to sell the property for satisfaction of the decree. Terms of the compromise having not honoured, requisite proceedings envisaged under Section 19 of the 2001 Ordinance had been initiated by Respondent No. 2 to sell the Property. Necessary publications in daily Jang of 01.07.2009 and of daily Dawn of 02.10.2009 for auction of the Property were made.
5. It looks that as a ploy to defeat the above decree and proceedings initiated by the Respondent No. 2 under Section 19 of 2001 Ordinance, the Appellant filed the Applications, all of which in terms of the Impugned Order were dismissed by the Respondent No. 1 by observing that earlier in time Mr. Muhammad Shafiq, Advocate, who had preferred the Applications on behalf of the Appellant also moved similar applications on behalf of one Jamshed Hussain and that such applications had been dismissed by the Respondent No. 1 with cost of Rs. 10,000. Other reason for dismissal of the Applications was that, that the Appellant has already preferred Civil Suit without impleading the Respondent No. 2 therein and by misrepresentation and twisting of facts ex parte injunction Order dated 25.10.2010 without disclosing that the Appellant or Jamshed Hussain were not the owners of the Property was obtained.
6. In stark contrast to the above exposition, gathered by us from the record, the counsel for the Appellant attempted to argue that, the decree was obtained by concealing real facts from the Respondent No. 1 by playing "game fraudulently/ deceitfully with mala fide intention" and that, the Respondent (without disclosing which of the Respondent) sold out the Property to the Appellant by virtue of Sale Agreement dated 30.05.2005 for consideration of Rs. 6,0, 000. It was also argued that the Appellant was the real owner of the Property and therefore the auction proceedings in respect thereof were void and that the Respondent No. 1 did not apply its mind in deciding the Applications and passed the Impugned Order "without due course of law".
7. A perusal of various annexure, attached to the Appeal, would reveal that amongst others three sale agreements in quick succession in respect of the Property had been executed. First of such agreement is dated 12.03.2005, executed between Respondent No. 4 and one Adnan Khan for sale of the Property against consideration of Rs. 6,000,000/-. Second agreement in respect of the Property is dated 25.03.2005, executed between Adnan Khan and Jamshed Hussain again for a sale consideration of Rs. 6,000,000/- and the third agreement in respect of the Property is dated 30.03.2005, executed between Jamshed Hussain and the present Appellant wherein again sale consideration of Rs. 6,000,000/- was shown. It is a fact, also established from the Agreement to Create Mortgage and Memorandum of Deposit of Title Deeds dated 24.08.2005 that despite above three sale agreements for purported sale of the Property such was not conveyed in favour of any of the executants thereof and the title of the Property remained with the Respondent No. 4 who mortgaged it (the Property) in favour of the Respondent No. 2 on 24.08.2005 at the time of availing of the Finance Facility. The three purported purchasers of the Property at no stage of time and till date acquired title in it (the Property) inasmuch as by merely centering into sale agreement of the Property, title thereof was not conveyed, which could have been acquired only through a registered instrument of conveyance. This registered instrument of conveyance admittedly was not executed by the Respondent No. 4 in favour of the purchasers of the Property. All the three purported purchasers were perhaps ignorant of the principles of beware buyer and remained aloof in exerting their right under the sale agreements for a considerable period of time and/or woke up only when the Property was put up for auction. It appears that these purported buyers were in league with the Respondents No. 3 and 4 to defeat the decree in Banking Suit. This observation has been made after looking at the No Objections dated 27.08.2011, preferred by the Respondent No. 4 in the Appeal in hand, wherein it was mentioned that she or her husband (Respondent No.! 3) never approached the Respondent No. 2 for Finance Facility and that she never mortgaged the Property.
Allegation of cheating against the Respondent No. 2 was raised, despite the fact that in leave to defend application no such defence was raised and that the compromise was reached in the Banking Suit against which no appeal was filed.
8. Since Civil Suit in respect of the Property is pending adjudication before original side of this Court, wherein the Respondent No. 2 have also made their appearance by filing CMA No. 11895/10 (application under Order I, Rule 10, CPC) and injunctive Order against the Respondents No. 2, 3 and 4 are operating in such Civil Suit in favour of the Appellant in respect of the Property and all the allegations on either end would now be looked into and thrashed out vis-a-vis title of the Property through evidence therein, therefore for all that has been observed hereinabove, we found this Appeal to be meritless and/or under the circumstances Impugned Order was found to be sustainable, we dismissed it in limine on 20.09.2011 along with listed applications, reasons whereof are these.