' NADEEM AKHTAR, J.---This application has been filed by the objector Export Processing Zone Authority under Order XXI Rule 58(1), C.P.C. Praying that the claim of the objector be settled first out of the sale proceeds to be realized in these execution proceedings from the sale of the assets of judgment debtors.
2. The background of this case is that the judgment debtors obtained a finance facility of Letter of Credit from the Export Processing Zone Branch of the decree holder bank, and in consideration thereof, they hypothecated their plant, machinery and equipment by creating first charge in respect thereof in favour of the decree holder bank through a letter of hypothecation dated 28-3- 1985. The said hypothecated assets, were installed at Plots Nos. 7 and 14, Sector A-11, situated at Export Processing Zone Authority, Landhi Industrial Area Extension, Karachi. Hereinafter referred to as "THE LAND", owned by the objector. In view of the default committed by the judgment debtors, the decree holder filed Suit No, 783 of 1996 before this Court against the judgment debtors for declaration and for recovery of US $ 4,766,357.95. The said suit was decreed on 16-10-1997 in favour of the decree holder jointly and severally against the judgment debtors for the amount of U.S. $ 4,766,357.95 with interest thereon as specified in the decree. It was declared in the above Suit that the fixed assets belonging to judgment debtor No,1 being the land together with building, sheds, structures, plants, machinery, moulds, air-conditioning plants, spare parts, appliances, fittings, fixtures affixed, installed or attached therewith or therein with other goods and materials lying therein are the subject matter of the mortgage and charge with the plaintiff's (decree holder's) claim in suit. A sale of the mortgaged property and assets was also passed in favour of the decree holder.
3. In order to execute the above mentioned decree, the decree older filed this Execution Application on 30-11-1998 praying that the amount mentioned therein be recovered through attachment and sale of the land as well as the assets hypothecated by the judgment debtors. It is pertinent to mention here that though a decree for sale of the land together with buildings, sheds, structures and hypothecated assets had been passed in favour of the decree holder, but the decree holder never attempted or pressed for sale of the land. The decree holder has all along been trying to recover the decretal amount only through sale of the hypothecated assets. The record shows that a detailed valuation report was prepared through a licensed surveyor/engineer in order to evaluate the proper market value, of the hypothecated assets and a number of attempts were made to sell the same, however, no reasonable offer was received in respect thereof. Finally, one Mr. Khalid Fahim showed interest in purchasing the hypothecated assets. By order dated 1-3-2012, the Official Assignee was directed by this Court to enable the said Mr. Khalid Fahim to inspect the property which is the subject matter of these execution proceedings, and to submit an offer in respect thereof.
4. The said Mr. Khalid Fahim, hereinafter referred to as "THE BIDDER", submitted an offer of Rs,4,600,000.00 before the Official Assignee for the structure standing on the land along with all the hypothecated assets on "as is where is basis" with all liabilities and dues. The bidder paid a sum of Rs,1,500,000.00 on 28-5-2012 as earnest money to the Official Assignee. Through Reference No,2 of 2012 dated 29-5-2012, the learned Official Assignee placed before this Court the above offer of the bidder for acceptance. The objector has filed the listed application praying that, instead of releasing the sale proceeds payable by the bidder in favour of the decree holder, the same should be paid to the objector as the judgment debtors are liable to pay to the objector a substantial amount, and as the owner of the land, the objector has the first charge on the hypothecated assets as well as on the sale proceeds thereof.
5. Mr. Faisal Kamal Alam, learned counsel for the objector, submitted that judgment debtor No,2 was merely a licensee of the objector by virtue of the agreement/licence for land dated 25-11-1984, whereby the land was handed over to judgment debtor No,2 on licence for a period of 30 years for setting up a Synthetic Leather PVC Rexene manufacturing plant in the name and style of Synthetic Leather Industries, the respondent No,1 herein. He emphasized that the status of the judgment debtors was and has always been that of licensees and that the land was handed over to them by the objector only for a fixed period and for a specific purpose/use. He also emphasized that the ownership of the land always vested with the objector which fact is not disputed according to the learned counsel. He contended that as mere licensees the judgment debtors had no right or authority to mortgage the land owned by the objector or to hypothecate their assets installed at objector's land or the structure erected thereon in favour of the decree holder. The learned counsel submitted that the objector has no objection as far as the sale of hypothecated assets is concerned, but he insisted that the sale proceeds thereof should be paid to the objector as the judgment debtors are liable to pay a substantial amount to the objector on account of the dues outstanding in respect of the land.
6. Mr. Abu Bakr I. Chundrigar, learned counsel for the decree holder strongly opposed this application on a number of grounds. His first objection was that this application by the objector under Order XXI Rule 58, C.P.C. Is miserably barred by limitation as the decree was passed on.. 16- 10-1997 and sale was ordered in these proceedings in the year 2000; whereas this application was filed on 11-7-2012. He contended that the objector, in case of any claim or grievance, ought to have filed this application within one year under the Proviso of Order XXI Rule 58(1), C.P.C. He submitted that the application is liable to be dismissed on this ground alone. In support of this submission, the learned counsel cited and relied upon the following cases:--
(a) 1979 SCMR 32: ' The. Thal Engineering Industries Ltd. v. The Bank of Bahawalpur Ltd. And another.
' In the above cited authority, the Hon'ble Supreme Court was pleased to hold that under Order XXI Rule 58, C.P.C. No. Such investigation can be undertaken if it appears to the Court that the claim or objection petition had been dishonestly or unnecessarily delayed or was not made within one year of the date of the first attachment of the property in execution of the decree, whichever is earlier.
(b) 2001 SCMR 805: ' Chaudhary Muhammad Saulat Zaman v. Pakistan Employees Cooperative Housing Society and others.
' In this case, execution proceedings were filed by the decree holder in the year 1982 and an application was filed therein after sixteen (16) years by intervenors for becoming parties to execution proceedings. In revisional jurisdiction, High Court dismissed the said application, but gave direction to the intervenors to move the Executing Court for becoming party. Such order of the High Court was set aside by the Hon'ble Supreme Court by holding that direction given by the High Court to interveners for becoming party was redundant and uncalled for.
(c) PLD 1995 Karachi 421: ' Nan Fung v. H. Pir Muhammad Shamsdin.
' In this case, it was held by a learned single judge of this Court that objections under Order XXI Rule 58(1), C.P.C. Filed more than one year after the attachment of the property would fall under the mischief of the Proviso contained in Rule 58(1) of Order XXI C.P.C.
7. Mr. Chundrigar further submitted that, without prejudice to his preliminary objection regarding limitation, the listed application is not-maintainable on several other grounds also. He submitted that a similar application bearing C.M.A. No, 1074 of 2008 was filed by the objector which was dismissed vide order dated 4-2-2010. The learned counsel then invited my attention to Clause 16 of the Agreement / License for Land filed and relied upon by the objector, whereby the objector itself had authorized the judgment debtor No,1 (investor) to assign, mortgage, or create any charge or security, on the building, plants, engines or machinery with banks or financial institutions. The learned counsel also referred, to the Extract of the Register issued and certified by the objector/EPZA wherein charge in respect of judgment debtor No,1 s plant, machinery, equipment, spare parts and all other properties and assets installed/situated/lying at Karachi Export Processing Zone (KEPZ), was shown as first charge of the decree holder.
8. Mr. Chundrigar, -learned counsel for the decree holder, also relied upon the case of M/S Industrial Development Bank of Pakistan v. Messrs Maida Limited and .Others reported as 1994 SCMR 2248 wherein it was held inter alia by the Hon'ble Supreme Court that under Order XXXIV, Rule 13, C.P.C first priority has to be given to all expenses incurred on sale or any attempted sale: then comes the claim of the prior mortgagee and cost incurred by him; thereafter interest due on account of mortgage in pursuance of which decree was passed and sale was effected and cost of the Suit in which such decree was passed, have to be satisfied ; the principal amount of such mortgage has fourth priority ; and if any residue is left after satisfaction of the afore stated claims, it is to be appropriated amongst the persons who prove to be interested in the property sold according to their respective interests. The important and relevant point which was held in this authority by the Hon'ble Supreme Court was that claimants can succeed in claiming priority over a mortgagee/decree holder provided such right has been conferred on them" in supersession of the right of such mortgagee which he enjoys sunder law.
9. In reply to Mr. Chundrigar's submissions about this application being time barred and dismissal of previous application, Mr. Faisal Kamal Alam, learned counsel for the objector, submitted that the listed application is not barred by limitation and this fresh application is maintainable. The reasons given by him in support of this contention were that, before filing the listed application, the objector filed C.M.A. No, 1074 of 2008 under Order I Rule 10(2) C.P.C. Praying that the objector may be joined as a decree holder in these execution proceedings; that, vide order dated 31-3-2009, the said application was treated as an application under Order XXI Rule 58(1), C.P.C., and the objector was directed to file an additional affidavit explaining the apparent delay in filing the said application ; and that the said application was dismissed vide order dated 4-2-2010, but the objector was given the liberty to 'participate at the time of auction and to bring forward its contention at that time. The learned counsel reiterated that as mere licensees the judgment debtors had no right or authority to mortgage the land owned by the objector or to hypothecate their assets installed at objector's land or the structure erected thereon in favour of the decree holder, and that the sale, proceeds should be paid to the objector as the judgment debtors are liable to pay a substantial amount to the objector on account of the dues outstanding in respect of the land.
10. It may be noted that all the above objections and contentions were raised in the counter affidavit filed by the decree holder in reply to the listed application to which no affidavit-in- rejoinder was filed by the objector.
11. Clause 16 of the Agreement/License for Land referred to by Mr. Chandigarh is reproduced below for convenience and ready reference:- "16. That the Investor may assign, mortgage or create any charge or security on building, plants, engines or machinery with banks or financial institutions.
' In addition to the above quoted Clause 16 of the said Agreement / License for Land, I have noticed that Clauses 21(ii) and 21(iii) thereof are relevant and important for the purposes of this application and as such the same are reproduced below:-- "21 (ii). That if the judgment debtors decide to windup, suspend or withdraw from the sanctioned industry after the expiration of a minimum period of three (3) years from the date of actual operation of the industry, the Investor with the written permission of the Authority may sell the buildings and constructions upon the land on such terms and conditions as prescribed and approved by the Authority to a new Investor duly obtained (l) a sanction for establishing an industry within the Karachi Export Processing Zone."
"21(iii). (If and when the sanctioned granted to the Investor under section 11 of the Ordinance IV of 1980 by the Authority is revoked, cancel or withdrawn for any reason whatsoever or the said yearly rents hereby reserved or any part thereof or any dues payable by the Investor shall be in arrears or -should the Investor commit breach of any of the terms and conditions of these presence or should he neglect to comply any direction given to him by the Authority or in any other respect fails to carry out his obligations under these presence it shall be lawful for the Authority to terminate this agreement by a notice in writing to the Investor and on such termination the land shall revert to the Authority and all payments made by the Investor shall be forfeited and the Authority or any person/persons duly authorized by it in this behalf may enter upon the land or any part thereof and take possession of the same and all buildings, erected upon the said land, the Authority may, if thinks fit, require the Investor to remove all buildings, constructions and installations from the land, at his cost and expenses, within the time so specified by the Authority; in case the Investor fails to remove the buildings, constructions, installations from the land within the period so specified by the Authority, the Authority itself shall remove the buildings, erections, installations and get the site -cleared at the cost of the Investor or if the Authority further deems fit on affecting a sale thereof pay to the Investor the net sale proceeds after deducting all expenses incidental to the demolition clearance and sale and/or such other dues."
The above referred Clauses of the Agreement/License for Land clearly show that the objector never had any charge, lien and/or interest on the hypothecated assets installed/stored/lying at the land, or in respect of the structure/sheds erected on the land. The alleged claim of the objector is falsified by its own document, that is, by the Extract of the Register issued and certified by the objector wherein charge in respect of judgment debtor No,l's plant, machinery, equipment, spare parts and all other properties and assets installed/situated/lying at the land has been shown as first charge of the decree holder.
12. The authority, namely, 1994 SCMR 2248 (supra) cited by Mr. Chandigarh is fully applicable in this case. By following the said authority, it is held that the objector/Claimant can succeed in claiming priority over the mortgagee/decree holder provided such right has been conferred on the objector/claimant in supersession of the right of the mortgagee/decree holder which the mortgagee/ decree holder enjoys under law and that after satisfying the expenses of sale, the decree, including the principal thereof and the interest thereon, if any residue is left, it is to be appropriated amongst the persons who prove to be interested in the property sold according to 'their respective interests. In the instant case, the objector does not have any legal right in supersession of the right of the decree holder which right the decree holder enjoys and possesses by virtue of a valid and subsisting decree passed in its favour by the competent Court. Even otherwise, after authorizing the judgment debtor to assign, mortgage, or create any charge or security, on the building, plants, engines or machinery with banks or financial institutions, and after specifically recording and acknowledging such charge of the decree holder as the first charge, the objector has no right either to file the instant application or to claim any amount out of the sale proceeds of the assets hypothecated by the judgment debtors.
13. As noted above, though a decree for sale of the land together with buildings sheds, structures and hypothecated assets had been passed in favour of the decree holder, but the decree holder never attempted or pressed for sale of the land. This position was again reiterated by- the decree holder in its counter affidavit. The objector is, therefore, not entitled to receive any amount out of the sale proceeds of the hypothecated assets as well as the structure standing on the land, for which the bidder has submitted his offer and has paid earnest money, as the objector owns only the land and not the assets, structure and/or sheds hypothecated by the judgment debtors with the consent of the objector.
14. Regarding the preliminary objection raised by the learned counsel for the decree holder, it may be noted that the first application (C.M.A. No 1074 of 2008) was filed by the objector on 6-12-2008, whereas order for appointment of Receiver for sale of the property in question was passed in March 2000 in these execution proceedings. Since the said first application wag hopelessly barred by time as it- was filed by the objector after about eight (08) years and nine (09) months without any application for condonation of such a long delay, the submission made on behalf of the objector that the instant/second application, which according to him is a continuation of the said first application, is within time is not correct and cannot be accepted. It is a well settled principle of law that once the prescribed period of limitation expires,- then fresh period of limitation cannot be computed, and even courts cannot create a right which a party loses due to its own fault including the fault caused due to actions initiated beyond the prescribed period of limitation. It is also a settled law that in such a situation valuable right accrues to the other side which cannot be taken away or interfered with. As far as the listed application is concerned, it is also miserably time barred as it was filed on 11-7-2012, and no application for condonation of delay was filed with this application also. The law on this point is- also very well settled that a time barred application can neither be entertained nor is maintainable if the same is not supported by an application for condonation of delay. The law cited by Mr. Chandigarh on this point shall also apply in this case. It is, therefore, held that this application is barred by limitation.
' In view of the above discussion, C.M.A. No, 380 of 2012 filed by the objector is dismissed with no order as to costs.