Shahid Karim, J:- This is an appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (Ordinance). The challenge in this appeal is to an order dated 31.01.2014 passed by the Judge, Banking Court-II, Multan (the impugned order). By the impugned order, Judge, Banking Court-II, Multan has dismissed the objection petition filed by the appellant herein.
2. The relevant facts are that respondent bank filed a suit for recovery of Rs.7,01,561/- against the appellant which was decreed vide judgment and decree dated 04.05.2010. The decree was converted into an execution petition and it was further ordered that notice under Order XXI rule 66 CPC be issued to the judgment debtor within three days.
3. It seems that the proceedings in the execution petition were kept pending and finally they were consigned to the record vide order dated 08.07.2011.
4. It is admitted on all hands that proceedings for the execution of the decree and for the sale of the mortgage property measuring 128 kanals and 01 marla situated at Mauza Chak Bhaku, Tehsil Mailsi, District Vehari were consigned to the record vide order of the Banking Court dated 08.07.2011.
Subsequently the respondent bank purportedly exercising the powers conferred under section 19(3) of the Ordinance conducted the auction proceedings of the mortgaged property on 31.12.2011.
Respondent No.2 was declared as successful auction purchaser. A report of the auction proceedings was duly submitted to the Banking Court on 30.01.2012 for its perusal.
5. An objection petition was filed by the appellant which was dismissed vide the impugned order.
The primary reason which weighed with the Banking Court in dismissing the objection petition was that since the objection petition had been filed under order XXI, rule 89 of CPC and the said provision of law required deposit of a sum equal to 5% of purchase money for its payment to the auction purchaser and an amount specified in the proclamation of sale for payment to decree holder and since the said amount had admittedly not been paid by the objection petitioner, the objection petition was liable to be dismissed. According to the Banking Court the said provisions were mandatory and the deposit of 5% compensation of purchase price was a sine qua non and until that was complied with, no objection petition was maintainable.
6. We have heard the learned counsel for the parties.
7. The learned counsel for the appellant submits that the objections of the appellant have been dismissed summarily and in a cursory manner by the Banking Court. He takes cavil with the reliance of the Banking Court upon the provisions of order XXI, rule 89 CPC as being mandatory. He has also raised serious objections regarding the procedure which has been observed while auctioning in the property and according to him grave and material irregularity has crept in the whole process.
8. The learned counsels for the respondent bank as well as auction purchaser have supported the process of auction conducted by the bank and submitted that the bank was well within its right to auction the property without intervention of the Court. They have placed reliance on the provisions of section 19(3) of the Ordinance which according to them do not require the bank to seek permission before the auction is conducted.
9. As brought forth above, the only order which gives an indication regarding the culmination of the execution proceedings pending before the Banking Court is dated 08.07.2011. That order is in vernacular and merely consigns the execution proceedings to record on the ground that the decree holder bank seems uninterested and therefore there was no reason to keep the proceedings pending.
10. The baseline question which is germane for the determination of the controversy in the instant appeal is whether the Financial Institution can proceed under section 19(3) of the Ordinance without seeking a formal permission from the Banking Court and continue with the execution proceedings and conducting the auction under the said provisions of law. This aspect was not adverted to by the Banking Court and as stated above the Banking Court was swayed by the mere fact that provision of order XXI, rule 89 CPC were not complied with. For facility of reference, relevant portion of section 19 of the Ordinance is reproduced as under: "19. Execution of decree and sale with or without intervention of Banking Court.-
(1) Upon pronouncement of judgment and decree by a Banking Court, the suit shall automatically stand converted into execution proceedings without the need to file a separate application and no fresh notice need be issued to the judgment-debtor in this regard. Particulars of the mortgaged, pledged or hypothecated property and other assets of the judgment-debtor shall be filed by the decree-holder for consideration of the Banking Court and the case will be heard by the Banking Court for execution of its decree on the expiry of 30 days from the date of pronouncement of judgment and decree: Provided that if the record of the suit is summoned at any stage by the High Court for purposes of hearing an appeal under section 22 or otherwise, copies of the decree and other property documents shall be retained by the Banking Court for purposes of continuing the execution proceedings.
(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.
Explanation.- The term assets or properties in subsection (2) shall include any assets and properties acquired benami in the name of an ostensible owner.
(3) In cases of mortgaged, pledged or hypothecated property, the financial institution may sell or cause the same to be sold with or without the intervention of the Banking Court either by public auction or by inviting sealed tenders and appropriate the proceeds towards total or partial satisfaction of the decree. The decree passed by a Banking Court shall constitute and confer sufficient power and authority for the financial institution to sell or cause the sale of the mortgaged, pledged or hypothecated property together with transfer of marketable title and no further order of the Banking Court shall be required for this purpose.
(4) Where a financial institution wishes to sell mortgaged, pledged or hypothecated property by inviting sealed tenders, it shall invite offers through advertisement in one English and one Urdu newspaper which are circulated widely in the city in which the sale is to take place giving not less than thirty days time for submitting offers. The sealed tenders shall be opened in the presence of the tenderers or their representatives or such of them as attend: Provided that the financial institution shall be entitled in its discretion, to purchase the property at the highest bid received."
11. In our opinion the submission of the learned counsel for the respondents to the effect that a Financial Institution is not obliged to seek permission from the Banking Court prior to conducting an auction or to sell the mortgaged property without the intervention of the Court on its own is devoid of force.
12. In this respect the provisions of section 19 of the Ordinance will have to be read in conjunction with each other and as a whole. The provisions of section 19 of the Ordinance cannot be read in isolation, one from the other. Some of the rules of interpretation which will be engaged to elucidate the principle that the text must be considered as a whole are discussed below, with reference to the judgments of the superior Courts.
13. In Mirza Shaukat Baig and others v. Shahid Jamil and others (PLD 2005 Supreme Court 530) it was held by the Supreme Court of Pakistan as under: "7. No provision of law can be interpreted on the basis of "pick and choose" of a few words and in case of any confusions the relevant provisions of law should be read in toto along with the preamble of the statue coupled with the objects and reasons thereof to remove the confusion if any which altogether was not available and in absence whereof the question of any academic exercise or scholarly interpretation by considering the various events happened on global level having no concern with the Act does not arise.
14. The above principle was reiterated in Collector of Sales Tax and Central Excise (Enforcement) and another v. Messrs MEGA TECH (Pvt) Ltd (2005 SCMR1166) in the following words: "---Every word used by the Legislature must be given its true meaning and the provisions construed together in a harmonious manner--- Not legal or proper to apply one provision of law in isolation from the other provision as no surplusages or redundancy can be attributed to the legislative organ of the State."
15. The Sindh High Court dilated upon the said principle in Commissioner of Sales Tax, Karachi v.
Pakistan Machine Tool Factory Ltd., Karachi (PTCL 2004 CL.97) and the following observations are recorded: "It is cardinal principle of interpretation of statues that no word or expression or few words, should be taken from the context in which there are used and then be interpreted in isolation. A provision of law is to be read and interpreted as a whole and if there is any scheme of law then the entire scheme is to be taken together into consideration and no part thereof is to be considered in isolation."
16. The Whole-Text Cannon, as it finds expression in the American Jurisprudence has been dealt with in Reading Law: The interpretation of Legal Texts by Antonin Scalia and Bryan A. Garner in the following words: "Perhaps no interpretive fault is more common that the failure to follow the whole-text canon, which calls on the judicial interpreter to consider the entire text, in view of its structure and of the physical and logical relation of its many parts. Sir Edward Coke explained the canon in 1628: "[I]t is the most natural and genuine exposition of a statue to construe one part of the statue by another part of the same statue, for that best expresseth the meaning of the makers." Coke added: "If any section of a law be intricate, obsure, or doubtful, the proper mode of discovering its true meaning is by comparing it with the other sections, and finding out the sense of one clause by the words or obvious intent of the other." In more modern terms, the California Civil Code states, with regard to private documents: "The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other."
17. It will be seen from a reading of the provisions of section 19 reproduced above that upon pronouncement of judgment and decree passed by the Banking Court, the decree shall automatically stand converted into execution proceedings and no separate application in this regard is required. The case shall be heard by the Banking Court for the execution of decree on the expiry of thirty days from the pronouncement of the judgment and decree. By sub-section 2 the decree of the Banking Court shall be executed in accordance with the provisions of CPC or any other law for the time being enforced or any such other manner as the Banking Court may at the request of the decree holder consider appropriate. Sub-section 3 is an exception to the normal procedure for the execution of the decree and carves out a power to vest in the Financial Institution to cause the sale of the mortgaged property without the intervention of the Banking Court. The words "without the intervention of the Banking Court" do not confer unbridled power on the Financial Institution to proceed for the auction of the property on its own and without informing or seeking permission from the Banking Court. The term "without the intervention of the Banking Court" is neither synonymous with the term permission of the Banking Court nor does it clothe the Financial Institution with power to oust the Banking court in the matters of execution of decree. It is important to point out that in each case the execution proceedings, by the provision of section 19 of the Ordinance, commence and are pending with the Banking Court and in order to take them out of the jurisdiction of the Banking Court, the least requirement is for the Banking Court be informed and a permission be sought in this regard. Otherwise it would be tantamount to holding parallel execution proceedings to the execution petition which is pending with the Banking Court. This would cause a serious conflict in that two proceedings as they would be running parallel to each other which cannot be the intention of the legislature. The ineluctable intention that can be gathered from the holistic reading of the entire section 19 of the Ordinance is that the oversight and supervision of the Banking Court cannot be ruled out at the whim and discretion of the Financial Institution.
18. In this regard the provisions of sub-section 5 would also assume relevance in the instant case.
By virtue of sub-section 5, by reference, sub-section 10 of section 15 of the Ordinance has been made to be applicable to proceedings under section 19. Sub-section 10 of section 15 of the Ordinance obliges the Financial Institution to file proper accounts of sale proceeds in the Banking Court within thirty days of the sale and by subsection 11, all the disputes relating to the sale of mortgaged property shall be decided by the Banking Court. This amply demonstrates that the supervision of the Banking Court has not been ousted and it remains in place throughout the proceedings of auction conducted whether these are conducted by the Banking Court or conducted without the intervention of the Banking Court under section 19(3) of the Ordinance.
19. Some of the observations of the Supreme Court of Pakistan in National Bank of Pakistan and 117 others v. SAF Textile Mills Ltd and another (PLD 2014 Supreme Court 283) would be pertinent and relevant to the issue in the instant appeal. This judgment of the Supreme Court of Pakistan was rendered on the question of the vires and constitutionality of section 15 of the Ordinance. It was held to offend Articles 4 and 115 of the Constitution and consequently section 15 of the Ordinance was declared as ultra vires the Constitution. For the purpose of the present appeal guidance can usefully be sought from certain observations in the said judgment which are reproduced as under: "...The right of such debtor to ensure that the mortgaged property is sold in a free, fair and transparent manner so as to fetch the best possible price is now a well recognized principle of law, which finds its manifestation both in various statutory provisions, more particularly, Code of Civil Procedure (including Order XXI of C.P.C) as well as the law, as laid down by this Court, including the case reported as Mir Wali Khan v. Agricultural Development Bank of Pakistan, Muzaffargarh and another (PLD 2003 SC 500), wherein it has been held as follows:-- "Crux of what has been discussed above is that clever maneuvering forcing way for disposal of a property in execution of a decree for a paltry sum has to be guarded against and jealously so with all the care and circumspection so that it may go for a sum it deserves."
"41. The conscious exclusion of remedies and deliberate omissions provide for a due process of conduct of sale including the absence of the necessity to fix a reserve price becomes even more significant, as the Financial Institution has been clothed with the right to purchase the property put by it to public auction at the highest bid. No permission, in this behalf, is required from any Court, as is in the normal course in terms of C.P.C. Thus, in fact, it is a Financial Institution, which is the seller, buyer, the auctioneer and the beneficiary, hence enabled to take full advantage of the misfortune of the mortgagor/debtor thereby facilitating predatory and exploitative behaviour which perhaps would not sit well with Article 3 of the Constitution."
20. The conclusion that we have drawn is evident from a construction of the reading of section 19 of the Ordinance as a whole. The said construction is in consonance with the scheme of section 19 and the intention of the legislature that can be gleaned from the entire consideration of the various clauses of section 19 of the Ordinance. The scheme of section 19 of the Ordinance is that a decree shall be converted into execution proceedings and shall be deemed to be pending with the Banking Court. The scheme in our opinion does not countenance for separate proceedings to be initiated by the Financial Institution while the execution proceedings are pending with the Banking Court. This would impinge upon the administration of justice and would be diminishing the authority of the Banking Court. Even if the said intention of the legislature is not clearly split out, by making use of the tool of reading down, we have no doubt in our mind that the permission of the Banking Court is a prerequisite for the Financial Institution to trigger and commence execution proceedings on its own and without intervention of the Banking Court. In fact the term 'without the intervention of the Banking Court' is merely confined to the process of auction and the sale of property and does not include within its ambit the commencement of the said proceedings nor does it include the final outcome of those proceedings in that it is always subject to an objection petition being filed and determined by the Banking Court.
21. In view of the above, this appeal is accepted. The auction proceedings purportedly conducted by the respondent bank as well as all the consequential steps taken in pursuance thereof are illegal and set aside. The Financial Institution shall be at liberty to proceed under section 19 of the Ordinance in accordance with observations made in the instant judgment.