' SHAHID KARIM, J.---This is an appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (Ordinance, 2001) which lays a challenge to the order dated 24-10-2014 passed by the Banking Court-III, Multan Camp at Sahiwal.
2. The relevant facts for the purpose of instant appeal are that the respondent bank filed a suit for recovery of Rs.1,56,78,749/16 before the Banking Court-III, Multan Camp at Sahiwal. The appellants herein filed an application for leave to defend which was dismissed and the suit was decreed on 23-2-2012. Appellants filed an appeal against the judgment and decree dated 23-2-2012 which is pending before this Court by way of R.F.A. No.73 of 2013. It is not essential to recapitulate in greater detail the facts. However, for the purpose of the present appeal, it would suffice to state that the decree was converted into an execution petition in terms of the provisions of the Ordinance, 2001.
An application under section 19(3) of the Ordinance, 2001 was filed by the respondent bank by which permission was sought for the auction of the mortgaged properties by the. Respondent bank itself without the intervention of the Court. The said application was allowed and the decree holder bank was directed to proceed to auction the mortgaged properties strictly in terms of section 19(3) of the Ordinance, 2001. Simultaneously, proceedings in the execution were adjourned sine die.
3. Pursuant to the permission granted to the respondent bank to undertake the auction proceedings, the bank took steps to auction the property. For the purpose, the mode for the auction which was selected by the bank was by way of invitation through sealed tenders. This, it is pertinent to state, is one of the modes for auction permissible under the law. In order to comply with the mandatory provisions of the Ordinance, 2001 in this regard, the decree holder bank issued proclamation in daily 'Express' on 4-10-2013 and in the daily 'The Nation' on 3-10-2013 through which sealed tenders were invited till 6-11-2013. The date of the auction was set down as 7-11-2013. Posters were also prepared and affixed at the prominent places in accordance with provisions of the Ordinance, 2001. On 7-11-2013 auction proceedings were conducted and sealed bids received in response to the proclamation were opened in the presence of the bidders. Mr. Muhammad Rafique was declared as successful bidder and his bid was accepted. It is pertinent to mention that the said auction took place in respect of three properties. Mr. Muhammad Rafique was declared as successful in relation to property No.
1. However, no one offered bid for property No.2 which was not, therefore, auctioned. In respect of property No.3, bid Submitted by Sheikh Muhammad Akram was declared as highest and he was declared as the successful bidder. The report of the auction proceedings was duly submitted to the Banking Court by the auctioneer appointed by the bank vide report of the auctioneer dated 2-12- 2013.
4. The appellant filed an application by way of objection petition under Order XXI, rule 90, C.P.C.
Read with enabling provisions of the Ordinance, 2001. Serious objections were raised by the appellant to the sufficiency in law of the process of auction which was conducted by the bank. This application was dismissed vide order dated 24-10-2014 by the Banking Court-III, Multan Camp at Sahiwal. The instant appeal calls in question the said order passed by the Banking Court.
5. It is submitted by the learned counsel for the appellant that grave and palpable procedural irregularities have been committed in the entire process of the auction undertaken by the decree holder bank and that before allowing the respondent bank to put to sale the mortgaged properties without intervention of the court no notice was given to the appellants. It was further submitted that findings of the Banking Court as regards the deposit of 20% of the decretal amount as a prior requirement for maintaining an application under Order XXI, Rule 90, C.P.C. Has been misconstrued by the Banking Court and the essential facts have been ignored while concluding that the appellant has been found wanting in complying with the order of the Banking Court for it to deposit 20% of the decretal amount. According to the learned counsel serious and irreconcilable lapses have accrued in the auction proceedings which have rendered the entire auction proceedings unlawful and non est.
6. The learned counsel for the decree holder bank as well as the auction purchaser defended the impugned order passed by the Banking Court. They submitted that appellants had all along known regarding the fact of auction taking place and did not deliberately join the proceedings. This deliberate lapse on the part of the appellant cannot be condoned. Learned counsel for the decree holder bank has referred to the various steps which were taken for complying with the provisions of the Ordinance, 2001 with regard to auction of properties without the intervention of the Court and has submitted that no irregularity has crept in the entire process.
7. We have heard the learned counsel for the parties and do not find any substance in the contentions raised by the learned counsel for the appellants. Section 19(3) of the Ordinance, 2001 confers a right upon A the decree holder bank to proceed to auction the properties without the intervention of the Banking Court. Section 19 of the Ordinance grants to a decree holder options to either choose for a public auction or to invite 2015] S.M. Nisar and Company v. Banking Court-III 1847 Multan Camp at Sahiwal (Shahid Karim, J) sealed tenders for putting to sale the mortgaged properties of a judgment debtor. For facility, the part of section 19 of the Ordinance, 2001 relevant for our purposes is reproduced as under: "(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."
' As is clear from a reading of the provision of law reproduced above, the primary requirement is for the decree holder bank to seek permission from the Banking Court which was duly done and the said permission was granted vide order dated 17-5-2013. It is further clear that in case the decree holder opts for sale of mortgaged properties by inviting sealed tender, the notices thereof are required to be published in one English daily newspaper and one Urdu daily newspaper and thirty days time is to be given for submitting offers by the prospective bidders. The decree holder bank after seeking permission from the banking court proceeded for the auction of the properties properly and by duly complying with the provisions of section 19(3) and (4) of the Ordinance, 2001.
In this regard an auctioneer was appointed who took steps to issue proclamation in widely circulated newspapers and also affixed posters at prominent places in order to give wide publicity to the sale. The process prescribed by section 19 of the Ordinance was fully met with by the respondent bank in the instant case.
8. The learned counsel for the appellants has in the objection petition as well as in the grounds of appeal raised objections regarding non-observance of the requirements of Order XXI, Rule 66, C.P.C. Which more properly pertain to the auction of mortgaged properties by way of a public auction. However, it must be borne in mind that, in the present case the decree holder bank has chosen to invite sealed tenders for the auction and, therefore, the objections raised by the learned counsel do not apply to auctions through sealed tenders. The main objection of the appellants was that prior to the grant of permission to the respondent bank to sell the properties without the intervention of the court, they should have been put to notice. This argument is bound to fail for a number of reasons. Firstly, it was specifically stated in the judgment and decree that the suit is being converted into execution and a date was also given for filing of Fard Tailiqa by the decree holder. The appellants have filed an appeal (R.F.A. No.73/13) against the said judgment and decree and, therefore, cannot deny that they did not know about the pending execution proceedings against them. Secondly, we have perused the report of the auctioneer as well and it finds mention therein that proclamation as well as the posters were posted to the judgment debtors/appellants but were not received by the appellants. Postal receipts and notices received back have also been annexed with the said report of the auctioneer. It would be incredulous to think that the appellants did not ever come to know regarding the auction of three properties and it was belatedly that the appellants came to know about the fact regarding the auction of the properties by the decree holder bank. Be that as it may, from the order sheet of the Banking Court produced before us, it is evident that the counsel for the appellants/judgment debtors had been appearing before the Banking Court in the execution proceedings and, therefore, it can be inferred that the learned counsel had the knowledge regarding the order dated 17-5-2013 whereby permission to the decree holder bank was granted to auction the property without the intervention of the court. At no point in time, the appellants made any objection to the sale of mortgaged assets without intervention of the court and let the process go through and only filed objections once the sale of properties had been completed.
9. The learned counsel for the appellants laid great stress on the portion of the impugned order which relates to the deposit of 20% of the decretal amount and the failure on the part of the appellants to do so. However, the said portion of the impugned order does not impact the over all effect of the impugned order as the Banking Court has proceeded to analyse the objections raised by the appellants and to reject those objections as being without reasonable basis and tendentious. The learned counsel for the appellants also took the objection regarding the properties having been sold at a throw-away price. This objection too has no merit as inadequacy of price as a post-sale objection has no merit. Be that as it may, the sale price of the properties was more than their forced sale value as determined in the report of the FBA approved evaluator.
10. The process utilized by the respondent bank for putting the mortgaged assets to sale was provided for in the Ordinance, 2001 and in regard thereto all the procedural requirements were fulfilled. The sale was well advertised, fair and transparent and competing bidders participated therein. It is further an admitted fact that the first attempt by the respondent bank to sell the mortgaged properties on 15-8-2013 failed as the only bidder failed to deposit the amount of the bid. It was only on the, second attempt on 7-11-2013 that the respondent bank managed to attract buyers for the sale of two properties. The objections to the said sale by the appellants were perfunctory and tentative in nature and had no nexus with the sale by invitation of sealed tenders.
The Banking Court, therefore, rightly rejected the objection application filed by the appellants.
' In view of the above, the appeal is without substance and is hereby dismissed.