' M. SOHAIL IQBAL BHATTI, J. --- Through this appeal the appellants/judgment-debtors have sought the indulgence of this Court for setting aside the order dated 5.4.2010 passed by the learned Judge Banking Court-III, Lahore, and a declaration has been sought that the auction proceedings conducted by the Court Auctioneer are void and illegal.
2. The facts of the case are that respondent No, 1 Bank filed a suit for recovery of an amount of Rs, 8,57,374/-against the appellants. The suit was decreed through judgment and decree dated 2.2.2007 and the decree was converted into execution proceedings under Section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The learned Judge Banking Court-III, Lahore, appointed a Court Auctioneer for sale of the property description of which is given below:-- - "Factory measuring 7 marlas bearing khasra number 5008/202, khewat number 634, khatooni number 1591 present khewat number 709, khatooni number 1591 property unit No, N-127-R-115 situated at Rashid Park, behind Kot Begum, Tehsil and District, Lahore, alongwith entire construction."
' The Court Auctioneer conducted the auction on 23.2.2008 and the property mentioned above was sold for an amount of Rs, 15,10,000/- in favour of respondent No,
2. The appellants filed an objection petition under Section 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 for setting aside the alleged sale. The learned Judge Banking Court, through the impugned order dated 5.4.2010, dismissed the objection petition. Hence, this appeal.
3. The learned counsel for the appellants while advancing arguments submitted that there had been material irregularities committed by the Court as well as by the Court Auctioneer. It has been further argued that there had been contravention of material provisions of law i,e, Order 21, rule 66, C.P.C. And Order 21, rule 84, C.P.C. It has been also argued that the auction proclamation did not mention place of auction which in itself was an illegality and would vitiate the sale and the learned Judge Banking Court, while passing the impugned order, has wrongly held that contravention of material provisions of law regarding proclamation of sale, its publication and the conduct of sale, are only material irregularities, would not render the sale a nullity.
4. On the other hand, learned counsel for respondents No, 1 and 2 while placing reliance upon Messrs Chawla International v. Habib Bank Ltd., and others (2003 CLD 956) argued that any non- compliance with the provisions of C.P.C. Is a material irregularity and not an illegality rendering the sale a nullity. It has been further argued that the present appeal was filed on 5.5.2010 and an injunctive order was passed but it is a matter of record that the sale certificate had been issued by the learned Judge Banking Court on 27.4.2010. Hence, this appeal was not maintainable at the relevant time. It has been further argued that the Banking Court in execution proceedings can adopt any procedure and the non-compliance of mandatory provisions of C.P.C. Would not vitiate the sale.
5. We have considered the arguments advanced by learned counsel for the parties and have also perused the record and certified copies of the proceedings placed on record by the learned counsel for the appellants.
6. It is established from the record that on 12.6.2007 a schedule of auction was submitted and approved by the Banking Court but thereafter the report was submitted by the Court Auctioneer as is evident from order dated 20.7.2007 that auction could not take place and the Court Auctioneer was directed to file fresh schedule of auction. The execution proceedings remained pending and the auction schedule was submitted on 18.1.2008 and was approved on the same date. In pursuance to the approval of the auction schedule the alleged sale was conducted on 23.2.2008.
At this stage it would be useful to refer to the relevant provision of Order 21, rule 66, C.P.C. Which reads as under:--- "66. Proclamation of sales by public auction.-- (1) Where any property is ordered to be sold by public auction in execution of a decree, the Court shall cause a proclamation of the intended sale to be made in the language of such Court.
(2) Such proclamation shall be drawn up after notice to the decree-holder and the judgment- debtor and shall state the time and place of sale, and specify as fairly and accurately as possible:- --
(a) the property to be sold;
(b) the revenue assessed upon the estate or part of the estate; where the property to be sold is an interest in an estate or in part of an estate paying revenue to the Government;
(c) any encumbrance to which the property is liable;
(d) the amount for the recovery of Which the sale is ordered; and
(e) every other thing which the Court considers material for a purchaser to know in order to judge the nature and value of the property.
(3) Every application for an order for sale under this rule shall be accompanied by a statement signed and verified in the manner hereinbefore prescribed for the signing and verification of pleadings and containing, so far as they are known to or can be ascertained by the person making the verification, the matters required by sub-rule (2) to be specified in the proclamation.
(4) For the purpose of ascertaining the matters to be specified in the proclamation, the Court may summon any person whom it thinks necessary to summon and may examine him in respect to any such matters and require him to produce any document in his possession or power relating thereto."
' The rationale behind Order 21, rule 66, C.P.C. Has been discussed by this Court in a judgment reported in Brig. (Retd.) Mazhar-ul-Haq and another v. M/s. Muslim Commercial Bank Limited, Islamabad and another (PLD 1993 Lahore 706) and it was observed as under:- "The purpose of fixing the reserve price under the proclamation is that the Court safeguards the rights of the judgment-debtor and the bid starts from that figure. Such price had to be fixed after objective consideration of the relevant material which the Court could procure by holding a summary inquiry and summoning and examining any person possessed of necessary information as provided by clause (4) of Rule 66, C.P.C."
7. In our view the wisdom behind enacting Order 21, rule 66, C.P.C. Is that parties in the execution proceedings should be treated alike and the rights of the decree-holder should not be preferred over the interest of judgment-debtors. It is true that the function of the executing Court is to execute the decree but at the same time it is also the duty of the executing Court to protect the rights of the judgment-debtors, which should not be jeopardized and scarified at the altar of the execution of a decree. Thus a duty is cast upon the executing Court to determine the reserve sale price of the property as the executing Court is to safeguard the interests and rights of the judgment-debtor and ensure that the properties are not sold at throw-away prices and therefore, it has been held in a number of judgments that the reserve sale price means the market price of the property. This Court in a judgment reported in Muhammad Amin alias Jaloo v. Judge Banking Court and others (2011 CLD 280) has held that the provisions of Order 21, rule 66, C.P.C. Are mandatory in nature and without fulfilling the basic requirements, if some auction had taken place that could not be considered to have been lawfully made. A specific order under Order 21, rule 66, C.P.C. Was required by the Court which produced the effect of drawing proclamation envisaging terms and conditions of sale. Intention of law was to fix reserve price in proclamation to safeguard the rights of judgment-debtor and the executing Court while not fixing the reserve sale price committed material irregularity.
8. There is another aspect of this matter that no place of sale has been mentioned in the auction proclamation. In our opinion it is essential that the place of sale must be specifically mentioned in the auction proclamation and the failure to do so would be a material irregularity vitiating the sale.
Form 29, Appendix-E, C.P.C. Specifically provides that the place of sale must be specifically mentioned in proclamation of sale. This question regarding non-mentioning of place of sale was dealt with by this Court in a judgment reported in Messrs Makki Chemicals Industries (Pvt.) Limited through Chief Executive and 3 others v. Habib Bank Ltd., through Manager and 2 others (2003 CLD 571) in the following words:--- "Above all, there is no mention in the proclamation about the venue, where the sale has to be conduced. We are unable to agree with learned counsel for the appellant that in absence of specific mention of any other place, it should be presumed that the auction shall be conducted at the site of the property to be auctioned. Rather, according to Order 21, rule 66, C.P.C. The place of sale must be specifically mentioned and failure to do so should be material irregularity vitiating the sale."
' The above-referred judgment was challenged before the Honourable Supreme Court of Pakistan but was upheld in a judgment reported in Mst. Nadia Malik v. Messrs MAQI Chemical Industries Pvt.
Ltd. Through Chief Executive and others (2011 CLD 1517).
9. The arguments advanced by learned counsel for the respondents that the objections to the conduct of sale being violative of mandatory provisions of Order 21, C.P.C. Were not maintainable on account of non-obstante clause of sub-section (7) of Section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, are not well-founded. It is only for the purpose of the adjudication of the issues mentioned in this sub-section that the lengthy procedure provided in CPC for such determination has been given up. The Court has been empowered to decide the objections etc., on the basis of the material before it without going in the regular trial but the relevant substantive law part, contained in CPC for the sale of immovable property, continues to be attracted. This is specially so in view of Section 7(i)(a) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 whereby the provisions of CPC have been made applicable to all nature of proceedings before the Banking Court and the decree has to be executed in accordance with the provisions of CPC. Therefore, any sale, conducted and made absolute in violation of rules provided in CPC, could be validly challenged under Section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.
10. It is also admitted fact that the auction purchaser did not deposit 25% of the purchase money with the Court Auctioneer which in itself is a violation of Order 21, rule 84, C.P.C. It would be useful to reproduce Order 21, rule 84, C.P.C. As under:- "84. Deposit by purchaser and re-sale on default.--(1) On every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per cent, on the amount of his purchase-money to the officer or other person conducting the save, and default of such deposit, the property shall forthwith be re-sold.
(2) Where the decree-holder is the purchaser and is entitled to set-off the purchase-money under rule 72, the Court may dispense with the requirements of this rule."
' The perusal of Order 21, rule 84, C.P.C. Makes it explicit that this provision of law is mandatory as consequence of its non-compliance has itself been provided under that provision of law which states that if a purchaser had committed default in immediate payment of 25% of the sale price, the property would forthwith be resold. Since 25% of the purchase price had not been deposited within the period prescribed under Order 21, rule 84, C.P.C.; even executing Court had no power to extend the time for doing an act it has been determined and fixed by law. We are fortified in our view by a judgment reported in Muhammad Ali Asghar Sabir Raja v. Mst. Sajida Bashir and others (2006 SCMR 801) wherein the Honourable Supreme Court of Pakistan has held as under:- "Auction purchaser is required under Order 21, rule 84, C.P.C. To deposit 25% of purchase money immediately on fall of hammer. Such amount is required to be paid to the officer of the Court or other person conducting the sale. In case of default of such deposit, the property has to be resold forthwith."
' Reliance in this regard is further placed on Afzal Maqsood Butt v. Banking Court No, 2, Lahore and 8 others (PLD 2005 SC 470), Arshad Chaudhry v. Judge Banking Court No, 1, Lahore and 5 others (2006 CLD 1467), Messrs S.P.R.L. Remand Brothers and another v. Judge Banking Court No, II, Lahore and another (2000 MLD 1957) and Messrs Dawood Flour Mills and others v. National Bank of Pakistan (1999 MLD 3205).
11. The principles which should govern confirmation of sale are well-established. The condition of confirmation by the Court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case, it is the duty of the Court to satisfy itself that no irregularity has been committed in conduct of the sale. It is because the executing Court is the custodian of the interest of the parties i,e, decree-holder and the judgment-debtor, therefore, it is incumbent upon the executing Court to satisfy itself that no material irregularity has been committed even when there is no suggestion of irregularity or fraud.
12. We are of the considered opinion that material irregularities have been committed by the executing Court. Though we would not observe that the proceedings conducted by the executing Court as well as the Court Auctioneer are fraudulent but at the same time we observe that fraud is a multi-dimensional concept. According to dictionary meanings fraud is a deceitful act which exposes someone to actual loss or risk of possible loss. Law does not provide a particular quantum of evidence for establishing a fraud. It is for the Court called upon to decide such an issue to be satisfied by the material brought before it to decide about practicing of fraud upon one of the litigating parties. For what has been brought before this Court we are constrained to hold that material irregularities have been committed and therefore, the confirmation of sale by the executing Court on 27.4.2010 cannot be used as a shield for the fraud by which the sale has been effected. We are guided in forming this opinion by a judgment reported in M/s. National EleCtric Company of Pakistan v. Allied Bank of Pakistan Ltd. And 2 others (1996 CLC 192) wherein the Division Bench of this Court held that the sale conducted in contravention to the material provisions of law is a nullity and void ab initio and therefore, if, on the basis of void proceedings, subsequent proceedings have taken place or subsequent orders have been passed, the whole series of such orders together with the superstructure of rights and obligations built upon them must fall to the ground. Reliance in this regard is placed upon Yousaf Ali v. Mohammad Aslam Zia and 2 others (PLD 1958 SC (Pak.) 104).
13. For what has been discussed above, this appeal is accepted. The impugned order dated 5.4.2010; the sale and all consequential orders (issuance of sale certificate dated 27.4.2010 in favour of respondent No, 2) are set aside. The auction purchaser/respondent No, 2 shall be entitled to withdraw the purchase money deposited with the Banking Court.