JAWAD HASSAN, J.---Through this Execution First Appeal (the "Appeal"), filed under section 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001 (the "Ordinance") the Appellants have challenged the validity of order dated 17.05.2017 passed by the Banking Court-I, Gujranwala (the "Banking Court") whereby it issued warrants of arrest of the Appellants.
2. Brief facts of the case as alleged by the Appellants are that in execution proceedings of the decree dated 08.01.2008 passed against the Appellants, Fard Talika was filed by the Respondent Bank regarding the Mortgaged Property of the Appellants measuring 35 Kanals and 17 Marlas (the "Mortgaged Property") which was put to auction but could not be sold. Subsequently, the Respondent opted to execute the decree through arrest and detention of the Appellants and show cause notices under Order XXI, Rule 37, Code of Civil Procedure, 1908 (C.P.C.) were issued which were duly replied by the Appellants. On 29.06.2016 the Respondent abandoned the execution of the decree through arrest and detention and again opted to execute the decree through sale of the Mortgaged Property. In pursuance, of which the Mortgaged Property was put to auction on 23.02.2017 but again could not be sold. Later on, the Branch Manager on behalf of the Respondent appeared and on 17.05.2017 on his sole verbal statement warrants of arrest were issued against the Appellants vide the impugned order. Hence, this Appeal.
3. Learned counsel for the Appellants inter alia contended that the impugned order is illegal and non-speaking; that the Banking Court has not taken into consideration the fact that mere on the statement of representative of the Respondent the proceedings cannot be changed twice from auction to warrants of arrest and vice versa rather the law has to be followed; that before issuing the warrants of arrest against the Appellants no show cause notice was issued to the Appellants which is clear violation of law; that the request for issuance of warrants of arrest to execute the decree was to be made through proper application in writing whereas on the verbal request the proceeding initiated by the Banking Court, are illegal; that no sufficient cause has been brought on record for issuance of warrants of arrest to execute the decree whereas there is no hindrance to auction the Mortgaged Property; that no legal course has been adopted prior to issuing the impugned order, as such the same is liable to be set aside.
4. On the other hand learned counsel appearing on behalf of the Respondent controverted the arguments advanced by the learned counsel for the Appellants and prayed for dismissal of the Appeal on the grounds that the impugned order has been passed strictly in accordance with law; that the impugned order has been issued on the specific request of the Respondent and the Banking Court was fully empowered to adopt the mode which it thinks appropriate to execute the decree; that the decree was passed in the year 2008 and till to date the same has not been realized, therefore, the Banking Court was left with no option but to issue warrants of arrest against the Appellants through the impugned order.
5. We have heard the arguments advanced by the learned counsel for the parties and perused the record.
6. The record reveals that admittedly, during the pendency of the execution proceedings before the Banking Court the Mortgaged Property was put to auction but could not be sold and the Respondent opted on 14.01.2016 to execute the decree through arrest and detention and in pursuance of which show cause notices under Order XXI, Rule 37, C.P.C. were issued to the Appellants which were duly replied by them. But when the case was fixed for arguments on 29.06.2016, none else but the learned counsel for the Respondent himself opted to execute the decree through auction and requested not to issue warrants of arrest and the Mortgaged Property was again put to auction but could not be sold. On 17.05.2017 the representative of the Respondent appeared and again said that the decree be executed through arrest and detention and Said warrants of arrest were issued. The language of Order XXI, Rule 37, C.P.C. is very clear that prior to issuing warrant of arrest show cause notice is mandatory. The record reveals that the prior to passing the impugned order no such show cause notice was issued to the Appellants rather the Banking Court relied upon the earlier issued show cause notice and reply thereto. It is the fundamental right of every individual to show cause/explain his position prior to initiation any coercive measures against him/her. The previously issued show cause notices cannot be relied upon on the fresh proceedings as the circumstance may vary with the passage of time. In fact the provisions of section 51 and Order XXI, Rule 37, C.P.C. intend to provide an opportunity to the judgment-debtor to pay the amount or to show cause, as to why he was defaulting to pay the decretal amount. Chance must be given to the judgment-debtor to pay the decretal amount unless the conduct of the judgment-debtor is not bona fide or his object is to effect the delay of the execution of the decree or the judgment-debtor is likely to abscond or leave the local limits of the jurisdiction of the Court or after the institution of the suit, he has transferred dishonestly his property or any part of his property concealed or removed any part of his property or has done any other act or committed any act of bad faith with regard to his to fail in relief of his property so as to deprive the decree holder in the satisfaction of the decree. When these or other acts of these kinds are not found in a case, -the Execution Court cannot order straightway the arrest or detention of the judgment-debtor in the execution. It may be pointed out here that these pre-conditions are not exhaustive. There may be other conditions and circumstances of exceptional cases, which could satisfy the judicial conscience of the Court to adopt such course of arrest and detention of the judgment-debtor in a given case. Furthermore, the Respondent has not submitted any written application for issuance of warrants of arrest against the Appellants as per requirements of the Order XXI, Rule 37, C . P.0 .
7. Moreover, the Appellants have averred in the Appeal that neither the Appellants have transferred, concealed or removed any part of their property or committed any other act of bad faith in relation to their property nor the Appellants have obstructed the process of auction at any stage. There is nothing on record which could show that the Appellants became reason or hindrance in the auction proceedings rather they have categorically stated that the value of the property is much more than the amount recoverable and the same may be auctioned to recover the decretal amount. It was not the case of the Respondent that the value of the Mortgaged Property is less than the recoverable amount rather they adopted the stance that the Appellants may flee from the local limits of the jurisdiction of the Court. But the impugned order is explicitly silent about the fact that whether the Appellants are obstructing or delaying the execution of decree or whether there is every likelihood of abscondance of the Appellants from the local limits of the jurisdiction of the Banking Court. The Banking Court mere on oral statement of the Respondent's representative and replying upon the show cause notice and reply thereto issued on the previously initiated proceedings, issued warrants of arrest against the Appellants and did not support the impugned order with cogent and confidence inspiring reasons.
8. It is also pertinent to note here that at the time of obtaining loan from the Respondent, the Appellants got their property mortgaged with it as security. Mortgage means, a legal agreement that conveys the conditional right of ownership on an asset or property by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan. The lender's security interest is recorded in the register of title documents and is voided when the loan is repaid in full. In case the Appellants, in any circumstances, remain failed to repay the loan the outstanding amount will be recovered by the Respondents from the Mortgaged Property through adopting legal course. The Banking Court started one after other proceeding against the Appellants for the realization of decretal amount and ultimately issued warrants of arrest through impugned order irrespective of the fact that the Appellants have not caused any type of hindrance to execute the decree by auction as discussed above. We, therefore, feel no hesitation to hold that in absence of any obstruction in the auction proceedings by the Appellants, adopting coercive measures against them are in sheer violation of section 51 and Order XXI, Rule 37, C.P.C.
9. For what has been discussed above, the instant Appeal is hereby allowed and the impugned order is set aside. The Banking Court is directed to execute the decree through auction of the Mortgaged Property. It is to be noted that the decree was passed in the year 2008 and it is now 2018; about a decade has passed to execute the decree but nothing tangible could come on surface, therefore, the Banking Court is directed to expedite the auction proceedings and conclude the same within shortest possible time, with intimation to the Deputy Registrar (Judicial) of this Court.
10. Needless to add that, if need be, the Executing Court would be well within his powers to pass a fresh order for the arrest and detention of the Appellants in civil prison under section 51 read with Order XXI, Rule 37, C.P.C. in accordance with law and the procedure laid down therein and this order in no way fetters the powers of the Executing Court.