QAISER RASHID KHAN, J.---Through the appeal in hand, the appellant, Sikandar Sher through his attorney Zohaib Hassan Khan, has called in question the judgment/order dated 29.04.2009 of the learned Banking Court-I, Peshawar whereby the objection petition of the appellant/objector was turned down.
2. The learned counsel for the appellant contends that though the appellant had availed of certain financial facility from the respondent-bank and to this effect mortgaged his property but then bank proceeded against him under section 15 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 and accordingly the property was auctioned in favour of respondent No,2 which was in turn confirmed through the learned Banking Court-I, Peshawar. He further contends that the requirements of law have not been fulfilled as firstly, the respondent-bank did not bring on record the mortgage deed whereby the property was mortgaged with the respondent-bank and secondly, the latter acted in violation of the explicit provisions of section 15 of the Ordinance as no notice was served upon the appellant under section 15(2) thereof and thirdly, the provisions of section 15(4) of the Ordinance were violated as well
3. Contrarily, the learned counsel representing represent-bank as well as respondent No,2 being the auction purchaser supported the impugned judgment/order dated 29.04.2009 of the learned Banking Court-I, Peshawar on almost the same grounds as detailed therein and further contend that it was on account of failure of the appellant to fulfill his monetary obligations towards the respondent-bank when proceedings under section 15 of the Ordinance ibid were initiated against him whereby respondent No,2 emerged as the highest bidder and the property was auctioned in his favour for an amount of Rs, 6,80,477/- and once the matter was taken before the learned Banking Court for confirmation of the execution proceedings, the appellant came over with his time barred objection petition.
4. Arguments heard and available record perused with the valuable assistance of the learned counsel for the parties.
5. As per facts gathered from the available record as well as the valuable submissions made by the learned counsel for the parties, the appellant had availed of a financial facility of Rs, 2,50,000/- from the respondent-bank for the purchase of a tractor and cultivator way back in the year 1990 and by way of security had mortgaged his landed property measuring 29 kanals and 18 marlas, situated in Mouza Zarin Abad, Tehsil Takht Bhai, District Mardan with the bank and on account of default to pay off his liability, the respondent-bank proceeded against him as per section 15(2) of the Ordinance ibid for the recovery of the amount outstanding against him which ultimately culminated in the sale of the mortgaged property in favour of respondent No,2 being the highest bidder and accordingly a sale deed was executed by the respondent No,1 in favour of respondent No,2.
6. We understand that the appellant had undoubtedly availed of a financial facility of Rs, 2,50,000/- from the respondent-bank and in the year 1993 had paid off only a sum of Rs, 49,000/- towards the adjustment of his liability and thereafter did not pay any amount. Since the facility was for a period of eight years payable through installments, therefore, the respondent-bank did not act in any manner by approaching the learned Banking Court for the recovery of the outstanding dues against him. It was long after in the year 2007 when the respondent-bank issued notices to the appellant as per section 15 of the Ordinance ibid. What has caught the attention of the court is the statement of account annexed with the application submitted by the respondent-bank before the learned Banking Court. Where the finance was for a period of eight years commencing from 1990 and ended in the year 1998, still the respondent-bank in sheer violation of banking practice and procedure as well as State Bank of Pakistan Regulations proceeded with charging mark up over mark up on the account of the appellant and thereby the outstanding amount swelled to a figure of Rs, 657922.00 as on 31.12.2005.
The respondent-bank is unable to present any account for the mark up so charged by them after the expiry of finance limit in the year 1998. Thus whether any reliance can be placed on such statement of account is one question. What further agitates our minds is that the same has not been certified as per section 4 of the Bankers' Books Evidence Act, 1891, which clearly provides that the same shall be certified by the bank manager who shall vouch for the correctness of the entries so contained in the statement of account and the same shall be in turn reconciled with the books of the bank. Thus on both scores, such uncertified statement on account loses its evidentiary and probative value in the eye of law.
7. Now coming to the language of section 15 of the Ordinance ibid which on the one hand refers to the 'Sale of Mortgaged Property' but simultaneously casts a duty on the bank to serve notices upon the defaulter. Moreover, it is not merely the issuance of the notices but receipt of the same or acknowledgement thereof by the addressee as well, in this particular case, the appellant. Though copies of the notices have been annexed with the application for confirmation of the auction proceedings before the learned Banking Court but neither any AD card nor registered receipts in respect of the same have been furnished with the said application.
8. Next, subsection (4) of section 15 of the Ordinance in an unequivocal and unambiguous manner provides that after the issuance of the said notices, the publication must be made in one Urdu daily and another in English daily. In this particular case, the respondent-bank appears to have acted in a haste wh'en in a rather casual manner they only have made a publication in Urdu daily without complying with the mandate of law to go for another publication in an English daily.
7(sic.) The auction proceedings as conducted by the respondent-bank are also before- us wherein it appears that the said proceedings were conducted probably in some branch of the bank and the same cannot be termed by any stretch of imagination to be a public auction.
Moreover, the application of the respondent-bank under section 15(10) of the Ordinance ibid for confirmation of the auction proceedings before the learned Banking Court is certainly not without its startling disclosure wherein they have in a rather casual and on an indifferent note admitted that since the amount outstanding against the appellant was Rs, 680477/- as on 25.09.2007, therefore, the respondent-bank sold the mortgage property in auction for the same very amount and thereby adjusted the dues of the bank. Through such admission, the respondent-bank has rather laid bare its intention of putting the valuable property of the appellant for a paltry sum of Rs, 680477/- only with the view to realize its dues and without caring a bit for the interest of the appellant.
8(sic.) No doubt, the respondent-bank or for that matter any other bank may proceed against its defaulter under section 15 of the Ordinance ibid but after due compliance with the mandatory provisions of law and that too, when a person is being deprived of his valuable property. No record or list of any bidders or their details have been furnished by the bank while submitting an application before the learned Banking Court to get a seal of confirmation of the auction proceedings so conducted by the bank in respect of the mortgaged property of the appellant.
9(sic.) In view of the foregoing discussion, this appeal is allowed, the impugned judgment/order dated 29.04.2009 of the learned Judge Baking Court-I, Peshawar is hereby set aside and accordingly, the proceedings so conducted by the respondent-bank pursuant to pressing into service the provisions of section 15 of the Ordinance ibid are declared to be illegal, without lawful authority and thus of no legal effect. It is further directed that the appellant shall pay compensation of 5% of the purchase amount to the respondent No,2. The respondent-bank, on its own shall return the auction amount to the respondent No,2 in accordance with law. At the same time, the respondent-bank may, if so advised, adopt proper procedure for the recovery of its dues against the appellant. No order as to costs.