This regular first appeal is filed under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the Ordinance ) challenging order dated 06.01.2014 passed by the banking court in dismissing the application filed by the appellants.
2. Brief facts of the case are that respondent No,1 bank after obtaining judgment and decree on 07.02.1998 against respondents Nos,1 to 5 filed the execution application for recovery of the decretal debt through sale of the mortgaged properties which included property falling in Khewat No,2001, Khatoni No,2484 Square No,89 Khasra No,21/13 measuring 10 Marla 1.25 Sarsi out of 11 Marla 6.5 Sarsi as per copy of record of rights for the year 1988- 1989 situated in Tehsil and District Faisalabad owned by one Imam Bakhsh son of Ahmad Bakhsh. The auction of the property was held on 29.08.2009 in which Muhammad Sharif son of Muhammad Bootta/respondent No,6 was declared as successful bidder . After confi rmation of the sale, the requisite sale certified was issued in favour of the auction purchaser on 08.11.201 1. The appellants instituted the application before the banking court on 28.01.2012 for setting aside the auction proceedin gs held on 29.08.2009 and for cancellation of sale certificate. This application was dismissed by the banking court through order dated 06.01.2014 holding the said application to be time barred.
3. Learned counsel submits that the mortgager Imam Bakhsh alienated the property in favour of Farman Ali through mutation No,16649 dated 13.12.1994 which was further alienated to Muhammad Afzal through mutation No,17527 dated 24.03,1998. Muhammad Afzal on 21.10.1995 sold the property to Muha mmad Ishaq through mutation No,17975 froth whom it was purchased by Asghar Ali through registered sale deed dated 07:02.2001. The appellants purchased the property from Asghar Ali through sale deed registered on 30.03.2005. It was furthermore submitted that the property was not mentioned in either the suit or in the Fard Taliqa and was introduced for the first time in the auction schedule.
4. Learned counsel for respondent No,1 bank has placed on record the copy of sale deed No,636 dated 22.04.1993 in favour of Imam Bakhsh who submitted the same with the bank for the purposes of creating the mortgage. The mortgage instrument and the irrevocable general power of attorney both dated 17.06.1993 were also executed in favour of the bank by Imam Bakhsh copies whereof have also been provided to us. It is thus clear that prior to the alleged alienation of the property by Imam Bakhsh as asserted by the appellants, the same had been mortgaged with the respondent bank which continues to be in possession of the title document ever since.
The appellants, therefore, cannot assert title over the mortgaged property ahead of and in preference to the respondent bank. The appellant also cannot claim to be bona fide purchasers in view of the fact that the original sale deed of A Imam Baldish in respect to the property in dispute was tendered with the respondent bank much earlier to the alleged sale in favour of Farman Ali. A learned Division Bench of this Court in identical circumstances held in the case of Habib Bank Limited v . Syed Muhammad Haroon and 4 others 2009 CLD 140 as under: As a general principle if any immovable property is under a charge or mortgage and subsequently alienated, the charge and mortgage would follow the transfer except in the case of bona fide purchaser without notice of such charge or mortgage. It is a settled law that before equitable defense of bona fide purchaser under section 41 of the Transfer of Property Act can be accepted: It must be established that such purchaser has exercise due care and diligence in ascertaining the clean vendible title of his transfer . It is equally settled law that search and reliance solely of the revenue record is not sufficient to attract section 41 of the Transfer of the Property Act. Reference in this behalf has been made to the judgment reported as Maulana Riaz-ul-Hasan v. Muhammad Ayyub Khan and another 1991 SCMR 2513 ; Citi Bank N.A. through Branch Manager v. Munir Ahmad Gill and 2 others 2000 YLR 2938.
Furthermore, any person who acquires property without obtaining the title deed of the original transferor cannot also be said to have exercised due care and caution so as to enable him to take the defense of a bona fide purchaser as is evident from the judgment reported as Mst. Nasiban Bibi v. The Australasia Bank Lahore and others 1970 SCMR 657; Citi Bank N.A. through Branch Manager v. Munir Ahmad Gill and 2 others 2000 YLR 2938 and Muhammad Anwar Khan v . Habib Bank Limited and 4 others 2005 CLD 165 . (Emphasis Supplied) In a judgment reported as Citi Bank N.A. v. Muhammad Akbar and 3 others 2005 CLD 384, a learned Division Bench of this Court held as follows: ..............obviously once the property has been mortgaged, even though, it can be transferred, but such alienation shall be subject to the charge of mortgag e. The person purchasing the property , cannot take the advantage of the "equitable rule" by avoiding the charge and claiming the transfer to be free from encumbrance. Admittedly , the property in question was equitably mortgaged on 11.04.1996 and the propertie s have been purchased by the respondents/objectors much thereafter . Resultantly , they cannot frustrate and defeat the mortgage rights of the appellant bank on the ground of being "Bona fide Purchasers".
5. Learned counsel for the appellants placed a great deal of emphasis on the fact that the property in question was not mentioned in either the suit or in Fard Taliqa. This plea is not based on correct appreciation of the record. While executing memorandum of deposit of title deeds dated 17.06.1993, the description of the sale deed No,66 was rightly mentioned in Schedule-I of the said instrument. In Schedule-II, however , Khasra No,21/13 was wrongly mentioned as 21/15. This error in description of the property also got mentioned in the Fard Taliqa. Be that as it may, this mis-description of the Khasra number in Fard Taliqa is of no significance as original title deed of the property in dispute is still in possession of the respondent bank. The appellants too were not labouring under any misapprehension regarding the identity of the property as is apparent from their objection application filed before the banking court.
6. In any event, the appellants instituted their objection application much after the conclusion of the auction proceedings and issuance of the sale certificate. The banking court rightly held that the objection application filed by the appellants was time barred. In our opinion, the banking court after the issuance of the sale certificate had also become functus officio qua the mortgaged property and should not have entertained the objection application filed by the appellants in the first place. In conclusion, the objection application filed by the appellants before the banking court was not maintainable and was rightly dismissed. The order impugned before us does not call for any interference.
7. In the circumstances, this appeal being devoid of any merit is dismissed.