Sultan Tanvir Ahmad, J. Through the instant Appeal, filed under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("the FIO, 2001") , the Appellants seek to set-aside order dated 14.04.2021 (the "impugned order") passed by the learned Judge Banking Court No.II, Faisalabad (the Banking Court") by invoking Order XXI Rule 37 of CPC to arrest the Appellant.
2. Learned counsel for the Appellant states that the Appellant availed finance facility from the Respondent Bank against which the bank filed a suit before the learned Banking Court under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("FIO, 2001") which was decreed vide order dated 06.09.201 1 to the extent of some of the defendants and the appeal was preferred by the decree holder bank challenging said order before this Court through RFA No.1034/2012 which was accepted vide order dated 13.12.2016 and the matter was remanded to the Banking Court for framing of issues and taking the evidence in accordance with law. Adds that during pendency of said Appeal, the learned Judge Banking Court vide order dated 28.05.2019 issued notice under Order XXI Rule 66 CPC directing the Appellant to join proceedings for determination of terms and conditions of auction. Further adds that while passing the impugned order dated 14.04.2021, the learned Banking Court did not take into consideration that arrest of the Appellant/judgment debtor can only be ordered upon conclusion of an independent inquiry under first proviso of Section 51 CPC, however , instead of adopting the required legal course, the learned Court, at the request of decree holder bank issued non-bailable warrants of arrest against the Appellant to satisfy the decree despite of the fact that the decree holder bank did not file any application under Order XXI Rule 37 CPC which is a sheer violation of law .
3. Conversely , learned counsel appearing on behalf of the Respondent Bank negates the stance taken by the learned counsel for the Appellant and states that the finance facility was availed which had been renewing from time to time; that the Appellant entered into an agreement/settlement but he could not keep is part of the terms and defaulted, therefore, the Bank has no option but to execute the decree drawn against him; there is no illegality or irregularity in the impugned order dated 14.04.2021.
4. We have given our anxious consideration to the contentions of the learned counsel for the parties and perused the record.
5. Section 19 (2) of FIO, 2001 empowers the learned Banking Court to execute the decree in accordance with the provision of the Code of Civil Procedure, 1908 or any other law for time being enforce or in such manners as the learned Banking Court consider appropriate. The decree holder filed "Fard Taleeqa" dated 27.05.2019 and opted to request the learned Banking Court to execute the decree by way of sale of mortgag ed property (24-Kanals and 14- Marlas situated in Tehsil Tandlianwala District, Faisalabad) having value of approximately 17.9 million. On 28.05.2019 notices under Order XXI Rule 66 of the Code of Civil Procedure, 1908 were directed to be issued.
Thereafter , no material proceedings took place, as per the order sheet available on record. On 19.09.2020 warrants of arrest of judgment debtor were issued which were recalled on 03.11.2020. On 14.04.2020 once again request was made by the decree holder for issuing fresh non-bailable warrants of arrest which were accepted by the learned Banking Court. No reason has been mentioned for not executing the decree by auction of the mortgaged property as detailed in the "Fard Taleeqa" dated 27.05.2019 or sale of other asset s of the Appellant and/or non- availability of any assets for execution of decree.
6. The detention of the judgment debtor can be ordered in accordance with Section 51 read with Order XXI, Rule 37 to Rule 40 of the Code of Civil Procedure, 1908. Section 51 of the Code of Civil Procedure, 1908 is as under:- Sec. 51.----Powers of Court to enforc e execution . ----Subject to such conditions and limitations as may be prescribed, the Court may , on the application of the decree-holder , order execution of the decree-- a) by delivery of any property specifically decreed; b) by attachment and sale or by sale without attachment of any property; c) by arrest and detention in prison; d) by appointing a receiver; or e) in such other manner as the nature of the relief granted may require: 1 [Provide that, 2[***] execution by detention in prison shall not be ordered unless, after giving the judgment-debtor an opportunity of showing cause why he should not be committed to prison, the Court, for reasons recorded in writing, is satisfied:
(a) that the judgment-debtor , with the object or ef fect of obstructing or delaying the execution of the decree,--
(i) is likely to be abscond or leave the local limits of the jurisdiction of the Court, or
(ii) has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed, or removed any part of his property , or committed any other act of bad faith in relation to his property ; or
(b) that the judgment-debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same , or
(c) That the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account Explanation. ---In the calculation of the means of the judgment-debtor for the purposes of clause (b), there shall be left out of account any property which, by or under any law or custom having the force of law for the time being in force, is exempt from attachment in execution of the decree.] [Emphasis supplied]
7. Before passing any order of arrest, finding is required to be recorded by the Court to the effect that the Court is satisfied that decree cannot be executed by delivery of any property or by attachment and sale or sale without attachment of any property . This preposition has already been settled in number of cases including case titled "Messrs Azhar & Co. And Others vs. National Bank of Pakistan (PLD 2018 CLD 830), the relevant part of the same is as under:- "6. 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 default ing 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 .C.
8. Adopting the coercive measures, without due course of Law will also violate Art. 10-A of the Constitution of Islamic Republic of Pakistan, 1973. This Court in the case titled "Dr. Rauf Ahmad Azhar vs. Banking Court No.II, Lahore and 6 Others" ( 2007 CLD 964 ) involving similar facts, has taken the following view: "4. Perusal of the record appended with this petition reveals that the contentions raised on behalf of the petitioner are not without force. There is no alleg ation on the record that the petitioner is guilty of any act or omission specified in section 51 C.P.C. which would make him liable for detention in pursuance of execution of a decree. No preliminary inquiry appears to C have been conducted and it was not even prima facie established that the petitioner was liable to be arrested and detained. No citizen can be deprived of his liberty without due process of law.
[Emphasis supplied]
9. Further reliance, in this regard, can be placed on cases titled "Muhammad Ashraf vs. Mst. Safia Bibi" (2008 CLC 1583 ), "Altaf Hussain and Others vs. Z.T.B.L. And others" (2019 LHC 857), "Muhammad Mobeen vs. A.B. N. Amro Bank Limited Through Manager" (2015 CLD 1904 ), "Muhammad Shahbaz Sharif vs. Meezan Bank Limited and Others" (2019 CLD 729), "Bashir Ahmad vs. Judge Banking Court-I, Gujranwala Division Gujranwala And Another" (2005 CLD 1728 ), "Habib Ahmad vs. Haji Munir Ahmad" (2004 YLR 1540 ), "Mehboob Alam vs. Federation of Pakistan Through Secretary Finance And 2 Others" (2003 CLD 1705 ), "Mst. Munawar Khanum vs. M/S. Habib Bank Ltd. And 3 Others" (PLJ 2007 Lahore 213), "Major (Retd.)
Mahmood Hussain vs. Habib Bank Limited And Another" (K.L.R. 2002 Civil Cases 4), "Ghulam Nabi vs. Banking Court No.Ii, Gujranwala And Other" (K.L.R. 2002 Civil Cases 104), "Aftab Saleem Choudhary And Another vs. Soneri Bank Limited Through Attorneys"( 2005 CLD 401) and "Abdul Qayyum Arif vs. Agha Gul and 2 Others"( 2002 YLR 2541 ).
10. Request on the basis of bald allegatio ns without reference to any material evidence or fact merely to procure a coercive order , without adequate efforts to satisfy the decree by adopting the other modes provided in law is highly unjustified. No mechanical order for detention or arrest can be passed. The pre-condition for issuing of warrants of arrests should be proved to have satisfied and the Courts should ensure that the debtor is likely to leave the limits of the Court to frustrate the decree or execution thereof or debtor has dishonestly transferred the property to avoid the decree or he has means to pay the decree and neglecting to do the same must be reflected from the record before adopting such coercive measures.
11. The order sheet also reflects that the Appellant has remained absent on certain dates of hearing, however , as per contention of the learned counsel for Appellant, the same is not intentional rather due to pandemic situation of Covid-19, beyond the control of the Appellant, therefore, principle laid down by Honourable Supreme Court of Pakistan in case titled "Balochistan Trading Company (Pvt.) Ltd and Others vs. National Bank of Pakistan and Another" ( 1998 SCMR 1899 ) is not applicable in the present case.
12. For what has been discussed above, the instant Appeal is hereby allowed and the impugned order is set aside.
The learned Banking Court is directed to execute the decree through auction of the mortgaged property and/or sale of any other asset of the Appellant / Judgment Debtor . 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.
Appeal allowed.