1. ' NAZIM HUSSAIN SIDDIQUI, J.---This appeal under section 15 of the Ordinance X of 1980 is directed against order dated 2-12-1992, passed by a learned Single Judge of this Court in Suit No,628/86, whereby he permitted The Official Assignee to pay K.E.S.C. Charges out of the sale proceeds of the premises in question. The facts relevant for decision of this appeal are as follows:-- ' United Bank Limited, the appellant, filed a suit for recovery of Rs,9,28,32,051.00 against respondent No,1 M/s. Akbar Cotton Mills Ltd., in this Court and obtained preliminary and final decrees dated 4- 10-1989 and 12-8-1989 respectively. The respondent No,1 had deposited with the appellant title documents of plot of land, bearing No,L&F-32, measuring 27,060 sq. Yds. Having construction, structure, furniture, and fixture etc., situate at Landhi Industrial Area, Karachi with intent to create an equitable mortgage as a Security in respect of amount availed by respondent No,1. The Official Assignee was deputed by this Court to take possession of aforesaid property and sell it by auction.
2. Accordingly, the Official Assignee put an advertisement in Daily 'Dawn' and `Jang' dated 11-7-1991.
3. Several offers were received by the Official Assignee and from amongst them the offer of respondent No,2, M/s. Hussain Industries Ltd., being the highest in the sum of Rs,37.5 million was accepted, subject to confirmation of this Court, which accordingly was confirmed vide order dated 3-12-1991. Thereafter, the respondent No,2 took possession of Mill Premises together with machinery and building constructed thereon. The Official Assignee found that various agencies had dues against respondent No,L Accordingly, he made a reference on 27-8-1992, showing the amount of those dues to the tune of Rs,52,50,509.96, which also includes K.E.S.C. Charges, amounting to Rs,29,79,323.46. The appellant has claimed that electric charges are not covered by incumbrance.
4. ' Learned Single Judge in the impugned order held that electric charges are as much incumbrance on the land as on the business of judgment-debtor. While recording above finding, he followed the rule laid down in High Court Appeal No,4/89 (M/s. Hyderabad Allied Bank Ltd. v. Ghafoor Textile Mill Ltd.). It would be advantagcuous to quote the legal meaning of word "ENCUMBRANCE". It has been defined at pages 39, 160 and 1344 of Words and Phrases Legally defined by John B.L. Saunders, Vol.III, I-N, Second Edition, Words and Phrases legally defined by John B. Saunders, Vol.II-D-H Second Edition, and Stroud's Judicial Dictionary, 4th Edition respectively, as follows:-- "Words and Phrases Legally Defined at page No,39: ' INCUMBRANCE. The word "incumbrance" shall mean any legal or equitable mortgage in fee or for any less estate, and also any money secured or charged on land by a trust or by judgment, decree, or order of any superior Court of law or equity, and also any legacy, portion, lien or other charge whereby a gross sum of money is secured to be paid and also any annual or periodical charge, which by the instrument creating the same, or by any other instrument, is made repurchasable on payment of gross sum of money, and also any arrear remaining unpaid or any annual or periodical charge, for payment of which arrear of sale of any land charged therewith might be decreed by a Court of equity (Land Registry Act, 1862, S.140).
5. ' Incumbrance includes a mortgage in fee, or for a less estate, and a trust for securing money, and a lien, and a charge of a portion, annuity, or other capital or annual sum; and incumbrancer has a meaning corresponding with that of an incumbrance, and includes every person entitled to'the benefit of an incumbrance, or to require payment or discharge thereof (Conveyancing Act, 1881,,S.2).
6. ' Incumbrances: include mortgage and terminable charges (Finance Act, 1894, S.22(1).
7. ' Incumbrance' includes a legal or equitable mortgage and a trust for securing money, and a lien, and a charge of a portion, annuity, or other capital or annual sum; and "incumbrancer" has a meaning corresponding with that of incumbrance, and includes every person entitled to the benefit of an incumbrance, or to require payment or discharge thereof (Law of Property Act, 1925, S.205).
8. ' `The word incumbrance' has no strictly technical meaning; but what is usually understood is, that where a person has a right at his pleasure to charge pound 3,000 upon an estate, that is an incumbrance. In such a stater of things nobody could say he had an estate free from incumbrances while his estate was liable at any time to be charged with such a sum of money."
9. Words and Pharases Legally.Defined at page No,160: "ENCUMBRANCE. See also INCUMBRANCE ' Australia.--The word 'encumbrances' in its ordinary connotation, means that a person or estate is burdened with debts, obligations or responsibilities. True, the word is in law especially used to indicate a burden on property, a claim, lien or liability attached to property. But when we remember that the whole estate of the testator is liable in the hands of his executor for payment of debts and the expense of administering his estate, it is not an. Extravagant use of language to say, that his 'whole estate is not free from encumbrance' until those debts and expenses are paid. The estate would in fact, be burdened with those debts, and no tehnical use of the word 'encumbrances' can alter that result." Wallace v. Love (1922) 31 C.L.R. 156, per cur; at p.
10. 164."
11. Stroud's Judicial Dictionary at page No, 1344. INCUMBRANCE. (1) "In Wharton's Law Lexicon, I find `incumbrance' defined as being, 'a CLAIM, LIEN, OR LIABILITY, attached to property: and this definition is wide nough to cover the plaintiff's claim, which was, as assignee for value of a revisionary interest, against a person coming in under a subsequent title (per Romer J., Jones v. Barnett (1899)
12. 1 Ch. 620)."
(2) A power to charge land with a sum money is an "incumbrance" on the land (Evans v. Evans, 22 L.J. Ch. 785).
(3) A lease would not ordinarily be described as an "incumbrance" (District Bank v. Webb (1958) 1 W.L.R. 148). But it was held to be an incumbrance if a vendor has contracted to give vacant possession."
13. ' Mr. S. A. Pingar learned counsel for the appellant contended that learned Single Judge erred in law in holding that electric charges constituted an encumbrance on the land. He also argued that since respondent No,1 was not in liquidation, as such, the dues claimed by K.E.S.C. And other agencies were not to be paid out of the sale proceeds of auction money, but the same were still the liability of said respondent. In support of his contentions, he cited (1) AIR 1937 Calcutta 129 L.A.
14. Creet v. Ghungraj, Gulraj. (2) AIR 1951 Hyderabad 93, Kashinath v. Phoolchand and otheRs, In Calcutta case, it was observed that position of a purchaser at an execution sale is the same as that of a judgment-debtor and execution purchaser purchases subject to all the charges and encumbrances, legal and equitable, which would bind the debtoRs, Further, it was observed that notice is not necessary in the case of an auction-purchaser at execution sale, in order to bind him with all the charges and encumbrances standing against the judgment-debtor at date of auction sale. Rule laid down in this case was followed in Hyderabad case referred to above.
15. ' Mr. Pingar learned counsel for the appellant also produced a copy of Supreme Court judgment in Civil Appeal No, 169-K of 1989, Habib Bank Ltd. v. M/s. Ghafoor Textile Mills Ltd. And 10 others, decided on 9-1-1993. According to this judgment, Hon'ble Supreme Court, after taking into consideration the provisions of Order 34, Rule 13, C.P.C., observed `as follows:-- "It is therefore, quite clear that except the incidental expenses of sale and the claim of a prior mortgagee no other claim can be paid out of the sale proceed' of the mortgaged property in a mortgage suit, unless the mortgagee/decree-holder is paid in full. Therefore, a person holding any charges, encumbrance or claim against the property cannot claim any preferential payment out of the property sold in mortgage suit under Order 34, Rule 13, C.P.C. Such person, will however, be free to follow his remedies under the law to enforce payment of their claim in the ordinary course."
16. ' Above-quoted judgments from Indian jurisdiction and of Supreme Court are distinguishable and the rules laid down in these cases are not applicable to this case. In the case in hand, auction- purchaser had given an offer to purchase the premises free from all disputes and charges and said offer was accepted with consent of the appellant.
17. ' A perusal of above-quoted definition of word 'encumbrance' shows that, though it means a claim, lien or liability attached to property, but it has no restricted technical meaning and its scope is wide enough to include other claims and charges such as a liability to a Local Authority. Electric charges, ex facie, are a liability attached to property and the estate is usually burdened with such type of debts as has been done in this case. Even a lease would be an encumbrance if a vendor has contracted to give vacant possession.
18. ' As regards the plea that the respondent No,1 was not in liquidation and was primarily liable for the said charges, it noted that the respondent No,2 in its letter dated 12-8-1991 had given offer to purchae the premises free from all disputes, including Government dues Gas, Labour, K.E.S.C.
19. WAPDA, Custom, water and conservancy charges, Property Tax, Excise dues, and other dues and charges. Above offer was accepted after the appellant had given Written Consent which is as follows:-- "(1) That the plaintiff Bank is agreeable to the cash offer of Rs,37.5 million made by Hussain Industries Ltd. To the Official Assignee in pursuance of the Advertisement dated 11-7-1991 published in Dawn English by the Official Assignee.
(2) That the Hussain Industries Ltd. Has already deposited Rs,4 million to the Official Assignee and in pursuance of the observation made by this Court on 25-11-1991 and as per the statement of their counsel Mr. Zahid Hussain Burhani, they have brought today Pay Orders of Rs,16 million in favour of Official Assignee, totalling Rs,20 millions out of the sum offered of Rs,37.5 million.
(3) That the balance amount of Rs,17.5 million would be payable within time limits and after the full payment, Hussain Industries Ltd. Would be entitled for leasehold rights, title, and interest of land bearing Plot No,L.F./32, measuring about 27,710.60 sq. Yards, situated at S.I.T.E., Landhi Industrial Area, Karachi with construction, structures, machineries, furnitures, fittings, and fixtures etc. Known as Akbar Cotton Mills, free from any incumbrances."
20. ' It being so, the terms of the offer, now, cannot be unilaterally modified to the disadvantage of the respondent No,2. Therefore, the electric charges are incumbrance on the premises and these charges are to be satisfied from the sale proceed. The payment of other charges,' enumerated by the Official Assignee, has not been challenged before us. Therefore, those charges as ordered by learned Single Judge, are also to be satisfied from the sale proceed.
21. ' Accordingly, we do not find any merit in this appeal and the same is dismissed with cost.