1. ' CH. MUSHTAQ AHMAD KHAH, J.--Messrs K. Agricole (Pvt.) Ltd., Shahrah-e-Kashmir, Islamabad, the respondent No,2, entered into an agreement with National Development Finance Corporation, the respondent for financing the purchase of Raw Materials, Finished Goods, Stores, Spares, Plant and Machinery and other assets etc. On mark-up basis on 9-31986, under the terms whereof respondent No,1 purchased for respondent certain assets at the purchase price of Rs,2,250,000 (Rupees two million two hundred fifty thousand only), which were repurchased by respondent No,2 for the marked-up price of Rs,5,221,400 (Rupees five million two hundred twenty one thousand and four hundred only). The marked-up price was payable by respondent No,2 to respondent No,1 in ten six monthly equal instalments amounting to Rs,522,140 each, within the period commencing 17- 1988 up to 1-1-1993. By way of security and repayment of the aforementioned financial facility, respondent No,2 executed the following documents through its Managing Director, the respondent No,3:--
(1) Promissory Note for Rs,5,221,400.
(2) Letter of hypothecation, dated 24th July, 1986.
(3) Deed of floating charge, dated 24th July, 1986.
2. ' The last deed was presented to the Deputy Registrar, Joint Stock Companies, Islamabad under the provisions of section 127 of the Companies Ordinance, 1984, who registered the same in accordance with the above said provisions. Respondent No,3, further executed by way of security an irrevocable general power of attorney in for of respondent No,1 and an equitable mortgage of his Property bearing Plot No,C-1/A measuring 9.78 acres, Scheme No,II, Poultry and Vegetable Farm, Chak Shahzad, Islamabad in favour of respondent No,1, particulars where are as under:-- "DESCRIPTION OF TITLE DEEDS AND EQUITABLE MORTGAGE HANDED OVER AND EXECUTED BY THE DEFENDANT NO.2.
(i) Description of the Title Deeds:
(a) Agreement to lease of Immovable Property, dated 20th November, . 1984 executed between Capital Development Authority, Islamabad and Mr. Khushnood All registered on 25-11-1984 as No,4529 in Book No,1, Volume No,58 and a duplicate copy pasted in the Additional Book No,1, Volume No,219 on pages from 1 to 7 at the office of the Sub-Registrar, Islamabad.
(b) No-objection certificate dated 19-6-1986 from Capital Development Authority, Islamabad.
(c) Allotment Letter No, CDA/DEM(PVC-15)C-1/A/84/4982, dated 19-11-1984 issued by Additional Director, Environment, Capital Development Authority, Islamabad.
(ii) Description of Equitable Mortgage: ' All that piece and parcel of plot of land bearing No,C-1/A measuring 9.78 acres or thereabout situated in P&V Scheme No, II, Islamabad.
3. ' Thereafter, respondent No,2 availed of all the aforementioned financial facilities of the amount of Rs,2.25 million but failed to liquidate the liability in terms of the agreement referred to above and did not pay a single instalment. Resultantly, after service of legal notices, dated 25-9-1989 and 19- 4-1990, a suit was filed by respondent No,1 for recovery of Rs,3,694,639.30 as on 30-6-1991 with liquidated damages at 29% annum to the date of its full and final payment or realization with costs, against respondents Nos.2 to 6, out of whom respondent No,2 is the company, whereas the others are its Directors, in the Lahore High Court, Rawalpindi Bench, Rawalpindi under the Banking Companies (Recovery of Loans) Ordinance, 1979. The respondents Nos.2 to 6 were initially summoned in the ordinary course, registered post acknowledgement due and also by publication in the Daily Nawa-i-Waqt and the Nation, Lahore for 22-2-1992. They were served but did not appear, hence, were proceeded against ex parte. A preliminary decree was passed in favour of respondent No, 1 as prayed for. Subsequently, an application under Order XXXIV, Rule 5, C.P.C. Was filed by respondent No,1 for passing of final decree, which application was also not contested by the respondents in spite of service, therefore, vide judgment and decree dated 23-10-1993, a final decree was passed in favour of respondent No,1 by the learned Special Court Banking, Rawalpindi.
2. On the basis of the aforementioned final decree, respondent No,1 filed execution petition before the learned Special Judge Banking, Rawalpindi, whereupon the mortgaged property, referred to above, was attached and was published to be auctioned on 13-7-1995, on which date an objection petition was filed before the learned Executing Court by Messrs- Capital Farms Islamabad, who is the appellant before this Court under the provisions of Order XXI, rules 97 and 99 read with section 151, C.P.C. In this application the stance taken by the objector is that the plot, which has been attached and is going to be sold in pursuance of the decree passed in favour of respondent No,1, was allotted to Syed thushnood All Rizvi, respondent No,3 on 15-11-1984, which has been agreed to be sold by him, vide agreement to sell dated 27-10-1988, for total consideration of Rs35,00,000, out of which the objector has already paid Rs,20,00,000, and as the plot has not so far been transferred by the C.DA. In absence of respondent No,2, who had left for Canada, the appellant has filed a suit for specific performance of the contract, which is pending adjudication in the Court of Syed Ikhlaque Hussain Shah, Civil Judge, Islamabad and that it is only. Today that the objector has come to know that the suit plot is going to be auctioned under a decree passed by the Court and upon further inquiry it has transpired that the said plot was mortgaged with the National Development Finance Corporation and its dues were not cleared by the concerned persons, therefore, as the objector is a bona fide purchaser for value and is in possession of the suit plot in his own independent right, the same may be excluded from the list of the property to be auctioned, otherwise the applicant shall suffer irreparable loss, hence, he may be protected against the malpractices of the third party. This application was ordered to be fixed for hearing on 16-7-1995, on which date notice was issued to respondent No,1 for 19-7-1995, however, on the said date the applicant did not appear and the application was dismissed in default. One Raza Hussain has also appeared on behalf of the applicant before the Court Auctioneer as well on 13-7-1995 and had stated that an application has been filed before the Executing Court, which has been fixed for 16-7- 1995. The auction proceedings under the above circumstances were not held on 13-7-1995 and ultimately on 19-7-1995, the plot was put to auction, on which date besides Javed Mawaz Khan respondent No,9 and others, Mahmood Alam, who is the husband of Mst. Aisha Alam and also a partner of Messrs Capital Farms, Islamabad and another partner of the firm who is the real brother of Mst. Aisha Alam, through whom the present appeal has been filed, participated in the auction.
4. The respondent No,9 being the highest bidder purchased the plot in question for an amount of Rs,62,00,000, in whose favour, the auction has been confirmed and the sale certificate has also been issued to him, vide order dated 22-8-1995. The execution proceedings have also been filed vide the same order. It may be mentioned here that the objection petition referred to earlier was filed through husband of Mst. Aisha Alam, who is a partner of the appellant Firm. The judgment- debtors have neither challenged the preliminary or final decree nor have challenged the auction proceedings, hence, the same have become final qua the decree-holder, the judgment-debtors and the appellant who claims interest in the property through the judgment-debtors.
3. Messrs Capital Farms has filed this time-barred regular first appeal to challenge the judgment and decree passed in the suit wider the provisions of section 12 of the Banking Companies (Recovery of Loans) Ordinance, 1979. Along with memo of appeal, application under section 12(6) of the Ordinance, 1979 seeking condonation of delay has also been filed. Grounds given in the application in support of condonation of delay are that the appellant being not a party to the suit acquired knowledge of the decree on 13-7-1995, when the plot was going to be put to auction, immediately whereupon, an application was filed before the executing Court and after getting certified copy of the judgment and decree, the appeal has been field on 9-8-1995, which is within time with effect from the date of knowledge, therefore, the delay in filing of the appeal is condonable in the interest of justice and the appeal is liable to be heard on merits.
4. Mr. Mansoor Ahmad, Advocate assisted by Mr. Waqar-ul-Haq Sheikh, Advocate has appeared on behalf of the appellant, whereas Sh. Iftikhar Ahmad, Advocate has entered appearance on behalf of respondent No,1, Mr. S.M. Kamal, Assistant Director, C.D.A. Has appeared on behalf of respondent No,7, none has entered appearance on behalf of respondents Nos.2 to 6, who have been proceeded against ex parte, M/s. Raja Muhammad Anwar, IQ. Muhammad Farooq and Raja Shafqat Abbasi, Advocates have appeared on behalf of respondent No,9. Respondent No,8 is the Court which has passed the decree and is not represented and even otherwise is not a necessary party to these proceedings, hence, shall be deemed to have been deleted as a respondent in the appeal.
5. In support of this appeal, learned counsel for the appellant has raised the following contentions:- -
(i) That the appellant has entered into an agreement for sale with respondent No,3 without notice of the mortgage of the plot in question in favour of respondent No,1, under which agreement the possession , was delivered to him, therefore, the appellant being a bona fide interest-holder without notice for consideration is entitled to retain the possession of the plot under section 53-A of Transfer of Property Act, hence, the proceedings, which were initiated during the pendency of the suit for specific performance filed by him and which have culminated in the passing of a decree and sale of the plot in question are illegal and inoperative qua his rights, therefore, the appellant has a locus standi to challenge the impugned decree, which is, not binding upon him. In support of this contention, reliance has been placed on the cases of H.M. Saya & Co., Karachi v. Wazir All Industries Ltd, Karachi and another PLD 1959 SC 65; Arsalla Khan v. Bashir Ahmad Blour and 3 others PLD 1976 SC 581 and Sh. Fazal-ur-Rehman and another v. Chief Settlement and Rehabilitation Commissioner, Punjab and others 1991 SCMR 423.
5. ' That the relationship between respondents Nos.1 and 2 was that of a financer and the customer, therefore, the only forum which could have adjudicated the dispute and passed a decree therein is the Tribunal created under the Banking Tribunals Ordinance, 1984, Ordinance LVIII of 1984, which forum has exclusive jurisdiction as is clear from the joint reading of sections 2(c), 2(e), 4, 5 and 8(c) thereof, the Special Court constituted under the Banking Companies (Recovery of Loans)
6. Ordinance, 1979 did not possess jurisdiction in the case in hand as the said Court is competent to adjudicate the dispute relatable to loans on interest basis and not finances advanced under the finance agreement which are two distinct relationships/agreements, therefore, the impugned decree is patently void and inoperative against the rights of the appellant, hence, is liable to be set aside. In this behalf reliance has been placed by the learned counsel on the case of Messrs Grain Systems (Pvt.) Ltd. And 10 others v. Agricultural Development Bank 1993 SCMR 1996.
7. ' That the appeal is not barred by time as the same has been tiled within 30 days with effect from the date of knowledge of passing of the decree and even if it is assumed to be barred by time, the appellant being not a party thereto had acquired knowledge thereof on 13-7-1995, obtained certified copies thereof and filed the same on 9-8-1995, hence, it is a fit case for condonation of delay, particularly when the decree is void and bar of limitation does not operate against the appellant to challenge the decree in question. Reliance in this behalf has been placed on the cases of Syed Mahmud Alam v. Syed Mehdi Hussain and 2 others PLD 1970 Lahore 6; Hussain Bakhsh and others v. Settlement Commissioner and another PLD 1969 Lah. 1039; Syed Nazir Hassan v.
8. Settlement Commissioner, Lyallpur PLD 1974 Lah. 434; Nawabzada Muhammad Umar Khan (represented by his Legal Heirs ) and 4 others v. Pakistan through Secretary, Cabinet Division and 2 others PLD 1982 Pesh. 1; Province of Balochistan v. Messrs Tribal Friends Company, Loralai PLD 1986 Quetta 321 and Mst. Rehmat Bibi and others v. Punnu Khan and others 1986 SCMR 962.
(iv) That the remedy of filing objections was not available to the appellant under the provisions of section 47/151 read with Order XXI, rules 98 and 99 of C.P.C. As the said provisions authorise the Executing Court to render a fading on the question of execution and discharge of a decree and that the said Court has no jurisdiction to go behind the decree, and hence, declare it as void, therefore, the objection petition filed by the appellant even if dismissed for want of prosecution will not take away his right to file the appeal against the decree in consequences whereof his rights are also effected. Reliance has been placed on the cases of Muhammad Sharif v. Jalal-ud-Din 1971 SCMR 594; Sardar Abdul Majid Khan Lashari v. The Asio-African Co. Ltd. 1972 SCMR 236; S. Anwar All Shah v. S. Niaz All Shah PLD 1978 Lah.
9. 1078.
(v) That the plot in question did not legally an mortgaged with respondent No,1 as the plot did not belong to the Company and no registered deed of mortgage was executed in favour of respondent No,1 by the Company. Consequently, no decree could have been passed in relation to the plot in dispute. Reliance to this behalf has been placed on the case of Messrs Eagle Star Insurance Co. Ltd. v. Messrs Usman Sons Ltd. And others PLD 1969 Kar.
10. 123.
(vi) That the appellant being a bona fide agreement holder, in possession of the plot in question and being a suiter before the Civil Court in a pending suit for specific performance of the contract, his rights cannot be effected by the decree passed in favour of respondent No,1 on the basis of a so-called mortgage by deposit of title deeds firstly for the reasons that the suit by respondent No,1 was filed during the pendency of the appellant's suit and secondly for the reasons that under section 53-A of the Transfer of Property Act, the appellant is entitled to retain possession of the plot even if the equity of redemption has been sold and purchased by respondent No,9. Reliance in this behalf has been placed on the case of Karachi Catholic Cooperative Housing Society Ltd. V. Mirza Jawad Baig PLD 1994 Kar.
11. 194.
12. 5-A. As against the above arguments, Messrs Kh. Muhammad Farooq, Raja Muhammad Anwar and Raja Shafqat Khan Abbasi, Advocates, learned counsel for respondent No, 9 have raised the following contentions:--
(i) That the only remedy available to the appellant if any, was to file an application under section 47 read with Order XXI, Rules 98 and 99, C.P.C., which remedy he did avail of by filing of objection petition, but did not pursue the same, which has been dismissed for want of prosecution, therefore, he is not entitled to file an appeal to obtain the same relief which he sought from the Court of competent jurisdiction and his motive was dismissed for want of prosecution. Reliance has been placed on the cases of Islamic Republic of Pakistan v. Muhammad Saeed PLD 1961 SC 192; Brig.
13. (Retd.) Muhammad Aslam Khan v. The Azad Government of the State of Jammu and Kashmir 1983 CLC 1204; Muhammad Lal v. Abdul Quddus PLD 1975 Quetta 29; Muhammad Lal Patni v. Sr. Kali Nath AIR 1962 SC 199 and Abdul Malek 1Vliah v. Moslemuddin (Mokleshuddin) Sheikh PLD 1970 Dacca 743.
14. ' That the appellant has no right or interest in the suit property which is the subject-matter of the suit. The plot in dispute was mortgaged by the judgment-debtors in favour of the decree-holder on 9-3-1986, whereas the alleged agreement, even execution whereof has been denied by the executants, before the Civil Court, was executed on 27-10-1988, therefore, valid first charge having been created on the plot in question in the year 1986, any agreement relatable thereto subsequently executed/will be subject to the satisfaction of the first charge, therefore, even if it is conceded for the sake of argument that there is a valid agreement to sell in favour of the appellant, the same being subsequent in date to the date of mortgage, no cause of grievance can be raised by the holder thereof against the satisfaction of the first charge which satisfaction has not been objected to by the judgment-debtors. Even otherwise the agreement for sale does not create any interest or right in the property till the time a sale-deed is executed in pursuance thereto either by the executant of his own or in execution/pursuant to a decree for specific performance of the contract passed by the Court and till then the agreement-holder does not acquire any actionable cause of action against a third party, who is not a privy to the agreement or contract, therefore, it is not a fit case wherein the appellant can be allowed to challenge the decree and that too after expiry of the period of limitation.
15. ' That the appellant is not entitled to challenge that decree hence, permission cannot be granted to him to prosecute this appeal as the plot in dispute has already been purchased by respondent No,9 in execution proceedings for consideration without notice, the sale cannot be set aside even if decree is held to be void and is set aside, therefore, title in the property having passed to a third party in execution of lawful proceedings, the so-called agreement as well as proceedings before the Civil Court on the basis thereof automatically stand frustrated and fructified. The appellant as such is not entitled to prosecute this appeal against a decree which has become final between the parties, on the basis of a claim being raised through the judgment-debtors. Reliance has been placed on the cases of Zain-uIAbdin Khan v. Muhammad Asghar All Khan and others ILR 10 Allahabad 166 (PC); Chitambar Shrinivasbhat v. Krishnappa ILR 26 Bombay 543; Sundaram v.
16. Mamsa Mavuthar and others AIR 1921 Madras 157; A.C. Subba Beddi and andther v. Vasireddi Jaya Jiayya and others AIR 1923 Madras 659; Nanhelal and another v. Umrao Singh AIR 1931 PC 33; Abdul Rahim v. Abdul Haq AIR 1936 Lahore 191; Ambujammal v. P.Thangavelu Chettiar and another AIR 1941 Madras 399; Chowdhari Abdul Subhan Sahib v. Kante Ramanna AIR 1945 Madras 161; Nur Ahmad and others v. B.Muhammad Ibrahim and another PLD 1953 Lahore 470; Lutfor Rahman v. Mst.
17. Tahera Khatun and others PLD 1961 Dacca 303; Lalji Sah and others v. Sat Narain Bhagat and others AIR 1962 Patna 182; S. Chokalingam Asari v. N.S. Krishna Iyer and others AIR 1964 Madras 404; Haji Ghulam Rasul and others v. Chief Administrator of Auqaf, West Pakistan, Lahore PLD 1966 Lahore 978; Janak Raj v. Gurdial Singh and another AIR 1967 SC 608; Hudaybia Textile Mills Ltd. And others v.
18. Allied Bank of Pakistan Ltd. And others PLD 1987 SC 512; Munawar v. Mst. Nooran and 4 others 1989 MLD 1535 and Jane Margrete William v. Abdul Hamid Mian 1994 CLC 1437.
(iv) That the appellant after filing the objection petition did not prosecute the same and two partners thereof participated in the auction proceedings, hence, the appellant accepted the decree as valid. Having failed in his efforts to get the property in auction proceedings, therefore, having acquiesced the auction proceedings by participating therein, the jurisdiction of the Court cannot be allowed to be challenged and, hence, granted permission to file this appeal. Reliance is placed on the cases of Nidamarthu Balasurya Bheemaraju v. Changati Mrutyanjayudu AIR.1931 Madras 354; Mst. Mumtaz Begum v. Abdul Rashid 1988 CLC 2023 and Karim Bakhsh and 4 others v.
19. Riaz Hns.Sain 1993 SCMR 1667.
(v) That the decree is valid as the Special Court constituted under the Ordinance, 1979 has a concurrent jurisdiction to decide the suit in question as the word 'load used in section 2(d) of the Ordinance has been amended so as to include the finance agreement as well as is clear by the provisions of section 5(gg) added to the Ordinance by the Banking Companies and Financial Service (Amendment of Laws) Ordinance, 1984 (Ordinance LVII of 1984). Therefore, the argument of the learned counsel for the appellant on this score is misconceived. Reliance has been placed to the later part of the judgment in case of Messrs Grain Systems (Pvt.) Ltd. (supra), relied upon by the learned counsel for the appellant.
(vi) That no case for condonation of delay has been made out inasmuch as it is not clear from the application as to how and when the knowledge of passing of the decree was acquired by the appellant nor is there any proof that the knowledge of the decree was acquired on the date on which the plot was to be put to auction. Even if the plot was put to auction publication for the auction was made much earlier to the date of auction and there is a presumption that as the auction proceedings were conducted after wide publicity in the press, the appellant must have acquired the knowledge of the decree, but he kept silent and did not challenge the same within thirty days in spite of the knowledge. Even looked from another angle, the appellant can at the most challenge the decree on the basis of the pleas available to the judgment-debtors within the time available to them to challenge a decree as he is claiming interest to challenge the decree through them, who had the knowledge of the decree, but did not proceed to challenge.
20. Consequently, delay in filing the appeal cannot be condoned merely on the basis of a bald assertion that the knowledge of the decree was acquired by the appellant on 13-7-1995. Reliance has been placed on the cases of Messrs United Bank Limited v. Messrs All Oil Mills and 4 others 1992 MLD 1039 and Riasat All and 2 others v. Mahmood Ahmad 1993 CLC 120.
21. ' We have considered the arguments addressed by the learned counsel for the parties, gone through, the record the statutory provisions and relevant case-law on the subject, a brief resume whereof is as under: ' In case of H.M. Saya & Co. (supra), it has been held that a stranger to the suit or proceedings can file an appeal with leave of the Court if he is adversely affected by the order passed in such a suit or proceedings. At pages 68 and 69 of the report, it has been held as under:- "There can be no dispute that the only party which was adversely affected by the order of ad interim on junction was respondent No,1. We are satisfied that Saya & Co., deliberately omitted to make them parties with the intention of avoiding a contest. They knew fully well that the reliefs sought were really directed against Wazir All Industries Limited and their bankers. A stranger to a suit or a proceeding is not prohibited by the Code of Civil Procedure from filing an appeal from an order passed therein. It is true that there is no express provision permitting such party to prefer an appeal against such an order. This omission, however, cannot be understood to amount to prohibition. The Court ought not to act on the principle that every procedure is to be taken as prohibited unless it is expressly provided for. To give such a meaning to the omission would result in grave injustice. The facts of this case are clear example in point. The Court should proceed on the principle that every procedure which furthers administration of justice is permissible even if there is no express provision permitting the same. Section 96 of the Civil Procedure Code deals with appeals from decrees and section 104 deals with appeals from orders. These provisions do not in terms say who is entitled to prefer an appeal. The Code, however, lays down that it is the decree or the order that has to be appealed against. If the decree or order appealed from adversely affects a person he should be permitted to challenge the same in appeal even if he was not made a party to the original suit or proceedings.
22. ' The learned counsel for the appellants has, in support of his Contention, relied upon three decisions.
23. ' In the case of J. Rustamji of Lahore v. Official Liquidator of the People's and Amiritsar Bank Ltd. And another AIR 1919 Lahore 180, an appeal filed under section 169 of the Companies Act by a creditor against an order sanctioning a compromise was found to be incompetent as the appellant had not qualified himself under rule 58 of the Rules framed under the Act to attend the proceedings and was not a party to the proceedings before the trial Judge. In the case of Indian Bank Limited, Madras v. Saith Bansiram Jashamal (Firm) and another AIR 1934 Madras 360, an appeal preferred by a creditor of an insolvent against the decree in a suit in which the Official Receiver was impleaded as a party was found to be in competent as the appellant was not a party to the suit.
24. This decision, however, was not fully approved in the case of Sm. K. Pannalagu Ammal v. The State of Madras and others AIR 1953 Madras 485, wherein the right of the Appellate Court to grant permission to a person who is not a party to the suit but is affected by the judgment-decree or order of the trial Court to prefer an appeal against the same was recognised. Lastly the learned counsel for the appellants referred to the case of Al-Kisan Transport Co. Ltd. v. Regional Transport Authority, Lahore PLD 1961 Lahore 723. In this case it was observed: `The only reasonable interpretation that can be placed on the language employed in the relevant provisions of the Code of Civil Procedure is that an appeal can be instituted by a party to the proceedings in which the order sought to be appealed against was passed and this conclusion is inevitable even if I proceed on the resumption that the Code of Civil Procedure did not in terms say that an appeal could be presented by a party to the proceedings in which the order appealed against was passed. It is inconceivable that the intention of the authors of the Code of Civil Procedure, parts of which devote meticulous attention to the question what persons could or should be parties to proceedings in Courts, was that an appeal could be lodged by person who was not a party to the proceedings in which the order intended to be appealed against was passed. If this were so, numerous rules occurring in the Code of Civil Procedure with regard to impleading persons as parties to the proceedings governed by that Code would be entirely redundant and in the absence of very cogent proof to that effect I am not prepared to hold that the Legislature which was responsible for passing the Code of Civil Procedure had indulged in redundancy on a very prolix scale.'
25. ' We may point out, with due respect, that it has not been possible for us to accept the above observations.
26. ' The English Courts have consistently followed the practice that a person who is not a party to a suit or a proceeding may prefer an appeal if he is affected by the judgment, decree or order of the trial Court provided he obtains leave from the Court of appeal. The test applied in granting leave to appeal, in such cases, is that if the person who wants to prefer the appeal might properly have been a party in the suit or proceeding then he may obtain leave to appeal. The case of in re: B. An Infant (1958) 1 QB 12, 17) on which Mr. Dingoomal has relied lends support to the above proposition.
27. In our view this is an equitable rule which should be followed in the absence of any provision to the contrary in the Code of Civil Procedure."
28. ' In case of Sh. Fazl-ur-Rehman (supra), it has been held that a claimant of land on the basis of deed of an agreement to sell, which was subsequently sold, in favour of another person has a locus standi to file a Constitution petition. At page 425 of the report, it has been held as under:-- "While dismissing the writ petition filed by the petitioners it has been observed as follows: `The petitioner (W.P. No,331/R-76) filed by Fazalur Rehman and Abdul Rashid is liable to be dismissed as stated by the allottees had only executed agreement to sell the allotted land to them.
29. No right in the land as such came to vest on the basis of the alleged agreement. The allottees have not entered appearance in this petition. On the basis of the agreement to sell, the petitioners cannot maintain this petition. This petition as such is liable to be dismissed on this, short ground alone'."
30. ' Mr. S.A. Manna, on behalf of the petitioners, has challenged this view and drawn our attention to the decisions of this Court reported as Joydeb Agarwala v. Baitulmal Karkhana Limited PLD 1965 SC 37, Mian Fazal Din v. Lahore Improvement Trust, Lahore and another PLD 1969 SC 223 and All Muhammad v Shera and another 1987 SCMR 207 that a perspective vendee or a person likely to be affected has a locus standi to institute and maintain a writ petition.
31. ' We agree, but we are of the opinion that in so far as the allotments made in favour of the vendors of the petitioners namely Shujaat Ali and Mirza Badar-ud-Din themselves were not legal and proper, as held by the High Court a finding with which we agree, the petitioners had no case even on the merits. It may be pointed out that the allotment made in favour of Shujaat Ali in village Bhakewal was found to have been obtained fraudulently and illegal by the Settlement Commissioner (Lands) with powers of the Chief Settlement Commissioner (S. Walayat Ali Bokhari) vide order dated 30-7-1976, on his own statement."
32. ' In case of Nur Ahmad (supra), it has been held that even if a decree for specific performance of the contract on the basis of agreement for sale is passed in favour of a person, the sale shall only be perfected when the sale-deed is executed.
33. ' In case of Hussain Bakhsh (supra), at page 1048 of the report, it has been held that if an order is without jurisdiction and void then it need not be formally set aside and, hence, no question would, therefore, arise of holding that the matter cannot be considered on merits on account of any bar of limitation.
34. ' In case of Messrs United Bank Limited (supra) where a time-barred application for leave to appear and defend the suit was filed and delay was sought to be condoned without specifying the facts as to how and through what source the defendant applicant came to know about the institution of the suit and the service made through all prescribed modes including publication having been effected, it was held that no case was made out for condonation of delay as no specific reasons have been assigned for the same.
35. ' In case of Riasat All (supra), in paragraph No,3 of the report, it has been held that even a void order has to be challenged within limitation. Reliance in this judgment has been placed on the case of Conforce Limited v. Syed All Shah PLD 1977 SC 599 and S. Sharif Ahmad Hashmi v. Chairman, Screening Committee, Lahore and another 1978 SCMR 367.
36. ' In case of Mst. Rehmat Bibi (supra), it has been held that if an order is a nullity in the eye of law, no question of limitation will arise while deciding the appeal. Reliance in this case has been placed on the case of Allah Dino v. Faqir Muhammad and another PLD 1969 SC 582.
37. In case of Nawabzada Muhammad Umar Khan (supra), while deciding the question of laches, it has been held that if the impugned order is without jurisdiction and, hence, is void, ab initio and non-existing in the eye of law, question of laches does not arise in such like cases.
38. ' In case of Syed Nazir Haksan (supra), it has been held that to challenge a void order, the question of limitation does not arise. Similar view has been taken by this Court in case of Painda Khan v.
39. Member, Board of Revenue etc. 1995 CLC 1816.
40. ' In case of Syed Mahmud Alam (supra), it has been held that if a decree is passed without notice, the period of limitation in filing of an appeal shall start running from the date of appellant's knowledge of order.
41. ' In case of Muhammad Saeed (supra), wherein a question arose as to whether a void decree can be refused to be executed in execution proceedings, their lordships of the Supreme Court of Pakistan at page 197 of the report have held that all the questions relating to the executability of an order or a decree can be raised even in execution proceedings and it is open to the party against whom it is sought to be executed to show that it is null and void and had been made without jurisdiction or that it is not capable of execution.
42. ' In case of Abdul Malek Miah (supra) at page 749 of the report, it has been held that it is well- settled a legal proposition that an Executing Court cannot go behind the decree except where the decree is without jurisdiction or is a nullity in the eye of law.
43. ' In case of Hira Lal Patni (supra), it has been held that in execution proceedings the validity of the decree can be challenged on the ground that the Court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have seizing of the case because the subject- matter was wholly foreign to its jurisdiction or that the defendant was dead at the time the suit had been instituted or decree passed, or some such other ground which could have the effect of rendering the Court entirely lacking in jurisdiction in respect of the subject-matter of the suit or over the parties to it.
44. ' In case of Muhammad Lal (supra) at page 32 of the report, it has been held that an Executing Court cannot go behind the decree, however, if a decree is without jurisdiction or nullity in the eye of law, the Executing Court is entitled to take notice thereof.
45. ' In case of S. Anwar All Shah (supra), it has been held that section 47 relates to execution, discharge and satisfaction of the decree and, therefore, validity or invalidity of a decree cannot be challenged under section 47 particularly when the original decree is valid and no party has raised any objection there against, hence, subsequently no objection to its validity can be raised in the Executing Court. In the judgment the view taken in case of Muhammad Saeed (supra) by their lordships, has not been taken note of nor was it a matter in issue as to whether it can be shown during the course of execution proceedings that the decree is without jurisdiction, nullity in the eye of law and, hence, is not executable.
46. ' In case of Sardar Abdul Majid Khan Lashari (supra), it has been held that Executing Court cannot go behind the decree. In this judgment the issue as to whether a void decree can be refused to be executed or not has neither been raised nor determined.
47. ' In case of Muhammad Sharif (supra), it has been held that a decree passed in a time-barred claim is not a nullity in the eye of law, therefore, the Executing Court is not competent to go behind the same and refuse execution thereof.
48. ' In case of Messrs Eagle Star Insurance Co. Ltd. (supra), it has been held that a memorandum of deposit of title deeds purporting to create in presenti interest in the property in favour of the plaintiff-Insurance Company constitutes a mortgage and, hence, is compulsorily registrable, such writing in absence of registration, hence, is not only inadmissible in evidence but also does not create any mortgage. In this case the deed had not been certified by the Registrar of Joint Stock Companies under section 127 of the Companies Ordinance.
49. ' In case of Zain-ul-Abidin Khan (supra), it has been held that a sale having taken place in execution of a decree in force, at the time of auction cannot afterwards be set aside against a bona fide purchaser not party to the decree on the ground that on further proceedings the decree has been subsequent to the sale set aside by the Appellate Court.
50. ' In case of Chitambar Shrinivasbhat (supra) it has been held that in a case where an ex parte decree was fraudulently obtained against the plaintiff and in execution proceedings certain land of the plaintiff worth Rs,200 was auctioned and was purchased by second defendant for Rs,400, who had no knowledge of fraud, it was held that the plaintiff/judgment-debtor was not entitled as against the auction-purchaser to have the sale .Set aside as in a case where the property is sold in execution of a decree obtained fraudulently, mere inadequacy of price. Apart from participation or knowledge of fraud is not a circumstance sufficient to justify setting aside of the decree.
51. ' In case of Nanhelal (supra), it has been held that when a sale has been effected, a third party's interest intervenes and there is nothing in rules that this should be disregarded, Court cannot refuse confirmation.
52. ' In case of Abdul Rahim (supra), it has been held that once a sale has taken place the Court has jurisdiction to confirm it unless the specified objections are taken and sustained. Sale in execution of a decree cannot be set aside merely on the ground that after the date of sale in fact more than 30 days after the date of sale but before its confirmation the judgment-debtor was declared to be a member of an agricultural tribe whose land could not be sold.
53. ' In case of Ambujammal (supra), it has been held that even though the decree has been set aside after the execution of sale and before confirmation a sale in favour of a stranger-purchaser, must nevertheless be confirmed if the sale could not be set aside under the provisions of Order XXI, Rules 89 and 91. The inherent powers of the Court cannot be equal in aid to justify the setting aside of a sale under such circumstances so as to safeguard the judgment-debtor by doing an inquiry to the innocent-auction purchaser when the Code contains no provision for such powers.
54. ' In case of Chowdhari Abdul Subhan Sahib (supra), it has been held that once the sale has been confirmed it confers an absolute title on the auction-purchaser whether he be decree-holder or a stranger provided there was title in the judgment-debtor. It is immaterial whether the decree- holder had deliberately deceived the judgment-debtor and by false statement prevented him from taking steps to have an adjustment of decree.
55. ' In case of Lalji Sah (supra), it has been held that where the property was sold for a grossly inadequate price and this was ascribed to the negligence of the gnardian of the minor defendant it was held that this fact would not affect the auction-purchaser unless he was creature of the decree-holder.
56. ' In case of S. Chokalingam Asari (supra), it has been held that where a property is purchased in execution of decree by the decree-holder himself the property will be liable to an obligation or claim for restitution in the event of the decree under execution being reversed or set aside on appeal. But in the case of a stranger auction-purchaser to judgment-debtor is not allowed to obtain restitution .Of property. If the purchaser were to lose the benefit of purchase on the contingency of the subsequent reversal of the decree there will be no inducement to the intended purchasers to buy at execution sale and consequently the property would not fetch its proper price at the sale and the net result would be that judgment-debtor will be the ultimate sufferer.
57. ' In case of Janak Raj (supra), it has been held that section 65 of C.P.C.. Lays down that where immovable property is sold in execution of a decree and such sale has become absolute the property shall be deemed to have vested in the purchaser from the time when it was sold and not from the time when the sale becomes absolute. The result is that the purchaser's title relates back to the date of sale and not the confirmation of sale. There is no provision in the C.P.C. Either under Order XXI or elsewhere which provides that the sale is not to be cod-limed if it be found that the decree under which the sale was ordered has been reversed before the confirmation of sale. It does not seem over to have been doubted that once the sale is confirmed the judgment-debtor is not entitled to get back the property even if he succeeds thereafter in having the decree against him reversed.
58. ' In case of Hudaybia Textile Mills Ltd. (supra), it has been held that Court cannot refuse to confirm sale on the ground that decree has been satisfied by mutual arrangements between one and the other.
59. ' In case of Karim Bakhsh (supra), at page 1670 of the report it has been held that if a person directly affected by a void order, does not question its validity according to law and rather acts upon it, the order stands legitimised, as a order is bereaved of its effectiveness only when it has been pronounced upon so by a Court, the delayed action shuts the remedy by the act of the party itself, and, hence, difference between a void and voidable order is reduced to a vanishing point.
60. ' In case of Duke of Leeds v. Amberst (1846) 78 RR 4, it has been held that if a party claiming a right stands by and sees another dealing with the property in a manner inconsistent with that right and raises no objection when that act in progress, he cannot afterwards complain having acquiesced.
61. ' In case of Messrs Grain Systems (Pvt.) Ltd. (supra), it has been held that a suit between a financing institution and the customer based on a finance agreement on mark-up basis, is exclusively triable by a Banking Tribunal constituted under the Ordinance of 1984 and that Special Court constituted under the Ordinance of 1979 has no jurisdiction to try such a suit.
7. Following legal principles have been laid down in the aforementioned judgments:--
(i) That a void decree can be challenged even in execution proceedings although ordinarily an Executing Court cannot go behind the decree.
(ii) That if a void order of decree is being acted upon and a person does not object at that time the principle of acquiescence will be attracted and subsequently he will not be allowed to challenge the act on the ground that the order or the decree is void.
62. That a person in whose favour there is an agreement for sale does not acquire any right or interest the property sold as a sale-deed is executed in his favour either by the owner or by a Court in execution of the decree for specific performance of the contract, except rights created under the provisions of section 53-A of the Transfer of Property Act.
(iv) That a mortgage created in favour of a Company having been certified under the provisions of section 127 of the Companies Ordinance shall be deemed to be a registered transaction and, hence, shall create a first charge on the property satisfaction whereof cannot be objected to by a person in whose favour either subsequent charge is created or a subsequent agreement for sale has been executed.
(v) That a stranger can file an appeal against adverse judgment and decree by the leave of the Court, which hence, may not be granted to a person, who has no right or interest in presenti and has also accepted the decree by not objecting thereto, when the same was being acted upon.
(vi) That the question of lack of jurisdiction cannot be allowed to be raised by a person who has accepted the decree as valid by his act or conduct on the basis of the principles of approbation and reprobation That there is no limitation to challenge a void order or a decree but in cases where such a decree is not challenged within limitation and in pursuance thereto rights have been created in favour of a third innocent person, it cannot be allowed to be challenged after expiry of the limitation.
(viii) That in order to get the delay condoned the appellant has to show that how and in what manner and when he acquired the knowledge of the decree and merely general contentions are not sufficient to entitle him to the condonation of delay in filing of a time-barred appeal on the ground that he did not earlier acquire the knowledge for the same.
63. (ix)That a bona fide purchaser for value of the property sold in execution proceedings, even of a void decree, wherein the objector participated and, hence, acquiesced to the validity thereof, cannot be made to suffer.
64. That a suit based on an agreement of finance on mark-up basis is exclusively triable by the Banking Tribunal constituted under the Ordinance of 1984.
65. That a person who holds an agreement for sale in his favour and has acquired certain rights in the property in pursuance thereof may under certain circumstances be permitted to challenge the adverse decree in appeal to which he is not a party.
8. Admittedly the appellant is not a party to the transaction between the respondents Nos.1 and 2 nor in the proceedings wherein the impugned decree has been passed. Similarly, the respondents Nos.1 and 2 were not parties to the alleged agreement for sale on the basis where the appellant is claiming interest in the property and has also filed a suit for specific performance of the contract without impleading them as parties. It is established on the record that the mortgage was created in favour of respondent No,1 by respondent No,2 through respondent No,3, who was a director of the Company in March, 1986 whereas respondent No,3 in his personal capacity allegedly entered into an agreement for sale with the appellant in the year 1988. The mortgage has been created by deposit of title deeds and has been certified by the Deputy Registrar of Joint Stock Companies, Islamabad under the provisions of section 127 of the Companies Ordinance, 1984.
66. "127. Certificate of Registration.--The Registrar shall give a certificate under his hand , of the registration of any mortgage or charge registered in pursuance of section 121, stating the amount thereby secured and the certificate shall be conclusive evidence that the requirements of sections 121 to 125 as to registration have been complied with."
9. A perusal of the above said provision of law clearly shows that if the deed of mortgage is executed for a financial institution and is certified by the Registrar in terms of section 127, the deed shall be deemed to be a registered document. Therefore, there being a valid charge created in favour of financial institution (respondent No,1) through a registered deed prior to the date of alleged execution of the agreement for sale in favour of the appellant by one of the Directors of the Company in his personal capacity, it cannot be said that any overriding right or interest was created in favour of the appellant by execution of the agreement for sale in his favour, which document itself does not per se create any interest or right in the suit property unless or until the sale-deed is executed in his favour either by the owner of in execution in pursuance of a decree for specific performance of the contract which has as yet not been passed as held in case of Ahmad (supra). Therefore, the position till today is that in pursuance of a finance agreement in a suit filed by a Finance Institution against the judgment-debtors, uncontested preliminary decree and final decree has been passed in terms of Order XXXIV, Rule 5, C.P.C., equity of redemption in the mortgaged property has been put to auction and purchased by respondent No,9 for a huge amount of consideration in presence of at least two partners of the appellant who are husband and real brother respectively of Mst: Aisha Alam, through whom the present appeal has been filed in this Court. Auction in his favour has been confirmed, sale certificate has also been issued to him, therefore, the practical dispute now shall be between the appellant and a bona fide purchaser for value.
9. It Is now well-established a legal proposition that a person who acquiesced, doing of an act and against his interest cannot be allowed to approbate and reprobate as held in case of Karim Bakhsh (supra), therefore, the appellant, who participated in the auction proceedings, having failed in outbidding the respondent No,9 cannot be allowed to turn round and challenge the validity of the decree, and, hence, the auction proceedings. Therefore, for all what has been said above, we hold that neither the appellant has a locus standi to file this appeal nor we can permit him to challenge the decree, which had become final between the parties thereto and which decree has been passed in an uncontested suit and has not been challenged till today by the judgment- debtors, who have not cared to appear in Court even today. Therefore, we refuse to grant the permission to the appellant to file and prosecute the appeal.
10. As regards the question of limitation, the period fixed for, filing of an appeal against a decree passed by a Special Court is thirty days with effect from passing of the decree. Stance of the appellant is that he being not a party to the decree came to know of passing of the same on 13-7- 1995, whereupon he filed an objection petition. A judicial notice can be taken of the fact that in this case the respondents have been served through citation in the press, all the three partners of the appellant are resident of Islamabad. The auction proceedings have also been held after wide publicity in the local as well as in the National Press. The appellant filed objection petition and subsequently for the reasons best known to it, did not prosecute the same although he could show that the decree is not executable as a void decree can be refused to be executed by the Executing Court as well, as the issue relates to executability of the decree. It is not clear in the application as to why the knowledge was not acquired by the appellant prior to 13-7-1995 or as to how and under what circumstances the knowledge of decree was acquired by him, on 13-7-1995. Failure to appear in the objection petition on 10-7-1995, getting the same dismissed for default and participation in the auction proceedings clearly proves that till an effort had failed to outbid the respondent No,9, the appellant was not in fact aggrieved of the decree. The objection filed before the Executing Court also did not show that the appellant was aggrieved of the validity of the decree as the only stance taken before the Executing Court is that he has entered into an agreement for sale bona fidly and that he has filed a suit for specific performance of the contract. The plea of voidability of the decree is an afterthought and, therefore, we cannot allow a litigant to go on changing positions particularly when an innocent purchaser by spending a huge amount has changed his position and has acquired the property by a lawful method. Consequently, we do not deem it fit case for exercise of discretion to allow the filing of appeal, to condone the delay in filing the appeal and, hence, hold that the appeal is liable to be dismissed as being barred by time.
11. As regards the objection with regard to validity of the decree, suffice it to say that the appellant cannot be allowed to raise pleas which were available to the judgment-debtors and have- not been raised by them as he cannot challenge the decree on the basis of those pleas which are not available to the judgment-debtors as he is claiming right/interest in the property through the judgment-debtors, who did neither contest the suit nor the auction proceedings nor have raised the objection of jurisdiction at any stage of the proceedings. Even the appellant when filed the objection petition did not raise the objection of validity of the decree, which objection petition was subsequently dismissed for want of prosecution. The partners of the appellant rather participated in the auction proceedings and, hence, accepted the validity of the decree where under the auction proceedings were being held, therefore, having once conceded the validity of the decree by the judgment-debtors and also by the appellant by his overt acts and conduct, they cannot be allowed to approbate and reprobate, and, hence, the objection of the validity of the decree for want of jurisdiction cannot be allowed to be raised in this appeal. Therefore, we need not dilate on the question as to whether the decree passed by the Special Court constituted under the Ordinance of 1979 is without jurisdiction or not, as we are holding that the appellant cannot be allowed to raise objection of jurisdiction of the Court, which had passed the decree.
12. It is not denied that the respondent No,9 has purchased the plot in question in an open auction for an amount of Rs,62,00,000, on payment of which amount sale certificate has been issued in his favour and the execution proceedings have been stopped having been satisfied. Partners of the appellant were themselves participants in the auction proceedings, an objection petition filed claiming deletion of the property from the auction proceedings was not pressed and was dismissed for want of prosecution, the respondent No,9, therefore, was well justified in offering the bid in a bona fide belief that he will be purchasing the plot without any dispute or claim being raised by the appellant, hence, is a bona fide purchaser for value, sale in his favour, as such, cannot be set aside even if the appeal is ultimately accepted as held in the case referred to above.
67. Therefore, on this score as well it is not a fit case where the appeal should be entertained, hence, the same is not maintainable.
13. For what has been held above, we see no force in this appeal, hence, the same is dismissed.
68. However, keeping in view the controversial question of law involved in this matter the parties are left to bear their own costs.
14. Before parting with this Judgment, we will like to place on record our appreciation for very valuable assistance rendered by learned counsel for both the parties.