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1996 CLC 192

M/s. NATIONAL ELECTRIC COMPANY OF PAKISTAN vs ALLIED BANK OF PAKISTAN

Citation1996 CLC 192
CourtLahore High Court
Judge(s)Sharif Hussain Bokhari, Ch. Khurshid Ahmad
ResultOrder accordingly

' CH. KHURSHID AHMAD, J.---Respondent No,1 filed a suit for recovery of Rs,7,48,465.29 plus interest in the Special Court Banking. The appellant was granted permission to leave to appear and defend the suit on the condition of his depositing the suit amount and on his failure to do the same decree was passed against the appellants in the sum of Rs,7,48,465.29 with interest at the agreed rate or 2% above the bank rate whichever be higher from the date of the institution of the suit till the entire payment of the decretal amount. The respondent-Bank filed an application for execution in year 1985 and alongwith the said application Fard Taliqa was enclosed and the property mentioned therein was attached. The amount claimed in the execution petition is though contested by the appellant before us on the ground that excessive rate of interest has been applied but the same was a matter which was to be determined by the executing Court so we decided to abstain from making any comment thereon.

2. The attachment order was given effect to and a notice under Order XXI, Rule 66, C.P.C. Was also served on 22-9-1987. Property attached, according to the appellant, was land in building and did not include the machinery, spare parts, tools and the stocks.

3. The proclamation of sale was issued, by the Court auctioneer and it was mentioned therein that {{URUD TEXT}} was also to be sold but, according to the learned counsel for the appellant this machinery was not attached as according to him the machinery was not mentioned in the Fard Taliqa and that the value of the property to be auctioned was incorrectly mentioned as Rs,50 lacs whereas the site situated in the said industrial estate was selling at Rs,2 lac per Marla. The sale was held by the Court auctioneer and respondent No, 3 was the successful bidder with the rate of Rs,47,60,000 and 20% of the same was deposited by respondent No,3 with the Court auctioneer on the same day. The rest of the auction money had also been deposited with the bank by respondent No, 3 on 31-3-1992

4. An application under Order XXI, Rule 90, C.P.C. Was made by the judgment-debtors/appellants.

Apart from various grounds taken by the judgment-debtor/objector a specific ground was regarding the day. It was mentioned in the proclamation of sale that public auction shall be held on 8-3-1992, a Monday in the afternoon. The objection precisely is reduced as under:-- "That the judgment-debtors were assured that the property was going to be sold on Monday whereas the actual date which was fixed for the auction was the 8th of March which was Sunday thus he did not allow the judgment-debtors or the genuine bidders to come on the site and bid which renders the sale illegal and void."

' The Special Court Banking dismissed the application and discussed this objection in Para. No, 4 at page 3 of the impugned order. Nothing specifically was mentioned by him as to the day which fell on 8-3-1992. We have checked it from the diary. On 8-3-1992 it was Sunday and not the Monday.

The Monday fell on 9th of March, 1992. This was clearly misrepresentation made by the Court auctioneers and amounts to misconduct. The Court below failed to attach any importance to this objection particularly as it went to the very route of the auction. May be a few of the intending buyers were to go on Monday without prejudice to the day falling on such date but where the date is mentioned but the day is incorrect anybody could be misled. The Special Judge Banking has placed onus incorrectly on the objector whereas it was the duty of the executing Court to ensure and check from the copy of the proclamation pasted outside the Court house that all particular details as mentioned therein tallied with the particulars of the attached property and were also in accordance with the Fard Taliqa and there was difference in dates or days mentioned therein. It was further the duty of the Court that the property sought to be sold was not materially under- valued by the decree-holder. All possible pleas were taken by the judgment-debtor but the Court below did not properly appreciate the same.

5. The learned counsel for the respondents tried to defend the impugned order on various grounds including the valuation of the property which, according to him, was in accordance with the valuation placed thereon by the evaluators in 1987. We are not prepared to accept the valuation prepared in June, 1987 to the valuation of the property which must have been sufficiently appreciated with the passage of time. Moreso, this valuation report was prepared under the instructions of the Manager of the respondent and decidedly was for the benefit of the respondent.

A glance at page two of the said report which has been placed on the file would show that the evaluator has fixed the price of the land as Rs,15,000 per Marla, a ridiculously low price for the land situated in industrial estate. He assessed the cost of the covered area at the rate of Rs,50 per square feet. This report shows a lot of mala fides and dishonesty on the part of the respondent- Bank.

6. Objection has also been taken on the question of limitation in filing the application by the judgment-debtor before the Court below. It has been submitted that the Article 166 of Limitation Act, 1908 applied to the present case wherein the limitation is provided as 30 days for making such applications. In the present case a fraud was played upon the judgment-debtor. It was antecedent to the sale itself by mentioning Monday instead of Sunday which was to fall on 8-3-1992. The valuation of the property as mentioned therein was also fixed in a mala fide manner, with the intention of causing irreparable loss to the judgment-debtor. The property situated in the best possible industrial estate on G.T. Road and as observed ibid, the valuation was too low. The sale being a nullity in view of the above it was void ab initio and Article 181 of Limitation Act, 1908 shall apply. Reliance is placed on "Janan Sundry Nandi v. Narain Chandra Sardar" (PLD 1957 Dacca 198). I seek further support from "Mst. Mansoor Jehan Begum etc. v. Haji Hussain Bakhsh" (PLD 1966 SC 375). The property sold as mentioned in the proclamation in the present case was different from the one appearing in Fard Taliqa filed by the decree-holder in Court and, as such, the sale was without Jurisdiction and void ab initio. Their Lordships in the Supreme Court in the above case held that in such cases the applications were governed by Residuary Article i,e, Article 181 of Limitation Act, 1908 which provides limitation of three years.

7. C.P.C. Was a procedural law and the object thereof was to promote the interest of justice and intends, where possible by language, remedy to avoid injustice. In the present case similar were the circumstances. Reliance is place on "Mst. Ahmad Begum v. U.B.L" (PLD 1976 Kar 723). As the application was for declaring the sale as null and void it was governed by Article 181 and not by Articles 165 and 166 of Limitation Act, 1908. "Sundar Das etc. v. Nikka etc." (AIR 1931 Lah. 586(2) can be quoted in support of this.

8. There was a Full Bench ruling of the Privy Council in which their Lordships held that misstatement as to the value of the property by the decree-holder in sale proclamation was a fraud on Court by the decree-holder and as such deserves to be set aside. Reliance is placed on "Maru Danayagam Pillai v. Manichavasakam Chettiar" (AIR (32) 1945 PC 67). A similar dispute arose between Sardar Bhagwan Singh and Lala Barkat Ram. Applying the rule of ejusdem generic their Lordships in a Full Bench held that such objections where petitions under section 47, whatever be given the name and Article 181 of Limitation Act, 1908 applied. Reliance is placed on "Barkat Ram v. Srdar Bhagwan Singh" (AIR(30) 1943 Lah. 140).

9. In "Punjab Province v. Kh. Feroze Din Butt and another" (PLD 1960 West Pakistan Lah. 791). The following were laid down the conditions essential for the acceptance of such application:-

(i) That there has been material irregularity or fraud in publishing or conducting the auction sale,

(ii) that the applicant has sustained substantial injury, and

(iii) that the injury is the direct result of the proved irregularity or fraud.

In the present case as observed earlier material irregularity has been committed by the Court auctioneer and fraud had been played in publishing the wrong particulars, less valuing of the property and the conduct of auction which was not sold at site. The applicant sustained substantial injury by mentioning of the property having meager value as against the market price and also by stating the name of the day on which 8-3-1992 was to fall and the injury to the present appellant was not only substantial but was also the direct result of the patent fraud played by the decree-holder in collusion with the Court auctioneer.

10. In view of what has been stated above this appeal succeeds and the same is accepted with no order as to costs. The impugned order passed by Mr. Zulfiqar Ali Khan, Special Judge Banking Court, Lahore dated 26-7-1993 is set aside. The application of appellants objecting to the sale is allowed and the sale conducted by the Court auctioneer on 8-3-1992 (Sunday) is set aside. The Special Court Banking is directed to proceed afresh in accordance with law.

11. Respondent No, 3 had deposited the total auction price. There is no allegation of collusion or fraud against the said respondent. He is entitled to the interest/mark-up at the rate of 10% from the date of his depositing the amount till today. The amount shall be returned by the Court immediately on receipt of the copy of this order. The judgment-debtor shall compensate him by depositing interest at the above rate to be collected by the Special Court. Regarding charges of the decree-holder on proclamation etc. And the commission of the Court auctioneer I am to refer a judgment of a Division Bench of this Court in United Bank Limited v. Fateh Khan. Tiwana and others wherein on an application by the Local Commissioner, Rule 22 of the High Court Rules and Orders, Volume I, Chapter XII-L had been specifically adverted to and interpreted. As the auction proceedings have been set aside due to the misconduct of the Court auctioneer; wrong publication of proclamation by the Local Commissioner, he was not entitled to any commission in the present case. The proclamation was not in accordance with the draft of proclamation of sale approved by the Court on 22-1-1985 filed by the bank itself. The following was mentioned therein:-- "This Court has already attached judgment-debtors property including plot and factory building in Small Industrial Estate, Gujranwala as per report of the Local Commissioner dated 12-11-1981."

' The draft of the proclamation was filed by the decree-holder. The only reference to the report of the Local Commissioner shall not be enough to show the property to be sold as the details given by the Local Commissioner are not available in the said proclamation. This fact was also taken due note of by us while deciding incorrectness of proclamation issued by the Court auctioneer. The decree-holder thus is held not entitled to the expenses of proclamation.

12. As we have held earlier that even the draft proclamation approved by the executing Court was defective, the executing Court shall commence its proceedings from requiring the decree-holder to file the draft proclamation and then shall approve the same and shall take all subsequent proceedings in accordance with law. Orders accordingly.

Cited by 14 cases

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