The petitioner has assailed the order dated 19-3-1995, passed by respondent No.1, Special Court Banking, Rawalpindi, whereby, the auction proceedings dated 9-3-1995, were not confirmed in favour of the petitioner and it was directed that the auction be held again at the expense of respondent No. 11 Industrial Development Bank of Pakistan, Islamabad.
2. Learned counsel for the petitioner has argued that in the auction held on 9-3-1995, in pursuance of proclamation published on 26-1-1995, the petitioner was the highest bidder having offered Rs.
Sixty lacs for the property under auction, and after his bid has been accepted, he deposited a sum of Rs.15,00,000 with respondent No.1 on 19-3-1995 which was the date fixed by respondent No. 1 for confirmation of the auction on the report of the auctioneer.
3. That instead of confirming the auction, respondent No.1 passed the impugned order for re- auction of the property of the judgment-debtors, respondents Nos.3 to 10, which is without lawful authority since it does not conform to the requirements of the Civil Procedure Code which have been made applicable to the auction proceedings by virtue of section 3 of the Banking Companies (Recovery of Loans) Ordinance, 1979 as has been held in case: Pakistan Fisheries Ltd., Karachi and others v. United Bank Ltd. (PLD 1993 SC 109).
4. Learned counsel has argued that the auction dated 9-3-1995 was held in execution of decree dated 1-7-1993, passed in favour of respondent No.2 against respondents Nos. 3 to 10 in the sum of rupees 20 lacs with interest at 11 % with quarterly rests from 22-11-1984 till recovery of the entire amount, that the auction proclamation had been published under Order 21, rule 66, C.P.C. And when the matter came up for confirmation of the auction by respondent No. 1, he was bound to act in accordance with the provisions of Order 21, Rule 92, C.P.C. Which require that "Where no application is made under rule 89, rule 90, rule 91, where such application is made and disallowed, the Court shall make an order confirming the sale and thereupon the sale shall become absolute that application could be filed for setting aside the auction proceedings by the respondent No.2 or respondents 3 to 10 in accordance with the provisions of rule 89 and-rule 90 of the C.P.C. That neither respondent No.2, decree-holder nor respondents No.3 to 10 i.e. Judgment-debtors had filed any such application before respondent No.1 in terms of rule 89 or rule 90. The only matters that were pending before respondent No. 1 were the report of the auctioneer of the auction proceedings which had been put up for confirmation of auction and application filed by respondent No.11 who was also decree-holder against respondents Nos.3 to 10. The application of respondent No.11 had been filed under section 73, C.P.C. To the effect that the proceeds of the execution sale be rateably distributed amongst the decree-holders i.e. Between respondent No. 2 and respondent 11 who had also obtained decree for a sum of Rs.1,85,20,464.44 against respondents 2 to 10 from the Court of learned Additional District Judge, Islamabad. According to respondent No. 11, who was the applicant, an amount of Rs.9,300,000.00 had been offered by respondent No. 10 in the execution proceedings pending before the learned Additional District Judge, Islamabad for the property under auction which was rupees 33 lacs more than the bid of the petitioner and the present petitioner had also offered on 14-2-1995 to purchase the same property for Rs.88 lacs and in view of this contention, respondent No. l had set aside the auction. Learned counsel for petitioner has contended that such an order could not have been passed by respondent No. I on an application under section 73 which was merely for the purpose of rateable distribution of the auction money and such order was parently illegal. Further argued that all the respondents i.e. Respondents Nos.2 and 11 decree-holders as well as respondents 3 to 10, judgment-debtors were represented during the auction proceedings and they could have participated in the bidding (respondent No.2 with permission of the Court) however none of them chose to do so and they were thus estopped from opposing the confirmation of the auction in any manner. Further argued that the order for setting aside the auction had been passed in absence of the petitioner and without notice to him which is against principles of natural justice and that the proclamation itself issued by respondent 1 under which the auction was held contained conditions which were alien to the provisions of Order 21, C.P.C. According to which only the Court can prescribe by the conditions of auction whereas no such conditions had been prescribed by respondent No. l and they had been introduced in the proclamation by the auctioneer who had no authority to do so. Even respondent No.1 statedly did not have the authority to introduce a condition to the effect that the Executing Court could reject any offer without assigning any reason. Further argued that no reserve price was fixed in the proclamation issued by respondent No. 1 on the basis of which the auction could have been set aside and thus the petitioner was entitled to confirmation of his bid and the impugned order was without lawful authority.
5. Learned counsel for respondent No. 2 decree-holder had taken preliminary objection to the maintainability of this petition on the grounds (i) that the petitioner had no locus standi to file the instant petition on 14-5-1995, since he had already withdrawn- his security deposit amounting to Rs. 15 lacs from the Court of respondent No. 1 on 19-4-1995 and had thus no interest or cause of action on the basis of which he could file this petition. Further argued that this petition is not maintainable on account of the provisions of section 12 of the Banking Companies (Recovery of Loans) Ordinance, 1979 since specific remedy of appeal was available to the petitioner which could have been availed within 30 days of the passing of the impugned order and since the petitioner had failed to avail of this remedy of appeal within 30 days, this petition did not lie. Reliance has been placed on M/s. Associated Cement Companies v. Pakistan etc. (PLD 1978 SC 151). Further argued that the auction dated 9-3-1995, had been held subject to the conditions contained in proclamation dated 26-1-1995 which was published after these conditions had been duly approved in execution proceedings filed by respondent No. 2 in which notice was served on the judgment-debtors and no objection had been taken to the conditions of the auction by any one and thus these conditions were confirmed and included in the proclamation on the express order of respondent No. 1 dated 4-4-1994. The conditions had been examined by the petitioner who participated in the auction without taking any objection against the same, and, therefore, he was bound by the same. Even otherwise, these conditions were in accordance with the Form No.29Annex' E' of the Schedule to the C.P.C., in which it was specifically shall be in the discretion of the Court or Officer holding the sale to decline acceptance of the highest bid when the price offered appears so inadequate as to make it inadvisable to do so, and in these circumstances, the conditions contained in proclamation could not be deemed as illegal. Further argued that in write jurisdiction petitioner can claim discretionary relief since he himself had earlier offered Rs.8.8 million for the same property in respect of which he had bid only 6 million during the auction and the auction proceedings had been manipulated by the petitioner who had set up the only other bidder who made only half-hearted bid and thus auction proceedings were collusive and interests of the decree-holders as well as the exchequer would be adversely affected if the petition was allowed:
6. Learned counsel for respondent No. 11 Industrial Development Bank of Pakistan had also opposed the present petition on the ground that it contained incorrect statement of fact to the effect that the conditions contained in proclamation of auction had not been prescribed by the Court since during execution proceedings, notice of the conditions had specifically been issued to the judgment-debtors and no objection had been taken against the same. Further argued that respondent No 11 had filed an application before respondent No. l within 3 days of the holding of the auction in which, it had been alleged that the auction had been held collusively between the petitioner and the second bidder who did not effectively raise the bid at the instance of the petitioner and the auction proceedings merits to be set aside on this ground alone. Further argued that respondent No. 11 was also creditor of respondent Nos.2 to 10 (judgment debtors) and respondent No. 11 had obtained decree against respondents Nos. 2 to 10 from the Court of the learned District Judge, Islamabad in accordance with the provisions of section 39, Industrial Development Bank of Pakistan Ordinance, 1961 and its application for execution of the decree, was pending adjudication in the Court of the learned District Judge, Islamabad. During the pendency of this execution petition, respondent No.2 had applied for execution of his decree against respondents Nos.2 to 10 in the Court of respondent No. 1 and had obtained the order for auction, in which the petitioner had been the highest bidder, that respondent No. 11 had also filed writ petition before the High Court in 1994 which had been disposed of with a direction that respondent No. 11 could seek his remedy before respondent No. 1, that respondent No. 11 had no notice of the execution proceedings before respondent No. 1 and had only come to know of the auction through the proclamation and the representative of respondent No. 11 had opposed the holding of the auction before the auctioneer and had immediately thr6reafter approached the respondent No. l for getting the auction proceedings set aside. .
7. Learned counsel for respondent No.11 supported the arguments of the learned counsel for respondent No.2 regarding non-maintainability of the petition on account of withdrawal of the security deposit by the petitioner and his not availing the remedy of appeal available to him under section 12 of the Ordinance. Further argued that the conditions prescribed in the proclamation were reasonable and in conformity with the C.P.C. Particularly, Form No. 29 contained in APP. ' E' of the Schedule and the supervisory and regulatory powers of the Court cannot be whittled down by asserting that the prescribed condition is not specifically contained in the rules contained in Order 21, C.P.C., under which the auction is to be held. Learned counsel had relied on judgment cited as M/s. Sarbaz Cement Ltd. Through Manager v. Bankers Equity Ltd. And 8 others (1996 SCM R 88) wherein it had been held that powers of the Liquidator to accept bid in liquidation proceedings was subject to acceptance by the Court since this had been clearly indicated in the terms and conditions published in the newspaper whereby offer for sale of the assets had been invited. It had also been held that till such time as highest bidder was approved by the Court no vested right was created in favour of the highest bidder to enforce the sale in his favour since till such time as the Court approved the offer it - remains yet to be accepted. Further argued that when the matter of confirmation of the bid of the petitioner came up before respondent No. 1, respondent No. 10 gave a statement to the effect that he was willing to pay Rs.93 lacs for the same property and he had also deposited a pay order of Rs.23,25,000 in the Court with the offer that he would bid Rs. 93 lacs if the property was put for reauction and his Pay Order could be confiscated if he did not participate in the auction. However, if the bid exceeded Rs. 93 lacs, he would be entitled to get a refund of the amount deposited by him in the Court. It was argued that in these circumstances, the conduct of the petitioner and surrounding circumstances did not entitle him to any discretionary relief.
8. In reply to the arguments, learned counsel for petitioner asserted that he had withdrawn his deposit of Rs. 15 lacs on a direction of the Court contained in the impugned order, in order that he may utilize the money profitably till the present petition was decided and he would redeposit the amount if the matter was decided in his favour. Further argued that the auction having been conducted under section 47, C.P.C., the remedy available under section 12 of the Banking Companies (Recovery of Loans) Ordinance was excluded by the specific provisions of this section, which provides that all questions relating to execution, discharge or dissatisfaction of a decree shall be determined by the Court executing the decree. Further argued that in a Form 29 contained in Annex 'E' of the Schedule to the C.P.C., Condition No.3 referred to by the learned counsel for the respondents provides that the discretion to decline acceptance of the highest bid would be available only to the persons conducting the auction proceedings which could be either the Court or Officer actually holding the sale and there was no provision of law whereby the highest offer could be declined subsequent to its having been accepted at the time of auction. It was reiterated that all the respondents were present at the time of auction and they could have made highest bid at that time but they refused to do so and they were estopped from reopening the matter and that the petitioner could not be bound by his earlier offer of 8.8 Million which was made before the bid commenced since this offer was not accepted at the time it was made.
9. I have heard the learned counsel for the parties and I have also gone through the record with their assistance. Learned counsel for respondents Nos.2 and 11 have objected to the maintainability of this petition on the ground that section 12 of the Banking Companies (Recovery of Loans)
Ordinance provides an effective remedy to the petitioner which he had not availed. Section 12 of the Ordinance provides as under-- "12. Appeals.--(I) Any person aggrieved by any order, judgment, decree or sentence of a Special Court may, within thirty days of such order, judgment decree or sentence, prefer an appeal to the High Court within whose jurisdiction the order, judgment, decree or sentence is passed: Provided that no appeal shall lie from an interlocutory order which does not dispose of the entire case before the Special Court. "
The order which has been assailed through this Constitutional petition is admittedly an order of Special Banking Court and it disposes of the entire case before the Special Court in respect of confirmation or otherwise of the auction held on 19-3-1995, as such, the appropriate remedy for the petitioner would be to file an appeal under section 12 of the Ordinance within the prescribed time before the High Court.
Section 11 of the Ordinance provides as under:
11. Finality of orders.--Subject to the provisions for appeal in section 12, no Court or other authority shall call or permit to be called in question any order, judgment or sentence of a Special Court or the legality or propriety of anything done or intended to be done by the Special Court under this.
Ordinance."
10. The argument of the learned counsel for the petitioner that the auction had been held under the provisions of section 47, C.P.C. And not under the Banking Companies Ordinance, and, therefore, the provisions of the Ordinance in respect of appeal would not be applicable, has no force since the order impugned has been passed by the Special Banking Court and section 12 specifically provides for appeal against any order of the Special Court. The adoption of the procedure laid down in the C.P.C. For the purposes of conducting auction would not take the impugned order out of the ambit of orders passed by a Banking Court for which appeal is provided in section 12.Section 11 prohibits the scrutiny of any order passed by the Special Court through proceedings other than those provided under section 12 of the Ordinance. In these circumstances this petition is not maintainable since the petitioner has not availed of the remedy of appeal provided in section 12 of the Ordinance.
11. Even otherwise I find no merit in the petition since the auction dated 9-3-1995 had been conducted in pursuance of the order of respondent No. Dated 4-4-1994, in which the terms and conditions of auction have been approved which were included in the proclamation dated 26-1- 1995. The petitioner participated in the auction with full knowledge of these conditions which are in conformity with the Form No.29 included in Annex. ' E' of the C.P.C. One of these conditions is to the effect that the highest bidder shall be declared successful subject to the confirmation by the Court who has the authority to accept or reject any bid. The petitioner had not acquired any vested right prior to such confirmation. He had also withdrawn his deposit before filing this petition. Thus, the impugned order would not merit interference by this Court in the exercise of its equitable and discretionary Constitutional jurisdiction, even if this petition was maintainable.