' SARDAR MUHAMMAD RAZA KHAN, J.---Industrial Development Bank of Pakistan obtained a money decree for the recovery of Rs.44,57,607 from the Banking Court at Abbottabad on 19-12-1994 against Messrs Ali Match Industries Ltd. Baldehr Abbottabad. The execution proceedings were in progress when on 26-9-1995 the executing Court directed the sale through auction of Ali Match Industries to be conducted on 26-11-1995. But in the meanwhile the Honorable Supreme Court stayed the auction on 8-11-1995 on the condition that the decretal amount be deposited within one month.
2. The amount aforesaid was not deposited and hence vide order, dated 7-2-1996 of the executing Court, the auction proceedings/order was revived. The auction was directed and advertised to be conducted on 21-4-1996 the report whereof was to be submitted on 22-4-1996. Messrs Ali Match Industries, on 2-4-1996 filed an application for withdrawal of auction order. No decision was given thereon, the auction was conducted on 21-4-1996, the report thereof was submitted on 22-4-1996 and the auction was confirmed on 6-8-1997. Through the instant appeal Messrs Ali Match Industries have challenged the auction proceedings as well as the confirmation thereof.
3. Learned counsel for the appellant came up with the first objection that auction proceedings were conducted and the auction was ordered without notice to the appellant/Judgment-debtor. It is evident from record and not disputed that no notice was served on the judgment-debtor. Order XXI, rule 66 of the C.P.C. Provides that an executing Court is bound to cause a proclamation of the intended sale by public auction. Such proclamation is drawn up after notice to the decree-holder as well as the judgment-debtor stating therein the time and place of sale and specifying as fairly and accurately as possible, the description of all the property to be sold, the revenue assessed thereon, the incumberance to which the property is liable, the amount for the recovery of which the sale is ordered and every other thing which the Court consider material for a purchaser to know in order to judge of the nature and value of the property. A plain perusal of rule 66 of Order XXI of the C.P.C. Would indicate that issuing of notices to both, the decree holder as well as the judgment- debtor is mandatory. Even otherwise it is a matter of common sense that the judgment-debtor, against such notice, might come up with certain material suggestions which might not require the property to be put to auction. He might come up with payment either partial or full or he might come up with the request to be permitted to sell the property himself and thereafter, to make payment of the decretal amount. Such mandatory provision having been violated in the instant case, the auction proceedings and the confirmation thereof are liable to be set aside on this score alone.
4. The learned counsel for the respondent-auction purchaser came up with the objection that the appellant, before filing objection petition, had not deposited such amount not exceeding 20% of the sum realized at the sale, within the contemplation of Order XXI, rule 90 of C.P.C. Learned counsel for the appellant met the objection saying that such deposit of 20% of the auction money is not mandatory and is liable to be deposited only when directed by the Court. He placed reliance on Rashid Ehsan and others v. Bashir Ahmed and others (PLD 1989 SC 146) in elaborating the principle that the non-compliance of the provisions in question was due to the Court which had not passed any order to that effect and that, therefore, the appellant is not to be penalized for an act resulting from the non-compliance of a law by the Court:
5. The second proviso contained in Order XXI, rule 90 of C' C. Requires the deposit of such amount which should not exceed 20% of the sum realized at sale. The Court at this stage is supposed to apply its judicial mind and to direct the deposit of any percentage not exceeding 20%. As, such amount can vary in the circumstances of each case, no deposit can automatically be made by the objector unless specifically ordered by the Court. The learned counsel further relied upon Mst.
Alhamdi Begum v. National Bank of Pakistan (PLD 1976 Karachi 723) where A.D. Had observed that the Court had to pass an order either to direct the deposit of a sum upto 20% of the auction amount or to direct furnishing of security as deemed appropriate in the circumstances and then give an opportunity to the objector to comply with such order. Thus, we hold that the punitive aspect of Order XXI rule 90 of C.P.C. Can be invoked only after when the objector fails to comply with such orders of deposit passed by the Court. The objection petition of the present appellant, therefore, was not liable to be thrown out because there was no order passed by the executing Court for deposit of any sum not exceeding 20% of the auction money.
6. The second point raised was that the Industrial Development Bank of Pakistan had first brought objection against the auction proceedings but had later on withdrawn the same with mala fide intention and in collusion with the auction purchaser to provide ground to the executing Court to confirm the auction. Learned counsel for the auction purchaser as well as learned counsel for IDBP argued that the objection of the IDBP were connected with and dependant upon the objections of another bidder named Haji Muhammad Asif who had offered to make payment of Rs.1,30,000 as against the highest bid of Rs.81,00,000 offered by Mr. Haroon Bilour. This is an utterly unsatisfactory and unreasonable explanation offered by the Bank because assessment of the valuation of a property by the bank never depends upon any valuation given by the third person. The IDBP was a decree-holder creditor in whose favour the property stood already mortgaged. As the Bank was a creditor itself, it was its paramount interest to remain informed of the latest valuation of the mortgaged property because it involved the monetary interest of the Bank and the realization of the amount. The withdrawal of objections by IDBP prima facie seems collusive to safeguard the interest of the purchaser.
7. The next objection raised was to the effect that no auction proceedings could be conducted and no auction could take place without first deciding the objection petition filed by the judgment- debtor or for that matter by any of the party interested. A Division Bench of Allahabad High Court in Chander Sarup and others v. Murari Lal and others (AIR 1933 Allahabad 137) had considered such act to be a material irregularity. Finding ourselves to be in complete agreement with Allahabad High Court we hold that the conduct of auction proceedings in the instant case without first deciding the objection petition was materially irregular and seriously violative of the rights of party concerned. The above ruling of Allahabad High Court though dealt with different stage of auction yet is fully followed in principle. This point was not met at all.
8. The next objection was to the effect that before auction, the property was bound to be attached.
Learned counsel for the auction purchaser met this objection by saying that the property did not require to be attached because it had already been mortgaged with the bank. We do not find the answer to be proper at all because mortgage on the one hand and attachment on the other, are two different phenomena altogether. Mortgage is to secure the interest of the creditor bank while attachment brings the property under the dominion of the Court. Unless a property comes within the domain of the Court, it cannot be auctioned or it cannot be dealt with in any other manner. The factum of attachment would give specification to the property giving the boundaries thereof, the area thereof, the machinery contained therein, the rooms it consisted of and particularly the specific description of what is going to be auctioned. Thus, the order of auction cannot be confused with the order of attachment. Reliance was placed on Gopal Chandar v. Ramesh Chandra and others (PLD 1961 Dacca 492). We believe that the attachment was necessary before putting the property to auction.
' The very notice of auction, reproduced facility of reference, is vague as well as confusing. {{URDU TEXT}} The auction, according to notice above was to start from 800 a.m. And was to finish in the afternoon. This is against the very principle of auction by bidding because the bidders offer their bids in one sitting and in one transaction which is bound to be concluded with the fall of the hammer. The duration given in the notice can be visualized only in cases where sealed tenders are invited and allowed to be received within a specified duration. The auction report C/2 at page 16 is also not reliable because it was prepared and signed by the auctioneer on 22-4-1996 whereas it was signed by the witnesses on 21-4-1996. This controversy is irreconcilable. No signatures of the bidders were obtained on the report and one-fourth of the auction money was received through Cheque which could never amount to down payment because a cheque could be dishonoured as well. The proper course to deposit through cash or through bank-draft was avoided. Such a large concern was being auctioned but no minimum bid was fixed by the auctioneer or under the instructions of the Court.
10. The bidding as such appear to be collusive because only six persons appeared to bid out of whom the first two were real cousins named Haroon Billour and Bashir Billour, as disclosed at the bar. The third bidder Haji Muhammad Asif his given a bid to the tune of Rs,80,00,000 and it is surprising to note that he did not enhance the bid beyond that highest bidder who had hardly gone to the extent of Rs,81 ,00,000, thereby leaving the difference to the tune of Rs,1,00,000 only.
Though inadequacy of bid by itself is not very material but it becomes so in view of the attending circumstances which give clear indications of mala fides and which prove that a very valuable property had been thrown away at throwaway price.
11. In view of what is discussed above, the appeal is accepted, the entire auction proceedings and the confirmation of auction through impugned order dated 6-8-1997 are hereby set aside as void and illegal. The executing Court is directed to auction the property, if required to be auctioned, strictly in accordance with law. Parties, however, to bear their own costs.