In 1. In view of the orders to be passed hereinafter, the Official Assignee's Reference dated 3-3- 2000 is accepted and he is directed to sell the Property to the highest bidder, namely, Ejaz Ahmed Khan for a sum of Rs,10 Million. The Reference stands disposed of in the above terms.
2. Mr. Iftikhar Javed Kazi, learned counsel for the occupant of Bungalow No,23/A-II, Khayaban-e- Tanzeem, Defence Housing Authority, Karachi states that he has no objection if the recommendation of the Official Assignee given in Para. 7 of his Reference dated 4-3-2000 is approved. Reference is accordingly accepted and official assignee is directed to proceed with the sale of property accordingly. Reference disposed of.
3 and 4. Mr. Ejaz Ahmed Khan who is the occupant of the Bungalow situated on Plot No,11/I, Khayaban-e-Hafiz, Defence Housing Authority, admeasuring 1066 square yards has objected to the sale of the said property by the official assignee who was directed by this Court to dispose of the same as prayed by the Decree-holder in this Execution Application towards satisfaction of the decree dated 11-12-1997 passed by this Court. Mr. Dasti Muhammad Ibrahim, learned counsel for Objector, filed two applications one under Order XXI, Rule 58 read with section 151, C.P.C. To investigate his claim and stay the auction sale of the property and the other under Order XXI, Rules 26 and 29, C.P.C. Inter alia, to stay the execution of the Decree and to delete the property from the auction sale proceedings on the basis of an Agreement of Sale dated 22-5-1997 executed between his client and Judgment-debtor No,4 according to which JD No,4 had agreed to sell the property to him for a consideration of Rs,81 Lakhs out of which he had paid Rs,20 Lakhs as part payment and had agreed to pay the balance amount of Rs,61 Lakhs to JD No,4 at the time of execution and registration of a proper sale-deed before the concerned, Sub-Registrar. He argued at length that on the basis of the said Agreement that the Objector had the right and interest in the property which required to be investigated by this Court (Mst. Razia Ghafoor v. Messrs Eastern General and others 1987 CLC 777, 783). There is no cavil about the proposition advanced by the learned counsel.
The objections raised by him, if not considered by the Official Assignee pursuant to the Court order dated 14-2-2000, shall now be considered and adjudicated by this Court so that the matter may be disposed of justly and expeditiously. Mr. Ibrahim contended that the claim of the decree-holder is based upon an equitable mortgage of property which is the subject-matter of the sale and as such the plaintiff could not recover the decretal amount of the decree but must file a suit under Order XXXIV, Rules 14 and 15, C.P.C. Which read as follows:-- "Rule 14. Suit for sale necessary for bringing mortgage property to sale.--(1) Where a mortgagee has obtained a decree for the payment of money in satisfaction of a claim arising under the mortgage, he shall not be entitled to bring the mortgage property to sale otherwise than by instituting a suit for sale in enforcement of the mortgage, and he may institute such suit notwithstanding anything contained in Order II, Rule 2.
(2) Nothing in sub-rule (1) shall apply to any territories to which the Transfer of Property Act, 1882, has not been extended. Rule 15. Mortgages by the deposit of title deeds and charges.--All the provisions contained in this Order which apply to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of title-deeds within the meaning of section 58, and to a charge within the meaning of section 100 of the Transfer of Property Act, 1882." He further submitted that Emirates Bank had a prior mortgage and accordingly only the said bank had the right to sell the property as specified in Order XXXIV, Rule 12, C.P.C. The said provision reads as follows: "Rule 12. Sale of property subject to prior mortgage.--Where any property the same of which is directed under this Order is subject to a prior mortgage, the Court' may, with the consent of the prior mortgagee, direct that the property be sold free from the same, giving to such prior mortgagee the same interest in the proceeds of the sale as he had in the property sold." There is no cavil about this proposition of law also. However, it must be remembered that this Court is a Special Court established under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and exercises its power in accordance with the provisions specified therein. According to section 14 of the Banking Companies Act. 1997, the Banking Court is not required to pass a Preliminary Decree as provided in Order XXXIV, C.P.C. But is empowered to pass a final decree for sale. Further, for execution of the decree, by section 18 of the Banking Companies Act, 1997, the Court has been empowered to follow the procedure laid down in Civil Procedure Code, 1908 or any other manner as the Banking Court may deem fit. If the arguments advanced by the learned counsel are upheld the Court would get flooded with objections every time an execution application is filed, thus, there would be no end to litigation and the purpose of the Banking Companies Act, 1997 would be frustrated. The Legislature being cognizant of the fact that C.P.C. Which was enacted in 1908 had not been amended frequently like the English Civil Procedure Rules to keep pace with the changing times and challenges, that there are innumerable shortcomings in the Code and that the requirements of execution are too cumbersome and time consuming under section 18 of the Banking Companies Act, 1997 granted to this Court special powers and wide discretion to follow such procedure which would ensure expeditious recovery of bank loans without doing injustice to any party. It is therefore, not mandatory to follow the procedure laid in Order XXI, C.P.C. If it comes in the way of expeditious disposal and speedy recovery and this Court is free to follow any procedure which it deems fit in the circumstances of the case for recovery of bank loans so long as it does not violate the fundamental rights guaranteed by the Constitution and the principles of natural justice. Mr. Ibrahim also objected that the Sale Proclamation which was published in the Daily Dawn of 10- 2-2000 was not in accordance with Order XXI, Rule 66, C.P.C. I have already held that the provisions of procedure. On perusal of the Sale Proclamation it is patently clear that it Order XXI are not mandatory and the ,Court can follow any reasonable substantially fulfils the requirements of Rule
66. No prejudice harm has been or would be caused by such publications to any beneficiary of the sale. In fact, the decree-holders have gained to the extent of Rs,40 Lakhs. The Objection is frivolous and overruled. It would not be out of place to mention here that the Executing Court cannot go behind the decree.
The objection of the learned counsel that the decree-holder should have filed a suit for sale of the mortgaged property is mala fide as the decree, prima facie, shows that the suit was filed for sale of the mortgage property. Further, Order XXI, Rule 15, C.P.C. Provides that the provisions contained in Order XXI shall also apply to mortgage by deposit of title-deeds which has been done by the Banking Court. The objection raised with reference to Order XXI, Rules 14 and 15, C.P.C. Are frivolous and rejected. Admittedly, the Agreement of Sale dated 22-5-1997 was entered into between the parties while litigation between the Bank and the Customer was in progress in two suits which included the mortgaged property involved herein. This Agreement is, thus, subject to the doctrine of lis pendens and the rights of the Objector/Intervenor would be determined in light of the judgment given in the suits filed by Emirates Bank and Habib Bank Limited (decree-holder in the present Execution Application). It is interesting to note that clause 7 of the Agreement dated 22-5-1997 between the Objector and JD No,4 clearly provides that "as there is a loan against the said property the vendor shall get it cleared before the full and final payment and transfer". The Objector/alleged buyer of the said property, therefore, knew at the time of executing the Agreement that this property was subject to mortgage and, therefore, insisted upon a clear title before transfer. He cannot, therefore, now object to the sale of the property in execution of the mortgage decree. As far as adjudicating the rights of the Objector/Intervenor is concerned, the Official Assignee conducted an inquiry and submitted his report dated 4-3-2000. Additionally, the Objector has now been given full opportunity to show and establish his right or title in the property. He produced copies of documents without any objection and submitted his arguments without hindrance from any party. The requirements of Order XXI, Rule 58 have been substantially complied as full opportunity to present his case was provided to him to comply with the principles of natural justice.
It is admitted that the property was mortgaged with both Emirates Bank and Habib Bank Limited.
The argument of learned counsel that Habib Bank Limited does not have a right to sell the property as Emirates Bank has a prior charge (Reference Order XXXIV, Rule 12, C.P.C.) is apparently based on misunderstanding of the law. The said Rule does not forbid the Court from selling the property but only states that in case a property is subject to a prior mortgage it can be sold with the Consent of the prior mortgagee subject to his priority in the sale proceeds. Emirates Bank who had a prior charge over the property has not objected to the sale of this property by this Court in these proceedings. Further, it is clearly laid down in section 73, C.P.C. That the process of execution sale are to be rateably distributed among the decree-holders subject to the law of priorities as stated therein which gives precedence to the first mortgagee over the rights of the mortgagees following him unless all the mortgagees have agreed otherwise in writing. The objection raised by the counsel is unjustified and rejected.
Mr. Ibrahim also referred to a letter dated 19-1-2000 written by Emirates Bank to the Official Assignee that Emirates Bank had no objection if the offer of Rs,6 Million from Ejaz Ahmed Khan, the occupant of the above property was accepted by the Court and contended that the offer of the Objector having been accepted by Emirates Bank, the Objector had the right to get the property on payment of Rs,6 Million. It appears that learned counsel has forgotten that if one mortgagee accepts a lower price than what is available in the market without the consent of the other mortgagee whose interests are adversely affected the Court would not allow the property to be sold at a low price as it would be unjust. The Courts are sitting here to do justice and not allow technicalities to come in their way and deprive the other decree-holders of the fruit of their decrees. The arguments of learned counsel do not inspire confidence about the authenticity of the alleged Agreement of Sale; they are mala fide and rejected. All the arguments raised by the Objector are prima facie vexatious to his knowledge. The two Applications of the Objector are accordingly rejected with special costs of Rs,10,000 to be paid by the Objector to the Official Assignee within fifteen days for the benefit of the decree-holder. The Official Assignee states that the Objector participated in the auction and offered a sum of Rs,10 Million as reported in his Reference dated 3-3-2000 which is not disputed by Mr. Ibrahim. In view of this position Mr. Ibrahim should have acted prudently and should not have raised unreasonable objections for the sake of objections. By doing so he wasted precious time of this Court. Accordingly, he shall pay further costs of Rs,5,000 to the Official Assignee for the benefit of Mr. Azizur Rehman, counsel for the decree-holder. Mr. Rehman states that the costs instead of being paid to him may be deposited in the High Court Clinic Fund. The Official Assignee is directed to deposit the said amount of Rs,15,000 with the Nazir of the Court for the benefit of the High Court Clinic, after recovery of the amount from the Objector/Auction-Purchaser.