IHSAN-UL-HAQ CHAUDHRY, J.---The relevant facts for the decision of this F.A.O. Are that the respondent No,1 instituted a suit for recovery of Rs,2,99,35,720. The plaintiff during the pendency of the suit moved application for attachment of bungalow No,59, Koh Murree. The attachment was ordered on 284-1998. Thereafter, the suit was decreed on 26-7-1999. In execution petition, the Court ordered sale of the aforementioned house. The appellant at this juncture filed application under Order XXI, Rules 57, 58 and 62 read with section 151, C.P.C. The application was contested by the decree-holder. The Executing Court after hearing the arguments dismissed the application vide order dated 25-9-1999, which has been assailed through the present appeal, which was admitted to regular hearing, notices were issued to the respondents but respondent No,1 alone has appeared and contested the appeal, the others are proceeded ex parte.
2. The learned counsel for the appellant argued that the Property No,59 measuring 7 Kanals, 1 Marla situated at Koh Murree was mortgaged with the appellant vide agreement dated 17-2-1999.
Thereafter, the appellant received an amount of Rs,2,02,53,800 from the L.D.A. Vide payment voucher dated 16-6-1999 and out of this an amount of Rs,1,62,53,800 was advanced to Mrs. Nasreen Aftab and mortgage was created by deposit of title deeds of the property. It is argued that the learned Executing Court did not afford opportunity to the appellant to substantiate its objection.
The learned counsel for the decree-holder took documents from his pocket and argued the case on the basis of the same. The learned Executing Court did not even allow opportunity to the appellant to meet those documents. It is, therefore, prayed that the appeal be accepted and matter be remanded to the Executing Court, which shall decide the application after allowing opportunity to the appellant to prove its contentions.
3. On the other hand, learned counsel for, the respondent No,1 argued that the appellant is a fake and bogus Society. In this behalf, he has referred to the list issued by the Circle Registrar, Cooperative Societies, Lahore. It is added that two Societies of the same name are mentioned in the list at Serial Nos. 1 and 2. The only difference is that the address of society at No,1 is of Lahore-II while that of the other of Lahore-III. It is submitted that the agreement itself is fake and the purpose was to defeat the decree likely to be passed. It is explained that the property is hardly of worth Rs,1,50,00,000 and mortgage has been created for Rs,1,62,53,800. The purpose was that if the property was sold subject to the mortgage then nothing shall be left for the decree-holder. It is added that it was a Housing Society and lending of amount was not covered by its bye-laws. This would also prove that all documents are fake and fabricated. It is argued that the Society never functioned. It is explained that neither any annual audit report nor annual statement nor any activity, whatsoever, was sent by the Society to the Registrar. It is added the respondents judgment-debtors constituted the Executive Committee of the Society.
4. The learned counsel for the appellant while summing up the arguments produced photo-copies of 8 cheques along a memo. Addressed to Manager, First Women Bank Limited, Lahore. The first cheque is by the Society allegedly advancing this amount while the remaining cheques were allegedly issued by Mrs. Nasreen Aftab to D.C.I.T. Circle 8, Lahore. These are all dated 23-6-1999 but drawn for different amounts. It is, therefore, added that this proved that the transaction was genuine.
5. We have given our anxious consideration to the arguments, gone through the record and documents referred to by the parties. It seems that the Registrar, Cooperative Societies carried a detailed survey of the societies after the 'cooperative scam' surfaced. It prepared a 'List of Cooperative Housing Societies in Papers and defunct SOCS (Neither funds collected nor land purchased). The name of the appellant appears twice at Serial Nos.1 and 2. The appellant after having full knowledge never cared to challenge this order. Besides this, we asked the learned counsel for the appellant to refer to annual balance-sheet of the Society, the audit reports or any document rebutting that it was not a fake Society. The learned counsel could not refer to any such document. This clearly proved that the Society was fake.
6. Now coming to the cheque issued by the Society in favour of Mrs. Nasreen Aftab-respondent No,4. The appellant has failed to produce a certificate of the Bank as to the encashment of this cheque. The matter becomes further suspicious when we look at the dates of the cheques. The appellant allegedly advanced the amount through cheque dated 23-6-1999 and respondent No, 4 issued seven cheques same day in favour of D.C.I.T. Circle 8, Lahore. There is no proof that these cheques ever reached Income Tax Department and were got en cashed either from the Bank or from the Department. There is no explanation why seven different cheques on same day were issued when the payee was the same.
7. Now coming to the agreement. The same was executed on 17-2-1999 while suit property already stood attached vide order of the Court dated 28-4-1998 and suit for recovery was near conclusion.
This is not all. It contained very unusual conditions, which proved that the whole effort was to defeat the decree likely to be passed. We in this behalf may refer to the following conditions:-- Firstly, that the possession was allegedly handed over to the appellant Society with the execution of the agreement when not a single penny has been advanced; Secondly, that the mortgage was not to get any benefit in return in any form from the alleged mortgage amount but instead was to pay the mortgagor rent for the property at the rate of Rs,20,000 per month; and Thirdly, that the amount allegedly secured was more than the price as argued by the learned counsel for respondent No,1. This fact was not rebutted by the appellant. It is clear from the payment voucher that the Society did not have even a registered office and for that reason address of the respondent No,3 was given. Neither the bye-laws of the Society showing that the lending was within the scope of the Society nor resolution of the Society approving this agreement have been produced. All these facts go a long way to show that it is just a fake Society being introduced to defeat the decree. This is further proved by the fact that respondents Nos.3 and 5 were Members of the Managing Committee. They were fully aware that the property has already been attached by a Court of competent jurisdiction.
8. The basic and rather only point canvassed before us is that the appellant should have been afforded an opportunity to substantiate its contentions on the one hand and to rebut the documents produced by respondent No,1 just at the time of hearing on the other hand. We have asked the learned counsel that he may refer to the documents, which the appellant wants to produce to rebut the allegation that it was a defunct and fake Society as from the date of order i,e, 25-9-1999 up-to-day 23-12-1999 the appellant had sufficient time at his disposal to collect the documents to disprove the contention of the decree-holder. The learned counsel could not refer to any document, whatsoever. This fact alone is sufficient to knock the bottom of the arguments built on behalf of the appellant, which has not till today challenged the order of the Registrar, Cooperative Societies branding it as a defunct Society. The learned Executing Court has concluded as under:-- "Only an agreement of mortgage has been placed on the record but according to the terms of agreement no mortgage money was paid to the petitioner/judgment-debtor, and thus, the transaction of mortgage seems to be a sham transaction, concocted for the purposes of delaying the execution proceedings. There is also no proof regarding the acquisition of other property by L.D.A. And even otherwise judgment-debtor has no right to ask for the deletion of said property as according to him he has no right in the said P... ..."
The appellant had sufficient time at its disposal to rebut these findings, if there was a grain of truth in the objection petition of the appellant. The failure prima facie proved that the application was mala fide and the purpose was to defeat the decree, therefore, was rightly dismissed by the learned Executing Court. The appellant has failed to make out a case for interference in the appeal.
The appeal is otherwise incompetent for want of service of notice as required under Order XLIII, Rule 3 of C.P.C.
9. The upshot of the above discussion is that this appeal is dismissed with costs.