MAULVI ANWAR-UL-HAQ, J.--- This E.F.A. Calls in question the order dated 4.2.1989 passed by Banking Court-I, Faisalabad, whereby sale of property of the appellants held on 12.9.1998 was confirmed after disallowing the objection filed by the appellants against the sale.
2. The E.F.A. Was filed against the National Bank of Pakistan only. It was admitted and notice issued to the respondent. C.M. No.2-C of 1999 was moved on behalf of one Aamir Waseem through Syed Farooq Hassan Naqvi, Advocate wherein notice was issued and it was ordered that it will he taken up along with the main appeal. The appeal was admitted to hearing on 5.4.1999.
3. Today the main appeal was called. No-one appeared for the respondent. Syed Farooq Hassan Naqvi, Advocate, appeared for Mr. Aamir Waseem, who is stated to be the purchaser of the property in question in the auction held on 12.9.1998 We have accordingly heard the learned counsel for the appellants as well as the counsel for the said intervener.
4. The brief facts leading to the filing of this E.F.A. Are that in suit No. 167 of 1995 filed by the respondent Bank against the appellants a decree for the recovery of Rs. 3078125/- plus Rs. 60,430/- as costs was passed against the appellants. The decree was put into execution by the Bank vide application ,dated 21.10.1996. It appears that during the pendency of the said application the appellants deposited an amount of Rs. 700,000/- out of the decretal amount on various dates. The Executing Court ultimately proceeded to determine the terms of the auction and proclamation for sale of the property in question Was issued stating that the property will be put to auction on 12.9.1998 at 3 p.m. The market value of the property was stated as Rs. 41,241,708/-. The bid was, however, reserved at Rs. 3,138,563/-. This appears to he the original decretal amount. It is stated that the property was sold on the said date, time and place and the intervener was declared to be the highest bidder and the property was knocked down to him by the Court auctioneer against a sum of Rs. 48,00,000/-. On 24.9.1998, the appellants filed objection petition purportedly under Order 21 Rule 90 CPC. Along with the petition a sum of Rs. 9,60,000/- was deposited representing 20% of the bid amount in terms of Order 21 Rule 90 CPC. The application was contested by the respondent as well as the intervener. After hearing all concerned, the Banking Court proceeded to dismiss the objection petition" and confirmed the sale.
5. Mian Hamid Farooq, Advocate, learned counsel for the appellants, has informed us that the entire decretal amount stands paid by the appellants to the Bank. Out of this amount. Rs. 700,000/- were paid during the execution proceedings, Rs. 9,60,000/- were deposited with the objection petition while the balance of Rs. 14,78,583/- was deposited in compliance with the order of this Court dated 16.2.1999. Copy of a certificate and account closing statement issued by the respondent have been placed on record.
6. Learned counsel for the appellants contends that the property comprised of a flour-mill constructed on land measuring 18 kalials 18 marlas 8 sarsais in the heart of Faisalabad city. Its market value was evaluated at R. 41,241,708/- by the executing Court itself. Its sale against a price of Rs. 48,00,000/- only which is almost 1/10th of the said market value on the face of it speaks for the fraudulent nature of the sale. Further contends that the alleged auction was conducted in a Branch of the respondent Bank. He argues that 1/4th of the hid amount was not deposited in accordance with the mandatory provisions of law.
7. Syed Farooq Hassan Naqvi, advocate, learned counsel for the auction purchaser, on the other hand, contends that the impugned order is in accordance with law and the sale cannot he set aside on the grounds stated by the appellants.
8. We have gone through the record with the assistance of the learned counsel for the parties. We find that there is no proportion between the market value and the price for which the property was knocked down to the alleged auction purchaser. It is true that inadequacy of the bid offered by itself has not been considered to he a ground for setting aside the sale. However, we find that the objection taken by the appellants that there was violation of the provision of Order 21, Rule 84 CPC is not without force. A copy of the proclamation of sale is on record and we find that in accordance with the said provisions of law condition No.7 was incorporated therein which is to the following effect: {{URDU TEXT}} The auction purchaser was required to pay immediately after he was declared to be the purchaser, 25% of the bid money to the court auctioneer and in default of such deposit the property shall be resold. Learned counsel for the alleged auction purchaser admits that such a deposit was not made and instead a cheque in the sum of Rs. 12,00,000/- was handed over to the officer conducting the auction. It is not clear from the record as to when the cheque was cashed.
However, this fact is certain that the requisite amount was not deposited or handed over to the officer conducting the sale. The consequence of this default.Is that the property was to be resold forthwith. It was not done by the Court auctioneer. Thus, no sale took place in favour of the alleged auction purchaser on 12.9.1998 as because of the failure of the purchaser to make the required deposit the sale stood nullified by operation of law. Needless to say that no resale took place. The manner and mode in which payment was to be made is prescribed by law and the consequence also laid down in clear terms. Over and above this the matters were made clear in terms of proclamation itself. A cheque can in no circumstances be held to be a substitute for the deposit required to he made under the law. The learned Banking Court has dealt with this objection in a very callous manner. This lapse on the part of the'court auctioneer, as seen in the light of patent fact that property worth fifty million had been managed to be sold for less than five millions also supports the contention of the learned counsel for the appellants that there was fraud in the conduct of sale. Even if we were to hold that there was no intentional fraud, the said lapse on the part of the auction purchaser and consequently the executing Court committed a material irregularity within the meanings of Order 21 Rule 90 CPC. It was held in Manilal Mohanlal v. Saved Ahmad (AIR 1954 SC 349) that the provisions of Order 29 Rules 84 to 86 are mandatory and upon non-compliance with this provision there is no sale at all and the sale proceedings were complete nullity. It was further observed that the very fact that the Court was hound to 'resell the property in the event of default shows that the previous proceedings for sale were completely wiped out as they do not exist in the eye of law.
9. Reliance by the learned counsel for the auction purchaser on the case of Hudabia Textile Mills Ltd. v. Allied Bank of Pakistan Ltd. (PLD 1987 SC 512) is misplaced. In the said case without there being any proceedings under Rules 89, 90 or 92 of Order 21 CPC the auction was set aside simply on the ground that after the sale the decretal amount had been paid by the judgment debtor to the decree holder. The present case stands on a different footing. We have held that the sale was a nullity within the meanings of Order 21 Rule 90 CPC for reasons stated above.
10. The present EFA is accordingly allowed. The order dated 2.4.1999 of Banking Court-I Faisalabad is set aside. No order as to costs.