SABIHUDDIN AHMED, J.--- This appeal is directed against an order of learned Single Judge of this Court exercising Banking Court's jurisdiction whereby, upon a reference from the Official Assignee, the auction bid of the respondent No. 5 was accepted. At the out set, it may be stated that we had already dismissed the appeals preferred by respondent No. 4 and the Chief Executive of respondent No. 6 vide our short order dated 29.11.2002 and reasons thereof have also been recorded. Mr. Abdul Hafeez Pirzada learned counsel for the appellant however, argued that his case was somewhat different and on a much stronger pedestal and needed to be heard and decided on its own merits. Consequently, we proceeded to commence hearing of this appeal.
2. By way of necessary factual background it may be stated that the respondent No. 4 had been granted certain finance facilities by the respondents Nos. 1 to 3, it defaulted in payment of its liabilities. The respondents Nos. 1 to 3 filed suit for recovery of money which was decreed. Upon an application for execution being made the Court by orders dated 8.5.2002 and 15.8.2002 for execution applications Nos. 88 and 99 and 42 of 2002 directed the Official Assignee (respondent No. 8) to attach and sell the sugar mills belonging to the respondent No. 4. The respondent No. 8 submitted a reference dated 18.9.2002 stated that he had invited sealed tenders and out of the offers received by him the appellant appeared to be the highest bidder ready to make lump sum payment of Rs.175 Millions in cash. He attempted to negotiate improvement in the offers from all the four bidders and the appellant agreed to pay Rs. 253 Millions as purchase price and his offer continued to remain the highest. However, pursuant to the reference dated 17.9.2002, the Court did not accept and on 23.9.2002 observed as follows:- "Official -Assignee may negotiate with Mis. Chawla International, M/s. Indus Sugar Mill Limited or any other party interested for buying the properties of the Judgment-Debtors and submit his fresh reference by the next date."
3. In his subsequent reference dated 7.10.2002, the respondent No. 8 reported that on 21.9.2002 he received the offer for Rs. 300 Millions from the respondent No. 5 whereafter he called a meeting of the bidders on-1.10.2002 which was inter alia attended by the appellant and the respondent No. 5.
While the respondent No. 5 came to raise his offer to Rs. 400 Millions. The appellant did not appear to be willing to make any improvement in his earlier offer of Rs. 253 Millions. Apparently this reference was also not accepted by the Court and the respondent No. 8 was directed to seek further improvements. Pursuant to the-above another meeting was called by the respondent No. 8 and the respondent No. 5 was willing to raise it to Rs. 457.5 Millions but the appellant did not participate in the meeting. Consequently a reference was made to the Court whereupon the offer of the respondent No. 5 was accepted. This order has been assailed in this appeal.
4. Mr. Abdul Hafeez Pirzada learned counsel for appellant argued that the impugned order was passed in violation of the mandatory requirements of Rules 65, 66 and 67 as well as Rules 84 and 85 of Order 21, CPC. He contended that Rule 65 contemplated that unless otherwise prescribed every sale made in execution of a decree was to be made through public auction. He argued that admittedly the procedure for sale by way of public auction had been commenced when sealed bids were invited and thereafter the Court or the respondent No. 1 could not resort to the method of sale through private negotiations. Consequently if the Court was not satisfied with the offers received, the only option available to it was to order re-auction. He further contended that even if improvement of offers was sought negotiations could only be held with the bidders and not through inviting fresh offers from rank outsiders like respondent No. 8 to negotiate, apart from the bidders with "any other party interested in buying the properties" was a nullity in law and the sale conducted pursuant thereto was of no legal effect. With reference to Rule 66 learned counsel argued that no reserve price was mentioned in the sale proclamation and this by itself vitiates the sale. Moreover he contended that failure of the respondent No. 5 to deposit 25% of the sale price immediately upon acceptance of his offer and the remaining 75% within fifteen days thereafter rendered the sale void.
5. It is not disputed that the sale proclamation did not refer to any reserve price. However, we are constrained to observe with profound respects that this question was also raised in HCA Nos. 284 and 295 of 2002 preferred by respondents Nos.4 and 6 respectively and we had repelled the same.
We are, for reasons recorded therein, not persuaded to take a contrary view.
6. Mr. Pirzada than argued that Order 21, Rules 65, C.P.C. Contemplated that unless otherwise prescribed every sale in execution of a decree was to be made by public auction and therefore, even if the learned Single Judge found the offer received to be unacceptable he could only direct a fresh sale through public offers, but could not authorize sale through negotiations. Mr. Rizwan Ahmed Siddiqui learned counsel for respondent No. 3 however, contended that the learned Single Judge in the instant case was exercising the jurisdiction of a Banking Court under Financial Institutions (Recovery of Finances) Ordinance, 2001 and not that of a Civil Court under the C.P.C. He pointed out that the provisions of the aforesaid Ordinance were to prevail over any law inconsistent therewith and Section 19 provided mode of execution of decrees of a Banking Court. Under Section 19(2), such decrees could be executed either according to provisions of the C.P.C. Or any other law in force or in such manner as it considered appropriate upon the request of the decree-holder. He therefore, argued that the provisions of C.P.C. Were not strictly applicable to execution of decrees of a Banking Court.
7. Respondent to the above Mr, Pirzada raised a twofold contentions. In the first instance, he contended that the Banking Court could resort to execution in a manner other than that prescribed by C.P.C. Only upon the request of the decree-holder and there was nothing on record to indicate that such request was ever made by the decree-holder. Secondly he argued that even if execution under "any other mode" was permissible, once the Banking Court had decided to follow the method provided for by the C.P.C. It could not, pick and chose certain provisions and ignore the rest. In support of his argument learned counsel placed reliance upon a Division Bench judgment of the Lahore High Court in Brig. (Retd.) Ma.Zhar-ul-Haq and another v. M/s. Muslim Commercial Bank Limited (PLD 1993 Lah. 706), which apparently supports his point of view.
8. Indeed there seems to be some forte in Mr. Pirzada's contention. Nevertheless, with profound respects to his learning and experience, and assuming that the provisions of C.P.C. Were applicable, we find ourselves unable to uphold the contention that sale could only be made through public auction and in no other manner in view of the explicit pronouncement of the Honourable Supreme Court in Asma Zafarul Hassan v. United Bank Ltd. And another (PLJ 1981 SC 242) to the following effect- "These provisions do prescribe the mode of disposal by public auction but neither of them expressly or by necessary implication prohibit any other mode of disposal. Therefore, if the Court had deviated from this mode of disposal to serve the ends of justice, no exception can be taken to it. In Narsing Das v. Mangal Dnbey [(1883) 5 All, 163] Mahmood, J. Observed:- "Courts are not to act upon the principle that every procedure is to be taken as prohibited unless it is expressly provided for by the -Code but on the converse principle that every procedure is to be understood as permissible till it is shown to be prohibited, by the law. As a matter of general principle prohibition cannot be presumed."
9. The main thrust of Mr. Pirzada's contention however, was that Rule 84 of Order 21, CPC required that on every sale of immovable property the person declared to be purchaser shall pay immediately after such declaration a deposit of 25% of the purchase money and in default of such deposit the property was required to be resold. Similarly Rule 85 submitted that the remaining amount of purchase money was to be paid within 15 days of such sale and according to Rule 86 in the event of such default the property was to be resold. Leaned counsel argued that both these conditions were not met by the respondent No. 5 and therefore, the sale had to be held as a nullity.
To ascertain the relevant factual matrix, we requested the respondent No. 8 to provide necessary details regarding payments made by the respondent No. 5. He stated that after the passing of the impugned order the respondent No. 5 deposited slightly more than 25% of the purchase money on 11..11.2002 i.e. Within one week time granted by the learned Single Judge. Admittedly the remaining sale consideration was never deposited but Mr. All Bin Adam Jafery learned counsel for respondent No. 5 argued that while the aforesaid respondent was ready and willing to make the deposit, he was prevented from doing so by an order of this Bench dated 15.11.2002 passed in H.C.A. No. 284/2002 restraining the respondent No. 8 from proceeding further in the matter. While we had dismissed the aforesaid appeal alongwith H.C.A. No. 295/2002 by a short order dated 29.'11.2002, the order was allowed to remain suspended for a period of one week during which apparently the respondent No. 4 judgment-debtor moved the Honourable Supreme Court and obtained a restraining order. It was also brought to our notice that on 12.11.2002 the respondent No. 5 submitted C.M.A. No. 2956/2002 under Section 151 C.P.C. Praying that they may be allowed to enter the factory to start maintaining/renovation of the machinery installed within its premises which was in possession of the Official Assignee. On 13.11.2002 after notice being waived by the respondent No. 8, but without notice to any other party, the application was granted subject to the condition that the respondent No. 5 would furnish comprehensive insurance coverage so as to cover loss of each and every type to the extent of the balance 70% of the sale consideration and deposit a sum of Rs.30,000/- to enable the respondent No. 8 to post his representative during the period of the process.
10. Mr. Pirzada argued that the failure of the respondent No. 5 to deposit 25% of the sale consideration immediately upon the acceptance of bid and the subsequent failure to deposit the remainder within 15 days of such acceptance completely vitiated the so-called sale. He relied upon a number of reported cases to substantiate his contention. In National Bank of Pakistan v. Nasir Industries (PLJ 1982 Kar. 56) decided by a very eminent Judge of this Court (Saeeduz Zaman Siddiqui, J.) an order of a learned Single Judge extending time for deposit of 75% of sale consideration in terms of Order 21, Rule 85 was sought to be set aside. It was held that the relevant provisions regarding payment of sale price under Order 21, were mandatory and the Court had no jurisdiction to grant any extension in terms of Sections 148 and 151, C.P.C. In Syed Brothers v. District Council Lyallpur (PLD 1977 Lah. 542). Aftab Hussain, J., was also of the view that the period of time for depositing the remaining sale consideration under Rules 84 and 85 were mandatory and an order confirming sale without such deposit was without jurisdiction unless extension of time for deposit was made by mutual consent of decree-holder and auction purchaser. In such cases the sale would be treated as a fresh sale. Similarly the Supreme Court of India in Manilal Mohanlal Shah v Sardar Sayed Ahmed (AIR 1954 SC 349) also held that failure to deposit 25% of the sale price immediately when auction purchaser is not the decree-holder to some other person, wipes out the sale and is liable to be treated as nullity.
1 1. Indeed all these precedents emanating from the judgments of some very eminent Judges are entitled to the highest respects. Surprisingly however, in none of these cases the principles of law laid down by the Honourable Supreme Court in Ghulam Abbas v. Zohra Bibi (PLD 1972 SC 337) were noticed. In this case Hamodur Rehman, C.J. Observed:- "Indeed, it would appear that the view of the Courts has consistently been that the non- compliance with the provisions of the Code of Civil Procedure, with regard to the proclamation of sale, its publication and the conduct of the sale in execution, are only material irregularities but not illegalities which render the sale in disregard of those provisions of a nullity."
1 2. In yet another case of Rashad Ahsan v. Bashi, Ahmed (PLD 1989 S.C. 146) a sale was sought to be set aside on the ground of non-compliance with Order 21, Rule 85 and the defence of the auction purchaser was that the Court had failed to specify the time by which payment was to be made. Their Lordships extended the principle of "actus curiae neminem gravabit" (no one should he prejudiced by the act of the Court) to such matters and proceeded to hold that since the error was committed by an officer authorized to conduct the sale, penalizing the auction purchaser was neither fair nor equitable.
13. Keeping the above position in view, we may now examine the effect of non-compliance with the provisions of Rules 84 and 85 separately. No doubt Mr. Pirzada seems to be correct in ascertaining that 25% of the sale consideration is required to be paid immediately in terms of the strict requirement of Rule 84. Nevertheless, in view of th pronouncement of the Honourable Supreme Court in Ghulam Abbas's case, such omission could only be treated as a material irregularity but would not render the sale a nullity.
Moreover, it is evident from the impugned order that one week's time was granted by the learned Single Judge to the respondent No. 5 to make the aforesaid deposit and the deposit during this period. This would clearly attract the principles laid down in Rashad Ahsan's and the respondent No: 5 could not be penalized for mistake of the Court. Therefore, deposit within the aforesaid period and not immediately could not vitiate the sale.
14. As regards the failure to make the entire payment within 15 days of the passing of the order, the respondent No. 5 has contended that they were precluded from making payments on account of the interim order passed in H.C.A. No. 284/2002 and this has not been disputed by the respondent No. 8. In these circumstances, it would be highly inequitable to require them to fulfill a condition for reasons entirely beyond their control and the principle of law laid down in Rashad Ahsan's case would apply with equal force.
15. Finally Mr.. Pirzada argued that the impugned order could only be treated as one of acceptance of bid and not confirmation of the same in terms of Rule 92, Order 21, CPC. He contended that such confirmation could take place only after the entire sale consideration had been paid in terms of Rule 85 and objections if any under Rules 89 and 90 had been disposed of. None of the learned counsel for the respondents was able to effectively rebut this contention. Mr. A.I Bin Adam Jafery attempted to question the maintainability of this appeal on the ground that only an order under Rule 92 could be questioned in terms of Order 43, Rule 1(j), CPC. The above argument, however, pre supposes that the impugned order was not covered by the aforesaid provisions and could not be treated as one confirming the bid of the respondent No. 5. We have also gathered from the case- law examined by us that Courts have proceeded to set aside sales when they have caused prejudice to any of the parties. In the instant case it appears that neither of decree-holder objected to the acceptance of the bid of the respondent No. 5 and the appellant who was duly represented at the time of hearing also express his unwillingness to match the bid. In these circumstances, we find no ground for interfering with the order accepting the bid submitted by the respondent No. 5.
16. Mr. Abdul Hafeez Pirzada learned counsel for the appellant however, during the course of his arguments offered that his client was ready and willing to match the offer of the respondent No. 5.
We are not sure whether such course is permissible during the period intervening the acceptance and confirmation of sale and though we had granted time to learned counsel for the parties to address us on this aspect of the matter, we did not have the benefit of their assistance. In these circumstances we would observe that this question may be examined by the learned Single Judge when the matter comes-up for confirmation of the bid.
17. Since the Official Assignee was restrained from proceeding further in the matter on 15.11.2002 and the controversy is already before the Honourable Supreme Court, we would not like to pass any order relating to deposit of remaining sale consideration. Nevertheless, we may observe that the order passed on CMA No. 2256/2002 on 13.11.2002 has been over taken by events and we are therefore of the view that possession of the premiss may be delivered to the respondent No. 5 only after the sale is made absolute in terms of Rule 92 subject to any orders passed by the Honourable Supreme Court. With these observations the appeal is dismissed. .