AMANULLAH KHAN, J.--- This appeal under Section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (hereinafter referred to as the Act) is directed against the order dated 31.3.2001 passed by learned Special Judge Banking Court, Quetta in Execution Application No. 173 of 1997 wherein Objection petition filed under Section 47, CPC and Section 12(2), CPC has been rejected.
2. The background of the case is that late Haji Muhammad Qasim, husband of respondent No. 1 and father of respondents Nos. 2 and 3 (hereinafter referred to as the deceased), obtained loan of Rs.90 lakhs from respondent bank. As security against the said loan mortgaged property bearing Plot No. 9-B situated at Chaman Road Smungli Housing Scheme, Quetta measuring 14000 sq.Ft.
And Bungalow constructed thereon (hereinafter referred to as the property in dispute) belonging to appellants Nos. 2 and 3. It may be pointed out that at the time of execution of the mortgage deed, appellants Nos. 1 and 2 were minors. The learned Guardian Judge had granted permission to the deceased to get the property mortgaged for the benefit of minors vide Order dated 17.2.1987. The property in dispute was mortgaged to the extent of Rs.16 iakhs. Besides, another property measuring 55 acres 2 rods 5 poles situated in Mauza Apozai, District Zhob belonging to the deceased was also mortgaged to the extent of Rs.1,62,37,500/-.
3. The respondent bank filed a suit for recovery of Rs.2,15,11,653/- against the deceased and appellants Nos. 2 and 3 before the Banking Tribunal. The said suit was decreed on 30.3.1994 and an Execution Application was filed on 3.8.1994; on the application of the bank, the property in dispute was put to auction and the highest bid received was. Rs.42,55,000/- on 5.4.1995 which was not accepted by the learned Banking Tribunal. Thereafter property was put to auction on various occasions but none came forward for the purchase of the same. On 11.7.1997 on the application of the respondent decree-holder, possession of the house in dispute was handed over to respondent. The respondent submitted an application that the property in dispute be sold to the bank decree-holder for 3 consideration of Rs.1 crore which be adjusted against the said decretai amount. The learned Banking Court accepted the said application vide Order dated 12.12.1998 and ordered that the house in dispute be transferred in the name of the respondent decree-holder for a consideration of Rs.10 million; and also ordered for transfer of the property in the name of the decree-holder in the revenue record. It may be pointed out that objection petition was filed on 7.11.1998 by the appellant No. 1 wherein it was stated that the property is worth Rs.4 crores; thus the sale in favour of decree-holder for Rs.1 crore is not proper and further request was made that before transferring the property in favour of decree-holder, price of the same may be got assessed. The said application was rejected on the same day i.e. 17.11.1998. Thereafter property was transferred in the name of respondent decree- holder on 4.11.1999 vide mutation No. 1071.
4. Being aggrieved from the afore-mentioned proceedings, deceased filed a Constitutional petition before this Court which was dismissed on 1,4.1999. Thereafter a Civil Petition for Leave to Appeal was filed before the Hon'ble Supreme Court which was disposed of on 1.11.2000 with the observations that the appellants were allowed to file fresh objection petition before the Executing Court regarding execution of the decree against them to the extent of their share in the mortgaged property. Thereafter appellants filed an Objection Petition on 26.1.2000 which was rejected by the learned Banking Judge vide impugned Order dated 31.3.2001; hence the instant appeal.
5. Mr. Basharatullah, Advocate for the appellants contended as follows:-
(1) That the decree against the appellants Nos. 2 and 3 being minors at the time of institution of the suit is illegal void and could not be enforced against them as no guardian was appointed on their behalf.
(2) That appellants Nos. 2 and 3 are only liable to the extent of property mortgaged by them i.e. Rs.16 Iakhs and not beyond that.
(3) That the observations by the learned Trial Court that appellants Nos. 2 and 3 were liable for the entire amount after the death of deceased being his legal representatives are not tenable under the law.
(4) That transfer of the property in dispute in the name of decree-holder, on their oral request for a consideration of Rs. 10 million without assessing the market value, as prayed by the appellants is arbitrary.
6. K.N. Kohn, Advocate for the respondents opposing the arguments of the learned counsel for the appellants contended that deceased was the legally appointed guardian of the minors vide Order dated 14.2.1987; therefore, there was no need to appoint guardian in the suit for appellants Nos. 2 and 3. Besides, the decree, as such, has not been challenged on the said ground and the learned Banking Tribunal has rightly rejected the Objections petitions of the appellants.
7. We have considered the arguments of the learned counsel for the parties and with their assistance have perused the record: Adverting to the arguments of Mr. Basharatullah, Advocate that the judgment and decree dated 30.3.1994 is not enforceable against appellants Nos. 2 and 3 as they were minors and no guardian was appointed to defend the suit on their behalf. It may be pointed out that the deceased was appointed as guardian of the minors and their property by the Court under the Guardians and Wards Act vide Order dated 14.2.1987 and thereafter on 17.2.1987, deceased was allowed to mortgage the four plots comprising all the property in dispute i.e. 9-B, 10- B, 50-B and 51-B measuring 14000 sq.Ft. We are not persuaded to agree with Mr. Basharatullah that decree has been passed without notice to appellants Nos.
2 and 3. Perusal of the record reveals that deceased who was then the duly appointed guardian of the appellants Nos. 2 and 3 appeared before the Court and submitted application for leave to defend the suit on his behalf and on behalf of appellants Nos. 1 and 2 but the learned Banking Tribunal rejected the same and decreed the suit. It may be observed that when the application for leave to defend was filed, deceased was still acting as guardian ad item of appellants Nos. 2 and 3 as appointed vide order date 14.2.1987. No objection was raised for non-appointment of guardian of the minors. Thus the contention of Mr. Basharatullah that no notice to appellants Nos. 2 and 3 was given and decree to their extent is void, is repelled.
8.. Reverting to the next contention of Mr. Basharatullah that appellants Nos. 2 and 3 are only liable to the extent of property mortgaged on their behalf; it may be observed here that mortgage deed dated 25.2.1990 executed between the appellants as mortgagor in favour of respondent on behalf of deceased as their guardian ad item is upto Rs.16 lakhs. Learned counsel referred to Section 58 of the Transfer of Property Act which provides that the liability of the -mortgagor against the property mortgaged is only to the extent of the mortgaged amount; while confronted with the said legal proposition, Mr. K.N. Kohli did not dispute the same, however, contended that equitable mortgage was also executed by the deceased and further title documents were also deposited. The contention of Mr. Basharatullah has substance that deceased was only authorized by the Guardian Court to mortgage the property with the bank and not beyond that, as far as creation of equitable mortgage is concerned, no sanction was obtained by the learned Trial Court. As far as deposit of title deeds is concerned, only fard of the property was deposited which cannot be termed as title deeds. Besides, no permission was ever sought and granted by the Guardian Court to create collateral mortgage or deposit of title deeds. Thus as far as deposit of title deeds and execution of collateral mortgage deed is concerned, minors cannot be held liable for the same as deceased exceeded his powers as guardian and at the time of deposit of title deeds, respondent Bank did not ask the deceased for permission from the concerned Court; thus the findings of the learned Banking Court that since equitable mortgage deed was also created in favour of the bank which covers the entire finance facility is in excess of jurisdiction as deceased was legally bound to have obtained permission from the Guardian Court regarding execution of collateral mortgage deed and deposit of title deeds form the Court. Mr. K.N. Kohli could not substantiate the said arguments; thus it is held that liability of appellants Nos. 2 and 3 is only to the extent of. Rs.16 lakhs as in the mortgage deed and not beyond that.
9. Coming to the next contention of Mr. Basharatullah it may be pointed out that the learned Banking Court erroneous:; held that appellants Nos. 2 and 3 were also liable for the entire amount as after the death of the deceased, they have stepped into his shoes and as such his legal heirs.
With due respect to the learned Banking Tribunal, we are not persuaded to agree with such.
Observations/findings. Mr. Basharatullah, learned counsel contended that under Section 52 of the CPC, decree can be executed against the deceased/judgment debtor to the extent of the property left by him and legal representative of the deceased cannot be held responsible beyond the property left by the deceased. Findings of the learned Banking Judge are erroneous that the property was purchased by the deceased in the name of his sons. There is nothing on record to support the said findings. Be that as it may, even assuming that the property was purchased by the deceased in the name of his son which was done much prior to the execution of the mortgaged deed still the appellant were owners of the property in dispute at the time of execution of the mortgage deed. The deceased never claimed to be the owner of the property in dispute. Thus in such circumstances, the entire property of appellants Nos. 2 and 3 as minors cannot be attached towards satisfaction of the entire decretal amount.
10. Mr. Basharatullah, Advocate further argued that on the oral request of the respondents, possession of the house in dispute was handed over to the respondents by the learned Banking judge. The learned counsel contended that while handing over possession to the respondents, the procedure as laid down has not been followed by the learned Banking Court. The learned counsel referred to Section 18(2) of the Act whereby procedure has been laid down for sale of the mortgaged property by way of auction and inviting tender and thereafter under Section 18{3) after the sale is completed, if the possession of the property is not handed over to the seller voluntarily by the judgment debtor, the Banking Court shall order possession of the mortgage property to be delivered to the purchaser. In the case in hand, possession of the property was handed over to the decree-holder on oral request. It may be observed that while handing over possession; an application was also made by the appellant that value of the property be assessed, which was rejected, thereafter it was ordered to be sold to the decree-holder for an amount of Rs. 1 crore. It is pertinent to point out that without getting the value of the property, the learned Banking Court rejected the application and ordered for transfer of the property in the name of decree-holder, haphazardly and in haste. When confronted with the same, Mr. K.N. Kohli could not meet the Objections of Mr. Basharatullah, thus it is held that said exercise of powers, the learned Banking Court ignoring the law is without lawful authority and arbitrary.
11. Mr. Basharatullah in the end argued that had the property been rented out at the time when possession of the same was handed over to the bank, on 11.10.1997 till today, in fact the very income received could have been adjusted towards the loan liability of appellants Nos. 2 and 3 and prayed that appeal be allowed with mesne profits. In our considered opinion, the contention of Mr. Basharatullah has substance. We have held that since possession of the property was handed over to the respondents on their oral request by the Banking judge in an arbitrary manner and property has been in use of the respondent; thus the appellants are entitled for mesne profits. Fair rent of the property be got assessed at the market rate from the date the Bank took possession, till delivery to the respondents and amount calculated be adjusted towards the amount of Rs.16 lakhs, being liability of appellants Nos. 2 and 3, pursuant to mortgage deed dated 25.2.1990. It has come on record that the property belonging to the deceased situated in Apozal District Zhob was also mortgaged with the respondent Bank but no steps were taken for getting the said property auctioned and sold by the learned Banking Tribunal. Thus before resorting to further execution proceedings, steps be taken for sale by way of auction or by any other method as deemed fit of the property situated in Zhob for the satisfaction of the decree.
12. In view of above discussion, it is held that the liability of the appellant is only to the extent of Rs.16 lakhs, and property has been wrongly handed over to the respondent bank. Possession of the property in dispute be handed over to appellants Nos. 2 and 3 and mutation entires be corrected in their names as it existed on the date of execution of the mortgage deed. Appellants Nos. 2 and 3 to pay the deferential amount after adjusting of the rent of the property as observed above.
3. Parties are left to bear their own costs.