2016 C L D 1175


2016 C L D 1175

[Sindh]

Before Sajjad Ali Shah and Syed Saeeduddin Nasir, JJ

MUHAMMAD ALI RASHID---Appellant

Versus

Messrs UNITED BANK LIMITED and 7 others---Respondents

First Appeal No. 40 of 2014, decided on 5th May, 2015.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 15 & 19---Civil Procedure Code (V of 1908), S.12(2)---Auction of mortgaged property---Auction-purchaser impugned order of Banking Court whereby application under S.12(2), C.P.C., filed by objector against sale of mortgaged property was allowed---Contention of auction-purchaser was that he had deposited entire amount of auction price of mortgaged property with Nazir of Banking Court, however, sale in his favour had not been confirmed and application under S.12(2), C.P.C., filed by objector was to obstruct auction of mortgaged property in question and to linger on auction proceedings---Validity---Exercise taken by objector by filing an application under S.12(2), C.P.C., was mala fide on the face of it as objector had no right whatsoever to sell property in question by way of auction inasmuch as the same was already mortgaged with the Bank who had obtained decree for sale and foreclosure of mortgage---No reason was available as to why Banking Court considered it a matter which required further evidence, framed four issues and directed parties to adduce their evidence after allowing application under S.12(2), C.P.C., of objector---Application under S.12(2), C.P.C., was dismissed---Appeal was allowed, accordingly.

            Obaid-ur-Rahman for Appellant.

            Ijaz Ahmed Shirazi, Faiz Ahmed and Shaikh F.M. Javed for Respondents.

            Date of hearing: 5th May, 2015.

ORDER

            SYED SAEEDUDDIN NASIR, J.---This 1st Appeal is directed against the order dated 08.5.2014 passed by the learned Judge of the Banking Court No.II, Karachi, wherein the learned Judge of Banking Court No.II the respondent No.7 herein, passed an order in Execution No.163 of 2013 of Suit No.204 of 2011 whereby the learned Judge of Banking Court No.II allowed the application of the applicant/objector under section 12(2) of the Code of Civil Procedure, 1908 and after framing four issues directed the parties to adduce evidence on the same. Since short question of law is involved in this appeal, therefore, we intend to dispose of the same at the preliminary/Katcha Peshi stage.

2.         Brief facts of the case are that the Appellant offered a bid of Rupees three crores eighty five lacs for the purchase of mortgaged property in Execution Application No.163 of 2013 before the Banking Court No.II, Karachi. The appellant deposited the entire sale consideration with the Nazir of the Banking Court No.II, Karachi, but due to late payment some part of the sale consideration, the sale could not be confirmed in favour of the appellant.

3.         In the meanwhile, the respondent No.8 Muhammad Younus Malim made an application with the learned Banking Court No.II, Karachi under section 151, C.P.C. and another application under section 12(2), C.P.C., Order XXI, Rule 90, C.P.C. read with section 151, C.P.C., on the ground that he had obtained a decree in suit bearing Suit No.641 of 2003 and also obtained an injunctive order against the respondent No.6 from this Court against creating any third party interest in respect of the mortgaged property. Upon which the learned Banking Court No.II, Karachi passed the impugned order dated 08.05.2014 after framing of issues.

4.         Mr. Obaidur Rehman, the learned counsel appearing for the appellant argued that the appellant has deposited the entire amount of auction price of the mortgaged property with the Nazir of the Banking Court No.II, Karachi, however, the sale in favour of the appellant has not been confirmed. He next contended that the applicant/objector filed application under section 12(2), C.P.C., Order XXI, Rule 90, C.P.C., read with section 151, C.P.C. in order to obstruct the auction of the mortgaged property in question and just in order to linger on the auction proceedings. He further contended that Suit No.641 of 2003 is a collusive suit which has been filed by the respondent No.8 against the respondent No.6, who are blood relations unto each other, in order to frustrate any decree which may be passed against them in the Banking suit filed by the respondent No.1, as they had already planned to mortgage the aforesaid property with the respondent No.1. The mortgaged property is not the subject matter of Suit No.641 of 2003, thus the doctrine of lis pendens as provided under Section 52 of the Transfer of Property Act, 1882 is not attracted.

5.         The learned counsel for the respondent No.1 has also supported the contentions of the counsel for the appellant and has stated that the respondent No.1 has prior charge in respect of the mortgaged property inasmuch as it has got a registered mortgaged deed executed in respect of the said property.

6.         The learned counsel for the respondent No.8 has placed before us an order dated 31.05.2004 passed by this Court in Suit No.641 of 2003 whereby the respondent No.6 has been restrained from creating third party interest in respect of the mortgaged property herein, therefore, according to him by virtue of Section 52 of the Transfer of Property Act, 1882, the property in question cannot be sold till the decision of the aforesaid suit. However, upon being confronted by a question from the Court as to whether or not the mortgaged property is subject matter of the said suit pending before this Court between the respondents Nos.6 and 8, the learned counsel for respondent No.8 candidly admitted that indeed the mortgaged property is not the subject matter of that suit.

7.         We have heard the learned counsel for the parties, perused the impugned order and other material available on the record of the case with the able assistance of the learned counsel for the parties and have come to the conclusion that the property in question is indeed mortgaged with the respondent No.1 by way of registered mortgage. The mortgaged property is undoubtedly not the subject matter of Suit No.641 of 2003 pending before this Court on the original side, therefore, any injunctive order obtained in the aforesaid suit in respect of the mortgaged property by the respondent No.8 against the respondent No.6 cannot come in way of execution of decree in Banking Suit No.204 of 2011 and Execution Application No.163 of 2013, since the auction thereof is not hit by section 52 of the Transfer of the Property Act, 1882, which only bars "Transfer of property pending suit relating thereto".

8.         It is an admitted position that in Suit No.641 of 2003 no right to immovable property is directly and specifically in question, due to which the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, the said suit is a simple suit for recovery of certain amount, which is due and payable by the respondent No.6 to respondent No.8 in which the mortgaged property in Banking Suit No. 204 of 2011 is not involved directly or indirectly. The respondent No.8 has merely obtained an injunction order in Suit No.641 of 2003 from this Court in respect of the property in question, whereby the respondent No.6 is restrained from creating third party interest therein.

9.         The entire exercise undertaken by the respondent No.8 by filing an application under section 12(2), C.P.C. is mala fide on the face of it. The respondent No.8 has no right whatsoever to sell the property in question by way of auction inasmuch as the same is already mortgaged with the respondent No.1, who has obtained decree for the sale and foreclosure of the mortgage. We do not see any reason as to why the learned Judge of the Banking Court No.II, Karachi considered it a matter which requires further evidence, framed four issues and directed the parties to adduce their evidence after allowing the application under section 12(2), C.P.C. of the applicant/objector.

10.       Therefore, for the aforesaid reasons we see no force in the arguments extended by the counsel for the respondents Nos.1, 6 and 8, consequently, we set aside the impugned order dated 08.05.2014 and the application under section 12(2), C.P.C. which is also hereby dismissed. However, while parting with the order, we may observe that the Banking Court No.II, in case does not find the present auction process in accordance with law or for any lawful reason is not satisfied with the process, is at liberty to put up the mortgaged property for re-auction after issuing fresh proclamation for sale in accordance with law.

            Above are the reasons for the short order announced in the open court on 05.05.2015 whereby we had set aside the order dated 08.05.2014 and had dismissed the application under section 12(2), C.P.C.

RR/M-23/Sindh                                                                        Application dismissed.



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