2016 Y L R 1304

2016 Y L R 1304

[Sindh]

Before Faisal Arab, C.J. and Muhammad Iqbal Kalhoro, J

Messrs NATIONAL FIBER LTD. and 5 others---Appellants

Versus

NATIONAL BANK OF PAKISTAN and 2 others---Respondents

Spl. HCA No.143 of 2015, decided on 3rd December, 2015.

(a) Civil Procedure Code (V of 1908)---

----O.XXI, R.90, Ss. 12(2) & 47---Limitation Act (IX of 1908), Art. 166---Law Reforms Ordinance (XII of 1972), S.3---Intra court appeal---Execution---Sale, setting aside of---Reversal of decree---Compromise between parties---Appellant sought setting aside of sale in execution of decree on the plea that during proceedings under S.12(2), C.P.C. a compromise had been reached whereby decree was reversed--- Validity--- Decree could be reversed effectually through a compromise only when person in whose favour certain rights were created as a result of execution of decree, was willing to forego his rights and was made party in proceedings culminating in compromise---Private agreement between parties to reverse decree during pendency of appeal filed against dismissal of application under S. 12(2), C.P.C. could not be presumed to have actually varied or reversed decree, notwithstanding the fact it was incorporated in court's order---No action was taken within the prescribed period of 30 days in terms of Art. 166 of Limitation Act, 1908, by a party competent to do so, hence filing of application by appellant, that was after a long time, which ex facie was time barred never merited consideration on merits---Division Bench of High Court declined to interfere in the matter---Intra court appeal was dismissed in circumstances.

            2006 YLR 1223; 2000 YLR 2117; 2009 SCMR 1161; 2009 SCMR 720; PLD 1961 DAKA 686; 2001 CLC 737 and 1998 (sic) 2419 ref.

(b) Civil Procedure Code (V of 1908)---

----O.XXI, R.90---Sale, setting aside of---Pre-conditions---In terms of O. XXI, R. 90, C.P.C. sale has to be set aside on the ground of material irregularity or fraud in publishing or conducting it---Any objection though based on grounds of material irregularity or fraud in proceedings but does not relate to publishing and conducting sale cannot be taken under O. XXI, R. 90, C.P.C.---Material irregularity would imply a course adopted in selling of property that is not in conformity to rules regulating sales in execution of decree.

            Mushtaq A. Memon for Appellant No.1.

            Farooq H. Naek for Appellants Nos. 2 to 5.

            Ms. Zahrah Sehr Vayani for Respondent No.1.

            Adnan Iqbal Chaudhry for Respondent No.2.

            A.I. Chundrigar for Respondent No.3.

            Date of hearing: 15th October, 2015.

JUDGMENT

            MUHAMMAD IQBAL KALHORO, J.---This special High Court appeal is filed for setting aside an order dated 17.03.2015 passed by the learned Single Judge of this Court on an application C.M.A. 390/2009, under section 47 read with section 144 and Order XXI, Rule 90, C.P.C. in Execution No.36/2001 moved by the appellants to recall sale of tangible assets of Appellant No.1/Messer's National Fiber Limited (the Company) in favour of respondent No.2/Messer's Zubair Amin Motiwala and Abdul Jabbar Motiwala, whereby the said application was dismissed.

2.         Mr. Farooq H. Naek learned advocate argued the case on behalf of the appellants. He briefly traced the background leading to filing of the instant appeal. According to him, above stated application (C.M.A. 390/2009) was moved by the appellants and Mrs. Jamila Ather (since deceased) for revival of the Company and that was to be done by restituting its immovable property i.e. Plots Nos. 13 to 20 and 37 to 44 in Sector No. 22, admeasuring 201,889 Sq. yards, in Korangi Township, Karachi with the buildings, sheds, parts, appliances, fittings and fixtures, equipments machinery etc. affixed and installed thereon to the appellants (Schon family) who were majority shareholders of the company. During the year 1997 due to political circumstances Schon family had to leave the country. As the management of the company was with them, in addition to NDFC (National Development Finance Corporation) and two other institutional shareholders jointly holding 46% of shares of the company, they called a meeting of company's creditors on 19.08.1997. In the meeting Habib Bank Limited was also present. It was decided that proceedings under Section 290 of the Companies Ordinance, 1984 (the Ordinance) be filed in the Court and after taking over the management of the company steps be taken for its revival. Accordingly, the NDFC and two other shareholders filed petition J.M. 39 of 1997 on 06.10.1997 before the Company Bench of this Court and through an interim order one Saadat Hussain Khan, nominee of the NDFC, was appointed as Chief Executive of the company with necessary powers to manage its affairs as per Memorandum and Article of Associations. However, he could not perform his job satisfactorily as a result thereof he was substituted, and on an application (C.M.A. No. 1077/1998) Board of Directors of the Company was suspended on 02.03.2000. Meanwhile Habib Bank Limited filed a Suit No. B-85/2000 for recovery of a sum of Rs.264,493,163.00 against the Company on 31.05.2000. Mr. Saadat Hussain holding control of the Company was instructed not to contest the matter as such it was decreed ex-parte as prayed, and against that judgment no appeal was preferred by the said nominee of NDFC. Resultantly Execution Application No. 36/2001 was filed on 08.01.2001 by the HBL seeking attachment and sale of the moveable and immovable properties of the company. Accordingly, writ of attachment was issued and ultimately Official Assignee was directed to auction. As Schon family was out of the country, it through an attorney filed an application under Sections 12 and 18 of the Financial Institutions (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (1997 Act) read with Order XXI, Rule 58, C.P.C. for reversal of the ex-parte decree in the above suit. That application came to be treated as an application under Section 12(2), C.P.C., which was dismissed vide order dated 25.10.2001 against which Special HCA No. 291/2001 was preferred.

3.         Leaned counsel further informed that meanwhile in execution proceedings, the offer submitted by respondent No.2 was confirmed despite pendency of above stated appeal; they deposited the entire bid amount i.e. Rs.430 million and were handed over physical possession of the immovable property of the company. Before the sale proceeds could be disbursed, Schon family filed an application in J.M. 39/1997 to restrain the Official Assignee from distributing sale consideration in order to save the Special HCA No. 291/2001 from being rendered infructuous. On 07.08.2002 learned Company Judge passed restraining order thereon and on 03.12.2004 when the execution application and said J.M. were fixed for hearing before the learned Single Judge, the said J.M. was dismissed as not pressed and the Board of Directors of the company (Schon family), as had existed before the order of 04.12.1997, was revived. Subsequently Schon family came to know that due to negligence of the then Chief Executive of the company Mr. Saadat Hussain, various creditors and leasing companies had succeeded in obtaining ex parte decrees against the company and they had filed applications under Section 73, C.P.C. for ratable distribution of the sale proceeds held by the Official Assignee. On account of change in the circumstances, Schon family negotiated an agreement with NAB to liquidate various liabilities and finalize a schedule for repayment. Such agreement was reached on 25.10.2005 but was modified subsequently through addendum on 18.07.2008. Various creditors of the company including the decree-holder in above suit were taken on board and provision was made for payment of Rs.652.532/- million to several decree-holders and creditors of the company. Resultantly, Schon family deposited a substantial amount with NAB for its disbursement in accordance with the agreed schedule. As the terms for reversal of the decree in the above suit and for discharge of claim of the decree-holder through NAB were settled, an application under Order XXIII Rule 3, C.P.C. being C.M.A. No. 615/2008 was filed in Special HCA No.291/2001 on 25.04.2008 by the decree-holder, the Company and Schon family. It was, inter alia, contended in the said application that the decree in Suit No.B-85/2000 and decree in Suit No.B-79/ 2001 would reverse as a result of complete satisfaction of the claim of Respondent No. 1/National Bank of Pakistan. That application was however opposed by the Auction Purchasers/respondent No.2 and respondent No.3/ABL. Nonetheless it was allowed with observation to the effect that whatever rights had already accrued to the third party, they would not be affected by the said compromise. Learned counsel further stated that resultantly the decree in Suit No. B-85/2000 was reversed with the consent of decree-holder vide order dated 07.10.2008 passed in the above stated Special HCA, wherein it was also recorded that claim of NBP had been fully satisfied and of all these facts respondent No. 2 had the full knowledge. On 03.04.2009 Schon family filed the subject application in the execution application (36/2001) for restitution of the properties of the company and seeking recall of sale proceedings and setting aside the sale itself, on the grounds, among others, that the sale of the property of the company was hit by Section 410 read with Section 294 of the Ordinance, hence void, having been effected during pendency of J.M. 39/1997 filed under Section 290 of the Ordinance, but it was dismissed. It was further argued by the learned counsel that the impugned order was contrary to facts and law. He read out sections 294 and 410 of the Ordinance to emphasize his point. In support of his arguments he relied upon the decisions reported in 2006 YLR 1223, 2000 YLR 2117, 2009 SCMR 1161 2009 SCMR 720, PLD 1961 DAKA 686, 2001 CLC 737 and 1998 (sic) 2419.

4.         Mr. A.I. Chundrigar, learned advocate for Respondent No.3/Messer's Allied Bank of Pakistan stated that section 410 of the Ordinance was not attracted in the facts and circumstances of the case as it related to a situation coming about after the winding up of the company started. According to him, the appellants were strangers to the decree and merely because they were shareholders in the company would not mean that they were its absolute owners. A company is a distinct and separate entity from the shareholders. What the appellants wanted was not the restitution of the company's property to it but restoration of its possession to them, which was materially a new situation beyond the scope of the provisions of law under which the application was moved by them. More over in terms of Order XXI and Rule 90, C.P.C., the appellants were required to deposit 20% of decretal amount in the Court but they failed to do so as such they were not entitled to any relief.

5.         Mr. Adnan Iqbal Chaudhry learned counsel for the respondent No.2/Auction Purchasers contended that the appellants in fact were not aggrieved by the sale of the property itself but had questioned the manner whereby the sale was conducted. He in this regard referred to the prayer clause of the application under section 12(2), C.P.C. to support his contention. Learned counsel also referred to section 65, C.P.C. to argue that after the property was sold in execution of a decree, and if such sale became absolute, a vested right would be deemed to have been created in favour of the purchaser of the property, which was inviolable. He further explained the point by stating that once the sale of immovable property in execution of a decree became final and absolute and the possession of the property handed over to the purchaser, any subsequent arrangement or development between the decree-holder and judgment-debtor would not nullify or stultify such sale.

6.         Ms. Zahrah Sehr Vayani learned advocate for Respondent No.1/Messer's National Bank of Pakistan adopted same arguments adduced by other respondents' counsel.

7.         We heard the counsel for the parties and with their assistance went through the entire record and the case laws cited by them at the bar on 15.10.2015 and on the same day through a short order we dismissed the present appeal. Following are the reasons for such conclusion.

8.         On the basis of the order passed in High Court Appeal No. 291/2001; the subject application was filed in the executing proceedings (Ex.36/2001) for setting aside the sale of property of the company. The reason cited was that as a result of compromise incorporated in Court's order in above appeal decree dated 11.12.2000 was reversed hence the company was entitled to restitution of its property, which was basically sold to satisfy the decretal amount in Suit B-85/ 2000, filed by the HBL against the company. Record as it stands reflects that the appellants 2 to 6 (Schon family), in the year 1997 allegedly due to some political circumstances left the country and at that time they being majority shareholders (51%) were in the management of the company with NDFC and two other institutional shareholders who jointly held 46% of shares of the company. They called meeting of various creditors on 19.08.1997, Habib Bank Limited also participated therein. It was decided that proceedings under Section 290 the Ordinance be filed in the Court and after taking over the management of the company steps be taken for its revival. Accordingly the NDFC and two other shareholders filed the petition (J.M.39 of 1997) on 06.10.1997 before the Company Bench of this Court and through an interim order one Saadat Hussain Khan, nominee of the NDFC, was appointed as Chief Executive of the company with necessary powers to manage its affairs. Later on he was substituted due to unsatisfactory performance. Then on an application (C.M.A. No. 1077/1998) Board of Directors of the Company was suspended on 02.03.2000. Meanwhile Habib Bank Limited went into litigation and filed the Suit (B-85/2000) for recovery of a sum of Rs.264,493,163.00/- against the Company on 31.05.2000. Mr. Saadat Hussain who was still holding the control of the Company did not contest the matter as such it was decreed ex parte as prayed. That judgment attained finality as against which no appeal was preferred by the said nominee of NDFC. Resultantly Execution Application No. 36/2001 was filed on 08.01.2001 by the HBL seeking attachment and sale of the moveable and immovable properties of the company. Accordingly writ of attachment was issued and ultimately Official Assignee was directed to conduct sale of the assets of the company through auction. First attempt to sell the property did not yield results as the highest bidder backed out from his commitment, thereafter in the next try the offer of respondent No.2 was accepted on 18.03.2002 and on 29.04.2002 sale in his favour was confirmed and he was put into possession. Schon family meanwhile through an attorney had filed an application under Sections 12 and 18 of 1997 Act read with Order XXI, Rule 58, C.P.C. for reversal of the ex parte decree in the above execution proceeding, but later on it was withdrawn and filed as an application under Section 12(2), C.P.C. in Suit No.B-85/ 2000, there it was dismissed vide order dated 25.10.2001. Against such dismissal Special HCA No.291/2001 was preferred by the appellants. The said appeal was disposed of on 07.10 2008 in terms of the compromise application filed by the appellants and NBP, the only parties in the said appeal. In the light of such development Schon family filed the subject application but was dismissed through impugned order.
9.         We have observed that order on the said compromise application in above appeal was passed in presence of the counsel for the parties. During the course of hearing of that application learned counsel for respondent No.2 Mr. Faisal Siddique informed the Court that his clients had become auction purchaser of some of the properties of the company and made a request that their right might not be affected. Mr. A.I Chundrigar learned counsel for ABL was also present and he showed his reservation to the compromise on the ground that his client was a mortgagee hence a secured creditor. He also requested that his client's rights might not be affected. In the wake of such requests learned Division Bench of this Court while disposing of the application observed "It appears that the compromise is in between the NBP and the appellant, who are the only parties to the appeal, with no mention in it to effect any right of third party. Learned counsel of the parties to appeal submit that whatever right has already been accrued or there is any entitlement, then it will not be effected by compromise. In such circumstances, there should be no apprehension in the mind of third parties against the compromise." These observations were made without any objection raised by the appellants either at the time of passing of the said order or thereafter in any proceedings. It is clear that not only rights of the third parties were considered but to a certain degree were protected, and it was all done with the consent of the appellants. It appears that the appellants and NBP were conscious that their compromise had no effect of diluting the interest or rights of third parties. Their explicit submission/consent to preserve the rights of respondents No.2 (auction purchaser) and 3 (ABL) is so noticeable in the said order that it need not be specifically emphasized. Since the compromise took place in the appeal emanating from dismissal order of application under section 12(2), C.P.C., its examination is relevant. It is to be noted that that application was filed by the appellants mainly on the grounds that they being necessary party were not joined in the suit; the decree was collusive and it was obtained through fraud and concealment of facts. But these grounds did not sustain and the application failed. Appeal against that was not decided on consideration of merits but due to compromise between the appellants and the National Bank of Pakistan, it was disposed of. (NBP is the current decree-holder as on the application of the appellants in the Special HCA No.291/2001, decree-holder Habib Bank Limited was substituted by CIRC when it acquired all the assets of HBL and subsequently National Bank of Pakistan replaced the CIRC.) Amid several terms and conditions contained in the compromise filed in the appeal, there is a "condition precedent" stipulated in clause 8 of the agreement whereby the parties agreed to reverse the decree in the suit. This condition in the facts and circumstances as appear above is the hub of the controversy in hand. Its reproduction here would be beneficial.
         
"08) CONDITION PRECEDENT.
         
The parties agree that upon acceptance of this compromise, the decrees passed in suit No.B-85 and suit No. B-79 of 2001 shall stand fully satisfied and be reversed with consent of the parties hereto and the Decree, holder-NBP hereby consents and agrees that any amount received from any Bidder/Auction Purchaser by the Commissioner for sale shall be returned and vacant possession of all the assets of National Fibres Limited will be handed over to "Schon Family". NBP would provide its NOC to High Court of Sindh, with regard to handing over the unit of National Fibres Limited to Schon Group and shall have no responsibility for providing vacant possession of the unit."

It is through this condition the decree is purportedly understood by the parties to have both been satisfied and reversed. Although these words i.e. "satisfied and be reversed" from their meaning and implication and connotation are not synonymous, but have been so crafted by the whole idea inherent therein to sound and appear having similar approach so long as the decree in question is concerned. It is absurd to assume that a decree can be satisfied and reversed simultaneously. The decree that is satisfied obviously creates certain rights in favour of some party and, therefore understandably goes beyond the region of reversal. Its reversal or variation would be possible in the circumstances where it has not yet been satisfied and no rights are created. The party affected by the decree can be put back in a situation where it would have been only when the situation in the meanwhile has not materially changed. The understanding of the parties or manner in which the condition precedent has been written by them may not be relevant under the law, but since it has been made part of the order whereby the Special High Court Appeal 291/2001 was disposed of, its importance and relevancy relating to the controversy in hand cannot be understated to the extent of finding out its impact on the merits of the case. In our view, by incorporating the said condition precedent, the appellants have gained nothing legally. For through this condition the decree-holder though has agreed that vacant possession of all the assets of the company be handed over to Schon family; but knowingly the obligation it has taken in this regard is to give only its NOC to the High Court of Sindh, and that is all. Beyond that no responsibility of handing over possession of the property to Schon family has been undertaken by the decree-holder. When this agreement was being drafted (25.04.2008) between the parties and the order being passed (07.10.2008), neither the decree-holder nor Official Assignee was in possession of the property which they could have handed over back to Shon family in compliance of the Court order. Much before that time, sale of the property was confirmed in favour of respondent No.2 (29.04.2002) and they were put in possession thereof. In terms of section 65, C.P.C., which reads like "Where immovable property is sold in executing of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute.", title over the property had already stood vested in their favour. The NOC of the decree-holder was of no value and help to the appellants to claim restitution of that property, as its right under the decree to sell the property and recover its money was already enforced by sale and transfer of possession of the property in favour of respondent No.2. Understandably without determining rights of the auction-purchasers who have, since already, paid the entire amount of sale and put in possession of property long ago, its restitution to the appellants merely on the basis of an agreement between them and NBP (excluding the auction purchaser) in the proceedings emanating from dismissal of 12(2), C.P.C. application cannot be legally sustainable. This appears to be the reason why the decree-holder did not take any other responsibility except to give NOC to help the appellants gain control over the property. From very inception, approach of the parties in crafting the said condition precedent was ambiguous so long as its object appeared to them and very clear as far as its result was understood by them. They knew it was not implementable and merely by that agreement neither the decree was satisfied nor reversed to provide an opportunity to the appellants to claim restitution of the property. We are of the view, the disposal of High Court Appeal 291/2001 on the basis of said compromise application has not resulted at all in reversing the decree which to a material part already stood satisfied and rights accrued to the auction-purchaser, the only remaining portion was and is collection of decretal amount by the decree-holder from the Official Assignee who was tasked to sell the property. A decree, which is already executed to a material part in a manner that certain rights have accrued in favour of a third party, cannot be varied or reversed to its original position which existed prior to its implementation. Respondent No.2 are in uninterrupted possession of the company's property for more than 13 years, therefore the changes and improvements in the property cannot be ruled out. Our view is solidified from the very language of order dated 07.10. 2008, the relevant part thereof has already been produced above, which conspicuously gives ear to the apprehension of other parties' interests and makes sure that those interests are not disturbed. In this regard therein specific commitment of the counsel for the parties that "whatever right has already been accrued or there is any entitlement, then it will not be effected by compromise." and the observations of the Court that "In such circumstances, there should be no apprehension in the mind of third parties against the compromise" have been recorded. And if the interest of the auction-purchaser is preserved by that compromise, then how it can be assumed that the decree, because of only mention of reversal in the compromise application, is in effect reversed. The decree can be reversed effectually through a compromise only when the person in whose favour certain rights have been created as a result of execution of the decree is willing to forego his rights and is made party in the proceedings culminating in the compromise. The private agreement, between the parties to reverse the decree, during pendency of the appeal filed against the dismissal of application under section 12(2), C.P.C. surely cannot be presumed to have actually varied or reversed the decree, notwithstanding the fact it was incorporated in the Court's order. The Court's order, that does not judicially determine the injury caused by the decree and without appreciating consciously the concomitant situation that has evolved since then, if so reverses or varies the decree will not be read to have actually done so in effect. Because without attending to the development following execution of a decree, its reversal even ordered would be non-implementable firstly and secondly fruitless; and it may result into further litigation which, of course, cannot be the object of the law. In the case in hand though the terms of compromise have been made part of the order, but it does not appear that judicial examination of these terms and conditions took place to determine whether the decree sought to be reversed was at all reversible any more or not. Record bears testimony to it that simply the appeal was disposed of on the basis of an arrangement entered into between the parties (excluding third parties) outside of the Court. It always requires judicial determination in the manner as provided by the law to infer that the decree passed by the Court stands either reversed or varied. We have also seen the reasons of learned Single Judge on the point in the impugned order in para No.32. Not only we fully agree with these reasons but would like to make them part of this order to the extent of reproducing herein below.
         
32. Coming to the compromise actually at hand, it will be recalled that clause 8 recorded that on account thereof, the decree stood "fully satisfied and …..reversed". Now, this certainly creates an anomaly. The reason is that if the decree is "fully satisfied", then there is nothing left to reverse. On the other hand, if the decree is being reversed then it cannot be satisfied. In my view, this apparent confusion is in fact a deliberate contrivance. It is recognition that, in reality, what was happening was simply (and only) a compromise that sought to satisfy the decree. However, by the time the compromise came about, the Company's property had been sold in the auction proceedings and the price had been received from the auction purchaser who had been put in possession. To get around this "problem", the compromise added the words "and be reversed" in order to create some basis for invoking restitution by making an application under section 144. This is also clear from the last sentence of clause 8: "NBP would provide its NOC to High Court of Sindh, with regard to handing over the unit of National Fiber Limited to Schon Group and shall have no responsibility for providing vacant possession of the Unit". Thus, NBP (as it were) washed its hands off the entire matter after receiving the settlement amount from the Applicants. This is hardly consistent with a party (i.e. NBP) making "restitution" on a putative reversal of the decree. Thus, whatever may be the sense in which, the compromise has resulted in the "reversal" of the decree in Suit B-85/2000, it is not a sense relevant for restitution, or as makes section 144 applicable. Whatever may be the relief, if any, to which the Applicants may be entitled on the basis of the compromise decree, they are not entitled to relief under section 144."

10.       As we have concluded that the decree in the suit B-85/2000 has not been effectually reversed or can even be assumed to have been varied to the extent of right of auction-purchaser and various creditors of the company due to compromise between the parties in the High Court Appeal 291/2001, no relief in terms of sections 47 and 144 read with Order XXI Rule 90, C.P.C. can be granted to the appellants. The company in law is a distinct and separate entity from the shareholders, and benefit, if at all permissible in law, under section 144, C.P.C. could be extended to it and not to the appellants. Contrary to it the appellants were trying for restitution of the company's property to them and not to the Company as was evident from the agreement entered into by them with the NAB, which was virtually a new situation beyond the scope of the provisions of law under which the subject application was moved by them. Therefore, in our view the appellants who were strangers to the decree, as merely being shareholders would not make them the Company, were not qualified to claim restitution of its property to them under the garb of the compromise. Property of the company was sold in compliance of the decree passed in banking suit against which no appeal was filed and in terms of arrangement provided in section 27 of 1997 Act, the decree had attained finality. The scheme provided in section 410 of the Ordinance appears to have no relevance with sale of the company's property held in the execution of decree in the banking suit. In view of what has been stated above section 410 of the Ordinance is not attracted in the facts and circumstances of the present case as it relates to a situation where the company is being wound up by or subject to the supervision of the Court. Only then the sale without leave of the Court of any of the properties of the company after the commencement of the winding up shall be void. In the present case no such proceedings were underway when the auction of property of the Company took place and its sale was confirmed in favour of respondent No.2. J.M. 39/97 against alleged oppression of the Company was filed, inter alia, for rehabilitation of the Company and vide order 04.12.1997 one Mr. Sadat Hussain Khan was appointed as its Chief Executive with all the powers to revive its fortunes. At no point of time the Company was proposed to be wound up by any one nor was any such order ever passed by the Court. About auction of property of the Company all the interested parties including the appellants were aware of such facts, but none of them ever made any attempt to oppose it or bring facts of J.M. in the notice of the Company Bench to thwart further progress that led to actual auction of the property of the Company. Only on the day (03.12.2004) when the said J.M. was being withdrawn, these facts were brought to the knowledge of the Company Judge, that too with the sole object of seeking some restraining order against distribution of the sale amount lying with the Official Assignee. And under these circumstances on that day, the counsel for the petitioner (NDFC) had extended his no objection on the application (C.M.A. No.1937) moved for a direction to revive Board of Directors of the Company as had existed before the order dated 04.12.1997. It is also reflected from the said order (dated 03.12.2004) that such concession of no objection to the revival of Board of Directors was extended because there was left no tangible assets of the Company. The counsel of NDFC was further instructed to withdraw from the said J.M. as they (NDFC) assumed that they were no longer responsible for the assets of the Company. All this was happening after a long time of sale of properties of the Company. After dismissal of J.M.39/97 as not pressed on 3.12.2004 no proceedings were ever filed for its revival. On whatever cause of action, it was filed, it already stood buried and now no nexus can be established between the said J.M. and the subject application for restitution of property to the appellants that was filed after considerable period of time on 03.04.2009. The sale of properties of the company in favour of respondent No.2 is a fait accompli, which has to be accepted by the appellants.

11.       In terms of Order XXI Rule 90, the sale has to be set aside on the ground of material irregularity or fraud in publishing or conducting it. However any objection that is though based on grounds of material irregularity or fraud in proceedings but does not relate to the publishing and conducting the sale cannot be taken under this rule. Material irregularity would imply a course adopted in selling of the property that is not in conformity to the rules regulating sales in execution of a decree. Here the ground taken by the appellants in the subject application was not about any alleged material irregularity or fraud in either publishing or conducting sale of the property of the company, but it was urged therein that attachment of the property sold in execution of decree was void being opposed to section 410 of the Ordinance, and it was obtained through misrepresentation and fraud. The other ground was that HBL though was present in the meeting held on 19.08.1997, but despite that it filed the suit against the Company and got the then Chief Executive instructed not to contest the suit (B-85/2000), which resulted in passing of the ex parte decree. On these grounds admittedly a valid sale of the property in execution proceedings cannot be set aside. No action was taken within the prescribed period of 30 days in terms of Article 166 of the Limitation Act, 1908 by a party competent to do so then hence filing of the subject application (C.M.A. 390/2009) on 13.4.2009, that is after a long time, which ex facie was time-barred, never merited consideration on merits.

12.       This Special High Court Appeal is disposed of in these terms.

MH/N-41/Sindh                                                                                   Order accordingly.