Messrs RASU FOOD INDUSTRIES and another vs Messrs PAKISTAN INDUSTRIAL
This petition for leave to appeal arises from a judgment of the Lahore High Court dismissing the petitioners' First Appeal from Order, which had challenged the dismissal of their application under Order XXI, Rule 90 of the Code of Civil Procedure 1908. The core legal question concerns whether the petitioners were entitled to set aside the auction of their property in execution proceedings based on a conditional compromise order they failed to fulfill. The Supreme Court held that since the petitioners failed to deposit the decretal amount within the stipulated time, making the prior compromise order ineffective, and because the property had subsequently changed multiple hands, no relief could be granted. The petition was accordingly dismissed and leave to appeal declined, reinforcing the principle that failure to comply with conditional settlement orders in execution proceedings defeats subsequent equitable claims, particularly after third-party rights have accrued.
- Whether an application under Order XXI Rule 90 C.P.C. is maintainable when the judgment debtor fails to comply with a conditional compromise order?
- Can property auction proceedings be reversed after the property has been transferred to multiple subsequent purchasers?
- Whether leave to appeal should be granted when the petitioner fails to fulfill the prerequisite conditions of a settlement?
- Order XXI Rule 90, Code of Civil Procedure 1908
ORDER
' IFTIKHAR MUHAMMAD CHAUDHRY, J.--- This petition for leave to appeal has been filed against the judgment dated 16th May, 2002 passed by the Lahore High Court, Lahore whereby F.A.O. Filed by the petitioner has been dismissed by means of impugned judgment.
2. Precisely stating the facts of the case are respondent No,1 filed a suit for recovery of Rs,6,78,556 before the Banking Court against the petitioners as they failed to return the amount of the Bank.
Petitioners were given an opportunity of hearing and the Banking Court ultimately did not allow them permission to leave to defend the suit and passed a decree in favor of respondent-Bank. The Bank then resorted to execution proceedings for the recovery of the decretal amount and during the process of these proceedings the orders for auction of the property owned by the petitioners were passed. Petitioners challenged the orders, of auction of property before the trial Court through an application under Order XXI, rule 90, C.P.C. However, the said application was, ultimately dismissed by the trial Court. F.A.O. Filed by the petitioner was also dismissed by means of impugned judgment. As such instant petition for leave to appeal has been filed.
3. Learned counsel contended that now the petitioners are ready to deposit 15% of the auction amount, in view of the compromise, arrived at between the parties, in pursuance whereof Writ Petition No,21894 of 1999 was disposed of vide order dated 10th April, 2001.
4. The contention so raised by the learned counsel has no substance. As a careful perusal of order of disposing of writ petition vide order dated 10th April, 2001, clearly indicates that it was conditional order as petitioners were required to deposit decretal amount before the Banking Court within a period of one month, but admittedly they failed to do so, with the result that sale of the house in favor of auction-purchaser was confirmed and certificate of sale was issued. It is important to note that by the time the property has changed three hands as respondent No,2 sold the house to respondent No,3 from whom respondent No,4 has purchased the same. As the process of selling the property to satisfy the decree has gone much ahead, therefore, no relief at this stage can be granted to the petitioners.
5. No other point was argued by the learned counsel for the petitioners.
' Thus, for the foregoing reasons petition is dismissed and leave declined.
' Leave to appeal declined.
Cited by 3 cases
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- Mrs. SOHAILA SHAHZAD vs FEDERATION OF PAKISTAN through Secretary and 4 others 2011 PLJ Karachi 174