KAUSAR PARVEEN and another vs KASB BANK LIMITED and others
This matter concerns a petition for leave to appeal against the confirmation of an auction sale of a residential property conducted in execution of a banking decree. The petitioners, who were not parties to the original suit, challenged the auction proceedings on the grounds that the auction purchaser failed to deposit the balance auction price within the mandatory fifteen-day period prescribed by law. The petitioners further contended that the auction proceedings were procedurally flawed due to the absence of a proper record maintained by the auctioneer and that the property in question was in their physical occupation. The Supreme Court, having considered the submissions regarding the alleged violation of mandatory procedural requirements and the reliance placed on established precedents concerning auction irregularities, granted interim relief. The Court stayed the execution of the warrant for possession of the property and ordered the maintenance of status quo, subject to the petitioners depositing a specified sum of Rs. 1,500,000 with the Registrar of the Court. The matter was subsequently adjourned for further hearing.
- Does the failure to deposit the balance auction price within the mandatory period under Order XXI, Rule 85, C.P.C. render an auction sale a nullity?
- Can an executing court confirm an auction sale if the auctioneer failed to maintain a proper record of the proceedings?
- Is a person in physical possession of a property, who was not a party to the original suit, entitled to challenge the execution proceedings against that property?
- Order XXI Rule 85, Code of Civil Procedure 1908
ORDER
' It has, inter alia, been contended by the learned counsel for the petitioners in these two petitions that in respect of finance facility advanced to the firm decree was passed by the learned Judge Banking Court-IV, Lahore, on 8-2-1999, which admittedly according to the learned counsel attained finality and for satisfaction of the decretal amount, the property in question comprising of a residential house bearing No,6 Street No,12, (Karim Street) Mohallah Kachupura, Lahore measuring 5 marlas was put to auction under the orders of the learned Executing Court. The learned counsel further submitted that the said property was put to auction against a sum of Rs,12,75,000 and sold to Muhammad Gulzar respondent No,2 which eventually was finalized/confirmed and sale certificate accordingly was issued. The learned Advocate Supreme Court contended that within the specified time of 15 days, the balance amount of the auction price was not deposited by the respondent No,2, yet the learned Executing Court approved the sale made through auction against the mandatory provisions of Order XXI, Rule 85, C.P.C. Although, the auction on such score alone had become a nullity in the eye of law. Further, the learned counsel argued that there I was no record of the auction proceedings maintained by the auctioneer, which is evident even from the order passed by the learned Judge Banking Court. According to the learned counsel, the house in question is in the physical occupation of the petitioners, who also have their due share in such property against whom the decree was not operating nor were they parties in the suit brought against the judgment debtors by the respondent Bank. The learned counsel next argued that only the title deeds in respect of the stated mortgaged property were deposited by the borrowers, who were enjoying the running finance facility extended to them by the Bank.
' It reflects from the record that possession of the property in question has not yet been delivered to the auction purchaser/ respondent No,2 and warrant of possession was issued for the purpose by the learned Executing Court and the matter is now fixed for report on 16-2-2010. The learned counsel to supplement his contentions as regards flagrant violation of the mandatory provisions of Order XXI, Rule 85, C.P.C. Has placed reliance on the judgments namely Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed Sayed Mahmd and another (AIR 1954 SC 349), Balram son of Bhasaram v. LIain Singh and others (AIR 1996 SC 2781) and Afzal Maqsood Butt v. Banking Court No,II, Lahore and others (PLD 2005 SC 470). In the last it has been categorically submitted by the learned counsel that the petitioners are ready and willing to deposit the auction price in the Court in addition to the expenses incurred in such behalf.
2. Having considered the submissions put forth on behalf of the petitioners including the contents of the impugned judgment, as well as, the documents available on the paper-book, we having also taken into account, the impact of the rule laid down in the above quoted reported judgments, are inclined at first instance to issue notice to the respondents subject to deposit of Rs,15, 00,000 (Rupees fifteen lac) with the Registrar of this Court within 15 days of this order. In the meanwhile, the warrant for delivering the possession of the house in question to the auctioneer purchaser/respondent No,2 is stayed and status quo particularly in respect of this property be maintained.
3. These matters be re-listed in the third week of February, 2010.