Syed ABDULLAH SHAH Versus LAHORE CENTRAL COOPERATIVE BANK

The brief facts in this writ petition are that one Abdul Latif real paternal uncle of the petitioners was owner of the land measuring 97 Kanals, 3 Marlas. Out of the total land' he pledged the land measuring 32 Kanals, one Marla with the Cooperative Bank by. way of mortgage but he could not, pay back, the loan. Consequently the property was put to, auction on 17‑4‑1972. Four persons participated in that auction and. the petitioners who were minors at that time through their father who was the brother of Abdul Latif; paid the highest bid of Rs.4, 500, the total amount, for the land measuring 32 Kanals, 1 Marla in open auction in the year 1972. according to the submissions of the petitioners they deposited 1 /4th of the total amount at the spot and later on the Assistant Registrar issued them a certificate. The auction was accepted on 14‑7‑1972. The remaining balance amount was to be paid on 19‑7‑1972 and the petitioners through a composite cheque paid the said amount. Thereafter, the petitioners through their father received notices, dated 17‑9‑1986 and 1‑2‑1987 which were duly replied by them. The Petitioners were summoned by the defendant/ respondent No. 2 for 21‑2‑1987 and later on through 3rd notice, dated 8‑3‑1987 they were informed that auction in their favour was cancelled being collusive and irregular. Against this decision a revision petition was filed which was dismissed. Consequently he filed a suit for declaration with consequential relief challenging all the three aforesaid notices and the orders, dated 31‑3‑1987 and 22‑8‑1988 passed by the defendants/ respondents Nos.2 and 3 respectively the suit was contested by the respondents/ defendants. The following issues were framed:‑‑

(1) Whether the orders, dated 31‑3‑1987 and 22‑8‑1988 passed by the defendants Nos.2 and 3 are illegal, against law and facts and ineffective qua the rights of the plaintiffs on the basis of averments made in the plaint? OPP

(2) If Issue No. 1 is proved, whether the plaintiffs are entitled to a decree for declaration with injunction as prayed for? OPP

(3) Whether the plaintiffs have not served the defendants with a notice before the institution of this suit? If so, its effect? OPD

(4) Whether the suit is barred by time? OPD

(5) Whether the suit is incompetent in its present form? OPD

(6) Whether the plaintiffs have no locus standi to bring this suit as stated in Objections. Nos.4 and 51 of the written statement? OPD

(7) Whether the auction of the property in dispute was void ab inito and against law and the same was collusive inter se Abdul Latif Shah, Mazhar Shah and the present plaintiffs and thus the defendant No.2 has rightly cancelled the said auction as stated in Objections Nos.6 and 7? OPD

(8) Relief.

2. The learned Civil Court vide judgment and decree, dated 3‑3‑1992 dismissed the suit of the petitioners. An appeal was ‑filed assailing the same which was also dismissed vide judgment and decree, dated 27‑1‑1998. Now both the judgments and decrees of the learned lower Courts, dated 3‑3‑1992 and 27‑1‑1998 have been assailed in the instant revision petition.

3. The learned counsel for the petitioners submits that both the learned lower Courts have failed to consider the evidence of the parties in true perspective and have kept in view the evidence produced by the defendants. Therefore, the judgments of both the learned lower Courts suffer from misreading of evidence, as the Issues Nos. 1,2 ,6 and 7 were decided on the basis of finding on Issue No. 1. This is a violation of the Order XX, rules 4 and 5, C.P.C. The Issues Nos.3, 4 and 5 have been decided against the defendants on the basis of finding on Issue No.l and the learned lower Court has erred in considering the evidence of the parties and the most important matter has been ignored by the learned lower Court while deciding the issues aforementioned against the appellants that the auction was held in 1972 and was confirmed. vide Letter No.715, dated 14‑7‑1972 and the impugned order for cancellation of auction was passed on 31‑3‑1987 after 15 years on the basis that the sanction of Board of Revenue was not obtained by the defendants/ respondents and this act on the part of the officials was considered to be a fault on the part of the plaintiffs/ petitioners, as no auction can be cancelled on irregularities. The collusion as alleged by the defendants was not proved and the relationship of the parties is no bar to the participation in auction. The petitioners' father being natural guardian could legally bid on behalf of his son or sons and in this regard no guardianship certificate is required. The delay in laches has not been explained by the defendants nor the Court has looked into this matter. The period of 15 years waived the rights of the defendants if they had any. The learned Appellate Court has pronounced a short judgment which is not permissible under the law.

4. The learned counsel for the respondent No. 1 submits that the real brother of father of the petitioner Abdul Latif was a loanee of about Rs.1,06,992.75. He pledged his property by way of mortgage and failed to pay back the loan. Consequently the property mortgaged in the hand of the respondent No. 1 was put to auction. Only four persons participated in the auction. Two were held ineligible and then the 3rd one was also a relative and 32 Kanals and 1 Marla was purchased in consideration of Rs.4, 500 only and on the part of the minors the petitioners who were minors at that time their father Mazhar Ali Shah deposited Rs.1,000. This auction was conducted against a loan of Rs.1,06,992.75 in the year 1972. He further submitted that the most important fact in this case is that the minors' father was an official of the Cooperative Bank. The minors were not competent to independently participate in the auction proceedings. The P.W.1, the minor plaintiff, appearing as major witness admitted that the cheque was signed by him, although he was a minor at the time when the auction took place. He further submitted that at the time of auction only one person can deposit Zar‑e‑Zamanat. The Zar‑e‑Zamanat cannot be deposited by composite two persons nor they can give bid. A bid was given by Mazhar Ali Shah against whom no price was deposited, so he was not eligible to participate in the auction proceedings. Even it is settled law that the agricultural land cannot be auctioned without the prior sanction of the Board of Revenue. In this way the total proceedings are void. The auction was collusively not publicized and against a loan of Rs.1,06,992.75 the property measuring 32 Kanals, one Marla the market value of which was not less than Rs.1 lac in any case was auctioned for Rs.4, 500. Even the auction was less than the market price and was not sufficient for the satisfaction of the loan. Even the auction money was not deposited within three days when the auction took place. The Khata of Mazhar Ali Shah, the father of the petitioners Abdul Latif was joint, therefore, the auction was declared as void. The most important aspect of this case is that the proceedings against the petitioners were conducted under M.L.O, No.241. Under M.L.O. No.241 no Court has jurisdiction to challenge the same. As no remedy of challenging this order is provided under the M.L.O. and the petitioners did not advert to the Constitutional jurisdiction, under the mandatory provision of section 70 of the Cooperative Societies Act, before bringing an. auction in any Court the notice must be served on the Registrar. The total proceeding of the auction was just a paper work. It was not publicized. It was not attended by the people. One was a bank employee and the other was the father of the minors and 2 other persons were present and receipt of the cheque was given. The learned Courts below have rightly decided the case in favour of the defendants/ respondents.

Respondent No.2, the Manager of the Cooperative Bank hasp submitted that since the auction stood cancelled and the respondent lost cases in the learned Courts below, the Punjab Provincial Cooperative Bank, Lahore in its meeting, dated 9‑2‑1996 had considered the application of Imdad Begum and Shahnaz Begum, the widows of Abdul Latif borrower opted to refund the total amount of Rs.2,09,836.68 with profit. She was allowed under certain conditions while the photocopy was placed on record by the respondent No.2 and she had paid the total amount. The property under mortgage could not be returned to him as there was a stay issued by this Court in the instant civil revision. In this way now there is no loan remaining with the Bank about Abdul Latif deceased defaulter as the same had been paid by his predecessor‑in‑interest.

5. I have heard the learned counsel for the parties and have perused the record.

6. One of the plaintiffs appeared as P.W.1. He submitted that his father and his brother Moazam purchased the property in Mauza Bogri and according to the terms they paid Rs.1,125 and the auction was accepted and then they paid Rs.2,175.67 and gave a cheque for the payment of Rs.1,199.37 from Cooperative Bank, Lahore. At the time of auction the representative Inspector Muhammad Ali, and Haji Abdul Aziz were present. The possessions was delivered to them. Abdul Aziz filed a suit against :the bank and stay was issued. He filed an appeal before the Deputy Registrar who dismissed his appeal and they were granted the decree for ownership. In across examination he accepted that Latif Shah was a joint owner and' at the time of auction he was 10 years old and his younger brother was,7 years old and both of them have not participated in the auction. The auction bid was made by his father but the Zar‑e‑Neelam was deposited in his name and in his brother name and Zar‑e‑Neelam was Rs.1,125. He admitted that it is correct that his father did not deposit Zar‑e‑Neelam in his name. He also admitted that Eight/ten people participated in the auction and he does not know their names. Amanat and Sheeda also participated in the auction and he did not sign after the auction was conducted. He does not know that Latif Shah had 'a stay against this auction. The cheque was issued by him as he had the bank account and at that time during minority he signed the cheque. It is wrong that the auction proceedings were collusive.

P.W.2 is Ashraf Ali, one of the auction participants. He stated that the possession is with the plaintiff and Amanat, Hassan All Shah, Yousif Ali Shah, Nazar Khan and Siraj also came at the spot. They were 30/40 persons. Abdul Aziz, Manager Bank and Muhammad Ali, Sub Inspector were present. Farzand Ali Khan gave auction bid in the sum of Rs.3,000 and lastly Mazahar Ali Shah gave auction bid for Rs.4, 500 on behalf of his minor sons. In cross‑examination he admitted that the plaintiffs are his real nephews and Latif Shah is his real brother. It is correct, that Mazhar Ali Shah father of the plaintiffs was an employee in the Cooperative Bank and retired 10 years before and he was not a borrower but there was a loan of Rs.800 against him. He did not know whether Latif had to pay Rs.2 lacs. Hassan Ali Shah is the uncle in relation and Yousif Ali Shah is also an uncle in relation. The total property was 12 acres and Abdul Latif owned 1 /3rd of it and rest of the property belongs to him and to the father of the plaintiffs as the Khata is "Mustarka". The auction started at 11 a.m. and finished at 3‑30 p.m. and there were 15/.16 persons of Kot Murad Khan and 50/60 persons of Mauza Bogri. Only 3/4 persons participated in the auction and he cannot tell the names of the participants in the auction and his bid was of Rs.2,700/2,800. Plaintiff No. 1 went there as minor. He must be about 14/ 15 years of age and could not participate in the auction. Zar‑e- Chaharam was deposited but Zar‑e‑Zamanat was not deposited and it is correct that the father of the plaintiffs was a treasurer in Tehsil. 1 /4th money was also deposited by the participants on his behalf. The market value of that property is more than 2 lacs per acre and it is double now.

P.W.3 is Ismail. He stated that his father gave a bid of Rs.3,000. The property was 4 acres. 100/ 150 persons were participant in the auction. The auction started at 1 p.m. His father gave a bid of Rs.3,000 and then Mazhar Ali Shah gave a bid of Rs.4, 500 and no one else participated in the auction. The plaintiffs produced in evidence a copy of the order, dated 22‑8‑1986 arid Exh.P.1, copy of notice, dated 4‑3‑1987 as Exh.P.2, copy of the letter Exh.P.3, copy of the letter, dated 14‑7‑1972 Exh.P.4, copy of the letter Exh.P.5, copy of the notice Exh.P.6, copy of another notice Exh.P.7, copy of the reply to notice Exh.P.8, copy of the receipt Exh. P.9, copy of the Pass Book Exh.P.10 and copy of original Pass Book Exh.P.11.

7. D.W.1 Naimat, Sub‑Inspector appeared. He stated in examination‑in‑chief that he has no knowledge that before the auction the permission was taken from the Board of Revenue and the minor cannot participate in the auction and, therefore, the auction was cancelled. In cross -examination he stated that he does not know whether the guardian of the minor can participate in the auction or not.

D.W.2 is Abid Hussain Shah. He stated in examination‑in‑chief that the precondition of the auction was that every participant should pay Rs. Y000 prior to auction and then participated in the auction. At the spot four persons participated in the auction. Two were minors and both the minors compositively deposited Rs.1,000. Mazhar Ali Shah participated in the auction. Abdullah did not give any bid. The prior permission of the Board of Revenue was necessary. It was not taken. The auction of Rs.4, 500 took place in respect of 32 Kanals. 7 Marlas. The value of the property was much higher against the bid. Mazhar Ali Shah could not participate in the auction and he did not deposit the auction money within a month and it was rightly cancelled by the Registrar. The auction was cancelled on 31‑3‑1987. An explanation' was called from the persons who conducted the illegal auction. The Cooperative Bank also objected that the auction has been conducted wrongly. Upon this, the auction was cancelled. The minors could not participate in the auction. In the record the objection of the Bank is recorded and he cannot tell when the Bank objected and it is incorrect that there is no objection on the record on behalf of the Bank. It is also incorrect that under an intrigue the auction was sanctioned. They produced in evidence the copy of auction proceedings as Exh.D.1 and copy of the receipt Exh.D.2 and closed the evidence.

8. The learned Civil Court decided Issue No.1, whether the orders, dated 31‑3‑1987 and 22‑8‑1988 passed by the defendants Nos.2 and 3 are illegal, against law and facts and inoperative qua the rights of the plaintiffs on the basis of averments in the plaint and decided this issue‑ against the petitioners. Issue No.2 was, whether the plaintiffs are entitled to a decree for declaration and with injunction, the decree was passed on the basis of Issue No.1 which was elaborately recorded against the plaintiffs. Issue No.3 was also answered in the negative which was about the notice. Having not served the notice on the defendants onus of which was O.P.D. and giving the issue wise findings dismissed the suit of the petitioners. The learned Appellate Court also through a well‑reasoned judgment dismissed the appeal filed by the petitioners.

9. I have carefully read both the judgments of the learned lower Courts. In view of all the evidence on record the manner in which the auction was conducted without prior permission of the Board of Revenue and the persons who participated in the auction and the P.Ws. are closely related. The property of 32 Kanals, one Marla was auctioned in the sum of Rs.4, 500 which is a ridiculous amount on its face. No proclamation of the auction proceedings nor any evidence in respect of its being held with the prior permission of the Board of Revenue has been produced by the petitioners as plaintiffs. Undoubtedly the loan against the borrower was about Rs.1,06,992.75 and ridiculously the property of 32 Kanals, 1 Marla was auctioned in the sum of Rs.4, 500. The auction was participated by an employee of the Cooperative Bank on behalf of his minor sons. Moreover, composite deposit of Zar‑e‑Chaharam, signing of cheque by the minor, all incident shows that auction was void and it was not held in the manner and way it should be held. This also shows and proves the collusion on record. Both the judgments passed by the learned lower Courts are issue wise findings, well‑reasoned and passed within the lawful jurisdiction.

The bank has also satisfied the total loan on behalf of widows of the original borrower and this factor is nowhere challenged up to this time. Therefore, finding no force in the instant revision petition the same is dismissed.

10. No order as to costs

S.A.K./A‑553/L Petition dismissed