HABIB BANK LTD. Versus KOHINOOR COTTON MILLS LTD.
In execution proceedings (Ex.A. No.8‑B of 1986) titled Habib Bank Limited v . Messrs Kohi Noor Cotton Mills and another sale of the attached property through public auction was directed by my order dated 25‑2‑1987. The attached property consisted of cloth and yarn. M/s. Ghulam Qadir and M.Z. Khalil, Advocate, were appointed Court Auctioneers, they conducted the auction on 20th of April, 1987 in pursuance of the aforementioned order. The sale by auction which fetched a total price of Rs.24, 80, 000 was confirmed by my order dated 29th of April, 1987. The auctioneers through an application dated 10‑5‑1987 (Report No.2) requested that they be paid free for the auction conducted by them. It was also submitted by them that the sum of Rs.50,000 given to them by the decree‑holder‑bank for publicity for auction etc. has been practically exhausted, in that a sum of Rs.49,025 was spent by them towards payment of bills for newspapers, publications of handbills and their affixation etc. The details of expenses were submitted alongwith the aforementioned application.
2. On 12‑5‑1987 the Court Auctioneers were directed to file the exact amount payable to them as their fee and also the amount that will be payable to the Government. A copy of application/ report aforementioned and the addendum that the Auctioneers may file per aforementioned direction was ordered to be provided to the learned counsel for the decree‑holder who was to file necessary certification within seven days about the correctness or otherwise of the amounts claimed by the Court Auctioneers.
3. The decree‑holder‑bank filed the reply asserting that the fee claimed by the Court Auctioneers is too high and excessive and not permitted by rules. It‑ was also asserted that per rules the entire expenses of execution including expenses .for publicity and commission to Court Auctioneers should not exceed 2 % of the total auction price.
4. The Court Auctioneers filed reply to this objection on 5th of July, 1987, in which it was asserted that the fee claimed by the Auctioneers is in accordance with Rule 21, Chapter 12‑L, Volume I of the High Court Rules and Orders and that the fee is not excessive. It was also denied that expenses of execution proceedings including publicity etc. are to be spent out of the commission admissible to the Auctioneers. It was asserted that such expenses were to be borne by the decree‑holder apart from the commission to be paid to the Court Auctioneers and the Government. It was also averred in the reply that a complete account of amount spent on publicity etc. has been rendered and the amount of Rs.50,000 stands adjusted.
5. The objection of the decree‑holder‑bank is that expenses for auction are to be incurred by the Auctioneers out of the fee payable to them under the High Court Rules and Orders. The learned counsel for the decree‑holder in support of the above contentions has referred to Rule 21, Chapter 12‑L, Volume I of the' High Court Rules and Orders. He submitted that per sub‑rule (ii) of Rule 21 (ibid) all incidental expenditure had to be met with by the Auctioneers.
6. On the contrary the Court Auctioneers have submitted that expense on publicity for auction before the auction is held cannot be termed as an "incidental expenditure". Elaborating this contention the Court Auctioneers submitted that in the case in hand the total commission per rules comes to Rs.62,125 and after deducting the Government share of 20 $ of the above, the balance left would be Rs.49,700 and if the word "incidental expenditure" is interpreted to include the publicity expenses as well then the said expenditure incurred being almost equal to the commission left payable to the Auctioneers, they (the Auctioneers) will be paid nothing for the services rendered.
7. The Auctioneers further submitted that "incidental expenditure" is such expenditure only which would follow the main event. In this connection, Mr. M.Z. Khalil, Joint Court Auctioneer has submitted that the "incidental expenditure" has been defined in the Shorter Oxford Dictionary, Second Edition, Volume I as such expenditure as is incurred apart from primary disbursements.
8. In order to decide the controversy the only word requiring interpretation is "incidental expenditure" occurring in sub‑rule (U) of Rule 21 of High Court Rules and Orders, Chapter 12‑L, Volume I. For facility of reference sub‑rules (i) and (ii) of the said Rule 21 are reproduced hereunder:‑
21. Government commission.‑‑
(i) Commission at the following rates shall be deducted from the proceeds of sales under this Chapter:‑
(a) If the sale proceeds do not exceed rupees five thousand at five per centum.
(b) If the sale proceeds exceed rupees five thousand‑‑at five per centum on rupees five thousand and two and a half per centum on the remainder.
(ii) If the sale is conducted by the Court Auctioneer, 80 per cent. of the Commission will be paid to him and 20 per cent will be paid into the Treasury to the credit of Government. All incidental expenditure shall be met by the Auctioneer.
To me it appears that the only meaning that can aptly be ascribed to the words "incidental expenditure" used in sub‑rule (ii) (ibid) can be such expenditure which follows the main event of the holding of auction itself. Sub‑rule (i) provides that commission shall be deducted from the proceeds of sales under the Chapter. That means the commission becomes payable only after the auction has been held. The expenditure incurred before the holding of auction, therefore, cannot be termed as incidental. The expense incurred before the holding of auction i.e. in the process of holding an auction may be expense incurred in the execution but it cannot be said to be an expense incurred on the auction itself. The expense of publicity, therefore, would obviously be not an expense incidental to the auction but will be an expenditure which is a prelude to the holding of auction.
9. The word "incidental" is not foreign to the legal phraseology as well. It has been defined both in the ordinary English Dictionaries as well as in the Legal Dictionaries. The meaning assigned to it in the New Oxford Illustrated Dictionary, Volume I, at page 844 is as under:‑----
"Casual, not essential; one perceived as consequence of impressions no longer present."
In the Webster's New International Dictionary, Second Edition, at page 1257 this word "incidental" has been assigned the following meaning:‑----- "happening as a chance or undersigned feature of something else, casual; hence, not of prime concern; subordinate;
(2) liable to happen or to follow as a chance feature or incident".
The Shorter Oxford English Dictionary, Second Edition, Volucre I defines 'incidental' as 'occurring or liable to occur in fortuitous or B subordinate conjunction with something else; casual; b. or a charge or expense, such as is incurred apart from the primary disbursements."
In the Funk and Wagnalls Encyclopaedic College Dictionary, at p. 680 'incidental' has again been defined as 'occurring without design or regularity; casual; also, minor; secondary.'
10. In the Black's Law Dictionary, Third Edition the word 'incidental' has been defined at p. 924 in more clear and precise terms as under:‑--
"Depending upon or appertaining to something else as primary; something incidental to the main purpose."
11. Similarly in Wharton's Law Lexicon, Fourteenth Edition, the word 'incidental' has been defined as 'a thing necessarily depending upon or following another that is more worthy.'
12. My view as expressed above that the "incidental expenditure" in the context of Rule 21 of High Court Rules and Orders, Chapter 12‑L, Volume I, could only be an expense of casual/minor nature which would follow the main event viz. the holding of auction and is not a major or primary expense such as the publicity for the holding of an auction thus finds square support from the meanings assigned to these words by the various authentic English dictionaries.
13. I am, therefore, clearly of the view that the incidental expenditure would not include the expenditure of major nature such as publicity for holding of auction which of necessity has to be borne by the decree‑holder though adjustable out of the proceeds of auction separately.
14. Before parting with the case it may be observed that a question may then arise that if the publicity expenses etc. are not to be taken as incidental expenditure, what other expenses can be termed as incidental expenditure to the auction. The obvious answer is that expenses of minor nature such as expenses of transport, stay at the place of auction etc. are the incidental expenses envisaged by the provision.
15. In view of the foregoing, I would reject the objection of the decree‑holder‑Bank to the claim of fee of the Court Auctioneers except that the Auctioneers will not be entitled to the expense incurred by them on meals and hotel charges of stay at Mianwali appearing at item No.7 of their bill and to the expense appearing at item No. 6 which obviously are expenses of minor nature and personal expenses of the Auctioneers to carry out the function assigned to them which cannot be separately charged apart from the commission fee payable to them.
A . A . / H‑79/ L Order accordingly.