Haji GHULAM YASIN vs ASSISTANT REGISTRAR, COOPERATIVE SOCIETIES and others
The petitioner, a borrower in default, sought leave to appeal against a High Court judgment that dismissed his constitutional petition challenging the auction of a house pledged as security for a loan. The petitioner contended that the auction was conducted without proper notice and that he had locus standi to challenge the sale of the surety's property. The Supreme Court examined the record, finding that the petitioner had been served with multiple notices under the relevant Ordinance and had actively participated in appellate and revisional proceedings regarding the auction, thereby demonstrating full awareness of the process. The Court held that the auction proceedings were consistent with the statutory scheme, which mandated not only the securing of loans but also specific repayment schedules that the petitioner failed to satisfy. Consequently, the Court determined that the auction could not be avoided on grounds of lack of notice or failure to meet statutory repayment requirements. Leave to appeal was refused, as no substantial question of law requiring further examination was raised.
- Does a principal debtor have locus standi to challenge the auction of a surety's property pledged for the debtor's loan?
- Can a borrower avoid the auction of mortgaged property on the grounds of lack of notice when the record demonstrates active participation in appellate proceedings regarding the auction?
- Does the Co-operative Societies and Co-operative Banks (Repayment of Loans) Ordinance permit the auction of mortgaged property solely because the loan was secured, or must statutory repayment requirements also be met?
- Section 10, Co-operative Societies and Co-operative Banks (Repayment of Loans) Ordinance
- Section 5, Co-operative Societies and Co-operative Banks (Repayment of Loans) Ordinance
- Section 8, Co-operative Societies and Co-operative Banks (Repayment of Loans) Ordinance
- Section 64-A, Co-operative Societies Act 1925
- Section 7, Co-operative Societies and Co-operative Banks (Repayment of Loans) Ordinance
ORDER
1. ' SHAFIUR RAHMAN, J.-- The petitioner, a borrower adjudged to be in default, seeks leave to appeal against the judgment of the Lahore High Court, dated 23-1-1979 whereby his constitutional petition challenging the sale of a house pledged against the loan and belonging to his nephew who was the surety for the loan was dismissed.
2. ' The petitioner admitted that he owed a sum of Rs,29,000 to the respondent-co-operative bank in 1966 and got executed a mortgage deed, dated 22-3-1966 thereby securing the loan. Without notice to him the house pledged with the bank against the loan was sold by respondent No,1 at public auction on 15-8-1969. The petitioner challenged the auction and the re-sale of the house on the ground that loan was already secured, that he has not been given any notice and that the order of the Assistant Registrar directing the sale and selling the house was without lawful authority. He also challenged the launching of a criminal complaint against -him under section 10 of the Co-operative Societies and Co-operative Banks (Repayment of Loans) Ordinance (hereinafter referred to as the Ordinance).
3. ' The learned Judge in the High Court held that from the petitioner's own documents it appeared that he had received the necessary notice as the surety to whom the house belonged had not come forward to challenge it the petitioner had not locus standi to do so. The criminal proceedings launched under section 10 by the same order of the Assistant Registrar was, however, quashed as it was not found to be in accordance with the law.
4. ' The learned counsel for the petitioner contended that as a Principal debtor the petitioner was responsible to the surety whose house had been put to auction and disposed of for the loan obtained by him. As such the petitioner had the locus standi to invoke the constitutional jurisdiction. However, it was contended that the proceedings taken were not in accordance with the law as no notice under the Ordinance had been served before the house was put to auction.
5. ' We find that there is an order of the Assistant Registrar, Sheikhupura, dated 25-10-1966 wherein it is specifically mentioned that the petitioner was served notice under section 5 personally on 15-7- 1966 and on 25-8-1966. There is also a notice under section 8 of the Ordinance. Dated 13th of July, 1966. The fact of service of notice also finds mention in the criminal complaint launched against the petitioner on 14th of March, 1967. On 6th of July, 1968 the petitioner preferred an appeal under section 64-A of the Co-operative Societies Act, 1925 in which awareness was shown that the bank was holding an auction of the mortgaged house for the realization of the amount. He filed a detailed memo, of appeal on 1-8-1968. He was afforded an hearing by the Registrar Co-operative Societies on 1st of August, 1968 and the petition was rejected and the auction was ordered to be held. He then filed a revision petition before the Secretary to the Government of West Pakistan but did not pursue it in spite of notice and it was dismissed for default. It is clear from these proceedings, orders and recitals that the petitioner was not uninformed of the proceedings and did not specifically repudiate the service of notice on the dates given.
6. The other contention of the learned counsel for the petitioner touches the merits and is made on the assumption that auction proceedings could not be held if the loan was secured. We are afraid, it is not the scheme of the Ordinance. Not only the loan had to be secured if it was insecured but payments had to be made on receipt of such notice, that is, 15 per cent of the loan within six months of the service of notice under section 5 and the balance in 12 equal half-yearly instalments as provided in clauses (b) and (c) of section 7 of the Ordinance. There is nothing on the record or in the recitals of the petitioner that any payment in terms thereof was made at any stage. In the circumstances, we do not think auction could be avoided by the petitioner either on the ground of want of notice or on the ground of the satisfaction of the statutory requirements with regard to repayment of the loan. No other question of law has been raised such as may require further examination by this Court. Hence leave to appeal is refused.