Mrs. SHAHIDA SALEEM and another vs HABIB CREDIT AND EXCHANGE BANK

1. AMANULLAH ABBASI, J.--- Suit No.143 of 1993 filed by present respondent No.1 was decreed in the sum of Rs.16,75,121. Subsequently Execution Application No.70 of 1994 was filed and on 12-11-1995 Chairman, Banking Tribunal-II, passed the orders, relevant portion whereof is as under:-- "In the above circumstances, it is ordered that the mortgaged property be sold by auction as prayed by the D.H. Issue writ of attachment."

2. Thereafter, notice of sale of property in question by public auction was published in newspaper on 21-7-1996 and the date of auction was fixed as 21-8-1996. According to the appellant there was only one auction purchaser and the property was auctioned to the said purchaser for an amount of Rs.27,00,000 (Rupees twenty-seven lacs). The appellant filed application under Order XXI, Rule 90, C.P.C. read with section 151, C.P.C. before the Tribunal on the ground that the provisions of Order XXI, Rule 66 had not been complied with. According to him no reserved price for the property was fixed and the amount for the recovery of which the sale was ordered was not mentioned and this was non-compliance of Order XXI, Rule 66(2)(d). The Tribunal by order, dated 5-11-1996 dismissed the application filed under Order XXI, Rule 90, C.P.C. Against this order present appeal has been filed.

3. Learned Advocate for the appellant has submitted that non-compliance of provisions of Order XXI, Rule 66 renders the sale proceedings illegal and void. He relied on decisions reported in (1) AIR 1963 Mad. 156, (2) AIR 1926 Mad. 959, (3) AIR 1970 SC 2037 (relevant portion in paragraph 6 on page 2039), (4) AIR 1974 SC 1331, (5) PLD 1957 Lah. 1054 and (6) 1996 CLC 192.

4. Learned Advocate for respondent No .5 submitted that the appellant No.1 filed an application under Order XXI, Rule 66 for setting aside the judgment and the decree, dated 21-12-1993 and for setting aside the auction of the mortgage property of appellant No.2 who was owner of the property. The appellant No.2, however, did not file any application for setting aside the auction proceedings. The Banking Tribunal dismissed the said application on 5-11-1996 and the sale was confirmed. The entire amount was deposited by the auction purchaser with the Nazir. The omission to state or mention the estimated value of the property before the auction proceeding is neither illegality nor irregularity. The appellant No.1 had failed to show.that she has sustained substantial injury and, therefore, the auction proceedings cannot be invalidated. The provisions of Order XXI, Rule 66, C.P.C. are directory and not mandatory. Order XXI, Rule:90 -C.P.C. defines the person who can file application under-this provision and appellant No.1 is not covered by such definition, therefore, the application was not maintainable. She is neither owner of the property nor she has any right or title, interest or share in the property of the appellant No.2 and her possession in the said property is due to appellant No.2 who is her husband. Mere possession of appellant No.1 cannot be said to be "interest" in the property. Therefore, he cannot claim that they had suffered or sustained any injury.

5. The learned Banking Tribunal-II, Karachi in order, dated 5-11-1996 has mentioned as under:-- "The formalities under Rule 66 of Order XXI, which are required to be observed for issuing sale proclamation are obviously intended to safeguard the interest of the purchaser. They are in the nature of a signal which is intended to alert the purchasers/bidders about the property to be auctioned. If the highest bidder has no complaint about compliance of the said formalities, it cannot lie in the mouth of J.D. No.3 to agitate the non-compliance of the formalities particularly when she has no interest in the property. In this connection reference may also be made to PLD 1972 SC 337 relied upon by the Advocate of the highest bidder. It was held by the Supreme Court.

6. 'Indeed it would appear that the view of the Courts has consistently been that non-compliance with, the provisions of the Code of Civil Procedure, with regard to the proclamation of sale, its publication and the conduct of the sale in execution, are only material irregularities but not illegalities which render the sale in disregard of these provisions a nullity.

7. The rules are not mandatory in nature and substantial compliance with them is enough'.

8. In view of the above Supreme Court authority, the cases of Lahore High Court reported in PLD 1997 Lah. 706 and 1993 CLC 1949 relied upon by the Advocate of the applicant have no force. Moreover, applicant's Advocate has failed to convince the Court that the applicant would sustain substantial injury if the sale was not set aside as required by first proviso to Rule 90. For the above reasons I see no merit in the application which is, therefore, dismissed. There being no other application or complaint against the auction, the sale by the highest bid of Rs.27,25,0004 confirmed. The- highest bidder will deposit the balance of the bid within a week."

9. It has been agitated before us that the property worth Rs.70,00,000 (seventy lacs) approximately was auctioned to the only bidder for Rs.27,00,000 (Twenty-seven lacs) and this was done in contravention of provision of Order XXI, Rule 66. Rule 66(2) is as under:-- "66. Proclamation of sales by public auction.-- (1)......................................................

10. (2)Such proclamation shall be drawn up after notice to the decree-holder and the judgment- debtor and shall state the time and place of sale, and specify as fairly and accurately as possible- - (a)The property to be sold; (b)The revenue assessed, upon the estate or part of the estate, where,the property to be sold is an interest in an estate or in part of an estate paying revenue to the Government; (c)Any incumbrance to which the property is liable; (d)The amount for the recovery of which the sale is ordered; and

(e) Every other thing which the Court considers material for a particular to know in order to judge the nature and value of the property."

11. It is apparent that neither the requisite notice was issued to the appellant nor the reserved price of the property settled with the result that no one knew what was the value of the property and without determining this the offer of the respondent No.5 purchaser was accepted who, perhaps, was the only person present at the time of auction, for, the appellant has vehemently denied that there were other purchasers too. It is worth noting that it was the first attempt for the sale of the property and, therefore, if there were not sufficient number of bidders available at the site, the auction could have conveniently been postponed. In the circumstances, we consider that the provisions of Rule 66 were grossly violated and the grievance of the appellant that the property in question was sold at throw away price without making serious efforts to sell it at prevailing market price cannot be ignored. The contention on behalf of respondent No.5 that the appellant No.1 has no interest in the property as the property was owned by appellant No.2 alone, cannot be given much consideration, for the appellant No.1 was in occupation of the property and as the wife of the appellant No.2 her interest could seriously be affected if the property was to be sold at a price much lower than e market price, but, that apart in such cases where the property is sold incomplete disregard of the rules and under questionable circumstances, even suo motu action for setting aside the sale would be justified. In case decree has not been satisfied, the mortgaged property may be re-auctioned but this time the rules may strictly be complied with. The appeal is allowed and stands disposed of.