PLJ 2004 SC 732

[Appellate Jurisdiction]

Present: mian muhammad ajmal and faqir muhammad khokhar, JJ.

Ch. ABDUL MAJTD-Petitioner

versus

SADAQAT SAEED MALIK and others-Respondents C.P. No. 738-L of 2002, decided on 20.5.2004.

(On appeal from judgments dated 19.11.2001 of the Lahore High Court, Lahore, passed in R.F.A. No. 158 of 1990).

(i) Banking Companies (Recovery of Loans) Ordinance, 1979 (XIX of 1979)--

—S. 3-Civil Procedure Code (V of 1908), O.XXI, R. 1 OS-Constitution of Pakistan (1973) Art. 185(3)--Scparate suit on basis of sale agreement relating to property which had been auctioned by High Court in execution of decree-Provisions of S. 3 of the Ordinance of 1979, were not intendent to permit a party to file separate suit in disregard to provisions of Rule 103 of O.XXI of C.P.C. and to frustrate execution of decree passed by Special Court-Petitioner could have pursued his objection petition before Special Court to its logical conclusion-Impugned judgment passed by High Court whereby property in question, was auctioned in execution of decree does not suffer from any legal infirmity so as to warrant interference by Supreme Court-Leave to appeal was, therefore, refused.

[P. 738] C

(ii) Civil Procedure Code, 1908 (V of 1908)--

—-O. XXI, Rr. 97, 100 & 103-Specific Relief Act (I of 1877), S. 12--Sale of
property in question, in execution of decree by High Court—Petitioner
claiming such property on basis of sale agreement—Remedies available to
petitioner-All questions arising as to title, right or interest or possession
of immovable property between applicants under Rules 97 and 100 of

0. XXI of C.P.C., would be adjudged upon and determined by Court
executing the decree and no separate suit would lie for determination of
any such matter-Executing Court thus, has exclusive jurisdiction to
decide objection in respect of execution of decree-Petitioner, thus, could
not file separate suit on basis of agreement of sale. [P. 738] B

(iii) Transfer of Property Act, 1882 (IV of 1882)--

—S. 53-A-Sale of property in question, in execution of decree-Petitioner claiming to be in possession of agreement of sale in his favour relating to

property in question could not acquire better title over the same than
judgment debtor-Protection of S. 53-A of Transfer of Property Act 1882
was not available to petitioner—Judgment debtor being no more owner of
property in question, which had been auctioned in favour of respondent,
suit for specific performance of agreement filed by petitioner in respect of
that property was barred by law. [P. 735] A

PLD 1962 SC 119; 1997 SCMR 837; PLD 1958 SC 201; 2002 SCMR 496;

PLD 1987 SC 512; 1941 PC 128; PLD 1961 Karachi 53; AIR 1959 Andhre

Pradesh 534; AIR 1963 Cal. 198 (DB); PLD 1989 SC 575; PLJ 1981 SC 313;

PLD 1988 SC 391; PLJ 1981 SC 795; PLD 1993 SC 109 and

1982 SCMR 650 ref.

Mian Fazal-e-Mehmood, ASC & Ch. AkhtarAli, AOR for Petitioner.

Mr. Gulzarin Kiyani, ASC & Mr. M.S. Khattak, AOR for Respondent No. 4.

Date of hearing : 20.5.2004.

judgment

Faqir Muhammad Khokhar, J.—The petitioner seeks leave to appeal, under Article 185(3) of the Constitution of Islamic Republic of Pakistan, 1973, against judgment and decree dated 19.11.2001, passed by a learned Division Bench of the Lahore High Court, Lahore, in R.F.A. No. 158 of 1990.

2. The dispute pertains to House No. 102, Babar Block, New Garden Town, Lahore. The Respondent No. 2, Union Bank of Middle East, Limited instituted a suit before Special Court, Banking under the provisions of the Banking Companies (Recovery of Loans) Ordinance, 1979 (No. XIX of 1979) (hereinafter referred to as the Ordinance), against the Respondents Nos. 1 and 3, for recoveiy of Rs. 14,43,369/-. The suit was decreed by the Special Court Banking, by judgment and decree dated 31.7.1982. In the course of execution of the decree, the suit property was attached on 19.9.1982. One Izzat Khalil filed an objection petition claiming therein that the Respondent No. 1 had executed an agreement dated 7.9.1982, for sale of the suit property in his favour. The execution proceedings stood transferred to the High Court by operation of law. The objection petition of Izzat Khalil was dismissed by the High Court, by order dated 15.10.1985. The suit property was sold on 18.12.1985, byway of public auction in favour of the Respondent No. 4 being the highest bidder. In the meantime, the petitioner also intervened by filing an objection petition C.M. No. 164-B/1985 in Execution Petition No. 22-B/1983. He claimed therein that the judgment debtor, by agreements dated 7.9.1979 and 12.4.1982 had agreed to sell the suit property to him for a consideration of Rs. 10,50,000/- out of which a sum of Rs. 7,00,000/- had already been paid. On 17.5.1986, the learned counsel for the petitioner withdrew the objection petition from the High Court on the ground that the petitioner had filed a civil suit, in the Civil Court, Lahore, for specific

performance of sale agreements in which an injunctive order against the delivery of the possession of the suit property had already been passed. The sale of the suit properly through public auction was confirmed on 8.7.1986 by the High Court in favour of the auction purchaser and sale certificate was issued accordingly. Thereafter, the Respondent No. 4, being auction-purchaser filed application C.M. No. 8-B/1986 in the High Court for delivery of vacant possession of the suit property. The said application was disposed of with the direction that, subject to any order that might be passed by any competent Court, the possession of the auctioned property be delivered to the auction purchaser.

3. The application of the petitioner for temporary injunction was
dismissed by the Civil Judge, Lahore, by order dated 5.11.1986, The
Respondents Nos. 2 and 4 filed their separate written statements in which
the contents of the plaint were denied and objections were taken, inter alia,
as to the maintainability of the suit and the bar of jurisdiction to entertain
and try the suit. The Respondent No. 4 also filed an amended written
statement on 28.7.1990. The trial Court framed necessary issues on the
divergent pleadings of the parties and recorded statement of Akhter Ali
Qazlibash, Advocate, P.W.-l, on 12.10.1989. Thereafter, the Respondent No.
4 filed an application dated 27.1.1990 seeking rejection of plaint under Order
VII Rule 11 CPC on the ground that the suit was barred by law. The trial
Court, by order dated 6.10.1990, rejected the plaint. The petitioner preferred
R.F.A. No. 158 of 1990 there-against, which was dismissed, by a learned
Division Bench of the Lahore High Court, by the impugned judgment and
decree dated 19.11.2001. Hence this petition for leave to appeal.

4. The learned counsel for the petitioner argued that the
proceedings taken, orders made and decree passed by the Special Court,
Banking, against the Respondents Nos. 1 and 3 for recovery of loan would
not bar a civil suit by the petitioner for specific performance of agreements to
sell. The physical .possession of the suit property delivered by the
Respondent No. 1 to the petitioner was protected by the provisions of Section
53-A of the Transfer of Property Act, 1882 (hereinafter referred to as the
Act, of 1882) as held in the case ofMohiuddin Molla versus The Province of
East Pakistan and others (PLD 1962 SC 119) and Fazla versus Mehr Din
and 2 others (1997 SCMR 837). It was submitted that where an auction
purchaser had notice of an agreement to sell, third person was entitled to file
a suit for possession on the basis of his right as the remedy of such person
was not confined to application under Rule 100, Order XXI CPC. It was next
contended in view of law laid down in the cases of. Muhammad Tufail versus
Abdul Ghafoor (PLD 1958 S.C. 201), Pakistan Industrial Credit and
Investment Corporation Limited Peshawar Cantt. and others versus
Government of Pakistan through Collector Customs, Customs House,
Jamrud Road, Peshawar and others (2002 SCMR 496), an order passed by a
Special Court (Banking) even though presided over by a High Court Judge
would not be binding on the Civil Court if it was not in conformity with the

provisions of the Ordinance. Therefore, as provided by Section 3 of the Ordinance, the Civil Court had plenary jurisdiction to entertain an determine the suit of the petitioner for specific performance of agreement respect of the suit property. It was lastly contended that the learned Judge of the High Court in Chambers did not take into consideration the leg aspects of the case in proper perspective.

5. On the other hand, the learned counsel for the auction-purchast
(the Respondent No. 4) argued that the petitioner had himself invoked tt
jurisdiction of the High Court by filing objection petition C.M. No. 16'
B/1985 before confirmation of sale and withdrew the same on 8.7.198'
Thereafter, the sale of the suit property in favour of the auction-purchas
was confirmed by the High Court. The learned counsel submitted that
view of the provisions of Sections 3, 6(4), 8(2) and 11 of the Ordinance
1979, the jurisdiction of the Civil Court was barred to entertain the suit
the petitioner. The only remedy open to the petitioner was by way of filir
an objection petition before the High Court which he had availed.
learned counsel relied on the case of Hudaybia Textile Mills Ltd., etc. versi
Allied Bank of Pakistan Ltd. etc. (PLD 1987 S.C. 512 = NLR 1988 SCJ 19
in support of contention that once the High Court had made up its mind
execute the decree by sale of public auction in terms of CPC, then all
provisions of Order XXI CPC would be attracted including the filing
objections by the petitioners under Order XXI Rule 100 CPC. Therefor
independent civil suit by the petitioner was not competent in view of Ru
103 of Order XXI C.P.C.

6. We have heard the learned counsel for the parties at length,
our view, the petitioner could not acquire a better title over the suit proper
than the judgment debtor (the Respondent No. 1) under whom he
claiming his inchoate rights. The protection of Section 53-A of Act, 1882,
not available to the petitioner against the Respondent No. 4 who was
auction purchaser of the suit property which was sold to him by the Hi
Court in execution of a decree. The Respondent No. 4 had nothing to do with
the judgment debtor and was not claiming his rights through or under his
The judgment-debtor the (Respondent No. 1) was no more an owner of the
suit property which had been auctioned in favour of the Respondent No.
In these circumstances, the suit for specific performance of the agreemer
filed by the petitioner in respect of the suit property was rightly held by the
High Court to be barred by law. Needless to say that Section 53-A of the A
1882, creates an estoppel between a transferor and a transfer of
immovable property. It does not bind a third party who does not claim under
either of them. This question was examined in a number of cases. In S.
Banerji and another (AIR 1941 Privy Council 128), the Privy Coun
observed that Section 53-A of the Act did not operate to create a form
transfer of property which was exempt from registration. It create,d not
right. It merely created rights of estoppel between the proposed transfer
and transferor which had no operation against third persons not claim

under those persons. A some-what similar view was also taken in the cases of the P&T Co-operative Housing Society Ltd. Karachi versus Ch, Manzoor Ahmad Sahi (PLD 1961 Karachi 53), Yeditha Satyanarayanamurty and others versus Tadi Subrahmanyam and others (AIR 1959 Andhre Pradesh 134 (D.B) and Stuart and Co. Ltd versus C. Mackertich (AIR 1963 Calcutta 98 (D.B). In the case of Shamim Akhter versus Muhammad Rasheed (PLD 989 S.C 575), this Court held that the part performance under Section 53-A f the Act, 1882, conferred upon the transferee the privilege of invoking the .octrine embodied therein only as a shield against any invasion of his rights y the transferor or person claiming under him.

7. By the provisions of Sections 2(f) and 6 (l)(a) of the Ordinance, as
bey stood at the relevant time, the High Court in exercise of its original civil
jrisdiction was vested with all the powers of a Civil Court under the Code of
Jivil Procedure, 1908, in respect of a case in which the outstanding amount
f the loan exceeded one million rupees. Sub-section (4) of Section 6
spressly provided that no Court other than a Special Court would have or
sercise any jurisdiction with respect to any matter to which the jurisdiction
f a Special Court extended under the Ordinance, including a decision as to
ae execution of a decree passed by a Special Court; It was further provided
mt all proceedings, including the proceedings for the execution of a decree
ithin the jurisdiction of a Special Court, by whatever Court passed, pending
i any Court would stand transferred to the Special Court. By virtue of
action 8(3) of the Ordinance, as it originally existed, a Special Court was
squired, ..on the application of the decree holder, to pass an order for
cecution of the decree as arrears of land revenue or such other manner as it
light deem fit. Therefore, there was noting to prevent the Special Court to
How the procedure provided by the C.P.C., in appropriate cases, for
:ecution of the decree.

8. Section 3 of the Ordinance provides that the provisions of the
rdinance shall be in addition to and, save as hereafter expressly provided,
in derogation of any other law for the time being in force. The impact of
action 3 of the Ordinance was examined by this Court in some cases. In the
se of Industrial Development Bank Limited versus Messrs Nadeem Flour
ills and others (PLJ 1981 S.C. 313 = 1981 SCMR 143), an application was
ed in the original said of the High Court of Sindh under Section 39 of the
dustrial Development Bank of Pakistan Ordinance, 1961, for attachment
id sale of the mills on account of default of payment of loan. The High
Court of Sindh returned the plaint for presentation before the proper forum,
was held by this Court that the application filed by the banking company

the High Court stood transferred to the Special Court on the plain nguage of Section 6 of the Ordinance. It would defeat the very object of the rdinance if the litigants were permitted to institute or to continue parallel oceedings before various forums in respect of a matter wliich could be termined by the Special Court, Banking. In the case of Mst. Yasmeen ghat and others versus National Bank of Pakistan and others (PLD 1988

SC 391) it was held that even the pending proceedings in all the suits falling within the ambit of the Ordinance would stand transferred to the Special Court. In Muhammad Ayub Butt versus Allied Bank of Pakistan Limited (PLJ 1981 S.C. 795 = PLD 1981 S.C. 359), a Bank instituted civil suits before the Civil Court for recovery of different sums of loans alongwith applications for permission to the sale of goods which were lying as security. In the meantime, the Ordinance was promulgated. Therefore, all the pending cases were transferred to the Special Court. A guarantor of the loan submitted applications before the Special Court for dismissal of the suits on the ground that there had been illegal conversion of the pledged goods on the part of the Allied Bank of Pakistan by selling them without permission of the Court. The Special Court banking dismissed all the applications. The guarantor filed revision petitions under Section 115 CPC which were dismissed by the Peshawar High Court on the ground that finality was attached to the orders of the Special Court under Section 11 of the Ordinance and the revisions petitions were not competent. It was held by this Court that the provisions of the Civil Procedure Code would continue to apply unless its application was excluded by the provisions of the Ordinance. It was further held that Section 3 of the Ordinance, did not allow the High Court to exercise revisional jurisdiction vested in it under Section 115 of the Code of Civil Procedure in respect of an order made by a Special Court under the special law and in case of inconsistency between the provisions of the Ordinance and those of civil laws, the former would prevail. Section 4 C.P.C. itself provides that in the absence of any specific provision to the contraiy nothing in the Code shall be deemed to limit or otherwise effect any special or local law in force or any special jurisdiction or power conferred on any special forum or procedure prescribed by or under any other law for the time being in force. Undoubtedly, a Special Court is a Court with special procedure and by virtue of Sections 11 and 12 of the Ordinance, the revisional jurisdiction of the High Court was not exercisable qua the orders of the Special Court. In Hudaybia Textile Mills Ltd, etc. (supra), it was observed that while trying a suit under the Ordinance, the Special Court was to follow the procedure laid down in the Code of Civil Procedure except to the extent where the application of C.P.C. was excluded by the provisions of the Ordinance. As the High Court was already an established Court and not the creature of the special enactment, the procedure ordinarily governing the trial of the suits would regulate the proceedings including the general right of appeal from its decisions unless contraiy intention was expressed by the Ordinance. It was held that the equitable principles underlying the provisions of the C.P.C. could be invoked where a sale had been effected. This Court also took notice of the provisions of Order XXI Rule 92 CPC and held that once a sale had been effected, a third party interest intervened which could not be disregarded. In the case of Pakistan Fisheries Ltd. versus United Bank Limited (PLD 1993 S.C. 109), this Court while construing the provisions of Section 13 of the Ordinance, held that provisions of C.P.C. which were not in conflict with the Ordinance could well be enforced by the

Special Court and that the High Court while acting as a Special Court exercised its original Civil Jurisdiction.

9. In the present case, the suit property was auctioned by the High Court in favour of the Respondent No. 4. The petitioner himself had filed objection petition on the basis of his alleged agreements to sell in respect of the suit property. The same was dismissed by the High Court as withdrawn and the judicial sale of the suit property was confirmed in favour of the Respondent No. 4 by following the procedure as laid down in CPC. In the facts and circumstances of the case it could not be said that the petitioner could not seek his remedy before the High Court in terms of Order XXI CPC. The provisions of Rule 103 ibid were amended by the Law Reforms Ordinance, 1972, whereby it was provided that all questions arising as to the title, right or interest, or possession of immovable property between the applicants under Rules 97 and 100 and the opposite party, would be adjudged upon and determined by the Court, and no separate suit would lie for the determination of any such matter. At the same time a corresponding amendment was also introduced in Order XLIII Rule 1 (ii) CPC whereby an order under Rule 103 CPC was made appealable. The object of these provisions was to avoid multiplicity of litigation and to confer exclusive jurisdiction on the executing Court to decide the objections in respect of the execution of decree. The case of Mohiuddin.Molla (supra) is distinguishable from the facts of the present case. In the case of Sheikh Ghulam Nabi etc. versus Ejaz Ghani and others (1982 SCMR 650) it was held that, under Rule 103 Order XXI CPC, a party aggrieved by an order made by the executing Court, could not institute a suit as it could bring an appeal under Clause (ii) of Rule 1 of Order XLIII, CPC. The provisions of Section 3 of the Ordinance were not intended to permit a party to file a separate civil suit in disregard to the provisions of Rule 103 of Order XXI C.P.C. and to frustrate the execution of decree passed by the Special Court (Banking). The petitioner could have pursued his objection petition before the Special Court to its logical conclusion. He was not entitled to institute a separate suit as his objections could be looked into by the Special Court. Needless to mention that the suit property had already been mortgaged by the Respondent No. 1 with the bank. In our view, the impugned judgment passed by the High Court does not suffer from any legal infirmity so as to warrant interference "by tiiJs Court. Even otherwise, this is not a fit case for grant of leave to appeal.

8. For the foregoing reasons, we do not find any merit in this petition which is dismissed and leave to appeal is refused accordingly.

(A.A.) Leave refused.