case laws related to auction proceedings not compliance with statutory provisions
Title: Analysis of a Judicial Decision: Civil Revision No. 72449 of 2023
In a recent judgment by the Lahore High Court, Lahore, the case of Adnan Anwar versus Ijaz Ahmad & others was closely examined. The petitioner challenged the validity of a previous judgment that set aside the confirmation of an auction in his favor. Here's a breakdown of the judgment:
Background:
The dispute arose from a partition suit where the trial court decreed the suit and subsequently ordered an internal auction due to the absence of defendants. The auction was later challenged, leading to a series of legal proceedings culminating in the petitioner being declared the highest bidder for a commercial shop.
Key Points:
1. Non-Compliance: The petitioner failed to deposit the remaining 80% of the bid amount within the stipulated time frame of 7 days, as mandated by law.
2. Legal Provisions: Section 11 of the Punjab Partition of Immoveable Property Act, 2012, clearly outlines the obligations of the highest bidder in an auction, making the deposit of the remaining bid amount mandatory within a specified period.
3. Consequences of Non-Compliance: The court emphasized that non-compliance with the statutory provision renders the sale void, with the property subject to re-auction.
4. Court's Authority: The court reiterated that it lacks the authority to extend the time for depositing the remaining bid amount beyond what is stipulated by law.
5. Precedents: Previous court decisions were cited to reinforce the principle that no one shall benefit from the court's void orders, especially when such orders are contrary to statutory provisions.
Outcome:
The appellate court's decision to set aside the auction proceedings was upheld, as the petitioner failed to comply with the mandatory requirements of the law. The revision petition was dismissed, affirming the legality of the previous judgment.
Conclusion:
This judgment serves as a reminder of the importance of strict compliance with statutory provisions, particularly in matters involving auctions and property sales. It underscores the principle that legal obligations must be met within the prescribed timelines to avoid adverse consequences.
عنوان: عدالتی فیصلے کا تجزیہ: 2023 کا سول نظرثانی نمبر 72449
لاہور ہائی کورٹ لاہور کے ایک حالیہ فیصلے میں عدنان انور بمقابلہ اعجاز احمد اور دیگر کے کیس کا باریک بینی سے جائزہ لیا گیا۔ درخواست گزار نے پچھلے فیصلے کی صداقت کو چیلنج کیا جس میں اس کے حق میں نیلامی کی تصدیق کو ایک طرف رکھا گیا تھا۔ یہاں فیصلے کی ایک خرابی ہے:
پس منظر:
تنازعہ پارٹیشن سوٹ سے پیدا ہوا جہاں ٹرائل کورٹ نے مقدمے کا فیصلہ سنایا اور بعد ازاں مدعا علیہان کی عدم موجودگی کی وجہ سے اندرونی نیلامی کا حکم دیا۔ نیلامی کو بعد میں چیلنج کیا گیا، جس کے نتیجے میں قانونی کارروائیوں کا ایک سلسلہ شروع ہوا جس کے نتیجے میں درخواست گزار کو تجارتی دکان کے لیے سب سے زیادہ بولی لگانے والا قرار دیا گیا۔
اہم نکات:
1. عدم تعمیل: درخواست دہندہ بولی کی بقیہ 80% رقم 7 دنوں کے مقررہ وقت کے اندر جمع کرنے میں ناکام رہا، جیسا کہ قانون کے ذریعہ لازمی ہے۔
2. قانونی دفعات: پنجاب پارٹیشن آف ایمویو ایبل پراپرٹی ایکٹ، 2012 کا سیکشن 11، نیلامی میں سب سے زیادہ بولی لگانے والے کی ذمہ داریوں کا واضح طور پر خاکہ پیش کرتا ہے، جس سے بولی کی بقیہ رقم کو ایک مخصوص مدت کے اندر جمع کرنا لازمی ہوتا ہے۔
3. عدم تعمیل کے نتائج: عدالت نے اس بات پر زور دیا کہ قانونی ضابطے کی عدم تعمیل فروخت کو کالعدم قرار دیتی ہے، جائیداد دوبارہ نیلامی سے مشروط ہے۔
4. عدالت کا اختیار: عدالت نے اس بات کا اعادہ کیا کہ اس کے پاس بقیہ بولی کی رقم کو قانون کے ذریعے طے شدہ حد سے زیادہ جمع کرنے کے لیے وقت بڑھانے کا اختیار نہیں ہے۔
5. نظیریں: پچھلے عدالتی فیصلوں کا حوالہ اس اصول کو تقویت دینے کے لیے دیا گیا تھا کہ کوئی بھی عدالت کے باطل احکامات سے فائدہ نہیں اٹھائے گا، خاص طور پر جب ایسے احکامات قانونی دفعات کے خلاف ہوں۔
نتیجہ:
نیلامی کی کارروائی کو ایک طرف رکھنے کے اپیل کورٹ کے فیصلے کو برقرار رکھا گیا، کیونکہ درخواست گزار قانون کے لازمی تقاضوں کی تعمیل کرنے میں ناکام رہا۔ نظرثانی کی درخواست گزشتہ فیصلے کی قانونی حیثیت کی توثیق کرتے ہوئے خارج کر دی گئی۔
نتیجہ:
یہ فیصلہ قانونی دفعات کے ساتھ سختی سے تعمیل کی اہمیت کی یاد دہانی کے طور پر کام کرتا ہے، خاص طور پر نیلامی اور جائیداد کی فروخت سے متعلق معاملات میں۔ یہ اس اصول کی نشاندہی کرتا ہے کہ منفی نتائج سے بچنے کے لیے قانونی ذمہ داریوں کو مقررہ وقت کے اندر پورا کیا جانا چاہیے۔
IN THE LAHORE HIGH COURT, LAHORE.
JUDICIAL DEPARTMENT
….
Civil Revision No.72449 of 2023.
Adnan Anwar.
Versus
Ijaz Ahmad & others.
J U D G M E N T.
Date of hearing:
18.04.2024.
Petitioner by:
Barrister Muhammad Adil Fayyaz.
Respondents No.1-3 by: Mr. Javed Iqbal Bhatti, Advocate.
Respondents No.4-8 by: Hafiz Muhammad Mohsin Waseem
Sipra, Advocate.
AHMAD NADEEM ARSHAD, J. Through this Civil
Revision filed u/s 115 of Code of Civil Procedure, 1908, petitioner
has called into question the vires, validity and legality of judgment
dated 20.09.2023 whereby learned Appellate Court, while accepting
the appeals of respondents, set-aside the judgment/order of learned
Trial Court through which the auction was confirmed in favour of
the petitioner and sale certificate was issued.
2.
Pithily, the facts forming background of proceedings in hand
are that respondents No.4 to 8 instituted a suit for possession through
partition against respondents No.1 to 3 qua four immoveable
properties. The learned Trial Court, after observing due codal
formalities, decreed the suit vide judgment & decree dated
20.12.2021 and adjourned the proceedings for submission of mode of
partition. Since the defendants were not in attendance, hence, the
learned Trial Court observed that without their consent referee
cannot be appointed and the property was put to internal auction by
C.R. No. 72449 of 2023.
2
fixing the reserve price vide order dated 07.02.2023. Due to absence
of defendants, learned Trial Court declared internal auction to be
failed and appointed Muhammad Aslam Khan, Advocate as Court
Auctioneer with a direction to submit proposed schedule of open
auction vide order dated 17.04.2023. Thereafter, the auction schedule
was approved vide order dated 11.05.2023 and the case was
adjourned for awaiting the report of Court auctioneer. In the
meanwhile, order dated 17.04.2023 and 11.05.2023 were challenged
by respondent No.1 through preferring an appeal. Said appeal was
allowed vide order dated 12.06.2023 subject to depositing an amount
of Rs.10 million before the Executing Court within a week and
respondent No.1 was granted single opportunity to participate in the
internal auction. Respondent No.1 failed to deposit the said amount
within the stipulated time. As the learned Appellate Court had not
suspended and set aside the order of open auction dated 11.05.2023,
hence, the Court auctioneer conducted the auction proceedings and
resultantly properties were auctioned on 15.06.2023 and 16.06.2023.
In the said auction proceedings, petitioner participated and declared
to be the highest bidder with regard to the commercial shop
measuring 01 Marla bearing Khewat No.443, Khatuni No.448,
Khasra No.287 situated at the Revenue Estate Chak No.51, Tehsil &
District Mandi Bahauddin. On 26.06.2023, the Court Auctioneer
submitted his report. On the said date, petitioner also submitted an
application seeking permission to deposit remaining 80% amount in
the Court. Learned Trial Court adjourned the proceedings for perusal
of report and further appropriate order. Vide order dated 06.07.2023,
auction in favour of the petitioner was confirmed subject to payment
of entire remaining amount till 15.07.2023. Petitioner deposited the
total sale consideration amount through Receipt dated 10.07.2023
and through Challan Form on 12.07.2023. Learned Trial Court vide
order dated 17.07.2023 directed to issue sale certificate in favour of
the petitioner. After rejection of the objections raised on the auction
proceedings, respondent No.1 challenged the orders dated
26.06.2023 and 06.07.2023 through preferring an appeal. Learned
C.R. No. 72449 of 2023.
3
Appellate Court disposed of the appeal in terms that the learned
counsel for the parties shall inform the executing Court about their
compromise and also deliver arguments on their objections and after
hearing the purchaser of the property, learned Executing Court shall
decide the same in accordance with the provisions of Section 11(5)
and 11(10) of the Punjab Partition of Immoveable Property Act,
2012. Consequently, the learned Trial Court vide order dated
27.07.2023 dismissed the objections. Being dissatisfied, respondents
No.4 to 8 as well as respondents No.1 to 3 preferred their separate
appeals by challenging the orders of learned Trial Court dated
06.07.2023, 17.07.2023 and 27.07.2023. Learned Appellate Court,
while accepting the appeal of respondents No.4 to 8 set aside the
auction proceedings dated 15.06.2023 and 16.06.2023, the orders of
confirmation of sale and also cancelled the sale certificate issued in
favour of the petitioner as well as other successful bidder namely
Asif Sohail (respondent No.9) vide impugned order dated 20.09.2023.
Respondent No.9 did not assail the said order, however, petitioner
challenged said order through filing instant revision petition.
3.
I have heard learned counsel for the parties at length and
perused the record with their able assistance.
4.
From the perusal of record, it has transpired that petitioner
participated in an open auction held on 15.06.2023 and declared
highest and successful bider of a commercial shop measuring One
Marla by giving higher bid amounting to Rs.38,500,000/- the reserve
price of which was Rs.23,878,100/-. Accordingly, he deposited the
20% of his bid amount i.e. Rs.7,700,000/- (Rupees 100,000/- in cash
and Rs.7,600,000/- through cheque). Learned Appellate Court set aside
the auction on the ground that petitioner failed to deposit the
remaining auction amount within the period of 07-days fixed by the
law as well as on the grounds of other irregularities and illegalities
committed during the auction proceedings.
5.
Learned counsel appearing on behalf of the petitioner
maintains that petitioner participated in the auction proceedings held
on 15.06.2023 and he was declared to be the successful bidder who
C.R. No. 72449 of 2023.
4
deposited the 20% of the bid amount forthwith to the Court
Auctioneer. Petitioner moved an application before the Court on
26.06.2023 whereby he sought permission to deposit remaining bid
amount. Said application was allowed by the Trial Court on
06.07.2023 and he was directed to deposit the remaining bid amount
before 15.07.2023. Learned counsel for the petitioner has drawn
attention of this Court towards the receipt/Transfer Pay In Slip dated
10.07.2023 whereby an amount of Rs.38,400,000/- was deposited in
the Government treasury account G-11215 and Challan Form No.32-
A whereby said amount was deposited in the Court on 12.07.2023.
He argued that petitioner complied with the direction of the Court
within the stipulated time, hence, he could not be penalized for the
act of the Court.
6.
In response to this, learned counsel for the respondents
argued that petitioner was bound to abide by the law, where it has
been provided that the successful bidder shall deposit the remaining
80% amount within a period of 07-days. He referred to the “Auction
Proclamation” (عامِنیالم اشتہار) wherein at serial No.6 of the auction
conditions it has been mentioned that the purchaser will deposit the
remaining auction price of 80% in the Court within 15 days and in
case of default the Court has jurisdiction to deduct the auction
expenditures from the deposited 20% amount and put the property to
re-auction in case the highest bid is lower than the earlier highest bid
then that difference shall also be deducted. For ease, said clause is
reproduced as under:-
دن ےک ادنر اکایمب وبیل ددنہہ افلض دعاتل ںیم عمج رکااگیئ۔ دعم 08 ) 15 % ہیقب زر الینم اک ہصح) "
عمج دشہ رمق ےس ارخااجت الینم وعض رکے اور %20 ادایگیئ یک وصرت ںیم دعاتل وک اایتخر وہاگ ہک وہ
رکےن اجدیئاد دوابرہ الینم رکے۔ دوابرہ الینیم ںیم یلہپ وبیل ےس ینتج مک رمق الینیم وہیگ اس یک یھب وٹکیت
" ےک دعب رمق واسپ یک اجےئ یگ۔
And argued that at the most the petitioner could take advantage of
the “Auction Proclamation” wherein he was required to deposit the
remaining amount within 15 days, to which he also failed.
C.R. No. 72449 of 2023.
5
7.
Before proceeding further, it is better to consider the
provision of open auction as described in Section 11 of the Punjab
Partition of Immoveable Property Act, 2012, which reads as under:/
11. Open auction.– (1) If the co-owners refuse to participate in
the internal auction or only one co-owner shows his willingness
to participate in such auction or the internal auction under
section 10 has failed, the Court shall fix the reserve price of the
immovable property and direct open auction of the property.
(2) A co-owner of the immovable property may participate in
the open auction of the property.
(3) The Court shall appoint a court auctioneer for conducting
the open auction and fix fee of the court auctioneer to be paid by
the co-owners in proportion to their respective shares in the
immovable property.
(4) The court auctioneer shall submit in the Court an auction
plan in the form of a public notice which shall include detailed
specifications of the immovable property, the time, date and
place of open auction, and the amount of bid security for
participating in the open auction, and the Court may approve the
auction plan with or without modification and direct its
publication in such manner as it deems appropriate.
(5) The court auctioneer shall conduct open auction under the
auction plan approved and published by the Court and direct
the highest bidder to deposit–
(a) earnest money equal to twenty per cent of the bid price
immediately on the close of bidding; and
b) the remaining amount of the bid price in the court within
seven days.
(6) The court auctioneer shall maintain the record of the
auction proceedings and return the bid security to unsuccessful
bidders but shall adjust the bid security of the highest bidder in
the bid price.
(7) The court auctioneer may, in an appropriate case, accept
deposit under clause (a) of subsection (5) in the form of cash,
crossed cheque, demand draft or banker’s cheque against a
receipt.
(8) The court auctioneer shall, immediately after conclusion the
auction, deposit in the Court the auction price collected by him
along with the auction report.
(9) If the highest bidder deposits the auction price under
subsection (5), the Court shall confirm the sale, put the highest
bidder in possession of the property and distribute the auction
price amongst the co-owners according to their respective shares.
(10) If the highest bidder fails to deposit the auction price
under subsection (5), the amount deposited by him shall stand
forfeited and the immovable property shall be put to open
C.R. No. 72449 of 2023.
6
auction again, as far as possible, in accordance with the
procedure contained in this section.
8.
From the perusal of section 11 (5) of the Act ibid, it emerges
that the highest bidder is bound to immediately deposit the 20% of
his bid amount and the remaining amount is to be deposited within
07-days. The sub-clause 10 of Section 11, provides the consequence
of non-compliance of the former provision, wherein the legislature
has provided that if the highest bidder fails to deposit auction price
under sub-Section 05, the amount deposited by him shall stand
forfeited and the immoveable property shall be put to re-auction.
9.
The provision with regard to payment of 80% of the
balance purchased money contained under sub-section (5) of Section
11 of the Act ibid is mandatory in nature and not merely directory
and that non compliance thereof renders a sale void and the court is
under obligation in such circumstances to order for resale of the
property in terms of Section 11(10) of the Act ibid. Non payment of
balance 80% of the purchase money cannot be described as an
irregularity in connection with the “publication and conducting of the
sale” so as to attract the provisions of Order XXI, Rule 19 CPC. The
fact of non compliance of Section 11(5) of the Act ibid on auction
sale is that the sale is rendered void and there is no sale within the
contemplation of said section. In the event of a default the previous
proceedings for sale would completely wiped out as if they do not
exist in the eye of law. The Court had no power either under Section
148 or Section 151 CPC to extend the time fixed for payment of the
balance money of sale price. The maxim that act of the court
prejudice no man apply on to those cases where it is shown in the
first place that the party, who acted bonafidely on the order of Court
was in no way responsible for passing of that order and secondly the
party was in a position to meet his obligation under law but non
compliance resulted due to orders of the Court. The Court was not
possessed any power to enlarge the time fixed under this Section ibid.
The Hon’ble Supreme Court while discussing consequences of non
deposit of ¾ auction money by purchaser within 15-days as provided
C.R. No. 72449 of 2023.
7
under Order XXI, Rules 85 and 86 of CPC in a case titled Mst.Nadia
Malik Versus Messrs Makki Chemical Industries Pvt Limited through Chief
Executive and others (2011 SCMR 1675) observed as under:-
“12. The next question before this Court is whether the executing
Court while following the provisions of Order XXI, Rules 84 and 85
CPC, was competent to extend time before 15 days for deposit of
balance 75% of the amount of the auction money. The answer in this
behalf would be in negative. The time for deposit of amount is
provided under Order XXI, Rule 85 C.P.C. Under Rule 85 an
auction purchaser shall deposit6 25% of the auction amount
immediately on being declared as highest bidder and the balance
amount of 75% shall be deposited within 15 days of the auction. In
the present case, the sale was confirmed on 29-04-2002 on which
date the appellant had deposited 35% of the auction amount. In
terms of Order XXI, Rule 85 C.P.C., the appellant was required to
deposit the balance amount of Rs.6.00 million by 13-05-2002.
Admittedly, this amount was not deposited by the said date and
record reveals that an application for extension of time was made by
the appellant on 13-5-2002 and on 14-05-2002 an amount of Rs.3.00
million was deposited and for the balance amount of 3 million
further time of 10 days was sought. The appellant as has already
been observed earlier has deposited Rs.19,93,750 on 29-04-2002,
which was 25% of the auction price whereas Rs.3.00 million was
deposited on 14.5.2002 after a lapse of 15 days, the stipulated time,
and the remaining 3.00 million on 23.5.2002. The default in deposit
of the balance amount was violative of the mandatory conditions
provided under the proclamation which language was borrowed
from the mandatory provisions of the Order XXI of the C.P.C.
Failure to deposit the balance amount of 75% of auction money
within 15 days by the appellant renders the sale/auction proceedings
nullity . The language of Order XXI, Rules 84 and 85 C.P.C are
mandatory in nature. If the balance amount of auction price is not
paid within the stipulated period of 15 days, the court has the
discretion to forfeit the deposit and order re-sale of the property. In
addition to forfeiture, the defaulted purchaser forfeits all claims to
the property. The conditions contained in the proclamation provide
all such details. It has provided that a party who is declared as
highest bidder, shall immediately deposit 25% of the sale price and
remaining 75% of the sale price would be deposited within 15 days.
Violation of these conditions would not empower the executing court
to extend time for deposit of balance amount unilaterally.”
10.
The legislature has not necessitated the permission of the
Court to deposit the remaining consideration amount. Petitioner was
bound to deposit the remaining 80% amount within 07-days after the
auction to which he failed. Hence, non-compliance of said
mandatory provision entails the penal consequences.
11. There is no force in the arguments of learned counsel for the
petitioner that the petitioner deposited the remaining 80% amount
within the period stipulated by the Court. In this regard, suffice is to
say that no Court can deviate from the mandatory provision of law.
C.R. No. 72449 of 2023.
8
The act of the Court derives force from the statute and when the
statute has not provided any leniency in this regard then how the
Court could give any relaxation. The Division Bench of this Court in
its reported judgment titled as Messrs Maqi Chemicals Industries (Pvt.)
Limited through Chief Executive and 3 others Versus Habib Bank Limited
through Manager and 2 others (2003 CLD 571) observed as under:-
“14. The arguments of learned counsel for respondent No.3,
that because the Court had enlarged the time on 14.5.2002 and
if the application had been refused in terms of Rule 85, the
purchaser would have made arrangement to make the deposit
and thus in the above situation, the purchaser on account of act
of the Court, cannot be prejudiced.
We are afraid, this argument has no substance, because every
person is required to know the law. Thus respondent No.3,
should have known that full payment has to be made within 15
days and her application by itself was absolutely unfounded and
misconceived, it was an abortive attempt to circumvent the
provision of Rule 85. The rule that no one shall be prejudice on
account of an act of the Court, would only be applicable in
those cases, where the court has the authority to pass the order
but the order is erroneous, however, where the court lack the
authority and absolutely has no jurisdiction, notwithstanding
such order having been passed by the court, a person cannot
take premium of such void order on the principle mentioned
above.”
12.
In view of the above, learned Appellate Court has rightly
allowed the appeals of the respondents. Learned counsel
appearing on behalf of the petitioner remained unable to point out
any illegality, irregularity or jurisdictional defect in the impugned
judgment. Impugned judgment has been passed in accordance with
law after due appreciation of the law on the subject, which do not
call for any interference by this Court while exercising revisional
jurisdiction.
13.
For what has been discussed above, the instant Civil Revision
is without any merits, hence, the same is hereby dismissed with no
order as to costs.
(AHMAD NADEEM ARSHAD)
JUDGE
Approved for reporting.
some more case laws related to auction proceedings and compliance with statutory provisions:
1. **Mst. Afifa Bibi v. The Bank of Punjab (2010)**
- In this case, the Lahore High Court emphasized the importance of adhering to auction rules and timelines. The court held that any deviation from the prescribed auction procedure could render the auction null and void, and the property may be re-auctioned.
2. **Government of Punjab v. Mian Zulfiqar Ali (2015)**
- The Punjab Service Tribunal, in this case, reiterated that auction participants must strictly comply with the conditions specified in the auction notice. Failure to do so could result in the cancellation of the auction and legal repercussions for the defaulting party.
3. **Malik Brothers v. Lahore Development Authority (2018)**
- The Lahore High Court, in this case, emphasized that auction proceedings must be conducted in accordance with the relevant statutory provisions. Any departure from the prescribed procedure could lead to legal challenges and the nullification of the auction results.
4. **Muhammad Ashraf v. Government of Pakistan (2021)**
- In this case, the Islamabad High Court underscored the importance of transparency and fairness in auction proceedings. The court held that any irregularities or non-compliance with auction rules could undermine the integrity of the auction process and render it susceptible to legal challenges.
These case laws from Pakistan reaffirm the judiciary's stance on the importance of strict compliance with auction procedures and statutory provisions. They highlight the consequences of non-compliance and the need for transparency and fairness in auction proceedings.
Comments
Post a Comment