IN THE HIGH COURT OF SINDH, KARACHI

PRESENT:

MR. JUSTICE AQEEL AHMED ABBASI

MR. JUSTICE ABDUL MOBEEN LAKHO

Ist Appeal No.94 of 2018

Saeed Akhtar & 2 others

Vs.

M/s. Muslim Commercial Bank Pakistan Ltd. & 4 others

Appellants: through Mr. Ghulam Murtaza, Advocate

Respondent No.1: through Mr. Adil Khan Abbasi, Advocate.

Respondents 2&3: through M/s. Muhammad Masood Ali Khan, Abdul Hameed Khan and Khakhan Babar Mughal, Advocates.

Respondent No.4: through Mr. Abdul Shakoor, Advocate.

Date of Hearing: 22.03.2022

Date of Short Order: 22.03.2022

O R D E R

AQEEL AHMED ABBASI, J : -- Instant Appeal has been filed against the impugned order dated 13.09.2018 passed by the learned Banking Court No.II, at Karachi in Execution Application No.3 of 2018 (in Suit No.549 of 2016), whereby, two applications; one under section 12(2) CPC read with Section 151 CPC and the other under Order XXI Rule 58 & 60 CPC read with Section 151 CPC filed by the appellants as objectors with the prayer to set aside the judgment dated 10.11.2017 and decree dated 14.11.2017 respectively, passed in the abovementioned suit, as well as to recall and set aside the order dated 26.01.2018 passed by the learned Banking Court for attachment of mortgaged property, have been dismissed.

2. It has been contended by the learned counsel for the appellants that the learned Banking Court has erred in facts and law while dismissing the aforesaid applications, and failed to appreciate that the judgment and decree passed in the above suit and the order for attachment of the mortgaged property have been obtained through fraud and misrepresentation of facts. According to learned counsel for the appellants, the defendant No.1 in the above suit i.e. M/s. Uni Traders does not exist, whereas, the address of the defendant No.2, namely, Muhammad Sabir S/o Latifullah was wrongly mentioned, therefore, the summons could not be served on such addresses, nor the appellants were aware about any proceedings before the learned Banking Court, therefore, could not establish their claim, right and entitlement over the mortgaged property, whereas, the appellants are in lawful possession alongwith their mother since 1989. According to learned counsel for the appellants, the subject mortgaged property was purchased by the appellants’ parents out of their own funds in the name of their brother, namely, Muhammad Sabir, who was the eldest son, however, the appellants are residing alongwith their parents in the suit property and the other property bearing No.N-159 was purchased in the name of appellants’ mother after taking loan from HBFC, however, in the year 2006 parents of the parties decided to distribute the share value of their properties amongst their children, including appellants and the respondent No.3 in accordance with law of inheritance. According to learned counsel for the appellants, the respondent No.3 and his brother and sister executed affidavits to the effect that they have taken their share from the above two properties and the respondent No.3 also agreed to register general power of attorney in respect of the suit property in favour of the appellants, whereas, original file of the subject properties including sale deed and lease deed was also handed over to the appellants by the respondent No.3. According to the learned counsel for the appellants, when the appellants desired to transfer the suit property in their name pursuant to general power of attorney registered No.735 dated 29.05.2006, the appellants came to know that such general power of attorney and the title documents of the suit property were not traceable, therefore, the appellants lodged a report at Police Station New Karachi and also obtained certified copies of the said documents from the Central Record and then on the basis of said certified copy, general power of attorney was registered as No.735 dated 29.05.2006, which documents were valid and legal documents, therefore, the appellants while exercising their authority pursuant to said power of attorney, issued sub-power of attorney in favour of one Gohar vide Registered No.166 dated 10.02.2016. Thereafter, Gohar has got sale deed registered in favour of the appellants. According to learned counsel, the appellants are the actual owners of the suit property, who have never mortgaged such property with respondent No.1, whereas, respondent No.3 had no right or authority to get the suit property mortgaged with the respondent Bank. It has been prayed that since the impugned judgment and decree as well as order for attachment of mortgaged property have been obtained through misrepresentation of facts, whereas, the right of the appellants has been affected; therefore, the same may be set aside and subsequent auction of the subject property be declared as illegal.

3. Conversely, learned counsel for the respondents have vehemently opposed the contention of the learned counsel for the appellants and submitted that instant appeal, besides being devoid of any merits, is otherwise not maintainable, as the same has been filed by the appellants, who were strangers to the proceedings and not party before the learned Banking Court in Suit No.549/2016, which was filed by respondent Bank for the recovery of the amount claimed to be outstanding against the borrower in respect of finance facility granted by the respondent Bank. Per leaned counsel, the suit was decreed by the learned Banking Court vide judgment dated 10.11.2017 and decree dated 14.11.2017 against Judgment-Debtors jointly and severally in the sum of Rs.1,138,556/- alongwith cost of fund from the date of default till realization of the entire decreetal amount, whereas, the prayers of respondent Bank with regard to the cost of suit and sale of mortgaged property were also allowed. According to learned counsel for the respondent, pursuant to the aforesaid judgment and decree, respondent bank filed execution proceedings i.e. Execution Application No.3 of 2018 and since the decreetal amount could not be paid by the Judgment-Debtors, the Decree-Holder Bank moved an application for attachment and sale of mortgaged property i.e. House No.R-20, Sanober Cottage, Block 11/K, North Karachi, Karachi, which was allowed by the learned Banking Court vide order dated 26.01.2018, whereafter, the auction was held on 12.07.2018 before the learned Banking Court after compliance of all codal formalities, and the sale of mortgaged property was confirmed, whereafter, the successful bidder deposited 100% sale amount, and, therefore, the sale of the mortgaged property through auction stood completed. It has been further submitted that the appellants, who were not the party in suit, hence, strangers to the proceedings, otherwise do not fall under the definition of “customer” in terms of Section 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, cannot seek any relief in these proceedings, nor they have any locus standi to file two frivolous applications, under Section 12(2) CPC read with Section 151 CPC and under Order XXI Rules 58 & 60 CPC read with Section 151 CPC, with the prayer to set aside the judgment and decree as well as order for attachment of mortgaged property on frivolous and baseless grounds while alleging that they have purchased the mortgaged on the basis of general power of attorney registered No.735, dated 29.05.2006. According to learned counsel for the respondent No.1, the above general power of attorney was already revoked by the Judgment-Debtor No.2 through Revocation Deed dated 13.02.2007, therefore, was not in existence, therefore, the sale deed dated 31.03.2016 executed on the basis of the General Power of Attorney, which was already revoked, otherwise has no value in the eyes of law. According to learned counsel for respondents, the property was mortgaged through registered mortgage deed dated 13.02.2007 in favour of Decree-Holder bank, whereas, all t the original title documents of the mortgaged property were also deposited before the learned Banking Court and the same are still lying with the bank, therefore, the alleged sale in respect of the property, which was already mortgaged by the judgment-debtor with the Decree-Holder’s Bank is otherwise nullity in the eyes of law. It has been prayed that instant appeal being devoid of merits may be dismissed with cost.

4. We have heard the learned counsel for the parties, perused the the impugned orders, the judgment and decree passed by the learned Banking Court No.II, at Karachi in Suit No.549/2016, in the aforesaid execution proceedings, and have also examined the record with their assistance.

5. Perusal of record shows that the appellants were not party in the Suit No.549/2016 filed by the predecessor-in-interest of respondent No.1, M/s. NIB Bank Limited, against its customers, namely, respondent No.2 i.e. M/s. Uni Traders and respondent No.3 i.e. Muhammad Sabir for recovery of amount of Rs.27,63,973.64 under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in respect of running finance facility ganted by the respondent No.1 Bank to respondent No.2, whereas, the subject suit was decreed against the aforesaid respondents jointly and severally vide judgment dated 10.11.2017 and decree dated 14.11.2017 in the sum of Rs.1,138,556/- alongwith cost of fund from the date of default till realization of the entire decreetal amount, whereas, the prayers of Decree-Holder Bank with regard to grant of cost of fund of the suit and sale of the mortgaged property were also allowed. The above judgment and decree attained finality, as no appeal appears to have been filed by the judgment-debtors, however, the appellants, for the first time, approached the learned Banking Court No.II at Karachi in the aforesaid execution proceedings when the order of attachment and sale of the mortgaged property through auction were passed by the learned Banking Court, claiming to have acquired right and title in respect of the mortgaged property pursuant to the alleged power of attorney registered No.735, dated 29.05.2006. However, it has come on record that such power of attorney was revoked by the judgment-debtor No.2 through revocation deed dated 13.02.2007 and, thereafter, original title documents of the mortgaged property were deposited, which as per record are still lying with the Bank. It is settled legal position that a property, which is already mortgaged through registered mortgaged deed alongwith possession of the title documents of the said property with the Bank, the subsequent transaction for sale/purchase of such property, while concealing the facts regarding mortgage of the property, is nullity in the eyes of law, and cannot affect the proceedings before the learned Banking Court. Moreover, the alleged sale deed in respect of mortgaged property on the basis of general power of attorney, which stood revoked prior to such sale is nullity in the eyes of law.

6. In view of hereinabove facts and circumstances of the instant case, we are of the considered view that the impugned judgment dated 10.11.2017 and decree dated 14.11.2017 and the order dated 26.01.2018 for attachment of mortgaged property passed in the aforesaid execution proceedings as well as orders both dated 13.09.2018 by the learned Banking Court, as referred to hereinabove, cannot be assailed by the appellants in these proceedings, as the scope of a banking suit is limited to the extent of a dispute between a customer and financial institution in respect of finance so advanced and its recovery in case of default, whereas, the appellants are strangers to the suit proceedings. The appellants have failed to establish their nexus with the banking suit filed for recovery of amount by the respondent Bank against its customer under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. Accordingly, instant appeal was dismissed alongwith listed applications by our short order dated 22.03.2022 and above are the reasons of short order.

J U D G E

*Farhan/PS*