Mst. SAIMA NAEEM vs HABIB BANK LIMITED S — 2023 CLD 1244 LAHORE-HIGH-COURT-LAHORE

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Mst. SAIMA NAEEM VS HABIB BANK LIMITED S. 58---Mortgage---Mortgage by deposit of title-deeds---Scope---Mortgage is transfer of an interest in specific immovable property for the purposes of securing the payment of money advanced or to be advanced by way of loan or financing, an existing or future debt or the performance of an agreement which may give rise to a pecuniary liability---Once the mortgage is validly created against a specific immovable property, the interest of mortgagor in the property, to the specific extent, stands transferred to the mortgagee---Upon creation of mortgage, the charge travels with the property and not with the person---Thus, if a mortgagor manages to part with the property or confers further interest to third party then the buyer or the third party will step into the shoes of mortgagor and he cannot claim any better title or rights in the property or any interest free from the charge of mortgage. S. 9---Transfer of Property Act (IV of 1882), S. 58---Suit for recovery of finances---Mortgage by deposit of title-deeds---Creation of charge on mortgaged property---Scope---Bank filed a suit for recovery under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which was decreed---Decree stood converted into execution in terms of S. 19(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and proceedings for its satisfaction through auction of mortgaged property were initiated by the Banking Court---Appellant filed objection petition in terms of S. 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 with the averments that one-third of the mortgaged property belonged to her as per undertaking given by her ex-husband (mortgagor), who had concealed the same from the Banking Court, thus, the proceedings of auction were nullity in the eyes of law---Said objection petition was contested by the bank---Banking Court dismissed the objection petition vide impugned order---Validity---Admittedly, the mortgage by way of deposit of title deed(s) was effected in favour of the Bank, whereas, the appellant had asserted her rights on the basis of the undertaking, which was purportedly executed by the mortgagor about nine months after the creation of mortgage, therefore, appellant could not claim any right in the property free of encumbrance created through the mortgage---Rights of the appellant, if any, in the mortgaged property on the strength of the undertaking, was minus the interest that had been created by way of the mortgage in favour of the mortgagee/Bank---Banking Court had rightly proceeded with the auction of the mortgaged property for satisfaction of the decree passed in terms of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was dismissed.

Mst. SAIMA NAEEM vs HABIB BANK LIMITED S — 2023 CLD 1244 LAHORE-HIGH-COURT-LAHORE

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