AL-HADI RICE MILLS (PVT.) LTD. vs MCB BANK LIMITED S — 2023 CLD 85 LAHORE-HIGH-COURT-LAHORE

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AL-HADI RICE MILLS (PVT.) LTD. VS MCB BANK LIMITED S. 19--- Civil Procedure Code (V of 1908), O. XXI, Rr. 65, 66 & 90---Execution of decree---Sale of property---Public auction---Single bidder---Objection to sale---Non-deposit of 20% auction price---Value of other mortgaged properties as surety---Appellant/objector was aggrieved of dismissal of its objections by Executing Court against confirming auction in favour of single bidder of one property out of total three properties put to auction---Plea raised by auction purchaser was that objection petition was not maintainable as appellant/objector did not deposit 20% of auction price---Validity---Public auction referred in S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001 and O. XXI, Rr. 65 & 66, C.P.C. was one of the modes of sale under execution proceedings---Bid offered by single/sole bidder could not be classified as 'public auction'---Court was dealing with an invalid sale not qualified to be termed as a public auction wherein settlement of reserve price was based on five years old valuation report---Executing Court had discretion under second proviso to O. XXI, R. 90, C.P.C., to direct deposit of amount not exceeding 20% of the sum realized or to furnish such security, as the Court directed---Discretion rested with Executing Court opting for either direction to deposit in cash or a security was to be examined in the context of the facts of each case---Various properties [at serials 1, 2(i) & (ii) & 3] were put to auction sale, out of which property at serial 1 was allegedly auctioned and rest of the properties could not be auctioned---Auction purchaser offered a bid of Rs.29,525,000/-, 20% whereof had come to Rs.5,831,000/- and reserve price(s) of other properties was Rs.12,380,625, which was more than the limit of 20% of the amounts realized---Properties not auctioned could be treated as security for entertaining objections for ensuring compliance of second proviso of O. XXI, R. 90, C.P.C.---Executing Court, in the wake of gross illegalities, causing substantial injury could treat other properties as security and entertain objections against alleged auction---Sale under reference was a nullity, in the wake of the scale of lapses and illegalities in the conduct of auction and was inherently defective---High Court set aside order of Executing Court confirming auction sale and dismissal of objections---High Court declared that auction sale and confirmation thereof, including all steps taken in pursuance thereof were void and of no legal effect--- Appeal was allowed, in circumstances.

AL-HADI RICE MILLS (PVT.) LTD. vs MCB BANK LIMITED S — 2023 CLD 85 LAHORE-HIGH-COURT-LAHORE

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