NAVEED KHALID BUTT vs The BANK OF PUNJAB Ss — 2024 CLD 626 LAHORE-HIGH-COURT-LAHORE

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NAVEED KHALID BUTT VS The BANK OF PUNJAB Ss. 15(8), proviso and 15(13), 15(14) & 15(5) [as amended by Financial Institutions (Recovery of Finances) Amendment Act (XXXVIII of 2016)]---Sale of mortgaged property without intervention of the Court---Objection petition ¬¬¬seeking injunction for restraining the sale before filing of proper accounts for the sale proceeds---Maintainability---Appellants (who intented to participate in the bidding process) objected, through two Civil Miscellaneous Applications, to the sale of mortgaged property through auction without intervention of the Court, seeking a restraining order against the decree-holder/Bank from transferring the mortgaged property in favour of the auction purchaser through the sale deed---Executing Court (Single Judge of the High Court ) dismissed both Civil Miscellaneous Applications moved by the appellants holding the same as not-maintainable as the decree-holder/Bank had not yet filed the requisite accounts of the sale---Validity---There is nothing in the provisions of subsections (13) and (15) of S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001') to suggest that application qua objection to the sale of mortgaged property without intervention of the Court and seeking injunction for restraining of sale of mortgaged property are not maintainable before proper accounts for the sale are filed in the Court---After the sale takes place (real or fictitious), a sale deed in respect of the property is to be executed by the financial institution which is authorized in said behalf by virtue of subsection (8) of S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Said subsection (8) contains a proviso that no such sale deed shall be executed or registered until expiry of seven days after the completion---Prior to enactment of the Financial Institutions (Recovery of Finances) Amendment Act, 2016, there was no provision in the Ordinance, 2001 which permitted objecting to the conduct of sale after the fall of hammer, which was declared repugnant to due process and fair trial, as guaranteed under Art. 10-A of the Constitution by the Supreme Court of Pakistan in the case of National Bank of Pakistan and 117 others v. SAF Textile Mills Limited reported as PLD 2014 SC 243, whereafter provisions of S.15 of the Ordinance, 2001 were amended to provide for the remedies under subsections (13) and (14) of S. 15 of the Ordinance, 2001---Subsequently, a Full Bench of High Court in the case of Muhammad Shoaib Arshad and another v. Federation of Pakistan through Secretary, Ministry of Law, Justice Human Rights and Parliamentary Affairs and 4 others reported as 2020 CLD 638, declared the provisions of aforementioned amended S. 15 intra vires the Constitution---No doubt the financial institution which has sold the mortgaged property is required to submit proper accounts of the sale proceeds in the Banking Court within thirty days of the sale, as manifest from subsection (11) of S. 15 of the Financial Institutions ( Recovery of Finances) Ordinance, 2001, however, in the scheme of said section such occasion arises after the sale has become absolute either because no remedy was availed under subsections (13) and (14) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 or the remedy availed does not yield fruitful results for the objector---Thus, the impugned orders had been passed apparently without having regard to the provisions of subsections (13) to (15) and proviso to subsection (8) of S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, the impugned orders were not sustainable in law and the same were set aside---Civil Miscellaneous Applications of the appellants would be deemed to be pending before the Executing Court (Single Judge of the High Court) to be decided in accordance with law---Execution first appeal was allowed, in circumstances.

NAVEED KHALID BUTT vs The BANK OF PUNJAB Ss — 2024 CLD 626 LAHORE-HIGH-COURT-LAHORE

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