Ms Faran Maize Industries (Pvt) Limited Vs ZTBL .

Stereo. H C J D A 38.

JUDGMENT SHEET

THE LAHORE HIGH COURT, LAHORE

JUDICIAL DEPARTMENT

Execution First Appeal No.253599 of 2018 M/s Faran Maize Industries Vs. Zarai Taraqiati Bank (Pvt.) Ltd. and others Limited and others

JUDGMENT

Date of Hearing 11.06.2026 For Appellants: M/s Barrister Khurram Raza, Barrister Abdullah Jehangir and Barrister Amber Niaz.

Advocates for appellants.

Rana Muhammad Arshad Khan, Advocate for appellant in connected EFA No.255956/2018.

For Respondents: M/s Muhammad Khalil Rana and Mian Abdul Sattar, Advocates for respondent bank in both the appeals.

M/s Hafeez Saeed Akhtar, Basharat Ali, Ghulam Ali Raz and Hafiz M. Nauman Zafar, Advocates for auction purchaser/respondent No.4.

M/s Amjad Butt and Firdous Imtiaz, Court Auctioneers.

Hassan Nawaz Makhdoom, J.- Through this common judgment, we intend to dispose of the instant Execution First Appeals No.253599 and 255956 of 2018 (Rana Shahzad Akhtar v. Judge Banking Court, etc.), which arise out of the same execution proceedings and call in question the legality and propriety of the order dated 15.11.2018 (the “Impugned Order”) passed by the learned Judge, Banking Court No.1, Lahore in Execution Petition No.4-B of 2011, arising out of COS No.06 of 2004. By virtue of the impugned order, the learned Banking Court dismissed the objections preferred against the auction proceedings conducted on 24.05.2016, while confirming the auction/sale of the mortgaged properties and consequentially, directed the issuance of sale certificate in favour of the auction purchaser.

2.The essential facts for the disposal of these appeal are that, Zarai Taraqiati Bank Limited, formerly Agricultural Development Bank of Pakistan, instituted Civil Original Suit No.06 of 2004 against M/s Faran Maize Industries (Pvt.) Ltd. and others for recovery of outstanding

finance secured through various mortgages and guarantees. The suit was initially decreed through an interim decree dated 04.05.2010 and subsequently a final decree dated 03.06.2015 was also passed, whereby an amount of approximately Rs.75.425 million was held recoverable from the defendants. Pursuant thereto, execution proceedings commenced before the learned Banking Court for enforcement of the decree and realization of the outstanding liability through auction of the secured assets. The record shows that although six properties formed part of the mortgaged assets, but four thereof were ultimately auctioned on 24.05.2016. The highest bid was offered by Farrukh Sana (Respondent No.4 in EFA No.253599 of 2018), who was declared the successful purchaser against a total bid amount of approximately Rs.82.04 million. The auction proceedings were, however, challenged through a series of objection petitions filed by the judgment-debtors and their legal heirs, wherein the legality of the auction, non-compliance with the provisions of the Code of Civil Procedure, 1908 (“C.P.C.”) and the validity of the sale process were questioned. The learned Banking Court, through the Impugned Order, dismissed all such objections, while holding the application under Order XXI Rule 90, C.P.C. as not maintainable. Resultantly, the auction/sale was confirmed.

3.Learned counsel appearing on behalf of the appellants in EFA No.253599 of 2018 assailed the impugned order on both procedural and substantive grounds. It was contended that the learned Banking Court failed to meaningfully examine the objections raised before it and disposed of the matter through a non-speaking order without addressing the material controversies arising from the record. According to learned counsel, the auction proceedings dated 24.05.2016 suffered from fundamental legal infirmities rendering the subsequent confirmation of sale unsustainable. The principal challenge was directed towards the alleged non-compliance of the provisions contained in Order XXI Rules 84 and 85, C.P.C. Learned counsel submitted that the statutory requirement regarding immediate deposit of twenty-five percent of the purchase money was not fulfilled, as the auction record allegedly reflected that additional time was granted to the successful bidder after

the fall of hammer for arranging the requisite amount. It was argued that such relaxation is not in consonance with the law as the mandatory requirements governing judicial sales could not be diluted by the Court Auctioneers. Similar objection was raised with regard to the deposit of balance seventy-five percent of the sale consideration, which, according to the appellants, was neither deposited directly in Court nor within the period prescribed by law. It was further maintained that the Court Auctioneers had no authority to receive or retain the auction proceeds after completion of the auction proceedings and any such deposit could not be treated as compliance with the statutory mandate. Learned counsel further argued that the circumstances surrounding the auction proceedings gave rise to serious doubts regarding its transparency and genuineness. It was pointed out that four separate properties were allegedly auctioned within an exceptionally short span of time and that the record did not contain the usual supporting material expected from a public auction, including complete bid sheets and identification particulars of the participants. Reference was also made to certain banking transactions and documentary material which, per learned counsel for appellants, disclosed inconsistencies regarding the procurement of demand drafts and movement of funds immediately after the auction. The appellants also questioned the legality of the sale proclamation and publication process. It was contended that no fresh publication was issued for the auction conducted on 24.05.2016 and that valuable industrial assets, including plant and machinery, were either inadequately described or omitted altogether from the sale process. According to the appellants, such deficiencies materially impaired public participation and ultimately resulted in sale of the assets at a grossly inadequate price. It was emphasized that properties and industrial assets allegedly worth several hundred million of rupees were sold for approximately Rs.82 million, thereby causing substantial prejudice to the judgment-debtors. In support of the submissions, reliance was placed upon various precedents dealing with the mandatory nature of Order XXI Rules 84 and 85, C.P.C., the legal consequences of non-compliance therewith and the standards governing judicial scrutiny of court-conducted auctions.

4.Learned counsel appearing on behalf of the appellant in EFA No.255956 of 2018 supplemented the challenge to the impugned order by advancing certain jurisdictional and procedural objections. It was argued that dismissal of the objection petition on account of non-deposit of the amount contemplated under Section 19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the “Ordinance”) and Order XXI Rule 90, C.P.C. did not constitute an adjudication of the substantive objections on merits and, therefore, could not operate as a bar to subsequent examination of the legality of the auction proceedings. Per learned counsel, the earlier proceedings before this Court and the Honourable Supreme Court of Pakistan remained confined to the question of deposit of the statutory amount and did not culminate in any final determination regarding the validity of the auction itself. It was further submitted that the legal position governing the requirement of deposit under Section 19(7) of the Ordinance was itself undergoing judicial scrutiny during the relevant period and, therefore, the earlier dismissal of the objections could not be construed as conclusively determining the rights of the parties. Learned counsel maintained that the Banking Court was under an obligation to afford the objectors a meaningful opportunity to substantiate their objections and that the summary nature of proceedings under Section 19 of the Ordinance did not dispense with the requirement of fair adjudication through a reasoned order.

The appellants also questioned the propriety of the Banking Court proceeding with the matter despite pendency of Transfer Application No.227645 of 2018 before this Court concerning issues of jurisdiction and consolidation of proceedings. Particular reliance was placed upon the Banking Court’s own order dated 10.09.2018, whereby it had considered it appropriate to await the outcome of the proceedings pending before this Court. It was contended that the subsequent passing of the Impugned order was inconsistent with the said course adopted by the Banking Court. Reference was also made to proceedings pending under Section 12(2), C.P.C. challenging the underlying judgment and

decree, and it was argued that confirmation of the auction sale during pendency of such proceedings warranted careful judicial scrutiny.

5.Learned counsel appearing on behalf of respondent No.1/Decree- holder Bank opposed both the appeals and supported the impugned order. It was contended that the objections raised by the appellants were either devoid of merit or had already been examined and settled in earlier round of proceedings, including orders passed by this Court prior to the auction. Per learned counsel, the judgment-debtors had consistently obstructed the execution process, resulting in failure of previous attempts to auction the mortgaged properties, and could not now be permitted to derive advantage from delays and impediments attributable to their own conduct. Learned counsel further submitted that the auction was conducted pursuant to valuations obtained through the process approved by the executing Court and that the properties ultimately fetched consideration exceeding the reserve price fixed for the purposes of sale. It was argued that neither any independent valuation nor any bona fide higher offer was ever produced by the judgment-debtors to demonstrate that the properties had been sold at an undervalue/ inadequate price or that any prejudice had been occasioned to them on account of the auction. Referring to the objections regarding deposit of the purchase money, learned counsel maintained that the law does not insist upon physical cash transactions and that payment through demand drafts or pay orders has consistently been recognized as a valid mode of compliance with the requirements governing judicial sales. It was submitted that, having regard to the substantial amount involved, procurement of demand drafts on the date of auction constituted reasonable and lawful compliance with the statutory requirements, and that the auction proceeds were duly transmitted through the Court Auctioneers to the office of the Deputy Registrar (Judicial). It was further argued that no illegality, material irregularity or jurisdictional defect had been established so as to warrant interference with the impugned order in exercise of appellate jurisdiction by this Court.

6.Learned counsel appearing on behalf of respondent No.4, the Auction Purchaser, also supported the impugned order and opposed the

appeals. At the very outset, it was contended that the challenge to the auction proceedings, insofar as it pertained to certain properties, is not sustainable as the matter had already attained finality. The reference was specifically made to the property owned by Late Fazal-ur-Rehman, whose objections to the auction had been dismissed by the learned Banking Court and who had not chosen to assail the said determination before any superior forum. Per learned counsel, the subsequent attempt by M/s Faran Maize Industries (Pvt.) Ltd. to assert an independent claim over the said property was an afterthought and, in any event, any transfer allegedly effected after institution of the banking suit was hit by the provisions of Section 23 of the Ordinance.

Learned counsel further submitted that the controversy raised by the legal heirs of late Rana Buland Iqbal Khan stood conclusively determined after availing remedies before the superior Courts and, thus, could not be reopened. Learned counsel submitted that the objections filed by the said judgment-debtor against the auction proceedings were dismissed by the learned Banking Court vide order dated 08.10.2018 on account of non-compliance with the mandatory requirement of deposit envisaged under Order XXI Rule 90, C.P.C. The said order was assailed before this Court through EFA No.243815 of 2018, which was dismissed by a learned Division Bench vide judgment dated 29.10.2018. Thereafter, the challenge was laid before the Honourable Supreme Court of Pakistan through Civil Petition No.4363 of 2018; however, the said petition was ultimately dismissed as withdrawn vide order dated 04.03.2020. It was, thus, argued that the order dated 08.10.2018, having remained undisturbed by the superior fora, attained finality inter se the parties and the objections relating to the auction proceedings could not be permitted to be resurrected or re-agitated through the present appeals under the guise of a fresh challenge.

On merits, learned counsel contended that the Auction Purchaser had fully complied with the requirements governing judicial sales. It was submitted that the prescribed twenty-five percent of the purchase money had been deposited through demand drafts on the date of auction and that the remaining amount was duly deposited within the period

contemplated by law. Reliance was placed upon judicial precedents recognizing payment through demand drafts and pay orders as valid modes of compliance with the statutory requirements relating to deposit of purchase money in auction proceedings. The allegations of fraud, collusion, manipulation of record and lack of transparency were emphatically denied. Learned counsel argued that the auction proceedings had been conducted under the supervision of Court Auctioneers appointed by the executing Court and that the auction record did not disclose any circumstance suggestive of mala fides or illegality. It was further submitted that no independent valuation, higher offer or other tangible material had been produced by the appellants to demonstrate either substantial injury or gross inadequacy of consideration sufficient to invalidate a completed judicial sale. Lastly, learned counsel invoked equitable considerations, submitting that the Auction Purchaser had participated in the auction bona fidely, paid the entire sale consideration and had remained deprived of the fruits of the transaction for several years owing to protracted litigation. According to learned counsel, settled principles governing judicial sales require due regard to the rights of a bona fide purchaser and militate against unsettling concluded transactions in the absence of clear proof of fraud or fundamental illegality. It was also objected that certain documents subsequently brought on record by the appellants through miscellaneous applications constituted fresh evidence introduced without leave of the Court and, therefore, could not lawfully be relied upon while deciding the present appeals.

7.Arguments heard. Record perused.

8.The principal question arising in these appeals is whether the appellants can be permitted to reopen the validity of the auction proceedings despite the fact that the issue relating to the maintainability of their objections already stands conclusively determined inter se the parties. The controversy, in its true perspective, is not confined to the maintainability of the objections under Order XXI Rule 90, C.P.C.; it is whether an issue conclusively adjudicated and having attained finality inter se the parties can lawfully be permitted to be re-agitated on the

basis of a subsequent exposition of the law. A careful examination of the record reveals that Rana Shahzad Akhtar and the other judgment-debtors filed objections challenging the auction proceedings without depositing the amount contemplated by the second proviso to Order XXI Rule 90, C.P.C. When the maintainability of the objections was questioned, they moved a subsequent application seeking permission to deposit the requisite amount after the institution of the objections. The learned Banking Court, vide order dated 08.10.2018, dismissed the said application and held that the objections were not maintainable for want of compliance with the statutory requirement. The said order was challenged before this Court through E.F.A. No.243815 of 2018, which was dismissed on 29.10.2018. The said orders were thereafter assailed before the Honourable Supreme Court of Pakistan through Civil Petition No.4363 of 2018, but the petition was dismissed as withdrawn on 04.03.2020. Consequently, the order dated 08.10.2018 attained finality inter se parties and has never been set aside, modified or recalled by any competent forum.

9.Learned counsel for the appellants has, however, relied upon the judgment of the Honourable Supreme Court in Mst. Samrana Nawaz and others v. MCB Bank Ltd. and others (PLD 2024 SC 873) to contend that the second proviso to Order XXI Rule 90, C.P.C. does not oblige an objector to deposit twenty percent of the sale consideration simultaneously with the filing of objections and that such deposit becomes payable only upon a prior direction of the executing Court. There can be no cavil with the proposition that the Hon’ble Larger Bench of the Supreme Court of Pakistan vide the said judgment has authoritatively interpreted the second proviso to hold that the executing Court must first determine the amount, not exceeding twenty percent of the sale price, or the nature of security to be furnished, and thereafter afford the applicant an opportunity to comply before declining to entertain the objections. The earlier view taken in Habib and Company v. MCB Bank Ltd. (PLD 2020 SC 227) was expressly overruled.

10.The aforesaid pronouncement, however, does not materially advance the appellants’ case. The controversy before us is not one where

the question regarding the interpretation of the second proviso to Order XXI Rule 90, C.P.C. falls for determination for the first time. The maintainability of the objections on account of non-deposit already stood adjudicated between the very parties through the order dated 08.10.2018 passed by the learned Banking Court, which was affirmed by this Court on 29.10.2018 and thereafter allowed to attain finality when Civil Petition No.4363 of 2018 was dismissed as withdrawn on 04.03.2020 by the Hon’ble Supreme Court of Pakistan. The binding effect of that adjudication cannot now be avoided merely because the legal position has subsequently been explained differently by the Hon’ble Larger Bench in Mst. Samrana Nawaz’s case (supra). The said judgment neither declares that all earlier decisions, which had attained finality shall automatically stand reopened nor does it confer a fresh cause of action upon parties whose rights had already crystallized by virtue of final judicial determinations.

11.It is a settled principle that a subsequent declaration or clarification of law does not, by itself, obliterate or unsettle judgments that have already attained finality between the parties unless such final adjudication is displaced through a legally recognised procedure. The doctrine of finality of litigation is founded upon considerations of public policy and judicial discipline. Once a controversy has travelled through the hierarchy of Courts and culminated in a binding determination, the parties are precluded from reopening the same issue in collateral proceedings merely because the legal position has thereafter undergone judicial reconsideration. Any contrary approach would seriously undermine certainty in the administration of justice and render concluded litigation perpetually vulnerable to reopening.

12.In the peculiar facts of the present case, the issue requiring determination is not whether the law subsequently declared in Mst. Samrana Nawaz’s case (supra) departs from the legal position prevailing at the relevant time. The real question is whether the adjudication embodied in the order dated 08.10.2018 passed by the learned Banking Court, having been affirmed by this Court in E.F.A. No.243815 of 2018 and thereafter having attained finality upon

dismissal of Civil Petition No.4363 of 2018 as withdrawn by the Honourable Supreme Court of Pakistan, can now be reopened indirectly through the present appeals. We are unable to answer the question in the affirmative. The question already stands finally settled inter se the parties. See judgment dated 27.02.2026 rendered by the Honourable Federal Constitutional Court of Pakistan in F.C.P.L.A. Nos. 508, 591, 346, 347, 348, 589, 267, 593, 130 and 353 of 2025 (The Province of Sindh v. Muhammad Rizwan Khan and others), wherein it was reaffirmed that, “...It is trite law that judgments of the Supreme Court operate prospectively and not retrospectively...” The said principle squarely governs the present controversy. The question relating to the maintainability of the objections already stands conclusively determined inter se the parties and cannot be permitted to be reopened under the guise of assailing the subsequent execution proceedings. The appellants are, therefore, estopped from re-agitating an issue, which has already attained finality through a series of binding judicial determinations.

13.The contention that the impugned order is liable to be set aside on the ground of being a non-speaking one is also devoid of merit. It is by now well settled that the validity of a judicial order is to be assessed with reference to its substance, reasoning and overall treatment of the controversy rather than its volume or length. Brevity, by itself, is not a legal infirmity, nor does a concise order become vulnerable merely because it is not elaborately worded. What the law requires is that the Court must apply its judicial mind to the issues raised before it and disclose the reasons, which persuaded it to arrive at a particular conclusion. A careful reading of the impugned order reveals that the learned Banking Court took notice of the principal objections advanced by the judgment-debtors, including those relating to valuation of the properties, fixation of reserve price, publication and conduct of the auction proceedings, deposit of the auction consideration, as well as the maintainability of the objections in the light of the statutory requirements. Upon consideration of the material available on record and the submissions of the parties, the learned Banking Court proceeded to record its conclusions and dismissed the objections. The appellants’

inability to secure a favourable determination before the learned Banking Court cannot, by itself, justify the contention that the impugned order is bereft of reasons or suffers from the vice of being non-speaking. The distinction between an erroneous order and a non-speaking order must always be kept in view. An order may be assailable on merits, but it does not become a non-speaking order simply because one of the parties disagrees with the conclusions recorded therein. The validity of a judicial order is to be judged by the quality and sufficiency of its reasoning rather than the extent of its elaboration, and not by whether the outcome is acceptable to the party aggrieved thereby. We are, therefore, unable to subscribe to the argument that the impugned order suffers from any such deficiency as would warrant interference on the ground of being non-speaking.

14.The objections predicated upon the alleged non-compliance with Order XXI Rules 84 and 85, C.P.C. are likewise devoid of substance and do not merit acceptance. The material available on the record reflects that the Auction Purchaser deposited the requisite purchase money through banking instruments, which were accepted by the Court Auctioneers in the course of the auction proceedings conducted under the supervision and authority of the executing Court. The sale consideration was subsequently deposited and appropriated towards satisfaction of the decretal liability, and no element of default on part of the Auction Purchaser has been established from the record. More significantly, the appellants remained unable to establish the existence of any substantial injury or prejudice resulting from the alleged irregularities, a requirement, which lies at the very heart of a challenge to a judicial sale. Mere assertion of procedural lapses, without proof of consequential prejudice, does not furnish a sufficient basis for setting aside a court-supervised auction. The record is conspicuously devoid of any material demonstrating that the impugned sale failed to attract genuine competition or that any prospective bidder was prevented from participating in the auction process. No rival bidder has appeared before this Court alleging exclusion from the bidding process, nor has any person come forward with a higher or more advantageous offer

suggesting that the properties were capable of fetching a substantially greater price. Moreover, no evidence has been produced to show that the decree-holder, the judgment-debtors or any other interested person suffered any identifiable financial loss attributable to the alleged irregularities in the conduct of the auction or the manner in which the sale consideration was deposited. In the absence of a proof that the alleged procedural deviations had any bearing upon the outcome of the auction or occasioned any real prejudice to the rights of the appellants, the objections remain confined to technical grievances lacking the essential element of substantial injury contemplated by law. Thus, the objections are insufficient to impeach the validity of the auction or the consequential proceedings arising therefrom. It is a settled principle that every procedural irregularity does not ipso facto vitiate a judicial sale. The law does not permit interference with a concluded auction sale unless the irregularity complained of is both material and demonstrably productive of substantial prejudice to the objector. The appellants have been unable to satisfy this essential requirement. Their challenge, therefore, rests upon technical objections unsupported by any demonstrable consequence affecting the fairness or outcome of the auction proceedings. In these circumstances, we find no legal basis to hold that the alleged non-compliance with Order XXI Rules 84 and 85, C.P.C. has rendered the auction proceedings invalid or has otherwise caused such prejudice as would justify setting aside of the sale.

15.The reliance placed by the learned counsel for the appellants upon Muhammad Ashraf and others v. U.B.L. and others (2019 SCMR 1004) and Rehmat Nawaz Khan v. Mst. Syeda Khurshid Begum through Legal Heirs and others (2019 CLC 52) is misplaced and is distinguishable on facts. In Muhammad Ashraf’s case (supra) the Honourable Supreme Court of Pakistan interfered because the auction proceedings suffered from patent and fundamental legal defects, including the physical impossibility of conducting auctions of multiple properties at different sites simultaneously, absence of bid sheets, and uncertainty regarding compliance with the mandatory requirement of deposit on the fall of the hammer. The Court found that the auction itself was tainted by serious

irregularities affecting its legality and validity. Conversely, in Rehmat Nawaz Khan’s case (supra), the sale was set aside because the mandatory requirements of Order XXI Rules 84 and 85, C.P.C. had admittedly not been complied with, the requisite deposit having not been made in the manner and within the time prescribed by law. The facts of the present case stand on an altogether different footing. In the present case, the auction was conducted pursuant to orders of a competent Court, the properties fetched a price exceeding the reserve price fixed by the executing Court, the entire consideration was realized and appropriated towards satisfaction of the decree, and no material irregularity resulting in substantial injury has been established. The record further reveals that neither the decree-holder nor any rival bidder or an interested stakeholder has alleged, much less established, that any prejudice was suffered as a consequence of the impugned auction proceedings. The ratio of the aforesaid authorities, therefore, does not advance the appellants’ case; rather, the principles emerging therefrom reinforce the settled proposition that interference with a concluded judicial sale is justified only where material illegality or irregularity is shown to have caused substantial prejudice to the objector. The said essential requirement is conspicuously absent in the present case.

16.The contention advanced on behalf of the appellants regarding alleged inadequacy of the auction price is equally devoid of merit. The record reflects that the auctioned properties were sold for an amount exceeding the reserve price fixed by the executing Court on the basis of the valuation material available at the relevant time. Significantly, no contemporaneous valuation report disputing either the valuation accepted by the executing Court or the reserve price so fixed was produced by the appellants during the execution proceedings. Having failed to challenge the valuation through legally admissible material at the appropriate stage, the appellants cannot now be permitted to reopen the issue on the strength of valuation assessments procured subsequently for the purposes of litigation. It is well recognized that a valuation report is, at best, an opinion of an expert regarding the estimated market worth of a property and that different evaluators may legitimately arrive at

different conclusions depending upon the methodology, assumptions and data relied upon by them. A valuation report obtained after the auction indicating a higher market value cannot, per se, constitute a conclusive proof that the auction price was inadequate or that the sale was otherwise unfair. Any contrary approach would render every judicial sale vulnerable to challenge on the basis of subsequently procured valuation opinions, thereby undermining the certainty, finality and stability which the law seeks to preserve in execution proceedings. It is equally settled that a mere inadequacy of price, irrespective of its extent, does not furnish an independent ground for setting aside a judicial sale unless it is further established that such inadequacy was the direct result of a material irregularity, illegality or fraud in the conduct of the sale and that the same occasioned substantial injury to the objector. The appellants have failed to establish any such element. No material has been brought on record demonstrating that the price realized at the auction was depressed owing to any proven illegality, fraud or material irregularity, nor has any substantial prejudice attributable thereto been established. The challenge, therefore, appears to stem more from dissatisfaction with the outcome of the auction rather than from the existence of any legally sustainable ground for invalidating the sale. Consequently, the plea of undervaluation does not warrant interference either with the auction proceedings or the impugned order. The judgments relied upon by the learned counsel for the appellants, reported as Muhammad Attique v. Jami Limited and others (PLD 2010 SC 993) and Mst. Nadia Malik v. Messrs Makki Chemical Industries (Pvt.) Ltd. (2011 CLD 1517), are clearly distinguishable on facts. In the referred cases, there were circumstances involving established violations of mandatory provisions governing judicial sales and material defects affecting the legality and transparency of the auction process. No such situation exists in the present case, where neither any fundamental illegality in the process of the auction nor any substantial injury resulting therefrom has been established. The ratio of the aforesaid judgments, therefore, is inapplicable and does not advance the appellants’ case.

17.The allegations of fraud, collusion and manipulation levelled by the appellants are equally devoid of substance and remain unsubstantiated on the record. It is a settled principle of law that fraud is a serious allegation carrying grave civil consequences and, therefore, cannot be presumed or inferred lightly. A party alleging fraud is under a legal obligation to plead the same with precision, disclose the particulars thereof and substantiate such allegations through clear, cogent and legally admissible evidence. Mere assertions, suspicions or conjectures, irrespective of the degree of conviction with which they are advanced, do not constitute proof in the eye of law. In the present case, although extensive allegations have been levelled regarding the conduct of the auction proceedings, the banking transactions and the role of the Auction Purchaser, none of such allegations has been established through any admissible evidence required by law. Consequently, their authenticity, evidentiary value and probative worth remain unverified. It is trite that findings of fraud cannot be founded upon disputed material. The Courts are required to act upon legally admissible evidence and not upon suspicion, surmise or speculation. However strong a suspicion may appear, it cannot take the place of proof, particularly where a concluded judicial sale conducted under the supervision of a Court is sought to be invalidated. The Honourable Supreme Court of Pakistan has consistently held that allegations of fraud must be established through unimpeachable evidence and that the burden resting upon the party asserting fraud is considerably heavier than that applicable to ordinary civil disputes. In the absence of such proof, no adverse inference can be drawn and no judicial determination invalidating concluded proceedings can be based upon mere allegations. The material available on the record falls far short of the standard of proof required for establishing allegations of fraud, collusion or manipulation in judicial proceedings. The appellants have been unable to place before the Court any legally admissible and reliable material capable of substantiating the serious accusations levelled against the auction proceedings. In the absence of such proof, no inference of fraud or collusion can legitimately be drawn, nor can a concluded judicial sale be invalidated on the basis of mere assertions, suspicions or unverified allegations. Accordingly, no finding

to that effect can be recorded, and the objections founded upon such allegations are liable to be rejected.

18.We also find no substance in the objection relating to the jurisdiction of the learned Banking Court. The mere pendency of a transfer application before this Court or proceedings under Section 12(2), C.P.C. did not, in the absence of any express order of stay or suspension, operate to divest the learned Banking Court of the jurisdiction otherwise vested in it by law. It is a settled principle that judicial proceedings continue to remain operative and executable unless specifically restrained by a competent forum. The record does not disclose the existence of any order whereby the execution proceedings were stayed or the learned Banking Court was restrained from proceeding further in the matter. Consequently, the learned Banking Court remained fully seized of the execution proceedings and continued to possess the statutory authority conferred upon it under Section 19 of the Ordinance, to supervise the execution process, adjudicate pending objections and pass appropriate orders in accordance with law. The pendency of ancillary or collateral proceedings does not automatically suspend the jurisdiction of the executing Court, nor does it create a legal embargo upon the exercise of powers expressly conferred by statute. At best, such proceedings may furnish a ground for seeking a specific order of stay from the competent forum. In the absence of any such restraint, the learned Banking Court was well within its jurisdiction to proceed with the execution proceedings and determine the objections pending before it. Moreover, in the absence of any statutory or judicial restraint upon the exercise of jurisdiction by the learned Banking Court, the challenge founded upon jurisdictional grounds must fail. The proceedings conducted by the learned Banking Court cannot be characterized as coram non judice, nor has any material been brought on record demonstrating that the Court acted beyond the scope of its lawful authority. The objection is, thus, devoid of merit and stands rejected.

19.The controversy may also be examined from a broader jurisprudential perspective. The Auction Purchaser entered the auction process pursuant to a sale conducted under the supervision of a

competent Court, participated as a bona fide bidder, deposited the entire purchase consideration, secured confirmation of the sale and thereafter remained embroiled in protracted litigation extending over several years. The law attaches considerable sanctity to rights acquired through judicial proceedings, particularly where third-party interests have intervened on the strength of orders passed by a Court of competent jurisdiction. It is a settled principle that concluded judicial sales ought not to be disturbed lightly or for insubstantial reasons. The stability and efficacy of the execution process depends upon the confidence reposed by general public in the integrity and finality of court-upervised auctions. If bona fide purchasers are exposed to the constant risk of losing rights acquired through judicial sales on the basis of speculative allegations, technical objections or grievances unsupported by cogent evidence, the willingness of genuine bidders to participate in such auctions would be seriously diminished, thereby frustrating the very object sought to be achieved through the process of judicial sale. The Superior Courts have repeatedly emphasized that while Courts must remain vigilant against fraud, illegality and material irregularity, equal importance must be accorded to the protection of bona fide purchasers, who acquire rights through judicial proceedings. Once a sale has been confirmed and third-party rights have crystallized, interference is warranted only upon the specific proof of illegality, fraud or substantial injury. Mere conjectures, unsubstantiated suspicions or procedural objections devoid of demonstrable prejudice do not furnish a sufficient basis for unsettling vested rights. In the present case, the Auction Purchaser has remained under the shadow of litigation for an extended period despite having complied with the financial obligations arising from the auction and despite the sale having been confirmed by the competent Court. In these circumstances, principles of certainty, finality and fairness strongly militate against disturbing the auction sale on objections that have either attained finality, stand unsupported by evidence, or fail to establish any substantial prejudice warranting judicial intervention.

20.For the reasons recorded hereinabove, we are of the considered view that the appellants have failed to point out any illegality, material irregularity, jurisdictional defect, misreading or non-reading of any material available on the file, or any other legal infirmity in the impugned order warranting interference by this Court in exercise of appellate jurisdiction under Section 22 of the Ordinance. The findings recorded by the learned Banking Court are firmly rooted in the record and are fully supported by the applicable legal framework governing execution proceedings and judicial sales. The objections raised by the appellants either stand concluded by earlier judicial determinations that have attained finality, or otherwise fail on merits for want of conclusive proof of any material irregularity, fraud, illegality or substantial injury. The challenge mounted against the auction proceedings is, therefore, devoid of legal substance and does not furnish any valid ground for unsettling a concluded judicial sale conducted under the supervision of a competent Court.

21.Consequently, both these Execution First Appeals fail and are hereby dismissed. The Impugned Order passed by the learned Judge, Banking Court No.1, Lahore in Execution Petition No.4-B of 2011 arising out of COS No.06 of 2004 is affirmed in its entirety. Resultantly, the auction conducted on 24.05.2016, the confirmation thereof, and all consequential actions taken pursuant thereto, including the issuance of the sale certificate in favour of the Auction Purchaser, are maintained and upheld. All interim orders passed during the pendency of these appeals stand vacated forthwith. All pending miscellaneous applications shall also stand disposed of in consequence of this judgment.

(Khalid Ishaq) (Hassan Nawaz Makhdoom) Judge Judge

Approved for reporting.

Judge Judge Announced/dictated on 11.06.2026 and signed on 07.07.2026.

Tahir Noor.