Mst. Badam Zari Vs Z.T.B.L

JUDGMENT SHEET

IN THE PESHAWAR HIGH COURT,

PESHAWAR

(Judicial Department)

F.A.B.No.14-P of 2022 with C.M.No.405 of 2022.

Mst.Badam Zari Vs. Z.T.B.L.

Date of hearing: 10.06.2026.

Mr.Naqeeb Ahmad Takkar, advocate for the appellant.

Mr.Taimur Noor, advocate for respondent No.1.

Mr.Muhammad Ashfaq Khan Akhunkhel, advocate for respondent No.2.

JUDGMENT

MUHAMMAD FAHEEM WALI, J.- This appeal is directed against the judgment dated 30th March, 2022 passed by learned Jude Banking Court-II, Peshawar, whereby objection petition filed by the appellant against the auction of mortgage property comprising 04 kanals 14 marlas situated at Mouza Torlandy District Swabi was dismissed and auction in lieu of Rs.290,000/- was confirmed in favour of respondent/bank.

2.As per averments in the appeal, the respondent/bank filed a suit for recovery of Rs.129,400/-, which was decreed ex-parte to the tune of Rs.106,033/- against the predecessor of appellant by the learned trial court with cost of suit and cost of fund, whereafter the suit was converted into execution proceedings. It is averred that during execution proceedings, the learned trial court issued warrant of auction of mortgage valuable property measuring 04 kanal 14 marlas situated at Torlandy, Tehsil and District Swabi. It s stated that in the warrant of auction, the auctioneer and decree holder/bank were ordered to conduct the auction with certain conditions and submit report before 18.12.2017, whereafter the auctioneer auctioned the mortgage property and submitted his report on 18.12.2017.

Later, the appellant submitted objection petition under Order 21 Rule 89 C.P.C.

against the auction proceedings before the learned trial court. After hearing

arguments on the objection petition, the appellant was ordered to deposit auction money in the court whereas respondent No.2 was put on notice, who appeared and submitted written reply to the objection petition. After hearing the parties, the learned Judge Banking Court-II, Peshawar dismissed the objection petition vide order dated 30.03.2022 and confirmed the auction proceedings in favour of respondent No.2 and, thus, according to the appellant, a valuable property measuring 04 kanals 14 marlas was sold out on a throw away price of Rs.290,000/- against which the appeal in hand has been filed.

3.Arguments heard and record gone through.

4.The controversy in the present appeal revolves around the true scope of Order XXI, Rule 89, C.P.C. and whether the appellant, having availed the said remedy and having made the necessary deposit, was still to be non-suited on the

ground that some other provision ought to have been invoked. It is appropriate to reproduce Order XXI, Rule 89, C.P.C:-

(1)Where immovable property has been sold in execution of a decree, any person either owning such property or holding an interest therein by virtue of a title acquired before such sale may apply to have the sale set aside on his depositing in Court, a) for payment to the purchaser a sum equal to five per cent of the purchase money; and b) for payment to the decree holder the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered less any amount which may since the date of such proclamation of sale have been received by the decree holder.

(2)Where a person applied under rule 90 to set aside the sale of his immovable property he shall not unless he withdraws his application be entitled to make or prosecute an application under this rule.

(3)Nothing in this rule shall relieve the judgment-debtor from

any liability he may be under in respect of costs and interest not covered by the proclamation of sale.”

5.A plain reading of the above provision shows that it is a specific and independent statutory remedy available to a person interested in the property sold in execution. The right under this rule is not dependent upon the setting aside of the ex-parte decree. Nor can the application be rejected merely on the ground that some other provision might also have been available. The moment the sale has taken place and the applicant, being a person covered by the rule, deposits the amount contemplated by the rule, the Court is bound to examine the matter within the four corners of Rule 89 itself.

6.The true scope of Order XXI, Rule 89, when read in conjunction with Rule 92(2) of the same Order, establishes that an applicant who either owns the property or holds an interest therein has

an unqualified right to have an auction sale set aside. This right is distinct and independent as noted earlier because, unlike Rule 90 which requires proof of material irregularity or fraud, Rule 89 operates as a statutory indulgence or a “last chance” for the owner to save their property by simply satisfying the decree and compensating the purchaser. The mandatory language of Rule 92(2) is what renders this right unqualified; it provides that where the deposit required by Rule 89 is made within the statutory period, the Court “shall” make an order setting aside the sale. This leaves no room for judicial discretion or the evaluation of the legality of the sale process itself. As observed by the Hon’ble Supreme Court in Zakaria Ghani v. Muhammad Ikhlaq Memon (PLD 2016 SC 229), a judgment debtor is not obligated to show any legal infirmity in the order of sale and possesses an “unqualified right” to have the sale set aside provided the full decretal amount

plus 5% for the auction purchaser is deposited.

7.The provision is intended to defeat the claim of the auction purchaser unless the decree is simultaneously satisfied, a principle affirmed in Mst. Anwar Sultana v. Bank Al-Falah Ltd. (2014 SCMR 1222), which clarifies that Rule 89 confers a right even after the property is sold to satisfy the decree-holder’s claim while compensating the purchaser. Therefore, once the appellant in this case made the necessary deposit, the Court was bound to examine the matter strictly within the four corners of Rule 89. The right is unqualified because it allows the interested party to bypass the complexities of proving fraud or irregularity, provided they meet the strict 30-day limitation and deposit requirements. As established in Alhamdi Begum v. National Bank Of Pakistan Karachi (PLD 1976 Karachi 723), this is a final opportunity to get the sale set aside

before confirmation. Consequently, the moment the deposit contemplated by the rule is made by a person covered by the rule, the mandate of Rule 92(2) is triggered, and the Court has no legal justification to non-suit the applicant on the ground that other provisions should have been invoked or that the sale process was otherwise regular.

8.Thus, the objection of the respondents that the appellant should have resorted to Order XXI, Rule 90, C.P.C. is, therefore, untenable. The said stance proceeds on a misconception of the scheme of the Code. The present matter is not one where the appellant was seeking to question the decree simpliciter; rather, the appellant was invoking the statutory remedy available against an execution sale by making the deposit required by law. Once the sale had already been effected and the deposit was made in accordance with Rule 89, the respondents could not

validly defeat the application by insisting upon a different provision.

9.The record further shows that the legal heirs of the judgment-debtor were served during the execution proceedings and that the auction was conducted after proclamation. Be that as it may, the decisive question is not whether the appellant could also have pursued some other remedy, but whether the conditions of Rule 89 stood satisfied. On this score, the record supports the appellant. The deposit was made, the application was moved in time, and no legal bar has been demonstrated to disentitle the appellant from the benefit of the rule.

10.The learned Judge Banking Court-II, Peshawar appears to have been swayed by considerations of alleged irregularity in auction proceedings and by the circumstance that the auction purchaser had emerged as the highest bidder. Those aspects, though relevant in a challenge under

other provisions, cannot override the express statutory command of Rule 89 once the appellant has complied with its mandatory conditions. The auction purchaser’s interest, though undoubtedly deserving of protection in ordinary circumstances, cannot prevail against a valid statutory application made under the rule. The law on judicial sales is settled that while sanctity of auction proceedings must ordinarily be preserved, where the legislature itself has provided a redeeming provision on deposit, the Court cannot deny relief on equitable impressions alone. Order XXI, Rule 89, C.P.C. is meant to afford a final opportunity to save the property from being lost in execution, subject to strict compliance with the prescribed deposit.

The appellant having complied with that requirement, the sale ought to have been set aside.

11.For the foregoing reasons, this appeal is allowed. The impugned order

dated 30.03.2022 is set aside. The appellant’s application under Order XXI, Rule 89, C.P.C. is accepted and the auction sale of the mortgaged property is set aside. Consequential directions shall follow in accordance with law regarding the deposited amount and the refund, if any, payable to the auction purchaser under the rule. Parties shall bear their own costs. The listed C.M. also stands disposed of.

JUDGE

JUDGE

Announced.

Sadiq Shah DR (DB) (Hon’ble Mr.Justice Syed Arshad Ali & Hon’ble Mr.Justice Muhammad Faheem Wali)