IN THE SUPREME COURT OF PAKISTAN 
 
(Appellate Jurisdiction) 
 
 
PRESENT: 
MR. JUSTICE EJAZ AFZAL KHAN. 
MR. JUSTICE DOST MUHAMMAD KHAN. 
MR. JUSTICE IJAZ UL AHSAN.  
 
 
Civil Petition No.2064 of 2016  
Against judgment dated 28.04.2016 of Lahore 
High Court, Bahawalpur Bench, Bahawalpur, 
passed in EFA No.4 of 2016. 
 
Siraj Ahmed through LRs  
 
 
 
 
Petitioner(s) 
 
 
 
 
 
VERSUS 
 
Faysal Bank Limited & others   
 
 
 
Respondent(s) 
 
 
 
 
For the Petitioner(s) 
:  
Mr. M. Akram Sheikh, Sr.ASC 
 
 
Syed Rafaqat H. Shah, AOR 
 
For Respondent#1  
: 
Ch. Faiz Ahmed Sanghera, ASC 
 
For Respondent#2  
: 
Ch. Ali Muhammad, ASC. 
 
Date of Hearing 
 
: 
08.12.2017. 
 
JUDGMENT 
  
 
 
IJAZ UL AHSAN, J-. The petitioner seeks leave to 
appeal against a judgment of Lahore High Court, Bahawalpur Bench, 
Bahawalpur, dated 28.04.2016. Through the impugned judgment, an 
appeal (EFA No.4 of 2016) filed by the petitioner was dismissed. 
 
2. 
 
Briefly stated the facts necessary for decision of this lis 
are that Respondent No.1-Faysal Bank Limited filed a suit for 
recovery of Rs.1,40,19,636.36/- against Siraj Ahmed, predecessor in 
interest of the petitioner and others. The suit was ultimately decreed 
on 13.06.2013 for a sum of Rs.1,03,84,569.07/-. The respondent-
Bank initiated execution proceedings. The predecessor in interest of 
the petitioner filed objections which were dismissed on 24.10.2013. 
The said order was challenged by way of Writ Petition No.6278 of 
Civil Petition No.2064 of 2016  
 
2  
2013. Vide order dated 25.10.2013, the High Court stayed auction 
proceedings. 
 
3. 
 
It appears that notwithstanding the stay order, the auction 
proceedings were completed. Although the petitioner moved a 
contempt application before the High Court, but subsequently did not 
press the same and the constitutional petition as well as the contempt 
application were dismissed on 20.01.2015. It also appears that during 
proceedings in the execution petition, the predecessor in interest of 
the petitioner filed an application under Order XXI Rule 90 of CPC on 
23.01.2015. However, subsequently on 03.11.2015 a request was 
made to treat the same as an application under Order XXI Rule 89 of 
CPC. Although the conversion was allowed, the application was 
dismissed on 05.04.2016. The sale was confirmed and sale certificate 
was issued in favour of Ata ur Rehman, Respondent No.2.  
 
4.  
 
The record reveals that during pendency of the 
application under Order XXI Rule 89, CPC the petitioner also 
tendered an amount of Rs.1,03,84,569.07/- in addition to a further 
sum of Rs.10,84,569.09/- equivalent to 5% of the decretal amount. 
The objections as well as the application under Order XXI Rule 89, 
CPC were dismissed. The said dismissal was challenged by way of 
an appeal before the High Court, which was dismissed on 
28.04.2016. Hence, this petition.  
 
5. 
 
The learned counsel for the petitioner has laid great 
emphasis on the fact that the requirements of Order XXI Rules 66, 67 
& 68 of CPC were not fulfilled by the executing Court. He points out 
that no reserve price was fixed, no date or time of auction was 
mentioned, the notices were neither affixed at the place of auction nor 
Civil Petition No.2064 of 2016  
 
3  
on the notice board of the Court house; and that the property was 
sold at a throwaway price. He adds that the auction was collusive, did 
not actually take place and was meant to defraud the predecessor in 
interest of the petitioner. He finally maintains that auction was 
conducted in violation of the stay order issued by the High Court and 
has resulted in a grave miscarriage of justice.  
 
6. 
 
The learned counsel for the respondent-Bank has 
defended the impugned judgment.  
 
7. 
 
The learned counsel appearing on behalf of Respondent 
No.2/auction purchaser Ata ur Rehman has vehemently argued that 
predecessor in interest of the petitioner had not contested the 
proceedings seriously in view of the fact that he neither prosecuted 
his application under Order XXI Rule 90, CPC nor deposited the 
decretal amount together with 5% of the auction price within the time 
provided by law. He maintains that the allegation of collusive sale at a 
throwaway price is baseless in view of the fact that Respondent No.2 
had paid more than the value fixed by the predecessor in interest of 
the petitioner himself in the constitutional petition filed by him before 
the High Court.  
 
8. 
 
We have heard the learned counsel for the parties and 
gone through the record with their assistance. The suit filed by the 
respondent-Bank was admittedly decreed on 13.06.2013 for a sum of 
Rs.1,03,84.569.07/-. It appears that the said judgment and decree 
was not successfully assailed before any higher forum by the 
predecessor in interest of the petitioner. However, when execution 
proceedings commenced he did file objections on the ground that 
reserve price had not been fixed, certain properties owned by the 
Civil Petition No.2064 of 2016  
 
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predecessor in interest of the petitioner were not included in the 
proclamation given by the Court auctioneer. The objection petition 
was dismissed. The predecessor in interest of the petitioner 
challenged such dismissal by way of a writ petition. He succeeded in 
obtaining a restraining order from the High Court in the said petition 
vide order dated 25.10.2013.  
 
9. 
 
However, it appears that for some reason which is not 
clear from the record the auction proceeded and was finalized. 
Respondent No.2 was declared as the highest bidder having offered a 
sum of Rs.1,03,84,567.07/-. The predecessor in interest of the 
petitioners initially challenged the sale through an application under 
Order XXI Rule 90, CPC however, later he appears to have changed 
his mind and requested the executing Court to treat the application as 
one filed under Order XXI Rule 89, CPC. It also appears that in the 
meantime on 30.11.2015 he had tendered pay orders in the sum of 
Rs.1,03,84,569.07/- being the price of the property plus a sum 
equivalent to 5% of the recoverable amount, with the executing Court. 
The executing Court, however, without assigning valid or cogent 
reasons dismissed the application and confirmed the sale which order 
was upheld by the High Court.  
 
10. 
 
The record shows that the process of auction left much to 
be desired. The mandatory provisions of Order XXI Rules 66 to 68, 
CPC were not strictly adhered to in so far as reserve price does not 
appear to have been fixed. Further, there is nothing on record to 
indicate that auction was widely publicized through advertisement in 
the newspapers and affixation of the proclamation/notices on and in 
the vicinity of the property to be auctioned and on the notice board of 
Civil Petition No.2064 of 2016  
 
5  
the Court house. It has also vehemently been argued that despite the 
fact that it was a valuable agricultural property measuring 280 kanals 
5 marlas and could have attracted many buyers, had it been properly 
advertised, the notice of auction was only published in an unknown 
newspaper under the name and style of REHBAR. Even the said 
notice which was sans material particulars was published on 
24.10.2013 while the auction took place on 25.10.2013. As expected, 
only three persons participated in the auction proceedings.  
 
11. 
 
In Lanvin Traders, Karachi v. Presiding Officer, Banking 
Court No.2 (2013 SCMR 1419) while dealing with similar issue, this 
Court held as follows:- 
“Agreed that the expression “reserve price” does not find mention in 
the relevant rule but the words used in the rule pointedly hint 
thereto. A sale, in its absence, is apt to give walkover to 
manoeuvrers to fix any price of their choice. A sale thus effected is 
no sale in the eye of law especially when the number of bidders is 
meager, which, indeed is close to nill. A superstructure of sale built 
on such a shaky infrastructure cannot sustain itself. Neither the 
buttress of limitation nor the ministerial nature of the rule can 
prevent it from a fall………………………………………………… 
……………………………………………………………………………. 
Crux of what has been discussed above is that clever 
manoeuvering forcing way for disposal of a property in execution of 
a decree for a paltry sum has to be guarded against and jealously 
so with all the care and circumspection so that it may go for a sum it 
deserves. The judgments rendered in case of “Messrs Majid and 
Sons and another v. National Bank of Pakistan through Manager 
and another”, “Messrs Magi Chemicals Industries v. Habib Bank”, 
Appu alias Subramania Patter v. O. Achuta Menon and others”, “Mir 
Wali Khan and another v. Manager, Agricultural Development Bank 
of Pakistan, Muzaffargarh and another” (supra) may well be 
referred to in this behalf. The learned counsel when faced with this 
situation also sought to invoke the application of section 99 of the 
Code by submitted that no decree of order could be reversed or 
modified for an error or irregularity not affecting the merits or 
jurisdiction but we are afraid the argument addressed on the 
strength of the aforesaid provision could not be of any help to him 
when it is rather incontestably clear on the record that such errors 
and irregularities have affected the merits of the case.  
 
12. 
 
Although, in the case of Zakaria Ghani v. Muhammad 
Ikhlaq Memon (PLD 2016 Supreme Court 229) it was observed that 
the reserve price would not be a material factor, however, the Court 
went on to observe as under:-  
Civil Petition No.2064 of 2016  
 
6  
“Thus, the reserve price in the normal course has no special 
significance. However, the position would be different in cases of 
manifest fraud. If, for example, an auctioneer is acting in collusion 
with someone and proceeds to dispose of the property at a nominal 
price without making the requisite publicity then most certainly the 
Court would intervene to prevent such a fraud taking place. It is for 
this very reason that if a judgment debtor is apprehensive of foul 
play he should make a specific request in advance, or as soon as 
practicable thereafter, to have a reserve price fixed.” 
 
13. 
 
In the instant case, the petitioner had raised a specific 
plea regarding non fixation of reserve price in his objection petition 
before the executing Court as well as before us. Further, “a series of 
ploys [which] appear to have been employed to harm one to benefit 
the other” (see Lanvin ibid). As such, non mention of reserve price is 
by no means the only defect in the auction proceedings, which have 
been found by us to be replete with defects, shortcomings and 
procedural flaws.   
 
14. 
 
It has further been pointed out and is evident from the 
notice of auction that the same did not take place at the location of 
the property which was sought to be sold. On the contrary, the 
auction was held in the premises of Faysal Bank Limited, the decree 
holder which by itself makes it highly suspect.  
 
15. 
 
The learned counsel for the petitioner has also placed on 
record an evaluation report prepared by AJ Associates, who are 
professional Engineers and Architects approved by Pakistan Bankers 
Association. They have evaluated the property and valued it much in 
excess of the amount paid by the auction purchaser. Likewise, the 
learned counsel for the petitioner has also referred to DC1( )-
Civil Petition No.2064 of 2016  
 
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16. 
 
The learned counsel for the Respondents have not been 
able to specifically deny either the evaluation report or DC rates or the 
fact that the property was sold for an amount much less than its real 
value. They have laid much stress on technicalities and asserted that 
the application under Order XXI Rule 89, CPC was barred by time. 
However, we have come to the conclusion that the auction was not 
properly conducted. The property was sold at a throwaway price in an 
auction which does not prima facie appear to be fair, transparent and 
above board. We are convinced that serious legal and procedural 
errors were committed at all stages of the execution proceedings 
which has caused serious miscarriage of justice. We cannot close our 
eyes to the same. We are not inclined to agree with the assertions of 
learned counsel for the Respondents, who has relied on mere 
technicalities to support his case. In this context, we may refer to 
Imtiaz Ahmed v. Ghulam Ali (PLD 1963 SC 382) wherein it was held 
as follows:-  
“The proper place of procedure in any system of administration of 
justice is to help and not to thwart the grant to the people of their 
rights. All technicalities have to be avoided unless it be essential to 
comply with them on grounds of public policy. Any system, which by 
giving effect to the form and not to the substance defeats 
substantives rights is defective to that extent” 
 
17. 
 
For reasons recorded above, while setting aside the 
impugned judgment of the High Court dated 28.04.016, we convert 
this petition into an appeal and allow the same. The matter is 
remanded to the executing Court i.e. Judge, Banking Court, 
Bahawalpur with the direction to conduct a fresh auction in 
accordance with law. The auction purchaser/Respondent No.2 shall 
have the right to participate in the fresh  auction  (if he so desires). He  
Civil Petition No.2064 of 2016  
 
8  
shall also be given the right of first refusal if he matches the highest 
bid. In the event he does not wish to participate in the fresh auction or 
exercise of his right of first refusal, the respondent-Bank shall refund 
to him the entire amount paid by him together with mark up at the rate 
fixed by the State Bank of Pakistan from the date of the auction till the 
amount is refunded to him. Likewise, the respondent-Bank shall also 
have the right to claim cost of funds in accordance with the judgment 
and decree passed by the Banking Court.  
 
 
 
 
 
 
 
 
 
 
JUDGE 
 
 
 
 
 
 
 
 
 
 
 
JUDGE 
 
 
 
 
 
 
 
 
 
 
 
JUDGE 
ISLAMABAD, THE  
8th of December, 2017. 
ZR/* 
NOT APPROVED FOR REPORTING