IN THE SUPREME COURT OF PAKISTAN 
(Appellate Jurisdiction) 
 
 
PRESENT: 
Mr. Justice Faisal Arab 
Mr. Justice Sajjad Ali Shah 
 
Civil Petition No. 686-K of 2019 
(Against the judgment dated 5.12.2019 of the High  
Court of Sindh, Karachi passed in First Appeal No. 109 of 2019) 
 
Muhammad Jawed 
 
…Petitioner(s) 
Versus 
First Women Bank Ltd. and others 
 
…Respondent(s) 
 
For the Petitioner(s): 
Mr. Khawaja Shamsul Islam, ASC 
 
 
For the Respondent-2 
Syed Kazim, Legal Advisor, FWB 
 
 
For the Respondent-4: 
Mr. Abrar Hassan, Sr. ASC 
 
 
Date of Hearing: 
08.09.2020 
… 
JUDGMENT 
 
Sajjad Ali Shah, J.- The Petitioner, through the instance petition, 
seeks leave of this Court to appeal against the judgment of the High Court 
of Sindh, Karachi whereby his appeal against the orders of the Banking 
Court rejecting his bid, was dismissed.  
Facts and Procedural History 
2. 
 
Briefly, a Running Finance Facility to the extent of Rs.50 
million at the request of Respondent No.3-9 was allowed to their Company- 
respondent No.2. The respondents after having availed the facility failed to 
repay the same giving rise to initiation of recovery proceedings before the 
Banking Court. The suit ultimately was decreed ex parte on 09.01.2018 
against the said respondents excluding Respondent No.3 (“Judgment 
Debtors”) jointly and severally in the sum of Rs.51,760,377/- along with 
the cost of funds as prescribed by the State Bank of Pakistan from the date 
of default till realization of the entire decretal amount.  
3. 
 
Upon failure of the Judgment Debtors to pay the decretal 
amount, Execution Proceedings were initiated wherein a writ to attach the 
CP 686-K of 2019 
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mortgage property was ordered on 14.02.2018. After the attachment of the 
mortgaged property, notices as required under Order XXI Rule 66 of the 
Code of Civil Procedure 1908 (“CPC”) were issued and the attached property 
was ordered to be put into open auction vide order dated 26.04.2018. The 
Nazir of the Court then issued proclamation of sale of the said property on 
31.05.2018, which was published in different national dailies on 
20.06.2018, declaring that public auction for the said property will be held 
on 26.07.2018. However, just two days before the auction, on 24.07.2018, 
an application under Order XXI Rule 26 read with Rules 66, Rule 69, and 
Section 151 of the CPC was filed on behalf of the respondents along with 
Banker’s 
Cheque 
No.184623 
dated 
24.07.2018 
in 
the 
sum 
of 
Rs.5,000,000/-, praying that the auction proceedings be suspended. The 
auction was nevertheless conducted on 26.07.2018 despite objection on 
account of pending application due to non-availability of the learned 
Presiding Officer. In the auction, two bidders, namely, the Petitioner and 
one Mr. Muhammad Shahid, offered bids of Rs.96,000,000/- and 
Rs.95,600,000/-, 
respectively. 
The 
Petitioner 
also 
deposited 
Rs.24,000,000/- being more than 25% of the bid amount on 09.08.2018. 
The record also reveals that prior to this, the Petitioner, on 06.08.2018, had 
filed an application for withdrawal of earnest money. However, he later 
deposited the balance bid amount within stipulated time despite the 
pendency of his application.  
4. 
 
It appears that the highest bid of the Petitioner was placed 
before the Court for acceptance on 20.11.2018 when the Nazir filed a report 
stating that the Judgment Debtors had incrementally deposited a total sum 
of Rs.66,340,961/- in the Court, which consisted of the entire decretal 
amount (Rs.51,760,377/-), the cost of funds (Rs.14,547,606.50), and the 
cost of suit (Rs.32,977/-). In view of this development, the Court refused to 
accept the aforesaid bid, directed the Nazir to return the deposited bid 
amount of Rs.96,000,000/- to the Petitioner, and ordered the bank to 
CP 686-K of 2019 
-: 3 :-
deposit original title documents of the property in question with the Nazir of 
the Court for onward delivery to the respective judgment debtor. Being 
aggrieved, the Petitioner challenged this order before the High Court of 
Sindh, Karachi by way of first appeal which was dismissed vide the 
impugned judgment. The Petitioner now seeks leave of this Court to appeal 
against the said judgment. 
Submissions of the Parties 
5. 
 
Mr. Khawaja Shams-ul-Islam, learned ASC for the petitioner 
contended that the facts that the Petitioner was the highest bidder in a fair 
and transparent auction and that he had deposited the earnest money and 
the balance amount within stipulated time, created a vested interest in the 
auctioned property and, therefore, in absence of any application under 
Order XXI Rule 89 or Rule 90 of CPC, the bid of the petitioner could not 
have been rejected. ASC further submitted that the Petitioner had a 
legitimate expectation that the Court will accept his bid and confirm the 
sale under Order XXI Rule 92 CPC, particularly because no application 
under Order XXI Rules 89 or Rule 90 CPC had been filed. He further 
submitted that the Banking Court erred in prolonging the acceptance of the 
bid which provided unreasonably extra time to the Judgment Debtors for 
depositing the decretal amount which even otherwise was of no 
consequence. Per counsel such subsequent deposit could not be considered 
after the auction proceedings were concluded. In support of his 
contentions, the learned counsel primarily relied upon the dictum laid 
down in the case of Hudaybia Textile Mills LTD v Allied Bank of Pakistan 
LTD (PLD 1987 SC 512) and Mst. Anwar Sultana v Bank Al-Falah LTD (2014 
SCMR 1222). 
6. 
 
On the other hand, Mr. Abrar Hassan, learned Sr. ASC for the 
Respondent No.4 argued that the basic purpose of the execution 
proceedings always is to ensure realization of the decretal amount which 
purpose has been fulfilled by depositing the decretal amount and the other 
CP 686-K of 2019 
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costs well before the acceptance of petitioner’s bid. Therefore, the execution 
stood satisfied before creation of any rights in the mortgage property. He 
also submitted that even otherwise, the delay can be explained in light of 
the fact that the Presiding Officer was on leave during the relevant time and 
the same should therefore not be attributed to the conduct of Respondent 
No.4 in order to adversely affect his right to redeem the subject property. 
Furthermore, relying primarily on Muhammad Khalil v Messrs. Faisal M.B. 
Corporation (2019 SCMR 321), he submitted that no vested right can be 
created in favour of a bidder prior to confirmation of sale under Order XXI 
Rule 92 CPC. Based on this reasoning, he contended that since the Court 
neither accepted the Petitioner’s bid nor confirmed the sale as aforesaid, it 
cannot be said that a vested right had accrued in favour of the Petitioner. 
Per counsel the present petition is therefore devoid of any merits and is 
liable to be dismissed.  
Opinion of the Court 
7. 
 
We have heard the learned counsels for the respective parties 
and have also perused the record and the case law cited at bar with their 
able assistance. 
The only question which needs to be decided in this case 
is as to whether after having been declared the highest bidder any vested 
right in the subject property was created in favour of the Petitioner 
extinguishing the right of redemption. 
Enforcement Proceedings 
8. 
 
The execution proceedings are conducted under Section 51 
read with Order XXI of the CPC. A brief description of various stages of 
these proceedings, in our opinion, is warranted before a detailed discussion 
of the issue. In decrees involving payment of money backed by mortgage, 
the judgment-debtor may satisfy his/her obligations by payment in Court 
or to the decree-holder in terms of Order XXI Rule 1 CPC. However, if the 
judgment-debtor fails to satisfy the decree in such manner, the decree-
holder may inter alia apply to the Court for attachment of, the immovable 
CP 686-K of 2019 
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property of the judgment-debtor under Order XXI Rule 54 CPC. After 
adjudicating upon any and all objections raised against such attachment 
under Order XXI Rule 58 CPC, the Court may order the attached property 
to be sold through public auction under Order XXI Rule 64 CPC. Once such 
an order is made, the Court causes a proclamation of intended sale, 
containing material details such as description of the property, its reserve 
price, the terms and conditions of the auction, and its time, date and 
venue, to be published in terms of Order XXI Rule 66 and Rule 67 CPC. 
This auction-sale can however be stopped or adjourned under Order XXI 
Rule 69 CPC if, inter alia, the requisite debt and costs are tendered to the 
officer conducting the sale or to the Court. Similarly, the sale can be 
postponed as well under Order XXI Rule 83 CPC. However, in case no such 
eventuality arises, the Court Auctioneer conducts the auction in 
accordance with the terms and conditions mentioned in the proclamation of 
sale. Upon completion of the auction proceedings, the Court Auctioneer 
declares the highest bidder to apprise him of his obligation to deposit the 
sale price in terms of the proclamation of sale and then sends a report to 
the Court describing various particulars of the proceedings including the 
detail of participants, the bids offered by them, the information about the 
highest bidder, and the notification of earnest money as deposited by the 
latter under Order XXI Rule 84 CPC. The Court then applies its judicial 
mind on the report in order to choose the most appropriate bid, preferably 
the highest, for the realization of the decree and attendant costs. Once a 
bid is accepted by the Court as adequate and thereafter the full purchase-
money is deposited in terms of Order XXI Rule 85 CPC, a qualified sale of 
the auctioned property comes into being which can only be defeated 
through an application made under Order XXI Rule 89, 90, or 91 CPC. If, 
however, no such application is made within the time limit prescribed by 
law, the Court mandatorily confirms the qualified sale under Order XXI 
Rule 92 CPC, thereby making it absolute and transferring the title of the 
CP 686-K of 2019 
-: 6 :-
auctioned property in the name of the successful bidder/purchaser, unless 
a delayed application is entertained in the circumstances. Once the sale is 
confirmed and made absolute, the Court grants a sale certificate to the 
successful bidder/purchaser under Order XXI Rule 93 CPC and gives the 
sale proceeds necessary for the satisfaction of the decree to the decree-
holder under Order XXI Rule 64 CPC, thereby bringing the execution 
proceedings to an end. It is in the context of these different stages of 
execution proceedings that we now proceed to discuss the legal issues 
involved in this case. 
Highest Bidder vis-à-vis Legitimate Expectation 
9. 
 
Before discussing the central issue of legitimate expectation, we 
think it is pertinent to decide on the legal effects that follow when a bidder 
is declared the highest bidder at the end of a court auction involving sale of 
immovable properties. In this regard, this Court has repeatedly held that 
the nature of a bid made in such auctions, notwithstanding whether it is 
the highest or the lowest, is that of an offer which does not by itself give rise 
to any rights, as the same is always subject to acceptance by the Court 
after proper application of its judicial mind followed by the deposit of full 
purchase-money under Order XXI Rule 85 CPC. This position was fortified 
in Muhammad Attique v Jami Limited (PLD 2010 SC 993), wherein a three-
member bench of this Court held that “a bid made at an auction is in the 
nature of an offer which does not mature into a contract till its 
acceptance.” In this regard, reference can also be made to Navalkha & Sons v 
Ramanya Das [(1969) 3 SCC 537], Union Bank of India v Official Liquidator 
[(2000) 5 SCC 274], and FCS Software Solutions LTD v LA Medical Devices LTD 
[(2008) 10 SCC 440].  
9A. 
 
Indeed, this position is understandable from a jurisprudential 
point of view as well. As we know, except inherent human rights, rights and 
CP 686-K of 2019 
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liabilities generally arise out of legal relationships that exist in the society, 
be they between the state and the citizens or among the citizens 
themselves. Since a bid, being an offer, standing alone does not create any 
such relationship, and neither does the aforesaid deposit, it logically follows 
that no rights can be said to arise out of the same. According to the 
Muhammad Attique case, such relationship is created only when a bid is 
accepted by the Court in due exercise of its judicial discretion and the 
successful bidder/Purchaser deposits the full purchase-money before the 
Court closes on the fifteenth day from the sale of the property meaning 
thereby from the date of acceptance of the bid by the Court in terms of 
Order XXI Rule 85 CPC. The word employed in Order XXI Rule 85 CPC for 
providing the time line for the deposit of balance sale price is “fifteen days 
from the sale” and the sale factually takes place when the bid is accepted by 
the Court. In case the proposition that the declaration by the Court 
Auctioneer as highest bidder is to be treated as sale is accepted then it 
would amount to devolving the duty/function of the Court to see the 
appropriateness of the bid on the auctioneer which under no circumstances 
is permissible as functions of the Court cannot be delegated. Beside the 
Court always withhold the power to reject any or all the bids without assigning 
any reason which itself reflect that the declaration by the Auctioneer as the 
highest bidder is not a sale, therefore, to ask the highest bidder “to deposit the 
balance sale price” upon being declared as the highest bidder would be highly 
unfair and would amount to asking him to deposit the entire purchase price and 
then wait if his bid is accepted by the Court or not which is against the spirit of 
Order XXI Rule 84 and 85 CPC.   
9B. 
 
It is to be kept in mind that the declaration of the highest bidder at the 
end of an auction is merely to let the participant bidders know who is to deposit the 
earnest money in terms of Order XXI Rule 84 CPC. As to the creation of legitimate 
expectation in favour of the highest bidder to the sale of subject property, such 
CP 686-K of 2019 
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expectation is of course created in favour of the highest bidder but against the other 
bidders, making him expect that his/her offer shall be accepted by the Court and the 
property in question against other competitors will be transferred in his/her name 
after all the legal requirements have been met. However, it should be borne in mind 
that such expectation does not give rise to any right much less vested right in the 
property, for such rights are created, as is discussed hereinafter, only when a bid is 
accepted by the Court after proper application of its judicial mind and, in 
consequence thereto, the full purchase-money is deposited as aforesaid.  
Acceptance of the Bid vis-à-vis Vested Rights 
10. 
 
The issue as to when vested rights are created in favour of a bidder 
in such proceedings has been previously addressed in three pronouncements of 
this Court. In Hudaybia Textile Mills LTD v Allied Bank of Pakistan LTD (PLD 1987 
SC 512), this Court held that “once a sale has been effected, a third party interest 
intervenes which cannot be disregarded.” The question as to when sale is effected 
in execution proceedings involving auction of immovable property was considered 
in the Muhammad Attique case, wherein this Court held that in cases involving 
court auctions of immovable properties “the contract/sale comes into being 
when the bid is accepted by” the Court. This position was reiterated in 
Muhammad Khalil v Messrs. Faisal M.B. Corporation (2019 SCMR 321) – albeit in 
slightly different terms, wherein this Court held that “it needs no reiteration that 
an auction is always subject to confirmation by the Court.” This Court then 
held that since “the executing court never confirmed the auction. Therefore, no 
vested right had accrued in favour of the auction purchaser.”  
10A.  
A holistic reading of these judgments, along with the 
provisions of Order XXI, reveals that in execution proceedings involving 
court auction of immovable property, so-called vested/third party rights 
accrue in favour of a bidder when the auction-sale becomes complete, i.e. 
when a bid is accepted by the Court and thereafter the full purchase-money 
is deposited in terms of Order XXI Rule 85 CPC. However, such vested 
rights again are defeatable and would not take away the right of the 
CP 686-K of 2019 
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mortgagor to redeem his/her property if s/he brings his/her case within 
the parameters of Order XXI Rule 89, Rule 90, or Rule 91 CPC. If, however, 
no application under these provisions is made within the time limit prescribed by 
law or the same is rejected, the Court mandatorily confirms the qualified sale and 
makes it absolute under Order XXI Rule 92 CPC, transferring the title of the 
property in the name of the successful bidder/purchaser, unless a delayed 
application to set aside the sale is entertained. The property is then deemed to 
have been vested in the purchaser, per Section 65 of the CPC, since the time when 
sale became complete. It is a known fact that the Court sale is a forced sale 
and, therefore, contain certain elements of risk with a chance of litigation 
and for this very reason properties auctioned by the Courts do not fetch the 
price which it would in sale between two private persons. This inter alia, is 
for the reason that the law provides maximum opportunities to the 
mortgagor to redeem the property and discourages any clog against the 
equity of redemption and as a last recourse when the mortgagor fails to 
avail all the opportunities provided under the law extinguishes the right of 
redemption. However this does not, by any stretch of imagination, would 
mean to provide undue favour by prolonging the execution or auction 
proceedings. 
The 
auction 
once 
conducted 
successfully 
then 
the 
Auctioneer’s report must be taken up in Court for orders at the earliest if 
not on the next day accepting or rejecting the sale. To prolong the 
proceedings or to keep the Auctioneer report pending for months altogether 
as was in this case not only discourages the public in general to participate 
in Court sale but effects the sanctity of the proceedings and also cause loss 
to financial institutions and recovery of public money.    
Examination of the Petitioner’s case 
10B.  
If we consider the facts of the instant case in light of the foregoing 
discussion, it becomes immediately clear that no such acceptance was ever 
tendered by the executing court. In fact, the Court refused to accept the 
Petitioner’s bid vide order dated 20.10.2018. Without the requisite acceptance, his 
bid was merely an offer that did not result into a complete sale out of which vested 
CP 686-K of 2019 
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rights could have accrued in his favour. In this regard, the reliance placed by the 
learned counsel for the Petitioner on the Hudaybia Textile Mills case in favour of 
the position that vested rights accrued in the latter’s favour at the time when he 
was declared the highest bidder, before the acceptance of his bid by the court, is 
misplaced. It is misplaced because the same is based on misreading of the said 
judgment and is therefore contrary to the settled legal position on this issue. It is 
pertinent to note that in Hudaybia Textile Mills case, the court had accepted the 
bid and the sale had been completed, giving rise to vested rights in the auctioned 
property. In contrast, the factual scenario in the instant case is distinguishable 
from the Hudaybia Textile Mills case, as the bid of the Petitioner in this case was 
never accepted by the executing court. As such, no vested rights accrued to the 
Petitioner on the basis of which he could apply for the confirmation of sale under 
Order XXI Rule 92 CPC as of right. Furthermore, the delay which took place 
between the declaration of the Auctioneer and the order of the Court rejecting the 
bid was on account of the fact that the Petitioner himself had made an application 
for refund of the deposited amount on the ground that the subject property was 
under some sort of litigation and that he therefore had no intention to buy such 
property. Though ASC for the Petitioner has pleaded that on deposit of the balance 
sale price this application had become infructuous, but admits that this 
application was never withdrawn. This argument does not appeal to us that on 
the one hand the Petitioner has clearly given in writing that he does not 
want to buy the property under litigation and on the other hand he has 
deposited the whole amount while keeping his application alive. In our 
opinion, the only answer to justify such contrary actions appears to be that the 
Petitioner wanted to save his initial deposit of Rs.24,000,000/- from the peril of 
forfeiture under Order XXI Rule 85 CPC. Besides, the Petitioner has made no 
efforts to ensure that a court order accepting or rejecting the bid is made in due 
time which perhaps could be on account of non-availability of the Presiding Officer 
as asserted by the ASC for the Respondent No.4. Under these circumstances, 
there was no clog on the equity/right of redemption as it was neither narrowed 
down to be exclusively challenged under the provisions of Order XXI Rules 89, 90 
and 91 CPC nor extinguished.  
CP 686-K of 2019 
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11. 
 
The foregoing are the reasons for the Short Order of even date 
whereby this petition was dismissed by declining the leave to appeal, which 
reads as follows:- 
“For the reasons to be recorded later, this petition is 
dismissed by declining the leave.” 
 
 
Judge 
 
 
 
 
Judge 
Karachi, the 
8th September, 2020 
Approved for reporting 
Asad Ullah Khan, LC.