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Judicial Miscellaneous Nos. 30, 31 of 1971 and 49 of 1975, decided on 15th October, 1980.

‑_ S. 30‑Loan ‑ Outstanding dues‑‑Sale of mortgaged security‑ More than half of dues of applicant recovered‑Sale of whole of mortgaged security, held, not justified‑Sale ordered in respect of flats of only defaulting allottees so as to recover balance amount due to applicant.

Syed Anwar Ali for Applicant.

Muhammad Maqsood for Respondent No. 1

Muhammad Arif for Respondents Nos. 2 6 and 8.

A. R. Mirza for the Remaining Respondents.

Date of hearing: 15th October, 1980.

These four applications under section 30 of House Building Finance Corporation Act (XVIII of 1952) are filed by the applicant for sale of the mortgaged properties for realisation of the outstanding dues. Properties known as Shahenshah Babar House, Shahenshah Akbar House, Shahenshah Jehangir House and Shahenshah Shah Jehan House are respectively owned by Shabenshah Babar Co‑operative Housing Society Ltd., Shahenshah Akbar Co‑operative Housing Society Ltd., Shabenshah Jehangir Co operative Housing Society Ltd. and Shahenshah Shah Jehan Co‑opera tive Housing Society Ltd. All the above properties are mortgaged with the applicant against building advances obtained by the above‑named Co‑operative Societies from the applicant. The prayer of applicant in all these applications is for sale of the above‑mentioned properties along with several other properties belonging to sureties who bad also offered their respective properties as a security for the loan advanced by the applicant to the above‑mentioned Co‑operative Societies. Out of these applications J. M. 30/1971, J. M. 31/1971 and J. M. 32;1971 were filed in 1971 while J. M. 49/1975 was filed in 1972.Several orders were passed on these applications by different learned Single Judges of this Court from time to time as and when these matters came up before them, but it is not necessary to refer to all these orders now, I will refer only to some of the orders passed in these cases, as they have a direct bearing on the final decision of these applications.

2. On 15‑5‑1978, when these applications came up for consideration before my brother Mushtaq Ali Kazi, J., it was argued before him that if the balance amount outstanding against individual flat‑owners and the amounts lying deposited with the Societies are recovered, it may not be necessary to order for sale of any of these properties as the total amount so recovered will be much more than the clam of applicant in these applications. It was also argued that if these buildings are auctioned it will cause serious prejudice to the allottees of these buildings. The learned Single Judge on equitable grounds with the consent of all the counsel then present before him (which included the counsel for applicant as well) passed an order that all amounts lying with the above‑mentioned Societies and the outstanding balance against individual flat owners of these buildings may be recovered and deposited in Court and after payment of the dues of applicant excess amount if any may be returned to Societies. Notices were accordingly ordered to be issued to the flat owners to deposit the outstanding balance amount against each flat in Court upto 15‑6‑1978. A Commissioner was also appointed simultaneously by the learned Judge to prepare the accounts relating to the amount due against each Society to the applicant. It appears that some difficulties arose in the implementation of the above order of the learned brother whereupon an application for review/modification of order dated 15‑5‑1978 was made on them round that under the order dated 15‑5‑1978 if any one flat owner in any one of these buildings commits a default then irrespective of the fact that others have paid the dues against their flats, the building as a whole is to be sold for realisation of the dues of applicant. This application for review/modification of the order dated 15‑5‑1978 came up for heating before my brother Mushtaq Ali Kazi, J. on 20‑1‑1979. The learned Judge after hearing the learned counsel in the case (including the counsel for applicant) clarified his earlier order dated 15‑5‑1978 to the extent that in event of sale of flats for realisation of the dues of applicant, first of all those flats will be sold whose allottees/owners have not paid the outstanding dues. This order was passed by the learned Judge in spite of the opposition of the counsel for applicant and time was also extended by 30 days for payment of outstanding dues by flat owners who had not paid by then. This order was challenged by the applicant unsuccessfully before a Bench on this Court and a review application (C. M. A. 95/19791 was also filed for further review of order dated 20‑1‑1979 before the learned Single Judge but this application remained pending until this date and no notice was issued to other side for the simple reason that the applicant never pursued it after filing in Court. Thereafter the matter came up before the learned Single Judge on several occasions but was adjourned from time to time on the ground that the accounts were not ready and further extensions were granted to the flat owners to pay the dues outstanding against them and to the Commissioner to submit the report. The applicant during all this period from time to time withheld substantial amount deposited by the Societies and flat owners in Court in pursuance of the above ordeRs.The Commissioner appointed in these cases submitted his first report on 12‑11‑1979 and when the matter came up for hearing before the said learned Judge on 15‑12‑1979 for consideration of this report, time was sought by the applicant to file objections to the report. Thereafter when matters came up for consideration before another learned Single Judge of this Court, S. A. Nusrat, J. on 23‑2‑1980. The learned counsel for applicant once again repeated his objection before S. A. Nusrat, J. which was urged before Mushtaq Ah Kazi, J. at the time of passing of order dated 20‑1‑1979 that no privity of contract existed between the applicant and the owners of individual flat owners and as such the Court could not make an order for deposit of outstanding dues against them in Court. The learned Judge, however, did no accept this argument and held in his order dated 23‑2‑1980 that earlier order of Mushtaq Ali Kazi, was passed on equitable ground and did not impair the ultimate remedy of the applicant against other properties. The learned Judge, however, in view of the objection of applicant against the report of Commissioner directed the Commissioner to prepare and file a statement showing the details of deposit so far made by the individual flat owners, and also the amount, which according to the statement of Societies is outstanding against each one of them. The Commissioner has since submitted his report dated 24‑3‑1980 in compliance with order of S. A. Nusrat, J. dated 23‑2‑1980. The report of Commissioner alongwith another application for withdrawal of amount deposited in Court came up before me on 20‑9‑1980. No objections were filed by any one against this second report of Commissioner but Mr. Anwar Ali the learned counsel for the applicant maintained before me that he still has same objection against the first report of Commissioner dated 12‑11‑1979. As the objection pointed out by Mr. Anwar Ali were of minor nature and had no bearing on the decision of the main case and these matters were sufficiently old, f directed the office to fix the hearing of main application in these cases on 15‑10‑1980 while adjourning it on 20‑9‑1980.

On 15‑10‑1980 when these matters were taken up by me, I found that out of the total claim of approximately 40 lacs made in these applications by the applicant quite a sizable amount was since re covered in pursuance of the order dated 20‑1‑1979 and paid to applicant and the balance remaining outstanding according to learned counsel for applicant is in the vicinity of Rs.20 lacs only now. I accordingly asked Mr. Anwar Ali, Advocate, the learned counsel for the applicant, to justify the passing of order in the changed circumstances. I also indi cated to Mr. Anwar Ali, that there exists every justification to pass a final order for sale of only such portion of mortgaged security which will be sufficient to satisfy the remaining claim of applicant and in these circumstances if only these‑ flats are ordered to be sold whose allottees have not paid balance of the dues as earlier ordered by my brother Mushtaq Ali Kazi, J. on 20‑1‑1979, it will meet the ends of justice. At this stage Mr. Anwar Al, Advocate pointed out that against the order dated 20‑1‑1979 passed by Mushtaq Ali Kazi, J., the applicant had already filed a review application which has not been disposed of. I accordingly with the consent of Mr. Syed Anwar‑Ali took up the review application and by a Separate detailed order rejected the same.

In view of the above‑discussed position, I am of the view that there is no justification for ordering the sale of whole of the mortgaged security in the cases as more than half of the dues of the applicant has by now been recovered in these proceedings. List of the defaulting allottee is still outstanding and it is not denied that if only these. flats are sold the balance amount due to applicant will be recovered. 11 accordingly, order that in the first instance all these flats which are mentioned in the list Annexures 'A', B', C' and 'D', of the report of Official Assignee dated 24‑3‑1980 be held by public auction towards realisation of the due of applicant and if after sale of these flats same amount still remains dues and payable then other properties mentioned in these applica tions will be sold for realisation of the balance. The expenses relating to sale proceedings will be borne by the applicant in the first instance and same will be recoverable afterwards from the sale proceeds. There will be no further order as to costs.

M Y H. Applications dismissed.