Law:

Section:

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)-------Ss. 23 & 19---Transfer of Property Act (IV of 1882), S.52---Lis pendens, principle of---Applicability---Sale of mortgaged property---Bona fide purchaser---Scope---Suit for recovery was decreed, and mortgaged property was ordered to be auctioned by the plaintiff Bank---Contention of the appellants was that they were bona fide purchasers of the suit property which could not be sold as satisfaction for the decree---Validity---Appellants purchased the property three months after the passing of the decree and under S.23 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; a suit was converted into an execution application after passing of decree and no formal application was required to be made in this regard---Appellants purchased the property at less price therefore, the purchase of the appellants did not seem to be bona fide--- Principle of lis pendens defeated rights of the appellants--- Appeal was dismissed, in circumstances. JUDGMENT IJAZ AHMAD, J.---Respondent No.3 availed loan facility amounting to Rs.16,00,000 from respondent No.2 instead of mortgaging the property of the loanee, only a memorandum of deposit of title deeds of the property was entered. Respondent No.3 failed to repay the loan. Respondent No.2 instituted a suit for recovery of the money on 26-8-2010. The suit was decreed in favour of respondent No.2 vide judgment and decree dated 27-4-2009, passed by the learned Judge Banking Court-I, Multan. The property whose documents had been deposited, which finds mention in paragraph No.4 of the loan agreement was transferred by respondent No.3 in favour of respondent No.4 vide registered sale deed dated 18-8-2008. It was purchased by the appellants from respondent No.4 through a registered sale deed 27-7-2009. 2. It is contended by the learned counsel for the appellants that the appellants are bona fide purchasers without notice of any charge/encumbrance on the property in question; that the appellants had taken all precautions before purchasing the property and they had no knowledge of the decree; that the copy of records of rights for the year 2003-2004…

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