| Citation(s) |
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| 2026 SLD 3528 2026 SLG 3528 = 2026 SCP 202 |
Supreme Court of Pakistan
Civil Appeals No. 232-L and 1553 of 2017 (Against the judgment dated 26.09.2017, passed by the Lahore High Court, Lahore in EFA No. 1649 of 2015)
Presented By: Mr. Justice Yahya Afridi, CJ Mr. Justice Naeem Akhter Afghan Mr. Justice Shakeel Ahmad
Mr. Muhammad Munir Paracha, Sr. ASC (in CA No. 232-L of 2017)
Civil Appeals No. 232-L and 1553 of 2017 (Against the judgment dated 26.09.2017, passed by the Lahore High Court, Lahore in EFA No. 1649 of 2015)
Presented By: Mr. Justice Yahya Afridi, CJ Mr. Justice Naeem Akhter Afghan Mr. Justice Shakeel Ahmad
Mr. Muhammad Munir Paracha, Sr. ASC (in CA No. 232-L of 2017)
Zarai Taraqiati Bank Ltd (in CA No. 232-L of 2017) Sikandar Khan (in CA No. 1553 of 2017) Appellant(s)
VERSUS
Sher Muhammad & another (in both cases) ... Respondent(s)
Law: Financial Institutions (Recovery of Finances) Ordinance, 2001
Section: 15, 9
Law: Code Of Civil Procedure, 1908.
Section: XXI
Law: Transfer of Property Act, 1882
Section:
Law: Registration Act, 1908
Section:
Summary: The Lahore High Court set aside a Banking Court order that had validated a bank auction sale under Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 after that provision was declared ultra vires; because possession remained with the judgment debtor, no registered sale deed was executed, and mutation alone does not transfer title, the auction did not perfect ownership. The High Court therefore dismissed the bank’s recovery claim, protected the judgment debtor’s rights, and ordered restitution (with markup) to the bonafide auction purchaser who paid the price but acquired no enforceable title. Core points: Background: Judgment debtor mortgaged land to Zarai Taraqiati Bank via Mutation No. 583 (18-07-1995). Auction: Bank held public auction on 12-05-2008; auction purchaser paid and mutation was attested in his favor. Procedural history: Banking Court allowed bank’s Section 15(10) petition; judgment debtor filed objection under Section 9 read with Order XXI Rule 66 CPC; High Court allowed EFA and set aside Banking Court order. Constitutional issue: Section 15 of the Ordinance was declared ultra vires by High Court (Full Bench) and affirmed by Supreme Court; declaration’s temporal effect (prospective vs retrospective) was relevant. Property law principle: Mutation is fiscal and does not by itself transfer title; transfer of immovable property requires executed and registered conveyance under the Registration Act, 1908 (and Transfer of Property Act, 1882 principles). Possession: Bank never took physical possession; judgment debtor retained possession, indicating sale was not perfected. Legal effect: Auction without execution/registration of sale deed did not vest enforceable title in auction purchaser. Remedy for auction purchaser: Bonafide purchaser who paid in good faith is entitled to restitution of purchase money with mark-up (banking rate) from deposit date until refund, to prevent unjust enrichment. Outcome: Bank’s appeal dismissed; auction purchaser’s appeal partly allowed limited to monetary restitution. Law and Section table Subject Statute / Rule Legal effect or holding Recovery…