KARACHI, Sept 5: The provisions of the Civil Procedure Code are not applicable to transactions concluded under the Banking Companies Ordinance, 2001, a division bench of the Sindh High Court ruled on Friday.

The ruling came on a writ petition moved by Advocate Shamsul Islam and his wife, who had purchased a bungalow for Rs10 million in a public auction held by a banking court in execution of a decree in favour of a creditor bank. The court asked the official assignee for execution of a sale deed/certificate in the name of the auction purchasers.

The chief inspector of stamps, Sindh board of revenue, however, declined to sanction registration of the deed as, according to him, the court could only order execution of a sale certificate under the CPC. He said the rate of stamp duty on a sale certificate was five per cent as against three per cent recoverable on a sale deed. He asked the purchasers to pay another Rs 200,000 by way of stamp duty and a fine of Rs 20,000 for defaulting on payment of the amount due. The purchasers challenged the order in the high court.

Justices S. Ahmed Sarwana and M. Mujibullah Siddiqui, who constituted the division bench, held that the CPC was not applicable to transactions under the Banking Companies Ordinance. The chief inspector of stamps did not impound the sale deed nor preferred an appeal against the court order, which became final. He did not even move a reference against the execution order. Setting aside the fine, the bench ordered the chief inspector to release the original sale deed after its registration.

Meanwhile, accepting an application filed by the New Allied Electronic Industries (Pvt) Limited, Justice Shabbir Ahmed warned the chief inspector to be careful in adjudication of stamp duty, particularly in cases involving court sale.

The company had purchased tax-free plazas in Lahore and Karachi for Rs 120 million and Rs 48 million, respectively, in execution of a decree obtained by the Habib Bank against Global Marketing Limited and its chief executive, Fouzi Ali Kazmi, and director Tariq Omer. A sale deed in respect of the Lahore plaza was registered in the Punjab capital. When a conveyance deed in respect of the Karachi plaza was presented to the chief inspector, he refused to stamp it, insisting that since the auction orders emanated from the Sindh High Court and the sale was finalized in Karachi, stamp duty for both the properties be paid in Karachi.

The chief inspector filed a reference in the high court and the auction purchaser moved an application against his order.

Rejecting the reference and allowing the application, Justice Ahmed asked the chief inspector to stamp the conveyance deed in respect of the Karachi plaza within a week and warned him to be careful in future. Additional Advocate-General Abbas Ali appeared for the provincial board of revenue in both the cases.

EJECTION NOTICE: A division bench of Sindh High Court, comprising Justice Sabihuddin Ahmed and Justice Syed Ali Aslam Jaffery, disposed of a petition by cement block-makers against the ejection notice and asked the petitioners to move an appeal with the concerned officer, add agencies.