Find a Lawyer

Writ Petition No. 951 of 1962, decided on 13th March 1968

(a) Pakistan (Administration of Evacuee Property) Ordinance (XV of 1949), S. 16 read with Pakistan (Administration of Evacuee Property) Rules, 1950, r. 12(5)‑‑Confirmation of sale sought by person entering into agreement with evacuee owner‑Claimant allottee in possession of property in dispute‑Necessary party to confirmation proceedings before Custodian‑Such person entitled to notice under rule 12(5) and also on principles of natural justice‑Failure to implead such party‑Vitiates order of Custodian passed in confirmation proceedings ‑‑ Displaced Persons (Compensation and Rehabilitation) Act (X.YVIII of 19.58), Sched. I and Settlement Scheme No. I.

Petitioner, a claimant displaced person had been allotted disputed house since September 1947, and was in possession. The house was subsequently transferred provisionally to the petitioner In accordance with the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, and Settlement Scheme No. I in November 1959. The respondent who had entered into an agreement of purchase from the evacuee owner in respect of the disputed house approached the Custodian on 29‑9‑1958, for confirmation of sale and for permission to file suit for specific performance. The Custodian, without any notice to the petitioner passed order in confirmation proceedings and permitted the respondent to file suit for specific performance:

Held, the order of the Custodian confirming the sale is vitiated for want of a statutory notice as contemplated by rule 12(5) of the Pakistan Administration of Evacuee Property Rules, 1950, as also for violation of the principles of natural justice which are to be read as part of each statute unless and until by special provision or by necessary intendment the rule of natural justice has been done away. The petitioner is admit tedly an allottee and in "possession" of the property which i9 the subject‑matter of the writ petition and the Deputy Settlement Commissioner had transferred the same to him under the Displaced Persons (Compensation and Rehabilitation) Act, 1958, and as such, the petitioner was not only likely to be interested .in, but was bound to be "affected by the result of the applica tion", within the meaning of rule 12(5) of the Rules, and as such, it was incumbent on the Custodian to issue a notice before passing an order of confirmation:

Sh. Rahmatullah v. The Deputy Settlement Commissioner, Centre A', Karachi and others P L D 1963 S C 633 ; Muhammad Siddiq and 2 others v. Chief Settlement and Rehabilitation Commissioner, Lahore and 2 others P L D 1965 S C 123 ; Ch. Sir Muhammad Zafarullah Khan and 3 others v. The Custodian of Evacuee Property, West Pakistan, Karachi mid 5 others P L D 1964 S C 865 and Syed Ali Abbas and others v. Vishan Singh and others P L D 1967 S C 294 rel.

Ata Ullah Malik v. The Custodian, Evacuee Property, West Pakistan, Karachi and 5 others P L D 1964 S C 236 distin guished.

(b) Pakistan (Administration of Evacuee Property) Ordinance (XV of 1949), S. 16 read with Pakistan (Administration of Evacuee Property) Rules, 1950, r. 17‑A

‑Application for confirma tion of agreement time‑barred‑No application for condonation of delay tinder r. 17‑A filed‑Custodian passing order in confirmation Proceedings without applying mind to question of limitation‑Order of Custodian, in circumstances, held, without lawful authority.

Syed Azmat Ali v. The Chief Settlement and Rehabilitation Commissioner, Lahore and 2 others P L D 1964 S C 260 and Muhammad Farooq Imam v. Claims Commissioner, Lahore and 2 others P L D 1964 S C 585 rel.

Dr. Nasim Hassan Shah assisted by Muhammad Idrees and Maqbool Ahmad for Petitioner.

Mahmud Ali Qasuri assisted by Syed Munir Hussain Shah, Fazle Mahmud and Ch. Muhammad Siddiq for Respondent No. 3.

Major Ishaq Muhammad Khan, Settlement Commissioner (Legal) for Respondents Nos, 1, 2 and 4.

Dates of hearing : 11th, 12th, 15th and 18th to 22nd Decem ber 1967.

FAILULLAH KHAN, J.‑

--‑This writ petition under Article 08 of the Constitution of the Islamic Republic of Pakistan is at the instance of Mr. Zahid Ali, Regional Manager, Electricity, WAPDA, and pertains to house No. 119, Upper Mall, Lahore and directed against (1) Chief Settlement Commissioner Lahore, {') Custodian, Evacuee Property, West Pakistan, Lahore, (3) Messrs Pak. Autos Ltd., Karachi and (4) Government of Pakistan through Secretary, Ministry of Rehabilitation, Rawalpindi, The prayers in the petition are "that the orders of respondent No. 2 dated 27‑3‑1958 and all intermediate orders of the fast order of the Custodian dated 23‑6‑1960 be declared as inoperative and without lawful authority". It is further prayed "that respondent No. 1's order dated 31‑7‑1962 may also be declared as without lawful authority and inoperative."

2. The material facts leading up to this writ petition may be stated as follows : The petitioner is admittedly a claimant displaced person. On 17‑9‑1947 lie was allotted house No. 98 now No. 119, Upper Mall, Lahore, which was the property of non‑Muslim Evacuee: and has been allegedly in possession of the petitioner ever since. At the commencement of the settlement operations, in accordance with the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 and the Settlement Scheme No. 1, the petitioner was provisionally transferred the house by the order of the Deputy Settlement Commissioner, Circle‑1, Lahore on 12-11‑1959. The petitioner made defaults in payment of the instalments and the Deputy Settlement Commissioner, Circle‑1 Lahore, by notice dated 4‑9‑1961 required the petitioner to pay the balance sum of R s. 50,416 within 30 days of the: receipt of the letter, "failing which he was warned the P. T. O and Appendix" in his favour shall be cancelled and 25 % of the amount already paid will be forfeited. The petitioner thereupon by associating other claimant paid the balance due towards the transfer price.

3. In May 1960, the petitioner received a notice from the Chief Settlement Commissioner in connection with the application of‑Pak Autos (respondent No. 3). In the application, it was stated that the respondent had entered into an agreement on 29‑9‑1948 with Messrs Naraindas & Co. for the purchase of movable and immovable properties at Karachi and Lahore, including the house which was ;object‑master of the writ petition, and that the Custodian, Karachi, by leis order dated 27‑3‑1958, had permitted the filing of the suit for specific performance and the suit instituted in the Civil Court thereafter had been decreed on 2‑12‑1959 and the sale‑deed registered on 16‑4‑1960. The petitioner made an application to the Custodian on 16‑5‑1960 praying him to suo motu review the order of the Custodian as inter alia the petitioner "who was necessary party to the proceedings, had not been heard." The review application was summarily dismissed. Annexure D is the copy of the order of the Custodian rejecting the review petition.

4. In paragraph 5 of the petition, the petitioner has traced the history of how respondent No. 3 obtained orders of the Custodian confirming the sale in his favour in regard to the house .in dispute and the other property situate in Karachi. Respondent No. 3 filed two applications, one at Karachi on 10‑9‑1949 (Annexure D/1) for specific performance of the agreement in respect of the property situate at Karachi, and a similar application before the Deputy Custodian, Evacuee Property, Lahore on 12‑10‑1949 (copy Annexure D/2). With respect to Lahore application, it was Maimed by the petitioner that respondent No. 3 had apparently not shown any interest in its prosecution as the said petition was twice dismissed for default once on 18‑5‑1953 and after its restoration again dismissed on 15‑2‑1954. The above application dragged on when the respondent got the proceedings before the Deputy Custodian, Lahore stayed and later oar by order dated 7‑6‑1956, the Ministry of Refugees and 1Zehabilitation, acting under section 36 (A) of the Pakistan (Administration of Evacuee Property) Ordinance, 1949, sent the application to the Custodian Karachi for disposal. In the application for confirmation of sale in regard to Karachi property, Mr. Justice Akbar Hussain, Custodian of Karachi, on 26‑4‑1951, passed an order that as only Rs. 5,00,000 had been paid against Rs. 1.2,50 000 stipulated in the agreement and as the transaction could not be confirmed, a charge be created of Rs. 5 lacs against, the Karachi property. The copy of the order is Annexure D/3.

5. On 15‑8‑1956, respondent No. 3 made an application to the Deputy Custodian, Karachi for confirmation of the transaction and for an order under section 2 (3) of Ordinance XV of 1949 seeking permission to file a suit in the Civil Court for specific performance of agreement dated 29‑9‑1948 relating tea the immovable property at Karachi. The proceedings in both the applications were suspended by the order issued by the Deputy Secretary, Refugees and Rehabilitation, until 25‑2‑1957, when the proceedings were again revived.

Mr. Justice Memon, the then Custodian Evacuee Property, on 27‑3‑1958, passed an order now impugned whereby he disposed of the application filed at Lahore and the above mentioned application of the respondent dated 15‑8‑1956, and held that the respondent had paid by then a sum of Rs. 10,45,000 towards the, account of Naraindas & Co. for income‑tax and sales‑tax, which formed more than 80% of the consideration of Rs. 12,50,000. He further ordered permitting the respondent to file‑a suit for specific performance of the agreement dated 29‑9‑1948. In pursuance of that order, the respondent instituted a civil suit for specific Performance of the agreement on the original side of the Karachi High Court and the suit was decreed on 2‑12‑1959. The sale‑deed was ultimately registered on 16‑4‑1960 and the sale was confirmed by an order dated 23‑6‑1960.

7. Respondent No. 3 on 16‑4‑1960 on a plain paper moved an application to the Chief Settlement Commissioner praying for the cancellation of the petitioner's P. T. O. The above application was entrusted to Sheikh Muhammad Rafiq, Settlement and Rehabilitation Commissioner with powers of Chief Settlement Commissioner. The petitioner resisted the petition of respondent No. 3 for cancellation of the P. T. O. on various grounds listed in paragraph 6 of the writ petition. Grounds Nos. (iv) and (vii) read as follows

"(iv) That the order of Custodian could be ignored as it was without jurisdiction and ex parse. The present petitioner was never made a party to the proceeding before the Custodian.

(vii) That the original application by respondent No. 3 for the permission of the Custodian to move the civil Court for the specific performance of the contract of sale having been rejected in 1949, the Custodian bad no jurisdiction to entertain a second application dated 15‑8‑1956 about the same matter several years latter. The grant of permission was void and without jurisdiction, hence a nullity."

The learned Chief Settlement Commissioner, by his order dated 31‑7‑1962 (copy Annexure K), accepting the application of respondent No. 3 ordered the cancellation of the P. T. O. in favour of the petitioner.

8. In the writ petition various grounds have been taken to assail the impugned orders, but the principal grounds directed against the impugned orders are mentioned in paragraph 7 (a) and (c). It will be convenient to reproduce those objection here :‑

"7 (a). Section 3 (2) of the Act, 1958 provides that as and when so required by the Central Government the Government of West Pakistan shall, for any of the purposes of the Act, by notification in the official Gazette, acquire such evacuee property, other than agricultural land situated in the Province (excluding the Federal Capital) as the Central Government may deem it necessary to acquire.

Subsection (3) of section 3 further provides that on the publication of a notification under, subsection (2), the right, title and interest, of any evacuee property specified in the notification, shall with effect from the date of such a publication, be extinguished, and the property shall vest wholly and absolutely in the Central Government free from all encumbrances.

The relevant Notification No. U‑8‑79/3113, dated 21‑9‑1959 published in the official Gazette dated 21‑8‑1959 states

"Whereas the Central Government in pursuance of the powers conferred by subsection (2) of section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 (hereinafter referred to as the said Act) have asked the Government of West Pakistan to acquire, for the purposes of the said Act, all immovable evacuee property situated within the province of West Pakistan, other than . . . .

(iii) Property with regard to which any proceedings are pending on the date of this Notification under the Pakistan (Administration of Evacuee Property) Act, 1957, before a Custodian; and

(iv) Now, therefore, in exercise of the powers conferred by subsection (2) of section 3 of the said Act, the Government of West Pakistan is, hereby pleased to acquire, with immediate effect all the said evacuee immovable property."

The point for consideration therefore was whether the property in dispute stood acquired on 21‑8‑1959 on the issue of relevant notification. It is respectfully submitted that it stood acquired.

The property in dispute is alleged to have been agreed to be sold by respondent No. 3 from the evacuee owner under the Agreement dated 29‑9‑1948 but the contract for sale had not been confirmed until 21‑8‑1959, and as such the property was undisputedly evacuee' under section 2 (3) (b) of Act XII of 1957. Doubtless permission was granted by the Custodian to institute a suit in the civil Court for specific performance of the contract on 27‑3‑1958, but thereafter proceedings, if any, were to be before a civil Court and no further proceedings remained pending before the Custodian. According to the relevant notification dated 21‑8‑1959 only such property with regard to which any proceedings were pending on the date of this notification tinder the Pakistan Administration of Evacuee Property Act, 1957 (Act XII of 1957), before a Custodian, was not to be acquired. Since no proceedings were pending with respect to the property in question before a Custodian as has been admitted by respondent No. 3 vide para. 8 of Annexure B, the said property was validly acquired and thereupon vested in the Central Government and the Custodian had no longer any authority with respect to the property in question.

(c) That the petitioner being an allottee and in continuous possession of the property in question since September 1947 was a necessary party in the confirmation proceedings before the learned Custodian. The order dated 27‑3‑1958 is bad at law on account of the failure to implead the petitioner as a party in the proceedings. Even by the rules framed under section 46 of Ordinance XV of 1949 viz. rule 12 (5), it is provided that in the matter of applications for confirmation of such transactions the Custodian shall cause a notice to be served on the respondents, and the rehabilitation authority of the area in which the property is situate and on any other person likely to be interested in, or affected by the result of the application. The petitioner being necessarily affected by the order of the Custodian, being the allottee and transferee of the property in question and vitally interested in the application of respondent No. 3 was, therefore, a necessary party. The failure so to do vitiates the resultant order. This Hon'ble Court in several decisions has been pleased to uphold this contention."

9. Separate written statements were filed on behalf of respondent No. 3 as also on behalf of respondents Nos. 1 and 2, in which various pleas were raised inter alga. that the writ petition suffers from laches inasmuch as the review application of the petitioner was decided by the Custodian on 14‑11‑1961, but he did not challenge the order till October 1962, that the property in question could not be transferred to the petitioner in that the Provincial Government under Notification dated 21‑8‑1959 issued under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, expressly excluded from acquisition property with regard to which any proceedings are pending on the date of the notification under the Pakistan (Administration of Evacuee Property) Act, 1957 before a Custodian, and that the proceedings for confirmation of the property before the Custodian were pending at the time of notification as also at the time when the P. T. O. was issued, that the petitioner was not a necessary party to the proceedings before the Custodian for confirmation, of the sale in presence of the Rehabilitation Authorities, and consequently the impugned orders were not bad in law, and that, at any rate, the petitioner had been given a hearing by the Custodian in the review petition, and lastly that the order of transfer by the Deputy Settlement Commissioner in favour of the petitioner was not proper.

10. Dr. Nasim Hassan Shah, learned counsel for the petitioner, also raised a point that the application for confirmation was time‑barred and no application for condonation of delay was ever made, and therefore the order of the Custodian confirming the property on an application which was out of time was without lawful authority. The learned counsel vehemently argued that in the proceedings for confirmation, the petitioner who was a claimant and obtained a transfer order, was necessary party to the proceedings as provided in rule 12 (5) of the Administration of Evacuee Property Rules, 1950 (hereinafter referred to as the Rules). Rule 12 referred to above prescribes the procedure for confirmation under section 16. Since sub‑rules (2) and (5) of rule 12 are material, the, same are reproduced below :‑

"12 (2) The application shall be presented within sixty days of the date of publication of these rules or the date of execution of the instrument effecting the transaction sought to be confirmed, whichever be later, and any period during which the completion of such transaction is prohibited by or under any law for the time being in force in the area in which the property is situate shall be excluded.

(5) The Custodian shall cause a notice to be served on the respondent, and the Rehabilitation Authority of the area in which the property situate, and on any other person likely to be interested in or affected by the result of the application, and may also pause a public notice to be published in a newspaper at the expense of the applicant."

11. The learned counsel contended that on 26th March 1958, the Displaced Persons (Compensation and Rehabilitation) Act, 1958 came into force, which provided that a claimant in possession of an immovable property has a vested right to the transfer of the property in his possession. The learned counsel backed his argument by referring to the case or Sh. Rahmatullah v. The Deputy Settlement Commissioner Centre 'A' Karachi and others (P L D 1963 S C 633) in which it was held that the Claimants have vested beneficiary interest from the date when the Act cants, into force.

Reliance was also placed on the decision of the Supreme Court in Muhammad Siddiq and 2 others v. Chief Settlement and Rehabilitation Commissioner, Lahore and 2 others (P L D 1965 S C 123) wherein it was held that "person, associated‑with permission of Settlement Authorities, acquires a vested right' in property and cannot be deprived of right without being heard", and the impugned order was consequently declared to be invalid for violation ‑1 of the principles of natural justice.

Reliance was also placed on the decision of the Supreme Court in Ch. Sir Muhammad Zafarullah Khan and 3 others v. The Custodian of Evacuee Property, West Pakistan and Karachi and 5 others (P L D 1964 S C 865) where order of the Custodian passed in Review in absence of the parties concerned' (transferees of the property) was quashed by certiorari and the case remitted to the Custodian with the direction that the matter should be decided by "full procedure of a civil suit".

The decisions of Syed Azmat Ali v. The Chief Settlement and Rehabilitation Commissioner, Lahore and 2 others (P L D 1964 S C 260) and Muhammad Farooq Imam v. Claims Commissioner, Lahore and 2 others (P L D 1964 S C 585) were also relied on in support of the contention that since in the proceedings for confirmation various Custodians had not at all applied their mind to the question of the application being within time, the orders of confirmation were rendered without lawful authority and the case should be remitted to the Custodian to implead the petitioner as a party in the case, and then decide the case according to law.

12. Mian Mahmood Ali Qasuri, learned counsel for respondent No. 3, and Major Ishaq Muhammad, learned counsel representing the Department, on the other hand, argued that in the first instance the petitioner was not necessary party to the proceedings before the Custodian, and, at any rate, the order of the Custodian passed in his absence would not vitiate the impugned orders in that the petitioner had been heard in his review petition. Reliance was sought on the decision of the Supreme Court in Ata Ullah Malik v. The Custodian Evacuee Property, West Pakistan, Karachi and 5 others (P L D 1964 S C 236) in which the majority view was that an allottee has no vested right in property and failure to notify him would not vitiate proceedings in confirmation.

13. I first address myself to the question of laches. This question admits of a short answer and in favour of the petitioner inasmuch as I am clearly of the view that the writ petitioner had filed the writ petition very expeditiously on 17‑10‑1962, i.e. after 2 months and 17 days, when the last impugned order dated 31‑7‑1962 was passed by respondent No. 1 against the petitioner cancelling the P. T. O. Though the petitioner's review petition was dismissed by the Custodian by his order dated 16‑5‑1960, but he was not bound to file the writ petition as long as the application of respondent No. 3 before the Chief Settlement Commissioner asking for the cancellation of the P. T. O. was pending. The petitioner had two substantial reasons for not invoking the writ jurisdiction before the Chief Settlement Commissioner had ordered the cancellation of his P. T. O., (1) that an objection would have been raised that the writ petition was premature so long as the Chief Settlement Commissioner had not given a decision against the petitioner, and (2) that there could be possibility of the Chief Settlement Commissioner not giving adverse finding against the petitioner.

14. I now deal with the principal point which was hotly contested by the parties, namely, whether the petitioner was entitled to hearing before the Custodian in the application of respondent No. 3 for confirmation of the sale. After giving the arguments addressed at the Bar on this point my careful consideration, I have formed the opinion that the order of the Custodian confirming the sale is vitiated for want of a statutory notice as contemplated by rule 12 (5) of the Rules as also for violation of the principles of natural justice which in view o the pronouncements of the Supreme Court are to be read as part of each statute unless and until by special provision or by necessary intendment the rule of natural justice has been done away. The petitioner is admittedly an allottee and in "possession" of the property which is the subject‑matter of the A writ petition and the Deputy Settlement Commissioner had transferred the same to him under the Displaced Persons (Compensation and Rehabilitation) Act, 1958, and as such, the petitioner was not only likely to be interested in, but was bound to be "affected by the result of the application", within the meaning of rule 12 (5) of the Rules, and as such, it was incumbent on the Custodian to issue a notice before passing an order of confirmation. There is another substantial reason for rendering the impugned orders of‑ the Custodian without lawful authority, i.e., an error which is patent on the record, namely, that the application of respondent No. 3 for confirmation of the agreement was out of time and there was no application E for condonation of delay as contemplated by rule 17‑A of the Rules, and since various Custodians had not applied their minds to this aspect of the case the impugned orders are rendered without lawful authority.

15. The majority decision in Ata Ullah Malik v. The Custodian, Evacuee Property is not in the least apposite or at par with the facts of the instant case in that Ata Ullah Malik was allottee simpliciter, anal as stated at page 244 of the authority that at the time when the question of confirmation wag taken up, no proceedings had yet taken place under the Displaced Persons (Compensation and Rehabilitation) Act, 1958 which could have the effect of divesting the Custodian of his title. In that case it was held

"The appellate order of the Additional Custodian allowing the transfer was made in September 1958, and it was not until August 1959, that evacuee properties generally were vested in the Government by notification, and so became available for transfer to claimant refugees and others."

The point, in my view, stands concluded by the decisions of the Supreme Court in Ch. Sir Muhammad Zafrullah Khan and 3 others v. The Custodian of Evacuee Property, West Pakistan, Karachi and S others and Muhammad Siddiq and 2 others v. Chief Settlement and Rehabilitation Commissioner, Lahore and 2 others and particularly the recent decision of the Supreme Court in Syed Ali Abbas and others v. Vishan Singh and others (P L D 1967 S C 294) which is on all fours with the facts of the instant case. The case of Ata Ullah Malik v. The Custodial: of Evacuee Property and others was considered in this case and Cornelius, C. J. speaking for the Court on the question of violation of rule of natural justice and the applicability of the rule enunciated in the case of Ata Ullah Malik, at page 297, expressed himself thus‑-----

"The learned Judges thought that this precedent covered the case before them, but it is to be pointed out that the status of Ataullah Malik in respect of the evacuee property therein question was that of a mere allottee or licensee, whereas the present case was rested on the fact that permanent rights in the land had passed to the writ petitioners. Therefore, the cases were by no means on all fours, in respect of the natural justice' argument."

At page 298, the learned Chief Justice observed

"This appeal should in our opinion be allowed, and steps should be taken to provide for the appellants that right of appeal from the order of the Deputy Custodian, which appears clearly to have been denied to them by what can only be described as a perversion of procedure in the Custodian's department. The appellants, holding as they did, vested rights in the land in disputes, had a vested right to appeal against the order of the Deputy Custodian, which had the effect of depriving them of the land."

On accepting the appeal and setting aside the judgment of the High Court, the Supreme Court directed "that the appeal filed by the appellants before the Custodian should now be restored to its original number and should be heard and decided by the Custodian himself after proper notice to the parties."

16. Since the impugned orders of the Custodians as also the order of the Chief Settlement Commissioner which is based on the impugned orders of the Custodians are rendered without lawful authority on the ground that the petitioner was not given a hearing and as also that the Custodians in the impugned orders had not at all applied their minds to the question whether the application for confirmation was within time, I need not decide the other contentions raised by the parties.

17. As a result of the foregoing discussion, I accept the writ petition and remit the case to the Custodian with the direction that the application for confirmation of the agreement should be decided afresh by applying "full procedure of a Civil Suit" as held by the Supreme Court in Ch. Sir Muhammad Zafarullah Khan and 3 others v. The Custodian of Evacuee Property, West Pakistan, Karachi and S others after issuing notice to the petitioner. I make no order as to costs.

SAJJAD AHMAD, J.‑--I agree.

A. E. Petition accepted.

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.