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Civil Appeal No. K‑126 of 1981, decided on 27th February,1985.

(From the judgment of the High Court of Sind, dated 24‑8‑1981 passed in Constitutional Petition No. 121 of 1980).

Civil Appeal No. K‑23 of 1982, heard on 27th February, 1985.

(From the judgment of the High Court of Sind, dated 18‑5‑1981, passed in Constitutional Petition No. D‑1701 of 1980).

‑‑‑Arts. 185(3) & 199‑‑West Pakistan Cooperative Board (Dissolution) Act (II of 1966), S.4‑‑Constitutional jurisdiction, exercise of‑‑Leave to appeal granted to consider inter alia, whether dispute which concerned contractual liabilities arising out of lease agreement which also contained a provision for arbitration of such dispute, was an appropriate case for exercise of constitutional jurisdiction by High Court.

‑‑‑Art. 199‑‑West Pakistan Cooperative Board (Dissolution) Act (II of 1966), S.4‑‑Writ jurisdiction, exercise of‑‑Dispute concerning contractual liabilities arising out of lease a6reement which also contained provision for arbitration of such dispute‑‑Whether an appropriate case for exercise of writ jurisdiction‑‑Held: Question of jurisdiction and competency of functionaries of Cooperative Fund being involved, jurisdiction of High Court to deal with such matters could not altogether be ruled out.‑ [Jurisdiction ].

‑‑‑Ss. 4 & 7‑‑Powers of Administrator‑‑‑ Delegation of‑‑There being no provision in Act enabling Administrator to delegate authority Project Manager or Project Director could not act in exercise of any of powers vested in Administrator by law.

Akhtar Mahmuu, Advocate‑on‑Record for Appellant.

S.M. Rizvi, Advocate Supreme Court instructed by Faizanul Haq, Advocate‑on‑Record for Respondent No.l.

Z.U. Ahmed, Advocate Supreme Court instructed by M.S. Ghaury, Advocate‑on‑Record for Appellant.

Abdul Hafeez Memon, Advocate Supreme Court instructed by Muzaffar Ali Khan, Advocate‑on‑Record (absent) for Respondent No.3.

Dates of hearing: 26th and 27th February, 1985.

This judgment will dispose of Civil Appeals Nos. K‑126 of 1981 and K‑23 of 1982, as in both the dispute concerns shops in the same building and as common question arise for determination.

2. The building, known as the Saddar Co‑operative Market, at Abdullah Haroon Road, Karachi, and comprising a large number of shops and offices, had been built by the Government of Pakistan in collaboration with the Rehabilitation Department and the Karachi Development Authority. It was first managed by the Co‑operative Investment and Management Agency Limited and later by the West Pakistan Co‑operative Board established under the West Pakistan Co‑operative Board Ordinance (XIV of 1962). The Ordinance was replaced on 2‑12‑1966 by the West Pakistan Co‑operative Board (Dissolution) Act (II of 1966), in the result of which the Board was dissolved and the building came to be managed by the 'Administrator' appointed by the Government under section 4 of the Act. A fund was also established under section 7 of the Act, known as the Co‑operative Development Fund' which vested in Administrator.

3. Shop No. 227, which is the subject‑matter of this appeal, had been leased out to Muhammad Nazeer (respondent No.l) on 6‑1‑1964 under an agreement on conditions including that of payment of the lease money in monthly instalments. On failure to pay three consecutive instalments, the agreement, in terms of its clause 3, would stand cancelled and the amounts paid forfeited, According to clause 11, the status of the lessee was that of a licensee. Clause 14 prohibited subletting of the shop without the written permission of the lessors. Clause 22 of the agreement provided for arbitration under the Punjab Co‑operative Societies Act, 1912, in case of any dispute arising between the lessor and the lessee Muhammad Nazeer defaulted in payment of the instalments, but in view of the new situation brought about by the enactment of Act 11 of 1966, the default was condoned and a new agreement was executed in his favour on 24‑4‑1969 which contained similar provisions regarding default, status of the lessee and arbitration as in the previous agreement. Muhammad Nazeer, however, again defaulted and also sublet the shop in favour of appellant Muhammad Ashraf Ali. Notices were issued to him in 1973, 1974 and 1976 and ultimately the Project Manager of the Co‑operative Development Fund, by letter, dated 30‑11‑1977, cancelled the allotment of the shop on account of default in payment of instalments and subletting and directed Muhammad Nazeer to vacate the shop. On the application of the appellant, made on 5‑12‑1977, the shop was leased out to him by an agreement executed in his favour on 26‑12‑1977 by the Project Manager on behalf of the Fund. Muhammad Nazeer agitated the matter by filing three successive applications, in the result of which the Project Director, by his order, dated 16‑3‑1978, recalled the order of cancellation from the name of Muhammad Nazeer as also the order of allotment made in favour of the appellant and restored the allotment of Muhammad Nazeer. But the order was, on an application made by the appellant, set aside on 29‑5‑1978 by the Administrator who held that as the earlier cancellation on 30‑11‑1977 from the name of Muhammad Nazeer had been ordered by the Project Manager in compliance of decisions taken by the Administrator 'who is the sole authority under the West Pakistan Co‑operative Board (Dissolution) Act, 1966', the Project Director 'had no jurisdiction to pass an order against the decision of a superior authority The allotment made in favour of the appellant was consequently upheld and the lease in his name restored. Muhammad Nazeer challenged the decision through Constitutional Petition No. 945 of 1978 on the ground, inter alia that the same having been made without notice to him was in breach of the rule of natural justice. By consent of the parties, the High Court, on 4‑9‑1979, quashed the order of the Administrator, dated 29‑5‑1978 and remanded the matter to him for a fresh decision after hearing the parties. The Administrator accordingly heard the parties but by a detailed order passed on 14‑1‑1980 maintained his previous decision in favour of the appellant. Muhammad Nazeer came once again before the High Court in Constitutional Petition No. 121 of 1980, which was accepted by the impugned judgment, dated 24‑8‑1981. The High Court relying on the Administrator's letter, dated 21‑1‑1978, whereby he had authorised the Project Director 'to examine the case and decide the same on merits', held that the Project Director was a delegatee and as such not incompetent to pass the order in favour of Muhammad Nazeer on 16‑3‑1978, that he was competent to condone the non‑payment the instalments as also the breach arising out of the subletting and that the Administrator, even if he were held competent to review, could not have recalled the order of the Project Director, dated 16‑3‑1978.

4. Leave was granted to consider, inter alia, whether the dispute which concerned contractual liabilities arising out of the lease agreement, dated 24‑4‑1969, which also contained a provision for arbitration of such dispute, was an appropriate case for the exercise of constitutional jurisdiction by the High Court.

5. Following from the leave granting order, Mr. Akhtar Mahmud appearing for the appellant, urged that as the dispute between the parties arose out of a contract, the High Court could not bring into the same in its constitutional jurisdiction. However, we find that no such point had been raised before or examined by the High Court in any of the writ petitions. Same is the position as regards the effect of the arbitration clause on the jurisdiction of the High Court. Moreover, the question of jurisdiction and competency of the functionaries of the Co‑operative Development Fund is also involved. The jurisdiction of the High Court to deal with such matters, therefore, cannot altogether be ruled out.

6. The main point urged before us, related to the competency of the Project Director to have passed the orders they did. It is to be noted that both parties had before the High Court conceded that the said officers had acted as delegatees of the Administrator. Mr. Akhtar Mahmud, however, argued that, notwithstanding that concession, the fact remained that the powers of the Administrator, in the absence of any enabling provision in that regard in Act 11 of 1966, could not be delegated and as such the Project Manager and the Project Director could not discharge the powers legally vested in the Administrator, under the colour of being his delegatees. He submitted that both the orders, one, dated 30‑11‑1977 passed by the Project Manager cancelling the allotment from the name of Muhammad Nazeer and the other, dated 16‑3‑1978 passed by the Project Director restoring that allotments were without jurisdiction. As for the case of the appellant, he did not rely on the order of the Project Manager, dated 26‑12‑1977 granting the lease in his favour which was thus, also without jurisdiction, but on the orders of the Administrator himself passed first on 29‑5‑1978 and then on 14‑1‑1980 which both had, according to him, been competently passed in favour of the appellant. The first order, as already stated, had been set aside by consent of the parties on finding that the same had been made without notice, and the second had been passed on remand of the case by the High Court. Mr. Akhtar Mahmud further contended that the matter in the earlier round having been remanded to the Administrator by consent of the parties, the respondent could not subsequently challenge the Administrator's jurisdiction which had thus become res judicata. He submitted that this point had been duly taken before the High Court as also in ground No. 5 of the civil petition before this Court.

7. We find force in the submission. There being no provision in the Act enabling the Administrator to delegate his authority, the Project Manager or the Project Director could not act as delegatee of the, Administrator by law. Moreover, if the case of the respondent was that the Administrator had no jurisdiction to question the orders passed by the Project Manager or the Project Director as his delegatees, he should have said so before the High Court in the earlier proceedings when the matter was being remanded to the Administrator but instead he consented to the remand. He was, therefore, estopped from challenging the jurisdiction of the Administrator. Moreover, since neither the Project Manager or the Project Director could act as delegatees of the Administrator, the High Court had clearly erred in holding that the Administrator could not have recalled the orders passed by the Project Director as such orders did not exist in the eye of law. The order of the High Court, therefore, cannot be sustained.

8. This appeal concerns shop No. 138 in the same building. It was initially given on lease to Zaheer‑ud‑Din (respondent No. 3) on 27‑4‑1965 which was substituted by another lease on 31‑7‑1969. He, too, defaulted in the payment of instalments and also sublet the shop in favour of Muhammad Shoaib (appellant), with the result that the Project Manager by letter, dated 28‑11‑1977 cancelled the allotment of the shop from his name and called upon him to vacate it. Later, on 24‑12‑1977, the shop was leased in favour of Muhammad Shoaib appellant. Zaheer‑ud‑Din filed an "appeal" but the same was dismissed by the Project Director on 18‑5‑1978 upon the view that the administration of the Project vested in the Administrator, that the Project Manager had simply conveyed the order of cancellation passed by the Fund administered by the Administrator and that the Project Director had, as such, no jurisdiction as he could not sit over the orders passed by "a superior authority". A review application filed by Zaheer‑ud‑Din having been dismissed by the concerned Secretary of the Provincial Government on 30‑8‑1980, he filed Constitutional Petition No. D‑1701 of 1980 which was accepted by the impugned judgment, dated 18‑5‑1981 and the order of cancellation of the allotment from the name of Zaheer‑ud‑Din was quashed on the ground that the same had been passed without notice to him.

9. Leave was granted as the case involved an identical question arising in the other appeal (C.A. No. K‑126 of 1981).

10. Mr. Z.U. Ahmed, appearing for appellant Muhammad Shoaib, did not controvert that there could be no delegation in the absence of an enabling provision in the Act but contended that the order of cancellation from the name of Zaheer‑ud‑Din had in fact been made by the Administrator. For this he relied on the observation of the Project Manager in his order, dated 28‑11‑1977 that:

"In view of these violations on your part, the Co‑operative Development Fund and Project have decided to cancel the allotment of shop No. 138 in your favour."

Further, he referred to the following observation made by the Project Director in his order, dated 18‑5‑1978:

"I have carefully perused the cancellation of shop order and there is absolutely no doubt in my mind that the letter of cancellation has been issued under the orders of the Administrator of the Project. The Project Manager has simply conveyed the order of cancellation passed by the Co‑operative Development Fund and Project which is administered and run by the Administrator appointed under section 4 of the Act."

In this connection he also referred to the provisions of section 4 and section 7 of the Act (II of 1966), according to which all properties, funds, etc., which vested earlier in the Board, shall under the Act vest in the Administrator and the Fund established under the name "the Co‑operative Development Fund" shall vest in the Administrator. He, therefore, urged that the cancellation order was in fact the order of the Administrator. Though he failed to refer to any order passed by the Administrator himself, he relied on the following observation made by the Project Director in his order, dated 30‑8‑1980:

"The shop in question has been cancelled after obtaining necessary approval from the Administrator, Co‑operative Development Fund----------"

11. But this is of little help because even if the approval by the Administrator meant that he had decided the matter himself, the decision still suffered from a breach of the principles of natural justice. The appeal must, therefore, fail.

12. In the result of the above discussion, we accept Appeal No. K‑126 of 1981, set aside the impugned order of the High Court and restore that of the Administrator passed on 14‑1‑1980. Appeal No. K‑23 of 1982 is dismissed. There shall be no order as to costs in either appeal.

M. I. Order accordingly.

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