P L D 1965 Supreme Court 123 (PLP)

S. A. RAHMAN, J.‑This appeal by special leave calls in question an order passed by a learned Single Judge of the High Court of West Pakistan in writ jurisdiction. The relevant facts are these. The appellant, Muhammad Siddiq, is a claimant displaced person. He had been in possession of a shop along with a chaubara consisting of two rooms, on the first floor which covered this shop as well as an adjoining shop. There was a staircase leading to the chaubara above, in between the two shops, which, however, opened into the verandah of the chaubara common to the two rooms. The adjoining shop was in the possession of a local. By order dated the 27th April 1960, the two shops along with the chaubara above, were directed to be transferred by the Deputy Settlement Commissioner, Sheikhupura, to the appellant, Muhammad Siddiq. On the 20th of January 1961, the third respondent, Khaliq Ahmad Ansari, who happens to be the Stenographer and P. A. to Mian Bashir Ahmad, Settlement Commissioner (Policy), purported to lay an information with the Enforcement Staff that the transfer in favour of the appellant was an irregular one. A report being submitted by the Enforcement Staff to the Settlement and Rehabilitation Commissioner, Lahore Division, the latter cancelled the transfer of the shop which was in the possession of a local, along with the room above it, to the appellant and directed its transfer to Khaliq Ahmad Ansari, treating him as an informer. In these proceedings no notice was sent to Ghulam Rabbani and Idrees Rizvani, the 2nd and 3rd appellants, who had been associated by Muhammad Siddiq in the transfer, with the approval of the Settlement Authorities and to whom a P. T. O. had been issued jointly with Muhammad Siddiq, on 29‑3‑61. The order of the Settlement and Rehabilitation Commissioner had the effect of divesting them of their property rights without their being heard. It is stated that the second shop which was originally in the possession of a local, had been taken over by these two associates of Muhammad Siddiq. The three appellants challenged the action of the Settlement and Rehabilitation Commissioner by a writ petition in the High Court. A report from the Settlement and Rehabilitation Commissioner was called. The learned Judge held after its perusal and after hearing counsel for the parties, that the transfer in favour of Muhammad Siddid could only have been made, of one shop, legally and consequently, the informer was right in claiming that the transfer in his favour was irregular. With regard to the rights claimed by the other two appellants, it was observed that they were not the original transferees of the property in dispute and derived their title from association with Muhammad Siddiq only. It was held that it was not necessary, under the law, for the Settlement Commissioner to hear them before passing the impugned order. The petition for a writ was therefore dismissed in limine. Special leave to appeal was granted in this case to consider, inter alia, the question raised in the grounds of the petition, whether powers delegated by the Chief Settlement Commissioner and exercised by his delegate, were subject to appellate of revisional jurisdiction or not. The point was raised on behalf of the respondents whether the appeal was not confined to this question alone, but the order was clearly designed to admit the appeal on all the grounds raised in the petition and it was only mentioned that one of the questions calling for decision would be that relating to delegation of powers. Mr. S. M. Zafar who appeared for the appellants before us, has, however, not pressed the point about the amenability of delegated powers to appeal or revision. He concedes that in the circumstances of this case that question will not call for consideration. Learned counsel for the appellants has raised three contentions in support of the appeal. He has argued firstly that the transfer in question in favour of Muhammad Siddiq was not an "irregular transfer", within the meaning of notification No. S.R.O. 824(K)/61, dated 1‑9‑61 and published in the Gazette of Pakistan, Extraordinary, on the 2nd of September 1961, on which the learned Settlement and Rehabilitation Commissioner had relied. Secondly, it was maintained, the impugned order was bad in law as it deprived the 2nd and 3rd appellants of their property rights, without giving them an opportunity of being heard. Thirdly, the argument was advanced that the notification in question had ceased to have any legal effect, after the amendment of section 10 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, (hereinafter referred to as the Act) by Ordinance 11 of 1962, on 13‑1‑62. We will deal with these points in seriatim. The notification of the 1st September 1961, promulgated an Order of the Central Government passed in exercise of the powers conferred by clause (b) of section 10 of the Act (hereinafter to be referred to as the Order). This section declared that subject to the provisions of the Act and the rules made thereunder, the Chief Settlement Commissioner may transfer or dispose of any property out of the compensation pool‑ (a) on evaluation basis or by sale by means of auction or otherwise, in accordance with the provisions of the Schedule; or (b) in such other manner as may be approved by the Central Government, In the Order, "irregular transfer" was defined to mean a transfer' purported to be made under the provisions of the Act, by a Settlement Authority, which, in the opinion of the Chief Settlement Commissioner was made mala fide or was not made in accordance with the provisions of the said Act or the schemes made thereunder or suffers from a patent error or defect. An B "informant" is defined as one who informs the authority specified in the Order, of the existence of any "hidden evacuee property" or of any "irregluar transfer". The transfer in question in this case was not in respect of "hidden evacuee property". The question is whether it fell within the definition of "irregular transfer" as given in the Order. Mr. S. M. Zafar has invited our attention to the definition of "shop" in item 12 of section 2 of the Act. A "shop" is define therein as meaning evacuee business premises of any value, in an urban area, or of the value of ten thousand rupees or more in a rural area, together with godowns or store‑houses, if any, attached or appurtenant to such premises, but does not include any building situated within the premises of an industrial concern or a building or premises declared under paragraph 16 of the Schedule to be a big mansion or hotel. This is followed by two provisos which read as under:‑ "Provided that where any building or premises not so declared, consists of more than one business unit, and such units are in the possession of several persons, then unless the Chief Settlement Commissioner orders otherwise, the whole of such building or premises shall be deemed to be a shop: Provided further that where any such building or premises consists of both residential and business units, the Chief Settlement Commissioner may order that the whole of such building or premises, or such part or parts thereof as may be specified in the order, shall be deemed to be a shop or a house." Proviso (2) to the definition of "shop", appears to be applicable to the premises in question in this case. The property transferred to the appellants is part of a building consisting of a number of residential as well as commercial units. It has not been declared to be a big mansion or a hotel. It has no connection with any industrial premises. The building is adequately described in a report submitted by the Assistant Settlement Commissioner, Sheikhupura, to the Deputy Settlement Commissioner of that district and which appears at pages 66‑73 of the record. There were shops situate on two sides of the building, nine in number, and the residential portions were located either at the back of these shops or above them. We are concerned only with the two shops denoted by the letters "I" and "H" with the two rooms of a chaubara above them. The Assistant Settlement Commissioner made it clear in his report that the shops "I" and "H" together with the rooms above them, could be treated as independent units and that there was a staircase which could meet the needs of these two portions. He, however, added that Muhammad Siddiq who was in possession of shop "I" along with the whole of the chaubara consisting of two rooms above the shops "H" and "I", had requested for the transfer to him of both the shops, along with the chaubara as a single unit. This whole portion could be treated as an independent unit according to the Assistant Settlement Commissioner and the Deputy Settlement Commissioner was asked to consider the request of Muhammad Siddiq in this regard. He pointed out that the shop "H" was in the possession of a local who was not entitled to its transfer. The Deputy Settlement Commissioner accepted the recommendation of ‑ the Assistant Settlement Commissioner and in consequence, the two shops alongwith the chaubara above, were directed to be transferred to Muhammad Siddiq as one unit. As has been mentioned above, Muhammad Siddiq associated with himself, the other two appellants, with the permission of the relevant authorities and a provisional transfer order was issued to all three of them, on the 29th of March 1961 describing the property transferred as a "shop". Mr. Zafa contends that this order was within the powers of the Deputy Settlement Commissioner to pass, under the 2nd proviso to the definition of "shop" given in item 12 of section 2 of the Act, as he could declare any part of a composite building to be a "shop" or a "house". This argument has considerable force. The transfer, therefore, was in accordance with the provisions of the Act and our attention has not been drawn to any scheme prepared under the Act, the provisions of which could be said to have been contravened by the order in question. The order also suffers from no patent error or defect. It is, therefore, contended and with reason. that the transfer in favour of the appellants did not fall within the definition of "irregular transfer" at all and could not consequently have been set aside on a reference made by the Enforcement Staff. This transfer was not challenged by any appeal or revision for a period of two years nearly, till the Enforcement Staff took up the matter at the instance of the respondent. The second proviso to the definition of "shop" has not been referred to, either by the learned Settlement and Rehabilitation Commissioner exercising the powers of the Chief Settlement Commissioner or by the High Court, in their respective orders. They have proceeded on the assumption that the appellants had been transferred two "shops", whereas the Deputy Settlement Commissioner had actually treated the portion consisting of the two shops and the chaubara above, as a single shop. It is to be noted that even under the first proviso to the definition of shop, more than one business unit could be collectively declared to be single "shop". Dr. Nasim Hasan Shah who appeared for Khaliq Ahmad Ansari placed his reliance on the fact that the report of the Assistant Settlement Commissioner had described the various shops as independent units and had even mentioned their rents separately in his report. He consequently contended that the appellant had been transferred two shops. The short answer to this contention is that he had, at the same time, visualised the possibility of declaring the two shops in question with the chaubara above, as a single unit and this recommendation was accepted by the. Deputy Settlement Commissioner. The mention of separate rents of the shops was merely for the purpose of assessment of the value of the property thus transferred and cannot lead to the inference that the Deputy Settlement Commissioner was transferring two "shops" to the appellants. It was suggested by Dr. Nasim Hasan Shah that the action of the Deputy Settlement Commissioner was not in consonance with the instructions issued by the Chief Settlement Commissioner, appearing at page, 68 et seq, of the Manual of Settlement. After referring to the definition of "house" and "shop" in the first paragraph, the Chief Settlement Commissioner declared in these instructions that he had decided to lay down, what he described as broad principles which should be kept in view, while disposing of houses and shops. The first direction is to the effect that in accordance with the general principle contained in the definitions of "house" and "shop", a whole building as it existed on the 14th August 1947, should normally be transferred to one person. The second principle is formulated in the shape of four propositions. (a) If a building can conveniently be partitioned vertically down to the ground floor so as to divide it into independent and self‑contained residential or business units each with an independent access, such partition may be carried out where necessary and each unit transferred separately. While carrying out such partition, sufficient space should be allowed for passages and other easements. (b) Bungalows should as far as possible, be transferred as complete units except in very obvious cases where they can be divided into more than one independent and complete bungalow. (c) A building consisting of one business unit and one residential unit above it, if situated in a predominantly commercial area should be treated as a shop and the whole building transferred as a shop. (d) A building similarly consisting of a business unit and a residential unit above it, situated in a predominantly residential area should be treated as a house and transferred accordingly. The third principle is to the effect that where a building consists of more than two units some of which are residential and the others business units and it cannot be divided in accordance with the instructions at (2) above, and such units have independent access and can be utilized independently for residential or commercial purposes, each such unit may be treated as a house or a shop as the case may be and transferred accordingly. In such cases also, it is clarified, efforts should be made to transfer the whole building to one person, if practicable. It is clear on a perusal of these instructions that they do not have the effect of subjecting the powers conferred by the second proviso to the definition of shop in the Act, on the Chief Settlement Commissioner, when exercised by his delegate such as the Deputy Settlement Commissioner admittedly was, to any limitations. His discretion is left unfettered in the light of the broad principles set out above. We are unable to accede to the suggestion that any of these instructions stood in the way of the Deputy Settlement Commissioner treating the two shops and the chaubara above, in this case, as a single unit and to transfer it as a "shop" to the appellants. Indeed, the spirit of these instruction would appear to be in consonance with the order passed by the Deputy' Settlement Commissioner. Our attention was invited by Dr. Nasim Hasan Shah to some G further instructions issued by the Chief Settlement Commissioner with regard to the transfer of houses and shops, in possession o more than one person, appearing at page 92 of the Manual of Settlement. These instructions too do not take away the discretion vesting in the delegates of the Chief Settlement Commissioner to make such divisions of the property to be transferred, as they deem fit, so long as the Act or the various schemes framed thereunder are not contravened. It would appear, therefore, that the transfer in favour of the appellants was not an "irregular transfer" and could not have been interfered with, under the Order. The learned Attorney‑General who appeared to oppose the appeal, on behalf of the Settlement authorities, contended that the matter was not governed at all by the Order. Section 10 of the Act was substituted by another section by Ordinance II of 1962 on 13‑1‑62. In the new section, instead of the old clause (b), the following was inserted as subsection (2): "(2) Notwithstanding anything contained in subsection (1) the Central Government may order the transfer in public interest of any property out of the compensation pool in such manner as it may deem proper." Henceforth, therefore, there was no question of transfer by the Chief Settlement Commissioner, of any evacuee property under this clause, with the approval of the Central Government. In future, only the Central Government could order a transfer in public interest. In view of this change of the law, the order issued on the 2nd of September 1961, under clause (b) of section 10, as it then stood, had lost its efficacy. The impugned order of the Settlement and Rehabilitation Commissioner was passed on 12‑3‑62, long after this amendment and indeed, it is contended on behalf of the appellant that this circumstance alone sufficed to invalidate the impugned order of the Settlement and Rehabilitation Commissioner. It is true that the learned Settlement and Rehabilitation Commissioner has not referred to the Order in specific terms but apparently he had it in mind when passing the impugned order, because the Inspector, Enforcement, was present and was heard along with the parties. He also mentioned at the outset of his order that on the information supplied by Khaliq Ahmad Ansari, the Enforcement Staff, after holding an inquiry, had recommended that one of the two shops irregularly transferred to Muhammad Siddiq should be cancelled and the same should be transferred to the informant. In the report submitted by him in the High Court, he claimed to have been authorized to deal with "irregular transfers" and "hidden property" and in para. 11 of his report expressly referred to the order (see page 37 of the record). He had clearly therefore in mind the definition of "irregular transfer" given in the order. Obviously, the order could not have been invoked by him on 12‑3‑62 and if he purported to derive his power there from, his order would be invalid. The learned Attorney‑General, however, suggests that the impugned order was passed under the general powers of revision vesting in the Settlement and Rehabilitation Commissioner who exercised the powers of the Chief Settlement Commissioner, under subsection (3) of section 20 of the Act. This enabled him to call for the record of any case or proceeding under the Act, in which a subordinate officer of the Settlement Department had passed an order, at any time, for the purpose of satisfying himself "as to the correctness, legality or propriety of such order and to pass thereon any order that he might think fit". The powers under this section of the Act are, it is to be noted, wider than those given in revision or review under the Central Government's order. Under section 20, even the impropriety of an order might furnish a ground for interference in revision. Such a ground, however, was not available under the order. The difficulty in the way of acceptance of the learned Attorney‑General's argument is that proceedings under section 20 of the Act would be confined to persons who were parties to the proceedings before the subordinate Settlement Authorities and the informant would not figure any where in the picture. It is true that the impugned order here must be deemed to have been passed under section 20, read with the order. The effect of the combination of these two is that a limitation is imposed on the Settlement Authority concerned, to confine his attention to the question whether the transfer is an "irregular transfer" within the meaning of the order or not. Only then it could be revised and transferred to the informant. An order passed under section 20 of the Act simpliciter, could enure either for the benefit of one of the contesting parties excluding the informant who would be a stranger to the proceedings or could at best deprive those parties of any benefit of the evacuee property if none of them was eligible for its transfer. In the latter event, conceivably, the property in question may be ordered to be sold by public auction. In no case, in proceedings purely under section 20 of the Act, a transfer to then alleged informant would be possible. The learned Attorney‑General also referred us to the instructions appearing at page 166 of the Manual of Settlement in the shape of a Press Note dated the 29th September 1960. This Press Note, according to him, governs the situation in the absence of the order passed by the Central Government under section 10 of the Act. The Press Note cannot improve the position of the informant in the circumstances of the present case, for it relates to information being supplied in case of "transfer to ineligible persons, by misrepresentation of facts and giving false declarations to the Settlement Authorities". As an inducement to informants unearthing such a transaction it was declared that "if a person gives information about any such case and the accused is found guilty of the charge, the property will be transferred to the informant if he is not ineligible to the transfer of the property under the Act, the Rules or the Schemes made thereunder". There is no question of misrepresentation of facts or making of a false declaration to the Settlement Authorities by any of the appellants in the instant case. They were transferred the property in question as the result of open proceedings with knowledge of all the relevant facts, by the Deputy Settlement Commissioner. It is not claimed on behalf of the informant that he would have been eligible to the transfer of the property in question under the Act apart from the provisions of the order. The Press Note, therefore, is of no avail to the respondents in this case. It may be added, that even if the Settlement Commissioner exercising the powers of the Chief Settlement Commissioner, could be persuaded to exercise his powers under section 20 of the Act, to revise the transfer order in favour of the appellants on the ground of impropriety, he would have no power to transfer it to the informant in the present case. In point of fact, however, it was not the impropriety of the transaction that was canvassed but its character as an "irregular transfer" within the meaning of the order. Both the learned Settlement and Rehabilitation Commissioner and the High Court (we say so with respect) appear to have lost) sight of the second proviso to the definition of "shop" given in the Act. The assumption on which they acted, was that two shops had been transferred to the appellants. This was begging K the question. If this second proviso had been kept in view, it should have been clear that, in law, only one "shop" had been legally transferred to them by the Deputy Settlement Commissioner. The learned Attorney‑General also sought to place reliance on rule 7 of the Permanent Transfer (Houses and Shops) Rules, 1961, published in the Gazette of Pakistan, Extraordinary, dated the 30th May 1961. Rule 7 provides that "it shall be lawful for the Central Government or a Settlement authority not below the rank of an Additional Settlement Commissioner, to resume the whole or any part of the property if, at any time, it is, for reasons to be recorded in writing, satisfied that the transferee or his predecessor‑in‑interest had secured the transfer of the property, or had obtained or obtains compensation in any other form by fraud or misrepresentation or in contravention of any provision of the Act". Demonstrably, this rule is not applicable to the facts of this case which involves no fraud or misrepresentation on the part, of the appellants nor was the order in their favour in contravention of any provision of the Act. The learned Attorney‑General also referred us to President's Ordinance III of 1963 promulgated on the 17th of January 1963, and attempted to argue that the transfer in favour of the informant could be said to have been validated by its provisions. Section 2 of this Ordinance enacts that "any property transferred by the Chief Settlement Commissioner with the approval of the Central Government from the compensation pool, to any person or class of persons, by any general or special order, on or after the 8th August 1959, but before the commencement of this Ordinance, in the purported exercise of the powers under the said Act, shall, notwithstanding anything contained in the Displaced Persons (Compensation and Rehabilitation) Act, 1958 or m any rule or order made thereunder, be deemed to have been validly transferred, as if the Chief Settlement Commissioner had, at all, material times, powers under the said Act to so transfer such property and the validity of any such transfer shall not be questioned in any manner whatsoever. This is a general enactment intended to cover transfers made by the Chief Settlement Commissioner with the approval of the Central Government, about whose validity doubts may have arisen. It does not expressly refer to transfers in favour of "informants" made under the authority of the order. We are not prepared to hold that an illegal order in favour of an informant has also been validated by this Ordinance. It is plain that before the impugned order was passed by the Settlement and Rehabilitation Commissioner the second and third appellants who had been associated with the first appellant, with the requisite permission of the Settlement authorities themselves, had acquired a vested right in the property in question and had been issued a P. T. O. in their favour, jointly with the first appellant. Without giving them any notice or a opportunity to be heard, the Settlement and Rehabilitation Commissioner could not have interfered with their property rights. In so far as he did so, he contravened the principle of natural justice and this circumstance, alone, would invalidate the impugned order. To this part of the appellant's case, neither. Nasim Hasan Shah nor the learned Attorney‑General wail able to give an answer. With the amendment of section 10 of the Act by Ordinance III of 1962, the Settlement and Rehabilitation Commissioner lost his power to take action under the order. Ordinance II of 1962 contains no saving clause in respect of pending proceedings. Dr. Nasim Hasan Shah attempted to press into service section 6 of the Central General Clauses Act for the purposes of suggesting that despite the amendment, the old proceedings could continue,. But assuming, for the sake of argument, that this contention is correct, the point whether the transaction in dispute was really an "irregular transfer" within the meaning of the order, would still remain and its answer would clearly be against the respondents. The position therefore that emerges from the above discussion is that the order passed by the Settlement and Rehabilitation Commissioner, cancelling the transfer in favour of the appellants, was misconceived in law and could not be sustained. We therefore allow this appeal and quash the order of the Settlement and Rehabilitation Commissioner passed on the 12th of March 1962. This will have the effect of restoring the order of the Deputy Settlement Commissioner in favour of the appellants. In the circumstances of the case, we make no order as to costs in this Court. A. H. Appeal allowed.