P L D 1962 Supreme Court 384 (PLP)

FAZLE‑AKBAR, J.‑

This appeal is brought by special leave against an order of a Division Bench of the High Court of West Pakistan at Peshawar dismissing a petition for a writ which was brought before that Court by appellant Abdul Latif in the circumstances mentioned below. By an agreement dated the 15th February 1948, entered into with the North West Frontier Province Government, the appellant Abdul Latif agree to act as a Treasurer in respect of Peshawar, Charsadda and Noshera Treasuries for a period of two years and he worked in that capacity till 15th May 1950 when the contract was terminated. On 3rd April 1952, the North West Frontier Province Government (hereinafter referred to as the Government) filed a suit against him in the Court of Senior Subordinate Judge, Peshawar, for recovery of Rs. 15,469‑1‑8 being the loss sustained by the Government due to his negligence. Subsequently by an amendment of the plaint, the claim was reduced to Rs. 9,519‑1‑

8. On 16th January 1954, Abdul Latif filed a suit in the said Court of the Senior Subordinate Judge for recovery of Rs. 27,391‑4‑4 being the balance of pay, allowances and certain compensations due to him for services rendered by him under the agreement. On 3rd March 1954, the then Deputy Commissioner, Peshawar, started a proceeding under section 11 of the Frontier Crimes Regulation against Abdul Latif for criminal breach of trust and cheating and appointed a Jirga of four officials for that purpose. On 12th November 1953, Abdul Latif filed a petition under section 233‑A of the Government of India Act, 1935, before the High Court challenging the legality and propriety of the action of the Deputy Commissioner. On 2nd June 1956, the suit filed by the Government was decreed for a sum of Rs. 5,035‑2‑0 and that of Abdul Latif for a sum of Rs. 7,651‑13‑

0. On 11th November 1957, the learned Judges of the High Court allowed the petition of Abdul Latif and held that the proceedings under the Frontier Crimes Regulation were without jurisdiction. On 9th January 1958 the Treasury Officer, Peshawar, wrote to the Deputy Commissioner, Peshawar, that on annual review of working of the treasury it was found that there was a deficiency of Rs. 7,484‑3‑3 in the stamps of the treasury during the contracted period of Abdul Latif. He along with the letter sent a statement showing details of "deficiencies in remittances and shortage in stamps etc." On 21st January 1958 the Deputy Commissioner sent the following official memorandum to the Tehsildar Peshawar:‑-- "In enclosing herewith a copy of memo. No. 208/T/19/177 Misc., dated 9‑1‑58 from the Treasury Officer, Peshawar, to my address together with a copy of the statements enclosed there with, it is requested that immediate action may please be taken regarding recovery of the amounts mentioned therein from the defaulter M. Abdul Latif Khan Ex‑Government Contracting Treasurer Peshawar Cantonment, under the provision of Land Revenue Accounts." A copy of the above memorandum was also sent to Abdul Latif. The Tehsildar on receipt of the above letter passed the following order on the 10th February 1958 :‑ "Claim for the recovery of Rs. 7,484‑3‑3 on account of deficiency in the stamps in the Treasury. Abdul Latif Khan may be directed in writing at once to produce before the Deputy Commissioner, Peshawar, or the Treasury Officer, Peshawar, within 15 days any proof which he might have got regarding the accounts because there is no record with the office of the Tehsildar except these papers." On the same date he issued the following parwana to Abdul Latif :‑ "Regarding deposit of the amount into the Treasury on account of the deficiency. Abdul Latif Khan, Ex‑Contractor Treasurer, may be informed that I have inspected his file. He should produce within 7 days the proof for the non‑existence of any deficiency or copies of the decree before the Deputy Commissioner, Peshawar, or the Treasury Officer, Peshawar because excepting the orders for recovery there are no arty other orders available in the Tehsildar Office and render accounts with them. If within 15 days he failed to produce a receipt showing the deposit of the amount (found due from hits) or a stay order from the Deputy Commissioner, Peshawar, or the Treasury Officer, Peshawar, a warrant of arrest under section 69/ L. R. A. will be issued. I have also perused the statement dated 8‑2‑58." Against this threatened action to recover the aforesaid amount by the peremptory process under the Land Revenue Act, Abdul Latif moved the High Court for a writ of certiorari and pro hibition. The petition was resisted by the Government. The High Court after consideration of the legal provisions came to the conclusion that if the petitioner challenged the claim he must first deposit the amount claimed under protest as to the whole or In part and then seek for adjudication by the Civil Court as provided by section 4 of the Revenue Recovery Act, 1890. The learned Judges of the High Court accordingly dismissed the writ petition on the 28th June 1960. The petitioner then obtained special leave to appeal to this Court. To complete the narration it may be mentioned that after decision of the High Court that proceeding under Frontier Crimes Regulation were without jurisdiction, the case was sent to the Assistant Commissioner, Peshawar, for trial. On reversal of the decision of the High Court by this Court the Deputy Commissioner on 4th November 1958, withdrew the case from the Assistant Commissioner and on 4th December 1958 sent it back to a Jirga. Against the above order Abdul Latif moved a writ petition before the High Court, which is still pending. The main issue requiring determination in this case is whether the Deputy Commissioner of Peshawar Is entitled to recover from this appellant a sum of Its. 7,484‑3‑3 alleged to be due on account of "deficiencies in remittance and shortage In stamps etc." as an arrear of land revenue without giving him an opportunity to question the correctness of the said alleged liability. To appreciate the contention raised in this case it is necessary to state the provisions of the Public Accountants, Default Act (Act XII of 1850), which are as follows :‑ "(1) Every public accountant shall give security for the due discharge of the trusts of his office, and for the due account of all money which shall come into his possession or control, by reason of his office. (2) In default of any act having special reference to the office of any public accountant, the security given shall be of such amount and kind, real or personal, or both, and with such sureties (regard being had to the nature of the office), as shall be required by any rules made or to be made from time to time, by the authority by which each public accountant Is appointed to his office. (3) For the purposes of sections 1 and 2 of this Act, the expression `public accountant' means any person who as Official Assignee or Trustee, or as sarbarahkar, is entrusted with the receipt, custody or control of any moneys or securities for money, or the management of any lands belonging to any other person or persons and for the purposes of sections 4 and 5 of this Act the expression shall also include any person who, by reason of any office held by him In the service of the Crown in (Pakistan), is entrusted with the receipt, custody or control of any moneys or securities for money, or the management of any lands belonging to the Crown. (4) The person or persons at the head of the office to which any public accountant belongs may proceed against any such public accountant and his sureties for any loss or defalcation in his accounts, as if the amount thereof were an arrear of land revenue due to Government. (5) All Regulations and Acts now or hereafter to be in force for the recovery of arrears of land‑revenue due to Government, and for recovery of damages by any person wrongfully proceeded against for any such arrear shall apply with such changes in the forms of procedure as are necessary to make them applicable to the case, to the proceedings against and by such public accountant." It is apparent from the scheme of the above Act particularly from sections 4 and 5, that the authority concerned can proceed against a public accountant for loss and defalcation in his account "as if the amount thereof were an arrear of land revenue due to the Government". The Punjab Land Revenue Act of 1887 (Act XVII of 1887) lays down stringent procedures for collection of arrears of land revenue. Section 158 excludes the jurisdiction of Civil Courts in these words :‑ "Except as otherwise provided by this Act‑ (1) a Civil Court shall not have jurisdiction in any matter which the Board of Revenue or a Revenue Officer is empowered by this Act to dispose of or take cognizance of the manner In which the Board of Revenue or any Revenue Officer exercises any powers vested in ft or him by or under this Act ; (2) a Civil Court shall not exercise jurisdiction over any of the following matters, namely, * * * * * * * * * * * * (xiv) any claim connected with, or arising out of, the collection by the Government, or the enforcement by the Government of any process for the recovery of land revenue, or any sum recoverable as an arrear of land revenue ; * * * * * * * * * Similarly the Revenue Recovery Act, 1890, makes provisions for speedy recovery of certain public demands. Relevant pro visions of the Act are as follows :‑ "3. (1) Where an arrear of land‑revenue, or a sum recover able as an arrear of land‑revenue, is payable to a Collector by a defaulter being or having property in a district other than that In which the arrear accrued or the sum is payable, the Collector may send to the Collector of that other district a certificate in the form as nearly as may be of the schedule, stating‑ (a) the name of the defaulter and such other particulars as may be necessary for his identification, and (b) the amount payable by him and the account on which it is due. 4. (1) When proceedings are taken against a person under the last foregoing section for the recovery of an amount stated in a certificate, that person‑ may, if he denies his liability to pay the amount or any part thereof and pays the same under protest made in writing at the time of payment and signed by him or his agent, institute a suit for the repayment of the amount or the part thereof so paid.

5. Where any sum Is recoverable as an arrear of land revenue by any public officer other than a Collector or by any local authority, the Collector of the district in which the office of that officer or authority is situate shall, on the request of the officer or authority, proceed to recover the sum as if it were an arrear of land‑revenue which has accrued in his own district, and may send a certificate of the amount to be recovered to the Collector of another district under the foregoing provisions of this Act, as if the sum were payable to himself." The High Court relying on the provisions of section 3 of the Public Accountants, Default Act of 1850 and section 158 of the Punjab Land Revenue Act of 1887 observed:-- "Reading these two provisions together, it is clear that the sum due from the petitioner, who Is a public accountant, could be recovered as arrears of land revenue, and a Civil Court has no jurisdiction to go into the matter under section 158 subsection (2) clause (xiv) of the Punjab Land Revenue Act. There is nothing in that Act by which the liability could be challenged in any forum." The above observations no doubt indicate the general policy of the Acts. This, however, does not mean that the Deputy Commissioner or the revenue authorities are at liberty to act, in any manner they please, according to their caprice and unchecked by any superior authority. The principle to be applied in such cases is now well settled. The Privy Council in the case of The Colonial Bank of Australasia v. Robert Willan (1874 L R 5 P C 417) pointed out that where an order of a quasi‑judicial body is objected to before a Court, it is to be seen whether the objection relates‑ "to a defect of jurisdiction founded on the character and constitution of the Tribunal, the nature of the subject‑matter of the enquiry, or absence of some preliminary proceeding which is necessary to give jurisdiction to it." If any of these things is established the Court can quash the order of that authority. Similar observations will also be found in Secretary of State v. Mask & Co. (67 I A 222). Their Lordships of the Privy Council observed:‑‑-- "It is settled law that the exclusion of jurisdiction of the Civil Courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction Is so excluded the Civil Courts have jurisdiction to examine into cases where the provision of the Act has not been complied with or the Statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure." In this connection reference may be made to the decision of the Judicial Committee in Balkishen Das and others v. Simpson (25 I A 151). In the above case, the proprietors had filed a suit to annul a revenue sale of their shares on the ground that there was no arrear due from them. The Subordinate Judge annulled the sale. On appeal the High Court reversed that decision and dismissed the suit. Their Lordships of the Judicial Committee while reversing the decree of the High Court observed:‑-- "Section 3 of the Act XI of 1859 provides that, in default of payment of revenue, within the time appointed for each district by the Board of Revenue, `the estates in arrear' in those districts `shall be sold at public auction to the highest bidder'. The Act does not sanction, and by plain Implication forbids, the sale of any estate which Is not at the time in arrear of Government revenue. The whole clauses of the Act of 1859, in so far as these relate to sales or to their challenge at the instance of the proprietor as well as the provisions of section 3 of Act VII of 1878 (Bengal), are framed upon the express footing that they are to be applicable to the sale of estates which are in arrear of duty. The enactments of 1859 and 1868 are obviously intended to apply to cases In which, if the irregularity or illegality of the sale proceedings alleged by the objector be negatived, the sale will remain valid. But the chief and substantial objection upon which the appellants' plaint Is based is that, at the time when their 5 annas share of the village Shahzadpore Anderkilla was sold, there were no arrears of revenue due by them in respect of it. It does not appear to their Lordships to admit of dispute that the objection is founded in fact. In their opinion a stupid blunder made by the Collector or his staff in his own books cannot deprive the appellants of their right to claim, and have effect given to, the permanent abatement which was followed by the Board of Revenue in March 1884. The result is that the whole pro ceedings of the Collector with a view to the sale of the 5 annas share, were beyond his jurisdiction, and are not entitled to the protection given him by the Act in cases where sale is authorised, although it may be attended with some irregularity or illegality. Their Lordships are accordingly of opinion that it was rightly held by the Subordinate Judge that he had jurisdiction to entertain the objection to the sale to which he gave effect although the point bad not been considered and disposed of by the Commissioner." It, therefore, must be borne in mind that the whole provisions with regard to processes under the Land Revenue Act are founded "on the express footing that they are applicable to the sales of Estate which are in arrear of duty". It is thus clear that existence of the arrear of revenue is the sine qua non of the Collector's jurisdiction to sell and that as long as there is an arrear due, the remedy open is that which the Revenue Act provides. But for the exercise of this peremptory machinery there must be an arrear due. Hence the main issue in this case is whether the appellant could be regarded as a "defaulter" under the provisions of the Punjab Land Revenue Act of 1887 or the Revenue Recovery Act 1890. The latter Act defines "defaulter" thus‑ "defaulter means a person from whom an arrear of land revenue or a sum recoverable as an arrear of land revenue, is due and includes a person who is responsible as surety for the payment of any such arrear or sum." Similar definition will also be found in section 3 (8) of the Punjab Land Revenue Act. The High Court after referring to the above definition observed :‑ "It would be clear from the examination of the provisions that the petitioner is a defaulter within the meaning of the Act." The learned Judges in coming to the above conclusion obviously relied on section 66 of the Punjab Land Revenue Act which says :‑ "A statement of account certified by a Revenue Officer shall be conclusive proof of the existence of an arrear of land revenue, of its amount and of the person who is the defaulter." Here we may observe that the object and reason of the Punjab Land Revenue Act together with the policy underlying it is all too apparent from the Act itself. There are provisions in the Act with respect to the making and maintenance of records of rights in land, and other matters relating to land and liabilities incidental thereto. There are several classes of Revenue Officers under the control of the Board of Revenue. There is elaborate procedure for reconsideration of assessment and the assessee has a right of appeal. The order of the Revenue Officer is also open to revision. From these provisions it seems perfectly clear that the Act does not give absolute power to the Revenue Officer to fix the liability at their sweet will. When the land revenue has been determined after following an elaborate procedure, prepa ration of a statement of account becomes more or less a mechanical job. In the above context it is laid down in section 66 that "a statement of account certified by a Revenue officer shall be conclusive proof of the existence of an arrear of land revenue, of its amount and of the person who is the defaulter". It must, be remembered that a right construction of the Act can only be attained if its whole scope and object, together with an analysis of its wording and the circumstances in which it is enacted are taken into consideration. From an examination of the Land Revenue Act, it is apparent that it provides first a procedure for determination of land revenue and then comes the machinery for realisation of such revenue. It is, therefore, manifest that before the operation of the machinery section for realisation of the arrears, the authority concerned must decide whether there is an arrear due or not. It is true the Public Accountants Default Act or the Revenue Recovery Act does not contemplate anything like a hearing in a Court of justice. No procedure has also been prescribed as to how the accounting party has to be heard in connection with the allegations made against him. The question for consideration, therefore, is whether the authority to whom the function of determining the liability is entrusted should conduct the proceedings in accordance with the requirements of substantial justice. An identical question came up for consideration in the case of Spackman v. Plumstead ((1885) 10 A C 229) in which the facts were somewhat similar to the present case. In that case the question arose on a prosecution for infringement of an Act of Parliament making provisions for fixing the "general line of buildings" on a road. The certificate of the Superintending Architect as to the general line of buildings came in for discussion as to whether the architect, before deciding as to how the general line has to be fixed, had to hear the parties concerned. In this connection the Earl of Selborne L. C. observed :‑- "No doubt, in the absence of special provisions as to how the person who is to decide is to proceed, the law will imply no more than that the substantial requirements of justice shall not be violated. He is not a Judge in the proper sense of the word; but he must give the parties an opportunity of being heard before him and stating their case and their view. He must give notice when he will proceed with the matter and he must act honestly and impartially, and not under the dictation of some other person or persons to whom the authority is not given by law. There must be no malversation of any kind. There would be no decision within the meaning of the statute if there were anything of that sort done contrary to the essence of justice. But it appears to me to be perfectly consistent with reason that the statute may have intentionally omitted to provide for form, because this is a matter not of a kind requiring form, not of a kind requiring litigation at all, but requiring only that the parties should have an opportunity of submitting to the person by whose decision they are to be bound such considerations as in their judgment ought to be brought before him. When that is done, from the nature of the case, no further proceeding as to summoning the parties, or as to doing anything of that kind which a Judge might have to do, is necessary." The above observations are fully applicable to the present case. Similar observations will also be found in the cases of Board of Education v. Rice (1911 A C 179); General Medical Council v. Spakman (1943 A C 627) and Russel v. Russel (14 C D 478). This Court had also occasion to consider as to what extent the quasi‑judicial and administrative bodies should be guided by rules of natural justice in the cases of Chief Commissioner, Karachi v. Mrs. Dina Sohrab Katrak (P L D 1959 S C (Pak.) 45) and Messrs Faridsons Ltd., Karachi and another v. Government of Pakistan (P L D 1961 S C 537). In the last mentioned case S. A. Rahman, J. made the following observations :‑ "This Court laid it down as a rule in Chief Commissioner Karachi v. Mrs. Dina Sohrab Katrak that the maxim: audi alteram parten‑`No man shall be condemned unheard' applies to judicial as well as administrative bodies, specially where the proceedings taken may affect the person or property or other rights of the parties concerned in the dispute. Even if, there‑ fore, the proceedings before the Chief Controller were neither strictly judicial nor even quasi‑judicial in character, the principle of natural justice embodied in the above maxim could be called in aid by the appellants." The learned Judge while dealing with the facts of the case observed :‑ "The action savoured of inquisition and a determination of guilt and clearly the requirements of a notice coupled with an opportunity of hearing in advance were attracted to the case." The above observations apply with equal force to the present case. Here the appellants service had been terminated in May 1950. In January 1958, without any notice to the appellant the Treasury Officer prepared a statement "showing deficiencies in remittances and shortage in stamps etc." The Deputy Commis sioner in issuing the order faithfully followed the information conveyed to him by the Treasury Officer without giving the appellant an opportunity to meet the allegations made against him. The procedure adopted to say the least was against all principles and canons of justice and fair play. This aspect of the case totally escapted the attention of the learned Judges of the High Court. They took the view that the appellant must first deposit the amount claimed, under protest, and then seek an adjudication by the Civil Court as provided by section 4 of the Revenue Recovery Act, 1890. He may or may not have enough funds to take recourse to the provision of section

4. In any event, there is nothing in the above section militating against the grant of an opportunity to the alleged defaulter of defending himself and showing cause against the issue of a certificate for realisation of the alleged dues. We may also observe that a plain reading of the provisions of the Public Accountants' Default Act clearly leads to the inference that the authority concerned is required to give an opportunity to the alleged defaulter to explain the account before starting any proceeding against him under the Revenue Recovery Act. Section 1 of the Act makes the accountant answerable for the money and securities entrusted to him. Hence it is manifest that before taking a decision regarding shortage and deficiencies of the funds or securities the accountant concerned must be given a chance to answer the charges. It could not, therefore, be contended and in fact it was not urged by the learned counsel for the respondents that the Deputy Commissioner was not under a duty to give a notice to the appellant and to hear his objections before taking action against him. He, however, attempted to argue that such notice had been given to the appellant. In support of his argument he relied on the two letters of the Tehsildar, dated 10th February 1958, which have been quoted in extenso in the earlier part of the judgment. By the first letter the appellant was asked to produce "within 15 days any proof which he might have got regarding the accounts." On the same day he received another letter asking him to produce, "within 7 days the proof for the non‑existence of any deficiency or copies of the decree before the Deputy Commis sioner, Peshawar, or the Treasury Officer, Peshawar, because excepting the orders for recovery there are no any orders available in the Tehsildar Office and render accounts with them." The Tehsildar concluded the letter as follows :‑ "If within 15 days he failed to produce a receipt showing the deposit of the amount (found due from him) or a stay order from the Deputy Commissioner, Peshawar, or the Treasury Officer, Peshawar, a warrant of arrest under section 69/ L. R. A. will be issued." From the above two letters it is clear that the appellant on receipt of the order of the Deputy Commissioner that a sum of Rs. 7,484‑3‑3 should be realised from him under the provisions of Land Revenue Act, approached the Tehsildar with his grievances. First the Tehsildar asked him to produce within 15 days his accounts. Shortly thereafter he realised that he had no power to grant any relief to the appellant and he then wrote Treasury Officer with his papers and to get a stay order from them. By no stretch of imagination these two letters, could be treated as show‑cause notices by a competent authority. Here we may point out that the Deputy Commissioner in his anxiety to expedite the matter even forgot to issue a demand certificate. It is manifest that he proceeded far too hastily in this case and apart from imputing to him any prejudice or any desire to do wrong, we think the mode In which the whole thing arose and was disposed of was so slipshod and irregular that it was bound to lead to injustice. It is quite possible that if the case instead of being disposed of in the summary way in which it was disposed of, had been considered by the Deputy Commis sioner in accordance with the principles of justice, he might not have taken the extreme measure that he did. This matter arose in the course of investigation, and the authorities concerned proceeded to deal with It in the absence of the appellant and to pronounce a verdict upon it not having heard him. He had been served with the order of the Deputy Commissioner, not for the purpose of further investigation, not for the purpose of what he had to say in the matter, but simply to carry out the order. This as a matter of substance seems to be a course of proceeding which it is impossible to support. For the reasons stated above, we hold that the action taken by the Deputy Commissioner, Peshawar, against the appellant by his Memorandum, dated 25th January 1958, could not validly" have been taken without giving him an opportunity of being heard. In this view of the matter we do not deem it necessary to deal at length with the argument advanced on behalf of the appellant that he was not a. "public accountant" within the meaning of section: 3 of the Public Accountants' Default Act, 1850. It will suffice to say that the salient features of the appellant's function under his contract leave no room for doubt that he was a "public accountant" within the meaning of section 3 of the pct. From the judgment of the High Court it appears that this feet was not disputed by the appellant before that Court. Also the argument that by recourse to civil action in the first instance, the Government by implication renounced the other mode, namely, the peremptory process under the Revenue Recovery Act is devoid of force. The Government's contention that the items which formed the subject‑matter of the present proceedings were not included in the deficit amount for recovery of which a civil suit had been filed against the appellant was disputed by this appellant. This disputed question of fact, however, cannot be agitated in these proceedings. The learned counsel for the appellant thin contended that the proceedings before the Deputy Commissioner were barred under the provision of rule 2 of Order II of the Code of Civil Procedure. As already stated, the case of the Government was that the proceedings under the Revenue Recovery Act were not based on the same cause of action on which the previous suit was based. We are not impressed with the argument that in this case the Revenue authorities had no jurisdiction to take proceedings under the Revenue Recovery Act. In any event, the appellant cannot be allowed to raise this mixed question of fact and law in a writ proceeding. Before concluding this judgment we would like to observe that the facts of the case do convey an Impression of harassment of the appellant by various different proceedings on allegations of the same type. We do hope that the pursuit of the appellant has reached a final terminus. For the reasons stated in detail above, we would accept the appeal, reverse the order of the High Court and prohibit the Deputy Commissioner, Peshawar, from further proceeding with his order contained In his official memorandum dated the 20th January 1958. The appellant will be entitled to his costs of this curt as well as that of the High Court. A. H. Appeal accepted.