P L D 1971 Supreme Court 438 (PLP)

M. R. KHAN, J.-These two appeals, by special leave, arise out of an order of the then High Court of West Pakistan at Lahore passed in two Letters Patent Appeals reversing the judgment of a Single Bench of the Court and declaring that the auction of a portion of Bakhshi Market, Lahore as a big mansion was illegal and holding that the said portion was liable to be disposed of to the persons found eligible for it on their entitlement. In order to appreciate the points of law involved in these appeals, it is necessary to state briefly the facts of this case. These are as follows :- The property bearing No. S-64-R-112, known as Bakhshi Market, Anarkali, Lahore, is an evacuee property. It was acquired under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 (hereinafter called 'the D. P. Act'). The Bakhshi Market consisted of a number of shops on the ground floor and a hotel and some residential flats on the upper floor. These shops and fiats have been in occupation of different persons. Its monthly rental was Rs. 7,

402. One specific portion of this market comprising one shop on the ground floor and two residential flats above that shop was the subject-matter of the litigation between the parties out of which the present two appeals have arisen. This portion shall herein after be called 'the disputed portion'. The monthly rental of the disputed portion was Rs.

890. The shop included in the disputed portion was called 'Delhi Cloth Mills' and was in occupation of Muhammad Yaqoob Khan. One of the flats above the said shop was in occupation of Abdus Sattar, the respondent No. 1 in Civil Appeal No. 226 of 1969 and the other flat was in occupation of late Muhammad Idds,the predecessor-in interest of the respondents Nos. 2 to 6 in Civil Appeal No. 227 of 1969. Muhammad Yaqoob Khan filed one C. S. Form for the transfer of the shop in his occupation, whereas Abdus Sattar and late Muhammad Idris filed C. H. Forms in respect of the flats in their respective occupation. No action on any of these forms was taken by the Settlement Authorities aqasmuch as the Bakhshi Market as a whole was declared to be a big mansion. Accordingly, the whole of the Bakhshi Market was required to be sold by unrestricted public auction in accordance with paragraph 16 of the Schedule to the D. P. Act and paragraph 4 of the Settlement Scheme No. III made under the said Act, unless the Central Government directed under section 10 of the Act for the disposal of the Bakhshi Market otherwise than by unrestricted public auction. The Government issued no direction for the disposal of the Bakhshi Market. Hence, the Bakhshi Market was to be disposed of by unrestricted public auction, but, instead of putting the whole of the Bakhshi Market to public auction, only the disputed portion thereof was put to auction on the 9th August 1960 by the Deputy Settlement Commissioner (Industries). In the auction, Syed Nawazish Hussain for self and on behalf of his two relatives S. M. Fakhar Hussain and Begum Syed Hafiz Hussain gave the highest bid of Rs. 4,10,000 representing 38 years' rent for the disputed portion., It has come into the record that a few days before this auction a number of appli cations were made by different persons including the auction -bidders offering price of the disputed portion equivalent to 50 years' rent. In spite of these higher offers, the bid at 38 years' rent for the disputed portion was accepted and the same received the approval of the Settlement Commissioner (Industries) on the 15th August 1960. Meanwhile, a complaint was made about the manner of disposal of the disputed portion at lesser price. This occasioned an inquiry into the matter and ultimately the Settlement Commissioner (Industries) suggested to the Chief Settlement Commissioner for setting aside the auction in respect of the disputed portion on the ground that the Bakhshi Market as a whole should have been disposed of as a big mansion by unrestricted public auction. It was pointed out that auction of only the disputed portion of the market was not permissible and that the Chief Settlement Commissioner alone was competent to accept or reject the bid, but the Settlement Commissioner (Industries) was not. The Chief Settlement Commissioner, by his order, dated the -8th October 1962, accepted the suggestion cancelling the bid in respect of the disputed portion. The auction-bidders, however, having approached the Chief Settle ment Commissioner in the meantime, the latter, by his order, dated the 22nd October 1962, suspended his earlier order cancelling the auction. Thereafter, on the 14th September 1963, the Chief Settlement Commissioner, after discussion with the Additional Settlement Commissioner (Industries) and the Addi tional Settlement Commissioner, Lahore, made an order by which he upheld the transfer of the disputed portion by auction. This decision of the Chief Settlement Commissioner, dated the 14th September 1963 (hereinafter called the impugned order) was challenged by Muhammad Yaqub Khan and Abdus Sattar In Writ Petition No. 2255-R of 1963 and by the heirs of late Muhammad Idris in Writ Petition No. 861-R of 1964. Both these writ petitions were dismissed by a learned Single Judge of the High Court of West Pakistan, Lahore. Thereafter, Letters Patent Appeal No. 1342 of 1966 was preferred by Abdus Sattar alone and Letters Patent Appeal No. 1346 of 1966 was preferred by the heirs of late Muhammad Idris. Both these Letters Patent Appeals were disposed of by a single judgment. ' The learned Judges of the Letters Patent Bench declared that ; the disposal of the disputed portion alone by public auction as a , big mansion was without lawful authority and of no legal effect. Having made this declaration, the learned Judges observed that the disputed portion was liable to be transferred to the persons found eligible for it on their entitlement. The present two appeals are from the decision in the Letters Patent Appeals. Of the three auction-bidders, Syed Nawazish Hussain and Begum Syed Hafiz Hussain died. The present two appeals have been preferred by the original auction-bidder S. M. Fakhar Hussain (appellant No. 1), the heirs of Begum Syed Hafiz Hussain (appellants Nos. 2 to 6) and M. I. Warsi (appellant No. 7) who is one of the several heirs of late Syed Nawazish Hussain. The heirs of Syed Nawazish Hussain, other than M.

1. Warsi, not being parties to these appeals, those left out heirs, other than Mst. Jasimun Nisa, a daughter of late Syed Nawazish Hussain were subsequently added in the two appeals as respon dents. The result is that all the persons interested in the auction of the disputed portion other than Mst. Jasimun Nisa are now parties to both the appeals either as appellants or as respondents. It is admitted on all hands that the Bakhshi Market as a whole was declared as a big mansion. It is, however, no body's case that the disputed portion itself was ever declared by the Chief Settlement Commissioner to be a big mansion, although its monthly rental exceeded Rs.

500. It is also not the case of any of the parties that the Chief Settlement Commissioner's order declaring the whole of the Bakhshi Market as a big mansion was ever withdrawn by him by any positive order made in that behalf. In this state of things, the Bakhshi Market, in its entirety, continued to be a big mansion and was liable to be disposed of by unrestricted public auction in accordance with the provisions of paragraph 16 of the Schedule to the D. P. Act, and paragraph 4 of the Settlement Scheme No. 111, the Government having given no direction to dispose of the Bakhshi Market by negotiation or otherwise. What, however, happened in this case was that on the 9th August 1960, the Deputy Settlement Commissioner (Industries) put the disputed portion alone to public auction instead of putting the whole of the Bakhshi Market to such auction. The highest bid of Syed Nawazish Hussain and two others at 38 years' rent was eventually approved by the Settlement Commissioner (Industries) on the 15th August 1960, although higher offers in writing at 50 years' rent including the offer of the auction-purchasers themselves bad been made some days before the auction. It was noticed that neither the Deputy Settlement Commissioner (Industries) nor the Settlement Commissioner (Industries) was competent to hold the auction or approve of an auction bid as the power of the Chief Settlement Commissioner with regard to holding of a public auction in respect of a big mansion had not been delegated to these officers. However, the matter was ultimately sought to be resolved by the Chief Settlement Commissioner himself by his order, dated the 14th September 1963. The order of the Chief Settlement Commissioner, dated the 14th September 1963, therefore, holds the field and is pertinent to the question of legality or otherwise of the auction of the disputed portion. The relevant portion of the impugned order of the Chief Settlement Commissioner, dated the 14th September 1963, is as follows "(1) The transfer of ,the portion of the Bakhshi Market (i.e., the disputed portion) which had already been disposed of in any other manner (i.e. by public auction) may be allowed to stand. (2) The remaining portion of the market may not be treated as part of a big mansion and may be disposed of as individual houses, shops etc. The persons in occupation of the respective units may be permitted to submit C H, C S Forms etc. within 30 days, if they have not already done." By this order, the Chief Settlement Commissioner having maintained the transfer of the disputed portion by auction, whatever defect was there in the auction proceeding on account of incapacity of the Deputy Settlement Commissioner (Industries) and that of the Settlement Commissioner (Industries), was cured. In other words, the auction bid in respect of the disputed portion, in view of the Chief Settlement Commissioner's ex post facto approval of the transfer of that portion by public auction, was no more questionable only on the ground that the Deputy Settlement Commissioner (Industries) and the Settlement Commissioner (Industries) had not the requisite delegated power to hold public auction and to approve of it. This, however, does not resolve the matter. The question then still remains whether it was competent to the Chief Settlement Commissioner himself to put to auction the disputed portion alone instead of disposing of the Bakhshi Market as a whole by unrestricted public auction. The legal provision with regard to this matter, as already stated, is that a big mansion is to be disposed of by unrestricted public auction unless the Government has directed its disposal in any other manner. The fact remains that the Bakhshi Market as a whole was not put to auction, but only a portion thereof, namely, the disputed portion was put to public auction. The pertinent question is whether the disposal of the disputed portion alone by public auction is at all permissible in law. There does not appear any provision A in the D. P. Act and in its Schedule or in the Settlement Scheme No. III permitting the disposal of only a portion of a big mansion by unrestricted public auction. The Chief Settle ment Commissioner does not appear to be competent under any provision of the D. P. Act and the Settlement Scheme to dispose of only a portion of a big mansion by unrestricted public auction without first declaring that portion itself to be a big mansion. The Chief Settlement Commissioner had, at no stage, declared the disputed portion to be a big mansion, although the same could have been so declared because of its monthly rental exceeding Rs.

500. The impugned order of the Chief Settlement Commissioner, dated the 14th September.1963, quoted hereinbefore, did not directly revoke his earlier order declaring the whole of the Bakhshi Market as a big mansion. At the most, the impugned order may be construed as having impliedly cancelled or revoked the Chief Settlement Commissioner's earlier order declaring the Bakhshi .Market as a big mansion. If the impugned, order at all admits of such construction, then, with the implied cancellation or revocation of the earlier order declaring the Bakhshi Market to be a big mansion, that Market including the disputed portion at once ceased to be a big mansion and, therefore, all its portions became liable to be disposed of as shops and houses. If the Chief Settlement Commissioner had intended to dispose of the disputed portion alone as a big mansion, then, he should have made a fresh order declaring that portion alone to be a big mansion, but instead of declaring the disputed portion itself as a big mansion, the Chief Settlement Commissioner gave only his ex post facto approval to the transfer of that portion by public auction. No order of the Chief Settlement Commis sioner declaring a property to be a big mansion can take effect retrospectively. It cannot, therefore, be said that the impugned order impliedly cancelled or revoked the Chief Settle ment Commissioner's earlier order declaring the whole of the Bakhshi Market as a big mansion and, at the same time, had the effect of declaring the disputed portion itself to be a big mansion with retrospective effect from a date prior to the holding of the auction of that portion on the 9th August 1960. Thus in any view of the matter, the disposal of the disputed portion alone by public auction as a big mansion, in the facts of this case, was unauthorised. This goes to the root of the matter. The disposal of the disputed portion by public auction cannot, therefore, be sustained in law. The view taken by me as above finds support from the decision of this Court in the case of Noor Muhammad Butt v. Chief Settlement Commissioner (P L D 1968 S C 336). In that case "Mela Ram Building", the Mall, Lahore, was declared to be a big mansion and put to auction on the 21st September 1959. The highest bid of Rs. 10,30,000 of the appellants Nos. 15 and 16 in that case was accepted. The auction, however, fell through as the bidders were unable to deposit the balance of the sale price in cash as directed by the Chief Settlement Commissioner. Subsequently, the bidders, that is, the appellants Nos. 15 and 16 along with appellant No. 1 negotiated with the Chief Settlement Commissioner (Mr. Hashim Raza) to purchase the "Mela Ram Building" for Rs. 10,50,

000. This private offer was accepted by the Chief Settlement Commissioner. The respondent No. 2 in that case, who had made a written offer for the purchase of the "Mela Ram Building" as an allottee in possession, made an appli cation for review of the order of the Chief Settlement Commis sioner who had accepted the private offer of Rs. 10,50,000 made by the appellants Nos. 1, 15 and

16. This review was accepted by the succeeding Chief Settlement Commissioner (Pir Ahsanuddin) with the result that the private offer of the appellants Nos. 1, 15 and 16 stood rejected. Thereupon the appellants Nos. 1,15 and 16 moved the High Court in the exercise of its writ jurisdiction against the order made in review. The High Court dismissed the writ petition. The petition for special leave against the High Court's order dismissing the writ petition was also dismissed, but this Court subsequently reviewed its order dismissing the leave- petition and granted leave to appeal to consider if the approval accorded by the Chief Settlement Commissioner to the sale of the big mansion "Mela Ram Building" to the appellants Nos. 1, 15 and 16 by private negotia tion was valid in law. The Court answered this point in the negative stating that the Chief Settlement Commissioner has no power to dispose of a big mansion except by unrestricted public auction. After making a reference to the provisions of section 10 of the D. P. Act, this Court finally decided as follows "The Chief Settlement Commissioner had thus no power to, dispose of a big mansion except by unrestricted public auction as provided in the Schedule. It followed that the order by Syed Hasbim Raza dated 14-11-1959 accepting the joint offer by the appellants Nos. 1, 15 and 16 for the purchase of the Mela Ram Building for a sum of Rs. 10,50,000 was beyond his competence and as such was rightly set aside by Pir Ahsanuddin on review." In the cited case, it was submitted on behalf of the depart ment that instances were there to show that the Chief Settlement Commissioner disposed of big mansions otherwise than by unrestricted public auction. The submission was found by this Court to be untenable on the following ground "In any case the question involved was of legal competence which could not be affected by any departmental practice." It follows from the decision of this Court in the cited case that the provision with regard to disposal of a big mansion by unrestricted public auction is mandatory and that the Chief Settlement Commissioner is not competent to dispose of any big mansion except by unrestricted public auction. It follows as a corollary that the Chief Settlement Commissioner is competent to dispose of a big mansion as a whole by unrestricted public auction but not any portion thereof unless that portion fetches a monthly rental exceeding Rs. 500 and is itself declared as a big mansion. Accordingly, the disposal of only the disputed portion of the Bakhshi Market without first declaring itself to be a big mansion was unauthorised. For the reasons stated above, the learned Judges of the High Court were justified in declaring that the impugned order was made without lawful authority and of no legal effect. The appeals will, therefore, fail. Having declared the impugned order to be illegal, the learned Judges made an observation to the effect that the disputed portion is liable to be disposed of to the persons found eligible for it on their entitlement. The appellants have rightly taken B exception to this observation. The disposal of the disputed portion by public auction having been found to be illegal and of no legal effect, it is for the Settlement Authorities to dispose of that portion according to law. As monthly rental of the disputed portion exceeds Rs. 500, the Chief Settlement Commis sioner may even now, if he so likes, declare that very portion to be a big mansion and dispose of it as such. Or, if no such declaration is made, the disputed portion may be disposed of by the Settlement Authorities or shops and houses. Hence, the observation made by the learned Judges in the Letters Patent Appeals for disposal of the disputed portion to "the persons found eligible for it on their entitlement" was not called for and shall be treated to have been rescinded. In the result, I would dismiss both the appeals with the observation that the disputed portion of the Bakhshi Market is still available for disposal by the Settlement Authorities according to law. I would leave the parties to bear their own costs. HAMOODUR RAHMAN, C. J.-I agree. SAJJAD AHMAD, J.-I agree. WAHEEDUDDIN AHMAD, J. -I agree. SALAHUDDIN AHMAD, J.-I agree. Appeal dismissed.