2026 PLP 754 (CLC)

KHWAJA MUHAMMAD NASIM, J.

The captioned appeal, by leave of the Court, is addressed against the judgment of the High Court dated 20.10.2023 passed in Writ Petition No. 288 of 2017.

2. The brief facts of the case are that an evacuee land bearing survey Nos. 433 to 437 (old) 982 (new) measuring 15 kanal 3 marla situated at Bhimber was allotted to Syed Iqbal Hussain Shah being refugee. The Proprietary Rights Transfer Order (PRTO) was issued on 12.05.1994. Subsequently, this land was transferred to the father of real respondents (Muhammad Rafique) through a gift-deed dated 03.07.1994. The aforesaid land was acquired vide award No.01/2017. The Collector Land Acquisition after assessing the amount of compensation as Rs.18156684/- sent the same to the Custodian Evacuee Property who vide order dated 24.07.2017 directed to make the payment to the respondents after deducting of service charges amounting to Rs.3,63,134 and compensation of proprietary rights i.e., Rs.4,94,496/-. Feeling aggrieved from this order, the respondents filed a writ petition before the High Court. The learned High Court, after necessary proceedings accepted the writ petition through the impugned judgment, set aside the order dated 24.07.2017 and directed the Custodian to pay full compensation amount to the respondents, hence, this appeal by leave of the Court.

3. The learned counsel representing the appellant argued with vehemence that the judgment passed by the High Court is against law and the facts. He added that the land in question was initially allotted to Syed Iqbal Hussain Shah and PRTO was issued on 12.05.1994. Subsequently, this land was transferred to the father of respondents by way of gift deed without obtaining NOC from the Custodian. The aforesaid land was acquired vide award No.01/2017. The Collector Land Acquisition after assessing the amount of compensation as Rs. 18156684/- sent the same to the Custodian Evacuee Property. He added that under section 25 of the Pakistan (Administration of Evacuee Property) Act, 1957 (Act, 1957), the Custodian is vested with the vast powers for managing and administering the evacuee property. In exercise of these powers the Custodian Evacuee Property has issued the orders dated 22.10.1997 and 16.08.2000 imposing service charges. The respondents have never challenged these orders, hence, the Custodian Evacuee Property rightly passed the order dated 24.07.2017 regarding deduction of service charges and compensation of proprietary rights. The learned counsel further argued that the reliance of the High Court on section 3 of the Evacuee Property Allottees (Compensation) Order, 1967 (Compensation Order, 1967) is erroneous because under the said section an allottee is entitled to full compensation money, however, in this case the original allottee had transferred the land through gift-deed without obtaining NOC from the Custodian/appellant. A proviso to subsection (2) of section 18-A of Act, 1957 speaks that in case a refugee allottee, after obtaining proprietary rights, transfers the allotted property, the transferee thereof shall pay to the Custodian the prescribed cost of property, however, in this case the prescribed cost has not been paid, hence, the Custodian Evacuee Property has rightly made the deductions while issuing order dated 24.07.2017. In this state of affairs, the judgment rendered by the High Court is not sustainable. In support of his contentions, the learned counsel placed reliance on the case reported as Ghulam Sarwar v. Fateh Muhammad and others [2017 SCR 1283].

4. Conversely, Raja Zaffar Hussain Khan, Advocate, the learned counsel representing respondents Nos. 1 to 4 argued that the judgment passed by the High Court is well in accordance with law. He added that it is misconceived on behalf of the appellant that the land was transferred without obtaining any NOC. He referred to the NOC available at page 11 of the file of the High Court and submitted that the NOC was duly obtained and issued, hence, this argument has no force. He further argued that under section 3 of the Compensation Order, 1967, if an allottee has obtained certificate of provisional proprietary rights before the issuance of award, he shall be entitled to full compensation money. It is undisputed that the PRTO was issued before issuance of award, hence, the High Court has not committed any illegality while declaring the respondents entitled to full compensation. He lastly argued that even if the version of the appellant is deemed correct, even then the deduction made in lieu of compensation of proprietary rights is not justifiable because the land was transferred after obtaining NOC and depositing the requisite amount.

5. We have heard the learned counsel for the parties and gone through the record. A perusal of the record shows that an evacuee land bearing survey Nos. 433 to 437 (old) and 982 (new), measuring 15 kanal and 3 marla, situated in Bhimber was initially allotted to Syed Iqbal Hussain Shah, a refugee, and PRTO was issued on 12.05.1994. Subsequently, the land was transferred to the father of the respondents, Muhammad Rafique, through a gift deed. Later on, the land was acquired under Award No. 01/2017, and the Collector Land Acquisition determined and assessed the compensation amount as Rs.18,156,684/-. This amount was forwarded to the Custodian Evacuee Property, who issued an order on 24.07.2017, directing payment to the respondents after deducting service charges of Rs.3,63,134/-, and compensation for proprietary rights amounting to Rs.4,94,496/-. Aggrieved by the Custodian's order, the respondents filed a writ petition before the High Court. After hearing the matter, the High Court accepted the writ petition, set aside the order dated 24.07.2017, and directed the Custodian to pay the full compensation amount to the respondents.

6. The sole proposition to be resolved by us is whether the Custodian has rightly issued order dated 24.07.2017 regarding payment of the compensation after deduction of service charges and compensation for proprietary rights. The learned High Court has passed the impugned judgment solely on the basis of proviso to section 3 of the Compensation Order, 1967, however, in our opinion the said proviso is not applicable to the case in hand. The proviso clearly speaks that where an allottee has obtained certificate of provisional proprietary rights before the issuance of award, he shall be entitled to full compensation money. This proviso relates to an allottee, whereas, in this case admittedly the land was transferred through gift-deed and the deduction has been made from transferee and not the allottee. The learned counsel for the appellant has rightly referred to proviso to subsection (2) of section 18-A of Act, 1957 which speaks that: "Provided further that in case a refugee, after obtaining proprietary rights, transfers such property, the transferee thereof shall pay to the Custodian the prescribed cost of property." It is clear that in case of transfer of property by the allottee, the transferee shall pay to the Custodian the prescribed cost of property. In this regard, the learned counsel for the appellant has rightly referred to the judgment reported as Ghulam Sarwar v. Fateh Muhammad and others [2017 SCR 1283], wherein, it was held that:-

8. The argument of the learned counsel for the appellants on the strength of the statutory provisions of section 18-A of the Pakistan Administration of Evacuee Property Act, 1957 appears to have relevance in the light of findings recorded by the trial Court. The claimed amount of Rs.40,300/- as cost of NOC is included in the decree in addition to sale consideration and expenses incurred on sale-deed, however, the same has been excluded by the first appellate Court. This point has also been raised in second appeal by the appellants and forcefully argued but remained unattended by the learned High Court in the impugned judgment. The first appellate Court while resolving this proposition has held that according to the receipt (Exh.DA) the cost has been deposited by the vendor on 09.05.2006, whereas, the sale-deed has been registered on 11.05.2006, hence, the vendee cannot claim the same. In our opinion the conclusion drawn by the first appellate Court is incorrect. According to the receipt (Exh. DA) an amount of Rs.40,300/- was deposited. In the receipt it has been only mentioned that the amount has been deposited in relation to NOC of sale of the land between Bashir Ahmed, vendor, and Hakim Ali, vendee. It does not speak that the amount has been deposited by the vendor. According to the statutory provisions of subsection (2) of section 18-A of the Pakistan Administration of Evacuee Property Act, 1957 in case of sale of evacuee property the proprietary rights of which have been granted to the allottee without cost, the transferee (vendee) has to pay the Custodian the prescribed cost of the property. Thus, according to the statutory provisions it is held that the cost of NOC has been paid by the vendee (purchaser) and he is entitled to claim such amount. In this state of affairs, while reversing the findings of first appellate Court the findings of the trial Court to this extent are restored. Consequently, the amount of Rs.40,300/- paid by the appellants for NOC regarding sale of the evacuee property is included in the decree."

7. Now, the question arises whether the transferee has paid prescribed cost of property. In this regard, along with the writ petition (at page 11) the respondents have appended a copy of the NOC according to which an amount of Rs.2327/- was paid. This fact has been admitted by the appellant in the written statement filed before the High Court. Even before this Court, the learned counsel for the appellant, on Court's query, admitted that the transferee has paid the amount. In this state of affairs, the requirement of aforesaid proviso has already been complied with and deduction of an amount of Rs.4,94,496/- by the Custodian in lieu of compensation of proprietary rights was not just.

8. So far as the deduction of service charges, is concerned, under clauses (p) and (q) of subsection (2) of section 25 of the Act, 1957 the Custodian is vested with the powers to create a charge on evacuee property, incur or allow any expenditure to be incurred in the prescribed manner. In exercise of these powers, the Custodian vide order dated 22.10.1997 has fixed 1% service charges in case of award of the evacuee land. Subsequently, vide order dated 16.08.2000 the rate of services charges were increased upto 2%. In this state of affairs, we are of the view that the service charges have rightly been deducted before making payment of compensation to the respondents. Resultantly, we accept this appeal, overturn the impugned judgment of the High Court and partly set aside the order dated 24.07.2017 to the extent of deduction of an amount of Rs.4,94,496/-. SA/47/SC/AJ&K Appeal allowed.