P L D 1969 Peshawar 324 (PLP)

SHAH ZAMAN BABAR, J.

‑ Abdul Hamid Khan plaintiff‑ appellant was working as contracting Treasurer for the Treasury at Abbottabad District Hazara from 1947 till 1950. After the expiry of the contract he surrendered the charge to Qazi Maslahuddin.

2. Later on some losses and defalcations in the Abbottabad Treasury were discovered. Similar losses and defalcations, in various treasuries of the former N.‑W. F. P. were found out. The question of realisation of the amount of losses and defalcations from various treasuries was referred to the Board of Revenue, West Pakistan.

3. Ultimately the Commissioner, Peshawar Division, Peshawar, forwarded the memo. dated 24‑1‑57 (Copy Exh. D. W. X/1) to the Deputy Commissioners, Peshawar, Mardan and Hazara. This memo. runs thus "In connection with the cases concerning losses and defalca tions in various treasuries in the former N. W F. P., a reference to the Board of Revenue, West Pakistan, was made by this office for a speedier remedy than a civil suit for the recovery of Govt.'s outstanding dues against the contracting Treasurers. The Law Department Government of West Pakistan, to whom the case was referred by the Board of Revenue, West Pakistan, have advised that a Contracting Treasurer appointed under the N. W. F. Province. Revenue Circular No, 48 is public Accountant within the meaning of section " of the Public Accountant's Default Act, 1850 and Government dues outstand ing against him can be recovered as arrears of land revenue as authorised by section 4 of the said Act. Recovery of arrears of land revenue being a speedier and more drastic remedy than a Civil suit, the question of having recourse to civil Courts for the purpose should not ordinarily arise. However, as regards the available assets of Evacuee Treasurers, no direct action against them is permissible under the law and it would be necessary to address the claims against them to the Custodian Evacuees Property. (2) It is therefore desirable that all cases of recoveries of Government dues outstanding against the Government contract ing treasurers in your district may please be disposed of in the light of the observations made by the law Department Govern ment of West Pakistan and progress of recoveries in each case intimated to this office on the 15th of every month henceforth. (For D. C. Hazara only) The case regarding recovery of Government dues from the ex‑contracting Treasurer M. Abdul Hamid Khan, for which the solicitor Government of West Pakistan has been approached for an authority by the Government Pleader vide his memo. No. 5483/1/45‑Rev. dated 17‑12‑1955 is also covered by the above‑cited instructions."

4. The Treasury Officer Hazara vide letter dated 9‑2‑57 (copy Exh. D. W. X/3) addressed the D. C. Hazara on the subject of losses and defalcations as under :‑ "Ref. your office memo. No. 1397/l/45‑Rev. dated 5‑2‑257 and the Commissioner, Peshawar Division endorsement No. 2404‑06/IA dated 24‑1‑

57. The required list of recoveries Government dues outstanding against the Government Cont racting Treasurers in the Hazara District is attached here with. LIST OF GOVERNMENT DUES OUTSTANDING AGAINST THE GOVERN MENT CONTRACTING TREASURERS IN TILE HAZARA DISTRICT S. No. Name of Govt. Contracting Treasure Amount Outstanding Shortage in Judicial stamps Remarks 1. .. .. .. ..

2. Abdul Hamid Khan Rs. 43876/8/10 Total:- (i) Deficiencies in remittances Rs. 34012/7/1 (ii) Overpayment on account of commission on sale of entertainment stamps Rs. 7057/3/9 (iii) Amount misappropriated by his agent. Rs. 2806/14. 43,876/8/10 An exhaustive list of the deficiencies has already been submitted to the Deputy Commissioner, Hazara with this office Endt. No. 1364-T, dated 18-5-55. 3. .. .. .. ..

5. The Deputy Commissioner, Hazara forwarded the follow ing memo. dated 23‑2‑57 (copy Exh. D. W.X/2) to the Tehsildar, Haripur, for the realization of the sum of Rs. 43,876/8/10, as arrears of land revenue :‑ A sum of Rs. 43,876/8/10 (Rs. Forty three thousand Eight Hundred and Seventy Six‑8/10) only is recoverable from M. Abdul Hamid Khan Ex‑Contracting Treasurer of Talokar on account of losses in the Abbottabad Treasury. It is hereby directed that the said amount should please be recovered from him as arrears of land revenue. The amount so recovered should be deposited into the treasury under head `XLVI‑Misc. Provincial. A monthly progress report of the recoveries made should please be sent so as to reach this office on 5th of the following month at the latest.

6. Later on the Treasury Officer, Hazara forwarded another memo. (Copy Exh. D. W. X/5) given below to the Deputy Commissioner, Hazara on 7/2/58 :‑‑ "Kindly refer to your memo. No. 2327‑31/l/45‑Rev. dated 22‑2‑57 to the address of Tahsildar, Haripur with copy to this office. In addition to the sum of Rs. 4387/8/10 mentioned in your memo. under reference the . following amounts totaling Rs. 2832‑1‑0 are also recoverable from Mr. Abdul Hamid ex -contracting treasurer (1) Deficiency in remittance in the accounts of 8/50 as intimat ed vide Comptroller NAW P Peshawar memo. No. Book Cy/CB/ 4139‑40 dated the 12‑3‑57 to the address of Deputy Commis sioner, Hazara with copy to Treasury Officer, Hazara Rs. 53 (2) ‑do‑ Rs. 18 (3) Amount misappropriated by the agent of Mr. Abdul Hamid on 18‑8‑

48. Rs.161‑2‑0 (4) ‑do‑ Rs. 701‑15‑0 (5) Deficiency in stamps intimated by the Assistant Secy. Board of Revenue, West Pakistan, Lahore, vide his End. No. 7394‑57/3792‑St. dated 24‑12‑57 to the address of Deputy Commissioner, Hazara. (i) Judicial stamps Rs. 321‑6‑0 (ii) Non‑Judicial stamps Rs. 1,576‑10‑0 Total Rs. 2,832‑1‑0

7. The Deputy Commissioner Hazara forwarded another memo. dated 18‑2‑58 (copy Exh. D. W. X/4), as given below, to the Tehsildar Haripur, for the realization of a further sum of Rs. 2,832‑1‑0 as arrears of land revenue :‑ "A sum of Rs. 2832/1 (Rs. Two thousand eight hundred and thirty‑two/l/‑) only is recoverable from Mr. Abdul Hamid Khan Ex‑Contracting Treasurer of Talokar on account of losses in the Abbottabad Treasury. It is hereby directed that the said amount should please be recovered from the said Abdul Hamid Khan as arrears of land revenue. The amount so recovered should be deposited into the Treasury under head `XLVI‑Misc. Provincial'. A monthly progress report of the recoveries made should please be sent so as to reach this office on the 5th of the following month at the latest. "

8. It appears that the Tehsildar, Haripur, commenced action for the realisation of the stated amounts due from Abdul Hamid plaintiff-appellant as arrears of land revenue.

9. Abdul Hamid plaintiff instituted two suits for declaration.

10. In the present Suit No. 35/1, instituted on 30‑11‑60, Abdul Hamid plaintiff‑appellant prayed for a declaratory decree to the effect that he while working as Treasurer Contractor from the years 1947 to 1950, did not owe any amount to defendant No. 1 (Government of West Pakistan) and that the demand of defen dant No. 1 for Rs. 43876/8/10 from him and mode of its recovery as arrears of land revenue is wrong, against law, and without jurisdiction.

11. This suit was contested by defendant No. 1 (Government of West Pakistan), defendant No. 2 (Deputy Commissioner, Hazara) and defendant No. 3 (Cehsildar, Haripur) on various grounds. The pleas of the parties were reflected in the following issues :‑ (1) Whether plaintiff has got a cause of action, (2) Whether this Court has got jurisaiction to try this suit? (3) Whether notice under section 80, C. P. C. has not been properly served? (4) Whether the suit is bad for non‑joinder and mis joinder of parties? (5) Whether the suit is within time? (6) Whether the suit has been properly valued for the pur poses of court‑fee and jurisdiction? (7) Whether the suit is competent in its present form? (8) Whether plaintiff is estopped by his conduct from bring ing this suit? (9) Whether plaintiff' is entitled to the declaration asked for ? (10) Whether the plaintiff is entitled to the perpetual injunc tion asked for? (11) Relief.

12. This suit was tried by the Senior Civil Judge, Hazara who by his judgment and decree dated 17‑7‑65 dismissed the plaintiff's suit with costs to the defendants.

13. Abdul Hamid preferred an appeal to the District Judge, Hazara, who by his judgment dated 24‑3‑67, upheld the preli minary objection on behalf of the defendants that the jurisdiction of the Civil Court is completely barred under section 158 of the Land Revenue Act, but when proceedings are taken under the Land Revenue Act for the recovery of arrears, the person against whom the proceedings are taken under section 78 of the Act institutes a suit in a civil Court if he denies his liability for the arrears only after he has paid the amount of arrears under protest made in writing at the time of payment, and thus dismissed the appeal with costs.

14. Abdul Hamid plaintiff preferred a second appeal. This appeal was heard by Sher Bahadur Khan, J., who by his order dated 27‑11‑67, with the under mentioned observation, considered it essential for the right decisions of the suit upon the merits of the case that the learned lower Court may frame an issue in the light of the observation and take additional evidence required thereafter proceed to try such issue and return the evidence together with his finding thereon to this Court. This order was made under order XLI, rule 25, C. P. C. with the consent of the counsel for the parties :‑ "The main point arising in this appeal and which was argued at length in this Court is, whether the appellant was served with a show‑cause notice before the amount in dispute, which was sought to be recovered from him as arrears of land revenue, was found recoverable from him. The appellant in para. 6 of the plaint had clearly stated that the respondents had taken proceedings behind his back. In this way it was contended that he was not heard and was condemned unheard before the defendant‑respondents declared that he had committed defalcation in respect of the amount in dispute. This aspect of the case was not given consideration by the Courts below and there was no evidence to show whether the appellant was heard and it was declared that he was liable to pay the amount as defalcation in the treasury had taken place, while he was contractor."

15. The learned Senior Civil Judge, Hazara framed the following issue :‑ "Whether plaintiff was not served with a show‑cause notice before he was charged with the liability in question, and the proceedings against him were conducted behind his back." The learned Senior Civil Judge, by his‑"order dated 24‑2‑68 gave the following finding on the issue :‑ "The plaintiff besides appearing himself, produced Abdul Khaliq Khan, Head Clerk Treasury Office, Abbottabad, Fakhar‑uz‑Zaman Khan, H. V. C. and Rozi Shah, Wasil Baqi Nawis as his witnesses. The defendants did not produce any evidence. From the statements of the plaintiff and his witnesses it is clear that no show‑cause notice was served upon the plaintiff before he was charged with the liability in question. It is also clear that proceedings against the plaintiff were conducted behind his back. If the plaintiff had been served with a show‑cause notice, nothing was easier for the defendants than to have produced it. The issue is" decided in favour of the plaintiff against the defendants."

16. The R. S. A. was again heard by Sher Bahadur Khan, J. The learned Single Judge upheld the judgment of the District Judge, Hazara, and dismissed the appeal with costs by his judg ment dated 26‑9‑68.

17. Sher Bahadur Khan, J. granted the following certificate to Abdul Hamid plaintiff for an L. P. A. on 7‑10‑1968. "It is a fit case for appeal before the letters patent Bench. The important question involved in this case is whether the civil Court has jurisdiction in a matter where the amount is being recovered as arrears of land revenue in view of the clear bar under section 158 of the Punjab Land Revenue Act, 1887. This point was considered in Noor Muhammad v. The Province of West Pakistan P L D 1966 B J 19 but the question being an important question of law, it will be appropriate that it is con sidered by a larger Bench. The Certificate is granted."

18. Abdul Hamid has filed this letters patent appeal.

19. Mr. D. M. Kamil, learned counsel for the appellant argued that the collector Hazara had passed the order of realisa tion of the suit amount from the appellant as land arrears behind his back in violation of the rule of natural justice embodied in the maxim "audi alteram partem, nobody should be condemned unheard, and that the civil Court had jurisdiction in the matter as the order passed by the Collector, being in violation of the rule of natural justice, was a nullity in the eye of law. The learned counsel based his argument on the rule laid down in Abdul Latif v. Government of West Pakistan and others (PLD 1962 S C 384). This authority was also relied upon by the plaintiff‑appellant before the learned Senior Civil Judge, Hazara, District Judge, Hazara, and also before the learned Single Judge. All the three Courts con sidered that the facts of the cited case were on all fours with the one in hand. The learned Single Judge distinguished the precedent case with the observation :‑ "The distinguishing feature of the present case is that here the appellant chose to have gone to the civil Court for the enforcement of his right, while Abdul Latif in the precedent case had come to this court in the exercise of its extra‑ordinary jurisdiction for the issuance of a writ of certiorari and prohibition. In the exercise of its extraordinary jurisdiction this Court is not called upon to see whether the contractor had deposited the amount under protest or not but jurisdiction of the civil Court was barred under section 158 of the Land Revenue Act to have adjudicated on the point in dispute unless the amount was deposited under protest, as laid down in section 78 of the Land Revenue Act. Thus the precedent case had no bearing on the question in hand." The learned Single Judge had placed reliance on Noor Muhammad v. The Province of West Pakistan (P L D 1966 BJ 19) wherein it was held :‑ "Under section 9 of the Code of Civil Procedure the Courts have the jurisdiction to try all suits of civil nature except suits of which their cognizance is either expressly or impliedly barred. The civil Courts, have, therefore, jurisdiction under section 9 to try all suits of civil nature and their jurisdiction in any particular matter cannot be regarded as ousted unless the Legislature has in unmistakable language taken away that jurisdiction. The jurisdiction of civil Courts is ousted under section. 158 of the Punjab Land Revenue Act, 1887 in regard to such cases as are clearly covered by the precise terms of this section. They cannot determine the liability of any person to pay any amount which he is required to pay under the Land Revenue Act. It is also not competent to the civil Courts to adjudicate on the amount which is to be recovered as arrears of land revenue under the said Act. It clear from section 78 of the Act that in a case where an amount is recoverable as arrears of land revenue, the defaulter cannot dispute in a civil Court his liability to pay that amount unless he first pays the amount under a protest in writing that the amount is not recoverable from him. Thus a civil suit to contest one's liability to pay the amount which is to be recover ed as arrears of land revenue is barred until the amount claimed is paid under protest." In the result the learned Single Judge concluded "In view of the above finding, it is no longer necessary to go into the question as to whether the appellant was heard before he was called upon to pay the amount in dispute. The judgment of the learned District Judge is upheld and the appeal fails. It is hereby dismissed with costs."

20. In Secretary of State v. Mask & Co. (A I R 1940 P C 105) the dictum "The exclusion of the jurisdiction of the civil Courts is not to be readily inferred but such exclusion must either be explicitly expressed of clearly implied. Even if jurisdiction is so excluded, the civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure." Abdul Latif, who was a treasury contractor, was also proceeded against similarly by the Deputy Commissioner, Peshawar for realisation of the defaulted amount as arrears of land revenue. In his case (P L D 1962 S C 384), the Supreme Court observed : "The appellant was a treasury contractor. At the end of his term of contract, a deficiency of Rs. 7,484‑3‑3 in the stamps of the treasury was found, which was sought to be recovered by the Tehsildar, at the instance of the Deputy Commissioner on a certificate of the Treasury Officer, by bringing into operation the coercive provisions (section 69) of the Punjab Land Revenue Act (XVII of 1887), without serving any show‑cause notice on the appellant : Held, that the action taken by the Deputy Commissioner against the appellant could not validly have been taken without giving him an opportunity of being heard. The Supreme Court prohibited the Deputy Commissioner from further proceeding with his order. Section 66, Punjab Land Revenue Act, 1887, lays down 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'. A right construction of the Act can only be attained if its whole scope and subject, together with an analysis of its wording and the circumstances in which it is enacted are taken into considera tion. 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 arrears due or not. It is true the Public Accountant's Default Act or the Revenue Recovery Act do not contemplate anything like a hearing in Court of justice. No procedure has 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'. In the instant case the appellant's 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 Commissioner in issuing the order faithfully followed the information conveyed to him by the Treasury Officer with out giving the appellant an opportunity to meet the allegations made against him. The procedure adopted to say the least was against all princi ples and canons of justice and fairplay. A plain reading of the provisions of the Public Accountant's Default Act 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, 1890. A show‑cause notice must be issued by a competent authority. In The University of Dacca through Vice Chancellor and another v. Zakir Ahmed (P L D 1965 S C 90) also, it was held :‑ "That in all proceedings by whomsoever held, whether judicial or administrative, the principles of natural justice have to be observed if the proceedings might result in consequences affect ing `the person or property or other right of the parties concerned. This rule applies even though there may be no positive words in the statute or legal document whereby the power is vested to take such proceedings, for, in such cases this require ment is to be implied into it as the minimum requirement of fairness. Wherever any person or body of persons is empowered to take decisions after ex post facto investigation into facts which would result in consequences affecting the person, property or other right of another person, then in the absence of any express words in the enactment giving such power excluding the application of the principles of natural justice, the Courts of law are inclined generally to imply that the power so given is coupled with a duty to act in accordance with such principles of natural justice as may be applicable in the facts and circumst ances of a given case. What these principles of natural justice are it is not possible to lay down with any exactness, for, they have been variously defined in various cases. The requirements of natural justice must depend on the circumstances of the case, the nature of the enquiry, the rules under which the Tribunal is acting, the subject‑matter that is being dealt with, and so forth. Nevertheless, the general consensus of judicial opinion seems to be that, in order to ensure the `elementary and essential principles of fairness' as a. matter of necessary implication, the person sought to be affected must at least be made aware of the nature of the allegations against, him, he should be given a fair opportunity to make any relevant statement putting forward his own case and to correct or controvert any relevant statement brought forward to his prejudice. Of course, the person, body or authority concerned must act in good faith, but it would appear that it is not bound to treat the matter as if it was a trial or to administer oath or examine witnesses in the presence of the person accused or give him facility for cross‑examining the witnesses against him or even to serve a formal charge‑sheet upon him. Such a person or authority can obtain information in any way it thinks fit, provided it gives a fair opportunity to the person sought to be affected to correct or contradict any relevant statement prejudicial to him. In other words, in order to act justly and to reach just means' the courts insist that the person or authority should have adopted the above elementary and essential principles' unless the same had been expressly excluded by the enactment empowering him to so act"

21. Thus the Deputy Commissioner, Hazara 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. This procedure adopted was against all principles and canons of justice and fairplay. The Deputy Commissioner Hazara, to whom the function of determining the liability of the appellant was entrusted should have conducted the proceedings of the recovery in accordance with the requirements of substantial justice. In the present suit one of the reliefs claimed by the plaintiff‑appellant is that the demand of defendant No. 1 for Rs. 43,876‑8‑10 from him and the mode of its recovery as arrears of land revenue, is wrong, against law and without jurisdiction.

22. Consequently, we are of the view that the action taken by the Deputy Commissioner, Hazara against the appellant could not validly have been taken without giving him an opportunity of be ing heard. The Deputy Commissioner has conducted the proceed ings of realisation of the suit amount from the appellant in viola tion of the requirements of substantial justice and has not acted in conformity with the fundamental principles of judicial procedure, and thus a Civil Court has jurisdiction to examine such cases. We, therefore, accept this letters patent appeal, reverse the judg ment of the learned Single Judge, dated 26‑9‑68 set aside the judgments and decrees of the first appellate Court and the trial Court and grant the plaintiff‑appellant a declaration that the recovery of the suit amount from the plaintiff as arrears of land revenue in the questioned manner is erroneous in law, in violation of the rule of natural justice and with no legal effect.

23. As a law point is involved, the parties are to bear their own costs throughout. Appeal accepted.