P L D 1961 Supreme Court 6 (PLP)

Karam Elahi Chauhan, Advocate Supreme Court, instructed by Kamal Mustafa Attorney for Respondent No.

2. Mazharul Haq, Advocate Supreme Court, instructed by Maqbul Ahmad Attorney for Respondent No.

3. Date of hearing : 18th October 1960 CORNELIUS, C. J.-As we are proposing to remand this case to the High Court for a fresh decision, it is not necessary to cite the facts in any great detail. The case arises out of a suit instituted as far back as 1947 by two plaintiffs, namely, (1) the Associated Hotels of India Limited, and (2) Rai Bahadur Mohan Singh Oberoi, Managing Director of the first plaintiff against a single defendant, namely, Rai Bahadur Jodha Mal Kutbalia for a recovery of a sum of rupees five lacs and ten thousand. The Senior Sub-Judge of Lahore awarded a decree in favour of the second plaintiff, Rai Bahadur Mohan Singh Oberoi in the sum of rupees five lacs plus Rs. 8,333-5-4 as interest. He expressly by his judgment dismissed the suit of the first plaintiff, namely, the Associated Hotels of India Limited and the decree-sheet also contains an express declaration that the suit of the first plaintiff was dismissed. An appeal being instituted in the High Court, the appellant Rai Bahadur Jodha Mal Kuthalia was required to deposit a sum of rupees three lacs out of the decretal amount, and to furnish security for the remaining sum to the satisfaction of the executing Court as a condition of obtaining stay of execution of the decree. The sum of rupees three lacs was duly deposited. The High Court allowed the appeal and dismissed the plaintiff's suit on the 24th November 1949, and on the 1st December 1949, Rai Bahadur Jodha Mal Kuthalia applied for and obtained an order for refund of his deposit, subject to intimation to the Custodian of Evacuee Property, who at once applied that the money should be paid to him. In the meantime an appeal was moved in the Federal Court and no further action was taken in respect of the deposit until after the 21st December 1953, when the appeal of Rai Bahdur Mohan Singh Oberoi was accepted, and the decree of the trial Court was restored, by a unanimous judgment of a Bench composed of three learned Judges. After this decision was given, Rai Bahadur Jodha Mal Kuthalia applied to the High Court withdrawing his previous application for refund, and asking that the amount should be adjusted towards satisfaction of the decree against him. At a later stage as appears from the judgment now under appeal, Rai Bahadur Jodha Mal Kuthalia applied to the Court for transfer of the deposit to India. This application was made while the High Court was engaged in dealing with a similar application by his opponent Rai Bahadur Mohan Singh Oberoi made on the 31st March 1954, that under the provisions of the Transfer of Evacuee Deposits Act 1954, the money should be transferred to India. Certain facts stand out clearly. Since the money was deposited under the orders of the Court by Rai Bahadur Jodha Mal, and there being no order of the Court regarding the disposal of this money so as to divest Rai Bahadur Jodha Mal of his ownership thereof, it would appear that prima facie the principal and direct interest in the money is that of Rai Bahadur Jodha Mal. The money having been deposited in relation to a decree of the Court, for the purpose of being applied to the satisfaction of that decree, and such decree standing exclusively in the name of Rai Bahadur Mohan Singh Oberoi, he might appear to have a secondary and indirect interest in the money. At one time, the Associated Hotels of India Limited, were joined in the suit along with Rai Bahadur Mohan Singh Oberoi as plaintiff's, but we have seen that the suit on behalf of this Company was expressly dismissed by the trial Court, and that the Federal Court eventually restored this decree. It does not appear that the High Court in their judgment in the case had occasion to deal with the claim such as it was on behalf of the Associated Hotels of India Limited, for by the order of the High Court, the suit was dismissed, but the following observation contained in the leading judgment delivered in the High Court may be reproduced as indicating the attitude then taken by the High Court with regard to the standing of this Company in the case "The first plaintiff is the Associated Hotels of India Limited and was impleaded by way of abundant caution." It would appear that the reference is to the impleading of the Associated Hotels of India Limited as a respondent in the appeal and the mention of "abundant caution" can only be understood to mean that after the dismissal of the suit by this Company, its impleading as a respondent was not legally necessary, and had only been done from an exaggerated desire to avoid all legal pitfalls. But the point is clear that as a result of the litigation ending with the judgment of the Federal Court, the Associated Hotels of India Limited, had been eliminated from the case altogether, and consequently no interest in the deposit here in question ever arose or could possibly arise in favour of this Company. The deposit had, been made at a time when the Associated Hotels of India Limited had been cut out of the case by the dismissal of their suit. The judgment of the High Court makes it clear that the impleading of this Company in the appeal was only done by way of "abundant caution" and not of legal necessity, so that no legal rights or interests could successfully be founded solely upon such) impleading. Disposal of the deposits under the Transfer of Evacuee Deposits Act, 1954, is governed by section 4 of that Act, which has been quoted in the judgment of the High Court under appeal, and need not be reproduced here. For the purposes of a case such as the present, the necessary conditions clearly appear to be, firstly, that as to the deposit, no party interested therein should be a Muslim, and, secondly, that the Court should not find or hold the opinion that "any of the persons interested in a deposit is not an evacuee". When these two conditions are satisfied, an absolute duty devolves upon the Court which is expressed in the following words, namely, that the Court "shall, as soon as may be after the commencement of this Act, transfer the deposit along with the record relating thereto, to such authorised officer or authority in India as the Central Government may by general or special order specify in this behalf." We have examined the various provisions of this Act, and have formed the opinion that the absolute duty which this section imposes upon a Court when the two conditions indicated above have been satisfied, is to be performed irrespective of the operation of any provision of the Act relating to the Administration of Evacuee Property. For, it is clear that the deposits referred to constitute movable property, and that all the interest in such property is exclusively that of evacuees, and such evacuees are exclusively non-Muslims. Unless all the provision of the laws relating to the Administration of Evacuee Property be avoided, such a transfer as is joined by section 4 cannot possibly take place. Only one duty is placed upon the Court in relation to the Custodian and that is specified in subsection (2) of section 4, namely, that the Court. "shall as soon as may be send to the Custodian in such form as may be prescribed, particulars of all deposits transferred to India under subsection (1)." The Court is not required to settle any of the rights and liabilities which affect the retention or disposal of the deposit otherwise than by the statutory transfer. It is safe to presume that the intention of the law was that all such questions would be decided as between the parties interested in the deposit, by the appropriate .p authorities in India. But under this special law, the Court has jurisdiction to the exclusion of that vested in the Custodian by the general law of the evacuee property, to decide whether all interest in the deposit are held by evacuees. Having cleared the ground so far, we proceed now to consider the attitude taken in the case by the Division Bench of the High Court whose decision is before us in appeal. The question posed for themselves by the learned Judges of the Division Bench is stated as follows :- "The point to decide is whether any Muslim or non-evacuee is interested in the deposit." For the purpose of deciding this point the learned Judges issued notice to the Associated Hotles of India Limited as well to all its shareholders and they have stated that one of these shareholders, Sir William Roberts by name appeared before them and contested the application for transfer of the deposit. The learned Judges took the view, overruling the contention of the decreeholder, that the Associated Hotels of India Limited had an interest in the deposit, and this conclusion was considered sufficient for the purposes of rejecting the application for transfer of the deposit. It is noted in the judgment that on behalf of Rai Bahadur Mohan Singh Oberoi it had been contended that he was the sole decree-holder and it was only his "ownership" in respect of the deposit that the Court could recognise. The learned Judges rejected this argument. They agreed that only the decree holders could execute a decree, but they differentiated between the right to execute the decree and the ownership of the amount awarded by the decree. They advanced two hypothetical instances in support of their view. The first is that of a benamider filing suit and obtaining a decree for possession of a house, and the proposition was stated that this circumstance would not "debar even the executing Court from recording a finding that the property decreed does not belong to him." The case before the Court was regarded as being stronger than the case put, because "a deposit in a Court may not be connected with an execution at all." The provisions of section 4 were interpreted in the widest way as will appear from the following quotation from the judgment, viz :- ?Section 4 . . . . . . prohibits a transfer if in the opinion of the Court any non-evacuee has an interest in the property, and it is clear that the opinion of Court is not subject to any limitation as to the person in whose name a decree or deposit stands." The second illustration furnished is that of a firm of two partners, one a Muslim and the other an evacuee, suing for debt due to the firm, upon a document which stands only in the name of the evacuee partner. The learned Judges came to the conclusion that the decretal amount when deposited by the judgment-debtor could not be transferred to India, merely because the decree is in the name of the evacuee partner. With respect, it must be observed that the cases suggested by the learned Judges afford no parallel to the present case, where the Associated Hotels of India Limited, appeared openly in the first instance, as a plaintiff, and by express decision of the Court, their suit was dismissed. To the end of the litigation, the situation which remained after that decision was that the Associated Hotels of India Limited had no interest in the subject-matter of this suit. The cases suggested in the judgment under appeal might have possessed some measure of similarity if in the first instance given the beneficiary had been joined as a plaintiff in the suit and the suit had been expressly dismissed as against him, and in the second case, if the Muslim partner had similarly joined in the suit and the suit had been dismissed against him. Here, so far as concerns the deposit held in concrete shape by the High Court the existing and possible interest are those of Rai Bahadur Jodha Mal and Rai Bahadur Mohan Singh exclusively. It may well be that as a result of some further litigation, the Associated Hotels of India Limited, if they were so minded, might be able to establish an interest in the amount of the deposit for them-selves. But that is a thing of the future, and does not prevent the conclusion that at present there is no subsisting interest in the deposit in question which the Associated Hotels of India Limited can claim. The learned Judges of the High Court have considered the question of res judicata not in the light of the above discussion, but in regard to the finding of the trial Court that the "evidence was insufficient to prove that the agreement had been entered into on behalf of plaintiff No. 1 (i.e., the Company) in consequence of which finding the decree was in favour of plaintiff No. 2." The question was considered by the High Court from the stand point whether the Associated Hotels of India Limited could resist that finding in a subsequent litigation, but to us it seems that after the implementation of section 4 aforesaid, on its true construction the interests to be looked for are immediate and existing interests, and not anything of a remote or speculative or potential or controversial characters, or which requires as a condition of its existence that there should be successful litigation. In any case, section 4 does not debar the raising of such questions by interested persons in respect of raising transfer of deposit, in the country to which the transfer is made, we are informed that the Company is incorporated and established in India, and such interests as the learned Judges of the High Court have thought might possibly exist in favour of the Company, can in our opinion, quite properly be raised in India and do not require for their protection that the deposit should be retained in Pakistan. As for the statement that Sir William Robeits, who appears to be a British national resident in Pakistan, has a present interest in the Associated Hotels of India Limited, as a shareholder, there is on the record of the High Court a certified copy of the latest list of shareholders of the Company dated 10th January 1955 which does not include his name. Furthermore, it is highly questionable whether any shareholder of a Company can claim to have an interest in any particular piece of property in which the Company has an interest unless the Company itself is brought into liquidation, and even then the interest is not of a direct nature. Therefore, it seems to us that the mention of Sir William Roberts in this case was quite superfluous, and we are clearly of the opinion that the High Court is in error in holding, by reference to the possibility of the Associated Hotels of India Limited being able to establish some kind of claim to the money, despite the final dismissal of the Company's suit for the money that this Company is a party interested in the deposit, so that "its Muslim and non-evacuee owners have an interest in the deposit" and in holding, consequentially, that this stands in the way of transfer of the deposit to India. The further condition for the making of an order of transfer is that it should be found by the Court that neither Rai Bahadur Jodha Mal nor Rai Bahadur Mohan Singh Oberoi whom we hold to the exclusion of all others, the person having a principal and a subsidiary interest respectively in the deposit, is a non-evacuee, and on this point, the High Court has given no finding. The learned Judges have observed at one place that both these gentlemen are "admittedly evacuees within the meaning of the Pakistan Administration of Evacuee Property Ordinance," but they have not given any finding as to whether they are evacuees within the meaning of the relevant Act, namely, the Transfer of Evacuee Deposits Act, 1954 where the definition of evacuee is clearly different in character from the much wider definition in the Ordinance of 1949 to which the learned Judges have referred. As we have already observed, the provisions of Transfer of Evacuee Deposits Act, 1954 appear to us to be intended to apply in derogation of anything contained in the laws relating to the administration of evacuee property. Some part of the complexity appearing from the judgment under appeal would have been avoided if this point had been kept clearly in view. It is impossible to interpret section 4 aforesaid in a manner consistent with the very wide provisions regarding vesting and control in respect of all forms of evacuee property which appear in the laws relating to the administration of evacuee property. But the duty under section 4 is absolute and we find no hesitation in holding that it must be performed irrespective of any objections that can be raised by the Custodian of Evacuee Property whose only right in relation to a transfer is to be informed by the Court as to the making of the transfer. The failure of the High Court to record an opinion with respect to the two parties interested in the deposit, namely, Rai Bahadur Jodha Mal and Rai Bahadur Mohan Singh Oberoi whether either or both of them are evacuees within the meaning of the Transfer of Evacu; a Deposits Act, 1954, necessitates a remand to the High Court on this point, and we accordingly allow this appeal and direct that the case be returned to the High Court to record the necessary finding or findings as indicated above, and to make an order thereafter as required by law. Costs will be costs in the cause. A. H.??? Case remanded.