P L D 1967 Lahore 419 (PLP)

Dates of hearing: 15th and 17th February 1966. The dispute in this case is about' an unregistered industrial concern known as Narang Flour Mills; Arifwala. From the history of its allotment as given in Annexures R/1 to R/3 filed by respondents Nos. 4 and 5 and also from the written statement (paragraph 2 on merits), this concern was allotted in full to the said respondents in year 1947. This allotment was confirmed on 22‑4‑1950, vide Annex. R/l. It appears from a perusal of the title of Annex. R/2, that on 16‑12‑1950, one‑third share of this concern was allotted to the present petitioners. The matter went up in revision before the late Mr. Justice M. A. Soofi, in his capacity as Addl. Custodian Evacuee. Property, who by means of his order dated 15‑5‑51, maintained that allotment by adding a condition that the present petitioners should pay one‑third of the expenses incurred by respondents Nos. 4 and 5 towards the repairs of this concern, before they enter into joint possession of the Mills. , The struggle, it appears, continued and was patched upon 24‑8‑54 as is evident from the order of the Rehabilitation Commissioner (General), of the said date, (Annex. R/3), when the respondents agreed to give 1/3rd share of the income to the present petitioners and the present petitioners agreed as not to insist on physical possession of the premises.

2. During the Settlement Operations, both the parties, namely, the present petitioners and respondents Nos. 4 and 5, applied for the transfer of this concern. The D. S. C. by means of his order, dated 1‑3‑1960, transferred the entire concern to the petitioners, but on appeal by respondents Nos. 4 and 5, the Addl. S. C. by means of his order, dated 9‑5‑1960, remanded the case. After remand, the D. S. C. on 7‑9‑1960, transferred the con cern to the parties in equal shares. His order is somewhat incon sistent because, after observing that the concern should be trans ferred to the parties in equal shares, he went on to hold that as regards the Management they should enter into some compromise, and if no compromise was arrived at, then the premises should be sealed and auctioned. Against this order, both the parties filed cross‑appeals. The Addl. S. C., by means of his order, dated 13‑12‑1961, accepted the appeal of respondents Nos. 4 and 5 and holding that they alone were in physical possession of the concern transferred the same to them. Consequently, the appeal of the present petitioners was dismissed. This order again is somewhat inconsistent because though in effect it transferred the entire concern to respondents Nos, 4 and 5; in the last sentence of the order, it was, however, written that both the appeals stood dismissed. The petitioners filed a revision petition which was dismissed by the S. C. by means of his order, dated 7‑2‑1962. Thereafter, the petitioners have filed the present writ petition in this Court.

3. The first point raised by the learned counsel for the petitioners is that .his clients have been denied transfer of this concern or of any share in this concern ‑solely on the ground that they are not in possession or to be more exact, physical possession of any part of it. He submits that persons who were allotted shares in the income and profits of a concern by the Rehabilitation Department are as much equally in possession as those, who were ; dually running the concern. For this purpose he relies upon Messrs Chiragh Din Ghulam Muhammad v. Messrs Muhammad Ramzan, Muhammad Ismail, Muhammad Ibrahim and others (P L D 1902 Lah. 714), wherein J. H: Rizvi, J., held that the word possession included constructive possession and all allottees of shares in income, can also be deemed to be in possession of an industrial concern. For this purpose, the learned Judge relied upon certain instruc tions of the C. S. C., which he observed must be regarded as having been given under the directions of the Central Government. Learned counsel for the petitioners also places reliance upon the instructions printed at page 141 of the Settlement Manual (Old Edition). He ‑particularly refers to Paragraph 7 of the said instructions which read as follows:‑ "(7). All allottees of an industrial concern not allotted by the Industries Rehabilitation Board, are entitled to its transfer to them in proportion to their allotted shares. If at the time of the transfer of an industrial concern it comes to notice that an allottee could not submit his application for the transfer of the property within the prescribed time, he may be given an opportunity to file the requisite application and delay be condoned where considered appropriate." "It has been noticed that in certain cases allotments have been made in terms of money and shares. The Addl. S. Cs., may assess the total income of such industrial concerns and convert money allotments into share allotments and then proceed with the transfer of the concerns to the allottees."

4. On the basis of these instructions the learned counsel for the petitioners submits that it is not merely the physical possession which is contemplated in section 2(6) of the Displaced Persons (Compensation and Rehabilitation) Act, 1958. Reliance is also placed on Fatehyab Khan and others v. Mst. Amtul Hafeez and others (P L D 1963 Kar. 953), where Wahiduddin Ahmad, J. on page 958 wrote as follows:.‑ "In fact the question for consideration was whether the petitioner should be considered to be in possession of the property as an allottee in view of the fact that his family was staying in the premises in his absence in England. None of the Settlement Authorities has applied his mind to this aspect of the case. Mr. Merchant contended that a tenant may be absent from a place but if the premises taken by him on rent are occupied by his family, the possession of the tenanted premises will be considered as that of the tenant and not of his family. His contention is that the person who took the premises on rent will be treated in law as tenant of the premises and not the person who is staying in it. In support of his contention the learned' counsel has referred me to a decision of the English Courts in the case of Brown v. Draper (1944) 1 K B Div.

309. In that case a husband was the tenant of a house on weekly tenancy. After occupying the house for some months he left it on account of disputes with his wife, but he left his wife and child in occupation of the house, and continued to pay the rent. It was held that the wife's possession must be regarded as that of the husband and could not be treated as unlawful so long as the husband had the right to claim the protection of the Acts. The observations of the Appellate Court in the above‑mentioned decision fully support the petitioner's contention that as his family members were living in the flat in question, in law the possession would be that of the petitioner and not of his children or of his mother. In my opinion the view of the Settlement Authorities that the petitioner was not in .possession of the flat in dispute when he claimed it cannot be supported on the provisions of the Displaced Persons Compensation Act. The definition of "possession" does not at all say that the claimant must be in physical possession of the property. A constructive possession also will be a valid possession in law. In the absence of any negative provision to this effect, the constructive possession of a person will be treated to be as good possession for purposes of claiming the property under the Displaced Persons Compen sation Act. I would, therefore, set aside the order of the Settle ment Authorities and direct them to transfer the flat in question to the petitioner if he is otherwise found entitled to it."

5. The next case relied upon is Syed Muhammad Munir Shah v. Mst. Akbar Jan and others: (P L D 1963 Lah. 59), where Shabir Ahmad, J., held that in a case where a mortgagee was in possession of the evacuee property and he let out the same to another tenant then the possession in the eye of law is of the mortgagee, and the person in actual possession of the premises as a tenant cannot have a better right to the transfer of the property than the mortgagee. The actual passage which occurs at page 61 of the report runs as follows:‑ "I am not prepared to accept the contention of Mr. Aftab Hussain, the learned Advocate for the petitioner, to the effect that a tenant in possession of evacuee property can claim a better right to the transfer of that property than the person who put him into possession of the property as a tenant. The possession contemplated by the Displaced Persons (Compen sation and Rehabilitation) Act, 1958, is no doubt physical possession, but I am clear in my mind that a landlord who has let out property to a tenant has to be deemed to be in possession of the property in spite of the fact that he is not in actual physical possession thereof." There is considerable force in the point raised by the learned counsel for the petitioners. The word "possession" is wide enough to include constructive possession or possession in law and there is no reason as to limit its scope only to physical possession. Physical possession is sometimes des cribed by the word "occupation" and if the Legislature intended to restrict the word "possession" to "occupation" then it would have used that word instead of the word "posses sion". Evacuee property was being governed under Pakistan (Administration of Evacuee Property) Act XII of 1957 and Pakistan Rehabilitation Act XLII of 1956. Under the Pakistan (Administration of Evacuee property) Act XII of 1957 property means property of any kind, and includes any right or interest in such property (See section 2 (5) of that Act). Under section 18 of the said Act, a Rehabilitation Authority was authorised for the purposes of the rehabilitation of displaced persons, or social or economic rehabilitation in Pakistan, to allot to any person any evacuee property or property of which the Custodian has taken possession. This would show that rights and interests in any evacuee property were also property and were allotable. A person to whom right to share any income of an evacuee property B was allotted could claim to be in possession of that right or interest or of that property. Under section 25 of the same Act, the Custodian had the powers to take such measures as he considered necessary or expedient for the purpose of securing, administering, preserving and managing any evacuee property and without prejudice to the generality of the provisions in that behalf, he could appoint a manager for the property of the evacuee or for carrying on any business or undertaking of the evacuee and authorise the said manager to exercise any of the powers of the Custodian under that Act. He could take all such measures as may be necessary to keep any evacuee property in good repair. He could replace or install machinery in any factory. He could partition or permit a Rehabilitation Authority to partition any property or rights therein or to effect consoli dation of holding of evacuees. Under the Rehabilitation Act, the Rehabilitation Authorities had the powers and duties of removing dislocation in the social and economic life of Pakistan caused by the migration of evacuees and securing for refugees an orderly entrance into that life. They had the right and authority to pool and allot property and could have passed necessary orders in that behalf. They could settle refugees on any abandoned land or in any abandoned house and grant to any refugee or other person a lease of any abandoned business or undertaking. They had the authority to arrange for the reopening and carrying on of any abandoned business or under taking on such terms and conditions as they may deem fit. A perusal of the provisions of these two Acts would, therefore, show that the Custodian and Rehabilitation Authorities had the ,jurisdiction to allot evacuee properties, sometimes by giving its actual physical possession to any person or sometimes by creating rights or interests in the form of share and income of the evacuee property or appointing its managers, etc. When the Settlement operation started it could never be the intention that the persons who were considered eligible for being rehabilitated during their earlier stage were to be ruled out altogether because they were not in any physical possession but only constructive possession of the evacuee properties. Strictly speaking all evacuee property vested in the Custodian and he alone was to be considered to be in possession that property, and any other person who was allotted property by the Custodian or by the Rehabilitation Authority was to hold the same under the Custodian and his possession was to remain subordinate to that of the Custodian or the Rehabilitation Authority. Strictly speaking, therefore, it was not the actual or physical possession which alone was considered to be valid possession by the Displaced Persons (Compensation and Rehabilitation) Act, and persons in constructive possession were also to be rehabilitated and compensated for their claims. Looked at from this point of view it is safe to hold that possession in section 2(6) is not merely the physical possession which was contemplated by the Act. In Hamidullah and another v. Rai Khurshid Ahmad Khan and others (P L D 1958 S C (Pak.) 516) a question arose V to whether persons who were given shares in the income of a cinema (an industrial concern) could also be considered as allottees of the cinema or not. Their Lordships of the Supreme Court held that the expression "allottee" was not a term of art in law and for its proper construction reliance may properly be , placed upon the practice of the Rehabilitation Department to which the operation of the relevant law had been entrusted. In that case, they held that since the practice of the Department was to consider allottes of shares in the income of an industrial concern, also as allottees, they were, therefore, held to be allottees and could enforce; their rights on that basis. Following the same principle, I hold that since in the instructions of the C. S. C., printed at page 141 of the Settlement Manual (Old Edition), allottees of shares in the income of the industrial concerns are to be considered to be in possession, therefore, they can be held to be in possession of the industrial concern.

6. The learned counsel for the respondents on the other hand drew my attention to Ch. Altaf Hussain and two others v. Shabbir Hussain and others (P L D 1961 Lah. 449) where at page 460, Masud Ahmad, J., observed that the possession under the Act would be of a person who is actually occupying a property and not possession of some one else. This passage occurs in the context of giving preference to a direct claimant as against an indirect claimant and is intended to hold that constructive possession of the kind with which his Lordship was concerned was not preferable to a direct possession. This case was the subject‑matter of adjudication before the Supreme Court in Ch. Altaf Hussain and others v. The Chief Settlement Commissioner, Pakistan, Lahore and others (P L D 1965 S C 68) wherein their Lordships of the Supreme Court armed the view that a direct claimant has a preference over an indirect claimant. The Supreme Court did not hold that possession must always be physical. Rather the principle enunciated itself shows that indirect claimants, who claimed on the possession of other persons, are also eligible for the transfer of evacuee properties. 1f that were not so, then the question of comparing ‑their merits with direct claimants would not have arisen. Secondly, the case aforesaid was not a case where allotments had been made by shares in income of any property or concern, and therefore anything which may have been observed by Masud Ahmad, J. while dealing with the case in High Court Bench in P L D 1961 Lah. 449 cannot apply to a case of the present kind.

7. Having given my anxious consideration to the point, in hand, I am of the view that the contention raised by the learned counsel for the petitioners has a great force and the orders or the Settlement Authorities in this case, which purport to reject the entitlement of the petitioners on the ground that they were not in physical possession of the concern but were merely shareholders in its income, are without lawful authority.

8. The result of the above discussion is that the order of the Settlement Commissioner, who refused to transfer the concern in question to the petitioners, is illegal and is hereby quashed, and the case is remanded to him for a fresh decision in accordance with law. K. M. A. Petition accepted.