1987 PLP 548 (SCMR)

Aggrieved by this order of the Settlement Commissioner (Industries), the two appellants filed a constitutional petition. In the constitutional petition, the appellants took up the plea that the Patel Engineering Works which was the subject‑matter of disposal by the public auction and was purchased by respondent No.2 was confined to the original plot of evacuee land bearing No.8 L.R.8, Lawrence Quarters, Karachi, and the possession of the appellants was over a different property the original number of which was 10/2 measuring 1007 sq. yds. and the increase in the area of the property purchased by respondent No.2 from 1766‑400=1366 sq. yds to 2588 sq. yds. was fraudulent and the result of misrepresentation. The appellants further claimed that the property in their possession was a plot for which they had applied and it could not be taken to be an Industrial concern for the purposes of the Act or disposed of as such. The disposal of the property giving it any different character from that of a plot was against law and all the orders approving such a transfer were of no consequence on the rights of the appellants. The learned Judge who dealt with the case in chambers came to the conclusion that the definition of Industrial Concern in the Act being inclusive and not exhausitve, left scope for other properties like that in dispute to be treated as an Industrial Concern for the purposes of disposal. Besides, it was held that this question was actually a question of fact whether a particular property was, at the time of its disposal and earlier to it, an Industrial Concern or not and it could not be redecided in constitutional jurisdiction. It was further held that the appellants had no locus standi to claim the property as a plot or building site and "the fact of their having made an application is of no consequence." For that reason, they could not question the transfer made by public auction in favour of respondent No.

2. It was also found that the appellants had not diligently followed their claim to the property on account of this flaw in their claim of which they were aware. Their claim was held to suffer from laches as they were present at the time of auction of the property, wasted time in preferring misconceived and incompetent applications, and allowed the years to pass by. Their constitutional petition was, therefore, dismissed with no order as to costs. The entire case of the appellants was examined afresh by the Letters Patent Bench in appeal and the contentions that the transfer documents of respondent No.2 were not in accordance with the auction proceedings or that portion in possession of the appellants was still available for transfer and could not be disposed of as an Industrial concern were found to be without merit. Their conduct of not availing the legal remedies before invoking constitutional jurisdiction of the High Court and being present at the auction and having delayed the challenge to it was held to bar them from claiming relief in the matter. The arguments advanced by Mr. Fazle Ghani Khan, the learned counsel for the appellants, have necessarily taken us back to the history of the plot, its ownership and construction on it and the orders passed with respect to it in the past. The contention of the learned counsel was that the property in possession of the appellants is a distinct and a separate property from Patel Engineering Works, the two being separated by Pucca boundary walls in existence since Independence. The appellants had installed looms on the plot by providing sheds thereon and were running an Industrial concern of a very different type than the Patel Engineering Works existing on adjacent plot. It was contended that as movables in the form of machinery and plant of Patel Engineering Works in its entirety had already been declared non‑evacuee property, what was left as evacuee property was only the plot and the sheds and without the plant and the machinery, the plot and the sheds could not be disposed of as an industrial concern and it had necessarily to be disposed of either as an open plot or as a building. There being no competing claim in respect of this specific property in possession of the appellants of which they were old allottees, the same could not be auctioned and purchased by the respondent No.2. The property put to auction as an Industrial concern must be confined to 1366 sq. yds, the original number of plot being 8 L.R.8. The increase which had taken place in the area and the extent of the property was on account of misconceptions and misrepresentations‑ misconceptions on the part of the Settlement Authorities and misrepresentation on the part of the auction purchaser. Mr. A. A. Fazeel, Advocate, the learned counsel for the respondent No.2 on the other hand contended that the antecedent litigation over the property clearly showed that after the two plots No.8 L.R.8 and 10/2 were amalgamated in 1936. Patel Engineering Works came to be located on a plot measuring 2773 sq. yds. In view of the three‑storeyed building, Patel house, constructed before partition on a corner of the plot covering about 404 sq. yds, which had to be excluded and was in fact excluded, the area of the Industrial concern sold to respondent No. 2 was reduced to 2374 sq. yds. A similar effort, according to the learned counsel for the respondent, as was being made by the appellants was attempted by one Allah Din in respect of the similar construction existing on another corner of the plot but as would appear from the decision in Writ Petition No.214 of 1963 (Allah Din v. Muhammad Shafi decided on 1‑9‑1965, it was treated as a part of the Industrial concern Patel Engineering Works. In between the plot conceded to the respondent No.2 and denied to Sh. Allah Din in that constitutional petition lies the portion of which extraction and exclusion as a separate entity is sought by the appellants. This according to the learned counsel, cannot be done either legally or physically. The learned counsel for the respondent No.2 also pointed out to the features making the receipt held by the appellants for seeking its transfer as plot suspicious and fake. It has been said that in their application to the Additional Settlement Commissioner, they had mentioned the date of filing form as 16‑9‑1959 though on the receipt itself the date happens to be 21‑12‑1959. The property is located in B Settlement area while the receipt bears the seal of D Settlement area. No effort was made by the appellants to present this receipt before the officer with whom the forms were submitted to claim adjudication or disposal or 'to get a factual finding recorded about the genuineness of the form and its pendency and competence. He has referred to Settlement Scheme No.VI relating to building site and Settlement Scheme No. 2 relating to the transfer of Industrial concerns and the instructions on page 139 (old Settlement Manual) to demonstrate that under neither schemes nor as a converted property, the appellants could maintain their claim. The learned counsel has taken us also to the record of the auction proceedings in order to establish that by an express order of the competent Settlement authority, the property in dispute was included and put to auction and purchased by respondent No.2. The appellants did not challenge such a transfer. Instead, they all the time attributed misrespresentation and fraud to the purchaser and relied mainly on the nature of the property in their possession prior to its amalgamation in the year 1936. So far as the conduct of the appellants concerning this property is concerned, it is clear that at no stage did they formally and directly approach in writing the authority with whom they claimed to have filed. the plot form nor did they seek and obtain a written order with regard to the filing of their form, its pendency or disposal. In what is expressed to be an appeal under section 19 of the Act and was filed by them on 19th of September, 1964, they made no direct mention of their having filed any claim form of any sort. What they stated on the subject has already been reproduced verbatim earlier in the judgment. In para 5 of that memo. of appeal, they mentioned as hereunder:‑ "That the appellant's case pending disposal needs immediate consideration and necessary action, so that the appellant may be able to save himself from the unnecessary harassment by the respondent involving the appellant in litigations." It was in the subsequent application for clarification of the boundaries made on 30th of November, 1964 that they mentioned the antecedent facts as follows:‑ "That the applicant being entitled to the transfer of the portion of the said plot in his occupation i.e. about 700 sq. yds. known as G/1/1 applied to the Dy. Settlement Commissioner, Karachi for transfer of the same to him as far back as 16‑9‑1959. Since then the applicant has been pursuing the matter in the office of the Dy. Settlement Commissioner but with no results as most of the period the file had been missing". Even at that stage, it appears they did rely on the receipt possessed by them which gave the date of filing of the form for a plot as 21‑12‑1959. The relief claimed by them in that application already reproduced above showed that they wanted the property in their possession to be treated as a plot and not an Industrial concern. either converted or original and considered that its disposal was within the competence of the local Settlement authorities. Even when they took up the matter formally, it was not with a view to get the form filed by them located and disposed of but to dispute the extent of the property transferred by P.T.O. to No.2, the auction purchaser. In this background, it is not surprising that the question having not been raised by them directly did not receive pointed attention of the Settlement authorities and was not determined in accordance with law. The fact of their having filed a form remains as open as ever. The other feature of their conduct is that though the auction of the property had been confirmed by the Chief Settlement Commissioner and they were seeking modification of that order, they in the first instance on 19‑9‑1964 appealed to the Additional Settlement Commissioner under section 19 of the Act. When they were told by an order dated 5‑10‑1964 that they should file regular appeal before the competent authorities, they resorted to a miscellaneous application addressed to the Additional Settlement Commissioner (Industries), Lahore. When the appellant No.2 was informed by order dated 22‑7‑1965 that his request cannot be acceded to and was rejected, he filed a representation on 28‑7‑1965 seeking clarification of the area auctioned to respondent No.2 and it was this application seeking clarification which was ultimately allowed by the Additional Settlement Commissioner (Industries). The Settlement Commissioner exercising the powers of the Chief Settlement Commissioner, the learned Judge in Chambers, and the Letters Patent Bench concurrently held this order of the Additional Settlement Commissioner (Industries) to be completely without jurisdiction because these proceedings were not entertainable in the form in which they were presented particularly keeping in view the earlier rejection of the claim by the same authorities and the orders passed after on the spot verification immediately before the auction. By failing to take proper legal proceedings, the appellants deprived themselves of the equitable constitutional jurisdiction even if other conditions had been satisfied. It is to be noticed that the claim to the property made by the appellants varied at various stages. The receipt dated 21‑12‑1959 was put in to show that they wanted it as building site (Settlement Scheme No. VI). In application dated 19‑9‑1964 the claim made was of having put up permanent construction 'with a view to instal a factory'. In the next application dated 30‑11‑1964 what the appellants emphasized was that it was "through manipulation, misrepresentation or fraud" that respondent No.2 was laying claim to this property and that it being "not ‑an Evacuee Industrial Concern" 'its disposal is within the competence of local Settlement authorities'. Finally, in the application, dated 28‑7‑1965 they claimed that their plot was No.10/2 a different property and they had spent "huge sums of money over the said independent and separate piece of plot in raising Textile Factory" and were entitled to its transfer. It was a case of converted property, as An Industrial concern, covered by Settlement Scheme II read with instructions published at p.139 of Settlement Manual (Old Edition) for which applications were entertainable by an officer now below Additional Settlement Commissioner (P.90 ibid). In the case of Mirza Muhammad Yakub P L D 1965 S C 254 it was held by this Court that "there is no obligation on the Settlement authorities to make inquiries as to facts not pleaded before them or to take up suo motu factual grounds of transfer not urged before them by an applicant." As the Settlement Authorities have not examined these varied aspects of the claims made by the appellants at different stages, it would not be possible for this Court or the High Court to give a finding approving of any of these claims. Nevertheless, this variance in the claim made by the appellants has to be taken note of and kept in the background while evaluating the effect of their conduct in the proceedings. It is a fact that the appellants were admittedly present at the time of auction of the Patel Engineering Works. Their grievance that the advertisement in the newspaper did not provide sufficient description of the property and that they could not by their very presence be aware of the extent of the property that was being offered for sale is based on misconception of the requirements of law. The instructions with regard to disposal of Industrial Concerns and Cinema Houses not allotted by Industries Rehabilitation Board are printed at page 82 of the Settlement Manual (Old Edition), and the main features of it are that only brief particulars of the Industrial concerns were to be published in the leading newspapers and the date and time and place of auction was to be indicated. The auction was normally to be conducted at the premises of the Industrial concern. What is more important was that the site plan of the Industrial concerns or Cinema Houses included in the auction was required to be prepared before‑hand and it was required to be signed by the highest bidder as well as Chairman of the Auction Committee and was to be placed on the relevant auction file. Officers not below the rank of Additional Settlement Commissioner were alone entitled to receive applications for the transfer of Industrial concerns. When the suction of this property took place it was measured, the area was disclosed and objections were received as already indicated one coming from Mr. Kadery with regard to the construction and one from Messrs Maston & Co. with regard to its transfer. Besides, the Industrial concern that was offered for public auction was not described by the name of the allottees or non‑evacuee occupants but it was identified by the evacuee Industrial concern's name and description as appearing in the records from the year 1947 or earlier, in this case since 1939. The examination of the relevant file shows that property in dispute after amalgamation with the adjacent plot had formed part of the Patel Engineering Works. It is different matter that after Partition and so far its possession was concerned it came to be divided into different units. Such a description in the advertisement could leave no manner of doubt that it was the evacuee concern as known before Partition which was being offered for sale and the auction was being held on the very property where the appellants happened to be present with their installations. There are certain particulars mentioned in the pro forma prepared at the auction which are indicative of its condition and value. Entry No.4 provides the details of the accommodation in the following words:‑

4. Details of accommodation: (i) Total area. 2588 sq. yds. approximately 2473 sq. yds. as site plan approved. (11) Covered area. 656 sq. ft. (or 73 sq. yds.) app. office room and 3 store rooms." (iii) Tenements etc. Another column contains the particulars about the description of the present condition of the factory in the following words:‑ "

12. Present condition of the factory. (i) Building The condition of office room and stores is satisfactory. The roof of the workshop shed is old, rusty and partly damaged. (ii)Machinery The machinery is claimed by Messrs Decora Ltd. Karachi to be their property (Details of evacuee heavy machinery installed in the concern may be given). and finally the value and the general remarks are in the following words:‑ "

15. Present estimated value of. (i) Land. Rs.1,03,520 approximately (ii) Building Rs. 46,000 approximately Shed: Rs.15,000 approximately (iii) Machinery; Not assessed, as it is claimed by Messrs Decora Ltd., Karachi to be Their property. Total Rs.1,23,120 Approximately.

16. General Remarks; (1) The survey was completed on the spot just before the auction of the concern. (2) The information was collected partly on the spot and partly from the Head Clerk, Office of the Additional Settlement Commissioners Karachi who was present. (3) Total value of the land, building and shed was assessed at Rs.1,23,120 approximately. As required under the instructions published, the site plan was prepared and signed. In the presence of these documents, there was no question of appellants suffering from any misconception with regard to the area or of any unauthorised increase in it after the auction. The record further shows that the existence of three tenancies was taken note of and an order was passed that the three units shall be auctioned as one Industrial concern. In this background, the presence of the appellants at the time of the auction cannot be taken to be as that of a disinterested observer not put on inquiry with regard to the nature and extent of the property that was being put to auction. The view taken by the High Court that the inclusive definition of Industrial concern makes it not exhaustive of the properties covered by it and that the inclusions themselves indicate an extension in the definition rather than precision and restriction, appears to be correct and consistent with the law laid down by this Court. Such an extension in the meaning had taken place even under the instructions of the Chief Settlement Commissioner appears from what is published at page 141 of the Settlement Manual (Old Edition) wherein brick‑kiln, water mills and Kharases have been ordered to be treated as Industrial Concerns. In the case of Sheikh Ahmed Sadiq v. Chief Settlement Commissioner P L D 1974 SC 368 this question was considered and the Industrial concern was found so defined as to include some of the business premises also though not all. In that case a structure without fixtures, fittings and furnishing, which had not even received electricity' connection but was put up to be eventually used as a Cinema House was taken to be a Cinema House and not a mere building. It follows from the above discussion that the High Court's refusal to extend the equitable discretionary relief to the appellants is unexceptionable because appellants manifested neither diligence nor ordinary care and prudence in pursuing their application, if any, filed by them with Deputy Settlement Commissioner, because of their being present on premises where auction took place and not having objected to the description of the property, to its measurement or to the auction itself without prior adjudication of their pending claim. On the other hand, the auction was held observing all the formalities and requirements unmistakably indicating that disputed property was in fact auctioned and Respondent No.2 was a bona fide purchaser for value the property itself qualifying as an evacuee Industrial concern. This appeal has, therefore, no merit and is dismissed with costs. S.Q./4444/S Appeal dismissed