P L D 1963 (W (PLP)

Muhammad Bashir petitioner filed an NCH Form No. LHR -3-616 (NCH) on 4th October 1959, for the transfer of a portion of property No. N-14-1-S-32 Osmanganj, Badamibagh, Lahore. The property consisted of a steel re-rolling mill, an iron shop and some residential quarters. The other occupants of the property also applied for the transfer of the portions in their possession. The Deputy Settlement Commissioner by his order dated the 7th February 1960, transferred the premises in dispute in favour of the respondents on the basis of an agreement executed among them. Malik Ghulam Jilani Khan, Additional Settlement Commissioner by his order dated 25th November 1960, dismissed the appeal of the petitioner on the basis that he had failed to produce the rent clearance certificate and that in the absence of the same his appeal was not competent. On revision under section 20 clause (3) of Act XXVIII of 1958, the Settlement Commis sioner remanded the case to the Additional Settlement Commis sioner for adjudicating on the respective rights of the parties on merits. The case on remand was heard by Mr. Muhammad Azar, Additional Settlement Commissioner, who dismissed the peti tioner's appeal on the ground that he had submitted a belated NCH Form and that he was in arrears of rent on that date. Mr. Ijaz Hussain, learned Settlement Commissioner rejected the revision petition again on the basis that the petitioner was a non -claimant and had not cleared arrears of rent.

2. The order of the Settlement Commissioner has been challenged through this writ petition and it is contended that non-clearance of rent is not a sine qua non for the transfer of the property to a non-claimant. Mr. Muhammad Akram, learned counsel for the respondents was very candid in conceding this proposition of law but contended that the respondents had a superior right to the petitioner being claimants in possession. Mr. Gul Muhammad, however, argued that the portion in possession of the petitioner was separate house and had been wrongfully trans ferred to the respondents and further complained that the entitle ment of the petitioner thereto had not been determined because the authorities refuse to consider his case on the basis of non- clearance of rent which ground was unwarranted by law.

3. It had come to my notice in a number of cases that the Settlement Authorities refused to consider the eligibility of a non- claimant on the short ground that they had not filed the certificates of clearance of rent. Since this point was going to affect a number of cases and though the Settlement Authorities has chosen 'not to be represented, I called upon Major Ishaq Muhammad to make an appearance and place before me the view point of the Department. He supported the orders of the Settlement Authorities and contended that application of a non-claimant merited summary rejection if he did not file the rent clearance certificate before the Deputy Settlement Commis sioner.

4. Under paragraph 2 of the Schedule to the Act a house in possession of a non-claimant displaced person which he desires to retain has to be transferred to him on payment of the prevailing market price. The words used are- "shall he transferred" and, therefore, all that is required under the said provision of law is that a non-claimant should be in possession of the house. The only limitations placed on his eligibility are that not more than one house can be transferred to any one non-claimant and that if there are more than one applicant for the transfer of the house, the house has to be transferred to the non-claimant who obtained prior possession. It is, however, provided in paragraph 22 of the Schedule that any amount payable by a non-claimant displaced person in respect of any property, "transferred to him" shall be paid by him within one year in 12 equal instalments but the public dues or any other amount payable by him under the other provisions of this Act shall be paid immediately. The public dues payable immediately under this paragraph is referable to the "property transferred" to the non-claimant. It, therefore, means that it is after the property is transferred to a non -claimant, that he has to pay the public dues immediately, and for that reason so long as the transfer is not made, the latter part of paragraph 22 dealing with the immediate payment of the public dues obviously does not come into operation. `Public dues' as defined in clause (10) of section 2 of the Act include "arrears of rent".

5. A perusal of sections 10 and 16 shows that the provisions in the Schedule have to be subordinate to the main provisions contained in the Act and the Scheme to be framed under section 16 in turn has to be subject to the provisions of the Act, the Rules and the Schedule. If, therefore, there is any provision In the Act itself, which is inconsistent with the provisions of paragraph 2 or 22 of the Schedule, applicable to the transfer of the property to non-claimants, the former shall prevail as against the latter. A reference to some of the provisions of the Act therefore is necessary. A claimant has to make an application in a prescribed form under section 11 for compensation under this Act. The authority concerned under section 12 has to determine the public dues as defined in clause (10) of section

2. These public dues are to be set off against the verified claim under Schedule VI and if they are in excess of such a claim, the amount so in excess has to be recovered from the compensation payable to the claimant from the Compensation Pool, which obviously means from the verified claim under Schedules I, II and III. Section 13 provides for the determination of public dues recover able from the non-claimants and locals, and says that the authority concerned shall after making inquiries in the prescribed manner determine at the time of transfer of any evacuee property to a local or a non-claimant displaced person the amount of public dues if any recoverable from him and shall require a local or non-claimant displaced person to pay such dues to the person entitled to receive the same. The determina tion of the public dues under this section therefore is relatable to the time of the transfer of any evacuee property and not earlier. It is laid down in section 14 that any amount due to the Custodian in respect of any property in the Compensation Pool for a period prior to the date of its acquisition has to be recovered as arrears of land revenue. The last mentioned section is clearly attracted to the amount due from the claimants, and non-claimants and locals. These are the only sections of the Act which deal with the determination of the public dues and their recovery. It will be noticed that they do not make it a condition precedent, for the determination of eligibility or for the transfer of the property from Compensation Pool to a non-claimant that he must clear arrears of rent. A reference to these provisions and paragraphs 2 and 22 of the Schedule do not even remotely indicate that the Settlement Authorities competent to transfer the property are not to deal with the applications of non-claimants unless the arrears of rent are cleared. For purposes of the present case it would have been sufficient for me to hold that such a condition which is pressed into service by the Settlement Authorities in all cases, before they consider eligibility of non- claimants for the transfer of houses, is not warranted by the Act and the Schedule and that being so their orders are without jurisdiction.

6. The Schemes made under section 16 have also to be subordinate to the Act and the Rules. If there had been a pro vision of the nature referred to in para 3 above, in the Scheme, that would have been completely ultra vires of the provisions of the Act. The Scheme No. I under which the houses and shops can be transferred, does not lay down any such condition either and on strict application of provisions of the Scheme such limita tion is impossible to be imposed. Chapter 11 of the Scheme deals with the submission and scrutiny of applications. A non -claimant displaced person in possession of a house which he is entitled to retain under paragraph 2 of the Schedule to the Act, can submit an application in Form NCH, as specified in Appendix III, whose Part B deals with the public dues recoverable from the applicant end under heading "II-Creditable to Rent Bill" he is to state the amount of arrears of rent due in respect of the evacuee house etc., with the particulars of location of the property, the authority to whom payable and the total amount payable. The Deputy Settlement Commissioner is to scrutinise his application under paragraph 7 of the Schedule and if he finds that the application does not contain essential information, he has to return the application with a memorandum of objection as specified in Appendix VI.

7. If, however, the application is complete in all material respects, the Deputy Settlement Commissioner enters its parti culars in the Register of demand to dispose it of. It will be noticed that non-compliance with any of the requirements of the form does not render the form liable to rejection. A duty is cast on the Deputy Settlement Commissioner to give an opportunity to the applicant to have the form amended. After the scrutiny of the forms the Deputy Settlement Commissioner has to determine the entitlement of the applicant under Chapter III of this Scheme. In taking decision in such a case, he under sub -para. 2 of paragraph 8 has to take into consideration the claims of all other persons' who may have applied for the same property. After bearing the case the Deputy Settlement Commis sioner pronounces his order under paragraph

16. The ascertain ment of entitlement and the determination thereof is not the same thing as the transfer of property, and Chapter III dealing with the ascertainment and determination of entitlement Is conspicuous by absence of any reference to any condition that the entitlement of a non-claimant is dependant on (i) making payment of the arrears of rent or (ii) submitting a clearance certificate to that effect. The case of the petitioner was not considered at this initial stage, and the orders passed by the Authorities therefore are tantamount to a refusal to exercise jurisdiction vested in them by law. It is only after the eligibility is determined that the Deputy Settlement Commissioner is to decide under Chapter IV about the amounts payable by the transferees which include the price, as well as the public dues. Paragraph 23, contained in Chapter IV of the Scheme is as follows:- "Where the entitlement of the applicant to retain the property and its rent for 1946 have been determined, the Deputy Settlement Commissioner shall proceed to determine the evaluation price of the property in the case of a claimant and the market price in the case of a non-claimant or a local." As provided in paragraph 26, the Deputy Settlement Commis sioner has then to determine the public dues recoverable from the applicants who are non-claimant displaced persons or locals, and in doing so he has to follow the procedure laid down in the instructions issued by the Chief Settlement Commissioner. It is therefore after the entitlement of the applicant is determined, and the evaluation of the property is done that the Deputy Settlement Commissioner has to determine the public dues. The duty is obviously cast on the Deputy Settlement Commissioner to find out, in accordance with the instructions prescribed by the Chief Settlement Commissioner, the amount of the public dues and there is no indication, not even a remote one, that the applicant has to do anything in this behalf. This, for all practical purposes, seems to be a reasonable thing because unless the amount of arrears of public dues is, in fact, determined, it is not possible for a person to pay off the same in complete liquidation such an amount due from them. It will therefore be preposterous to expect the non-claimant himself to produce a rent clearance certificate before his entitlement is determined and in fact such prerequisite will be in flagrant disregard of the provisions of the Scheme.

8. After this, under Chapter V an intimation of transfer and notice of demand is given to the person concerned under Chapter XXIX and to a non-claimant displaced person this has to be in the form as specified in Appendix IX, and paragraph 2 of the form is significant and according to this public dues which include the arrears of rent also are payable along with the first instalment. The first instalment, however, is not paid immediately on the service of the notice of transfer in Appendix 1X, because under clause (1) of para. 29 of the Scheme, the applicant is required to comply with the directions contained in paras. 3 and 4 of the said Appendix within 15 days. It only after the expiry of 15 days that under sub-para. (3) of para. 29 of the Scheme the Deputy Settlement Commissioner fixes the instalments and hands over to the transferee an instalment order in form Appendix XI and a Provisional Transfer Order in form specified in Appendix XII. This procedure is in strict conformity with the provisions of paragraph 22 of the Schedule referred to above which says that any amount payable by a non-claimant displaced person in respect of any property transferred to him shall be paid by him within one year in equal monthly instalments but the public dues shall be paid immediately. The contents of this paragraph do not leave a shadow of doubt that the arrears of rent by the non-claimants have to be paid only after the notice of transfer is sent to them in the form specified in Appendix IX and the first instal ment under sub-paragraph (4) of paragraph 29 is payable within one month of the date of the issue of the instalment order in the form Appendix XI.

9. The mode of payment is given in Chapter VI and under paragraph 32 of the Scheme, public dues can be paid by a non -claimant through adjustments in Compensation Books of associating claimants or in cash in 12 equal monthly instalments. To the extent that the public dues under this paragraph can also be liquidated by 12 equal monthly instalments, in my opinion, is ultra vies of the provisions of paragraph 22 of the Schedule to the Act which says that the public dues by non-claimants shall be paid immediately. The rest of the paragraph 32 which enables the non-claimant to pay the public dues through adjustments in Compensation Books of associating claimants, however, is perfectly legal and not open to any exception. If the non- claimants have in fact to clear the arrears of rent before their entitlement is to be determined, the provisions of paragraph 32 are bound to become-redundant for the reason that association with the claimants is possible only after the property is transferred, as is clear from the Press note issued by the Chief Settlement Commissioner with the approval of the Central Government on the 13th of February 1960. According to paragraph 1 of the Press note, a claimant, non-claimant displaced person or local, to whom any property has been transferred or who is found entitled to the transfer may associate any claimant for payment of the transfer price. Under paragraph 2 the associating claimant may clear the public dues on behalf of the transferee by adjusting from his Compensation Book under Schedule VI. This would clearly imply that there can be no legal obligation on the part of the non-claimants to clear off the arrears of rent in anticipation of the ascertainment of their entitlement, because in that case they cannot associate which any claimant and avail of the provisions of paragraph. 32 of the Scheme, read with the Press note referred to above. If, however, the non-claimant fails to pay the arrears of rent with the first instalment within one month of the issue of the instalment order under clause (4) or paragraph 29 of the Scheme, he can render himself liable to ejectment under paragraph 35 of the Scheme and also in my opinion under section 29 of the Act for having failed to pay the public dues. The amount, moreover, can be recovered from him under section 14 of the Act, as arrears of land revenue.

10. Having examined provisions of the Act, the Schedule anti the Scheme, I have no doubt that a condition such as the clearance of rent, cannot be imposed on the non-claimant before he can be considered eligible for the transfer, of a house in his possession. The Settlement Authorities have been enforcing this condition in pursuance of Memo. No. SAW-P & R-60/192, dated the 28th of January 1960, which is printed on page 111 of the Manual of Settlement and Paragraph 1 of the same reads as follows:- "Under the existing policy, non-claimant displaced persons and locals who have submitted applications on Forms NCH, NCS, KNCH and LH, are required to declare that they have paid the rent and other public dues in respect of the house/ shop from the date of occupation up to 30th September 1959, in order to render themselves eligible for the transfer of such house/shop. For this purpose, they have to produce a Clearance Certificate before the Deputy Settlement Commis sioner concerned."

11. To the same effect there is another Memo. No. SAW-P & R-33-60/6660, dated the 6th of October 1960, of the Chief Settlement Commissioner. These memoranda represent policy of the Department. They are not issued under any provision of law. There is no law warranting the issuance of any such direction and, in fact, they are in flargrant violation of the provisions of the Act, the Schedule and Scheme No.

1. The directions are ultra vires and have been issued without any lawful authority. They are not binding on the Settlement Authorities and any action taken in pursuance thereof is equally devoid of legal consequences. The Settlement Authorities, therefore, cannot act upon them and thereby refuse to determine the eligibility of non-claimants on account of the non-payment of the arrears of rent. The Settlement Authorities are under a statutory obligation to determine not only the eligibility, but if the non-claimants are found eligible for transfer, to issue Appendices IX and XI to them and thereafter to issue the provi sion I transfer order for the said property. The arrears of rent being public dues, have to be paid by them with the first instalment after 30 days of the issuance of the instalment order under sub- clause (4) of paragraph 29 of the Settlement Scheme No. 1.

12. The orders of the Settlement Commissioner and the Additional Settlement Commissioner whereby they refused to entertain the appeal and revision of the petitioner respectively are without lawful authority and of no legal effect. The orders are, therefore, quashed and a direction ii given to the Additional Settlement Commissioner to hear and dispose of the appeal of the petitioner in accordance with law. K. B. A./A. H. Petition accepted.