P L D 1969 Supreme Court 167 (PLP)

(i) that the auction should be set aside after declaring the same to be illegal and as having been held by the back door; and (ii) that the order of the 21st of July 1960, be set aside as having been passed behind his back and without offering him any opportunity of hearing. Along with this application he also filed a copy of his allotment order, being No. 547, dated the 18th May 1959, and a copy of the order of the Deputy Settlement Commissioner, Sukkur, dated 2u‑3‑58, sanctioning the charge for Rs. 9,966 on account of repairs. This petition was filed long after the expiry of the time prescribed for the filing of an appeal but no petition was filed for the condonation of the delay. Nevertheless, the Additional Settlement Commissioner treated it as an appeal and dealt with it on merits without noticing or saying anything about the delay. The appellants' resisted this appeal and produced a photostat copy of a letter written by the respondent No. 3 on 1‑9‑58 to the Income‑tax Officer saying that he was in the T. B. Sanatorium at Quetta for treatment from May 1957 to January 1958, and that in May 1958, he had actually sold his business for Rs. 7,450 to one, Abdur Rashid. They also filed a copy of a complaint lodged by the Inspector of weights and measures against the said Abdur Rashid to show that he was carrying on business in this shop even in November 1958 and urged that the respondent No. 3 having abandoned the shop for good had no locus stands to apply for its transfer and hence his 'P' Form did not merit consideration. The learned Additional Settlement Commissioner, however, took the view that the auction in favour of the appellants had been manipulated, in so far as on the 21st of July 1960, the property, of which the reserved price was Rs. 26,840, had actually been sold to one Muhammad Ishtiaq for Rs. 40,000, and the record of the auction held in favour of Muhammad Ishtiaq destroyed. He was also of the opinion that the order of the 21st of July 1960, had been passed without giving due hearing to the respondent No. 3 and without considering that he had already been given a charge for a large sum of money on this property. The failure on the part of the Deputy Settlement Commissioner to consider this last question was also held to be in contravention of the instructions of the Chief Settlement Commissioner contained in his Memorandum No. 2240‑PL‑Reh.‑60, dated 3‑2‑60 (vide p. 422 of new Settlement Manual). The auction was accordingly set aside and relying on the above mentioned instructions the property in dispute was transferred to respondent No. 3 at the prevailing market value minus the amount of the charge. The appellants went up in revision from this order to the Settlement and Rehabilitation Commissioner, Khairpur. In this they claimed that their auction was, in no way, surreptitious, for, it had since been duly confirmed and after the payment of the entire price in March 1961 a P.T.O. and finally a P. T. D. had been issued in their favour on the 18th December 1962. It was more than a year after this that they received the notice of the. hearing of the appeal before the Additional Settlement Commissioner on 30‑4‑1963. They were heard and they came away with the impression that the learned Additional Settlement Commissioner was of the view that the shop could not be transferred to the respondent No. 3 who was a local. Subsequently when they obtained a copy of the order they found to their surprise that the appeal had actually been allowed, even though it had been filed about 2J years after the order rejecting the `P' Form. This revision was heard by the learned District Judge of Sukkur as an Ex officio Settlement Commissioner and he also agreed with the Additional Settlement Commissioner that the respondent No. 3 was entitled to the transfer of the premises according to Settlement Scheme No. VI read with the Chief Settlement Commissioner's Memorandum No. 2240‑PL‑Reh.‑60, dated 3‑2‑60 (vide page 422 of the new Settlement Manual), and that the order of the Deputy Settlement Commissioner, dated the 21st of July 1960, had been passed without hearing the respondent. In this view, the latter order was also illegal on the fact of it, because, the Deputy Settlement Commissioner had no power to review his own order without first obtaining the sanction of the Additional Settlement Commissioner of his area, but no such sanction was obtained. His earlier order of 10‑1‑60 directing the issuance of the P. T. O. therefore, still stood good. He also held that the shop was still in the possession of the respondent No. 3 but again nothing was said about the delay in the filing of the appeal, apart from an observation in the concluding paragraph of the order to the effect that "there is no irregularity about the proceedings." The revision was, accordingly, dismissed. The appellants then invoked the jurisdiction of the High Court under Article 98 of the Constitution, but the petition, as already stated, was summarily dismissed. Leave was granted in this case, because, it was felt that the finding of the Additional Settlement Commissioner regarding the auction in favour of the appellants being vitiated by fraud was based on wholly speculative grounds and the learned District Judge acting as Settlement Commissioner had not even touched this question of fraud in his order. The question as to whether the appeal of the respondent No. 3 before the learned Additional Settlement Commissioner was barred by limitation, had also not been considered by any of the Courts below. The entitlement of the respondent No. 3 to the transfer of the shop also needed examination in view of the fact that he was a local and at the relevant time a local was not entitled to the transference of a shop. There is no doubt that the petition filed by the respondent No. 3, which was treated as an appeal by the learned Additional Settlement Commissioner, was clearly out of time and neither was any application filed for the condonation of the delay nor was any order passed by the Additional Settlement Commissioner condoning the delay. The learned District Judge and Ex officio Settlement Commissioner too disposed of the revision on an entirely different ground. By subsection (2) of section 19 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, it has been expressly provided that "the appeal shall be presented within 15 days of the date of the order appealed against and shall be in such form and manner as may be prescribed." Then sub section (3) of section 19 makes applicable the provisions of sections 5 and 12 of the Limitation Act, 1908, for computing the aforesaid period of 15 days. Section 5 of the Limitation Act provides for the extension of the prescribed period of limitation in cases where the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within the prescribed period. The learned counsel appearing for the respondent No. 3 has, however, urged that since section 3 of the Limitation Act has not been made expressly applicable to proceedings under the Displaced Persons (Compensation and Rehabilitation) Act, 1958, the plea of limitation cannot be raised now, as the appellants never raised this plea before any of the Settlement Authorities. In any event it is said, since the Additional Settlement Commissioner had entertained the appeal and decided it on merits it must be taken that he had also condoned the delay, particularly, since the respondent No. 3 had stated in his application that he had only come to know of the order of the 2lst of July 1960, on the 16th September 1962. We are unable to agree with this contention, for section 29(2) of the Limitation Act itself provides that "where any special oil local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed therefore by the First Schedule, the provisions of section 3 shall apply, as if such period were prescribed therefore in that Schedule." The Displaced Persons (Compensation and Rehabilitation) Act, 1958, is undoubtedly a special law. It is clear, therefore, that whether the plea of limitation was raised or not, it was the duty of the Settlement Court, to notice the point of limitation. A waiver of the question of limitation is not permissible, even where the period of limitation is prescribed by a special or a local law. It has also been held by the Court in several cases that mere disposal of tae appeal on merits is not sufficient to lead to the inference that the delay must have been condoned. There must be something in the order or judgment itself to show that the Court concerned was conscious of the fact that the proceeding was out of time and had applied its mind to the question of limitation before dealing with the proceeding on merits, vide Ata Ullah Malik v. The Custodian of Evacuee Property and others (P L D 1964 S C 236); Syed Azmat Ali v. Chief Settlement and Rehabilitation Commissioner etc. (P L D 1964 S C 260) and Mohd. Farooq Imam v. Claims Com missioner etc. (P L D 1964 S C 585). In the present case, it has to be pointed out that the respondent No. 3 had not even filed any application for con donation of delay. Therefore, " is difficult to appreciate how the delay could be taken to have been impliedly condone. In the facts and circumstances of this case we arc: not in a position to say that the Settlement Authorities were even aware of the fact that any question of limitation arose. There could be no question, therefore, of their applying their mine to this aspect of the case far less of finding sufficient cause for the condonation. As regards the finding of the learned Additional Settlement Commissioner that the auction in favour of the appellants had been vitiated by fraud, it appears to us that this finding has been arrived at only on the basis of the entries in the CSC IV Register. The copy of the register filed does not show that any auction was held in favour of any person, called Muhammad Ishtiaq the earlier auction according to the entries therein, was in favour of one, Muhammad Irtiza, through his Attorney Mumtaz. In this auction the highest bid was only Rs, 10.000. This was not accepted as it was far below the reserve price. The next auction is in favour of the appellants and this is for the sum of Rs. 14,000 only. The copy does not, of course, shoe, that the figure "14,000" has been written over Rs. 40,000, But this register does show that the `LH' form filed by Habibullah, the respondent No 3, was rejected and then another `P' Form No. 245 was filed by one, Habib Ahmed. This too was rejected on 21‑7‑

60. As against this the appellants had filed before the Deputy Settlement Commissioner a copy of an application wherein respondent No. 3 had prayed in November 1960, for the payment of Rs. 9,966‑2‑0, the amount of the charge declared in his favour, on the ground that "the shop and the upper‑storey were auctioned by the Settlement Organization as the applicant was a local and not entitled to the transfer of the same." To which auction did this refer? This piece of evidence has not been taken into account, even though it appeared to have a material bearing on the question of fraud. The order of the Deputy Settlement Commissioner, dated the 21st July 1969, again recites that Notice No. DSC/ W/739; dated 9‑2‑60 was issued to respondent No. 3 for the production of documentary evidence in support of his claim. Does this not support the contention of the appellants that the respondent No. 3 was aware of the auction m favour of the appellants and of the rejection of his `P' Form on 21‑7‑60 at least in November 1961 ? It is also difficult to appreciate how the learned Additional Settlement Commissioner came to the conclusion that even his 'LH' form had not been disposed of by the Deputy Settlement Commissioner. The 'P' Form filed on the 30th of November 1959, could not have been filed unless the respondent No. 3 knew that his `LH' form had been rejected. The learned ex officio Settlement Commissioner has pro ceeded on the ground that the Deputy Settlement Commissioner had no jurisdiction to review his order of 10‑1‑60 but he has failed to notice that this order was made "subject to confirmation on verification of area and nature of construction." In pursuance of this order the Assistant Settlement Commissioner. On 17‑7‑60, ordered the case to be put up for spot inspection on 19‑7‑60 and on 19‑7‑60 he recorded that this shop had already been auctioned. The provisional transfer orders were again no doubt, drawn up along with the Appendices IX and XI, but that by itself does not establish that these were actually issued to the respondent No.

3. The learned counsel for the appellants also points out that these purport to be in favour of Habib son of Mir Ahmad and not in favour of respondent No. 3, although the latter is also described as the son of Mir Ahmad This may have been a mere misdescription but these facts clearly indicate that the case had not received the careful consideration that it should have done by the learned Additional Settlement Commissioner. It behaved the Additional Settlement Commissioner to have scrutinized all the available evidence with care before recording a finding of fraud and holding an auction held by the department to be surreptitious, The bid sheet of this auction in the Settlement record shows that there were as many as seven bidders who participated in this auction, including Abdur Rashid, and the highest bid was that of the appellants. The burden of proving fraud, it must be remembered, is on the party alleging it and that too by clear and convincing evidence, particularly, where" a long period has expired and valuable rights have accrued to the other side. It was, as pointed out earlier in this judgment also the duty of the Additional Settlement Commissioner to apply his mind to the question of limitation and to examine the facts relating to the claim of respondent No. 3, since valuable rights to property were involved. The Settlement Authorities had, we regret to say, not dealt with the case according to law and in the High Court too this aspect of the case was not noticed. We are, therefore, of opinion that this appeal must be allowed and the judgments of the High Court as also of the Settlement Commissioner and the Additional Settlement Commis sioner set aside. The case will now be remanded to the Additional Settlement Commissioner for the disposal of the appeal in accordance with law after giving the parties adequate opportunity of representing their respective cases and adducing evidence both on the question of limitation as well as the question of fraud. In view, however, of the fact that the appellants did not specifi cally raise the plea of limitation in the Court of the learned Additional Settlement Commissioner, we leave the parties to bear their own costs. K. B. A. Appeal accepted.