P L D 1957 Supreme Court (Pak (PLP)

MUHAMMAD SHARIF, J.‑

This judgment shall decide Civil Appeal No. 4 of 1957 and Writ Petition No. 6 of 1956. These have arisen in the following circumstances:‑-- Long ago, about the year 1866, some of the Hindu citizens of Karachi formed an Association for the protection and preservation of cattle and, on 25th of April 1938, under a licence granted by the Central Government, it was registered under the Companies Act as the Karachi Panjrapore Association in conformity with section 26 of the Indian Companies Act, which refers to an association for "promoting religion, charity or any other useful object" and which prohibits "the payment of any dividend to its members". It continued to work, but on Partition the Hindus migrated in large numbers from Karachi. In 1949, an application was made for a declaration of the property belonging to the Karachi Panjrapore Association as "evacuee property" This was done on 28th of January 1950, by the Additional Custodian (Judicial) Evacuee Property (Mr. S. A. M. Jafry), Sind and Federal Capital, Karachi. The Karachi Panjrapore Association went up in revision to the Custodian of Evacuee Property Sind and ‑Federal Capital Karachi. The then Custodian, Mr. Akbar Hussain, by his order, dated 18th of July 1950, accepted the application for revision, holding that: "The fact that the bulk of the members of the Managing Committee are now evacuees, does not affect the character of the property because they have ceased to have any right or interest in the property". The Association was, therefore, not an "evacuee" and the property belonging to it not "evacuee property". On account of amendments made in the Evacuee Caw by the Act of 1951, another application was presented in which it was alleged that the Karachi Panjrapore Associa?tion had become a defunct body and, therefore, the property owned by it should be declared an "evacuee property". The enquiries made by the Assistant Rehabilitation Commissioner in regard to the working and management of the Association revealed that the whole Association had collapsed and the management was being carried on by persons who had no authority to manage and supervise the affairs of the Associa?tion, nor was any general meeting of the Association ever held since 1947. The Karachi Panjrapore Association was given an opportunity to rebut the facts ascertained during the enquiry and the allegations made by the applicant. In this connection the statement of Seth Jethanand Biranand, President of the Association, was recorded on 21st of January 1950. It was stated that out of the members of the Managing Committee mentioned in the report of 1946, only 5 remained in Pakistan. The last annual meeting of the Association was said to leave been held on 27th of October 1947. Its minutes were recorded in the Proceedings Book, but they had not been confirmed or signed. In 1948, there was no annual general meeting. No record of the proceedings of the meeting claimed to have been held since 1947 was, however, forthcoming. In view of these facts, Mr. S. M, Wajid Ali Shah, the Deputy Custodian (Judicial), Evacuee Property, Karachi, by his order, dated the 18th of August 1953, came to the conclusion that the Karachi Panjrapore Association had become defunct and by reason of the definition of "evacuee" given in clause (d), subsection (2) of section 2 of the Pakistan (Administration of Evacuee Property) Ordinance, 1949, the Association was declared an "evacuee" and its property as "evacuee property". A revision petition to the Custodian by the Karachi Panjrapore Association was dismissed on 19th of April 1956, with the observation that the Association had fought its case before the Deputy Custodian for more than two years and had ample opportunity to produce evidence in support of its plea that it had not ceased to function wholly or partially. No such evidence was, however, produced and on the evidence on the record, the conclusion was unescapable that the undertaking of this Association had at least partially ceased to function and the Corporation must, therefore, be held to be an "evacuee". On 22nd of May 1956, a petition under Article 170 of the Constitution of Pakistan for the issue of a writ was filed in the High Court of West Pakistan, Karachi Bench. This is Writ Petition No. 160 of 1956. It was prayed that the order of the Custodian be quashed and the Association be declared as "non‑evacuee" and its properties restored. The religious and charitable character of the Association was emphasized and reference was made particularly to the Memorandum of Association and the Articles of the Asso?ciation in which the objects for which the Association was established were clearly specified. The above petition was dismissed by order dated 12th of November 1956. It was held that the finding of the learned Custodian that the business or the undertaking of the petitioner had ceased at least partially was one of fact which was based on some statements of the members of the petitioner‑Association. It was further held that there was no doubt that the authority of the persons who were managing the Association at the present time had not been approved of by the Custodian. A petition for special leave to appeal against the order of the High Court of West Pakistan, Karachi Bench, dis?missing Writ Petition No. 160 of 1956 was presented by the Karachi Panjrapore Association. Another petition for the issue of a writ was also made to this Court by Madhavji Dharasibai and others (for themselves and on behalf of the members on the Hindu community who had made endowments and paid contributions for the objects of the Karachi Panjrapore Association) under Article 22 of the Constitution of Pakistan. It was alleged that the fundamental rights guaranteed by Article 15 with respect to the protection of the property rights and Article 18 with respect to their right to establish, maintain and manage their religious institutions had been violated by the order of the Custodian. This is Writ Petition No. 6 of 1956. The application for special leave to appeal against the order of the High Court, Karachi Bench, was granted on 17th of December 1956, and is now Civil Appeal No. 4 of 1957 and in the petition for writ, a notice was issued to the opposite‑party. The first contention urged by the learned counsel for the appellants was that the Karachi Panjrapore Association was not an "evacuee" and its business had not ceased to be carried on wholly or partially. A reference was made to the Memorandum of the Association as also to the Articles of the Association. Article 18 of the Articles of Association recites that the affairs of the Association shall be managed by a committee of 28 members out of whom 22 are to be elected annually at the ordinary general meeting, 2 to be nominated by Government every year, 2 to be nominated by the Indian Merchants Association, Karachi, and 2 member to be nominated by the Buyers and Shippers Chambers every year. The annual general meeting shall be held every year as far as possible in the month of March on a date fixed by the committee (Article 9). The quorum of the Managing Committee was fixed at 7 (Article 20). It has been found by the Custodian and is also clear from the statement of Seth Jethanand Hiranand, the President of the appellant‑Association, that no annual general meeting was held after 1946. An attempt was made by Seth Jethanand Hiranand to wriggle out of the admission made by him in his statement of 21st of January 1950, by disputing its correctness for the first time in his affidavit filed at the time of the presentation of the writ petition to the High Court, Karachi Bench, on 22nd of May, 1956, i.e., after more than six years. In this affidavit, it was asserted that the 17 members of the Managing Committee did not migrate at one time but on different occasions and whenever a vacancy occurred it was filled up and at no time was the number of the members of the Managing Committee less than seven. This modification of his original statement cannot be accepted without some positive evidence to the effect that the vacancies occurred at different times and that there was always a quorum of seven members of the ' Managing Committee as required by Article

20. No record was available. At one time, during the course of the arguments, it was vehemently suggested that the minute book had been taken away by one Dr. Swallhay to whom the Dairy Farm, after the order of the 28th January 1950, had been allotted by the Rehabilitation Department. This suggestion does not receive support from any material on the record. On the other hand, from the order of Mr. Akbar Hussain, Custodian, dated the 18th of July 1950, it appears that Seth Jethanand Hiranand, the President of the Associa?tion, had "produced the minutes". It was up to Seth Jethanand to explain what happened to the minute book which was admittedly in his possession at the time when the case was heard by the Custodian on 18th of July 1950. Further, a detailed inventory of the property belonging to the Karachi Panjrapore Association was prepared under orders of 29th of March 1951, by the Official Assignee and the minute book does not figure as one of the articles which were found on the premises. Under the circumstances, it is not too much to say that the statement of Seth Jethanand made on 21st of January 1950, is the correct one and an attempt to change it in his affidavit of 22nd of May 1956 is no more than dictated by considerations for the success of his case. The status of the appellant‑Association is to be deter?mined with reference to the definition of "evacuee" contained in the Pakistan (Administration of Evacuee Property) Ordinance, 1949, as amended by Acts VI and XXXI of 1951. The relevant portion of the definition is as follows:‑ "2(2) `evacuee' means any person‑ (d) whose business or undertaking in Pakistan, in the case of a Corporation, has on account of the setting up of the Dominions of Pakistan and India, or on account of civil disturbances, or the fear of such disturbances, ceased to function, wholly or partially, or is being carried on by persons (whether duly empowered in this behalf by the Corporation or its management or otherwise) whose authority to do so on or after the first day of March 1947, has not been accepted or approved by the Custodian:" This clause was inserted by Act VI of 1951 and it was clearly stated therein that the amendment made in this section shall be deemed always to have been made and shall have effect accordingly. In other words, the amendment was unequivocally given a retrospective effect from the first day of March 1947. It has been mentioned above that no general annual meeting was held after 1946 and that the number of the members of the Managing Committee had fallen below the minimum. The work of the Association was not and could not therefore be carried on in accordance with the Articles of the Association. Much capital was sought to be made of Article 31, which permitted the Managing Committee to fill a casual vacancy occurring upon death, resignation or non‑attendance or absence from Karachi of one of its members, from out of the members of the Association, and of Article 33, which authorized the Managing Committee to remain in office till its successor was appointed. Both these provisions did not dispense with the holding of the general meeting of the Association every year and the term of office of the members of the Managing Committee, (whether co‑opted under Article 31 or elected at the general meeting), could only extend up to the next general meeting. As a matte of fact, under section 76 of the Companies Act, a company is under a statutory obligation to convene a general meeting once at least in every calendar year and not more than 15 months after the holding of the last preceding general meeting, and Associations, like the appellant‑Association registered under section 26 of the Companies Act, are also subject to the same obligation under subsection (3) of section

26. This could not be done for a number of years and the Association has, therefore, ceased to function, wholly or partially, as mentioned in clause (d) of sub?section (2) of section 2 of the Pakistan (Administration of B Evacuee Property) Ordinance, 1949. At this point, it might conveniently be mentioned that toe alleged, functioning of the Association, after it ceased to function in accordance with the Companies Act, and its Articles of Association, was clearly under the control of persons, who could not derive their authority from the aforesaid instruments, and whose authority therefore required the approval of the Custodian, if the Association were not to fall within the definition of "evacuee" cited above. It is quite clear that the approval of the Custodian was neither sought nor recorded at any time. But the conclusion that the Karachi Panjrapore Asso?ciation is an "evacuee" does not dispose of the case entirely. From the very moment that proceedings were started against the appellant‑Association to declare it "evacuee" and the property held by it as "evacuee property", it has been consistently maintained by the appellant‑Association that it was registered for the purpose of promoting "religion, charity or any other useful object" and the objects of the Association have been to provide for the protection and preservation of the cattle and other animals and to arrange for their feeding etc., as described in the Memorandum of Association, but the effect of these objects and activities the Association has not at all been taken into consideration by the Custodian. Section 6 of Ordinance XV of 1949 casts???????? some duty upon the Custodian in this behalf. Section 6 is as follows:? "(1) All evacuee property shall vest and shall be deemed always to have vested in the Custodian with effect from the first day of March 1947. (2) Where any evacuee property is property held in trust for religious or charitable purposes, the property shall remain vested in the Custodian only till such time as fresh trustees are appointed in the manner provided by law, and pending the appointment of fresh trustees the trust property and the income thereof shall be applied by the Custodian for fulfilling, as far as possible, the purposes of the trust," The protection of the animals, especially the cows, is considered a sacred duty by the Hindus and it is the case of the appellant‑Association that the income from the properties in its possession has been always utilized in fulfilling the objects for which the Association was founded. It is further asserted that some items of property were entrusted to it for a particular purpose connected with the charitable objects of the Association and it is claimed that there is a large number of documents to support this assertion. No step was ever taken to find out that property was held in trust; for religious or charitable purposes; for according to subsection (2) of section 6, the custody of the Custodian over such property is only a temporary one and o the income has to be applied for carrying on the purposes of the trust. It appears that this aspect of the case was not pressed before the High Court, Karachi Bench, nor is there anything to show that at any stage did the Custodian ever apply his mind to it, though in view of the allegations of the appellants such a determination was necessary. The appellants should have been called upon to produce evidence as to the nature of the properties held by them and the manner in which the income derived there from was spent. The justice of the case requires that such an investigation be made and the future action of the Custodian should be regulated by the result. On coming to know of our decision in the appeal, the learned counsel for the petitioners in Writ Petition No. 6 of 1956 asked for permission to withdraw the writ petition and this was allowed. The writ petition is, consequently, dismissed. Civil Appeal No. 4 of 1957 is accepted and we direct the High Court of West Pakistan, Karachi Bench, to issue a writ of mandamus to the Custodian to take such action as is provided by section 6 (2) aforesaid in respect of any property or properties of the Association which he may find, after enquiry, to be "property held in trust for religious or charitable purposes". The parties are left to bear their own costs. The order of appointment of the Custodian as Receiver is hereby discharged, but he shall keep a separate account of the income of the properties belonging to the appellant‑Association and till the completion of his enquiry, shall not make any allot?ment of any portion thereof. A. H.??????????????????????????????????????????????????????????????????????????????????????????????????? Appeal accepted.