1988 PLP 972 (SCMR)

MUHAMMAD AFZAL ZULLAH, J.‑‑Leave to appeal has been sought from Judgment, dated 7‑12‑1987 of the Peshawar High Court; whereby, in a case arising out of acquisition of land for respondent's company, the Constitutional Petition filed by the petitioners was dismissed.

2. The case narrated and the contentions raised from the petitioners side before the High Court, are as follows:‑‑ "The facts of this writ petition are that Government of N.‑W.F.P. respondent No.3 had acquired agricultural land belonging to Abdul Hamid Khan father of the petitioners for the purpose of construction of Swat Textile Mills respondent No.1 in the year 1953. The total area of land acquired was 762 kanals 15 marlas. The respondent No.1 constructed mills on a small portion of the land and an area of more than 500 kanals lay vacant. The Swat Textile Mills was running in loss and it was ordered to be liquidated. During liquidation proceedings a scheme was worked out to sell the aforesaid excess land which measured 533 kanals and 10 marlas in small residential plots and with the income so received it was proposed to discharge the loans of the banks through the Pakistan Banking Council respondent No.4 and in this respect an agreement was executed with M/s. Seven Brothers respondent No.5. The contention of the petitioners is that the respondent No.1 was never in need of the whole area of land acquired from their predecessor and that in so far as the excess land was concerned it was never acquired for any public purpose and that in the event of sale of this excess area they were entitled to purchase the same as being successors of the original owners from whom it was acquired. The petitioners have by this writ petition challenged the order, dated 19‑1‑1985 of respondent No.2 whereby permission was granted for the sale of the aforesaid excess area by open auction. They have also challenged the order, dated 2‑3‑1985 of the respondent No.2 whereby the respondent No.4 was given permission to sell the said land' through negotiation or any other method. Two other similar writ petitions No.74 of 1976 "Abdur Rehman v. Swat Textile Mills" and No.46 of 1987 "Nasim Ahmad Khan v. Swat Textile Mills" have also been instituted in this Court. Since, the respondents in and the subject‑matter of these three writ petitions is the same, all the three have been heard together and judgment in the present writ petition No.286 of 1986 will dispose of all the three writ petitions. In so far as the facts are concerned the same have been admitted by all the parties in all the three writ petitions. The learned counsel for the petitioners has challenged the impugned action on the following grounds:‑‑ (a) The entire area of land originally acquired through Notification dated 15‑5‑1954 was not for a public purpose; ( b) the petitioners were entitled under the law and in view of the terms of the agreement executed by Government with the respondent No.1 under section 41 of the Land Acquisition Act to claim restoration of excess area; and (c) the orders, dated 24‑1‑1985 and 2‑3‑1985 of respondent No.2 are illegal and void."

3. The first contention was repelled on the finding that "the entire area of land was acquired for a public purpose and there was no mala fide in that action at the time of acquisition".

4. The second contention was based, inter‑alia, on Section 43‑A of the Land Acquisition Act and related provisions thereof, paragraphs 66 and 69‑A of the Revenue Circular No.54 of 1912 together with related provisions and paragraph‑4 of the Agreement duly signed by the Company at the time of acquisition. The High Court held that Para 4 of the Agreement had not been contravened by sale of the excess land to private individuals or through them. It was so held notwithstanding the fact that the huge profits and benefits were to be derived by the third parties without an iota or restoration to the original owners. Regarding paras 66 and 69, it was held that they were of no avail to the petitioner; nor the provisions of the Land Acquisition Act or any other law prevent the Government and or the company to act in the manner they did. Accordingly the Writ Petition was dismissed.

5. All the arguments advanced before the High Court together with supporting contentions have been reiterated before this Court. The learned counsel for the petitioners also repeated the assertion in the memo of petition for leave to appeal, that the petitioners were willing to purchase the land at the same rate which is being charged from the outsiders. Not only this, he agreed that if instead of the benefit going to private individuals and outsiders, the Government decides to acquire the land for public purpose of developing a housing colony as is being done by the "Seven Brothers" respondent No.5, the petitioners would have no objection and would participate in such a project. The question of adjustment of the so‑called rights of individual allottees of plots through respondent No. 5 could also be, in that case, adequately dealt with.

6. The learned counsel for the Company (respondent No.1) and the M/s. Seven Brothers (respondent No.5) have been heard at length. They have reiterated the reasoning in the impugned High Court judgment and have also added that the alienation of the excess land for private purposes is neither illegal nor improper notwithstanding the fact that it was originally acquired for the company for public purpose. They also relied on the Supreme Court Order dated 15‑6‑1987 passed in Swat Textile Mills v. Punjab Cotton Limited (C.A. 7‑P of 1976);. whereby the agreement between the parties in liquidation proceedings, was made order of the Court.

7. Prima facie the reading together of Section 43‑A with Rule 69‑A and paragraph‑4 of the Agreement shows that the Government could not have granted permission for sale of the excess land to outsiders for private benefits and commercial profits ignoring the rights of the original owners altogether. It is also very doubtful whether the sale could be without regard to the public purpose. In other words prima facie the public purpose would have been served by resale to the original owners. The stipulation in the agreement, to which the Government was a party, is clear that the land in question had to be resumed by the Government and was to be returned to the original owners. It also further seems that, although Rule S6 does not specifically mention the land acquired for the company, but Rule 69‑A read with section 43‑A assumes that Rule 66 also applies to the land acquired for the companies. If it is not, the question would then arise whether such a rule was not hit as ultra vires the provisions and purposes of the Land Acquisition Act; wherein the entire emphasis is on public purpose; which prima facie it appears, as already noted, has been ignored while taking the action impugned before the High Court. Although the contravention of the relevant fundamental rights has not been considered by the High Court, in 6 the circumstances of the case, that might also require examination. The proceedings and orders by this Court in the matter of liquidation of respondent‑company, prima facie do not create any bar‑‑the petitioners, original owners of the land, were neither parties to the agreement produced before the Supreme Court nor they were parties to the liquidation proceedings. Moreover, those proceedings, it seems, do not prejudice the rights of the petitioners nor, it seems, they would create any bar for the Government in developing the land in question into a housing colony and adjusting the sale proceeds in accordance with the orders of the Supreme Court, which have been relied upon by the learned counsel for the respondents.

8. All these and other questions raised and involved in this case are of great public importance. We, accordingly, grant leave to appeal. Security Rs.10,000!‑. Further allegations and transfers in whatsoever manner are stayed. The further development of the site as a housing colony through respondent No.5 or otherwise as also the construction of all types upon the excess land is stayed subject to notice for 3rd of April, 1988, to respondents Nos.2 and 3, who would take separate and independent steps in this behalf. The learned counsel appearing on their behalf on that date shall seek instructions on the aforenoted Suggestion with regard to the Government itself taking over and developing the entire excess land as a housing colony and would make a statement before the Court on the said date in this behalf. M .I . /A‑196/S Leave granted.