P L D 1961 Supreme Court 436 (PLP)

S. A. Nusrat Advocate Supreme Court instructed by Shafiq Ahmad Attorney for Respondents Nos. 1 and 3. Respondent No. 2 : Ex parte. Mahmud Ali Senior Advocate Supreme Court (Miss R: S. Qari Advocate Supreme Court, with him) instructed by Zahir Abbas Attorney for Petitioner. Saeed A. Shaikh, Advocate Supreme Court instructed by Shafiq Ahmed, Attorney for Respondent No. 1. Respondents Nos. 2 and 3 : Ex parte. Date of hearing : 1st June, 1961. S. A. RAHMAN, J. This is an appeal by special leave, directed against the order, passed by the Custodian of Evacuee Property, Karachi, in review jurisdiction. A writ petition was also moved in this Court for obtaining the same relief and this order will dispose of the appeal and the writ petition together. These proceedings have their genesis in the following circumstances. The appellant‑petitioner, was one Muhammad Moin Khan, who is dead and is now represented by his widow and children. The respondents are the Chief Settlement Commissioner, Lahore, the Central Government through the Secretary, Ministry of Rehabilitation and Settlement, Karachi, and the Rehabilitation Commissioner, South Zone, Karachi. The deceased Mohammad Moin Khan obtained a ten years' lease of Carlton Hotel Karachi by a registered deed, dated the 9th July 1947, from its owner, Mst. Rukibai. The rent stipulated in the deed was Rs. 1,000 p.m. for the building and Rs. 4,000 per mensem for crockery, cutlery, furniture and fittings, bar licence and other licences for running the Hotel. Mst. Rukibai migrated to India in 1949 and thus became an evacuee. Muhammad Moin Khan made an application to the Rent Controller, Karachi, in that year, claiming that the rent agreed to be paid was extortionate and prayed for fair rent to be fixed. The Rent Controller, by order, dated the 8th October 1949, determined the fair rent to be Rs. 800 p.m. plus 6 % increase up to the 31st March 1949, and a further increase of 32 from the 1st Aril 1949. In this way, the rent payable was fixed at Rs. 850 p.m. up to the 31st March 1949 and at Rs. 880 p.m. thereafter. The lessee had paid Rs. 40,000 by way of security deposit to Mst. Rukibai at the time of the execution of the lease. On the 15th October 1949, Ordinance XV of 1949, was promulgated which necessitated an application on the part of Muhammad Moin Khan to the Custodian for confirmation of his lease‑deed under section 16 thereof. Muhammad Moin Khan's prayer was that instead of the stipulated rent of Rs. 5,000 p. m. the transaction should be confirmed with a variation of the rate of rent so as to conform to the order passed by the Rent Controller. The case was dealt with by Mr. S. M. Jafri, Additional Custodian (Judicial). He confirmed the lease but declined to alter the rate of rent as mentioned in the lease deed. From this order, an appeal was taken to the Custodian. No appeal, however, lay against the order of the Additional Custodian and the learned Custodian, therefore, treated it as a revision petition. Mr. Akbar Hussain, the then Custodian, by order, dated the 16th February 1950, held that the Custodian was not bound by the order of the Rent Con troller, which appeared to him on the face of it to be wrong. He remarked that the Carlton Hotel was apparently a flourishing business and the rent fixed was "ridiculously low." He how ever, modified the order of the Additional Custodian, so as to reduce the rent from Rs. 5,000 p. m. to Rs 1,200 p. m. As a condition precedent to obtaining confirmation of the lease deed, the lessee had to produce a certificate of "No abjection" from the prescribed Income‑tax authority. The Income‑tax Department demanded Rs. 8,970 to be paid on account of income‑tax due in respect of the Carlton Hotel for 1950‑51. This property had been assessed to income‑tax in the hands of the husband of Mst. Rukibai presumably as part of his own income. The lessee paid the amount and the Custodian, when moved in this Behalf, by order, dated the March 1950, created a charge in favour of the lessee on the property in question to that extent. By another application, the lessee successfully obtained a further charge of Rs. 40.000 on the property by order of the Custodian, dated the 7th December 1950. This was on account of the sum placed in deposit by the lessee with the lessor who had become an evacuee. By the same order, a sum of Rs. 89,933 was declared to be an additional charge on the property. This amount represented the excess rent said to have been paid by the lessee prior to the reduction of the rent ordered by the Custodian. It appears that the lessee also got sanctioned a sum of Rs. 3.744 for repairs to the Hotel by Mr. Abdullah Khan, Additional Custodian (Administrative) on the 7th of September 1952, and a sum of Rs. 9,000 for the same purpose by K. B. Abdul Majid Khan. Deputy Custodian, on the 20th December 1952. Mst. Rukibai, the lessor, coming to know of these develop ments submitted an application for review to the Custodian and contested the reduction of the rent from Rs. 5,000 p. m. to Rs. 1,200 p. m. Mr. Mansoor Alam, who had by then replaced Mr. Akbar Hussain, by order dated the 29th December 1955, dismissed this petition as time‑barred though he added that on the merits too Mst. Rukibai had no case. All these orders were reviewed suo motu under section 43 (6) of the Pakistan (Administration of Evacuee Property) Act (XII of 1957), by order, dated the 21st August 1957. The Custodian at that time was Mr. Muhammad Bakhsh Memon. The learned Custodian held that the order passed by Mr. Jafry an the 16th of January, 1950, contraming the lease was a final order and his predecessor had no jurisdiction to interfere with it under the provisions of section 16 of the Ordinance XV of 1949, It was further found that the charge for income‑tax declared on the property was not a valid one and that the lessee could not have obtained relief in respect of the alleged excess of rent paid prior to the order passed by, Mr. Akbar Hussain, As for the two amounts alleged to have been spent on the repairs of the premises, it was held that, in the lease deed, it was the lessee's obligation, to keep, the premises in good repair and consequently, he could not claim these sums from they' Custodian Department. As for the sum of `Rs. 40,000 the learned Custodian remarked that, on taking accounts between the lessee and the Custodian's Department; credit may, be given to the lessee for this sum, but it was surmised, that the final account might reveal that added was, a debtor to the Department. The Custodian added a direction that is the Rule so permitted, a rebate may also' be allowed to the lessee who was a refugee, in respect of the fixed rent of Rs. 5,000 p.m. In the order, granting leave to appeal the following, 'law' points were mentioned as arising for consideration this case:- "(1) Whether the order of the Additional Custodian, Mr. Jafry, dated the, 15th of January 1950, could be legally reviewed and could the Custodian change the terms and conditions of the lease as he did by his order of 16th of February 1950? (2) Whether the Custodian could review suo motu the various orders have failed above as he did in his f order of 21st of August 1957? (3) Whether the following amounts could constitute a valid charge on the property and in favour of the petitioner:‑ (a) the amount of Rs. 8,972-2‑0 paid to the Income‑tax; Department; (b) the amount of Rs., 3,744 and, Rs. 9,000 said to have been spent on repairs under the order, dated the 7th of January 1952 and 20th December 1952, respectively; (c) Rs, 89,933 alleged to, have been paid, over and above the amount actually due in accordance with the order of the Custodian; dated the 16th of‑February 1950 ; and (d) Rs. 40,000 paid in advance as security deposit." The first question that falls for determination is whether Mr. Akbar Hussain, the, then Custodian, was competent to vary the terms and conditions of the lease, in respect of rent, while hearing a revision petition: against the order passed, by Mr. Jafry on the 15th of January 1950, confirming the lease at the stipulated rent of Rs. 5,000 p. m. Under. subsection (4) of section 36 of Ordinance XV of 1949, the Custodian could pass such order in relation to this case as he thought fit, in revision. It is contended however, on behalf of, the respondent that this power was not available to him to interfere with the temps and conditions of a lease that was the subject of confirmation proceedings under, section 16 of the Ordinance. On they other-hand, the learned counsel for the appellant maintain that subsection (4) of section 16 gave ample authority to the Custodian to vary the terms and conditions of the contract of which confirmation was sought. The subsection reads as follows:‑ "Section 16 (4).‑If the application is not rejected under subsection (3), the Custodian may confirm the creation or transfer either unconditionably or subject to such terms and conditions as he thinks fit to‑ impose." On a plain reading of this provision, it appears to me the expression "subject to such terms and conditions as he thinks fit to impose" has no reference to the terms and conditions of the transaction submitted for confirmation. It contemplates some additional terms and conditions which the Custodian might deem fit to impose before according confirma tion to the transaction. The learned Custodian, Mr. Muhammad Bakhsh Memon, apparently thought that the word "impose" in this section was the key‑word and that it implied that Mr. Akbar Hussain had no jurisdiction to reduce the rent from Rs. 5,000 to Rs. 1,200 p.m. but that he could only impose additional terms and conditions to the disadvantage of the lessee. He expressed the opinion that terms and conditions which could confer my advantage on the lessee could not be said to have been "imposed." This aspect of the case need not detain us for the matter can be disposed of on another ground. Assuming that Mr. Akbar Hussain had no legal power to vary the terms and conditions of the lease which was submitted for confirmation and that the Custodian was also not bound to accept the fair rent fixed by the Rent Controller, the question remains whether the Custodian's order by which he reduced the rent to Rs. 1,200 p.m. from the stipulated rent of Rs. 5,000 was entirely without jurisdiction. It must be remembered in this connection that the application for confirmation had distinctly prayed that the transaction be con firmed at the rent fixed by the Rent Controller. There was thus a claim raised which could have been met by a compromise by the Custodian under clause (i) of subsection (2) of section 20 of Ordinance XV of 1949 which was then in force. This clause empowers the Custodian inter alia, to institute, defend or continue any legal proceeding in any civil or revenue Court on behalf of the evacuee or refer any dispute between the evacuee and any other person to arbitration or compromise any claims, debts and liabilities on behalf of the evacuee". It may be that if the Custodian had finally insisted on the rent of Rs. 5,000 p.m. for the premises, the lessee might not have pressed his application for confirmation and might have preferred to leave the premises. He would have a locus penitentiae in that case. It seems to have been his case that the premises had been previously requisitioned for the R. A. F. prior to the Partition, at a rental of Rs. 800 p. m. only, inclusive of the building, furniture and fittings and loss of business occasioned by the requisition. Here, then was a dispute raised and the powers of the Custodian under section 20 could be invoked to resolve it. If the order passed by Mr. Akbar Hussain is read in the light of sections 16 and 20 of the Ordinance together, it can be construed to mean that, while confirming the transfer, the Custodian simultaneously agreed tote reduce the rent to Rs. 1,200 p.m. by virtue of his powers under section 20 of the Ordinance. It is true that Mr. Akbar Hussain did not purport specifically to act under, section 20, but if his order could be related to that section, it would be difficult to hold that the impugned order was entirely without jurisdiction. The order can be, regarded as a composite one. In part, it wits an order upholding the confirmation of the lease under section 16 and in part an order in exercise of the powers under section 20, on the administrative side. This view would also be consistent with the pleadings of the parties in this Court as the concise statement submitted on behalf of the respondents concedes that Mr. Akbar Hussain's order was not open to any legal exception and was within his revisional powers as Custodian. This fact stands out in strong contrast with the argument now advanced that Mr. Akbar Hussain's order suffered from lack of jurisdiction. The ground of want of jurisdiction being thus out of the way, the next question that calls for consideration is whether in exercise of his powers of review, under section 43 of Act XII of 1957, (which by then had replaced Ordinance XV of 1949), Mr. Memon could have revised the order passed by Mr. Akbar Hussain, re‑fixing the rent at Rs. 5,000 p.m. and giving this order retrospective effect. The relevant provision of section 43 (6) of that Act is expressed in these terms :‑ "(6) The Custodian or Additional Custodian may on application made to him in this behalf within tile prescribed, period or of his own motion at any time and after giving notice to the parties, concerned, and the Rehabilitation Authority, review his own order or an order passed by his predecessor‑in‑office on any ground whatsoever as the justice of the case may require:- Provided that no final order passed on or before the seventeenth day of November; 1956, declaring any person to be not evacuee or any property to be not evacuee property shall be reviewed." This provision gives very wide powers to 'the Custodian inter alia to review his predecessor's order, suo motu, at any time and on any ground whatsoever as the justice of the Case may require. An order thus passed in review can conceivably take effect from the date of the original order reviewed but certain consideration arise in the circumstances of this case which would appear to militate against the unrestricted power to give retrospective effect to such a review order in all cases. As pointed out above, it would seem that Mr. Akbar Hussain, the learned predecessor of Mr. Memon while, confirming the lease in favour of Muhammad. Moin Khan, must be further deemed to have entered into a contract with him in his administrative capacity, agreeing to charge rent at the rate of Rs. 1,200 p.m. Mr. Memon reviewed that order on the 21st August 1957, whereas the ten years lease in favour of Muhammad Moin Khan had already run its course on the 8th of July 1957. We understand that the appellant had been dispossessed of the premises by the Custodian's Department with the dispossessed from the 15th July 1957. The point that falls for deter mination is whether Mr. Memon could have interfered with what in law amounts to a contract entered into by his predecessor in respect of a lease, retrospectively, after the lease had expired and the transaction had been finally closed. If the lease had been still, current, Mr. Muhammad, Bakhsh. Memon, perhaps in review, could have varies the contract to which his predecessor was a party, and for the future fixed the rent at whatever figure he pleased. It might then have been open to Moin Khan to accept the changed lease or not. It would seem conscionable to upset a transaction which was for all purposes closed and done with, by a review order not do any legal grounds that may have been discovered, but merely because it was felt that Mr. Memon's predecessor had agreed to accept a rent lower than what might have been appropriately demanded for certain evacuee premises. All evacuee property vested in the Custodian and he was clothed with all the rights of the owner to grant leases in respect of such property Powers were given to film to administer, preserve and manage all evacuee property which was, vested in him by sub section (1) of section 20 of Ordinance XV of 1949. He could even soil evacuee property notwithstanding anything contained in any other law or agreement to tile contrary, relating thereto, subject of course to prior approval of the Central Government; vide clause (n) of subsection (2) of section 20 of the Ordinance. In view of these considerations, I have reached the conclusion that it does not open to Mr. Memon, as the successor of Mr. Akbar Hussain, to vary the terms of a contract which must be deemed, in the circumstances of the case, to have been entered into as a party by Mr. Akbar Hussain so as to interfere retrospectively with the rights of the opposite party to the contract, in respect of the period past and gone. On this view, the re-fixation bf the rent of the premises at Rs. 5,000 p. m. with effect from a date prior to tile order‑of review passed by Mr. Memon, was not sustainable in late. It must be‑further clarified, that the order passed by. Mr. Akbar Hussain also could have taken effect only from the date of that order and not from the date of the inception of the lease. To the extent, therefore, that Mr. Akbar Hussain purported to give the benefit of the reduced rent to the lessee from the very start of the lease, his order was not tenable in law on the footing that he was merely dealing with a claim for reduction of rent in his administrative capacity at the same time as he had upheld the confirmation of the lease in his judicial capacity. This amounted to entering into, a fresh contract with the lessee, iii respect of tie rent payable, on the date of the order. The sum of Rs. 89,933 therefore, which represents the alleged excess of rent paid, by the lessee prior to the date of Mr. Akbar Hussain's order, could not have been declared to be a charge on the property. This sum was not in fact recoverable by the lessee. The review order of Mr. Memon in so far as it covers this pint must be upheld. Coming to the question of the charge on the property, in respect of ‑the payment made by Moin Khan to the Income‑tax Department, it is not understandable why the learned Custodian Mr. Memon, came to the conclusion that the payment had been made by the lessee in his own interest. Clearly, this sum of Rs. 8,972‑2‑0 was not due from him‑personally but was paid on account of income‑tax assessed on the property of Mst. Rukibai in the hands of her husband. Even if part of this money covered some taxes payable by Mst. Rukibai's husband, who is also an evacuee, the lessee could legitimately claim to be reimbursed by the Custodian for the payment made by him. Presumably, Mst. Rukibai's husband had also left some property here. Primarily, it was the responsibility of the Custodian's Department to pay the income‑tax due from Mst. Rukibai and her husband, out of the income of Vie evacuee properties abandoned by them in this country. No legal reason has been mentioned by Mr. Memon, in support of the view that this sum did not re present a legitimate charge on the property. The order passed by him in review is, therefore, erroneous and may indeed be characterised as arbitrary and, therefore, outside the purview of Act XII of 1957. He does not appear to have applied his mind to the legal implications of this payment of what was in reality a debt due by the evacuee. It was clearly within the power of the Custodian to pay any debt due by the evacuee to the relevant person or authority under clause (9) of subsection (2) of section 25 of Act XII of 1957. Mr. Memon was absolutely correct in holding that it was the lessee's obligation under the lease of which he had obtained confirmation, to effect all necessary repairs to the leased premises. While obtaining variation of the rent at the time that he applied fur confirmation of the lease, he did make prayer that he may be allowed to incur expenditure on account of certain repairs also. Mr. Akbar Hussain apparently did not apply his mind to this aspect of the case, as he seems to have been under the impression that the lessee was only claiming certain sums against the evacuee. He, therefore, gave a general direction that in respect of such claims the lessee might institute separate proceedings. The important fact is that no variation of the terms of the lease placing the burden of effecting repairs on the lessee was ordered. Nor was such a prayer ever made on behalf of the lessee, specifically. When he applied to Mr. Jafry for sanction of the expenditure on repairs that officer pointed out to him that it was his responsibility to effect repairs to the leased premises, though he added that the proper authority to be approached in connection with repairs was the Additional Custodian (Administrative). It was after this that the lessee applied to the Additional Custodial (Administrative) without, however, revealing that the lease deed had imposed the obligation of keeping the premises in good repairs, on himself. It appears that, as a matter of routine, a direction was given that the premises may be inspected and a proper amount for repairs sanctioned. In this way, the appellant succeeded in obtaining sanction of two bills amounting to Rs. 3,942 and Rs. 9,000. There is nothing in the order placed on the file to show that the authorities concerned were conscious of the existence of the relevant clause in the lease deed and that they waived their rights under that clause on behalf of the Custodian's Department. Waiver in law can be effective only if there is consciousness of the right itself at the time of the allege, waiver. In the circumstances, I am disposed to hold that Mr. Memon was right in interfering in review with the orders of the relevant authorities who had sanctioned these repair charges in favour of the lessee. In this behalf, Mr. Memon's order must be upheld. Concerning the sum of Rs. 40,000 which had been deposited by the lessee with the evacuee lessor, Mr. Memon has made it clear in his order that credit will have to be given to the lessee when the account is taken. No further direction is called for in that connection. The upshot of the whole discussion, therefore, is that the reduction of the rent from Rs. 5,000 to Rs. 1,200 was effective from the date of Mr. Akbar Husain's order and that Mr. Memon's review order could not have restored the original rate of rent posthumously with the expiry of the lease. The appellant petitioner is entitled further to reimbursement, in respect of the sum he paid to the Income‑Tax Department, and to have a charge on the property declared to that extent. Rs. 40,000 on account of the deposit made with the owner can also be legitimately charged on the property in these circumstances. He, however, would have no right to the creation of any charge for the two sums he is alleged to have spent on the repairs of the premises. We allow the appeal and modify the order of the learned Custodian, Mr. Memon, to the extent indicated, and direct that the Custodian's Department should now do the accounting with the lessee on this basis. The parties will be left to bear their own costs in this Court. A. H. Order accordingly.