P L D 1972 Supreme Court 346 (PLP)

Learned counsel, appearing in support of this appeal, has referred us to subsection (9) of section 2 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, to point out that the price or value of a premises means, in the case of a house or a shop not situated within the limits of a cantonment, an amount equal to forty times the gross annual rent of the house or shop, as the case may be, prevailing in 1946. Then paragraph 22 of the Settlement Scheme No. 1, framed under section 16(1)(b) & (c) of the Displaced Persons (Compensation & Rehabilitation) Act. 1958, lays down a formula for the determina tion of the rent prevailing in 1946. Under this formula, the assessment made by Government under any of the Immovable property tax laws or, where no such assessment exists, by the local body concerned, has first to be adopted ; but, where no assessment had been made and enforced by Government or a local body in or before 1946, the Deputy Settlement Commissioner was himself to determine the rent prevailing in that year, according to the following formula. Under this formula, the Deputy Settlement Commissioner was to take the assessment made by Government or a local body subsequent to the year 1946 as the basis, but he was to reduce that assessment by an amount arrived at by multiplying three per cent. of such assessment by the number of years intervening between the year of assessment and the year 1946. Thus, if a house was not assessed in the year 1946 but was assessed !n the year 1954-55 at Rs 600 per annum, then the rent for 1946 war to be calculated as follows ===600-(3 % of 600) x (1954 -1946) ===600.- (18 x 8) ===600-144 ===

456. There was; however, an exception to this rule, namely, that if in any case the Chief Settlement Commissioner was of the view that the assessment made subsequent to 1946 was not suitable, he could cause a fresh assessment to be made and could for this purpose issue necessary instructions. To this Scheme was added paragraph 22-A on the 6th of November 1959, which provided :- (i) Where assessments had been made both by Government and a local authority for the same year and the assessments were different, then the lesser of the two assessments had to be adopted ; (ii) Where the assessment of a property was dispropor tionately low as compared with the rent of other properties of the same nature in the same locality, then the Deputy Settlement Commissioner was, after inspection of the property, entitled to increase the rent by an amount not exceeding 50%. If he came to the conclusion that the rent should be increased beyond 50%, he could make a recommendation to that effect to the Additional Settlement Commissioner who could then, after inspecting the property, pass such order as he thought necessary ; (iii) Similarly, where the assessed rent of a property was disproportionately high with the rent of other properties of the same nature in the same locality, the Deputy Settlement Commissioner was authorised after inspection to submit a proposal to the Additional Settlement Commissioner to suitably reduce the valuation ; and (iv) Where the rent assessed for the whole town or the entire locality in a town was found to be disproportionately high or disproportionately low as compared with the rent of similar properties in other towns or other localities, then the Chief Settlement Commissioner alone could order a fresh assessment. In the present case, it is admitted that no assessment of the year 1946 or prior thereto was available. But a draft assessment had been prepared by the Excise & Taxation Department in the year 1958-59. Evidently, the Settlement Authorities considered this draft assessment prepared by the Excise & Taxation Department for the city of Hyderabad not suitable. Therefore, it; exercise of his powers, presumably under the exception is Paragraph 22 of Scheme No. 1, the Additional Settlement & Rehabilitation Commissioner, Hyderabad & Khairpur Divisions, on the 11th of August 1959, prescribed certain instructions by his Circular No. Reh/39-Gen/58 for the evaluation of an urban evacuee property within the municipal limits of Hyderabad and Khairpur Divisions. Under these instructions the valuation was to be made on the following basis :- In Hyderabad town the value bad to be determined after applying a blanket reduction of 50 % on the gross draft assessment of the Excise & Taxation Department. This was followed by another Circular No. L/4R/59 dated 7th October 1959, under which another formula was laid down, namely ;- The draft annual assessment of the Excise & Taxation Department should be divided by 2 and then multiplied by 40 or the final assessment of the Excise & Taxation Department should be reduced by 3 % multiplied by 40, whichever be less. This was followed by a third Instruction No. 873-AST-S & R/ 59 dated 7-11-59 from the office of the Chief Settlement & Rehabilitation Commissioner, Lahore. This again decided that fresh assessment in the case of Hyderabad town should be equal to 50 % of that entered by the local Excise & Taxation Depart ment in the draft valuation list or 61 % of that entered in the current valuation list prepared under the West Pakistan Urban Immovable Property Tax Act, 1958, whichever is less. Learned counsel contends that, except the Additional Settlement Commissioner, none of the other Settlement Authorities had applied their minds to the various provisions of the Scheme or the instructions mentioned therein. The Deputy Settlement Commissioner, presumably acting under sub-paragraph (2) of paragraph 22-A of Scheme No. 1 and Circular No. 6027-Comp Reh/59 dated the 11th November 1959 (since cancelled by Memo. No. 3033-PC(49)-Reh/61 dated 9-8.61. Vide t pages 614 and 625 of New Manual) enhanced the valuation given in the draft valuation list prepared by the Taxation Department for the year 1958-59 without noticing the special instructions issued by the Additional Settlement Commissioner and the Chief Settlement Commissioner with regard to valuation of houses in Hyderabad City. He enhanced the valuation of the house in dispute from Rs. 210 to Rs. 350 without mentioning on what basis or formula this was done. If the valuation arrived at on the basis of the draft valuation list prepared by the Taxation Department was Rs. 210, then under sub-paragraph (2) of paragraph 22-A, the Deputy Settlement Commissioner had, in any event, no power to increase it by more than 50 %. An increase of 50 % of Rs. 210 would come to Rs. 315 and not Rs. 350 as determined by the Deputy Settlement Commissioner. Even assuming that the Deputy Settlement Commissioner had the power to enhance the valuation, he could not do so arbitrarily. He had to follow one or the other formulae laid down either in the Scheme itself or in the instructions issued from time to time in exercise of the powers given under the Scheme. The Additional Settlement Commissioner did point out that the view taken by the Deputy Settlement Commissioner was "not in accordance with the instructions of the Chief Settlement Commissioner Pakistan" and that it had never been the intention of the Settlement Authorities that the rental value of houses in possession of locals should "be enhanced arbitrarily as has been done in this case by the Deputy Settlement Commissioner". Even if it is accepted, as contended on behalf of the respondent, that the power given to a Deputy Settlement Commissioner under sub-paragraph (ii) of paragraph 22-A of the Scheme No. 1 is a special power to be exercised in the case of an Individual premises notwithstanding the application of the general instructions regarding the evaluation of a whole town or an entire locality then too the power hag to be exercised subject to the conditions mentioned in the said sub-paragraph and in the manner therein prescribed. As has been rightly pointed out by the Additional Settlement Commissioner in his appellate order this too was disregarded because no comparison was made even with the adjoining house. The valuation of the latter as made in the draft valuation list of the Excise and Taxation Department, was accepted by the Deputy Settlement Commissioner. As compared to this the valuation of the premises in dispute was by no means disproportionately low. The comparison was made by the Additional Settlement Commissioner who came to the following conclusion :

"In the adjoining house there are seven rooms whereas in the disputed house there are five rooms. The rental assessment fixed for the adjoining house according to the Taxation Department Rs. 330 p.a. Spreading over this rent on seven rooms it would be Rs. 47 per room. Thus the rent for five rooms would be Rs. 235 p.a. However the Taxation Department has fixed the rent to Rs. 210 p.a. instead of Rs. 235 p.a. Thus it is quite obvious that the Taxation Department has not deliberately fixed the low assessment in respect of the disputed house due to certain pressure as inferred by the Deputy Settlement Commissioner." In the circumstances the conditions precedent to the exercise of the power under paragraph 22-A (ii) did not exist and the Deputy Settlement Commissioner acquired no jurisdiction to enhance the valuation. The other objections raised by the Deputy Settlement Commissioner regarding the entitlement of the appellant to the transfer of the house were also found to be unwarranted, because, the appellant had produced the order of the District Judge dated 17-12-58 allotting the house to him. This established his possession from before the prescribed date, namely 20-12-58, without any doubt. Unfortunately, the Settlement Commissioner, Hyderabad & Khairpur Divisions, sitting in revision in this very case, also forgot that it was he himself who had issued the instructions earlier referred to in this judgment laying down the formulae for the determination of the evaluation price in respect of houses situated in Hyderabad 'either the Settlement Commissioner nor the Chief Settlement Commissioner, Hyderabad & Khairpur Divisions, gave any specific finding with regard to the valuation or advanced any cogent reasons for repelling the grounds accepted by the Additional Settlement Commissioner in his well-reasoned order. The High Court also, we regret to say, has not given sufficient weight to these instructions, which would have resulted in the valuation given in the Excise & Taxation Department assessment of Rs. 420 for the year 1959 being reduced by half to Rs. 210 and then mutiplied by

40. This would bring the valuation price down to Rs. 8,400 and entitle the appellant, a local, to claim the transfer of the house. We are, therefore, of the view that there is a great deal of force in the contentions advanced by the learned counsel for the appellant. His criticism is fully justified that neither the High Court nor the Settlement Authorities had considered the various instructions issued by the Settlement Authorities with regard to the assessment of evacuee houses in Hyderabad town. The Chief Settlement Commissioner was duly empowered both under the exception to paragraph 22 and sub-paragraph (4) of paragraph 22-A of the Settlement Scheme No. 1 to issue such instructions. It is nobody's case that these instructions did not apply. It was, therefore, incumbent upon the subordinate Settlement Authorities to follow these special instructions in preference to other general instructions as the former specifically dealt with the evaluation of evacuee house in Hyderabad Town. They must be deemed to have superseded all other general instructions to that extent in Hyderabad. Any evaluation made in disregard of these instructions cannot be upheld. We, therefore, allow this appeal, set aside the judgments and orders of the High Court, as also of the Settlement Commissioner and the Chief Settlement Commissioner and restore that of the Additional Settlement Commissioner is appeal. In view of the fact that the dispute as to the valuation has arisen as a result of the failure of the Settlement Authorities to take into consideration their own instructions and not due to any fault of the respondent No. 1, who alone has appeared to oppose this appeal, we make no order as to costs. K. B. A. Appeal accepted.