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Petitioner: Mufti AMANULLAH AND 65 ORTHERS VS Respondent: SETTLEMENT COMMISSIONER (LAND), JUDGMENT
Court Name: Peshawar High Court Judge(s): Faiz Muhammad Khan Title:Mufti AMANULLAH AND 65 ORTHERS vs SETTLEMENT COMMISSIONER (LAND),
JUDGMENT
Reported As: 1983 CLC 1801 Result: Petition dismissed Judgment JUDGMENT ' This Constitutional Petition, filed by Mufti Amanullah and 65 others, is directed against the order, dated 12th April, 1980 passed by the Settlement Commissioner (Industries) Peshawar, Division Peshawar, whereby he refused to cancel the unrestricted public auction held, on 31st January, 1963 and approved by the Chief Settlement Commissioner, West Pakistan, on 15th April, 1963 in respect of an Evacuee Big Mansion, known as Kawatra Building, situated on Arbab Road, Peshawar Cantt. It is prayed in this petition that the said order of the Settlement Commissioner (Industries) and all actions taken by the Authorities pursuant thereto being without lawful authority and of no legal effect, may be so declared. It is further prayed that an appropriate direction be made that the Deputy Settlement Commissioner concerned, with whom each one of the petitioners has allegedly filed claim on prescribed form for the transfer in his favour of the unit in his possession out of the said building, may be allowed by the Authorities above him to proceed freely in determining each claim. 2. Prior to the partition of the Sub-Continent, the Kawatra Building, as it used to be then called, was owned by non-Muslims, who on partition migrated to India. This building consisting of 38 houses and 36 shops, which were occupied' by various persons, thus, became an evacuee property and was declared by the Chief Settlement Commissioner for the purpose of disposal, to be a Big Mansion. It was accordingly disposed of by an unrestricted public auction, which was held, on 31st January, 1963 by an Auction Committee constituted for the purpose. Against the reserve price of Rs, 5,72,850 this building fetched, at auction, Rs, 15,05,000 as the highest bid which was jointly given by Major Muhammad Rafique, Major (now Brig. Rtd.) Faqir Muhammad Khan and Mr. Ghulam Sarwar.
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As was required by paragraph 9 of Settlement Scheme No, III, the auction proceedings were submitted to the Chief Settlement Commissioner, after completion of necessary formalities and after receiving payment of 25 per cent of the transfer price in the shape of claims. Compensation Books through Association Deeds, for acceptance. The aforesaid joint bid was accepted by the Chief Settlement Commissioner, Lahore, on 11th April, 1963 intimation whereof was sent to the bidders on 15th April, 1964. 3. While the finalisation of the case of transfer was pending and the entire transfer price was yet to be paid, a change amongst the bidders came into being in that Mr. Ghulam Sarwar Khan and Major Faqir Muhammad Khan each surrendered half of his share in favour of Mst. Qamar Sultana. Later, Mr. Ghulam Sarwar Khan, by surrendering his remaining half share in favour of Major Muhammad Rafique, totally served his connections with the building. The transfers so made ultimately left the persons noted below to possess the shares noted against each : (1) Major Muhammad Rafique Khan (2) Mst. Qamar Sultana (3) Major (now Brig. Retd.) Faqir Muhammad Khan ... 4. Since all the bidders were locals, the entire bid money was to be paid by them within thirty days of the date of receipt of the intimation of acceptance of their bid by the Chief Settlement Commissioner. The intimation of acceptance could be delivered to the successful bidders by hand or by registered post, as provided in paragraph 11 of the Terms and Conditions of Auction of Big Mansions and Hostels, and as in this case the successful bidders were living away from the Headquarters of the Chief Settlement Commissioner, the intimation of acceptance was naturally sent to them by registered post, the receipt whereof by them was deemed after the expiry of three days after its despatch, as provided in paragraph 12 of the said Terms and Conditions. 5. It appears that the bidders were not able to deposit the entire bid money within the prescribed period of thirty days from the date of receipt of the intimation of acceptance. They, therefore, applied for the extension of the period for making payment of the bid money. The Chief Settlement Commissioner extended the period of payment upto three months, which period was further extended upto 11th April, 1964 by the Government of Pakistan. The whole of the transfer price could not be deposited by the bidders upto the extended date. They, therefore, made another request to the Chief Settlement Commissioner for the extension of the period of deposit which was allowed and the date upto which the deposit could be made was extended to 11th July, 1964. Failure was still there, so another request was made by the bidders to the Chief Settlement Commissioner for the extension of the period, which was also allowed and the period extended upto 31st August, 1964. This detail is available in the notice (Annexure 'A' to this writ petition), dated 28th December, 1964 issued by the Additional Settlement Commissioner Industrial to the bidders whereby they were directed to pay the entire outstanding bid money within seven days of the receipt of that notice. The bidders were also informed through the same notice that if they failed to pay the entire outstanding bid money, the auction in their favour "will be cancelled with attendant penalties'. The Annexure 'A' to the judgment order, however, shows that even after the said notice the bidders had continued tendering Compensation Books of various amounts for adjustment against the transfer price and this process continued upto 29th December, 1966 on which date, as mentioned in the said annexure, the value of the Compensation Books and the each amount tendered by the bidders stood at Rs, 15,85,119.70. 6. The matter of verification of the Compensation Books through Association Deeds presented difficulty and for that reason the finalisation of the case lingered on. After the break-up of One-Unit the Settlement Authorities of this. Province took cognizance of the matter. Many notices were issued to the bidders for the payment of the outstanding bid money, the last of the series being the one issued on the 4th April, 1973 by the Additional Settlement and Rehabilitation Commissioner
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(Industries) N.-W. F. P. In that notice the amount tendered through Compensation Books and admitted to have been adjusted towards the auction price was shown to be Rs, 4,93,755 and the bidders were accordingly directed to remit the balance of Rs, 10,11,245 within seven days of the receipt of that notice. The admitted amount mentioned in that notice was probably the one respecting which some out of many Compensation Books tendered by the bidders had by then been verified. Aggrieved by that notice, the bidders took up the matter with the Chief Settlement Commissioner, N.-W. F. P. Who, by his detailed order, dated 15th September, 1973 directed the Additional Settlement Commissioner to carry out immediate verification of the Compensation Books already tendered by the bidders and if need be, to permit the auction-purchasers to make extra payment towards the bid money. 7. Action was then intimated by the Additional Settlement Commissioner in compliance with the aforesaid order of the Chief Settlement Commissioner. During the progress of that action, however, another development took place and that is that the Chief Settlement Commissioner vide letter No, 3884/PB/BOR/NWFP, dated 13th December, 1975 informed the lower Authorities that the Chief Minister was pleased to order that since the bidders or their successors-in-interest had not fulfilled the Terms and Conditions of the auction and had not deposited the entire bid money, the property involved should be excluded from the list of Big Mansions and should be disposed of by allotting each unit to the sitting tenant in due course of law under Scheme No, VIII then in vogue. 8. The Settlement Commissioner (Industries) accordingly issued a notice, on 17th June, 1976 to the bidders to show cause as to why auction in their favour should not be cancelled and the property resumed for fresh disposal. It would be of advantage to reproduce below the said notice. "Whereas you were served with the Notices No, 1062/ASC/Acctt/ Ind/ Adj, dated 23rd July, 1971 No, 3531/ASRC/72, dated 23rd October, 1972 No, 3532/ASRC/Ind, dated 24th October, 1972, No, 5040/ASRC1IND/72, dated 18th December, 1972, No, 262/AS & RC, dated 9th February, 1973 and No, 918/AS & RC/73, dated 4th April, 1973 in respect of the above-mentioned property for which you had offered a sum of Rs, 15,05,000, payable by you within 30 days from the date of intimation of confirmation of auction of the property in your favour i. e. On 15th April, 1963. (2) And whereas you have failed to comply with the directions contained in the said notices so far, which inter alia required you : ' To produce original/certified copies of verification order by the Claim Officer/Deputy Claim Commissioner/Additional Claim Commissioner/ Claim Commissioner with Compensation Books and powers-of-attorney before the Officer Incharge Claim Record Office, Karachi and the Additional Settlement Commissioner and Rehabilitation Commissioner/Settlement Commissioner Industries/Chief Settlement Commissioner, N.-W. F. P. To enable this office to verify the bona fides of the incomplete Association Deeds, which you had filed to be accounted towards the price of the property. And whereas the bona fides of the incomplete Association Books valuing Rs, 3,00,000 (at present in the custody of the Enforcement Police) could not be established for the last 10 years. You are hereby served with this final show-cause notice as to why : (a) The incomplete association Deeds involving Rs, 10,11,245 (ten lac eleven thousand two hundred and forty-five only) be not treated invalid and rejected straightaway. (b) The auction of the property be not cancelled from your name. (c) The property be resumed for fresh disposal. Your reply should reach this office within 15 days of the receipt of this notice failing which ex parte proceedings will be taken in the case." ' This notice was replied to by the bidders, who simultaneously filed a writ petition in the High Court where they succeeded in obtaining on 27th August, 1976 a interim status quo order, which somehow or other appears to have continued till the writ petition was finally disposed of by the Court, on 7th May, 1980. In that writ petition the High Court on 19th December, 1979 made an interim order in the following terms :-
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"(1) The Department has accepted that a sum of Rs, 5,46,987.70 has been received by them and adjusted on the basis of Compensation Books. They have also admitted the receipt of Rs, 1,00,000 as cash. Apart from that they admit that C. Bs. Of Rs, 6,32,916 has been verified but the adjustment has not been made in view of the writ petition. In respect of the Compensation Books of Rs, 5,74,724 it is stated that Compensation Books relating to this amount though verified, the amount thereof has not been adjusted as such a course would have been contrary to the instructions contained in letter of 27th March, 1964. (2) To resolve the controversy and to reduce the limit of time for final disposal of the matter, the learned counsel has shown his readiness to pay in cash a sum of Rs, 2.70,113 about which the Department is not sure. This amount should be paid within a period of thirty days by the petitioners. After the receipt of this amount the Settlement Commissioner notwithstanding any interim status quo order of this Court may make a tentative decision whether the transfer of the property in favour of the petitioners is to be finalized by issuance of transfer order. If he comes to the decision that the petitioners are entitled to the transfer then the present writ petition would become infructuous. If the tentative decision is to the contrary then the writ petition shall proceed. The Settlement Commissioner should communicate the tentative decision to this Court within three months of the date of the deposit of the amount of Rs, 2,70,113 by the petitioners if done within thirty days. (3) As regards the uncertainty about Rs, 5,74,724 the Settlement Commissioner should give an opportunity to the petitioners to explain the same and if he is satisfied about the genuineness of the Compensation Books then the cash deposit by the petitioners shall be refunded to them and the amount of the Compensation Books adjusted against the transfer price. (4) A copy of this order should be handed over to the petitioners, to the counsel for the Department and to the counsel for newly-added respondents. One copy of the order should be sent directly to the Settlement Commissioner. (5) The replies of the Settlement Commissioner and the Chief Settlement Commissioner have been received and placed on record." 9. Pursuant to the directions given by the High Court in the interim order aforesaid, the petitioners deposited in cash, on 9th January, 1980 the amount of Rs, 2,70,113 towards the payment of auction price. Thereafter the Settlement Commissioner (Industries) proceeded to make a tentative decision whether or not the transfer of the property in favour of the bidders could be finalised by issuance of transfer documents, as was directed by the High Court in the interim order aforesaid. This exercise was completed by him after hearing the bidders, the sitting tenants, who had already become party to the proceedings before him and the High Court, and their learned counsel. He finally announced his orders on 12th April, 1980, whereby he refused to set aside the auction proceedings concluded in the year 1963 with the approval of the Chief Settlement Commissioner. In the last paragraph of his orders, however, the Settlement Commissioner (Industries), despite the fact that the Central Record Office, Karachi had certified vide letter No, SC(CRO)/Claims/80-182- 183, dated 19th February, 1980 that the Compensation Books were correct and were certified with the original record lying in that office, directed that the matter of certification would be examined in due course to make sure that was conveyed by the Central Record Office, Karachi through their letter aforesaid, was correct according to record. 10. It appears that the bidders were satisfied with the aforesaid order of the Settlement Commissioner (Industries), who in consequence appeared before the High Court on 7th May, 1980 and made a statement that in the light of the said order they had no intention to continue with their writ petition as in fact it had become infructuous. Their writ petition was accordingly disposed of on the said date as having become infructuous.
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11. The aforesaid order of the Settlement Commissioner has, however, aggrieved the sitting tenants who have filed this constitutional petition calling in question the said order and all further actions taken by the Authorities pursuant thereto. The main grounds taken up in the writ petition, briefly stated, are that the disputed property having been disposed of by unrestricted public auction under Settlement Scheme No, III and all the bidders being locals, they, in view of paragraph 12 of Terms and Conditions of Auction relating to the said Scheme, were to pay the whole of the bid money within thirty days of the date of receipt of the intimation of acceptance, that the bidders after having failed to deposit the entire bid money of the prescribed date applied for the extension of the date which was granted but they failed to deposit the bid money even by the extended date, that as a result of the default made by the bidders in the payment of the entire auction price by the specified or the extended date to rights acquired by them at the auction stood extinguished by the operation of paragraph 22 of the Terms and Conditions of Auction forming part of the Settlement Scheme No, III, that no notice or further action for extinguishment of such rights was necessary to be given or taken by any authority, nor was necessary to be passed any formal order to that effect, that all subsequent actions taken by the Settlement Authorities in issuing notices of cancellation to the bidders and for treating the whole case pending at the time of the repeal of the Settlement Laws were all illegal and void ab initio, and what was, in fact, pending was the transfer of the various units of the building, comprising the houses and the shops, to the persons who were in occupation thereof and had already applied to the Settlement Authorities for their transfer in their favour. 12. The bidders have contested this petition on factual as well as legal grounds, the main being that the petitioners were not the "aggrieved persons", that they had no locus standi to claim transfer of various units of the property in their favour, that the disputed property already stood finally transferred in favour of the bidders and was thus not an 'available property' and could not, therefore, be transferred under the reconstituted Settlement Scheme No, VIII, that the entire bid money was deposited by bidders, with the approval of the Settlement Authorities, by tendering cash amount and Compensation Books before the close of the year 1966 and for that reason the auction was not cancelled by the Settlement Authorities, and that the impugned order of the Settlement Commissioner (Industries) being fair, just and equitable, into the circumstances of the case, did not require interference. The averments made in the writ petition were also controverted by the Settlement Commissioner (Industries) and the Government of the North-West Frontier Province, who are respondents 1 and 2 herein. 13. Major Ishaq Muhammad Khan, Advocate appeared on behalf of petitioner Khawaja Nazir Ahmad, Advocate appeared on behalf of the respondents 1 and 2 and Sardar Muhammad Iqbal, Advocate, assisted by Mr. Sardar Khan, Advocate, appeared on behalf of the respondents 3 to 5. The learned counsel for the parties addressed lengthy arguments. Several decided cases have also been cited from both the sides. They are : PLD 1975 SC 58, 1972 SC M 8.359. PLD 1978 Kar. 100, PLD 1982 SC 412, PLD 1973 SC 236, 'PLD 1979 Lah. 330, PLD 1978 SC 89, PLD 1962 Lab. 217, PLD 1976 SC 208 and 410, PLD 1969 SC 223, 1980 SCM R 921, PLD 1982 SC 272, 1978 SCMR 367, PLD 1963 Pesh. 85. PLD 1973 Lah. 345. 1970 SCMR 542, 1974 SCMR 337, PLD 1963 Lah. 436, 1974 SCMR 352, 1979 SCMR 287, PLD 1979 Pesh. 56, PLD 1971 SC 252, PLD 1971 SC 438, PLD 1968 SC 362, 1978 SCMR 367, 1982 SCMR 1038, PLD 1974 Lab. 370, 1968 SCMR 1207, 1968 SCMR 1316, 1969 SCM R 110, 1976 SCMR 8 and 118,PLD 1978 SC 273,1980 SCMR 792 and 827, 1972 SCMR 62, 1974 SC MR 337, 1975 SCMR 24 and 33, NLR 1980 (Civil) Lah. 605, PLD 1975 Lah. 825 and PLD 1982 SC 413. 14. Before the learned counsel for the petitioners could open his case, the learned counsel for the respondents 3 to 5 raised a preliminary objection as to the maintainability of the writ petition. His argument was that the disputed property had stood finally transferred by public auction, duly
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confirmed by the then Chief Settlement Commissioner, as was required by the Terms and Conditions of Auction relevant in the context, much earlier than the coming into operation of the Settlement Scheme No, VIII and as such, on the commencement of the Settlement Scheme No, VIII, and thereafter, it was not an 'available property' within the meaning of the expression used in the said Scheme, especially when, as the record would show, the auction bidders had long ago deposited the entire bid money with the Settlement and Rehabilitation Authorities in the form of cash amount and Compensation Books. He further argued that as soon as the offer of the bid was accepted by the Chief Settlement Commissioner and the acceptance was conveyed to the bidders, a contract of sale between the parties had come into being, subject only to the rights and obligations of each party as mentioned in the relevant law of the Terms and Conditions of Auction. In such circumstances, the learned counsel argued, since the disputed property was not an 'available property' and since it had already stood finally transferred in favour of the auction bidders and concluded contract of sale between the parties had come into being, the petitioners, or for that matter those who were in possession of various units of the disputed property. Had no locus standi to question the transfer in favour of the auction bidders or to ask for the transfer of various units of such property in their favour. 15. The learned counsel for the petitioners, replying to the preliminary objection, argued that the whole case of the petitioners was that the auction held in favour of the auction bidders had come to an end by operation of law in the year 1963, or at the most in the year 1964, no matter no order to that effect was passed by any authority, as it was not necessary, and that thereafter the rights which the bidders had acquired at the auction did not subsist when they made default in the payment of auction price within the specified or the extended period and the property thus became available for re-auction or re-disposal in accordance with law. He submitted that the preliminary objection raised by the learned counsel for the respondents 3 to 5 could not be decided until the whole case of the petitioners was heard. 16. After considering the arguments of the learned counsel for the parties on the prelimniary objection, I was of the view that this objection, though appearing to be of a preliminary nature, constituted the main defence of the respondents 3 to 5. For its decision, therefore, it was necessary to deal with the full case of the parties on merits. This objection could not, therefore, be decided as a preliminary objection and has been dealt with at appropriate place while dealing with the case of the parties on merits. 17. The main arguments of the learned counsel for the petitioners were that the Kawatara-building was disposed of as a 'Big Mansion' by an unrestricted public auction under Settlement Scheme No, III. The respondents 3 to 5 had bid for the property and were successful in offering the highest bid. Their bid was accepted by the Chief Settlement Commissioner and the intimation of acceptance was issued to them by the registered post which they had received on 15th April, 1963. Since the bidders were locals, they, under paragraph 12 of the Terms and Conditions of Auction under Settlement Scheme No, III, were required to pay the whole bid money within thirty days of the receipt of the intimation of acceptance. They, however, failed to pay the amount by the due date and applied to the Chief Settlement Commissioner for the extension of period of payment. This extension, under paragraph 25 of the Schedule to the relevant Act, could have been granted by the Chief Settlement Commissioner for a period not exceeding three months. In this case, however, the time was extended on many occasions beyond the prescribed period of three months, which was against the statutory provisions. The total period within which the whole of the bid money could have been deposited by the bidders, being locals, was four months from the date of the receipt of the intimation of acceptance, which had expired, on 15th August, 1963. The bidders had failed to pay the total bid money upto that date and their rights in the property, therefore, extinguished automatically under paragraph 22 of the Terms and Conditions of Auction and no formal order for
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the purpose was necessary to be passed by any authority. After such automatic extinguishment of rights the disputed property could have been put to re-auction or could have been disposed of in accordance with law. This was, however, illegally not done. The notices issued from time to time by the Settlement Authorities were unwarranted by law and could in no manner change the status of the property which by operation of law had become open for re-disposal, nor could such notices revive the extinguished rights of the bidders. Since the petitioners continued in undisturbed possession of the units in their possession, they, upon the enforcement of the re-constituted Settlement Scheme No, VIII, became entitled to the transfer of the units which they were possessing, for which they had already filed applications on the prescribed forms. The learned counsel for the petitioners also urged that if the Settlement Authorities had failed to notice the correct provisions of law, then it was the duty of the Court to discover the correct law and apply it to the case before it. He further argued that since the auction-rights of the respondents 3 to 5 had come to an end by operation of law in the year 1963, or at the most in the year 1964, there was no case pending…
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