ORDER SARMAD JALAL OSMANY, J.- Vide this application it has been prayed that the Mukhtiarkar Keamari Town as well as the Sub-Registrar T Division X, Karachi be directed to register the sale agreement in respect of the property in question between the applicant/auction purchaser and the present buyers of the same.
2. The brief facts of the matter are that the petitioner-Company was liquidated in this J.M. By order of this Court and its property consisting of 70. Acres of land lying within the limits of Central Excise and Land Custom Department at Mauri pur, Karachi was put to auction. On 19.2.1989 this Court accepted the bid of the applicant/purchaser Abdul Rehman's Jinnah and confirmed the sale in his favour upon payment of the full price to the Official Liquidator where after a sale certificate was issued in favour of the former which was registered with the Registrar T Division V Karachi.
Thereafter the auction purchaser/applicant entered into an agreement to sell 60 Acres of the property with Khawaja Aamir Ishaque and Syed Rizwan Ahmad and also at the same time paid the dues/ground rent on the property to the Collector Central Excise and Sales Tax as demanded by him viz. In the amount of Rs.1 3,10,991/-. However despite the completion of all the above- mentioned formalities, per the applicant, the Sub-Registrar T Division, X Karachi has demanded a NOC and Deh Form 2 from the concerned Mukhtiakar duly signed by the DDO (Karachi). Hence this application with the afore-mentioned prayer.
3. Notice of this application was ordered upon the learned A.-G. As well as DAG so also Collector Excise and Sales Tax Karachi, Mukhtiarkar Keamari Town and the concerned Sub-Registrar. The Sub- Registrar has filed his written-statement to the application whereby it has been averred that he would be willing to registered the sale-deed between the parties provided that an approved plan from the concerned authority is obtained as the property is undivided per Rule 149(xvi) of the Sindh Registration Rules. So also he has required that an NOC be obtained from the Mukhtiarkar duly signed by the DDO as per the letter dated 10.8.2002 issued by the City District Govt. Karachi and finally a receipt be also obtained regarding payment of the sale price to the owner of the land as per letter dated 8.9.2001 issued by the Board of Revenue Government of Sindh.
4. Comments have also been filed by the Collector Excise and Sales Tax Karachi in which it has been averred that no NOC can be given by the said officer to the proposed transaction since the conditions of the lease deed regarding the said property have bee violated by the applicant/purchaser namely those contained in clause 2(a)(i.e), clause 4 and clause 5 thereof. As regards clause 2(a)(i.e) of the lease deed it is the Collector's contention that the ground rent at the rate of Rs.20,328 per year from 19.2.1989 has not been paid by the applicant. Secondly per clause 4 of the lease deed, the land in question could only be used for the purpose of erecting a fertilizer factory or related by product as it was on this basis that the land was leased out to the company.
Since the company never established any such factory the land should revert to the Excise and Taxation Department, In any event the land cannot be sold of in portions without firstly being partitioned for which no permission has been obtained by the Auction Purchaser. Finally per clause 5 of the Lease Deed the lessee viz. The company had no power to assign or under let to any person the property rights given nor create a charge thereon without the previous consent in writing of Government of Pakistan or the Collector, however, contrary to this clause the Auction Purchaser has agreed to sell 60 Acres out of 70 Acres of the land which transaction is sought to be registered.
It is also contended vide NOC dated 11.6.1989 issued by the Collector of Central Excise and Land Customs the Auction Purchaser obtained a loan from the National Bank of Pakistan for the purpose of setting-up a fertilizer plant but he failed to do so. As a result Suit No. 662/1994 (Ex. No.. 164/2002) was filed by the National Bank of Pakistan against the Auction Purchaser for recovery of Rs.4,12,66,410/- and similarly another suit is pending in this Court viz. No 105/1998 fled by the Govt, of Sindh, Pakistan Swedish Institute of Technology against the Auction Purchaser for recovery of Rs;30,000,000/-. Hence in view of the foregoing circumstances the Collector has declined to issue an NOC for the transfer of the land and prayed that the Auction Purchaser be directed to establish an industrial unit in terms of the lease agreement between the company and the Govt, of Pakistan.
5. The Mukhtiarkar Revenue Keamari Town in his reply has basically maintained that the land in question is the property of Govt, of Sindh and hence the Central Excise and Land Custom Department has no title over the same. For this submission he has relied upon the notifications issued in the years 1875, 1930 and 1935 by the then British Administration to the effect that the land was earmarked for the purpose of manufacturing salt only. Hence the lease in favour of the company as well as the subsequent sale to the Auction Purchaser is null and void. Consequently, no entry exists in the favour of the Central Excise and Land Customs in the record of rights/Property Register maintained by the Mukhtiarkar and neither has the property been demarcated and surveyed nor any site plan ever prepared. Hence mutation cannot be made in favour of either the applicant or subsequent purchaser of the property without getting clarification from the higher authorities.
6. Mr. Raja Qureshi has firstly taken up the objections of the Sub-Registrar. As regards the first objection viz. Submission of an approved plan from the concerned authority as the land is undivided per Rule 149(xvii) of the Sindh Registration Rules, 1940, according to Mr. Raja Qureshi Rule, 149 lays down conditionalities which have to be complied with before a document can be registered and item No. XVII has been added as one such condition by virtue of an amendment in exercise of the power contained in Section 69 of the Registration Act. In this connection he has firstly submitted that under Section 69 the Inspector-General has been given the powers to supervise the Registration Officers and to make rules consistent with the Act which would be submitted to the Provincial Government for approval and thereafter published in the official Gazette upon which they would be deemed to have the force of law as if they were part of the Act itself. Hence per learned counsel since the relevant amendment in the rules has neither been issued by the Inspector-General nor approved by the Provincial Govt, and also never gazetted it cannot be deemed to . Have been validly made. More so as the amendment has been authored by the Member of Board of Revenue. Regarding the second objection of the Sub-Registrar viz obtaining of an NOG from the Mukhtiarkar duly countersigned by the DDO and DO of the City District Govt. Learned counsel has submitted that a complete answer is available in Rule 135 of the Sindh Registration Rules viz. That the Registrar is not concerned with the validity of any document proposed to be registered. For this proposition learned counsel has relied upon Province of Punjab v. Muhammad Yaqoob (1992 CLC 2065). Finally with regard to the third objection viz. Payment of sale price to the applicant, Mr. Raja Qureshi has submitted that a receipt has been executed by him in the sum of Rs. 144,000,000/- in favour of the buyer which has been endorsed by the High Commission of Pakistan in London duly witnessed by Mr. Akhtar Hussain, Advocate a copy of which has been annexed to the i.e. Hence, learned counsel has submitted that the Sub- Registrar's objections cannot be upheld. He has, therefore, prayed that the sale-deed in question be registered by him for which orders are solicited.
7. Regarding the comments of the Collector Sales Tax and Excise Karachi firstly as to the non- payment of land rent etc., Mr. Raja Qureshi has submitted that this has been paid as per the demand of the Collectorate in the sum of Rs.1,317,911/- vide Pay Order No. 0002907. Regarding the second objection that the land could only be used for setting up a fertilizer factory per clause 4 of the Lease Deed and since the same was never done by the company hence the land reverted back to the Govt, of Pakistan, learned counsel has submitted that the liquidation proceedings in the present matter were in fact initiated by the Govt, of Pakistan through the Ministry of Production and the Ministry of Finance and as much is reflected in the order of the then Hon'ble Chief Justice of this Court dated 2.11.1982 whereby this petition was allowed and the Nazir was appointed as Provisional Liquidator with all necessary powers. Hence per learned counsel now the Govt, of Pakistan acting through the Excise Department has no locus standi to object to the sale of the land in question which they never did in the first place when the property was put to auction through publication.
Taking-up the next objection regarding bifurcation of the plot and sale of the same by the applicant, Learned counsel has referred to Section 7 of the Transfer of the Property Act which empowers every person authorized to dispose of transferable property not his on to do so either wholly and in part or either absolutely or conditionally in the circumstances to the extent and in the manner allowed and prescribed by any law for the time being in force, In the present case the applicant is the recorded owner of the property in question under the sale certificate issued by this Court wherein he has been declared to be the purchaser of the right title and interest thereof and the same has been confirmed vide this Courts order passed in the present J.M. Dated 19.2.1989. He has further submitted that the sale certificate was duly registered by the Sub-Registrar T Division.
Hence per learned counsel under no provision of the law can the applicant be restrained from selling the property in question either in whole or in parts. Secondly, in this connection he has submitted that under Rule 844 of the Sindh Chief Court Rules (OS) property sold by order of the Court would be considered a sale under a decree of the Court and hence Order 21 of the CPC would apply with regard to the matter which controls Court sales and objections thereto as well as the conditions under which the same can be set aside. Per learned counsel as nothing was done by any person/department before or after the sale certificate was registered in favour of the applicant upon the sale being made absolute, now, at this stage, the Sales Tax Department cannot challenge the same. Reverting to the next objection as to the irrevocable power-of-attorney given by the applicant in his favour. Mr. Raja Qureshi has submitted that this objection is totally frivolous since there is nothing in the lease deed which could be construed otherwise. Finally as regards the objection to the obtaining of the loans from the various Financial Institutions, Mr. Raja Qureshi has submitted that the litigation which has arisen therefrom has been compromised and loans fully paid-up. Consequently in view of the foregoing submission learned counsel was prayed that the objections of the Collectorate be dismissed.
8. Finally as regards the comments/objections of the Mukhtiarkar (Revenue) Kemari Town, Karachi, Mr. Raja Qureshi has supported the same to the extent that the central excise and land customs has no title to the property in question since there is no entry to this effect in the property register.
However, as regards comments that the Mukhtiarkar is not in a position to mutate the entry without getting it clarified form the higher authorities, learned counsel has submitted that this is of no consequence since all the authorities are subservient to this Court and have the obey the orders passed by it.
9. Mr. Mujib Pirzada appearing for the Collector Central Excise and Customs while supporting the objections taken by the Department has also submitted that since disputed questions of fact are involved therefore a suit is the only remedy available to the applicant rather than filing an application in this matter. As an example of the above learned counsel has submitted that in the lease deed field along with this application in para. 4 the last line has been scored out. So also in the copy of the receipt for the amount received by the applicant from the new purchaser, his signatures don't tally with those on his passport, NIC as well as agreement to sell and power of attorney an hence the Registrar's objection on this score are valid. Next learned counsel has submitted that after the property has been sold through this Court the latter has become functus officio and is, therefore, not responsible to assist the buyer in future sale transactions, and hence to that extent also either a writ petition or a civil suit should have been filed by the applicant in order to obtain his remedy. More so, as a new cause of action has accrued to the applicant. Next per learned counsel the legse deed clearly lays down that the department is the lessor and hence it can object to subsequent transactions if the terms of the lease deed are being violated. Finally, per learned counsel the provisions of CPC would not apply specially Section 151, CPC as directions have been sought against a public functionary for which the only remedy is a Constitutional petition.
10. Mr. Ahmed Pirzada appearing for the City District Government has submitted that in the revenue record the Sindh Government has been shown as the owner since originally the land was demarcated for the manufacture of salt by the Bombay Government and the excise and sales tax department was only authorized to collect the excise duty on the sale. Hence, the department cannot i.e any objections to the transactions in question. Mr. Pirzada has however fully supported the Registrar's objections as the Government of Sindh is the owner of the property.
11. Mr. Ziauddin Nasir, learned Standing Counsel, appearing for the Federal Government has referred firstly to the notification dated 23.7.1948 published in the Gazette of Pakistan and issued by the Ministry of Interior whereby Karachi has been notified as the Federal Capital. Per the learned standing counsel the land in question is included within the boundaries of Karachi and hence belongs to the Federal Government. Secondly per clause 4 of the lease deed the land can only be used for setting-up a fertilizer factory and hence its outright sale by the applicant without permission of Govt, of Pakistan as contemplated in Clause 5 is not lawful particularly as no steps were taken by the applicant for setting-up such a factory. So also the land has also not been bifurcated and hence sale of a portion thereof without the same being also cannot be sustained.
12. In reply Mr. Raja Qureshi has submitted that the certificate issued to the applicant by the Nazir of this Court says that the plot can be used only for industrial purpose which the applicant and the proposed buyer are willing to abide with. Further as the company was liquidated thereof, any term and condition in the lease pertaining to the company cannot be enforced viz. Setting-up of a fertilizer factory of prior permission for sale etc. As the purchase derived its fights from the sale certificate. Finally per learned counsel Article 23 of the Constitution gives a citizen the right to acquire and dispose of property subject to reasonable restrictions. Seen in this context the objections raised by the Sales Tax Collectorate cannot, therefore be sustained as the same are not reasonable. He has further reiterated that per Section 7 of the Transfer of Property Act every person competent to contract and entitle to transferable property or authorized to dispose of the same not his on is competent to transfer such property either wholly or in part as per the prescribed law.
Similarly, per Section 57 of this Act in a Court sale of immovable property the Court may declare such property free from any encumbrance. Finally, per learned counsel, Section 328 of the Companies Ordinance, 1984 contemplates that a statement of affairs is to be made by the official Liquidator by the company containing the particulars prescribed therein whereafter a report has to be filed by him under Section 329 to the Court regarding the company, In view of the foregoing submissions. Learned counsel has, therefore, prayed that the objections of the Excise and Sales Tax Collectorate, Government of Sindh, Sub-Registrar and the Mukhtiarkar be over ruled and the Sub- Registrar be directed to register the Conveyance Deed in question.
13. I have herd all the learned counsel as well as the learned Addl. A.-G. And my conclusions are as follows:-
14. I would firstly take-up the preliminary objections advanced by Mr. Mujib Pirzada to the effect that after the property had been sold to the applicant/auction purchaser and the sale certificate issued in his favour this Court in its companies jurisdiction became functus officio and could not sit in judgment upon disputes between the applicant and other persons regarding the further sale of the property for which purpose separate proceedings should have been filed. As a matter of principle, I would agree with the learned counsel that once the company had been wound-up, its assets sold and the money received therefrom distributed amongst its creditors, the proceedings initiated under the Companies Ordinance for winding-up of the company as in the present case would come to an end. Thereafter any further dispute with regard to the property would give a fresh cause of action to the auction purchaser which could only be agitated through a separate proceeding. However, in the present case it would be seen that the matter with regard to the rateable distribution of the company's assets is still in progress and the official liquidator has yet to give his final report to the Court regarding the affairs of the company. Even otherwise it would be seen that if the title to the property is in dispute, which has been vested with the auction purchaser through the process of this Court, then he would be most certainly entitled to approach this Court in companies jurisdiction for his relief, In the present case the Government of Sindh has disputed the title of the Federal Government to the property which has put a clog upon the auction purchaser's title as well as he derives the same from the Federal Government. So also the Excise and Taxation Department has stated in its comments that since the factory in question as contemplated in para. 4 of the lease deed between the company and the Federal Government had not been set-up consequently the property reverted back to the Federal Government. Hence to direct the auction purchaser in the present circumstances to i.e separate proceedings for his remedy would be inappropriate.
15. Reverting to the objection of the learned Addl. A.-G. As to the title of the property viz. Whether it ever remained with the Federal Government in the absence of any record maintained by the concerned Mukhtiakar in the property Register, in this respect, it would be seen that the property in question has always been designated as a salt manufacturing area right from the colonial period, It was acquired from the Karachi Port Trust by the erstwhile Bombay Government in 1935 and was licenced from time to time to various persons for the purposes of manufacturing salt. Vide Governor General's Order No. 15/1948, the City of Karachi and adjoining areas as mentioned in the Schedule to the order were bifurcated from the Province of Sindh and demarcated as the federal capital which included the property in question which thus vested in the Federal. Government.
Thereafter, vide the West Pakistan Administration (Merger of the Federal Territory of Karachi) Order, 1961, whilst a vast area which previously formed a part of the federal capital reverted back to the Province of Sindh, the property in question and other areas/properties were retained by the Federal Government i.e. Those which belonged to it per Article 6(2). As much is clear from copies of the various documents/notifications filed by the learned Standing Counsel.
16. In view of the discussion/observations, I have no hesitation in holding that the property in question continues to be vested with the Federal Government and hence to that extent the submissions of the learned A.A.-G. Cannot be accepted.
17. I would next revert to the sale of the property by this Court in favour of the applicant/auction purchaser and the rights given to him accordingly and the objections raised thereto by Mr. Pirzada as well as learned Standing Counsel with regard to the further sale thereof, In this context, it would be seen that per clause 4 of the lease deed between the company and the Federal Government the property was to be used for the setting-up of a fertilizer manufacturing plant within three years of the date of the execution thereof failing which the property would revert back to the Federal Government, In this connection, it would be seen that the lease of the property given to the company by the Federal Government was specifically for the purpose of setting-up a fertilizer factory which object could not be achieved and hence the company was wound up voluntarily under Section 166 of the Companies Act, 1913 as the company was unable to pay its debts and it was otherwise just and equitable that it be wound-up. This process was initiated by the Federal Government itself through the Ministry of Production in consultation with the Ministry of Finance vide letter dated 23.5.1982 addressed to the Chairman of National Fertilizer Corporation by the Secretary Ministry of Production, a copy of which has been filed as Annexure "H" to the petition, It would also be seen that the company is wholly owned by the Government of Pakistan, In these circumstances, in my opinion when the Government of Pakistan being the owner of the property leased it to the company which was also wholly owned by it for the specific purpose of setting up a fertilizer factory which could not be done and finally the company was liquidated again at the behest of the Government of Pakistan then to enforce clause 4 against the auction purchaser would certainly be unjust. This conclusion is further fortified from the fact that the Government of Pakistan never made any attempt whatsoever to redeem the property after expiry of three years from the date of the lease. Consequently, I would hold that clause 4 of the lease deed would become redundant insofar as the auction purchaser or for that matter subsequent purchasers of the property are concerned.
18. I would now come to the second objection raised both by the learned Standing Counsel as well as Mr. Pirzada with regard to clause 5 of the lease deed which prohibits the lessee from assigning or under letting the property or any part thereof to any person or creating a charge thereon without the previous consent in writing of the Government of Pakistan. Based upon the import of this clause both. Learned counsel have submitted that the bifurcation of the property and sale of one of such portions without the previous consent in writing of the Government of Pakistan was in violation of the same. While bifurcation of the property and sale of such portions does not come within the meaning of assigning, or under letting the same to any person or for that matter creating a charge thereon as postulated in clause 5 of the lease deed, the fact remains that where such transactions which fall short of an outright sale have been prohibited without the sanction of the Federal Government, by necessary analogy sale of the property or any of its bifurcated areas should also have the sanction of the Federal Government. Consequently, I would hold that the auction purchaser would have to obtain such sanction both for the bifurcation of the property and its sale to the purchaser. However having said as much I would also direct the Government of Pakistan that once it is approached by the auction purchaser for the necessary bifurcation/permission to sell it shall act reasonably in the matter in accordance with past precedent and where such permission is refused cogent reasons should be given for the same.
19. Finally, with regard to the objection of nonpayment of ground rent etc., Mr. Raja Qureshi had adequately met this by attaching a copy of the pay- order in favour of the Collector as per his demand. So also I find no force regarding the objections of the Collector as to the power-of- attorney given by the applicant to Mr. Raja Qureshi. Similarly, whether or not the applicant had taken loans tor setting-up a fertilizer factory in the property which became the subject- matter of litigation, cannot be a clog upon his right to dispose of the same subject to reasonable restrictions which right has been given to him by the Constitution. In any event, it appears that the litigation pertaining to said loans has been resolved.
20. I would lastly now advert to the objection of the Registrar, In this connection, it would be seen firstly that the Registrar has demanded an approved plan from the concerned authorities as the property is undivided as per item (xvi) in Rule 149 of the Sindh Registration Rules, In my opinion besides the fact that any amendment per Section 69 of the Registration Act in the Rules can only be initiated by the Inspector-General of Registration, the said item pertains to buildings and approved plan for the same and not with regard to an open piece of land such as the one under consideration. Secondly, per the Registrar an NOC has to be obtained from the concerned Mukhtiarkar duly countersigned by the DO (Revenue), City District Government, Karachi, In this respect, it would be seen that Rule 135 of the Sindh Registration Rules provides that the Registrar is not concerned with the validity of any documents which is proposed to be registered and as much has been held in Province of Punjab v. Muhammad Yaqoob (1992 CLC 2065). Finally, with regard to the last objection viz. Payment to the auction purchaser/applicant vide Section 27-B of the Stamp Act, Mr. Raja Qureshi has filed the receipts in question whereby the applicant has received the money which are duly authenticated by the High Commission Pakistan in the U.K. In view of the foregoing observations, the objections of the Registrar are dismissed. He shall proceed to register the conveyance deed in question.
21. In view of the foregoing discussion, this application is allowed subject to the permission of the Government of Pakistan for the sale in question. Order accordingly.