' The subject-matter of dispute in this case is a residential quarter consisting of two Rooms bearing No, 90/119 situate in 'K' Area of Korangi Township near Karachi. It is not disputed that the said quarter was allotted to the appellant in pursuance of a sale scheme by the Karachi Development Authority (K. D. A.). The case of the appellant is that after the initial payment of Rs, 1,200 towards the sale price he was delivered possession of the property in question on 7-10-1961 and he continued to enjoy the same until January, 1963 when he had to leave for Hyderabad in connection with the illness and treatment of his mother-in-law and upon his return he found respondent No, 2 in occupation of the property illegally. After his protests met with no satisfactory response from the respondents he filed Suit No, 358/1967 in the Court of Civil Judge First Class, Karachi against the K.
D. A. And respondent No, 2 for declaration, possession and mesne profits. The respondents resisted the suit. The plea of the K. D. A. Was that the possession of the property was never handed over to the appellant and in fact in consequence to a refund application dated 8-7-1961 by the appellant his allotment was cancelled and the property was allotted to respondent No,
2. Subsequently however, the appellant requested for restoration of the allotment which was refused and he was offered allotment of another quarter but he refused to take it. Respondent No, 2 also contended that he is the rightful owner and allottee of the disputed property under a valid allotment order dated 20-3-1963. The Court of first instance came to the conclusion that the quarter in question was validly allotted to the appellant and he was made over the possession thereof by the Administrative Officer of the K. D. A. It was also found by the said Court that the allotment order in favour of the appellant was not validly cancelled in accordance with the terms and conditions of the allotment. Notwithstanding these findings the Court took the view that since the allotment constituted and had the effect of a licence, its illegal cancellation did not given any right to the appellant to maintain a suit for possession. In this view of the matter the suit of the appellant was dismissed by the trial Court by its judgment dated 22-3-1973. The appeal filed by the appellant challenging the judgment of the trial Court has also been dismissed by the learned IIIrd Additional Ditsrict Judge, Karachi by the impugned judgment dated 1-104974. The learned 1st Appellate Court has, however, disagreed with the finding of the trial Court that the allotment of the appellant was not validly cancelled and has reached the finding that the evidence on record shows that the allotment of the appellant was cancelled on the basis of his own request. The appellant now seeks to challenge the aforesaid judgment in this second appeal.
2. It may at once be stated that the view taken by the trial Court that the allotment made in favour of the appellant by the K.D.A. Merely conferred licensee's rights upon the appellant and, therefore, even the illegal cancellation of the rights was not liable to be challenged by action at law, is not sustainable. As held in a D. B. Judgment of this Court reported as Noor Muhammad v. Karachi Development Authority (1), the allottee of a plot in a housing scheme formulated under the Karachi Development Authority Ordinance, 1957 is not merely a licensee, but has a right in rem in respect of the plot allotted to him. Therefore, as also held in the same judgment arbitrary or capricious cancellation of the allotment of plot without giving fair opportunity to the allottee to show cause against cancellation of such allotment contrary to the terms and conditions of the allotment will render the action illegal and without lawful authority. In the present case the concurrent finding of the two Courts below is that the impugned cancellation was not in accordance with the terms and conditions of the allotment and no prior notice or other opportunity of hearing was granted to the appellant before such action was taken. Indeed the finding of the Ist Appellate Court is that that no proper order cancelling the allotment was produced in evidence. The allotment order (Exh. P/1) clearly stipulates in the terms and conditions mentioned on its reverse that it will be liable to be cancelled upon default in the payment of the hire purchase instalments. Clearly, therefore, coupled with the fact that the appellant was made over the possession of the property a right in the property was created by the allotment which could not be taken away except in accordance with the terms and conditions agreed between the parties.
3. The ground that finally prevailed with the Court below to uphoid the allotment subsequently issued after a lapse of nearly two years in {{FOOT NOTE}}
(1) PLD 1975 Kar. 373 {{FOOT NOTE}} ' favour of respondent No, 2 was that on 8-7-1961 the appellant submitted an application to the Chief Administrative Officer, K.D.A., Karachi after he had deposited the initial amount of Rs, 1,000 in pursuance of the allotment, that the balance of the purchase price should be deducted from his verified claim as was allegedly announced in the newspaper by the K.D.A. In this application which has been placed in the evidence as Exh. D/2 the appellant stated in the final paragraph as under :- "I beg to inform you that I have no cash in hand, if you are agreed to give possession of the said quarter on my verified claim which value will be deducted from my verified claim then I am ready to take the possession otherwise refund my money Rs, 1,000 as early as possible because I have taken this amount on loan and escape me from this trouble."
' It was held by the Court below that upon this application the allotment of the appellant was cancelled as it was not possible to accede to his request for adjustment of the balance of the price from his claim. As already pointed out no order seems to have been passed by any competent authority directing the cancellation of the allotment, but the Court below relied upon the word "cancelled" rubber stamped upon the face of the application at two places. It was argued on behalf of the appellant that this stamp only indicated that the application was cancelled and cannot by any stretch be construed as cancellation of the allotment at the request of the appellant himself. There seems to be considerable force in the submission. It is established by the document (Exh. P/1) that after the aforesaid application the appellant was delivered and he received possession of the property on 7-10-1961 and further payments were made by the appellant towards the purchase price thereafter. These payments have been mentioned in paragraph 8 of the trial Court Judgment. These circumstances are sufficient to hold that the appellant did not pursue his application any further and had accepted the allotment on the terms and conditions on which it was offered by taking over possession and making further payments. It was, therefore not open to the K.D.A. To cancel the allotment on the basis of his application for refund. Indeed, it seems no action was taken in pursuance of the request made in the application as no refund was made to the appellant and, therefore, it appears that this plea has been set up only to justify the illegal action of the K.D.A. In issuing duplicate allotment to respondent No,
2. I, therefore, do not agree with the Court below that the stamping of the word "cancelled" on Exh. D/2 proves that the allotment of the appellant was cancelled at his own request.
4. In order to further strengthen his case the appellant has submitted an application in this Court under Order XLI, rule 27, C. P. C. For receiving additional evidence in the form of three documents.
One of the documents is a copy of the application dated 13-9-1961 purporting to have been submitted to the Chief Administrative Officer, K.D.A., Karachi bearing the endorsement of Inward No, 11498/4-9-1961. It is stated in this application that the appellant had earlier applied for adjustment of the balance of purchase price from his verified claim or in the alternative for refund of the amount of Rs, 1,000, but now the Ministry of Rehabilitation had sanctioned the adjustment of verified claim against the price of the quarteRs, It was, therefore, requested that the previous application for refund may be cancelled to the extent of Rs, 500 and the balance of price may be adjusted from his verified claim. In support of this application a slip of paper with the seal of the K.D.A. Mentioning the inward number and date of application in token of receipt of application has been produced. The third document purports to be a letter dated 25-9-1961 such by the Deputy Chief Administrative Officer, K.D.A. With reference to the appellant's aforesaid subsequent application dated 13-9-1961 and intimating him that his said application had been forwarded to the Ministry of Rehabilitation for approval. It is further mentioned in this letter that the appellant is advised in his own interest to take over possession immediately after payment of Rs, 40 as one month's rent. It was urged on behalf of the appellant that these documents were discovered from the papers of the appellant's deceased father on 21-1-1979 and, therefore, they could not be produced earlier. Learned counsel for respondent No. 1 opposed this application on the ground that nothing was stated in evidence by the appellant about the existence of these documents, but no counter-affidavit was filed denying the genuineness of these documents although one of the documents, as already stated, purports to be a letter from the K. D. A. Itself. I have, therefore, no hesitation to allow this application as these documents throw light on the effect of Exh. D/2 and would help in resolving the ambiguity as to the meaning and purpose of affixing the stamp of the word "cancelled" on the application of the appellant made earlier. In view of this additional evidence it is clear to me that the application (Exh. D/2) for refund of the entire amount paid by the appellant was subsequently withdrawn by the appellant and the K. D. A. Forwarded his subsequent request to the Ministry of Rehabilitation. It seems thereafter in pursuance of advice contained in this letter the appellant deposited the amount of Rs, 40 vide Exh. P/5 on 7-10-1961 and obtained possession, The case for cancellation of the allotment in pursuance of the appellant's own application for refund is thus totally demolished.
5. Be that as it may, the K. D. A. Was not authorised to cancel the allotment after delivering the possession and receiving further payment after a lapse of two years on the alleged ground that the appellant himself asked for refund of the initial amount deposited without issuing any notice for cancellation. It therefore, follows that the allotment issued in favour of respondent No, 2 was palpably invallid and created no rights in favour of the said respondent. Mr. S. M. Raza, learned counsel for respondent No, 2 argued that he cannot be deprived of his rights under the subsequent allotment as he was a purchaser in good faith as laid down by section 41 of the Transfer of Property Act. The submission is without substance. The occasion for application for section 41, Transfer of Property Act does not arise in the facts of this case. As is well established section 41 is based upon the equitable doctrine of estoppel which operates between the true owner and the transferee in good faith and would arise only where the transferor is the ostensible owner of the property with the consent expire or implied of the person interested in immovable property. In the present case it cannot be argued that the appellant had expressly or impliedly consented that the K. D. A. Be the ostensible owner of the property free from any rights created in his favour by virtue of the earlier allotment. Respondent No, 2, therefore, cannot claim any rights on the basis of the illegal issued in his favour without proper cancellation of the prior allotment in favour of the appellant.
6. In the result, I allow this appeal and decree the suit of the appellant as regards the relief of declaration and possession. No relief for manse profits can be allowed- as it was not pressed at the hearing and no evidence was led on this question. The appellant shall have costs throughout.