' MUHAMMAD SAIR ALI, J.---The facts herein involved are by and large undisputed. Bungalow No,866 (Khassra No,2126) measuring 4 kanals Mansehra Road, Abbottabad was owned by respondents Nos. 4 to 6. It was given on rent in 1991 to the Employees Old Age Benefits Institution ("EOBI") i,e, the respondent, for its Regional Office through Lt.-Col. Farukh Siyyar respondent No,7 as attorney of the owner.
2. The EOBI was served with a legal notice by the landlords to vacate the Bungalow. EOBI allegedly claiming an agreement for the purchase of the said Bungalow, (denied by 'the owner landlords) in July, 1993 filed a Suit No,295/1 against respondents Nos. 4 to 7, for specific performance.
3. The owners later sold the property to the appellants. Mutation No,3039 was attested in favour of the appellants on 11-11-1993. Appellants also served EOBI with notice dated 8-12-1994 for vacation of the bungalow. The appellants filed an ejectment petition against respondents Nos.1 to 3 before the Controller of Rents, Abbottabad Cantonment on grounds of default, bona fide personal need and damage to the property.
4. EOBI then got initiated proceedings for the acquisition of the said bungalow under the Land Acquisition Act, 1894 "for the Regional Office of the Employees Old Age Benefit Institution, Abbottabad". The Collector Abbottabad issued Notification No,152 dated 23-2-1995 under section 4 of the Land Acquisition Act. This notification intriguingly bore signatures and designation of the Deputy Regional Head of EOBI as well. To obtain proceedings under section 17 of the Land Acquisition Act, respondent No,1 deposited Rs,37,00,000 with the Collector who sought approval of the Commissioner, Hazara Division, Abbottabad. The Commissioner examined the matter and stayed the acquisition proceedings by order dated 26-10-1995 which read as under:-- "I feel that the exercise of powers under section 17 are not warranted. Besides, civil litigation at different forums is also in progress. Under humanitarian grounds as well as to meet the ends of natural justice it seems fit that the acquisition proceedings be held in abeyance till the decision of Civil Court, while the acquiring department may be advised to acquire less expensive land."
5. In EOBI's suit for specific performance, plaint was rejected by the learned trial Court vide order dated 25-3-1996. The rejection of the plaint under Order VII, Rule 11, C.P.C. Was not challenged by EOBI etc. i,e, respondents Nos.1 to 3 and thus became final.
6. EOBI however filed a composite Writ Petition No,18 of 1995 to restrain the Rent Controller from proceeding with the ejectment matter "in view of the acquisition proceedings". This writ petition was accepted through judgment dated 9-7-1996 by the Peshawar High Court whereby:- "(i) order dated 26-10-1995 passed by the Commissioner staying the land acquisition proceedings, was set aside and the Land Acquisition Collector was directed to resume the proceedings thereof;
(ii) The Controller of Rents, Abbottabad Cantonment was restrained from proceeding with the eviction application of the petitioners. And
(iii) Order dated 25-3-1996 rejecting plaint of EOBI's Suit was, set-aside and the learned Civil Judge was directed to restore EOBI's civil suit for specific performance and decide the same on merits.
7. Against the above judgment, the appellants sought leave to appeal from this Court by filing C.P.
No, 268-P of 1996 which was dismissed and leave was refused by this Court on 14-5-1999. The Rent Controller was however allowed to proceed with the eviction case but was restrained from announcing the final order till the decision of the civil suit and the acquisition proceedings.
8. In the meantime as per the High Court's judgment dated 9-7-1996 the acquisition proceedings were recommenced. However vide Notification No, 370/Acq dated 3-7-1998 the property was de- notified by the Land Acquisition Authorities "Taking all the matters into consideration in general and the public interest in particular".
9. On 1-9-1998 EOBI etc./respondents Nos.1 to 3 challenged the above order of de-notification of acquisition proceedings through Writ Petition No, 356 of 1998 in the Peshawar High Court, Circuit Bench, Abbottabad. This writ petition (Writ Petition No, 356 of 1998) was dismissed on 10-4-2003 on withdrawal by the EOBI etc. (respondents Nos. 1 to 3) with leave to file a fresh petition.
10. Having lost interest in civil suit for the specific performance, EOBI/respondents Nos. 1 to 3 did not obtain restoration/revival of the suit despite orders of the High Court and this Court. The learned trial Court therefore by order dated 28-2-2002 consigned the same to record. Appellants' application for restoration of the suit, was however dismissed by the trial Court as un-maintainable for the reason that the defendants lacked right to seek revival of respondent plaintiff's suit.
11. As such the acquisition proceedings for EOBI and the Civil Suit of EOBI concluded against EOBI i,e, respondents Nos.1 to 3. In the meanwhile, the Rent Controller thereupon recommencing proceedings on the appellants' eviction petition against EOBI, by order dated 11-12-2001 directed respondents Nos. 1 to 3 to deposit the arrears of rent as well as the future rent. EOBI etc. (the respondents Nos. 1 to 3) failed to comply with the said order. As such their defence was struck off by order dated 19-3-2002 and they were directed to vacate the property and put the appellants in possession of the bungalow/property in question. The possession of the bungalow was delivered to the appellants on 4-5-2002 in the execution proceedings. This eviction order dated 19-3-2002 and the delivery of possession of the said property in execution proceedings to the appellants on 4-5- 2002 attained finality in absence of any challenge thereto by respondents Nos. 1 to 3.
12. EOBI's civil suit for specific performance and the appellants eviction petition thus stood conclusively decided against EOBI etc. i,e, respondents Nos. 1 to 3.
13. Against de-notification of the Acquisition proceedings, a fresh Writ Petition No, 27 of 2004 was filed on 10-11-2003 by EOBI. This writ petition was allowed by the High Court vide judgment dated 24-2-2005 whereby the order de-notifying the land/property and the subsequent orders thereto were set-aside. And the Land Acquisition Collector was directed to "immediately recommence the land acquisition proceedings" as under: "That a fresh notification under section 4 be issued and the date of such notification would be the determining factor for fixing the fair compensation on the prevailing market rates subject to the restriction and guidelines given in section 23 of the Land Acquisition Act and when the petitioners are ready to pay the compensation to be determined afresh."
14. Feeling aggrieved of the High Court's judgment dated 24-2-2005, the appellants filed Leave Petition No, 1637 of 2005. The respondents also filed C.P. No, 1878 of 2005 thereagainst to seek acquisition at the rate of compensation/prevailing as of 23-10-1995 i,e, the date of previous notification under section 4 of the Land Acquisition Act. These petitions were heard together. Leave was granted on 18-1-2007, to consider the following questions:--
(i) Whether section 17 of the Land Acquisition Act would be applicable in the cases in hand?
(ii) Whether a bungalow can be acquired by way of land acquisition proceedings? And
(iii) That what would be effect of order dated 14-5-1999 passed by this Court in above referred Civil Petition No, 268-P of 1996 particularly when all the forums below have neither made mention of the same in their orders nor attended to those directions?
15. In support of these appeals, Raja Muhammad Ibrahim Satti, learned Sr. Advocate Supreme Court for the appellants contended that Notification dated 23-10-1995 under section 4 of the Land Acquisition Act, 1894 was meanouvered by the respondents Nos. 1 to 3 i,e, EOBI etc. And was 'got' issued in bad faith to the deteriment of the owners to avenge the eviction of EOBI etc. From the property and the EOBI Officers had become personally motivated against the owners of the said property.
' Also that the property was neither specified nor described in the notification which was issued hurriedly, unfairly, mechanically and illegally by the Collector etc. Conniving with, respondents Nos.
1 to 3 without existence of a "public purpose" but for the Regional Office of EOBI. And that on consideration of all the facts and the law, the competent authority validly de-notified the acquisition proceedings of the said property on 3-7-1998. And that acquisition authorities could not have been ordered by the learned High Court to recommence the acquisition proceedings to acquire the property. The High Court passed the impugned judgment, beyond the scope of its constitutional jurisdiction under Article 199 of the Constitution, and that the Commissioner, Abbottabad was not a party to the writ petition wherefor the impugned judgment was void. Further that the Commissioner acted on good reasons, in good faith and in public interest and the High Court had no jurisdiction to substitute its own opinion regarding acquisition or non-acquisition of the said property. Also that the public resources and the public money was spent to satisfy the personal ego and anger of the Regional head of the EOBI against the appellants. EOBI under law could only act for the welfare of the labour and not for personal malice. The "public purpose" to acquire could best be judged/determined/decided by those empowered to do so under the Land Acquisition Act and the High Court could not have assumed powers of the Land Acquisitioning Authority.
16. In support of Civil Appeal No, 622 of 2007 and to meet contentions of the appellants, the learned Advocate Supreme Court for the respondents Nos. 1 to 3 stated that respondents' appeal was only on the limited ground to assail direction for the issuance of fresh notification under section 4 of the Land Acquisition Act instead of proceeding under the notification of 23-2-1995 because under the direction of determining compensation afresh at the latest market rates, the EOBI would not be able to pay compensation at the prevailing market rates.
17. Heard. Record examined.
18. The fundamental question that arises is as to whether Employees Old-Age Benefits Institution
(EOBI) could initiate proceedings and obtain acquisition of the said property and if so under which provisions of the Employees Old Age Benefits Act, 1976 or the Rules and Regulations framed thereunder and were such provisions adhered to.
19. To provide old age benefits to the persons employed in the Industrial, Commercial and other Organizations, the Employees Old-Age Benefits Act,. 1976 was introduced. The scope of the applicability of the Act was prescribed in section 1 and section 3. For the administration of the scheme of the Act, Employees Old Age Benefits Institution was established by the Federal Government as a body corporate having perpetual succession and a common seal with powers, subject to the provisions of this Act, to acquire, hold and dispose of property. The institution enjoyed the capacity to sue or be sued in its name (section 4).
' The management, the general direction and superintendence of the affairs of the Institution vested in a Board which, with the assistance of the Chairman of the Institution, could exercise all powers and perform all acts and things exercisable by the Institution. The policy, guidelines and instructions regarding discharge of functions by the Institution were to be provided by the Federal Government (section 6). The Trustees on the Board were also to be nominated and notified by the Federal Government (Section 7).
' The Government thus enjoyed the control of the Institution and its Board and the superintendence of the affairs of the Institution.
20. Section 8 ibid defined the powers and functions of the Board of Trustees by inter alia stating that:-- "In addition to the powers conferred on; and the functions entrusted to it, by other provisions of this Act or by the rules, the Board shall have powers:--
(a) to approve the budget estimates, the audited accounts and the annual report of the Institution for submission to the Federal Government in accordance with the provisions of this Act; (b)
(c)
' The Chairman of the Institution was also to be appointed by the Federal Government to exercise prescribed powers and functions (Section 8-A).
21. Under section 17 the Institution was to have a fund to be called the Employees Old Age Benefits Fund to incur the expenditure necessary for the purposes of this Act. 'All contributions made under this Mt and all moneys received by the Institutions were to be paid into the Fund and were to be utilized solely for the purposes of the Act.
22. Section 18 of the Act allowed making of investments or reinvestments by providing that:-
(1) Subject to rules, the Institution may, from time to time, invest any money which are not immediately required for expenses under this Act, and may reinvest or realize such investment;
(2) The Institution may, with the previous sanction of the Federal Government and on such terms as it may specify, raise loans and take measures for discharging such loans.
23. The Institution under section 19 of the Act was obliged to draw up annually a budget and submit the same to the Board for the approval of the Federal Government.
24. Under section 44 the Federal Government was empowered to make rules for carrying out the purposes of the Act including the "Investments of surplus moneys, realization of investment and reinvestment of proceeds" section 44(2)(vii). The Board under section 45 was given the powers to make and notify Regulations consistent with the provisions of the Act and the Rules.
25. In exercise of powers conferred under section 44 of the Act, the Federal Government through S.R.O. No,438-I of 77 dated 12-5-1977 notified the Employees Old Age Benefits (Board of Trustees)
Rules, 1977. Rule 6 thereof provided for the "powers and functions of the Board" as under:--
(a) to approve the annual budget and revised budget estimates, the audited accounts and the annual report prepared by the Institution for submission to the Federal Government...................
(b)
(c)
(d)
(e)
(g) to order investment and disinvestments in real estate where the investment exceeds fifty lac rupees;
(h) to make financial commitment outside the budget, where revenue or capital, involving an amount exceeding fifty lac rupees and recurring outlay exceeding twenty five lac rupees;
26. Similarly, the Employees' Old-Age Benefits (Investments) Rules, 1979 were framed. Rule 3 clause
(h) provided that "the Institution may invest any moneys which are not immediately required for expenses under the Act in immovable property, whether freehold or leasehold, within the country, not outside the country" or under Rule 3(i) in such other investments as the Institution may think fit with the previous approval of the Federal Government.
' Rule 4(1) placed limits upto which investments could be made under Rule 3(h) by restricting investment in one property to the extent of ten percent of the portfolio; or in respect of all properties together to the extent of thirty per cent of the portfolio.
' The requirements of compliance with the imperatives of above Rules was mandated in terms of Rule 5 ibid which disallowed and prohibited disbursement of money where limits provided in Rule 4 exceeded.
(1) If at any time the existing investments in any class or aggregate of classes or in any one authority, corporation, company, non-guaranteed bank on immoveable property exceed the limits prescribed by Rule 4, then except as provided in Rule 6, no additional investment by way of actual disbursement of money or money's worth shall be made by the Institution at that time in such class or classes, or authority, corporation, company, non-guaranteed bank or immovable property.
(2) In respect of any class or aggregate of classes, or any one authority, corporation, company, non-guaranteed bank or immovable property, no additional investment shall be made at any time by way of actual disbursement of money or money's worth if such additional investment will cause the limits prescribed by Rule 4 to be exceeded, except as proved in Rule 6.
(3) For the purposes of this rule and Rules 3, 4 and 6 all existing investments shall be taken at current book value.
27. The Act thus allowed the Institution to invest or reinvest any money not immediately required for expenses under the Act but subject to the provisions of the Rules. Section 8 (a) and section 19 related to the budgetary provisions. The estimate and allocation for the income and expenditure etc., were to be drawn up by the Board in the prescribed manner for submission to the Government; on whose approval, the same could constitute the budget of the Institution. The Institution was under a duty to maintain accounts of its income, expenditure, assets and liabilities as well.
28. Reading the above provisions of the Act, Rules and Regulations, it is evident that the EOBI to purchase or acquire immovable property was bound to show under section 18(1) read with Rule 3(h) of Investment Rules that the money needed for such investment was surplus as not required for the expenses under the Act and Institution was acting through its Board in whom the power had been vested. Also that such investment did not exceed the limits placed under Rule 4(1) of Investment Rules, 1979.
29. In the present case the EOBI, the respondents in Appeal No, 621 of 2007 and appellants in Appeal No, 622 of 2007, have neither pleaded nor have they asserted or produced any document to evidence that the assessm ent/ estimation thereto as the budgetary item was even submitted by the Board for approval or the proposed purchase or the acquisition of the property was duly approved by the Board of the Institution and was in consonance with the Act and the Rules. There is nothing on record to prove that procedure prescribed in above referred Rules and Regulations was followed by the Institution, its Board or its Chairman or Officers for initiation of the acquisition proceedings and for payment of compensation thereto.
' In Civil Appeal No, 622 of 2007, EOBI at pages 23 and 24, the respondents Nos.1 to 3 have only filed minutes of the meeting dated 25-1-1993 which was held at the office of Deputy Director General (North Zone, Islamabad) in connection with the purchase of the Regional Office Building, Abbottabad. These minutes only indicate that the negotiations were held between the parties on the proposal for the outright purchase of the property by EOBI. These minutes did not relate to the necessary approvals or the price or the concluded agreement between the parties.
' As narrated above, on the basis of these minutes, EOBI unwisely filed its civil suit for specific performance against the appellants, EOBI later opted not to pursue the civil suit which was therefor consigned to record by the trial Court.
30. EOBI has neither pleaded nor asserted at any stage nor has it shown through record that the Board of the Institution or the Government either sanctioned the initiation of the acquisition proceedings or permitted acquisition of the said property or that any budget thereto was allocated and approved for the purpose. In absence of any such approval on record, we are constrained to hold that the proceedings in question initiated on behest of EOBI were coram non judice and of no legal effect. This aspect of the case appears to have escaped attention of the learned Division Bench while pronouncing the impugned judgment dated 24-2-2005.
31. Having ruled as to the fundamental illegality of the action of EOBI and the proceedings of acquisition of the property, other questions, on which leave was granted, do not need adjudication.
32. As recounted above, appellants were made to undergo cumbersome, time and finance consuming but un-necessary litigation for a period of 15-16 years. They were deprived of the benefits and enjoyment of their proprietary rights over their property. Actions of EOBI and its functionaries were patently unlawful unfair and legally and factually mala fide. Respondent No,1 through its Chairman is thus directed to pay compensatory costs of Rs,500,000 (Rupees five lacs only) by or before 15th of December, 2010, otherwise the appellant No,1 may file proceedings for recovery of the same against the respondents and for disobedience of the direction of this Court by the respondents. EOBI shall however be entitled to recover the above amount from its responsible functionaries if it so chooses.
33. We also agree with the learned Advocate Supreme Court for the appellants that the acquisition proceedings initiated on behalf of EOBI and notification under section 4 issued by the Collector lacked public purpose and good faith. As held above, the acquisition proceedings were un-fair, illegal and mala fide. The ill-intentioned functionaries of EOBI obtained the notification with object to continue un-lawful possession of appellants' property in Abbottabad. The proceedings lacked transparency as well as the application of the principles of Rule of law and natural justice. The acquisition proceedings were neither for statutory nor for a public purpose. The proceedings were also shorn of the sanction of social justice, law and morality.
34. The Land Acquisition Collector acted mechanically, without an inquiry or satisfaction as to the existence of the public purpose or public welfare. We would like to record that the commissioner on due inquiry and application of law validly held the acquisition proceedings to be against the provisions of Land. Acquisition Act being contrary to the public purpose and the financial feasibility.
We believe the acquisition proceedings also offended the provisions of Article 24 of the Constitution of Islamic Republic of Pakistan. The impugned judgment dated 24-2-2005 passed by a learned Division Bench of the Peshawar High Court Abbottabad Bench cannot thus be sustainable. The same is thus set- aside. As recorded in the short order dated 15-3-2010, "Civil Appeal No, 621 of 2007 is accepted and Civil Appeal No, 622 of 2007 is dismissed subject to cost of Rs,500,000 (Rupees five lac only) which to be paid to Javed Iqbal; appellant in Civil Appeal No,621 of 2007".