ZAFFAR HUSSAIN MIRZA, J.-This is a Letters Patent Appeal arising out of a judgment of a learned Single Judge of the erstwhile High Court of West Pakistan, Karachi Bench, Karachi dated 22-4-70 whereby the Petition under Article 98 of the Constitution of 1962 filed by the present appellant was dismissed.
2. Briefly the facts forming the background of this case are that the property known as "Lallan Market" situated near Bombay Bazar, Karachi was purchased as a big mansion by the appellant from the Settlement Depart--ment in an open auction for Rs. 6 lass on 22-7-1959. The appellant paid Rs. 5,000 in cash at the time of the auction as earnest money and subsequently the auction was confirmed by the Chief Settlement Commissioner on 26-8-59. For the purpose of payment of the purchase price the appellant associated with his mother and mother-in-law who were claimants holding verified claims under Schedules I, II, III and VI of the Registration of Claims (Displaced Persons) Rules, 1955. The appellant was allowed adjustment of the purchase price to the extent of Rs 5,11,972 from the deferred payment of his associates under Schedules I, II and III. For the remaining balance of Rs. 83,027.14 he was granted the facility of 36 instalments payable at the rate of Rs. 2,036.6 per month. The first instalment was paid on 28-8-1959 and the possession of the property was delivered to the appellant followed by the Provisional Transfer Order in his favour on 5-9-1959.
3. In November 1959, however, the appellant applied to the Deputy Settlement Commissioner praying that the balance amount of Rs. 83,027.1.4 may be realized from the decreed payment of his associates' verified claim under Schedule VI and the earnest money of Rs. 5,000 along with the amount of first instalment be refunded to him. On this application the Deputy Settlement Commissioner by his order dated 3-11-1959 allowed adjustment of 40 % of the amount under Schedule VI and also the refund of earnest money as well as the instalment paid by the appellant.
The appellant, however, did not remain satisfied with this and by his application dated 27-8-1963 sought the payment of the unutilized balance amount of the deferred payment in Schedule VI, in reply to which he was informed by the Additional Settlement Commissioner vide his letter dated 22-10-1963 that the Chief Settlement & Rehabilitation Commissioner had rejected his request and "allowed only 10 % under Schedule VI permissible as per Notification dated 27-1-62". Further the appellant was called upon to produce compensation books for necessary adjustment and was required to arrange payment of the balance within a week. The appellant then challenged the said order in the Constitu--tional Jurisdiction before the High Court in Writ Petition No. 895/1063 which was latter withdrawn so that he could. Re-agitate the matter before the Department.
Consequently, the appellant filed fresh proceedings before the Chief Settlement Commissioner, but the latter Officer rejected the request of the appellant by his order dated 25-6-1968. The last- mentioned order was challeng--ed before the High Court in Writ Petition No. 546/68 which was dismissed by the impugned judgment.
4. Now under section 15 (1) of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 (hereinafter referred to as the Act) as it stood before its amendment by Ordinance 1,111 of 1958, a claimant was entitled to receive payment out of the Compensation and Rent Pools to the extent of the amount shown in the certificates issued to him under subsection (2) of section 12, subject to such maximum limits, if any, as may be prescribed from time to time. By the aforesaid amending Ordinance the words "maximum limits" were substituted by the words "scale of compensation".
Subsection (3) of section 15 provided as under :--- "Subject to the provisions of this Act and the Rules made thereunder, compensation may be paid in any one of the following forms or partly in one and partly in any of the other forms, namely :-
(a) in cash ;
(b) by sale or by any other mode of transfer to the claimant of any immovable property out of the Compensation Pools, setting off the purchase money or the valuation of the property, as the case may be, against the compensation payable to him ;
(c) .
(d) In such other form as may be prescribed."
Section 11 authorises the Chief Settlement Commissioner by notification in the official Gazette to invite applications for the payment of compensation under the Act from claimants. Such notification was issued in the Gazette of Pakistan, 1963,. Part I, page 337. Under subsection (1) of section 12 of the authority concerned has to ascertain the amount of compensation to which the applicant is entitled, separately under the Compensation Pool and the Rent Pool having due regard to the prescribed scale of compensation, the nature and value of his verified claim and other circumstances of the case. Under subsection (2) of section 12 finally the not amount payable to the applicant from the two pools after deducting the public dues recoverable from the applicant and settlement fees shall be determined and certificates issued to the applicant in the prescribed form.
5. The Central Government issued and promulgated the Displaced Persons (Scale of Compensation) Rules, 1959 in exercise of power under section 35 read with subsection (1) of section 15 of the Act for the first time on 17-11-1959. These Rules, however, provided for the scale of compensa--petition payable to a claimant from the Compensation Pool against his verified claim under Schedules I, II and III to the Registration of Claims Rules, 1955. These Rules were amended and a new rule 3 was added on 25-1-1962 provid--ing for the first time for the rate of compensation from the Rent Pool against verified claim under Schedule VI at 10` of the verified claim subject to the maximum amount of compensation payable to any, one claimant being Rs. 25,000.
6. From the aforesaid facts it will be seen that the dispute in this case relates to the adjustment of the outstanding balance of the purchase price from the deferred payment under Schedule VI for which payments could be claimed from the Rent Pool. It was contended by Mr. A. A. Fazeel, learned counsel appearing for the appellant that the scale of payment having been prescribed in this regard, in 1962, the Settlement Authorities were not governed by this scale at the time when in 1959 adjustment was allowed because there were no rules in force on the subject regulating the matter and the rule framed in 1962 could not be made applicable retrospectively. In this connection reference was made to section 5 of the Act and paragraph 19 of the Schedule to the Act. Section 5 provides for constitution of a Rent Pool for compensa--petition to claimants in respect of unrealised rent of or income from immovable property other than agricultural land left in India Subsection (3) of the said section lays down that the Rent Pool shall be utilized in such manner as may be prescribed. This subsection as originally enacted contained a proviso laying down that flat rate shall be prescribed for payment of compensation from the Rent Pool, but this proviso was deleted by Ordinance LIII of 1959 with effect from 26-3-1958. Para. 19 of the Schedule to the Act on which strong reliance was placed by the learned counsel may be reproduced as under; "If a person to whom the property is transferred is a claimant holding a verified claim; payment of the amount due from him shall, unless such payment is required under the other provisions of this Act, to be made immediately, be deferred to he extent indicated below, that is to a say,
(i) if the amount of verified claim does not exceed one lac of rupees, up to 40 % of the amount of the claim ;
(ii) . Not relevant."
(iii) ------------------------..
Para. 13 of the terms and conditions of the auction for big mansions under Settlement Scheme No. III, which deals with the disposal of big mansions which was referred to as a para. Of the Scheme itself, provides that if the bid of a claimant is accepted he shall be entitled to the benefit of the deferred payment as well as to the facility of making payment in instalments in accordance with the provisions of the Schedule to the Act, the relevant extracts of which are reproduced at the end of the conditions of auction. Paragraphs 19 to 26 of the Schedule have been mentioned at the end of the conditions as the relevant provisions of the Schedule. Counsel, therefore, submitted that by the combined effect of para. 13 of the terms and conditions and para. 19 of the Schedule to the Act the appellant was entitled to adjust--ment of 40 % of the amount of his claim under Schedule VI of his registered claim and not only to 10% of his verified claim as was allowed by the impugned order.
7. A bare reading of the provisions of para. 19 of the Schedule will show that the same did not provide for `adjustment' of the purchase price against the verified claim but only lays down that the payment of the amount due from a claimant shall be `deferred' to the extent indicated therein.
Clearly, therefore, the appellant was not entitled to claim nor was the learned Deputy Settlement Commissioner empowered to order adjustment of the amount to the extent of 40 % from the appellant's verified claim under Schedule VI. Para. 10 of the Settlement Scheme No. III provides that when the bid of an auction-purchaser-has been accepted the Chief Settlement Commissioner will pass an order transferring the property to the purchaser after the amounts payable by the auction-purchaser have been paid in accordance with the terms and conditions of auction.
Paragraph 15 of the terms and conditions of the auction provides that in calculating the amount of deferred payment only the amounts of a claim verified or unverified as shown against Schedules I, II and III will be taken into account. Clearly, therefore, even for the purpose of deferred payment to the extent of 40 % as provided by para. 19 of the Schedule to the Act, the appellant was entitled to the facility of deferred payment in respect of only the claim under Schedules I, II and III. Schedule VI was not to be taken into account for this purpose.
8. The learned Single Judge has taken the vie. That in absence of the rules framed under subsection (3) of section 5 for the utilization. Of the Rent Pool at the relevant time the learned Deputy Settlement Commissioner had no power to order payment by adjustment from the Rent Pool. Mr. Fazed challenged this interpretation and placed reliance on the rule laid down in M. U. A.
Khan v. M. Sultan PLD 1974 SC 228to the effect that, failure or omission of designated authority to frame necessary rules and regulations under a statute cannot be construed as having effect of rendering the statute nugatory. In other words the submission was that even in absence of the rules framed by the competent authority the Rent Pool could be utilized. I find no substance in the submission. The facts of the reported case and the statute interpreted by their Lordships are materially different from those involved in the present case. The question in the reported case was about the validity of an appoint--ment of a person against the post of Chief Inspector of Mines, West Pakistan under the Mines Act, 1923. - Under section 29 of the said Act the Provincial Government was authorised to frame regulations inter alia prescribing the qualifications to be required by a person for appointment as Chief Inspector or Inspector. Section 4 of the said Act empowered the Provincial Government to appoint a "duly qualified person" as Chief' Inspector of Mines. The conten--petition before their Lordships was that in absence of the regulations prescribing qualifications for appointment to the post of Chief Inspector, the Government was not competent to. Exercise the power of appointing a person to the said post. The contention was repelled by their Lordships as misconceived on the ground that the enabling provision contained in section 29 of the said Act was intended to further the object of the statute and not to obstruct and stultify the same. It was then observed as under; "As a consequence, the failure or omission of the designated authority to frame the necessary rules and regulation, in exercise of the power conferred on it by the Legislature, cannot be construed as having the effect of rendering the statute nugatory and unworkable, Such an eventuality could arise only if' the. Legislature indicates an intention tar this effect in clear and unmistakable terms.
(Underlining* is mine).
Now in the present case, if the Legislature had intended that the appoint--ment of the Chief Inspector of Mines could not be made at all until such time as rules or, regulations had been framed in terms of section 29(a) of the Act, then section 4(1) of the Act would have been so worded as to include a stipulation to the effect that "the appropriate Government may, by notification in the official Gazette, appoint a person qualified in accordance with the regulation made under section 29(a) of the Act to be Chief Inspector of Mines . . . . . ." The relevant section, however, does not contain any such prescription, but contemplates only that the appropriate Government may appoint a "duly qualified person" to be the Chief Inspector of Mines. It is, therefore, clear that effect could be given to the command of the Legislature even without framing the regulation under section 29(a) of the Act."
I might with respect say that the above passage sufficiently elucidates the limits within which the rule laid down by their Lordships can operate. Applying these principles to the present case one finds that section 5 of the Act provides for constitution of a Rent Pool from the sources of funds mentioned therein and subsection (3) thereof contains the command of the statute that the Rent Pool shall be utilized in such manner as may be pres--cribed by rules. If the observations of their Lordships in the passage re-- produced above are carefully applied, it becomes clear that the power to utilize the Rent Pool will not be exercisable except in the manner provided by Rules. I am, therefore, of the confirmed view that the Legislature intended that the utilization of the funds in the Rent Pool should be in accordance with the Rules framed under the Act and not otherwise at the discretion of the Settlement Authority. I am, therefore, - in respectful agreement with the view expressed by the learned Single Judge that until the framing of the Rule prescribing the manner the Rent Pool could not be utilized. In this view of the matter the contention that Rule 3 framed and subsequently inserted in theDisplaced Persons (Scale of Compensation) Rules, 1959 cannot be given retrospective operation to apply to past and closed transactions does not arise. The reliance placed by the learned counsel on subsection (3) (b) of section 15 of the Act is also not of much assistance to the case of the appellant, for, the said provision is merely an enabling provision permitting the payment of compensation in one of the forms including by setting off the purchase money against the compensation payable to a claimant. Sub-- section (3) cannot be read in isolation and reading it alongwith subsection (1) of section 15 makes it abundantly clear that the compensation thus adjustableby being set off against the purchase price of property transferred to the claimant, would be the compensation payable to him subject to the scale of compensation as may be prescribed from time Jo time. The appellant, was,therefore, not entitled to adjustment of the compensation payable to him under Schedule VI from the Rent Pool except in accordance with the scale prescribed by the Rules. The scale referred to in subsection (1) of section 15 has no reference to the scale of percentage of deferred payment in para. 19 of the Schedule to the Act. The appellant could not, therefore, be permitted adjustment from the said Schedule according to the scale mentioned in the said para. It appears to me that the object underlying the provisions of para. 19 was to tentatively defer payments to the extent prescribed therein until the Government prescribed the scale subject to which a claimant was entitled to compensation. The intention of the Legislature seems to be that upon the determination of the scale, the amount of deferred payment of the D transfer price under para. 19 could be adjusted against the compensation finally determined and the balance paid by the transferee claimant by other modes. For all the foregoing reasons, I am unable to hold that the learned Deputy Settlement Commissioner had the power to pass order dated 3-111-1959 allowing adjustment of the balance of purchase price to the extent of 40Y. Of the verified claim under Schedule VI.
9. Mr. A. A. Fazeel reiterated the alternate submission advanced before the learned Single Judge that in any case the appellant was entitled to payment from the Rent Pool at the rate of 25 %. In support of this admission reference was made to the Memorandum dated 19/23-5-1961 issued by the Chief Settlement Commissioner. This contention was repelled by the learned Single Judge on the view that the Memo. Was primarily directed towards adjustment of public dues against Schedule VI and not to the scale of com--pensation payable to a claimant. This Memo. On the face of it was issued to clarify instructions earlier issued by the Head Office. No reference was made to any earlier Memo. Authorising adjustment of the transfer price against Schedule VI to the extent of 25 %. It is not possible, therefore, to construe this Memo. As the Legal basis for permitting adjustment to the extent claimed. In any case this Memo. Was issued in May 1961 long after the order passed by the Deputy Settlement Commissioner allowing adjustment to the appellant and cannot, therefore, tie availed of in support of the said order.
10. Finally it was urged by the learned counsel that the order of the Deputy Settlement Commissioner could not be set aside by means of the Impugned order by the Chief Settlement Commissioner as he had no power of revision at the relevant time. This contention does not seem to have been urged before the learned Single Judge. Be that as it may, I find no substance in the contention. In the first place the impugned order was passed on the application of the appellant himself addressed to the Chief Settlement Commis--sioner and therefore, he cannot now be permitted to challenge the competence of the officer concerned who passed the order. Secondly in the view that I have taken that the order of the Deputy Settlement Commissioner permitting adjustment of the transfer price to the extent of 40 % of the verified claim under Schedule VI was an order palpably without jurisdiction, it could be ignored as a nullity by the- Chief Settlement Commissioner and the appellant cannot be allowed to urge that such an illegal order be restored by exercise of the constitutional jurisdiction.
11. For the foregoing reasons, there is no, merit in this appeal which is accordingly dismissed with no order as to costs.
TANZIL-UR-RAHMAN, J.-I agree.