The subject-matter of the litigation which culminated in this Regular First Appeal is a plot of land bearing No. 8/8, measuring 2 kanals, situated at Park Road, University Town, Peshawar. This plot formed part of an open land which was owned and possessed by the University Town Committee and the whole of it was reserved for Park purposes.
2. In exercise of powers conferred by subsection (2) of section 2 of the North-West Frontier Province Local Government Ordinance, 1972 (N: W. F. P. Ordinance III of 1972), read with section 93 thereof, the Govern--ment of North-West Frontier Province was pleased to make the University Town Committee Rules, 1974 (hereinafter called the Rules). Since rules 3,4,5,7 and 10 of the Rules are relevant for determination of some of the points involved in this case, they are reproduced below for facility of reference "3. Establishment and incorporation.-As soon as may be, there shall be established a Committee to be known as the University Town Committee for carrying. Out the purposes of the provisions of the Ordinance which remain applicable and these rules.
4. Constitution of the Committee.-(1) The Committee shall consist of such number of members, not exceeding eight, excluding the Administrator who shall also be a member as may be appointed by Government: Provided that not more than half of the members appointed may be Government Officials.
(2) Each member shall-
(a) hold office for a period of one year unless sooner removed and may be re-appointed thereafter for such period or periods as Government may in each case determine;
(b) perform such duties as may be prescribed by regulations or as the Committee may by order in writing assign to him; and
(c) receive such salary and allowances as may be determined by Government.
(3) A non-official member may at any time resign his office by tendering in writing his resignation to the Government.
5. Appointment of Administrator.--There shall be appointed an Administrator of the Committee, on such terms and conditions as Government may determine, who shall be the Chief Executive Officer of the Committee.
6. ......
7. Meeting of the Committee.-(1) The meetings of the Committee shall be held at such time and at such places as may be prescribed by regulations: Provided that until regulations are made in this behalf such meetings shall be convened by the Administrator as and when required.
(2) To constitute a quorum at a meeting of the Committee not less than four members, including the Administrator, shall be present.
(3) The Administrator shall preside at every meeting at which he is present, and if the Administrator is absent from a meeting, a member chosen by the members present at that meeting shall preside at the meeting.
(4) Each member, including the Administrator, shall have one vote, and in the event of an equality of votes the Administrator, shall have a second or casting vote.
8. ........
9---------.
10. Functions of the Committee.-Subject to these rules and such direc--tions as Government may from time to time issue, the Committee shall, within the limits of the funds at its disposal, undertake all or any of the works specified in the Appendix in the manner to be prescribed by Regulations."
3. In accordance with rule 3, the Government of North-West Frontier Province appointed a Committee whose period of tenure seems to have expired on 15th of September, 1975. During the period from 16th September, 1975 to 15th April, 1976, the Committee was without members as the Provincial Government, for reasons best known to it, did not appoint the members as required by rule 4.
4. In November, 1975, Mr. Habibullah Khan, a retired Major of the Pak. Army, was appointed as Administrator of the University Town Committee and he occupied this seat till April, 1976, when he seems to have been removed from his office for having misconducted himself in the performance of his official duties. During his tenure of office as Administrator of the Committee, he, by four separate orders dated 9th February, 1976, transferred Plots Nos. 8/8, 8/2, 8/9, and 8/1 to Messrs Iftikhar Ahmad, Rehmatullah, Mohibur Rehman Kiani and Dr. Zair Gul respectively. By an order dated 20th February, 1976, he transferred Plot No. 8/7 in favour of his own son Mr. Najeebullah, who, in turn, sold the same some--time after to Mr. Muhammad Yousaf Mohmand. By two separate orders dated 2nd March, 1976, he transferred Plots Nos. 8/4 and 8/5 to Abdul Majeed Khan and Muhammad Naeem respectively. The sale price in respect of each one of the plots measuring two kanals was fixed at Rs. 40,000 by the Administrator. The sale deeds in favour of all the seven transferees were got registered by him on a number of dates ranging from 21st February, to 20tb March, 1976.
5. It appears that on coming to know of these allotments/transfers, the Minister for Local Bodies, Government of North-West Frontier Province, called a meeting for 13th April, 1976, which amongst others, was also attended by the Administrator, Mr. Habibullah Khan. A decision as to the allotments made by him was taken in the meeting which was also officially communicated to the Administrator, vide No. SO (LG-I) LG-23/18/75 Vol. II) dated 13-4-1976. Since this letter contains all the details of the decision taken in the meeting, and would facilitate the understanding of the case, it is reproduced as under :- "Government of N: W. F. P.
Local Government, Cooperation and Social Welfare Department Wing No. SO (LG-I) LG-23/18/74 Vol.II) dated Peshawar the 13-4-1976.
To The Administrator, University Town Committee, Peshawar.
Subject.-Sale of Vacant Plots of Land.
Ref.-Meeting with the Minister for Local Bodies, N.-W. F. P., Peshawar dated 13-4-1976, on the subject noted above.
2. You are requested to withhold action with reference to the sale of vacant plots in the University Town Area. You are also requested not to approve building site-plan in respect of these plots and to withhold these already approved by you.
3. The newly constituted Committee (being notified separately) will meet immediately and will discuss these allotments and send its reports to the Provincial Government.
4. The above directions were given to you by the Minister for Local Bodies, N: W. F. P., Peshawar in the meeting today.
(Sd.) Sher Baz Khan, Section Officer (I)."
A copy of this letter was also forwarded to the Commissioner, Peshawar Division, Peshawar, for information.
6. On 15th of April, 1976, the Provincial Government appointed Dr. Said Kamal, Mr. Muhammad Saeed Khan, Mr. Hukmat Khan, Fazal Haq Shaida, Abdur Rauf Khan, Ghulam Nabi Khan and Abdul Qayum Khan as members of the Town Committee for a period of one year. On 19th of April, 1976 an emergent meeting of the Committee was held, the minutes of which were reduced into writing and are detailed below :- "Minutes of the Meeting of the University Town Committee, Peshawar held on 19th April, 1976 at 10- 30 a.m. In the Office of Committee."
The following members of the Committee attended the meeting :- "(1) Mr. Muhammad Said Khan.
(2) Mr. Hukmat Khan.
(3) Mr. F. H. Shaida.
(4) Mr. Abdur Rauf Khan.
(5) Mr. Ghulam Nabi Khan.
(6) Mr. Abdul Qaiyum.
(7) Dr. Syed kamal attended by invitation Mr. Muhammad Said Khan presided over the meeting.
1. The Committee considered the illegal and unauthorised sale by the Administrator, Town Committee of the open land of Park Road reserved for extension of the Park and other public utility service without obtaining prior approval of the Town Committee, which alone under the rules of the Committee promulgated by the Provincial Government is competent to acquire, hold and transfer the property of the Committee.
2. The Administrator had divided the land in question into nine plots of about two Kanals each.
These he allotted to his close relatives, including his son and his friends and business associates.
Applications for allotment of the plots had been obtained by him direct from the allottees, which he had kept in his personal custody, till the plots had been allotted and all other formalities in connection therewith had been completed. '
3. The plots had originally been allotted to nine persons, disregarding 385 applications on the waiting list which include some deserving application who are residing in the University Town or elsewhere in rented houses. In one case the allotment has been made in favour of a student of the medical college, whose father/mother owns a house in the University Town in the compound of which he is presently building another house also. Subsequently to the original allotment of nine plots the allotment of two plots had been cancelled for reasons not known.
4. The allotment had been made in desperate hurry within a few days of the receipt of applications and strict secrecy had been observed all along. The scrools for payment of the sale price by the allottees, contrary to the normal practice, had been prepared and forwarded in all cases by the Head Clerk to the Bank and not the Treasurer who is the concerned official, and who, according to the normal procedure as provided on the scrool sheets has to approve every transaction. In these cases the amount being large it was all the more necessary 'hat the payment scrools should have been scrutinised and approved by the Treasurer before forwarding the same to the Bank.
5. The plots have been sold by the Administrator for ridiculously low price of Rs. 20,000 per kanal as against the current market rate of Rs. 70,000 or so, benefiting each allottee, including his son to the tune of Rupees one lac (for plot of two kanals) whereby the Committee has been deprived of the additional amount of rupees seven lacs which would have accrued to it if the plots had been sold at the market price. The plea taken by the Administrator for the sale of the land as recorded on the file, was the poor financial position of the Committee. If he was really sincere and had the interest of the Town Committee at heart and had no motive of benefiting his relatives and friends or had any other consideration he would have charged the market price for the sale of the plots.
6. A most serious and dangerous irregularity committed in this deal is that in most cases the sale deeds had been executed much before the payment had been made. In the case of his own son the sale deed had been executed and registered on 24-2-1976, the sale price was paid on 19-3- 1976 nearly a month after registration of the sale deed. This is a criminal offence as a wrong declaration had been made before the Registration Authority and the allottees could refuse payment.
(7) In view of the above, the Committee came to the conclusion
(a) That the allotments made by the Administrator are illegal and unauthorised and the Town Committee has been defrauded of huge sum of money and it was resolved that the illegal sale of the land should be cancelled forthwith and the money received refunded to the allottees. The Honey: Joint Secretary was instructed by the Committee to implement this decision immediately.
(b) That prima facie a case of gross misuse of authority and criminal breach of trust exists against the administrator on this account and it was resolved that the matter should be immediately reported to the Provincial Government to take necessary action against the Adminis--trator of irregularities in this case.
(c) A Sub-Committee consisting of Mr. Hukmat Khan, Mr. F. H. Shaida and Dr. Syed Kamal was appointed to go into cases of other irregulari--ties, if any, committed by the Administrator and his staff and report to the Committee for further action.
The Committee also decided that in the over all interest of the residents of the Town, all the open spaces, Parks etc. Reserved for specific purposes should not be sold, or otherwise disposed of in future."
7. In consequence of the minutes of the Committee, the Government of North-West Frontier Province in the Local, Co-operation and Social Welfare Department, cancelled all the allotments. A Letter No. 329/7-W dated 19th April 1976, was addressed by the University Town Committee to Mr. Iftikhar Ahmad intimating him that the Administrator had, in contravention of the Rules and regulations of the Town Committee allotted him Plot No. 8/8 and that the allotment being illegal has been cancelled by the Committee. A crossed cheque for a sum of Rs. 40,000 was also sent to Iftikhar Ahmad alongwith this letter.
8. After the receipt of the above letter, Iftikhar Ahmad instituted a suit in the Court of Senior Civil Judge, Peshawar against the University Town Committee, Peshawar, and nine others, for a declaration that he was valid transferee of Plot No. 8/8 through sale deed registered on 24-2-1976 for a sale consideration of Rs. 40,000 and that the defendants were neither entitled nor competent to cancel or otherwise alter the said transfer in any manner whatsoever. A perpetual injunction by way of consequential relief was also sought against the defendants. The plaintiff's case, in nutshell, was that he was a valid transferee of the plot in question and that the Administrator by whom it had been transferred to him was competent to do so.
9. The suit was vigoriously contested by the defendants on various grounds as a result of which the trial Court framed the following issues :- "(1) Whether the suit is not properly valued for the purposes of court-fee and jurisdiction ?
(2) Whether the suit is properly valued for the purposes of the court-fee and jurisdiction ?
(3) Whether the suit is bad for misjoinder of parties ?
(4) Whether the plaintiff has got a cause of action ?
(5) Whether document registered by Sub-Registrar, Peshawar on 24-2-1976, vide Bhai No. 1. Volume No. 1257, page No. 26, Document No. 437 is void and if so, to what effect 7
(6) Whether the cancellation of the allotment of the suit plot by the defendant; is illegal, mala fide and void ?
(7) Whether the plaintiff has spent a sum of Rs. 22,000 on account of construction in the suit plot ?
(8) Relief."
10. After recording all the evidence which the parties wished to adduce, the trial Judge found Issues Nos. 2, 4, 6 and 7 in favour of the plaintiff while he decided Issues 1, 3 and 5 against the defendants.
Consequently, he decreed the plaintiff's suit on 8th February 1979, leaving the parties to bear their own costs. This decision is now being complained of before me.
The only issues which have been argued before me by the learned counsel for the parties and on which the fate of this appeal hinges are Issues Nos.4, 5, 6 and 7. I will, therefore, confine my discussions to these four issues.
11. The first and the most vital question for consideration is : Whether the Administrator was empowered to dispose of the plots owned by the Town Committee ? It has not been disputed that rule 10 of the Rules empowers the Committee, subject to the rules and such directions as Government may, from time to time issue, to undertake all or any of the works specified in the Appendix in the manner to be prescribed by Regulation, and that Item XIV of the Appendix refers to the "acquisition of land for housing schemes and disposal of plots for houses".
The Administrator in his official capacity as such does figure nowher in the Rules in so far as the powers to undertake all or any of the works specified in the Appendix are concerned. In other words he has not been empowered by the Rules or any other law to dispose of the plots for houses. By virtue of rule 4, the Committee shall consist of members, not exceeding eight excluding the Administrator who shall also be a member as may be appointed by the Government. In this way, he enjoys the status of being an official member of the Committee. Besides, the Administrator as envisaged by rule 5, shall be the Chief Executive Officer of the Committee. The fact that the Town Committee in question was without any members at the time when the plots in question were disposed of in not in dispute between the parties.
12. While challenging the competency of the Administrator in relation to the disposal of plots, Mr. Raza Ahmad Khan, the learned counsel for the appellant, strenuously contended that the powers for the disposal of plots vested in the Committee by virtue of rule 10 of the Rules read with Appendix annexed thereto. It was said that the Administrator had no authority whatsoever to dispose of the plots and that the plots were given by him to his own son and friends to shower favours on them in that the market value of each of the plot measuring two kanals was, in no case, less than Rs.
1,50,000 whereas the Administrator transferred each plot for a sum of Rs. 40,000 only. The learned counsel further went on to say that the orders for the disposal of plots by the Administrator were without jurisdiction because of the fact that he had no such powers of disposal and for that reason, a validly constituted Committee by the Government, was competent to annul his orders as has been done in the present case.
13. Repelling the above contentions, the learned counsel for the plaintiff-respondent maintained that the Administrator being the Chief Executive Officer of the Committee was competent to dispose of the plots for houses, as he did in the case in hand, and that the orders passed by him in this regard could not be questioned by the Committee muchless could the Committee cancel the allotments of plots made by the Administrator. He added further that in the present, case, the Commissioner, Peshawar Division, Peshawar, had also accorded approval for the disposal of the plots in question with the result that with his approval the matter attained finality.
14. I have given a careful thought and dispassionate consideration to the matter and have arrived at the conclusion that the contentions raised by the learned counsel for the appellant are well- founded and must prevail. It is an undeniable fact that by virtue of rule 10 read with item XIV of the Appendix, the powers for disposal of plots for houses vest in the Committee appointed by the Government. It has not been alleged before me that the Committee, at any time, delegated any of its powers under the rules to the Administrator with the approval of the Government. Rule 7(2) of the Rules provides that to constitute a quorum at a meeting of the Committee, B not less than four members, including the Administrator, shall be present. The Administrator alone thus does not constitute the Committee and his position, while attending the meetings of the Committee is also the Chief Executive Officer of the Committee having reference to the items contained in the Appendix. As Chief Executive Officer of the Committee, he is required to perform functions of executive nature other than those having reference to the items contained in the Appendix. By no stretch of imagination, he can be regarded as having been vested with the powers of the Committee. The powers having reference to the items mentioned in the Appendix are to be exercised by the Committee and by none else. In this view of the matter, I am clear in my mind that the Administrator had no power to dispose of the plots including the one in dispute in the present case.
15. The question next arises whether Commissioner, Peshawar Division, Peshawar, whose approval seems to have been obtained by the Administrator for the disposal of plots in question was competent in law to accord such a sanction and thereby validate the transfers in favour of the plaintiff and others. My attention has been invited by the learned counsel for the plaintiff- respondent to rule 19 of the Rules which provides that "any person aggrieved by an order passed by the Committee or its Administrator in pursuance to these rules, or regulations or bye-laws framed thereunder may appeal to the Commissioner within 30 days of the announcement or communication of the impugned order, and any order passed in appeal shall be final". It has been argued that the Commissioner can exercise all the powers under the Rules and since he accorded sanction to the disposal of the plot in favour of the plaintiff, that approval amounted to the exercise of powers to dispose of the plots under the Rules and for that reason, the disposal of plot had attained finality. On the first impression, this argument appears to be formidable, but on a careful consideration, I find that the argument is one of form and without any substance in it. It is true that the Commissioner has been empowered to hear appeals from the orders passed by the Committee or its Administrator in pursuance to the Rules, or the regulations or bye-laws framed thereunder. But it is also true that he can pass such orders only if and when an appeal is preferred to him C against an order of the Committee or its Administrator. Until and unless such an appeal has been preferred to him, he is not competent to pass any order under the Rules. This power of hearing appeals and passing appropriate orders on appeals cannot be taken to confer upon him the powers of the disposal of plots, which powers exclusively vest in the Committee. Since in the present case, no appeal was pending before the Commissioner, he was not at all competent to accord approval to the disposal of plots.
16. The position which emerges from the discussion given above is that the order passed by the Administrator for the disposal of plot in favour of the plaintiff-respondent, was wholly without jurisdiction and was, therefore, not sustainable in law.
17. The learned counsel for the plaintiff-respondent also urged that even if the Administrator was found having no powers of disposal of plots, he had an apparent authority to enter into contract on behalf of the Principal, namely, the University Town Committee, with the result that the transfer of plots made by him would be valid even though in fact he had no such authority. It was argued that the plaintiff having no knowledge of limited powers of the Administrator would be protected, firstly on the principle embodied in section 237, Contract Act, and secondly on the rule laid down in section 41 of the Transfer of Property Act. To support his conclusion on the first submission, the learned counsel referred to, and relied on, Sirshar A.I v. Roberts Cotton Association Ltd. And another (PLD 1963 SC 244) and Mohammad Han f v. Hyderabad Municipality and others (PLD 1966 Kar.
219).
18. I see no substance in these submissions. The rule of the liability o principal as envisaged by section 237, Contract Act, can have no application whatsoever to present case. This section can apply only if and when the principal, by his words or conduct, induces third person to believe that the acts and obligations performed by the agent were within the scope of the agent's authority. In the present case, the powers of the Administrator and those of the Town Committee, had been specified in the Rules and could therefore, very easily be ascertained from the Rules which were available to the plaintiff. It is pertinent to note that the plaintiff was a student in the College at the time of transfer in his favour and that his father is an Advocate who could not possibly be unaware of the legal position. Even a cursory glance at the relevant provisions of the Rules would have convinced the plaintiff that the Administrator had no powers for the disposal of plots to any one. In view of the clear cut provisions contained in the Rules on the subject, the plaintiff cannot successfully maintain the plea that he was unaware of the powers of the Administrator in the matter. Had he taken that much care which a prudent man was expected have taken in the circum--stances of the case, be would have certainly come to know that the Admini--strator had no authority in the matter of disposal of plots. The authorities referred to, and relied on, by the respondent's counsel proceeded on their own facts and are clearly distinguishable. These authorities, it will appear, have some distinctive feature or other which are not existing in the present case. In PLD 1963 SC 244, the position was that there was a term in the contract of agency placing restrictions on the authority of agent and the party concerned was unaware of such restrictions. It was in those circumstances that it was held that the principle of estoppel was available against the Principal. In Mohammad Hanif's case the rule of estoppel was applied against the municipality for the reason that in spite of wrongful acts of it's servants, the municipality had been recovering the rents from persons concerned for many years. None of the elements in the said two cases is g found to exist in present case. The illegal act of the administrator in this case was neither recognized by the Town Committee in one form or the other, nor could it be said that the Town Committee, in anyway, induced the plaintiff and others to believe that such disposal of plots was within the scope of~ the Administrator's authority. In such a state of things, the principle embodied in section 237, Contract Act, can have no application to the case before me.
19. As regards section 41 of the Transfer of Property Act, it may be stated that what it requires is that where, with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer, shall not be voidable on the ground that the transferor was not authorised to make it provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, had acted in good faith. In this case, the Administrator could not be regarded as an ostensible owner, of the property in question with the result that section 41 cannot come to the rescue of the plaintiff. Assuming, however, for the saks of arguments that the Administrator was an ostensible owner, the plaintiff is faced with a further difficulty, and a formidable difficulty indeed arising out of the fact that he cannot be said to have acted in good faith because of the fact that he did not take reasonable care to ascertain that the transferor had power to transfer the property. In this view of the matter, there can be no doubt that the plaintiff is not protected by section 41, Transfer of Property Act. .
20 I now arrive at a stage where it becomes necessary to consider the point as to the validity of the registered deed dated 24-2-1976, executed by the Administrator, in favour of the plaintiff. It was contended on behalf of the plaintiff that the sale-deed in respect of the plot having been duly registered in his favour, he was vested with full ownership of which he could not legally be divested.
1 regret my inability to accept this contention. The Adminis--trator himself having no authority whatsoever to dispose of the plots, the execution of sale-deed by him and its registration in respect of the plot in question could not confer any rights of ownership on the transferee under the deed. It would thus be seen that in the given circumstances, the registered sale-deed was void and inoperative and on its basis, therefore, the plaintiff could not claim Any rights.
21. This brings me to the consideration of the point, whether the allot--ment/transfer of the suit plot in: favour of the plaintiff could be cancelled by the Town Committee. The answer to this question has to be given in the affirmative. It has been made sufficiently clear that the order of allotment/ transfer made by the Administrator was illegal and that the powers for disposal ' of plots vested in the Town Committee. The learned counsel for the plaintiff4espondent has not been able to show as to how and why the orders of cancellation passed by the Town Committee, in this case were illegal and void. He has also been not in a position to show that these orders were mala fide. It is, on the other hand, proved on the record of this case that these orders were not only legally justified but were also called for in the circumstances of the case.
22. The trial Judge, on Issue No. 7, found that the plaintiff had spent a sum of Rs. 22,000 on the preliminary construction work. In coming into this conclusion, he relied on the statement of Amir Sher Khan P. W. 3 who happens to be the father of the plaintiff. He stated that foundations for the building to be constructed on the said plot had been dug out and were then filed up and thereafter walls were constructed upto plinth area which cost the plaintiff a sum of Rs. 22,000. No doubt he was supported in this behalf by Mr. Hayat Khan Head Clerk, University Town Committee, who was examined as P. W. 4, but that would not make any material difference. The reason being that there is nothing in the statement of Amir Sher Khan P. W. 3 that the work referred to by him in his statement was carried put before the notice for cancellation of the allotment of plot was sent to the plaintiff. In such a situation, the plaintiff cannot be regarded as having mad the preliminary constructions in a bona fide manner. Even otherwise the plaintiff was not entitled to claim any compensation on account of this construction because of the fact that his position under a void transaction was no better than that of a trespasser. Being a trespasser, he would not be entitled to claim any amount.
23. With one more argument I must deal which was pressed by the learned counsel for the plaintiff-respondent on more occasions than one during the course of his arguments. It was said that before the cancellation of allotment/transfer, the Committee did not serve any notice on the plaintiff with, the result that the doctrine of audi alteram partem would come into play. This argument should be dismissed straightaway for the short and good reason that this point was never raised in the plaint. Since the question whether such a notice was or was not issued to the plaintiff before the cancellation of the allotment/transfer is a question of fact and it having been not raised in the plaint so as to enable the defendant/appellant to meet it in its written statement and the evidence, it cannot be allowed to be raised at this stage.
24. For the reasons given above, this appeal must succeed. I would, therefore, accept this appeal, set aside the judgment and decree of the trial Court and dismiss the plaintiff's suit. In the circumstances of the case, I leave the parties to bear their own costs throughout.