' This second appeal has arisen out of a judgment given by the learned Additional District Judge, Sukkur, in Civil Appeal 35/67 in the following circumstances.
2. The respondent was allotted evacuee property bearing No, C-566-568 known as Regent Cinema, Sukkur, by allotment order dated 31-5-1948 initially for a period of one year. The said property belonged to Verumal and Leela Rain, evacuees and the same vested in the Custodian of Evacuee properties.
' On 25-11-1959 the respondent applied for the transfer of the aforesaid Cinema under Settlement Scheme No, 2 being an industrial concern Cinema house available for transfer under para. 15 of the Schedule to the Displaced Persons (Compensation and Rehabilitation) Act, 1958.
' The Settlement and Rehabilitation Commissioner, Hyderabad, Khairpur Division by his letter dated 15th January, 1960 (Exh. 32) informed the respondent that he had been found eligible for the transfer of the aforesaid property under sub-paras. (1), (3) and (4) of para. 15 of the Schedule to the Displaced Persons (Compensation and Rehabilitation) Act of 1958, as amended at the Market value which would be determined in due course. He was further informed that he was permitted to run the concern "on behalf of the Chief Settlement Commissioner, Pakistan on the usual condition of the allotment." The respondent was warned that he would be liable to be dispossessed if he failed to comply with the notice of the demand or any other direction that may be issued by the authorities concerned.
' Subsequently the price was determined at Rs, 81,729 and the Additional' Settlement Commissioner (Industries) West Pakistan by letter dated 27-7-1964 (Exh. 33) informed the respondent as follows :- "You are, therefore, required to make payment of the assessed price within 3 days from the receipt of this Memo. Failing which your entitlement will be cancelled and you will be liable the ejectment under section 29 of the Act."
2. On 13-10-1965 the Additional Settlement Commissioner Industries West Pakistan Lahore issued the Permanent Transfer Order Exh. 30 in favour of the respondent which reads as follows :- "This is to certify that land and Building of Regent Cinema, Sukkur, whereupon evacuee rights and interest in the said property, which had been acquired under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 and vested in the Central Government, stand permanently transferred to Messrs Ahsan Ullah Khan, Aman Ullah Khan with effect from 22-5-1963.
A letter of eligibility was issued to them on 15th January, 1960. No Provisional Transfer Order was issued."
3. In the meantime by order passed on 26th September, 1959 the Assessing Authority under the West Pakistan ,Urban Immovable Property Tax Act, 1958 assessed the tax payable in respect of the aforesaid property. The respondent unsuccessfully challenged the aforesaid order of assessment by appeal filed before the Collector (Dy. Director Excise and Taxation) Hyderabad Division and in revision before the Commissioner Khairpur Division. The plea of the respondent that he was not liable to pay the tax demanded was rejected by the Commissioner on the ground that is view of the issues of the eligibility certificate the respondents were liable to pay the tax with effect from the date of the issue of said certificate i,e, from 13th January, 1965. It may be mentioned here that the rate of assessm ent is not disputed before this Court.
' Pursuant to the aforesaid orders the Assessing Authority issued a notice calling upon the respondents to pay the tax in respect of the aforesaid property for the period from 1-4-1960 to 30- 6-1965.
4. Aggrieved by the aforesaid orders and the demand notice the respondents filed Civil Suit No, 57 of 1965 in the Court of First Class Civil Judge, Sukkur, for the following reliefs ; amongst others :- "(a) That it be declared that the orders of the Defendants in Form P. T. 10 and Orders dated 8-10- 1965, 13-10-1965 and 8-3-1965 are null and void and the plaintiffs are not liable for the property tax under West Pakistan Act V of 1958 for the period from 1-4-1960 to 30-6-1964 when they had not been transferred the Regent Cinema provisionally or permanently under the Displaced Persons Act, 1958 or they are liable for property tax only from 22-5-1965 when they were permanently transferred the cinema.
(b) That the defendants be restrained from recovering the property tax on Regent Cinema Sukkur for the period from 1-4-1960 to 30-6-1964 and/or be restrained from sealing down the Cinema in default of furnishing the cash security in the sum of Rs, 20, 000."
' The suit was contested by the defendants/appellants and number of issues were framed.
' The learned trial Court by judgment and decree passed on 3rd November, 1966 held that the impugned demand and the orders are without lawful authority and that the respondents are not liable to pay property tax from 1st April, 1960 to 30th June, 1965 but from 22nd May, 1965 and onwards. The appellants/defendants were restrained from recovering the tax for the period from Ist April, 1960 to 30th June, 1965.
5. Against the aforesaid judgment and decree, the appellants filed Civil Appeal No, 35 of 1967 in the Court of the District Judge, Sukkur, which was ultimtately heard by the Additional District Judge Sukkur. The learned First Appellate Court after hearing the parties, by judgment and decree passed on 29-11-1967 dismissed the said appeal. The present Second Appeal has been filed by the appellants challenging the aforesaid judgments and decrees passed by the two Courts below.
6. The only question which has been argued before this Court is whether in view of the vesting of the property in the Central Government by virtue of the Notification dated 21-8-1959 under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, .1958 (hereinafter referred as D.
P. Act of 1958) and the Permanent Transfer Order made in favour of the respondents on 22nd May, 1965, the appellants could claim the property tax from the respondents for the period from Ist April, 1960 to 22nd May, 1965.
7. In order to appreciate the arguments of the learned counsel for appellant, we may first refer to the relevant provisions of Sind Urban Immovable Property Tax Act, of 1958 hereinafter referred to as the said Property Tax Act.
' Section 2(h) of the aforesaid Property Tax Act defines tax as the "tax leviable under the provisions of section 3" which section itself provides that subject to subsections (3) and (4) thereof, there shall be levied and collected tax on annual value of buildings and lands at the scales provided therein.
For the purposes of this case we may now refer to section 2(e) and subsection (5) of section 3 of the said Property Tax Act which are reproduced herein below : Sub-item (e) of section 2 of the Act reads :- "(e) "owner" includes a mortgagee with possession, a lessee in perpetuity, a trustee having possession of a trust property and a person to whom an evacuee property has been transferred provisionally or permanently under the Displaced Persons (Rehabilitation and Compensation) Act, 1958 (Act No, XXVIII of 1958) ;"
And subsection (5) of section 3 provides that :- "(5) The tax shall be due from the owner of buildings and lands."
We need not refer to other provisions of the aforesaid Act, as the point urged in this appeal is that no tax shall be due from the respondent, for the period prior to 22-5-1965 as until then he had not acquired the ownership of the property in question. Indeed section 2(e) read with subsection (5) of section 3 reproduced expressly contemplates that the tax under the aforesaid Act shall be due and payable by an "Owner" of the buildings and lands.
8. Under the Displaced Persons (Compensation and Rehabilitation) Act, 1958 and Schemes framed thereunder a person who is a mere allottee of an evacuee property from the Custodian or Rehabilitation Authority cannot be considered as the "transferee" of the allotted property within the meaning of said D. P. Act of 1958 and for that reason he would not be deemed to be owner thereof within the meaning of section 2, subsection (2) of the aforesaid Sind Urban Immovable Property Tax Act of 1958 as well.
' The property in question being evacuee property vested in the Custodian of Evacuee Properties under laws governing evacuee properties and was subsequently acquired by the then.
Government of West Pakistan under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act of 1958, pursuant to the Notification No, 4-8-1979/3119 dated 21-8-1959 issued by the Central Government. The learned counsel for the respondents argued that until 22nd May, 1965 when the property was permanently transferred to them, they were merely allottees running the Cinema on behalf of the Chief Settlement Commissioner and could not be considered as the owners or transferees of the said property. He placed reliance on the letter dated 15-1-1960 (Exh.
32) issued by the Settlement and Rehabiliation Commissioner, addressed to the respondents, the relevant portion whereof reads as follows :- "Reference your application dated the 26-11-1959 for the transfer of building No, C-566 to 568 known as Regent Cinema Sukkur on payment of prevailing market value. You have been found eligible under sub-paras. 1, 3 and 4 of paragraph 15 of the Schedule to the Displaced Persons (Compensation and Rehabilitation) Act, 1958 as amended up-to-date for the transfer of building Nos. C/566 to 568, Sukkur at the market value which would be determined in due course, on the condition that you possess no other industrial concern except this. Meanwhile you are permitted to run the concern on behalf of the Chief Settlement Commissioner, Pakistan, on the usual condition of the allotment.
' You will, however, be liable to be dispossessed, if you fail to comply with notice of demand or any other direction that may be issued by this Office."
Perusal of the above-mentioned letter/memorandum would show that the respondents thereby were intimated that they had been found eligible "for the transfer of the building" in question at market value which was yet to be determined, and that in the meantime the respondents were allowed to run the concern (the Cinema) "on behalf of the Chief Settlement Commissioner on usual conditions of the allotment". This letter obviously did not amount to the transfer of the property or be deemed to have conferred any right of ownership upon the respondent.
9. Mr. Maroof Ali Khan, the learned counsel for the respondent submitted that the certificate of transfer dated 13th October 1965 (Exh. 30) reproduced in para. 2 above shows that the property was for the first time transferred to the respondents permanently with effect from 22nd May, 1965 and that before this date the respondents were mere allottees, in whose favour neither any P. T.
0. Nor P. T. D. Or Transfer Order had been issued.
' Under Settlement Scheme No, 11 any person who is entitled to transfer of an industrial concern or a Cinema house may if he so desires, submit an application in the manner and within the prescribed period to the Chief Settlement Commissioner giving the particulars as are required under para. 7 and stating that the grounds on which he claims transfer of the property, while para. 13 thereof provides that :- "Where the order of transfer of the property has been passed and communicated to the transferee the proprietary rights in the property shall, subject to any terms and conditions of Auction to the contrary, stand transferred to him free from all encumbrances."
' We may now refer to para. 15 of the Schedule to D. P. Act which is relevant and reproduce below sub-paras. 1, 3 and 4 under which the property in question was transferred to the respondents :- "15.-(1) Every industrial concern or a Cinema house shall, subject to the provisions of the following sub-paragraphs, be sold in an unrestricted public auction.
(3) If an Industrial concern or a Cinema house, not allotted by the aforesaid Industries Rehabilitation Board, is in the possession of a displaced person or a local, then such concern or Cinema house shall, in case he applies in that behalf, be transferred to him on payment of its prevailing market value minus the investment, made if any.
(4) If any local or displaced person has invested in any Industrial concern or Cinema house, not being an Industrial concern or Cinema house, transferred under sub-paragraph (2) or sub- paragraph (3) not less than 40% of its prevailing market value then that concern or Cinema house shall, in case such local or displaced person applies in that behalf, be transferred to him on payment immediately of the prevailing market value minus the investment made."
The provisions of para. 15 of Schedule to D. P. Act of 1958 read with rule 13 reproduced above and other provisions of Settlement Scheme No, II make it abundantly clear that a mere allotment of an industrial concern (Cinema house) would not confer any right upon the allottee or applicant unless an application for transfer is made within the stipulated period and in the manner prescribed under the said Scheme and an order for its transfer is passed by the Settlement Authorities.
' The respondents in this case have successfully shown that the letter of their eligibility for the transfer of the property in question was issued on 15-1-1965 and no Provisional Transfer Order was ever issued in their favour, and that for the first time they were intimated vide certificate dated 13th October, 1965 (Exh. 30) that the said property stood permanently transferred to them (Ahsanullah Khan and Amanullah Khan) with effect from 22nd May, 1965.##TE#
10. Mr. Maroof Ali Khan lastly relied upon the cases reported in Messrs Mari Hill Transport Co. v.
Ghulam Jeelani and Ch. Muhammad Nazir v. Ata-ul-Haq in support of his submission that determination of mere eligibility of the certificate did not confer right of ownership or amounted to transfer of the property in favour of the respondent. These submissions of the learned counsel for1 2 the respondents find full support from the above-mentioned decisions of the learned High Court of Lahore.
Having found as aforestated that the property in question was transferred to the respondents on 22nd May, 1965, the inescapable conclusion would be that they became owner thereof only from that date. Accordingly no tax was due from or payable by the respondents for the period prior to it, as under subsection (5) of section 3 of the Sind Urban Immovable Property Act of 1958, "the tax shall be due from the owners of the buildings and lands" alone.##TE#
11. The respondents would not be liable to pay any tax for the period prior to 22nd May, 1965 when the property was transferred to them for another reason as well, that the said property being an evacuee property was acquired and vested in the Central Government vide section 3 of the Displaced Persons (Compensation & Rehabilitation) Act, 1958. Subsection (4) of section 3 of the aforesaid Act, provided :- "(4) The Central Government shall prescribe the extent to which, and the period within which-
(a) any charge created by a Custodian or the Chief Settlement Commissioner on any property acquired under subsection (1) or subsection (2), or
(b) Omitted (by Ordinance I of 1959)
(c) any taxes due to the Central or Provincial Government or a local authority, shall be satisfied and the manner in which it shall be satisfied."
' It is conceded by the learned Advocates for both the parties that the Central Government has neither framed any rules nor has prescribed the extent to which and the period within which the taxes due to the. Central or Provincial Government or a local authority shall be satisfied. In my opinion in the absence any authority or rule framed under subsection (4) of section 3 of D. P. Act of 19, the impugned demand made upon the respondents to pay the taxes, would not be justified.
' I may refer here to the case of S. M. Rizwanullah v. Commissioner, Hyderabad and others (C. P.
466/63), decided by a learned Division Bench of this Court in which the opinion was delivered by Mr. Justice A. S. Farooqui and it was held :- "We do not say that the claim of the Municipality with regard to the arrears of taxes have been extinguished by the acquisition of the property by notification under subsection (3) of section 3 of the Act. The question is as to how and from whom such arrears are to be recovered. It must be noted that the provisions of the Displaced Persons Act apply notwithstanding any law to the contrary. The auction of this factory was held after the property had been acquired by the Central Government and in so far as it was expressly provided by clause (c) referred to above that rules were to be framed with regard to the satisfaction of the taxes due to the Central or provincial Government or a local authority, it must be held having regard to the Scheme of the Act and such rules as were framed with regard to charge created by a Custodian that it was never intended that any liability on the property was to be met by a transferee of such property unless a term to that effect had been included in the instrument of transfer. It may be noted that even with regard to the provisional transfer order issued to the transferees all that is provided is that taxes shall be paid by the transferees as from the date of the P. T.
0. It will, therefore, follow that any previous liability with regard to the tax must be the liability of the Settlement department. We are, therefore, clearly of the opinion that while it is open to the Municipality to make a claim for the aforesaid arrears from the Settlement Department the purchasers of the factory at the auction were not liable for these arrears."
12. The above judgment of the High Court was challenged before the Hon'ble Supreme Court of Pakistan and is reported as Chairman, Municipal Committee v. Jamila and others. While dismissing the petition the Hon'ble Supreme Court held :- "Even if the Municipal Committee had a charge in respect of a Municipal tax, the charge, it is conceded, would not be a right in the property and, therefore, does not constitute property. By the3 acquisition under section 3 of the Act, therefore, the charge disappears and the only remedy left to the Committee now is to ask the Central Government to frame rules under subsection (4) of section 3 of the Act to provide for the extent up to which and the manner in which the taxes are to be discharged from the proceeds of the property. This provision is to be given effect despite any other law to the contrary, by virtue of section 36 of the Act. The view that prevailed in the High Court therefore, that the Committee had no right to ask the respondents to pay the arrears of the tax pertaining to the period prior to the transfer in their favour, appears to be correct."
13. The result of the above discussions is that the respondent who became owners of the property on 22nd May, 1965 were rightly held to be E not liable to pay arrears of tax pertaining to the said property for a period prior to the date of its transfer in their favour.##TE# ' Accordingly I find no merits in this appeal which is dismissed. In the circumstances of the case there shall be no order as to costs. PLD 1970 Lah. 864 PLD 1971 Lah. 180 1968 SC MR 369