1. ZAFFAR HUSSAIN MIRZA, J.-- Leave was granted in this case to consider the following to questions:- (1)That the writ petition filed by the appellant earlier having been] finally disposed of by the Letters Patent Bench simply on the ground that the appellant had not impleaded the Chief Settlement Commissioner as a party and no opinion having been expressed by the Court on merits of the case, the matter cannot be said to have been heard finally and decided in the earlier proceedings, and, therefore, fresh writ petition agitating the merits was competent (2)That on the merits the decision of the High Court that simply because the appellant had declined to apply for transfer of the property in dispute under Settlement Scheme No. 1, he was debarred from claiming the transfer under Settlement Scheme No. VIII was erroneous as the High Court had so held without assigning any reasons.
2. The facts of the case are that the appellant who is a non-claimant displaced person was in possession of a small shop in property No. V-6-S-1, Dhobi Mandi Old Anarkali, Lahore. On 19-10-1959 the appellant had made a statement that he did not wish to apply for the transfer of this property (under Settlement Scheme No. 1). Later on, however, on the promulgation of Settlement Scheme No. VIII for the transfer of available properties, he submitted a form on 28-8-1968 seeking the transfer of the same property. Notwithstanding his application for transfer, the property was disposed of by auction on 25-6-1970 and was purchased by respondent No.2. This auction sale was confirmed on 8-7-1970. The appellant being dissatisfied by the refusal on the part of the Settlement Authorities to transfer the property in his favour, challenged the order, dated 20-5-1,970 passed by the Settlement Commissioner, Lahore, on the direction of the Chief Settlement Commissioner by means of Writ Petition No. 798-R of 1979 in the Lahore High Court, Lahore. A learned Single Judge of dismissed this Writ Petition in limine that Court on 19-3-1975, on to-fold grounds, firstly that the appellant having declined to take the shop under Settlement Scheme No.1 could not be transferred the same under Settlement Scheme No. VIII and, secondly that he had not impleaded the Chief Settlement Commissioner as a party under whose orders the property was put to auction. Against this order, the appellant filed a Letters Patent Appeal (L.P.A. No. 62 of 1975), which was also dismissed by a Division Bench of the Lahore High Court, but only on the preliminary ground, namely, that the Writ Petition was not competent due to non-joinder of the Chief Settlement Commissioner, who was a necessary party to the proceedings. The learned Judges considered it futile to enter into the merits of the case, as the necessary parties were not before the Court. The appellant, thereupon, filed a fresh Writ Petition (Writ Petition No. 350-R of 1979) impleading the Chief Settlement Commissioner as respondent No.1 therein. However, a learned Judge of the Lahore High Court again dismissed this Writ Petition in limine on 10-4-1979 on the ground that the earlier Writ Petition on the same cause of action having been dismissed, a second Writ Petition was not competent by virtue of the principles of res-judicata. The appellant's Inter Court Appeal directed against the said order having been dismissed he filed the present appeal by special leave as stated before.
3. The first question to be considered is whether in the circumstances of this case the second Writ Petition, out of which this appeal has arisen, was barred on the principles of res judicata. It has been urged on behalf of the appellant that as no decision was given by the Letters Patent Bench in appeal from the order passed by the learned Single Judge in the previous Writ Petition, an essential ingredient for the application of the rule of res judicata, namely, that the matter in the previous proceedings should have been heard and finally decided, is absent. It is no doubt true that the learned Single Judge disposed of the Writ Petition on the merits as well as on the question of law as to the maintainability of the Writ Petition on account of non-joinder of a necessary party viz. The Chief Settlement Commissioner. The decision was challenged by the appellant on both, these grounds. However, the Letters Patent Bench declined to enter into the question of merits and upheld the order of the learned Single Judge on the preliminary question of non-joinder of necessary parties. There can, therefore, be no doubt that the controversy between the parties as to the merits of the case was not finally heard and decided by the appellate Court.
4. We were referred to the case of Sheosgar Singh and others v. Sitaram Singh I L R 24 Cal 616 in which the Privy Council held that the finality of a decision made by the trial Court comes to an end on the filing of an appeal and where no decision on merits was given, there would be no res judicata. It was similarly held in Raja Balbhandar Singh v. Shankar Das AIR 1937 Lah. 211. In Chimanlal Ganpatram Ghanchi v. Natvarlal Maganlal AIR 1935 Bomb. 131 the Court held that where the trial Court refused to consider the merits of the case at all and dismissed the suit upon the threshold for misjoinder of causes of action and for misjoinder of parties, the rule of res judicata would not apply to the subsequent proceedings on the same cause of action. Learned counsel also referred to the opinion of Kaikaus, J., in F.A. Khan v. The Government of Pakistan PLD 1964 SC 520 on the proposition that where the order of the original Court has been simply affirmed by the appellate Court, the only decree or order in existence is the order of the appellate Court. However, the most appropriate decision quoted by the learned counsel, directly on the point was in Abdullah Asghar Ali Khan v. Ganesh Dass AIR 1917 PC 201. In this case a suit was brought on the ground of fraud for cancellation of a bond, which was dismissed by the trial Court, and the decree was upheld in first appeal. However, in Second Appeal, the merits of the case were not gone into but the appeal was dismissed on the ground of defective constitution of the suit. The defendant in the original suit then filed a -suit on the bond and in his defence the plaintiff reiterated his plea that the bond was vitiated on account of fraud. The Indian Courts held the defence barred by res judicata. However, their Lordships of the Privy Council held that the issue as to fraud was not finally decided in the prior litigation, the second appellate Court, having decided the case on other grounds and hence it was not barred by rule of res judicata.
5. Now, it is well-settled by a number of decisions of this Court that the principles of res judicata are applicable to proceedings in writ jurisdiction. See Managing Committee Masjid Muhajrin v. Mst.
6. Zainab Bibi and others 1974 SCMR 230 and Fazal Din v. Custodian Evacuee Property and others PLD 1971 SC 779. It cannot be disputed, therefore, that the essential ingredient of res judicata that the matter on which the plea of res judicata is founded must have been finally adjudicated and decided in the previous proceedings, in order to furnish the ground for such plea to succeed. A matter, which though is in issue, was not heard or decided either actually or constructively, cannot be res judicata for the purposes of subsequent proceedings. Where a matter was decided by the lower Court but was left undecided by the appellate Court, the result would be the same. In the present case, no doubt, the merits of the claim of the appellant were very much in issue before the'
7. Letters Patent Bench in the earlier proceedings but since the same were left open and 'undecided, no finality, in our opinion, attaches to the adjudication of the merits by the first Court. We are, accordingly unable to agree with the learned Judges who passed the impugned judgment that the subsequent Writ Petition filed by the appellant was barred on the principles of res judicata.
8. This leads us to the question of the merits of the claim of the appellant. The learned Judge, who decided the first Writ Petition of the appellant disposed of the claim of the appellant by the following passage:- "Learned counsel then contended that the petitioner, had, at no stage, declined the transfer of the shop but even if he had done so he could still apply for its transfer when Settlement Scheme No. V III came into force. When confronted with the statement, dated 19th October, 1959, made by the petitioner, learned counsel was not in a position to deny this, but contended that this statement at the most was binding on the petitioner for the transfer of the property under Settlement Scheme No.1 but the same could not be used against him when he had applied for the transfer under Settlement Scheme No. VIII. This argument on the face of it is fallacious and hardly deserves any consideration. Similarly, the second contention that the form had not been disposed of in accordance with law is also without any substance, because in view of the statement of the petitioner, referred to above, the department was not obliged to summon and examine him again, once the petitioner had voluntarily given up his claim for transfer, that was the end of the matter and the Settlement authorities were, therefore, well within their right to dispose of the property by means of unrestricted public auction. I think no exception can be taken to the action taken by the department."
9. It has been urged on behalf of the appellant that merely because the appellant declined or did not claim transfer of the property in question under Settlement Scheme No.I, he did not forfeit or could not have deemed to have relinquished all rights to transfer under the subsequently issued Settlement Schemes, particularly Scheme No.VIII in terms of which he had acquired independent entitlement to transfer. This argument was disposed of by the learned Single Judge without any reason as in his opinion it did not deserve any consideration. However, we find great substance in it. There is no principle of law or rule or provision in the Displaced Persons (Compensation and Rehabilitation) Act, 1958 or the Schemes framed there under, which debarred a person from claiming transfer of a property if once he had declined to avail his entitlement under another Scheme. On the admitted facts on record the property in question remained un disposed under Settlement Scheme No.I until the appellant applied for its transfer under Settlement Scheme No.VIII which was expressly issued for the purpose of disposal of "available properties", which term means properties, inter alia, consisting of shops which had not yet been transferred to any person or which may in future become available for transfer on resumption. We see no legal obstacle in the way of a person entitled under this Scheme to the transfer of a property if he, for any reason, had not availed of his entitlement to its transfer under Settlement Scheme No.I. The order of the Chief Settlement Commissioner directing the disposal of the property in dispute by open auction, without first disposing of the pending application of the appellant for transfer, was, therefore, illegal and unsustainable in law.
10. The result is that the sale of the property through auction in favour of respondent No. 2 is likewise illegal and without lawful authority. We, therefore, declare the order of the Chief Settlement Commissioner to have been passed without lawful authority and is of no legal effect. The sale in favour of respondent No.2 also stands cancelled. The Writ Petition No.350-R of 1979 filed by the appellant is allowed.
11. In consequence the case is remanded to the officer notified by the Provincial Government for disposal of cases under section 2 (2) of the Evacuee Property and Displaced Persons Laws (Repeal)
12. Act, 1975 (Act XIV of 1975) for deciding and disposing of the application for transfer filed by appellant in accordance with law in the light of this judgment. In these terms, the appeal is allowed with no order as to costs.