M.S.H.QURAISHI, J.--Messrs Siddique Textile Mills Ltd. Appellant in this appeal by leave of the Court, calls in question the legality of the Provincial Government's decision to resume the land given to it earlier in 1962 for setting up its textile factory.
2. The possession of his land measuring 11 acres 5 Marlas situate in the vicinity of the city of Faisalabad, had been made over to the appellant on 25-4-1962 on its undertaking to pay its price as would be fixed by the Board of Revenue. The question of fixation of its price remained pending with the Government and in any case nothing was paid by the appellant until 28-6-1975 when the Government by letter No.2030-75-2030 CSII of that date offered to sell by private treaty at the rate of Rs.48,000 per acre with 10% surcharge, 1 acre 5 Marlas which area only, out of the disputed land, was being actually utilized for the factory and directed the remaining area to be sold by open auction. In pursuance of the directive, the Deputy Commissioner, by letter dated 3-6-1976 asked the Assistant Commissioner, to resume the remaining area of 10 Acres which was accordingly resumed on 4-6-1976. The appellant made a representation but the Government vide letter dated 8-8-1977 issued in super session of their earlier letter dated 28-6-1975, decided not to make any fresh sale of State land in view of the ban imposed by Martial Law Authority and further directed that outstanding dues and rent in respect of the said 1 Acre 5 Marlas should be recovered. As the appellant failed to make payment, he was served with a notice dated 31-1-1976 to show cause why the land measuring 1 Acre 5 Marlas also should not be resumed for non-payment of the purchase pt-ice.
3. The appellant challenged the aforesaid orders dated 28-6-1975, 3-6-1976, 8-8-1977 by. Filing a writ petition before the Lahore High Court on 13-9-1977 and sought a mandamus directing the Government to transfer the entire land measuring 11 Acres 5 Marlas to it at a price prevalent in 1962.
The learned Single Judge held that in the absence of any express writing, there was no enforceable undertaking on the part of Provincial Government or the Board of Revenue and that the handing over of possession of the State land in the manner it was done by the Collector, was ultra vires of his power. The appellant's counsel had conceded that it was not a case of grant under any of the schemes, such as Horse-Breeding, Lambardari or Grow More Food, but had urged that it was a case of direct grant by the Board of Revenue subject to general approval of the Government and that any way it was a case of implied contract on the part of the Provincial Government. The first contention was repelled for the reason that there had been no order of the Board or any approval of the Provincial Government for setting the whole of the land in dispute on the appeal and that when the Provincial Government or the Board of Revenue ultimately decided on 28-6-1975, they were prepared to grant land only to the extent of 1 Acre 5 Marlas and not beyond that. The other contention that it was a case of implied contract was also rejected on the view that there was no case for directing specific performance of the so-called implied contract and .That no writ could lie for enforcement of a contract. The writ petition was, therefore, dismissed in limine.
4. In its Intra-Court Appeal, which the appellant preferred, a contention was raised that the delivery of possession of the land to the appellant had been made in pursuance of the then Financial Commis--sioner's letter dated 28-4-1953, which constituted a scheme promulgated under section 10 of the Colonization of Government Lands Act (hereinafter referred to as the Act) but the contention was rejected upon the view that the said letter could not be called a scheme or statement of conditions issued under section 10 of the Act. In the result, the Intra-Court Appeal, to, was dismissed in limine.
5. Leave to appeal was granted to examine whether the land in question had been transferred to the appellant under a contract of sale or under a scheme made under section 10 of the Act.
6. The Financial Commissioner of the Punjab, in order to accelerate the pace of industrial development in the province and to encourage entrepreneurs to make investment in industrial ventures and considering it essential to obviate delays in procurement of land to make and available to industrialist on easy terms, issued Memo. No.2931-C, dated 28-4-1953, conveying the following decisions:- "(1)Where land has been sold in the previous 5 years for industrial purposes, the price charged will be average of the sales of such land. Where such sales for industrial purposes have not taken place the price charged would be the average price of land for agricultural purposes. The price fetched by lands sold for shops, buildings etc., should not be taken into account.
(2)The land may be sold on 20 half-yearly installments basis, 25% of the total price will be recovered in the first instance while the remaining amount will be recovered in 20 half-yearly installments and the usual interest will be charged.
(3)The land measuring more than one square may be had on lease of 30 years with one option for renewal. Where an industrialist takes land for industrial purposes on lease, the rent should be charged at such rates as may be determined in consultation with the Finance Department.
(4)Financial Commissioner, Resettlement and Colonies, will allow the possession of the land being given to the industrialists in anticipation of the formal sanction on their undertaking to pay the price of the land when finally decided by Government.
(5)All applications for land for industrial purposes will be entertained through the Director of Industries, Punjab, who will certify that the area required is the absolute necessity for the purpose.
(6)In order to check the general tenancy among the industrialists to demand big areas of land for labour colonies and utilizing them for other purposes, 9 clause should be provided in the sale-deed that if the purchaser uses such area for purposes other than labour welfare he will be liable to forfeit such land along with any other structure raised thereon.
(7)Preliminary formalities in Industrial Land Acquisition cases will be completed by the La6d Acquisition Officer (Industries) with the help of his own staff instead of the previous procedure of getting this done by the revenue staff of the district. After the preliminary work has been done, the case will be referred by the Land Acquisition Officer (Industries) to the Collector of the District who will pass it on to the Financial Commissioner, Settlement and Colonies direct eliminating the state of Commis--sioner's endorsement."
The above decisions which were to remain operative for a period of five years became ineffective after 28-4-1958. The Provincial Government, however, decided vide Memo. No. 592-59/1167-S (G), dated 21-2-1959 to continue the decisions for another five years subject to the following modifications: "(1)The old scheme was applicable only to big industries but extended scheme will be applicable to all kinds of industries, big and small.
(2)Preliminary formalities in industrial land acquisition cases will be complete by the revenue staff of the District concerned instead of by the Land Acquisition Officer (Industries).
(3)The plan of the area required for industrial purposes shall be submitted alongwith the application of the Industrialists concerned indicating therein the various uses to which the land shall be put.
(4)The price of the land shall be assessed as follows:- (a)Where sales have taken place for industrial or for other non--agricultural purposes in the same locality or in an adjoining Chak or Village, the price shall be determined on the basis of the average of the sales during the previous 5 years. The relative merits of a particular site, the area to be sold and the commercial importance of the industry for which it is to be sold should be taken into account while determining the price.
(b)In areas where no sales for industrial or other non-agricultural purposes have taken place, the price shall be determined on the basis of the average of the prices fetched during the preceding 5 years of any purpose including agricultural purpose. If there is no data of any kind available which can afford a fair index to the prevailing market value, it will be determined by the Board of Revenue in consultation with the Finance Department.
(c)In all cases in addition to the price so determined a surcharge at the rates of 10$ of the price shall be charged on account of concession to sell land by private treaty.
(5)The price shall be payable in a lump sum or by installments viz. 33-1/3$ of the total price in advance and the balance in 10 equal half-yearly installments with interest on unpaid balance at the rate of 4 per cent per annum and penal interest at 9 per cent per annum on overdue installments.
(6)No land will be leased out for industrial purposes.
(7)Possession of the land shall only be delivered to the vendee when the price of the land has been fixed and accepted by the purchaser in writing and he has executed the necessary sale agreement in the prescribed form."
7. The appellant first applied on 9-12-1961 for allotment of an industrial plot and selected for the purpose the land in question and expressed it willingness to pay its price to be fixed by the Government. Since the appellant had already been sanctioned a textile unit by the Industries Department, its case was duly recommended by the Collector, Lyallpur, on 15-3-1962, for sale of the land in its favour at the rate of Rs.16,000 per acre (computed on the basis of the average of last 5 years sale price) plus 10$ on account of concession to sell the land by private treaty. The Commissioner supported the proposal and by letter dated 20-4-1962 forwarded the same to the Secretary (Colonies), Board of Revenue, directing at the same the, the Collector to hand over possession of the land in anticipation of sanction. The appellant furnished another undertaking on 25-4-1962 to pay its price at a rate to be determined by the Board of Revenue and on the same date possession was delivered to it.
8. In this background, it has been urged by Sardar Muhammad Iqbal learned counsel for the appellant: (1)That the transaction was not in the nature of a contract but of sale by grant of land under section 10 of the Act on the conditions contained in the memorandum dated 28-4-1953 which constituted the statement of conditions of the grant.
(2)That the delivery of possession of the land made by Collector in anticipation of a formal sanction was not ultra vires of his powers but was covered by clause (4) of the said memorandum dated 28-4-1953 as well as by the provisions of subsections (3) and (4) of section 10 of the Act.
(3)That in any case the making of delivery of possession collector not be said to be unanuthorised inasmuch as the Government in spite of full knowledge of it had not disapproved the same for the next thirteen years and as such was estopped from questioning the legality of the delivery of possession.
(4)That the appellant being purchaser from Government of the land which had been placed in its possession by the Collector had, in view of the provision of section 15 of the Act, to be deemed a tenant of the land until the purcahse money had been paid and other conditions set forth in the statement of conditions fulfilled. That being so, the land could not be resumed without notice and in a manner otherwise than under section 24 of the Act.
9. Mr. Khalil Ramdey, learned Assistant Advocate-General, conceded that the disposal of the land in question which had been evacuee property but had been transferred to the Provincial Government in exchange for colony land for the purpose of expansion of Lyallpur Town, was governed by the provision of the Act though he argued that it was controlled by the provision of subsection (1) and not subsection (2) of section 10 of the Act inasmuch as it was not a case of grant of land to tenants but of sale by private treaty for industrial purpose.
Subsection (1) reads: "Board of Revenue subject to the general approval of the Government may grant land in a colony to any person on such conditions as it think fit.
On this premises he had based his contention that neither the provision of subsections (2), (3) or
(4) of section 10 nor of sections 15 or 24 of the Act was attracted. He submitted that the memorandum of 1953 having lapsed after five years and having, in any case, been superseded by the memorandum of 1959 the transaction was to be regulated by the latter memorandum and that as possession of the land, in terms of para. (7) of the 1959 memorandum, could not be delivered to the vendee unless the price of the land had been fixed and accepted by the purchaser in writing and he had executed the necessary sale agreement in the prescribed form, which implied that he had also paid 1/3rd of the total price in advance in terms of para. (5), the delivery of possession by the Collector was unauthorised and not binding on the Government. He pointed out that even under the memorandum of 1953 by virtue of its para. (6), the purchaser, if found to be using the area for purposes other than that for which the sale was made, would be liable to forfeit such area along with structure if any raised thereon. He submitted that a like provision would have been invariably incorporated in the sale agreement to be drawn under the memorandum of 1959.
He, therefore, urged that the resumption of 10 acres out of the land, which was not being actually utilized for the factory, was fully competent and the purchaser was not entitled to any relief in this regard in the discretionary writ jurisdiction. Lastly, he submitted that the resumption having been ordered in 1975 the writ petition filed in 1977 to challenge it was belated, that the appellant had in fact been reconciled to the resumption but had come to the High Court only when it was served with the notice of resumption of the remaining 1 Acre 5 Marlas on account of its price not having been paid. In passing he explained that the Department's point could not come up before the High Court either in the writ petition or in the Intra-Court Appeal because both had been dismissed in limine.
10. Taking first the question of delay in filing the writ petition, we find that the resumption had actually taken place on 4-6-1976, against which the appellant had made representation, of which it had received a reply in the negative on 8-8-1977. Shortly thereafter, notice of resumption of the remaining area had been sent to it on 31-8-1977 against both of which it had come to the High Court on 13-9-1977. The writ petition was, therefore, not belated.
11. The memorandum of 1953 and 1959 had not been before the learned Single Judge but the I . C . A . Bench before which it had been placed, held that the same could not be called a scheme or statement or statements of conditions issued under section 10 of the Act. It is to be seen that the Collector's letter dated 13/15-3-1962 initiating the proposal shows that the sale of the land was by private treaty. This position was admitted by the appellant in para. (4) of the writ petition. For the purpose of decision of this appeal, it is not necessary for us to go into the question whether this intended sale by private treaty fell under subsection (1) or (2) of section 10 of the Act and whether sections 15 and 24, etc. Were applicable though it is apparent that there was no intention of the Government to create a lease of tenancy in the land in favour of the purchaser. This is clear from para. (6) of the memorandum of 1959 which is to the effect that no land will be leased out for industrial purposes. However, since the learned Assistant Advocate-General concedes that the sale of the land was under section 10 (1), it is difficult to accept that the conditions in the memorandum of 1953 as modified by that of 1959, which were operative at the the when the delivery of possession of the land was given, would not constitute conditions of grant.
Memorandum as held in Safia Begum v. B Board of Revenue Punjab PLD 1973 Lah. 726 can well be construed as statement of conditions. The I.C.A. Bench was, therefore, not justified in holding that the memorandum did not constitute condition of the grant.
12. It follows that the appellant was liable for breach, if arty, of the conditions. The delivery of possession by the Collector, no doubt, could not in terms of para. (7) of the memorandum of 1959, whereby para. (4) of the earlier memorandum of 1953 had been superseded, be delivered to the purchaser in anticipation of the payment of the price and without the agreement having been executed. Nevertheless, the action of the Collector had been in compliance with the direction of the Commissioner who had informed the Government about it five days before the delivery of possession. The Government had at no stage during those five days of the next thirteen years disapproved the action. Such conduct would rather imply approval. The view, therefore, that the action of the delivery of possession was unauthorised does not carry weight. The possession of the land having been given and the appellant having set up an industry on it, it was therefore, entitled to a notice at least on the general principle of audi alteram partem if not under section 24 of the Act before any portion of the land was resumed from it for breach of the conditions on the assumption that such portion was not being actually utilized for the factory. The appellant, if opportunity of hearing was given to it, might demonstrate that such assumption was wholly or partly incorrect. This aspect of the matter has unfortunately not been considered by the departmental authorities of the High Court.
13. We therefore, set aside the orders of the High Court dated 12-3-1978 and 18-12-1977 as well as the departmental orders dated 28-6-1975, 3-6-1976, 8-8-1977 and 31-8-1977 and direct that before resumption of whole or part of the land the appellant should be afforded an opportunity of hearing.
There shall be no order as to costs.