' ABDUL SHAKURUL SALAM, J.--House No, B-HI-7S--45, Hafizabad was in possession of Ali Muhammad respondent No,2, his brother Muhammad Sherif, father of the appellant, and one Kallan Khan. On the C.H. Form Ali Muhammad, the house was transferred to him by Deputy Settlement Commissioner on 21-11-1959. On 25-5-1960 both the brothers i.e. Transferee of All Muhammad and Muhammad Sharff executed an agreement of association to share the house half and half. According to the case of the appellant, the agreement of association was filed and also an application by the appellant's father to the effect that a sum of Rs, 3,500 be adjusted from his compensation book and half of the house transferred to him. The application is, dated 26-5-1960.
Aforesaid Kallan Khan carried on litigation about the transfer of the house but without success when it ended in 1979. In the meanwhile, Muhammad Sharif had died in 1966. His son, the appellant filed an application for bringing on record the legal representatives of the deceased Muhammad Sharif on 18-6-1980. Respondent No,2 filed a reply on 9-7-1980 saying that "the application for bringing on record the legal representatives of the deceased Muhammad Shull' Was without basis and entitlement because the deceased had acquired no rights under the Displaced Persons (Compensation & Rehabilitation) Act, 1958. Further that the agreement of association was unapproved and statements of the parties were not recorded. He would like to take legal steps for its cancellation. Without the approval of the agreement of association, no rights had accrued to the heirs of the deceased. Therefore, the application for appointment of legal representatives being without basis be rejected." The Deputy Settlement Commissioner called the parties to record their statements. The appellant filed Writ Petition No, 887/R-80. It was disposed of as no final order had been passed. The Deputy Settlement Commissioner recorded the statements of the parties.
The respondent No,2 stated that the house in dispute was allotted to him. He had applied for its transfer which was done. Muhammad Sharif was his elder brother. He had entered into an agreement of association with him. The litigation started with Kellen Khan. In the year 1966, I asked Muhammad Sherif for payment of the expenses of the litigation. He was ill in those days. He said that he did not want to have share in the house. Nor wanted the agreement of association to be acted upon. Muhammad Sharif had three daughters and a son. He (the witness) was a claimant.
The compensation books of his and Muhammad Sherif were separately issued. He was prepared to pay the transfer price of the house. The agreement of association had been cancelled mutually by him and his brother. He did not want it implemented. The transfer price should be realized from him which he was prepared to pay. Deceased Muhammad Sheriff's son, Muhammad Ali, was quarrelling on the behest of others, otherwise, his, three sisters have already withdrawn from the litigation. The agreement of association between him and Muhammad Sherif deceased should be cancelled. The witness was cross-examined, his two sisters Mst. Rashida Bibi and Mst. Zubeda Bibi supported him. The third sister also supported him through her attorney-husband. She also filed an affidavit in support thereof.
' The Deputy Settlement Commissioner concluded that "as indicated above the agreement of association has not been approved till date. According to Ali Muhammad the original transferee and the three daughters of Muhammad Sherif agreement of association was cancelled shortly after its execution and has, therefore, become a dead letter. The original transferee has unreservedly opposed the approval of agreement sought for by Muhammad Ali. In the peculiar circumstances of the case, I have, therefore, no option but to withhold the approval and reject the disputed Agreement of Association. The transfer price of the house be recovered from All Muhammad according to rules and transfer deed issued in his favour accordingly." This was vide order dated 23-6-1981. Appellant Muhammad All son of Muhammad Sharif filed a Constitutional petition bearing No, 477/R-81 which has been dismissed by a learned Single Judge on 13-10-1982.
Hence, this Intra-Court Appeal.
2. The learned counsel for the appellant have vehemently contended that it is admitted that agreement of association was executed by All Muhammad respondent No,2 and his brother Muhammad Sherif, father of the appellant, and that it was filed. This was final. The Deputy Settlement Commissioner had to approve it. Abdul Majid Khan, Advocate for the appellant cited Begum Shamsun Nisa v. Said Akbar Abbasi and another PLD 1982 SC 413 and referred to the paragraph starting from the bottom of page 420 containing the contention of Major Muhammad !Shag that it was not necessary to record the statements of the parties before giving effect to an agreement of association, nor the approval of the D.S.C. Was essential. Learned counsel submitted that the contentions of the other side that recording of statements of the parties or approval of the Deputy Settlement Commissioner was necessary, was not accepted. He also referred to Mst. Sardar Begum v. Sub. Maj. (Retd.) Aziz Ahmad and 9 others 1983 SCMR 90 at 93 to contend that an agreement of association once filed before the Settlement Authorities was final.
3. Learned counsel appearing for the contesting respondent No,2 have submitted that recording of statements of the parties to the agreement of association and approval by the Deputy Settlement Commissioner are essential to give effect to an agreement of association. Otherwise, it remains inchoate for purposes of transfer under the Settlement Law. Learned counsel have referred to a number of decisions; Haji Ghulam Hussain v. Hamid Hassan Khan PLD 1969 Lah. 147; Fatima Bibi v.
Settlement Commissioner PLD 1973 Note 23 at p.34; Hafizan Begum, etc. v. Deputy Settlement Commissioner etc. PLD 1974 Note 17 at p. 51; Mst. Sabira Begum and others v. Fazal Din and others 1982 SCMR 437; Nabi Ahmad Shah v. Mir Waiz Muhammad Abdullah and others 1976 SCMR 132 and Mst. Amina Begum v. Additional Settlement Commissioner, Lahore and others 1981 SCMR 228.
4. We have heard the learned counsel for the parties at length. There is no doubt that an agreement of association, was executed by the respondent No,2 and his brother Muhammad Sherif, father of the appellant. However, according to the case of respondent No,2 while the litigation was going with a third party, he asked his brother 'for sharing the expenses of the litigation. The latter was ill and said that he did not want to have the share in the house, nor, wanted to act upon the agreement of association. He the (respondent No,2) also said that the two brothers had by mutual agreement cancelled the agreement of association. This was the statement of the respondent No,2 made before the Deputy Settlement Commissioner on 23-2-1981.
The appellant did not question him on any of these facts at all, notwithstanding that an opportunity for cross-examination was given to him. Now if the two brothers after the execution of the agreement of association had mutually cancelled that, that would be the end of the matter. A series of the decisions quoted by the learned counsel for the respondent No,2 show that it is essential before an agreement of association can be given effect to by the Settlement Authorities that the statements of the parties are recorded. There is also consistency in the decisions that an agreement of 'association requires the approval of the Settlement Authorities to give effect to the transfer of the property in favour of the parties to the agreement. The reasons are very sound. If it were possible hat anybody may submit an agreement of association saying that the transferee had further transferred the house in his favour and if it were to become operative ipso facto, it may happen that the original transferee may find himself without his house or shop after a number of years. In order to safe-guard the interest of the transferee, it was provided vide clause 6 of the Instructions issued by the Chief Settlement Commissioner with the approval of the Central Government, dated 13th February, 1960 (p. 115 of the Old Settlement Manual) that an agreement of association "will be filed by the parties" meaning thereby by both or all the parties. In order to ensure that the transferee is entering into an agreement of association it has been the practice of the Department and the precedents are to the effect that the statements of all the parties are recorded by the Deputy Settlement Commissioner. The approval of the Deputy Settlement Commissioner as laid down in the aforesaid decisions is also for very sound reasons. In case of PLD 1969 Lah. 147, it was observed;-- "It does not however, mean that the Settlement Authorities were in all cases, bound to accept the association. In proper cases, they could refuse to accept or act upon an association, e.g. In case when the transferee is a widow, or an invalid and the association agreement is silent or is tricky about the consideration the Settlement Authorities may refuse to accept to such an association.
There are many cases where the Settlement. Authorities refused to accept the association.
Admittedly, the normal practice is that an association is not acted upon, unless it is formally accepted by the Settlement Authorities."
' The decision was quoted with approval and the ratio expressly upheld by the learned Supreme Court of Pakistan in Mat. Sabira Begum and others v . Fazal Din and others 1982 SCMR 437. Another reason for the Settlement Authorities to come in may be submitted. A house is transferred to a destitute widow. She may for lack of funds enter into an agreement of association to surrender her rights for cash consideration. The Settlement Authorities may refuse to approve the agreement of the association on the ground that the house was transferred to her for "rehabilitation" and if she were to surrender it, she would be on road and that would be against the purpose of the law which is to rehabilitate people. Moreover, the State, in spite of law, will be left to shoulder the responsibility of looking after such a person. Therefore, we are of the view quite clearly that in accordance with the purpose of Displaced Persons (Compensation & Rehabilitation) Act, 1958 and the consistent law laid down by the learned Judges of the High Court an Supreme Court, an agreement of association must be filed by both the parties, their statements recorded in support thereof, and that it is approved by the relevant Settlement Authority before it can become operative so as to effect transfer of the property from the Compensation Pool in favour of a person other than the original transferee. The two decisions relied upon by the learned counsel for the appellant are o no help. In the first, the question was found to be not important and appeal decided on other grounds.
In the second, the precise point were neither raised nor were in issue. In the case in hand, it is disputed that statements of the respondent No,2 and his associate brother were never recorded.
According to the respondent No,2, he and his brother had mutually cancelled the agreement of association. On the point respondent No,2 was not even put a question when he deposed as above before the Deputy Settlement Commissioner. The three daughters of the deceased associatee have supported the respondent as against their brother the appellant. The agreement of association was never approved by the Settlement Authorities. In these circumstances we cannot say that the learned Single Judge erred in not setting aside the order of the D.S.C. Who had not approved the agreement of association as he had acted within the jurisdiction conferred on him by law. There is no reason to say that he acted without lawful authority.
5. For the foregoing. Reasons, the appeal is dismissed but in the circumstances, the parties are left to bear their own costs.
6. At this stage, the learned counsel for the respondent No,2 who accompanied by Muzaffar Ali, a son of the respondent No, 2, stated that on their own authority and on instructions of the latter, they offer that if the appellant stops the litigation and vacates the portion of the house in his possession by the end of six months, they are prepared to pay a sum of Rs, 10,000 (Rupees ten thousand) within two weeks to the appellant to enable him to build his own house. This is acceptable to the attorney of the appellant namely, Aziz-ud-Din who has placed on record a registered power of attorney in his favour and is identified by Mr. Abdul Majid Khan, Advocate who argued the appeal.
Since the parties have compromised, it is allowed in the interest of justice and their own. The appellant shall be paid a sum of Rs, 10,000 (Rupees ten thousand) within a fortnight as stated by the learned counsel for the respondent No,2 and the appellant in his turn shall hand over the vacant possession of the portion in his possession within the next six months, at the latest by the 1st of October, 1984. The order has been dictated in the presence of the learned counsel for the parties and the persons mentioned above. They accept it and have no objection. The matter is thus finally disposed of.