' The petitioners' predecesor-in-interest Haji Muhammad Siddique was a claimant displaced person. His claim was verified by the Deputy Claims Commissioner on 25-3-1958. It was scrutinized and affirmed by the Claims Commissioner on 2-5-1960. He was accordingly issued Compensation Books. He was transferred a house bearing No,S-2-7S-1, Dhani Ram Road, Lahore. He, then, purchased two shops one bearing No, S-64-R-10, Anarkali, Lahore in auction on 3-2-1960 and another one No, S-2-9S-12, Dhani Ram Road, Lahore, on 2-4-1960. He deposited his Compensation Book and adjustment of the transfer price of the shops was made. According to the case of the petitioner's predecessorin-interest. Haji Muhammad Siddique as reiterated he had a dispute about the transfer of an industrial concern with his co-allottee Fazal Din. The latter happened to be a brother-in-law of a Settlement Commissioner (Policy) On the motion of aforesaid Fazal Din, Enforcement Staff made an application against the verification of the claim of the petitioners' predecessor-in-interest and Raja Ziaullah. Claims Commissioner cancelled the claim.
Compensation Book and ordered benefits drawn therefrom to be withdrawn. This is, vide order, dated 7-5-1962. Challenging this order, the petitioners' predecessor-in-interest filed Writ Petition No, 541 of 1962 which was accepted, the impugned order was declared to be without lawful authority and case remanded for fresh decision. This is vide order, dated 3-4-1963. Fazal Din filed Civil Appeal No, 24 of 1965 in the learned Supreme Court which was dismissed on 13-1-1986. His review appplication too was dismissed on 6-4-1966. In pursuance of the remand order, dated 3-4- 1963, the Claims Commissioner reverified the claim on 29-2-1968. The claimant finding the same to be meagre and not in accordance with law, filed Writ Petition No, 263-R of 1968 which was allowed and case remanded on 1-2-1971. The claims was reverified on 28-3-1978 but that too was found to be not satisfactory by the claimant. He then filed Writ Petition No, 578 of 1978 which was again allowed and case remanded on 5-11-1980. This time the claim was verified under Schedules I and III for Rs,2,53,418.75 and under Schedule VI for Rs,1,18,485, vide order, dated 30-5-1982.
2. On the Settlement side, when the claimant's claim verified by the Deputy Claims Commissioner and upheld by the Claims Commissioner was cancelled by Raja Ziaullah, Claims Commissioner, on 7-5-1962 (which order, as stated above, had been set aside and claim subsequently reverified) the Compensation Book of the claimant was cancelled by a Chief Accounts Officer on 26-6-1967. On 11-7-1967, the Deputy Settlement Commissioner issued a notice for payment of the transfer price in respect of the two shops purchased in auction by the claimant. The claimant filed a reply saying that the re-verification of his claim was pending and action had to be taken in accordance with para. 20 of the Schedule to the Displaced Persons (Compensation and Rehabilitation) Act, 1958.
Nonetheless, the Deputy Settlement Commissioner passed orders of cancellation of transfer, forfeiture of 25% of the transfer price and resumption of the properties. This is, vide order, dated 17- 8-1967. The claimant filed appeals in respect of the cancellation and resumption of the two shops from him on 2-9-1967. While these were pending, the claimant obtained an order from the Claims Commissioner where his claim was pending verification, staying disposal of the shops in auction.
The order is, dated 11-11-1967. In spite thereof, the Deputy Settlement Commissioner transferred the two shops to Fazal Karim and Muhammad Iqbal Butt on their L.S. Form, vide order, dated 30-1-1968 and 26-1-1968 respectively. It may be noted that both these gentlemen being local had not applied for transfer of the shops under Settlement Scheme No, 1 and, therefore, the same had been auctioned in favour of the claimant, predecessor-in-interest of the petitioners. The claimant filed appeals against the transfer of the shops to Fazal Karim and Muhammad Iqbal Butt. He also filed an appeal against the resumption of the house. The Additional Settlement Commissioner took up all the appeals together and finding that the deferred payment in respect of the reverified claim was sufficient only for one property, he allowed on 12-10-1968 the appeal in respect of the shop transferred to Fazal Karim but he rejected the appeal regarding the house and the other shop transferred to Muhammad Iqbal Butt both of which he ordered to be put to auction. The claimant filed a revision petition. So did Fazal Karim against the transfer of the shop earlier transferred in his favour to the petitioners' predecessor-in-interest. Muhammad Iqbal Butt also filed a revision against the order of auction of the shop earlier transferred to him. On 20-11-1973 the Settlement Commissioner accepted the claimants' revision as regards the house but rejected his claim to the two shops purchased by him in auction. He transferred these to Fazal Karim and Muhammad Iqbal Butt. This order is challenged by the petitioners successor-ininterest of the claimant through the aforetitled Constitutional Petition.
3. Learned counsel for the petitioners has contended firstly that the Compensation Book issued in .The name of the predecssor-in-interest of the petitioners HO Muhammad Siddique could not have been cancelled by the Chief Accounts Officer on 26-9-1967 because the matter of verification of the claim had been remanded by the High Court in. Writ Petition No, 541 of 1962, vide order, dated 3-4-1963 which order was upheld on appeal and review petition by the learned Supreme Court when the same were dismissed on 13-1-1966, and 6-4-1966 respectively. Secondly, during the pendency of the verification of the claim, action had to be taken under para. 20 of the Schedule of the aforesaid Act. After the issuance of notice for payment of the transfer price by the Deputy Settlement Commissioner on 11-7-1967, the petitioners' predecessor-in-interest had filed an application for action under the afore-mentioned paragraph and also pointed out that his claim was pending verification and therefore, the notice be not acted upon. But no action was taken on the application and the shops were, it was thirdly contended, hurriedly resumed and transferred to Fazal Karim and Muhammad Iqbal Butt mala fide. This had been done in spite of the order of the Claims Commissioner, dated 11-11-1967 prohibiting further disposal of the shops. It was fourthly contended that the transfer of the shops to Fazal Karim and Muhammad Iqbal Butt by the Deputy Settlement Commissioner was without authority because only an Additional Settlement Commissioner could transfer the cancelled/resumed shops under para. 1(2)(b)(ii) of the Settlement Scheme No, VIII.
4. Ch. Khurshid Ahmad, Advocate, appearing for the legal representatives of Fazal Karim, respondents Nos. 5 to 13, has submitted that para. 20 of the Schedule aforesaid has no application to the facts of the case because that relates to the transfer of a property and not to 'auction'. He has also submitted that at the time of resumption and transfer in favour of his clients the predecessor-in-interest of the petitioners was not a claimant in accordance with the definition of the word 'claimant' in sub-para. (3) of para. 1 of Settlement Scheme No, VIII which reads as follows:- - "'Claimant' means a person who has surrendered a Compensation/ Rehabilitation Book in which there exists a balance of compensation amount (deferred payment) and has also submitted Form W."
' It was submitted that this is different than the definition given in the Registration of Claims Act, 1956. He submitted that the transfer in favour of his clients was valid. He placed reliance on Niaz Muhammad v. Sh. Abdur Rashid and another 1980 C M R 904.
5. Mr. S.A. Mannan, Advocate appearing for the legal representatives of Muhammad Iqbal Butt adopted the arguments of his predecessor. He also submitted that the petitioners' predecessor- ininterest, the claimant Haji Muhammad Siddique did not die prior to 31st of August, 1959, but in 1972; and, therefore, the petitioners are not included in the definition of a claimant under section 2(2) of Displaced Persons (Compensation and Rehabilitation) Act, 1951 which reads as follows: -- "CLAIMANT'. Means displaced person whose claim (excluding claim in respect of agricultural land) has been registered under the aforesaid Act of 1956 and includes the successor-in-interest of a claimant who does on or before the 31st day of August, 1959 but does not include any second person whose claim has subsequent to registration being withdrawn or rejected."
' He further submitted that since the claim of the claimant had been rejected at the relevant time i.e. At the time of resumption of the properties he could not be treated as claimant. It may be noted here that the claim of the claimant has finally not been rejected but accepted and verified.
6. Mian Nusratullah, Advocate appearing for the Settlement Department has submitted that during the pendency of the verification of the claim of the petitioners' predecessor-in-interest under the order of the High Court, dated 3-4-1963 which had been upheld by the learned Supreme Court of Pakistan, the property could not be resumed for default in payment of the transfer price, particularly when the fact of pendency of the verification of the claim had been brought to the notice of the Deputy Settlement Commissioner.
7. I have heard the learned counsel for the parties at length and perused the record with their assistance. From the narration of facts made above, it would be quite clear that the predecessor- in-interest of the petitioners, the claimant, purchased the two shops in dispute in the public auction in the early part of 1960. May be his misfortune commenced when he came in conflict with his co- allottee in an industrial concern for its transfer, namely, Fazal Din who happened to be 'a brother- in-law of the then Settlement Commissioner (Policy) at the Headquarters and on whose motion the Enforcement Staff got the verified claim of the claimant by the Deputy Claims Commissioner, affirmed by the Claims Commissioner or in early part of 1960 cancelled on 7-5-1962. This order was found to be without lawful authority and of no legal effect by the High Court and its judgment was upheld by the learned Supreme Court when Fazal Din's appeal and review petition were dismissed on 13-1-1966 and 6-4-1966. Notwithstanding that, the claimant coiuld not escape the Settlement authorities. His Compensation Book was cancelled, transfer of the shops through auction in his favour was cancelled and the shops resumed from him and were transferred to two others.
Leaving aside the luck the order of the Deputy Settlement Commissioner, dated 17-8-1967 cancelling the transfer of the two shops auctioned in favour of the claimant, forfeiture of 25$ of the auction price and resumption thereof, requires consideration and so also the subsequent orders of the Settlement authorities. The order of the Deputy Settlement Commissioner, dated 17-8-1967 had been passed after issuance of a notice to the claimant on 1-7-1967 for payment of the transfer price of the two shops. The claimant had replied on 10-8-1967 that his claim was still pending verification under the order of the High Court and that action be taken under para. 20 of the Schedule of the Displaced Persons (Compensation and Rehabilitation) Act, 1958 which allows deferring the payment of transfer price according to certain scale. No need was paid to the application. Orders of cancellation and resumption were passed on 17-8-1967. This was obviously a case of callousness perverting smo oth running of administration of justice. The claimant filed appeals and during the pendency thereof, he obtained an order from the Claims Commissioner on 11-11-1967 prohibiting the further disposal of the shops by means of auction. Letter of the law probably was not violated but the order was subverted by the Deputy Settlement Commissioner by transferring the shops in favour of Fazal Karim and Muhammad Iqbal Butt on 30-1-1968 and 26-1- 1968, respectively on their L.S. Forms. He had no jurisdiction in the matter of transfer of the cancelled/resumed shops because it was only an Additional Settlement Commissioner who was vested with such powers, vide para. 1(2)(b)(ii) of Settlement Scheme No, VIII under which transfer was purportedly made by the Deputy Settlement Commissioner. All the orders of the Deputy Settlement Commissioner clearly show arbitrariness and smack of something unwholesome at the bottom. Superstructure cannot stand A on unsound foundations and must fall to the ground eventually. In the last order, dated 20-11-1973, the learned Settlement Commissioner observed that I am told that the High Court has given direction that the claim of Haji Muhammad Siddique will be inquired into by the S.C./ C.C. Afresh. It means Haji Muhammad Siddique has no claim whatsoever with him. The entire matter will now be inquired into afresh by the Department. Since Haji Muhammad Siddique had nothing and consequently failed to deposit the price of the shops purchased by him in auction he was, therefore, a defaulter for all intends and purposes. I am therefore, left with no other alternative but to hold that the order passed by the D.S.C. In resuming the two shops from him and subsequently transferring one shop to Muhammad Iqbal Butt and the other to the heirs of Fazal Karim, was a lawful order. When these orders were passed by the D.S.C.
The properties were definitely available for disposal. These were accordingly, rightly transferred to Muhammad Iqbal Butt and the heirs of Fazal Karim, respectively. The reasoning of the learned Settlement Commissioner is obviously simplicistic and nothing but sophistry. When the High Court had directed re-verification of the claim afresh after declaring the order of the Claims Commissioner cancelling the entire claim as without lawful authority of no legal effect, it could not be inferred that the claimant has no claim whatsoever and that he had nothing and consequently failed to deposit the price of the shops purchased by him in auction, he was, therefore, a defaulter for all intents and purposes. He had the claim which was firstly verified by the Deputy Claims Commissioner and was affirmed by the Claims Commissioner. Its cancellation was set aside by the High Court. It was to be re-verified. It cannot be said that he had nothing. Even if that be so, he could not be said to have failed to deposit the price because he was saying that his claim was pending and action need be taken under para. 20 of the Schedule under the aforementioned Act.
He could not be said to be defaulter for all intents and purposes. On the other hand, he was trying to re-establish his verified claim for payment and asking for action under the law, i.e. Para. 20 of the Schedule. His efforts to get his verified claim restored succeeded though partly ultimately. Re- verification of the claim would obviously retroact because verification of the claim was in respect of the properties left behind in India in 1947. The verification is only a declaration of pre-existing fact.
8. The contention of Ch. Khurshid Ahmed, Advocate that para. 20 of the Schedule to the Act applies to properties 'transferred' and not to properties 'auctioned' is too specious without substance. Even after auction the property is 'transferred' to convey title. In the case in hand, the Deputy Settlement Commissioner in his first and basic orders had said that I....(a) cancel the transfer of the said property, '(b) forfeit the paid amount upto 25% of the transfer price'. The contention that the predecessor-in-interest of the petitioners was not a 'claimant' in terms of sub-para. (3) of para. (1) of the Settlement Scheme No, VIII at the time of transfer of shops to his clients predecessor- ininterest, it need only be said that rights of his clients would only come into being if the orders of cancellation and resumption of the properties from the claimant were valid. These have already been found to be not valid. Secondly, the definition in the aforesaid provisions does not mean that if a claimant has surrendered his Compensation Book in which there exists deferred amount and has filed Form 'W' he will cease to be a claimant if wrongfully his Compensation Book has been cancelled and his claim is re-verified and he is entitled to the Compensation Book with modified deferred amount. The claimant's claim stands re-verified as stated above. Therefore, the contention is without force. The other contention of Mr. S.A. Mannan, Advocate that the claimant did not die prior to 31-8-1959 in 1972 and, therefore, his successor's, the petitioners cannot be included in the definition of 'claimant' under section 2(2) of the Act, is altogether misconceived. The case is not of the petitioners being claimants. It is as regards the rights of the claimant who had purchased the shops in auction and was deprived of the transfer by cancellation of the transfer and resumption of the proeprties in 1968. He was very much alive then. He died in 1972. He could not live, it was not in his power to live, until the end of litigation. The second contention that at the relevant time of 1968, the claimant's claim stood rejected, is not quoted correct. Cancellation of the claim was found by the High Court to be without lawful authority and of no legal effect. The case was remanded for re-verification of the just claim. Finally, it was re-verified and will have retrospective operation as stated above. The contentions of the two learned counsel are without force. It may be added to the credit of the learned counsel for the Settlement Department that he candidly stated that in view of the pendency of the verification of the claim under the orders of the High Court and the learned Supreme 'Court of Pakistan, the properties could not be cancelled and resumed from the claimant, auction-purchaser for default in payment of the transfer price especially when the aforesaid fact was brought to the notice of the Deputy Settlement Commissioner.
9. In view of what has been stated above, this petition is allowed.
The impugned orders are declared to be without lawful authority and of no legal effect. The transfer in favour of the predecessor-in-interest of the petitioners made over a quarter of a century ago shall hold the field and the petitioners shall get the auction price adjusted from their finally verified claim and the balance, if any, they shall pay within the next three months. Costs shall be borne by the private respondents as the Settlement Department has conceded that the transfer in favour of the predecessor-in-interest of the petitioners could not be cancelled during the pendency of the verification of the claim.