1. MUHAMMAD HALEEM, C. J.-This appeal, by leave, arises from the judgment of the Lahore High Court, Lahore, dated 10th of January, 1983, by which Regular Second Appeal No. 990 of 1969, was allowed with costs throughout.
2. Leave to appeal was granted to consider whether condition No. 9 of the grant which empowers the Collector to determine it and resume the possession of the land was an independent power exercisable on violation of any of the terms or conditions of the grant, and excluded the procedure of arbitration provided in the grant itself for resolving disputes, if any.
3. The respondent No. 1, herein, applied to the Collector, district Sheikhupura, for the transfer of 3 Kanals and 2J Marlas of land on lenient terms for the construction of a school for teaching oriental languages. The Board of Revenue, West Pakistan, by its order dated 11-4-1956, agreed in principle to transfer the land on terms and conditions amongst others at a price of Rs. 200 per Marla. By letter dated 7th of August, 1958, the Secretary to Government, West Pakistan, Revenue Department, conveyed to the Secretary (Colonies), Board of Revenue, West Pakistan, Lahore, the sanction of the Governor to the sale of 3 Kanals and 2J Marlas of land in the city of Sheikhupura on the Lahore- Sheikhupura Road at the rate of Rs. 200 per Marla or Rs. 4,000 per Kanal subject to the following conditions
(i) The sale should be specifically for the purposes of a School and in case it is put to any commercial use the Provincial Government will be competent to suitably enhance the sale price.
(ii) The sale should not be in favour of any individual but should be in favour of a registered body which has to manage the school.
4. On the payment of Rs. 12,50 as its price, the land was granted to the respondent No. 1 through a deed, of conveyance on 5-5-1959. Instead of constructing the school, the respondents installed a saw mill and construct--ed shops on the land and rented them out. Thereupon, several complaints were made and an inquiry was conducted by the Secretary (Colonies) and two other officers.
5. Consequently a show-cause -notice was issued by the Collector, Sheikhupura, on 14th of April, 1960, to the respondent No. 1 calling upon him to show cause as to why action should not be taken for breach of the terms and conditions of grant for having put the land to a commercial use instead of constructing a school building. The said respondent in his reply, dated 19th of April, 1960, stated that as the institution was facing financial difficulties, therefore, in order to make it self-sufficient to meet the expenses, the shops were constructed to earn funds required for that purpose.
6. The plan sent for approval was not sanctioned. Again the Collector by notice, dated 3rd of August, 1962, called upon the respondent No. 1 to appear before him on 7th of September, 1962, and show cause as to why action contemplated under section 24 of the Colonization of Govern--ment Lands Act should not be taken against him. The respondent No 1, by letter, dated 7th of September, 19,.,2, intimated that the show-cause notice was misconceived as the land had been sold to him. Earlier the premises was inspected by Sardar Karim Nawaz, Secretary (Colonies), Board of Revenue, and by letter, dated 23rd of February, 1962, it was communicated to the respondent No. 1 that from the inspection it appeared that his intention was to put the land to commercial use. Finally, the COllector, Sheikhupura, by order dated 7th of September, 1962, cancelled the grant and resumed the land.
7. The respondent No. 1 went in appeal against the resumption of the plot before the Additional Commissioner, exercising the powers of Commis--sioner, Lahore Division, Lahore, who heard the appellant inspected the site on 15-11-1962 and recorded his note on 19-11-1962. By order dated 12th of December, 1962; he rejected the appeal. The respondent No. 1 thereupon filed a revision before the Board of Revenue, West Pakistan, which was also rejected on 1-7-1963. The respondent No. 1 thereafter instituted a suit in the Court of Senior Civil Judge, Sheikhupura, on 8th of January, 1965, against the order of resumption, dated 7th of September, 1962, which was dismissed on 7th of April, 1969. An appeal against the dismissal of the suit met the same fate as it was also dismissed on 23rd October, 1969.
8. The respondent No. 1 thereupon preferred a regular second appeal in the Lahore High Court and succeeded as by order, dated 10th of January, 1983 ; the judgments and the decrees of the Courts below were set aside ; and, the suit was decreed with costs throughout. The High Court in holding so reversed the following conclusions of the Courts below
(i) The declaratory suit under section 42 of the Specific Relief Act was not maintainable as the appellant had not prayed for pos--session ;
(ii) Section 36 of the Colonization of Government Lands Act is a bar against a civil suit ; and
(iii) The order of the Collector resuming the grant was valid in view of breach of the conditions of sale.
9. The learned counsel for respondent No. 1, before the High Court, contended that the Collector had no power to interfere under section 24 of the Colonization of Government Lands Act, hereinafter referred to as "the Act", after the proprietary rights had been granted. Reliance in this context was placed on Muhammad Din and others v. Imam Din (PLD 1947 P C 317 The High Court while accepting the above contention, relied on Muhammad Din's case, and so also on Government of Punjab v. Harbhagwan and another (1940 P L R 529), wherein it was further held that if the Government felt aggrieved, section 24 of the Act could not be availed of, but it was open 5o the Government to seek remedy by way of a suit if it considered that there was a breach of any condition of sale or to enforce the arbitration clause if provided in the conveyance deed.
10. The High Court next relied on section 30 of the Act to hold that notwithstanding anything in the statement of conditions, a tenant who has acquired proprietary rights in any land shall not be subject to any statement of conditions issued under the Act, and shall be bound by the conditions set out in Schedule II of the Act as well as the other provisions of law applicable to proprietors of land. Reading together section 3 of the Government Grants Act, 1895, and section 30 of the Act, the High Court reached the conclusion that notwithstanding the conferment of proprietary rights such a person shall be bound only by the conditions in Schedule II as well as the other conditions in the Act which apply to proprietors and not tenants. It was also noted by the High Court that there was no violation of the conditions mentioned in Schedule II nor was any provision relating to the proprietors of land violated. Reliance was additionally placed on para. 155-A of the Colony Manual, Volume II, which provides that on the execution of the sale-deed the purchasers ceased to be governed by the conditions incompatible with those actually included in the sale--deed, and in case of violation of such conditions, the re-entry clause is subject to the arbitration clause so that if a dispute arises as regards Government rights to re-enter then the dispute or difference shall be referred to the arbitrator. And it would be the arbitrator's decision and not that of the Collector which would be final and conclusive between the parties. It further recites that the alleged breaches of conditions embodied in such grants by way of conveyance are to be treated on different lines from those breaches of conditions of a tenancy governed by section 24 of the Colonization of Government Lands Act.
11. In this regard, the High Court also placed reliance on the case reported as Anjuman-e-Ahmadiya v. Deputy Commissioner Sargodha (PLD 1963 SC 639), and finally held that the Collector had no jurisdiction to himself cancel the sale and resume the property after the conferment of proprietary rights, and so were the higher authorities in error in not correcting the unlawful act of the Collector, and hence it was of the view that the Collector "should have either approached the Civil Court or enforced the arbitration clause of the agreement".
12. It would be of advantage to first deal with the conditions incorporated in the grant itself. Condition No. 1 of the grant by way of conveyance recites that the grantee shall hold the land in proprietary right subject to the exceptions and. The reservations and on the terms and conditions hereinafter appearing. Condition No. 2 of the grant is specific to mention that it is made only for the purpose of construction of a school of oriental languages. The further obligations of the grantee were "(a) To commence the construction of the building within six months from the date of the grant in accordance with plans which shall have been previously approved by the Collector ;
(b) To complete, the building to the satisfaction of the Collector within eighteen months of the date of the grant."
13. Condition No. 8 of the grant recites as under "(a) This grant is subject to the provisions of the Colonization of Government Lands (Punjab) Act, 1912, so far as they are applic--able thereto;
(b) The grantee shall be deemed to be a tenant of such land unless and until he has fulfilled the terms and conditions of this grant."
14. Condition No. 9 of the grant empowers the Collector to cancel the grant and resume possession of the land in case the grantee fails to perform or commits any breach of any of the terms or conditions of the grant. Condition No: I 1 of the grant contains an arbitration clause in the follow-- ing words "(A) If any question, difference or objection whatsoever shall at any time hereafter arise between Government and the grantee in any way touching or concerning this grant, or the construction meaning operation or effect thereof or any clause herein contained or as to the rights, duties or liabilities of either party under or by virtue of this grant or touching the subject-matter of this grant, or arising out of or in relation thereto, then save in so far as the decision of any such matter has been hereinbefore provided for and has been so decided, the matter in difference shall be referred to the arbitra--tion of the Commissioner, who shall have power to decide any matter so referred, including the following questions :-
(i) whether any other provision has been made in these presents for the decision of any matter and if such provision has been made, whether it has been finally decided accordingly, and
(ii) whether the grant should be terminated or has been rightly terminated, and what are or will be the rights and obligations of the parties as the result of such termination.
(B) The decision of the arbitrator shall be final and binding : and when any matter so referred to arbitration involves a claim for the award, increase or reduction of a sum of money by way of compensation or any other .Payment or recovery of money, only the amount decided by the arbitrator shall be recoverable in respect of the dispute so referred."
15. The pivotal point which failed to attract the consideration of the High Court was that the respondent No. 1 held the land in proprietary rights subject to the terms and conditions. One of those terms and conditions was, condition No. 8, that is, that he shall be deemed to be a tenant of such land unless and until he fulfils the terms and conditions of the grant. There is no dispute that the grant was made for the purpose of construction of a school for oriental languages. This being the eminent object of the grant, the proprietary rights were subject to the fulfilment of this condition and till that event happened, condition No. 8 remained operative, in that, respondent No. h was deemed to be a tenant and not a proprietor. In this connection it may also be observed that the words "deemed to be a tenant" were lifted from section 15 of the Act which provides that his status shall remain as such till he pays the sale price and fulfils the other conditions set forth in the statement of conditions of sale issued by the Collector which are none else but those mentioned as condi--tions Nos. 2 and 8 in the grant itself.
16. The treatment of the case by the High Court has been on the plane that he was a proprietor, and, therefore, section 30 of the Act read with clause 5 of Schedule 11 was operative, and further condition No. 11 of the grant could not be invoked by the Collector himself for cancelling the grant and resuming possession as that was a matter for decision through arbitration, and that even if the Collector had passed that order still the matter had to be decided by the arbitrator, and the decision of the arbitrator was final. The High Court failed to notice that section 30 of the Act specifically refers to the acquisition of proprietary rights by a tenant under any such condition of sale in the statement of conditions issued under the Government Tenants (Punjab) Act, 1893, or otherwise by agreements with, or under rules issued by the Provincial Government which is not the case. Here the grant, in favour of the respondent No. 1, was not of a tenancy in accordance with the statement of conditions under section 10 of the Act so as to enable him to acquire proprietary rights in the land. Necessarily, therefore, section 30 of the Act has no application in which case he is also not bound by the conditions set out in Schedule 11 of the Act or by other provisions of the Act applicable to proprietors of land. The High Court was also in error to deny the power to the Collector to invoke the breach of condition No. 11 for cancelling the grant and resuming the land as the respondent No. 1 was still deemed to be a tenant, and not grantee, in possession of the land by virtue of condition No. 8(b) of the grant.
17. Now section 11 of the Act deals with the legal effect of statement of conditions, and, in terms, provides that subject to the provisions of the Act, the grant of any tenancy in accordance with any statements of conditions shall be deemed to be a transfer of a land within the meaning of the Government Grants Act, 1895, and shall be governed by the provi--sions of the said Act.
18. Moreover, condition No. 8(a) of the grant makes it subject to the provisions of the Colonization of Government Lands (Punjab) Act, 1912, so far as they are applicable thereto, that is, so far as applicable consistent with the provisions of the Act itself. Therefore, both sections 11 and IS of the Act will be applicable to the grant and by reason of section 3 of the Government Grants Act, 1895, which, by reference, is incorporated in section 11 of the Act, the terms and conditions of the grant itself pre--eminently would prevail so as to give to them an overriding effect. Thus, the Collector was empowered to cancel and resume land in case of a breach of any condition of the grant independently of section 24 of the Act which equally empowered him to cancel the grant and resume possession of the land by invoking a breach -of any of the conditions of the grant itself.
19. Having excluded the applicability of section 30, clause 5 of Schedule 11, which is differently worded, also stands excluded. Reading the arbitration clause in the grant itself, it is significant to notice the words "then save in so fir as the decision of any such matter has been hereinbefore provided for and has been so decided", which clearly exclude the operation of condition No. 9 from the subject- matter of arbitration, that is, condition No. 9 -is given full effect, and if the Collector has acted in accordance with it then his decision could not be made the subject-matter of a dispute before the arbitrator. This being so, the High Court was in error to hold that in case of a breach of any condition, the validity of the order passed by the Collector. Could be challenged in arbitration proceedings initiated under clause 5 of Schedule II or for that matter as provided in para. 155-A of the Colony Manual, Volume II, and that it was the decision of they arbitrator which was final. The further argument that even if the order is passed by invoking condition No. 9 of the grant still that decision was subject to the decision of the arbitrator, is also without any substance.
20. Lastly, the High Court has strongly relied on Rajindra v. Raghubans Kunwar (AIR 1918 P C 25)), wherein it was held that after the grant was made no further condition could be super imposed, but it has no applicability to the case under consideration as the conditions of grant were not super imposed, but were incorporated in the grant itself. Government of Punjab v. Harbhag--wan and another, was another case relied upon by the High Court, but this case is also distinguishable on facts as in that case too there was an acquisition of the proprietary rights, which is not the case here.
21. For the reasons given above, the appeal is allowed and the order of the High Court is set aside with the result that the suit stands dismissed, but there will be no order as to costs.