AKHTAR HASSAN, J- This Regular First Appeal and the Cross 'Objections (C.M. No. 1198/1986) arise from the same decree dated 26-6-1984 passed by the learned Civil Judge Ist Class, Okara, whereby the suit of the appellants/plaintiffs for specific performance was dismissed. However, they were granted the relief of refund of Rs.50,000 against defendants Nos. 1 to 9 with at the rate of 6 per cent per annum from June, 1969, till realization. Their prayer for damages to the tune of Rs.7,00,000 was rejected. This judgment shall dispose of both the Appeal and the Objections.
2. Same of the parties died during trial. Their legal representatives have been substituted for them.
The case of the plaintiffs was that defendants Nos. 1 and 2 Khawaja Muhammad Sadiq and Haji Muhammad Siddique showing themselves to be "full owners" of the industrial unit in question entered into an agreement dated 14-6-1969 with them for its sale in lieu of Rs.7,50,000 and also received an earnest amount of Rs.25,000 through a cheque of even date from them. They added to have paid them a further sum of Rs.25,000 on 22-6-1969 when yet another agreement containing similar terms was executed by them in their favour. Later, however, they came to know that the defendants were not granted Permanent Transfer Deed of the property on account of their failure to pay arrears to the tune of Rs.2,17,000 to the Settlement Department and further that they were minded to transfer the property for a higher bait to a third party. They averred that they made applications dated 24-10-1969 and 29-10-1969 to the Settlement Commissioner concerned requesting him not to transfer the property to any third party as they would be willing to clear the arrears on behalf of the defendants. In spite of these applications, the defendants filed a Deed of Association on 25-10-1969 before the Additional Settlement Commissioner (Industries) whereby they surrendered their rights in the factory in favour of defendants Nos. 3 to 10. The plaintiffs' objection was spurned, the Deed of Association mentioned above was approved on 31-10-1969, defendants Nos. 3 to 10 cleared the balance and eventually were given a Permanent Transfer Deed.
The plaintiffs' appeal before the Settlement Commissioner failed and they challenged the transfer of the property to the defendants in the present suit maintaining that it was bad in law inasmuch as they had notice of their prior interest in the property under the earlier agreements; that the defendants had committed fraud to cause loss to them; that the agreement of association being not stamped, nor registered was hit by various provisions of the relevant Acts; and that the Settlement Officers acted mala fide showing Unholy haste in approving the deed and issuing the P.T.D. To defendants Nos. 3 to 10. They claimed themselves to be bona fide purchasers of the property and prayed for specific performance of the contract showing willingness to pay the balance of sale price Rs.2,17,000.
3. The defendants contested the suit pleading that the Civil Court had no jurisdiction to call in question the orders passed by the Settlement Authorities in tape exercise of their exclusive jurisdiction. They maintained that the agreements (fated 14-6-1969 and 22-6-1969 were nullity in the eye of law, in that they had no saleable interest in the property by the time; that at the most they were highest bidders in an auction, but having not paid the consideration amount they had not oven conferred title; and that the Deed of Association with the defendants having been validly approved could not be assailed. It was pleaded on behalf of defendants Nos. 3 to 10 (presently defendants Nos. 10 to 17) that they had no notice of the so-called prior agreements relied by the plaintiffs. They explained additionally that the Deed of Association having been written on a stamp and registered m accordance with the relevant scheme, did not suffer from any legal infirmity on that plane. Lastly, they asserted that they were bona fide purchasers for value without notice and that the sale in their favour was immune from any attack. A technical objection was also taken to the effect that the plaint was not signed and verified m accordance with the law. The following issues were framed:- (1)Whether the plaint has not been signed in accordance with the law and the suit is bad under Order VI, Rule 14, C.P.C. And Section 45 of the Contract Act? O.P.D.
(2)Whether the plaint has not been verified in accordance with the law? If so, what is its effect?
O.P.D.
(3)Whether Civil Courts lack jurisdiction to try this suit? O.P.D.
(4)Whether the plaintiffs have got no cause of action to file the suit? O.P.D.
(5)Whether the plaintiffs lack locus standi to file this suit? O.P.D.
(6)Whether the suit is incompetent against defendants No.11 and 12 and 18 and 19? O.P.D. .
(7)Whether the plaintiffs are estopped by their act and conduct from filing this suit? O.P.D.
(8)Whether defendants from 10 to 17 are bona fide purchasers of the disputed property for valuable consideration without any notice of the alleged agreements in favour of the plaintiffs? O.P.D.
(9)Whether defendant No.1, the predecessor-in-interest of defendants No.2 to 9 had entered into agreements for sale of the disputed property in favour of the plaintiff on 14-6-1969 and 22-6-1969?
O.P.D.
(10) Whether Rs.50,000 were paid to defendant No. 1 under these agreements? O.P.P.
(11) Whether the order passed by the Additional Settlement Commissioner dated 31-10-1969 and by the Settlement Commissioner on 8-11-1969 are ultra vires and void? O.P.P.
(12) Whether deed of association dated 25-10-1969 was result of fraud an a void? O.P.P.
(13) Whether the P.T.D. Based on this deed of association is a null and void document? O.P.P.
(14) Whether the defendant No. 1 had made a representation to the effect that he was full owner of the disputed property? If so, what is its effect? O.P.P.
(15) Whether the agreements alleged by the plaintiffs can be enforced specifically? O.P.P.
(16) In case issue No.15 is decided against the plaintiffs, then whether they are entitled to get any damages, if so, what is the measure of these damages? O.P.P.
(17) Relief.
The trial Court dismissed the suit chiefly because it found that it--had no jurisdiction to call in question the Deed of Association approved by the Settlement Authorities in their exclusive jurisdiction. It, however, allowed refund of Rs.50,000 to the. Appellants/plaintiffs.
4. The grounds taken up in the plaint were reiterated at the Bar but the fact remains that the appellants had availed the exclusive jurisdiction of the Settlement Authorities initially by making two applications dated 24-10-1969 and 29-10-1969 and later by preferring an appeal from the order dated 31-10-1969 by which the Deed of Association in favour of the defendants was approved. After having failed there, they came up before the Court of plenary jurisdiction to state that those orders were bad in law. They could not do so. The rule was that if remedies in a special hierarchy were availed, an ordinary suit would not be available to challenge a decision ultimately passed in that hierarchy. It holds the field ever since it was initially enunciated by a Full Bench of this Court in Sultan l, A.I Nanghiana v. Nur Hussain (AIR (36) 1949 Lahore 131), was followed by this court in Abdul Aziz v. Syed Arif A.I and 6 others (PLD 1978 Lahore 441) and' later applied in Central Government through Income Tax Officer, D.I.Khan v. Sher Muhammad Khan and others (PLD 1971 Peshawar 153). Secondly the approval of the Deed of Association in favour of the defendants was an order passed by the Settlement Authorities in the exercise of their exclusive jurisdiction. Its validity was assailed on the ground that it did not bear the necessary stamp nor was it registered under the Registration Act. Para 14 of the impugned judgment elaborately dealt with this aspect holding that it had been correctly drawn on Rs.4 non-judicial stamp attested by a First Class Magistrate and approved by the Settlement Authorities under clause (6) of Manual of Settlement Laws and Procedure published by the Government of Pakistan. The objection that it was void for want of necessary stamps was overruled. Conversely in para 15 it was held that the so-called agreements Exh.P.I and Mark-2 held by the: appellants/plaintiffs were untenable in that those were not written on four-rupee non-judicial stamp paper, nor were attested by any Oath Commissioner, nor did they conform to the provisions of scheme promulgated under the Displaced Persons (Compensation and Rehabilitation) Act, 1958. It took the view that the Settlement Authorities could have justifiably refused to accept such agreements and that the order passed by them was saved by sections 22 and 25 of the said' Act. We do not find anything to hold a different opinion on the point. There were no gainsaying the fact that approval accorded to the Deed of Association lay in exclusive jurisdiction of Settlement Authorities. In Muhammad Siddiq etc. v. Chief Settlement & Rehabilitation Commissioner etc. (PLD 1965 S.C. 123), it was held that after approval, such a Deed of Association created vested rights in favour of the associates. Those proceedings were obviously final under section 22 of the Act and were immune from being challenged in a Civil Court. Section 25 of the Act fully applied. Still further, the Act had an overriding effect against all other laws.
Section 36 thereof was quite eloquent in that context and, therefore, any claim by the plaintiffs either under the Contract Act or the Specific Relief Act or the Transfer of Property Act as prior promisees could not be entertained. The approval of the Deed of Association was quite sacrosanct.
Learned counsel cited Syed Murtaza Shah v. Maj. (Retd.) Mufti Nazar Muhammad etc. (1980 CLC 138) in support of the contention that the Civil Court could scan such a Deed of Association, but a careful perusal of the authority shows that the transferee in that case had paid the entire price of Rs.1,33,400 and presumably had had no occasion to surrender his rights in the property in favour of his associates. Further, the pivotal point therein was upto see whether the attachment of the property was void or not. One of the arguments advanced was that the so-called association was a cloak against attachment of the property. No such consideration was obtaining in the present case and evidently the citation was of no assistance to the appellants.
5. We, therefore, eminently agree with the decision of the Trial Court, affirm it and dismiss the appeal leaving the parties to bear their own costs.
6. The Cross-objection relating to refund of Rs.50,000 had no merits for the simple reason that receipt of this amount was not categorically denied in the written statement where the two agreements relied upon by the plaintiffs were assailed only on the ground of legal vires rather than denying their factum. Any benefit obtained under a contract which is frustrated has to be restored under Section 64 of the Contract Act, 1872. Nor was it urged that the respondents could forfeit this amount as penalty, which again was in the discretion of the Court as contemplated by section 74 of the said Act. The cross-objections are also dismissed.
M.Z.S./Z-102/L.