' SAEEDUZZAMAN SIDDIQUI, J.---The above case has been placed before the Full Bench on a reference by the Division Bench (consisting of Saeeduzzaman Siddiqui and Imam Ali G. Kazi, JJ.), which initially heard it and after noticing divergence of views in the two reported cases of Hafeez Begum v. Assistant Administration, Evacuee Trust Property PLD 1983 Kar. 374 and Tahir All v.
Federation of Pakistan PLD 1987 Kar. 290, on the interpretation of section 10 of the Evacuee Trust Property (Management and Disposal) Act, 1975 (hereinafter to be referred as the "Act" only) requested the Honourable Chief Justice for constitution of a larger Bench, to resolve the conflict of opinion. The relevant facts are as follows:
1. One Mahboob Khan, the predecessor-in-interest of the petitioners was in occupation of a portion (G-3) of property bearing No, O.T. 3/121, situated in Old Town, Karachi. The said Mehboob Khan, purchased property No, O.T. 3/121 in an open public auction held by the Settlement Authorities on 10-4-1964 for a sum of Rs, 64,000. The auction price of the property was paid by the said Mehboob Khan through the compensation book of a claimant displaced person with whom he had entered into an agreement of association. A provisional transfer order No, 17722 dated 30th April, 1964, was issued in favour of said Mehboob Khan, after payment of transfer price. The said Mehboob Khan died on 15-8-1978 and it is an admitted position in the case that no permanent transfer deed in respect of the property has been issued either in favour of said Mehboob Khan or the petitioners.
After the death of said Mehboob Khan the petitioners who are legal representatives of Mehboob Khan were called upon by respondent No, 4 to pay the rent of the portion of the building in their occupation on the ground that the property was an evacuee trust property. It is admitted in para. 8 of ; he petition that in consequence of the above demand the petitioners paid arrears of rent amounting to Rs,20,000 in January, 1979. In 1981 respondent No, 4 filed an application under sections 8 and 10 of the Act before respondent No, 3 for declaration that the disputed property was an evacuee trust property and its transfer to Mehboob Khan was void. This application was contested by the petitioners but respondent No, 3 by his order dated 16-9-1982 declared the transfer of above property to late Mehboob Khan as void. The petitioners filed a revision petition against the order of respondent No, 3 before respondent No, 2 but the same was also dismissed on 20th June, 1983. The petitioners have now challenged the orders passed by respondents Nos. 3 and 4, declaring the transfer in favour of Mehboob Khan as void, in the above petition.
2. Learned counsel for the petitioners contended before us that said Mehboob Khan having paid the entire transfer price of the property before June, 1968, and a P.T.O. Having been issued in his favour before the target date mentioned in section 10 of the Act, the transfer in his favour was protected under the law. In support of his contention learned counsel has placed reliance on the case of Tahir All v. Federation of Pakistan PLD 1987 Kar.
290. Learned counsel for the respondents on the other hand contended that the transfer of property in suit in favour of Mehboob Khan was void, as the property was an evacuee trust property which could not be sold in auction by the Settlement Authorities. It is also contended that the transfer of above property in favour of Mehboob cannot be described as bona fide as the property was admittedly attached to a `Dharamshala' and was notified as such by the Divisional Evacuee Trust Board, Karachi, vide Notification No, 5(12)/63 dated 15-7-1963 which was published in the Gazette of Pakistan dated 9-8-1963. In the alternative, it is urged by the respondents' counsel that the transfer in favour of Mehboob Khan could not be protected under section 10 of the Act, as no permanent transfer deed of the property was issued in his favour before June, 1968.
3. It is not disputed before us that the property is attached to a `Dharamshala' and as such it is an evacuee trust property, which was not transferable under the provisions of Displaced Persons (Compensation and Rehabilitation) Act, 1958. It is, however, contended that as the petitioners' predecessor had paid the full transfer price of the property in 1964, its transfer in his favour was protected under section 10 of the Act and mere fact that permanent transfer deed of the property was not issued in favour of late Mehboob Khan or the petitioners before June, 1968, could not render the provisions of section 10(1)(b) of the Act inapplicable to their case. It is contended, that the responsibility for preparation of the record of permanent transfer in favour of transferee after its price is paid in full, was that of the Settlement Department and if for any reason the authorities concerned failed to prepare the said record, the same could not come in the way of giving effect to the provisions of section 10(1)(b) of the Act. It is, accordingly, contended that in the present case not only the transfer of the property in dispute had taken place in favour of the predecessor of the petitioners much before June, 1968, but its entire price was also paid before the crucial date mentioned in section 10 of the Act and a Provisional Transfer Order in respect of the property dated 30-4-1964 was also issued in favour of transferee and as such the transfer of the property was protected under section 10 of the Act. In support of his above contention, the learned counsel mainly relied on the case of Tahir Ali v. Federation of Pakistan PLD 1987 Kar.
290.
4. The learned counsel for the respondents, on the other hand, contended that the transfer in favour of petitioners could not be validated under section 10 of the Act, as it was neither a bona fide transfer nor the permanent transfer deed of the property was issued in favour of petitioners before the crucial date, namely, June, 1968. Reliance is placed by the learned counsel for the respondent on the case of Hafeez Begum v. Assistant Administrator, Evacuee Trust Property PLD 1983 Kar. 374 in support of his argument.
' In Hafeez Begum's case a Division Bench of this Court (consisting of Nasir Aslam Zahid and Ali Nawaz Budhani, JJ.) while interpreting the scope of section 10 of the Act held as follows:- "The question whether an evacuee property is attached to a charitable or other specified trust or institution or not is to be decided by the Chairman. If a P.T.D. In respect of an evacuee trust property situated in an urban area has been issued bona fide to a transferee against satisfaction of a verified claim it is deemed to be validly transferred by the Chief Settlement Commissioner provided the P.T.D. Was issued prior to June, 1968. For validation under section 10(1)(b) of the Act, 1975, therefore, two conditions must be satisfied. Firstly, the P.T.D. Must have been issued prior to June, 1968, and secondly the transfer by the Settlement Authorities must be bona fide and the question whether such transfer is bona fide or not is to be decided by the Chairman. In the instant case P.T.D. Was issued to the petitioner on 19-6-1974, which is a date much after June, 1968, and as such if the property was evacuee trust property the transfer could not be validated by the Chairman even if the transfer in favour of the petitioner is presumed to be bona fide."
5. It would appear from the ratio in Hafeez Begum's case that provisions of section 10(1)(b) of the Act, which provided for validation of transfer of certain immovable evacuee trust properties in urban areas, applied on two conditions: Firstly, that the transfer of such property was made bona fide in satisfaction of the verified claim of a person, and, secondly, a permanent transfer deed in respect of such transferred property was issued to the transferee prior to June, 1968. Hafeez Begum's case has been referred with approval in a recent unreported D.B. Decision of this Court in the case of Muhammad Swaleheen and another v. Secretary, Ministry of Religious Affairs CP No, D- 17 and CP No, D-657 of 1984, decided on 3-84989. In the above unreported decision the learned Judges, while examining the scope of section 10 of the Act in the light of the provisions contained in sections 3 and 4 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, observed as follows:-- "9. In order to compensate the displaced persons in respect of the immovable property left by them in Bharat the Government of Pakistan acquired all the evacuee property under section 3 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, and constituted a compensation pool of the properties so acquired together with other items under section 4(1) of the said Act. Immovable Evacuee Property attached to any charitable, religious or educational trust or institution could not be included in the pool under subsection (2) of section 4 of the Act.
Settlement Scheme No, I was prepared under the Act to transfer houses/shops to the claimant and non-claimant displaced persons and the locals. Keeping in view the embargo placed on inclusion of trust properties in the compensation pool, provision was made in para.3 of the said Scheme prohibiting inviting of applications for transfer of such properties. In spite of such a mandatory provision of law if any such property was transferred to any one, such transfer can only be considered as ab initio void and any such action that is taken contrary to the provision of law can never be considered to be bona fide action. It appears that the legislature being conscious of such illegal and void transfers granted validation to certain void transfers by making such a provision in section 10 of the Evacuee Trust Properties (Management and Disposal) Act, 1975. It reads as under:- "10(1) An immovable evacuee trust property, (a) if situated in a rural area and utilized bona fide under any Act prior to June, 1964, for allotment against the satisfaction of verified claims; and
(b) if situated in an urban area and utilized bona fide under any Act for transfer against the satisfaction of verified claims in respect of which Permanent Transfer Deeds were issued prior to June, 1968, shall be deemed to have been validly transferred by the Chief Settlement Commissioner, and the sale proceeds thereof shall be reimbursed to the Board and shall form part of the Trust Pool.
(2) If a question arises whether a transaction referred to in subsection (1) is bona fide or not, it shall be decided by the Chairman whose decision shall be final and shall not be called in question in any Court.
(3) If it is decided that a transaction referred to in subsection (1) is not bona fide, the Chairman may pass an order cancelling the allotment or transfer of such property: ' Provided that no decision under subsection (2) or order under subsection (3) shall be taken or passed in respect of any property without giving the person affected a reasonable opportunity of being heard."
10. Properties in an urban area utilized bona fide under any Act for transfer against the satisfaction of verified claim and in respect of which Permanent Transfer Deeds were issued prior to June, 1968 (i.e, up to 31st May, 1968) only were granted validation.
11. The Chairman, Evacuee Trust Board has been invested with full powers to finally decide whether an evacuee property is attached to any charitable, religious or educational trust or institution or not. Such a finding can only be disturbed by this Court in exercise of jurisdiction under Article 199 of the Constitution only when it can be shown that finding is perverse, arbitrary or capricious. Or the finding is based on misreading of evidence or misinterpretation of evidence or on no evidence at all. Such a view was also taken in the case reported in PLD 1983 Kar.
374."
' Although Tahir Ali's case was not cited before the learned Judges in Muhammad Swalehin's case but the case of Fazal Ellahi v. Chairman, Evacuee Trust Board 1987 CLC 1010 which was mainly relied by the learned Judges of the D.B. In Tahir Ali's case was discussed and distinguished.
' In Tahir Ali's case, the learned Judges, though referred to the case of Hafeez Begum but distinguished the same on facts and relying on Fazal Ellahi's case (decided by Quetta Bench) held as follows:-- "13. We are, therefore, of he clear view that although the petitioner was described as provisional transferee but the provisional order of the transfer in his favour was in fact a permanent order of transfer and since it was issued after his having paid the full transfer price and all other dues, the same was a final transfer for all purposes and the property was utilised bona fide in satisfaction of claim and was no more available for disposal on the crucial date as well as at the time when the notification was issued and as such the transfer was saved under section 10 of the Act."
' The following further cases were also referred by the learned Judges in Tahir Ali's case in support of their conclusion:--
(1) Secretary, Evacuee Trust Board v. Allah Rakha PLD 1975 Kar. 854,
(2) Farkhanda Akhtar and 3 others v. Chairman, Evacuee Property Trust Board, Lahore PLD 1980 Lah. 804,
(3) Divisional Evacuee Trust Committee v. Abdullah and 2 others 1970 SCMR 503,
(4) Deputy Administrator of Evacuee Trust Property v. A.R. Choudhary 1981 CLC 1006.
6. After careful examination of Tahir Ali's case as well as other cases referred by the learned Judges of the Bench in Tahir Ali's case we find ourselves unable to agree with the interpretation placed on section 10 of the Act in that case. Both, in Tahir Ali's case as well as Fazal Illahi's case the learned Judges took the view that there was no difference between a P.T.O. And P.T.D. For the purpose of section 10 of the Act if the transfer price of the property is paid in full by the transferee before June, 1968. It was accordingly, held in the above cases that even in respect of those transfers, where full transfer price was paid before June, 1968, and only a P.T.O. Was issued to transferee, the provisions of section 10 of the Act will be attracted. With utmost respect, we are unable to subscribe to the above view. Provisional Transfer Order (P.T.O.) and Permanent Transfer Deed (P.T.D.) have different connotations and meanings under the provisions of Act XXVIII of 1958. A person, in whose favour only a P.T.O. Was issued in respect of a property transferred to him under the provisions of Act XXVIII of 1958, could not alienate the property in any manner pending issuance of Permanent Transfer Deed in his favour but he could lease out or mortgage the same to any person subject to such conditions as were laid down by the Chief Settlement Commissioner. In contra-distinction to the terms of P.T.O., a transferee, in whose favour record of permanent transfer was made under Rule 4 of Permanent Transfer Rules, 1961 (hereinafter to be called as "the Rules" only for the sake of convenience), is entitled to hold and enjoy the property and the rights, title and interest appurtenant thereto and to transfer or alienate the same n accordance with the normal law. No doubt, in respect of property transferred way of auction, permanent transfer order could be issued on payment of full transfer price but after promulgation of the Rules, which came into effect on 1st November, 1961, such transfer order could only be issued in accordance with rule 3 of the Rules. Rule 3 of the Rules, clearly provides that where a property has been provisionally transferred and the provisional transferee has paid in full: (i) the transfer price or auction price of the property; (ii) settlement fee and all public dues, as a record of permanent transfer of the property in the name of transferee shall be made by the Deputy Settlement Commissioner of the area in the prescribed Register and thereupon the property shall stand permanently transferred to the transferee free from all encumbrances. It will be seen from the above rule that the record of permanent transfer could not be made in favour of transferee unless he paid the full transfer price, the settlement fee prescribed in this behalf and all public dues of the property. It is contended before us that in respect of a property, which was sold by auction, no public dues were required to be paid by the transferee. It may be so, in respect of a transferee, who is not in occupation of auctioned property, but this consideration did not apply in respect of settlement fee, which is prescribed by the Central Government undo section 33 of Act XXVIII, 1958, and which has priority as a charge over all other charges on transferred properties, and has to be paid by all manners and clause of transferees.
' It is, therefore, not correct to say that where a transferee has paid ful transfer price and holds a P.T.O., the P.T.O. Will require the status of Permanent Transfer Deed. The cases of Secretary, Evacuee Trust Board v. Allah Rakha; Farkhanda Akhtar v, Chairman, Evacuee Property Trust Board Divisional Evacuee Trust Committee v. Abdullah and Deputy Administrator o Evacuee Trust Property v. A.R.
Chawdhary, need not be discussed here, as the are not relevant for the issue under discussion.
7. We now turn to the provisions of Act XXVIII of 1958, relating to evacuee trust properties. It is quite clear from the reading of section 4 of the D.P. Act, XXVIII of 1958, that under clause (2) thereof immovable evacued properties, which were attached to any charitable, religious or educational trust or institution were not to form part of the compensation pool constituted under subsection (1) of section 4 ibid. A careful reading of section 10 of Act XXVIII o 1958 will show, that the properties could be sold on evaluation basis or by sale b means of auction or otherwise in accordance with the provisions contained in the Schedule to the Act XXVIII of 1958 by the Chief Settlement Commissioner o any other officer authorized by the Government in this behalf, out c compensation pool. It is, therefore, quite clear, that only those properties could be transferred either on evaluation price or by sale by means 'of auction accordance with the provisions contained in the Schedule to Act XXVIII 1958, which, formed part of the compensation pool. As the immovable propertie attached to any charitable, religious or educational trust or institution were specifically excluded from the compensation pool, the same could not b transferred either on the basis of evaluation price or by means of auction by the Settlement Authorities. It, therefore, follows that the transfer of property attached to religious, charitable or educational trust or institution under th e schemes prepared by the Chief Settlement Commissioner for disposal of properties forming part of compensation pool constituted under section 4(1) of Act XXVIII of 1958, was void ab initio. However, under section 10 of the Act, certain classes of immovable properties, which were transferred or utilized bona fide in satisfaction of the claim, were held to be valid on the conditions mentioned in the said section. We are, therefore, in no doubt that in every case, where a transferee of an urban evacuee trust property, which was attached to a charitable, religious or educational trust or institution, seeks validation of its transfer in his favour in terms of section 10 of the Act, he has to show that (i) it was utilized bona fide under any Act and transfer against the satisfaction of verified claim, and (ii) that in respect of such property a Permanent Transfer Deed has been issued in his favour prior to June, 1968. If any of these conditions are missing, the transfer of such property could not be validated under section 10 of the Act. In the case before us the respondents have found in the impugned order that the transfer of the property in favour of predecessor of the petitioner by way of auction was not a bona fide transfer, as the property was already notified under the Notification dated 15th July, 1963, which was published in the Gazette of Pakistan dated 9th August, 1963, as evacuee trust property attached to a religious trust. The genuineness of the Gazette Notification is not disputed before us. It is an admitted position in the case that the property was put to auction by the Settlement Authorities on 10-4-1964 and as such we are of the view that the finding of the respondent that the transfer could not be held to be bona fide, is not without substance. The second objection to the transfer against the petitioner's predecessor is that the transfer was not made against the satisfaction of verified claim of the transferee. It is admitted before us, that predecessor of petitioners was a non-claimant and he purchased the property in an auction held by the Settlement Authorities on 10th April, 1964. The fact that the transfer price of the property was paid by the predecessor of the petitioners by entering into an agreement of association with a claimant could not amount to a transfer in satisfaction of verified claim, as it is also an admitted position in the case that the property was transferred in favour of the predecessor of the petitioners and not in favour of the claimant whose verified claim was utilized for payment of the auction price of the property. It is, therefore, quite clear to us that the transfer in favour of the petitioners' predecessor was not in satisfaction of the verified claim. The other necessary condition for validation of transfer under section 10 of the Act is also missing in the case before us, as admittedly, the permanent transfer deed of property has not been issued in favour of petitioners till today.
8. We accordingly find no ground for interference with orders passed by respondents. This petition is, therefore, dismissed but we leave the parties to bear their respective costs.