1. NASIM HASAN SHAH, J.---This appeal, by leave of this Court, is directed against the judgment dated 3-6-1980 passed by the Lahore High Court in LY.A No. 50 of 1970.
2. The facts, which form the background to this appeal are that the appellants were running a school in the house in dispute bearing No3-4/B, Model Town, Lahore. They submitted an application on Form LEI on 6-8-1959 for the transfer of the said house, whose value admittedly is more than Rs.10,000.
3. The LH Form, it appears; was rejected by the Deputy Settlement Commissioner on 4-12-1959, but without hearing the appellants or informing them of the order passed by him in this regard. The appellants, therefore, continued submitting application and representations for favourable disposal of their LH Form.
4. In the meanwhile, the predecessor-in-interest of respondents Nos. 1 to 9 namely Syed Muhammad Hussain Shah, a claimant displaced person, was trying to get the house where he was living namely House No. S-15, Manohar Street, Nicholson Road, Lahore, transferred in his favour. But he was unsuccessful in this attempt and the house was transferred to its other occupant. Since he also deserved to be accommodated, the Chief Settlement Commissioner vide order dated 5-1-1961 directed the Additional Settlement Commissioner to find alternate suitable accommodation for him. To secure implementation of this directive Syed Muhammad Hussain Shah submitted an application to the Additional Settlement Commissioner informing him that house namely House No. 4-B, Model Town, Lahore was available for transfer which may be transferred to him. As the information about the said house being available was supported by the Deputy Settlement Commissioner, the Additional Settlement Commissioner apprised the Chief Settlement Commissioner accordingly. In his report, he pointed out that this house was "in occupation of a school" - New High School for Girls and Boys since the pre---independence days and is still in use as such though under the management of a different committee. He also informed him that the school was not a recognised institution and that the application made by the school management for its transfer had been rejected against which no appeal had been lodged by the management.
5. The Chief Settlement Commissioner thereupon passed an order on 25-2-1961 directing the Additional Settlement Commissioner "to transfer the property as alternate accommodation to Syed Muhammad Hussain Shah". A P.T.O., in pursuance of the said order of the Chief Settlement Commissioner for the transfer of the House No. 4-B, Model Town, Lahore was thereafter issued on 28-2-1961 in favour of Syed Muhammad Hussain Shah.
6. Shortly thereafter, on 13-3-1961, the said transferee sent a notice to the appellants intimating them that he had been transferred the premises and that they should attorn to him. On reciept of the notice, the Principal and Chairman of the school (the late Miss L.M. Stratford) filed an appeal on 29- 3-1961 before the Additional Settlement Commissioner praying for setting aside of the P.T.O. Issued to Syed Muhammad Hussain Shah and also prayed that the property be transferred in their favour.
7. In this appeal, the following grounds, inter alia, were taken up:-- "4. That the appellant has been pursuing her case from time to time with the Settlement Authorities but no satisfactory action was taken to the relief of the appellant. The appellant on different occasions filed written statements and applications and it was only on the receipt of a notice from respondent No.2 that the appellant was informed of the transfer of 4-B, Model Town vide P.T.O. No. 817930 dated 28-2-1961 to the respondent No.2.
7. That all the recognised and private schools are given special protection by the Settlement Department for the transfer of the properties in their possession, even when the value of the property is more than Rs.10,000 in case of locals.
8. That the LH Form of the appellant was summarily rejected by the D.S.C. Without holding any inquiry or recording statement of the appellant. The action taken by the respondent No.l is, therefore, illegal and ultra vires in so far as it is against the instructions contained in the Displaced Persons (Compensation and Rehabilitation) Act, 1958 and the Settlement Scheme No. I"
8. The appeal was heard by the Additional Settlement Commissioner (Judicial), Lahore Division. In his order passed on 25-7-1961 he observed:-- "I find that Miss Stratford filed a LH Form on behalf of the aforesaid school in respect of two properties in suit, that her LH Form was rejected on the 4th December, 1959, she had not challenged that order to this appeal dated the 29th March, 1961, that a report was submitted by the Additional Settlement Commissioner No.II, Lahore, to the Settlement Commissioner (Policy), Lahore, in respect of No. 4-B, Model Town, Lahore on which the learned Chief Settlement and Rehabilitation Commissioner passed the following orders:-- `Please ask the Additional Settlement Commissioner, Lahore to transfer this property as alternative accommodation to S. Muhammad Hussain as already directed by the Rehabilitation Commissioner, Lahore and by me in the judicial orders.'
9. In compliance with the above order the D.S.C. Transferred Property No. 4-B-I1I to the respondent."
10. He went on to add:-- "This school is not recognised by the Secretary Board of Secondary Education vide his letter No. 879/Recog., dated the 9th May 1961, Exh.I, that the appellant had filed LH Form for the transfer of the properties which was rejected on the 4th December, 1959 by the D.S.C. Centre-V, Lahore, that the appellant had not filed any application for the transfer of these properties up to the 21st May, 1960 as laid down in the Press Note dated the 3rd May, 1961 issued in respect of the transfer of Hospitals and other charitable, religious or educational trusts etc."
11. Thus the appeal was dimissed on two-fold grounds:--
(a) that the appellant was not entitled to the transfer of the property; and
(b) the appeal did not lie (seemingly on the ground that the property was transferred under orders of the Chief Settlement Commissioner dated 25-2-1961).
12. The appellants being of the opinion that their appeal had been dismissed basically on account of the last-mentioned ground filed a review petition before the Chief Settlement Commissioner for recalling his order dated 25-2-1961 (regarding transfer of House No.4-B, Model Town, Lahore in favour of Syed Muhammad Hussain Shah). In this petition of review, it was, inter alia, submitted that the respondent was not in occupation of the school building; that he had not submitted any form for its transfer; therefore, the property in question could not be transferred to him. He also submitted that there was no order whereby the appellants' form was rejected. The prayer made was that the impugned order be set aside on review and the school building transferred to the appellants. This petition, however, was summarily rejected on 18-5-1962. The order of rejection was passed again, without hearing the appellants.
13. The appellants thereupon moved the Lahore High Court by a writ petition (W.P.No. 1070/R/1964) to question the above order of the Settlement authorities. This petition was heard by the late Mr. Justice Karam Elahi Chauhan, who in an elaborate order proceeded to accept the petition. His Lordship observed that no clear cut order existed to show that the appellants' form had been rejected. He pointed out that the order which was being construed as the order of rejection was merely a note dated 4-12-1959 which was to the following effect: Subject: Property No.3-4-B. Model Town. Lahore I have visited the spot myself. 4-B is a bungalow wherein a school is being run by Miss L.M. Stratford, who has submitted Form LH, for the transfer of the adjoining Plot No. 3-B, wherein outhouses are built. These outhouses are occupied by Mst. Shafiqa widow of Abdul Rashid. She claims to be a displaced person. She has not submitted her NCH form for the reason that she was never accepted as tenant by the Rehabilitation Department. Since these outhouses are the part and parcel of the plot, therefore, the case will be dealt with as soon as clear cut instructions about the disposal of plots are received from the Government. The value of the building of the School is more than Rs.10,000; therefore, it appears that due to error it has not been shown as available for earmarking by the claimants under the relevant category. Necessary particulars of the premises should be submitted to the Additional Settlement and Rehabilitation Commissioner, Lahore, with the request that it may kindly be included in the list of category `B' Houses. Submitted for favour of information. "A.S. And R.C."
14. (Sd.)
15. D.S.C. Centre V, Lahore."
16. Commenting on the above note and the earlier note dated 31-12-1959, the learned Judge observed:-- "A perusal of the above two notings would show that they do not purport to pass any final order with regard to the claim of the petitioner about the property in dispute. The note Annex. R/3 was marked .To the Additional Settlement and Rehabilitation Commissioner with a request that the property in dispute may kindly be included in the list of Category B' Houses. There is nothing to show as to what orders were passed by the Additional Settlement and Rehabilitation Commissioner on the above noting. This would show that the contention of the petitioner that the relevant form remained undisposed of is correct. The necessary corollary of all this will be that the order passed by the learned Chief Settlement and Rehabilitation Commissioner on 25-2-1961 would be without lawful authority as it was passed without disposing of the petitioner's form."
17. He went on to add:-- "Apart from the fact that the order by the Chief Settlement Commissioner was passed when the form of the petitioner was still undisposed, there is a serious objection to the order of the learned Chief Settlement Commissioner, inasmuch as the same is not backed by any provision of the Act, its schedule or any rules on the subject."
18. The conclusion in this connection was expressed thus: "The view which I am taking about the point under discussion is shared by the Department in its two reports submitted to this Court and the oral arguments of the learned Settlement Commissioner (Legal) at the Bar who has conceded that the transfer by the Chief Settlement Commissioner was without lawful authority."
19. Accordingly, the writ petition was accepted and the orders passed by the Settlement Authorities were declared to be without lawful authority and of no legal consequence against the appellants.
20. The case was remanded to the Deputy Settlement Commissioner for disposal of the form of the appellants in accordance with law. This judgment was passed on 4-2-1970.
21. The judgment of the learned Single Judge was challenged by a Letters Patent Appeal by the heirs of Syed Muhammad Hussain Shah who had died in the meanwhile. The Letters Patent Bench accepted the appeal vide judgment dated 3-6-1980 mainly on two grounds, namely that the writ petition suffered from laches and that the remanding of the case for the disposal of LH Form was of no avail because under para. 20 of the Settlement Scheme No.l if a building which was a house or a shop on 14 August, 1947 had been converted to some other use, then the Chief Settlement Commissioner would determine as to whether it should be disposed of as a house or a shop or any other type of property. In furtherance thereof in the press note dated 3rd May, 1960 (printed at pages 139-141 of the Settlement Manual - Old Edition) the Chief Settlement Commissioner directed that if a house or shop had been converted to some other use after 14th August, 1947 then it would be transferred in the manner given therein. But, according to the L.PA. Bench in so far as in the instant case, the property had not been converted into a school after 14th August, 1947 the provisions of para. 20 of Settlement Scheme No.I read with the aforesaid press note were not applicable to the case. Furthermore, since the value of the property was more than Rs.10,000 then as a house it could not be transferred to a local.
22. Leave to appeal was granted to examine, inter alia, whether the L.P.A. Bench while interpreting para. 20 of the Settlement Scheme No.I read with the aforesaid press note could set aside the order of the learned Single Judge ,whereunder the matter was remanded to the settlement authority for the determination of the main point in controversy namely whether the form filed by the appellants had been disposed of in accordance with the law. And, furthermore as to what is the correct interpretation of para. 20 of Settlement Scheme No.l read with the aforesaid press note.
23. We have heard Ch. Khalil-ur-Rehman, learned counsel for the appellants and Mr. S.M. Zafar, learned counsel for the respondents at full length.
24. It has not been disputed before us that the LH form fled by the appellants which was disposed of on 4-12-1959 was without issuing any notice to them or hearing them. Indeed according to the learned Single Judge, the Said form has in fact not so far been disposed of as the order of the Deputy Settlement Commissioner dated 4-12-1959 was merely a note requesting the additional Settlement and Rehabilitation Commissioner to include the school building in the list of Catetgory `B' Houses, a request which was not heeded to, no order in this respect ever passed by the learned Additional Settlement Commissioner.
25. We, however, consider that in so far as the Deputy Settlement Commissioner had mentioned in his note that the value of the property was ,lore than Rs.10,000 and that it should be included in the earmarking list these recitals indicate sufficiently that the appellants' prayer for transfer of the disputed property on their Form III had not been accepted. It is true that no ,fear cut orders to the effect that their LH Form was being rejected were passed, but the terms of the order dated 4-12- 1959 are to the said effect.
26. In our opinion, however, the more serious objection to the said order is that it was passed without due notice to the appellants and without affording them an opportunity to be heard.
27. Even more importantly, the order of transfer dated 25-2-1961 in favour of the contesting respondents suffers from an inherent defect, namely that it is not backed by any provision of law.
28. Mr. S.M. Zafar, in order to refute this objection, relied on section 10 of Displaced Persons (Compensation and Rehabilitation) Act, 1958. Section 10 aforesaid, at the relevant time, was couched in the following terms: "Subject to the provisions of this Act and the rules made thereunder, the Chief Settlement Commissioner may transfer or dispose of any property out of the Compensation Pool:-- (a)on evaluation basis, or by sale by means of auction or otherwise, in accordance with the provisions of the Schedule; or (b)in such other manner as may be approved by the Central Government."
29. Under Para. 4 of the Schedule, persons not in possession can, in certain situations, be transferred a house not in their possession. This. Para. Lays down:-- "4.A house not transferred under paragraphs 1, 2 and 3 shall be available for transfer to any claimant who applies in that behalf and to whom a house has not been transferred under paragraph 1, and shall be transferred to such claimant at a price determined on evaluation basis: Provided that (a)except in the case of a house the value of which does not exceed twenty-five thousand rupees, the claim of such a claimant is at least fifty per cent. Of the value of the house; (b)not more than one house shall be transferred to any one claimant under this paragraph; and (c)if there is more than one applicant for the transfer of the same house, the transfer shall be effected by drawing lots in such manner as may be prescribed."
30. However, a Scheme has been framed, viz.Settlement Scheme No.V, for the purpose of the implementing this provision. This Scheme, briefly stated, provided for drawing up of lists of houses (which have not been transferred under Paras. 1, 2 and 3 of the Schedule) in three categories, depending upon their annual rent, for transfer to claimants who have been unsuccessful in obtaining transfer of any house in lieu of their claim.
31. Now admittedly the predecessor of respondents Nos.l to 9 has not been transferred the house in dispute under Scheme No.V but he has obtained its transfer under the orders of the Chief Settlement Commissioner, on the ground that he could not, for one reason or the other, obtain transfer of the house which was in his possession. A transfer, on such a ground can, prima facie, be made only under the provisions of Scheme No.V aforesaid. But, according to Mr.Zafar, this was possible also under the provisions of section 10(1) of the Act. He submitted that the Chief Settlement Commissioner is empowered to transfer the property out of the compensation pool "on evaluation basis or by sale by means of auction or otherwise, in accordance with the provisions of the Schedule" (underlining is ours). According to him, the Chief Settlement Commissioner has unfettered powers to transfer a property under section 10(1) of the Act as hereunder he can order the transfer of an evacuee property by means of auction or "otherwise" the only limitation being that the order of transfer should not be inconsistent with the provisions of the Schedule. In this case, it is contended by the learned counsel, that as the order of transfer fell within the ambit of the provisions of Para. 4 of the Schedule, the transfer made in favour of the respondents was fully within the four corners of the provisions of section 10(1) of the Act.
32. We regret we cannot agree. A careful perusal of the provisions of subsection (1) of section 10 shows that it empowers the Chief Settlement Commissioner to order the transfer of any property out of the compensation pool on evaluation basis or through sale by means of auction or otherwise. In other words, in case where the Chief Settlement Commissioner decides to transfer a property by means of sale, this mode of transfer can be resorted to either through auction or otherwise. But before the transfer by means of auction or "otherwise" is ordered there should be a prior decision to dispose of the property by means of sale. However, if the transfer of a house is ordered for the purpose of compensating a claimant for the losses suffered by him on account of his forcible migration to Pakistan on account of the disturbance attendant to the partition of the country, the provisions of section 10 are not in point and are not attracted. In such cases, the relevant provision in the Act which is applicable is section 16, which lays down: "16. Payment of interim compensation to certain person etc.--(1) Subject to the provisions of this Act and the rules made thereunder, the Central Government may, by order in writing, require the Chief Settlement Commissioner or any other officer specially empowered by the Central Government in this behalf to prepare, in anticipation of the settlement of claims, one or more schemes---
(a) for the grant of interim compensation to widows, orphans or old or infirm persons against verified claims in accordance with the prescribed sale;
(b) for the transfer of immovable property on evaluation basis or otherwise to claimants, non- claimants or locals in accordance with the provisions of the Schedule; or
(c) .. ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..."
33. Now, in respect of transfer of houses under Para. 4 of the Schedule, a Scheme has been framed (Settlement Scheme No.V) and this Scheme provides with exactitude the manner in which houses liable to transfer under said Para. Are to be disposed of. This Scheme, to the extent relevant, is reproduced below: "Whereas the Central Government has required the Chief Settlement Commissioner under section 16(1)(b) and (c) of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, to prepare a Scheme for the transfer of houses to claimants by the drawing of lots under Para. 4 of the Schedule to the Act and for the making of deferred payment in accordance with the provisions of the Schedule to the Act.
34. And whereas the Central Government has approved the Scheme prepared by the Chief Settlement Commissioner and has authorised him to execute it.
35. Now, therefore, the Chief Settlement Commissioner is pleased to publish the following Scheme which shall be called Settlement Scheme No.V... ... ... ... ... ... ....
2. The Deputy Settlement Commissioner of the area shall from time to time prepare centre-wise and town-wise lists of houses in each category, which are available for transfer to claimants by the drawing of lots under Para. 4 of the Schedule to the Act." (Underlining is ours).
36. In the present case, the house in dispute was being transferred to compensate Syed Mohammad Hussain Shah for the property abandoned by him in East Punjab and not by means of sale. Hence the only manner in which this transfer could be made to him was the manner laid down in Settlement Scheme No.V. In so far as the impugned order of the Chief Settlement Commissioner dated 25-2- 1961 ordered the transfer of the house in question in disregard of its provisions to the predecessor of the respondents, the said order "had no backing in law. Accordingly, the order of transfer dated 25- 2-1961 made in favour of Syed Muhammad Hussain Shah, being violative of the express provisions of the Scheme framed under section 16(1)(b) of the Act was a void order and a nullity at law.
37. On this view of the matter, the objection with regard to laches is of no significance.
38. The discussion made above also shows that the LH Form of the appellants has not been attended to as provided for in law and that is yet to be disposed of in accordance with law. It has also been found that the order dated 25-2-1961 of the Chief Settlement Commissioner transferring the disputed property to the respondents is a nullity at law. The result is that the said property is still "available" for transfer and it seems to us that in the present state of the law, the appellants herein are entitled to its transfer.
39. The upshot is that the appeal succeeds and is allowed. The judgment of the High Court passed in L.PA. No.50 of 1974 on 3-6-1980 is hereby set aside, while that of the learned Single Judge of the High Court dated 4-2-1970 passed in Writ Petition No. 1070 of 1964 is restored.
40. Since complex questions arose for decision in this case, the parties are left to bear their own costs.