' In pursuance of the Lahore High Court, Lahore's orders dated 26-1-1991 in Writ Petition No,8054/1990, the Commissioner, Multan Division accompanied by Superintending Engineer, Provincial Buildings Circle, Multan, Joint Director, Labour Welfare, Multan Region, Deputy Director of Industries, Multan Division and Mr. Shahan Bhatti, Deputy Secretary (Settlements), Board of Revenue, Punjab, visited the premises of the Colony Woollen Mills Limited, Islamabad, Multan on 9- 2-1991 in the presence of Mr. Naseer A. Sheikh, Chairman, Colony Woollent Mills Limited, Multan.
2. The Site Inspection Report submitted by Mr. Shaban Bhatti to the Board of Revenue contains the following facts:--
(i) On the site there did exist an old building structure covering a few kanals' area. An area of a few kanals, adjacent to the old structure, comprised of the debris of a demolished building, whereupon except for scattered bricks nothing was constructed.
(ii) Inside the building there were various halls, rooms or barracks and a long corridor. The internal condition of the building reflected evidently that the building had not been used as the Mill for the last many years. Inner walls were in dilapidated condition, with layers of dust and spiders' web on them. Some of the gates could not even be properly opened and were placed in a condition dangerous to human life.
(iii) Machinery was installed only in three halls. All this machinery appeared to be outdated and unable to be operational. There were thick layers of dust and spiders' web on the Machines as well.
In the rest of the halls or rooms there was no machinery at all. Only certain traces of supporting stands were present.
(iv) At some places there were downstairs leading to basement (which was described as godowns by the petitioner). The downstairs were badly broken and posed serious difficulties for passage.
Onlookers could easily realize that the interior of the basement could not easily be approached due to the broken downstairs and complete darkness inside the basement.
(v) At one place passage to certain rooms was closed by a wall's construction. It was informed (by some persons present at the site) that the rooms behind the walls were lent on rent by the petitioner to some other party (probably to Ghee Mill-owners).
(vi) There was no labour activity anywhere inside the building described as Colony Woollen Mills, Multan.
3. The above report was submitted to the Lahore High Court, by the Board of Revenue, Punjab. A similar, if more comprehensive, report was also submitted by the Commissioner, Multan to the Lahore High Court. The Lahore High Court thereupon remanded the case to the Board of Revenue with the direction that the petitioner should be served with a show-cause notice specifying therein particularly the alleged breach or non-performance of the terms and conditions of the agreement, keeping in view the report of the Commissioner and other material which may be available and after providing with an opportunity of being heard, the matter should be decided afresh justly, fairly and in accordance with Law by the Member (Revenue), Board of Revenue, Punjab as expeditiously as possible but not later than ninety days.
4. Accordingly the undersigned heard Syed Sajjad, Advocate, the learned counsel for the petitioner-Mills on 13-4-1991 in response to a Notice issued to the petitioner. The learned counsel was asked by the undersigned to furnish copies of the balance-sheets of the Mills (petitioner) from 1953 to date in order to determine whether the Company has been operating throughout this period or whether any violation of the conditions of the contract had taken place. The learned counsel drew the attention of the undersigned to para.2 of the Lahore High Court's order dated 20- 2-1991 and contended that the notice for hearing had not been issued in accordance with the directions contained therein. A show-cause notice in accordance with aforesaid order, was therefore, issued to the Company on 8-5-1991. On this a detailed representation was received from Mr. Naseer A. Sheikh, Chairman, Colony Woollen Mills Limited, who contended therein that the supposition of publication of the necessary Gazette notification was no longer of any effect in view of their production of a copy of the (non-gazetted) notification. The petitioner-Company further contended that 'the words of the Agreement reproduced in your notice do not say that the Mills shall be in operation in perpetuity. The agreement only makes it obligatory for the Company to perpetually hold, use and enjoy the land for the purpose of erection of Woollen Spinning and, Weaving Mills and other industries. The word erection is very clear and it does not include continuous operation of any such Mills. This interpretation of continuous operation cannot be made from the Agreement because no document is interpreted to make it meaningless. No Mills can remain in operation continuously since it can temporarily stop due to strikes, earthquake, floods, downturn in business, renovation of buildings replacement of its machinery and plant and for many other reasons. We have used the land only for the purposes stipulated in the Agreement and for no other purpose. The Agreement clearly prohibits us from using the land for any other purpose. The Mills is in working order and can be started up any time so required'.
5. The case remained pending for want of Law Department's advice which has not been furnished todate despite repeated requests at all levels. In the meanwhile the Lahore High Court has directed disposal of the case within thirty days vide its order dated 13-10-1991, passed on Criminal Original No,424-W-91 in Writ Petition No,8054 of 1990-Colony Woollen Mills v. Hafeezullah Ishaq, Member (Revenue), Board of Revenue.
6. I have considered the arguments and pleas of the petitioner-Company, perused the case record and have also examined the case in perspective. It is evident from the Site Inspection Report submitted by the Commissioner, Multan Division, dated 19-2-1991 that--
(I) some part of the building of the Colony Woollen Mills is still in existence at the site, though it is in a very dilapidated condition and has apparently been abandoned;
(ii) some buildings adjacent to the aforementioned structure have been razed to the ground as are other ancillary buildings, quarters etc.,
(iii) some sheds (Nos.41, 46 and 47) have been leased out to a Ghee Mills; and
(iv) except for sheds Nos.10, 21 and 22 the entire building does not contain any machinery. Sheds No,10, 21 and 22 contain some equipment which is covered with thick layers of dust and cob-webs etc. Indicating that it has not been operational for long. The machinery of some other sections has been dismantlled and removed from the premises.
' The Commissioner also stated that according to the Joint Director, Labour Welfare, Multan the Colony Woollen Mills Limited had closed down by 1983 when the registration of its Labour Union was cancelled due to non-existence. The Commissioner further commented, in consultation with Officers accompanying him, that it cannot be said with any certainty as to when the construction of Colony Woollen Mills and other machinery was undertaken but at present the Colony Woollen Mills is no longer in operation and can be made operational only after heavy and extensive repairs to buildings, plant and machinery.
7. Assuming without conceding that the contention of the petitioner regarding publication of Gazette notification is correct, it is relevant to reproduce clauses Nos.2, 3, 4 and 5 of the Agreement between the Government of the Punjab and the petitioner-Company: "Clauses of Agreement--
(2) That on transfer by the said Government to the said Company of the aforesaid land the said Company shall perpetually hold, use and enjoy the same for the purposes following and no other, that is to say, the said Company shall on being put in proprietary possession of the aforesaid land make legitimate use of the land as may be necessary or requisite for the purposes of the erection of a Woollen Spinning and Weaving Mills and other industries and ancillary buildings, godowns and quarters therein, and further that the said Company shall complete the construction of Woollen Spinning and Weaving Mills or other Industrial undertakings and ancillary buildings, godowns, and quarters within twenty-four months from the date of the possession of the aforesaid land being given to the said Company by Government or within such further time as may be agreed to in writing between the said Company and Government and the said buildings shall be maintained by the said Company in proper condition sat its own expenses.
(3) The dwelling houses shall be provided to the workmen on such terms as may be mutually agreed upon between the said Company and the workmen.
(4) The Company shall not let or hire, lease, sell, exchange or otherwise dispose of the land mentioned above or any part thereof except with the previous permission of the Government.
(5) The Company shall provide employment to the public. It will also provide technical knowledge and training to suitable members of the public by affording them apprenticeship and training facilities."
' It is evident that not only the Company was required to erect a Woollen Spinning and Weaving Mills and other industries within 24 months from the date of possession but was also required that the said buildings shall Ix maintained by the same company in proper condition at tis own expense. Further that the Company was not to let or hire. Lease or sell or otherwise dispose of the land without prior permission of the Government. The Company was required to provide employment to the public as well as training etc. None of these conditions are being fulfilled by the Company as is obvious from the above report. It has, on the other hand, let out the land (as defined in section 3(a) of the Land Acquisition Act, 1894), without permission of the Government.
8. A perusal of the balance-sheet of the petitioner-Company (Capacity and Production para. 24) for the year 1989 shows that there has been no weaving operation during the year under report and the Company undertook "outside spinning". It further notes that "the plant capacity was reviewed in 1982". The assessm ent report of the Income Tax Department, Panel 07, Companies, Lahore foi the year 1988-89 included as Annexure with the Writ Petition No,8054-90 reveals as follows:--
(i) "The disclosed spinning charges are not fully open to verification. As per details furnished complete addresses of the parties have not been made available... Such instances can be multiplied to any extent.
(ii) No day-to-day production record has been produced for examination and verification.
(iii) All the expenses claimed in the P & L Account are not fully open to verification.
(iv) The said case has history of rejection of accounts....... " etc. When the foregoing observations of the Income Tax Department (a document produced and relied upon by the petitioner) are considered with the Site Inspection Reports, it becomes evident that the Company exists on paper and its accounts and records are not reliable. It is not existing as a manufacturing industrial concern but as a trading Company, at best, although not at the acquired site. It has, therefore, failed to observe the conditions of the Agreement and it has further sublet the lands to other parties without the prior permission of the Government in violation of the Agreement.
The precedent case of Colony Taxtiles Mills quoted by the petitioner-Company is of no help to it because that Company is still in existence as an operational Textile Mills in accordance with the Agreement. The contention that no Mills can remain in operation continuously due to strikes, earthquakes, floods, downturn in business, renovation of buildings, replacement of machinery and plant etc. Refers, or is applicable, to a temporary phase or a transitional period in the life of an industrial concern but it does not mean that a Mills not working for years altogether for unspecified reasons can be described as 'operational'. No employment and training facilities have been provided to the public which, to say the least, defeats, the very objective of such acquisition under sections 40 and 41 of the Act, ibid.
9. The execution of the conveyance deed and grant of proprietary rights is contingent upon the fulfillment of all the conditions in the Agreement but in view of the foregoing position, the petitioner-Company has no case on merits and their prayer for execution of the conveyance deed, is hereby rejected.