FAKHRUDDIN G. EBRAHIM, J.-By this petition the petitioner shipping company seeks to quash the proceedings taken by the City Deputy Collector for recovery of the sum of Rs. 26.881.33 for the benefit of respondent No. I under the coercive provisions of the Land Revenue Act, 1967 on the ground that the amount claimed is disputed and being neither determined nor established cannot be said to be a due recoverable in the manner aforesaid.
2. The facts giving rise to this petition are that the petitioner-Company entered into two contracts of carriage by sea, dated 29-6-1971 and 16-1-1971 of Chinese Coke in bulk from the Republic of China to Pakistan. The contracts among other things provided for payment of despatch money by petitioner to the respondent No. 1 consignee. The present petition is con--fined to the claim made by the respondent No. 1 for despatch money at U. S. Dollars 2000 per day or pro rata in respect of cargo carried by "s. s. Panachrantos" under contract dated 16-1-1971. The respondent No. 1 by his letter dated 20th July 1971 requested the petitioner to ask the owners of the vessel Panachrantos to arrange for the payment of $5270.83 at the earliest to the Director of Audit and Accounts, Office of the High Commis--sioner for Pakistan in U. K. On or about 11-11-1972 the petitioner received a notice of demand from the City Deputy Collector under section 83 of the Land Revenue Act, 1967 calling upon the petitioner to pay Rs. 26,250.86 being equivalent of the aforesaid $5270.83. The demand was repeated on 11-7-1973. The petitioner in pursuance thereof duly met the demand includ--ing an additional sum of Rs. 500 towards recovery charges. On 8-3-1974, after elapse of over seven months, the petitioner received yet another notice from the City Deputy Collector demanding a sum of Rs. 26,881.33 on behalf of the respondent No. 1. This demand as will appear hereafter, was based on the assumption that the petitioner was required to pay equivalent of $5270.83 at 1972 post-devaluation rate of exchange and so calculated the balance payable came to Rs. 26,881.33.
On 15th May, 1974, Mr. A. R. Khan of the petitioner-Company personally delivered to the respondent No. 1 a cheque in terms of this demand but it is their cases that this cheque was given to save himself from harassm ent and on condition that the same will not be presented for payment until the dispute between the parties was resolved for it was the petitioner's case that the exchange rate applicable was pre-devaluation rate, for the despatch money claimed had become due and payable in 1971, much prior to the 1972 devaluation. On 31st July, 1974, the petitioner received a communication from the respondent No. 1 in which the complaint was made that their cheque dated 15-5-1974 for Rs.26,881.33 had been returned by the bank dishonoured and that this non- payment of the balance due was viewed with disfavour as "it was contrary to the earlier decision arrived at". The petitioner was called upon in the first instance to arrange for the said balance amount in form of a demand draft after which their case for the payment of despatch money at the old exchange rate will be considered on merit. In their reply dated 2nd August 1974 the petitioner alleged that the earlier cheque had been delivered to the department on the clear understanding that it will not be presented for payment until the matter was finally decided but the cheque was unfortunately presented without any intimation to the petitioner. The letter also referred to the advice of the Law Ministry given in this case that the amount due was to be calculated at the pre-devaluation rate of exchange and called upon the respondent No.1 to withdraw the demand. The letter specifically named the officers in the Directorate of Industries and Mineral Development who had been delivered the cheque on the understanding hereinabove stated and further assertion that it is these very officers who had informed Mr. A. R. Khan of the Law Ministry's decision. The respon--dent No. 1 in his reply dated 7th August 1974 did not deny the petitioner's version of the circumstances under which the cheque had been delivered, but, surprisingly, demanded that U. S. Dollars 5270.83 be paid within 15 days failing which proceedings under the Land Revenue Act, 1967 will be initiated. The petitioner protested by their letter dated 22nd August 1974 and again reiterated the circumstances under which the cheque had been delivered and the legal opinion of the Ministry of Law but the response was again a dem--and for payment of $5270.83 and that "pending settlement of the dues the earlier amount of Rs. 25.036.54 (paid earlier by the petitioner) was being withheld to be refunded only after the demand for U. S. Dollars 5270.83 was met". The petitioner again protested but to no avail and finally received the impugned notice dated 4-4-1975 from the City Deputy Collector demand--ing Rs. 26,881.33 under threat of coercive proceedings under the Land Revenue Act.
3. Now it is obvious to us that the dispute between the parties was substantial for the question as to the rate of exchange applicable was not free from doubt. In the absence of anything more it would not have been even possible for the respondent to contend that the amount claimed could be recovered as "dues" under the Land Revenue Act. The learned Assistant Advocate-General, however, relied on the dishonoured cheque saying that it was a case of an admitted liability. The circumstances under which the cheque was delivered has been impressly stated by the petitioner in their letters dated 2-8-1974 and 27-8-1974, being Annexures 'J' and 'L' to the petition. These averments were not denied in the reply sent by the respondent No. 1. Even in this petition, these averments must be accepted as factually correct for no counter-affidavit has been filed by the respondents, Moreover this un contradicted version finds support from the failure of the respondents to specifically deny the same in their replies dated 17-8-1974 and 23-9-1974, withholding the presentation of the cheque until 8-71974, and the Department's own stand that the question of rate of exchange applicable will be considered on merit notwithstanding the demand made and the cheque received.
4. It is well settled that the recovery proceedings under the Land Reve--nue Act would be available only in case the amount claimed was due and since the amount claimed was in serious dispute, it was not open to the respondent No. 1 to resort to coercive recovery proceedings under the Land Revenue Act.
5. The result is that the notice dated 4-4-1975 issued by the respondent No. 2 in purported exercise of powers under section 83 of the Land Revenue Act, 1967 is held to be without lawful authority and of no legal effect. The petitioner will also be entitled to the cost.