MIAN ALLAH NAWAZ, J.- The dispute, in three Letters Patent Appeals Nos. 1062, 1143 and 1361 of 1966, pertains to urban immovable evacuee property No. 151 sinuated in Ward No.8, Lakar Mindi, Faisalabad, It is a part of composite evacuee urban property bearing No. P.150. It shall be herein after described as "property in dispute.
2. The facts, briefly stated, leading to filing of these appeals are that property No. P.150 was a composite prtfjterty and comprised of a number of residential as well as commercial units. It was situated in a predominantly commercial area known as Lakar Mandi. Jan Muhammad/appellant in L.P.A No. 1062 of 1966 was in possession of a residential unit, whereas Maula Bakhsh/a local, was allottee of the property in dispute which formed part of property No. 150. Jan Muhammad was an owner of a nominal claim. The unit in his possession was a small room with an independent staircase and opened into street on the backside. The property in dispute comprised of a store with a verandah and it has an opening towards Lakar Mandi. Maula Bakhsh had been using it for the purchase and sale of timber since its allotment to him. In the year 1953 St became in a highly dilapidated condition and so Maula Bakhsh, with the permission of Rehabilitation and Settlement Authorities, undertook its repairs and reconstructed it. With the commencement of settlement operations, Jan Muhammad filed a form for the transfer of residential as well as property in dispute. Vide an order dated 3.12.1959, the Deputy Settlement Commissioner transferred the residential unit to him, but declined to transfer "the property in dispute" to him holding that it was a shop and it was not in his possession. Feeling dissatisfied with this order, Jan Muhammad filed appeal which was accepted by the Additional Settlement Commissioner vide an order dated 16.7.1960. While doing so, he treated both residential unit and the property in dispute as one unit and transferred it to Jan Muhammad. This order was corrected to the extent of name of its allottee/occupant. Resultantly the name of Maula Bakhsh was incorporated in the order of transfer.
This happened vide order dated 7.8.1960.
3. Being armed with these orders, Jan Muhammad entered into a deed of association with one Ehsanul Haq, who is appellant in L.PA. No. J361/1966. By this agreement of association, Jan Muhammad surrendered his entire rights in the property in dispute to Ehsanul Haq, who paid its price and the concerned Settlement Authority issued its P.T.D, to him on 27.3.1961. This was , however, not the end of the matter. Maula Bakhsh, a local-allottee/occupant of the property in dispute moved the Deputy Settlement Commissioner for the purpose of its transfer to him contending that he was allottee in possession of the property in dispute; that in the year 1953 he has undertaken its repairs and had almost reconstructed it. Since he did not find any answer, therefore, he submitted another application to the similar effect to the same Authority on 21.2.1961.
The Deputy Settlement Commissioner rejected his application on 27.3.1961 for the reason that the property in dispute stood already transferred to Jan Muhammad. Maula Bakhsh, thereafter appealed against that order before the, Addl. Settlement Commissioner, who dismissed the same by means of order dated 17.8.1960. Unrelenting, Jan Muhammad filed revision petition, which too was dismissed by the Settlement Commissioner on 4.4.1962. In that order the learned Settlement Commissioner found that Jan Muhammad was a local; that the property in dispute was a shop and so he was not entitled to its transfer; that Jan Muhammad was also not entitled to its transfer and so he put the property in compensation pool for the purpose of its disposal through unrestricted public auction. This order became the bone of contention between the parties i.e. Jan Muhammad, Ehsanul Haq and Maula Bakhsh. Jatt Muhammad as well as Maula Baksh filed two writ petitions Nos. 698-R/1962 and 1581-R/1963 which were dismissed by the learned single Judge of this Court in Chamber on 23.6.1966. The learned single Judge came to the conclusions (hat the property in dispute was a business premises; that it was as separate unit and so could not be transferred to Jan Muhammad; that Maula Bakhsh was not entitled to its transfer on account of being local. Ehsanul Haq/herein appellant in L.PA. No. 1143/1966, invoked the constitutional jurisdiction of this Court by means of Writ Petition No. 1068-R/1966-R/1966 which too was dismissed by bis Lordship Mr. Justice Bashir-ud-Din Ahmad (as his Lordship then was) vide bis order dated 1.8.1966. Against this order L.PA.No. 1143/1966 was filed. Against the order dated 23.6.1966 the Letters Patent Appeals Nos.1062/1966 and 1361/1966 were preferred. All the three Letters Paten! Appeals were heard by a Division Bench comprising of Mr. Justice A.R. Sheikh and Mr. Justice Muhammad Akram. Two of them were accepted vide decision dated 29.1.1975. Maula Bakhsh thereafter moved under section 151 C.P.C, for recalling of the order of Division Bench dated 29.1.1975 and rehearing of the case on the premises that the Division Bench had decided the case without hearing him. His plea was accepted by another Division Bench comprising of Mr. Justice Shamim Hussain Qadri and MrJustice Shafi-ur-Rehman vide order dated 12.6.1970. This is how these L.PAs have come up for hearing before us.
4. The arguments advanced by Ch. Ataullah, Senior Advocate, appearing on behalf of Jan Muhammad and Ehsanul Haq, can be conveniently summarised as below:- Firstly, that Ehsanul Haq has become owner of the property in dispute by means of an agreement of association dated 27.2.1961 executed by Jan Muhammad with the permission of the Settlement Authorities. On this premises, it was urged that he was a necessary party, that the impugned order dated 4.4.1962 was passed by the learned Settlement Commissioner without affording any opportunity of hearing to him. On this view of the matter, it was suggested that the order dated 4.4.1962 was violative of principle of natural justice "that nobody should be condemned unheard."
According to learned council, the aforesaid order was, therefore, wholly without jurisdiction and could not be confirmed by the learned single Judge-in-Chamber. Reliance was placed on Atta Muhammad Qureshi Vs. The Settlement Commissioner, Lahore Division, Lahore and 2 others (PLD 1971 S.C.61).
Secondly, that Jan Muhammad was a claimant; that the property in dispute, irrespective of its commercial nature, was the part of a composite property; that Maula Bakhsh was a local. On these factors, it was represented vehemently that the Additional Settlement Commissioner was clearly correct it treating the property in dispute and residential portion as one unit and he was eminently correct it transferring it to Jah Muhammad. According to learned council, treating of the property as one unit was essentially the prerogative of the Settlement Authority and was, no|, amenable to interference by this Court in constitutional jurisdiction. Reliance was placed on Muhammad Siddiq etc. Vs. Chief Settlement A Rehabilitation Commissioner, Lahore, 'et. (PLD 1965 S.C.123) Mian Rehmat Ali Vs. Khadeja Hakim (PLD 1967 LAHORE 29- at p.37), Muhammad Ishaq Vs. The Chief Settlement Commissioner and others (PLD 1967 Karachi 605) and Abdul Majid Vs .Chief Settlement etc. (PLD 1967 S.C.437).
Thirdly, that being local, Maula Bakhsh had no right to challenge the order of the Additional Settlement-Commissioner dated 16.7.1960.
Fourthly, that the order passed by the Additional Settlement Commissioner dated 16.7.1960 was never challenged by Maula Bakhsh and so had become final qua the parties.
5. The learned Council for respondent Maula Bakhsh supported the impugned decision on the following three grounds:- Firstly that the property in dispute was a business premises) that is formed part of composite building which as situated in a commercial area known as Lakar Mandi; that it was treated by the Deputy Settlement Commissioner in the first instance as business premise; that Maula Bakhsh was entitled to its transfer under Settlement Scheme No. VIH. Reliance was placed on Abdul Majid Vs. Chief Settlement Commissioner etc. (PLD 1967 S.C. 437), Haji Muhammad Hanif Vs. Chief Settlement and Rehabilitation Commissioner and others (PLD 1964 (W.P) Lahore 261), Muhammad Amin Vs. Chief Settlement & Rehabilitation Commissioner, Karachi and others (PLD (W.P) KARACHI 91), Mst.
Zohra Begum Vs. Assistant Rehabilitation Mukhtiar kar & Assistant Settlement Commissioner, Sanghar and another (PLD 1976 KARACHI 784), Abdul Ghani Vs. The Settlement Commissioner, Khairpur Division and another (PLD 1967 KARACHI 292) and Muhammad Ishaq Vs. The Chief Settlement Commissioner and others (PLD 1967 KARACHI 605).
Secondly, that the Additional Settlement Commissioner had passed order . Dated 16.7.1960 and 17th August, 1960, without affording opportunity of hearing to Maula Bakhsh who was a necessary party, so the aforesaid order suffered from contravention of principle of natural justice that "nobody shall be condemned unheard."
Thirdly, that Maula Bakhsh was in . Possession of the property in dispute, that he had undertaken its repairs and its reconstruction in 1953, that Jan Muhammad was owner of a nominal claim and had submitted form to get the property in dispute and then sold it to someone else. In these circumstances, it was submitted that the decision rendered by the learned Single Judge-in- Chamber was just and in consonance with the calls of substantial justice.
6. From the foregoing narration, the following questions emerged for adjustification:
(1) Whether the order of learned Settlement Commissioner dated 4.4.1966 and the order of learned Single Judge-in-Chamber dated 23.6.1966 are in defiance of principle of natural justice that nobody should be condemned unheard:?
(2) Whether the Additional Settlement Commissioner vide order dated 16.7.1966, correctly treated the residential unit and property in dispute as one unit?
(3) Whether Maula Bakhsh, a local, had no locus standi to claim transfer' of the "property in dispute" to him?
7. As regards the first question, the answer to it is free from any difficulty, This question was resolved as far back as the year 1966 when the Supreme Court in Muhammad Siddiq etc. Vs. Chief Settlement & Rehabilitation Commissioner, Lahore etc. (PLD 1965 S.C.123) had "that a person associated with the permission of Settlement Authorities acquires a vested right in the property purchased by him". This being the legal position, we have no hesitation in coming to the conclusion that Ehsanul Haq by means of deed of association dated 27.2.1967 had purchased the property in dispute and he was issued permanent transfer deed by the Settlement Authority. On these facts, he was a necessary party and had a right to be heard before passing any order against him. We further find that the order dated 23.6.1966 was passed by the learned single Judge- in-Chamber in absence of Ehsanual Haq. The order of the learned single Judge was, therefore, clearly in contravention of the rule laid down in Muhammad Siddique etc. Vs. Chief Settlement & Rehabilitation Commissioner, Lahore, etc. (Supra).
8. We, now, turn to question No.2. Its answer turns upon the construction of section 2(12) of Displaced Persons (Compensation & Rehabilitation) Act (XXVIH of 1958), (hereinafter referred to as Act) and circular dated 23.10.1959. A plain look at section 2 of the Act shows that it defines the word "shop". This section has two provisos. The second proviso to this section is of relevance in this case.
Under this proviso, the Chief Settlement Commissioner/his delegatee is authorised to treat the residential unit and a business unit in a composite property as one unit and vice versa. The Authority designated therein is to pass the order after taking into consideration the circumstance of . Each case i.e. Whether the composite property is situated in a predominantly commercial area or a residential area, whether the business unit and residential unit have a separate access or not.
Furthermore a local in possession for evacuee shop was given right for the first time by means of clarificatory press note dated 23,10.1959. The aforesaid section of the Act and circulars were examined by a Division Bench of this Court in Haji Muhammad Hanif Vs. Chief Settlement and Rehabilitation Commissioner and Others (PLD 1964 (W.P) Lahore 261), it was held therein:- It is obvious that unless the Chief Settlement Commissioner decided to treat the whole or any part of the building as a house or a shop, the two portions are to be disposed of separetely, one as house and the other as a shop, according to their definition in section 2, clauses (4) and (12). The division of a house or a shop, of course, stands on a different footing. As observed by the learned Judge, the power to divide them may be exercised only to adjust the claims of more than one claimant, non-claimant, or a local; otherwise the whole of the house or shop, although it consists of more than one unit in occupation of different persons, is to be disposed of as one. However, if a building consists of more than one house or shop, it does not follow that more than one house or shop are to be transferred to a claimant, non-claimant or a local in possession of a part thereof.
Take for instance, the case of buildings consisting of several residential flats and shops whish are not desisted as such mansions, It does not stand to reason that the occupant of one of those flats or shops can lay claim to the transfer of the entire building because there is no rival building. In this connection, it has to be borne in mine that claimants have a right to be compensated out of the evacuee pool which consists of the evacuee property as well as the proceeds of their sale. It is common knowledge that every evacuee displaced person has not been compensated by transfer of the evacuee property. As observed by their Lordships of the Supreme Court in Rehmat Ullah v.
Deputy Settlement Commissioner (PLD 1963 S.C.633), the claimants have a charge on an evacuee pool while non-claimants and locals fall in the category of "other persons" who may be rehabilitated under the Displaced Persons (Compensation and Rehabilitation) Act (XXVIII of 1958)
Sale of evacuee property by public auction will, undoubtedly result in accretion to the evacuee pool and out of it the claimants will be satisfied by Cash payments. An other benefit which will accrue to them is that against their verified claims they can purchase evacuee properties in a restricted or unrestricted" auction. The division of a composite property and inclusion of a part or parts thereof in the list of the evacuee properties to be sold by public auction is, therefore, eminently consistent with the object and scheme of the Act.
This view was followed by this Court in Mst. Bashir Bano Vs. Chief Settlement Commissioner and another (PLD 1967 Lahore 786). These provisions were materially considered before the Supreme Court in Abdul Majied Vs. Chief Settlement Commissioner, Lahore, etc. (PLD 1967 S.C.437), where it was held:- " This argument is, in our opinion, clearly untenable, for, we can find nothing in the Act which debars the Settlement Authorities from exercising the power under sub-section (4) or even under the first proviso to sub-section (12) of this very section after the power under the second proviso has been exercised. It seems to us that in the case of premises consisting of both residential and business units the power of division under sub-section (2) and the first proviso to sub-section (12) will arise only after the specification under the .Second proviso to sub-section (12) has been made. Unless and until it is known as to which portion is a bouse and which a shop, it is difficult to appreciate how the authorities can at all consider as to whether the residential portion (house) or the business portion (shop) is capable of further sub-division. In our opinion, the words "shop" and "house" occurring in the second proviso have been used to signify a "business unit" and a "residential unit".
They do not necessarily exclude the power given by sub-section (4) of section 2 and the first proviso to sub-section (12) itself. We see no force, therefore, in the contention advanced by the learned council. We are unable also to agree that the decision relied upon goes to the extent of supporting the contention now advanced by the learned council, for, it does not say that once the power under sub-section (12) of section 2 has been exercised, no further division can be made. The powers given by the above mentioned two subsections are not mutually exclusive nor are they exhausted by a single exercise of the power under either of the two sub-sections. If, however, the High Court by the observation quoted earlier intended to lay down that a sub-division can also be made under the second proviso to sub-section (12) of section 2 of the Act of 1958 then to that extent its decision cannot be accepted as correct. The further sub division after the separation of the residential from the business portion even if made simultaneously will be referable to the powers given under sub-section (4) of section 2 and the first proviso of subsection (12), for, the second proviso of the latter only says that the specification made thereunder shall be deemed to be "a shop or a house" and not "shops or houses".
In the present case what actually happened was that the Deputy Settlement Commissioner after specifying as to which portions were to be treated as "a shop" and which as "a residential premises" further sub-divided one portion into two shops but the residential portion was left undivided. He, therefore, did not exercise his delegated power in respect of the residential portion. The Additional Settlement Commissioner affirmed this so far as the non-division of the residential portion was concerned but the Settlement Commissioner in revision reversed this and for the first time divided.
The residential portion in the exercise of his delegated power. There was no further interference by the Chief Settlement Commissioner. So even under the principle laid down in Jalal Din Vs. Muhammad Rafiq (PLD 1965 S.C.261), there was no question here of a superior Settlement Authority reversing in appeal or revision the decision made by a subordinate Settlement Authority in the exercise of his delegated powers as regards the divisibility of a house."
The ratio deducible from the aforesaid discussion is as follows:-
(i) That the Chief Settlement Commissioner/his delegatee was empowered under second proviso to section 2(12) of the Aet the various units of a composite evacuee property as one unit after taking into consideration the circumstances of each case. He was required to undertake this exercise after the application of mind to various circumstances i.e. Whether the composite property was situated in a predominantly commercial area or residential area; that the business unit and residential unit were independent or not; whether the units had a separate and independent access. This exercise was to be done by the designated Authority with an object to accommodate as many persons as possible and to integrate them in socio economic dynamics of the society.
(ii) That although the power under second proviso to section 2(12) of the Act was within the domain of the designated Settlement Authority,. Yet the Authority was to pass an order fairly, honestly and without any caprice. He was further required to take the aforestated circumstance into consideration objectively and not speculatively. The order of that Authority was subject to the constitutional jurisdiction of this Court under Article 199 of the Constitution of 1973.
(iii) From the perusal of press note dated 23.10.1959, it is evident that the locals were given a right to seek transfer of evacuee shops through unrestricted public auction. Under the above circular, the locals had acquired a substantial right to acquire the evacuee shops within the parameters of law.
The locals were, therefore, necessary parties in the above exercise.
9. Applying the above principles to the facts and circumstances of this case, it becomes quite clear that Jan Muhammad was in possession of the residential unit, which had a separate staircase and a separate access; that the property in dispute had a separate access towards Lakar Mandi; that the property in dispute was situated in predominantly commercial area known as Lakar Mandi. It is also not in dispute that Maula Bakhsh had been allotted the property in dispute as back as in 1952; that he had repaired and reconstructed it with the permission of the Settlement Authorities. The name of allottee was incorporated in the papers of Settlement Department. These facts are even uncontradicted before us. The Deputy Settlement Commissioner, in the first instance, had taken cognizance of the aforesaid premises and decided to dispose it of through unrestricted public auction. Surprisingly enough, the Additional Settlement Commissioner, while passing the order dated 16.7.1960, did not advert to the aforesaid circumstances. He did not issue any notice to Maula Bakhsh, whose name as allottee stood incorporated in the Settlement record. He passed the order in unhealthy haste. This is discernible from the contents of the order dated 16.7.1960 Wherein an incorrect name of the allottee in possession of the property in dispute was recorded. On the facts, noted above, we are in no manner of doubt that Maula Bakhsh was a necessary party and was clothed with legal right to participate in the disposal of the property in dispute through unrestricted public auction under press note dated 23.1.1959. This being the position, the orders passed by the Additional Settlement Commissioner dated 16.7.1960 and 17.8.1960 were clearly is 4008016' of principle of natural justice that "nobody should be condemned unheard.* This being the position, the orders passed by the Additional Settlement Commissioner, noted above, were clearly coram non judice, and any subsequent superstructure built upon them is clearly without any legal foundation and cannot survive. We, therefore, accordingly declare that the order of the learned Addl. Settlement Commissioner dated 16.7.1960 and 17.8.1960 are without any legal support and as such are declared guilty in the eye of law. Taking the above discussion to logical conclusion, .We have no other option but to hold that the learned single Judge-in-Chamber had also passed the order dated 23.6.1966 without affording opportunity of hearing to Ehsanul Haq associate. The order of the learned single Judge, therefore, cannot be sustained on the above conclusion. So is the position of order of the Settlement Commissioner dated 4.4.1962.
10. For the foregoing conclusions, we accept all the three L.PAs. Nos. 1062, 1143 and 1361 of 1966. In result, the order of the Additional Settlement Commissioner dated 17.6.1960, the order of the Additional Settlement Commissioner dated 7.8.1960, the order of the learned Settlement Commissioner dated 4.4.1962, the order of the learned single Judge of the High Court dated 23.6.1966 and the order of the learned single Judge of this Court dated 8.6.1966 are hereby set aside. These cases are hereby remitted to the concerned notified officer with a direction to decide the competing claims of Jan Muhammad, Maula Bakhsh and Ehsanul Haq after affording them opportunity of hearing and strictly in accordance with law. The learned notified officer shall decide the matter within a period of nine months from the receipt of the order of this Court. In view of the nature of the question involved in these L.P As, we are not inclined to burden any party with costs.