SAIDUZZAMAN SIDDIQUI, J.---We propose to dispose of the abovementioned to civil appeals by a common judgment as they arise from the same impugned judgment and the points of law and facts arising therein are identical.
2. Clifton Hotel, Murree (hereinafter to be called as 'the Hotel' only) was put to public auction by the Settlement Authorities on 11-10-1969. It was purchased by one Sh. Abdur Rauf for a consideration of Rs.96,100. The said Sh. Abdur Rauf after the auction of the Hotel in his favour deposited a sum of Rs.1,000 towards the auction price on 13-10-1969. He also claimed before the Settlement Authorities that he subsequently deposited to further sums of Rs.23,250 and Rs.25,065 in the Government treasury towards the auction price of the hotel on 14-11-1969 and 11-5-1970 respectively. On these representations, the auction of the hotel in his favour was confirmed by the Settlement Authorities on 17-4-1970 and possession was also handed over. Respondent No.2 in Civil Appeal No.244 of 1993 and appellant in Civil Appeal No.245 of 1993 (hereinafter to be referred as 'the respondent' only) challenged the auction of the hotel in favour of said Abdul Rauf and asserted his right for transfer of a portion of the property on the basis of his physical possession, before the Settlement Authorities. Having failed to obtain any redress from the Settlement Authorities, the respondent filed Petition No. 101-R of 1972 before the Lahore High Court which was dismissed on 9-3-1972. The respondent thereafter, agitated the matter first before the Letters Patent Appeal Bench of Lahore High Court and finally before this Court in Civil Petition for Leave to Appeal No.252-R of 1982, but without any success.
3. It appears that the Chief Settlement and Rehabilitation Commissioner, Punjab, directed Settlement Commissioner, Rawalpindi, on 13-12-1972 to examine the case of transfer of the Hotel in favour of said Abdur Rauf in exercise of his suo motu revisional jurisdiction under Displaced Persons (Compensation and Rehabilitation) Act, 1958 (hereinafter to be called 'the Act' only). Accordingly a notice was issued to the said Abdur Rauf which he challenged in Writ Petition No.379-R of 1973. This writ petition filed by said Abdur Rauf challenging issuance of notice to him in suo motu revision petition was heard alongwith Letters Patent Appeal No.73 of 1972 and was disposed of by a learned Division Bench of the High Court with these observations:-- "Ordinarily, once the entitlement regarding transfer of a property has been determined in accordance with the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, the suo motu revisional jurisdiction stands exhausted and cannot be allowed to be exercised on the dictation of a superior officer, as in that situation the prejudice is apparent as the exercise of revisional power under the dictation of the superior officer would not be with an impartial and judicial mind. But in the instant case, it is in the interest of the petitioners themselves to meet the allegations being levelled by the Department and to establish their entitlement to the transfer of the property through auction and to retain the same. It is not the case of the petitioners that they can retain the property even without making payment of the transfer price. The petitioners instead of challenging the proceedings should welcome these proceedings as they will be getting the opportunity to clear their position with, regard to the allegations made against them. We have no doubt in mind that in the proceedings held, the petitioners shall be allowed full and fair opportunity to present their case. "
Thereafter suo motu revision was heard by the Additional Commissioner (R) exercising powers of Settlement Commissioner, Rawalpindi Division, who set aside the auction proceedings in favour of Abdur Rauf by his order dated 21-3-1985. On the ground that said transfer was obtained fraudulently. The said order further directed, Deputy Administrator (R&P), Rawalpindi to dispose of the hotel by public auction after affording opportunity of hearing to Abdul Hameed, Inamul Haque, Zakir Hussain and S.A. Rashid, who claimed the transfer of the hotel under Settlement Scheme No.IX.
The order of the Settlement Commissioner dated 21-3-1985 was challenged both by Abdur Rauf as well as the respondent in to separate Writ Petitions bearing No.19-R of 1985 and 14-R of 1985 respectively before the Lahore High Court. In the meantime, the Deputy Administrator (R&P) after remand of the case by the Settlement Commissioner rejected the claim of Abdul Hameed, Insamul Haque, Zakir Hussain and S.A. Rashid under Settlement Scheme No.IX and directed for disposal of the property through public auction by order dated 1-6-1970. The case of respondent was also examined by the Deputy Administrator (R&P) in the above proceedings but no opinion was expressed regarding his case in view of the pendency of Writ Petition No. 14-R of 1985 in the High Court. Abdur Rauf did not challenge the order dated 1-6-1970 passed by the Deputy Administrator (R&P). However, the said order was challenged through revision by respondent before the Additional Commissioner/Settlement Commissioner which was dismissed on 15-6-1988. The respondent, therefore, filed another Writ Petition, bearing No.23-R of 1988 challenging the order of Deputy Administrator (R&P) as well as the order of Additional Commissioner mentioned above.
Similarly, Zakir Hussain S.A. Rashid and Mian Abdul Hameed also filed separate Writ Petitions Nos.25-R of 1988, 26-R of 1988 and 28-R of 1988 respectively, before the Lahore High Court challenging the order of Deputy Administrator (R&P) dated 1-6-1970. While the abvoe mentioend writ petitions were pending before the High Court, the appellants moved a miscellaneous application before the Member, Board of Revenue/Chief Settlement Commissioner, Punjab, offering to pay the balance of the transfer price of the Hotel auctioned in his favour in the year 1969. The Member, Board of Revenue/Chief Settlement Commissioner after obtaining an undertaking from appellants that Writ Petition No.19-R of 1985 filed by them before the High Court of Lahore, challenging the order dated 21-3-1985 will be withdrawn, proceeded with the miscellaneous application filed by them and by a detailed order dated 16-7-1992 allowed the appellants to pay the balance of the transfer price of the Hotel in cash in lump sum and further directed that upon payment of full transfer price, P.T.D. May be issued in favour of the appellants. The order of the Chief Settlement Commissioner/Member, Board of Revenue dated 16-7-1-992 was impugned before the Lahore High Court in Writ Petition No.595 of 1992 by the respondent which was accepted and against the order of High Court, leave was granted by this Court to consider the following contentions of the appellants:-- "The learned counsel for the petitioners contended before us that the auction of Clifton Hotel, Murree having been confirmed in favour of their predecessor, Sheikh Abdur Rauf, on 17-4-1970 the same could not be set aside by the Settlement Commissioner on the ground of non--payment of the auction price. The learned counsel contended that under the Settlement Scheme NO.VIII the property could not be resumed on account of non-payment of the transfer price unless a notice of demand was served on the petitioner or their predecessor calling upon to pay the defaulted amount. It is, accordingly, contended by the learned counsel that the order of the Settlement Commissioner dated 21-3-1985 cancelling the transfer of property in favour of the petitioners without giving them an opportunity to pay the price was wholly without jurisdiction and in violation of 'the provisions of Settlement Scheme No.VIII. It is also contended by the learned counsel that the order of Chief Settlement, in the circumstances restoring the property in favour of the petitioners and allowing them to pay the auction price was in accordance with the provisions of Settlement Scheme No.VIII and was otherwise a just and equitable order, which could not be interfered with by the High Court under Article 199 of the Constitution. The contentions raised by the learned counsel for the petitioner require further examination. We, accordingly, grant leave to appeal.
Respondent No.2 in Constitutional Petition for Leave to Appeal No.405 of 1992 has filed a separate petition for leave to appeal (Constitutional Petition for Leave to Appeal No.25 of 1993) impugning the order of High Court in Writ Petition No.595 of 1992. Since wehave already granted leave to appeal in the connected Civil Petition No.405 of 1992, we grant leave in Constitutional Petition for Leave to Appeal No.25 of 1993 as well. Both the appeals will be heard together. Parties are directed to maintain status quo till the disposal of the appeals. "
It may be mentioned here that the respondent had also filed Civil Petition No.25 of 1993 against the judgment of Lahore High Court which carne up for hearing alongwith the petition (Civil Petition No.405 of 1992) filed by the appellant and in view of the leave granting order in Civil Petition No.405 of 1992, leave was also granted in Civil Petition No.25 of 1993.
4. The learned counsel for the appellants contended before us that as no notice of demand for the balance of transfer price of the Hotel in accordance with the provisions of Settlement Scheme No.VIII (hereinafter to be referred as 'the Scheme' only) was issued to the appellants or the said Abdur Rauf, predecessor-in-interest of the appellants, the order cancelling the auction was wholly without jurisdiction. It is further contended by the learned counsel that in terms of the provisions of Settlement Scheme No.VIII even after cancellation of the transfer of said Abdur Rauf, the Settlement Authorities were competent to allow payment of the balance price and the same having been allowed by the Chief Settlement Commissioner/Member, Board of Revenue, the order passed by Chief Settlement Commissioner could not be interfered with by the High Court in exercise of its jurisdiction under Article 199 of the Constitution. The learned counsel for the appellants argued that the appellants had questioned the legality of the order dated 21-3-1985 passed by the Additional Commissioner (R&P) cancelling the auction in his favour of his predecessor in Writ Petition No. 19-R of 1985 before the High Court but the same was withdrawn as the Chief Settlement Commissioner made the withdrawal of the writ petition filed before the High Court a condition for decision of the miscellaneous application filed before him. It is accordingly contended by the learned counsel for the appellants that in these circumstances it was not a fit case for interference by the High Court in exercise of its discretionary jurisdiction under Article 199 of the Constitution as an obvious, injustice done to the appellants was remedied by the order of Chief Settlement Commissioner/Member, Board of Revenue.
5. The learned counsel for the respondent, on the other hand, vehemently contended that the order of the Settlement Commissioner dated 21-3-1985 having been challenged by the appellants in the writ petition which was withdrawn the said order attained finality and, therefore, it could not be set aside in collateral proceedings by the Chief Settlement Commissioner. It is, accordingly, argued that the order dated 21-3-1985 having not been set aside in any competent proceedings, the transfer in favour of the appellants stood cancelled and, therefore, question of acceptance of payment of balance of auction price of the Hotel did not arise at all. The learned counsel of the respondent also contended that his client was entitled to the transfer of the property as it was available as a result of the cancellation of the auction in favour of Abdur Rauf and, therefore, the order of the learned Judge in Chambers declining to grant relief to the respondent was not justified.
6. From the above narration of facts, it is quite clear that in so far the entitlement of the respondent for transfer of the Hotel on the basis of his possession was concerned, the same stood finally decided when the petition -for leave to appeal filed by him before this Court against the order of the High Court was dismissed. The Courts below, therefore, rightly reached the conclusion that the respondent had no locus standi to agitate the matter. However, as the respondent has also supported the order dated 21-3-1985 whereunder auction in favour of Abdur Rauf (predecessor of the appellants) was cancelled, we will now examine whether the Chief Settlement Commissioner/Member, Board of Revenue was competent to allow payment of the balance of the auction price by the appellant in lump sum in cash.
7. The main thrust of the argument of the learned counsel for the respondent is that the confirmation of the auction in favour of the appellants' predecessor was the result of mis representation and fraud committed by the said Abdur Rauf who represented to the Settlement Authorities that he had deposited Rs.23,250 and Rs.25,015 in the Government treasury on 14-11-1969 and 11-5-1970 which turned out to be false and as such the very basis of the transfer stood vitiated on account of fraud and mis representation of the auction-purchasers. We have examined the record placed before us and we find that notwithstanding the fact that the representation made by Abdur Rauf to Settlement Authorities that he deposited to sums of money amounting to Rs.23,250 and Rs.25,015 on 14-11-1969 and 11-5-1970 respectively towards the auction price of the Hotel, turned out to be incorrect, the Federal Government on an application of said Abdur Rauf, wherein he offered to pay the balance of the auction price of the Hotel including the amount which was represented by to receipts dated 14-11-1969 and 11-5-1970, through adjustment from the compensation book of a claimant under an agreement of association, allowed payment of transfer price of the Hotel' through adjustment of compensation book by its letter dated 8-6-1973 as follows:-- "Government of Pakistan Works and Rehabilitation Division NO.FI(5)/71 SLI, Islamabad, the 8th June, 1973 To The Chief Settlement Commissioner, Punjab 11 Egerton Road, Lahore.
Subject: Payment through Association.
Sir, I am directed to say that on representation made by Sh. Abdul Rauf transferee of property known as Clifton Hotel, Murree, it has been decided that entire outstanding transfer price in respect of the said property may be allowed to be paid by adjustment against Compensation Books though association.
Yours obedient servant, (Sd.) (M.A. Qureshi) CSS, Section Officer.
Phone: 20529 Copy forwarded to Sh. Abdul Rauf No.AA/1233 Mohallah Akalgarh, Rawalpindi, with reference to his application, dated 4th June 1973.
(Sd.) M.A. Qureshi, Section Officer.
Phone: 20529 In pursuance to the above order of the Federal Government, the Chief Settlement Commissioner allowed the said Abdur Rauf to pay the balance of the auction price of the Hotel by associating a claimant and accordingly, Abdur Rauf entered into an agreement of association with a claimant and submitted the compensation book showing deferred payment of Rs.1,36,500 out of which a sum of Rs.1,34,800 was still due to the claimant, for adjustment of the balance of transfer price of Rs.95,100. He also filed W-form of the compensation book as required under the procedure before the Settlement Authorities which was sent to the concerned office to ascertain the genuineness of the compensation book. It is not disputed before us that the Settlement Authorities neither declared the said compensation book as bogus or fictitious nor they conveyed their refusal to adjust the transfer price of the Hotel from the compensation book of the claimant submitted by Abdur Rauf. In our view, the Federal Government having allowed payment of the balance of the auction price of the Hotel, including the to amounts represented by receipts dated 14-11-1969 and 11-5-1970, by the said Abdur Rauf through adjustment of the compensation book, the Settlement Authorities could not subsequently rely on the fictitious nature of the receipts showing payment of the sums of Rs.23,250 and 25,015 on 14-11-1969 and 11-5-1970 respectively to strike down the auction in favour of said Abdur Rauf as fraudulent. In view of the fact that the Chief Settlement Commissioner. Allowed the said Abdur Rauf, to pay the entire balance of transfer price of the Hotel by associating a claimant, the non-payment or fraudulent representation of payment of the to amounts of Rs.23,250 and Rs.25,015 on 14-11-1969. And 11-5-1970 respectively by Abdur Rauf earlier, lost its significance and relevance. There is nothing on record to show that before cancelling the auction in favour of Abdur Rauf, the Settlement Authorities, conveyed him their refusal to adjust the transfer price of the Hotel from the compensation book of claimant submitted by said Abdur Rauf or that he was called upon by the Settlement Authorities to make payment of the balance of transfer price of the Hotel in cash, as required under the provisions of Settlement Scheme No.VIII. At this stage it will be advantageous to reproduce here paragraphs 2 to 4 of the Settlement Scheme No.VIII as reconstituted on 13-8-1973 which have important bearing on the present case. They read as follows:-- "2. An Additional Settlement Commissioner (Industries), or the Deputy Settlement Commissioner concerned, as the case may be, will serve a Demand Notice upon a transferee of a property who has failed to pay to consecutive instalments or, if no instalments had been allowed to him, has defaulted in payment of transfer price due from him, requiring him to pay the whole outstanding amount within a period of thirty days from the date of issue of Demand Notice. The Demand Notice will be issued by registered post acknowledgement receipt,. When received from the addressee will be pasted on the file of the Demand Notice. Where necessary, substituted service of Demand Notice, as provided in the Code of Civil Procedure, may be made.
3.--(1) If payment is not made within the specified period, the competent Authority, without giving any further notice to the defaulter, will--
(a) cancel the transfer of the property;
(b) forfeit an amount not exceeding twenty-five per cent, of the transfer price of the property already paid by the transferee plus other dues, if any,
(c) resume .The property for fresh disposal under Chapter III of the Scheme by ejecting the defaulter from the property forcibly, if, considered necessary,
(2) A copy of the order made under sub-para. (1) will be sent to the defaulter by post within fifteen days from the date of expiry of the period of Demand Notice, also refundng the excess amount, if any, to the defaulter within thirty days.
4.---(1) The authority concerned may, on application made to him by the defaulter within fifteen days of the date of the order of cancellation as aforesaid allow him to pay in lump sum the whole of the transfer price payable by him within a period of thirty days from the date of order of cancellation or by monthly instalments not exceeding twelve as may be allowed on merit by the Additional Settlement Commissioner, if by then the property has not been transferred to any other person.
(2) The competent Authority may, on an application made to him in this behalf within 15 days, of the date of order of cancellation as aforesaid, allow a joint transferee of a property to pay in lump sum the amount(s) due from the defaulter(s) immediately or within the period of thirty days from the date of order of cancellation or by monthly instalments not exceeding twelve as may be allowed on merit by the Additional Settlement Commissioner and obtain transfer of share(s) in the property cancelled from such defaulter(s) if by then the share(s) resumed has (have) not been transferred to any other person(s)."
As the question of adjustment of the auction price of the Hotel was still pending and no final decision was taken by the Settlement Authorities, the Chief Settlement Commissioner/Member, Board of Revenue was well within his right in terms of Settlement Scheme No. VIII to allow adjustment of the price by asking the auction-purchaser to pay the same in cash. The learned counsel for the respondent, however, supported the judgment of the High Court by arguing that in the order dated 21-3-1985 passed by the Settlement Commissioner it was clearly stated that notices were issued to the auction-purchaser under Settlement Scheme No.VIII before cancellation of the auction and, therefore, cancellation of the- auction as a result of non-payment of the transfer price, was fully justified and with jurisdiction. Alternatively, the learned counsel for the respondent also argued that since the auction had taken place when the Settlement Scheme No.VIII existed in its original form, which did not provide for serving of any notice on the transferee before cancellation of the transfer on account of non--payment of the transfer-price, no objection could be taken to the cancellation of the auction in favour of Abdur Rauf to support his contention, the learned counsel relied on the case of Abdul Hamid v. Fazalur Rehman (1989 SCM R 120). The learned counsel, particularly, relied on the following paragraph appearing in the above judgment:- - "We have heard learned counsel for both the sides at some length. It appears that when the appellants made a bid for the plot in question in 1970, Settlement Scheme No.VIII as amended up to 1965 was in the field. Part V of the said Scheme deals with the mode of payment and forfeiture on default of available evacuee property which was to be sold in an auction. Para.21 under that part reads as follows:-- 'If the successful bidder fails to pay the balance within 30 days as aforesaid the acceptance of his bid shall stand cancelled and the amount of earnest money and the other amount equal to twenty-five per cent. Of the bid money shall also stand forfeited. If the defaulter is a claimant necessary debit entries will be made in his Compensation/Rehabilitation Book in accordance with the procedure laid down in para. 19.'
Since this provision was in force at that the when the appellants participated in the first auction, on their default, the acceptance of their bid automatically stood cancelled. In the circumstances the concerned authorities were under no obligation to serve a demand or cancellation notice or to pass a resumption order. The admitted position is that the appellants were defaulters and they did not pay the full amount of auction money within 30 days. The provisions of para.2, Chapter II of Settlement Scheme NO.VIII are not applicable to the facts of the present case. Furthermore, since no resumption order was to be passed in the circumstances of the case the subsequent auction in favour of the respondents was quite legal. The facts of the case cited by the learned counsel for the appellants are distinguishable and the law laid down therein is not applicable to the facts of the present case."
7. In our view the case cited by the learned counsel is distinguishable on facts as in that case the auction was cancelled before the amendment of Settlement Scheme No. VIII and the property was re-auctioned on 19-3-1971. In the present case, the auction has been ordered to be cancelled on 21-3-1985 when reconstituted Settlement Scheme No.VIII was in force which mandatorily required service of notice before cancellation of the transfer on account of default in payment of the transfer price on the transferee. The record before us does not show that any notice of demand as required by para 2 of the Scheme was served on the auction-purchaser before cancellation of the auction. Apart from it, under para. 3(2) of the Scheme, the Settlement Authorities were required to send to the transferee by post within 15 days from date of expiry of the period of demand notice, a copy of the order passed under para. 3(1) of the Scheme. It is no body's case that the copy of order of cancellation of auction in favour of Abdur Rauf was despatched to him as required by para. 3(2) of the Scheme. In our view despatch of the copy of order of cancellation to a defaulter in terms of para. 3(2) of the Scheme was a necessary requirement as under paragraph 4(1) of the Scheme the transferee had the right to approach the concerned Settlement Authority for restoration of transfer, and the competent Authority had the jurisdiction even after cancellation of the transfer in favour of transferee on account of failure to pay transfer price, to allow him to pay the same either in lump sum or in monthly instalments not exceeding 12 as the merit of the case permitted within 30 days of the cancellation, if the property was not disposed of in the meantime. In the case of Muhammad Afzal v. Muhammad Yousaf (1984 SCM R 296), this Court while considering the non-compliance of the requirements of paragraphs 2, and 3 of the Scheme by the Settlement Authorities observed as follows:-- "Reading paras.2 and 3 together, there is a mandatory requirement of a 'demand notice' being sent by a registered post acknowledgement due and the acknowledgement receipt, when received back to be pasted on the file of the Demand Notice. The penal consequences flow only when the requirement of Demand Notice is not fulfilled, that is, the payment of the entire outstanding amount. There is no manner of doubt that para.2 has to be strictly complied with as was held by this Court in E.A. Evans v. Muhammad Ashraf (1) while construing Section 30 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958. In its absence the penal consequences cannot flow as it is the failure on the part of the defaulter which gives power to the Deputy Settlement Commissioner to resume the property. Here I may mention that if at all the Settlement Department was serious it should have cancelled the transfer of the property pursuant to para.24 of the Schedule, but it did not do so in spite of the several notices issued, and, therefore, the High Court was right in not treating the notices as a compliance of para.2 of the Settlement Scheme on account of its resumption in accordance thereto and its treatment as available property. "
8. In the case before us, the order of cancellation of auction in favour of appellant was passed on 21-3-1985 by the Settlement Commissioner in suo motu revision, which was challenged in the writ petitions filed before the Lahore High Court by the appellant, respondent and other 3 persons and as such the property was not transferred to nay one in the meantime. It was during the pendency of the Writ Petition No. 19-R of 1985 filed by the appellants challenging the order dated 21-3-1985 that the appellants represented to the Member, Board of Revenue/Chief Settlement Commissioner offering to pay the entire price in lump sum in cash which was accepted and he was allowed to pay the same. In these circumstances, the order of Chief Settlement Commissioner/Member, Board of Revenue restoring the transfer of the hotel on payment of entire transfer price in cash in lump sum did not suffer from any legal infirmity. Even otherwise, we are of the view that the order passed by the Chief Settlement Commissioner/Member Board of Revenue restoring transfer of hotel in favour of appellants and allowing them to pay the transfer price, in cash in lump sum, in the circumstances of- the case, was a just and proper order which did not justify interference by the High Court in exercise of its discretionary jurisdiction under Article 199 of the Constitution. As a result of the above discussion, we accepted Civil Appeal No.244 of 1993 and set aside the impugned order and restore the order of Chief Settlement Commissioner/Member, Board of Revenue dated 16-7-1992. As a consequence of the above order, the appeal filed by the respondent (Civil Appeal No.245 of 1993) is dismissed but in the circumstances of the cases, we will make no order as to costs.