Amar Chand vs The Financial Commissioner, Punjab, Chandigarh, and Others

Shamsher Bahadur, J.—This petition which had been adjourned on two or three occasions for a compromise is concerned with two shops at Narnaul sold to the petitioner by a sale deed registered on the 8th of March 1953 for a sum of Rs. 11,000/-.

The shops of which the petitioner claims to be an owner belonged at first to Chargh-ud-din and Salim-ud-Din, who are now evacuees, and had been mortgaged as security with the third respondent, i.e. the State Bank of Patiala Under Ijlas i khas order No. 61 of the then Ruler of Patiala passed on the 9tn of January 1948 the shops were handed over to the state Bank. As the legal consequences of this order have been a subject-matter of debate in this Court it would be well to set it out in detail. "His Highness Shri 108 Maharajadhiraj Mahendera Bahadur was graciously pleased to approve of the Bank taking possession of the properties mortgaged to it by the Muslim evacuees and sell them in repayment of the loans. The foodgrains and other movable property recovered out of the houses of the Muslim evacuees were to be sold and proceeds credited to the loans advanced by the Bank in each case" This general order applied to all properties belonging to Muslim debtors of the State bank of Patiala and in pursuance of it, the shops in Narnam were auctioned by the Collector of Mohindergarh and the 4th respondent Rattan Lal purchased the property for a sum of Rs. 7,500/-, which amount has since been credited to the account of the evacuees by the respondent Bank. On 21st of December 1949 the Custodian of Evacuee Property moved the Collector of Mohindergarh u/s 17 (2) of Ordinance 27 of 1S49 to set aside the sale but it was dismissed in default on the 10th September, 19(sic)5 after various opportunities had been given to the petitioner. Meanwhile the shops in question were purchased by Amar Chand Jain petitioner on 20th February, 1953, from respondent No. 4 for Rs. 11,000/. The Custodian applied on 8th of October, 1953 for restoration of the application which had been dismissed on the 10th September, 1953. This application also suffered the fate of the previous one and was dismissed again. Two more attempts were made by the Custodian to have the original application restored but every time it was dismissed. Eventually the Collector Mohindergarh referred on the 20th of June, 1957 an application made by the Custodian on the 4th of December, 1954 to the Commissioner, Patiala Division. These proceedings culminated in the order of Collector of Mohindergarh who set aside the sale of the evacuee shops by this order of the 25th of December, 1959. As both the Commissioner and the Financial Commissioner have rejected the appeal and revision petition by Amar Chand Jain, he has now invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.

The case of the petitioner is simple. A" stated by his learned counsel the petitioner is bona fide purchaser for value and had acquired the property which had been ordered to be sold by the State Bank in pursuance of an order of the Ijlas-i-khas which concededly has the authority of law. The petition is opposed by the first two res pondents who are the Financial Commissioner Punjab and the Custodian of evacuee property. The State Bank of Patiala (3rd respondent) is supporting the petitioner.

Mr. Sarin submits that though the petitioner acquired the shops from the fourth respondent these were actually sold in consequence of their having vested with the State Bank for the discharge of the liabilities of the evacuee owners towards the third respondent Under the Patiala Recovery of State Dues Act, 200 Bk the State dues may be recovered by a department through -

(a) the Nazira who shall proceed to recover such dues as if these were arrears of land revenue; * * *

It is argued on the basis of the authority of the Supreme Court in Director of Endowments, of Government Hyderabad v. Akram Ali 1, that order No. 61 passed by the Ruler of Patiala has the force of law and could not be set aside by the first respondent. In the Supreme Court case it was held by their Lordships that the Nizam was an absolute sovereign regarding all domestic matters at the time when the Firman was issued and his word was law. The effect of this Firman was to deprive ''A'' and all other claimants of all rights to possesion and this order had to be respected by successor authorities. On a party of reasoning it is urged that the Firman-i-shahi of the ruler of Patiala has the force of law. Reference may also be made to a Division Bench authority of this Court in Anup Singh v. Harbans Kaur (1957) 59 P.L.R. 650, of Chief Justice Bhandari and Tek Chand J. in which it was stated that finality, no doubt, attaches to the deliberate and conscious commands of the Ruler except when the Ijlas-i-khas could net be intended to convey the real intention of His Highness. It is not disputed by Mr. Jain, the learned counsel for the respendents that the order of the Ruler embodied in annexure ''A'' is specific and conclusive and has the authority of law. It is, however, submitted by him that such an order could be set aside under the provisions of sub-section (2) of section 17 of the Administration of Evacuee Property Act 1950 according to which-

Where after the 1st day of March, 1947, any evacuee property which has vested in the Custodian or is deemed to have vested in the Custodian under the provisions of this Act has been sold in execution of any decree or order of any Court or other authority, the sale shall be set aside if an application in that behalf has been made by the Custo�dian to such Court or authority on or before the 17th day of October, 1950.

It is submitted that Ijlas-i-khas order must be regarded in the context as an order passed by "any other authority" mentioned in sub-section (2) of Section 17 and has to be set aside if an application is moved by the Custodian before the 17th of October, 1950. The first application which was moved by the Custodian was of the 21st of December, 1949 and the proceedings which led to the orders of the Collector, the Commissioner and the Financial Commissioner related to restoration of this application which had been dismissed in default. In my judgment the order of the ljlas-i-khas emanating as it did from a sovereign Ruler and having the force of law cannot be equated to a "decree or order of any Court or other authority." Though the property had never been acquired through notification by the Custodian, it may be assumed that it came to be vested in the Custodian. However, before that vesting the property had already passed from the hands of the evacuees in pursuance of the order of Ijlas-i-khas which was never expressly or impliedly repealed by subsequent legislation. The order of the Ijlas-i-khas cannot be said to have been repealed by implication, when we find that the properties which had been handed over to the State Bank of Patiala, especially the shops which are now in dispute, had passed to bona fide purchasers for value. It is not the case of the respondents, and never has been, that the auction sale was improper or that the price which the property fetched was inadequate. The sale cannot be set aside on the specious ground that the property had become evacuee property and the sale which took place in consequence of the order of the Ijlas-i-khas should be deemed to have taken place in pursuance of an "order.... of other authority" simpliciter. The order of the Ijlas-i-khas cannot be treated as ejusdem generis with a decree or order of any Court or other authority and its status as law bang indisputable, its effect cannot be off set by a mere inference that it has been impliedly repealed.

Mr. Jain contends that the property was purchased by the petitioner after the enactment of the Administration of Evacuee Property Act and he must be deemed to have known the effect and consequences of section (sic)7. This argument again assumes that the order of the Ijlas-i-khas is like any order or a decree of the Court or any authority which can be set aside merely on the asking of the Custodian. The Ijlas-i-khas order which constitutes law vested certain rights of which the petitioner cannot be deprived by a mere implication of its repeal. The parties cannot be divested of their vested rights unless the statute specifically so provides.

Mr. Jain learned counsel for the respondents has argued that the order of the Financial Commissioner passed on the 6th of February, 196l is in substance "an order passed on agreement" and as such no objection could be taken to it in these proceedings. The passage to which my attention has been invited is in these terms -

Before me, today, the petitioner''s plea is that if he is to be deprived of the shops then the price paid by him should be refunded. This seems a fair request * * *. In the event of the petitioner being deprived of the shops, the Custodian should reimburse him.

It is sought to be argued that the petitioner had acquiesced in the position that the Custodian had power to have the sale set aside under subsection (2) of section 17 and all that was claimed on his behalf was the right of reimbursement. In my opinion the order cannot be read in this perspective. The simple request of the petitioner was that if he was to be deprived of the shops he should be reimbursed. This cannot be taken to mean that the petitioner had abandoned his right to retain the property in pursuance of the order of the Ijlas-i-khas. Indeed if the right of reimbursement of the price paid by the petitioner in open auction is conceded and it has not been disputed before me, there is hardly any point or substance in insisting that the sale should be set aside under sub-section (2) of section 17. The petitioner had been fighting for his right since 1953, continuously before the revenue authorities and being a case of manifest injustice I would allow this petition and quash the orders of the Collector, the Commissioner and the Financial Commissioner denying the right to the petitioner to retain the property in pursuance of the order of the Ijlas-i-khas. The petitioner in my opinion is also entitled to his costs of this petition against respondents I and 2.