GHAFOORAN NISA Versus CHIEF SETTLEMENT COMMISSIONER

In Sargodha there is an unregistered industrial concern known as "Bharat Metal Works, Sargodha", which consists of a flour mill and a workshop for the manufacture of utensils. The concern was such which was not allotted by the Industrial Rehabilitation Board but was being allotted by the other competent Rehabilitation Authorities on the subject. The position of allotment was that there were originally four allottees in it, namely, Mst. Ghafooran-Nisa, Mr. Jamshed Ali Khan, Mr. Muhammad Hussain and Mr. Kabool Khan, to the extent of 1/4th share of each. In the wake of the Settlement operations Mst. Ghaforran-Nissa and Jamshed Ali Khan, applied for the transfer of this concern. By that time Muhammad Hussain co-allottee had left for India and Kabool Khan the fourth allottee had surrendered his share and in their place no other allottee had been substituted and the shares which were allotted to them were in this manner vacant. The industrial concern, however, kept on functioning and was not sealed or closed. Taking note of this fact, the learned Additional Settlement Commissioner by means of his order, dated 25th of February 1960, transferred the concern to Mst. Ghafooran Nisa and Jamshed Ali Khan to the extent of their shares of allotment, namely, 1/4 each. and the remaining one-half of the concern was directed to be put to auction.

2. Against the aforesaid order three appeals were filed, namely, by Mst. Ghafooran Nisa, Jamshed Ali Khan and one Maulvi Abdul Aziz who had allegedly applied for the allotment of a share in this concern .on 14-7-1958 but whose application in that respect had not been disposed of by that time. The learned Settlement Commissioner by means of his order dated 14-4-1960 accepted the appeals in this manner that he directed that each of the appellant before him should be transferred the concern in the share of 1 /3rd each. The direction to dispose of a part of the concern by auction was set aside. The aforesaid order was challenged in revision by Jamshed Ali Khan before the learned Chief Settlement Commissioner who by means of his order dated 18-10-1960 accepted the revision, set aside the order of the learned Settlement Commissioner and restored that of the learned Additional Settlement Commissioner. He further observed that Maulvi Abdul Aziz in any event had no case for securing allotment/transfer of the concern at 'that stage inasmuch as he had neither been an allottee and nor he was in possession of the concern on or before the relevant date.

A review application was made by Jamshed Ali Khan but the learned Chief Settlement Commissioner refused to review his order and dismissed it on 30-1-1968. Against the aforesaid proceedings and orders three writ petitions have been filed which are the subject-matter of this judgment. Writ Petition No. 372/R of 1968 has been filed by Mst. Ghafooran Nisa, Writ Petition No. 394/R of 1968 has been filed by Maulvi Abdul Aziz and Writ Petition No. 468/R of 1968 has been filed by Jamshed Ali Khan. The stand of Jamshed Ali Khan is that the whole of the concern should be transferred to him or in the alternative it should be transferred in equal shares to him and Mst. Ghafooran Nisa. The stand of Mst. Ghafooran Nisa is that she should be transferred half of the concern (she does not want the whole of the concern)-and the stand of Maulvi Abdul Aziz is that the concern should be transferred in the ratio of 1/3rd to each of the present petitioners, namely, Mst. Ghafooran Nisa, Jamshed Ali Khan and Maulvi Abdul Aziz. The parties it will be evident, are not certain as to what position they should take in a formidable manner and that is why that they have advanced alternative pleas as hereinbefore mentioned.

Re : Writ Petition No. 394-R/ 1968

3. Taking up Writ Petition No. 394-R of 1968 filed by Maulvi Abdul Aziz it can be safely disposed of on the short ground that as he was neither an allottee nor even otherwise in possession in any manner of the industrial concern, he has no right under any provision of the relevant law to claim transfer of the same. As a matter of fact; no provision of law in support of his case has been referred to me at the Bar. His writ petition is consequently dismissed with no, order as to costs.

Re : Writ Petitions Nos. 372-R/68 and 468-R/68

4. Coming to Writ Petition No. 372-R of 1968 and Writ Petition No. 468-8 of 1968 the question to be examined is as to whether the industrial concern which is not wholly allotted to any persons, but stands allotted in certain specific shares to various persons with the result that some share or shares therein are vacant and still unallotted, can be transferred only to the extent of allotted shares in favour of the respective allottees and the remaining vacant or unallotted shares can be disposed by unrestricted public auction. In other words must an industrial concern be auctioned as a whole or can it be transferred in parts on market value, and in parts by auction in cases of the present kind. Learned counsel for the petitioner referred to Paragraph 15 of the Schedule contained in the Displaced Persons (Compensation and Rehabilitation) Act (XXVIII of 1958) (hereinafter called the Act)-which reads as follows :-

Paragraph 15.-(1) Every Industrial concern or a cinema house shall subject to the provisions of the following sub-paragraphs, be sold in an unrestricted public auction.

(2) If an Industrial concern or a Cinema house allotted by the Industrial Rehabilitation Board constituted under the Pakistan Rehabilitation Act, 1956 (XLII of 1956), is in the possession of a claimant, who has left in India or any area occupied by India a registered Industrial concern or a Cinema house or whose verified claim under Schedule III to the Registration of Claims (Displaced Persons) Rules, 1955, is of the value of rupees one lac or more, then the Industrial concern or the Cinema house in the possession of such claimant shall, in case he applies in that behalf, be transferred to him on payment immediately of the prevailing market value minus the investment made, if any:

Provided that if the claimant concerned has abandoned a share in a registered industrial concern or a Cinema house, the industrial concern or the Cinema house in his possession shall not be transferred to him unless his verified claim in respect of such share is rupees thirty three thousand or more.

(3) If an Industrial concern or a Cinema house, not allotted by the aforesaid Industries Rehabilitation Board is in the possession of a displaced person or a local, then ,such concern or Cinema house shall, in case he applies in that behalf, be transferred to him on payment of its prevailing market value minus the investment, made, if any.

(4) If any local or displaced person has invested in any Industrial concern or Cinema house, not being an Industrial concern or Cinema house, transferred under sub-paragraph (2) or sub-paragraph (3), not less than 40 % of its prevailing market value, then that concern or Cinema house shall, in ' ease such local or displaced person applies in that behalf, be transferred to him on payment immediately of the prevailing market value minus the investment made.

(5) Not more than one Industrial concern or Cinema house shall be transferred to any one person under sub-paragraph (2), or sub paragraph (3) or sub-paragraph (4).

Explanation.-In this paragraph :-

(a) "Investment made" means an amount sanctioned by a Custodian or a competent Rehabilitation authority or the Chief Settlement Commis sioner on an application made on or before the 20th day of December 1958, and

(b) "Registered Industrial Concern" means a factory which stood registered under the Factories Act, 1934, on the fourteenth day of August 1947."

It was argued that in sub-paragraph (3) of the aforesaid paragraph which applied here, there was no indication of auction of an industrial concern in shares as has been done in the present case. On the other, hand the department has referred to certain instructions which are contained in Memo. No. 1111-F&M-Reh-59, dated 20th November 1959 printed on pages 82 to 84 of the Settlement Manual (Old Edition). Paragraph 5 of these instructions is relevant. It reads as follows :-

"Paragraph 5.-The industrial concerns and cinema houses which have not been allotted by the Industrial Rehabilitation Board, and for which no transfer application is received or in respect of which the transfer application has been rejected and those which are lying unallotted or sealed, shall be disposed of by unrestricted public auction. Disposal of these concerns will be made in the following manner . , . . : '

In my opinion, an industrial concern whenever it has to be transferred by a public auction has to be disposed of as a whole and its transfer or disposal in certain shares to its occupants and in certain shares by public auction is not permitted by any provision of law. Para. 15 of the Schedule , reproduced above contemplates auction of an evacuee industrial concern as a whole just like big mansions and hotels which according to the subsequent paragraph 16 cannot be transferred in parts by auction. That this is the law with regard to big mansions and hotels (see S. M. Fakhar Hussain and 6 others v. Abdus Sattar and 4 others P L D 1971 S C 438, Ch. Abdul Qayyum v. Chief Settlement Commissioner, Pakistan, Lahore and another P L D 1968 S C 362 and The Bank of Bahawalpur Ltd., Lahore v. The Chief Settlement and Rehabilita tion Commissioner, Lahore and another P L D 1966 Lah. 515. The position about an industrial concern, in my opinion, is also not dissimilar. It is the auction of the industrial concern which law contemplates and not of its shares and fractions. The Memo. dated 20-11-1959, relied upon by the Department in its report is of no help because it talks of such industrial concerns which are "lying unallotted or sealed". It does not say, for example, "such shares in an industrial concern which are lying unallotted," to the extent of unallotted shares are to be disposed of by auction. From that point of view the present concern was neither "unallotted" nor "sealed". The learned Chief Settlement Commissioner acted without lawful authority in directing disposal by auction of the industrial concern in dispute in a manner different from the one permitted by law. Neither on the construction of para. 15 of the Schedule nor on the wording of para. 3 of Memo. dated 20-11-1959, such a course was possible. The concern had to be transferred to the occupant-allottees on the prevailing market value. As to how their shares inter se were to be fixed, it was for the Settlement authorities to decide, keeping in view the principle that the shares must be exhausted between the allottee-transferees and no share should be allowed to be disposed of by auction. I must -clarify that emphasis in such cases is on avoiding auction and not so much on fixing shares of transferees inter se, which, once the auction is not to take place, will not remain any difficult problem.

5. The upshot of the above discussion is that the orders of the learned Chief Settlement Commissioner, dated 18-10-1960, and 30-1-1968, impugned in this case are declared to be without lawful authority and of no legal effect against the petitioners in Writ Petition No. 372/R of 1968 and Writ Petition No. 468/R of 1968 and are hereby quashed. The same is the position of the order of the learned Settlement Commis sioner, dated 14-4-1960, whereby he had included Maulvi Abdul Aziz in the transfer of this concern. Maulvi Abdul Aziz, as already held by me, has no right to claim transfer of any part of this concern. The result is that the case will have to be remanded to the learned Settlement Commissioner for fresh decision in accordance with law in the light of the observations herein before made. Writ Petitions Nos. 372/R of 1968 and 468/R of 1968 are accepted in those terms and the cases of the respective petitioners therein are remanded to the learned Settlement Commissioner for fixing their shares of transfer in the whole of this concern leaving no part or share to be disposed of by auction. There shall be no order as to costs.

K. B. A. Petition accepted. Case remanded.