DOSSA LIMITED Versus FEDERAL GOVERNMENT OF PAKISTAN

1. MAMOON KAZI, J.‑‑ In all these petitions, the petitioner's Cotton Ginning establishment was acquired by the Federal Government under the provisions of the Cotton Ginning Control and Development Ordinance, 1976 (hereinafter referred to as "the Ordinance of 1976") and the same has now been returned to it under the provisions of the Cotton Ginning Control and Development (Repeal) Ordinance, 1977 (hereinafter referred to as "the Ordinance of 1977") . The petitioner is now aggrieved as the Cotton Trading Corporation of Pakistan (hereinafter referred to as "the Corporation") has now demanded compensation from the petitioner and is employing coercive methods for recovery of the same. The only exception in this respect is petition No. D‑446 of 1977 wherein the petitioner has been aggrieved by acquisition of its oil extraction plant by‑ the Federal Government.

2. The facts may be summarised as follows:‑‑

3. Constitutional Petition No. D‑446 of 1977.

4. The Ordinance of 1976 came into force on 17th July, 1976 which empowered the Federal Government to acquire by an order published in A the Official Gazette the ownership and the management of any company, firm,' concern, institution or enterprise the whole or any part of the undertaking of which pertained to the cotton ginning industry including the business related to any such industry, as also any office, shop, building, factory, godown, yard, stocks, stores, vehicles, and assets, if any, found so related. The case of Haji Dossa Limited, the petitioner, herein is, that; in exercise of powers conferred on the Federal Government under section 5 of the Ordinance of 1976, the cotton ginning and pressing factory of the petitioner was included in the establishments taken over by the Federal Government. The Federal Government then acquired possession and control of the said factory of the petitioner which was situated on Plot No. A/12/B, S.I.T.E. Hyderabad. Two months later, the oil extraction plant of the petitioner which was situated on the adjacent plot bearing No. A/12/A was also sealed and taken over by the Federal Government without issuing any clarification in that respect. According to the averments made by the petitioner, the oil extraction plant was not related in any manner to the cotton ginning industry of the petitioner as it was situated on a separate plot and was established through a separate loan. Furthermore, the oil extraction plant of the petitioner was using rapeseed cake as its raw material. After the take over of its oil extraction plant, the petitioner made several representations to the Federal Government but without any success. Under such circumstances, the petitioner was compelled to file the instant petition.

5. Constitutional Petition No. D‑867 of 1978.

6. According to the averments made in this petition, also filed by Haji Dossa Limited, the Ordinance of 1977 came into force on 12th September, 1977. Section 3 thereof provided for delivery of possession of such establishments to their previous managements, the ownership and management of which had been acquired by the Federal Government under the Ordinance of 1976. As a result thereof the cotton going factories of the petitioner together with the oil extraction plant were returned to the petitioner on 3‑10‑1977. Thereafter, the petitioner received a letter, dated 22‑5‑1978, from the 'Corporation, requiring it to pay a sum of Rs.17,67,064 to the Corporation within thirty days of the receipt of such letter. Such demand according to the petitioner, was based on unilateral computation carried out by the Corporation of the ‑ Present Value of all the cotton ginning factories as well as the oil extraction plant of the petitioner. According to such computation, an amount of Rs.19,71,504 had become payable to the Corporation and after adjusting an amount of Rs.2,04,440 already recovered by the Corporation from the bank guarantee provided by the petitioner, the balance amount payable by the petitioner was computed at Rs.17,67,064. The computation details given by the Corporation disclosed that a sum of Rs.20,15,893 had been arrived at a recoverable in respect of the oil extraction plant of the petitioner.

7. Constitutional Petition No. D‑1205 of 1980.

8. In this third petition filed by Haji Dossa Limited, the case of the petitioner is, that at the time of filing of Constitutional Petition No. D‑867 of 1978, the petitioner also filed an application for stay which was dismissed by this Court. The petitioner then filed Civil Petition for Leave to Appeal (No. K‑35 of 1978) before the Supreme Court which was converted into civil appeal and an order was passed by the Supreme Court which was to the effect that the Corporation would offer an opportunity of hearing and associate the petitioner in the inquiry to be conducted by the Corporation for ascertaining the petitioner's liability. 'The Supreme Court, according to the petitioner, further directed the Corporation not to implement its demand against the petitioner till such liability of the petitioner was ascertained. However, according to the petitioner, despite such directions, the petitioner was not properly associated in the investigation made by the Corporation for the purpose. Thereafter, the petitioner received a letter, dated 21‑2‑1980, from the Corporation, claiming a sum of Rs.9,89,979 and demanding its payment within thirty days. However, the claim of the Corporation was ultimately reduced as adjustments were made in respect of two amounts of Rs.35,089 and Rs.51,983, respectively. Thereafter, notice, dated 9‑3‑1980 was received from the Corporation. The petitioner disputed its liability once again to pay the amount claimed by the Corporation, nevertheless it was served with another notice for recovery of the amount as arrears of land revenue.

9. Constitutional Petition No. D‑723 of 1979:

10. According to the petitioner, Hafiz Cotton Ginning and Pressing Factory, Tando Allah Yar, it had received two notices, dated 29‑12‑1977 and 18‑4‑1978 respectively from the Corporation for recovery of Rs.3,65,006 and Rs.4,57,004, respectively. The petitioner disputed its liability to make such payments and represented to the Assistant Martial Law Administrator and the Chief Martial Law Administrator in that behalf, but to no avail. The petitioner then received a notice, dated 29‑12‑1977, showing an amount of Rs.3,65,006 as payable by the petitioner to the Corporation. Again on 18‑4‑1978 the petitioner was served with another notice calling upon it to pay Rs.4,57,004 to the Corporation. The petitioner disputed its liability to pay the said amounts. Finally the District Manager of the Corporation sent an intimation to the petitioner on 6‑7‑1978 wherein further details in respect of the Corporation's claim were disclosed, showing a sum of Rs.2,57,004 as payable to the Corporation. Thereafter, the petitioner once again made reference to the Chief Martial Law Administrator and President of Pakistan in respect of the said demand and was later intimated that its representations had been forwarded to the Ministry of Industries (Agrarian Management Cell). Thereafter, the petitioner received notice from the Corporation for recovery of Rs.2,57,004 as arrears of land revenue.

11. Constitutional Petition No. D‑911 of 1980:

12. The case of Messrs Digri Cotton Ginning and Pressing Factory Limited, the petitioners in this petition is, that they received a notice, dated 13‑4‑1978, from the Corporation for payment of an amount of Rs.83,142,41. The petitioners disputed their claim vide their letter, dated 25th July, 1978 and then sent appeal to the Federal Government, purporting to be under the provisions of section 3(6) of the Ordinance of 1977. The petitioners thereafter received a reply, dated 26th September, 1978 informing them about the rejection of their appeal by the Government. The case of the petitioner is, that no opportunity of hearing was afforded to them before rejection of their appeal. However, the petitioners finally, received a notice of recovery of an amount of Rs.61,61,141 as arrears of land revenue.

13. Constitutional Petition No. D‑1021 of 1980:

14. The case of the petitioner, Mansukhdas Bodharam, in Constitutional Petition No. D‑1021 of 1980 is, that after return of its cotton ginning factory after promulgation of the Ordinance of 1977, the petitioner received a notice from the Corporation showing a sum to Rs.2,48,943 as recoverable from it. Thereafter, the petitioner, in order to fore‑close the dispute, forwarded a cheque in the amount of Rs.48,268 to the Corporation which was not accepted. The petitioner made representation under section 3(6) of the Ordinance of 1977 to the Federal Government. after which the petitioner received a letter, dated 1‑8‑1979 from the Corporation intimating it that the representation of the petitioner had been considered and accepted by the Federal Government but only to the extent of Rs.50,06,260. The petitioner thereafter received another notice from the Recovery Officer of the Corporation for payment of an amount of Rs.2,04,695 which compelled the petitioner to file a Civil Suit No. 102 of 1979 for declaration and injunction against the Corporation in the Court of Civil Judge, Nawabshah. In spite of the Civil Suit, the Corporation through its Recovery Officer at Nawabshah, attached two hundred bales of ginned Cotton, valued at Rs.4,00,000 belonging to the petitioner. The Corporation also filed an application under Order VII, rule 11, C.P.C. before the civil Court for rejection of the plaint, in the suit which was allowed. After rejection of the plaint, the petitioner filed appeal before the District Court, Nawabshah, which ordered maintenance of status quo in the case but the petitioner appreheneded dismissal of his appeal as according to it such appeal was not maintainable under the Ordinance of 1977. The petitioner also felt aggrieved about the manner in which its representations to the Federal Government had been disposed of by the latter as no opportunity of hearing has been provided to the petitioner which according to it was in gross violation of the principles of natural justice.

15. Constitutional Petition No. D‑1298 of 1980:

16. According to the averments made by Rais Cotton Factory, the said petitioner received a demand for payment of Rs.32,061 from the Corporation which figure, according to the petitioner, was arrived at by the Corporation after adjustment of an amount of Rs.4,08,391 paid by the petitioner through a bank guarantee to the Corporation. Thereafter, the petitioner sent various letters to the Corporation intimating it that such demand was erroneous and required rectification but despite 'that the Corporation persisted in its demand.

17. We have heard Mr. Muhammad Ali Sayeed, Mrs. Rashida Patel, Mr. Muhammad Sharif, Mr. S.A. Wadood, Mr. Ismail Kassim and Mr. Mujib Pirzada on behalf of the petitioners and Mr. INansoor Ahmed Khan and Mr. Muzaffar Hussain on behalf of the Corporation and the Federal Government, respectively. Since the questions raised by them are common, these petitions are being disposed of by this common judgment,. The first contention raised on behalf of Haji Dossa Limited, the petitioner in Constitutional Petition No. D‑446 of 1977 and Constitutional Petition No. D‑867 of 1978, was, that the acquisition by the Federal Government of the oil extraction plant of the petitioner was without lawful authority as the same was in no manner related to the cotton ginning industry of the petitioner. Although it was very frankly conceded by Mr. Muhammad Ali Sayeed, the petitioner's learned counsel, that after promulgation of the Ordinance of 1977 and return of the oil extraction plant to the petitioner, C.P. No. D‑446 of 1977 has more or less become infructuous, but the contention of the learned counsel further was, that since the initial acquisition of the plant by the Federal Government was without lawful authority, all subsequent actions which proceeded from such illegal acquisition, including the demand for payment of money made by the Corporation in respect of the plant, were also without lawful authority.

18. In order to appreciate the arguments advanced by the learned counsel, reference may first be made to some of the relevant provisions of both the Ordinances.

19. The Ordinance of 1976 came into force on 17th July, 1976. According to section 3 thereof, it was declared that "the industry shall be carried on and owned by the Federal Government, or a Corporation controlled by the Federal Government, to the exclusion of all other persons except a foreign investor". The word "industry" was defined in clause (h) of section 2 to mean "the Cotton Ginning Industry composed of one or more cotton ginning factories". Section 5 of the said Ordinance empowered the Federal Government, by an order published in the Official B Gazette, to acquire the ownership and management of any establishment. The term "establishment" was defined in clause (f) of section 2 to mean "any company, firm, concern, institution or enterprise the whole or any part. of the undertaking of which pertains to the industry, and includes the business related to the industry, and any office, shop, building, factory, godown, yard, stocks, stores, vehicles and assets in any form, so related, wherever they may be". Attached to this definition was an "Explanation" according to whim, ;r was Information Federal Government to decide whether the business is related or not to the industry and the decision of the Federal Government was to be I final. Reference may also be made to certain provisions of the Ordinance of 1977 which was promulgated on 12th September, 1977 and repealed the provisions of the Cotton Ginning Control and Development Act, 1976 (which had earlier 'replaced the Ordinance of 1976). Subsection (1) of section 3 of the Ordinance of 1977 provides for delivery of possession to the previous managements of establishment relating to cotton ginning business the ownership and management of which had been acquired by the Federal Government under the Ordinance of 1976. The proviso to subsection (1) of section 3 provides that "in any case in which any amount is recoverable by the Corporation from the previous C owner of the establishment under subsection (3) or subsection (4) of section 6, the Corporation may not so deliver possession of the establishment until such amount has peen recovered". Section 6 of the Ordinance then refers to the determination of the claims and liabilities of the Corporation towards the previous owner of the establishments and is couched in the following terms:

20. "6. Compensation.‑‑ (1) The Corporation shall pay compensation I in respect of an establishment at the rate of eleven per cent per annum of the amount determined as payable in accordance with paragraphs 1 and 2 of the Schedule to the repealed Act, for the period the ownership and management of the establishment remained with the Corporation.

(2) In a case is which the Net Worth Value is higher than the Present Value, the Corporation shall pay the difference between the Net Worth Value and the Present Value of the assets and liabilities transferred to the previous owners, both such difference and the Present Value to be determined by the Corporation.

(3) Where the Present Value is higher than the Net Worth Value, the Corporation may recover from the previous owners, in accordance with the provisions of section 7 or in any other manner it may deem fit, the amount representing the difference between the Net Worth Value and the Present Value.

(4) Where a previous owner has received payment of compensation assessed in accordance with paragraphs 1 and 2 of the Schedule to the repealed Act, such compensation shall be recovered from him in the same manner as is provided in subsection (3):

21. Provided that any interest which has accrued on any compensation bonds given to such previous owner shall not be withheld or, as the case may be recovered and shall be deemed to be the compensation payable under subsection (1)."

22. Reference may also be made to "present Value" anal "Net Worth Value"; the two terms which have been defined in the Ordinance of 1977 and 1976, respectively as under:

23. "(a) Present Value" means the Net Worth Value out of which shall be deducted the value of any fixed or Tangible Assets and Current Assets as shown in the Balance‑Sheet which are not handed over and to which shall be added (i) the value of the Fixed Tangible Assets and Current Assets which do not appeal in the Balance‑Sheet but the possession of which is handed over at cost and (ii) the decrease in the outstanding liabilities as shown in the Balance‑Sheet, out of which shall be deducted the value of any new liabilities handed over:"

24. (See section 2(a) of the Ordinance of 1977).

25. "(c) Net Worth Value" shall mean the value of the proprietary, interests of a company or other person in an establishment which are acquired under this Ordinance, as determined by the auditors appointed by the Federal Government, on the basis of the Balance‑Sheet of such establishment, drawn up as on the date of acquisition, to be prepared and verified by such auditors. The Net Worth Value shall be determined by valuing the Fixed Tangible Assets appearing in the Balance‑Sheet at their written down values, and valuing the Current Assets, e.g. stores inventory, work in progress, advances and Pre‑payments, cash and bank balances, at their cost or market value, whichever is lower. From the sum total of the Fixed and the Current Assets so valued as aforesaid, all the outstanding liabilities appearing in the Balance‑Sheet shall be deducted, thereby arriving at the Net Worth Value of the proprietary interests in such establishment."

26. (See clause 3(c) in the Schedule to the Ordinance of 1976).

27. Section 7 of the Ordinance of 1977 then refers to the recovery of any amount found due to the Corporation from any debtor of the Corporation and provides:

28. "Debtor.‑‑ (1) The Corporation may, by notice in writing, call upon a debtor to pay to the Corporation the amount of money due from him to the Corporation within a period of thirty days commencing from the date of receipt of such notice by the debtor.

(2) Where the debtor fails to pay the amount due from him within the period specified in the notice under subsection (1) the Corporation shall have the same power of effecting recovery as the Industrial Development Bank of Pakistan has under sections 39, 40 and 41 of the Industrial Development Bank of Pakistan Ordinance, 1961 (XXXI of 1961) ."

29. Subsection (6) of section 3, which pertains to settlement of dispute arising between the Corporation and the previous managements, is the next relevant provision and it provides as follows:‑

30. "(6) In the case of any dispute between the previous management of an establishment and the Corporation regarding the Assets or liabilitites of the establishment, the matter shall be referred to the Federal Government whose decision shall be final."

31. The argument of the learned counsel for the petitioner, Haji Dossa Limited, has been, that since the term "establishment" refers only to the Cotton Ginning Industry or the business related to such industry, the oil extraction plant of the petitioner not being related to such industry could not have been acquired by the Federal Government under the provisions of the Ordinance of 1976.

32. According to the case of the petitioner in Petition No. D‑446 of 1977, the petitioner was granted two separate leases by the Sind Industrial Trading Estate, Hyderabad in respect of the plots which were numbered as A/12/A and A/12/B, respectively. Both the plots were earmarked separately as industrial land for cotton ginning and pressing factory and vegetable oil extraction and oil refining plant, respectively. It, has been further averred, that both the plots were separated by a wall which was constructed prior to the said take over by the Federal Government. The independence of the two enterprises was further emphasised by the evidence of their having been established through separate loans sanctioned by the financial agencies. Besides that, the oil extraction plant of the petitioner was mainly using rape seed cake as its raw‑material.

33. These contentions of the petitioner have gone unrebutted as no counter‑affidavit has been filed by the respondents in Civil Petition No. D‑446 of 1977 or Civil Petition ' No. D‑867 of 1978. The respondents have filed counter‑affidavit only in Civil Petition No. D‑1205 of 1980 wherein the averments referred to above were not met by the respondents with any specific plea of denial. The only plea taken by the Corporation was, that in its opinion, the oil extraction plant and other subordinate or ancillary plants of the petitioner were necessary and essential parts of its larger cotton ginning establishment. Thus, the factual position stated by the petitioner, more or less, was admitted.

34. Although the "Explanation" at the foot of the definition of the term "establishment" in the Ordinance of 1976 invests the Federal Government with very wide powers to decide whether any business is related or not to the cotton ginning industry and any decision taken by the Federal Government in that behalf would be final, but, one cannot at the same time overlook the fact that such a decision should be based on cogent reasons. It hardly needs to be emphasized that when the legislature concedes wide discretion to any person, or authority, then the same has to be exercised reasonably and strickly in accordance with the spirit of the statute under which it is exercised. It is manifest from the above‑referred provisions of the Ordinance of 1976 that the Federal Government could not have acquired the oil extraction plant of the petitioner while purporting to exercise powers under the said Ordinance as under the provisions of the said Ordinance, the Federal Government was empowered to acquire only such establishments which pertained to the cotton ginning industry or business related to such industry. The word "business related to the industry" occurring in the definition of the term "establishment" in the Ordinance of 1976 no doubt, have a wide import, but in no case they could empower the Federal Government to acquire the oil extraction plant of the petitioner as business related to the cotton ginning industry.

35. Reference in this respect may also be made to Muhammad Aslan Bodla and 5 others v. Government of Pakistan and another PLD 197 Lah. 323, on which the counsel for the petitioner has very heavily relied. In that case, the oil mills of the petitioner were acquired b5 the Federal Government together with its cotton ginning factory under the provisions of the said Ordinance. Such action of the Government was challenged before the Lahore High Court and it was held by Single Judge of that Court:‑‑

36. "On a bare reading of these provisions it will be clear that the Ordinance or the Act did not contemplate affecting any factor separate from the Cotton Ginning Industrial which as stated above, must be composed of only ginning factories. A distinction should also be made between the words "business" and "factory".

37. The Government can take over only the industry comprised of Cotton Ginning Factories thereby or any business connected with it, but certainly it cannot take over any other factory which is not a Cotton Ginning Factory under the guise of its being a related business. The word 'Industry' has been defined as 'Industry' meaning thereby Cotton Ginning Factories. The extension of the scope of Industry to business related to it does not envisage inclusion 'within the definition of any other factory which different from the Cotton Ginning Factory. The business of that can be taken over, is a business of or related to cotton industry and not any other business. Shorn of the details the definition of establishment covers two things; firstly the industrial undertaking of Cotton Ginning Factories, and secondly business related to these factories. The terms 'business' is not used in the sense of a 'factory'. It is used only in the sense of commercial activity related to the factories of a particular type or category i.e. Cotton Ginning Factories. It cannot be extended to cover any other category of factories e.g. the Oil Mills. "

38. This judgment of the Lahore High Court was further challenged in appeal before a Division Bench of the same Court and the view taken by the Single Judge was reaffirmed. See P L D 1978 Lah. 516.

39. Since the view taken by us on the point is not different, we fully agree with the contentions raised on behalf of the petitioner, that the acquisition of their oil extraction plant by the Federal Government was illegal, without lawful authority and an action which was void ab initio.

40. A corollary of this would be that all subsequent actions of the respondents, proceeding from such taken over would also be without lawful authority since the same were based upon something which .was illegal and void ab initio and of no legal effect. It will not be out of place to quote the following passage from Yousuf Ali v. Muhammad Aslam and two others P L D 1958 S C (Pak) 104, cited by Mr. Muhammad Ali Sayeed, the learned counsel for the petitioner, Haji Dossa Limited:‑

41. "And if on the basis of a void order subsequent orders have been passed either by the same authority or by other authorities, the whole series of such orders, together with the superstructure of rights and obligations built upon them, must, unless some statute or principle of law recognizing as legal the changed position, of the parties is in operation, fall to the ground because such orders have as little legal foundation as the void order on which they are founded. On this view the orders made by the Rehabilitation Board and the Central Government refusing to eject the respondents which were based on that part of the Deputy Custodian's order which we have held to be in excess of his jurisdiction were void and not final within the meaning of section 13‑B of the Rehabilitation Ordinance, and it was the Rehabilitation Commissioner's order directing ejectment of the respondents that became final in law."

42. We are, therefore, clearly of the view that any demand made by the Corporation for payment of money which proceeds from the take over G of the oil extraction plant of the petitioner, Haji Dossa Limited is without lawful authority.

43. The next contention raised on behalf of the petitioners has been, that even the demands made .by the Corporation which are for payment of money found due on account of the take over of the establishments related to the cotton ginning business of the petitioners, are without lawful authority. The contention is based on the following grounds. Firstly, it has been argued that only established dues could be recovered as arrears of land revenue and since the claim made by the Corporation was a disputed claim, the same could not be recovered as arrears of land revenue. The second contention was that the Corporation was not itself empowered under subsection (3) of section 6 to determine the difference between the Net Worth Value and the Present Value, therefore, any amount so determined was without lawful authority and as such no further action could be taken by the Corporation for its recovery from the petitioners. It was next contended that the determination of the petitioner's dues by the Corporation, without associating them with any enquiry held by the Corporation for that purpose was opposed to the principles of natural justice and was illegal. The next argument was, that under subsection (6) of section 3 of the Ordinance of 1977, in all such cases where the claim made by the Corporation was disputed by the previous managements, the same had to be referred to the Federal Government for its decision and until the matter was referred for such decision to the Federal Government and finally determined thereby, the Corporation was not entitled to make recovery of any dues from the petitioners. Lastly, it was argued that even in those cases where the matter had been referred to the Federal Government, for its decision under subsection (6) of section 3, but such decision was given without giving an opportunity of hearing to the petitioners the same was without lawful authority.

44. As against this, the argument of. Mr. Mansoor Ahmed Khan and Mr. Muzzafar Hassan, the learned counsel for the Corporation and the Federal Government respectively was that both the said respondents had been vested with certain powers under the Ordinance of 1977 and merely because some irregularities have been alleged to be committed in the exercise of such powers by the said respondents, the same would not attract the writ jurisdiction of this Court. The learned counsel also pointed out that some of the petitioners have failed to refer their dispute to the Federal Government under the provisions of subsection (6) of section 3 of the Ordinance of 1977 as such they have failed to avail of an adequate remedy provided by the said Ordinance. Mr. Muzzafar Hassan has also referred to the Agrarian Establishments (Compensation) Rules, 1978 and has further contended that the petitioners have failed to act in accordance with rule 4 of the said rules, therefore, the instant petitions are not maintainable.

45. We would first refer to the contentions raised on behalf of the petitioners .

46. As to the proposition, that only established dues are recoverable as arrears of land revenue, there can hardly be any cavil against the H same. Reference in this respect may be made to the cases of Zakaria Rawanv v City Deputy Collector. Karachi and 2 others P L D 1975 Kar. 1008, Province of West Pakistan v. Muhammad Ayub Khuhro PLD 1967 Kar. 673, State Bank of Pakistan v. Karachi Development Authority P L D 1967 Kar. 216 and Abdul Latif v. the Government of West Pakistan and others P L D 1962 S C 384. In Zakaria A. Bawany v. City Deputy Collector Karachi and 2 others, earlier decided by a Division Bench of this Court, the Investment Corporation of Pakistan had sought to recover a sum of money from one Zakaria A. Bawany, the plaintiff, through the District Collector, as arrears of land revenue. A question was raised that the amount claimed was not recoverable as such as the same had not been determined or established. This Court came to a conclusion that only such dues can be recovered as arrears of land revenue which have been determined, established or admitted. In the next case reported as Province of West Pakistan v. Muhammad Ayub Khuhro, a certain sum of money being arrears of rent of a house in occupation of the defendant was sought to be recovered as arrears of land revenue as "ascertained dues payable to the Government and on behalf of .the Government". In that case also similar views were expressed. In State Bank of Pakistan v. Karachi Development Authority, also decided by this Court, the question was whether the Karachi Development Authority could recover an amount under section 147‑A of the Karachi Development Authority Order, 1957 which provided that all sums due to the authority shall be recoverable as land revenue. The view held by the Division Bench was that the said provisions, only provided for a method of recovery and that the section presumed that the amount sought, to be recovered by that method had been found to be due and, therefore, the Karachi Development Authority had first to get its claim duly adjudicated so that it could assume the form of dues. In Abdul Latif v. The Government of West Pakistan and others, it was observed by the Supreme Court that the land revenue Act first provides a procedure for determination of land revenue and then comes the machinery for realisation of the revenue. The Supreme Court was, therefore, of the view that before the operation of the machinery section for realisation of the arrears, the authority concerned must decide whether there is an arrear due or not.

47. Reverting to the instant case, it is manifest from the provisions contained in section 7 of the Ordinance of 1977 that the Corporation is empowered to call upon a debtor, by notice in writing, to pay to the Corporation the amount of money due from him to the Corporation within a period of thirty days commencing from the date of receipt o1 such notice by the debtor. When the debtor fails to pay such amount within the period specified in the notice, the Corporation is then empowered to effect recovery of such dues as arrears of land revenue. A question, therefore, arises as to when an amount becomes due to the Corporation for the purpose of its recovery from the debtor as arrears of land revenue? Reference in this respect may first be made to subsection (3) of section 6 of the Ordinance of 1977, where it is provided, that the Present Value is higher than the Net Worth Value the Corporation may recover from the previous owners in accordance with the provision: of section 7 or in any other manner it may deem fit, the amount representing the difference between the Net Worth Value and the Present Value. This subsection seems to be empowering the Corporation, in the first instance to determine the difference between the Present Value and the Net Worth Value. Although the petitioners have disputed the very existence of such power in the Corporation under subsection (3; of section 6, but this question we propose to discuss hereafter. Suffice it to say for the present, that the Corporation is empowered to determine its dues in the first instance. If the dues so determined by the Corporation are disputed by the previous managementsthen according to subsection (6) of section 3, such dispute is to be referred to the Federal Government for its decision which shall be final. These two provisions make it clear that in case, a claim made by the Corporation is disputed by the previous owners, then only such a claim shall be 1 deemed to be an established claim, which has been determined by the Federal Government under the provisions of subsection (6) of section 3. Therefore, unless such a claim is finally determined by the Federal Government, the same cannot be recovered by the Corporation as arrears of land revenue.

48. We may now advert to the next contention raised on behalf of the petitioners. The contention is, that the Corporation does not possess any authority to itself determine the difference between the Present Value and the Net Worth Value. Reference in this respect has been made to the language used by the Legislature in subsections (2) and (3) of section 6 of the Ordinance of 1977. It has been pointed out that while in subsection (2) it has been expressly provided that the Corporation can determine the difference between the Net Worth Value and the Present Value, of the assets and liabilities transferred to the previous owners, no such express provision has been made in subsection (3) of section 6. It has been further argued that the intention of the Legislature can be gathered from the different language, it has used in the two subsections.

49. It is true that the words "to be determined by the Corporation" which appear in subsection (2) of section 6 do not appear in subsection (3) thereof, but a perusal of section 6 of the said Ordinance, however, shows that the Corporation is obliged to pay compensation to the previous owners in respect of those establishments where the Net Worth Value is found to be higher than the Present Value. But where the latter is found to be higher than the former, the Corporation has been empowered to recover the difference from the previous owners. It appears on J plain reading of these subsections that no proper effect, in fact, can be given to the provisions of section 6 of the said Ordinance unless the Present Value or the difference between the Present Value and the Net Worth Value is first determined by the Corporation. The question whether the case falls within the purview of subsection (2) or subsection (3) of section 6 cannot be determined unless the Present Value or the Net Worth Value is first determined by the Corporation. Reference in this respect may also be made to the observations made by our learned brother Saeeduzzaman Siddiqui, J., in Hap Muhammad Aslam Aijaz Ali Bros. v. Cotton Trading Corporation of Pakistan Ltd., and others 1985 C L C 848 where also, similar point had been raised:‑

50. "It is also noteworthy that it is only when the 'Present Value' is determined then it can be said whether the case falls under subsection (2) or subsection (3) of section 6 of the Ordinance. 1, therefore, see no substance in the submission of learned counsel for the plaintiff that the Defendant No. 1 could not, determine the Present Value and the difference between the "Net Worth Value" and the Present Value if the case fell under subsection (3) of section 6 (ibid), while it could do so if the case is covered under subsection (2) of the said section."

51. (See page 854 of the report.)

52. It is, therefore, manifest that the argument advanced by the counsel is devoid of force and the Corporation is vested with powers to determine such dues even under subsection (3) of section 6. 1

53. The next contention of the learned counsel was, that the Corporation had no power to determine its dues without, first hearing the petitioners. Elucidating the point further, it was pointed out that, since the Corporation is vested with powers to decide upon the rights and interests of the parties concerned, no one‑sided decision could be taken by the Corporation without effective participation of the petitioners.

54. The plea taken by the petitioners has not been denied by the Corporation by filing any counter‑affidavit except for Constitutional Petition No. D‑1205 of 1980. The petitioner in that case, according to the Corporation, was fully associated in the inquiry held by the Corporation for determination of the amount payable by the petitioner. The point raised on behalf of the petitioners, although, has not been disputed by the learned counsel for the Corporation, but his contention has been, that all disputes of whatever nature in respect of the assets or liabilities of the concerned establishment are to be referred under section 3(6) of the Ordinance of 1977 to the Federal Government for its decision and only such decision would be final.

55. Since, admittedly, in all other cases, bearing Constitutional Petition No. D‑1205 of 1980, the Corporation has determined the liabilities of the petitioners without giving notice to them or associating them in some manner with the inquiry held for the purpose, we are of the view that the procedure adopted by the Corporation in this respect has been clearly opposed .to law. Although, we are conscious of the fact that the Corporation was not acting in such matters as judicial or quasi‑judicial authority, but since the Corporation was determining the rights and liablitites of the petitioners, it could not have proceeded against the petitioners in an arbitrary manner without giving them notice or providing them with opportunity of being heard. The term "determine" has some significance. According to Ballentine's Law Dictionary, 3rd edition, at page 344 "determine" means "to determine; to cease; to end". To put an end to controversy by deciding the issue or issues by making a settlement, or by adjustment. Field v. Auditor 83 Va. 882, 887. Same as "hear and determine" when used by a statute with reference to Court action but meaning merely "ascertain" where used in matters not pertaining to judicial process." The word "determine" has also been defined in the Concise Oxford Dictionary, and Stroud's Judicial Dictionary respectively as under:

56. "Determine. ‑‑‑Settle, decide (dispute, person's fate, what it to be done that whether etc.) come to a conclusion give decision; be the decisive factor in regard to (demand determines supply) ascertain precisely fix (arch) direct, impel to,

2. Decide (person) to do; resolve to, 3. (esp law) bring or come to an end, 4. limit in scope; define; fix (date) before hand,

5. Hence determine BLE a. (ME).

57. "(10)‑‑A statutory power to a Government Department to determine question does not enable it to legislate or make it an autocrate free to act as it pleases; it must exercise, and act with direction, and if that be not done in a bona fide manner the King's Bench can and will interfere."

58. Reference in this respect may also be made once again to the judgment in Haji Muhammad Aslam Aijaz Ali and Bros., just referred to by us wherein at page 854 of the report, while examining the import of the word "determine", it has been observed;

59. "I, therefore, find no difficulty in holding that the defendant No. 1 could not determine the present value of the assets and liabilities of the factory and the difference between the present value and net worth value without notice and without affording the plaintiff, an opportunity of hearing."

60. The next argument advanced on behalf of the petitioners refers to subsection (6) of section 3 of the Ordinance of 1977. It was contended that when the claim of the Corporation had been disputed by the petitioners, no recovery could be made on the basis of such claim unless the matter was first referred to the Federal Government for its decision.

61. The question raised has in fact been already answered by us in the affirmative. The contention simpliciter, has not even been opposed by the learned counsel for the respondents but their contention has been that since the petitioners had themselves failed to refer the matter to the Federal Government, by which an adequate remedy could be provided under the law, they cannot be permitted to agitate these questions now before this Court. Mr.. Muzzafar Hussain, the learned counsel for the Government has also raised the following objection. His objection has been that according to rule 4 of the Agrarian Establishments (Compensation) Rules, 1978 "a share‑holder, owner or partner of an establishment, who has not accepted or received payment of the difference as determined by the Corporation may, within fifteen days of the date on which the difference in respect of his establishment is intimated to him by the Corporation apply to the Federal Government or make a representation to the Corporation for enhancement or modification of the difference." The argument of the learned counsel, therefore, was, that firstly the previous managements should themselves have approached the Federal Government under subsection (6) of section 3 of the said Ordinance and secondly, that the same should have been done within fifteen days of the date when intimation in respect of the dues had been received by them from the Corporation.

62. The first contention raised by the learned counsel can hardly be disputed as the Legislature clearly provides for a remedy under subsection (6) of section 3 of the Ordinance of 1977, in case the dues determined by the Corporation are disputed by the previous owners. Such a remedy, in our opinion appears to be adequate as the Federal Government can determine the respective claims of the parties. Therefore, we agree with the contention that before approaching this Court the aggrieved party should have first referred the dispute for determination of the Federal Government.

63. Next, coming to the argument advanced by Mr. Muzzafar Hussain, as subsection (6) of section 3 itself fails to provide as to which of the parties to the dispute may refer such dispute to the Federal Government, it can reasonably be assumed that any of the parties to the dispute is competent to refer the same to the Federal Government. Although rule 4 of the Agrarian Establishments Rules, referred to by, Mr. Muzzafar Hassan, provides that a share‑holder, owner or partner of an establishment who has not accepted or received payment of the difference as determined by the Corporation may himself within fifteen days of the date on which such difference is intimated to him by the Corporation has to apply to the Federal Government but it is noteworthy that no reference to subsection (6) of section 3 has been made in this rule. It is also noteworthy that the said subsection neither provides for a period of limitation within which a dispute must be referred to the Federal Government for its decision nor does it make any reference to a party which is obliged to refer such dispute to the Federal Government.. If the intention of the legislature was to further provide for procedure in regard to any matter which may be referred to the Federal Government under subsection (6) of section 3 of the Ordinance of 1977, then we are certain, the Legislature would have expressed itself in clear terms. Rule 4 referred to by Mr. Muzzafar Hassan, in no way, points out that it refers to subsection (6) of section 3.

64. We, therefore, cannot agree with Mr. Muzzafar Hassan that the provisions of subsection (6) of section 3 of the Ordinance of 1977 are further governed by the Agrarian Establishments (Compensation) Rules, 1978.

65. The last contention raised on behalf of the petitioners has been that any decision given by the Federal Government without notice to the petitioners or without affording them opportunity of being heard would be illegal and any dues determined by the Federal Government by adopting such procedure would be without lawful authority.

66. We have already pointed out that where rights of parties are to be determined, the same cannot be done without hearing the affected party and such a procedure if adopted, would certainly be against the principles of natural justice. Although, we hardly expect the Federal Government, while determining any such rights to act as judicial authority, stricto sensu, but still it cannot be absolved of its obligation to provide a right of hearing to the affected party. In this respect, it would not be out of place to quote from Khawaj Din v. Rationing Controller Food, Faisalabad and 2 others P L D 1980 Lah. 15 .where reference to the observations made in Royal Aquarium and Summer and Winter Garden Socy. v. Parkinson (1892) 1 QB 431 has been made as follows;---

67. "The word 'judicial' has two meanings. It may refer to the discharge of duties exercisable by a Judge or Justices in Court,' or to administrative duties which need not be performed in Court, but in respect of which it is necessary to bring to bear a judicial mind, that is, a mind to determine what is fair and just in respect of the matters under consideration."

68. We, therefore, agree with the contention raised by the petitioners' counsel that there can be no valid decision under subsection (6) of section 3 of the Ordinance of 1977 by the Federal Government without first providing an opportunity of hearing to the previous owners.

69. Reverting to the facts of Constitutional Petition No. D‑446 of 1977, since the oil extraction plant of the petitioner admittedly, after promulgation of the Ordinance of 1977, has been returned to it, we think the petition has now becoming infructuous. It was even conceded as such by Mr. Muhammad Ali Sayeed, the petitioner's counsel. The said petition is, therefore, dismissed. But so far Constitutional Petition No. D‑867 of 1978 is concerned, since the oil extraction plant, of the petitioner was acquired by the Federal Government in excess of authority vesting in it under the provisions of the Ordinance of 1976, we find that the claim of dues made by the Corporation in respect of the plant was also without lawful authority since the same proceeded from the take over of the said plant, and action which was illegal and void ab initio. We, therefore, allow Constitutional Petition No. D‑867 of 1978. It may, however, be clarified that the same is allowed only to the extent as indicated above. As far as Constitutional Petition No. D‑1205 of 1980 is concerned, we find that after the petitioner received al revised demand notice from the Corporation, after filing of Constitutional Petition No. D‑867 of 1980, the petitioner failed to refer the matter to the Federal Government under the provisions of subsection (6) of section 3 of the Ordinance of 1977, but instead it filed Constitutional Petition No. D‑1205 of 1980 before this Court. This petition according to us is not maintainable as the petitioner clearly had an efficacious remedy before the Federal Government which it failed to avail. Constitutional Petition No. D‑723 of 1979 is also not maintainable since after disputing their liability to pay the Corporation's demand the petitioners failed to properly refer the matter to the Federal Government under the provisions of subsection (6) of section 3 of the said Ordinance. Although according to the petitioners they had made representations to the Chief Martial Law Administrator and the President of Pakistan which were forwarded to the Federal Government but such representations cannot be equated with reference under section 3(6) of the said Ordinance. Since there was an alternative remedy available to the petitioner which they have failed to avail of, this petition is, therefore, dismissed. Coming next to Constitutional Petition No. D‑911 of 1980, it appears that the petitioner did refer the dispute in regard to the dues claimed by the Corporation for decision of the Federal Government, but the representation of the petitioner was rejected by the Federal Government without either hearing the petitioner or assigning any cogent reasons, therefor. However, according to the averments made by the petitioner himself in para. No. 21 of the petition, the petitioners before filing this petition also filed Suit No. 157 of 1979 in this Court which is still pending disposal. Although a copy of the plaint has not been filed but according to the averments made by Mr. Rana Muneer Ahmed, the Manager of the Corporation in counter‑affidavit, the suit has been filed in respect of the same cause of action. Such averments have not been denied by the petitioner by filing any affidavit in rejoinder. In view of this, since a suit in respect of the same cause of action is already pending in this Court, we would be too reluctant to entertain this petition. If any authorities are needed in this respect, then reference be made to following: Muhammad Idrish v. East Pakistan Timber Merchants Group P L D 1968 S C 412, Dr. M.O. Chani v. Dr. A.N.M. Mahmood and another P L D 1966 S C 802 and Tanbir Ahmed Siddiky v. Province of East Pakistan P L D 1968 S C 185. Constitutional Petition No. D‑911 of 1980 is, therefore, dismissed. The position in regard to Constitutional Petition No. D‑1021 of 1981 also appears to be similar as according to the averments made by the petitioner itself, a Suit No. 120 of 1979 was filed by the petitioner in respect of the same cause of action before y the Civil Judge, Nawabshah. In that suit according to the petitioner, an application was made by the Corporation under Order VII rule 11 C.P.C. which was accepted by the learned Civil Judge, and the plaint filed by the petitioner was rejected. Against that, the petitioner has filed appeal which is now pending before the learned District Judge, Nawabshah and status quo has been ordered to be maintained by the parties. Since the petitioner has already chosen a remedy by filing a suit, an appeal against which is still pending, we would also dismiss this petition for the same reasons as given by us in Constitutional Petition No. D‑911 of 1980. According to the case of the petitioner in Constitutional Petition No. D‑1298 of 1980, the petitioner, although seems to have disputed the Corporation's demand for recovery of money, but it appears that the petitioner has failed to make any representation to the Federal Government under subsection (6) of section 3 of the Ordinance of 1977. Since the petitioner did have an adequate remedy available in the form of such representation which it has failed to avail of, this petition must also fail for the same reasons. The petition is, therefore, dismissed.

70. Therefore, with the exceptions of Constitutional Petition No. D‑867 of 1978, the rest of the petitions are dismissed. The parties are, however, left to bear their own costs.

71. A . A . Order accordingly.