HUSSAIN BIBI Versus MUBARAK HUSSAIN
This matter concerns a dispute over the cancellation of a property transfer by the Settlement Authorities. The respondent, Mubarak Hussain, purchased rights to an evacuee house and paid the balance price using a verified claim (compensation book). Years later, the petitioner alleged the compensation book was forged. Without conducting a formal inquiry or providing notice to the respondent, the Deputy Settlement Commissioner cancelled the transfer and re-allotted the property to the petitioner. The High Court remanded the case for an inquiry into the authenticity of the compensation book and directed that the respondent be given an opportunity to pay the deficiency if the document was found forged. The Supreme Court upheld the High Court's order, holding that the Settlement Authorities acted prematurely by cancelling the transfer without first establishing the forgery through a proper inquiry or granting the respondent a fair opportunity to be heard. The Court affirmed that before such drastic action as cancellation, the authorities must verify the alleged forgery and allow the party to rectify the payment, provided they were not complicit in the fraud.
- Can the Settlement Authorities cancel a property transfer based on an allegation of a forged compensation book without holding a formal inquiry?
- Is a party entitled to an opportunity to make good a deficiency in the sale price of a property before the transfer is cancelled due to an invalid payment instrument?
- Does the failure to provide notice to a party regarding an alleged forgery in their payment instrument violate the principles of natural justice?
ORDER
1. MUHAMMAD YAQUM ALI, C. J.-‑ Evacuee House No. N‑487, Mohallah Ch. Waris Khan. Rawalpindi, was purchased by Mst. Hussain Bibi, at a public auction held by the Settlement Authority for a sum of Rs. 8,000. As she did not have the requisite funds, she sold her right in the house to Mubarak Hussain, respondent, on 5th April 1964. The latter, in turn, purchased a verified claim of Amir Muhammad by a deed of association on 18‑4‑1964 for adjustment of the balance of the auction price amounting to Rs. 7,223. The deed was approved by the Settlement Authorities and a P. T. D. was issued to Mubarak Hussain on 28th April 1964.
2. The petitioner who is a local in possession of the house, some 7 years later, lodged a complaint with the Settlement Authorities that the compensa tion book of Amir Muhammad, out of which the sale price of the house was paid by Mubarak Hussain, was a forged document. The Deputy Settlement Commissioner, Rawalpindi, thereupon, wrote a letter to the Deputy Settlement Commissioner, Lyallpur, on 26th October 1971, inquiring whether the compensation book No. 116578/LYP/I of Amir Muhammad Qureshi, had been issued by his Centre. The Deputy Settlement Commis sioner, Lyallpur, replied that the compensation book had not been issued by his office and appeared to be bogus. He advised that it should be kept in the safe custody to make further probe into the matter.
3. On the receipt of the reply from the Deputy Settlement Commissioner, Lyalipur, the Deputy Settlement Commissioner, Rawalpindi, issued a notice to Mubarak Hussain, that he should make good the deficiency in the sale price of the house otherwise the transfer in his name will be cancelled. Mubarak Hussain, an ex‑Hawaldar was, in the meantime, recalled by the Army. during the 1971 War with India, submitted a written application to the Deputy Settlement Commissioner, Rawalpindi, on 17‑12‑1971, to post pone the matter until he was discharged from the Army. Nevertheless the Deputy Settlement Commissioner, cancelled the transfer in favour of Mubarak Hussain. resumed the house and transferred it to the petitioner under Settlement Scheme No. VIII.
4. Mubarak Hussain filed an appeal before the Additional Settlement Commissioner and a revision before the Settlement Commissioner against the order of resumption but both were dismissed. He, thereupon, filed a writ petition in the High Court which has been allowed and the case remanded to the Settlement Authorities to hold an inquiry about the genuineness of the Compensation Book No. 116578/LYP/I and td afford an opportunity to the respondent to make good the deficiency in case the compensation book is found to be forged.
5. The petitioner seeks leave to appeal from the order of the High Court.
6. On hearing learned counsel for the petitioner we see no ground to interfere with the order passed by the High Court. No inquiry was held by the. Deputy Settlement Commissioner, Rawalpindi about the genuineness of the compensation book out of which Mubarak Hussain, respondent, had paid a sum of Rs. 7,223 as balance of the sale price of the house. No notice was given to Amir Muhammad in whose name the claim was verified nor was any such notice given to Mubarak Hussain respondent, that the com pensation book, out of which he had paid the sale price, was a fictitious document. Indeed no finding is recorded either by a Settlement Authority or by an officer of the Claims Department that the compensation book of Amir Muhammad is a forged document. It is, therefore, necessary that in the first instance an inquiry should be held and if it is found that the compensation book of Amir Muhammad is a forged document, then an opportunity be given to Mubarak Hussain to pay up the balance of the sale price unless it is found that he is in any manner associated with or a privy to the forgery.
7. In the circumstances, we see no proper ground to interfere with the order of remand passed by the High Court and dismiss the petition for special leave to appeal.
8. Petition dismissed.