Ramdayal v. Custodian, Evacuee Property, Rajasthan
1956-02-03
MODI, WANCHOO
body1956
DigiLaw.ai
Wanchoo, C.J.—This is an application by Ramdayal under Art. 226 of the Constitution for a writ, direction or order to the Custodian Evacuee Property, Rajasthan, and arises in the following circumstances : 2. The applicant purchased a building in Jodhpur City on the 22nd of December, 1947, for Rs. 17,500/- and paid the money to Nisar Ali Khan and Sadiq Ali Khan, the vendors, and got possession on the same day. As Nisar Ali Khan and Sadiq Ali Khan became evacuees, an application was made on the 13th of January, 1950 for confirmation of the sale in favour of the applicant The Deputy Custodian, Jodhpur, held that the application for confirmation was time-barred, and also held that the property was, in all propability, worth Rs. 38,000/-, and certainly not less than Rs 30,000/-. Thereupon, the applicant appealed to the Custodian Rajasthan and the Custodian held in November, 1951, that the application for confirmation was within time and ordered that the case would be heard on other points on a date to be fixed latter. Before, however, the case could be heard by the Custodian on other points, there was a revision before the Custodian General of India This revision was pending when the Administration of Evacuee Property Act. No.XXXI of 1950, was amended in 1953. The Custodian General thereafter rejected the revision petition, and directed the Custodian to decide the case according to the amended law. So the Custodian heard the appeal in July, 1954, and came to the conclusion that the property was worth Rs. 25,000/-, and ordered the applicant to pay the balance namely Rs 7,500/- within two months, otherwise the petition for confirmation would stand dismissed. The applicant then went in revision to the Custodian General, and this was dismissed. Thereupon, the present application has been made to this Court. The case of the applicant is that though the Custodian acted under sub sec.(5) of sec. 49 he had no jurisdiction to pass the order which he did, as he did not take the consent of the applicant. The applicant, therefore prays for a writ in the nature of certiorari quashing the order of the Custodian. 3. The application has been opposed by the opposite parties, and their case is that the Custodians order is covered by sub-sec.(6) of sec.
The applicant, therefore prays for a writ in the nature of certiorari quashing the order of the Custodian. 3. The application has been opposed by the opposite parties, and their case is that the Custodians order is covered by sub-sec.(6) of sec. 40, and there is no reason for interference by this Court Sec. 40 of the Administration of Evacuee Property Act No.XXXI of 1950,as amended by Act No. II of 1953, lays down that no transfer made after the 14th day of August, 1947, by or on behalf of any person in any manner whatsoever of any property belonging to him shall be effective so as to confer any rights or remedies in respect of the transfer on the parties thereto or any person claiming under them or either of them if, at any time after the transfer, the transferor becomes an evacuee within the meaning of s.2 or the property of the transferor is declared or notified to be evacuee property within the meaning of the Act, unless the transfer is confirmed by the Custodian in accordance with the provisions of this Act. Sub-sec.(2) of sec. 40 provides certain exceptions. Sub-sec.(3) provides for an application for confirmation and sub-sec.(4), among other things, gives power to the Custodian to reject the application if he is of opinion that the transaction has not been entered into in good faith. Then comes sub-sec. (5) which provides that an application for confirmation, which has been rejected among other things solely on the ground that it was barred by limitation, may be reconsidered by the Custodian, and he may confirm the transfer subject to certain condi-tions. The applicant has referred to sub-sec.(5) as having been applied to the case by the Custodian. He is, however, wrong there because sub-sec. (5) does not apply to his case. It only applies to cases which have ended and not to pending cases like the applicants. Then comes sub-sec. 6). It says that if the application is not rejected under sub-sec.(4), the Custodian may confirm the transfer either unconditionally or on such terms and conditions as he may think fit to impose. The conditions mentioned in sub-sec.(5) do not apply to an order under sub-sec. (6). Then comes sub-sec.(7)which relates to applications for confirmation pending before the Custodian on the commencement of Act. No. II of 1953.
The conditions mentioned in sub-sec.(5) do not apply to an order under sub-sec. (6). Then comes sub-sec.(7)which relates to applications for confirmation pending before the Custodian on the commencement of Act. No. II of 1953. It provides that where such an application is liable to be rejected on either of the grounds specified in clauses(a) and (b) of sub-sec.(5), the Custodian can exercise any of the powers conferred on him under that sub-section. The Custodian has realty dealt with the applicants application for confirmation under sub-sec. (7) though the sub-section is not mentioned in the order. It is clear, however, that it was sub-sec. (1) which the Custodian had in mind for he quotes the words of sub-sec. (7) in the opening part of his judgment. Once sub-sec. (7) applies, the conditions of sub-sec. (5) also apply. 4. The first question, therefore, that calls for consideration is whether sub-sec. 6)applies in this case, as contended on behalf of the Custodian. It is enough to say that the scheme of sec. 40 is to deal with three kinds of applications for confirmation, namely (1) those which have ended (these are dealt in sub-sec. (5), (2) those which are pending on the date Act No. II of 1953 came into force (these are dealt with in sub-tec (7), (3) and others not covered by sub-sec. (5) or sub-sec. (7) these are dealt with sub-sec. (6). The present case is, in our opinion, obviously covered by sub-sec (7) for the application of the applicant for confirmation was pending on the date Act No. II of 1953 came into force. The Custodian was, therefore, light in applying sub-sec. (7) to this case He could not apply sub-sec. (61 when the case was covered by sub-sec. (7). 5. The next question is whether sub-sec. (7) has been properly applied to this case. Before, however, we deal with this question, we should like to point out that the Custodian was not right in saying as he did that the question of good faith did not arise in the case before him on the ground that the transaction was entered into at a time when there was no order, rule or law prohibiting or in any way restricting transfer of their properties by evacuees or intending evacuees, and it could not therefore be said that the applicant had purchased the property otherwise than bona fide.
We should like to point out that whether the Custodian deals with an application under sub-sec. (5) or under sub-sec. (7), he has still to apply the provisions of sub sec. (4) and to consider the good faith of the transaction before confirming it. This was apparently present in the mind of the Custodian when he said that no question of good faith arose in this case. We must, however, say that the Custodian was wrong in saying that no question of good faith arose in this case because there was no rule or law prohibiting or in any why restricting such transfers at the time this transfer was made. A perusal of sec. 40 shows that it is a retrospective piece of legislation and applies to all transfers made after the 14th of August, 1947, whether there was any Evacuee Property Law at the time or not. The Custodian was therefore not right in saying that no question of good faith arose in this transaction as there was no law or rule prohibiting or restricting transfers of this kind in December, 1947, when such transactions were made. We may also point out that this transaction was made when the former State of Marwar was in existence, and there was an almost similar laws there also, vide sec.5-Aof the Marwar Evacuee (Administration of Property) Act, No. XX of 1949. The custodian has therefore to consider whether the application should be rejected under sec. (4) If he comes to the conclusion that it should not be rejected under sub-sec. (4), then he has to apply sub-sec. (7) to this case. 6. So far as the application of sub-sec.(7) is concerned, it is enough to point out that the Custodian cannot ask the applicant to pay the difference (in this case Rs. 7,500/-) without securing his agreement. The Custodian can order the person applying for confirmation to pay the difference under sub-sec. (5) clause (b) (ii), and confirm the transfer if the transferee agrees to pay But if the transferee does not agree to pay, and also does not agree to the conditions provided in sub-sec. (5) clauses (b)(iii)and (iv), the Custodian has to act under sub-sec.
The Custodian can order the person applying for confirmation to pay the difference under sub-sec. (5) clause (b) (ii), and confirm the transfer if the transferee agrees to pay But if the transferee does not agree to pay, and also does not agree to the conditions provided in sub-sec. (5) clauses (b)(iii)and (iv), the Custodian has to act under sub-sec. 5(b)(v), i.e. he has to auction the property, and if the sale proceeds exceed the amount actually paid by the transferee the latter may be paid the amount paid by him and the balance be taken over, and if the sale proceeds are equivalent to, or fall short of, the amount actually paid by the transferee, the entire sale proceeds are to be paid to the transferee. We are, therefore, of opinion that the order of the Custodian cannot be maintained in view of sec. 40, sub-sec. (7). 7. We, therefore, quash the order of the Custodian dated 29th of July, 1954 and send the case back to the Custodian for considering whether the application should be rejected under the provisions sec. 40, sub-sec. (4). If he decides that it is not to be rejected under the provisions of sub-sec.(4), he should act in conformity with the provisions of sub-sec. (7) read with sub sec. (5) as indicated above. 8. As the applicant depended upon a wrong sub section of sec. 40 in his application we order parties to bear their own costs.