Lakhraj Sathramdas Lalvani v. Mathur — 1960 DIGILAW 213 (KER)

JUDGMENT S. Velu Pillai, J. 1. The business and assets of two firms; "Adam Hajee Peer Mohammed Essack" and "Hajee Ebrahim Kassam Cochinwala" in Kozhikode, which may be referred to hereafter as the "firms", were evacuee property, which became vested in the Custodian of Evacuee property for the State of Madras, under S.8 of the Administration of Evacuee Property Act, 1950, which may be referred to hereafter as the 1950 Act, when the former proprietors of the firms migrated to Pakistan, in or about the year 1947. On the application of the petitioner, a refugee from Pakistan, who, it is said, had registered his claim as a displaced person under the Displaced Persons (Claims) Act, 1950 the firms were entrusted to him for management on March 21, 1952. Subsequently, it was proposed, or, to adopt the language of a communication from the Government of India "decided in principle", to allot, meaning perhaps to convey absolutely the business of the firms to the petitioner, on terms and conditions which were to be settled ; but at the hearing it was common ground, that in spite of prolonged negotiations concerning them, commencing with Exts. P. 2 and P. 3 in October, 1953, and ending with Ext. P. 27 in September 1956, there never was at any time, consensus ad idem or a concluded contract or binding agreement between the parties, though the area of disagreement had narrowed a good deal. 2. In the year 1954, the Displaced Persons (Compensation and Rehabilitation) Act, 1954 which may be referred to hereafter as the 1954 Act, was passed. S.12 of which, empowered the Central Government to "acquire" any evacuee property "for a purpose connected with the relief and rehabilitation of displaced persons", and provided, that on the publication of the prescribed notification, the right, title, and interest of any evacuee in the property specified in it, shall be extinguished, and the property shall vest absolutely in the Central Government. A notification, Ext. P. 21, was made under S.12 of the 1954 Act in respect of "all urban immovable properties in the State of Madras" which had been declared to be evacuee property under the 1950 Act. A notification, Ext. P. 21, was made under S.12 of the 1954 Act in respect of "all urban immovable properties in the State of Madras" which had been declared to be evacuee property under the 1950 Act. The respondents have a contention in their counter affidavit, that the business of the firms, including the stock in trade and the goodwill, was also covered by the notification but the learned Advocate General could sustain it, only if and to the extent to which, the tenancy rights of the evacuee in respect of the business premises may be deemed to be affected by the notification. It is seen, however, from the communications which had passed, especially from Ext. P. 6 which finally embodied the terms and conditions of the proposed allotment, that the tenancy rights were never proposed to be conveyed to the petitioner; nor, are these rights claimed by him in this petition, and so no question arises with respect to them. It may therefore be taken, that the firms were not acquired under the 1954 Act. 3. To resume the narrative, after the 1954 Act came into force, evacuee property, including the firms, were advertised for sale by auction, when the petitioner applied to the Chief Settlement Commissioner, New Delhi, an Authority created by that Act, and to the Government of India, to stop the sale of the firms and to allot them to him. The Government of India, replied by Ext. P. 5 dated April 25, 1956, that "it has been decided in principle that the aforesaid evacuee concerns will be allotted" to the petitioner, that "the terms of allotment will be communicated........... separately" and that meanwhile, the petitioner "will continue to function as the Custodian's manager for the concerns in terms of S.10(2Xb)" of the 1950 Act; the sale by auction was stayed. This was confirmed also by the Custodian's letter dated June 3, 1956, to the Deputy Custodian, a copy of which was forwarded to the petitioner under covering letter Ext. P. 8. It was in pursuance of the above, that letter Ext. P. 6, referred to earlier, dated September 6, 1956 was addressed by the Assistant Custodian to the petitioner, formulating the terms and conditions upon which the allotment was to be made, and enquiring whether they were acceptable to him; as stated, some of the conditions were not accepted. P. 8. It was in pursuance of the above, that letter Ext. P. 6, referred to earlier, dated September 6, 1956 was addressed by the Assistant Custodian to the petitioner, formulating the terms and conditions upon which the allotment was to be made, and enquiring whether they were acceptable to him; as stated, some of the conditions were not accepted. In the meantime, the Chief Settlement Commissioner cum Deputy Custodian General intimated the Regional Settlement Commissioner cum Custodian of Evacuee Property, Bombay, by letter Ext. R. 4 dated March 18, 1958, that it has been decided to sell the firms in auction, on April 10, 1958. The petitioner thereupon moved this Court under Article 226 of the Constitution by O. P. No. 204 of 1958 for a writ of prohibition restraining the sale. In the meanwhile, the Deputy Chief Settlement Commissioner directed the Regional Settlement Commissioner by Ext. R. 5 dated August 16, 1958, that the services of the petitioner as manager of the firms may be terminated, immediately, and that complete charge may be taken over from him, deputing a Special Officer to proceed to Kozhikode. O. P. Mo. 204 of 1958 was disposed of on June 25, 1959, this court holding, that the sale by auction or otherwise could not go on, without the general or special order of the Chief Settlement Commissioner under Rule 101 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955, but leaving undecided, the other points raised by the petitioner. It may be mentioned, that such order was passed by the Chief Settlement Commissioner under Ext. R. 1. Apparently, in pursuance of the direction in Ext. R5, the tour programme of an officer, whose designation was set out in Ext. P. 11, as Deputy Custodian of Evacuee Property, Southern States, was forwarded to the petitioner by the District Collector, Kozhikode; the first respondent arrived in Kozhikode, according to schedule, and after preparing the inventories, on December 18, by Ext. P. 13, served on the petitioner, terminated his management of the firms and by Ext. P. 16, proceedings, took over possession, the petitioner entering his protest. 4. P. 13, served on the petitioner, terminated his management of the firms and by Ext. P. 16, proceedings, took over possession, the petitioner entering his protest. 4. This petition was filed on December 21, 1959, impleading the first respondent describing him as the Deputy Custodian of Evacuee Property, Southern States, the second respondent who was appointed to take charge of management in the place of the petitioner, and the third respondent, the District Collector, Kozhikode, who, according to the petitioner, had been appointed as the Managing Officer for Kozhikode under the 1954 Act. The main contention of the petitioner set out in his affidavit was, that by virtue of Exts. P. 5 and P. 8, the petitioner has obtained a right to manage the firms, at least until the final allotment is made, and that the proceedings evidenced by Exts. P. 13 and P. 16 are ultra vires and illegal. The prayers in the petition are, for the issue of, a writ of certiorari to bring up the records for quashing Exts. P. 13 and P. 16, a writ of mandamus to respondents 1 and 2 to hand over possession of the firms to the petitioner, and another writ of mandamus or other appropriate writ or order restraining respondents 1 to 3 from selling the firms, or doing "anything else in violation of the petitioner's legal rights founded on the Government of India's order, Ext. P. 5." The first respondent denied by his counter, that the petitioner had derived any right under Ext. P. 5 or Ext. P. 8, or that he has a right of management, and contended that the firms had been acquired under the provisions of the 1954 Act, and are liable to be sold in public auction. In his reply affidavit, the petitioner maintained, that the firms were never acquired under the 1954 Act, and that whatever steps had been taken against him under that Act are of no avail and cannot be sustained. From what has been stated earlier, it may be concluded, on the terms of Ext. P. 21, notification, that the firms as business concerns, did not come within its purview, and were not therefore acquired under S.12 of the 1954 Act. In my opinion, the conclusion is also irresistible, that the petitioner has now no right by virtue of Exts. P. 5 and P. 8. P. 21, notification, that the firms as business concerns, did not come within its purview, and were not therefore acquired under S.12 of the 1954 Act. In my opinion, the conclusion is also irresistible, that the petitioner has now no right by virtue of Exts. P. 5 and P. 8. Incidentally, it may also be held, that the first respondent has not succeeded in establishing, as contended by him, that Ext. P. 5 has been superseded. The learned counsel claimed, that the petitioner had acquired a right under Exts. P. 5 and P. 8, which he described in these terms. "Under the 1950 Act, the Custodian has jurisdiction at his discretion to allot or transfer evacuee property to the petitioner under S.10(2) (o). The Government of India by Ext. P. 5, and the Custodian by Ext. P. 8, had decided to allot the firms to the petitioner, and had also conferred on him the benefit of an appointment as manager under Section 10(2)(b) of the 1950 Act, which must hold till the final allotment is made; no authority subordinate to those which had conferred such rights on him can take them away". The" learned counsel pressed me for a decision on this claim, and as to whether, it was open to a subordinate officer like the first respondent, to derogate from what had been conferred on the petitioner by the highest authority in the heirarchy. The question has to be answered on the true scope and effect of Ext. P. 6; Ext. P. & does not go further than Ext. P. 5. The initial entrustment of the firms by the Custodian to the petitioner under Ext. P. 1, was for nothing more than management on the same terms which were applicable to the previous manager, whom the petitioner replaced. The power under S.10(2)(b) of the 1950 Act is of the Custodian, meaning the Custodian for the Slate as defined by Section 2(c), and is but to appoint a manager, in this case, to carry on the business of the firms. Apart from the decision "in principle" to allot, on terms and conditions to be formulated later, all that the Government of India did by Ext. P. 5 was, to recognise the petitioner as a manager appointed under S.10(2)(b), and not to make a fresh appointment. The reference to Section 10(2)(b) and Rule 34 in Ext. Apart from the decision "in principle" to allot, on terms and conditions to be formulated later, all that the Government of India did by Ext. P. 5 was, to recognise the petitioner as a manager appointed under S.10(2)(b), and not to make a fresh appointment. The reference to Section 10(2)(b) and Rule 34 in Ext. P. 5, made perhaps for the first time, did not change its true complexion. As I had occasion to point out, the petitioner could not find his way to accept in their entirety, the terms and conditions which were formulated and so the decision, which was only "in principle" to allot, could not be implemented and had lapsed. The Government of India when they decided in principle to allot, did not decide in the abstract, but only subject to concrete terms and conditions to be settled. It is impossible to hold, that by Exts. P. 5 and P. 8 the petitioner was granted a right of management, to enure till the final allotment whenever it maybe made, or as the contention implies, indefinitely, if no allotment is to take place. It may be, that the Authorities had hoped, that the terms and conditions would be accepted by the petitioner and that a final allotment made without delay, and had considered look that in the interval, the existing arrangement need not be disturbed. But it seems unreasonable to hold, that an indefeasible right of management had been conferred on the petitioner or still survives to him, after all that had transpired. The learned counsel then urged, that the termination of the petitioner's managership amounted to an infringement of his fundamental right under Articles 19(1) and 31 of the Constitution. The Supreme Court has ruled in Amar Singh v. Custodian, Evacuee Property, Punjab ( AIR 1957 SC 599 ) that even the interest of a quasi permanent allottee of evacuee property is not ''property within the concept of that word so as to attract the protection of fundamental rights". As a manager his rights are, as contended by the learned Advocate General, liable to be terminated both under the ordinary law of master and servant, and under S.16 of the General Clauses Act (Central). As a manager his rights are, as contended by the learned Advocate General, liable to be terminated both under the ordinary law of master and servant, and under S.16 of the General Clauses Act (Central). My attention was not invited to any decided case to the contrary, and it was not disputed, that on the terms of S.16 of the General Clauses Act and on the principle underlying it, a power to terminate "is a necessary adjunct of the power of appointment and is exercised as an incident to or consequence of that power", Rayarappan Nayanar v. Valia Madhavi Amma, (AIR 1950 FC 140). When no right had accrued to the petitioner under Ext. P. 5 and he can claim to be no more than a manager, there is no point in the argument that an officer subordinate to the Government of India cannot put an end to his managership. On these grounds, I reject the claim of the petitioner, to an indefeasible right to continue in management, until the Authorities could find their way to make a final, allotment to him. 5. It was strenuously contended, that in any view Exts. P. 13 and P. 16 have to be quashed as ultra vires and illegal. The firms not having been acquired, the petitioner's appointment in pursuance of the provisions of the 1950 Act, can be terminated, as contended, by the application of S.16 of the General Clauses Act or of the principle underlying it, only by the appointing authority under that Act, and not by any of the functionaries under the 1954 Act. This was not disputed, and the learned Advocate General took the stand, that in passing Ext. P. 13 and drawing up Ext. P. 16 the first respondent acted as Deputy Custodian of Evacuee Property under the 1950 Act, and not as managing officer under the 1954 Act, though he combined both capacities in himself. He relied also on the designation of the first respondent in Exts. P. 13 and P. 16 as managing officer cum-Deputy Custodian of Evacuee Property. If this was all, invoking the presumption of regularity of official acts as in illustration (e) to S.114 of the Indian Evidence Act, 1872 it was easy to establish, that the first respondent had acted in the capacity which was suited to the occasion and appropriate to confer validity on his action. If this was all, invoking the presumption of regularity of official acts as in illustration (e) to S.114 of the Indian Evidence Act, 1872 it was easy to establish, that the first respondent had acted in the capacity which was suited to the occasion and appropriate to confer validity on his action. But the case of the department, appearing from the documents and as confirmed by the first respondent's counter affidavit, has been consistent, that the firms had been acquired by the Central Government under "Section 12 of the 1954 Act. Exts. R. 4 and R. 5 are two of such documents which may be mentioned. By the former, the Chief Settlement Commissioner cum-Deputy Custodian General informed the Regional Settlement Commissioner cum-Custodian of Evacuee Properly on March 1958, that the sale by auction of the firms had been decided upon, and by the latter, the Deputy Chief Settlement - Commissioner directed the Regional Settlement Commissioner, after making a reference to a letter relating to the sale of the firms, to terminate "the services of the present manager," the petitioner. It may be mentioned, that the Chief and Regional Settlement Commissioners are officers in the hierarchy constituted by the 1954 Act. In paragraph 10 of the counter affidavit, Exts. P. 13 and P. 16 were stated to have been made or passed by virtue of S.17 of the 1954 Act, which applies only to acquired evacuee property which has been brought into the "compensation pool" as constituted by S.14 of the Act. id paragraph 12 of the counter affidavit, it was averred, that with the vesting of the firms in the Government of India "the Custodian or the Deputy Custodian of Evacuee Property censed to have any authority in the matter. Similarly S.10(2)(b) of Act XXXI of 1950 also ceased to have any application." It is true, that in the affidavit in support of the petition there is an averment, that the tour programme of an officer designated as Deputy Custodian of Evacuee Property was served on him, but this, apart from being based really on Ext. P. 11, was qualified by the further statement in the affidavit, that the petitioner had no idea of the status of this officer. The reference in paragraph 22 of the same affidavit to the Deputy Custodian is neither inconsistent nor conclusive. Armed with Ext. P. 11, was qualified by the further statement in the affidavit, that the petitioner had no idea of the status of this officer. The reference in paragraph 22 of the same affidavit to the Deputy Custodian is neither inconsistent nor conclusive. Armed with Ext. P. 21, which practically disproved the theory of acquisition, the petitioner in his reply affidavit, refuted the case in the counter affidavit. In these circumstances, I find myself unable to apply the presumption relied on, in order to hold, that Exts. P. 13 and P. 16 were passed or made by the Deputy Custodian of Evacuee Property under the 1950 Act. It has therefore to be concluded, that the first respondent purported to exercise the powers under the 1954 Act. Though the petitioner's right of management is not indefeasible, having been derived from an authority which acted in the exercise of its statutory powers, it cannot be terminated by any but the proper authority. On this, it is not necessary to say more than, that the managing officer under the 1954 Act, is not a proper authority, and I did not understand the learned Advocate General to contend, that he is. 1 therefore hold that Exts. P. 13 and P. 16 are ultra vires and are liable to be quashed. 6. It remains to consider whether the petitioner is entitled to a writ of mandamus to compel respondents 1 and 2 to restore possession, of what had been taken, to the petitioner, as a manager appointed under S.10(2)(b) of the !950-Act and functioning as such. My attention was invited to the general principles which regulate the issue of mandamus, particularly to the condition, that the applicant must have a specific legal right in him which can be enforced. In my opinion, when a public officer, without authority of law, dispossesses a person or removes him from a post which he is holding under law, a liability may well be imposed on him to restore what the other has been wrongfully deprived of; when his action has been successfully challenged, as by certiorari, it seems to me that it becomes his duly, even without mandamus, to make restoration. In Wazir Chand v. State of Himachal Pradesh ( AIR 1954 SC 415 ) upon seizure of goods by the police without the authority of law, mandamus, was ordered to restore them; in Mehar Singh v. Bally Municipality (AIR 1954 Calcutta 131) the return of a machine seized in execution of an illegal warrant issued by a Municipal Authority, was compelled by mandamus. In Sohan Lal v. Union of India ( AIR 1957 SC 529 ) the Supreme Court observed, that if the Union of India was in possession of a property from which a person was illegally evicted, mandamus could issue for restoration of the property to him. It is no doubt true, that the persons aggrieved. in the two cases of Wazir Chand and Mehar Singh, were owners of the properties' concerned; but I venture to think, that the same considerations should apply in the case of the petitioner who had been dismissed as it were, from managership. It may be, that on the finding that the petitioner has acquired no right under. Exts. P. 5, and P. 8, the proper authority hereafter terminate his managership, or. it may equally be, that he may continue in management. This Court is concerned only with the validity or otherwise of Exts. P. 13 and P. 16. 7. On the above considerations, I allow prayers (1) and (2) in the petition, quashing Exts. P. 13 and P. 16 and by directing mandamus to issue to respondents 1 and 2, to put the petitioner in possession and management as before; but I reject prayer (3) in the petition. The petition is thus partly allowed and partly dismissed. No costs.