1. Thakar Dass is a displaced person from West Pakistan. He had a verified claim to the extent of Rs. 36,750/-. He made a gift of this verified claim in favour of his daughter and on the 13th of August, 1953, the daughter made an application under the Displaced Persons (Compensation and Rehabilitation) Act, (No. 44 of 1954)--here--in after referred to as the Act--for the determination of the amount of compensation. On her application the amount was ultimately fixed at Rs. 9239/-, but the department refused to recognize the gift.
This led to an application by Thakar Dass to the effect that as the gift had not been recognized he should be paid the compensation. The department tagged his application to the application of the daughter and the amount of compensation already assessed was held to be the amount of compensation payable to him, namely, Rs. 9239/-. In the meantime, Thakar Dass was adjudged an insolvent on the 5th of July, 1954. Thereupon, the Official Receiver approached the department for payment of the amount of compensation to him instead of to Thakar Dass.
This request of the Receiver was opposed to by Thakar Dass and ultimately after obtaining advice from the Law Ministry, the department held that the compensation payable to the insolvent be assigned to the Official Receiver in the usual way and a receipt obtained from him. Thereafter the impugned order (Annexure 'A' to the petition) was passed. The order is in these terms:
'In this case Shri Thakar Dass was declared insolvent. The Official Receiver has filed application under S. 9 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, that he may be declared successor-in-interest to the claim of Shri Thakar Dass. The matter was referred to the Chief Settlement Commissioner, New Delhi, as there was doubt regarding legal position of the case. The Chief Settlement Commissioner has sent instructions that compensation payable to the claimant can be paid to the official assignee vide their letter No. 11 (37) Com-II/56-Pol-I, dated 7th August, 1958. The Official Receiver has further made an application that no deductions on account of public dues, E. P. etc, may be made from the compensation admissible to the claimant. The public dues etc. against the claimant and his family members under R. 7 are first charge on the compensation and will have to be deducted at the time of finalising the case in usual and ordinary course. The Official Receiver has produced order of Sub-Judge 1st Class, Patiala, dated 5-7-1954 declaring Shri Thakar Dass as insolvent, Ex. P-1.
The file is returned to Assistant Settlement Commissioner, Patiala for finalising it in accordance with the instructions mentioned above.'
Thakar Dass has accordingly filed the present petition under Art. 226 of the Constitution praying that the aforesaid order passed by the department may be quashed, ad the compensation in law cannot be paid to the Receiver he being not a displaced person. This petition is opposed by the department as well as by the Official Receiver.
(2) The contentions on behalf of the petitioner are that the claim to compensation is not property and that in any case compensation can only be paid to a displaced person to whom it is due and to none else.
(3) For the first contention the learned counsel for the petitioner relies on the decision of their Lordships of the Supreme Court in Amar Singh v. Custodian Evacuee Property, Punjab, (S) AIR 1957 SC 599, wherein it was held that the right in land so far quasi-permanent allotments are concerned is not property, and the reasons which impelled their Lordships to hold that it is not property were that the land which was in the possession of the allottee need not necessarily be allotted to him and its allotment could be cancelled by the department at its pleasure, and therefore such a precarious right could not be held to be property.
In the present case, however, the argument would have held good if the compensation had not been determined under S. 7 of the Act, but once the amount of compensation is determined, there is on option left to the department but to pay the same. The relevant portion of S. 8 of the Act is in these terms:
'8. (1) A displaced person shall be paid out of the compensation pool the amount of net compensation determined under sub-section (3) of S. 7 as being payable to him, and subject to any rules that may be made under this Act, the Settlement Commissioner or any other officer or authority authorised by the Chief Settlement Commissioner in this behalf may make such payment in any one of the following forms or party in one and partly in any other form, namely:
(a) in cash;(a) * * * *(b) * * * *c) * * * *(d) * * * *(e) * * * *(f) * * * *'
Therefore it is clear that a displaced person has to be paid the compensation out of the compensation pool, once it is determined and only the manner how that compensation has to be paid is left to the discretion of the authority concerned. After determination of the compensation the department cannot withhold it. Therefore the right to receive compensation is certainly property as creditor's right to recover a debt is property. Once it is held that the amount of compensation determined under the Act is property, it will by operation of law vest in the Official Receiver the moment the displaced person is declared as insolvent. In this connection reference may be made to S. 28 of the Provincial Insolvency Act, 1920.
(4) The learned counsel when faced with this difficulty pressed into service Section 15 of the Act which is in these terms:
'15. No property which forms part of the compensation pool and which is vested in the Central Government under the provisions of this Act shall be liable to be proceeded against for any claim in any manner whatsoever in execution of any decree or order or by any other process of any Court or other authority.'
and urged that in view of this provision there could be no vesting of this property in the Official Receiver. The compensation payable still formed part of the compensation pool and could not be proceeded against. This argument is partially correct. It is not doubt true that the Receiver cannot proceed against the compensation pool by having recourse to the coercive process of law but there is nothing in law to prohibit the department itself making the payment to the Official Receiver when approached by him.
In this case this is what the department has done and there is no provision in the Act which offends this course. Therefore the argument based on S. 15 of the Act does not help the petitioner. It may be mentioned that the Act does not override other laws. The provisions of the Provincial Insolvency Act would be applicable. Under the Insolvency Act the insolvents property would vest in the Official Receiver and there is no provision in the Act which is inconsistent with this vesting.
In the present case, the department itself is recognizing the adjudication and its consequences by agreeing to make the payment to the Receiver. No coercive process of law has been used by the Receiver to exact the payment from the Department. There is nothing in law which makes this proposed voluntary payment illegal.
(5) For the reasons given above, this petition fails and is dismissed, but in view of the fact that the question involved was not free from difficulty, I leave the parties to bear their own costs.
(6) Petition dismissed.