1. This is an application by Ramdayal under Article 226 of the Constitution for a writ, direction or order to the Custodian Evacuee Properly, Rajasthan, and arises in the following circumstances:
2. The applicant purchased a building in Jodhpur City on the 22-12-1947, for Rs. 17,500/-, and paid the money to Nisarali Khan and Sadiq Ali Khan, the vendors, and got possession on the same day.
As Nisarali Khan and Sadiq Ali Khan became evacuees, an application was made on the 13-1-1950, 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 probability, 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 later.
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 1.953. The Custodian General thereafter rejected the revision petition, and directed the Custodian to decide the ease 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-section (5) of Section 40 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 Custodian's order is covered by Sub-section (6) of Section 40, and there is no reason for interference by this Court. Section 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 14-8-1947, 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 Section 2 or the property of the transferor is declared or notified to be evacuee property within the meaning of this Act, unless the transfer is confirmed by the Custodian in accordance with the provisions of this Act.
Sub-section (2) of Section 40 provides certain exceptions. Sub-section (3) provides for an application for confirmation, and Sub-section (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-section (5) which provides that any 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 conditions.
The applicant has referred to Sub-section (5) as having been applied to the case by the Custodian. He is, however, wrong there because Sub-section (5) does not apply to his case. It only applies to cases which have ended, and not to pending cases like the applicant's. Then comes Sub-section (6). It says that if the application is not rejected under Sub-section (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-section (5) do not apply to an order under Sub-section (6).
Then comes Sub-section (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-section (5), the Custodian can exercise any of the powers conferred on him under that Sub-section The Custodian has really dealt with the applicant's application for confirmation under Sub-section (7) though the Sub-section is not mentioned in the order.
It is clear, however, that it was Sub-section (7) which the Custodian had in mind for he quotes the words of Sub-section (7) in the opening part of his judgment. Once Sub-section (7) applies, the conditions of Sub-section (5) alsoapply.
4. The first question, therefore, that calls for consideration is whether Sub-section (6) applies in this case, as contended on behalf of the Custodian. It is enough to say that the scheme of Section 40 is to deal with three kinds of applications for confirmation, namely (1) those which have ended (these are dealt in Sub-section (5), (2) those which are pending on the date Act No. II of 1953 came into force (these are dealt with in Sub-section (7)). (3) and others not covered by Sub-section (5) or Sub-section (7) (these are dealt with in Sub-section (6)).
The present case is, in our opinion,obviously covered by Sub-section (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, right in applying Sub-section (7) to this case. He could not apply Sub-section (6) when the case was covered by Sub-section (7).
5. The next question is whether Sub-section (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-section (5) or under Sub-section (7), he has still to apply the provisions of Sub-section (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 way restricting such transfers at the time this transfer was made.
A persual of Section 40 shows that it is a retrospective piece of legislation and applies to all transfers made after the 14-8-1947, whether there was any Evacuee Property Law at that 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 law there also: vide Section 5-A of the Marwar Evacuees Administration of Property) Act No. XX of 1949. The Custodian has therefore to consider whether the application should be rejected under Sub-section (4). If he comes to the conclusion that it should not be rejected under Sub-section (4), then he has to apply Sub-section (7) to this case.
6. So far as the application of Sub-section (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-section (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-section(5), clauses (b) (iii) & (iv), the Custodian has to actunder Sub-section 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 paidthe amount paid by him and the balance be takenover, and if the sale proceeds are equivalent to, orfall short of, the amount actually paid by the transferee, the entire sale proceeds are to be paid to thetransferee. We are, therefore, o opinion that theorder of the Custodian cannot be maintained in viewof Section 40, Sub-section (7).
7. We, therefore, quash the order of the Custodian dated 29-7-1954, and send the case back to the Custodian for considering whether the application should be rejected under the provisions of Section 40, Sub-section (4). If he decides that it is not to be rejected underthe provisions of Sub-section (4), he should act in conformity with the provisions of Sub-section (7) read with Sub-section (5) as indicated above.
8. As the applicant depended upon a wrong sub-s. of Section 40 in his application, we order parties to bear their own costs.