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Dhirajlal Vittalji Vs. the Deputy Custodian of Evacuee Property - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1956)1MLJ93
AppellantDhirajlal Vittalji
RespondentThe Deputy Custodian of Evacuee Property
Cases ReferredRaghubir Singh v. Court of Wards
Excerpt:
- .....under article 226 of the constitution praying that the order of the assistant custodian of evacuee property at mangalore, dated 19th march, 1950, and the order on appeal the reform of the deputy custodian of evacuee property, dated 9th march, 1952, may be quashed on the ground that section 40 of the administration of evacuee property act (xxxi of 1950) corresponding to section 38 of the administration of evacuee property ordinance (xxvii of 1949) is void under article 13 of the constitution.2. on 24th may, 1948, a sale deed was executed in favour of the petitioner by the power-of-attorney agent of one abdul sukoor thayab conveying property in mangalore (plot of land and house no. 106, kasba bazaar) for a consideration of rs. 20,000. on 18th march,. 1950, the vendor, abdul sukoor,.....
Judgment:
ORDER

P.V. Rajamannar, J.

1. This is an application under Article 226 of the Constitution praying that the order of the Assistant Custodian of Evacuee Property at Mangalore, dated 19th March, 1950, and the order on appeal the reform of the Deputy Custodian of Evacuee Property, dated 9th March, 1952, may be quashed on the ground that Section 40 of the Administration of Evacuee Property Act (XXXI of 1950) corresponding to Section 38 of the Administration of Evacuee Property Ordinance (XXVII of 1949) is void under Article 13 of the Constitution.

2. On 24th May, 1948, a sale deed was executed in favour of the petitioner by the power-of-attorney agent of one Abdul Sukoor Thayab conveying property in Mangalore (plot of land and house No. 106, Kasba Bazaar) for a consideration of Rs. 20,000. On 18th March,. 1950, the vendor, Abdul Sukoor, was declared an evacuee, and his properties were declared evacuee properties. Ordinance XXVII of 1949 came into force on or about 18th October, 1949. Section 38(1) of the Ordinance ran as follows:

No transfer of any right or interest in any property made in any manner whatsoever after the 14th day of August, 1947, by or on behalf of an evacuee or by or on behalf of a person who has become an evacuee after the date of the transfer shall be effective so as to confer any rights or remedies on the parties to such transfer or on any person claiming under them unless it is confirmed by the Custodian.

On 23rd December, 1949, the petitioner made an application under this section to the Assistant Custodian of Evacuee Property for confirmation of the transfer in his favour. By his order, dated 19th March, 1950, the Assistant Custodian rejected the application. He held that the transaction was not bona fide, that the consideration mentioned in the sale deed was inadequate, and that the sale was intended to liquidate the assets of the evacuee in the Indian Union and to transfer the same to Pakistan. Against this order, there was an appeal by the petitioner to the Custodian, of Evacuee Properties. That appeal was transferred to the Deputy Custodian of Evacuee Property, South Kanara, for disposal, and he dismissed the appeal by his order, dated 9th May, 1952. In this application, the petitioner seeks to have these two orders quashed.

3. By Act XXXI of 1950, Section 58(1), Ordinance XXVII of 1949 was repealed but in substance the Ordinance was re-enacted by the Act. Section 40 of the Act is for all material purposes identical with Section 38 of the Ordinance. Section 40(4) of the Act, (corresponding to Section 38(4) of the Ordinance) sets out the grounds on which an application for confirmation of a transfer can be rejected. It runs thus:

The Custodian shall hold an inquiry into the application in the prescribed manner and may reject the application if he is of opinion that....

(a) the transaction has not been entered into in good faith or for valuable consideration or

(b) the transaction is prohibited under any law for the time being in force or

(c) the transaction ought not to be confirmed for any other reason.

4. Mr. K.V. Venkatasubramania Ayyar, learned Counsel for the petitioner, contended that Section 40 of the Act is void for two reasons, : (i) because it did not satisfy the requirements of Article 31(2) and (ii) because it offended the provisions of Article 14 of the Constitution.

5. Learned Counsel developed the first point thus: The section in effect permits the deprivation of property without any provision for compensation. If the Custodian does not choose to confirm the transaction the transferee loses his title under his transfer. Article 31(1) does not permit a deprivation without compensation except in particular cases. In other cases, the law which authorises deprivation should be subject to the condition imposed by Article 31(2). Prima facie, there is considerable force in this contention. The Act as well as the Ordinance permits two things: (i) taking possession of the property declared to be evacuee property by the State through the Custodian, and (ii) taking possession of property declared to be evacuee property which has been transferred to even non-evacuees, if the transfer was made after a particular date, unless the Custodian confirmed the transaction. In either case, neither the Ordinance nor the Act contemplates the payment of any compensation.

6. The learned Special Government Pleader did not attempt to controvert the legal position thus put forward by counsel for the petitioner, He relied on Article 31(5) of the Constitution as furnishing a complete answer. Clause (5) of Article 31. is as follows:

Nothing in Clause (2) shall affect-

(a) the provisions of any existing law other than a law to which the provisions of Clause (6) apply or

(b) the provisions of any law which the State may hereafter make-

(i) for the purpose of imposing or levying any tax or penalty, or

(ii) for the promotion of public health or the prevention of danger to life or property, or

(iii) in pursuance of any agreement entered into between the Government of the Dominion of India or the Government of India and the Government of any other country, or otherwise, with respect to property declared by law to be evacuee property.

The learned Government Pleader made an attempt to bring the case within Sub-clause (a) of Clause (5). His argument was that the orders now impugned were passed under the Ordinance XXVII of 1949 and the Ordinance would be an 'existing law' and would therefore fall within the scope of Sub-clause (a). This argument is fallacious. The Ordinance was repealed by Act XXXI of 1950. The orders passed under the Ordinance would therefore cease to have any effect, but Section 58(2) of the Act provides inter alia that the repeal of the Ordinance shall not affect the previous operation thereof, and declares that anything done or any action taken in the exercise of any powers conferred by or under the Ordinance shall be deemed to have been done or taken in the exercise of the powers conferred by or under the Act, as if the Act were in force on the day on which such thing was done or action was taken. If the Government Pleader wants to say that the impugned orders are still valid and subsisting, it can only be on the footing that they must be deemed to have been passed under the Act now in force. There is yet another fact which conclusively demolishes this argument. Sub-clause (a) itself excludes a law to which the provisions of Clause (6) apply. That clause says that any law of the State enacted not more than eighteen months before the commencement of the Constitution may be submitted to the President for his certification, and if the President so certifies, it shall not be called in question on the ground that it contravenes the provisions of Clause (2) of Article 31 or the provisions of Sub-section (2) of Section 299 of the Government of India Act, 1935. Ordinance XXVII of 1949 was enacted in October, 1949, within eighteen months of the commencement of the Constitution. It is therefore a law to which the provisions of Clause (6) would apply. It is not pretended that there has been any certificate by the President in respect of the Ordinance. It follows that the Ordinance would fall within the category of laws excluded from the operation of Clause (5)(a). This contention of the learned Government Pleader is not tenable.

7. His contention, however, based on Clause (5)(b)(iii) must, in our opinion, prevail. Act XXXI of 1950 is a law with respect to property declared by law to be evacuee property. Mr. Venkatasubramania Ayyar found it impossible to get out of this clause. It was said by him that the only law saved by that clause would be a law in pursuance of an agreement between India and Pakistan. It is not necessary for us to decide whether the phrase 'with respect to property declared by law to be evacuee property' would qualify the term 'agreement' in the first part of the sub-clause. The words 'any agreement' and the mention of 'with Government of any other country' are wide enough to include within the scope of the first part of the sub-clause an agreement between India and any country other than Pakistan also, and there is nothing which restricts such an agreement to the subject of evacuee property. Assuming, however, that the phrase does qualify 'agreement', there is another word which completely destroys counsel's argument, and that is the word 'otherwise'. The sub-clause would certainly govern a law with respect to evacuee property in pursuance of an agreement between India and Pakistan. But a law not in pursuance of such an agreement would be a law 'otherwise' with respect to evacuee property. The impugned section is one such law.

8. Mr. Venkatasubramania Ayyar then contended that the sub-clause would only apply to a case of deprivation of an evacuee of his property and would not apply to a case like the present, where the law affects property belonging to a non-evacuee. He relied upon a stray passage in the judgment of Mahajan, J. (as he then was) in Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and Weaving Co., Ltd. and Ors. (1954) 1 M.L.J. 355 : (1954) S.C.J. 175 : : [1954]1SCR674 . It runs thus:

Not only has it (Clause (5) in Article 31) saved from the mischief of Clause (2) of Article 31 provisions of laws made for the purpose of imposing or levying any tax or penalty and the laws made for promotion of public health or the prevention of danger to life or property, but it has also saved from the mischief of the clause the provisions of all existing laws which may be construed as amounting to deprivation of property of a person as well as evacuee property laws under which the State takes possession of properties of persons who have left India for Pakistan.

We do not see how this observation helps the petitioner. In one sense, the property in question was the property of a person who had left India for Pakistan, and the result of non-confirmation of the sale in favour of the petitioner would be to enable the State to take possession of the property. We have no hesitation in holding that the Administration of Evacuee Property Act, including Section 40, is a law with respect to property declared by law to be evacuee property. The learned Special Government Pleader referred us to a decision of the High Court of Madhya Bharat in Shanta Devi v. Custodian, E.P. A.I.R. 1953 Mad. Bh. 181, in which the same view was taken. Indeed, it was not disputed by learned Counsel for the applicant in that case that by Clause (5) of Article 31 he was precluded from objecting to the Act on the ground that it violates the provisions of Article 31(2). The learned Judges say:

If it is assumed that Clauses (1) and (2) of Article 31 must be read together and 'deprivation' in Clause (1) has the same meaning as compulsory acquisition or taking possession of property mentioned in Clause (2) then clearly the petitioner is prohibited by Clause (5) of Article 31 from challenging the Act on the ground that it is repugnant to the provisions of Clause (2) and therefore also to the provisions of Clause (1).

9. Mr. Venkatasubramania Ayyar next contended that Section 40 of the Act offended the principle of Article 14 of the Constitution. Though the learned Counsel also mentioned Article 19(1)(f) he did not address any independent argument on that Article. His contention was that Sub-section 4 of Section 40 conferred on the Custodian an arbitrary power of confirming or rejecting any transaction. This contention was based upon the word 'if he is of opinion' and on Clause (c) of that sub-section, viz., 'the transaction ought not to be confirmed for any other reason'. The decision of the Custodian was entirely dependent on his subjective satisfaction and therefore beyond the purview of judicial review, and there were no definite and objective standards prescribed to regulate the Custodian's discretion....so the argument ran. We see nothing in the first part of the objection. The sub-section says that the Custodian shall hold an inquiry and may reject the application if he is of a particular opinion as to the nature of the transaction. We do not think that the words 'if he is of opinion in the context means that his opinion is unrelated to the facts and circumstances placed before him at the inquiry. In one sense, there is always a subjective element in arriving at a conclusion on the evidence by a Judge or Court. The words 'in my opinion' may very well occur in a judgment of a Judge of this Court or of the Supreme Court. But that would not mean that the conclusion is arbitrary or entirely subjective. Mr. Venkatasubramania Ayyar cited to us the following observation of Mahajan, J., (as he then was) in Raghubir Singh v. Court of Wards, Ajmer : [1953]4SCR1049 .

It was emphasised that the section had not used the familiar language 'in its opinion' or words like that, which are usually employed to indicate whether a matter depends on the subjective determination of an authority or whether it can be agitated in a civil Court.

Properly understood in the context, we think that observation has no relevancy to the present case.

10. Nor has the second part of the objection any force in respect of Clauses (a) and (b) of Sub-section 4. They furnish definite and objective tests. Learned Counsel said that the words 'in good faith' were rather vague. But it is too late in the day to say so, when that expression has been used in several statutes and has been the subject of many judicial decisions. But we do consider the objection to be well founded as regards Clause (c). What are the reasons comprised in the expression 'any other reason'? The learned Special Government Pleader suggested that the reasons must be ejusdem generis with the two reasons contained in clauses (a) and (b). It is difficult to imagine any such reason. Undoubtedly, Clause (c) confers an unfettered discretion on the Custodian to refuse to confirm any transaction. This view of ours, however, will not help the petitioner for we are clearly of opinion that in this case neither the Assistant Custodian nor the Deputy Custodian has acted or purported to act under Clause (c). The finding is that the transaction had not been entered into in good faith. We do not agree with the learned Counsel for the petitioner that because Clause (c) is bad, the entire sub-section, if not the entire section becomes void. Clause (c) can be severed from other clauses, leaving intact the rest of the section. It is not so integrally connected with the other parts of the sub-section of the section that with it the rest should also fall. It is sufficient in this case to hold that the impugned orders fall under Sub-section (4)(a) of Section 40, and Clause (a) is not void for any reason.

11. Finally, the learned Counsel for the petitioner attacked the correctness of the orders in question. He said that there was no evidence on which it could be held that the transaction was not bona fide. We do not think it is open to this Court in an application under Article 226 to canvass the correctness of a finding of fact arrived at by an inferior tribunal. There is nothing on the face of the record which appears to be perverse, obviously erroneous, or opposed to natural justice.

12. The application is dismissed with costs.


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