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Judgment
Grover, J.—This is a petition under Articles 223, 227 and 14 of the Constitution in which the facts are somewhat lengthy and may be first stated.
The petitioner-firm used to manufacture biscuits and make confectionary at Sukkar Sind under the name and style of Messrs. J.B. Mangharam & Company. After the partition of the country, the factories of the firm at Sukkar were allotted to one Mohammad Yakub, who owned a biscuit factory in Hyderabad known as the Rose Biscuit Factory alongwith his wife Zaib-un-nisa. On 9th February 1950 the Custodian of Evacuee Property, Hyderabad, entered into an agreement (Annexure ''A'') entitled "Agreement to allot Rose Biscuit Factory" with the petitioner-firm. Under Clause 5 of that agreement the allottees were bound to purchase all stocks, stores and other similar materials together with motor-cars, trucks, and hand-carts, if any, at the valuation agreed between the parties. Clause 2 was as follows:-
The above said allotment shall be subject to cancellation by one month''s notice on either side but the allotter will not cancel it without reasonable cause.
After the aforesaid factory had been acquired by the Central Government under the provisions contained in section 12 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954 (to be referred to as the Act), it was decided that the factory should be sold by public auction. The detailed terms and conditions of the auction notice are set out in Annexure ''R/8'' to the return. Condition No. 3 was that only right, title and interest of the evacuee in the property in question would be auctioned. According to condition No. 4, the auction sale was subject to the right of the tenants, allottees and lessees, if any, of the Custodian. When the auction took place the representatives of the petitioner-firm were present and are stated to have given a bid to the tune of Rs. 3,20,000/- but respondent No. 4 and his associates gave a bid of Rs. 3,50,000/-. This bid, which was the highest, was accepted on 14th February, 1958. A memorandum was issued to respondent No. 4 from the office of the Regional Settlement Commissioner, Bombay, (Annexure ''B'') in which it was stated that as there was likelihood of delay in finalising the adjustment of net compensation, it had been decided to transfer the possession of the said property to him on a provisional basis. Paragraph 2 was as under:-
The property is already in the occupation of tenants and you can get physical possession only if they are not entitled to the protection of section 29 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, read with rule 21 * * *. Meanwhile, you may exercise full power and control over the management of the said property * * * *.
In paragraph 3 it was stated that as the transfer was being made on a provisional basis, sale, mortgage or lease of the property would not be permissible until full and final rights of ownership had been transferred and a certificate of sale issued. A copy of this memorandum was forwarded to the Custodian of Evacuee Property, Bombay, as also the Assistant Custodian, Hyderabad, who was requested to inform the tenants in the aforesaid property to pay rent, compensation etc. due from the date of the letter to the auction-purchaser.
On 17th March 1958 the Custodian of Evacuee Property, Hyderabad, issued a show-cause notice to the petitioner-firm requiring it to surrender vacant possession of the factory with the machinery. The petitioner-firm filed a representation dated 8th April 1958 to the Secretary, Ministry of Rehabilitation, (Annexure ''D''). It was stated in this representation that the firm was entitled to retain possession of the property in question for a period of two years from the date of transfer u/s 29 of the Act, read with rule 121 and Government notification dated 27th September 1955. The concluding portion of this representation must be reproduced-
Ours is a reputed firm of displaced industrialists. We necessarily require reasonable time to construct a new factory and shift to it our own expensive machinery from the existing Rose Biscuit Factory. Whoever runs this Factory will also require sufficient time to replace our machinery and thus continue the factory in working order. In all the circumstances, we shall be grateful if our request for retaining possession of the property for at least two years is sanctioned by Government.
The submission is made without prejudice to our rights under the law.
It appears that the authorities realised that the Custodian had no jurisdiction to deal with the factory which by that time had been acquired by the Central Government and, therefore, on 14th April 1958 the Managing Officer issued a show-cause notice u/s 19 of the Act, read with rule 102. The reason given in that notice for cancelling the allotment was that it could be determined by notice of one month under clause 2 of the agreement between the alloter and the allottee and it had become necessary to give possession of the factory to respondent No. 4 and his associates to whom the factory and its assets had been auctioned. On 29th April 1958 the petitioner-firm filed a second representation to the Chief Set lenient Commissioner. It appears to have been in the same terms as the previous representation. On 2nd May 1958 the Inspecting Officer conveyed, in the following words, the orders of the Chief Settlement Commissioner to the Custodian:-
The Chief Settlement Commissioner has directed that the notice served by you should be withdrawn as under the rules the present allottees of the factory are entitled to protection of their tenancy. The present allottees will be attorned in the normal wav to the auction purchases provided they are not in arrears with their rent etc.
Thereupon the Managing Officer withdrew his show-cause notice dated 34th April 1958 by means of an order passed on 7th May 1958. The show-cause notice dated 17th March 1958 had already been cancelled. The petitioner-firm attorned to respondent No. 4, the auction purchaser, who started accepting rent from 1st June 1958, the receipts being Annexures ''C'' and ''R/1'' to ''R/7'' which show that rent was accepted upto January 1960. It has been pointed out that rent for the subsequent period up to date has also been paid by the petitioner-firm and accepted by respondent No. 4.
On 10th February 1960 the Managing Officer issued another show-cause notice u/s 19 of the Act for cancellation of the allotment with effect from 13th February 1960 on the ground that the period of two years, which had been granted by the Chief Settlement Commissioner, was about to expire. The petitioner-firm filed a writ petition in the Andhra Pradesh High Court at Hyderabad (No. 172 of 1960) challenging the legality and validity, of the aforesaid notice. This petition was admitted on 11th March 1960 and an interim stay order was granted. While the aforesaid stay order was operative the Managing Officer, Hyderabad, made an order on 25th August 1960 which is stated to have been received by the petitioner firm on the morning of 27th August 1960 cancelling the show-cause notice issued on 10th February 1960 but on the evening of 27th August 1960 he made another order recalling his previous order dated 25th August 1960 and reviving his show cause notice dated 10th February 1960. The petitioner-firm then filed another writ petition (No. 669 of 1960) in the High Court of Andhra Pradesh which was duly admitted. On 28th September 1960 the Managing Officer issued yet another show cause notice to the petitioner-firm fixing 14th October 1960 as the date for appearance. The petitioner-firm then filed a third writ petition in the High Court of Andhra Pradesh (No. 720 of 1960). The petitioner-firm moved the Managing Officer for adjournment but on 14th October 1960 the said officer made an order cancelling the allotment. This, according to the petitioner-firm, was done behind its back. On 15th October 1960 the Managing Officer is stated to have pasted another show-cause notice on the premises of the petitioner-firm and this was followed by the taking of the possession of the factory which according to the petitioner-firm was done forcibly. The factory was sealed with the help of the police. The petitioner-firm then filed the fourth writ petition (No. 720 of 1960) in the Andhra Pradesh High Court on 17th October 1960. The last two writ petitions, namely, 720 of 1960 and 726 of 1960 were disposed of by the High Court by one judgment on 9th January 1961. The former was dismissed but the latter was allowed and a direction was issued to restore the petitioner-firm to possession. On 17th January 1961 the Managing Officer issued another show-cause-notice u/s 19(2) of the Act requiring the petitioner-firm to give vacant possession of the factory and the premises. The petitioner-firm had filed an appeal in the mean-time to the Regional Settlement Commissioner u/s 22 of the Act against the notice dated 17th January 1961. An appeal was also preferred to the same authority against an order of the Managing Officer-dated 14th October 1960. These appeals were dismissed by the Regional Settlement Commissioner on 20th March 1961 (Annexure ''G''). A revision was preferred u/s 24 of the Act which was admitted by the Deputy Chief Settlement Commissioner and an interim stay order was given by him. It is, however, stated in the petition that in the meantime the Managing Officer soon after the dismissal of the appeals by the Regional Settlement Commissioner passed an order on 21st March 1961 directing the petitioner firm to surrender possession within seven days from 21st March 1961. A second revision petition had consequently to be preferred to the Deputy Chief Settlement Commissioner on 19th April 1961 and another interim stay, order was obtained. That revision petition was dismissed by the Deputy Chief Settlement Commissioner on 6th May 1961. He granted three months'' time to the petitioner-firm for vacating the factory and removing the machinery installed by it. The petitioner-firm came up to this Court with the present petition in July 1961.
A rejoinder dated 1st February 1862 was filed by respondent No. 1 on 23rd February 1962. Prior to that a petition dated 9th February 1962 had been preferred in this Court praying that the records be summoned and that the petitioner-firm might be allowed reasonable opportunity to inspect them before the date of hearing. The petitioner-firm, after inspection of the various files, put in a detailed affidavit by way of reply to the rejoinder which had been filed on behalf of respondent No. 4 In this affidavit reference was made to numerous letters, orders and documents on the record from which it was sought to be shown that the action of the Managing Officer, the Regional Settlement Commissioner etc, and the orders made by them were prompted by extrajudicial considerations and that they were actuated by mala fides.
In order to decide the points that have been canvassed before me by the learned counsel for the parties, it is necessary to determine what the status of the petitioner-firm was vis-a-vis the Central Government and respondent No. 4. When the factory was allotted to the petitioner-firm in 1950, it was evacuee property. As held in Amar Singh Vs. Custodian, Evacuee Property, Punjab, the basic features of the interest of a quasi-permanent allottee are that the ultimate ownership of the land is still recognised to be that of the evacuee and the allotment itself was liable to resumption or cancellation according to the exigencies of the administration of Evacuee Law. Such an allotment was made under the general powers of management vested in the Custodian u/s 10 which enabled him to grant leases and make allotments out of evacuee property in favour of displaced land-holders. The Custodian had the power to vary or cancel these allotments. The interest of the allottee was more in the nature of a licence which was liable to be cancelled by the grantor. It was, however, laid down that the rights of allottees as recognised in the statutory rules were important and constituted the essential basis of a satisfactory rehabilitation and settlement of displaced land-holders. Until such time as these land-holders obtained sanads of the lands, their rights were entitled to zealous protection of the constituted authorities according to administrative rules and instructions binding on them and of the Courts by appropriate proceedings where there was usuraption of jurisdiction or abuse of exercise of statutory powers. Section 29 of the Act provides for special protection from ejectment to certain classes of persons. According to sub-section (1) of that section, where any person to whom the provisions of the section apply, is in lawful possession of any immovable property of the class notified under sub-section (2), which is transferred to another person under the provisions of the Act, such person shall be deemed to be a tenant of the transferred on the same terms and conditions as to payment of rent or otherwise an which he held the property immediately before the transfer. According to the proviso no such person is liable to be ejected from the property during such period not exceeding two years except on the grounds given in the section. There can be no manner of doubt that if the factory in question had stood transferred to respondent No. 4 whose bid at the auction had been accepted, the petitioner-firm would, have been entitled to the protection conferred by section 29. But what transpired in the present case was that the sale certificate was not issued in favour of respondent No. 4, with the result that the petitioner-firm could not claim protection of section 29. The law on the point has been settled by Bombay Salt and Chemical Industries Vs. L.J. Johnson and Others, according to which where in respect of a sale by auction, of property of the class notified u/s 29(2) it is not shown that the sale certificate was issued to the highest bidder nor that the balance of the purchase price had been paid, there would be no transfer of the property sold at the auction and the benefit of section 29 could not be availed of. Thus although the provisional possession had been transferred to respondent No. 4 and the petitioner-firm had attorned in his favour at the behest of the Rehabilitation Department itself the property which had been acquired by the Central Government continued to vest in the Government and no title passed to respondent No. 4. Section 19 of the Act confers power on the Managing Officer to cancel any allotment under which any evacuee property acquired under the Act is held or occupied by a person notwithstanding anything contained in any contract or in any other law for the time being in force. That, however, is subject to the rules that have been framed under the Act. Rule 102 indicates the grounds on which the allotment can be cancelled, these being-
(a) has sublet or parted with the possession of the whole or any part of the property allotted or leased to him without the permission of a competent authority, or
(b) has used or is using such property for a purpose other than that for which it was allotted or leased to him without the permission of a competent authority, or
(c) has committed any act which is destructive of or permanently injurious to the property, or
(d) for any other sufficient reason to be recorded in writing;
The basic order impugned by the present petition is the one of cancellation of allotment made by the Managing Officer on 14th October 1960 and the appellate and revisional orders dated 20th March 1961 and 6th May 1961. They have been assailed on the ground of errors apparent and mala fides which may be more appropriately called bias prevalent in the minds of the authorities concerned. As the final order is of the Revisional Authority, Shri Parshotam Sarup, Deputy Chief Settlement Commissioner, it would be proper to examine whether it merits quashing on the grounds of patent or apparent errors, the first error on which stress has been laid is that the Deputy Chief Settlement Commissioner gave his decision on the premises that the matter could not be re-agitated on account of the applicability of the rule of res judicata. It has already been mentioned that the writ petition (No. 720 of 1960) was dismissed by the Andhra Pradesh High Court on 9th January 1961. In that petition a notice dated 28th September, 1960 issued by the Managing Officer had been challenged. It was pursuant to that notice that the allotment was cancelled on 14th October 1960. It had been contended before the learned Judge of that Court that the principal basis of the impugned notice was wrong inasmuch as the two year period granted by the Chief Settlement Commissioner (on 2nd May 1958) was not as a matter of grace but was merely a recognition of the statutory right which the petitioner-firm had u/s 29 of the Act and the Rules. This contention was rejected on the ground that unless and until a sale certificate had been issued in favour of the auction-purchaser no transfer of property could take place and a person in possession was not entitled to the said protection from ejectment afforded by that section. The other question was whether there was "any other sufficient reason" within the meaning of clause (d) of rule 102 justifying cancellation of the allotment. The reasons given in the impugned notice was that the petitioner-firm had represented to the authorities that reasonable time was required to surrender possession of the factory and that it was on that representation that the Chief Settlement Commissioner had permitted the retention of possession for a period of two years and that period had expired on 12tn February 1960. The learned Judge of the Andhra Pradesh High Court disposed of the aforesaid contention in the following words:-
If in fact the petitioner had made such a representation to the Chief Settlement Commissioner to grant it reasonable time to make alternative arrangements, that would certainly be "any other sufficient reason" within the meaning of clause (d) of rule 102 of the Rules. Their petitioner''s case is that no such representation had been made to the Chief Settlement Commissioner. Obviously this is a disputed question of fact which cannot be investigated and determined in a writ proceeding. Section 22 of the Act gives a right of appeal to the aggrieved party from an order passed by a Managing Officer to the Regional Settlement Commissioner. There is also a power of revision vested in the Chief Settlement Commissioner by section 24 against any order passed by the subordinate officials. The petitioner has thus an alternative remedy which is not only adequate but more appropriate and efficacious than an application under Article 226 of the Constitution, and that has not been availed by the petitioner. On the facts stated in the impugned notice, it cannot be said that in issuing the notice the respondent has acted without or in exercise of his jurisdiction nor is there any error of law on the face of the proceedings.
The Deputy Chief Settlement Commissioner relied on the fact that the notice issued u/s 19 dated 28th September 1960, had been held to be valid and that the petitioner-firm had asked for the quasing of the order cancelling the allotment dated 14th October 1960. He, proceeded to say-
The contention that there was no writ before the Hon''ble Judges against the order for cancellation of tenancy and as such the remarks made by the Judges are in the nature of obiter and have no force whatsoever does not hold good. The very fact that subsequent order was attacked and not the order cancelling the allotment clearly shows that the petitioner did not question the cancellation of tenancy and the remarks of the Hon''ble Judges were not in the nature of obiter. The decision re-validity of order cancelling the tenancy was necessary to adjudicate upon the validity of notice u/s 19(2). Moreover the remarks made by the Hon''ble Judges are entitled to respect and I am clear in my mind that in face of aforesaid decision of the Hon''ble Judges, this matter cannot be re-agitated before the Regional Settlement Commissioner or the Chief Settlement Commissioner.
Mr. Gurbachan Singh for the petitioner-firm has submitted that the Deputy Chief Settlement Commissioner was clearly in error in considering that merely because no writ petition had been filed seeking to quash the order dated 14th October 1960, it was not open to re-agitate that matter before the departmental authorities. An appeal had been filed against that order and indeed, that was the proper remedy to which resort should have been made. Mr. Pathak, who appears for respondents 1 to 3, did not very properly make any attempt to justify such a view. His contention, however, is that the Andhra Pradesh Court had given a final and binding decision in respect of the validity of the notice issued u/s 19 of the Act on 25th September 1960. If that be so, it is urged that so far as that matter was concerned it could not be re-agitated either before the departmental authorities or before me owing to the bar of constructive res judicata. There would have been a good deal of force in this submission provided in the former decision the question whether the reasons given by the Managing Officer in his notice constituted a sufficient reason within the meaning of clause (d) of rule 102 had been decided on the merits by the Andhra Pradesh Court. From the passage, which has been set out before, it is apparent that the learned Judge did not decide that point on the ground that it was a disputed question of fact which could not be investigated and determined in a writ proceeding. The writ petition was dismissed principally on the ground of the existence of alternative remedy which had not been exhausted. I must consequently hold that the order of the Deputy Chief Settlement Commissioner is erroneous so far as this, matter is concerned. The question still will remain whether his order which is based on other grounds as well must be quashed if no other error is found and if it can be sustained on the other grounds given therein.
The next point that was dealt with by the Deputy Chief Settlement Commissioner related to the effect of the circular issued by the Ministry of Rehabilitation. That circular is set out in his order and according to it, a policy decision had been taken that eviction of unauthorised occupants of evacuee properties which had already been auctioned should not be undertaken at the behest of auction-purchasers. This circular was issued in the year 1960. The Deputy Chief Settlement Commissioner''s, attention was invited to one of his own decisions in which he had held that it was the settled policy of the Department that no evictions were to be carried out at the behest of the auction-purchasers who could have their remedy in the Civil Courts after the conveyance deeds had been issued. It is pointed out by Mr. Gurbachan Singh that the Deputy, Chief Settlement Commissioner does not appear to have satisfactorily dealt with this aspect of the case and he has given an explanation with regard to his own decision which cannot stand scrutiny. The real reason given by the Deputy Chief Settlement Commissioner was that the petitioner firm could not be allowed to take advantage of getting the eviction stayed against it for two years and then plead that it could not, be ousted at the request of the auction-purchaser. Mr. Gurbachan Singh has relied on the concluding paragraph in the judgment of the Supreme Court in Amar Singh Vs. Custodian, Evacuee Property, Punjab, to which reference has already been made, It is submitted that although it was held that quasi-permanent allotment did not carry with it a fundamental right to property their Lordships were not to be supposed as denying or weakening the scope of the rights of the allottee which had been recognised in the statutory rules and which were entitled to zealous protection of the constituted authorities "according to administrative rules and instructions binding on them" and of the Courts by appropriate proceedings. According to these observations, so far as the departmental authorities were concerned, they were bound to give effect to the circulars. The effect, of these, circulars, of which details are mentioned in paragraph 26 of the petition, was seated to have been that if a public auction of an acquired evacuee property had taken place and provisional possession of the said property had been delivered to the auction-purchaser then in that event at, the request or suggestion of or at the behest of the auction-purchaser the displaced occupant of the property in question should not be evicted. The main grievance of the petitioner firm is that although all the conditions in these circulars had been satisfied nevertheless the departmental authorities rode roughshod over them on account of extraneous considerations. In the affidavit in reply filed on behalf of respondents 1 to 3 it is stated that these instructions have no legal force and do not bind the competent authorities while acting in a judicial capacity. Mr. Pathak sought to reinforce this position by further pointing out that the petitioner firm was not entitled to take benefit of these instructions or circulars because it had asked for a period of two years to be granted for making arrangements for removing the machinery and that request had been acceded to and after the expiry of that period, it was within the discretion of the authorities to give the benefit of those instructions or to decline to do so. The circulars in question did not admit of any exception and did not leave anything to the discretion of the departmental authorities in the matter of evicting any one at the request of the auction-purchaser. Normally the Deputy Chief Settlement Commissioner should have acted according to what was laid down in the circulars but it is not possible for the Courts to take any notice of the failure on the part of the Rehabilitation authorities to act according to them. The circulars did not have the force of statutory rules and at least two Benches of this Court have taken the view that the discretion of the authorities concerned cannot be fettered by executive or other instructions issued by the Department. The State v. Mehr Singh (1959) 61 P.L.R. 68 and Bishan Singh v. The Central Government (1931) 63 P.L.R. 74.
It is next pointed out that according to the Deputy Chief Settlement Commissioner the plea that eviction should not be ordered unless some reasonable or sufficient cause existed within the meaning of clause (2) of the agreement dated 9th February 1960 (Annexure ''A'') was not open to the petitioner-firm as it had taken a period of two years for giving up possession. It is said that the period of two years was granted, especially because the Chief Settlement Commissioner considered at that time that the petitioner-firm was entitled to the protection of section 29 of the Act and it was not granted by way of grace. The argument on this point is also connected with the more serious question whether any sufficient reason existed within the meaning of rule 102(d) for cancelling the tenancy. The Deputy Chief Settlement Commissioner considered that clause (d) of rule 102 was not to be read ejusdem generis with the preceding clause and the words "sufficient reason" were comprehensive enough to justify the cancellation of a tenancy of a person who remained in possession after having taken time for the purpose "of giving possession to the auction-purchaser". It is submitted on behalf of the petitioner-firm that time was never taken by it for the purpose of giving possession to the auction-purchaser as is apparent from the representation which was made and in which reliance was placed more on section 29 of the Act and only incidentally it was requested that the firm might be allowed to retain possession for at least two years. This certainly appears to be correct and the order of the Chief Settlement Commissioner which was conveyed on 2nd May 1958 by the Inspecting Officer did not grant permission for a period of two years as a matter of grace but the order was made in contemplation of certain rules, according to which the allottees were entitled to the protection of what was called their tenancy. It was even mentioned that the allottees would attorn in the normal way to the auction purchaser. The order was clearly made on the assumption that the petitioner-firm would be entitled to the protection which the tenants would enjoy u/s 29. It must not be forgotten that at that time there was no reason to believe that the sale certificate would not be issued to the auction-purchaser. Even the legal position with regard to the applicability of section 29 before a sale certificate was issued to the auction-parchaser was not so clear until it was elucidated in Bombay Salt and Chemical Industries Vs. L.J. Johnson and Others, . I am not satisfied that the order of the Chief Settlement Commissioner dated 2nd May 1958 made on the representation of the petitioner-firm merely granted a period of two years to it to remain in possession by way of special concession and thereafter put the auction-purchaser into possession. The entire premises on which the Deputy Chief Settlement Commissioner proceeded was based on an error. Mr. Pathak sought to rely on Deptylal, Lessee, Coronation Talkies, Ootacamund by power of attorney agent, Ramaswamy Vs. Collector of Nilgiris as the Managing Officer, under Act XLIV of 1954, Ootacamund, , but there the tenant had by his conduct persuaded the Chief Settlement Commissioner to desist from acting u/s 19 and to extend his stay and had agreed to peacefully hand over the possession at the expiry of that period and it was held that he was estopped, after the expiry of the period, from contending that he was not bound to vacate and that he was entitled to the benefit of section 29. As pointed out before, the representation made by the petitioner-firm did not contain a request to grant a period of two years as a matter of grace only but reliance had also been placed on section 29 and the tenor of the order of the Chief Settlement Commissioner showed that rightly or wrongly he was of the view that they were entitled to the protection which a tenant enjoyed which obviously had reference to the protection which section 29 would have afforded in the normal course.
Corning to the meaning of the words "sufficient reason" in rule 102(d), the view of this Court has been that clause (d) is not to be read as ejusdem generis with the preceding clause. Even if that be so, these words have to be given some definite meaning. It could not be contemplated that when the rule making authority had taken care to lay down a number of grounds on which allotment could be cancelled which were of a specific and precise nature, it would leave it to the Managing Officer to cancel the allotment according to his whim and caprice. According to Mr. Pathak, it would be for the Managing Officer to decide what would be a sufficient reason on the facts of each case. The reason, however, must relate to the subject-matter of Chapter 3 in which section 19 occurs. Chapter 3 provides for compensation pool for purposes of payment of compensation and rehabilitation grants to displaced persons. It is submitted that the power conferred by section 19 to vary and cancel an allotment is necessary for the purpose of carrying out the object of the provisions made by Chapter 3, the object being to have a compensation pool out of which displaced persons who had verified claims could be compensated for the properties which they had left in Pakistan and in respect of which they held those claims. The power u/s 19 must be exercised in the course of management and as that section is a special provision, the policy and purpose underlying section 29, which is a general provision, cannot be taken into consideration for ascertaining the extent of the power conferred by section 19. A great deal of reliance has been placed by Mr. Pathak on a decision of Falshaw J. (as he then was) in Mohinder Singh S. Shmsher Singh Vs. Union of India (UOI) and Others, . In that case the petitioner was a displaced person who had entered into occupation of a part of land on Rohtak Road, Karol Bagh. Later on, half of his plot which was evacuee property was taken over from him by the Custodian but his occupation of the remaining half was confirmed. Subsequently proceedings were taken for cancellation of his allotment on the ground that a portion of the land in his possession was to be allotted to an eye hospital. Thereupon the matter-wife brought the this Court under Article 226. It was found that it was proposed to give a portion of the plot occupied by the petitioner which had been taken over from him to Dr. Mathra Dass for an eye hospital. After rejecting the attack based on ground of mala fides and holding that the reasons for cancellation under rule 102(d) could not be analogous to clauses (a), (b) and (c) of that rule it was laid down that it would be sufficient if the reason given is "otherwise adequate". The following observations in this connection are noteworthy:-
In the present case the finding is that the petitioner was not using most of the land and he has still been left with a portion near the main road, and this in my opinion is an adequate reason for cancelling his allotment in respect of the land surplus to his requirements.
This case can lend no support to the argument addressed by Mr. Pathak as there could be no two opinions on the matter that when an allottee was not using a portion of the land allotted to him there would be sufficient reason for cancelling that portion of his allotment, especially when better use could Vie made of it by another proposed allottee. Although it may be true that section 29 of the Act is subject to the provisions contained in section 19 e.g., the Managing Officer can cancel an allotment until ownership is transferred to another person under the provisions of the Act which would attract the applicability of section 29, but what Has to be ascertained in the present case is whether according to the entire scheme of the Act and the rules framed thereunder it would be legitimate to hold that giving of possession to an auction-purchaser before the sale certificate had been issued to him would constitute sufficient reason for cancellation of the allotment within the meaning of rule 102(d). There can be no doubt that once the auction purchaser has fulfilled all the conditions laid down by rule 90 the sale certificate has to be issued to him as provided by sub-rule (15) of that rule which employs language of a mandatory nature; It is for that reason that in the present case as also invariably in all other cases which had come to the Courts provisional possession was given to the auction-purchaser and the allottees or occupants were directed to attorn to him. It was thus contemplated that they would be entitled to the protection of section 29 which could not be withheld if the sale certificate was issued. The essential policy underlying all this was that the allottees should have the same status as the tenants after the property was transferred by the Government to persons holding verified claims in satisfaction of the amount due to them by way of compensation. The very object of section 29 would be defeated if the Managing Officers started turning out the allottees in exercise of the provisions made u/s 19. Thus although legally the Managing Officers were empowered u/s 19 to cancel an allotment before a sale certificate was issued to the auction-purchaser I find it difficult to hold that it would constitute a sufficient reason within the meaning of rule 102(d) to cancel allotment for the sake of giving possession to the auction-purchaser as that would be opposed to the general policy and scheme of the Act as embodied in the various provisions and the rules. It would also enable the Managing Officers to make discriminatory orders, for instance, in one case they could direct cancellation of the allotment under rule 102(d) for giving possession to the auction-purchaser and in another case they might decline to do so. It is apparently for this reason that the Department itself issued the administrative instructions or circulars to which inference has already been made saying that the displaced occupant of a property should not be evicted at the request or suggestion of the auction-purchaser. Even if it be assumed that giving of vacant possession to an auction-purchaser would be a sufficient reason within the meaning of rule 102(d) to cancel allotment the Deputy Chief Settlement Commissioner''s decision would suffer from the infirmity that he proceeded on the basis that the judgment of the Andhra Pradesh High Court had binding force and also that the order of the Chief Settlement Commissioner made in May 1958 was merely a concession granted to the petitioner-firm as a matter of grace. As discussed before, even if the provisions of section 29 of the Act did not in terms apply the Chief Settlement Commissioner had acted according to the view which had prevailed in the Department throughout that an allottee in the circumstances which obtained in cases similar to the present case should not be evicted. The errors, which have been pointed out and which are apparent in the order of the Deputy Chief Settlement Commissioner are sufficient for his order being quashed by certiorari.
I shall now deal with another aspect of the matter which has been (sic) pressed before me on behalf of the petitioner-firm. It relates to allegations of mala fides and bias on the part of the Rehabilitation authorities and at least on the part of Shri H.K. Chaudhry, Regional Settlement Commissioner, Bombay, who disposed of the appeals of the petitioner-firm by an order dated 20th March 1961 (Exhibit ''G''). On behalf of the petitioner-firm an affidavit dated 13th March 1962 was filed in reply to the counter-affidavit of the General Attorney of respondent No. 4. This affidavit was filed after the records had been inspected under orders of this Court and allegations of a fairly serious nature were made questioning the bona fides of respondents 1 to 3. By a letter dated 8th January 1959 (at page 318 of the same file) respondent No. 2 wrote to Shri H.N. Bhatia, Assistant Settlement Commissioner, saying that when he was at Delhi the Chief Settlement Commissioner had spoken to him about the matter and had desired that the sale certificate should be issued to respondent No. 4 immediately. A request was made that the checking report with regard to the compensation of the associates be expedited so that the Regional Settlement Commissioner concerned could intimate the adjustments. The letter ended by saying-
I shall also be grateful if you apprise the Chief Settlement Commissioner about the reasons for the delay in the issue of the sale certificate to Shri Devi Dayal.
The office of the Chief Settlement Commissioner addressed a letter to respondent No. 2 in July 1959, which is at page 384 of file No. 8, in which paragraph 2 was as follows:-
I am desired to request that the case may be processed on ''priority basis'' and the conveyance deed issued, urgently. We shall be grateful if the latest position is intimated at an early date.
The auction-purchaser wrote a letter dated 25th August 1958 to Shri Mahavir Tyagi, former Minister for Defence Organisation, and then a sitting member of Parliament, a copy of which was also forwarded to Shri J.N. Hazarika, Parliamentary Secretary to the Minister of External Affairs, which is at page 16 of file No. 2, Volume II. This letter may be reproduced-
with a heavy heart I am approaching your goodself in the name of justice with the following:-
In January 1956 I purchased in open auction Rose Biscuit Factory in open auction (?) from the Regional Settlement Commissioner, Bombay. I filed the claims in 1957 February to the extent of Rs. 3,50,000 (full price). The present tenants J.B. Manga Ram & Company are defaulters but as they are influential and have approached to some Ministers in the Centre they are not being ejected although the law does not protect them. While your goodself was Minister you promised to help me in case I fulfill all the obligations on my part. I paid in full and filed all required papers with the R.S.C. Bombay on 28th February 1957. It is for the last two years that I alongwith my associates is suffering. The Chief Settlement Commissioner was kind enough to pass orders for the possession but later on to my bad luck the authorities gave me only provisional possession against which I have appealed and a copy of which is attached herewith. It is self explanatory, would you kindly help to save a poor refugee from the hands of an influential party.
At page 5 of file No. 2, Vol. II, is to be found some sort of appeal addressed by the General Attorney of respondent No. 4 to the Secretary to the Government of India, Ministry of Rehabilitation. This was forwarded to Shri M.C. Khanna, Minister for Rehabilitation, ''for his kind disposal'' by Shri J.N. Hazairka on 22nd December 1958. Shri J.N. Hazarika also wrote a demi-official letter on the same date to Shri M.C. Khanna (page 14 of the same filet. At page 15 of that file is to be found a letter to Mr. Johnson, Chief Settlement Commissioner, requesting him to look into the attached papers and do the needful. He further wanted to know the position about the eviction referred to. Shri M.C. Khanna wrote a letter dated 3rd January 1959 (page 17 of the same file) to Shri Hazarika saying-
The position about this factory is that Shri Devi Dayal is the auction-purchaser and Messrs. J.B. Mangharam & Co. are in possession as the Custodian''s lessees. The legal position is that since the Rose Biscuit Factory is an industrial establishment, the present lessees, provided they are not in default with their rent, are entitled to protection from eviction for a period of two years from the date when the property is transferred to Shri Devi Dayal. There is no question, therefore, of compelling these lessees to get out, as suggested by Shri Devi Dayal. Steps are being taken to issue transfer documents to Shri Devi Dayal so that full possession of the premises passes to him. Once this is done, he is free to take whatever action he might feel necessary against the lessees. Protection u/s 29 of the Compensation & Rehabilitation Act is given by the Courts and not by the Ministry of Rehabilitation. At present Shri Devi Dayal has been given provisional possession, which means that he is entitled to collect rent from the lessees.
It would thus appear that up to this stage although respondent No. 4 was making efforts to secure the eviction of the petitioner-firm through the departmental authorities the Minister very properly pointed out what in his opinion the true legal position was. On 11th January 1960 respondent No. 2 wrote a letter which is at page 423 of file No. 8. This was addressed to Shri I.N. Chib, Chief Settlement Commissioner. It appears from this letter that some note of discussion in a meeting had been recorded on 30th December 1959 about the factory in question at which Shri Mahabir Tyagi was present and in which he had participated. Towards the conclusion of the letter it was written:
If Shri Mahabir Tyagi has got the letter of May, 58, (?) issued by the Regional Settlement, I shall also be grateful to have a copy of that letter.
Incidentally, Shri Mahavir Tyagi had given me a ring from Hyderabad on 9th January 1960 about Rose Biscuit Factory, the House of Shri Laik Ali and some other matters relating to these cases.
On 15th March 1930 respondent No. 2 wrote a letter to Shri S.W. Shiveshwarkar, Chief Settlement Commissioner, (pages (sic) to 458 of file No. 8). This was in reply to some demi-official letter dated 12th March 1960 received from the Chief Settlement Commissioner regarding the notice issued to the petitioner-firm to surrender physical possession of the Rose Biscuit Factory. In paragraph 2 of this letter it was stated-
I agree that the question of protection u/s 29 is a matter between the transferee and the tenant and this office could only take action if the tenant or the lessee was guilty of any breach of the conditions of the tenancy or on any of the grounds mentioned in rule 102. * * * *.
In paragraph 3 he wrote-
Shri Mahavir Tyagi was at Hyderabad and brought this case to the notice of the Minister. I also explained this position to the Minister.
In paragraph 6 it was stated-
I also feel that the letter dated the 2nd April 1958, issued by the Chief Settlement Commissioner is not happily worded. The reference to protection u/s 29 was not correct. The protection is given u/s 29 against a transferee and as such arises only after the property has been transferred i.e. the sale certificate has been issued although the time u/s 29 then runs retrospectively from the date of the provisional possession.
In the concluding paragraph it was mentioned that as the case had been brought to the notice of the Minister by Shri Mahavir Tyagi, he would discuss what further action was to be taken when he came to Delhi. At page 26 of file No. 2 Volume III, is a letter written by Shri Mahavir Tyagi to Shri khanna, the Minister. This letter is as follows:-
In respect of the Rose Biscuit Factory Hyderabad, the High Court (A.P ) have recently given protection to your tenants J.B. Manga Ram uptil 30th of July, and have recognised the right of the Custodian to proceed with legal proceedings of giving notices etc, to the present occupant so that he may eject him after the 30th of July 1960. Could it not be possible for you to allow the Custodian to start proceedings of ejectment and deliver actual possession to Devi Dayal Marwah only after the present occupant had been ejected. There is a precedent for it in the famous case in the Supreme Court where ''Salt Mines'' were vacated by the tenaats.
Another letter of Shri Mahavir Tyagi to the Minister is to be found at page 44 of the same file, the material part of which is-
You are entitled to issue notice u/s 19(2) if only you agree to doing so. I am indeed very sorry to pester you with repeated requests about this matter. I hope, it is the last.
On 22nd August 1960 Shri Mahavir Tyagi wrote to the Minister (page 55 of file No. 2, Volume III) which may be reproduced-
I understand your Ministry has ordered the withdrawal of the ejection notice served against M/s. Manga Ram, a Government tenant of the Rose Biscuit Factory Hyderabad. And it is also said that the Law Ministry is of the view that the writ petition filed by Manga Ram is valid. I have consulted legal opinion of my own, and I have been assured that-
(a) in cases where law provides remedy, a writ cannot be entertained;
(b) moreover, so long as the factory has not been transferred to the auction-purchaser, the tenant does not enjoy any protection;
(c) as the issue of sale certificate has been unduly delayed, it is morally fair for Government to protect the rights of the auction-purchaser who himself is a refugee.
Could you be good enough to obtain the opinion of the Law Minister on these points. Thanks.
There is an order on it, presumably in the writing of Shri Khanna saying that the file may be sent to the Ministry of Law again for being put up before the Law Ministry. On 3rd September 1960 Shri Mahavir Tyagi wrote a letter, which is at page 60 of that file, to Shri Dharama Vira, Secretary, Ministry of Rehabilitation, saying-
I am enclosing herein the teleprinter message received from your lawyer Shankara Rao. According to him, there is no stay in operation now. Could you call Mr. Chaudhry, Custodian of Bombay to your residence and have a word with him. I understand, he is here, and is returning on Monday.
The Chief Settlement Commissioner made a note on a letter sent by respondent No. 2 to him dated 13th May 1960 that the Assistant Custodian, Hyderabad, apparently took orders from the auction-purchaser and not from his Regional Settlement Commissioner and so he had been rightly reverted (page 40 of file No. 2, Volume III). On 8th September 1960 respondent No. 2 issued "secret" instructions (page 29 of file No. 5) to the following effect:-
Sale certificate in respect of the Rose Biscuit Factory has not to be issued till further instructions.
The Regional Settlement Commissioner wrote on 17th September 1960 (page 29 of No. 5) to the following effect:-
Sale certificate in respect of the Rose Biscuit Factory has not to be issued till further instructions.
The Regional Settlement Commissioner wrote on 17th September 1960 (page 37 of the same file) expressing the view that in the presence of the terms and conditions of the agreement, the allotter was entitled to cancel the allotment for any reasonable cause. He wanted clear instructions regarding the action desired to be taken: At page 429 of file No. 8 is found a statement showing the position in respect of properties purchased by respondent No. 4. Although with regard to other properties the sale certificate had been issued but with regard to the Rose Biscuit Factory it is shown in this statement that the sale certificate had not yet been issued. This statement is signed by respondent No. 2.
It has been necessary to refer to the above correspondence and documents which are on the various files of the Department which have been produced before this Court because in the affidavit filed on behalf of the petitioner-firm dated 13th March 1962 reference has been made to them and it has been sought to be established that respondent No. 4 made a serious attempt to influence the authorities concerned through Shri Mahavir Tyagi, a member of the Parliament, to evict the petitioner-firm even though the view which prevailed in the Department at one stage and which was expressed by the Minister himself was that the petitioner-firm was not liable to eviction and that the Department ought not to interfere in the matter of giving possession to the auction-purchaser, namely, respondent No. 4. The suggestion on behalf of the petitioner-firm is that although upto August 1960 the auction-purchaser and the respondents were pressing for issue of a certificate but then at the instance of respondent No. 4, respondent No. 2, the Regional Settlement Commissioner, issued orders to his subordinates not to issue the sale certificate. This was done with the object of exercising powers u/s 19(2) for evicting the petitioner-firm because once the sale certificate had been issued admittedly the protection afforded by section 29 of the Act would have been claimed by the petitioner firm. It is most unfortunate that there should have been any out-side interfernce in matters which were more of a quasi-judicial nature but I am not satisfied that the Minister or the Secretary of the Rehabilitation Department allowed themselves to be in any way influenced by what was being done. The only question is whether respondent No. 2, who was the Regional Settlement Commissioner, became biased and prejudiced against the petitioner-firm because he did express deivergent views in several communications and finally he issued instructions that the sale certificate should not be issued to respondent No. 4. The petitions-firm based its case mainly on mala fides but I do not see how any question of mala fides can be raised when the Court has to examine whether the order of a quasi-Judicial Tribunal should be quashed by certiorari. Bias in the Tribunal is certainly a ground for doing so. According to Halsbury, Volume 11 page 67, it is an elementary principle that in the absence of statutory authority or consensual agreement no man can be a Judge in his own cause. Therefore where persons who have a direct interest in the subject matter of an inquiry before an inferior tribunal take part in adjudicating upon it, the tribunal is improperly constipated and is without jurisdication, and the Court will quash the determination, arrived at by it by cortiorari. Where the interest of the person adjudicating is not pecuniary, the order will not be granted unless it is shown that his interest is substantial and of such character that it will give rise to a real likehood of bias. In Frome United Breweries Co. v. Both Justice 1926 A.C. 586, a refusal of renewal of a licence by the compensation authority was quashed because three of the justices who sat and voted as members of the authority had been parties to a resolution of the licensing justices authorising a solicitor to appear on their behalf to oppose the renewal. Decisions of Magistrates in England had been quashed where it might seem that their decision was unduly influenced by their clerk retiring with them (page 69 of Halsbury, Volume II). Mr. Rathak referred to certain other cases i.e. Allinson v. General Council of Medical Education and Registration (1894) I.Q.B. 750, Vassiliades v. Vassiliades AIR 1945 P.C. 38, and Gurudeva Narayan Shrivastava v. State of Bihar AIR (1956) Pat. 131, but so far as we are concerned, the law has been laid down in Manak Lal Vs. Dr. Prem Chand, . The test, according to their Lordships, is not whether in fact a bias has affected the judgment; the test always is and must be whether a litigant could reasonably apprehend that a bias attributable to a member of the Tribunal might have operated against him in the final decision. It is in this sense that it is often said that justice must not only be done but must also appear to be done. In dealing with cases of bias, it is necessary to make distinction between pecuniary interest and prejudice so attributed. It is obvious that pecuniary interest, however; small it may be in a subject matter of the proceedings, would wholly disqualify a member from acting as a judge. But where pecuniary interest is not attributed but instead a bias is suggested, it often becomes necessary to consider whether there is a reasonable ground for assuming the possibility of a bias and whether it is likely to produce in the minds of the litigant or the public at large a reasonable doubt about the fairness of the administration of justice. Their Lordships referred to the decision in Rex v. Sussex Justices, Exparte Mc-Carthy (1924) 1 K.B. 256, as also to Rex v. Essex Justices, Exparte Perkins (1927) 2 K.B. 475. In the latter case there was a dispute between a husband and his wife and the wife had consulted the solicitor''s clerk in their office about the preparation of a deed of separation from her husband and the lawyer acted in the matter for time after which she ceased to consult him. No mention of the matter was made to the solicitor himself except one very short reference to it in a weekly report from his clerk, Subsequently the solicitor acted as a clerk to the justices who tried the, case. Although he stated in his affidavit that when acting as a clerk to the Justices he had no knowledge that his firm had acted for his wife, Avory J. made the following observation:-
though the clerk to the justices and the justices did not know that his firm had acted for the applicant''s wife, the necessary, or at least the reasonable, impression, on the mind of the applicant would be that justice was not done seeing that the solicitor for his wife was acting with the justices and advising them on the hearing of the summons, which she had taken against him.
Their Lordships rejected the contention raised before them that even if the constitution of the tribunal was defective or improper the orders of the tribunal could not be set aside or successfully challenged unless it was shown that the defective constitution of the tribunal had in fact led to prejudice. In the case decided by the Supreme Court, the question of waiver was also examined and it was held that bias in a member of the tribunal does not render the proceedings invalid if it is shown that the objection against the presence of the member in question had not been taken by the party even though the party knew about the circumstances giving rise to the allegations about the alleged bias. Their Lordships made it clear that waiver can be inferred only if and after it is shown that the party knew about the relevant facts and was aware of his right to take the objection in question. It is true that no objection was taken by the petitioner-firm on the ground of bias before respondent No. 2, namely, the Regional Settlement Commissioner but the rule of waiver cannot be applied as the petitioner-firm had no knowledge of the correspondence and the documents to which reference has been made at that time and on which the plea of bias has now been raised. A part from the fact that respondent No. 2, as is clear from the correspondence, had been having contact with Shri Mahavir Tyagi who was making every possible effort to help respondent No. 4 in seeking the eviction of the petitioner-firm, his secret instructions issued on 9th September 1960 that the sale certificate should not be issued was likely to create an impression that there was bias in him so far as the petitioner firm was concerned. In the affidavit filed on behalf of the petitioner-firm dated 13th March 1962 (paragraph 14(xxv) it was stated inter alia that respondent No. 2. wrote a letter to respondent No. 3 on 27th September 1960 forwarding the draft show-cause notice sent by Mr. Chib, the Deputy Chief Settlement Commissioner, and directed the Managing Officer, Hyderabad, that the said notice should be signed by him and should be issued on the next date i.e. 28th September 1960 and after 15 days'' time was over an order must be passed on 14th October 1960 and very expeditious action Should be taken. In the affidavit of Shri Gulab L. Ajwani, Assistant Settlement Commissioner, dated 11th April 1962, which has been filed in reply, these facts are not denied. It can, therefore, well be said that respondent No. 2 had already made up his mind to get the petitioner-firm evicted by the exercise of the powers u/s 19(2) and the test laid down by their Lordships in Manak Lal''s case viz. whether a litigant could reasonably apprehend that a (sic) attributable to a member of the tribunal might have operated against him in the final decision was satisfied. The facts established could not but produce in the mind of the litigant a reasonable doubt the fairness of the administration of justice when respondent No. 2 heard the appeals filed by the petitioner-firm. I would, therefore, hold that the orders made by respondent No. 2 in appeal dated 20th March 1961 deserve to be quashed by certiorari on the ground of bias. The order of respondent No. 2 also contains-other infirmities. It was based on the erroneous view that the Andhra Pradesh High Court had given a decision in the matter which was of a. binding nature. It also contains other errors which are to be found in the order of the Deputy Chief Settlement Commissioner which have already been discussed. The order of the Managing Officer dated 14th October 1960 was made almost under the directions of respondent No. 2 and it cannot be said that he brought his independent judicial mind to bear on the entire facts of the case. He was also largely influenced by certain orders which had been made by the Andhra Pradesh High Court. Moreover, that order will have to be quashed if the orders of the appellate and the revisional authorities are set aside since the order of the Managing Officer merged in the orders of the superior authorities.
Before concluding it is necessary to refer to the points that were urged by Mr. Pathak. One of them was that the decision to evict the petitioner-firm u/s 19 of the Act had been taken as far back as April 1958 when the Managing Officer issued a show-cause notice u/s 19, read with rule 102. The reason given in that notice was that the allotment could be terminated by notice of one month under clause (2) of the agreement and as it had become necessary to give possession to respondent No. 4 and his associates, the petitioner-firm should surrender possession. It is said that at last at that time no bias could be attributed either to the Managing Officer or to any superior authority and that Shri Mahavir Tyagi had not yet appeared on the scene. It is note worthy, however, that that notice was withdrawn by the Managing Officer by means of an order passed on 7th May 1958 owing to the directions of the Chief Settlement Commissioner conveyed by the Inspecting Officer on 2nd May 1958. The serving of other show-cause notices started in February 1960 and the manner in which they were issued has already been set out in the beginning of the judgment. The other matter on which Mr. Pathak laid emphasis was that the allotment could be cancelled by virtue of clause (2) in the agreement dated 9th February 1950 which had been entered into by the petitioner-firm with the Custodian of Evacuee Property. The position of the petitioner-firm is that giving of vacant possession to the auction-purchaser could not be considered to be reasonable cause within the meaning of that clause. Be that as it may, the course of subsequent events was quite different and cancellation of allotment was not based merely on that ground.
For all the reasons stated above, this petition is allowed and the impugned orders are quashed by certiorari. The parties are left to bear their own costs.