Bawa Harigir vs Assistant Custodian, Evacuee Property

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Petition No. 87 of 1957

Decision Date: 7 March 1961

Coram: J.R. Mudholkar, Bhuvneshwar P. Sinha, S.K. Das, A.K. Sarkar, N. Rajagopala Ayyangar

In this matter the petitioner, Bawa Harigir, challenged a decision of the Assistant Custodian of Evacuee Property, Bhopal, before the Supreme Court of India. The judgment was delivered on 7 March 1961 by a Bench consisting of Justice J. R. Mudholkar, Justice Bhuvneshwar P. Sinha, Justice S. K. Das, Justice A. K. Sarkar and Justice N. Rajagopala Ayyangar. The case is reported in the 1961 volume of the All India Reporter at page 1257 and also appears in the 1962 Supplementary Cause Reports at page 189. The dispute concerned provisions of the Administration of Evacuee Property Act, 1950 (Act 31 of 1950), specifically section 2(d) which defines evacuee property and section 40(4)(a) which empowers the Custodian to refuse confirmation of a sale. The petitioner invoked Articles 31(2) and 31(5)(b)(iii) of the Constitution of India, arguing that the statutory provisions allowed the State to deprive him of his property without legal authority. The headnote summarizes the factual background: the petitioner had purchased land from a person named R. R., who was later declared an intending evacuee and departed for Pakistan. The Assistant Custodian issued a notice requiring the petitioner to show cause why the land should not be declared evacuee property; after a hearing the Custodian declared the land to be evacuee property. Subsequent appeals and a revision against that order failed. The petitioner also applied under section 40 for confirmation of the sale, but the application was rejected on the ground that the evacuee had not acted in good faith. The petitioner claimed that sections 2(d) and 40(4) violated Article 31(2) because they permitted the State to take property without lawful authority. The Court held that the challenged provisions were not invalid in view of Article 31(5)(b)(iii), which protects not only statutes that themselves declare property to be evacuee property but also statutes that empower an authority to make such a declaration and prescribe the criteria for it. The Court further observed that section 40(4)(a) did not confer arbitrary power on the Custodian; rather, it was a judicial function, and the lack of a detailed standard for determining good‑faith could not render the provision unconstitutional.

The judgment originated as Petition No. 87 of 1957, filed under Article 32 of the Constitution for enforcement of fundamental rights. Counsel for the petitioner was assisted by a senior advocate, while the respondents were represented by a team of counsel. The Court noted that the petitioner’s principal allegations were that the Custodian’s order under subsection 4 of section 40 effectively stripped him of his property without any legal authority and that the order amounted to discriminatory treatment. The factual matrix, as detailed by the Court, showed that the petitioner had bought 195.51 acres of land in the former Bhopal State from Babu Rehmatullah on 23 June 1950 for a consideration of Rs. 3,500. Rehmatullah was subsequently declared an intending evacuee by the Assistant Custodian and left India for Pakistan on 20 June 1951. On 12 June 1951 the Assistant Custodian issued a notice to the petitioner demanding an explanation as to why the purchased land should not be declared evacuee property. After hearing the petitioner the Custodian declared the land to be evacuee property. The Court proceeded to examine whether the statutory provisions allowing such a declaration and the power to reject confirmation of the sale were constitutionally permissible, ultimately concluding that they were consistent with the constitutional protections provided by Article 31(5)(b)(iii) and could not be struck down as arbitrary or unconstitutional.

The petitioner argued that sections 2(d) and 40(4) of the Administration of Evacuee Property Act were unconstitutional. He claimed that the order issued by the Custodian of Evacuee Properties under section 40(4) effectively confiscated his land without any legal authority and that the order amounted to discriminatory treatment against him. These two contentions formed the principal categories of the arguments presented before the Court. The factual background was then set out. The petitioner had bought 195‑51 acres of land situated in the former Bhopal State from a man named Babu Rehmatullah on 23 June 1950 for a price of Rs 3,500. The Assistant Custodian of Evacuee Property later declared Rehmatullah to be an intending evacuee. Rehmatullah subsequently departed India for Pakistan on 20 June 1951. On 12 June 1951 the Assistant Custodian issued a notice to the petitioner requiring him to show cause why the land he had purchased from Rehmatullah should not be declared “evacuee property.” After hearing the petitioner, the Assistant Custodian declared the land to be evacuee property on 8 August 1951. The petitioner challenged that declaration by filing an appeal and a revision under the provisions of the Act, but both were rejected. He then filed a writ petition before the Judicial Commissioner of Bhopal, which was dismissed in limine on 14 July 1954. Consequently, the petitioner approached this Court invoking article 32 of the Constitution. The counsel for the petitioner, Mr B D Sharma, contended that the Evacuee Property Act, especially sections 2(d) and 40(4), violated the Constitution because they permitted the State to deprive him of his property without providing compensation, as required by article 31(2). The Court’s immediate response to that contention was that a law enacted pursuant to any agreement between the Government of India and the Government of any other country, or otherwise, concerning property declared by law to be evacuee property, would not be subject to the restriction of clause (2) of article 31. This principle is expressly stated in article 31(5)(b)(iii), which provides: “Nothing in clause (2) shall affect (b) the provisions of any law which the State may hereafter make—(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.” Mr Sharma further argued that the protection in that clause should apply only to statutes that themselves declare property to be evacuee property, not to statutes that merely empower an authority to make such a declaration. The Court rejected that argument, observing that the expression “property declared by law to be evacuee property” necessarily embraces property that can be declared evacuee by virtue of a law granting an authority that power.

property. A statute that deals with evacuee property is intended to lay down the criteria by which any piece of immovable or movable property may be classified as evacuee property. Such a law is not required to identify every individual parcel that will consequently be treated as evacuee property; its purpose is to prescribe the standards and the method of determination. The constitutional protection that was referred to earlier therefore cannot be confined, as Mr. Sharma argues, to a law that expressly declares particular assets to be evacuee property. The protection also embraces a law that merely provides the framework for deciding when property may be declared evacuee property. Learned counsel then put forward the contention that the specific property that is the subject of the present suit is not evacuee property and that Article 31(1) of the Constitution therefore bars any acquisition of that property. That line of argument is difficult to accept. Article 31(1) expressly provides that deprivation of property is prohibited except when it is carried out under the authority of law. The petitioner can certainly maintain that he feels deprived of his interest because the Custodian has declared the land to be evacuee property. However, that declaration was made in accordance with a statute that has been duly enacted by Parliament. Consequently, the declaration rests on a legal authority that satisfies the constitutional requirement of “authority of law”. Only if the Court were to hold that the enabling statute itself is unconstitutional would the petitioner’s claim acquire a different character. The Court therefore examined the validity of the statutory provision and found that the provision operates within the constitutional limitations placed on the State’s power to deprive property.

The next contention raised by counsel was that clauses (a) and (c) of Section 40, Sub‑section (4), are ultra vires because they confer an arbitrary power on the Custodian. This objection arose because the petitioner’s application to the Custodian under Section 40, seeking confirmation of a sale in his favour, was dismissed on the ground that the evacuee had not acted in good faith in effecting the sale. Sub‑section (4) of Section 40 reads: “The Custodian shall hold an inquiry into the application in the prescribed manner and may reject the application, if he is of the opinion that: (a) the transaction has not been entered into in good faith or for valuable consideration; (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.” The Court limited its analysis to clause (a) of that provision, the specific ground on which the Custodian relied, and did not address clause (c). Accordingly, the Court’s discussion is confined to clause (a). Sub‑section (4) therefore authorises the Custodian to conduct an inquiry into the genuineness or validity of a transaction that is sought to be confirmed, and it empowers him to refuse confirmation where he is satisfied that the transaction was not concluded in good faith. Counsel argued that the expression “good faith” is vague, slippery and fails to furnish a concrete standard for the Custodian to follow. The Court observed, however, that the term “good faith” appears in many statutes and has been given a definite meaning by courts of law through established jurisprudence. Moreover, the power conferred on the Custodian by Sub‑section (4) of Section 40 is of a judicial character; the absence of a rigid, prescriptive standard does not render the provision unconstitutional, and the Custodian’s discretion must be exercised in accordance with the established legal meaning of good faith.

The Court observed that the power exercised by the Custodian under subsection (4) of section 40 is a judicial power. Because this power is judicial in nature, the absence of a precise norm or standard for determining whether a transaction was entered into in good faith does not make the provision unconstitutional. In other words, even if the statute does not lay down a detailed test for assessing good faith, the provision remains valid since the Custodian is required to apply his judicial discretion in each case. The Court further noted that the statutory language permits the Custodian to refuse confirmation of a transfer when he is satisfied that the transfer was not made in good faith, and that this discretion is anchored in judicial authority rather than a rigid administrative rule.

Representing the petitioner, counsel argued that a mere lack of good faith on the part of the transferee should not, by itself, be a sufficient ground for denying recognition of the transfer. He contended that, unless the transferee himself was also shown to be acting without good faith, the transaction ought to be confirmed under subsection (4) of section 40. When the Court pointed out the decision in Rabia Bai v. The Custodian‑General of Evacuee Property (1), where it had upheld the Custodian’s refusal to confirm a transfer on the basis that the evacuee acted in bad faith, counsel did not pursue his argument further. The final contention raised by counsel was that the petitioner had been subjected to discrimination by the Custodian in the confirmation process. He highlighted that, before the land was sold to him by Rehmatullah, the same Rehmatullah had sold a house to a group of nurses for inadequate consideration, yet that sale had been confirmed by the Custodian. In contrast, the petitioner’s purchase, which was for adequate consideration, had not been confirmed. The Court reiterated that the Custodian’s order is a judicial order; an error in one particular case does not amount to discrimination against the petitioner. Consequently, the Court found the petition to be entirely without merit, dismissed it without costs, and entered a dismissal of the petition.