Bharoo Mal And Others vs Custodian General, Evacuee Property

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 7 to 9 of 1959

Decision Date: 10 March 1961

Coram: J.R. Mudholkar, Raghubar Dayal

The matter concerned an appeal filed by Bharoo Mal and several others against the Custodian General of Evacuee Property. The appeal was decided by the Supreme Court of India on 10 March 1961, and the judgment was authored by Justice J.R. Mudholkar, who was joined by Justices Subbarao, K. Dayal and Raghubar. The petitioners were identified as Bharoo Mal and others, while the respondent was the Custodian General of Evacuee Property. The case is reported in the 1961 All India Reporter at page 1283 and in the 1962 Supreme Court Reports (1) at page 246. The statutory framework involved the Administration of Evacuee Property Act, 1950 (Act 31 of 1950), in particular Section 10, and Rule 10 of the Administration of Evacuee Property (Central) Rules, 1950.

According to the headnote, the petitioners had exchanged their property situated in Pakistan for property belonging to an evacuee in India. They applied to the Deputy Custodian for confirmation of the exchange, and the Deputy Custodian granted the confirmation. Subsequently, the Custodian General revised the earlier order, set aside the confirmation, and directed the petitioners to vacate the exchanged properties. The Custodian also ordered the petitioners to render accounts of the rents and profits that they had derived from those properties. The petitioners contended that the Custodian lacked jurisdiction to compel them to render such accounts. The Court held that, under the Administration of Evacuee Property Act, the Custodian did not possess the power to direct a person who was in unauthorised possession of evacuee property to produce accounts of rents and profits without following the ordinary legal remedy of a suit.

The appeal fell within the civil appellate jurisdiction of the Supreme Court. It comprised Civil Appeals Nos. 7 to 9 of 1959, filed by special leave against the judgment and order dated 25 June 1955 in three separate cases numbered 0551‑R CG/54, 0602‑R CG/54 and 0503‑R CG/54 of 1954. Counsel appearing for the petitioners were described in a neutral manner, as were the counsel for the respondent. Justice Mudholkar delivered the judgment. The appeals challenged three orders that had been made on 12 March 1954 by the Custodian General, who had disposed of three revision petitions. Two of the revision petitions had been preferred by the late Bharoo Mal and by his widow, Padma Devi. Although a single common order had been issued by the Custodian General, three separate appeals were presented before this Court.

The factual background, as outlined in the judgment, indicated that an agreement had been executed on 11 April 1948 between Bharoo Mal and Nanan Begum for the exchange of Bharoo Mal’s properties located at Sukkar in Sind, Pakistan, for Nanan Begum’s properties situated in Lucknow. Earlier, on 7 April 1948, a similar agreement had been concluded between Padma Devi and Tahir Ali. Both parties to the exchanges took possession of the properties they had received, while the counterparties took possession of the properties that had originally belonged to Bharoo Mal and Padma Devi in Sukkar. The deed of exchange was intended to be finalized, though the record does not indicate that it had been executed at the time of the dispute.

It was stipulated in the original agreement that the deed of exchange should be executed within two years from the date the agreement was signed, but in reality the deed was never executed. As a result, in 1950 Bharoomal and Padma Devi filed three separate suits seeking specific performance of the exchange. The lower courts granted these suits, and in February 1952 the court issued sale deeds that transferred certain properties to Bharoomal and other properties to Padma Devi.

In October 1949 the Uttar Pradesh Administration of Evacuee Property Ordinance, 1949 (Ordinance 1 of 1949) came into force, and shortly thereafter the Administration of Evacuee Property (Chief Commissioners Provinces) Ordinance, 1949 (Ordinance 12 of 1949) was promulgated by the Central Government and extended to the United Provinces, thereby replacing the earlier Uttar Pradesh ordinance. After Nanan Begum and Tahir Ali migrated to Pakistan, Bharoomal and Padma Devi submitted three applications under clause 25(2) of the Central Ordinance seeking confirmation of the exchanges in their favour. The Deputy Custodian of Evacuee Property approved these applications in 1950.

In 1951 the Custodian of Evacuee Property, acting on his own initiative, reviewed the Deputy Custodian’s 1950 orders. He concluded that the agreements on which Bharoomal and Padma Devi based their applications did not constitute transfers and therefore could not be confirmed. He further held that the transfer deeds obtained by the parties from the court were not validated by the Custodian, and consequently their possession of the properties—properties that were undeniably evacuee property—was unauthorized. Accordingly, the Custodian ordered that possession of the properties be taken back from Bharoomal and Padma Devi and that they be required to render accounts of the rent and profits they had derived from those properties.

The parties then filed applications for revision before the Custodian‑General of Evacuee Property, and those applications were dismissed, as previously mentioned. In the present appeal before this Court the sole ground raised is that the Custodian lacked jurisdiction to issue an order compelling the appellants to account for the rents and profits earned from the properties they possessed. The counsel appearing for the appellants, Mr Achhruram, accepted that the Deputy Custodian’s 1950 orders confirming the transfers had been properly set aside by the Custodian in his revision. Consequently, the only issue remaining for determination is whether the Custodian was correct in further directing the appellants to render accounts of the rents and profits without resorting to the ordinary legal remedy of a suit.

The counsel for the Custodian‑General, Mr Gopal Singh, was invited to point out any provision in the Act or in the rules that authorises the Custodian of Evacuee Property to require a person alleged to be in unauthorized possession of evacuee property to account for the rents and profits of that property, without the need to pursue the conventional remedy of an action in court. Mr Gopal Singh proceeded to argue that such authority exists, contending that the relevant statutory provision empowers the Custodian to make the accounting order in the circumstances before him.

The counsel for the Custodian explained that when Nanan Begum and Tahir Ali migrated to Pakistan, their property situated in India automatically vested in the Custodian of Evacuee Property under clause 5(1) of the U P Ordinance 1 of 1949. He added that the vesting continued under Central Ordinance No XII of 1949, which had replaced the earlier U P ordinance. He further argued that, by virtue of subsection (2) of section 8 of the Administration of Evacuee Property Act, 1950 (XXXI of 1950), which came into force on 18 April 1950, any property that had vested in the Custodian under any law repealed by the Act shall be deemed to be evacuee property within the meaning of the Act and shall be deemed to have vested in the Custodian appointed under that Act. The counsel pointed out that Central Ordinance XII of 1949 was one of the statutes repealed by the Act. He then referred to section 10 of the Act and contended that, under that provision, the Custodian possessed the power to recover from an unauthorised occupant of evacuee property the rents and profits realised by such occupant during the period of unauthorised occupation. Sub‑section (1) of section 10 reads as follows: “Subject to the provisions of any rules that may be made in this behalf, the Custodian may take such measures as lie considers necessary or expedient for the purposes of securing, administering, preserving and managing any evacuee property and generally for the purpose of enabling him satisfactorily to discharge any of the duties imposed on him by or under this Act and may, for any such purpose as aforesaid, do all acts and incur all expenses necessary or incidental thereto.” According to the counsel, the words “for the purposes of securing, administering, preserving and managing any evacuee property” effectively conferred on the Custodian the power to recover rents and profits of the property from the person in possession. The Court observed that nothing in the language relied upon can be interpreted to give the kind of power asserted by the counsel. Sub‑section (2) of section 10 specifically enumerates certain powers of the Custodian, but the counsel was unable to point to any clause in that sub‑section that would empower the Custodian to recover rents and profits from a person in unlawful possession of the properties. The counsel then cited rule 10, claiming that the rule would entitle the Custodian to determine and recover rents and profits from unauthorised occupants of evacuee property. Sub‑rule 1 of rule 10 undeniably authorises the Custodian to recover possession of property from the evacuee or from any person, whether holding on behalf of, or under the evacuee, or otherwise, who does not have a lawful title to possession against the Custodian. However, there is nothing in that sub‑rule that further entitles the Custodian to determine and recover rents and profits from an unauthorised occupant of evacuee property. Sub‑rule 2 of rule 10 empowers the Custodian to issue a notice to a tenant or a licensee in possession of evacuee property when the Custodian cannot eject that occupant or does not wish to eject him.

The Court observed that the sub‑rule could not be applied to any person who is alleged to be occupying evacuee property without authorization. It further held that the language of the sub‑rule did not give the Custodian any authority to determine the amount of rents or profits that may be due, nor did it empower the Custodian to recover such rent in a summary or expedited fashion. Accordingly, the Court concluded that, on the facts before it, the provision could not be relied upon by the respondent to support the claim asserted. In view of this legal position, the Court held that the portion of the Custodian’s order, which had been confirmed by the Custodian General and which required the appellants to pay rents and profits in respect of the properties belonging to Nanan Begum and Tahir Ali that were in the appellants’ possession, must be set aside and declared of no effect. The Court further clarified that each party remained free to pursue, by whatever lawful means are available, any steps that may be open to them for establishing or enforcing their respective rights and claims over the disputed properties. The Court ordered that the costs of the appeal be borne by the respondents. Because the two appeals had been argued together, the Court directed that only a single set of hearing fees be payable. The appeals were therefore allowed.