Md. Sharfuddin vs R. P. Singh And Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 458 of 1958

Decision Date: 10 March 1961

Coram: Subba Rao, Raghubar Dayal, J. R. Mudholkar

In the matter of Md Sharfuddin versus R P Singh and others, the Supreme Court of India delivered its judgment on the tenth of March, 1961. The bench that heard the appeal comprised Justice Subbarao, Justice K Dayal, Justice Raghubar Dayal and Justice J R Mudholkar. The case is reported in 1961 AIR 1312 and in the 1962 volume of the Supreme Court Reports at page 239. The appeal was filed under the provisions of the Administration of Evacuee Property Act, 1950 (Act 31 of 1950), specifically invoking section 24(1)(a). The principal issue before the Court was whether the Assistant Custodian of the Headquarters in Patna could lawfully prefer an appeal against an order made by the Assistant Custodian stationed at Giridih, when that order held that the properties owned by the appellant were not evacuee property. The factual background revealed that the Assistant Custodian, Giridih, initially issued an order declaring the appellant’s holdings to be evacuee property, but after further inquiry later held that the same holdings were not evacuee property and consequently released them. Acting under section 26(1) of the Act, the Custodian at the headquarters summoned the records, heard the appellant and then dismissed the proceedings. Thereafter, the Assistant Custodian of the Headquarters, Patna, filed an appeal under section 24(1)(a) against the Giridih order. In that appeal the Custodian declared that the shares belonging to the appellant’s brothers in the same holdings were indeed evacuee property and ordered their separation. The appellant contended that the Headquarters Assistant Custodian was not a “person aggrieved” within the meaning of section 24 and therefore had no right to prefer such an appeal. The Supreme Court held that the appeal filed by the Headquarters Assistant Custodian was incompetent because he did not satisfy the statutory definition of a person aggrieved by the Giridih order and consequently could not maintain an appeal. The Court distinguished the earlier decision in Ebrahim Aboobakar v. Custodian‑General of Evacuee Property [1952] S C R 696, finding that its factual matrix differed.

The appeal, cited as Civil Appeal No. 458 of 1958, was filed by special leave against the judgment and decree dated the third of September, 1956, of the Patna High Court in Miscellaneous Jac No. 603 of 1955. The appellant was represented by counsel consisting of M K Ramaraurthi, R K Garg, S C Agarwal and D P Singh, while the respondents were represented by counsel R C Prasad. The judgment was pronounced by Justice Subbarao. The matter before the High Court involved an application under Article 226 of the Constitution seeking to quash an order dated the fourth of August, 1955, issued by Shri R P Singh, the Custodian of Evacuee Property for Bihar. The Court set out the relevant facts, beginning with information supplied by a person named Qurban Ahmad, upon which the Assistant Custodian at Giridih issued a notice under section 7(1) of the Administration of Evacuee Property Act, 1950, directing the appellant to show cause why three holdings—numbers 326, 774 and 654—held by him should not be declared evacuee properties. After conducting the requisite inquiry, the Assistant Custodian initially held that the said holdings were evacuee properties. Dissatisfied with this determination, the appellant filed a revision petition under section 26 of the Act against the order, addressing it to the Deputy Custodian at Hazaribagh. The subsequent procedural history, including the release of the holdings, the call for records by the Custodian, and the eventual appeal by the Headquarters Assistant Custodian, formed the backdrop against which the Supreme Court examined the question of locus standi for filing an appeal under section 24(1)(a).

The Deputy Custodian of Hazaribagh set aside the order issued by the Assistant Custodian and sent the matter back to the Assistant Custodian for disposal in accordance with the law. Subsequently, on 26 April 1954, the Assistant Custodian at Giridih examined the evidence placed before him and concluded that the properties in question were not evacuee properties; based on that conclusion he released the properties to the appellant. After this, the Custodian, exercising the power conferred by section 26(1) of the Administration of Evacuee Property Act, 1950, called for the case records and, after hearing the appellant, issued an order dated 27 January 1955 whereby he dropped the proceedings entirely. On 22 February 1955, the Assistant Custodian of the Headquarters located at Patna filed an appeal before the Custodian under section 24(1)(a) of the Act, challenging the Giridih Assistant Custodian’s order of 26 April 1954 that had released the appellant’s holdings. The Custodian, on 4 August 1955, set aside the Giridih Assistant Custodian’s order, declared that the shares of the appellant’s brothers in the same holdings were evacuee properties, and directed that the matter be referred to the appropriate authority for the separation of their interests. Following this order, the appellant instituted an application before the High Court under article 226 of the Constitution seeking to quash the Custodian’s order; the High Court dismissed the application, giving rise to the present appeal.

Although numerous issues were raised before the High Court, the appellant’s counsel emphasized only four specific questions before this Court: (1) whether any appeal lay to the Custodian from the Assistant Custodian’s Giridih order at the instance of the Assistant Custodian of the Headquarters, Patna; (2) whether, under section 7‑A of the Act, the Custodian possessed any power after 7 May 1954 to declare a property as evacuee where no proceeding was pending on that date, and consequently whether the Custodian’s order of 4 August 1955 was illegal because the appeal against the Giridih order was filed only on 22 February 1955, thus falling outside the statutory period; (3) whether the Custodian acted perversely by condoning the delay in filing the appeal without providing any reasons; and (4) whether the notice issued to the appellant under section 7(1) of the Act was defective, rendering the subsequent proceedings void. The High Court rejected the appellant on all four points. While the appellant’s counsel raised all four contentions before this Court, he gave serious focus only to the first two. In order to address the first contention adequately, it is necessary to examine the scope of the relevant statutory provisions. Section 2(c) of the Act defines “Custodian” as the State Custodian and includes any Additional, Deputy or Assistant Custodian of evacuee property in that State. Section 6 empowers the Central Government to appoint, for any State, a Custodian and as many Additional, Deputy or Assistant Custodians of evacuee property as may be required to discharge the duties imposed by the Act.

The Act provides that the Custodian, together with any Additional, Deputy or Assistant Custodian of Evacuee Property, must carry out the duties that the statute imposes upon them. Sub‑section (3) of the relevant provision expressly states that these subordinate custodians shall perform their functions under the overall superintendence and control of the State Custodian. Nevertheless, the Central Government retains the authority to issue either a general order or a special order directing how the workload may be allocated among the various custodians. Consequently, irrespective of the particular titles—whether Additional Custodian, Deputy Custodian or Assistant Custodian—all such officers fall within the definition of “Custodian” as given in the Act. Their distinct designations merely serve administrative convenience, because each class of officer either has duties defined by statute or by the rules issued under the Act.

Section 7 confers on any Custodian, including those belonging to the categories mentioned above, the power to determine whether a particular piece of property qualifies as evacuee property under the meaning of the Act. When a Custodian is of the opinion that a property is evacuee property, he must first cause a notice to be issued in the manner prescribed to all persons who have an interest in the property. After the notice, the Custodian is required to hold an inquiry that is appropriate to the facts and circumstances of the case. If, after completing the inquiry, the Custodian is satisfied that the property is indeed evacuee property, he may pass an order declaring the property as such. Sub‑section (3) of Section 7 further obliges the Custodian to publish the details of every property declared evacuee in the Official Gazette. Once the declaration is made, the ownership of the property vests in the State Custodian. Section 9 then authorises the Custodian to take possession of any evacuee property that has vested in him. Under Section 10, the Custodian is empowered to adopt any measures that he considers necessary or expedient for securing, administering, preserving and managing the property. Section 24 provides that any person who is aggrieved by an order made under Section 7 may prefer an appeal. If the original order was issued by a Deputy or Assistant Custodian and the value of the property does not exceed two thousand rupees, the appeal must be made to the State Custodian; for all other cases, the appeal lies to the Custodian‑General. Although Section 26, which once granted revisional jurisdiction to the Custodian, Additional Custodian or an authorised Deputy Custodian over orders of subordinate officers, was repealed by Section 8 of Act 91 of 1956, Section 27 now gives the Custodian‑General plenary power to revise and correct any Custodian’s order at any time. In essence, the legislative scheme operates as follows: after a proper inquiry, the Custodian may declare property to be evacuee; that declaration causes the property to vest in the Custodian; the Custodian then manages the vested property; if a declaration is later found to be erroneous or illegal, the aggrieved party may appeal under Section 24, and the Custodian or Custodian‑General may, exercising their revisional authority, set aside the flawed order; likewise, if a Custodian improperly releases a property, the same revisional mechanisms apply.

The Court noted that when a property was released on the ground that it was not evacuee property, such a release was subject to revision by either the Custodian or the Custodian‑General, as provided by section 26 or section 27 of the Act. Counsel for the respondents argued that the phrase “any person aggrieved” in section 25 of the Act was broad enough to encompass a Custodian, and therefore a Custodian could file an appeal against an order of a Custodian releasing property under section 7 of the Act. Acknowledging that the argument contained an obvious inconsistency, the counsel conceded that an appeal could be filed only by a Custodian other than the Custodian who had issued the order of release. The counsel further submitted that, pursuant to section 6 of the Act, the Central Government might allocate work among the various Custodians—Additional, Deputy and Assistant Custodians—and that in such an allocation the power to inquire whether a property was an evacuee property could be conferred on one Custodian while the power to manage the property could be given to another. In that scenario, the Custodian who was tasked with management would, the counsel argued, be a “person aggrieved” within the meaning of section 24 of the Act. In the Court’s view, this line of argument did not fit the scheme of the Act. Although the Act created different categories of Custodians for purposes of convenient management or judicial determination of disputes, all of those categories fell within the definition of “Custodian” in the Act. Moreover, the Act established a hierarchy of tribunals under the superintendence and control of the Custodian‑General. It would therefore be anomalous to hold that a Custodian could appeal against the order of another Custodian, because the Act never contemplated one officer preferring an appeal against the order of another officer. If an Assistant Custodian or a Custodian erred in declaring a property to be evacuee property, the Act provided that the Custodian or the Custodian‑General, as the case required, could set the matter right; after 1956, that power resided exclusively with the Custodian‑General. Consequently, the words “any person aggrieved” in section 24 could only refer to a person whose property had been declared evacuee, or a person who had approached the Custodian to have the property declared evacuee, or any other similarly affected individual. The expression could not be read to include any Custodian defined by the Act. The Court also observed that the respondents relied heavily on the decision of this Court in Ebrahim Aboobaker v. Custodian‑General of Evacuee Property. In that case, information supplied by one Tek Chand Dolwani to the Additional Custodian of Evacuee Property prompted the Additional Custodian to commence proceedings under the Bombay Evacuees (Administration of Property) Act, 1949, against Aboobaker. The Additional Custodian recorded Aboobaker’s statement and examined the evidence produced by Tek Chand Dolwani.

In the earlier case, Tek Chand Dolwani filed an appeal against the order of the Additional Custodian to the Custodian‑General of India. One of the issues that the Court examined was whether Tek Chand Dolwani could be described as a “person aggrieved” by the order of the Additional Custodian within the meaning of section 24 of the Central Ordinance XXVII of 1949, and consequently whether he possessed the right to lodge an appeal against that order. After reviewing the provisions, the Court held that Tek Chand Dolwani did qualify as a person aggrieved under the said section. The Court explained that rule 5(5) of the rules framed under the Ordinance expressly allowed any individual or individuals who claimed an interest in the inquiry or in the property that was being declared an evacuee property to submit a written statement in response to the written statement filed by persons asserting that the property should not be declared an evacuee property. Moreover, the rule required the Custodian to hear any evidence that the party appearing to show cause might produce as well as any evidence that the party claiming an interest might adduce. In effect, the rule empowered the Additional Custodian to decide a dispute between the person who moved the Custodian to declare a property as an evacuee property and the person who denied that declaration. In that context, the Court previously held that the person who moved the Custodian was a person aggrieved within the meaning of section 24. However, the Court observed that the decisions or authorities relied upon in that earlier case were not applicable to the present enquiry. When a statute or the rules made thereunder provide for a dispute to be resolved by a tribunal, it is implicit that the party whose case is rejected is an aggrieved person. The Court clarified that this principle does not extend to the Custodian and the party in whose favour the Custodian gave a decision, nor does it apply to a subordinate officer of the Custodian who made the decision and who has no statutory duty to appear before the Custodian to present the case of the department or to lead evidence in its support. Accordingly, the Court concluded, after considering the scheme of the Act, that the Assistant Custodian, Headquarters, Patna, was not a “person aggrieved” within the meaning of section 24 of the Act. Consequently, the appeal to the Custodian was not competent, and the second question raised before the Court therefore did not need to be considered.

The Court then set aside the order of the High Court and directed the issuance of a writ of certiorari to annul the order dated 26 April 1954 of the Custodian of Evacuee Property, Bihar, which had set aside the order of the Assistant Custodian, Giridih, and had released holdings numbered 326, 774 and 654 in Giridih that belonged to the appellant. The Court allowed the appeal with costs throughout, thereby granting the relief sought by the appellant.