Appeal No 1576 of 1966
Appeal from the judgment and ordered dated October 26
1965 of the Punjab High Court in Letters Patent Appeal No 174 of 1964
Bishan Narain SK Mehta and KL Mehta for the appellant
Harbans Singh and RN Sachthey for the respondents
The Judgment of the Court was delivered by Ramaswami J
In the month of August 1942 the appellant company hereinafter called the Company was incorporated with its registered office in the city of Jullundur dealing in sale 535 and purchase of land as its substantial business
By a sale deed executed on November 24 1944 the company purchased 646 karnals 9 marlas of land from Harjit Singh for a sum of Rs 32326 
The land was located in village Monanpura of District Sheikupura now in West Pakistan
Out of the consideration for the sale a sum of Rs 9000  was left with the company for payment to the previous mortgagees and the balance of the money was paid to Harjit Singh before the Sub Registrar at the time of registration
On the basis of the registered sale deed the company was allotted 27 standard acres and 11 12 units of land village Bohani Tehsil Phagwara District Kapurthala in the year 1950 in lieu of the land abandoned in Pakistan
A sanad No K248 dated March 9 1950 was issued in favour of the company
There was consolidation of holdings in village Bohani and as a result of consolidation the area allotted to the company came to 23 kanals and 5 marlas
Out of this the company sold 9 12 kanals to Mohan Singh a Jar of village Bohani for Rs 190000 by registered sale deed dated May 22 1956
Another portion of 220 kanals and 15 marlas was sold on September 12 1958 for Rs 10012 to one Mehnga Singh and his sons
It was later discovered that the company had been allotted less area of land than it was entitled to as a result of consolidation operations and so
an additional area of 24 kanals was allotted to the company in village Bohani to make up the deficiency
On August 30 1960 the Managing Officer respondent No 3 made a report Annexure C to the Chief Settlement Commissioner Respondent No 2 recommending cancellation of the allotment of land to the company and consequently the grant of permanent rights to it
The company was heard by the Chief Settlement Commissioner and thereafter the Chief Settlement Commissioner rejected the registered sale deed and balance sheets and relying on the jamabandi annexure X came to the conclusion that at the time of partition the company did not own any land in Pakistan nor was it in occupation of any such land
By his order dated February 27 1961 respondent No 2 set aside the permanent rights acquired by the company to the extent of 27 standard acres 1112 units and also cancelled the quasi permanent allotment of the land made in the name of the company
On March 29 1961 a revision petition was filed by the company to the Central Government respondent No 1
But the revision petition was dismissed on May 10 1961
On June 8 1961 the company filed a writ petition under article 226 of the Constitution praying for grant of a writ to quash the order of the Chief Settlement Commissioner dated February 27 1961
The writ petition was allowed by Shamshat Bahadur J
But the respondent took the matter in appeal under el
10 of Letters Patent to a Division Bench which reversed the judgment of the learned single Judge and ordered the writ petition to be dismissed
536 Section 24 of the 44 of 1954 hereinafter called the Act states 1 The Chief Settlement Commissioner may at any time call for the record oany proceeding under this Act in which a Settlement Officer an Assistant Settlement Officer an Assistant Settlement Commissioner an Additional Settlement Commissioner a Settlement Commissioner a managing officer or a managing corporation has passed an order for the purpose of satisfying himself as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit
2 Without prejudice to the generality of the foregoing power under sub section 1  if the Chief Settlement Commissioner is satisfied that any order for payment of compensation to a displaced person or any lease or allotment granted to such a person has been obtained by him by means of fraud false representation or concealment of any material fact then notwithstanding anything contained in this Act the Chief Settlement Commissioner may pass an order directing that no compensation shall be paid to such a person or reducing the amount of compensation to be paid to him or as the case may be canceling the lease or allotment granted to him and if it is found that a displaced person has been paid compensation which is not payable to him or which is in excess of the amount payable to him Such amount or excess as the case may be may on a certificate issued by the Chief Settlement Commissioner be recovered in the same manner as an arrear of land revenue
In support of the appeal it was contended on behalf of the company that the document described as jamabandi annexure II to writ petition was not the jamabandi of the year 1946 47 of the land in dispute and the Division Bench was in error in holding that the Chief Settlement Commissioner could properly rely upon annexure 
It was pointed out that annexure II was not the jamabandi for 1946 47 but it consisted of three notes one saying Maamur bai that is that there is no land of non Muslims in the village
the second note related to Kartar Chand and Gopal Dass who embraced Islam and the third related to sale of his land by Harjit Singh in favour of SA Latif
All these notes are dated May 3 1951
It was pointed out that these notes were made on May 3 537 1961 for the purposes of exchange of jamabandi and the document did not depict the state of affairs as on August 15 1947 which was the material date
It is not necessary to examine this document in detail for we are of opinion that the appeal must be allowed and the order of the Chief Settlement Commissioner must be quashed on the ground that there is no finding of the Chief Settlement Commissioner that the Company had obtained allotment of the land by means of fraud false representation or concealment of any material fact within the meaning of section 242 of the Act
It is true that the Chief Settlement Commissioner had recorded a finding that the company had not proved its title to any land in village Momonpura and the allotment was undeserved
But this is not tantamount to a finding that the allotment had been obtained by a false representation or fraud or concealment of material facts
Such a finding is a condition precedent for taking action under section 242 of the Act
The condition imposed by the section is mandatory and in the absence of any such finding the Chief Settlement Commissioner had no jurisdiction to cancel the allotment made to the company under section 242 of the Act
For these reasons we hold that the appeal should be allowed and the judgment of the Division Bench dated October 26 1965 in Letters Patent Appeal should be reversed and the judgment of Shamshat Bahadur J dated November 28 1963 quashing the order of the Chief Settlement Commissioner dated February 27 1961 should be restored
The appeal is accordingly allowed with costs
RKPS Appeal allowed


Summary:
By a sale deed executed on November 24 1944 the appellant company purchased certain land located in an area now part of West Pakistan
After the partition of India the company on the basis of a registered sale deed was allotted certain land in Kapurthala in 1950 in lieu of the land abandoned in Pakistan
On a report made by the Managing Officer Respondeat No 3 on August 30 1960 recommending cancellation of the allotment of land to the company and after hearing the company the chief Settlement Commissioner rejected the registered sale deed and came to the conclusion that at the time of partition the company did not own any land in Pakistan nor was it in occupation of any such land
Therefore by his order dated February 27 1961 he set aside the permanent rights acquired by the company
HELD The order of the Chief Settlement Commissioner must be quashed on the ground that there is no finding of the Chief Settlement Commissioner that the company had obtained allotment of the land by means of fraud false representation or concealment of any material fact within the meaning of section 242 of the Act
It is true that the Chief Settlement Commissioner had recorded a finding that the company had not proved its title to any land in the area now part of Pakistan and the allotment was undeserved
But this is not tantamount to a finding that the allotment had been obtained by a false representation or fraud or concealment of material facts
Such a finding is a condition precedent for faking action under section 242 of the Act
The condition imposed by the section is mandatory and in the absence of any such finding the Chief Settlement Commissioner had no jurisdiction to cancel the allotment made to the company under section 242 of the Act
537 A D