Case: Deputy Custodian, Evacuee Property, New Delhiand Others Vs. Official Receiver Of The Estate Of Daulat Ramsurana,Delhi

observe that the High Court thought that this decision afforded substantial guidance in determining the question of construction with which it was concerned in the present appeal. After quoting the material observations made by Ghulam Hassan, J. in Ebrahim Aboobakers case, 1953 SCR 691 : (AIR 1953 SC 298 ) the High Court has observed that in view of law laid down by their Lordships of the Supreme Court it must be held that as soon as the order of adjudication was made on the 17th June, 1950, the property of the insolvent vested in the Official Receiver for the purposes mentioned in the Provincial Insolvency Act, and so, it was not open to the Custodian to issue a declaration under S. 7(1) of the Act. With respect, we are unable to see how the decision of this Court in Ebrahim Aboobakers case 1953 SCR 691 : (AIR 1953 SC 298 ) can have any relevance or materiality in construing S. 7(1) of the Act for the purpose of deciding the dispute between the parties before us. The main test on which the validity of the proceedings taken against Ebrahim Aboobakar was successfully challenged, was that the alleged evacuee having died, a proper and valid enquiry could not be held. That test cannot be applied in the present case effectively. The alleged evacuee was alive at the date of the enquiry and there was no infirmity in the proceedings taken in that behalf. Having taken the view that the decision of this Court in Ebrahim Aboobakers case was decisively in favour of the respondents contention, the High Court did not feel called upon to address itself to the question of construction of S. 7(1) in the light of the other relevant considerations to which we have referred.14. Reverting then to S. 7(2) of the Act, it is noticeable that as a result of this provision, if a notice has been issued under sub-sec. (1) in respect of any property, such property shall, pending the determination of the question whether it is evacuee property or otherwise, be incapable of being transferred or charged in any way, except with the leave of the Custodian, and no person shall be capable of taking any benefit from such transfer or charge except with such leave. It is remarkable that the legislature has taken the precaution of prescribing a blanket ban on transfers of all properties in respect of which proceedings have commenced under S. 7(1). This ban operates even in respect of properties which may ultimately be found to be not evacuee properties, and that means the intention of the legislature clearly was to leave all properties as they were when proceedings have been commenced in respect of them under S. 7(1).15. Thus, the position appears to be that transfers made by intending evacuees before they migrated from India come within the definition of evacuee property, and declaration can be made in respect of properties so transferred under S. 7(1). Transfers made pending the proceedings cannot defeat the purpose of the enquiry under S. 7(1) and a declaration can be made in spite of such transfers pending the enquiry. The death of an alleged evacuee does not interrupt the continuance of the proceedings and the declaration can be made even after his death that his properties were evacuee properties. If that be so, could it have been the intention of the legislature to permit transfers of their properties by evacuees between the date of their migration and the date of the commencement of the proceedings under S. 7(1)? If the view taken by the High Court is right, then it follows that wherever properties have been transferred by evacuees after their migration and before the proceedings under S. 7(1) commenced, they would be beyond the reach of the Act. In our opinion, it is very difficult, if not impossible, to assume that such could have been the intention of the legislature. The risk posed by transfers which intending evacuees were naturally inclined to make to save their fortunes was so grave at the relevant time that the legislature has taken the precaution of making appropriate provisions to save the economy of the country; and so, it seems to us that the consequence which inevitably flows from the adoption of the construction for which Mr. Pathak contends is so patently inconsistent with the clear and unambiguous object of the Act that it would not be reasonable to accept that construction. In our opinion, the construction of S. 7 (1) presents a problem which can be resolved not merely by the adoption of the mechanical rule of construction based on grammar, but by a liberal construction which takes into account the bearing and purport of the relevant words used in S. 7(1), considered in the light of the other relevant provisions of the Act and the principal object of the Act.16. Mr. Pathak no doubt attempted to suggest that the omission to deal with the category of transfers to which we have just referred may have been deliberate because he points out that the legislature may have intended that if the properties of the evacuees were compulsorily acquired under the Land Acquisition Act, or had vested in the Official Receivers under S. 28(7) of the Provincial Insolvency Act, they should be exempted from the proceedings under S. 7(1) of the Act. We are not impressed by the argument. If the legislature wanted to save these categories of transactions where the evacuees title was lost, it could have easily made a suitable provision in that behalf. We feel no difficulty in holding that the legislature could not have intended to permit private transfers of their properties by evacuees after they migrated from India, provided these transfers were completed before the commencement of the proceedings under S. 7(1). We are, therefore, satisfied that the view taken by the High Court does not correctly represent the true scope and effect of the provisions contained in S. 7(1) of Act.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]5. The argument thus presented for the appellants prima facie appears to be attractive, but on a close examination of the relevant provisions of sections 7 and 8 of the Act, it becomes plain that the said argument proceeds on a misconception of the effect of the two section read together. It is true that S. 8 (1) (a) provides. that any property declared to be evacuee property under S. 7 shall be deemed to have vested in the Custodian for the State in the case of the property of an evacuee as defined in sub-clause (i) of clause (d) of section 2, from the date on which he leaves or left any place in a State for any place outside the territories now forming part of India. It has been found by the appropriate authorities that Daulat Ram became an evacuee under S. 2(d)(i) of the Act, and so, there can be no doubt that after the declaration was made in respect of his property under Section 7(1), the vesting in the Custodian will be deemed to have taken place on the date of his migration. But this position does not assist the appellants in the matter of construing S. 7(1), and the decision of the point raised by the appellants must ultimately depend upon the construction of the said section. If the view taken by the High Court is right that before a declaration can be made under S. 7(1), it must be shown that the property which is the subject-matter of the proceedings under the said provision is, at the date of the declaration, evacuee property, then the result would be that if the said property is not property of the evacuee at the relevant time, no declaration can be made under S. 7(1) and there would be no scope for the retrospective operation of the vesting of the property in the Custodian under S. 8(1).S. 8(1) can come into operation only if and alter a notification has been validly and properly made under S. 7(1). In other words S. 8(1) provides for a statutory consequence of a valid declaration made under S. 7(1). That is why the said section cannot be pressed into service for construing S.argument is misconceived. The relevant provisions of the two sections of the Provincial Insolvency Act do not disclose anything inconsistent with the relevant provisions of the Act, and so, there is no occasion to invoke the provisions of S. 4(1) in order to establish the conclusion that the provisions of the Act will prevail over the said provisions of the Insolvency Act. S. 28(7) read with ..S. 27 of the Insolvency Act merely provides that when an order of adjudication is made under S.27, the insolvents property vests in the official Receiver as from the date of the presentation of the petition made against the debtor. Neither S. 7(1), nor S. 8 . of the Act can be said to be inconsistent with these provisions. That is why we do not think any argument can be validly based on the provisions of S. 4(1) of the Act in repelling the claim made by the respondent in the present proceedings.There is considerable force in this argument. The rules of grammar may suggest that when the section says that the property is evacuee property, it prima facie indicates that the property should bear that character at the time when the opinion isscheme of S. 40 is clear. The provisions of S. 40(1) read with the other relevant clauses of the said section indicate beyond any doubt that the legislature intended to prohibit transfers made by intending evacuees with the object of converting their properties into cash and taking it away from India. It was thought that unless this drastic measure was adopted, the economic interests of the country would be put in great jeopardy because intending evacuees could openly and conveniently dispose of their properties and leave the country with cash in their pocket thereby materially affecting the national economy of our country. That is why in defining evacuee property, it has expressly provided that this definition would take in properties which had been transferred by the intending evacuees prior to their migration from India after the 14th August, 1947, and the inclusive part of the definition covers all modes of transfers which become ineffective by reason of the provisions contained in S. 40.Thus, it is clear that if the intending evacuees transferred their properties before migration, their properties would be deemed to be evacuee properties for the purpose of S. 7 (1) and the transferees would have to submit to the vesting of the said properties in the Custodian under S. 8 (1) of theour opinion, it is very difficult, if not impossible, to assume that such could have been the intention of the legislature. The risk posed by transfers which intending evacuees were naturally inclined to make to save their fortunes was so grave at the relevant time that the legislature has taken the precaution of making appropriate provisions to save the economy of the country; and so, it seems to us that the consequence which inevitably flows from the adoption of the construction for which Mr. Pathak contends is so patently inconsistent with the clear and unambiguous object of the Act that it would not be reasonable to accept that construction. In our opinion, the construction of S. 7 (1) presents a problem which can be resolved not merely by the adoption of the mechanical rule of construction based on grammar, but by a liberal construction which takes into account the bearing and purport of the relevant words used in S. 7(1), considered in the light of the other relevant provisions of the Act and the principal object of theare not impressed by the argument. If the legislature wanted to save these categories of transactions where the evacuees title was lost, it could have easily made a suitable provision in that behalf. We feel no difficulty in holding that the legislature could not have intended to permit private transfers of their properties by evacuees after they migrated from India, provided these transfers were completed before the commencement of the proceedings under S. 7(1). We are, therefore, satisfied that the view taken by the High Court does not correctly represent the true scope and effect of the provisions contained in S. 7(1) of Act.If this construction is not accepted, it would clearly lead to very anomalous consequences. We have already noticed that have inclusive part of the definition prescribed by S. 2(f) brings within the scope of the definition properties which are transferred by an Indian citizen before he migrated to Pakistan.Thus, the position appears to be that transfers made by intending evacuees before they migrated from India come within the definition of evacuee property, and declaration can be made in respect of properties so transferred under S. 7(1). Transfers made pending the proceedings cannot defeat the purpose of the enquiry under S. 7(1) and a declaration can be made in spite of such transfers pending the enquiry. The death of an alleged evacuee does not interrupt the continuance of the proceedings and the declaration can be made even after his death that his properties were evacuee properties. If that be so, could it have been the intention of the legislature to permit transfers of their properties by evacuees between the date of their migration and the date of the commencement of the proceedings under S. 7(1)? If the view taken by the High Court is right, then it follows that wherever properties have been transferred by evacuees after their migration and before the proceedings under S. 7(1) commenced, they would be beyond the reach of the Act. Inour opinion, it is very difficult, if not impossible, to assume that such could have been the intention of the legislature. The risk posed by transfers which intending evacuees were naturally inclined to make to save their fortunes was so grave at the relevant time that the legislature has taken the precaution of making appropriate provisions to save the economy of the country; and so, it seems to us that the consequence which inevitably flows from the adoption of the construction for which Mr. Pathak contends is so patently inconsistent with the clear and unambiguous object of the Act that it would not be reasonable to accept that construction. In our opinion, the construction of S. 7 (1) presents a problem which can be resolved not merely by the adoption of the mechanical rule of construction based on grammar, but by a liberal construction which takes into account the bearing and purport of the relevant words used in S. 7(1), considered in the light of the other relevant provisions of the Act and the principal object of the