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

2. An Indian citizen named Daulat Ram Surana was carrying on business, at Delhi as a Jeweller in the name of Sardar Singh Daulat Ram. He had a Muslim mistress and it appeals that by reason of his affection for the said mistress he migrated to Pakistan in the first week of February, 1950. He was possessed of extensive properties, both movable and immovable, but apparently, he was involved in financial difficulties about that time, and so, before he migrated to Pakistan he transferred his 1/2 share in his ancestral house in Baidwara Street, Delhi for a consideration of Rs. 26,000. On the 14th March, 1950, Nanak Chand and certain other persons claiming to be his creditors, filed a petition of insolvency against the firm of Daulat Ram and against Daulat Ram himself. On the 17th June, l950, both the firm and Daulat Ram were adjudicated insolvents and the respondent the Official Receiver, was appointed the Receiver of the estate of the insolvents. In August, 1951, the Official Receiver wanted to sell some items of the insolvents property and the sale was fixed to be held on the l8th August 1951. Two days prior thereto, however, the Assistant Custodian of Evacuee Property issued a notice under S. 7(1) of the Act to Daulat Ram and other interested persons to show cause why he should not be declared an evacuee under S. 2(d)(i) of the Act. The respondent came to know of the said proceedings appeared before the Assistant Custodian and raised objections to the property of Daulat Ram being declared as evacuee property. These objections were overruled by the Assistant Custodian and the property of Daulat Ram was declared evacuee property on the 15th February, 1954. The respondent challenged this order by preferring an appeal before the Authorised Dy. Custodian, and when the appeal was dismissed, he moved the Custodian General in his revisional jurisdiction. The revision application filed by the respondent was also dismissed. The respondent then moved the Punjab High Court by a writ petition and challenged the validity, of the orders passed by the respective authorities under the Act, declaring the property of Daulat Ram as evacuee property. To this petition the Dy. Custodian, Evacuee Property, the Authorised Dy. Custodian and the Assistant Custodian were impleaded as respondents. These are the appellants before us.3. When this matter was taken up before Bishan Narain J. of the Punjab High Court, he took the view that the point raised for his decision was of considerable importance, and so, he thought that it should be decided by a larger Bench. That is how the writ petition was placed before a Division Bench of the said High Court. The Division Bench has upheld the plea raised by the respondent and has directed that the orders made by the Custodian Department that the entire property of Daulat Ram vests in the Custodian are illegal and should be quashed by a writ of certiorari. It is against this order that the appellants have come to this court with a certificate granted by the High Court.

Reasoning:
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