FAZAL BHAI DHALA FAZAL BHAI DHALA Vs. CUSTODIAN GENERAL EVACUEE PROPERTY NEW DELHI :CUSTODIAN EVACUEE PROPERTY MADRAS

JUDGEMENT

(1.) Of these two appeals, one (Civil Appeal No. 194 of 1956) is against the order of the Custodian-General of India, declining to interfere with the order of the Custodian of Evacuee Property, Orissa, in respect of certain properties claimed by the appellant as his; and the other appeal (Civil Appeal No. 353 of 1958) is against the order of the Deputy Custodian-General of Indian, declining to interfere with the order of the Custodian of Evacuee Property, Madras, in respect of properties situate in Madras, claimed by the same appellant as belonging to him. Though most of the considerations that arise in the two appeals are identical, it will be convenient to take them up one after the other so as not to confuse a clear understanding of the facts on which these considerations which are all based on question of law arise.

(2.) The appellant Fazal Bhai Dhala and his brother Abdulla Dhala were partners in a business of hides and skins. A deed of partnership was executed on January 1, 1941, and the firm was registered in the Register of Firms, Cuttack, under S. 59 of the Indian Partnership Act. On August 10, 1949, Abdulla Bhai Dhala executed a deed of sale in respect of some immovable properties at Jharsuguda in Orissa, and also certain properties, at Madras, in favour of Fazal Bhai Dhala. The consideration in the document was mentioned as Rs. 85,000/- of which Rs. 50,000/- was mentioned as the value of the Madras properties and Rs. 35,000/- as the value of the Orissa properties. The sum of Rs. 85,000/- appears to have been paid in the presence of the Registrar by Fazal Bhai to Abdulla Bhai on August 11, 1949. A deed of dissolution of the partnership was also executed on the following day-the 12th August, 1949. It was stated therein that the two partners had agreed "that the said partnership shall stand dissolved as and from 2-11-48 and it has further been agreed that as from that day, 2-11-1948, the said business of Fazalbhoy Dhala and Co., shall belong to and be continued and carried on by Fazalbhoy Dhala." It was also stated that in view of fact that "accounts of the said partnership have not yet been taken or settled and cannot be taken or settled without much delay and trouble it has further been agreed that Fazal Bhai Dhala shall pay to Abdulla Dhala a sum of Rs. 40,000/- in full settlement and satisfaction of all the claims, as partner of Abdulla Bhai Dhala against the partnership, its assets,. goodwill etc., in respect of his share therein." A Receipt of the sum of Rs. 40,000/- was also acknowledged in this deed. On receipt of information that Abdulla Dhala had migrated to Pakistan after transferring his properties to his brother Fazal Bhai Dhala, the Assistant Custodian of Evacuee Property, Sambalpur (Orissa), issued a notice under S. 7(1) of the Ordinance XXVII of 1949 to Fazal Bhai Dhala on December 30, 1949, in respect of immovable properties at Jharsuguda including the properties covered by the sale deed of August 10, 1949, and the business in hides and skins under the name of Fazalbhoy Dhala and Co., and certain immovable properties standing in the name of that firm. In reply to the notice, Fazal Bhai contended that Abdulla Bhai was not an evacuee; and that in any case, he, Fazal Bhai, had become the sole proprietor of the business, with all assets and liabilities, with effect from November 2, 1948, when the partnership was dissolved and that while some of the immovable properties as mentioned in the notice had been conveyed to him by a deed of sale by Abdulla Bhai, the rest being assets of the firm of Fazal Bhai Dhala had vested in him after the dissolution of partnership, he prayed that his "title" in the assets of the firm, and in the immovable properties, mentioned in the notice should be confirmed. The Assistant Custodian held after consideration of the evidence that though the transfer of the properties mentioned in the sale deed was for adequate and valuable consideration it was not at all bona fide:as regards the other properties and the hides and skins business itself the Assistant Custodian held that Abdulla Bhai had no interest as the partnership had been dissolved on November 2, 1948. Against this decision Fazal Bhai appealed to the Custodian and prayed that the order of Assistant Custodian as regards the properties mentioned in Schedule "A" (1) and (II) mentioned in the notice under sub-section (1) of S. 7 of the Government of India Ordinance No. XXVII of 1949 should be set aside. The Custodian agreed with the Assistant Custodian, in respect of these properties, and held that these had been rightly declared as evacuee properties. He went further and held that there was no justification for the Assistant Custodian taking a different view as regards the other properties. His conclusion was that "in fact, with regard to these properties also the same amount of mala fides was present and as such these should also be included in the list of evacuee properties"; and that "it is but proper that the entire 8 annas share of the properties mentioned in Schedules A and B of the evacuee Abdulla should be treated as evacuee properties." The Custodian finally ordered:"in consequence of my above decision according to S. 6 of the Evacuee Interest Separation Act, the entire properties in Schs. A and B should now be treated as evacuee properties and revised action should be taken to notify as such under S. 7(3) of the Administration of Evacuee Property Act and the appellant be directed to get his 8 annas share in the properties separated in the Court of the Competent Officer."

(3.) Fazal Bhai moved the Custodian-General of India for revision of this order of the Custodian, Orissa. The Custodian-General however refused to interfere.