LexCUSTODIAN OF EVACUEE PROPERTY versus SMT. RABIA BAI
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CUSTODIAN OF EVACUEE PROPERTY v. SMT. iRABIA BAI August 19. 1976 255 [Y. V. CHANDRACHUD, R. S. SARKARIA AND P. N. SHINGHAL, JJ.J Administratio11 of Evacuee Property Act, 1'950-S, 40(4) (a) and. rule 22- Scqpe of-S. 10(2)(n) "out of the funds in his possession" meaning of. Rehabilitation Act, 1954-S. 14(1 )(b)-"Such cash balances"--Meaning of. Words a11d phrases--."aut of the fund~ i11 his possesslvn" and "such cash balanoes"-Meaning of. A B Section 40(1) of Administration of Evacuee Property Act, 1950 provides C !hat no transfer of aby prOpCil'ty belonging to an evacuee, which may subse- quently be declared to be evacuee property, shall be effective unless the transfer was confirmed by the Custod'an. Sub-section ( 4 )(a) provides that where an application had been made to the Custodian for confirmation, he may reject the application if he is of opinioh that the transaction had not been entered into in good faith or for valuable consideration. In 1949 the respondent purchased house property from an evacuee and pan the consideration. She made an application under s. 40 to the Assistant D Custodia'n for confirmation of the sale. The application was rejected by him on the QlfOUnd of want of good faith on the part of the vendor in entering into the transaction. Her appeal to the Custodian and revi9ion to the Custo- dian General were dismissed. In the meantime, under r. 22, of the Administra- tion of Evacuee Property (Central Rules) 1950, the respondent registered her claim for the return of the sale consideration to her. Thereafter r. 22 was deleted. She was informed by the Deputy Custodian that no third pany claim against immov»ble property was payable since r. 22 was deleted. In 1966 the G-OVernmeht transferred to Compensation Pool the 'surplus balance' of the E evacuee pool lying in the personal deposit account of the Custodian. The res- pondent later made a petition to the Custodian, which was rejected mainly on the ground that the sale proceeds had been credited to the compensation pool, that there was ho amount in the hands of the Custodian fr0m which her claim could be paid and that the words "out of funds in his possession" occurr- ing ih s. 10(2)(n) of the Act showed that the clause would be attracted only where funds were lying with the Custodian. The High Court held that payment made bv' the respondent to the evacuee F in pursuance of the infructuous sale, was not vitiated in any manner as the sale was refused confirmation, not because of want of bo11a fides in the trans- ferree, but on account of want of bona fides in the transferor, and as such the Custodiah was under a statutory obligation to refund the sale price paid by her an.l tha• the Custodian was competent to transfer only ~urphts fund Jen with hfo1. in excess of what was 1required by him for meeting the outstanding claims registered under r. 22. - In appeal to this Court it was contended that (i) the order of the Assist· G ant custodian registering the claim was a nullity becanse since the sale was not confirmed under s. 40(4)(a) it could not be deemed to be a boM fide trans- action for the purposes of registration of claim under r. 22; (V) reQ!istration was an administrative act required to be done for statistical purposes; and (iii) as a result of the1 delk:tion of r. 22 the Custodiah was no longer under an obliga- tion to meet the claim and no part of the- ,compensation pool was available to satisfy the claims of third parties who were neither displaced persons nor evacuees·. H Dismissing the appeal, HELD : (I) The High Court was right in directing the Custodian is refund the sale price t•J the respondent in payment of her claim and in further direc~ng A B c D E F G H 256 SUPREME COURT REPORTS [1977) 1 S.C.R. the Oentral Government to place at the disopsal of the Custodian the !>itid sum for the purpose of refund. [268 A-BJ . (l)(a) Under r. 22, before a claim for refund of money paid as considera- tion fol' the u·ansfer by an evacuee of any property is registered by the Custo- dian, he should be satisfied : (i) that such transfer has not been confirmed under s. 40 of (J1e Act, (ii) that such transfer is a bona fide transaction; (iii) that the amount for which the claim is being registered is proved to have been pa:d as oonsideration for the tra·nsfer of the property. [262 G] In the instant case, the vaMity of the, Assistant Custodiah's order reg'stering the respondent
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