PETITIONER: AMIR SINGH AND ANOTHER Vs. RESPONDENT: RAM SINGH AND OTHERS(And connected appeals) DATE OF JUDGMENT: 04/10/1962 BENCH: ACT: Pre-emption-Amending legislation creating new right and providing decrees not to be passed inconsistent with the new law-Retrospective operation-Effect on pending appeal-Punjab Pre-emption Act, 1913 (Punj. of 1913), as amended by Punjab Act 10 of 1960, ss.15(1) (C) cl. 4, 31. HEADNOTE: The properties in suit had been sold by A to the appellants on May 31; 1956, but the respondents, as the owners of certain agricultural land in the patti claimed that they had a right of preemption under s. 15 (c) (ii) and (iii) of the Punjab Preemption Act, 1913. In the suit instituted by the respondents for this purpose the appellants resisted the claim on the ground that the vendees from A had transferred by exchanges some of the items out of the lands purchased by them and that as a result of the said exchanges the appellants themselves had become entitled to preempt the said sales under the same statutory provision. The suit was, however, decreed by the trial court and the decision was confirmed by the High Court of Punjab. The appellants obtained special leave to appeal to the Supreme Court and during the pendency of 885 the appeal the Act was amended by Punjab Act 10 of 1960, by which, inter alia, (1) cls. (ii) and (iii) of s. 15 (c) of the original Act were deleted, (2) cl.4 of S. 15 (1)(c) provided that the right of preemption in respect of agricultural land and village immoveable property shall vest in the tenants who held under tenancy of the vendors or anyone of them the land or property sold or a part thereof, and (3) s. 31 provided that no court shall pass a decree in a suit for preemption whether instituted before or after the commencement of the amending Act of 1960 which was inconsistent with the provisions of the said Act. In view of the new provisions introduced by the amending act the respondents raised a new contention that they were tenants who held under tenancy of the vendor of the lands in question and, as such, they were entitled to the right of preemption under cl.4 of s.15 (1)(c) of the Act, as amended, even if it be held that the right to claim pre-emption under cls. (ii) and (iii) of s.15 (c) of the unmended Act was taken away retrospectively by the amending Act. The appellants pleaded that even assuming that cl.4 of s.15 (1)(c) was applicable, the respondents could not get a decree on the bassis of the new right of pre-emption inasmuch as they had no such right on the date on which the suit was filed or when the sales were effected. Held, that (1 the provisions of s.31 of the Punjab Pre- emption Act, 1913, as amended by Punjab Act 10 of 1960, are retrospective in operation and, therefore, the decree passed in favour of the respondents by the trial court and affirmed by the High Court under the unmended section could not be sustained. Ram Sarup V.Munshi--[1963] 3 S.C.R. 858 followed. (2) The retrospective operation of s.31 necessarily involves effect being given to the substantive provisions of amended s.15 retrospectively, and hence the rights which the respondents now claim under the amended provisions must be deemed to have vested in them at the relevant time, with the result that they are entitled, on remand, to ask for a decree passed on the basis of the said rights, JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 436 to 438
of 1961.
Appeals by special leave from the judgment and order dated
December 9, 1959, of the Punjab
886
High Court in Letters Patent Appeals Nos. 407, 408 and 409
of 1959.
Achhru Ram and B. D. Jain, for the appellants.
Gian Singh Vohra, for the respondents.
1962. October 4. The Judgement of the Court was delivered
by
GAJENDRAGADKAR, J.-What is the effect of the retrospective
operation of s. 31 introduced by the Punjab Pre-emption
(Amendment) Act, 1960 (X of 1960) in the parent Act of Pre-
emption (No. 1 of 1913). That is the short question which
arises for our decision in these three appeals which have
been ordered to be consolidated for the purpose of hearing
by this Court. These appeals arise from three pre-emption
suits instituted by the respondents against the respective
appellants. The respondents’ case was that the properties
in suit had been sold by Aftab Rai on May 31, 1956, for Rs.
10,000/- to the appellants and it is these sales which they
wanted to preempt. They alleged that they are the owners of
agricultural land in Patti Aulakli and Patti Rode, in Mauza
Marahar Kalan, and as such, they had the statutory right to
claim pre-emption, under s. 15(c) (ii) and (iii). The
appellants resisted this claim on the ground that the
respective vendees from Aftab Rai had transferred by
exchanges about 2 kenals out of the lands purchased by-them
and as a result of the said exchanges the appellants had
themselves become entitled to preempt the said sales under
the same statutory provision. Since the appellants had
acquired equal status with the respondents who claimed to be
the preemptors, their claim for pre-emption cannot be
sustained. That, in brief, was the nature of the contest
between the parties.
887
The trial Court held that the exchanges on which the
appellants relied bad not been proved and so, it gave effect
to the respondents’ right to preempt under s. 15(c) (ii) &
(iii). The appellants took the matter before the Addl.
District Judge in appeal. The lower appellate Court was
pleased to admit additional evidence under 0.41, r. 27, of
the Code of Civil Procedure and held that the exchanges in
question had in fact been proved and were, in law, valid.
It, therefore came to the conclusion that the appellants
acquired equal status with the respondents and so, the
respondents’ claim for pre-emption must fail. That is why
the appeals preferred by the appellants were allowed and the
respondents’ suits were dismissed.
The dispute was then taken up before the High Court of
Panjab by the respondents by second appeals. Mahajan, J.,
who heard these appeals held that the property acquired by
exchange in lieu of the part of the property purchased by
the vendees did not give the appellants a right to preempt.
He referred to the fact that exchange of lands was sometimes
recognised as conferring on the party the right to preempt,
but that was where the land exchanged did not form part of
the land sold and preempted. In the result, the High Court
held that the plea made by the appellants was not well-
founded in law and so, the respondents were entitled to pre-
empt. As a result of this finding, the decrees passed by
the lower appellate Court were reversed and the respondents’
suits were decreed. The appellants then moved the Division
Bench by Letters Patent appeals, but these appeals were
dismissed. It is against the decrees thus passed by the
Division Bench in Letters Patent appeals that the appellants
have come to this Court by special leave.
We have already noticed that both the appellants and the
respondents are claiming a right to
888
preempt under s. 15(c) (ii) and (iii) of the Parent Act of
1913. On February 4, 1960, the amending Act No. 10 of J960
was passed. Section 4 of the amending Act has substituted
anew s.15 of the old s.15 after making substantial changes
in the provisionsof the earlier section. Clauses (ii) and
(iii) of theoriginal s.15(c) have been deleted, with the
result that the claims for preemption made both by the
appellants and the respondents have ceased to be recognised
by the amended provisions. The appellants contend that
since the respondents have got a decree for pre-emption in
their favour on the provisions of the unamended s.15, that
decree can no longer be sustained because of the provisions
of s.31 of the amending Act. Section 31 provides that no
Court shall pass a decree in a suit for pre-emption whether
instituted before or after the commencement of the Punjab
Pre-emption (Amendment) Act, 1959(1960) which is
inconsistent with the provisions of the said Act. In
support of his argument that s.31 being retrospective in
operation the respondents’ title to claim pre-emption can no
longer be entertained. Mr. Achhru Ram for the appellants
has invited our attention to a recent decision of this Court
in the case of Ram Sarup v. Munshi (1) pronounced on August
30, 1962. In that case, Ayyangar, J., who spoke for the
Constitution Bench considered the question about the
retrospective operation of s. 31 and has observed that the
said provision is retrospective and that the language used
in the said section is “plain the comprehensive so as to
require an appellate Court to give effect to the substantive
provisions of the amending Act whether the appeal before it
is one against a decree granting preemption or one refusing
that relief,” It was no doubt urged before the Court in that
case that the words used in s. 31 did
(1) [1963] 3 S.C.R. 858.
889
not justify the application of the amended provisions to
proceedings pending before the appellate Court; them said
words showed that the said provisions could be invoked only
in cases which were pending before the trial Court. This
contention was rejected and so, it must be taken to be
settled that the provisions of s. 31 are retrospective and
can be relied upon by the appellants in their present
appeals before this Court.
This position would undoubtedly have helped the appellants
but for another complication which has been introduced by
the relevant provisions of the amended s. 15 enacted by the
amending Act. We have already noticed that some persons
whose right to preempt was recognised by the corresponding
provisions of the parent Act, have been omitted by the
amended section. The amended section has also introduced
another class of persons on whom the right to claim pre-
emption has been conferred. These persons are the tenants
who hold under tenancy of the vendors the land or property
sold or a part thereof. This class of tenants has been
introduced in clauses (a), (b) and (c) of amended s. 15.
Clause four of s. 15(1) (c) provides that the right of pre-
emption in respect of agricultural land and village
immovable property shall vest in the tenants who hold under
tenancy of the vendors or any one of them the land or
property sold or a part thereof. Similar provisions are
made in clauses (a) &- (b) of the said section. For the
respondents Mr. Vohra contends that they are the tenants who
hold under tenancy of the vendor the lands in question and
as such, they are now clothed with the right to claim pre-
emption. In other words, the respondents argument is that
though the right to preempt which they possessed under
clauses (ii) and (iii) of the unmended s. 15(c) of the
parent Act have been taken ,way retrospectively by the
amending Act, they have been clothed with the same right by
virtue of
890
the fact that they fall under the fourth clause of the
amended s, 15 (1) (c) and the conferment of this right like
the destruction of their right under the deleted provisions
of the unamended section must operate retrospectively. He,
therefore, suggests that the respondents ought to be given
an opportunity to prove their case under the fourth clause
of s. 15(c) as amended. In this connection, he has referred
us to the fact that this plea has been specifically taken by
the respondents in their statement of the case before this
Court. It is on this plea that the question about the
effect of the retrospective operation of s. 31 arises.
Mr. Achhru Ram contends that though s. 31 is retrospective
and in that sense the rights to preempt which vested in the
respondents at the time when they instituted the present
suits have been retrospectively taken away from them, it
cannot be said that the right to preempt to which the
respondents lay claim in the present appeals has been
retrospectively created. His argument is that by the
amending Act, the Legislature has no doubt provided that
certain classes of persons who were entitled to preempt
under the old Act should not be given that right and the
extinction of the said right should operate retrospectively,
but that cannot be said to be the policy of the legislature
in regard to the rights which have been created for the
first time by the amending Act.
The argument thus presented may prima facie appear to be
attractive; but a close examination of the words used in s.
31 shows that it is not well founded. Section 31, in
substance, requires the appellate Court to pass a decree in
a preemption matter which is not inconsistent with the
provisions of the amending Act. In the present appeals, if
we were to uphold the respondents’ right to claim preemption
on the strength of the provisions of s. 15(c)
891
as they stood prior to the amendment, that would be
inconsistent with the provisions of the amending Act, and
so, the change made by the amending Act has to be given
effect to and the right which once vested in the respondents
must be deemed to have been retrospectively taken away from
them. On this point there is no dispute. Would it make any
difference in the legal position when we are dealing with
rights which are created for the first time by the amending
Act on the date when this Court will pass a decree in the
present appeals? If the rights created in favour of the
tenants are not recognised and a decree is passed ignoring
the said rights, that decree would be inconsistent with the
relevant provisions of the amending Act, and s. 31 has
clearly enjoined that no Court shall pass a decree which is
inconsistent with the provisions of the amending Act. The
position, therefore, appears to be clear that when a decree
is passed in a preemption matter pending before the
appellate Court, that Court must refuse to recognise the
right to preempt which was recognised by the unamended Act
but has been dropped by the amending Act just as much as it
must recognise rights which were not recognised by the
unamended Act but have been created by the amending Act.
The retrospective operation of s.31 necessarily involves
effect being given to the substantive provisions of s. 15
retrospectively and that will apply as much to the
extinction of the old rights as to the creation of new ones.
The retrospective operation of s. 15 which is consequential
on the retrospective operation of s.31 is not affected by
the fact that the right of preemption prescribed by s. 15
if; referred to as a right which shall vest in the persons
specified in subsections (a), (b) and (c) of s. 15(1).
It is, however, urged that the law of preemption requires
that the preemptor must possess the right to preempt at the
date of the sale, at the
892
date of the suit and at the date of the decree. This
position cannot be disputed. But when it is suggested that
the respondents cannot claim that they had the right when
they brought the present suit or when the sales were
effected, the argument ignores the true effect of the
retrospective operation of s. 31 and s. 15. If the
inevitable consequence of the retrospective operation of
s.31 is to make the substantive provisions of s. 15 also
retrospective, it follows that by fiction introduced by the
retrospective operation, the rights which the respondents
claim under the amended provisions of s. 15 must be deemed
to have vested in them at the relevant time. If the
relevant provisions are made retrospective by the
legislature, the retrospective operation must be given full
effect to, and that meets the argument that the right to
preempt did not exist in the respondents at the time when
the sale transactions in question took place. Therefore, we
are satisfied that the respondents are entitled to claim
that they should be given an opportunity to prove their case
that as tenants of the lands in suit they have a right to
claim preemption. Incidentally, when the respondents filed
the present suits, they had a right to preempt under the
relevant provisions of the Act as they stood at that time;
by the amendment, that right has been taken away, but
instead they claim another right by virtue of their status
as tenants of the lands, and this right is, by the
retrospective operation of s. 31, available to them. We
must accordingly set aside the decrees passed by the High
Court and send the matters back to the trial Court with a
direction that it should allow the respondents an
opportunity to amend their claims by putting forth their
right to ask for preemption as tenants under the amended
provision of 8. 15. After the amendments are thus made, the
appellants should be given an opportunity
893
to file their written statements and then appropriate issues
should be framed and the suits tried and disposed of in the
light of the findings on those issues in accordance with
law. Under the unusual circumstances in which the
litigation has thus secured a further lease of life, we
direct that the costs incurred so far should be borne by the
parties.
Appeal allowed. Cases remitted
