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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-

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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

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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.

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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

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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

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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