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PETITIONER: MITHILESH KUMARI & ANR.

       Vs.

RESPONDENT: PREM BEHARI KHARE

DATE OF JUDGMENT14/02/1989

BENCH: SAIKIA, K.N. (J) BENCH: SAIKIA, K.N. (J) OZA, G.L. (J)

CITATION:  1989 AIR 1247            1989 SCR  (1) 621  1989 SCC  (2)  95        JT 1989 (1)   275  1989 SCALE  (1)358  CITATOR INFO :  RF         1991 SC1654  (40,44)  R          1992 SC 885  (6,7,8)

ACT:     Benami  Transaction-(Prohibition)  Act,  1988:  Sections 2(a),  (c),  3(2)  and 4--Prohibition of  right  to  recover property held benami-Whether applicable to an appeal pending on  the  date of commencement of Act--Delay in  disposal  of appeal--Whether  an action of court-Maxim actus curiae  gra- vabit nemenium--Applicability of.     Constitution   of   India,   1950:   Art.   136--Supreme Court--When can interfere with concurrent findings of fact.     Statutory  Construction:  Retrospective  operation--Pre- sumption    against--When   arises--Act    declaratory    in nature--Whether    operates   from   time   antecedent    to enactment--Qualifying   or  disqualifying   statute--Whether retroactive--Remedy  barred  by  Act--Whether  corresponding right      rendered     unenforceable--Law      Commission’s Report--Whether can be referred as external aid to construc- tion of provisions of statute.     Practice     &     Procedure:   Decree     passed     by courts--Appeal  pending--Appellate Court--Whether  competent to  take into account legislative changes subsequent to  the decree in moulding the relief to be granted. Words and Phrases: Ubi jus ibi remedium--Meaning of.

HEADNOTE:     The respondent filed a suit in the Court of Civil Judge, praying  that he be declared the sole and real owner of  the suit house and that the appellant be permanently  restrained from  transferring the suit house. The trial  court  decreed the  suit accordingly. The appellant filed an appeal  before the  Additional  District  Judge, who  dismissed  the  same, agreeing  with  the  findings of the trial  court  that  the respondent had paid the price and purchased the house benami in  the name of the appellant and therefore,  the  appellant had no right to create an equitable mortgage or to  transfer the  suit  house.  The appellant’s second  appeal  was  also dismissed  by the High Court. Hence, the appeal  by  special leave, by the appellant. During the pendency of the  appeal, the

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622 Benami Transactions (Prohibition) Act, 1988 came into force.     It  was  contended on behalf of the appellant  that  the respondent and the appellant had been living as man and wife and  out of affection for the appellant, the respondent  had purchased  the  suit  house  in  the  appellant’s  name  for Rs.8,000,  for which the appellant had contributed  Rs.2,000 and,  therefore, the courts below had erred in holding  that the  suit  house  was not gifted by the  respondent  to  the appellant but was held benami in her name, and that even  if it  was so held benami, the subsequent legislation,  namely, the  Benami  Transactions (Prohibition Act, 1988 had  put  a complete bar to the respondent’s suit against the appellants in respect of the suit house.     On  behalf of the respondent, it was submitted that  the issues on gift and benami have been concluded by  concurrent findings  of fact of the courts below and that the  respond- ent’s  right to the benami suit house having already  become final it would not be affected by the subsequent Act.     On the questions: (a) whether the concurrent findings of fact  of the courts below should be interfered with or  not, (b) whether despite the decree in favour of the  respondent, the  suit  or  action would be affected  by  the  subsequent legislation,  namely, the Benami Transactions  (Prohibition) Act,  1988 and its predecessor Ordinance, (c) whether, on  a proper  construction,  the legislature may be said  to  have expressed  its intention of retrospective  applicability  of the  legislation, and (d) whether there was a  suit  present between the respondent and the appellant on the date of  the law coming into force, Allowing the appeal, this Court,     HELD:  1.1 A retrospective operation is not to be  given to a statute, so as the impair existing right or  obligation otherwise  than as regards matter of procedure  unless  that effect  cannot  be  avoided without doing  violence  to  the language  of the enactment. The presumption  against  retro- spective operation is strong in cases in which the  statute, if  operated  retrospectively,  would  prejudicially  affect vested rights or the illegality of the past transactions, or impair contracts or impose new duty or attach new disability in  respect  of past transactions or  consideration  already passed.  However, a statute is not properly called a  retro- spective  statute because a part of the requisites  for  its action  is  drawn  from a time antecedent  to  its  passing. [633H; 634A-C] 623     1.2  Every law that takes away or impairs rights  vested agreeably to existing laws is retrospective, and is general- ly  unjust and may be oppressive. But laws made  justly  and for the benefit of individuals and the community as a  whole may  relate  to time antecedent to their  commencement.  The presumption  against  retrospectivity may in such  cases  be rebutted by necessary implication from the language employed in  the statute. It cannot be said to be an invariable  rule that  a  statute could not be retrospective  unless  so  ex- pressed  in  the very terms of the section which has  to  be construed. The question is whether on a proper construction, the legislature may be said to have so expressed its  inten- tion. [634C-E]     1.3 Before applying a statute retrospectively, the court has  to be satisfied that the statute is in fact  retrospec- tive.  The  Courts must also look at the general  scope  and purview  of the statute and at the remedy sought to  be  ap- plied and consider what was the former state of law and what the legislation contemplated. [634A-B]

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Craise on Statute Law, 7th ed. referred to.     1.4  Where  a particular enactment or amendment  is  the result of the recommendation of the Law Commission of India, it may be permissible to refer to the relevant report.  What importance  can be given to it will depend on the facts  and circumstances of the case. However, the court has to  inter- pret  the language used in the Act and when the language  is clear  and  unambiguous,  it must be given  effect  to.  Law Commission’s  Report may be referred to as external  aid  to construction of the provisions. [631C; 633D] Santa Singh v. State of Punjab, [1977] 1 S.C.R.  229referred to.     In the instant case, the Law Commission was of the  view that  the  legislation replacing  the  Benanti  Transactions (Prohibition  of Right to Recover Property Ordinance,  1988) should  be retroactive in operation and that no locus  peni- tentia  need be given to the persons who had entered in  the benami transactions in the past. [633B]     2.1  When an Act is declaratory in nature, the  presump- tion against retrospectivity is not applicable. Acts of this kind only declare. A statute in effect declaring the  benami transactions  to  be  unenforceable belongs  to  this  type. [636A-B] 2.2  The Parliament has jurisdiction to pass  a  declaratory legisla- 624 tion.  As a result of the provisions of the Benami  Transac- tions (Prohibition) Act, 1988, all properties held benami at the  moment  of the Act coming into force  may  be  affected irrespective  of their beginning, duration and origin.  This will be so even if the legislation is not retrospective, but only retroactive. [633E-F]     2.3 The expression "any property held benami" in s. 4 of the  Act  is  not limited to any particular  time,  date  or duration.  Once  the  property iS found to  have  been  held benami,  no  suit, claim or action to enforce any  right  in respect  thereof shall lie, and the real owner is bereft  of any defence against the person in whose name the property is held or any other person. In its sweep, s. 4 envisages  past benami  transactions also within its retroactivity. In  this sense, the Act is both a penal and a disqualifying  statute. In Case of a qualifying or disqualifying statute, it may  be necessarily retroactive. [635E-H]     2.4  The  presumption against taking away  vested  right will not apply in this case inasmuch as under law it is  the benamidar  in whose name the property stands, and  law  only enabled  the  real owner to recover the  property  from  him which  right  has now been ceased by the Act. In  one  sense there  was  a right to recover or resist in the  real  owner against the benamidar. Ubi jus ibi remedium. When there is a right,  there is a remedy. Where the remedy is  barred,  the right  is  rendered  unenforceable. In this sense  it  is  a disabling statute. All the real owners are equally  affected by  the  disability provision irrespective of  the  time  of creation of the right. A right is a legally protected inter- est.  The real owner’s right was hitherto protected and  the Act has resulted in removal of that protection. [636B-C]     2.5 When the law nullifies the defences available to the real owner in recovering the benami property from the benam- idar,  the  law must apply irrespective of the time  of  the benami  transactions. The expression "shall lie" in s.  4(1) and "shall be allowed" in s. 4(2) are prospective and  shall apply to present (future stages) and future suits, claims or actions only. [636D]     3.  The  hearing of appeal under the procedural  law  of

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India  is  in the nature of re-hearing  and,  therefore,  in moulding  the relief to be granted in a case on appeal,  the appellate court is entitled to take into account even  facts and  events which have come into existence after the  decree appealed  against.  Consequently,  the  appellate  court  is competent to take into account legislative changes since the decision  under  appeal  was given and its  powers  are  not confined only to see whether the 625 lower  court’s decision was correct according to the law  as it stood at the time when its decision was given. [636F-G]     Once  the  decree of the High Court  has  been  appealed against, the matter became sub judice again and,  therefore, the  Supreme Court had seisin of the whole case, though  for certain purposes, e.g. execution, the decree was regarded as final  and  the courts below retained jurisdiction  in  that regard. [636G-H]     Lachmeshwar v. Keshwar Lal A.I.R. 1941 F.C. 5;  Shyabud- dinsab  v.  The Gadag Betgeri Municipal  Borough,  [1955]  1 S.C.R. 1268; The King v. The General Commissioner of  income Tax,  [1916]  2  K.B. 249; Mukharjee  Official  Receiver  v. Ramratan Kaur. [1935] L.R. 63 I.A. 47; Dayawati v. Inderjit, [1966]  3 S.C.R. 275; Mohanlal Jain v.His Highness  Maharaja Shri  Man  Singh, [1962] 1 S.C.R. 702 and  Amerjit  Kaur  v. Pritam Singh, [1975] 1 S.C.R. 605 relied upon.     Nand  Kishore Marwah v. Samundri Devi, [1987]  4  S.C.C. 382 distinguished.     4.  Ordinarily, this Court in an appeal will not  inter- fere  with a finding of fact which is not shown to  be  per- verse or based on no evidence. But where there are  material irregularities affecting the said finding or where the court feels  that justice had failed and the finding is likely  to result  in  unduly  excessive hardship,  this  Court  cannot decline  to interfere merely on the ground that the  finding in question is finding of fact. [627E, H; 628A]     Babu  v. Dy. Director, A.I.R. 1982 S.C. 756;  Prasad  v. Govindaswamy,  A.I.R. 1982 S.C. 84; Dhanlibhai v.  State  of Gujarat, A.I.R. 1985 S.C. 603; Ganga Bishan v. Jay  Narayan, AIR 1986 SC. 441; Udaychand Disst v. Saihal Sen, A.I.R. 1988 S.C.  367  and Ram Singh v. Ajay Chawla AIR  1988  S.C.  514 relied upon.     In  the  instant case, the concurrent  findings  of  the courts  below are based on reasonable appreciation  of  evi- dence on record and, therefore, can in no way be said to  be perverse  or unreasonable. The High Court has  analysed  the facts  and correctly applied the tests to determine  whether the  transaction was benami or not. Therefore, there  is  no justification in tile appeal under Art. 136 of the Constitu- tion for interference with the concurrent findings of  fact. [629A-C]     However,  in view of the pendency of the  appeal  before the  Supreme Court, and consequently, the suit filed by  the respondent, on 626 the date of coming into force of s. 4 of the Benami Transac- tions (Prohibition) Act, 1988, which nullified the  defences available to the real owner in recovering the benami proper- ty  from  the benamidar, and since the  law  was  applicable irrespective  of  the time of the benami  transactions,  the respondent’s  suit or action for recovering the  suit  house held benami by the appellant cannot be decreed. [636D-E]     No doubt, nobody should suffer for an act of the  Court, but  delay  in  disposal of an appeal cannot  be  termed  an action  of the court. Hence the maxim actus  curiae  nemenim gravabit is not applicable in this case. [637F-G]

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   The  decree  passed by the lower courts  is,  therefore, annihilated  and  the suit filed by the respondent  is  dis- missed. [637G]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 2311  of 1978.     From  the  Judgment  and Order dated  27.3.1978  of  the Allahabad High Court in Second Appeal No. 130 of 1975. Awadh Behari and N.N. Sharma for the Appellants. Yogeshwar Prasad and Mrs. Rani Chhabra for the Respondent. The Judgment of the Court was delivered by     K.N. SAIKIA, J. This appeal by special leave is from the judgment  and  order dated 27.3.1978 of the  High  Court  of judicature  at Allahabad (Lucknow Bench), in  second  appeal No.  130  of 1975, dismissing the appeal and  upholding  the decree of the plaintiff-respondent’s suit.     The  plaintiff-respondent Prem Behari  Khare  instituted suit  No. 42 of 197 1 in the court of Civil Judge,  Mohanlal Gun j, Lucknow praying for the reliefs, inter alia, that  he be declared to be the sole and real owner of the suit house, and  that the defendant-appellant be permanently  restrained from  transferring the suit house. The learned Civil  Judge, Lucknow,  by  his judgment dated 133.1974 decreed  the  suit declaring the plaintiff to be the sole and real owner of the suit  house and permanently restraining the  defendant  from transferring  the suit house to any other person.  On  first appeal  by  the defendant appellant the  learned  Additional District Judge; Lucknow by his judg- 627 ment dated 23.12.1974 dismissed the appeal agreeing with the findings  of the trial court that it was  the  plaintiff-re- spondent  who paid the consideration and purchased the  suit house  benami in the name of tile  defendant-appellant  who, therefore, had no right to create any equitable mortgage  or to transfer the suit house. The defendant-appellant’s second appeal  thereafter was also dismissed by the High  Court  of Judicature  at  Allahabad  by the  impugned  judgment  dated 27.3.1978. Hence this appeal by special leave.     Mr.  A.B.  Rohtagi  learned counsel  for  the  appellant submitS, inter alia, that the learned courts below erred  in holding that the suit house was not gifted by the  plaintiff to  the defendant but was held benami in her name; and  that even  if it was so held benami, the subsequent  legislation, namely, the Benami Transactions (Prohibition) Act 1988,  has put  a  complete  bar to the plaintiff’s  suit  against  the defendant in respect of the suit house.     Mr. Yogeshwar Prasad learned counsel for the  respondent refutes  submitting that the issues on gift and benami  have been concluded by concurrent findings of fact of the learned courts  below; and that the plaintiff’s right to the  benami suit  house  having  already become final, it  will  not  be affected by the subsequent Act.     The  first  question, therefore, is whether  or  not  to interfere  with  the  concurrent findings  of  fact  of  the learned courts below. It has been said in a series of  deci- sions  that  ordinarily  this court in an  appeal  will  not interfere  with a finding of fact which is not shown  to  be perverse  or  based on no evidence, (Babu v.  Dy.  Director, A.I.R.  1982 S.C. 756), but will interfere if material  cir- cumstances  are ignored by the High Court. Prasad v.  Govin- daswaray,  A.I.R.  1982 S.C. 84. In Dhanjibhai v.  State  of Gujarat,  A.I.R. 1985 S.C. 603 it was observed that where  a

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finding of fact has been rendered by a learned Single  Judge of the High Court as a court of first instance and  thereaf- ter  affirmed in appeal by an Appellate Bench of  that  High Court, this Court should be reluctant to interfere with  the finding  unless there is very strong reason to do so.  There is  no reason why this should not apply to cases  where  the first  appellate court was the district court. It was  noted in  Ganga Bishan v. Jay Narayan, A.I.R. 1986 S.C.  441  that ordinarily  this Court, under Article 136 of  the  Constitu- tion, would be averse to interfere with concurrent  findings of fact recorded by the High Court and the Trial Court.  But where  there are material irregularities affecting the  said findings  or where the court feels that justice  has  failed and  the findings are likely to result in  unduly  excessive hardship this court could not 628 decline  to interfere merely on the ground that findings  in question are findings on fact. So also in Uday Chand Dutt v. Saibal  Sen,  A.I.R. 1988 S.C. 367 it was said  that  in  an appeal  by special leave under Article 136 of the  Constitu- tion  of  India where there are concurrent findings  of  the courts below this court is not called upon to reconsider the entire evidence in detail to ascertain whether the  findings are justified. In Ram Singh v. Ajay Chawla, A.I.R. 1988 S.C. 514  where  the concurrent finding was that  the  appellants were  in  unauthorised occupation of premises of  which  the respondents  were  the owners this court did  not  interfere with the concurrent findings of fact.     Mr. Rohtagi lays emphasis on the facts, namely, that the plaintiff  Prem  Behari  Khare’s wife having  died  in  1955 leaving behind two sons aged about 2 and 3 years respective- ly,  he faced great difficulties in managing the  household, looking after his sons and carrying on his duties as employ- ee of the Allahabad Bank; that under these circumstances  he agreed  to  take  in the defendant  Mithilesh  Kumari  whose relation  with  her husband Ram Swarup was  then  estranged; that  the relation between the plaintiff and  the  defendant come  to  be such that she bore two children  to  him;  that there were efforts to legalise their de facto living as  man and wife by obtaining defendant’s divorce from her  husband, and  in fact there was a decree for judicial  separation  in 1958; that the plaintiff had full confidence in, and  affec- tion  towards the defendant; and that in the court he  could give no reason why he purchased the house in the name of the defendant.  Under those circumstances, counsel submits,  the purchase of the suit house in the name of the defendant  was made  for Rs.8,000 out of which Rs.2,000 contributed by  the defendant, and the learned courts below ought, therefore, to have held the transaction of purchase in the name of defend- ant  to have been a genuine gift out of love  and  affection and not a benami purchase in her name.     Perusing  the judgment of the Trial Court we  find  that whether  the  transaction was a benami or it was  a  genuine gift  by the plaintiff to the defendant were main issues  on which parties led evidence. The averment that the  defendant contributed Rs.2,000 towards purchase price was  disbelieved by  both the courts below. The plaintiff  respondent  proved from the statement of his Savings Bank account of  Allahabad Bank,  Exts.  6,  7  and 8, that  he  withdrew  Rs.8,250  on 8.11.1962  and stated in witness box that he  purchased  the suit house in the name of the defendant by sale deed execut- ed  on  8.11.1962  which was registered  on  9.11.1962.  The plaintiff-respondent  has  since been staying  in  the  suit house. As the two were living as man and wife the 629

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custody of the sale deed was not very material. We thus find that the concurrent findings are based on reasonable  appre- ciation of evidence on record and, therefore, can in no  way be  said to be perverse or unreasonable. Counsel  criticises the observation of the High Court that the relation  between the  two  was of a rather objectionable nature.  We  do  not think that this observation was unwarranted or it had in any way  prejudiced  the defendant’s case. The  High  Court  has analysed the facts and correctly applied the tests to deter- mine  whether the transaction was benami or  not  discussing the case law. We do not find any justification in the appeal under Article 136 of the Constitution of India to  interfere with the concurrent findings of fact.     The  next  question  is whether despite  the  decree  in favour  of the plaintiff-respondent his suit or action  will be  affected  by  the subsequent  legislation,  namely,  the Benami  Transactions (Prohibition) Act, 1988 and its  prede- cessor  Ordinance. In other words, whether the  effectuation of  the decree has been barred. For this it is  relevant  to note  that  the  impugned  High  Court  judgment  was  dated 27.3.1978.  The first appellate court’s judgment  was  dated 23.12.1974, the trial court judgment dated 13.3.1974 and the suit  was  filed in 1971. The special leave  to  appeal  was granted by this Court on 15.11.1978. The Benami Transactions (Prohibition  of the Right to Recover  Property)  Ordinance, 1988,  hereinafter referred to as ’the Ordinance’, was  pro- mulgated  on  May 19, 1988 to come into force at  once.  The Benami  Transactions (Prohibition) Act, 1988 (Act No. 45  of 1988),  hereinafter referred to as ’the Act’,  received  the asset  of the President of India on September 5,  1988.  The provisions of Sections 3, 5 and 8 of the Act came into force at once on that date and the remaining provisions were to be deemed  to have come into force on 19th day of May 1988.  It is  an Act to prohibit benami transactions and the right  to recover property held benami and matters connected therewith or incidental thereto.     Mr.  Rohtagi  submits that provisions of the  Act  cover past  benami transactions also and that to hold so it  would be permissible for this Court to refer to the 57th Report of the  Law Commission of India wherein it was  suggested  that the  legislation should not be applied to past  transactions but the Parliament did not accept that suggestion, and  made the law applicable to past transactions also.     Learned  counsel  for the respondent  Submits  that  the provisions of the Act are prospective and not retrospective, and  as such would not affect the  respondent’s  established right  to the benami property. He has not controverted  that this Court can refer to Law Commission’s Report. 630     To decide the controversy the relevant provisions of the Act  may be referred to. As defined in section 2(a)  of  the Act  "Benami  Transaction" means any  transaction  in  which property  is transferred to one person for  a  consideration paid  or provided by another person. As defined  in  section 2(c)  of  the  Act "property" means property  of  any  kind, whether  movable  or immovable, tangible or  intangible  and includes any right or interest in such property. There  can, therefore,  be  no doubt that the transaction by  which  the suit  house was transferred to the  defendant-appellant  for Rs.8,000 paid or provided by the plaintiff-respondent  would be  a  benami transaction if this law is applicable  to  it. There is also no doubt that the suit house being a  tangible immovable  would  be  included  within  this  definition  of ’property’. Section  3 of the Act prohibits benami transactions by  pro-

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viding:                    "(1)  No  person  shall  enter  into  any               benami transaction.                      (2)  Nothing in sub-section  (1)  shall               apply  to  the  purchase of  property  by  any               person  in the name of his wife  or  unmarried               daughter and it shall be presumed, unless  the               contrary is proved that the said property  had               been purchased for the benefit of the wife  or               the unmarried daughter.                      (3)  Whoever  enters  into  any  benami               transaction shall be punishable with imprison-               ment  for  a term which may  extend  to  three               years or with fine or with both.                      (4) Notwithstanding anything  contained               in the Code of Criminal Procedure, 1973 (2  of               1974), an offence under this section shall  be               non-cognisable and bailable."     The appellant having not been wife or unmarried daughter of the respondent the exception in (2) will not be  applica- ble.     Section  4 prohibits the right to recover property  held benami by providing:                     "(1) No suit, claim or action to enforce               any  right  in resspect of any  property  held               benami  against the person  in           whose               name the property is held or against any other               person  shall lie by or on behalf of a  person               claiming to          be the real owner of such               property.               631                     (2)  No  defence based on any  right  in               respect  of any property held benami,  whether               against  the person m whose name the  property               is held or against any other person, shall  be               allowed in any suit, claim or action by or  on               behalf  of  a person claiming to be  the  real               owner of such property."     Having  upheld the finding that the suit house has  been held benami by the respondent in the name of the  appellant, the question is whether to this transaction the Act shall be applicable.  The Act has not been made retrospective by  any specific  provision. Is it permissible to refer to  the  Law Commission’s  Report  to ascertain  the  legislative  intent behind  the provision? We are of the view that where a  par- ticular enactment or amendment is the result of  recommenda- tion  of the Law Commission of India, it may be  permissible to refer to the relevant report as in this case. What impor- tance  can be given to it will depend on the facts and  cir- cumstances of each case.     In  Santa Singh v. State of Punjab, [1977] 1 S.C.R.  229 Fazal  Ali, J. in order to answer the question  whether  the non-compliance with the provisions of section 235(2) of  the Criminal  Procedure Code, 1973 vitiated the sentence  passed by the court considered it necessary to trace the historical background and social setting under which section 235(2) was inserted for the first time in the 1973 Code and referred to the  research done by the Law Commission which made  several recommendations in its 48th Report for revolutionary changes in the provision. The Statement of Objects and Reasons  were also  referred to in that context. In the instance  case  we find  that way back in 1972 the Government of India  consid- ered it necessary to request the Law Commission of India  to examine  the problem of benami held property with a view  to determining whether benami transactions should be  prohibit-

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ed. The Law Commission accordingly submitted its 57th Report on  benami  transactions on 7.8.1973 after  studying  benami system  as operating in India and in England. It also  exam- ined implications of the provisions of the Indian Trust Act, 1882 and other statutory modifications of the Benami Law  as contained  in the Code of Civil Procedure, the  Transfer  of Property Act, the Indian Penal Code and the Income-tax  Act. It  also  suggested  in its Report the  following  draft  of proposed legislation: 6.33  Recommendation: In the light of the above  discussion, we recommend the enactment of a separate law containing  the following legislative provisions: 632                    "(1)  No  suit to enforce  any  right  in               respect  of any property held  benami  against               the person in whose name the, property is held               or against any other person shall be institut-               ed  in any court by or on behalf of  a  person               claiming to be the real owner of such  proper-               ty.                     (2) In any suit, no defence based on any               right in respect of any property held  benami,               whether  against the person in whose name  the               property is held or against any other  person,               shall be allowed in any court by or on  behalf               of  a person claiming to be the real owner  of               such property.               (3) Nothing in this section shall apply:                     (a) whether the person in whose name the               property  is  held is a manager of, or  a  co-               parcener in, a Hindu undivided family, and the               property  is  held for)he benefit of  the  co-               parceners in the family, or                     (b)  where the person in whose name  the               property is held is a trustee or other  person               standing  in  a fiduciary  capacity,  and  the               property  is held for the benefit  of  another               person  for  whom he is a trustee  or  towards               whom he stands in such capacity."     On 19th May 1988, the President of India promulgated the Benami  Transactions  (Prohibition of the Right  to  Recover Property)  Ordinance, 1988 (No. 2 of 1988) "to prohibit  the right  to recover property held benami and for matters  con- nected  therewith and incidental thereto" based on the  sug- gestion  of the Law Commission of India made as far back  as in  1973.  With this Ordinance the  judicial  acceptance  of benami  transactions was being removed with a view  to  help people  to  keep property they were holding for  others.  It remedied the age old doctrine of benami and made a benamidar the real owner in law, of course with few exceptions.     The Ordinance was referred by the Government on July 22, 1988 to the Law Commission of India requesting the latter to take  up  the  question of benami  transactions  for  detail examination  and  to give its considered views as  early  as possible  so that a Bill to replace the Ordinance  could  be drafted  on the basis of its recommendations and got  passed before the close of the Monsoon Session of the Parliament. 633 The 130th Report of the Law Commission was submitted to  the Government  on  August  14, 1988.  The  Benami  Transactions (Prohibition) Bill, 1988, drafted after getting the  report, was  introduced in the Rajya Sabha on 31st August, 1988  and the  Bill  was passed. The Law  Commission  devoted  several pages to justify retrospective legislation and its view  was that  the  legislation  replacing the  Ordinance  should  be

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retroactive  in operation and that no locus penitentia  need be given to the person who had entered in the benami  trans- actions in the past. It reported at para 3.18 as follows:               "3.18.  Therefore, viewed from  either  angle,               the Law Commission is of the firm opinion that               the legislation replacing the ordinance should               be retroactive in operation and that no  locus               penitentia  need be given to the  persons  who               had  entered into benami transactions  in  the               past.  They had notice of one and a half  dec-               ades  to  set their house in  order.  No  more               indulgence is called for."     However, the court has to interpret the language used in the  Act, and when the language is clear and unambiguous  it must.  be given effect to. Law Commission’s Reports  may  be referred  to as external aid to construction of  the  provi- sions. It may be noted that the Act is a piece of prohibito- ry legislation and it prohibits benami transactions  subject to stated exceptions and makes such transactions  punishable and also prohibits the right to defences against recovery of benami  transactions as defined in section 2(a) of the  Act. The Parliament has jurisdiction to pass a declaratory legis- lation. As a result of the provisions of the Act all proper- ties held benami at the moment of the Act coming into  force may  be affected irrespective of their  beginning,  duration and  origin. This will be so even if the legislation is  not retrospective but only retroactive.     The  learned counsel for the respondent rightly  submits that  the  Act  contains no specific  provision  making  its operation retrospective. The Law Commission itself  observed that democratic culture abhors ex post facto legislation and that  it was necessary .to curb unlawful nefarious  uses  of property.      We  read  in Maxwell that it is a fundamental  rule  of English  Law  that  no statute shall be  construed  to  have retrOspective  operation Unless such a construction  appears very clearly at the time of the Act, or arises by  necessary and  distinct  implication. A  retrospective  operation  is, therefore,  not  to be given to a statute so  as  to  impair existing right 634 or   obligation,  otherwise  than  as  regards   matter   of procedure  .unless  that effect cannot  be  avoided  without doing  violence  to the language of  the  enactment.  Before applying  a  statute  retrospectively the Court  has  to  be satisfied  that  the statute is in fact  retrospective.  The presumption   against  retrospective  operation  is   strong in .cases in which the statute, if operated retrospectively, would  prejudicially affect vested rights or the  illegality of the past transactions, or impair contracts, or impose new duty  or attach new disability in respect of  past  transac- tions or consideration already passed. However, a statute is not  properly called a retrospective statute because a  part of  the requisites for its action is drawn from a  time  an- tecedent  to its passing. We must look at the general  scope and  purview of the statute and at the remedy sought  to  be applied,  and consider what was the former State of Law  and what the legislation contemplated. Every law that takes away or  impairs  rights  vested agreeably to  existing  laws  is retrospective,  and is generally unjust and may  be  oppres- sive- But laws made justly and for the benefit of  individu- als  and  the  community as a whole, as in  this  case,  may relate  to  a  time antecedent to  their  commencement.  The presumption  against  retrospectivity may in such  cases  be rebutted  by  necessary implications from the  language  em-

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ployed in the statute. It cannot be said to be an invariable rule  that  a statute could not be retrospective  unless  so expressed  in the very terms of the section which had to  be construed. The question is whether on a proper  construction the legislature may be said to have so expressed its  inten- tion. Craise on Statute Law, 7th Ed. writes that the general rule  of law that statutes are not operated  retrospectively may  be  departed from (a) by express enactment and  (b)  by necessary  implication from the language employed,  and  the author goes on to say:               "If  it  is a necessary implication  from  the               language employed that the legislature intend-               ed  a particular section to have a  retrospec-               tive  operation, the courts will give it  such               an operation. "Baron Parke," said Lord Hather-               ley  in Pardo v. Bingham, did not consider  it               an invariable rule that a statute could not be               retrospective unless so expressed in the  very               terms  of  the section which had  to  be  con-               strued,  and  said that the question  in  each               case  was whether the legislature  had  suffi-               ciently expressed that intention. In fact,  we               must look to the general scope and purview  of               the  statute, and at the remedy sought  to  be               applied,  and  consider what  was  the  former               state of the law, what it was that the  legis-               lature contemplated." But a statute is not  to               be    read    retrospectively    except     of               necessity  ....  In Main v.               635               Stark,  Lord Selborne said: "Their  lordships,               of  course do not say that there might not  be               something in the context of an Act of  Parlia-               ment,  or to be collected from  its  language,               which might give towards prima facie  prospec-               tive a larger operation, but they ought not to               receive  a  larger operation unless  you  find               some reason for giving it  ....  In all  cases               it is desirable to ascertain the intention  of               the legislature."               He went on: "Words not requiring a  retrospec-               tive  operation, so as to affect  an  existing               statute  preudicially,  ought  not  to  be  so               construed",  but in Renold v. Att.  Genl.  for               Novo Scotia it was held that this rule did not               extend to protect from the effect of a  repeal               a privilege which did not amount to an accrued               right." (pp. 392-393)     As  defined in Section 2(a) of the Act "benami  transac- tion" means any transaction in which property is transferred to  one person for a consideration paid or provided  by  any other  person."  A transaction must,  therefore,  be  benami irrespective of its date or duration. Section 3, subject  to the  exceptions, states that no person shall enter into  any benami  transaction.  This  section  obviously  cannot  have retrospective operation. However, section 4 clearly provides that  no suit, claim or action to enforce any right  in  re- spect  of  any property held benami against  the  person  in whose name the property is held or against any other  person shall  lie, by or on behalf of a person claiming to be  real owner  of  such  property. This naturally  relates  to  past transactions  as  well. The expression  "any  property  held benami"  is  not  limited to any particular  time,  date  or duration.  Once  the  property is found to  have  been  held benami,  no  suit, claim or action to enforce any  right  in

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respect  thereof  Shall lie. Similarly, sub-section  (2)  of section  4  nullifies  the defences based on  any  right  in respect  of  any property held benami  whether  against  the person  in  whose name the property is held or  against  any other person in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.  It means that once a property is found to have been held  bena- mi,  the  real owner is bereft of any  defence  against  the person  in  whose  name the property is held  or  any  other person. In other words in its sweep section 4 envisages past benami  transactions also within its retroactivity. In  this sense  the Act is both a penal and a disqualifying  statute. In  case of a qualifying or disqualifying statute it may  be necessarily retroactive. For example when a Law of Represen- tation declares that all who have attained 18 years shall be eligible  to vote, those who attained 18 yearS in  the  past would be as much eligible as those who 636 attained  that  age  at the moment of the  law  coming  into force. When an Act is declaratory in nature .the presumption against retrospectivity is not applicable. Acts of this kind only  declare.  A  statute in effect  declaring  the  benami transactions  to be unenforceable belongs to this type.  The presumption against taking away vested right will not  apply in  this case inasmuch as under law it is the  benamidar  in whose  name  the property stands, and law only  enabled  the real owner to recover the property from him which right  has now  been ceased by the Act. In one sense there was a  right to  recover or resist in the real owner against the  benami- dar. Ubi jus ibi remedium. Where there is a right, there  is a remedy. Where the remedy is barred, the right is  rendered unenforceable. In this sense it is a disabling statute.  All the  real  owners  are equally affected  by  the  disability provision irrespective of the time of creation of the fight. A  right is a legally protected interest. The  real  owner’s fight  was  hitherto protected and the Act has  resulted  in removal of that protection.     When  the  law nullifies the defences available  to  the real owner in recovering the benami property from the benam- idar  the  law must apply irrespective of the  time  of  the benami  transactions. The expression "shall lie" in  section 4(1) and "shall be allowed" in section 4(2) are  prospective and shall apply to present (future stages) and future suits, claims or actions only. This leads us to the question wheth- er there was a present suit between the plaintiff-respondent and  the defendant-appellant on the date of the  law  coming into  force. We have noted the dates of filing the suit  and judgments of the courts below. On the date of the section  4 of  the Act coming into force, that is, 19th May  1988  this appeal was pending and, of course, is still pending. Can the suit itself be said to be pending?      Lachmeshwar  v. Keshwar Lal, A.I.R. 1941 F.C. 5  is  an authority  for holding that the hearing of appeal under  the procedural  law of India is.in the nature of re-hearing  and therefore in moulding the relief to be granted in a case  on appeal, the appellate court is entitled to take into account even  facts and events which have come into existence  after the  decree  appealed against. Consequently,  the  appellate court is competent to take into account legislative  changes since the decision under appeal was given and its powers are not confined only to see whether the lower court’s  decision was  correct  according to the law as it stood at  the  time when  its  decision was given. Once the decree of  the  High Court  has  been  appealed against, the  matter  became  sub judice  again  and thereafter this court had seisin  of  the

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whole case, though for certain purposes e.g., execution, the decree  was regarded as final and the courts below  retained jurisdiction in that regard. This was followed 637 in  Shyabuddinsab  v. The Gadag-Betgeri  Municipal  Borough, [1955]  1 S.C.R. 1268 where after the judgment of  the  High Court  and  after grant of special leave by this  court  the legislation  was passed, and it was applied by  this  Court. Their  lordships, referring to The King v. The General  Com- missioner  of  Income Tax, [1916] 2 K.B. 249  and  Mukharjee Official  Receiver v. Ramratan Kaur, [1935] L.R. 63 I.A.  47 rejected the contention that unless there are express  words in  the  amending statute to the effect that  the  amendment shall  apply  to pending proceedings, it cannot  affect  the proceedings. In Dayawati v. Inderjit, [1966] 3 S.C.R. 275 it has  been held that the word ’suit’ includes an appeal  from the judgment in the suit. The only difference between a suit and  an appeal is that an appeal only reviews  and  corrects and proceedings in a cause already constituted but does  not create the cause. 1n Mohanlal Jain v. His Highness  Maharaja Shri Man Singh, [1962] 1 S.C.R. 702 it was observed that  "A person  is "sued" not only when the plaint is filed  against him,  but  is  "sued" also when the  suit  remained  pending against  him. The word "sued" covers the entire  proceeding, in  an  action." In Amerjit Kaur v. Pritam Singh,  [1975]  1 S.C.R.  605 it has been held that an appeal is  a  reheating and  in moulding relief to be granted in a case  on  appeal, the  appellate court is entitled to take into  account  even facts  and events which have come into existence  after  the passing of the decree appealed against.     For  the  respondent it is submitted that right  of  the parties to a suit would be determined on the basis of rights available  to them on the date of filing of the suit.  Reli- ance  is  placed on Nand Kishore Marwah  v.  Samundri  Devi, [1987]  4  S.C.C. 382. That however was a case  of  eviction where  the  rights of the parties on the date of  suit  were material  unlike in this case where  subsequent  legislation has nullified the defences of benami holders. That case  is, therefore, distinguishable.     Counsel  for the respondent lastly submits  that  nobody should  be allowed to suffer for fault of the court. As  the maxim  goes,  actus curiae neminem gravabit.  Nobody  should suffer  for an act of the court. However, the delay in  dis- posal of an appeal cannot be termed an action of the  court. The  consequence is that the plaintiff-respondent’s suit  or action cannot be decreed under the law; and hence the decree passed  by  the lower courts is annihiliated  and  the  suit dismissed.     In  .the  result, this appeal is allowed in  the  manner indicated above. Under the peculiar facts and  circumstances of the case, we make no order as to costs. N.P.V.                                                Appeal allowed. 638