TMI Blog1946 (1) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ively so as to affect trans-actions entered into before its enactment. 3. Section 13A was headed III.--A. -- Benami Transactions, and, provided as follows: 13.--A. (1.) When a sale, exchange, gift, will, mortgage, leasee or farm purports to be made either before or after the commencement of the Punjab Alienation of Land (Second Amendment)) Act, 1938, by a member of an agricultural tribe to a member of the same agricultural tribe or of a tribe in the same group, but the effect of the transaction is to pass the beneficial interest to a per son who is not a member of the same tribe or of a tribe in the same group, the transaction shall be void for all purposes, and the alienor shall be entitled to possession of the land so alienated, notwithstanding the fact that he may have himself intended to ovade the provisions of this Act. (2.) If the Deputy Commissioner, either of his own motion or on the application of the alienor, is satisfied after making such enquiries as may be prescribed from the parties concerned, and recording evidence that an alienation is void, under the provisions of the preceding sub-section, he shall by order in writing, after recording his reasons, eject a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n up, and if the amending Act of 1938--the impugned Act--is bad, the same result is in effect produced by enabling a coach to he driven through the principal Act by the simple process of employing nominees. The impugned Act will go entirely if the Board are against the appellant, but two things may be said; first, there is a possible case of severability; and secondly, there is the question whether the impugned Act is of valid retrospective operation. The suggestion which has found favour with the majority of the Federal Court is that Section 298 of the Government of India Act, 1935, which enacts that people are not to suiter from diserimination on various grounds, impinged on this Punjab legislation and destroyed its whole operation. That is the crucial point in this case. It is submitted that this Punjab legislation is not such as falls within the real mischief of racial or colour or similar discrimination referred to in Section 298 of the Constitution Act; further, if Section 13A is invalid, then anybody who wants to destroy the whole effect of the principal Act can do so simply by finding a local person who is qualified and will lend his name. [Reference was made to the history ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had a right to rely on the maxim in pari delicto, potior, est conditio possidentis. If it was a valid benami transaction he would have a right of property, but as it was a benami transaction designed to evade the provisions of an existing Act it was invalid, and from an invalid transaction he derived no rights at all, and therefore under the principal Act of 1900 Gopal Das had no right to this land, and so when the Act of 1938 invalidated the whole thing, whatever else it did it. certainly was not depriving Gopal Das of an existing title. [Reference wan made to the Contract Act, 1872, Section 23, and to the Trusts Act, 1882, Sections 4, 82, 84 and 96.] It was Said in Qadir Bakhsh v. Hakam (1932) I.L.R. 13 Lah. 713. that if it transpires that an effort had been made to evade the provisions of the Act, stops can be taken to have the transaction brought into conformity with its provisions. It is submitted that the respondent here cannot attack the impugned Act without at any rate asserting that if the principal Act had been passed after the Constitution Act it would have been invalid. Sundrabai Sitaram v. Manohar Dhondu AIR (1933) (Bom.) 202 gives point to the suggestion that if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the one point of retrospective operation. It is disputed that the Government of India Act gives any government the right to pass penal retrospective legislation; that is the whole burden of my submission. It is agreed that Sub-section 1 of Section 298 of the Constitution Act refers to a personal disability, and the question is whether there is a section in the impugned Act which impinges on the personal right given by Sub-section 1 of Section 298. If there is, then the whole section must be bad unless it is severable in the manner that has been suggested. Again, property in Sub-section 1 of Section 298 means any property, and no statute or section can be passed which has the effect of depriving a subject of His Majesty in India of the right to acquire or hold property. The question of belonging or not belonging to a tribe is a matter of descent. If it can be predicated of any section that it does in fact preclude one of His Majesty's subjects domiciled in India from acquiring, holding or disposing of property on the ground of descent only, that section, unless severable, must be bad, though the policy of the Act may be something quite different. Having, however, put a ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mortgage of 1933 was a perfectly valid transaction on the state of the law as it then was--it operated according to its tenonr. 11. On the two grounds, therefore, that the word prohibits' in Sub-section 2(a) of Section 298 of the Constitution Act looks to a future disposition and not to a past one, and also because the real operation of the impugned Act on an antecedent transaction is not to interfere with any disposition at all, but to interfere with a holding title, a de facto possession, the transaction in question here cannot he brought within the Act. 12. Pritt K.C. replied. The Provincial Legislature is sovereign within the scope of its powers, and can pass retrospective penal or punitive legislation. The only question is whether Sub-section 2 of Section 298 covers it if it does. The impugned Act prohibited dispositions made both before and after it came into force, and it is submitted, first, that it can validly prohibit in that sense as from that date, and secondly, it is not acting retrospectively in any very full sense of the term, because the only sense in which it can be said to be retrospective is that it has disturbed the possession or occupation which da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Commissioner considers to be reasonable. 15. As regards temporary alionations of land, Section 6, Sub-section 1, provides that if a member of an agricultural tribe mortgages his land and the mortgagee is not a member of the same tribe, the mortgage shall be made in one of certain prescribed forms, and Section 9, Sub-section 1, provides that, if a member of an agricultural tribe makes a mortgage of his land in any manner or form not permitted by or under the Act, the Deputy Commissioner shall have authority to revise and after the terms of the mortgage so as to bring it into accordance with such form of mortgage permitted by or under the Act as the mortgagee appears to him to be equitably entitled to claim. 16. Perhaps the most important section of the principal Act for present purposes is Section 4, under which the Local Government, for which the Provincial Government was substituted in 1937, were, by notification in the Official Gazetto, to determine what bodies of persons in any district or group of districts were to be deemed to be agricultural tribes or groups of agricultural tribes for the purposes of the Act. Accordingly, by Punjab Government Notification No. 63, dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted a mortgage with possession to respondent No. 1, who is a member of an agricultural tribe, of certain agricultural land and rights in the District of Sialkot, in the Schedule to the notification of 1901, to secure repayment of ₹ 1,500 to one Gopal Das, it is not disputed that respondent No. 1 was a benamidar, and that Gopal Das, who is not a party to the present suit, was the real beneficiary. While the mortgage deed has not boon produced, it is admitted that it is not in a form permitted by the principal Act, and that it would fall into the category referred to in Section 9, Sub-section 1, of the principal Act. 19. In February, 1939, the impugned Act was enacted, and, by a notification under Section 1, Sub-section 2, of the Act, it came into force on June 1, 1939. By Section 5 of the impugned Act it is provided that before Section 14 of the principal Act, a new heading and four new sections should be inserted. 20. [His Lordship road the now heading and the first of the new sections, Section 13A, so far as relevant to the present case, and continued:] A proviso to Sub-section 2 of the new Section 13A provides for compensation to the person ejected for improvements i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the India, and Burma (Temporary and Miscellaneous Provisions) Act, 1942, and continued:] By Section 6, Sub-section 2, of the Act of 1942, it was provided that the amendments; made by Sections 3 and 4 of the Act in the Government of India Act, 1935, should be deemed to have been made therein immediately before the passing thereof. It follows that, for the purposes of this appeal, their Lordships must have regard only to Section 298 as amended by the Act of 1942, and another result has followed the amendment, namely, that certain contentions which have been dealt with by the courts in India are no longer available and the question of the validity of the impugned Act will rest on the decision of one or, at most, of two questions. 23. The first question is whether the impugned Act, by Section 5 contravenes Sub-section 1 of Section 298 of the Act of 1935. If it does not contravene Sub-section 1, the attack on the impugned Act fails, and so does the suit. If, on the other hand, Section 5 of the impugned Act does contravene Sub-section 1 of Section 298, the question arises whether the appellant can claim the benefit of Sub-section 2, and here respondent No. 1 admits that the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Act was valid so far as future sales and mortgages were prohibited. On this last point the learned judges differed from the Subordinate Judge, but this did not affect the result so far as the mortgage in suit was concerned, if having been executed five years before the impugned Act was passed. Dalip Sungh J., in the leading judgment, did discuss the question of the validity of the principal Act, and expressed a somewhat tentative opinion, but Monroe and Sale JJ. found it unnecessary to express any opinion. Their Lordships will refer to this matter later. 26. The High Court having certified in terms of Section 205 of the Act of 1935 that the case involvod a substantial question of law as to the interpretation of that Act, the present appellant appealed to the Federal Court, which, by a majority judgment (Gwyer C.J. and Varada-chariar J., diss. Beaumont J.) hold that the impugned Act contravened Sub-section 1 of Section 298, in respect that in some cases it would operate as a prohibition on the ground of descent alone, and agreed with the High Court that the benefit of Sub-section 2 of Section 298 could not be claimed for the impugned Act so far as if purports to avoid transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isqualification is lack of a particular descent, such lack of descent is not the only, or even the primary, ground on which the rights are avoided. [1942] F.C.R. 89 28. In accordance with the opinion of the majority of the court, the decree of the High Court was set aside, and the case sent back to the High Court with a direction that proper issues were to be framed in the light of the observations in the majority judgment, and the case remitted to the trial court for further trial and decision. 29. Their Lordships desire to point out the limited nature of the issue in this appeal. In the first place, no question of the validity of the principal Act arises; neither of the two issues taken raises the question, no question of its validity was suggested by respondent No. 1 before the Board, and the appellant would clearly be concerned to defend its Validity. The amendment of Section 298 of the Act of 1935 by the Act of 1942, and the view of the impugned Act taken by their Lordships, and the concession by respondent No. 1 of its validity as regards future benami transactions, are not encouraging for any attack on the validity of the principal Act. In the second place, Mr. Pritt, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pritt, for the appellant, conceded that membership of a tribe was, generally, a question of descent, and, therefore, the question may be stated as whether the impugned Act prohibits any subject of His Majesty domiciled in India 'on the grounds only ........of 'descent' from acquiring, holding or disposing of property in British India.'' Three points arise on the question so stated, the first one being whether the provisions of the impugned Act involve a prohibition within the meaning of Sub-section 1; in the opinion of their Lordships, there can be no doubt that the avoidance of the benami transaction and the recovery of possession by the alienor, which are enacted by the impugned Act for the first time, involve such a prohibition. The second--and most important point--is whether such prohibition is only on grounds of descent. In view of the opinion already expressed by their Lordships, it will be enough to show that, such will be the result in some of the cases affected by the impugned Act, and it is clear, for example, that if the beneficial vendee or mortgagee either ordinarily resides or holds land in the district, but is not a member of an agricultural tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the impugned Act may be left to operate validly. 33. The majority of the Federal Court appear to have contemplated another form of severability, namely, by a classification of the particular cases on which the impugned Act may happen to operate, involving an inquiry into the circumstances of each individual case. There are no words in the Act capable of being so construed, and such a course would in effect involve an amendment of the Act by the court, a course which is beyond the competency of the court, as has long boon well established. Their Lordships are therefore of opinion that the course adopted by the majority of the Federal Court, and embodied in the order, is not warranted, and must be set aside. 34. The result is that the impugned Act being ultra vires and void in so far as it purports to operate retrospectively, it cannot, affect the position of respondent No. 1 under the mortgage in suit, but the decision of the present suit will not affect or prejudice any question that may arise as to action by the Deputy Commissioner under Section 9 of the principal Act, and the relief sought by respondent No. 1 must be adjusted so as to confine it within th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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