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TMI Blog2001 (7) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... ict in the view taken in the decisions of two three-Judges' Bench of this Court ,which are Didar Singh etc. etc. vs. Ishar Singh (dead) by Lrs. etc. etc. [1995 (1) Scale 1] (wherein it was held that in a suit for pre-emption, the pre-emptor must prove his right to preempt upto the date of decree of the first court and any loss of right or subsequent change in law after the date of adjudication of the suit and during pendency of appeal would not affect the decree of the first court ) and Ramjilal & Ors. etc. vs. Ghisa Ram etc. [JT 1996 (2) SC 649] (wherein it was laid down that appeal being continuation of the suit, the right to claim pre-emption must be available on the date when the decree is made and is finally to be affirmed or needs to be modified at the time of disposal of the appeal therefrom, and since the Amending Act came into force during pendency of appeal, the right and remedy of the plaintiff stood extinguished and as a result suit must fail.) In order to resolve the conflict between the aforesaid two decisions rendered by two different Benches, the Bench referred the appeal for decision by a Bench of five Judges. It is in this way, the matter has come before us. Sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the right a co-sharer had on the date of decree of the Court of first instance stood extinguished after the amending Act came into force. The third contention was that in any event, the amending Act being beneficial legislation passed for general good of citizens, this Court while construing new substituted Section 15 is required to apply rule of benevolent construction and in that event amending Act would have retroactive operation. On the other hand the contention of respondents' counsel is that in a suit for pre-emption a claimant has to prove his right on the date of the decree of the first court and loss of right after the date of decree by an act beyond his control or subsequent change in law did not effect his claim in the suit and, therefore, the amending Act subsequent to the date of decree of the first court has no effect on the maintainability of the suit. It was also contended that assuming the appeal being continuation of the suit, the amending Act having no retrospective operation does not effect the decree of the first instance court. It was also urged that in view of provisions of Order 20 rule 14 CPC the title to the property had already been passed on to the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r pre-emption must fail. The first case in the first category of decisions is judgment by Allahabad High Court in Sakina Bibi vs. Amiran and others [1888 ILR (10) Allahabad 472] wherein it was held that a court of appeal is required to see what was the decree which the court of first instance should have passed, and if the court of first instance wrongly dismissed the claim, the plaintiff cannot be prejudiced by her share having been subsequently sold in execution of a decree in another suit. Such a sale would not affect the preemptor's right to maintain the decree if she had obtained the decree in her favour in the court of first instance. In short, the view of the Court was that the right of pre- emption has to be found which existed on the date of the decree and any subsequent sale of the land in execution proceedings during pendency of the appeal would not affect the maintainability of the suit. In Baldeo Misir vs. Ram Lagan Shukul [1923 ILR (45) Allahabad 709], it was laid down that what is to be seen is whether the pre-emptor has the right on the date of the decree of the first Court. Any subsequent change of right during pendency of the appeal would not affect the right of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of the decree. If the claimant loses that right before passing of the decree, no decree for pre-emption can be granted by the Court even though he may have had such right on the date of the suit. In Didar Singh vs. Ishar Singh (supra) a Bench of three Judges of this Court laid down that in a suit for pre-emption, the claimant must prove that his right to pre-empt is subsisted till the date of the decree of the First Court and the loss of right after the date of the decree by an act beyond his control or by statutory intervention during pendency of the appeal against the decree of the trial Court would not disentitle the claimant to maintain his claim of preemption already exercised and decreed. In this case again decision by a Full Bench of Punjab & Haryana High Court in Ramji Lal vs. State of Punjab (supra) was approved. An analysis of the aforesaid decisions referred to in first category of decisions, the legal principles that emerge are these: 1. The pre-emptor must have the right to pre-empt on the date of sale, on the date of filing of the suit and on the date of passing of the decree by the Court of the first instance only. 2. The pre-emptor who claims the right to pre- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account the change in law which is retrospective. The decision of Punjab & Haryana High Court in Ram Lal vs. Raja Ram (supra) was approved in Ram Sarup Vs. Munshi & ors. [1963 (3) SCR 858]. A Constitution Bench of this Court in Ram Sarup case (supra) held that Section 31 of amending Act 10 of 1960 being retrospective, the right to pre-empt a sale which had accrued before coming into force of the amending Act stood defeated. The Constitution Bench also noted and explained that in Lachmeshwar Prasad Shukul vs. Keshwar Lal (supra), the Federal Court was construing Section 7 of the Bihar Money-lenders Act which had retrospective operation. The decision in Ram Sarup vs. Munshi (supra) was followed by another Constitution Bench of this Court in Amir Singh & Anr. vs. Ram Singh & Ors. [1963 (3) SCR 884] wherein, this Court while interpreting section 31 introduced by the Punjab Amending Act 1960 reiterated that retrospective operation of section 31 necessarily involves effect being given to the substantive provisions of amended section 15 by the appellate court, whether the appeal before it is one against a decree granting preemption or one refusing that relief. The legal position that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is statutorily recognised, it has to be given the same treatment as any other law deserves. The right of pre- emption of a co-sharer is an incident of property attached to the land itself. It is some sort of encumbrance carrying with the land which can be enforced by or against the co-owner of the land. The main object behind the right of pre-emption either based on custom or statutory law is to be prevent intrusion of stranger into the family holding or property. A co-sharer under law of pre-emption has right to substitute himself in place of stranger in respect of portion of the property purchased by him meaning thereby where a co-sharer transfers his share in holding, the other co-sharer has right to veto such transfer and thereby prevent the stranger from acquiring the holding in an area where law of pre-emption prevails. Such a right at present may be characterised as archaic, feudal and out-moded but this was law for nearly two centuries either based on custom or statutory law. It is in this background the right of pre-emption under statutory law has been held to be mandatory and not mere discretionary. The Court has no option but to grant decree of pre- emption where there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been shown to us which may persuade us to take a contrary view and disturb the settled law. It was argued by learned counsel for the appellant that an appeal being continuation of suit, the appellate court is required to notice and consider the subsequent event, namely, loss of qualification by the pre-emptor during pendency of an appeal. In fact, argument is that where a co-sharer looses the right to pre-empt during pendency of appeal the pre-emptor's suit must fail. It is no doubt true that in certain context an appeal is continuation of suit and appellate court is rehearing the suit, but such wide appellate power has not shown to be exercised to affect the vested right of a pre-emptor. It is not disputed that a claimant's right to get the property in preference to the vendee is an inchoate one upto the date of adjudication of the suit but it becomes effective as soon as a decree is passed in his favour. Order 20 sub-rule (1) of Rule 14 CPC provides that where a court decrees a claim to pre-empt in respect of a particular sale of property and a decree holder has deposited the purchase money along with the cost of the suit in the Court, the vendee is required to deliver possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate court and that (ii) all that is required to be seen by the appellate court whether decree passed by the court of first instance on the basis of rights of the parties on the date of adjudication, has ceased to be good law in view of decision of the Federal Court in Lachmeshwar Prasad Shukul Vs. Keshwar Lal Choudhuri (supra) wherein it was laid down that an appeal is rehearing of suit and appellate court is entitled to consider any subsequent change in law which has come into existence during pendency of appeal. On the strength the said decision it was vehemently argued that the powers of appellate court are not restricted only to see whether the decision of the first court was correct on basis of rights of the parties on the date of adjudication of suit but also to consider and give effect to subsequent change in law whereby a co- sharer's right of pre-emption has been taken away during pendency of appeal. It is true that in Lachmeshwar Prasad Shukul (supra) in the context of the provisions of Bihar Money-lenders Act, it was laid down that once the decree had appealed against, the matter became sub-judice again and thereafter the appellate court had seisin of the whole case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor law is enshrined in the United States Constitution and in the Constitution of many American States, which forbid it. The true principle is that lex prospicit non respicit (law looks forward not back). As Willes, J. said retrospective legislation is 'contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts, and ought not to change the character of past transactions carried on upon the faith of the then existing law." In Garikapati Veeraya s. N.Subbiah Choudhry 1957 SCR 488 this Court observed as thus: "The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed." In Smt. Dayawait and another vs. Inderjit and others 1966 (3) SCR 275, it is held thus: "Now as a general proposition, it may be admitted that ordinarily a court of appeal cannot take into account a new law, brought into existence after the judgment appealed from has been rendered, because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned with the application of the provisions of sub-section 1 (1-A) of S.23 as introduced by the Amending Act to acquisition proceedings which were pending on the date of commencement of the Amending Act. In relation pending proceedings, the approach of the courts in England is that the same are unaffected by the changers in the law so far as they relate to the determination of the substantive rights and in the absence of a clear indication of a contrary intention in an amending enactment, the substantive rights of the parties to an action fall to be determined by the law as it existed when the action was commenced and this is so whether the law is change before the hearing of the case at the first instance or while an appeal is pending (See Halsbury's Laws of England, 4th Edn., Vol.44, para 922)". From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a fresh legislation such legislation does not effect the substantive rights of the parties on the date of suit or adjudication of suit unless such a legislation is retrospective and a court of appeal cannot take into consideration a new law brought into existence after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of passing of the decree. Coming to decision in Lachmeshwar Prasad Shukul vs. Keshwar Lal Choudhuri (supra), which is the sheet anchor of the argument on behalf of appellants, it is necessary to notice the facts of the said case and the provisions of law which were interpreted by the Federal Court. In the said case, the plaintiff brought a suit for recovery of money by sale of mortgaged property. The suit was partly decreed. There was an appeal and cross-appeal to the High Court. Before the High Court one of the arguments raised was that section 11 of the Bihar Money-lender Act (3 of 1938) which was enacted by the Bihar Legislature during pendency of the appeal before the High Court is void. Accepting the arguments, the High Court held section 11 of the Act to be void. Subsequently, the defendants preferred an appeal before the Federal Court. While the appeal was pending Bihar Legislature repealed the Money-lender Act of 1938 and substantially re-enacted it as the Bihar Money-lender Act 1939. Section 7 of the Act (Act No.7 of 1939) which came for consideration before the Federal Court runs as under: "Notwithstanding anything to the contrary contained in any other law or in any t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. In the said case the plaintiff brought a suit for preemption on the ground of vicinage. The trial Court dismissed the suit on the ground that the land fell outside the limit of Panipat town and in that locality no custom of preemption prevailed. On appeal the appellate Court reversed the decision of the trial Court and decreed the suit. Second appeal was filed by the vendee before the High Court. During pendency of appeal, the State Legislature amended the Punjab Preemption Act by amending Act No.10 of 1960. By the said amending Act Section 15 of the Parent Act was deleted and in its place new Section 15 was substituted whereby the grounds on which the urban property was pre-empted was taken away. New substituted Section 31 further provided that no court shall pass decree in a suit for preemption whether instituted before or after the commencement of the amending Act which is inconsistent with the provision of the Act. The High Court applying the principles laid down in Lachmeshwar Prasad Shukul's case held that an appeal being continuation of suit, the appellate Court is to take into account the subsequent change in law which has retrospective operation. The said decision of Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efusing that relief. It may be noticed that the phraseology and the words "before and after" used in Section 7 of the Bihar Money-lender Act 1939 "no court shall in any suit brought before or after the commencement of this Act" and in Section 31 of Punjab Amending Act 10 of 1960 "no court shall pass a decree in a suit for pre-emption whether instituted before or after the commencement of the Act" led the Constitution Bench of this Court to come to conclusion that there is necessary intendment in the Act, that it has retroactive operation and has to be taken into consideration by the appellate court and the powers of an appellate court is not confined to see whether the judgment of the trial court was correct or not. Learned counsel for the appellants strongly relied upon a decision of Amarjit Kaur etc. vs. Pritam Singh & ors. etc. [1974 (2) SCC 363]. In the said case this Court was interpreting section 3 of Punjab Pre-emption Repealed Act 1973 which provided that on and from the commencement of the Act no Court shall pass a decree in any suit for pre-emption. This Court in the said case while applying principles laid down in Lachmeshwar Prasad Shukul vs. Keshwar Lal Choudhuri (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ends of justice. It is, therefore, true in the case of application of rule of benevolent construction also. If on application of rule of benevolent construction, the Court finds that it would be doing justice within the parameters of law there appears to be no reason why such rule of construction be not applied in the present case. But there are limitations on the powers of the Court, in a sense that Courts in certain situations often refrain themselves to apply rule of benevolent or liberal construction. The judicial precedents have laid down that, ordinarily, where and when the rule of benevolent construction is required to be applied and not to be applied. One of the situations is, when the Court finds that by application of rule of benevolent construction it would be re- legislating a provision of statute either by substituting, adding or altering the words used in the provision of the Act. In such a situation generally Courts have refrained themselves to apply rule of benevolent construction. Under the cover of application of rule of benevolent construction a Court is not entitled to re-legislate a provision of a statute and to do violence with the spirit of the provision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislation is always retrospective in operation even though such legislation either expressly or by necessary intendment is not made retrospective. In the case of Moti Ram vs. Suraj Bhan & Ors. [1960 (2) SCR 896] it was held thus: "It is clear that the amendment made is not in relation to any procedure and cannot be characterized as procedural. It is in regard to a matter of substantive law since it affects the substantive right of the landlord. It may be conceded that the Act is intended to provide relief to the tenants and in that sense is a beneficial measure and as such its provision would be liberally constructed; but this principle would not be material or even relevant in deciding the question as to whether the new provision is retrospective or not. It is well settled that where an amendment affects vested rights the amendment would operate prospectively unless it is expressly made retrospective or its retrospective operation follows as a matter of necessary implication. The amending Act obviously does not make the relevant provision retrospective in terms and we see no reason to accept the suggestion that the retrospective operation of the relevant provision can be spelt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a beneficial legislation has to be given retrospective effect. In the said decision it was held that if the expressions are ambiguous, then the construction that fulfils the object of the legislation must provide the key to the meaning. But that is not the case here. We have already held that there is no ambiguity in substituted Section 15 and, therefore, this decision has no application in the present case. We accordingly reject the arguments of the learned counsel for the appellants. Lastly, it was contended on behalf of the appellants that the amending Act whereby new Section 15 of the Act has been substituted is declaratory and, therefore, has retroactive operation. Ordinarily when an enactment declares the previous law, it requires to be given retroactive effect. The function of a declaratory statute is to supply an omission or explain previous statute and when such an Act is passed, it comes into effect when the previous enactment was passed. The legislative power to enact law includes the power to declare what was the previous law and when such a declaratory Act is passed invariably it has been held to be retrospective. Mere absence of use of word 'declaration' in an Act e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt, and there was no omission in its phraseology which was required to be supplied by the amendment." In R. Rajagopal Reddy (dead) by Lrs. & Ors. vs. Padmini Chandrasekharan (dead) by Lrs. [1995 (2) SCC 630], it was held thus: "Declaratory enactment declares and clarifies the real intention of the legislature in connection with an earlier existing transaction or enactment, it does not create new rights or obligations. If a statute is curative or merely declaratory of the previous law retrospective operation is generally intended. A clarificatory amendment of this nature will have retrospective effect and therefore, if the principal Act was existing law when the Constitution came into force the amending Act also will be part of the existing law. If a new Act is to explain an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act" From the aforesaid decisions, the legal principle that emerges is that the function of a declaratory or explanatory Act is to supply an obvious omission or to clear up doubts as to meaning of the previous Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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