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
October 4
The Judgement of the Court was delivered by GAJENDRAGADKAR J
What is the effect of the retrospective operation of section 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 10000 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 section 15c 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 section 15c 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 041 r 27 of the Code of Civil Procedure and held that the exchanges in question had in fact been proved and were in law valid
It therefore came to the conclusion that the appellants acquired equal status with the respondents and so the respondents  claim for pre emption must fail
That is why the appeals preferred by the appellants were allowed and the respondents  suits were dismissed
The dispute was then taken up before the High Court of Panjab by the respondents by second appeals
Mahajan J who heard these appeals held that the property acquired by exchange in lieu of the part of the property purchased by the vendees did not give the appellants a right to preempt
He referred to the fact that exchange of lands was sometimes recognised as conferring on the party the right to preempt but that was where the land exchanged did not form part of the land sold and preempted
In the result the High Court held that the plea made by the appellants was not well founded in law and so the respondents were entitled to pre empt
As a result of this finding the decrees passed by the lower appellate Court were reversed and the respondents  suits were decreed
The appellants then moved the Division Bench by Letters Patent appeals but these appeals were dismissed
It is against the decrees thus passed by the Division Bench in Letters Patent appeals that the appellants have come to this Court by special leave
We have already noticed that both the appellants and the respondents are claiming a right to 888 preempt under section 15c 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 s15 of the old s15 after making substantial changes in the provisionsof the earlier section
Clauses ii and iii of theoriginal s15c 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 s15 that decree can no longer be sustained because of the provisions of s31 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 19591960 which is inconsistent with the provisions of the said Act
In support of his argument that s31 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 vs 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 section 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 section 31 did 1  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 section 31 are retrospective and can be relied upon by the appellants in their present appeals before this Court
This position would undoubtedly have helped the appellants but for another complication which has been introduced by the relevant provisions of the amended section 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 section 15
Clause four of section 151 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 section 15c 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 section 15c 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 section 31 arises
Mr Achhru Ram contends that though section 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 section 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 section 15c 891 as they stood prior to the amendment that would be inconsistent with the provisions of the amending Act and so the change made by the amending Act has to be given effect to and the right which once vested in the respondents must be deemed to have been retrospectively taken away from them
On this point there is no dispute
Would it make any difference in the legal position when we are dealing with rights which are created for the first time by the amending Act on the date when this Court will pass a decree in the present appeals If the rights created in favour of the tenants are not recognised and a decree is passed ignoring the said rights that decree would be inconsistent with the relevant provisions of the amending Act and section 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 s31 necessarily involves effect being given to the substantive provisions of section 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 section 15 which is consequential on the retrospective operation of s31 is not affected by the fact that the right of preemption prescribed by section 15 if referred to as a right which shall vest in the persons specified in subsections a b and c of section 151
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 section 31 and section 15
If the inevitable consequence of the retrospective operation of s31 is to make the substantive provisions of section 15 also retrospective it follows that by fiction introduced by the retrospective operation the rights which the respondents claim under the amended provisions of section 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 section 31 available to them
We must accordingly set aside the decrees passed by the High Court and send the matters back to the trial Court with a direction that it should allow the respondents an opportunity to amend their claims by putting forth their right to ask for preemption as tenants under the amended provision of 8 15
After the amendments are thus made the appellants should be given an opportunity 893 to file their written statements and then appropriate issues should be framed and the suits tried and disposed of in the light of the findings on those issues in accordance with law
Under the unusual circumstances in which the litigation has thus secured a further lease of life we direct that the costs incurred so far should be borne by the parties


Summary:
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 section 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 section 15 c of the original Act were deleted 2 cl4 of section 15 1c 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 section 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 cl4 of s15 1c of the Act as amended even if it be held that the right to claim pre emption under cls
ii and iii of s15 c of the unmended Act was taken away retrospectively by the amending Act
The appellants pleaded that even assuming that cl4 of s15 1c 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 s31 of the Punjab Pre emption Act 1913 as amended by Punjab Act 10 of 1960 are retrospective in operation and therefore the decree passed in favour of the respondents by the trial court and affirmed by the High Court under the unmended section could not be sustained
Ram Sarup VMunshi 1963 3 SCR 858 followed
2 The retrospective operation of s31 necessarily involves effect being given to the substantive provisions of amended s15 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