Appeal No 230 of 1953
Appeal from the judgment and decree dated August 29 1950 of the former Madhya Bharat High Court at Indore in Special Appeal No 5 of 1949 arising out of the judgment and decree dated December 2 1948 of the said High Court in Civil First Appeal No 61 of 1948 against the judgment and decree dated June 11 315 1948 on its Original Side in Civil Original Suit No 30 of 1947
NC Chatterjee section C Isaacs J D Patel J B Dadachanji section N Andley and Rameshwar Nath for the appellant
M P Amin C B Sanghi and 1
N Shroff for the respondents
March 28
The following Judgment of the Court was delivered by SARKAR T
The Princely States that existed in British India merged themselves in the Union of India not very long after India became independent
Before the merger some of these States passed through certain stages which may be called transitional
The decision of this appeal depends on certain laws that came into existence during the transitional stage through which the Princely State of Indore passed before it became merged in the Indian Union
Up to April 22 1948 Indore as one of the Princely States of India enjoyed internal sovereign rights and had its own laws and courts
These laws and courts derived their authority from the Ruler of Indore in whom the sovereign power was vested
The highest court in Indore was called the High Court
The suit out of which this appeal arises was filed by the appellant against the respondents in the Indore High Court on November 6 1947
It was a suit for the specific performance of an agreement whereby it is said Govindram Sakstria whose heirs and legal representatives the respondents are agreed to sell to the appellant a share in a business
The said Govindram Saksaria having died prior to the suit it was brought against the respondents
On April 22 1948 the Rulers of Gwalior Indore and certain other States in the region known as Malwa Madhva Bharat entered into a Covenant to unite and integrate their territories in one State with a common executive legislature and judiciary by the name of the United State of Gwalior Indore and Malwa Madhya Bharat and to include in that United 316 State any other State the Ruler of which later agreed with the approval of the Government of India to merge his State in the United State
Article 3 of the Covenant provided for the constitution of a Council of Rulers one of the members of which was to be its President such President being called the Rajpramukh
It also provided that the Ruler of Gwalior would be the first Raj Pramukh of the United State
Under article 6 of the Covenant the Ruler of each covenanting State was required to make over the administration of his State to the Raj Pramukh by a date not later than July 1 1948
This article also provided that upon the administration of a State being made over to the Raj Pramukh all rights authority and jurisdiction belonging to its Ruler and appertaining or incidental to its Government would vest in the United State
Similar provision was also made in respect of the vesting of the rights authority and jurisdiction of the Ruler of a State which by a subsequent agreement became included in the United State
Article 10 provided that as soon as practicable a Constituent Assembly for the United State would be formed in the manner indicated for framing its Constitution and that the Raj Pramukh would by August 1 1948 constitute an interim Legislative Assembly
It also provided that until the Constitution framed by the Constituent Assembly came into operation the Raj Pramukh would have the power to make and promulgate Ordinances for the peace and good Government of the United State but such Ordinances would have force for a period not longer than six months from its promulgation and would be liable to be controlled or superseded by an Act of the interim Legislative Assembly
As a matter of interest it may be mentioned here though nothing turns on that in this appeal that the United State later became a Part B State as defined in the Constitution of India and lastly merged in the territories of what is now the State of Madhya Pradesh
The suit brought by the appellant was heard by a single Judge of the Indore High Court who decreed it by his judgment pronounced on June 11 1948
It 317 was five days after this judgment had been pronounced namely on June 16 1948 that the Ruler of Indore made over the administration of his State to the Raj Pramukh of the United State in terms of the Covenant
It appears however that the High Court of Indore continued functioning even thereafter
On June 19 1948 the Raj Pramukh promulgated Ordinance No 2 of 1948 to provide for the establishment of a High Court for the United State
Section
2 of the Ordinance provided that it would come into force on such date as the Raj Pramukh might prescribe and the Raj Pramukh by a Notification
published on July 28 1948 prescribed July 29 1948 as such date
On Ordinance No 2 of 1948 so coming into force on July 29 1948 the High Court of the State of Indore ceased to function from that date
Section 35 of the Ordinance provided that on the taking over of the administration of any State by the Raj Pramukh its High Court would cease to exist and all cases pending before it would be transferred to the High Court of the United State established by the Ordinance
The provisions of this section were found to be anomalous in the cases of States like Indore where the administration had been taken over sometime before the Ordinance had come into force and the High Court under it established for in regard to these States the cases pending in the State High Courts could not on the dates their administration was taken over be transferred to the United State High Court as it had not then come into existence
To remedy this anomaly on October 16 1948 the Raj Pramukh promulgated Ordinance No 14 of 1948
This Ordinance replaced section 35 in Ordinance 2 of 1948 by a new section and provided that it would be deemed to have always been so replaced
The new section provided that in the case of any State whose administration had been taken over by the Raj Pramukh before the establishment of the High Court of the United State the High Court of the State would cease to exist and function from the date of such establishment and thereupon all cases pending before the High Court of the State would be transferred to the High Court of the United State and the appeals 318 which would have lain to the High Court of the State would lie to the High Court of the United State
Before Ordinance No 14 of 1948 had been promulgated the respondents on August 24 1948 preferred an appeal to the Divisional bench of the High Court of the United State from the decision of the High Court of Indore decreeing the appellant s suit on June 11 1948 to which reference has been made earlier
A few days later namely on September 7 1948 the appellant also preferred a cross appeal to the Divisional Bench against the same decision
On December 2 1948 the Divisional Bench decided the appeal and the cross appeal in favour of the respondents and dismissed the appellant s suit
Now came the United State of Gwalior Indore and Malwa Madhya Bharat High Court of Judicature Act VIII of 1949 hereafter referred to as the Act
It was enacted by the Interim Legislative Assembly of the United State which had earlier come into existence
The Act came into force on January 18 1949
Section 40 of this Act repealed Ordinance No 2 of 1948
The question that arises in this appeal depends on the construction of some of the provisions of this Act which are now set out
Preamble Whereas it is necessary to provide for the continuance of the High Court of Judicature for the United State of Gwalior Indore and Malwa Madhya Bharat established under Ordinance No 11 of 1948 it is hereby enacted as follows section 4
In this Act unless there is anything repugnant in the subject or context d  High Court  means the High Court functioning as the High Court of the United State
section 2a
It shall extend to the whole of the United State of Gwalior Indore and Malwa Madhya Bharat and shall apply to all persons within the said United State over whom the Courts having jurisdiction in the Covenanting States forming part of the said United State had jurisdiction
b This Act shall apply to all Criminal and Civil Proceedings including those under testamentary 319 intestate matrimonial divorce and insolvency jurisdiction pending in the Courts in any State on the late on which the State is included in the United State and to such proceedings arising in the said Statesafter those dates
Special appeal shall lie to the Full Bench of the High Court from  1 a decree or an appealable order passed by the Divisional Bench of two Judges of the High Court in the exercise of extraordinary or appellate civil jurisdiction
On March 31 1949 the appellant filed an appeal to the Full Bench of the High Court from the judgment of the Divisional Bench dismissing his suit
He claimed to be entitled to file this appeal under section 25 of the Act
The Full Bench dismissed the appeal on the ground that section 25 was not available to the appellant and in this view of the matter it did not go into the merits of the appellant s case
It appears that another Full Bench of the High Court consisting of three Judges had held on an earlier occasion that section 25 did not apply where the Divisional Bench had delivered its judgment before the Act had come into force and no appeal Jay from such a judgment under this section
That view was endorsed by the judgment of the later Full Bench which however was larger consisting of five Judges
In the present appeal to this Court the correctness of the last Full Bench judgment is being challenged
The appellant contends that section 2b of the Act ap
plied the Act including section 25 to the proceedings mentioned in it and section 25 so applied gave a right of appeal to the Full Bench of the High Court from the decision of a Divisional Bench of that Court passed in these proceedings
He then says that the judgment of the Divisional Bench dated December 2 1948 from which he had appealed to the Full Bench had been passed in such a proceeding and therefore his appeal was competent
The High Court does not appear to have held that that proceeding was not of any 320 of the kinds mentioned in section 2b and it seems to us that it was of one of these kinds
Section 2b mentions two kinds of proceedings namely first those pending in the Courts in any State on the date on which that State was included in the United State and secondly those which arose in the States after those dates
Now the proceeding in which the Divisional Bench pronounced judgment was an appeal from a decision of a Single Judge of the Indore High Court given on June 11 1948 that is before that State became included in the United State
The appeal had however been filed on August 24 1948 that is after Indore had been included in the United State
The appellant contends that the fact that the decree from which he had appealed had been passed before the date of inclusion of Indore in the United State while his appeal had been filed after that date made no difference for an appeal being only a continuation of the proceedings in a suit the proceedings must be deemed to have been pending all along since the filing of the suit and therefore on the date when Indore was included in the United State though the appeal was filed later
Dinonath Ghose vs Shama Bibi 1 to which we were referred would seem to support the appellant s contention
In any case it seems beyond doubt that the appeal in which the judgment of the Divisional Bench dated December 2 1948 was pronounced was a proceeding of the second kind mentioned in section 2b namely  proceedings arising in the said States after those dates  i e the date of the inclusion of the State in the United State
It seems clear to us that the words  arising in the said States  do not refer to proceeding arising in a Princely State for the Princely State had ceased to exist after its inclusion in the United State and no proceeding could arise therein after such inclusion
So to understand these would result in this part of section 2b being rendered nugatory
We do not think
however such a result is inevitable
These words can well be taken to refer to a proceeding arising in the areas of an erstwhile Princely State subsequently included in the United 1 Cal
23 321 State
We think that to be the proper meaning to be given to these words
So understood the appeal in which the judgment of the Divisional Bench dated December 2 1948 was given was a proceeding arising in the areas of the erstwhile Indore State after the inclusion of that State in the United State for it was filed after such inclusion
It is therefore clearly a proceeding of the second kind mentioned in section 2b
The learned Judges of the High Court however did not as earlier stated accept the appellant s contention that section 25 gave a right of appeal to the Full Bench from the judgment of the Divisional Bench passed in a proceeding mentioned in section 2b
Their reasons for this view would appear broadly to be these To accede to the appellant s contention a retrospective operation would have to be given to the Act and thereby affect the right vested in the respondents at the date of the passing of the Act to the finality of the judgment of the Divisional Bench delivered before that date the rules of construction of a statute required that only such retrospective operation should be given to it as its language compelled there was no such language used in section 2b which properly understood only gave the High Court of the United State jurisdiction over proceedings pending in the High Court of  a Princely State on the date on which that State was included in the United State in any event the language of section 2b would be fully satisfied by giving retrospective operation to section 25 only to the extent of applying it to proceedings pending on the date of inclusion of a State in the United State and not closed by a final judgment passed before the Act came into force
It may be conceded that the judgment of the Divisional Bench was final under the law as it stood at the date it was passed and no appeal lay from it before the Act came into force
The respondents had therefore at the date of the Act a vested right to the finality of this judgment
It is also clear that a right to the finality of a judgment is a substantive right and that the acceptance of the appellant s contention would result in depriving the respondents of such a right
41 322 The only question in this appeal is whether section 25 gives a right of appeal from the judgment of the Divisional Bench
The rule is clear that  provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment   Delhi Cloth and General Mills Co Ltd vs Income Tax Commissioner Delhi 1
Before proceeding further we wish to observe that the rule that a statute is not to have retrospective operation is only applicable where it is doubtful from the language used whether or not it was intended to have such operation
Where the language of a statute plainly gives it a retrospective operation the rule has no application for  Of course it is obviously competent for the Legislature if it pleases in its wisdom to make the provisions of an Act of Parliament retrospective  Smith vs Callander 2
We may usefully read here what Bowen L J said in Reid vs Reid 3  Now the particular rule of construction which has been referred to but which is valuable only when the words of an Act of Parliament are not plain is embodied in the well known trite maxim ominis nova constitution futuris forman imponere debet non praeteritis that is that except in special cases the new law ought to be construed so as to interfere as little as possible with vested rights
We wish to emphasise that it is not as if all efforts should be made so as not to give a statute a retrospective operation whatever its language is
The rule does not require of the courts an  obdurate persistence  in refusing to give a statute retrospective operation
Now what is the language of the Act before us Section 25 does not contain any words to show that it was intended to have retrospective operation
It only provides for the future
It gives a new right of appeal and such appeal can of course only be filed after the Act has come into force
But there is section 2 b
That section says that the Act shall apply to all civil and criminal proceedings pending in the Courts in any State on the date on which the State is included in the 1 1927 LR 54 1
A 421
2  305
3 323 United State and to such proceedings arising in the said States after these dates
Section 2 b therefore makes section 25 and also all other sections of the Act applicable to the proceedings mentioned in it
Now what is the effect of this  What is the result if a section giving a right of appeal is made applicable to a proceeding  It can only be that an appeal would lie under that section from a judgment passed in that proceeding
It is in our view clear that the language of section 2b applies section 25 to a proceeding which was pending on a date before the Act came into force and therefore gives a right of appeal from a judgment of a Divisional Bench passed in that proceeding whenever it may have been passed that is to say irrespective of whether it was passed before the Act or after it
We have here plain language which gives the statute retrospective operation
It does not seem to us that there is any scope here
of applying the rule of presumption against the retrospective operation of a statute
But it is said that section 2b only extends the jurisdiction of the High Court to the pending cases over which it would not otherwise have any jurisdiction and is not intended to give retrospective operation to any part of the Act
It is said that that this is the real effect of section 2b is clear because it is put along with 2a which only specifies the territories and the persons over whom the High Court having authority under the Act is to have jurisdiction
It seems to us however that whether a section only creates jurisdiction or not will depend on its language and not on its proximity to another section of the same statute defining jurisdiction
Then it is said that the Act repealed and substantially re enacted Ordinance No 2 of 1948 and as the corresponding section of that Ordinance namely s4b which was practically in the same language as s2b of the Act was only concerned with jurisdiction s2b must be understood to do the same
This contention was accepted by the learned Judges of the High Court but in this they were clearly in error
We do not wish to be understood as saying that in no case is a reference to the old law permissible for interpreting a new statute but it seems to us that in the present 324 case such a reference was not justified
One of the cases on which the learned Judges of the High Court based themselves is Tumahole Bereng vs The King 1
There the Judicial Committee were dealing with a statute only a part of which had been amended and after reminding themselves of the wisdom of the warning given by Lord Watson in Bradlaugh vs Clarke 2 that it is  an extremely hazardous proceeding to refer to provisions which have been absolutely repealed in order to ascertain what the legislature meant to enact in their room and stead observed at p 267  the circumstances of the present case put it beyond the mischief Lord Watson was minded to discourage and that for two reasons
In the first place the terms of the section as it now stands are sufficiently difficult and ambiguous to justify the consideration of its evolution in the statute book as a proper and logical course and secondly the object of the instant enquiry is to ascertain the true meaning of that part of the section which remains as it was and which there is no ground for thinking the substitution of a new proviso was intended to alter
 In the case before us the language admits of no difficulty it is simple and it applies all the sections of the Act to certain proceedings and as one of these sections at least namely section 25 is new clearly a change in the law was intended
We do not wish to suggest that the circumstances which would justify a reference to the old law have been exhaustively set out by the Judicial Committee
It is enough for us to say that none of those circumstances exists here
In Abdur Rahim vs Mahomed Barkat Ali 3 which was also referred to by the High Court the Judicial Committee had to decide whether a suit was within section 92 of the Code of Civil Procedure 1908 and for that purpose to find out what reliefs the expression  further and other relief  in the section would include
These words are plainly wide and require definition
The Judicial Committee referred to the earlier law on the subject to find out what that general expression was intended to include
This case 1 2 1883 8 App
3 1927 LR 55 IA 96
325 does not justify a resort to the old law by us for here we have no general words as to the meaning of which difficulty has arisen
The last case on which the High Court based itself for this part of it  judgment to which we wish to refer was In re Mayfair Property Co There the contention was that a certain interpretation would defeat the object of the Act and in order to as certain that object a reference to the old law was found necessary
No such question arises in the case before us
It is not contended that the object of the Act before us would be defeated if section 2b applied section 25 retrospectively
For these reasons it seems to us that the present is not a case where it is permissible to in terpret section 2b of the Act by reference to section 4b of the Ordinance
Further in our view in any event section 4 b of the Ordinance provides no assistance in interpreting section 2b of the Act
Section 4b of the Ordinance was not concerned with applying to any case another provision in it giving a right of appeal which section 2b of the Act clearly is What we have to decide is in what cases that right of appeal was given and for that purpose plainly section 4b of the Ordinance can afford no assistance as it was not concerned with any such right of appeal
It is then said that sufficient meaning would be given to the words  pending in the Courts in any State on the date on which the State is included in the United State  in section 2b if they are understood as referring to the cases which were pending on that day and which had not been finally decided and determined before the Act had come into force
This contention is sought to be justified on the principle  that you ought not to give a larger retrospective power to a section even in an Act which is to some extent intended to be retrospective than you can plainly see the Legislature meant 
See Reid vs Reid 2
Now it seems to us that the principle has no application here
There is nothing in the section to indicate that the legislature intended the retrospective operation of section 25 to be confined to those pending cases which had not terminated before the Act had come into force
Such a construction would require adding to the section the 1 2 LR 1886 31 Ch
D 402408
326 words  and not finally decided before the Act comes into force 
The rule of presumption against the retrospective operation does not require the addition of any words to a section otherwise plain
We recall here what we have said earlier that the rule applies only where the words are not plain or are capable of two meanings
It does not justify subtlety in adding words to the section to make the rule applicable
It is also said that though section 2b applies section 25 to the proceedings mentioned therein it does not expressly say that in so applying it vested rights shall also be affected
We think it enough to dispose of this contention to say that the necessary result of applying section 25 to the proceedings mentioned is to disturb vested rights and that in order that a statute may have a retrospective operation it is not necessary to find words in it expressly stating that it will have such operation notwithstanding that that will disturb vested rights
We do not think that the words are not plain to give a retrospective operation
We therefore think that the appellant s appeal from the Divisional Bench was competent under section 25 of the Act
The result is that this appeal is allowed
The decree of the Full Bench of the High Court is set aside
The case will now go back to the High Court of Madhya Pradesh to be decided on the merits
The appellant will have the costs here and below
We have here to state that there were three other connected matters
First there was an application by the appellant to this Court for special leave to appeal from the Judgment of the Divisional Bench being Petition for Special Leave to Appeal Civil No 368 of 1957
Then there was another application by the appellant to this Court for special leave to appeal from the judgment of the Full Bench being Petition for Special Leave to Appeal Civil No 242 of 1957
These had been made by way of abundant caution
Lastly there was an application for leave to file additional documents in the appeal that has just been disposed of
It was Civil Misc
Petition No 472 of 1956
None of these applications were pressed and we therefore dismiss them but without any order for costs
Appeal allowed cause remitted


Summary:
 The appellant undertook construction of certain houses for the respondent Development Authority and completed the same on 2nd April 1980
The appellant sent several letters to the respondent requesting for finalisation of the bills the first one on 28th February 1983 and the last on 4th September 1985
Ultimately the appellant served notice through his counsel requesting the respondent to release the security amount and refer the dispute to arbitration
On respondent s failure to do so the appellant filed an application in the Court under section 20 of the seeking a direction for filing the arbitration agreement in the court and referring the dispute to arbitration
A Single Judge of the High Court dismissed the application as barred by time
This decision was upheld by the Division Bench
Allowing the appeal  HELD 11 Article 137 of the would apply to any petition or application filed in a civil court
353E F Kerala State Electricity Board Trivandrum vs TPKK Amsom and Bensom Kerala  relied on 12 In order to be entitled to an order of reference under section 20 it 352 is necessary that there should be an arbitration agreement and secondly difference must arise to which this agreement applied
The existence of a dispute is therefore essential for appointment of an Arbitrator under section 8 or a reference under section 20 of the Act
353H 354A 13 Dispute entails a positive element and assertion in denying not merely inaction to accede to a claim or a request
Whether in a particular case a dispute has arisen or not has to be found out from the facts and circumstances of the case
354F 14 A right to get payment would normally arise on completion of the work and a party cannot postpone accrual of cause of action by writing reminders or sending reminders
But where a bill had not been finally prepared the claim made by the claimant is the accrual of the cause of action
354C D In the instant case there was an arbitration agreement
There has been an assertion of claim by the appellant and silence as well as refusal in respect of the same by the respondent
Therefore a dispute has arisen regarding non payment of the alleged dues of the appellant
Since final bills had not been prepared and there was assertion of claim on 28th February 1983 and there was non payment the cause of action arose on that date
354A B D The application under section 20 of the Act having been filed in the Court in January 1986 ie within the period of three years from the date of cause of action it was within time and the High Court was in error in dismissing it on the ground of limitation
354G