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. 10,000/ 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 15(c) (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 15(c) (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 0.41, 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 15(c) (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 s.15 of the old s.15 after making substantial changes in the provisionsof the earlier section.
Clauses (ii) and (iii) of theoriginal s.15(c) 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 s.15, that decree can no longer be sustained because of the provisions of s.31 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, 1959(1960) which is inconsistent with the provisions of the said Act.
In support of his argument that s.31 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 15(1) (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 15(c) 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 15(c) 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 15(c) 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 s.31 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 s.31 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 15(1).
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 s.31 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) cl.4 of section 15 (1)(c) 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 cl.4 of s.15 (1)(c) of the Act, as amended, even if it be held that the right to claim pre emption under cls.
(ii) and (iii) of s.15 (c) of the unmended Act was taken away retrospectively by the amending Act.
The appellants pleaded that even assuming that cl.4 of s.15 (1)(c) 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 s.31 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 V.Munshi [1963] 3 S.C.R. 858 followed.
(2) The retrospective operation of s.31 necessarily involves effect being given to the substantive provisions of amended s.15 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,