Case ID: 1738

Judgment:
Appeal No. 549 of 1962. Appeals from the judgment and orders dated August 1	 1958 and March 13	 1959 of the Assam High Court A. Nos. 86 of 1958 and 14 of 1959 respectively. N. C. Chatterjee	 K. P. Sen and P. K. Chatterjee	 for the appellant (in C.A. No. 549 of 1962). 878 B. P. Maheshwari	 for respondents Nos. 1(a) to 1(e) (in C.A. No. 549 of 1962). Behrul Islam and R. Gopalakrishnan	 for the appellant (in C.A. No. 569 of 1963). D. N. Mukherjee	 for the respondent (in C.A. No. 569/ 63). February 24	 1964. The Judgment of the Court was delivered by GAJENDRAGADKAR C.J. These two appeals which have been brought to this Court with a certificate issued by the Assam High Court	 raise a short question about the construction and effect of section 5 of the Assam NonAgricultural Urban Area Tenancy Act	 1955 (No. 12 of 1955) (hereinafter called 'the Act '). The relevant and material facts which have led to the suits from which these two appeals respectively arise	 are similar	 and so	 it would not be necessary to state them in detail in regard to both the matters. We would	 therefore	 mention the facts broadly in C.A. No. 549/1962	 in dealing with the common point raised for our decision. The appellant in this case is Mst. Rafiquennessa who sued the predecessor of the respondents for ejectment. It appears that Lal Bahadur Chetri has executed a registered lease deed in favour of the appellant on the 14th February	 1946. The lease covered an open plot of land and under the covenant the leasee was entitled to build a house for residential purposes. In the ordinary course	 the lease was due to expire on the 12th February	 1952	 and the lessee had agreed to deliver vacant possession of the land at the expiration of the stipulated period. Accordingly	 a notice to quit was served on him to vacate on the 12th February	 1952. He	 however	 did not comply with the notice and that led to the present suit by the appellant for eviction (No. 149 of 1952). In support of her claim	 the appellant alleged that the lessee had contravened the terms of the lease inasmuch as he had sublet the premises built by him	 and so	 that was an additional ground for evicting the lessee. The sub lessees were accordingly joined as defendants to the suit. The lessee Chetri alone resisted the suit. The sub tenants let into possession by him did not join issue with the appel 879 lant. The trial Judge decreed the appellant 's claim where upon the lessee Chetri filed an appeal in the Court of the Sub Judge	 Lower Assam District	 Gauhati	 challenging the validity and the correctness of the decree passed against him (Civil Appeal No. 24/1953). While the appeal was pending	 the Act was passed and was published in the Assam Gazette on the 6th July	 1955. Thereafter	 when the appeal came on for hearing before the lower appellate Court	 the tenant filed an application praying that he should be permitted to take an additional ground under section 5 of the Act. Before that date	 the Assam High Court had taken the view that the said provision of the Act was applicable to the pending proceedings between land lords and tenants for eviction and that was the basis on which the tenant Chetri wanted to support his appeal. The lower appellate Court allowed the tenant 's plea	 framed an additional issue in pursuance of it and sent the matter back to the trial Court for a finding. On remand	 the trial Court took evidence and after local inspection	 made a finding that the two houses proved to have been built by the tenant must be regarded as permanent in relation to the locality of the plot. He	 however	 found that there was no evidence to show when the said houses were constructed. Part of the finding was challenged by the tenant before the lower appellate Court. The lower appel late Court ultimately allowed the appeal and set aside the decree passed by the trial Judge in favour of the appellant. The conclusion of the lower appellate Court was that the two houses had been constructed by the tenant within five years after the taking of the lease and that entitled the lessee to claim the benefit of section 5 of the Act. The appellant then preferred a second appeal in the High Court of Assam (No. 86/1958). Following its earlier decision about the applicability of the provisions of section 5 to pending proceedings	 the High Court summarily dismissed the said appeal. Thereafter	 the appellant applied for and obtained a certificate from the High Court and with the said certificate the present appeal has been brought before us. Pending these proceedings	 the tenant Chetri died and his heirs and legal representatives Mst. Tulsa Devi and others. 880 have been brought on the record and will be described as respondents hereafter. Thus	 the only point which arises for our decision is whether the Assam High Court was right in taking the view that the provisions of section 5 applied to the proceedings between the parties which were pending at the relevant time before the lower appellate Court. Appeal No. 569 of 1963 arises from a suit filed by the appellant Wahedulla against his tenant	 the respondent Abdul Hamid. The relevant facts are similar to those in C.A. No. 549/1962. In this case also	 the Act came into force while the appeal was pending before the lower appellate Court and by the application of section 5 respondent 's claim to continue in possession has been upheld and the appellant 's claim for ejecting the respondent has been rejected. The High Court granted certificate to the appellant when it was told that the appellant proposed to challenge the correctness of its earlier decision holding that section 5 of the Act applied to the pending proceedings. The Act was passed by the Assam Legislature in order to regulate in certain respects the relationship between land lord and tenant in respect of non agricultural lands in the urban areas of the State of Assam. It contains fourteen sections and the scheme which is evident in the operative provisions of the Act is to afford protection to the tenants by regulating in certain respects the relationship between them and their landlords in respect of the lands covered by the Act. Section 3(c) defines a 'landlord ' as meaning a person immediately under whom a tenant holds but does not include the Government. While section 3(d) defines a 'Permanent structure ' in relation to any locality as meaning a structure which is regarded as permanent in that locality	 the 'tenant and 'urban area ' are defined by clauses (g) and (b) respectively. Section 4 imposes an obligation on the tenant to pay rent for his holding at fair and equitable rates	 and the proviso prescribes that in case of any dispute as to fair rent 	between the parties	 the rent which was paid by the tenant immediately before the dispute shall be deemed to be fair and equitable unless a competent court decides to the 	contrary. Section 6 provides for compensation for improvements; section 7 provides for enhancement of rent by contract	. section 8 deals with enhancement of rent without contract; section 9 881 authorises the Court to make an order as to enhancement of rent: section 10 prohibits illegal realisation beyond the prescribed amount; section 11 provides for notice for ejectment; section 12 prescribes the procedure in which the notice has to be served; and section 13 confers rule making power on the State Government. Section 14 repeals the earlier Tenancy Act. Having thus broadly considered the scheme of the Act	 it is necessary to read section 5	 the effect of which is the main point of controversy between the parties before us. Section 5(i) reads thus: Notwithstanding anything in any contract or in any law for the time being in force (a) where under the terms of a contract entered into between a landlord and his tenant whether before or after the commencement of this Act	 a tenant is entitled to build	 and has in pursuance of such terms actually built within the period of five years from the date of such contract	 a permanent structure on the land of the tenancy for residential or business purposes	 or where a tenant not being so entitled to build	 has actually built any such structure on the land of the tenancy for any of the purposes aforesaid with the knowledge and acquiescence of the landlord	 the tenant shall not be ejected by the landlord from the tenancy except on the ground of non payment of rent; (b) where a tenant has effected improvements on the land of the tenancy under the terms whereof he is not entitled to effect such improvements	 the tenant shall not be	 ejected by the landlord from the	 land of the tenancy unless compensation for reasonable improvements has been paid to the tenant". Sub section (2) prohibits the ejectment of any tenant from the land of the tenancy except in execution of a decree for ejectment passed by a competent civil Court; and sub section (3) prohibits the execution of a decree for ejectment on the ground of non payment of rent within a period of 30 days from the date of the decree	 and allows the tenant to pay into the executing Court the entire amount due from him under 134 159 S.C. 56 882 the decree within the said period	 Whereupon the decree has to be entered as satisfied. Mr. Chatterjee contends that the Assam High Court was in error in coming to the conclusion that the proceedings which were pending between the parties at the appellate stage on 6th July	 1955 when the Act came into force	 fell to be governed by the provisions of section 5. He argues that at the relevant date when the suit was filed by the appellant	 he had acquired a right to eject the tenant under the terms of the tenancy	 and he contends that where vested rights are affected by any statutory provision	 the said provision should normally be construed to be prospective in operation and not retrospective	 unless the provision in question relates merely to a procedural matter. It is not disputed by him that the legislature is competent to take away vested rights by means of retrospective legislation. Similarly	 the legislature is undoubtedly competent to make laws which over ride and materially affect the terms of contracts between the parties; but the argument is that unless a clear and unambiguous intention is indicated by the legislature by adopting suitable express words in that behalf	 no provision of a statute should be given retroactive operation if by such operation vested rights are likely to be affected. These principles are 'unexceptionable and as a matter of law	 no objection can be taken to them. Mr. Chatterjee has relied upon the well known observations made by Wright J. in in re Athlumney Ex parte Wilson(1)	 when the learned Judge said that it is a general rule that when the Legislature alters the rights of parties by taking away or conferring any right of action	 its enactments	 unless in express terms they apply to pending actions	 do not affect them. He added that there was one exception to that rule	 namely	 that	 where enactments merely affect procedure and do not extend to rights of action	 they have been held to apply to existing rights. In order to make the statement of the law relating to the relevant rule of construction which has to be adopted in dealing with the effect of statutory provisions in this connection	 we ought to add that retroactive operation of a statutory provision can be inferred even in cases where such retroactive operation appears to be clearly implicit in the (1) 883 provision construed in the context where it occurs. In other words	 a statutory provision is held to be retroactive either when it is so declared by express terms	 or the intention to make it retroactive clearly follows from the relevant words and the context in which they occur. Bearing in mind these principles	 let us look at section section Before doing so	 it is necessary to consider section 2 which pro vides that notwithstanding anything contained in any con tract or in any law for the time being in force	 the provisions of this Act shall apply to all non agricultural tenancies whether created before or after the date on which this Act comes into force. This provision clearly indicates that the legislature wanted the beneficent provisions enacted by it to take within their protection not only leases executed after the Act came into force	 but also leases executed prior to the operation of the Act. In other words	 leases which bad been created before the Act applied are intended to receive the benefit of the provisions of the Act	 and in that sense	 the Act clearly affects vested rights of the landlords who had let out their urban properties to the tenants prior to the date of the Act. That is one important fact which is material in determining the scope and effect of section 5. Now	 section 5 itself gives an unmistakable indication of the legislative intention to make its provisions retrospective. What does section 5 provide? It provides protection to the tenants who have actually built within five years from the date of leases executed in their favour	 permanent structures on the land let out to them for residential or business purposes	 and this protection is available either when the construction of the permanent structure has been made by the tenant in pursuance of the terms of the lease	 or even without any term of that kind and the landlord had knowledge of it and had acquiesced in it. Thus	 the plain object of section 5 is to protect the tenants who have built a permanent structure either for business or for residence	 provided it has been built within 5 years from the date of contract of tenancy. Therefore	 cases where permanent structures had been built within 5 years of the terms of contract	 would fall within section 5 ( 1 ) (a)	 even though those constructions had been made before the date of the Act. Thus	 the very scheme of 5 (1) (a) clearly postulates the extension of its protection to 884 constructions already made. That is another point which is significant in dealing with the controversy between the parties before us. There is yet another point which is relevant in this connection. section 5(1)(a) provides that the tenant shall not be evicted by the landlord from the tenancy except on the ground of non payment of rent	 provided	 of course	 the con ditions prescribed by it are satisfied. If the legislature had intended that this protection should operate prospectively. it would have been easy to say that the tenant shall not be sued in ejectment; such an expression would have indicated that the protection is afforded to the suits brought after the Act came into force	 and that might have introduced the element of prospective operation; instead	 what is prohibited by section 5 (1)(a) is the eviction of the tenant	 and so	 inevitably	 the section must come into play for the protection of the tenant even at the appellate stage when it is clear that by the proceedings pending before the appellate court	 the landlord is seeking to evict the tenant	 and that obviously indicates that the pending proceedings are governed by section 5(1)(a)	 though they may have been initially instituted before the Act came into force. Incidentally	 an appeal pending before the lower appellate court is a continuation of the suit	 and so	 there is no difficulty in holding that a suit which was pending when the Act came into force would be governed by section 5(1)(a) and an appeal arising from a suit which had been decided before the Act came into force	 would likewise be governed by section 5(1)(a)	 provided it is pending after the date when the Act came into force. Therefore	 we are satisfied that the Assam High Court was right in coming to the conclusion that the dispute between the parties in the present case must be governed by the provisions of section 5(1)(a). It is common ground that if section 5(1)(a) is held to apply	 the decrees passed against the appellants in both the appeals cannot be successfully challenged. The result is	 the appeals fail and are dismissed with costs. One set of hearing foes. Appeals dismissed.

Summary:
The appellant sued the lessee	 the predecessor of the respondents	 for ejectment on the latter 's failure to deliver possession of a leased land at the expiration of the stipulated period. Under the covenant the lessee was entitled to build a house for residential purposes. The trial Court decreed the appellant 's claim whereupon the lessee filed an appeal. While the appeal was pending the Assam Non Agricultural Urban Areas Tenancy Act was passed	 and thereafter the lessee prayed for permission to take an additional ground under section 5 of the Act. Before that date	 the High Court had taken the view that this provision of the Act was applicable to pending proceedings. The lower appellate court allowed the lessee 's plea and ultimately allowed the appeal and set aside 	he decree passed by the trial Judge in favour of the appellant	 concluding that the two houses had been constructed by the lessee within five years after the taking of the lease and that entitled the lessee to claim the benefit of section 5 of the Act. The High Court on appeal	 following its earlier decision about the applicability of the provisions of section 5 to pending proceedings	 summarily dismissed the appeal	 but granted a certificate for leave to appeal to this Court Held: (i) A statutory provision is retroactive either when it is so declared by express terms. or the intention to make it retroactive clearly follows from the relevant words and the context in which they occur Re. Athlumney Ex parte Wilson	 	 referred to. (ii) The provisions of the Act clearly indicate that the legislature wanted the beneficient provisions enacted by it to take within their protection not only leases executed after the Act came into force	 but also leases executed prior to the operation of the Act. The plain object of s.5 is to protect the tenants who have built a permanent structure either for business or for residence	 provided it has been built within 5 yearsfrom the date of contract of tenancy	 even though those constructions had been made before the date of the Act. (iii) A suit which was pending when the Act came into force would be governed by section 5(1) (a) and an appeal arising from a suit which had been decided before the Act came into force	 would likewise be governed by section 5(1) (a)	 provided it is pending after the date when the Act came into force. for an appeal pending in a continuation of the suit.