Amir Singh And Another vs Ram Singh And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeals Nos. 436 to 438 of 1961

Decision Date: 4 October 1962

Coram: Gajendragadkar, J.

In this matter the petitioner Amir Singh and another sued the respondents Ram Singh and others concerning the sale of certain agricultural lands. The lands had been conveyed by an earlier owner, referred to as “A”, to the petitioners on 31 May 1956. The respondents, claiming ownership of some of the agricultural land in the same village (patti), asserted that they possessed a right of pre‑emption under clauses (ii) and (iii) of sub‑section 15(c) of the Punjab Pre‑emption Act, 1913. Accordingly, they instituted a suit seeking to enforce that right. The petitioners opposed the claim, contending that the purchasers who had acquired the land from “A” had subsequently effected exchanges of portions of the land, and that as a result of those exchanges the petitioners themselves had become entitled, under the same statutory provision, to pre‑empt the sales. The trial court dismissed the respondents’ claim and granted a decree in favour of the petitioners; this decree was affirmed by the Punjab High Court. The petitioners then obtained special leave to appeal to the Supreme Court. While the appeal was pending, the legislature enacted Punjab Act 10 of 1960, which amended the 1913 Act. The amendment deleted clauses (ii) and (iii) of sub‑section 15(c) of the original statute, introduced clause 4 to sub‑section 15(1)(c) providing that the right of pre‑emption in respect of agricultural land and village immovable property shall vest in tenants who hold under the tenancy of the vendor (or any of them) the land or any portion thereof, and inserted section 31 stipulating that no court shall pass a decree in any pre‑emption suit—whether instituted before or after the commencement of the amending Act—that is inconsistent with the provisions of the amended Act. In light of these new provisions, the respondents put forward a fresh contention that they were tenants holding under the tenancy of the vendor of the lands in question, and therefore were entitled to invoke the right of pre‑emption created by clause 4 of sub‑section 15(1)(c) of the amended Act, even if the earlier right under the deleted clauses (ii) and (iii) was retrospectively extinguished by the amendment. The petitioners countered that, even assuming the applicability of clause 4, the respondents could not obtain a decree based on the new pre‑emption right because they did not possess such a right at the time the suit was filed nor at the time the original sales were effected.

The Court held that the provisions of section 31 of the Punjab Pre‑emption Act, 1913, as amended by Punjab Act 10 of 1960, operate retrospectively. Consequently, the decree that the trial court had passed in favour of the respondents, and which the High Court had affirmed on the basis of the unamended provision, could not be sustained. In reaching this conclusion the Court followed the authority in Ram Sarup v. Munshi, reported in [1963] 3 S.C.R. 858. The Court further observed that the retrospective operation of section 31 necessarily gives effect to the substantive provisions of the amended section 15 in a retrospective manner. Accordingly, the rights that the respondents now assert under the amended provisions must be deemed to have vested in them at the relevant point in time. As a result, on remand the respondents are entitled to obtain a decree based on those vested rights.

In the present appeal, which falls under the civil appellate jurisdiction of the Supreme Court, the matter concerned Civil Appeals Nos. 436 to 438 of 1961. These appeals were filed by special leave from the judgment and order dated 9 December 1959 of the Punjab High Court in Letters Patent Appeals Nos. 407, 408 and 409 of 1959. Counsel for the appellants were engaged, while counsel for the respondents also appeared. The judgment was delivered on 4 October 1962 by Justice Gajendragadkar. The central question before the Court was to determine the effect of the retrospective operation of section 31 introduced by the Punjab Pre‑emption (Amendment) Act, 1960 (Act X of 1960) on the parent Act of Pre‑emption (Act No. 1 of 1913). The Court noted that this question was the short issue arising for determination in the three appeals, which had been consolidated for hearing. The appeals originated from three pre‑emption suits filed by the respondents against the respective appellants. The respondents claimed that the properties in dispute had been sold by Aftab Rai on 31 May 1956 for a price of Rs 10,000 to the appellants, and that they wished to pre‑empt those sales. They alleged ownership of agricultural land in Patti Aulakli and Patti Rode, situated in Mauza Marahar Kalan, and contended that, by virtue of that ownership, they possessed a statutory right to claim pre‑emption under section 15(c)(ii) and (iii). The appellants opposed this claim, arguing that the purchasers from Aftab Rai had, by way of exchanges, transferred approximately two kenals of the land they had acquired, and that, as a consequence of those exchanges, the appellants themselves had become entitled to pre‑empt the same sales under the identical statutory provision. The appellants maintained that, having acquired a status equal to that of the respondents who claimed to be the pre‑emptors, the respondents’ claim could not be sustained. The trial court found that the exchanges relied upon by the appellants had not been proved, and therefore it gave effect to the respondents’ right to pre‑empt under section 15(c)(ii) and (iii). The appellants appealed this decision to the Additional District Judge. The lower appellate court, admiring additional evidence under Order 41, Rule 27 of the Code of Civil Procedure, thereafter held that the exchanges were in fact proven and valid.

The appellate tribunal found that the exchanges relied upon by the appellants had indeed been proven and were legally valid, and consequently it concluded that the appellants had acquired the same status as the respondents; therefore the respondents’ claim to pre‑empt could not succeed. On that basis the appeals filed by the appellants were allowed and the suits instituted by the respondents were dismissed. The respondents then approached the High Court of Punjab by filing second appeals against this order. Justice Mahajan, who heard those appeals, held that the land obtained by the appellants through exchange in place of the portion purchased by the vendees did not confer upon the appellants any right to pre‑empt. He observed that while the law sometimes recognises a right of pre‑emption in favour of a party who receives land by exchange, such a right arises only when the exchanged land is not part of the land that has been sold and is subject to pre‑emption. Accordingly, the High Court concluded that the appellants’ plea was not well‑founded in law and that the respondents were therefore entitled to pre‑empt. As a result of that finding the High Court set aside the decrees of the lower appellate court and decreed in favour of the respondents. The appellants subsequently filed Letters Patent appeals before a Division Bench, but those appeals were dismissed. The present Court is reviewing the decrees that were issued by the Division Bench in those Letters Patent appeals, the appellants having obtained special leave to do so. It has already been noted that both the appellants and the respondents claim a right to pre‑empt under section 15(c)(ii) and (iii) of the Parent Act of 1913. On 4 February 1960 the Amending Act No. 10 of 1960 was enacted; section 4 of that Act substituted a new section 15 in place of the former provision after making substantial alterations to its wording. Clauses (ii) and (iii) of the original section 15(c) were deleted, so that the pre‑emption claims asserted by both the appellants and the respondents ceased to be recognised under the amended law. The appellants argue that because the respondents obtained a decree for pre‑empt‑ion on the basis of the unamended section 15, that decree can no longer be sustained in view of section 31 of the Amending Act. Section 31 provides that no Court shall pass a decree in any suit for pre‑emption, whether instituted before or after the commencement of the Punjab Pre‑emption (Amendment) Act, 1959 (1960), if such decree is inconsistent with the provisions of that Act. Relying on this provision, the appellants contend that section 31 operates retrospectively and therefore the respondents’ title to claim pre‑emption must be barred. Counsel for the appellants, Mr Achhru Ram, drew the Court’s attention to a recent decision of this Court in Ram Sarup v. Munshi (1), pronounced on 30 August 1962, wherein Justice Ayyangar, speaking for the Constitution Bench, examined the retrospective effect of section 31 and observed that the provision is

In that earlier decision the Court held that section 31 operated retrospectively and that the language of the provision was plain and comprehensive enough to require an appellate Court to give effect to the substantive provisions of the amending Act, whether the appeal concerned a decree granting pre‑emption or a decree refusing such relief. It was argued before the Court that the wording of section 31 did not justify applying the amended provisions to proceedings that were already pending before the appellate Court, and that the words indicated that the provisions could be invoked only in cases that were pending before the trial Court. The Court rejected that argument and consequently regarded the question as settled: the provisions of section 31 were retrospective and could be relied upon by the appellants in their present appeals before this Court. This legal position would have clearly favoured the appellants had it not been for another complication introduced by the relevant provisions of the amended section 15 enacted by the amending Act. The Court had already observed that certain persons whose right to pre‑empt was recognised under the corresponding provisions of the parent Act were omitted by the amended section. At the same time the amended section created a new class of persons who were now entitled to claim pre‑emption. Those persons were the tenants who held the land or property sold, or any part thereof, under the tenancy of the vendor. This new class of tenants was introduced in clauses (a), (b) and (c) of the amended section 15. Clause four of section 15(1)(c) provided that the right of pre‑emption in respect of agricultural land and village immovable property vested in the tenants who held, under the tenancy of the vendor or any one of the vendors, the land or property that had been sold or a part of it. Similar provisions were contained in clauses (a) and (b) of the same section. Counsel for the respondents, Mr Vohra, contended that the respondents themselves were such tenants who held the lands in question under the tenancy of the vendor and therefore were now vested with the right to claim pre‑emption. In other words, the respondents argued that although the right to pre‑empt that they previously possessed under clauses (ii) and (iii) of the unamended section 15(c) of the parent Act had been taken away retrospectively by the amending Act, they had acquired the same right by falling within the fourth clause of the amended section 15(1)(c). The conferment of this new right, like the extinction of their earlier right under the deleted provisions of the unamended section, was claimed to operate retrospectively. Consequently, the respondents sought to be given an opportunity to prove their case under the fourth clause of section 15(c) as amended. In support of that request, counsel referred to the fact that the respondents had specifically raised this plea in their statement of the case before the Court.

In this matter, the Court examined the plea that gave rise to the question concerning the retrospective operation of section 31. The counsel for the respondents argued that, although section 31 operates retrospectively and therefore the pre‑emptive rights that had vested in the respondents at the time they instituted the present suits were taken away retrospectively, it could not be said that the right to pre‑empt which the respondents now assert in these appeals was created retrospectively. According to that argument, the amending Act clearly intended that certain categories of persons who were entitled to pre‑emption under the earlier statute should have that entitlement withdrawn and that such withdrawal should operate retrospectively; however, the legislature did not intend the same retrospective effect for rights that were first created by the amending Act. This line of reasoning may initially appear attractive; nevertheless, a careful reading of the language of section 31 shows that it is not well founded. Section 31, in essence, requires the appellate Court to issue a decree in a pre‑emption dispute that does not conflict with the provisions of the amending Act. If, in the present appeals, the Court were to affirm the respondents’ claim to pre‑emption based on the pre‑amendment version of section 15(c), such a decree would be inconsistent with the amending Act. Consequently, the amendment must be given effect, and the right that once vested in the respondents must be deemed to have been retrospectively extinguished. There is no dispute on this point.

The Court then considered whether the legal position would differ when dealing with rights that are created for the first time by the amending Act at the moment the Court renders its decree. If the newly created rights in favour of the tenants are not recognised and a decree is issued ignoring those rights, that decree would also clash with the relevant provisions of the amending Act, and section 31 expressly forbids any Court from passing a decree that is inconsistent with the amending Act. Accordingly, the position is clear: when a decree is issued in a pre‑emption matter pending before the appellate Court, the Court must refuse to recognise the pre‑emptive right that was provided for by the unamended Act but removed by the amending Act, just as it must recognise rights that were not provided for by the unamended Act but were created by the amending Act. The retrospective operation of section 31 necessarily brings the substantive provisions of section 15 into retrospective effect, applying equally to the extinction of the old rights and to the creation of new ones. This reasoning leads to the conclusion that the Court must apply the amendment retrospectively both to extinguish previously vested rights and to give effect to newly established rights.

In this case the Court explained that the retrospective effect of section 31 automatically made the substantive provisions of section 15 operate retrospectively, and this consequence was not altered by the description of the pre‑emptive right in section 15 as a right that vests in the persons named in subsections (a), (b) and (c) of clause 15(1). The Court accepted the well‑settled proposition that the law of pre‑emption requires the pre‑emptor to hold the right to pre‑empt at the moment of the sale, at the moment the suit is filed, and at the moment a decree is passed, and it said that this requirement could not be contested. However, the Court rejected the suggestion that the respondents could not rely on a pre‑emptive right because they allegedly did not possess it when the present suit was instituted or when the transactions in question were effected, observing that such a suggestion ignored the true effect of the retrospective operation of sections 31 and 15. The Court held that, because the legislature made the relevant provisions retrospective, the fiction introduced by that retrospective operation required that the rights claimed by the respondents under the amended provisions of section 15 be deemed to have vested in them at the relevant times, even though the right to pre‑empt did not exist in the respondents at the actual time of the sale transactions.

The Court therefore concluded that the respondents were entitled to be given an opportunity to prove that, as tenants of the lands that are the subject of the suit, they possessed a right of pre‑emption. It noted that when the respondents filed the present suits they enjoyed a pre‑emptive right under the provisions then in force; the subsequent amendment removed that right, but the respondents now claimed a different right based on their status as tenants, a right that, by virtue of the retrospective operation of section 31, remained available to them. Accordingly, the Court set aside the decrees previously issued by the High Court and remitted the matters to the trial Court with a direction that the trial Court should allow the respondents to amend their claims to assert their tenant‑based pre‑emptive right under the amended provision of section 15. After such amendment, the appellants were to be given an opportunity to file written statements, appropriate issues were to be framed, and the suits were to be tried and disposed of in accordance with the findings on those issues and the applicable law. In view of the unusual circumstances that gave the litigation a further lease of life, the Court directed that the costs incurred up to that stage should be borne by the parties. The appeal was allowed and the cases were remitted.