Shyam Sunder and Ors. vs. Ram Kumar and Ors.

Judges: S.P. Bharucha, V.N. Khare, N. Santosh Hegde, Y.K. Sabharwal and Shivaraj V. Patil, JJ.

Facts:

The defendants/appellants herein purchased land vide sale deed. The plaintiffs/respondents herein claimed preferential right to pre-empt the sale in favour of defendant-appellants on the ground that they are co-shares by means of a civil suit laid before the Sub-Judge. In the said suit, issues were framed and the trial court decided all the issues in favour of the plaintiffs/respondents and consequently, the suit was decreed. The respondents after passing of the decree by the court of the first instance deposited the purchase money as required under Order 20 rule 14 CPC. The appeal preferred by the appellants before the first appellate court and the second appeal before the High Court were dismissed and the decree of the trial court was affirmed. The appellants thereafter preferred this appeal by way of special leave petition. During pendency of the appeal, Section 15(1)(b) of parent Act, on the basis of which the suit was filed by the plaintiffs/respondents was amended and was substituted by new Section 15 whereby the right of a co-sharer to preempt a sale was taken away.

The Bench, on the question of the effect of the amendment made in 1995 in the parent Act, found that there is conflict in the view taken in the decisions of two three-Judges' Bench of this Court, which are Didar Singh etc. etc. vs. Ishar Singh (dead) by Lrs. etc. etc. wherein it was held that in a suit for pre-emption, the preemptor must prove his right to preempt upto the date of decree of the first court and any loss of right or subsequent change in law after the date of adjudication of the suit and during pendency of appeal would not affect the decree of the first court and Ramjilal & Ors. etc. vs. Ghisa Ram etc. MANU/SC/1381/1996, wherein it was laid down that appeal being continuation of the suit, the right to claim pre-emption must be available on the date when the decree is made and is finally to be affirmed or needs to be modified at the time of disposal of the appeal therefrom, and since the Amending Act came into force during pendency of appeal, the right and remedy of the plaintiff stood extinguished and as a result suit must fail. In order to resolve the conflict between the aforesaid two decisions rendered by two different Benches, the Bench referred the appeal for decision by a Bench of five Judges.

Issue:

I. What is the effect of substituted Section 15 introduced by the Haryana Amendment Act, 1995 (Amending Act ,1995) in the parent Act i.e. The Punjab Pre-emption Act (parent Act) as applicable to the State of Haryana whereby the right of a co-sharer to pre-empt a sale has been taken away during the pendency of an appeal filed against a judgment of the High Court affirming the decree passed by the trial Court in a preemption suit?

II. Whether the appeal being continuation of the suit, the amendment in Section 15 of the parent Act whereby the right of a co-sharer to pre-empt a sale has been taken away during the pendency of the appeal would effect the maintainability of the suit and the rights of a co-sharer?

III. Whether the Amending Act has retrospective operation so as to affect the rights of parties in litigation?

Law:

The Punjab Pre-emption Act - Section 15 - Right of pre-emption to vest in tenant: The right of pre-emption in respect of sale of agricultural land and village immovable property shall vest in tenant who holds under tenancy of the vendor or vendors of the land or property sold or a part thereof.

Contentions:

Appellants

I. The right of a co-sharer to pre-empt sale having been extinguished by substituted Section 15 of the Act, the appeal being continuation of the suit, this Court is competent to take into account the legislative changes and in that event the plaintiff-respondents suit must fail.

II. The amending Act being declaratory in nature, it has retrospective effect and consequently, whatever the right a co-sharer had on the date of decree of the Court of first instance stood extinguished after the amending Act came into force.

III. In any event, the amending Act being beneficial legislation passed for general good of citizens, this Court while construing new substituted Section 15 is required to apply rule of benevolent construction and in that event amending Act would have retroactive operation.

IV. Where a co-sharer looses the right to pre-empt during pendency of appeal the preemptor's suit must fail.

V. Section 15 being a beneficial legislation enacted for general benefit of citizens, this Court while construing and on application of the said rule of construction the substituted Section 15 has to be given retroactive operation.

Respondents

I. In a suit for pre-emption,a claimant has to prove his right on the date of the decree of the first court and loss of right after the date of decree by an act beyond his control or subsequent change in law did not effect his claim in the suit and, therefore, the amending Act subsequent to the date of decree of the first court has no effect on the maintainability of the suit.

II. Assuming the appeal being continuation of the suit, the amending Act having no retrospective operation does not effect the decree of the first instance court.

III. In view of provisions of Order 20 rule 14 CPC the title to the property had already been passed on to the claimant on deposit of purchase money and, therefore, the amending Act does not affect the title acquired by the claimant.

I. An analysis of the decision referred to in first category of decisions decided by this court, the legal principles that emerge are these:

1. The preemptor must have the right to pre-empt on the date of the sale, on the date of filing of the suit and on the date of passing of the decree by the Court of the first instance only.
2. The preemptor who claims the right to pre-empt the sale on the date of the sale must prove that such right continued to subsist till the passing of the decree of the first court. If the claimant loses that right or a vendee improves his right equal or above the right of the claimant before the adjudication of suit, the suit for pre-emption must fail.
3. A preemptor who has a right to preempt a sale on the date of institution of the suit and on the date of passing of decree, the loss of such right subsequent to the decree of the first court would not affect the right or maintainability of the suit for pre-emption.
4. A preemptor who after proving his right on the date of sale, on the date of filing the suit and on the date of passing of the decree by the first court, has obtained a decree for preemption by the Court of first instance, such right cannot be taken away by subsequent legislation during pendency of the appeal filed against the decree unless such legislation has retrospective operation.

II. The legal position that emerges on review of the second category of decisions decided by this court is that the appeal being continuation of suit the appellate court is required to give effect to any change in law which has retrospective effect.

III. The legal principle that emerges out of the one more categories of decision decided by this court is that an appeal being continuation of suit, the right to pre-empt must be available on the date when the decree is made and is finally to be affirmed or needs to be modified at the time of disposal of the appeal and where right and remedy of plaintiff has been taken away statutorily during pendency of appeal, the suit must fail.

IV. Upon carefully gone into the decisions cited by the parties, the Judges were in respectful agreement with the statement of law expressed in the first and second categories of decisions.

V. It is no doubt true that in certain contest an appeal is continuation of suit and appellate court is rehearing the suit, but such wide appellate power has not shown to be exercised to affect the vested right of a preemptor. It is not disputed that a claimant's right to get the property in preference to the vendee is an inchoate one upto the date of adjudication of the suit but it becomes effective as soon as a decree is passed in his favour. Order 20 sub-rule (1) of Rule 14 CPC provides that where a court decrees a claim to pre-empt in respect of a particular sale of property and a decree holder has deposited the purchase money along with the cost of the suit in the Court, the vendee is required to deliver possession of the property to the decree holder and title to the property stands transferred in favour of claimant. In view of said provision, on deposit of purchases money in the Court by the claimant the right and title to the property vest in preemptor and it becomes vested right of the preemptor. This right of pre-emption prior to decree may be weak but after it becomes vested right, it can only be taken away by known method of law. The loss of qualification of preemptor or vendee acquiring status above to preemptor during pendency of appeal cannot be allowed to influence the Court as a Court of Appeal is mainly concerned with the correctness of the judgment rendered by the court of first instance.

VI. An appellate court is entitled to take into consideration subsequent event taking place during pendency of appeal and a Court in an appropriate case permits amendment of plaint or written statement as the case may be but such amendment is permitted in order to avoid multiplicity of proceeding and not where such amendment causes prejudice to the plaintiff's vested right rendering him without remedy. It is thus only those events which have taken place or rights of the parties prior to adjudication of pre-emption suit and which the trial court was entitled to dispose of, can only be taken into consideration by the appellate court.

VII. When a repeal of an enactment is followed by a fresh legislation such legislation does not effect the substantive rights of the parties on the date of suit or adjudication of suit unless such a legislation is retrospective and a court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights of the parties in an appeal are determined under the law in force on the date of suit. However, the position in law would be different in the matters which relate to procedural law but so far as substantive rights of parties are concerned they remain unaffected by the amendment in the enactment.

VIII. Therefore, where a repeal of provisions of an enactment is followed by fresh legislation by an amending Act such legislation is prospective in operation and does not effect substantive or vested rights of the parties unless made retrospective either expressly or by necessary intendment. There is a presumption against the retrospective operation of a statue and further a statute is not to be construed to have a greater retrospective operation than its language renders necessary, but an amending act which affects the procedure is presumed to be retrospective, unless amending act provides otherwise.

IX. Further, newly substituted section 15 brought in the parent Act by Amendment Act 1995 neither expressly or by necessary implication provided that it is retrospective in operation which may effect the right of the parties on the date of adjudication of suit and the same is required to be taken into consideration by the appellate Court.

X. Generally rule of interpretations are meant to assist the Court in advancing the ends of justice. It is, therefore, true in the case of application of rule of benevolent construction also. If on application of rule of benevolent construction, the Court finds that it would be doing justice within the parameters of law there appears to be no reasons why such rule of construction be not applied in the present case.

XI. However, there are limitations on the powers of the Court, in a sense that Courts in certain situations often refrain themselves to apply rule of benevolent or liberal construction. The judicial precedents have laid down that, ordinarily, where and when the rule of benevolent construction is required to be applied and not to be applied. One of the situations is, when the Court finds that by application of rule of benevolent construction it would be relegating a provision of statute either by substituting, adding or altering the words used in the provisions of the Act. In such a situation generally Court s have refrained themselves to apply rule of benevolent construction. Under the cover of application of rule of benevolent construction a Court is not entitled to re-legislate a provision of a statute and to do violence with the spirit of the provision of the Act so construed. The second situation is when the words used in a statue is capable of only one meaning. In such a situation, the courts have been hesitant to apply the rule of benevolent construction. But if it is found that the words used in the statute give rise to more than one meaning, in such circumstances, the Courts are not produced to apply such rule of construction. The third situation is when there is no ambiguity in a provision of a statute so construed. If the provision of a statute is plain, unambiguous and does not give rise to any doubt, in such circumstances the rule of benevolent construction has no application. However, if it is found that there is a doubt in regard of meaning of a provision or word used in provisions of an enactment it is permissible for court to apply the rule of benevolent construction to advance the object of the Act. Ordinarily, the rule of benevolent has been applied while construing welfare legislations or provisions relating to relationship between weaker and stronger contracting parties.

XII. Assuming that the amending Act is for general good of people, there is no presence of the aforestated situations which may call for application of such rule while construing substituted Section 15 introduced by the amending Act. A reading of substituted Section 15 would show that he words used therein are plain and simple and there is no ambiguity in it. The words used in the Section do not give rise to more than one meaning. Further, amending Act is neither expressly or by necessary implication is retrospective. If it has been held that the amending Act is retrospective in operation, it would be re-legislating the enactment by adding words which are not to be found in the amending Act either expressly or by necessary intendment and it would amount doing violence with the spirit of the amending Act. For these reasons, the

application of rule of benevolent construction is wholly inapplicable while construing substituted Section 15.

XIII. Also, Section 15 of the amending Act neither expressly or by necessary implication intended to supply an omission or to clear up a doubt as to the meaning of previous Section 15 of the parent Act. The previous Section 15 of the parent Act was precise, plain and simple, There was no ambiguity in it. The meaning of the words used in Section 15 of the parent Act was never in doubt and there was no omission in its phraseology which was required to be supplied by the amending Act. Moreover, the amending Act either expressly or by implication was not intended to be retroactive and for that reason we hold that the amending Act 10 to 1995 is not a declaratory Act and, therefore, it has no retrospective operation.

Conclusion:

I. The view of law taken in Didar Singh etc. vs. Ishar Singh (dead) by Lrs. etc. and Ramjilal vs. Ghisa Ram does not lay down the correct view of law.

II. The amending Act being prospective in operation does not affect the rights of the parties to the litigation on the date of adjudication of the pre-emption suit and the appellate court is not required to take into account or give effect to the sustained Section 15 introduced by the amending Act.

III. These appeals fail and accordingly are dismissed.

Important precedents:

I. Sakina Bibi vs. Amiran and Ors. MANU/UP/0030/1888

II. Ramjilal & Ors. etc. vs. Ghisa Ram etc. MANU/SC/1381/1996

III. Didar Singh etc. vs. Ishar Singh (dead) by Lrs. etc., Karan Singh v. Bhagwan Singh, MANU/SC/0574/1996