VERY IMPORTANT POINT
Section 15 introduced by the Haryana Amending Act, 1995 in the Parent Act, i.e. The Punjab Pre-emption Act is prospective in operation and thus 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 substituted Section 15 introduced by the Amending Act.

Headnote:The Punjab Pre-emption Act-Right of Co-sharer to pre-empt sale-Appeal pending in High Court against 1st Appellate Court affirming decree of Trial Court-Section 15 introduced by the Haryana Amendment Act, 1995 in the Punjab Pre-emption Act as applicable to State of Haryana-Amendment Act whether retrospective or prospective? (Prospective)-Effect-Right of co-sharer to pre-empt a sale is not taken away during the pendency of an appeal before High Court filed against a judgment of the 1st Appellate Court affirming the decree passed by the Trial Court in a pre-emption suit-Case law discussed-Interpretation of status-Benevolent Rule of Construction-Whether amending Act is declaratory-C.P.C. 1908-Order 20 Rule 14(1)-Decree in pre-emption suit.
       Held : An analysis of the aforesaid decisions referred to in first category of decisions, the legal principles that emerge are these:
        1. The pre-emptor must have the right to pre-empt on the date of 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 pre-emptor 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 pre-emptor who has a right to pre-empt 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 his right or maintainability of the suit for pre-emption.
        4. A pre-emptor 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 pre-emption 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. (Para 11)
       On analysis of second category of decisions held : The legal position that emerges on review of the second category of decisions 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. (Para 14)
       Held : The legal principle that emerges out of the aforesaid decisions 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. (Para 16)
       Held thereafter after having heard counsel for the parties and carefully gone into the decisions cited at the Bar we are in respectful agreement with the statement of law expressed in the first and second categories of decisions. However, we regret to express of our disagreement with the decisions in third category of decisions for the reasons hereinafter stated. In modern time, the right of pre-emption based on statutes is very much a maligned law. During hearing of these appeals such rights have been characterised as feudal, archaic and outmoded and so on. But its origin which was based on custom and subsequently codified was out of necessity of the then village community and society for its preservation, integrity and maintenance of peace and security. In changed circumstances, right of pre-emption may be called outmoded, but so long it is statutorily recognised, it has to be given the same treatment as any other law deserves. The right of pre-emption of a co-sharer is an incident of property attached to the land itself. It is some sort of encumbrance carrying with the land which can be enforced by or against the co-owner of the land. The main object behind the right of pre-emption either based on custom or statutory law is to be prevent intrusion of stranger into the family holding or property. A co-sharer under law of pre-emption has right to substitute himself in place of stranger in respect of portion of the property purchased by him meaning thereby where a co-sharer transfers his share in holding, the other co-sharer has right to veto such transfer and thereby prevent the stranger from acquiring the holding in an area where law or pre-emption prevails. Such a right at present may be characterised as archaic, feudal and out-moded but this was law for nearly two centuries either based on custom or statutory law. It is in this background the right of pre-emption under statutory law has been held to be mandatory and not mere discretionary. The Court has no option but to grant decree of pre-emption where there is a sale of a property by another co-sharer. And for that reason the Courts consistently have taken view that where there is a sale of holding or property by a co-sharer, the right of a pre-emption is required to be settled at the earliest either on pre-emptor s proving his qualification to pre-empt on the date of the sale, on the date of filing of suit, and on the date of the decree of the Court of the first instance or vendee improving his status till the adjudication of suit for pre-emption and after adjudication of suit any loss of qualification by the pre-emptor or vendee improving his status equal or above to right of pre-emptor is of no consequence. In Zahur Din v. Jalal Din, 1944 ILR (25) Lahore 443 a Full Bench of Lahore High Court while expressing necessity for settlement of rights of the parties at the earliest, held thus:
       "It seems to be essential that a line should be drawn at some stage when the race between a pre-emptor and a vendee ought to come to an end and after having the well-known landmark of the date of the sale behind-as one now must -the farthest limit that can be granted to a vendee is that of the time of adjudication of the suit by the trial Court." (emphasis supplied)
       As noticed earlier, in Hans Nath v. Ragho Prasad Singh, 59 LR (IA) 138 Privy Council held that a pre-emptor to maintain a suit for pre-emption is required to prove his right of pre-emption on three important dates. The claimant must possess right of pre-emption on the date of sale. The claimant must possess the same right on the date when the suit is instituted and that right should continue to exist on the date of adjudication of the suit. However, it is matter of no consequence whether the trial court decrees or dismisses the suit. It has also been the consistent view of Privy Council and various High Courts that a pre-emptor must possess qualification to pre-empt a sale on the date of decree of the Court of first instance only for maintainability of the suit although it is immaterial that pre-emptor looses the right of pre-emption after the adjudication of suit either by his own act or vendee improving his status equal to pre-emptor during pendency of appeal filed against the decree of the trial court. This view of law is in consonance with the object behind the right of pre-emption and held the field for over a century with which we are in respectful agreement, as nothing has been shown to us which may persuade us to take a contrary view and disturb the settled law. (Paras 17, 18 & 19)
       Held further : 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 purchase money in the Court by the claimant the right and title to the property vest in pre-emptor and it becomes vested right of the pre-emptor. The 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. (Para 20)
        We would now proceed to examine whether said provision of the amending Act is retrospective as urged by learned counsel for the appellant. (Para 22)
       From the aforesaid decisions the legal position that emerges is that 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. We are, therefore, of the view that 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. We are further of the view that there is a presumption against the retrospective operation of a statute 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. We have carefully looked into new substituted Section 15 brought in the parent Act by Amendment Act 1995 but do not find it either expressly or by necessary implication 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. In Shantidevi (Smt) and another v. Hukum Chand [1996(5) SCC 768] this Court had occasion to interpret the substituted Section 15 with which we are concerned and held that on a plain reading of Section 15 it is clear that it has been introduced prospectively and there is no question of such section affecting in any manner the judgment and decree passed in the suit for pre-emption affirmed by the High Court in the second appeal. We are respectfully in agreement with the view expressed in the said decision and hold that the substituted Section 15 in the absence of anything in it to show that it is retrospective, does not effect the right of the parties which accrued to them on the date of suit or on the date of passing of the decree by the Court of first instance. We are also of the view that present appeals are unaffected by change in law in so far it related to determination of the substantive rights of the parties and the same are required to be decided in light of law of pre-emption as it existed on the date of passing of the decree. (Para 29)
       A substituted section in an Act is the product of an amending Act and all the effects and consequences that follow in the case of an amending Act the same would also follow in the case of a substituted section in an Act. (Para 35)
       A reading of substituted Section 15 would show that the 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, we do not find that amending Act either expressly or by necessary implication is retrospective. If we hold that the amending Act is retrospective in operation, we 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. (Para 36)
       Held also : From the aforesaid decisions, the legal principle that emerges is that the function of a declaratory or explanatory Act is to supply an obvious omission or to clear up doubts as to meaning of the previous Act and such an Act comes into effect from the date of passing of the previous Act. Learned counsel for the appellants strongly relied upon a decision of two-Judges Bench of this Court in Mithilesh Kumari & Anr. v. Prem BehariKhare [1989(2) SCC 95] in support of his argument. In the said decision, it was held by this Court that The Benami Transactions (Prohibition) Act 1988 being a declaratory Act, the provisions of Section 4 of the Act has retroactive operation. The reliance of this decision by the appellants counsel is totally misplaced as this decision was overruled in R. Raja Gopal Reddy v. [1995(2) SCC 630] wherein it was held that, the Act was not passed to clear any doubt existed as to the common law or the meaning of effect of any statute and it was, therefore, not a declaratory Act. (Para 45)
       Held finally : We have already quoted substituted Section 15 of the amending Act but do not find that the amending Act either 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 of 1995 is not a declaratory Act and, therefore, it has no retrospective operation. For the aforestated reasons, we approve the view of law taken in Didar Singh etc. v. Ishar Singh (dead) by LRs. etc. [1995(1) Scale 1] and further hold that the decision in the case of Ramjilal v. Ghisa Ram [JT 1996(2) SC 649] does not lay down the correct view of law. The result of the aforesaid discussion is that 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 substituted Section 15 introduced by the amending Act. In view of what has been stated above, these appeals fail and accordingly are dismissed, but there shall be no order as to costs. (Paras 46, 47, 48 & 49)

Judgement Key Points

Key Points: - The substituted Section 15 introduced by the Haryana Amendment Act, 1995 is prospective in operation and does not affect the substantive rights of parties accrued on the date of suit or decree (!) (!) (!) . - An appellate court is not required to take into account or give effect to the substituted Section 15 during the pendency of an appeal against a decree in a pre-emption suit (!) (!) . - A pre-emptor must prove the right to pre-empt on the date of sale, date of filing the suit, and date of passing the decree by the Court of the first instance (!) (!) (!) . - Loss of the right of pre-emption by a pre-emptor subsequent to the decree of the first court does not affect the maintainability of the suit for pre-emption (!) (!) . - Once a decree for pre-emption is passed and purchase money is deposited under Order 20 Rule 14 CPC, the right and title vest in the pre-emptor and become a vested right (!) (!) . - The amending Act is not a declaratory Act as it does not supply an omission or clear a doubt in the previous Section 15 which was precise and plain (!) (!) . - The view that an appeal being a continuation of suit allows the appellate court to consider subsequent legislative changes is limited to laws with retrospective operation (!) (!) . - The decision in Ramjilal v. Ghisa Ram is distinguished because the amending Act in that case was found to have retrospective operation, unlike the 1995 Act (!) (!) .

What is the effect of the substituted Section 15 introduced by the Haryana Amendment Act, 1995 on the rights of a co-sharer to pre-empt a sale during the pendency of an appeal?

What are the rights of a pre-emptor regarding the maintenance of qualification from the date of sale, filing of suit, and decree of the first court?

What is the retrospective or prospective operation of the substituted Section 15 in the Punjab Pre-emption Act?

JUDGMENT

V.N. Khare, J.-Leave granted.

2. "What is the effect of substituted Section 15 introduced by the Haryana Amendment Act, 1995 (hereinafter referred to as the Amending Act 1995) in the parent Act i.e. The Punjab Pre-emption Act (hereinafter referred to as the 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".

3. That is the short question which we are required to answer in this group of appeals which has come on reference before us.

4. When Civil Appeal No. 4680/93 came up for hearing before a Bench of this Court, 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. v. Ishar Singh (dead} by LRs. etc. etc.1 (wherein it was held that in a suit for pre-emption, the pre-emptor 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. v. Ghisa Ram etc.2 (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. It is in this way, the matter has come before us.

5. Since common question of law is involved in this group of appeals, we would notice the facts which have given rise to Civil Appeal No. 4680/1993.

6. The defendants/appellants herein purchased land measuring 54 Kanals, situated in village Rithal Phogat, being ½ share of the land of Khewats Nos. 204, 205 and 206, measuring 108 Kanals for a sum of Rs. 84,000/- from vendors viz., Bharpai, Chhoto and Pyari -daughters of Bhagwana vide sale deed dated 17.7.1985. The plaintiffs/respondents herein claimed preferential right to pre-empt the sale in favour of defendants -appellants on the ground that they are co-sharers by means of a civil suit laid before the Sub-Judge, 1st Class, Gohana. In the said suit, issues were framed and the trial court decided all the issues in favour of the plaintiffs/respondents and consequently on 30.5.1990 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 substituted Section 15 of the Act runs as under:

"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."

7. Learned counsel appearing for the appellants, on the strength of the decision of this Court in Ramjilal v. Ghisa Ram (supra) and the amending Ac

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2001 Supreme(SC) 1006

What is the effect of the substituted Section 15 introduced by the Haryana Amendment Act, 1995 on the rights of a co-sharer to pre-empt a sale during the pendency of an appeal?

What are the rights of a pre-emptor regarding the maintenance of qualification from the date of sale, filing of suit, and decree of the first court?

What is the retrospective or prospective operation of the substituted Section 15 in the Punjab Pre-emption Act?

Cases Referred (19)