1. Pre-emption suits under Section 15(c) of the Punjab Pre-emption Act, 1913 — impact of retrospective amendments regarding the right to pre-empt. (Para 1 )
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1962 Supreme(SC) 144
SUPREME COURT OF INDIA
B.P.Sinha, C.J.I., J.C.Shah, K.C.Das Gupta, K.N.Wanchoo, P.B.Gajendragadkar, JJ.
Amir Singh
Versus
Ram Singh
Case No. : 436 , 438 of 1961
Date of Decision : 10/4/62
Advocates Appeared: Jain B.D. : Ram Achhru : Vohra Own Singh
Advocates:
ACHHRU RAM, B.D.Jain, Own Singh Vohra
ACHHRU RAM, B.D.Jain, Own Singh Vohra
The retrospective operation of a provision prohibiting decrees inconsistent with an amending Act applies to both the extinction of existing rights and the creation of new rights, with the latter being deemed to have vested at the relevant time by legal fiction.
Headnote:(A) Punjab Pre-emption Act, 1913 - Section 15 - Punjab Pre-emption (Amendment) Act, 1960 - Section 15 and 31 - Retrospective operation of amending Act - Right of pre-emption - Extinction of existing rights and creation of new rights - Section 31 mandates that no court shall pass a decree inconsistent with the provisions of the amending Act - This retrospective operation applies equally to the extinction of rights recognized under the parent Act and the creation of new rights under the amending Act (Paras 4, 7).
(B) Right of pre-emption - Requirement of possessing right at date of sale, suit, and decree - Where a statute is made retrospective by legal fiction, the rights created by such amendment are deemed to have vested in the claimant at the relevant time (Para 8).
Facts of the case:
Respondents filed suits for pre-emption of agricultural land based on provisions of the parent Act. During the pendency of the appeals, an amending Act substituted the relevant section, deleting the clauses under which the respondents claimed their right but introducing a new right for tenants of the vendor. The appellants argued that while the extinction of rights was retrospective, the creation of new rights was not, and therefore the respondents could not claim pre-emption as tenants.
Findings of Court:
The court found that the retrospective operation of the provision prohibiting decrees inconsistent with the amending Act necessitates that the substantive provisions of the amended section be applied retrospectively. This includes both the removal of old rights and the conferment of new rights.
Issues: Whether the retrospective operation of the amending Act, specifically the provision prohibiting decrees inconsistent with the Act, applies only to the extinction of existing rights or also to the creation of new rights of pre-emption.
Ratio Decidendi: The court ruled that to avoid a decree inconsistent with the amending Act, the appellate court must give effect to the substantive changes in the law. The retrospective operation of the law creates a legal fiction where new rights are deemed to have vested at the relevant time, allowing claimants to seek relief under the amended provisions even if those rights did not exist at the time of the sale.
Result: Decrees passed by the High Court set aside and matters remanded to the trial Court to allow respondents to amend their claims to assert rights as tenants.
Legal Category Hierarchy
Table of Contents
2. Whether the retrospective operation of Section 31 of the Amendment Act extinguishes existing pre-emption rights without creating new rights for tenants. (Para 4 , 5 , 6 )
3. Section 31 mandates that decrees must not be inconsistent with the amending Act, necessitating retrospective application to both the extinction and creation of substantive rights. (Para 7 )
4. Retrospective operation of a provision requiring decrees to be consistent with an amending Act applies equally to the extinction of old rights and creation of new ones. (Para 7 )
5. Decrees set aside and matters remanded to trial court to allow respondents to amend claims and prove pre-emption rights as tenants. (Para 8 )
6. What is the effect of Section 31 of the Punjab Pre-emption (Amendment) Act, 1960, on pending suits?
Section 31 is retrospective, requiring appellate courts to ensure that any decree passed in a pre-emption suit, whether instituted before or after the amendment, is not inconsistent with the provisions of the amending Act. (Para 4 , 7 )
7. Does the retrospective operation of Section 31 apply only to the extinction of rights or also to the creation of new rights?
The retrospective operation applies to both. A court must refuse to recognize rights dropped by the amending Act and must recognize new rights created by it to avoid passing a decree inconsistent with the Act. (Para 7 )
8. How does the retrospective application of the law affect the requirement that a pre-emptor must possess the right at the date of sale?
By legal fiction introduced through retrospective operation, rights created under amended provisions are deemed to have vested in the claimant at the relevant time, including the date of sale. (Para 8 )
P.B.GAJENDRA GADKAR, J.
(1) WHAT is the effect of the retrospective operation of s. 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. 10,000.00 to the appellants and it is these sales which they wanted to pre-empt. They alleged that they are the owners of agricultural land in Patti Aulakh and Patti Kode, in Mauza Marahar Kalan, and as such, they had the statutory right to claim pre-emption, under s. 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 pre-empt the said sales under the same statutory provision. Since the appellants had acquired equal status with the respondents who claimed to be the pre-emptors, their claim for pre-emption cannot be sustained. That, in brief, was the nature of the contest between the parties.
(2) 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 pre-empt under s. 15(c) (ii)&(iii). The appellants took the metter before the Additional District Judge in appeal. The lower appellate Court was pleased to admit additional evidence under O.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.
(3) THE dispute was then taken up before the High Court of Punjab 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 pre-empt. He referred to the fact that exchange of lands was sometimes recognised as conferring on the party the right to pre-empt, but that was where the land exchanged did not form part of the land sold and pre-empted. 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.
(4) WE have already noticed that both the appellants and the respondents are claiming a right to pre-empt under s. 15(c) (ii) and (iii) of the Parent Act of 1913. On February 4, 1960, the amending Act No. 10 of 1960 was passed. Section 4 of the amending Act has substitituted a new s,15 of the old s. 15 after making substantial changes in the provisions of the earlier section. Clauses (ii) and (iii) of the original s.l5(c) have been deleted, with the result that the claims for pre-emption 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.l5, that decree can no longer be sustain
