Bhave, J.

1. The respondent No.1 had purchased a piece of malik mukbuza land, measuring 0.26 acres, assessed to land revenue at Rs.0.62, of village Sausar, under a registered sale-deed dated 26-10-1928. After the said purchase, the respondent No.1 constructed a house on the said plot and thus diverted the agricultural land to non-agricultural purposes. The Sub-Divisional Officer, Sausar, acting under section 59 (2) of the Madhya Pradesh Land Revenue Code, 1959 (hereinafter referred to as 'the Code'), by his order dated 10th March 1964, revised the assessment of the land and fixed it at Rs.48.40. The assessment so fixed was to come into effect from the agricultural year 1963-64. That order was set aside by the Board of Revenue by its order dated 16th July 1966 wherein it was held that section 59 (2) of the Code was prospective in operation and the provisions thereof could not be relied on for re-assessment of the land which was diverted to non-agricultural purposes before the Code came into operation. This order is being challenged before us by the State of Madhya Pradesh by this petition under article 226 of the Constitution.

2. The relevant provisions of section 59 of the Code are as under:

“59. Variation of land revenue according to purpose for which land is used.-

(1) .................................

(2) Where land assessed for use for anyone purpose is diverted to any other purpose, the land revenue payable upon such land shall, notwithstanding that the term for which the assessment may have been fixed has not expired, be liable to be altered and assessed in accordance with the purpose to which it has been diverted:”

The respondents argument is that the expression "is diverted" is indicative of the fact that the diversion must take effect after the Code was enacted. The present tense used in sub-section (2) is indicative of the fact that the provisions of the sub-section are not applicable to past acts of diversion. In our view, the contention is not correct, and the Board of Revenue was clearly in error in accepting it. The recognised canon of interpretation is that a statute, unless it is made retrospective by use of specific words or by reason of necessary implication, must be treated as prospective. But it is equally well settled that a prospective statute can rely on past acts for fastening a liability or conferring a benefit on a person. In Ex parte Pratt [(1884) 12 QBD 334], interpretation of section 5 of the Bankruptcy Act, 1883 (46 and 47 Vict.), was involved. Section 5 of the Act provided: "If a debtor commits an act of bankruptcy", a receiving order could be made on a petition presented under the Bankruptcy Act, 1885. The question was whether any act of bankruptcy committed before the Act came into force could be relied on for making the receiving order. All the three Judges concurred in holding that such an order could be made. Bowen, L.J. expressed his opinion thus:

"I think that the more the Act is studied the more it will be found that it is framed in a very peculiar way. I do not wean to say that it is in artistically framed. I think it is framed on the idea that a bank-ruptcy code is being constructed and when the present tense is used, it is used not in relation to time, but as the present tense of logic. I think that is the true view of it." [P.340

Fry, L.J. observed as under:

"I entirely agree with Bowen, L.J. as to the meaning of the present tense in this section; it is used, I think, to express a hypothesis, without regard to time, just as in stating the proposition 'if A. is B., then B. is C.'. It is equivalent to saying, 'if at the lime when the petition is presented the debtor shall have committed an act of bankruptcy'. This construction of the Act appears to me convenient and just......" [P 341

In State of Bombay Vs. Vishnu Ramchandra [AIR 1961 SC 307], their Lordships of the Supreme Court referred to the above said decision, with approval. Their Lordships also referred to the decision in Bourke Vs. N