The overruling of a precedent is a declaration that the supposed rule never was law, and the correct law must be applied to the facts of the case.

1. This is Defendant's appeal against a final decree for foreclosure passed against him.

2. The Plaintiff-Respondent obtained a preliminary decree for foreclosure against the Defendant-Appellant on a mortgage of 1933. In a scheme framed under the Relief of Indebtedness Act, the debt was scaled down considerably and was made payable by three installments. Thereafter on 26-7-1942 the Plaintiff applied for making the preliminary decree absolute. It was contended that the Debt Relief Court had no jurisdiction to frame a scheme, as the liability of the debtor had ceased to be a debt on the passing of the preliminary decree for foreclosure. - Relying on - Dau Balwantsing v. Bindabai, 1942 ILR(Nag) 357, the trial Court made the decree final. The appeal against this final decree was unsuccessful. So also the second appeal. During the pendency of the second appeal, the view taken in - Dau Balwantsing v. Bindabai was overruled by a Full Bench in - Rukhmabai v. Shamlal, 1944 ILR(Nag) 568, where it was held that the relationship of debtor and creditor is not interrupted by the passing of a preliminary decree for foreclosure. In spite of this Full Bench decision binding on him, the learned Chief Justice dismissed the appeal, observing: When legislation is amended, except in matters procedural, the amendment is not retrospective unless a specific provision therefore is made, and interests acquired under the Act as it stood before the amendment are not disturbed.

Reliance was also placed on - Khulwa Sukhra v. Laharsai, 1936 AIR(Nag) 254. The learned Chief Justice further observed that the final decree being in accordance with the view taken in - Dau Balwantsing v. Bindabai could not be upset in appeal on the ground that the view was overruled.

3. In - Khulwa Sukhra v. Laharsai, 1936 AIR(Nag) 254 the question of the effect of Section 63, Transfer of Property (Amendment) Act (20 of 1929) was being considered, and it was held that Section 53A has retrospective effect. This decision was therefore of no assistance to the learned Chief Justice.

4. The function of a precedent is to supplement, to interpret, to reconcile and to develop the principles which the Code contains. As observed in Jurisprudence by Salmond, 10th edition, at page 189: The theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are 'res judicata' or accounts that have been settled in the meantime. A repealed statute, on the contrary, remains valid and applicable as to matters arising before the date of its repeal.

The account settled in the meanwhile cannot be reopened because of a rule that the money paid by a mistake of law cannot be recovered back. A precedent overruled, therefore, is definitely and formally deprived of all authority. It becomes null and void. Therefore, in the instant case, the learned Chief Justice had to apply the law to the facts of the case. Since the decision in - Rukhmabai v. Shamlal, 1944 ILR(Nag) 568 declared that the supposed rule enunciated in - Dau Balwantsing v. Bindabai, 1942 ILR(Nag) 357 was never the law, the learned Judge was bound to follow the overruling decision in - Rukhmabai's case ILR (1944) Nag 568 FB.

5. No attempt was made by the learned Counsel for the Respondent to submit that the decision in - Rukhmabai's case ILR (1944) Nag 568 FB requires reconsideration. He, however, relied on the following passage in the book "The Use of Judicial Precedents", by P. Ramanatha Aiyar 1930 edition, at page 133: Where rights of property have accrued and contracts have been made, in reliance upon the law as declared by a decision of the Court of last resort, and were valid at the time of their inception under such decision, a s