http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 19

CASE NO.:

Appeal (civil) 4680 of 1993

PETITIONER:

SHYAM SUNDER AND OTHERS

Vs.

RESPONDENT:

RAM KUMAR AND ANOTHER

DATE OF JUDGMENT: 30/07/2001

BENCH:

N.S.Hegde, Y.K.Sabharwal, S.V.Patil

JUDGMENT:

J U D G M E N T

V. N. KHARE, J.

Leave granted.

"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".

That is the short question which we are required to answer in

this group of appeals which has come on reference before us.

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. vs. Ishar Singh (dead) by

Lrs. etc. etc. [1995 (1) Scale 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. vs. Ghisa Ram etc. [JT 1996 (2) SC 649]

(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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 19

come before us.

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.

The defendants/appellants herein purchased land measuring 54

Kanals, situated in village Rithal Phogat, being 1/2 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 defendant-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."

Learned counsel appearing for the appellants, on the strength of

the decision of this Court in Ramjilal v. Ghisa Ram (supra) and the

amending Act of 1995 urged that 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. Secondly it was urged that 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. The third contention was that 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. On the

other hand the contention of respondents' counsel is that 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. It was also contended that 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. It was

also urged that 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 19

the title acquired by the claimant.

On the arguments of learned counsel of the parties the questions

that arise for consideration are : (i) 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 and (ii)

whether the Amending Act has retrospective operation so as to affect

the rights of parties in litigation.

Learned counsel for the parties in support of their arguments

relied upon number of decisions rendered by Privy Council, Federal

Court, this Court and various other High Courts. In order to have

complete picture of the views expressed in these decisions and

thereafter to arrive at the conclusion, it is appropriate to categorise the

decisions cited at the Bar which shall hereinafter be referred as first,

second and third categories of decisions. The first category of

decisions are those wherein the view of law expressed is that in a suit

for pre-emption, the pre-emptor must possess his right to pre-empt

right from the date of sale till the date of decree of the first Court, and

loss of that right after the date of decree either by own act, or an act

beyond his control or by any subsequent change in legislation which

is prospective in operation during pendency of the appeal filed against

the decree of the court of first instance would not affect the right of

preemptor. Second category of decisions deals with the cases where

right of a preemptor was taken away after the date of decree of the

first court and during pendency of the appeal by statutory enactment

which had retroactive operation. In such cases it was held that the

appellate Court is competent to take into account legislative changes

which are retrospective and accordingly affect the rights of the parties

to the litigation. The decisions in third category of cases are those

where it has been held that appeal being continuation of suit, the right

to pre-empt a sale 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 appeal and in case of loss of right by legislative changes

during pendency of appeal, the suit for pre-emption must fail.

The first case in the first category of decisions is judgment by

Allahabad High Court in Sakina Bibi vs. Amiran and others [1888

ILR (10) Allahabad 472] wherein it was held that a court of appeal is

required to see what was the decree which the court of first instance

should have passed, and if the court of first instance wrongly

dismissed the claim, the plaintiff cannot be prejudiced by her share

having been subsequently sold in execution of a decree in another suit.

Such a sale would not affect the preemptor's right to maintain the

decree if she had obtained the decree in her favour in the court of first

instance. In short, the view of the Court was that the right of pre-

emption has to be found which existed on the date of the decree and

any subsequent sale of the land in execution proceedings during

pendency of the appeal would not affect the maintainability of the

suit. In Baldeo Misir vs. Ram Lagan Shukul [1923 ILR (45)

Allahabad 709], it was laid down that what is to be seen is whether

the pre-emptor has the right on the date of the decree of the first

Court. Any subsequent change of right during pendency of the appeal

would not affect the right of the pre-emptor. In Hans Nath and others

vs. Ragho Prasad Singh [59 The Law Reports (Indian Appeals) 138],

the Privy Council following the decision in Baldeo Misir vs. Ram

Lagan Shukul (supra) held, that a pre-emptor's claim may be

defeated by losing his preferential qualification to pre-empt after the

sale and at any time before the adjudication of the suit. In short, it

was held that a 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 trial court. This decision by the Privy Council

related to the right of preemption prevailing in the then Agra

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 19

Province, but the same was followed and applied in the then

undivided Punjab before partition of the country by the Lahore High

Court in Madho Singh vs. Lt. James R.R.S. Kinner [1942 ILR(23)

Lahore 155] and Zahur Din and another vs. Jalal Din Noor

Mohammad and others [ 1944 ILR (25) Lahore 443]. In both the

cases, two Full Benches of Lahore High Court held that it is not

possible to extend the date by which a vendee in a pre-emption suit

may improve his status beyond the date of litigation of the suit by the

court of first instance and he cannot, therefore, by improving his

position during pendency of the appeal defeat the right of the pre-

emptor. In Ramji Lal & anr. vs. State of Punjab & ors. [1966 ILR 19

(2) Punjab 125] it was held that preemptor must have his qualification

to preempt on the date of sale, on the date of institution of the suit and

on the date of decree of the trial Court. The preemptor must maintain

his qualification to preempt on the date of decree of the first court

only and any subsequent loss of qualification by preemptor by his

own act or by an act beyond his control does not affect the

maintainability of the suit. In Bhagwan Das (d) by Lrs. & ors. vs.

Chet Ram [1971 (2) SCR 640] a Bench of three Judges of this Court

held that a preemptor must maintain his qualification to preempt upto

the date of decree for possession by preemption. This decision

approved the decision of Full Bench rendered by Punjab & Haryana

High Court in Ramji Lal vs. State of Punjab (supra). In Rikhi Ram &

anr. vs. Ram Kumar & ors. [1975 (2) SCC 318] a Bench of three

Judges of this Court reiterated that a pre-emptor who claims the right

to pre-empt the sale on the date of the sale must continue to possess

that right till the date of the decree. If the claimant loses that right

before passing of the decree, no decree for pre-emption can be granted

by the Court even though he may have had such right on the date of

the suit. In Didar Singh vs. Ishar Singh (supra) a Bench of three

Judges of this Court laid down that in a suit for pre-emption, the

claimant must prove that his right to pre-empt is subsisted till the date

of the decree of the First Court and the loss of right after the date of

the decree by an act beyond his control or by statutory intervention

during pendency of the appeal against the decree of the trial Court

would not disentitle the claimant to maintain his claim of preemption

already exercised and decreed. In this case again decision by a Full

Bench of Punjab & Haryana High Court in Ramji Lal vs. State of

Punjab (supra) was approved.

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 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 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 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.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 19

Coming to the second category of decisions it may be noted that

while the view of law laid down in first category of decisions held the

field, the Federal Court in the case of Lachmeshwar Prasad Shukul &

Ors. vs. Keshwar Lal Chaudhuri & Ors. [AIR 1941 Federal Court 5]

while interpreting Section 7 of the Bihar Money-lenders Act, 1939

which was found retrospective held that once the decree of the High

Court had been appealed against, the matter becomes sub-judice again

and thereafter the appellate Court had seisin of the whole case, though

for certain purposes, e.g., execution, the decree was regarded as final

and the Courts below retained jurisdiction. The principle of law laid

down by the Federal Court has to be understood in the context of the

provisions of the Act which the learned Judges were interpreting. The

view taken in Lachmeshwar Prasad Shukul & Ors. Vs. Keshwar Lal

Chaudhuri (supra) was followed in Ram Lal vs. Raja Ram & anr.

[1960 Punjab Law Reporter 291]. The High Court was of the view

that appeal being continuation of original proceedings and re-hearing

the suit, the amending Act being retrospective has to be taken into

consideration and given effect to not only in the fresh suit filed or suit

pending but also in cases where appeal is pending and not decided. In

nut-shell, the High Court was of the view that appeal being

continuation of a suit, the appellate court is entitled to take into

account the change in law which is retrospective. The decision of

Punjab & Haryana High Court in Ram Lal vs. Raja Ram (supra) was

approved in Ram Sarup Vs. Munshi & ors. [1963 (3) SCR 858]. A

Constitution Bench of this Court in Ram Sarup case (supra) held that

Section 31 of amending Act 10 of 1960 being retrospective, the right

to pre-empt a sale which had accrued before coming into force of the

amending Act stood defeated. The Constitution Bench also noted and

explained that in Lachmeshwar Prasad Shukul vs. Keshwar Lal

(supra), the Federal Court was construing Section 7 of the Bihar

Money-lenders Act which had retrospective operation.

The decision in Ram Sarup vs. Munshi (supra) was followed

by another Constitution Bench of this Court in Amir Singh & Anr. vs.

Ram Singh & Ors. [1963 (3) SCR 884] wherein, this Court while

interpreting section 31 introduced by the Punjab Amending Act 1960

reiterated that retrospective operation of section 31 necessarily

involves effect being given to the substantive provisions of amended

section 15 by the appellate court, whether the appeal before it is one

against a decree granting preemption or one refusing that relief.

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.

We shall now proceed to notice the third category of decisions

cited at the Bar. The first decision in this category of cases is decision

in Karan Singh & Ors. vs. Bhagwan Singh (dead) by L.Rs. & ors.

[1996 (7) SCC 559] wherein it was held that an appeal being

continuation of the suit, the right to claim preemption must be

available on the date when the decree is finally to be affirmed and

needs to be modified at the time of disposal of the appeal and since

substituted Section 15 of the Act came into force during pendency of

the appeal, the right and remedy of the preemptor stood extinguished.

This decision was followed in Ramjilal vs. Ghisa Ram (supra)

wherein it was held that since substituted section 15 introduced by

amending Act of 1995 having come into force during pendency of

appeal which is continuation of the suit, the right and remedy of the

plaintiff stood extinguished and as a result of which the suit for pre-

emption was not maintainable.

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 19

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.

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 of 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 vs. Jalal Din (supra) 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 vs. Ragho Prasad Singh

(supra) 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 19

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.

It was argued by learned counsel for the appellant that an

appeal being continuation of suit, the appellate court is required to

notice and consider the subsequent event, namely, loss of qualification

by the pre-emptor during pendency of an appeal. In fact, argument is

that where a co-sharer looses the right to pre-empt during pendency of

appeal the pre-emptor's suit must fail. It is no doubt true that in

certain context 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 pre-emptor. 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 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. The loss of qualification of pre-emptor or vendee

acquiring status above to pre-emptor 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. As earlier noticed that 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. We find support of our view from decision in Sakina Bibi vs.

Amiran (supra) wherein the High Court of Allahabad held that a Court

of Appeal was only required to see whether the trial court had

wrongly dismissed the claim of pre-emptor and it is irrelevant that

during the pendency of appeal land was sold in an execution

proceeding in another suit. In a pre-emption case where an appeal is

filed against the decree of court of first instance, the scope of appeal is

confined to the question whether the decision of the trial court is

correct or not. This being the legal position which held the field for

over a century any subsequent event taking place during pendency of

appeal cannot be allowed to be taken into consideration by the

appellate court otherwise it may displace the case of a pre-emptor.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 19

It was next contended on behalf of appellants that the view of

law (i) that subsequent event taking place or change in law during the

pendency of appeal filed against the decree in a pre-emption suit

cannot be looked into by the appellate court and that (ii) all that is

required to be seen by the appellate court whether decree passed by

the court of first instance on the basis of rights of the parties on the

date of adjudication, has ceased to be good law in view of decision of

the Federal Court in Lachmeshwar Prasad Shukul Vs. Keshwar Lal

Choudhuri (supra) wherein it was laid down that an appeal is

rehearing of suit and appellate court is entitled to consider any

subsequent change in law which has come into existence during

pendency of appeal. On the strength the said decision it was

vehemently argued that the powers of appellate court are not restricted

only to see whether the decision of the first court was correct on basis

of rights of the parties on the date of adjudication of suit but also to

consider and give effect to subsequent change in law whereby a co-

sharer's right of pre-emption has been taken away during pendency of

appeal. It is true that in Lachmeshwar Prasad Shukul (supra) in the

context of the provisions of Bihar Money-lenders Act, it was laid

down that once the decree had appealed against, the matter became

sub-judice again and thereafter the appellate court had seisin of the

whole case and therefore, the appellate court is entitled to take into

consideration any change in law taking place during pendency of

appeal and in such a situation the power of appellate court is not

confined only to find out whether the judgment of the Court of first

instance was correct.

It was also argued that the amending Act being retrospective

whatever the right the plaintiff possessed on the date of adjudication

of suit, the same stood extinguished during pendency of appeal and

therefore, the plaintiff suit must fail. Since both the arguments are

overlapping we shall consider the effect of decision in Lachmeshwar

Prasad Shukul vs. Keshwar Lal Choudhuri (supra) slightly later.

Before that it is necessary to consider the effect of substituted Section

15 introduced by the amending Act of 1995 on the substantive rights

of the parties. We would now proceed to examine whether said

provision of the amending Act is retrospective as urged by learned

counsel for the appellant.

In Maxwell on the Interpretation of Statutes, 12th Edn. the

statement of law in this regard is stated thus:

"Perhaps no rule of construction is more

firmly established than thus - that a

retrospective operation is not to be given to

a statute so as to impair an existing right or

obligation, otherwise than as regards matters

of procedure, unless that effect cannot be

avoided without doing violence to the

language of the enactment. If the enactment

is expressed in language which is fairly

capable of either interpretation, it ought to

be construed as prospective only.' The rule

has, in fact, two aspects, for it, "involves

another and subordinate rule, to the effect

that a statute is not to be construed so as to

have a greater retrospective operation than

its language renders necessary."

In Francis Bennion's Statutory Interpretation, 2nd Edn, the

statement of law is stated as follows:

"The essential idea of a legal system is that

current law should govern current activities.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 19

Elsewhere in this work a particular Act is

likened to a floodlight switched on or off,

and the general body of law to the

circumambient air. Clumsy though these

images are, they show the inappropriateness

of retrospective laws. If we do something

today, we feel that the law applying to it

should be the law in force today, not

tomorrow's backward adjustment of it.

Such, we believe, is the nature of law.

Dislike of ex post factor law is enshrined in

the United States Constitution and in the

Constitution of many American States,

which forbid it. The true principle is that lex

prospicit non respicit (law looks forward not

back). As Willes, J. said retrospective

legislation is 'contrary to the general

principle that legislation by which the

conduct of mankind is to be regulated ought,

when introduced for the first time, to deal

with future acts, and ought not to change the

character of past transactions carried on

upon the faith of the then existing law."

In Garikapati Veeraya s. N.Subbiah Choudhry 1957 SCR 488

this Court observed as thus:

"The golden rule of construction is that, in

the absence of anything in the enactment to

show that it is to have retrospective

operation, it cannot be so construed as to

have the effect of altering the law applicable

to a claim in litigation at the time when the

Act was passed."

In Smt. Dayawait and another vs. Inderjit and others 1966 (3)

SCR 275, it is held thus:

"Now as a general proposition, it may be

admitted that ordinarily a court of appeal

cannot take into account a new law, brought

into existence after the judgment appealed

from has been rendered, because the rights

of the litigants in an appeal are determined

under the law in force at the date of the suit.

Even before the days of Coke whose maxim

- a new law ought to be prospective, not

retrospective in its operation - is off-quoted,

courts have looked with dis-favour upon

laws which take away vested rights or affect

pending cases. Matters of procedure are,

however, different and the law affecting

procedure is always retrospective. But it

does not mean that there is an absolute rule

of inviolability of substantive rights. If the

new law speaks in language, which,

expressly or by clear intendment, takes in

even pending matters, the court of trial as

well as the court of appeal must have regard

to an intention so expressed, and the court of

appeal may give effect to such a law even

after the judgment of the court of first

instance."

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 19

In Hitendra Vishnu Thakur & ors. vs. State of Maharashtra &

ors. [1994 (4) SCC 602] this Court laid down the ambit and scope of

an amending act and its retrospective operation as follows:

"(i)A statute which affects substantive rights

is presumed to be prospective in operation

unless made retrospective, either expressly

or by necessary intendment, whereas a

statute which merely affects procedure,

unless such a construction is textually

impossible, is presumed to be retrospective

in its application, should not be given an

extended meaning and should be strictly

confined to its clearly defined limits.

(ii) Law relating to forum and limitation is

procedural in nature, whereas law relating to

right of action and right of appeal even

though remedial is substantive in nature.

(iii) Every litigant has a vested right in

substantive law but no such right exists in

procedural law.

(iv) a procedural statute should not

generally speaking be applied

retrospectively where the result would be to

create new disabilities or obligations or to

impose new duties in respect of transactions

already accomplished.

(v) a statute which not only changes the

procedure but also creates new rights and

liabilities shall be construed to be

prospective in operation unless otherwise

provided, either expressly or by necessary

implication."

In K.S.Paripoornan vs. State of Kerala & others [1994 (5)

SCC 593 @ p.636], this Court while considering the effect of

amendment in the Land Acquisition Act in pending proceedings held

thus:

"....In the instant case we are concerned

with the application of the provisions of

sub-section 1 (1-A) of S.23 as introduced by

the Amending Act to acquisition

proceedings which were pending on the date

of commencement of the Amending Act. In

relation pending proceedings, the approach

of the courts in England is that the same are

unaffected by the changers in the law so far

as they relate to the determination of the

substantive rights and in the absence of a

clear indication of a contrary intention in an

amending enactment, the substantive rights

of the parties to an action fall to be

determined by the law as it existed when the

action was commenced and this is so

whether the law is change before the hearing

of the case at the first instance or while an

appeal is pending (See Halsbury's Laws of

England, 4th Edn., Vol.44, para 922)".

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 19

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 vs. 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 preemption as it existed on

the date of passing of the decree.

Coming to decision in Lachmeshwar Prasad Shukul vs.

Keshwar Lal Choudhuri (supra), which is the sheet anchor of the

argument on behalf of appellants, it is necessary to notice the facts of

the said case and the provisions of law which were interpreted by

the Federal Court. In the said case, the plaintiff brought a suit for

recovery of money by sale of mortgaged property. The suit was partly

decreed. There was an appeal and cross-appeal to the High Court.

Before the High Court one of the arguments raised was that section

11 of the Bihar Money-lender Act (3 of 1938) which was enacted by

the Bihar Legislature during pendency of the appeal before the High

Court is void. Accepting the arguments, the High Court held section

11 of the Act to be void. Subsequently, the defendants preferred an

appeal before the Federal Court. While the appeal was pending Bihar

Legislature repealed the Money-lender Act of 1938 and substantially

re-enacted it as the Bihar Money-lender Act 1939. Section 7 of the

Act (Act No.7 of 1939) which came for consideration before the

Federal Court runs as under:

"Notwithstanding anything to the contrary

contained in any other law or in any thing

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 19

having the force of law or in any agreement,

no Court shall, in any suit brought by a

money-lender before or after the

commencement of this Act or in any appeal

or proceeding in revision arising out of such

suit, pass a decree for an amount of interest

for the period preceding the institution of the

suit which, together with any amount

already released as interest through the

Court or otherwise, is greater than the

amount of loan advanced, if the loan is

based on a document, the amount of loan

mentioned in, or evidenced by such

document."

(emphasis supplied)

After passing of the Act 7 of 1939, it was argued before the

Federal Court that the defendants are entitled to the benefit of section

7 of the Act 1939 whereas the respondents' argument was based on

the theory that hearing an appeal the appellate court was only

concerned to see whether or not , the judgment of the Court was in

conformity with the law as it stood at that time, that judgment was

given and further that as the Act of 1939 had not been enacted at the

time when the High Court decided the case, the Federal Court was not

competent to give relief to appellants in terms of Section 7 of the new

Act. In the background of the aforesaid facts, the Federal Court

while interpreting Section 7 of the Act was of the view that Section 7

has in terms been made applicable to appeals in suits brought before

the commencement of the Act and that the decree in appeal yet

remained to be passed. The Federal Court after having found that

Section 7 is retrospective held that the appellate court is required to

consider and give effect to legislative changes which have taken place

during pendency of the appeal as an appeal is continuation of suit. It

is in this context, the decision in Lachmeshwar Prasad Shukul vs.

Keshwar Lal Choudhuri has to be understood. Where a repeal of an

enactment is followed by fresh legislation, having no retrospective

operation, an appellate Court is not required to take into account the

change in law but to dispose of the appeal on the basis of right of pre-

emption on the date of adjudication of suit. In that view of the matter

the decision in Lachmeshwar Prasad vs. Keshwar Lal (supra) has no

application in the present case. Subsequently, the view taken in

Lachmeshwar Prasad Shukul vs. Keshwar Lal Choudhuri was

followed in Ram Lal vs. Raja Ram (supra) by Punjab and Haryana

High Court. In the said case the plaintiff brought a suit for

preemption on the ground of vicinage. The trial Court dismissed the

suit on the ground that the land fell outside the limit of Panipat town

and in that locality no custom of preemption prevailed. On appeal the

appellate Court reversed the decision of the trial Court and decreed

the suit. Second appeal was filed by the vendee before the High

Court. During pendency of appeal, the State Legislature amended the

Punjab Preemption Act by amending Act No.10 of 1960. By the said

amending Act Section 15 of the Parent Act was deleted and in its

place new Section 15 was substituted whereby the grounds on which

the urban property was pre-empted was taken away. New substituted

Section 31 further provided that no court shall pass decree in a suit

for preemption whether instituted before or after the commencement

of the amending Act which is inconsistent with the provision of the

Act. The High Court applying the principles laid down in

Lachmeshwar Prasad Shukul's case held that an appeal being

continuation of suit, the appellate Court is to take into account the

subsequent change in law which has retrospective operation. The

said decision of Punjab & Haryana High Court in Ram Lal vs. Raja

Ram was approved in Ram Sarup vs. Munshi & ors. (supra). In the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 19

said case, a Constitution Bench of this Court held that section 31 of

Amending Act 10 of 1960 being retrospective the right to preempt a

sale which has accrued before coming into force of the Amending Act

stood defeated. The Constitution Bench also noted and explained that

in Lachmeshwar Prasad Shukul vs. Keshwar Lal Choudhuri (supra),

the Federal Court was construing Section 7 of Bihar Money-lender

Act which had retrospective operation and in that context held that

appeal being continuation of suit, the appellate court is required to

take into account subsequent change in law. It is appropriate to

reproduce the following passage from Ram Sarup's case:

"Though we agree that there is a

presumption against the retrospective

operation of a statute and also the related

principle that a statute will not be construed

to have a greater retrospective operation

than its language renders necessary, we

consider that in the present case the

language used in section 31 is plain and

comprehensive so as to require an appellate

court to give effect to the substantive

provisions of the Amending Act whether the

appeal before it is one against a decree

granting pre-emption or one refusing that

relief. The decision of the Federal Court in

Lachmeshwar Prasad vs. Keshwar Lal on

which learned counsel for the appellant

relied fully covers this case. The question

there raised related to the duty of the Federal

Court when an amending Act enacted after

the decree appealed from was passed

adversely interfered with the rights of the

respondent before the Court. The learned

Judges held that the provisions of the Act

were clearly retrospective and should be

applied to the decree which was the subject

matter of appeal before it."

(emphasis supplied)

The decision in Ram Swarup vs. Munshi (supra) was

followed by another Constitution Bench of this Court in Amir Singh

& Anr. vs. Ram Singh & Ors. (supra). In Amir Singh's case also

another Constitution Bench of this Court interpreting section 31

introduced by Punjab Amending Act 1960 reiterated that the

retrospective operation of section 31 necessarily involves effect being

given to the substantive provisions of amended section 15 by the

appellate court whether the appeal before it is one against a decree

granting pre-emption or one refusing that relief.

It may be noticed that the phraseology and the words "before

and after" used in Section 7 of the Bihar Money-lender Act 1939 "no

court shall in any suit brought before or after the commencement of

this Act" and in Section 31 of Punjab Amending Act 10 of 1960 "no

court shall pass a decree in a suit for pre-emption whether instituted

before or after the commencement of the Act" led the Constitution

Bench of this Court to come to conclusion that there is necessary

intendment in the Act, that it has retroactive operation and has to be

taken into consideration by the appellate court and the powers of an

appellate court is not confined to see whether the judgment of the

trial court was correct or not.

Learned counsel for the appellants strongly relied upon a

decision of Amarjit Kaur etc. vs. Pritam Singh & ors. etc. [1974 (2)

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 19

SCC 363]. In the said case this Court was interpreting section 3 of

Punjab Pre-emption Repealed Act 1973 which provided that on and

from the commencement of the Act no Court shall pass a decree in

any suit for pre-emption. This Court in the said case while applying

principles laid down in Lachmeshwar Prasad Shukul vs. Keshwar Lal

Choudhuri (supra) held that as an appeal is rehearing, it would

follow that if the Court was to dismiss the appeal, it would be passing

a decree in a suit for pre-emption and therefore the only course open

to the High Court was to allow that appeal and that is what the High

Court has done. The said decision in Amarjit Kaur was followed in

Sadhu Singh & Anr. vs. Dharam Dev & Ors. [AIR 1980 SC 1654]

wherein this Court reiterated that Section 3 of the Act interdicts the

passing of the decree even in appeal as the appeal is rehearing of the

suit. In both the cases this Court without examining whether the

Section 3 of the Act is prospective or retrospective applied the

principle laid down by Federal Court in Lachmeshwar Prasad Shukul

vs. Keshwar Lal Choudhuri's case. We have not been supplied with

the full text of the Act and in its absence, we are unable to conclude

that either the said Act was prospective or retrospective in operation.

It appears, this Court proceeded on the assumption that Section 3 of

the Act was retrospective in operation and, therefore, applied the

principle laid down in Lachmeshwar Prasad Shukul vs. Keshwar Lal

Choudhuri (supra). In view of such facts and circumstances, these

decisions are of no assistance to the case of the appellants.

During the course of argument, a half-hearted argument was

raised that a substituted section in an Act introduced by an amending

Act is to be treated having retroactive operation. According to the

learned counsel for the appellant, the function of a substituted section

in an Act is to obliterate the rights of the parties as if they never

existed. This argument is noted only to be rejected. 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.

Coming to the next question, learned counsel for the appellants

after characterising the right of pre-emption as archaic and feudal,

argued that substituted Section 15 being a beneficial legislation

enacted for general benefit of citizens, this Court while construing it,

is required to apply rule of benevolent construction and on application

of the said rule of construction the substituted Section 15 has to be

given retroactive operation. 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 reason why such rule of construction be not

applied in the present case. But 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 re-

legislating a provision of statute either by substituting, adding or

altering the words used in the provision of the Act. In such a situation

generally Courts 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 statute 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 19

not precluded 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 to 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 construction has been applied while construing

welfare legislations or provisions relating to relationship between

weaker and stronger contracting parties. Assuming that the amending

Act is for general good of people, we do not find the 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 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.

Learned counsel then argued that since the amending Act being

a beneficial legislation, retrospectivity is implied in it. Assuming, for

the sake of argument that right of preemption being a feudal or archaic

law and therefore, the amending Act is a beneficial legislation meant

for general benefit of citizens but there is no such rule of construction

that a beneficial legislation is always retrospective in operation even

though such legislation either expressly or by necessary intendment is

not made retrospective. In the case of Moti Ram vs. Suraj Bhan &

Ors. [1960 (2) SCR 896] it was held thus:

"It is clear that the amendment made is not

in relation to any procedure and cannot be

characterized as procedural. It is in regard

to a matter of substantive law since it affects

the substantive right of the landlord. It may

be conceded that the Act is intended to

provide relief to the tenants and in that sense

is a beneficial measure and as such its

provision would be liberally constructed; but

this principle would not be material or even

relevant in deciding the question as to

whether the new provision is retrospective

or not. It is well settled that where an

amendment affects vested rights the

amendment would operate prospectively

unless it is expressly made retrospective or

its retrospective operation follows as a

matter of necessary implication. The

amending Act obviously does not make the

relevant provision retrospective in terms and

we see no reason to accept the suggestion

that the retrospective operation of the

relevant provision can be spelt out as a

matter of necessary implication."

We are in respectful agreement with the view taken in Moti

Ram Vs. Suraj Bhan & ors. (supra). The right of pre-emption may

be a weak right but nonetheless the right is recognised by law and can

be allowed to be defeated within the parameters of law. A statute

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 19

which affect the substantive right has to be held prospective unless

made retrospective either expressly or by necessary intendment.

Learned counsel appearing for the appellants strongly relied upon a

decision of this Court in the case of Rafiquennessa vs. Lal Bahadur

Chetri (dead) through His Representatives and others [1964 (6) SCR

876 @ 883] for contention that a beneficient provision enacted by

legislation has to be given retroactive operation. In the said case it

was held thus:

"This provision clearly indicates that the

legislature wanted the beneficient provisions

enacted by it to take within their protection

not only leases executed after the Act came

into force, but also leases executed prior to

the operation of the Act. In other words,

leases which had been created before the

Act applied are intended to receive the

benefit of the provisions of the Act, and in

that sense, the Act clearly affects vested

rights of the landlords who had let out their

urban properties to the tenants prior to the

date of the Act. That is one important fact

which is material in determining the scope

and effect of s.5."

In the said case Section 2 of the Act provided that notwithstanding

anything contained in any contract or in any law for the time being in

force, the provisions of the said Act shall apply to all non-agricultural

tenancies whether created before or after the date on which this Act

comes into force.. Section 5 further provided protection to the tenants

who have raised construction within 5 years from the date of leases

executed in their favour on the land let out to them for residential or

business purposes. While construing Sections 2 and 5 of the Act, this

Court held that Section 2 and Section 5 give an unmistakably

indication of the legislative intention to make its provisions

retrospective. For the said reasons the decision relied upon has no

application to the present case.

Learned counsel for the appellant then relied upon a decision of

this Court in the case of H. Shiva Rao & Anr. vs. Celelia Pereira &

Ors. [1987 (1) SCC 258] for the proposition that a beneficial

legislation has to be given retrospective effect. In the said decision it

was held that if the expressions are ambiguous, then the construction

that fulfils the object of the legislation must provide the key to the

meaning. But that is not the case here. We have already held that

there is no ambiguity in substituted Section 15 and, therefore, this

decision has no application in the present case. We accordingly reject

the arguments of the learned counsel for the appellants.

Lastly, it was contended on behalf of the appellants that the

amending Act whereby new Section 15 of the Act has been

substituted is declaratory and, therefore, has retroactive operation.

Ordinarily when an enactment declares the previous law, it requires to

be given retroactive effect. The function of a declaratory statute is to

supply an omission or explain previous statute and when such an Act

is passed, it comes into effect when the previous enactment was

passed. The legislative power to enact law includes the power to

declare what was the previous law and when such a declaratory Act is

passed invariably it has been held to be retrospective. Mere absence

of use of word 'declaration' in an Act explaining what was the law

before may not appear to be a declaratory Act but if the Court finds

an Act as declaratory or explanatory it has to be construed as

retrospective. Conversely where a statute uses the word 'declaratory',

the words so used may not be sufficient to hold that the statute is a

declaratory Act as words may be used in order to bring into effect new

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 19

law.

Craies on a Statute Law, 7th Edition stated the statement of law

thus:

"If a doubt is felt as to what the common

law is on some particular subject, and an Act

is passed to explain and declare the common

law, such an Act is called a declaratory

Act."

G.P. Singh on Principles of Statutory Interpretation quoting

Craies stated thus:

"For modern purposes a declaratory Act

may be defined as an Act to remove doubts

existing as to the common law, or the

meaning or effect of any statute. Such Acts

are usually held to be retrospective. The

usual reason for passing a declaratory Act is

to set aside what Parliament deems to have

been a judicial error, whether in the

statement of the common law or in the

interpretation of statutes. Usually, if not

invariably, such an Act contains a preamble

and also the word 'declared' as well as the

word' enacted". But the use of the words

"it is declared is not conclusive that the Act

is declaratory for these words may, at times,

be used to introduce new rules of law and

the Act in the latter case will only be

amending the law and will not necessarily

be retrospective. In determining, therefore,

the nature of the Act, regard must be held

to the substance rather than to the form.

If a new Act is 'to explain" an earlier

Act, it would be Without object unless

construed retrospective. An Explanatory

Act is generally passed to supply an obvious

omission or to clear up doubts as to the

meaning of the previous Act. It is well

settled that if a statute is curative or merely

declaratory of the previous law

retrospective operation is generally

intended."

In Keshavlal Jethalal Shah vs Mohanlal Bhagwandas & Anr.

[1968 (3) SCR 623], this Court while interpreting section 29(2) of the

amending Act, held thus:

"An explanatory Act is generally passed to

supply an obvious omission or to clear up

doubts as to the meaning of the previous

Act. Section 29(2) before it was enacted

was precise in its implication as well as in

its expression; the meaning of the words

used was not in doubt, and there was no

omission in its phraseology which was

required to be supplied by the amendment."

In R. Rajagopal Reddy (dead) by Lrs. & Ors. vs. Padmini

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 19

Chandrasekharan (dead) by Lrs. [1995 (2) SCC 630], it was held thus:

"Declaratory enactment declares and

clarifies the real intention of the legislature

in connection with an earlier existing

transaction or enactment, it does not create

new rights or obligations. If a statute is

curative or merely declaratory of the

previous law retrospective operation is

generally intended....A clarificatory

amendment of this nature will have

retrospective effect and therefore, if the

principal Act was existing law when the

Constitution came into force the amending

Act also will be part of the existing law. If a

new Act is to explain an earlier Act, it

would be without object unless construed

retrospective. An explanatory Act is

generally passed to supply an obvious

omission or to clear up doubts as to the

meaning of the previous Act"

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. vs. Prem Behari Khare [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 vs. Padmini

Chandrasekharan (supra) 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.

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. vs. Ishar Singh (dead) by Lrs. etc. (supra) and

further hold that the decision in the case of Ramjilal vs. Ghisa Ram

(supra) 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.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 19

.......... ...........................................J

.

(S.P. BHARUCHA)

........................................J.

(V.N. KHARE )

.... ...................................J.

1