AMIR SINGH AND ANOTHER versus RAM SINGH AND OTHERS

RamSatup •• Muna/ii A,1Jrangar J.

1962 0&tobe1" 4.

the circumstances that the appellant has succeeded only by virtue of subsequent legislation, we direct that there shall be no order as to costs in the appeal. •

Appeals Nos. 139, I 47 and 214 dismissed. ~ppeal No. 510 al/c11.·(d.

AMIR SINGH AND ANOTHER

RAM SINGH AND OTHERS

(And connected appeals)

(B. P. SINHA., c. J., P. B. G.AJENDR.AG.ADK.AR, K. N. W.ANCHOO, K, c. D.AS GUFTA and J. C. SH.AH, JJ.)

Prt·•mption-Amenrling legislatio11 creating new right• and providing rlecreea not to be passer! inconsistent with the new law-Retrospective operation-Effect on pending appeal-Punjab Pre-emption Acl, 1913 (Punj. of 1913), as amended by Punjab Act 10 of 1960, ss.15(1);c) cl. 4, 31.

The properties in suit had been sold by to the appellants on May 31; 1956, but the respondents as the owners of certain agricultural 1and in th~ patti claimed that they had right of pre-emption under s. 15 (c) (ii) and (iii) of the Pnujab Pre-emption Act, 1913. In the suit instituted by the respondents for this purpose the appellant• resisted the claim on the ground that the vendees from had transferred by exchanges some of the items out of the lands purchased by them and that as result of the said exchanges the appellants themselves had beeome entitled to pre.empt the said sales under the same statutory provision. The suit was, however, decreed by the trial court and the decision was confirmed by the High Court of Punjab. The appellants obtained special leave to appeal to the Supreme Court and during the pendency of

3S.C.R. SUPREME COURT REPORTS

the appeal the Act was amended by Punjab Act 10 of 1960, by which, inter alia, (1) els. (ii) and (iii) of s. 15 (c) of the original Act were deleted, (2) cl.4 of s. 15 (l)(e) pr'.>vided that the right of pre-emption in respect of agricultural land and village immoveable property shall vest in the tenants who held under tenancy of the vendors or anyone of them the ]and or property sold or part thereof, and (3) s. 31 provided that no court shall pass decree in suit for pre-emption whether instituted before or after the commencement of the amending Act of 1960 which was inconsistent with the provisions of the said Act. In view of the new provisions introduced by the amending act the responndents raised new contention that they were tenants who held under tenancy of the vendor of the lands in question and, as such, they were entitled to the right of pre-emption under cl.4 of s.15 (l)(c) of the Act, as amended, even if it be held that the right to claim pre-emption under els. (ii) and (iii) of s.15 (c) of the unamended Act was taken away retrospectively by the amending Act. The appellants pleaded that even assuming that cl.4 of s.15 (l)(c) was applicable, the respondents could not get decree on the bas sis of the new right of pre-emption inasmuch as they had no such right on the date on which the suit was filed or when the sales were effected.

Held, that ( 1) the provisions of s.31 of the Punjab Pre· emption Act, 1913, as amended by Punjab Act 10 of 1960, are retrospective in operation and, therefore, the decree passed in favour of the respondents by the trial court and affirmed by the High Court under the unamended section could not be sustained.

Ram Sarup v.Munshi-[1963] 3 S.C.R. 858 followed.

(2} The retrospective operation of s.31 necessarily involves effec, being given to the substantive provisions of amended s.15 retrospectively, and hence the rights which the respondents now claim under the amended provisions must be deemed to have v~sted in them at the relevant time, with the result that they are entitled, on remand, to ask for decree passed on the basis of the said rights.

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 436 to 438 of 1961.

Appeals by special leave from the judgment and order dated December 9, 1959, of the Punjab

J9dJ ---Amor Singh v. Ram Singh

1962 Amir Singh v. Ram Sin1h

Co.fendragaakorJ.

High Court in Letters Patent Appeals Nos. 407, 408 and 409 of 195~.

Achhru Ram and B. D. Jain, for the appel-lants.

Gian Singh Vohra, for the respondents.

1962. October 4. The Judgement of the Court was delivered by

GAJENDR.AGADKAR, J.-What is the fffcct 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). 'lhat i8 the short question which arises for our decibion in these three appeals which have been ordered to bA consolidated for the pur-pose of hearing by this Court. The8e appeals arise from three pre-emption suits in1tituted by the res-pondents against the respective appellants. The respondents' caie was that the properties in snit had been sold by Aftab Hai on May :n, 1956, for Rs. 10,000/- 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 Bode, in Mauza Mara.bar Kalan, and as sach, they had the statutory right to claim pre-emption, under s. l.5(c) (ii) and (iii). The appel-lants resisted this claim on the ground that the respective vendees from Aftab Rai had transferred by exchanges about 2 kenals out of the lands pur-chased by them and as result of the said exchan-ges 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.

3 S.Cl.R.

The trial Court held that the exohanges on which the appellants relied had 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 Addl. District Judge in appeal. The lower appellate Court was pleased to admit additional evidence under 0.41, 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 con-clusion that the appellants acquired equal status with the respondents and so, the respondent2' claim for pre emption must fail. That is why the appeals preferred by the appellants were allowed and the respondents' suits were dismissed.

The dispute wae then taken up before the High Court of Punjab by the respondents by second appeals. Mahitjan, 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 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 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.

We have already noticed that both the appel-

lants and the respondents are claiming right to

1962 .hnir Singh v. Ram Singh Gajend!'agadkar J,

1962 Amir81'ngh •• Ram Sin1h Gaj1ndragadlc«r J.

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 substi-tituted 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.15(c) have been deleted, with tho result that the claims for pre-emption made both by the appellants and the respondent. have ceased to be recognised by the amended provisions. The appellants oontend that sinco the respondt1nts have got decree for pre-emption in their favour on the provisions of the unamended s.15, that decree can no longer be sustai-ned because of the provisions of s.31 of the amen· ding Act. Section 31 provides that no Court shall pass decree in suit for pre-emption whether instituted before or after the commencement of the Punjab Pre-emption (Amendment) Act, 1959(1960) which is inconsistent with the provisions of the said Aot. In support of his argument that s.31 being retrospective in operation the respondents' title to claim pre-emption can no longer be entertained. Mr. Achhru Ram for the appellants has invited our attention to recent decision of this Court in the case of Ram Sarup v. Mushi (1) pronounced on August 30, 1962. In that case, Ayyangar, J., who spoke for the Constitution Bench considered the question about the retrospective opera-tion of s. 31 and has observed that the said prov1s10n is retrospective and that the language used in the said section is "plain the comprehensive so as to require an appellate Court to give effect to the substantive provisions of the amending Aot whether the appeal before it is one against decree granting pre-emption or one refus· ing that relief." It was no doubt urged before the Court in that case that·the words used in s. 31 did 11i [1963J 3 s.c.a. 858.

3 S.C.R.

not justify the application of the amended provi· sions to proceedings pending before the appellate Court; the said words showed that the said provisi-ons could be invoked only in cases which were pending before the trial Court. This contention was rejected and so, it must be taken to be settled that the provisions of s. 31 are retrospective and can be relied upon by the appellants in their present -, _ appeals before this Court.

This position would undoubtedly have helped the appellants but for another complication which has been introduced by the relevant provisions of the amended s. 15 enacted by the amending Act. We have already noticed that some persons whose --f right to pre-empt was recognised by the correspon-ding provisions of the parent Act, have been omitted by the amended section. 'fhe amended section has also introduced another class of persons on whom the right to claim pre-emption has been conferred. These persons are the tenants who hold under tena-ncy of the vendors the land or property sold or part thereof. This class of tenants bas been intro-duce<'! in clauses (a), (b) and (c) of amended s. 15. Clause four ofs. 15(1) (c) provides that the right of pre-emption in respect of agriculiural land and village immovable property shall vest in the tenants who hold under tenancy of the vendors or any one of them the land or property sold or part thereof. Similar provisions are made in clauses (a) & (b) of the said section. For the respondents Mr. Vohra , contends that they are the tenants who hold under tenancy of the vendor the la.nds in question and as such, they are now clothed with the right to claim pre-emption. In other words, the respondent's argument is that though the right to pre-empt which they possessed under clauses (ii) and (iii) of the un-• J. amended s. 15( c) of the parent Act have been taken way retrospectively by the amending Act, they have been clothed with the same right by virtue of

1962 Amir Sinzh Ram Singh '· Gaj•ndragadka, J.

1962 Amir Singh v. Ram Singh Ga}tndragadkaf' J.

the fact that they fall under the fourth clause of the amended s. 15 (I) (c) and the conferment of this right like the destruction of their right under the deleted provisions of the unamended section must operate retrospectively. He, therefore, suggests that the respondents ought to be given an opportu-nity to prove their case under the fourth clause of s. 15(c) as amended. In this connection, he has referred us to the fact that this plea has been speci-fically taken by the respondents in their statement of the case before this Court. It is on this plea that the question about the effect of the retrospec-tive operation of s. 31 arises.

Mr. Achhru Ram contends that though s. 31 is

retrospective and in that sense the rights to pre-empt which vested in the respondents at the time when thev instituted the present suits have been retrospectively taken away from them, it cannot be said that the right to pre-empt to which the respondents lay claim in the present appeals has been retrospectively created. His argument is that by the amending Act, the Legislature has no doubt provided that cert!tin classes of persons who were entitled to pre-empt under th!l old Act should not be given that right and the extinction of the said right should operate retrospectively, but that cannot be said to be the policy of the legislature in rega.rd to the rights which have been created for the first time by the amending Act.

The argument thus presented may prima facie

appear to be attractive; but close examination of the words used in s. 31 shows that it is not we!l-founded. Section 31, in substance, requirt>s the appellate Court to pass decree in pre-emption matter which is not inconsistent with the provisions of the amending Act. In the present appeals, if we were to uphold the respondents' right to claim pre-emption on the ~ treni:;th of the provisions of s. 15( c)

3 S.C,R.

as they stood. prior to the amendment, that would be inconsistent with the provisions of the amending Act, and so, the change made by the amending Act has to be given effect to and the right which once vested in the respondents must be deemed to have been retrospectively taken away from them. On this point there ie no dispute. Would it make any difference in lhe legal position when we are dealing with rights which are created for the first time by the amending Act on the date when this Court will pass decree in the present appeals? If the rights created in favour of the tenants are not recognised and decree is passed ignoring the said rights, that decree would be inconsistent wjth the relevant provisions of the amending Act, and s. 31 has clearly enjoined that no Court shall pass decree which is inconsistent with the provisions of the amending Act. The position, therefore, appears to be clear that when a. decree is passed in pre-emp-tion matter pending before the appellate Court, that Court must refuse to recognise the dght to pre-empt which was recognised by the unamended Act but has been dropped by the amending Act just as much as it must recognise rights which were not recognised by the unamended Act but have bePn created by the amending Act. The retrospective operatfon of s.31 necessarily involves effect being given to the substantive provisions of s. 15 retro-spectively and that will apply as much to the extinction of the old rights as to the creation of new ones. The retrospective operation of s. 15 which is consequential on the retrospective operation of s.31 is not affected by the fact that the right of pre-emp-tion prescribed by s. 15 is referred to as right which 11h&ll vest in the persons 11pecified in sub-sections (a,), ( b) and ( c) of s. 15( 1 ).

however, urged that the law of pre-

emption requires that the pre-emptor must possess the right to pre-empt at the date of the sale, at the

1962 Amir Stnih v. Ram Sin:h Gajmdro:adkar J.

1962 Amtr Singh v. Ram Singh Gojendragadkar J

date of the suit and at the date of the decree. This position cannot be disputed. But when it is sugge-sted that the respondents cannot claim that they had the right when they brought the present suit-or when the sales were effected, the argument igno-res the true effect of the retrospective operation of s. 31 and s_ 15. If the inevitable consequence of the retrospective operation of s.31 is to make the sub-stantive provisions of s. 15 also retrospective, it follows that by fiction introduced by the retrospec-tive operation, the rights which the respondents claim under the amended provisions of s. 15 must be deemed to have vested in them at the relevant time. If the relevant provisions are made retrospe-ctive by the legislature, the retrospective operation must be given full effect to, and that meets the argument that the right to pre-empt did not exist in the raspondents at the time when the sale transac-tions in question took place. Therefore, we are satisfied that the respondents are entitled to claim that they should be given an opportunity to prove their case that as tenants of the lands in suit they have right to claim pre-emption. Incidentally, when the respondents filed the present suits, they had right to pre-empt under the relevant provisi-ons of the Act as they stood at that time; by the amendment, that right has been taken away, but instead they claim another right by virtue of their status as tenants of the lands, and this right is, by the retrospective operation of s. 31, available to them. We muet accordingly set aside the decrees passed by the High Court and send the matters bitck to the trial Court with direction that it should allow -the re11pondents an opportunity to amend their claims by putting forth their right to ask for pre-emption as tenants under the amended provision of s. 15. After the amendments are thus made, the appellants should be given an opportunity

3 S.C.R. SUPREME COURT REPORTS

to file their written statements and then appropriate issues should be framed and the suits tried and disposed of in the light of the findings on those Issues in accordance with law. Under the unusual circumstances in which the litigation has thus secu-red further lease of life, we dire1Jt that the costs incurred so far should be borne by the parties. Appeal allowed. Oases remitted

GURSAHAI SAIGAL

COMMISSIONER OF INCOME-TAX, PUNJAB

(J. L. KAPUR, A.'_K. SARKAR and M. HIDAYATULLAH, JJ.)

Income Tax-Advance payment-Oonstruction of enact-meut-Rule-Penaltg in addition to liability-Indian Income· tax Act, 1922 (II of 1922), a.ISA, Sub-sa.(2),(3),(6),(8),(9).

By Sub-s.(8) of s.ISA. "where on making the regular assesment, the Income-tax Officer finds that no payment of the tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub-section ( 6) shall be added to the tax as determined on the basis of the regular assessment". Sub. section (6l of s.18A provided, "where in any year an assessee has paid tax under .. sub-section(3) on the basis of his own estimate, and the tax so paid is Jess than eighty percent or the tax determined on the basis of regular assessment ... simple interest at the rate of six per cent per annum from the first day of January in the financial year in which the tax was paid up to the date of the said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said eighty per cent."