# SHY AM SUNDER AND ANR v. RAM KUMAR AND ANR

- **Citation:** [2001] Supp. 1 S.C.R. 115
- **Court:** Supreme Court of India
- **Decided:** 2001-07-31
- **Case number:** Civil Appeal No. 4680 of 1993
- **Bench:** S.P. Bharucha. V.N. Khare, N. Santosh Hegde, Y.K. B Sabharwal, Shivaraj V. Patil
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/shy-am-sunder-and-anr-v-ram-kumar-and-anr-18038
- **Pages:** 32

## Headnote

P1111jab Pre-emption Act-Section 15-Haryana Amendment Act, 1995Sale of suit lands-Right of co-sharers of the suit lands to pre-empt sale- C
Trial Court decreed in favour of co-sharers-Right withdrawn through an
amendment in the Act during pendency of appeal-Effect of-Consideration
of the amendment by appellate Court-Held, right of pre-emption after decree
of the suit is a vested right of the pre-emptor-Appellate Court cannot consider
subsequent amendment in the Act during the pendency of appeal and take
away the vested right accrued on passing of the decree by Trial Court-The D
amended section is not retrospective in operation either expressly or impliedlyThe amending Act is not a declaratory Act-Hence, it has no retrospective
operation.
Interpretation of Statutes:
Beneficial legislation-Rule of benevolent construction-Applicability
of-Held, the amending Act is a beneficial legislation-Rule of benevolent
construction is not applicable while construing the amended Section of the
Act-Cannot be construed that a beneficial legislation is always retrospective
E
in operation even though it is not stated in the 1egislation either expressly or F
impliedly.
'
Appellants purchased suit lands from vendors through a sale deed.
Respondents tiled a suit before Trial Court claiming preferential right to preempt the sale on the ground that they were co-sharers of the suit lands. The
suit was decreed by the Trial Court in favour of the respondents. The G
respondents deposited required purchase money under Order 20 Rule 14
CPC. The appellants were not successful both before the Appellate Court and.
High Court. Hence they approached this Court. During pendency of the
appeal. Section IS(l)(b) of the Punjab Pre-emption Act (Act) was substituted
by a new Section 15 through Haryana Amendment Act, 1995 (amending Act)
1 1 'i
H
I 16
SUPREME COURT REPORTS [2001] SUPP. I S.C.R.
A whereby the right of a co-sharer to pre-empt a sale was withdrawn. When
the appeals came up for hearing before this Court, the Bench, on finding two
conflicting decisions of this Court in Didar Singh etc. etc. v. Ishar Singh (dead)
by lrs. etc. etc., (1995) I Scale I and Ramjilal and Ors., etc. v. Ghisa Ram etc.,
JT (1996) 2 SC 649 on the question of the effect of the amendment made in
B 1995, referred the appeals to a Constitution Bench.
The appellants contended that the respondents' right as a co-sharer to
pre-empt sale had been extinguisl1ed in view of substituted Section 15 of the
Act; that the appeal being continuation of the suit, this Court is competent to
take into account the legislative changes made in the Act; that the powers of
C appellate court are not restricted only to see whether the decision of the Trial
court was correct on the basis of rights of the parties on the date of
adjudication of suit but also to consider and give effect to subsequent changes
in law whereby a co-sharer's right of pre-emption has been taken away during
the pendency of the appeal; that a substituted section in an Act introduced
by an amending Act is to be treated having retroactive operation; that the
D amending Act being declaratory in nature, has retrospective effect and
consequently whatever the right the respondent had on the date of decree of
the suit stood extinguished; and that the amending Act, which is a beneficial
legislation passed for general good of citizens would have retroactive operation
by application of the rule of benevolent construction.
E
The respondent contended that in a suit for pre-emption, a claimant
has to prove his right on the date of the decree of the Trial Court and loss of
the right after the date of the decree by an act beyond his control or
subsequent changes in law would not affect the claim in the suit; that the
amending Act subsequent to the date of decree of the Trial Court has no effect
F on the maintainability of the suit; that assuming the appeal being continuation
of the suit, the amending Act has no retrospective operation which would
affect th

## Text

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SHY AM SUNDER AND ANR.
A
v.
RAM KUMAR AND ANR.
JULY 31, 2001
[S.P. BHARUCHA. V.N. KHARE, N. SANTOSH HEGDE, Y.K.
B
SABHARWAL AND SHIVARAJ V. PATIL, JJ.]
P1111jab Pre-emption Act-Section 15-Haryana Amendment Act, 1995Sale of suit lands-Right of co-sharers of the suit lands to pre-empt sale- C
Trial Court decreed in favour of co-sharers-Right withdrawn through an
amendment in the Act during pendency of appeal-Effect of-Consideration
of the amendment by appellate Court-Held, right of pre-emption after decree
of the suit is a vested right of the pre-emptor-Appellate Court cannot consider
subsequent amendment in the Act during the pendency of appeal and take
away the vested right accrued on passing of the decree by Trial Court-The D
amended section is not retrospective in operation either expressly or impliedlyThe amending Act is not a declaratory Act-Hence, it has no retrospective
operation.
Interpretation of Statutes:
Beneficial legislation-Rule of benevolent construction-Applicability
of-Held, the amending Act is a beneficial legislation-Rule of benevolent
construction is not applicable while construing the amended Section of the
Act-Cannot be construed that a beneficial legislation is always retrospective
E
in operation even though it is not stated in the 1egislation either expressly or F
impliedly.
'
Appellants purchased suit lands from vendors through a sale deed.
Respondents tiled a suit before Trial Court claiming preferential right to preempt the sale on the ground that they were co-sharers of the suit lands. The
suit was decreed by the Trial Court in favour of the respondents. The G
respondents deposited required purchase money under Order 20 Rule 14
CPC. The appellants were not successful both before the Appellate Court and.
High Court. Hence they approached this Court. During pendency of the
appeal. Section IS(l)(b) of the Punjab Pre-emption Act (Act) was substituted
by a new Section 15 through Haryana Amendment Act, 1995 (amending Act)
1 1 'i
H
I 16
SUPREME COURT REPORTS [2001] SUPP. I S.C.R.
A whereby the right of a co-sharer to pre-empt a sale was withdrawn. When
the appeals came up for hearing before this Court, the Bench, on finding two
conflicting decisions of this Court in Didar Singh etc. etc. v. Ishar Singh (dead)
by lrs. etc. etc., (1995) I Scale I and Ramjilal and Ors., etc. v. Ghisa Ram etc.,
JT (1996) 2 SC 649 on the question of the effect of the amendment made in
B 1995, referred the appeals to a Constitution Bench.
The appellants contended that the respondents' right as a co-sharer to
pre-empt sale had been extinguisl1ed in view of substituted Section 15 of the
Act; that the appeal being continuation of the suit, this Court is competent to
take into account the legislative changes made in the Act; that the powers of
C appellate court are not restricted only to see whether the decision of the Trial
court was correct on the basis of rights of the parties on the date of
adjudication of suit but also to consider and give effect to subsequent changes
in law whereby a co-sharer's right of pre-emption has been taken away during
the pendency of the appeal; that a substituted section in an Act introduced
by an amending Act is to be treated having retroactive operation; that the
D amending Act being declaratory in nature, has retrospective effect and
consequently whatever the right the respondent had on the date of decree of
the suit stood extinguished; and that the amending Act, which is a beneficial
legislation passed for general good of citizens would have retroactive operation
by application of the rule of benevolent construction.
E
The respondent contended that in a suit for pre-emption, a claimant
has to prove his right on the date of the decree of the Trial Court and loss of
the right after the date of the decree by an act beyond his control or
subsequent changes in law would not affect the claim in the suit; that the
amending Act subsequent to the date of decree of the Trial Court has no effect
F on the maintainability of the suit; that assuming the appeal being continuation
of the suit, the amending Act has no retrospective operation which would
affect the decree of the Trial Court; that in view of provisions of Order 20
Rule 14 CPC, the title to the property had already been passed on the deposit
of purchase money and, therefore, the amending Act does not affect the title
acquired by them.
G
Dismissing the appeals, the Court
HELD: U. The right of pre-emption has its origin based on custom
which was subsequently codified out of necessity of the then village community
and society of its preservation integrity and maintenance of peace and security.
H In the chane;ed circumstances, right of pre-emption may be called outmoded,
SHY AM SUNDER v. RAM KUMAR
117
but so long it is statutorily recognised, it has to be given the same treatment A
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 taw is to prevent intrusion of stranger into the family- B
holding or property. A co-sharer, under the law of pre-emption, has a right
to substitute himself in place of a 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 the law of
pre-emption prevails. Such a right at present may be characterised as archaic, C
feudal and out-moded but this was the law for nearly two centuries either
based on custom or statutory law. It is in this background that the right of
pre-emption under statutory law has been held to be mandatory and not mere
discretionary. Court has no option but to grant decree of pre-emption where
is a sale of a property by another co-sharer. For that reason, the Courts
consistently held that where there is a sale of holding or property by a co- D
sharer, the right of a pre-emption is required to be settled at the earliest either
on pre-emperor's proving his qualification to pre-empt on the date of sale,
on the date of filing of suit, and on the date of decree of the Court of the first
instance or vendee improving his status till the adjudication of suit for preemption and after adjudication of the suit, any loss of qualification by the E
pre-emptor or vendee improving his status equal or above to right to preemptor is of no consequence. (130-A-Fl
1.2. In certain context, it is true that an appeal is a continuation of a
suit and appellate court is rehearing the suit, but such wide appellate power
is not shown to be exercised to affect the vested right of a pre-emptor. It is F
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 decree is passed in favour of the claimant. In
view of the provision in Order 20 Rule 14(1) CPC, on deposit of purchase
money in the Court by the claimant the right and title to the property vest in G
pre-emptor and it becomes vested right of the pre-emptor. The right of preemption prior to the 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 the
pendency of appeal cannot be allowed to influence the Court as an appellate
Court is mainly concewed with the correctness of the judgment rend~red by H
118
SUPREME COURT REPORTS [2001] SUPP. I S.C.R.
A the Court of first instance. An appellate court is entitled to take into
consideration subsequent event taking place during the 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 proceedings and not where such amendment causes
B prejudice to the plaintifrs 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 whic h the trial court was entitled to
dispose of, can only be taken into consideration by the appellate court.
[131-E-H; 132-A-CI
C
1.3. In a pre-emption case, where an app~al 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
D pre-emptor. [132-D-E[
Didar Singh etc. etc. v. lshar Singh (dead) by Lrs. etc. etc., (199511 Scale
l; Bhagwan Das (d) by Lrs. and Ors. v. Chet Ram, (197212 SCR 640 and Rikhi
Ram and Anr. v. Ram Kumar and Ors., (1975) 2 SCC 318, relied on.
E
Sakina Bibi v. Amiran and Ors., (1888) ILR 10 Allahabad 472; Baldeo
Misir v. Ram Lagan Shukul, (1923) ILR 45 Allahabad 709; Hans Nath and Ors.
v. Ragho Prasad Singh, 59 The Law Reports Indian Appeals 138; Madho Singh
v. Lt. James R.R.S. Kinner, (1942) ILR23 Lahore 155 (FB); Zahur Din and Anr.
v. Jalal Din Noor Mohammad and Ors., (1994) ILR 25 Lahore 443 (FB) and
Ramji Lal and Anr. v. State of Punjab and Ors., (1996) LLR 19 (2) Punjab 125
F (FB), approved.
Ramjilal and Ors. etc. v. Ghisa Ram etc., JT (1966) 2 SC 649 and Karan
Singh and Ors. v. Bhagwan Singh (dead) by Lrs. and Ors., 119961 7 SCC 559,
overruled.
G
2.1. When a repeal of an enactment is followed by a fresh legislation,
such legislation does not affect the substantive rights of the parties on the date
of suit or adjudication of suit unless it is a retrospective legislation and an
appellate Court 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
H the date of the suit. However, the position in law would be different in the
SHY AM SUNDER v. RAM KUMAR
119 (
matters which relate to procedural law but so far as substantive rights of A
parties are concerned they remain unaffected by the amendment in an
enactment Therefore, 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 affect substantive or vested rights of the parties unless
made retrospective either expressly or by necessary intendment. There is a
presumption against the retrospective operation of a statute and further a B
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. [ 136B-C)
c
Ram Sarup v. Munshi and Ors., [1963) 3 SCR 858 (CB); Amir Singh and
Anr. v. Ram Singh and Ors., [1963[ 3 SCR 884 (CB); Garikapati Veeraya v. N.
Subbiah Choudhary, (1957] SCR 488; Smt. Dayawait and Anr. v. Inderjit and
Ors., ( 1966) 3 SCR 275; Hitendra Vishnu Thakur and Ors. v. State of Maharashtra
and Ors., (1994) 4 SCC 602; K.S. Paripoornan v. State of Kera/a and Ors., [1994)
5 SCC 593; Lachmeshwar Prasad Shukul and Ors .. v. Keshwar Lal Chaudhuri D
and Ors., AIR (1941) Federal Court 5; Shantidevi (Smt.) Anr. v. Hukum Chand,
(1996) 5 SCC 768; Ram Lal v. Raja Ram and Anr., (1960) Punjab Law Reporter
291; Amarjit Kaur etc. v. Pritam Singh and Ors. etc., [1974) 2 SCC 363 and
Sadhu Singh and Anr. v. Dharam Dev and Ors., AIR (1980) SC 1654, referred
to.
Maxwell on the Interpretation of Statutes, I 2th Edn.; Francis Bennion 's
Statutory Interpretation, 2nd Edn., referred to.
E
2.2. The new substituted section 15 of the Punjab Pre-emption Act by
Haryana Amendment Act 1995 either expressly or by necessary implication F
is not retrospective in operation which may affect 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. The substituted Section 15 of the Act,
in the absence of anything in it to show that it is retrospective, does not affect
the right of the parties which accrued to them on the date of suit or on the G
date of passing of the decree by the Court of first instance. The 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
the light of law of pre-emption as it existed on the date of passing of the decree.
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 H
120
SUPREME COURT REPORTS (2001] SUPP. 1 S.C.R.
A would also follow in the case of a substituted section in an Act
(136-E-F-G-H; 137-AJ
Shantidevi (Smt.) and Anr. v. Hukum Chand, [1996] 5 SCC 768, relied on.
3.1. Generally rules of interpretation are meant to assist the Court in
B advancing the ends of justice. It is, therefore, true in the case of application
of rule of benevolent construction also. If on application of the rule of
benevolent construction, the Court finds that it would be doing justice within
the parameters of law, then there is no reason for applicability of such rule
of construction in the present case. But there are limitations on the powers of
C the Court, in a sense that Courts, in certain situations, often refrain themselves
to apply the rule of benevolent or liberal construction. The judicial precedents
have laid down the situations where and when the rule of benevolent
. construction is required to be applied. One of the situations is, when the Court
finds that by application of the rule of benevolent construction it would be
re-legislating a provision of statute either by substituting, adding or altering
D the words used in the provision of the Act In such a situation generally Courts
have refrained themselves to apply the rule of benevolent construction. Under
the cover of application of the rule of benevolent construction, a Court is not
entitled to re-legislate a provision of a statue and to do violence with the spirit
of the provision of the Act so construed. The second situation is when the
E 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 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,
F 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 to the Act. Ordinarily, the rule of
G benevolent construction has been applied while construing welfare legislations
or provisions relating to relationship between weaker and stronger contracting
parties. (140-A; 141-A-FI
3.2. Assuming that the amending Act is for general good of people, the
presence of the aforesaid situations is not found for application of such rule
H while construing substituted Section 15 of the Act introduced by the amending
SHY AM SUNDER v. RAM KUMAR
121
Act. A reading of substituted Section 15 of the Act would show that the words A
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. If it is held
· that the amending Act is retrospective in operation, then the Court would be
re-legislating the enactment by adding words which are not found in the
amending Act either expressly or by necessary intendment and it would B
amount to 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 of the Act.
[141-G-H; 142-A]
3.3. There is no such rule of construction that a beneficial legislation is C
always retrospective in operation even though such legislation either expressly
or by necessary intendment is not made retrospective. [142-B, C]
3.4. 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 which affects the substantive right has to be held D
prospective unless made retrospective either expressly or by necessary
intendment. (142-F, GI
Moti Ram v. Suraj Bhan and Ors., [1960] 2 SCR 896, relied on.
Rajiquennessa v. Lal Bahadur Chetri (dead) through lrs. and Ors., 119641
6 SCR 876 and H. Shiva Rao and Anr. v. Ce/e/ia Pereira and Ors., [1987) 1
sec 258, distinguished.
4.L 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
E
F
and when such a declaratory Act is passed invariably it has been held to be
retrospective. Mere absense 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 G
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 law. The function
'
of declaratory or explanatory Act is to supply an obvfous 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. 1143-G-H; 144-A, Bl
H
122
SUPREME COURT REPORTS (2001] SUPP. 1 S.C.R.
A
Keshavalal Jethalal Shah v. Mohan/al Bhagwandas and Anr., (1968( 3
B
SCR 623 and R. Rajagopal Reddy (dead) by lrs. and Ors. v. Padmini
Chandrasekharan (dead) by lrs., (1995( 2 SCC 630, relied on.
Mithilesh Kumari and Anr. v. Prem Behari Khare, (1989( 2 SCC 95,
referred to.
Craies on a Statute law, 7th Edition; G.P. Sing~ on-Principles of Statutory
Interpretation, referred to.
4.2. Substituted section 15 of the amending Act either expressly or by
necessary implication intended to supply an omission or to clear up a doubt
C 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
D Act either expressly or by implication was not intended to be retroactive and
so the amending Act of 1995 is not a declaratory Act and, therefore, it has no
retrospective operation. (145-H, 146-A-Bf
5.1. 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
E pre-emption suit and the appellate court is not required to take into account
or give affect to the substituted Section 15 introduced by the amending Act.
(146-D]
F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4680 of
1993.
From the Judgment and Order dated 9.12.92 of the Punjab and Haryana
High Court in R.S.A. No. 647 of 1991.
WITH
G
C.A. Nos. 4945-46, 4949, 4947, 4948/2001, 11868, 11558/96, 416,
417, 668, 5083-84/97, 4390, 4377-78 of 1990.
P.C. Jain, Dr. Rajiv Dhavan, K. Ramamoorthy, S.K. Bagga, B.S. Malik,
M.N. Krishnamani, B<tbir Singh Gupta, K.B. Rohtagi, Ms. Apama Rohtagi
Jain, Jail Pal, Brijender Chahar, Ms. Jyoti Chahar, Vinay Garg, Mahesh Kasana,
H Jasbir S. Malik, M.S. Dahiya, S.M. Hooda, B.S. Mor, Mrs. Sureshta Bagga,
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE, J.]
123
Shiv Sagar Tiwari, Harinder M. Singh, Atul Kumar, Ranbir Singh Yadav, A
Ashutosh Kumar, Rajesh K. Sharma, Mrs. Shalu Sharma, Goodwill Indeevar,
Mrs. Anjani Aiyagari, K.G. Bhagat, Vineet Bhagat, R.K. Agnihotri, Ms. Kusum
Chaudhary, Rishi Malhotra, Prem Malhotra, R.S. Kataria, Balraj Dewan, S.K.
Mehta, Ajay Majithia, S.B. Upadhayay, Ghan Shyam Vasisht, Manoj Swarup,
Hardeep Singh, Hiren Dasan, S.S. Vats, Sarvesh Bisaria, K.R. Nagaraja, Vivek B
Sibal, Mrs. Naresh Bakshi, R.C. Verma, Vivek Vishnoi, Ms. Kiran Kapoor,
Neeraj Kumar Jain, Ms. Abha R. Sharma, Sheela Goel and Ms. S. Janani for
the appearing parties.
The Judgment of the Court was delivered by
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 I 995) in
c
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- D
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 pre-emption suit".
That is the short question which we are required to answer in this group E
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 F
Singh etc. etc. v. Ishar Singh (dead) by lrs. etc. etc., [1995] I Scale I
(wherein it was held that in a suit for pre-emption, the pre-emptor must prove
his right to pre-empt 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) G
and Ramji/al and Ors. etc. v. 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 H
124
SUPREME COURT REPORTS [2001] SUPP. I S.C.R.
A 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 come before us.
Since common question of law is involved in this group of appeals, we
B 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 ofKhewats 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
C 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,
I st 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
D 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
E 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 pre-empt
a sale was taken away. The substituted Section 15 of the Act runs as under:
F
"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 ver.dor or vendors
of the land or property sold or a part thereof."
Learned counsel appearing for the appellants, on the strength of the
G 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
H effect and consequently, whatever the right a co-sharer had on the date of
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE, J.)
125
decree of the Court of first instance stood extinguished after the amending A
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 B
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 affect 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 ofthe suit, the C
amending Act having no retrospective operation does not affect 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 the title acquired by the claimant.
D
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 affect the maintainability of the suit and the rights of a coE
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 F
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 G
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 H
126
SUPREME COURT REPORTS [2001] SUPP. I S.C.R.
A 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
B 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.
C
The first case in the first category of decisions is judgment by Allahabad
High Court in Sakina Bibi v. Amiran and Ors., [J 888] ILR I 0 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
D 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
E not affect the maintainability of the suit. In Baldeo Misir v. Ram Lagan
Shuku/, (1923) !LR (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 Ors. v. Ragho
Prasad Singh, (59 The Law Reports (Indian Appeals) 138], the Privy Council
F following the decision in Baldeo Misir v. 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 preempt on the date of sale, on the date of filing of thP. suit and on the date of
G passing of the decree by the trial court. This decision by the Privy Council
related to the right of pre-emption prevailing in the then Agra 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 v. Lt.
James R.R.S. Kinner, (1942) !LR (23) Lahore 155 and Zahur Din and Anr.
v. Jalal Din Noor Mohammad and Ors., (1944) ILR (25) Lahore 443). In
H both the cases, two Full Benches of Lahore High Court held that it is not
-·
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE,.J.]
127
possible to extend the date by which a vendee in a pre-emption suit may A
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 and Anr. v.
State of Punjab and Ors., (1966) !LR 19 (2) Punjab I 25 it was held that
preemptor must have his qualification to pre-empt on the date of sale, on the B
date of institution of the suit and on the date of decree of the trial Court. The
preemptor must maintain his qualification to pre-empt 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. and Ors. v. Chet
Ram, [I 971] 2 SCR 640 a Bench of three Judges of this Court held that a C
preemptor must maintain his qualification to pre-empt upto the date of decree
for possession by pre-emption. This decision approved the decision of Full
Bench rendered by Punjab & Haryana High Court in Ramji Lal v. State of
Punjab, (supra). In Rikhi Ram and Anr. v. Ram Kumar and 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 D
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 v. /shar 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 E
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 v. State of Punjab F
(supra) was approved.
An analysis of the aforesaid decisions referred to in first category of
decisions, the legal principles that emerge are these:
I.
The pre-emptor must have the right to pre-empt on the date of G
sale, on the date of filing of the suit and on the date of passing
1
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 th.e claimant loses H
128
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SUPREME COURT REPORTS [2001] SUPP. I S.C.R.
that right or a vendee improves his right equal or above the right
of the claimant before the adjudication of suit, the suit for preemption 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
B
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 pre-emption by the
C
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.
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
D Federal Court in the case of Lachmeshwar Prasad Shukul and Ors. v. Keshwar
Lal Chaudhuri and 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
E 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 and Ors. v. Keshwar Lal Chaudhuri
(supra) was followed in Ram Lal v. Raja Ram and Anr., [1960) Punjab Law
F 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
G account the change in law which is retrospective. The decision of Punjab &
Haryana High Court in Ram Lal v. Raja Ram (supra) was approved in Ram
Sarup v. Munshi and Ors., (1963) 3 SCR 858. A Constitution Bench of this
Court in Ram Sarup case (supra) held that Section 31 of amending Act I 0
of 1960 being retrospective, the right to pre-empt a sale which had accrued
H before coming into force of the amending Act stood defeated. The Constitution
(
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE, J.]
129
Bench also noted and explained that in lachmeshwar Prasad Shukul v. A
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 v. Munshi (supra) was followed by another
Constitution Bench of this Court in Amir Singh and Anr. v. Ram Singh and
Ors., [ 1963] 3 SCR 884 wherein, this Court while interpreting section 31 B
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 pre-emption or one
refusing that relief.
C
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 D
the Bar. The first decision in this category of cases is decision in Karan
Singh and Ors. v. Bhagwan Singh, (dead) by L. Rs. and & Ors., [ 1996] 7 SCC
559 wherein it was held that an appeal being continuation of the suit, the
right to claim pre-emption 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 E
pendency of the appeal, the right and remedy of the preemptor stood
extinguished. This decision wa:s followed in Ramjilal v. 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 F
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 affirmed or needs
to be modified at the time of disposal of the appeal and where right and G
·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 H
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