Holding

The amendment is prospective and does not affect the vested right of pre‑emption accrued by the decree; therefore the appellate court cannot overturn the trial court's decision.

Summary

The appellants purchased agricultural land from vendors and the respondents, as co‑sharers, filed a suit claiming a statutory right of pre‑emption. The trial court decreed in favour of the respondents and they deposited the purchase money under Order 20 Rule 14 CPC. While the appeal was pending, the Haryana Amendment Act, 1995 substituted Section 15 of the Punjab Pre‑emption Act, withdrawing the co‑sharer's right of pre‑emption. The appellants argued that the amendment, being retrospective or declaratory, extinguished the respondents' vested right and that the appellate court could consider the legislative change. The Supreme Court held that the amendment was prospective, not retrospective, and did not affect the vested right that accrued on the decree; the rule of benevolent construction was inapplicable, and the amendment was not a declaratory act. Consequently, the appellate court could not set aside the trial court's decree, and the appeals were dismissed.

Issues considered

The effect of the Haryana Amendment Act, 1995 (substituted Section 15) on a pre‑emption suit where the amendment was enacted during pendency of the appeal.
Whether the amending Act operates retrospectively or prospectively.
Whether the amendment can be treated as a declaratory act and thus have retrospective effect.
Whether the rule of benevolent (liberal) construction applies to the substituted Section 15.
Whether an appellate court may consider subsequent legislative changes that affect substantive rights of the parties.

Legislation cited

Code of Civil Procedure, 1908s. Order 20 Rule 14

Subjects

pre‑emptionvested rightretrospective legislationprospective amendmentappellate jurisdictionrule of benevolent constructiondeclaratory actsubstantive rightsprocedural law

Judgment

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, 1995-
Sale 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Trial Court decreed in favour of co-sharers-Right withdrawn through an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 ofpre-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 impliedly-
The amending Act is not a declaratory Act-Hence, it has no retrospective
operation.

Interpretation of Statutes:
E
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
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 pre-
empt 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 pre-
emption 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 pre-
emptor 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 pre-
emption 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 ofMaharashtra
and Ors., (1994) 4 SCC 602; K.S. Paripoornan v. State ofKera/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. E
Maxwell on the Interpretation of Statutes, I 2th Edn.; Francis Bennion 's
Statutory Interpretation, 2nd Edn., referred to.

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 E
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 F
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 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
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.
B
Craies on a Statute law, 7th Edition; G.P. Sing~ on-Principles ofStatutory
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]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4680 of
1993.
F
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
c
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
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:

"15. Right of pre-emption to vest in tenant. The right of pre-emption
F 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 co- E
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 pre-
empt 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 I25 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 pre-
emption 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 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A 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
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
130 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A 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
B was b1sed 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
C 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
D 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
E 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
F 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
G or above to right of pre-emptor is of no consequence. In Zahur Din v. 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
H an end and after having the well-known landmark of the date of the
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE, J.] 131

sale behind - as one now must - the farthest limit that can be granted A
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 v. 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 important dates. The claimant must B
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 C
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 losses 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 D
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 E
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 F
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 (I)
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 G
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 cla.imant the
right and title to the property vest in pre-emptor and it becomes vested right H
132 SUPREME COURT REPORTS (2001) SUPP. I S.C.R.

A 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
B 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 a.id 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
C 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
v. 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
D 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
E 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.

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
F 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 v.
G Keshwar Lal Chaudhuri (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
H of suit but also to consider and give effect to subsequent change in law
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE, J.] 133
whereby a ,co-sharer's right of pre-emption has been taken away during A
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· B
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 C
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 Shuku/ v. Keshwar Lal Chaudhuri
(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 D
said provision of the amending Act is retrospective as urged by learned
counsel for the appellant.

In Maxwell on the Interpretation of Statutes, I 2th Edn. the statement of
law in this regard is stated thus:
E
"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 F
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."
G
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. Elsewhere in this work a particular Act is likened
to a floodlight switched on or off, and the general body of law to the H
134 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A 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,
B 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
C to change the character of past transactions carried on upon the faith
of the then existing law."

In Garikapati Veeraya v. N. Subbiah Chaudhry, (1957] SCR 488 this
Court observed as thus:

D "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."

E In Smt. Dayawait and Anr. v. Inderjit and Ors., [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
F 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
G 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 ofirial as well as the court of appeal must
have regard to an intention so expressed, and the court of appeal may
H ·give effect to such a law ~ven after the judgment of the court of first
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE, J.] 135
instance."

In Hitendra Vishnu Thakur and Ors. v. State of Maharashtra and 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 B
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. C
(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 D
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. E
(v) a statute which not only changes the procedure but also creates
new rights and liabilities shall be construed to be prospective in
operation uriless otherwise provided, either expressly or by necessary
implication."
F
In K.S. Paripoornan V. State of Kera/a and Ors., [1994] 5 sec 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 I (I-A) of S.23 as introduced by the G
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 H
136 SUPREME COURT REPORTS [2001) SUPP. I S.C.R.

A 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)".
B
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 affect 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
C 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,
D 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 affect 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
E 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
F 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. In Shantidevi
(Smt) and Anr. v. Hukum Chand, (1996] 5 SCC 768 this Court had occasion
to interpret the substituted section 15 with which we are concerned and held
~hat on a plain reading of section 15 it is clear that it has been introduced
G 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 affect
the right of the parties which accrued to them on the date of suit or on the.
H date of passing of the decree by the Court .of first instance. We are also of
SHY AM SUNDER v. RAMKUMAR[V.N. KHARE, J.] 137
the view that present appeals are unaffected by change in law in so far it A
related to determination of the substantive rights of the parties and the same
are required to be decided in light of law of pre-emption as it existed on the
date of passing of the decree.

Coming to decision in Lachmeshwar Prasad Shukul v. Keshwar Lal
Chaudhuri (supra), which is the sheet anchor of the argument on behalf of B
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 C
section 11 of the Bihar Money-lender Act (3of1938) 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 D
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 having the force of law or in any agreement, no Court
shall, in any suit brought by a money-lender before or after the E
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 F
a document, the amount of loan mentioned in, or evidenced by such
document."
(emphasis supplied)

After pas.sing 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 G
1939 whereas the respondents' argument was based on the theory that hearing
an appeal t\le 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 193 9 had not been
enacted at the time when the High Court decided the case, the Federal Court H
138 SUPREME COURT REPORTS (2001] SUPP. I S.C.R.

A 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
B 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 v. Keshwar Lal Chaudhuri has to be understood. Where a repeal of
an enactment is followed by fresh legislation, having no retrospective
C 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 v. Keshwar Lal (supra) has no application in the present
case. Subsequently, the view taken in Lachmeshwar Prasad Shukul vs. Keshwar
D Lal Choudhuri was followed in Ram Lal v. Raja Ram, (supra) by Punjab and
Haryana High Court. In the said case the plaintiff brought a suit for pre-
emption on the ground of vicinage. The trial Court dismissed th~ suit on the
ground that the land fell outside the limit of Panipat town and in that locality
no custom of pre-emption prevailed. On appeal the appellate Court reversed
the decision of the trial Court and decreed the suit. Second appeal was filed
E by the vendee before the High Court. During pendency of appeal, the State
Legislature amended the Punjab Preemption Act by amending Act No. I 0 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
F 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
G decision of Punjab & Haryana High Court in Ram Lal v. Raja Ram was
approved in Ram Sarup v. Munshi and Ors. (supra). In the said case, a
Constitution Bench of this Court held that section 31 of Amending Act I 0 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 v.
H Keshwar Lal Chaudhuri (supra), the Federal Court was construing Section '1
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE, J.) 139
of Bihar Money-lender Act which had retrospective operation and in that A
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 B
not be construed to have a greater retrospective operafion 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 C
decree granting pre-emption or one refusing that relief. The decision
of the Federal Court in Lachmeshwar Prasad v. 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 D
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)
E
The decision in Ram Swarup v. Munshi (supra) was followed by another
Constitution Bench of this Court in Amir Singh and Anr. v. 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 F
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 G
suit brought before or after the commencement of this Act" and in Section 31
of Punjab Amending Act I 0 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 .H
140 SUPREME COURT REPORTS [2001) SUPP. 1 S.C.R.

A an appellate court is not confined to see whether the judgment of the trial
court was correct or not.

Loomed counsel for the appellants strongly relied upon a decision of
Amarjit Kaur etc. v. Pritam Singh and Ors. etc., [1974] 2 SCC 363. In the
said case this Court was interpreting section 3 of Punjab Pre-emption Repealed
B 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 v.
Keshwar Lal Chaudhuri, (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
C 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 and
Anr. v. Dharam Dev and 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
D 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 v. Keshwar Lal Chaudhuri '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,
E 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 v. Keshwar Lal Chaudhuri, (supra). In view of
such facts and circumstances, these decisions are of no assistance to the case
of the appellants.

p 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
G 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
H of citizens, this Court while construing it, is required to apply rule of benevolent
SHY AM SUNDER v. RAMKUMAR(V.N. KHARE, J.) 141

construction and on application of the said rule of construction the substituted A
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 B
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 C
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- D
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 not precluded to apply such E
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 F
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 G
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 H
142 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A 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.

B 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
C 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 v. Sura) Bhan and 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
D 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
E 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
F 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 v.
Sura) Bhan and 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
G defeated within the parameters of law. A statute 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 v. Lal
Bahadur Chetri (dead) through His Representatives and Ors., (1964] 6 SCR
876 @ 883 for contention that a beneficent provision enacted by legislation
H has to be given retroactive operation. In the said case it was held thus:
SHY AM SUNDER v. RAM KUMAR (V.N. KHARE, J.] 143
"This provision clearly indicates that the legislature wanted the A
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 B
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 C
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 D
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 upo·n has no application
to the present case.
E
Learned counsel for the appellant then relied upon a decision of this
Court in the case of H. Shiva Rao and Anr. v. Celelia Pereira and Ors.,
[I 987] I 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. Bunhat is not the case here. We have F
already held that there is no ambigl!ity 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 G
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 H
144 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A to declare what was the previous law and when st¥:h 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
B 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.

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
c 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:

D "For modem 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.
E
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 cone lusive 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
F 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
G 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 v. Mohan/a/ Bhagwandas and Anr., (1968]
H
SHY AM SUNDER v. RAM KUMAR [V.N. KHARE,J.] 145

3 SCR 623, this Court while interpreting section 29(2) of the amending Act, A
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, B
and there was no omission in its phraseology which was required to
be supplied by the amendment."

In R. Rajagopa/ Reddy (dead) by lrs. and Ors. v. Padmini
Chandrasekharan (dead) by lrs., [1995] 2 SCC 630, it was held thus:
c
"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 D
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 a5 to the meaning of the E
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 F
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 and Anr. v. 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. G
The reliance of this decision by the appellants' counsel is totally misplaced
as this decision was overruled in R. Raja Gopal Reddy v. 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.
H
146 SUPREME COURT REPORTS (2001) SUPP. I S.C.R.

A 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
B 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 I0 of 1995 is not a declaratory Act and, therefore, it
has no retrospective operation.
c For the aforestated reasons, we approve the view of law taken in Didar
Singh etc. v. lshar Singh (dead) by Lrs. etc. (supra) and further hold that the
decision in the c:ise of Ramjilal v. Ghisa Ram (supra) does not lay down the
correct view of law.

D 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.

E In view of what has been stated above, these appeals fail and accordingly
are dismissed, but there shall be no order as to costs.

B.S. Appeals dismissed.