Commercial And Industrial Finance Ltd. v. Jeelani Begum

1. This revision by the petitioner, under Art. 227 of the Constitution of India, gives rise to a short question of law, whether the provisions of Section 2 of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands (Third Amendment) Act, 1969 (hereinafter called “the amending Act”) are retrospective or prospective.

2. The applications filed on June 21, 1961 under Section 47 of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950 (hereinafter called “the Act), pursuant to an agreement of sale entered into between the 1st respondent-vendor and the petitioner-Vendee on May, 4, 1961 in respect of 252 and 384 acres of agricultural land in Survey Nos. 20 and 28 respectively of Miyapur village in Hyderabad west Taluk for a sum of Rs. 62,000/- seeking permission to alienate the lands have been rejected by the Tahsildar on October, 20, 1961. An extent of Ac. 204-48 cents was declared by the Revenue Divisional Officer, Hyderabad West in Case No. N/6961/62 to be in excess of the ceiling limit on November, 14, 1962. As the vendor refused to execute the sale deed, O.S No. 35/62 was Sled by the petitioner before the 1st Additional Chief Judge, City Civil Court, Hyderabad for specific performance of the agreement of sale, or, in the alternative, for damages. The decree for specific performance was granted by the Civil Court on February, 28, 1963. On appeal in C.C.C.A No. 17/64 the High Court allowed the appeal on 12-7-1968 and passed the following decree in modification and supersession of the decree of the lower court.

“(1) That the Tahsildar, Hyderabad West be and hereby is directed to dispose of the applications made by the defendant (Ex. B. 1 dt. 21-6-1961) and by the plaintiff (Ex. B. 4 dt. 26-6-61) in accordance with law and in the light of the provisions of the Hyderabad Tenancy and Agricultural Lands Act, 1950 and the Andhra Pradesh (Telangana area) Ceiling on Land holdings Act as expeditiously as possible, after giving an opportunity to both the parties to furnish all the information which they may desire;

(2) that the Tahsildar shall communicate a copy of the said order to both the parties as well as the first Additional Chief Judge, City Civil Court, Hyderabad;

(3) That, within one month of the receipt of the said order from the Tahsildar if the Tahsildar accords sanction in respect of any portion of the suit land, the plaintiff shall deposit into court the balance of the sale price for the entire land after giving notice to the defendant.

(4) That the defendant shall, within ten days of the receipt of the notice referred to in clause 3 supra, execute a registered sale-deed in favour of the plaintiff as per the terms, including expenses, as stipulated in Ex. A1:

(5) That if the defendant commits default, the trial court shall execute and register the sale-deed in favour of the Plaintiff;

(6) That, if sanction is not granted at all even in respect of any portion of the ceiling area, there shall be a decree against the defendant for Rs. 12000/- which has been paid to her by the plaintiff towards the sale price with interest at six per cent per annum from 16-6-61 till the date of payment;

3. In the meanwhile, an extent of AC. 384-15 cents comprised in Survey No. 28 of Mianpur village is sought to be acquired by the land Acquisition Officer and a notification under Section 4(1) of the Land Acquisition Act was made on March, 17, 1967. Pursuant to the direction given by the High Court, the Tahsildar in Case No. A4/5834/68, after affording opportunity to both parties, refused to grant the requisite sanction under section 47 of the Act by his order dt. October, 28, 1968, against which an appeal was preferred by the petitioner to the Joint Collector, Hyderabad in November, 1968. As the Tahsildar refused to grant permission under Section 47 of the Act, the defendant deposited a sum of Rs. 17400/- (i.e Rs. 12000 plus interest) on December, 17, 1968 in the City Civil Court and filed E.A No. 4/68 on January, 2, 1969 praying for recording satisfaction of the decree in C.C.C.A No. 17/64. That E.A was dismissed by the Court on February, 4, 1969 as premature in view of the pendency of the Appeal. On March, 18, 1969, the amending Act omitting sections 47 to 50 of the Principal Act came into force.

4. The petitioner thereafter raised a preliminary objection that the appeal before the Joint Collector is not maintainable in view of the amending Act omitting Sections 47 to 50, which, according to him, is retrospective. This claim of the petitioner has been resisted by the vendor The Joint Collector, repelling the contention of the petitioner, held that the amending Act is only prospective but not retrospective, Hence, this writ petition.

5. Sri Balakrishna Murthy, for the petitioner, strenuously contends that sections 47 to 50 of the Act are not substantive but procedural in nature and hence, the amending law has retrospective operation as the Legislature has not specifically made it prospective.

6. Sri Parvatha Rao appearing for the respondent contended contra.

7. The questions that arise for decision are:

1. Whether section 2 of the amending Act omitting Sections 47 to 50 of the Act is retrospective or prospective? and

2. Whether, on the facts and in the circumstances, the requisite sanction under Section 47 of the Act subsequently omitted, is necessary for the alienation of agricultural lands in question?

8. For a proper appreciation of the respective contentions of the parties, it is relevant and necessary at the outset to consider what is meant by procedural law and the difference and distinction best ween procedural and substantive law Procedure comprises of all steps which a party has before the commencement as well as after the initiation of the action. In Court in order to entitle him for the assistance of the Court for the enforcement of his rights. Wharton, in his Law Lexicon, defines the procedural law as “the mode in which the successive steps in litigation are taken”. Salmond on Jurisprudence stated the distinction between substantive law and the law of procedure thus.

“The law of procedure may be defined as that branch of the law which governs the process of litigation. It is the law of actions all the residue is substantive law and relates not to the process of litigation, but to its purposes and subject-matter”. (PP. 495 and 496)

9. Again at page 497, the learned author observed:

“The substantive law defines the remedy and the right, while the law of procedure defines the modes and conditions of the application of the one to the other”.

10. Suffice it to refer to the following passage in the Judgment of Venkataramana Rao, J. in Girdharilal Son & Co. v. K. Gowder . AIR 1938 Madras 688 at 694 and 695. where the learned Judge had succinctly laid down the law on the subject thus;

“……It is fairly clear that the law of procedure deals with the process by which remedy for the enforcement of a right is made available. A right of suit, a right of appeal and a right of distraint are all remedies for the enforcement of a right and they are equally substantive rights though remedial in nature. The law makes a distinction between rules of law which any way impair or destroy those rights and those which a litigant has to comply with for availing himself of those remedial rights. The alter belong to the law of procedure and an enactment altering the procedure is always held to be retrospective even where the alteration tends to the disadvantage of one of the parties save in cases where it tends to destroy the right or the remedy”.

11. I shall now turn to examine the scope and nature of the prove-sons of Sections 47 to 50 of the Act. The prime object and purpose of the Act as disclosed from the preamble is to prevent excessive sub-division of agricultural holdings and to regulate the relations of landlords and tenants of agricultural land and the alienation of such land, in Telangana area. “Agricultural land” is defined under Section 2(c) as land which is used or capable of being used for agriculture including fallow land and the sites of farm buildings and of dwelling houses occupied by agriculturists. Sections 47 to 50 are comprised in Chapter V which deals with restriction on transfers of agricultural land. The very use of the words “restrictions on transfers of agricultural land” comprised in the beading of Chapter V denotes that the provisions of Sections 47 to 50 are not procedural in nature. But they refer to the restrictions imposed on permanent alienation or transfers. Section 47 requires the previous sanction of the Tahsildar for any valid permanent alienation or transfer of agricultural land without which they there can be no valid transfer of interest or title in the property. Sub-Section (2) to Section 47 provides for the making of applications for such sanction by the Tahsildar, Section 48 imposes general restrictions on grant of sanction for permanent alienation or transfer of agricultural land. The area of land held by the alienor or transferor as well as the alienee or transferee, as the case may be, after alienation or transfer would be taken into consideration. By virtue of the transfer, transferor should not be deprived of the land less than the family holding; nor the alienee would be permitted to have the alienation where the purchase, if taken into consideration, would be above the family holding. Sub-section (2) to Section 48 deals with the case of a mortgage. Sec. 48-A refers to restriction on permanent alienation or transfer of land acquired by a protected tenant. Section 49 imposes additional restrictions where the alienee or transferee is a non-agriculturist. The Tahsildar shall not sanction the alienation or transfer in the case of a non-agriculturist transferee unless be is satisfied that the alienee or transferee intends to adopt the profession of an agriculturist. Proviso to section 49(a) makes it abundantly clear that if the alienee or transferee does not, within one year from the date of getting possession of the land, adopt the profession of an agriculturist, the Tahsildar may declare the alienation or transfer as invalid and restore the land to the land-owner or the transferor subject to the provisions of Sub-section (2) to Section 48. In the case of mortgage the Tahsildar must be satisfied that the transaction is of a bonafide nature. The restrictions imposed by sections 47 to 49 are not apple-cable where the alienation or transfer is made with the previous permission of the Tahsildar for any non-agricultural use or where registered sales before the commencement of the Act had taken place and possession of lands was given to the vendees pursuant to the agreement of sale before commencement of the Act. The provisions referred to above can, by no stretch of reasoning, be called mere procedural in character The framers of the Act intended that the minimum holding of agricultural land must be maintained and the holdings must be in the possession and enjoyment of those who profess in agriculture but not others. The lands would certainly be looked after and cultivated better if they are in the possession and enjoyment of or held by only agriculturists by profession. The non-agriculturists may not take pains to raise crops, whether they be food of commercial, and evince personal interest to produce more which is in the interests of the society at large. The minimum family holding also has been fixed with a view to see that an agriculturist should have an independent viable unit of land on which he can safely depend upon for the maintenance of his family and it should not be uneconomical in maintaining the agricultural holding. The transfers are necessarily intended to be amongst the agriculturists themselves. True, as contended by Sri Balakrishna Murthy, every citizen has a right to dispose of his property or deal with it as he likes and there can be no prohibition on the parties to enter into agreements of sale in respect of agricultural lands. However, the right to permanently alienate or transfer the agricultural land in Telangana area alone has been restricted or regulated under Sections 47 to 50. There is no restriction with regard to the use or enjoyment of the agricultural holding. The restrictions imposed under Sections 47 to 50 on the right of the owner to dispose of agricultural lands permanently are a kind of fetters. Such restrictions or fetters, viewed in the light of the scheme and intendment of the Act, in my considered opinion, are beneficial to the class of agriculturists in Telangana area and hence, must be held to be reasonable within the meaning of Art. 19(5) of the Constitution of India. The fetters or restrictions referred to above are not formal but effective and substantive. They are conditions precedent without whose compliance there can be no valid effective and binding transfer of interest in the property sought to be alienated. The power vested in the original authority, i.e the Tahsildar as well as the appellate authority to grant or refuse permission is regulated and circumscribed under Sections 47 to 50. The decision of the Tahsildar under Section 47 is subject to a review by the appellate authority. On a close reading of the material provisions of the Act, I am satisfied that the power invested with the statutory authorities is of quasi-judicial character. They are bound to exercise their power in a fair, just and equitable manner, but not arbitrarily or according to their whims and fancies. The statutory authorities under the Act are competent to grant the requisite sanction only if they are satisfied that it is permissible under Sections 47 to 50. No title in the property will pass to the alienee or transferee without the requisite sanction of the Tahsildar under Section 47 and any transfer made without such sanction cannot be held to be a valid and binding one. Where the provisions of the Act do not permit the grant of the sanction under Section 47, it must, on the facts and in the circumstances, be held that a valid right in favour of the party who resisted the claim of the other party for the sanction has accrued to him. The restrictions or fetters imposed on the right of a citizen to permanently alienate or transfer agricultural land may be of procedural or substantive character Wherever a party can without any legal impediment, secure the sanction by observing certain formalities, such formalities may be termed as procedural in nature. The restrictions imposed on the right of a citizen to permanently alienate or transfer his agricultural land in Telangana area are not steps in or process of litigation so as to bring them within the law of procedure as stated by Wharton in his law Lexicon or Salmond on jurisprudence. They really relate to the remedy and the right of the agriculturist. Upon the language of the provisions of Sections 47 to 50 read with the scheme and intendment of the Act, I am of the view that the restrictions and fetters provided under Sections 47 to 50 of the Act are not of mere procedural but substantive character creating rights of the parties.

12. I shall now examine the cases cited by the petitioner in support of his plea. Strong reliance has been placed on the following observation of my learned brother Parthasarathi, J in C.C.C.A No. 51/66 dt. 26-12-1969;

“It is obvious that the making of a contract itself is not prohibited by the statute. What is interdicted is the act of transfer of agricultural land except in accordance with the prescribed procedure”.

13. The aforesaid passage does not advance the case of the petitioner for more than one reason. Firstly, it was not held by the learned Judge that the provisions under Section 47 to 50 are procedural law. Secondly, the observation must be confined to the construction of Section 4 of the amending Act which fell for decision in that case. In any event, the observation is only obiter. The second case that is relied upon is of the erstwhile Hyderabad High Court in Elanak Ramakka v. State . A.I.R 1955 Hyd. 97.. In that case, it was observed that section 47 laid down one additional formality. It may be noticed that the formality was held to be a condition precedent for valid transfer of agricultural lands. It was also held that the restriction was reasonable and section 47 is valid and not violative of Art. 19(1)(f) of the Constitution. Hence, both the cases cited by the petitioner do not support his case, Judged from any angle, I must hold that there is no merit in the plea of the petitioner that sections 47 to 50 are only procedural.

14. It next falls for consideration as to whether section 2 of the amending Act is prospective or retrospective.

15. It is profitable to refer to the following passage by Maxwell on the Interpretation of Statues:

“……It is a fundamental rule of English law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication” See Wvest v. Gwynne and In Re Athlumney** (P. 25)

“The presumption against retrospective construction has no application to enactments which affect only the procedure and practice of the courts. No person has a vested right in any course of procedure but only the right of prosecution or defence in the manner prescribed for the time being, by or for the court in which he sues, and if an Act of Parliament alters that mode of procedure, he can only proceed according to the altered mode. Alterations in the form of procedure are always retrospective, unless there is some good reason or other why they should not he”. (Page 222) See Republic of Costa Riga v. Erlanger§ Wright v. Hal§§ Gardner v. Lucas† and Anant Gopal Sheorey v. State Of Bombay . AIR 1958 S.C 915 at 917..

16. There is a catena of cases dealing with the principles applicable for interpretation of statutory amendments affecting substantive rights. Suffice it to refer to the following principles enunciated by the Supreme Court in Mahadeolal Kanodia v. Administrator-General Of West Bengal . AIR 1960 S.C 936 at 939..

“The first of these is that statutory provisions creating substantive rights are ordinarily prospective; they are retrospective only if by express words or by necessary implication the Legislature has made them retrospective; and the retrospective operation will be limited only to the extent to which it has been so made by express words, or necessary implication. The second rule is that the intention of the Legislature has always to be gathered from the words used by it, giving to the words their plain, normal, grammatical meaning. The third rule is that if any legislation, the general object of which is to benefit a particular class of persons, any provision is ambiguous so that it is capable of two meanings, one which would preserve the benefit and anther which would take it away the meaning which preserves it should be adopted. The Fourth rule is that if the strict grammatical interpretation gives rise to an absurdity or inconsistency such interpolation which will give effect to the purpose the Legislature may reasonably be considered to have had, will be put on the words, if necessary even by modification of the language used”.

17. It is a fundamental rule of law that any statute is prospective unless the language of the enactment expressly or by necessary implication indicates that it is retrospective. The aforesaid rule of presumption of prospective operation has an exception. It is well-settled that where the repeal or amendment of any Act or provision of a statute relates to only procedure, the amendment must, unless it is specifically provided, be presumed to be retrospective, as no one has a right to a particular procedure being adopted in any proceeding. See Mukerjee v. Mt. Ramratam . AIR 1936 P.C 49. v. Craxfords Williams and Steer Manufacturing Co. Ltd.6 Shyabuddinsas v. Municipality of Gadag Betgeri . AIR 1955 S.C 314. Mahadeolal Kanodia v. Administrator-General Of West Bengal . AIR 1960 S.C 936. is ruled by the Supreme Court in Anant Gopal Sheorey v. State Of Bombay . AIR 1958 S.C 915., “A Change in the law of procedure operates retrospectively and unlike the law relating to vested rights is not only prospective”. See also Colonian Sugar Refining Co., Ltd. v. Irving . 1905 A.C 369. and Regina v. Reah . 1968 1 WLR 1508.. But however, this rule of construction is not applicable to cases where rights vested in or accrued to the parties are affected by a repeal or amendment of a statute even if it relates to procedural law. Where vested or accrued rights are affected by a repeal or amendment of any statute, even if it relates to procedural law, no retrospective operation unless it is expressly provided or by necessary intendment inferred, can be presumed. See Mata Prasad v. Nageshwar Shai . AIR 1925 P.C 272 at 278.. Where a vested right on the date of repeal or amendment, whether substantive or procedural law, has been accrued to or acquired by a party, the amending enactment cannot take away such right unless it is expressly or by necessary intendment made retrospective. The provisions of Section 8 of the Andhra Pradesh General Clauses Act would come into play to protect such vested rights accrued on the date of amendment or repeal as the case may be.

18. This brings me to examine whether the provisions of section 2 of the amending Act are prospective or retrospective. The amending Act, which received the assent of the President on the 7th March, 1969 came into force from March, 18, 1969 when it was published in the Gazette of Andhra Pradesh as per Section 5 of the Andhra Pradesh General Clauses Act. section 2 of the amending Act reads:

“Sections 47, 48, 49, 50 and 50-A of the Andhra Pradesh (Telaneana Area) Tenancy and Agricultural Lands Act, 1950 (hereinafter referred to as the Principal Act) shall be omitted”.

19. By section 2 of the amending Act, sections 47, 48, 49, 50 and 50-A of the Act have been omitted. Section 3 relates to the amendment of Section 48-A whereas section 4 substitutes sub-section (1) of Section 50-B of the Act. Sections 3 and 4 of the amending Act are not relevant for the controversy raised in the present case. What then is the effect of the omission of sections 47, 48, 49, 50 and 50-A of the Act. There is no particular form of words that should necessarily be used to express a repeal. Normally, the words is or are hereby repealed” or “shall cease to have effect” are used. As pointed out by G.P Singh in Principles of Statutory Interpretation “when the object is to repeal only a portion of an Act, words “shall be omitted” are normally used” (Page 308) The Supreme Court in Mahadeolal Kanodia v. Administrator-General Of West Bengal while considering the Calcutta Thika Tenancy (Amendment) Act, 1953, observed thus:—

“Reading the amendment Act as a whole there can be no doubt that the Legislature in using the word “amended in the proviso to sub-sec. (2) of Sec. 1 sought to make no distinction between amendment by additions, alterations or omissions. It is clear when certain words or sections have been added, altered or omitted by the amendment Act, the Calcutta Thika Tenancy Act, 1949 took on a new shape with some added features, some altered features and minus those features which have been omitted”.

20. As the omission of Section 28 in the case was found to be procedural in nature, it was held that the amendment Act to that extent was retrospective. In G. Ekambarappa v. Excess Profits Tax Officer Bellary . A.I.R 1967 S.C 1541 at 1543. it was held that the provisions of Excess Profits Tax Act 1940 have no application in Bellary, Ramaswami, J who spoke for the Court, observed:

“Repeal of an Act means revocation or abrogation of the Act and in our opinion, S. 6 of the General Clauses Act applies even in the case of a partial repeal or repeal of part of an Act.

21. As pointed out earlier, the provisions of Sections 47, 48, 49 and 50 of the Act are not procedural law but create substantive rights to the parties. On a careful reading of the entire amending Act, I am of the opinion that no indication is found that section 2 of the amending Act omitting Sections 47 to 50 of the Act is retrospective. For the reasons stated above, I have no hesitation to hold on question No. I that section 2 of the amending Act omitting sections 47 to 50 of the Act is prospective.

22. On the facts and in the circumstances of the case and in view of the aforesaid discussion, I must hold that the previous sanction of the Tahsildar under Sec. 47 of the Act is necessary for the alienation of the agricultural lands in question The second question therefore is answered in the affirmative.

23. I am unable to agree with Sri Balakrishna Murthy that the 1st respondent-vendor had no accrued right on the date of the coming into force of the amending Act as the matters relating to the grant of permission was still pending in appeal on that date. The 1st respond has acquired a valid right under the decision of the Tahsildar passed on October, 28, 1968 refusing permission under Section 47 to permanently alienate or transfer the agricultural lands in question. It may be noticed that the decision of the Tahsildar under section 47 of the Act was rendered pursuant to the direction of the High Court in the appeal. The basis for the decision of the Tahsildar in favour of the vendor is the decree and Judgment of the High Court. Unless and until that order is set aside by a competent authority, it is certainly valid and binding on the parties determining their rights. By virtue of the order of the Tahsildar, the original owner of the agricultural land has acquired a valid vested right not to execute the deed of sale in favour of the petitioner and that is a substantive right accrued to her by the date of the coming into force of the amending Act. The petitioner cannot insist on the execution of the registered deed as long as the decision of the Tahsildar is allowed to stand. See W.A No. 599/69 dt. 24-4-70.

24. The decisions in Abbott v. Minister for Lands . L.R 1895 A.C 425. and Director of Public Works v. Ho Po Sang . L.R 1961 A.C 901. on which strong reliance has been placed by the petitioner, will not advance his plea. In those cases, no rights were found to have been accrued within the meaning of the usual saving clause at the date of coming into force of the repealing statute. In the present case, a valid vested right has accrued to the 1st respondent on the date of the amending act by virtue of the decision of the Tahsildar. Hence, those cases are not applicable to the present case and are distinguishable. As observed by the Supreme Court in State of Kerala v. K.M.C Abdulla & Co. . A.I.R 1965 S.C 1585 at 1587. “an appeal is a continuation of the proceedings” as a result of which the entire proceedings would be before the appellate authority which is competent to pass appropriate orders according to law. The provisions of Sections 47, 48 and 49 must be given effect to even after the amendment which came into force on 18-3-69 by which date the petitioner has acquired a right to have his appeal filed by him before the appellate authority against the decision in favour of the respondent continued and disposed of. The petitioner may agitate before the appellate authority his claim that the facts and circus stances warrant the grant of the requisite permission under Section 47 of the Act. The Joint Collector is competent to pass appropriate orders in the appeal according to law and on a review of the entire material before him Judged from any angle, I am satisfied that there is no merit in this revision petition.

25. In the result, the revision petition is dismissed with costs Advocate's fee Rs. 250/-.