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Case Number

First Appeal No. 321 of 1939, from an order of D.N Joshi, Civil Judge of Farrukhabad, dated the 15th of May, 1939.

Attorney(S)

Messrs A.M Khwaja and Man Singh, for the appellant.
Mr. Baleshiuari Prasad, for the respondent.

Judges

Ganga Nath
Dar, JJ.

Acts

193Y7 U.P. Court-fees Act, 1870 as amended by Act of 1923,1924, 1932
Section 6A, Court-fees Act as amended by Act 19 of 1938,
SECTION 42 SPECIFIC RELIEF ACT
SECTION 24 COURT FEES ACT
Court-fees Act of 1938
Section 6, Sub-clause (3);
Section 115, Civil P. C,
Section 10, Civil P.C.,

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Smart Summary

Concise Analytical Summary of the Provided Opinion

Factual and Procedural Background

On 18 August 1937 the plaintiff, Mt. Mohri Kunwar, instituted a suit in the Court of Civil Judge of Farrukhabad seeking a declaration of title to a half share in a garden called Pannilalwalabagh, valuing the claim at Rs. 15,000 for jurisdictional purposes and paying court-fee applicable to a declaratory suit. The defendant, Babu Keshri Chand, contested and raised among other pleas that the plaintiff was not in possession and that the claim was barred by Section 42 of the Specific Relief Act.

Because of the defendant's plea, on 16 August 1938 the plaintiff applied to amend the plaint to seek possession (with appropriate court-fee), and the amendment was allowed on 17 August 1938. On that date the court also stayed the suit under Section 10, Civil Procedure Code, pending disposal of a related proceeding in the High Court (P.A. No. 157 of 1936). As a result, proceedings in the trial court were stayed.

While the suit remained stayed, the Government Inspector of Stamps reported (5 November 1938) that the plaint was not properly stamped and sought demand of additional court-fee on the basis that the garden should be valued as a garden (full value Rs. 15,000) and ad valorem duty applied for declaration and possession. The plaintiff objected (1 December 1938) and thereafter (3 March 1939 and 22 April 1939) sought further amendments to: reduce valuation to the plaintiff's half-share, allege the land was revenue-paying land, and amend reliefs. On 15 May 1939 the Civil Judge refused those amendment applications, disallowed the plaintiff's opportunity to prove the revenue-paying nature of the land, overruled the objection to the Inspector's report and ordered payment of the court-fee as reported.

The plaintiff appealed to the High Court under Section 6A of the Court-fees Act as amended by Act 19 of 1938. The respondent raised a preliminary objection that the appeal was not competent because, it was contended, at the date when the suit was filed (18 August 1937) the then-applicable U.P. Court-fees Act (as amended by Acts of 1923, 1924, 1932 and 1936) provided no right of appeal against such orders and a subsequent enactment (Act 19 of 1938) could not confer an appeal in respect of a suit already pending.

Legal Issues Presented

Whether an appeal under Section 6A of the Court-fees Act (Act 19 of 1938), brought after that provision came into force but during the pendency of a suit instituted earlier, is competent in respect of a court order directing payment of court-fee.
Whether the right to appeal against an order for payment of court-fee is a vested right (immune from impairment by subsequent legislation) or a matter of procedure in which the legislature may alter the procedure while litigation is pending.
Whether the trial court erred in refusing the plaintiff's applications to amend the plaint and in refusing to permit proof of the nature of the property (i.e., whether the land was revenue-paying), thereby affecting the proper assessment of court-fee.

Arguments of the Parties

Respondent's Arguments

The appeal under Section 6A (Act 19 of 1938) is not competent because, at the date the suit was instituted (18 August 1937), the existing Court-fees Acts provided no right of appeal against an order for payment of court-fee made in a pending suit.
The right of appeal (or lack of it) is governed by the law in force when the suit is filed; a subsequent enactment cannot confer an appeal in respect of a pending suit except by express provision or necessary implication.
Relied on authorities (including decisions of the Judicial Committee and a Full Bench) to support the proposition that vested rights present at the time of the later statute cannot be taken away.
Mr. Baleshri Prasad (respondent's counsel) further contended that orders refusing amendments are not open to appeal because no appeal is provided and such interlocutory orders are not liable to revision until final decision in the case.

Appellant's Arguments

The appellant relied on Section 6A of the Court-fees Act (Act 19 of 1938) which, on and after its commencement (15 May 1939 was after the Act's commencement), conferred a right of appeal against orders on Inspector of Stamps' reports.
The plaintiff-appellant also challenged the trial court's refusal to permit amendments and sought the opportunity to prove that the disputed garden is revenue-paying land so that court-fee should be assessed differently; counsel Mr. Man Singh stated the appellant intended to present a fresh application for amendment incorporating earlier applications.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Colonial Sugar Refining Co. Ltd. v. Irving (1905) A.C. 369	Principle that statutes are not to be held retrospective; a suitor's vested right to an appeal existing at the time of a later statute cannot be taken away by the later statute unless clearly intended.	The Court noted the principle but distinguished its applicability: it held that the right of appeal created by Section 6A is procedural in relation to court-fee (a matter of Crown interest) and therefore not a vested right protected from being conferred after institution of suit; the Privy Council rule was deemed not applicable to purely procedural changes of court-fee procedure.
Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, Delhi ('27) 14 A.I.R. 1927 P.C. 242	Affirmation of the general principle limiting retroactive effect of statutes and protecting vested rights (cited as to the same effect as Colonial Sugar).	The Court treated this decision as supporting the general rule but concluded the rule did not apply to the procedural alteration here (i.e., conferring an appeal in court-fee matters) because the right involved was not a vested substantive right of the suitor.
Ram Singha v. Shankar Dayal ('28) 15 A.I.R. 1928 All. 437	Full Bench decision cited as being to the same effect as the Privy Council authorities on protection of vested rights against subsequent statutes.	The Court acknowledged this authority but held that the rule protecting vested rights did not prevent the legislature from changing procedural rules concerning court-fee; therefore the precedent did not preclude the applicability of Section 6A to pending suits for purposes of procedure.
B.B. and C.I. Ry. Co. v. Mitthu (1931) 18 A.I.R. 1931 All. 659	Observation that the question whether court-fee should be paid is essentially a matter of government interest rather than a suitor's vested right.	The Court relied on this view to support its conclusion that court-fee procedure is a matter in which the Crown is interested and that suitors do not possess a vested right preventing change in procedure; this underpinned treating the right of appeal under Section 6A as procedural.

Court's Reasoning and Analysis

The Court first addressed the respondent's preliminary objection that the appeal was incompetent because, at the time the suit was instituted, no right of appeal existed against orders for payment of court-fee and a later statute could not create such a right in a pending suit.

The Court accepted the general principle (as stated in Colonial Sugar and other authorities) that statutes are not retrospective and that vested rights existing at the time a later statute is passed cannot be taken away by subsequent enactment unless clearly intended. However, the Court examined whether the right conferred by Section 6A of the Court-fees Act (Act 19 of 1938) was of that character.

The Court determined that the question of court-fee and the procedure for its determination are matters primarily of governmental interest and procedure. By statute (Section 24-A and related provisions), Inspectors of Stamps were empowered to examine plaints and report deficiencies; the Court is required to pass orders on the Inspector's report; and Section 6A expressly gives a suitor a right of appeal against those orders. The Court reasoned that such a right is a procedural provision instituted to regulate how court-fee determinations are made.

Because the right created by Section 6A pertains to procedure (the method of assessing and contesting court-fee) rather than to a substantive vested right of the parties, the legislature could validly alter the procedure during the pendency of litigation. The Court therefore held that conferring a right of appeal by the 1938 Act did not take away any vested right of either party and did not offend the general rule against retroactivity as applied to vested rights. Consequently, the preliminary objection to competency of the appeal was overruled and the appeal was held competent.

On the merits, the Court examined the trial judge's refusal to permit amendments and to allow proof regarding whether the disputed garden was revenue-paying land. The Court stated that a suitor has a right to amend his plaint so long as the amendments are not contrary to law or likely to cause injustice. The Court found no such bar against the proposed amendments, held that the amendments were wrongly refused, and that the plaintiff should have been given an opportunity to prove the nature of the property (revenue-paying or otherwise) because that fact affected the assessment of court-fee.

The Court also addressed the respondent's contention (through counsel) that orders refusing amendments are not open to appeal or revision; the Court observed that when an appeal lies against an order directing payment of court-fee, incidental interlocutory orders that lead up to that order (such as refusal of amendments) can be set right on appeal.

Finally, although the Court noted that a case had been "decided" for purposes of Section 115 Civil P.C. as regards the court-fee question, it did not express a final opinion on all procedural intricacies because counsel for the appellant indicated an intention to present a fresh amendment application. Instead the Court granted leave for such fresh application and directed that if made, the amendment may be allowed and the court-fee question be re-considered on the amended plaint.

Holding and Implications

Holding: The Court concluded that the appeal under Section 6A of the Court-fees Act (Act 19 of 1938) is competent despite the suit having been instituted before that Act came into force. The Court also held that the trial court erred in refusing the plaintiff's amendment applications and in denying her opportunity to prove the nature of the land.

Direct consequences and directions to the parties:

The preliminary objection to the competency of the appeal is overruled and the appeal is competent.
The plaintiff-appellant is granted leave to present a fresh application to the Civil Judge for amendment of the plaint incorporating the earlier amendment requests.
If such an application is made, the trial court is directed that the amendment may be allowed and, upon the amended plaint, the question of court-fee shall be considered afresh and disposed of according to law.

Broader implication: The opinion does not purport to establish a novel general rule beyond applying the distinction between vested substantive rights and procedural rules: changes in procedure governing court-fee assessment and appeals (a matter of Crown interest) may validly be applied to pending proceedings. The Court did not expressly declare any new precedent beyond its resolution of the issues in this case.

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Mohri Kunwar v. Keshri Chand

1. On 18th August 1937 plaintiff, Mt. Mohri Kunwar, instituted a suit in the Court of Civil Judge of Earrukhabad for a declaration of title to a half share in a garden known as Pannilalwalabagh situated in the district of Parrukhabad. The claim was valued at Rs. 15,000 for purposes of jurisdiction and the court-fee was paid on the plaint such as is required for a suit in which relief is claimed of a declaratory nature. The defendant, Babu Keshri Chand, contested the suit and inter alia he raised a plea that the plaintiff was not in possession of property and the claim was barred by Section 42, Specific Relief Act. As a result of this plea, the plaintiff on 16th August 1938 applied for amendment of plaint by praying that a relief be added in the plaint to the effect that if plaintiff be not deemed to be in possession of property possession might be awarded to her on payment of court-fee. This amendment was allowed on 17th August 1938 and on that date another order was passed staying the suit under Section 10, Civil P.C., till the disposal of P.A. No. 157 of 1936 pending in the High Court. By virtue of that order the case is yet pending in the Court of Civil Judge of Farrukhabad and all proceedings have been stayed.

2. On 5th November 1938, while proceedings in the suit were thus stayed, the Government Inspector of Stamps reported that the plaint was not properly stamped and he made a report for demand of additional court-fee. His contention in brief was that the garden, the subject-matter of suit, should be valued as garden and not as revenue paying land, it should be valued at Rs. 15,000 the full value of garden as given in the plaint and that ad valorem duty should be paid for the relief of declaration and possession. On 1st December 1938, the plaintiff filed objection to the report of Inspector of Stamps and on 3rd March 1939, and on 22nd April 1939, the plaintiff made two applications praying for further amendment of plaint. By these amendments, in substance, she wanted to reduce the valuation from Rs. 15,000 to half its amount the value of her share in the garden, she wanted to make out that the garden was a revenue paying land and she further wanted to amend her reliefs. By an order dated 15th May 1939, the learned Civil Judge refused the plaintiff's application for amendment, he disallowed the plaintiff an opportunity to prove that the garden in dispute was a revenue paying land. He further disallowed her objection to the report of the Inspector of Stamps and has ordered her to pay the court-fee as reported by the said Inspector.

3. Against the said order, the plaintiff has made an appeal to this Court under Section 6A, Court-fees Act as amended by Act 19 of 1938, and the respondent has taken a preliminary objection that the appeal is not competent. The contention of the respondent is that at the date when the suit was filed, viz., 18th August 193Y7 U.P. Court-fees Act, 1870 as amended by Act of 1923,1924, 1932 and 1936, was in force and there was no appeal provided in those Acts against an order for payment of Court-fee passed in pending suit.

4. On the date when the order for payment of court-fee was passed against the plaintiff, 15th May 1939, act 19 of 1938 had come into force and section 6a of act 19 of 1938 gives a right of appeal to the plaintiff, but the Act of 1938 is not retrospective and it cannot take away the rights which had come into existence prior to the passing of Act of 1938 and one right which had come into existence in favour of the defendant was that orders relating to court-fee passed against the plaintiff were final and were not open to appeal and this right could not be taken away by a new enactment which came into effect after the institution of the suit. The argument is that the right of appeal is governed by the law which exists on the date when the suit is filed, and this right could not be taken away or affected by a new enactment unless it is done so expressly or by necessary implication. And, if on the date of suit, there was no right of appeal, such a right cannot be conferred so far as that suit is concerned by any enactment which comes into force during the pendency of suit. And reliance is placed for these contentions on two decisions of Judicial Committee, Colonial Sugar Refining co. Ltd. v. Irving (1905) 1905 A.C. 369, Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, Delhi ('27) 14 A.I.R. 1927 P.C. 242 and on a Full Bench decision of this Court, Ram Singha v. Shankar Dayal ('28) 15 A.I.R. 1928 All. 437. Colinial Sugar Refining Co. Ltd. v. Irving (1905) 1905 A.C. 369 was an Australian case which went up to Privy Council. The question which arose in that case was whether the right of appeal to Privy Council which existed in favour of a suitor on the date when the claim was raised was taken away by subsequent enactment of Australian Commonwealth Judiciary Act, 1903, which allowed an appeal to the High Court of Australia and their Lordships' answer was in the negative. The suitor had taken the appeal to Privy Council and the respondent filed a petition that the appeal was incompetent. Lord Macnaghten in delivering the judgment of their Lordships observed as follows:

As regards the general principles applicable to the case there was no controversy. On the one hand it was not disputed that if the matter in question be a matter of procedure only, the petition is well founded. On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act, it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed. The Judiciary Act is not retrospective by express enactment or by necessary intendment. And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure. In principle, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested.

5. To the same effect is the law Lal laid down in the other two cases mentioned above. And the only question is whether it applies to this case? We are dealing here with a question of court-fee and it has been remarked in B.B. and C.I. Ry. Co. v. Mitthu (31) 18 A.I.R. 1931 All. 659 that the question whether court-fee should be paid or not is really a matter that is important from the point of view of Government and Government alone.

6. No suitor has a vested right to insist that during the pendency of a litigation which a suitor has started the enactment relating to court-fee shall not be charged and the fee leviable shall not be increased or reduced either with regard to future applications or with regard to future appeals and he would be entitled to carry no proceedings on the basis of law as it stood when the plaint was filed even though the law is different when he comes to file an appeal or to make an application. It is also not disputed that the Legislature can pass an enactment prescribing procedure for determining the amount of court-fee which is payable on a plaint and such a procedure would be binding on a suitor although it may not have been in existence on the date when the plaint was filed. Now this is what has taken place in the case which we are considering. By Section 24-A, Court-fees Act, the statute has appointed Inspectors of Stamp by Section 6, Sub-clause (3); these Stamp Reporters are authorised to examine plaints and report deficiency and the Court is required to pass orders on the report, and by Section 6-A a right is given to a suitor to appeal against that order. We therefore think that the right of appeal given to a suitor is a part of procedure relating to determination of court-fee and is purely a matter in which the Crown is interested and in which neither the plaintiff nor the defendant has such a vested right as cannot be affected by a subsequent enactment and the rule enunciated by the Privy Council is not applicable to such a case. The Court-fees Act of 1938 which allows an appeal against the order demanding Court-fee does not take away any right which was vested in the plaintiff on the date when he filed the plaint; it only confers upon him new right and we do not think it takes away any right which was vested in the defendant either and though it may be true that the defendant can object if a plaint is not properly stamped and the defendant may also have a right to have this matter determined by a Court he has no vested right in the procedure by which it is to be determined and this procedure can be changed and a change in procedure cannot be said to deprive him of any vested right. If the respondent's contention be correct, that a suitor has a vested right in the question of court-fee and the law relating to court-fee which was prevalent on the date when the plaint was filed cannot be changed by a subsequent enactment during the pendency of suit, then it must follow that a suitor will be entitled to file his appeal at a time when new enactment is in force on the basis of old law. We cannot accede to this contention and in our view the preliminary objection has no force and the appeal is competent.

7. Now as to the merits of the case : we are of opinion that the plaintiff's applications for amendment of plaint should have been granted. The trial of the case we have already stated had been stayed at the time when application for amendment was made. A suitor has a right to amend his plaint in any manner he likes and so long as amendments prayed for are not contrary to law, or are likely to lead to injustice they should be granted. No such case was made out against these amendments and in our opinion they were wrongly refused. We further think that the opportunity should have been given to plaintiff to prove if she could the nature of property in dispute and whether the garden in dispute was revenue paying land or not. Mr. Baleshri Prasad contends that orders refusing amendments are not open to appeal because no appeal is provided and they are not liable to revision because they are interlocutory orders and the case has not yet been decided and no revision can lie till the case is decided and no revision in fact has been filed. We think that when an appeal lies against an order directing payment of court-fee incidental orders which lead up to it can be set right. We also think that so far as the question of court-fee is concerned a case has been decided within the meaning of Section 115, Civil P. C, but it is not necessary to express any final opinion upon these contentions as Mr. Man Singh, the counsel for appellant, states that his client intends to present a fresh application for amendment of plaint incorporating his previous applications. We therefore grant leave to the plaintiff-appellant to make a fresh application in the Court of the Civil Judge where the suit is pending for amendment of plaint in such manner as the plaintiff is advised. We further direct that if such an application is made, the amendment may be allowed and on the amended plaint the question of court-fee may be considered afresh and be disposed of according to law.

Mohri Kunwar v. Keshri Chand

Concise Analytical Summary of the Provided Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Respondent's Arguments

Appellant's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Mohri Kunwar v. Keshri Chand

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