(Pandrang Row and Venkataramana Rao, JJ., delivered the following Judgments on 16th December 1937.)

JUDGMENT

Pandrang Row J:—This appeal is from the decree of the Subordinate Judge of the Nilgiris at Ootacamund, dismissing a suit for the recovery of Rs. 9,000 due on a promissory note executed on the 12th August 1931. A payment had been made on 23rd August 1931 and the suit was filed on the 23rd August 1934. The claim was in respect of money due to the plaintiff-firm, and that firm was actually registered about a month after the suit was instituted, namely, on the 22nd September 1934. In the original written statement, the defendants did not take any objection to the maintainability of the suit. But about a year later, namely, in November 1935, they raised the objection that the suit was not maintainable by reason of the provisions of S. 69, Cl. (2) of the Indian Partnership Act of 1932. This preliminary objection alone was decided by the Court below, and the suit was dismissed on the ground that the preliminary objection was good, the lower Court holding that the registering of the firm about a month after the institution of the suit could not date back to the institution of the suit, and would not overcome the bar imposed by S. 69(2) of the Indian Partnership Act. It seems to me that it is not necessary to decide whether the effect of the subsequent registration will relate back to the institution of the suit, unless it is found that S. 69(2) applies to the present suit. This does not mean that I differ on this point from my learned brother, but I prefer not to decide it because I am of opinion that S. 69(2) does not apply to the present suit and that the present suit is expressly saved by the saving clause in the Indian Partnership Act, namely, S. 74. It is on these points that I have to differ from my learned brother.

No doubt, there are several decisions of several High Courts which support the view which has commended itself to my learned brother. It is enough to refer to the earliest of these, as the others merely follow it, more or less, viz., Surendranath De v. Manohar De(1). The decision therein appears to be based mainly on two English Cases, namely Reg v. Leeds and Bradford Railway Company(2) and Kimbray v. Draper(3). I do not think these two decisions have remained unquestioned. Reg v. Leeds and Bradford Railway Company followed the earlier decision in Towler v. Chatterton(4). In Craies' Statute Law, 4th Edition at page 341 the result of the cases dealing with this question is stated as follows:

“The result of these decisions seems to be that the suggested exception is rarely if ever applicable, and cannot be enunciated as an undoubted rule of construction”,

the suggested exception being that where the legislature provides in the statute a certain period of time within which proceedings respecting antecedent injuries might be taken before the proper tribunal, the statute must thereafter be given a retrospective operation. It was this consideration that prevailed in Surendranath De v. Manohar De and in fact the very words used in Reg v. Leeds and Bradford Railway Company were quoted therein; it was held that the suspension of operation for a year so far as S. 69 of the Indian Partnership Act was concerned is to be taken “as an intimation that the legislature has provided that as the period of time within which proceedings respecting antecedent damages or injuries must be taken before the proper tribunal.” I may add that Kimbray v. Draper was a case concerned with a new provision made in an Act for security for costs. It purported to follow the earlier decision in Wright v. Hale though doubts were expressed about it both by Cockburn, C.J, and Blackburn, J. The latter case appears to be the first case in which the exception to the general rule of not giving retrospective effect to statutes so as to affect or impair existing rights was laid down, namely, that the rule need not be applied where the statutory provision is a mere matter of procedure. This case, Wright v. Hale, is the first case in which the rule was enunciated that where an enactment merely affects procedure and does not extend to rights of action, the general rule of not giving retrospective effect to statutes so as to affect or impair existing rights does not apply. It must be remembered that was a case in which the question that arose was one relating to costs. The words used by Pollock C.B, in that case show what exactly he had in mind when he referred to the matter before him as a matter of procedure. He said:

“I have always understood that there is a considerable difference between laws which affect vested rights and those laws which merely affect the proceedings of Courts; as for instance, declaring what shall be deemed good service, what shall be the criterion to the right of costs, how much costs shall be paid, the manner in which witnesses shall be paid, or what witnesses the parties shall be entitled to and so on………I do not think a matter of that sort can be called a right in any sense in which Lord Coke in his institutes has spoken of rights”.

If by mere matter of procedure is meant only matters of this kind, no difficulty can possibly arise. The difficulty arises when an elastic word of indefinite and uncertain import such as ‘procedure’ is used in an extended sense and a separate rule of law is laid down that where a statute relates to procedure it can be given retrospective operation, as distinct from the general rule that retrospective effect should not be unnecessarily given to a statute so as to affect existing rights. It is really incorrect in my opinion to say that these two rules are distinct, or that the former constitutes an exception to the latter. There is only one rule, the rule based on the foundation that the Legislature shall not be presumed to take away or impair existing rights; and when in matters of strictly so-called procedure retrospective operation is given it is because there is no right in a matter of procedure which any person can have and which he can enforce as against any one else. This aspect of the matter has been dealt with in Ramakrishna Chetty v. Subbaraya Aiyar as follows:

“It is well established principle that unless the terms of a statute expressly so provide or necessarily require it, retrospective operation will not be given to a statute so as to affect, alter or destroy any vested right. See S. 6 Cl. (C) of the Indian General Clauses Act and S. 8, Cl. (c) of the Madras Act 1 of 1891. For to do so would result in great injustice and it would be presumed that the legislature did not intend to deprive any person of a right previously vested in him. The general rule that statutes relating to processual law have retrospective operation is as much subject to this important qualification as statutes dealing with substantive rights. The question whether a person is entitled to maintain a particular action (or to do so in a particular action) or to do so in a particular form and what defences are open to the defendant cannot be affected by any Statute passed after its institution”.

Then the learned Judges go on to quote from the decision of the Privy Council in Colonial Sugar Refining Company v. Irving a case which requires full consideration for the purpose of the present question. The facts of that case were that a certain suit was pending when the Judicature Act of 1903 became law, the Act having received the Royal Assent on the 25th October 1903; the writ in the action had been issued in the previous year but judgment was not delivered till 4th September 1903, that is to say, a few days after the Judicature Act had come into force. The Judicature Act by Ss. 38 and 39 practically substituted the previous right which a litigant had of appealing to the Privy Council by a right of appeal to the High Court of Australia. It was held that though the judgment had not been delivered in the case before the new Act came into force, the new Act did not apply and that the litigant's right of appeal to the Privy Council continued to exist in spite of the new Act. The judgment in the case was delivered by Lord Macnaghten and the principal portion of the judgment at page 372 is 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 Judicature 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”.

The words used by Lord Macnaghten, namely “touches a right in existence at the passing of the Act” and “interference with existing rights” clearly indicate the broad scope of the rule which protects existing rights not only from destruction but also from any diminution or injury.

It was not seriously disputed before us that if a statute destroyed an existing right or even placed an onerous condition upon it, it would not be given retrospective effect unless the statute was clear on the point and no other interpretation of the statute was possible. Though questions of limitation and questions relating to the law of evidence are treated in some respects as branches of the law of procedure, nevertheless, it has been found necessary by Courts not to apply the so-called rule that laws of procedure are retrospective to cases where existing rights are altogether taken away or burdened with an onerous condition. It is not necessary for me to refer to all the cases on the point, some of which have been referred to by my learned brother in his judgment. It is enough to refer to the cases dealing with the new condition of obtaining leave of Court for the filing of a Second Appeal, namely, In re Vasudeva Samiar and Sadar Ali v. Dalimuddin. It was, however, argued that where the condition imposed newly by statute on the right of suit is one that can be easily performed by the intending plaintiff, there is no justification or reason for not giving effect to the new statute even as regards existing rights of action. In the first place, it is difficult in principle to draw a clear line between onerous conditions and light conditions. Secondly, the general rule of law is not only that existing rights should not be taken away or seriously affected, but should not be affected or impaired. Questions of degree do not arise in a matter like this and, in my opinion, it would be indefensible in principle to introduce an element of uncertainty in a rule of law which is of general application.

It seems to me that the real foundation of the fundamental rule of law common to all civilised nations against giving retrospective operation to statute so as to affect existing rights is the rule of justice which regards all deprivation or impairment of existing rights as prima facie wrong, and the consequent presumption that the Legislature which aims to promote the ends of justice should not be presumed to bring about an injustice of this kind unless the intention to do so is clearly expressed or unless such an inference is inescapable by reason of the words used by the Legislature. I do not think the injustice done in a case would become necessarily less when the injury to existing rights is the result of the operation of a new rule which may be said merely to relate to procedure. “Procedure” as I have already said, is a word of uncertain and indefinite import. Writers of text-books on jurisprudence have hardly succeeded in defining exactly what ‘procedure’ is, or where procedure ends and substantive law begins. Some jurists prefer to call ‘procedure’ as “adjectival law” because its object is to aid and protect the rights given by substantive law, and it exists only for the sake of substantive law. Holland in his book on jurisprudence, 11th Edn. at page 355 attempts the following definition:

“It comprises the rules for (i) selecting the jurisdiction which has cognisance of the matter in question; (ii) ascertaining the Court which is appropriate for the decision of the matter; (iii) setting in motion the machinery of the Court so as to procure the decision; and (iv) setting in motion the physical force by which the judgment of the Court is, in the last resort, to be rendered effectual.”

Judged by this definition S. 69(2) of the Indian Partnership Act cannot be said to relate to mere matter of procedure, for it requires something to be done, viz., registration, dehors the Court. My learned brother has referred to some passages from Salmond on Jurisprudence dealing with the same point and I would quote some more passages from the same work which have a bearing on those quoted by him. The learned author dismisses the plausible view of procedure which regards it as concerned not with rights, but with remedies, by saying that this is to confound the remedy with the process by which it is made available. At page 497, 7th Edn. the learned author observes as follows:

“Although the distinction between substantive law and procedure is sharply drawn in theory, there are many rules of procedure which, in their practical operation, are wholly or substantially equivalent to rules of substantive law. In such cases the difference between these two branches of the law is one of form rather than of substance. A rule belonging to one department may by a change of form pass over into the other without materially affecting the practical issues. In legal history such transitions are frequent, and in legal theory they are not without interest and importance”.

He goes on to refer to ‘three important classes’, in which procedure and substantive law appear to merge into one another and are practically indistinguishable, namely,

“(1) An exclusive evidential fact is practically equivalent to a constituent element in the title of the right to be proved. The rule of evidence that a contract can be proved only by a writing corresponds to a rule of substantive law that a contract is void unless reduced to writing;”

“(2) A conclusive evidential fact is equivalent to, and tends to take the place of, the fact proved by it. All conclusive presumptions pertain in form to procedure, but in effect to the substantive law……….for instance, a bond (that is to say, an admission of indebtedness under seal) was originally operative as being conclusive proof of the existence of the debt so acknowledged; but it is now itself creative of a debt; for it has passed from the domain of procedure into that of substantive law”, and

“(3) The limitation of actions is the procedural equivalent of the prescription of rights. The former is the operation of time in severing the bond between right and remedy; the latter is the operation of time in destroying the right. The former leaves an imperfect right subsisting; the latter leaves no right at all. But save in this respect their practical effect is the same, although their form is different”.

It may be said that even in form so far as the right to possession is concerned, the form as well as substance is the same, for, S. 28 of the Limitation Act provides that in such cases the right will be deemed to be extinguished. As observed by the Privy Council in Hari Nath Chatterjee v. Mothur Mohan Goswami and affirmed in Khunnilal v. Gobind Krishna Narain “the intention of the law of limitation is not to give a right where there is not one, but to interpose a bar after a certain period to a suit to enforce an existing right”. The intention of the law of limitation being practically to put an end to existing rights after a certain lapse of time, the reason why a new rule of limitation is applied retrospectively, is not because the law of limitation is a law of procedure but because the express intention of the law of limitation is to destroy or extinguish existing rights of action after a certain lapse of time. It is retrospective if it is clearly intended to be retrospective, and not because it is merely a matter of procedure.

So far as rules relating to questions of evidence are concerned, when a new law of evidence takes away an existing right and gives new rights to parties who had no rights before, the Courts are unwilling to give retrospective effect to it, though ordinarily the law of evidence is regarded as a matter of procedure. It is enough in this connection to refer to Gardner v. Lucas. That was a case where when an existing disability created by an Act of 1672 in respect of deeds not signed by a particular manner was removed by an Act of 1874, the new Act was held not to apply to deeds executed when the Act of 1672 was in force, because the new Act could not be said to create new rights in parties who had none, and in effect destroy existing rights by giving validity to deeds which otherwise were of no effect, divesting heirs or next of kin in favour of the party in whose interest the improbative instrument had been made. Lord Blackburn laid down the rule in the following words:

“Now the general rule, not merely of England and Scotland, but, I believe, of every civilised nation, is expressed in the maxim ‘nova constitutio futuris formam imponere debet non praeteritis’—prima facie, any new law that is made affects future transactions, not past ones”.

A similar provision is found in the Roman law; “Leges at constitutions futuris dare formam negotiis, non ad facta praeterita revocare” (Code 1-4-7): to the same effect is the positive provision in Art. 2 of the Code Civil—“La loi ne dispose que pour 1'avenir, elle n'a point d' effect retroactif”. The real test is, when deciding whether a particular provision of law is to be given retrospective effect or not, not whether the law is a law of procedure or substantive law, but whether the law in question affects or impairs existing rights including rights of action which are substantive rights. Where existing rights would be adversely affected, Courts decline to give retrospective effect unless compelled thereto by the words of the statute. That a right of action is a substantive right is not disputed: there is considerable authority in support of that position, and it is not necessary to refer to the large number of cases which bear on the point. It is enough to mention In re Joseph Suche & Co., Ltd. and In re Athlumney. The latter case deals also with the question whether in cases where the commencement of the operation of a statute is suspended for a time, it is an indication that no further restriction upon retrospective operation is intended. Wright, J., observed as regards this point as follows:

“But this exception seems never to have been suggested except in relation to statutes affecting procedure, such as statutes of Limitation, and even in relation to them it is questioned in Moon v. Durden”.

He proceeded to state that in the case before him the enactment did not merely affect procedure, though the effect of the enactment was not to destroy the right which the creditor had to dividend beyond 5 per cent but merely postponed that right. He continued as follows:

“If the section is construed retrospectively, it will postpone the creditor's right to dividend beyond 5 per cent and will pro tanto deprive him of the vested right of action which he possessed at the commencement of the Act and when the bankruptcy occurred.”

His decision was that retrospective effect should not be given in the case before him. In In re Joseph Suche & Co., Ltd. Jessel M.R observed that

“the right to prove for a debt is not distinguishable in substance from a right of action before winding up, being simply a legal proceeding to recover a debt from a company in liquidation”

and he held that the provisions of S. 10 of the Judicature Act which direct that

“in the winding up of any company under the Companies Acts, 1862 and 1867, whose assets may prove to be insufficient for the paymant of its debts and liabilities and the costs of winding up, the same rules shall prevail and be observed as to the respective rights of secured and unsecured creditors, and as to debts and liabilities provable……as may be in force”,

were not retrospective, though it was argued before him that the rules to be applied under that section, being rules relating to procedure, should be given retrospective effect, and Kimbray v. Draper was quoted in support of that contention. One other

English case may be referred to viz., Henshall v. Porter in which McCardie, J. held that in accordance with well-established rules of construction, as well as by virtue of S. 38(2) of the Interpretation Act, 1889, the Gaming Act of 1922, which repealed S. 2 of the Gaming Act 1835 and enacted that “no action for recovery of money under the said section shall be entertained by any Court,” did not prevent the bringing of an action under the repealed section of the Act of 1835 after the date when the repealing Act came into force in respect of a cause of action which had arisen before that date.

So far I have dealt with the question whether S. 69 Cl. (2) of the Indian Partnership Act should be given retrospective effect, and I have said enough to indicate my view that it should not be given retrospective effect. But the matter does not rest there because the Legislature has expressly enacted a saving clause in S. 74. In other words, the presumption that the Legislature does not intend to affect or impair existing rights including rights of action is reinforced in the present case by an express saving clause in the shape of S. 74 the relevant portions of which run as follows:

“Nothing in this Act or any repeal effected thereby shall affect or be deemed to affect—

(a) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or

(b) any legal proceeding or remedy in respect of any such right, title, interest, obligation or liability, or anything done or suffered before the commencement of this Act or………………

(f) any rule of law not inconsistent with this Act”.

Presumably Cl. (f) would include the rule of law which denies retrospective operation to statutes so as to affect existing rights and is embodied by the Legislature in the General Clauses Acts. So far as Cls. (a) and (b) are concerned, it is clear that the right with which we are now concerned, namely, the right of suit with respect to the debt due on the promissory note, is a right which had accrued before the commencement of the Act, and that the present suit is a remedy, and indeed the only remedy, in respect of such a right. Cl. (b) of S. 74 has been interpreted both by Sulaiman, C.J, in Danmal Parshotamdas v. Babu Ram Chhotelal and by my learned brother in Parinchu v. Ravi Varma in the same way, namely, that it would include any suit for the enforcement of a right already accrued, and that the words “before the commencement of this Act” would not qualify “legal proceeding or remedy”, found earlier in that clause. My learned brother however thought that the word ‘affect’ cannot be interpreted to mean ‘apply to’ as appears to have been understood or interpreted by Sulaiman, C.J Now the word ‘affect’ is an ordinary word which must be given its dictionary meaning. It means, ‘to act upon, to produce or effect a change upon, to influence, to touch.’ It does not therefore follow that a right is not affected unless it is taken away wholly or in greater part; any diminution or deterioration or impairment of the right would affect it. The word, ‘impair’ which has been used in this connection also has a wide meaning. ‘Impair’ means: to diminish in quantity, value or strength, to weaken; and an absolute right of suit is impaired or affected when a condition is imposed upon it. It may be the condition is light, or it may be the condition is onerous, but it is not always easy to say which burden is onerous and which is not. The onerous nature of the burden depends not only on the burden itself but also on the individual who has to bear the burden, and the law cannot have respect of persons in order to determine whether a particular condition is onerous or not. It is not possible to have any general principle based on such a shifting foundation. In my opinion, whenever a burden is imposed, the previously existing right is affected or impaired, if not imperilled. It seems to me that it is hardly right to say in a case of this kind, where we have got the actual facts before us, where a suit to recover a sum of Rs. 9,000 would otherwise be dismissed, that the right to recover that amount is not imperilled by reason of the condition imposed by S. 69(2) of the Indian Partnership Act. I am unable to shut my eyes to such an extent to the facts of the case as to say to the plaintiffs that, whatever they might think, their rights have not been affected by S. 69(2) of the Indian Partnership Act, though in effect they would lose their entire right to recover the money due to them by reason of that statutory provision. I do not think the law requires me to say that such deprivation of rights was intended by the legislature and should take place and that this consequence cannot be avoided because S. 69(2) of the Act relates to a matter of procedure.

Since the case was argued before us, I have come across a decision of a Full Bench of the Rangoon High Court, in which this question of what is procedure and what is not procedure has been considered and decided, and I think it is but right that I should refer to it. The case is Chettiar Firm v. Central Bank of India Ltd.. The High Court of Rangoon had made an amendment to O. 21, R. 90, of the Civil Procedure Code which made the right to have a sale set aside subject to the proviso that before such an application is made, a certain deposit was to be made. The Full Bench of the same High Court held that such an amendment by the High Court was ultra vires as the proviso did not relate to procedure. Roberts, C.J, approved the following definition of procedure given by Lush, J., in Poyser v. Minors.

“Procedure denotes the mode of proceeding by which a legal right is enforced as distinguished from the law which gives or defines that right.”

Roberts, C.J, observed that the right of applying to set aside a sale referred to in O. 21, R. 90 Civil Procedure Code, was only declaratory of the Common law, and as such right of application was taken away unless the person is able and willing to make the deposit, the new rule could not be regarded as mere procedure. He relied on Capel v. Child and on the observation in Broom's Legal Maxims, that no one is to be deprived of his property in any judicial proceeding unless he has an opportunity of being heard. Leach, J. observed as follows:

“Proviso (b) in the rule under discussion clearly offends against this principle, because in effect it says that a person shall not enter the Court and ask for redress until he has deposited a sum of money, not by way of Court-fee, but as a warranty of good faith. It is said that the proviso was inserted in the rule in order to prevent applications of a frivolous character being filed; but unfortunately its effect does not stop there. It can operate to prevent a person who has suffered a wrong coming into Court for redress because he has not the means to make the deposit.”

Braund, J., observed that the proviso was:

“a mandatory rule by which, when read with S. 47(1) of the Code, the Court purports not merely to regulate the mode of its exercise of jurisdiction but to divest itself altogether of jurisdiction in all cases in which the applicant cannot, or will not, make a substantial deposit,”

and that the proviso so far as it imposed an onerous condition upon an applicant applying to set aside a sale appeared to go further than a mere matter of procedure.

Here again, no doubt there is a reference to the onerous character of the condition precedent, but I do not think that it was meant to be an essential qualification. It appears to me that the fundamental and universal rule that no existing right should be deemed to be impaired or affected unless the Legislature's intention so to do is clearly expressed or such a result is unavoidable by reason of the words used in the statute, is not subject to any real exception. Otherwise the result would be what the Legislature is presumed not to intend, and work an obvious injustice, which the Legislature must be deemed to be at least as anxious to avoid as any one else. In my opinion, difficulties have arisen on this point only because the question has been complicated by the importation into the rule of elastic and general words of uncertain and indefinite import like “matter of procedure” or “processual law”—words which are very good illustrations of the fallacies that lie hidden in words which of all the idols imposed by words on the understanding are, according to Bacon, the most troublesome of all, and make human thought the bond slave of words. As I have said already, there is no real exception to the general rule so far as so-called matters of procedure are concerned, and if, even otherwise, there is such an exception so far as procedural law is concerned, the term ‘procedural law’ must be very strictly construed, and the exception should not be allowed to be extended so widely as to eat up the rule. The exception, no less than the rule, is, in my opinion, subject to the fundamental principle that existing rights are not taken away except by express enactment or by necessary intendment.

Bearing this fundamental principle in mind in construing the saving clause in the Act, namely, S. 74, I find it impossible to accept the contention that the Legislature intended that, in spite of S. 74(b), the bar imposed by S. 69(2) should prevail even in respect of rights of suit which were in existence when that section came into force. I am therefore of opinion that the present suit is maintainable and should not have been dismissed on the preliminary ground by the Subordinate Judge and that his decree should accordingly be set aside and the suit remanded for fresh disposal. As, however, my learned brother is of a different opinion, the question whether the suit is maintainable or not must be referred to a third Judge.

Venkataramana Rao, J.:—This is an appeal from the decree of the learned Subordinate Judge of Nilgiris dismissing the suit of the plaintiffs which was instituted for recovery of a sum of money borrowed from them on the 12th March 1931. The plaintiffs were non-suited on the ground that S. 69(2) of the Indian Partnership Act was a bar to the maintenance of the action as the plaintiffs' firm was not registered before the date of the institution of the suit, namely, 23rd August 1934.

In appeal it is contended by Mr. Sitarama Rao for the plaintiffs that S. 69(2) of the Act does not affect contracts entered into before the said Act Came into force, that they are saved by S. 74(b) of the Act, that even assuming registration of the firm was necessary, the firm was registered a month after the institution of the suit and the subsequent registration of the firm was enough to validate the original institution of the suit.

I shall first deal with the contention based on the subsequent registration of the firm. It seems to me that this contention is not tenable having regard to the plain language of the section which says “No suit to enforce a right arising from a contract shall be instituted” unless the condition mentioned therein, i.e, the registration of the firm is fulfilled. Therefore the condition is a condition precedent to the institution of a suit. The word used is ‘shall’. The Privy Council in dealing with an analogous section, (S. 80 Civil Procedure Code.) where the language was almost similar, namely, ‘no suit shall be instituted against the Secretary of State………until the expiration of the two months next after the notice in writing has been delivered’ remarked thus:

“The Act, albeit a Procedure Code, must be read in accordance with the natural meaning of its words. S. 80 is express, explicit and mandatory.” Vide Bhagchand Dagadusa v. Secretary of State for India.

This is the view which has been taken in construing an analogous section (S. 28(2) of the Provincial Insolvency Act) according to which leave of the insolvency Court is made a condition precedent to the institution of a suit and our High Court has held that leave subsequently obtained would not cure the initial defect and validate the institution of the suit—Vide Davood Mohideen Rowther v. Sahabdeen Sahib. In Chandulal v. Awad Bin Umar Sultan a question arose under S. 433, Civil Procedure Code, 1882, corresponding to S. 86 of the Civil Procedure Code, 1908, as to whether a suit against a Ruling Chief without obtaining the consent of the Governor-General can be validated by a subsequent consent and it was held that it could not be. In Danmal Parshotam Das v. Babu Ram Chhote Lal it was held that subsequent registration would not validate the original institution. A similar view was taken in Kishan Lal Ram Lal v. Abdul Gaffur Khan(5). But in some cases the view has also been taken that if the suit was not barred by limitation on the date of the subsequent registration, the suit must be deemed to have been instituted on the date when registration was effected. But it is unnecessary to consider whether this view is correct, as even the application of this rule would not help the plaintiffs because by the date of registration the plaintiffs' suit became barred. Mr. Sitarama Rao strongly relied on the decision in Rathnaswamy Pillai v. Adipuranan Pillai(6), which was a case under S. 92 of the Civil Procedure Code, and it was held therein that where a suit was instituted without the leave of the Advocate-General, it could be validated by subsequent consent. From a perusal of the case it will be seen that the learned Judges in that case made it clear that their observations must be confined only to cases arising under S. 92, Civil Procedure Code—Vide pages 468 and 469. It may be noticed that even this view was not shared by other High Courts—Vide for example Gopal Dei v. Kanno Dei(7). Mr. Sitarama Rao also relied upon two English cases, namely, Hawkins v. Duche(8) and In re Shaer(9), decided under S. 8 of the English Registration of Business Names Act. Under that section, it is no doubt true that no action can be maintained in respect of a contract unless the firm is registered but the section itself contained a provision that it is open to the Court to dispense with the said condition and relieve the disability. Therefore, once relief is granted by the Court, the effect will be as stated by Lord Hanworth M.R in In re Shaer “to rehabilitate the proceedings from the beginning,” But no such provision is contained in S. 69(2) of the Act and it may be a matter for the Legislature and not for the Court to grant a similar relief. Mr. Sitarama Rao again laid some stress on the Privy Council decision in Mahammad Azmat Ali Khan v. Lalli Begum decided under Pensions Act; but that case was decided on the language of S. 6 of the Act which provides that a Civil Court shall take cognizance of the claim relating to a pension upon receiving a certificate from the Collector. Their Lordships held that when the Court received the certificate it was bound to take cognizance of the claim and finding an existing suit when it received the certificate, it might take cognizance of the claim in that suit. It therefore seems to me that emphasis was laid by their Lordships on the word ‘claim’ and there is a distinction between the claim in the suit and the suit itself. Here the bar is to the institution of the suit and not to the cognizance of the claim. The subsequent registration of the firm will not validate the original institution of the suit and enable the plaintiffs to sustain this action.

I shall now consider the contention relating to S. 69(2) of the Act. At the outset, it may be mentioned that almost all the High Courts have taken the view that S. 69(2) is a bar to the maintenance of an action by an unregistered firm in respect of a contract or a cause of action which accrued before the commencement of the Act if it is instituted after 1st October 1933 the date when the S. 69(2) came into force: (Vide Kishanlal Ramlal v. Abdul Gafur Khan, Danmal Parshotam Das v. Babu Ram Chhotelal, Surendranath De v. Manohar De, Ramsunder v. Madhu Sudhan, Shazad Khan v. Darbar Babu Kuchhi, Catholic Sangam v. Ravi Varma, Varadarajulu Naidu & Kuppuswamy Naidu & Co. v. Rajamanicka Mudaliar, Sundararaja Aiyangar v. Mannarswami, and Firm of Syed Ibrahim Sahib v. Gurulinga Aiyar(10). The view taken in all these cases is that S. 69(2) enacts a rule of procedure and it is not controlled by S. 74(b) of the Act. In Catholic Sangam v. Ravi Varma, I stated the effect of S. 69(2) thus:

“There is no doubt that this section enacts a rule of procedure. It imposes a condition for the enforcement of a right and does not affect the right itself. Being an enactment relating to procedure it will apply to pending actions as well as to future actions. The Legislature, to avoid hardship, provided that S. 69, Cl. (2) shall come into force on 1st October, 1933. This provision is also a clear indication that the enactment is intended to be retrospective.”

It was also pointed out therein that all actions brought after October 1933 should be governed by the said provision and that S. 74(b) was only intended to save pending legal proceedings from the bar of S. 69(2) and not future proceedings. This view is canvassed by Mr. Sitarama Rao on the ground that the right of suit is a substantive right and therefore a right vested in the plaintiffs on the date of the Act, that any restriction placed thereon would affect that right and that S. 69(2) must be deemed to be a provision affecting a substantive right, that in accordance with the general rule of law governing the construction of statutes an enactment affecting a substantive right cannot be held to be retrospective and that this provision is made clear by the Legislature by enacting S. 74(b). In support of this position he relied on The Colonial Sugar Refining Co., Ltd. v. Irving, In re Vasudevaswamiar, Sadar Ali v. Dalimuddin and Rajah of Pittapur v. Venkatasubba Row. Before examining the soundness of the contention, it is necessary perhaps to explain what is meant by procedure and to determine whether S. 69(2) enacts a rule of procedure or enunciates a condition which affects a substantive right. Though it is not possible, as Salmond points out, to state with precision the exact nature of the distinction between substantive law and the law of procedure, still the distinction is marked. As stated by him “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.” (Salmond on Jurisprudence, pages 495 and 496). He further amplifies by observing that “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 (page 497). Holland in his book on Jurisprudence explains the scope of adjective law thus:

“A remedial right is in itself a mere potentiality deriving all its value from the support which it can obtain from the power of the State. The mode in which that support may be secured, in order to the realisation of a remedial right, is prescribed by that department of law which has been called ‘adjective’, because it exists only for the sake of ‘substantive law’, but is probably better known as “procedure”. In the exceptional cases in which an injured party is allowed to redress his own wrong, adjective law points out the limits within which such self-help is permissible. In all other cases it announces what steps must be taken in order duly to set in motion the machinery of the law-courts for the benefit either of a plaintiff or of a defendant.”

(Pages 358 and 359-13th Edition 1924.)

Wharton in his Law Lexicon explains it thus: “The mode in which successive steps in litigation are taken.” Thus it will be seen that under ‘procedure’ are comprised all steps which a party must take in order to get the aid of the Court for the enforcement of his right. It therefore includes not only the steps which a party has to take after an action is launched in Court but also steps which he has to take before commencing it. The issue of a citation or a summons, the procuring of necessary evidence and such other steps in the further progress of the suit are all comprised in procedure which a party has to observe after a suit is launched, but there may be certain steps which he has to take outside Court in order to enable him to initiate proceedings in Court. The familiar instance is the service of notice by the plaintiff on the defendant as enacted by S. 80 Civil Procedure Code, or by S. 350 of the District Municipalities Act. The rule of limitation which enjoins a party to bring his action within a particular period is another instance. As observed in Moon v. Durden “there is a material difference when an Act of Parliament is dealing with a right of action already vested, not intended to be taken away, and when it is dealing with mere procedure to recover those rights, which it may be quite reasonable to regulate and alter.” The right of action does not constitute a title to keep all the consequences of the right as they were before. S. 69(2) does not affect the right of action; it only prescribes that a condition is to be performed before a party seeks the aid of the Court for giving him relief in respect thereof. Under S. 80 Civil Procedure Code, no suit can be instituted unless notice has been served on the Secretary of State. This section has been held to enact a rule of procedure. (Vide Mulla's Commentary page 274). The Privy Council in Bhagchand Dagadusa v. Secretary of State for India refers to it as “a statutory provision as to procedure.” In Brooks v. Bockett the facts were these. Before 6 and 7 Victoria, Chap. lxxiii a solicitor was entitled to bring an action for work done outside Court immediately the work was done but S. 37 of the Act provided that no solicitor shall commence or maintain any action or suit until the expiration of one month after he shall have delivered a bill in the manner provided for therein. The Act was passed in 1843 but the work in respect of which the action was brought was completed before 1840. It was also evident that the bill was delivered before that date but no bill was delivered after the date when the Act came into force and before the action was brought. Lord Denman, C.J, observed that according to the Act a bill delivered before 1840 would not be sufficient because such a bill was not taxable before the Act, whereas, on the other hand, after the Act the bill was taxable and a defendant might insist upon such a taxation, that the Act distinctly provides that no attorney shall commence or maintain any action until he has delivered the bill after the Act and waited for a month and that the Act was retrospective, and as there was no delivery within the meaning of the Act, the action failed. Thus, though the cause of action to institute a suit accrued before the Act, yet the condition prescribed for instituting the suit was held to apply on the principle that the condition related only to procedure.

The observations of Lord Esher in Coburn v. Colledge on this section (S. 37) bring out clearly what is meant by a rule of procedure and they are to this effect.

“Before any enactment existed with regard to actions by solicitors for their costs, a solicitor stood in the same position as any other person who has done work for another at his request, and could sue as soon as the work which he was retained to do was finished, without having delivered any signed bill of costs or waiting for any time after the delivery of such a bill. Then to what extent does the statute alter the right of the solicitor in such a case, and does the alteration made by it affect or alter the cause of action? It takes away no doubt the right of the solicitor to bring an action directly the work is done, but it does not take away his right to payment for it, which is the cause of action. The statute of Limitations itself does not affect the right to payment, but only affects the procedure for enforcing it in the event of dispute or refusal to pay. Similarly, I think S. 37 of the Solicitors Act, 1843, deals not with the right of the solicitor, but with the procedure to enforce that right. It does not provide that no solicitor shall have any cause of action in respect of his costs or any right to be paid till the expiration of a month from his delivering a signed bill of costs, but merely that he shall not commence or maintain any action for the recovery of fees, charges or disbursements until then. It assumes that he has a right to be paid the fees, charges and disbursements, but provides that he shall not bring an action to enforce that right until certain preliminary requirements have been satisfied.”

The principle of this decision was applied and followed by our High Court in a case reported in Muthiah Chettiar v. Ramaswamy Chettiar. In that case the facts were these. Under S. 7 of the Rent Recovery Act “no suit brought and no legal proceedings taken to enforce the terms of a tenancy shall be sustainable unless pattas and muchilikas have been exchanged………” But this condition was done away with by S. 77 of the Madras Estates Land Act which enactes that “at any time after an arrear of rent has become due the landlord may institute a suit before the Collector for the recovery of the arrear.” A suit was instituted for arrears for faslis 1315, 1316 and 1317 which accrued due before the Estates Land Act came into force. The plea was taken that under S. 7 of the Rent Recovery Act the action was not sustainable. It was overruled by Sundara Aiyar and Sadasiva Ayyar, JJ. on the ground that S. 7 only enacted a rule of procedure and at the time the suit was brought, it was no longer in force. Both the learned Judges dissented from G. Lee Morris, Receiver of the Estate of the Late Rajah of Tanjore v. Sambamoorthy Aiyar, and in the course of the judgment, Sundara Ayyar, J. observed thus:

“Did S. 7 of the Act VIII of 1865 affect the landlord's right to the rent? In my opinion, it did not. It merely imposed a condition which the landlord was bound to fulfil if he wished to institute a suit for its recovery or to take legal proceedings to compel its payment………In so far as it related to the recovery of it through Court, it undoubtedly belonged to the region of processual law.”

A similar view was taken by Subramania Ayyar and Benson, JJ. in an unreported case (S.A No. 1091 of 1897) referred in Kumaraswami Pillai v. President, District Board, Tanjore. The learned Judges therein pointed out that the exchange of patta and muchilika or tender of patta was a condition imposed by law as a necessary preliminary to the filing of a suit.

It is well settled that “limitation is a branch of the law of procedure and is only a condition annexed to the enforcement of a right and does not affect the right itself.” Therefore it has been held that a statute shortening or extending time within which proceedings can be taken is retrospective. As an instance of a statute shortening the time may be mentioned the case of ‘The Ydun’, 1899 Probate Division, 236. In respect of a cause of action which accrued before the Public Authorities Protection Act came into force, the question arose whether the period of limitation prescribed by the said Act is applicable. The said Act, came into force on 1st January 1894. The default in respect of which the suit was instituted occurred in September 1893 and the suit was instituted in 1898; but under the Act the action must be commenced within six months after the default complained of. So on the date of the Act there was only a period of one month or so that was available if the period of limitation of six months were held to apply. But it was contended that the cause of action accrued before the Act and the period of limitation provided by the Act should not be made applicable. This contention was overruled and the action was held to be barred on the ground that it was not brought within six months after the matter complained of. Sir F.H Jeune observed as follows:

“It is clear that what must be taken to be an improvement in procedure is not considered as interference with a vested right of those who would have preferred the procedure to remain in its unreformed condition.”

This view was endorsed by the Court of Appeal. As an instance of a statute extending the time may be mentioned the case in Rex v. Chandra Dharma. In that case, a prosecution was launched under S. 5, sub-section 1, of the Criminal Law Amendment Act, 1885, for an offence committed on 15th July, 1904. Under that Act the prosecution should have been launched within three months after the commission of the offence, but by the Prevention of Cruelty to Children Act, 1904, which came into force on 1st October, 1904, the period of limitation was extended from three months to six months. It was held that though the prosecution was commenced on 27th December 1904, more than three months after the date of the commission of the offence, by virtue of the later Act, the prosecution was sustainable. Channel, J. there observed;

“An alteration of the time within which they might be prosecuted, whether by extension or diminution, was a matter of procedure only.”

But an exception has been made in cases where the alteration in procedure would have the effect of destroying a right of action, that is, if before the new Act came into operation the time fixed by it had already expired and would have prevented the plaintiff from enforcing his right, the new Act would not be considered as retrospective. It is this principle that was applied in Ramakrishna Chetty v. Subbaraya Iyer and Rajah of Pittapur v. Venkatasubba Row. In those cases the suits were for arrears of rent and on the date they were brought more than three years had elapsed after the rent became due and they were dismissed on the ground that they must have been brought within three years as prescribed by Ss. 210 and 211 and Art. 8 of the Schedule to the Estates Land Act. But for this Act, they would have had six years from the date when the rents accrued due and the suits would have been in time. It was held that as by the time the Estates Land Act came into force the three years' period had run out the rule of limitation prescribed by this Act should not be held to be retrospective. This position is well set out in Gopeshwarpal v. Jiban Chandra at page 1141 thus:

“The law as amended may regulate the procedure in suits in which the plaintiff could comply with its provisions, but cannot govern suits where such compliance was from the first impossible. The effect is to regulate not to confiscate. There are thus two positions: where in accordance with its provisions a suit could be brought after the passing of the amendment, it may be that the amendment would apply, but where it could not, then the amendment would have no application.”

In the Full Bench decision in Ganga Sahai…(Defendant); v. Kishen Sahai…(Plaintiff).* the distinction between the right and the relief and the process to be adopted for getting relief is well brought out. In that case a question arose as to the maintainability of a suit for foreclosure of a mortgage by conditional sale executed on the 3rd July 1877 when Regulation XVII of 1806 was in full force instituted after the Transfer of Property Act came into force which repealed the said Regulation. Under S. 8 of the said Regulation, no mortgage can be foreclosed without the service of one year's notice upon the mortgagor in the manner provided therein. Objection was taken that the conditions mentioned in the Regulation not having been complied with, the suit was not maintainable. This contention was repelled on the ground that the provisions of Ss. 7 and 8 of Regulation XVII of 1806 prescribed only a procedure and no person can have a vested right in procedure. An argument was advanced based upon S. 2 of the Transfer of Property Act which provided that nothing contained in the Act shall be deemed to affect any right or liability arising out of a legal relation constituted before the Act came into force, or any relief in respect of any such right or liability and therefore it must be taken that the previous provision must be deemed to have been unaffected by the Act. In dealing with this contention Oldfield, J., observed thus:

“There is no vested right to have recourse to a particular procedure for enforcing a contract; such a right cannot be claimed by the parties to a mortgage, as being in any sense a right which arises out of the legal relation of a mortgagor and mortgagee. To alter the procedure involves no breach of their contract.

Their rights and liabilities under their contract, and the relief they are entitled to in respect of such rights and liabilities, are different things from the procedure necessary to enforce such rights, liabilities and relief. And although the procedure for redemption and foreclosure of mortgage by conditional sale has been altered, it can scarcely be said that the mortgagor has been injuriously affected by the change. The Regulation prescribed certain ministerial proceedings to be taken, under which a year was allowed to the mortgagor to pay the debt, before a suit could be brought for possession, or to obtain a declaration of absolute title, whereas the present Act has done away with the preliminary proceedings, and allows the mortgagee to bring a suit for foreclosure.”

Dealing with a similar set of facts Trevelyan, J. in a Full Bench case in Bhobo Sundari Debi v. Rakhal Chunder Bose remarked thus:

“There is, I think, a clear distinction between relief and the mode of procedure for obtaining such relief. The relief remains unaffected by the change of the procedure. The rights and liabilities of the mortgagor and mortgagee, and the relief in respect of such rights and liabilities, are the same under the Transfer of Property Act as they were before. A different procedure for enforcing such rights and obtaining such relief has, however, been adopted. The procedure for enforcing a right is no portion of that right, nor does it alter or affect it.”

On an examination of the above cases and other decisions on this branch of the law, it is fairly clear that the law of procedure deals with the process by which a 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 in any way impair or destroy those rights and those which a litigant has to comply with for availing himself of those remedial rights. The latter 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.

The cases relied on by Mr. Sitarama Rao do not enunciate any principle which is in conflict with the principles above indicated. There are two cases on which Mr. Sitarama Rao laid considerable emphasis. The first is the case in The Colonial Sugar Refining Co., Ltd. v. Irving, where with reference to a pending action a right of appeal to the Privy Council which was available on the date when the Act was instituted was taken away and a right of appeal was given to the Chief Court of the Common Wealth of Australia. Lord Macnaghten observed thus:

“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……….”

Here, the right of appeal to the Privy Council as a superior tribunal is taken away and there is thus a deprivation or destruction of a vested right. The other case relied on by Mr. Sitarama Rao is a Full Bench decision in In re Vasudevaswamiar. There the question was whether the amendment of Cl. 15 of the Letters Patent which came into force on 31st January 1928 by which no second appeal can be filed without the leave of the Judge who gave the decision against which appeal is sought to be preferred will apply to a pending appeal. The learned Judges who delivered the judgment in that case were of the opinion that the principle laid downin The Colonial Sugar Refining Co., Ltd. v. Irving would apply to the case on the ground that the institution of the suit would carry with it the implication that all appeals then in force were preserved to it through the rest of its career. The decision can probably be supported on the ground that the condition of leave is one which a litigant cannot comply with but is dependant upon the will of a foreign agency in whom is the power vested either to give leave or refuse leave, that is, the power to preserve the right or to destroy it. It can therefore be said that an existing right of appeal is turned into a mere chance, put in peril and the right is thus affected. As Rankin, C.J, observed, ‘an intention to interfere with a substantive right, to impair or imperil it, cannot be presumed’.—Vide Sadar Ali v. Dalimuddin. It is thus clear that S. 69(2) enacts only a rule of procedure; the rights under the contract are not taken away; the remedy by way of a suit is also not taken away; the relief obtainable has not been interfered with; the condition imposed is the one which a party can comply with and the remedy by way of a suit is thus not imperilled in any way. The very cases relied on by Mr. Sitarama Rao also lay down the proposition that the provision of a statute dealing with a matter of procedure will have retrospective effect unless that construction is textually inadmissible: Delhi Cloth and General Mills Co. v. Income-tax Commissioner, Delhi. They also lay down a further proposition that the provisions which touch a right in existence at the passing of the Act are not to be applied retrospectively in the absence of express enactment or necessary intendment. Therefore, if the necessary intendment of the statute is that it ought to be applied retrospectively, the Court is bound to give retrospective effect to it. The language of S. 69(2) is very general and will apply to all suits arising from contracts whether entered into before the passing of the Act or not. S. 1 provides that S. 69 shall come into force on the 1st day of October, 1933, though the entire Act would come into force on the 1st day of October, 1932. This postponement of the operation of the section may fairly be taken as an indication of the intention of the Legislature to give retrospective operation to the section. (Vide Ramakrishna Chetty v. Subbaraya Iyer and the English cases referred to therein). But Mr. Sitarama Rao contends that by virtue of S. 74(b) of the Act it must be taken that the Legislature did not intend to give a retrospective operation to the section. S. 74 Cls. (a) and (b) are to this effect:

“(a) any right, title, interest, obligation, or liability already acquired, accrued, or incurred before the commencement of this Act, or

(b) any legal proceeding or remedy in respect of any such right, title, interest, obligation or liability, or anything done or suffered before the commencement of this Act.”

Clause (a) deals with what are called strictly substantive rights, that is, rights arising out of certain legal relationships between the parties; and Cl. (b) deals with what are known as remedial rights which law gives for the enforcement of or redress for the infringement of such rights. Therefore what S. 74 lays down is that “nothing in this Act shall affect or be deemed to affect” those rights; that is, a right to sue or institute a legal proceeding or a right to any remedy will not be affected by the Act. The section does not deal with the process or the procedure for the enforcement of the said right or remedy. The process by which the remedy is made available is not the same as the remedy. What is contemplated is that the right to institute a suit or to enforce any other remedy in respect of a contract available to a party at the date when the Act came into force will not be affected. But if a legal proceeding has already been commenced, it would not be affected by S. 69 Cl. 2. It appears to be the intention of the Legislature that the retrospective operation which is given to a rule of procedure should not be extended to legal proceedings pending on the date of the Act. As explained by me in Catholic Sangam v. Ravi Varma the word ‘remedy’ may be taken to be a comprehensive term as including a right to sue or any other remedy without resorting to Court, for instance, a right to sell pledged goods, a seller's lien and a right of resale of goods. But for this enactment, it may be that even pending legal proceedings would have been affected—Vide Kimbray v. Draper. If the intention was not to affect even legal proceedings not begun in respect of such contracts, the Legislature would have provided in S. 74 a provision similar to the one they did in respect of the repeal of an enactment, viz., any legal proceeding or remedy may be instituted or continued as if the Act had not been passed (c.f S. 6, Cl. (e) of the General Clauses Act). I am therefore of the opinion that the action is barred by S. 69(2) of the Act and it is not saved by S. 74(b) of the Act.

The suit has therefore been rightly dismissed by the Court below. I would therefore dismiss the appeal with costs.

(This appeal came on before Justice Varadachariar under provisions of Cl. 36 of the Letters Patent owing to the difference of opinion between Pandrang Row, J. and Venkataramana Rao, J.)

Varadachariar, J.—I agree with Pandrang Row, J. that the present suit is maintainable and that the objection based on S. 69(2) of the Partnership Act must be overruled. The arguments that can be urged in favour of one view or the other have been fully set out in the judgments delivered by my learned brothers; it is therefore not necessary for me to deal with every one of them in detail or with the several decisions referred to in their judgments.

The relevant facts and dates are: The promissory note sued on was executed on 12th March 1931, the Partnership Act except S. 69 came into force on 1st October 1932, S. 69 came into force on 1st October 1933, and this suit was filed in August 1934. On these facts, the question arises, whether the plaintiffs who admittedly constitute a firm but had not got themselves registered before the date of the institution of the suit are entitled to maintain the suit. If the matter were wholly res integra it may be open to argument whether the language of S. 69 of the Partnership Act clearly and necessarily applies to contracts entered into before the date of the coming into force of the Act. In Wright v. Greenoyd where the question arose with reference to S. 32 of the English Medical Act of 1858, Blackburn, J., thought that it was clear from the language of that section that the prohibition referred to a charge incurred after the 1st January 1859. The language of that section was that “after the 1st January 1859 no person shall be entitled to recover any charge in any Court of law for any medical or surgical advice, attendance or for the performance of any operation, or for any medicine which he shall have both prescribed and supplied, unless he shall prove upon the trial that he is registered under this Act.” As a matter of language, it is not easy to see any marked difference between the above words and the language of S. 69 of the Partnership Act. In view however of the way in which the general words of this section of the Partnership Act have been understood in many of the reported decisions, I prefer to deal with the case on the footing that, but for other considerations, the language employed is capable of being applied even to contracts entered into before the Act came into force and to causes of action that accrued before that date.

On the above assumption two questions arise for decision:—(1) Whether the saving words found in S. 74 have the effect of exempting a suit like the present from the operation of S. 69 and (2) if S. 74 has no such operation, whether on general principles the Court ought to hold that S. 69 does not apply to a suit to enforce a cause of action which had accrued prior to the date of the coming into force of the Act. In dealing with S. 74, I may note one ambiguity which however is not very material to this case. In Cls. (a), (b) and (c) reference is made to “the commencement of this Act” and the learned Counsel for the respondents rightly pointed out that it may not be easy to say when dealing with an objection under S. 69, whether the above words should be held to refer to 1st October, 1932 when the Act except S. 69 came into force or to 1st October, 1933 when that section came into force. I do not however express any opinion upon this question because the right of an action in the present case accrued even before 1st October, 1932 when the Act came into force. The material clause of S. 74 is Sub-Cl. (b) which [omitting the unnecessary words and importing what is necessary from Sub-Cl. (a),] will read as follows: “Nothing in this Act shall affect any remedy in respect of any right acquired or accrued before the commencement of this Act.” In view of the words ‘legal proceeding’ found in Sub-Cl. (b) it has been held in some of the reported decisions that all that the exemption was intended to secure was the continuance of proceeding pending at the commencement of the Act. With great respect I am unable to hold that the language of the section is capable of being so read. The difficulty in the way of so reading it is adverted to by Sulaiman, C.J in Danmal Parshotamdas v. Babu Ram Chhotelal and by Stodart, J., in Davood Mohideen Rowther v. Sahabdeen Sahib. By way of contrast I may refer to the language employed by the Legislature in S. 63 of Act XX of 1929 where the difference between the provision saving remedy in respect of a right already accrued and the special provision made in respect of proceedings pending on the date of the commencement of the Act is clearly brought out. Even if it is possible to read the expression ‘legal proceeding’ in Sub-Cl. (b) of S. 74 as in some way relating only to ‘pending’ proceedings, it is difficult to read the word ‘remedy’ with the same qualification because it is not appropriate to speak of a ‘pending remedy’. If S. 74(b) could be read—and I am inclined so to read it—as saving the “remedy” in respect of any right acquired or accrued prior to 1st October 1932 the preliminary objection raised in the present suit must be overruled.

Learned Counsel for the respondents however adopted another line of argument in dealing with Sub-Cl. (b) of S. 74. He emphasised the distinction between remedy in the sense of action or right of action and rules of procedure incidental to the working out of that remedy. I agree with him that this distinction is recognised in some of the cases referred to by him. The question still remains, under which of these categories, will the provision in S. 69 fall. He asks me to hold that it is a mere rule of procedure and does not affect any remedy that the plaintiffs were entitled to before the commencement of the Act. At one stage, he went the length of contending that the remedy can be said to be “affected” only if it is “extinguished”; but he did not persist in that contention, in view of decisions like The Colonial Sugar Refining Co., Ltd. v. Irving, Sadar Ali v. Dalimuddin and In re Vasudeva Samiar. These cases show that an alteration or restriction or even the imposition of a condition preliminary to the enforcement of the remedy must be held to affect the remedy, within the meaning of the rule presuming against the retrospective operation of statutes. He argued that it is not the imposition of every condition that can be said to affect the remedy even in this sense. He strongly relied upon two English decisions relating to the condition that a Solicitor should deliver a bill of costs before he could sue for the recovery of the amount thereof. The judgments in Coburn v. Colledge do not throw much light upon the question in the form in which it now arises for decision; but the earlier decision in Brooks v. Bocket does suggest that the Court regarded a condition of the above kind as a matter of procedure. The discussion in the case turned so much on the form of the pleading that there is hardly much light derivable from the judgment as to the reasons why this view was taken. Learned Counsel also relied upon the cases which have held that requirements like those relating to the delivery of a patta before a landlord could sue for rent or the delivery of a notice under S. 80 Civil Procedure Code are in the nature of a provision of processual law. These decisions undoubtedly support his contention that “processual provisions” are not for the purposes of the present discussion necessarily limited to steps to be taken after the institution of a suit or in the Court itself. While I agree with that contention, I must point out that it is not every condition that may be imposed upon a plaintiff in respect of his right of suit that can be regarded as a mere provision of processual law. In the English Medical Act case that I already referred to, it was certainly not regarded as a mere matter of procedure though the restriction was framed in very similar language. See also Thishleton v. Frewer.

In this connection, it is necessary to consider the purpose and effect of the provision in S. 69. If it had such unintegral connection with the subject-matter of the proposed suit as in some way to make the step required by it a step in the litigation, I should have been inclined to accept the argument that it related to a matter of procedure. But it is obvious that was not its purpose. In the case for instance of a patta being delivered or a notice being given or a bill being tendered by a Solicitor, it is clear that the condition intimately bears upon the subject-matter of the suit to follow. The object however of S. 69 was to make sure that the general policy of the legislature that all partnerships should be registered will be carried out. It is true that occasionally questions may arise in a suit as to who are the partners of a particular firm; but that cannot justify my ignoring the real purpose of the provision in S. 69. As pointed out by Sir Dinshaw Mulla, the object of this provision was to bring pressure to bear on partners to have the firm and themselves registered. This policy has been attempted to be enforced in various ways in different systems. In the English Legislation, S. 7 of Registration of Business Names Act of 1916 imposes a penalty upon partners making default in the matter of registration. Such a provision certainly cannot be described as a processual provision. The Indian legislature did not wish to go so far and for the present thought that it would be sufficient pressure to deprive unregistered partners of the right of suit. Though I do not wish to base any conclusion upon the language of a marginal note, it is noteworthy that in S. 8 of the English Act corresponding to S. 69 of the Indian Partnership Act, the marginal note is “Disability of persons in default.” In Indian Companies Act, the legislature has provided that unregistered associations of the kind contemplated by the Act will be illegal on default of registration. These are, in my opinion, different ways adopted by the legislature to enforce this policy of compelling registration, and I do not think it right to hold that the provision contained in S. 69 is really in the nature of ‘processual’ law in the sense in which that term is used in the cases discussing principle of retrospective operation of Statutes. In an early case, e.g, Lee Morris, Receiver of the Estate of the late Rajah of Tanjore v. Sambamoorthi Aiyar, Justice Holloway drew attention to the danger of confounding what are merely processual provisions with those which under that fictitious appearance are really provisions of material or substantive law. The particular application which the learned Judge made of that distinction in the case before him has no doubt been dissented from in later cases [See Muthiah Chettiar v. Ramaswamy Chettiar]. But the distinction is undoubtedly true.

In the above view, it does not seem to me to be necessary to deal with the second question stated at the outset, viz., whether even independently of S. 74, S. 69 can be given retrospective operation. Nor is it necessary to consider the argument based on the fact that the legislature gave an interval of one year before S. 69 was brought into operation. It cannot be said that interval can be explained only on the ground that the provision must have been intended to be retrospective. There are other considerations which required such an interval, particularly the necessity for bringing into existence the necessary machinery, and for the framing of rules contemplated by S. 71.

The result is that the decree of the lower Court will be set aside and the case remanded for disposal on the merits. The appellants will be entitled to a refund of the Court-fee paid on the Memorandum of Appeal and they will also be entitled to the costs of this appeal.

Case remanded.

N.R.R