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Ganga Sahai v. Kishen Sahai

Allahabad High Court
Mar 25, 1884
Smart Summary (Beta)

Structured Summary of the Provided Opinion

Factual and Procedural Background

The dispute arises from a conditional sale / mortgage deed executed on 3 July 1877. The Transfer of Property Act did not come into force until 1 July 1882, so at the time the deed was executed Regulation XVII of 1806 was in effect. A suit for foreclosure of the mortgage by conditional sale was brought under the provisions of the Transfer of Property Act (after 1882). The reference before the Court asked whether the procedure for foreclosure under the Transfer of Property Act or the procedure under ss. 7 and 8 of Regulation XVII of 1806 (which the Transfer of Property Act repealed) was applicable to a mortgage made before the Transfer of Property Act came into force.

Legal Issues Presented

  1. Whether clause (c) of s. 2 of the Transfer of Property Act ("any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability") saves a right to have foreclosure proceedings taken under Regulation XVII of 1806 for a mortgage executed before the Transfer of Property Act came into force.
  2. Whether a mortgagor's right to a year's notice (under Regulation XVII of 1806) is a vested right saved by s. 2 of the Transfer of Property Act or whether it may be displaced by the procedure substituted by the Transfer of Property Act.
  3. How s. 6 of the General Clauses Act, 1868, interacts with s. 2 of the Transfer of Property Act in relation to saving procedural rights existing before repeal.

Arguments of the Parties

Defendant's Arguments

  • The defendant contended that his right to have foreclosure made under Regulation XVII of 1806 is saved by clause (c) of s. 2 of the Transfer of Property Act (i.e., that rights arising out of legal relations constituted before the Act came into force, or relief in respect of such rights, are not affected by the Act).

The opinion does not contain a detailed account of the plaintiff's separate legal arguments in the text provided.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Maxwell on the Interpretation of Statutes (treatise) Principle that a suitor does not have a vested right to enforce a cause of action by a particular procedure in force when the cause arose; when procedure is altered by statute the suitor must proceed according to the altered mode. Oldfield J. (and Straight J. by adoption) cites this passage to support the conclusion that changing procedural law does not impair substantive rights and therefore clause (c) of s. 2 does not preserve the repealed Regulation's procedure.
Republic of Costa Rica v. Erlanger (quoted: Mellish, L.J.) "No suitor has any vested interest in the course of procedure"—supporting the proposition that procedure may be altered without creating a vested right in the parties to insist on the old procedure. Straight J. cites this passage to reinforce the view that s. 8 of Regulation XVII of 1806 did not create a vested right to twelve months' notice that must be preserved by s. 2 of the Transfer of Property Act.
Warner v. Murdoch (quoted: James, L.J.) "No one has a vested right in any particular form of procedure"—same principle as above. Quoted by Straight J. to support the conclusion that procedural changes effected by the Transfer of Property Act displace the earlier Regulation's procedure.
Wright v. Held Described in the opinion as an "authoritative decision" on the same point that no vested right exists in a particular procedure. Referred to by Straight J. as part of the authorities establishing that procedural modes may be changed without infringing substantive rights, supporting application of the Transfer of Property Act procedure.
Lord Wensleydale (judgment cited at p. 227 of 33 L.J., Exch.) Authority on the proposition that no vested right exists in particular forms of procedure (cited in support of the general rule). Quoted by Straight J. as confirming the principle that a suitor cannot claim a vested right in any particular mode of procedure, supporting the view that Regulation XVII's procedure need not be preserved.

Court's Reasoning and Analysis

Several judges gave views addressing the central question whether clause (c) of s. 2 of the Transfer of Property Act preserved the pre-existing Regulation XVII, 1806 procedure (notably the year's notice for redemption) for mortgages executed before the Act came into force.

Stuart, C.J.

  • Answered the reference "in the negative" (i.e., found against preservation of the old procedure in the sense urged by defendant).
  • Noted the deed was executed in 1877 while Regulation XVII of 1806 was in force and the Transfer of Property Act came into force in 1882.
  • Recognised that s. 2 of the Transfer of Property Act saves "any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability."
  • Stated that this saving clearly applies and that the right or liability constituted by the deed included the "procedure by notice and foreclosure" prescribed by Regulation XVII of 1806, including a year's notice—viewing the year's notice as a "beneficial right of a most important and serious nature."
  • Invoked s. 6 of the General Clauses Act to reinforce the saving of rights of procedure existing before the repealing Act.
  • Concluded that reading s. 2 together with the General Clauses Act leaves such pre-existing rights and remedies "in precisely the same position as if the Transfer of Property Act had never been passed."

Oldfield, J.

  • Described the suit and framed the key legal question (whether to apply Transfer of Property Act provisions or ss. 7 and 8 of Regulation XVII of 1806 for foreclosure of a mortgage made before 1882).
  • Set out s. 2 clause (c) of the Transfer of Property Act verbatim and identified clause (c) as the provision on which the reference depended.
  • Held clause (c) does not require foreclosure to be made under the old Regulation: the clause saves rights or liabilities "arising out of a legal relation" (i.e., the substantive mortgage-contract) but not the particular procedure for enforcing those rights.
  • Explained that ss. 7 and 8 of the Regulation constituted a procedure which has been repealed and superseded by the Transfer of Property Act; there is "no vested right to have recourse to a particular procedure for enforcing a contract."
  • Distinguished between substantive rights/liabilities under the contract and the procedure for enforcing them, and held that the change in procedure does not amount to breach of contract or injure the mortgagor: the new Act provides processes (including court discretion to enlarge time) that protect mortgagor interests.
  • Quoted Maxwell and analogous authorities to show that alteration of remedy or procedure does not take away vested substantive rights.
  • Observed that Regulation XVII had been "absolutely and without reservation repealed by s. 2 of the Transfer of Property Act" and that it was improbable Parliament intended to keep the old procedure operative indefinitely without explicit language to that effect.
  • Concluded that the Transfer of Property Act's provisions relating to foreclosure by conditional sale are applicable to the suit.

Straight, J.

  • Concurred with Oldfield J., emphasising that s. 8 of Regulation XVII of 1806 dealt only with the procedure to be followed by the mortgagee and did not create substantive rights in the parties.
  • Asserted the twelve months' notice did not arise out of the contract and was conferred by statute (the Regulation) and so ceased to have effect upon repeal.
  • Cited authorities (Republic of Costa Rica v. Erlanger; Warner v. Murdoch; Wright v. Held; Lord Wensleydale) reaffirming that suitors have no vested right in a particular mode of procedure and that statutes changing procedure may be applied to existing rights.
  • Noted s. 6 of the General Clauses Act might limit the application to proceedings commenced before repeal, but Straigth J. overall answered the reference affirmatively that Transfer of Property Act procedure applies.

Tyrrell, J.

  • Expressed the view: "I am entirely of opinion that my brother Oldfield's answer to this reference is not logically and legally sound, but also is strongly recommended by the argument at convenienti." (Text presented as given.)
  • The opinion does not contain further elaboration of Tyrrell J.'s reasoning in the provided text.

Brodhurst, J.

  • Recorded concurrence (no separate reasoning provided in the text).

Holding and Implications

Holding: The Court's operative answer to the reference is that "the provisions of the Transfer of Property Act relating to suits for foreclosure of mortgage by conditional sale are applicable to this suit."

Implications:

  • Direct effect on the parties: The suit must proceed under the procedures prescribed by the Transfer of Property Act (as substituted for the repealed Regulation XVII of 1806) rather than under ss. 7 and 8 of the Regulation. In other words, the court will apply the foreclosure procedure in the Transfer of Property Act to this mortgage executed in 1877.
  • Practical consequences noted by the Court: Although Regulation XVII had allowed a year's notice for redemption, the Transfer of Property Act provides its own procedural safeguards (including directions to take an account, declaration of amount due, a six [sic]—text unclear—period to pay from the date of declaration, and a power to the Court to enlarge time on showing of good cause). The Court observed these provisions afford the mortgagor opportunities to redeem and that no substantial injustice is shown by applying the new procedure.
  • No broader precedent beyond the resolution of the reference is expressly claimed in the opinion. The decision resolves the procedural question for the present suit and interprets the saving clause (c) of s. 2 of the Transfer of Property Act as not preserving the old statutory procedure where the repealing Act has substituted a new procedure.

If a reader seeks further particulars (for example, the exact form of the Transfer of Property Act's procedural provisions referred to in the opinion), those details are contained in the cited statutory provisions and are not reproduced in full in the provided opinion.

Show all summary ...

Stuart, C.J:— My answer to this reference is in the negative. The sale-deed under which the plaintiff makes his claim in the suit was executed on the 3rd July, 1877, when Regulation XVII of 1806 was in full force, and the Transfer of Property Act did not come into operation until the 1st day of July, 1882, or about five years after the date of the conditional sale-deed. The rights therefore created by that deed are saved by s. 2 of the Transfer of Property Act which, after repealing certain enactments in the schedule thereto, provides as follows:—“But nothing herein contained shall be deemed to affect * * * any right or liability arising out of legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability.”

This clearly applies to the case now before us, and the right or liability constituted by the deed included, in my opinion, the procedure by notice and foreclosure which was in force at the time the deed was executed—that is, the procedure prescribed by the regulation of 1806, including, among other things, the right to a year's notice, which is a beneficial right of a most important and serious nature, for by means of it a conditional vendor might be enabled to pay off his mortgage-debt and save his property. Even if s. 2 were less distinct than it is, it could never, I think, have been intended by any retrospective operation of it to deprive a mortgagor or conditional vendor of his right to a year's notice, and to cut it down to half of that time. The effect again of s. 6 of the General Clauses Act I of 1868 is to save all rights of procedure existing before the repealing Act came into force. In fact the legal effect of s. 2 of the Transfer of Property Act, read especially with the provisions of the General Clauses Act, is to save from the operation of that Act all rights whatever constituted and existing before it came into force,—that is, that such rights or liabilitias with their remedies the left in precisely the same position as if the Transfer of Property Act had never been passed.

Something was said at the hearing about the limitation period of sixty years, but that is a limitation that applies to either view of the case, whether under the Regulation of 1806 or the Transfer of Property Act of 1882, and does not in the slightest degree affect the question at to the effect of s. 2 of the latter Act.

Oldfield, J.:— The suit out of which this reference has arisen is one to foreclose a mortgage with conditional sale made by deed executed on the 3rd July, 1877. The suit has been brought under the provisions of the Transfer of Property Act, and the question raised is, whether the provisions of that Act relating to suits for foreclosure of mortgage by conditional sale or those of ss. 7 and 8, Regulation XVII of 1806 which it repealed, are to be enforced, the mortgage having been made before the Transfer of Property Act of 1882 came into force.

It is contended for the defendant that his right to have for a closure made under the Regulation is saved by clause (c), s. 2 of the Transfer of Property Act S. 2 is as follows:—In the territories to which this Act extends for the time being the enactments specified is the scledule hereto annexed shall be repealed to the extent therein mentioned. But nothing herein contained shall be deemed to affect.

(a) the provisions of any enactment not hereby expressly repealed:

(b) any terms or incidents of any contract or constitution of property which are consistent with the provisions of this Act and are allowed by the law for the time being in force:

(c) any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability: or,

(d) save as provided by s. 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction; and nothing in the second chapter of this Act shall be deemed to afreet any rule of Hindu, Muhammadan or Buddhist law.”

It is upon clause (c) that the answer to this reference will depend; and in my opinion that clause does not require that foreclosure shall be made under the old Regulation. What the Transfer of Property Act by clause (c) will not affect is any right or liability arising out of a legal relation constituted before the Act came into force, or any relief in respect of such right or liability. The right or liability must arise out of a legal relation—that is, in the case before us, out of the mortgage-contract or the relation to mortgagor and mortgagee.

The provisions of ss. 7 and 8, Regulation XVII of 1806, constituted a procedure for [redemption and foreclosure of mortgages by conditional sale which has now been repealed, and in its place the procedure prescribed by the Transfer of Property Act has been substituted.

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 arise out of the legal relation of a mortgagor and mortgaged to alter the procedure involves no breach of their contract.

Their rights and liabilities under their contract, and the relief they are entitled 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 charge. The Regulation prescribed certain ministerial proceedings to be taken, under which a year was allowed to be 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, and if be succeeds, directs that the decree shad order an account to be taken or declare the amount due, and allow the mortgagor six ??? on tbs to pay the amount from the date of declaring in Court the amount doe, and failing payment the mortgagor shall be absolute do barred of all right to redeem the property, and a power is given to the Court to enlarge the time for payment on good cause being shown. Much stress has been laid upon the mortgagor's right to a year's time in which to pay the amount due under Regulation XVII of 1806 having been affected by the Act, but the mortgagor cannot be said to be injuriously affected on this score, when the Act allows the Court to extend the time for payment on cause being shown. Besides, the right given to the mortgagor of a year's grace in which to redeem the mortgage was conferred by the Legislature, and did not arise out of the legal relation of the parties—indeed quite the reverse, for it was opposed to the terms of the contract, and modified the strict rights of the parties under the contract, and any right of the kind was defendant on the Regulation, and could only be enforced under it, and ceased to have effect upon its repeal.

The following passage from Maxwell on the Interpretation of Statutes may be cited as bearing on the case before us:—It dots not follow that because a suitor has a cause of action, he has also a vested right to enforce it by a course of procedure and practice which was in force when he began his suit. He has only the right of prosecuting it in the manner prescribed for the time being by or for the Court in which he sales, and if an Act of Parliament alters that mode of procedure, he has no other right than to proceed according to the altered mode. The remedy does not alter the contract or tort, it takes away no vested right, for the defaulter can have no vested right in a state of the law which left the injured party without or which only a defective remedy,” And cases are cited, as when the Legislature gave a new remedy for enforcing rights in the Admiralty by the Admiralty Acts of 1840 and 1861, those Acts were held to extend to rights which had accrued before the new remedy had been provided.

It may be observe also that Regulation XVII of 1806 has been absolutely and without reservation repealed by s. 2 of the Transfer of Property Act; and it is difficult to see how the provisions of a repealed statute can be enforced for obtaining foreclosure, and the great inconvenience of giving effect to the provisions of the repealed Regulation in the case of old mortgages for the next sixty years or more is so opinions that it seems impossible to suppose it was intended to keep in force the Regulation, and it may be added that had there been such an intention, it is reasonable to suppose that it would have been expressed in distinct terms.

The answer to this reference therefore is, that the provisions of the Transfer of Property Act relating to suits for foreclosure of mortgage by conditional sale are applicable to this suit.

Brodhurst, J.:— I concur.

Tyrrell, J.:— I am entirely of opinion that my brother Oldfield's answer to this reference is not logically and legally sound, but also is strongly recommended by the argument at convenienti.

Straight, J.:— I concur with my Hon'ble colleague Mr. Justice Oldfield. The provisions of s. 8 of Regulation XVII of 1806, declaring “how a mortgagee or holder of a deed of conditional sale is to proceed when desirous of foreclosing a mortgage or rendering a conditional sale conclusive,” was one concerning the procedure to be followed by the mortgagee at the time of seeking to enforce the contract of mortgage or conditional sale, and it did not operate to create any right in either of the parties to the contract, nor by reason thereof did any right arise to them out of the relation of mortgagee and mortgagor. Their respective rights and liabilities under the contract, existed and were to be determined by the terms of the instrument, and all s. 8 of the Regulation did was to lay down the procedure to be followed by one of them, ??? the mortgagee when seeking to foreclose. No right to twelve months' notice arose to the mortgagor out of the contract of mortgage itself, nor in respect of his relation with the mortgagee, but the latter was directed to follow a certain course of proceeding “No suitor has any vested interest in the course of procedure,” says, Mellish, L.J, in Republic of Costa Rica v. Erlanger (1). So again, James, L.J, in Warner v. Murdoch (2) remarks:—“No one has a vested right in any particular form of procedure”; and an authoritative decision upon this point is the case of Wright v. Held (3): see also the judgment of Lord Wensleydale at p. 227 of 33 L.J, Exch. The principle thus enunciated in these cases may I think with propriety be adopted and acted upon in the Courts here except is so far as s. 6 of the General Clauses Act limits its application by saving proceedings commenced before a repealing Act has come into effect. As to the argument of hardship, it does not appear to me that a mortgagor is subject to any injustice by having applied to him the procedure laid down in the Transfer of Property Act, Chapter IV. Taking ss. 67-86 and 87 in con-junction with one another, it is obvious that if the Courts properly discharge the duties thereby imposed upon them, no room for grievance or complaint need be left to him, if he is honestly anxious to discharge the incumbrance on his property, the Courts having full discretion to afford him every reasonable opportunity to do so. As in my opinion clause (c) of s. 2 of the “Transfer of Property Act” does not save the procedure provided is s. 8 of Regulation XVII of 1806, I would answer the question put by the reference in the affirmative.