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Dila Ram and ors. Vs. Atma Ram and ors. - Court Judgment

LegalCrystal Citation
Subject Civil
CourtAllahabad
Decided On
Reported inAIR1949All225
AppellantDila Ram and ors.
RespondentAtma Ram and ors.
Excerpt:
.....well settled that unless the ,statute so provides, either expressly or by necessary implication, a right of appeal, that exists on the date the proceedings are instituted and can thus be said to be vested on that date is not taken; in either case, there is an interference with the 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. it is a fundamental rule of english law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the act, or arises by necessary and distinct implication. 8. we are of the opinion that section 45 (2-a) was clearly intended to apply to orders or decrees passed after..........of five judges of the then chief court of oudh and there was a difference of opinion between the learned judges. the facts in that case were that an amendment came into force while the appeal was pending in the court below i. e., after the institution of the appeal in that court and before the decision of the appeal. (see, madley j. 298, col. l). the case is, therefore, distinguishable and the observations therein are not applicable to the facts of the case before us.7. we have already said that to accept the interpretation given to the amending act by learned counsel for the respondents would mean making the provisions of the amending act absolutely nugatory because cases under the encumbered estates act having already been filed by april, 1936 there was no meaning in conferring a.....
Judgment:

1. These five' appeals arise out of certain proceedings under the Encumbered Estates Act. One Lala Mutsaddi Lal was a member of a joint Hindu family who owned two firms known as Firm Ram Lal Mutsaddi Lal at Saharanpur and Firm Mutsaddi Lal Lachhi Ram at Deoband. Mutsaddi Lal died in the year 1923 leaving two sons, Pooran Lal and Roop Chand, two grandsons, Atma Ram and Madho Ram, by a predeceased son, Lachhi Ram and a widow, Mt. Muthri. After the death of Mutsaddi Lal, the third firm known as Pooran Lal Roop Chand was started in Hapur. We are informed that Roop Chand looked after these firms on behalf of the family. Debts were incurred and on 13th May 1929, Pooran Lal filed a suit for partition. The suit was decreed on 5th March 1934, and the properties were partitioned under the decree. The creditors of the firms, notably Phool Chand Mohan Lal and the Banaras Bank Limited, executed their decrees against; the share of the properties which had come into the hands of Pooran Lal's sons, Pooran Lal having died in the meantime, and realised a sum of about Rs. 19,000 which was rateably distributed between them and the other creditors under Section 73, Civil P.C. On 20th July 1935, Pooran Lal's sons, Kamta Prasad and Dila Ram, and Ram Kishun, son of Kamta Prasad applied under the Encumbered Estates Act. In the application under the Encumbered Estates Act, the landlords applicants mentioned that they had paid up more than their share of the debts due from the family and claimed that, as a matter of fact, they had paid in excess. The creditors of the joint family firms before partition, however, claimed the moneys due to them, and the question arose of the apportionment of the liability between the landlords-applicants and the non-applicants under Section 9, Sub-section (5), Encumbered Estates Act. The learned Special Judged apportioned the liability between the landlords-applicants and the non applicants by taking the amount remaining due to the creditors on the date of the order and dividing the amount between the landlords applicants and the non-applicants in accordance with their legal pharos. The landlords-applicants filed five appeals in the Court of the learned Additional District Judge of Saharanpur. The appeals were dismissed and these five appeals from order have been filed against those decisions.

2. The cases came up before a Bench of this Court which referred them for decision by a larger Bench on the ground that the principles underlying apportionment under Section 9 (5), Encumbered Estates Act raise questions of general importance which should be decided by a larger Bench.

3. Learned Counsel for the respondents has taken a preliminary objection that no second appeal lies to this Court. The Encumbered Estates Act proceedings were started by an application under Section 4, dated 20th July 1935. The Collector sent the application under Section 6 to the Special Judge and the ease was thereafter numbered and registered in the Court of the Special Judge, second grade, Saharanpur, as Case No. 45 of 1937. Learned Counsel for the respondents has urged that on the date that the application under Section 4, Encumbered Estates Act was filed before the Collector or on the date when the case was sent to the Court of the Special Judge, second grade, Saharanpur, under Section 6, Encumbered Estates Act, Section 45 of the Act provided for only one appeal and there was no further appeal to this Court item the order of the District Judge. He as urged: that the appellants are not entitled to rely on the amendment made in the year 1939 by the Amending Act, (XI [11] of 1939), which provided for a second appeal from the order of District Judge under Section 45 (2-a). The order of the trial Court is dated 19th December 1941, and the order of the lower appellate Court is dated 3rd April 1943, so, both these orders were passed after the amendment. Learned Counsel's argument is that any right of appeal given under Section 45 (2-a), after the case had been received by the learned Special Judge under Section 6, would not be available to the parties unless Sub-section (2-a) was retrospective in its operation.

4. Section 4, Encumbered Estates Act provision that all claims under that section should be put in within one year after the date on which chap. III of the Act comes into force. Chapter III of the Act came into force on 30th April 1935. All cases under the Encumbered Estates Act, which could only be initiated by an application under Section 4, Encumbered Estates Act, had therefore, to be filed by 30th April 1936. The contention of learned Counsel would make the amendment, in the year 1939, to Section 45, giving a right of second appeal, meaningless if it was not intended to apply to an order that had boon passed in an Encumbered Estates Act proceeding which had already started because no Encumbered Estates Act proceeding could be started after 30th April 1936. Both the orders under consideration, that is the order of the trial Court and the order of the lower appellate Court, were passed after the amendment and the decision of the Privy Council in the case of The Delhi Cloth and General Mills Co., Ltd. v. The Income-tax Commissioner, Delhi is therefore not applicable. In that case on the date the order was passed the order was final and there was no further appeal. Later by an Amending Act a right of appeal was given. Their Lordships observed that they had no doubt

that provisions which, if applied ' retrospectively would deprive of their existing finality orders which when the statute came into force, were final, are provisions which touch existing rights. Accordingly, if the section now in question is to apply to orders final at the date when it came into force, it must be clearly so provided.

It is well settled that unless the , statute so provides, either expressly or by necessary implication, a right of appeal, that exists on the date the proceedings are instituted and can thus be Said to be vested on that date is not taken; away and that the finality of a decision cannot be taken away by a statute passed after the decision unless a right of appeal against that order is expressly or by necessary implication confer-red by a statute. On the dates on which the orders in question in these appeals were passed, the orders were not final and they were subject to a further appeal to this Court.

5. In Ram Singha v. Shankar Dayal : AIR1928All437 . the point was entirely different. Under the Agra Tenancy Act of 1901 an appeal was provided from the decision of an Assistant Collector to the District Judge in certain class of cases. This right of appeal was taken away by the Agra Tenancy Act of 1926. The question for decision was whether in a suit that was instituted while the Agra Tenancy Act of 1901 was in force, the right of appeal would be affected by the taking away of the right of appeal under the Agra Tenancy Act of 1926, and their Lordships relied on the decision of the Privy Council in the case of Colonial Sugar Refining Co., Ltd. v. Irving (1905) A.C. 369 where it was held that a right of appeal was not a matter regulating procedure. The observations of their Lordships were to the effect that

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 the 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.

These decisions may apply to orders which were passed before the amendment was made on 30th September 1989, but they cannot necessarily be made applicable to the orders under appeal and passed after the 30th September 1939.

6. The point came up for consideration before the Oudh Chief Court, and learned Counsel has cited before us two decisions of that Court. In Ali Mohammad and Ors. v. Khwaj'a Khalil Ahmad a Full Bench of that Court held that the provisions of the Amending Act did not apply. The order passed was dated 19th March 1938, which was prior to the date of the Amending Act which came into force on 30th September 1939. The order had, therefore, be-come final before the amendment was made, and the observations of their Lordships of the Privy Council in the case of The Delhi Cloth and General Mills Co, Ltd. v. The Income-tax Commissioner, Delhi applied to it. The other case relied upon is Debi Prasad, v. M. Phundan Lal A.I.R. (29) 1942 Oudh 291. That was a decision of Bench of five Judges of the then Chief Court of Oudh and there was a difference of opinion between the learned Judges. The facts in that case were that an amendment came into force while the appeal was pending in the Court below i. e., after the institution of the appeal in that Court and before the decision of the appeal. (See, Madley J. 298, Col. l). The case is, therefore, distinguishable and the observations therein are not applicable to the facts of the case before us.

7. We have already said that to accept the interpretation given to the Amending Act by learned Counsel for the respondents would mean making the provisions of the Amending Act absolutely nugatory because cases under the Encumbered Estates Act having already been filed by April, 1936 there was no meaning in conferring a right of appeal unless it was intended by the legislature that that right of appeal would be available to the parties in the cases that had already been filed. It is not necessary that it should be expressly stated that the provisions of a statute are retrospective in their operation if the intention can be gathered by necessary implication. In Maxwell's Interpretation of Statutes, 9th Edn., it is stated that:

It is a fundamental rule of English law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication.

and again:

In general, when the law is altered during the pendency of an action, the rights of parties are decided ac cording to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights.

In Pardo v. Bingham (1868-69) L.R. 4 Ch. 735, Lord Hatberley observed:

The question is.... Secondly, whether on general principles the statute ought in this particular section to be held to operate retrospectively, the general rule of law doubtedly being, that except there be a clear indication either from the subject-matter or from the wording of the statute, the statute is not to receive retrospective construction.... In fact we must look at the general scope and purview of the statute, and the remedy sought to be applied, and consider what was the former state of the law and what it was the legislature contemplated.

8. We are of the opinion that Section 45 (2-a) was clearly intended to apply to orders or decrees passed after 30th September 1939, and to give a right of second appeal against such orders or decrees. If the orders had been passed prior to the Amending Act, it may have been necessary for us to consider whether the view expressed by the majority of the Full Bench of the Oudh Chief Court in Debi Prasad's case A.I.R. (29) 1942 Oudh 291 laid down the correct law, but as the orders have been passed in the cases before us after the Amending Act, it is not necessary for us to express an opinion on a point that has not arisen.

9. Coming to the merits of the case, we have not had the benefit of hearing any learned Counsel for the respondents as none of the parties interested in the apportionment of the liability are represented. Mr. B. N. Misra appears for some of the respondents in second appeal from order No. 5 of 1944. In the morning he sent an illness slip, but as the ease was notified several days ago and there appeared to be other counsel in the connected eases, we were not prepared to adjourn the case. The point for decision appears to us to be very simple. The creditor has no doubt the right to claim the amount that remains due to him and can ask the Court to apportion the liability, but the Special Judge, in determining the liability, has to consider the claims put forward by the applicants and the non-applicants and has to make the joint-debtors parties to the proceedings for that purpose and to hear any objection that they make before recording his finding. There is no reason why a joint-debtor should be shut out from pleading that so far as he was concerned he had paid up his share of the liability. In apportioning liability, the ordinary rules of apportionment have to be followed by the Special Judge and he has to determine what amount was due from each party and how much each party has paid and it is only then that he can come to a correct conclusion as to the liability of the parties. If the question of apportionment had not arisen before the learned Special Judge in an Encumbered Estates Act proceeding and the liability had to be divided either at the time of the partition or in any other suit for adjustment of mutual liabilities it could not be urged that separate payments made by one of the joint-debtors could be disregarded in apportioning liability. The Encumbered Estates Act does not lay down any special principles according to which apportionment has to be made. Ordinary rules of apportionment of liability should, therefore, apply to the proceedings under the Encumbered Estates Act also.

10. The lower appellate Court held against the appellants on the ground that if a joint-debtor has paid anything in excess, he ought to come forward as a creditor. But that can only apply if a co-debtor has paid more than his share of the dues. To take an illustration, if the joint debt amounts to Rs. 15,000 and there are three persons each liable to pay one-third and out of them one has applied under the Encumbered Estates Act and one of the non applicants has paid to the creditor Rs. 2000, there is no reason why Rs. 13,000 remaining unpaid should be divided into three equal parts and each one should be made liable for a one-third. The proper thing to do would be to hold that two of them were liable for Rs. 5000 each, while the person who had paid Rs. 2000 was liable for Rs. 3,000. To hold otherwise would lead to this injustice that the man who paid Rs. 2000 would have to pay more than the other two joint debtors and so far as we can see, he would have no remedy under the Encumbered Estates Act to claim any money from the landlord-applicant. We are, therefore, of the opinion that the learned Special Judge was not shut out from considering the objections as regards payments. In apportioning liability he should have taken the payments made by some of the joint-debtors into consideration and should have worked out the amount due from each in accordance with the provisions of Section 9 (5), Encumbered Estates Act.

11. In second appeal from order NO. 6 of 1944 the learned Special Judge held that, as only Pooran Lal and Roop Chand were the defendants in Suit NO. 47 of 1929, the liability of each was half and half. Learned Counsel for the appellants has urged that it being a liability due from the joint family firm, Pooran Lal's liability was only to the extent of one-third and Roop Chand's one-third and Lachhi Ram's two sons were liable for the other one-third. He has urged that it was not necessary that in a joint family business every member of the firm should have been impleaded as a defendant and if only some of them were impleaded they were there as representing the whole family. The respondents are not represented in this case. The point was not considered by the lower appellate Court. We have looked into the judgment of the trial Court and it has given no reason for holding that the liability of Pooran Lal and Roop Chand was half and half. We consider that it would be desirable that the point may be reconsidered by the trial Court when the case goes back to that Court.

12. The result, therefore, is that these appeals are allowed, the orders passed by the lower Courts are set aside and the cases are sent back to the learned Special Judge through the lower appellate Court for decision according to law in the light of the observations made by us above. Costs in all the Courts will abide the result.


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