1. This is a plaintiff's appeal arising out of a suit for preemption of a sale deed dated 9th November 1928. The suit was filed on the 8th of November 1929. On the 6th of February 1930, the defendants-vendees obtained a deed of gift in their favour which the present plaintiff also sought to preempt by a second suit. It has now been finally held that it was a transaction of gift and was not perceptible. On 20th December 1930, the Court of first instance decreed the plaintiff's claim for preemption, holding that the second transaction was a sale and not a gift. But on 14th December 1931 the lower appellate Court came to the conclusion that the second transaction was one of gift and accordingly dismissed not only the plaintiff's claim to pre-empt the second transaction but also his claim to preempt the first sale deed. The finding that the second transaction was a gift has been upheld by the High Court in second appeal.
2. The question that arises for consideration in this case is whether the defendants-vendees, by having taken a deed of gift on 6th February 1930, during the pendency of the suit in the trial Court, are entitled to defeat the plaintiff's claim.
3. The Amending Act (9 of 1929) received the assent of the Governor-General on 27th January 1930, and it was published in the Gazette on 15th February 1930. According to Section 5, U.P. General Clauses Act (1 of 1924), which applies to the Local Acts, an Act, when it is not expressed on which particular day it has to come into operation, comes into force on the day an which it is first published in the Gazette after having received the assent of the Governor-General. Accordingly the Amending Act came into force on 15th February 1930. It may be noted that there is a distinction as regards the Imperial Acts which are governed by the General Clauses Act (Imperial Act No. 10 of 1897), under Section 5 of which an Imperial Act comes into force on the day on which it receives the assent of the Governor-General.
4. The question is whether the Amending Act, having come into force before the passing of the first Court's decree, it applies to this case, and the defendants-vendees cannot avail themselves of the gift taken during, the pendency of the suit. The learned Counsel for the defendants-vendees strongly relies on Baldeo Singh v. Hargayan Singh 1933 All. 217. In that case the exchange was taken on 16th October 1929, and the first Court's decree had been passed on 14th February 1930, so that the assent of the Governor-General had been obtained after the exchange; but the Act had been published after the first Court's decree. The Bench assuming that the Act came into force on the day when it received the assent of the Governor-General, held that the Act applied and the deed of exchange conferred no advantage on the defendants-vendees. Unfortunately it was not brought to the notice of the Bench that the Local Amendment Act came into force not on the day when the Act received the assent, but on the day when it was published. There is however the further observation made by the Bench that it is the date of the decree which is the crucial date and any rule or change in the law which came into existence before that date would be the law that governed the suit. The learned Advocate strongly relies on this remark and contends that, inasmuch as the Amending Act on having been published came into force before the first Court's decree, it was applicable.
5. The learned Counsel for the respondents relies on Sheopujan Rai v. Bishnath Rai 1930 All. 706 in which there are certain observations which go to suggest that on the taking of a deed of gift a vendee defeats the plaintiff's right of preference immediately and acquires a substantive right to defeat the claim, so that the passing of the Amending Act subsequent to that date would not revive. the plaintiff's right of pre-emption. But in, that case the Amending Act came into force after the passing' of the first Court's decree and during the pendency of the second appeal. In Sheobalak v. Rak Saran 1933 All. 788 it was held that the effect of obtaining an exchange is to put the defendant on the same footing as the plaintiff on that day and a subsequent passing of the Amending Act would not improve the position of the plaintiff.
6. I may however point out that the remark in the course of the judgment made by me that the Amending Act (9 of 1929) came into force on 27th January 1930, when the assent of the Governor-General was received, was not correct. The slip was due to overlooking the fact that under Section 5, U.P. General Clauses Act, such an Act comes into operation on the date when it is first published in the Gazette. As a matter of fact in a previous case Muhammad Bashir Khan v. Kulsum Bibi 1927 All. 545 it had been laid down by a Bench of which I was a member that the Agra Pre-emption Act (2 of 1922) came into force on 17th February 1923, when it was published in the Gazette. Fortunately, it was not necessary for the purpose of that case to fix the date on which the Act came into force for, whether it came into force on the date of the assent or on the date of its publication in, the Gazette, both the dates were subsequent to the deed of exchange and prior to the date of the first Court's decree.
7. The learned advocate for the respondents further relies on the observations made in Ramsaran Das v. Bhgwat Prasad 1929 All. 53 by Boys, J., on pp. 419-20 and by King, J., on p. 429, but the point was not before the Full Bench in the direct form in which it has been raised before me. I think this case raises a substantial question of law and should be disposed of by a larger Bench. Let it be referred to a Bench of two Judges.
8. This case has been referred to the Full Bench on certain observations in some cases, which are not prima facie reconcilable. On 9th November 1928 the defendant, who was a stranger to the mahal, purchased a share in village Sunehra. On 8th November 1929, the plaintiff instituted a suit for preemption of that share. At that time the plaintiff was a co-sharer and the defendant being a stranger, the plaintiff had a preferential right as against him and was entitled to be substituted in his place. On 6th February 1930, the defendant acquired a small share in the same mahal by virtue of a deed of gift and became a cosharer. The plaintiff challenged this transaction as one of sale, but it has now been held against him that it was, in reality, a transaction of gift and not of sale. On 15th February 1930 the Amending Act (Act 9 of 1929) came into force. On 20th December 1930, the first Court decreed the suit, but on appeal the lower appellate Court has dismissed it.
9. The question for consideration before us is whether the amendment of Section 19, Agra Preemption Act, which came into force on 15th February 1930, after the deed of gift in favour of the defendant but before the passing of the first Court's decree, prevents the latter from defeating the plaintiff's claim. In the referring order it has been pointed out that the Amending Act came into force on 15th February 1930 on the date when it was published in the Gazette and not on 27th January 1930 when it received the assent of the Governor-General, because being a Local Act it was governed by Section 5, U.P. General Clauses Act of 1924, and not by the General Clauses Act (Imperial Act No. 10 of 1897). Before the passing of the Agra Preemption Act of 1922, the view which invariably prevailed in this Court was that the plaintiff may lose his right of preemption in two ways: (1) either by losing his own status as a co-sharer, or (2), by losing his right of preemption on account of the defendant acquiring a share in the village and placing himself on the same footing as the plaintiff. See Ram Gopal v. Piare Lal (1899) 21 All. 441 and Bihari Lal v. Mohan Singh 1920 All. 159.
10. Under the Agra Preemption Act of 1922 also it was held that an acquisition of a share by the defendant in the village destroys the plaintiff's right of preemption, although the share is acquired during the pendency of the suit. See the case of Qudratunnissa Bibi v. Abdul Rashid 1926 All. 661. The question came up finally for consideration before a Full Bench of this Court in Ramsaran Das v. Bhagwat Prasad 1929 All. 53. All the three learned Judges came to the conclusion that when a share is acquired by a defendant during the pendency of the suit, Section 20 of the Act, as it stood unamended, was inapplicable, but that the case was governed by Section 19, Pre-emption Act. Boys, J., on pp. 419-420 remarked:
If the law has not been altered, then the plaintiff pre-emptor had no 'subsisting right' at the date of the decree; his right had been defeated by the gift of the vendee prior to the decree. How then can he be said to have lost his 'subsisting right' by anything appearing from the Act
11. The learned Judge then went on to remark that he agreed that the legislature did not intend to amend the law and that the plaintiff-preemptor's subsisting right must be held to have been defeated by the acquisition. King, J., on p. 429 remarked, that Section 19 defeated the plaintiff's right to a decree, because at the time of the passing of the decree, the plaintiff had no subsisting right of pre-emption, inasmuch as the purchaser had by that time acquired a pre-emptive status equal or superior to that of the plaintiff. The learned Judge remarked:
The plaintiff may lose his right in a variety of ways, and one way is by the purchaser's acquisition of an interest which puts him on the same level as the plaintiff in respect of the right of pre-emption.
12. Agreed with the view expressed by the other learned Judges. There is therefore no doubt that the ratio decidendi of the judgments in the Full Bench case was that a plaintiff's right of preemption is lost either by plaintiff himself losing his status as a cosharer or by the plaintiff losing his right of preference and therefore ceasing to have a subsisting right on account of the defendant acquiring a share in the village.
13. The legislature has amended Section 19, Agra Preemption Act by adding a proviso thereto. The question before us is not whether the section as amended is retrospective, but whether the proviso added to the section is so. It is noteworthy that the proviso has not been added to Section 20, but has been added to Section 19 and is in the nature of an exception, because it is confined to cases of voluntary transfer in favour of a vendee after the institution of a suit for pre-emption, and lays down that such a voluntary transfer shall not defeat any right which the plaintiff had at the date of such institution. It seems to me that the legislature by borrowing the words from the judgments of the learned Judges in the Full Bench case and by adding the proviso to Section 19 has, by necessary implication, assumed that the interpretation of Section 19 as put by the Full Bench was correct, and that under that section a plaintiff's night of preemption can be defeated where a defendant acquires a share in the village during the pendency of the suit; but the legislature has thought it fit to lay down that in the special case of a voluntary transfer such a defeasance of the plaintiff's right should not take place. The proviso therefore is in the nature of an exception to the general rule and should ordinarily be construed to affect transactions which come into existence after the passing of the Amending Act. It is also to he noted that in the earlier Amending Act of 1923 (Act No. 8 of 1923), the legislature took care to add Section 3 specifically providing that the Act shall have a retrospective effect from 1922. There is no such section in the later Amending Act (Act 9 of 1929). On the other hand, the Act is professedly not a declaratory or an explanatory Act but is an Amending Act, and it is not only called the Agra Preemption (Amendment) Act; the preamble to the Act makes it clear that the legislature considered it expedient further to amend the Agra Preemption Act of 1922 and it was therefore necessary to enact certain provisions. Many alterations have been made in the Act and various sections have been amended, all of which cannot possibly be held to be merely explanatory of the previous provisions. There is therefore nothing in the Act, which would indicate that it was intended to have a retrospective effect. It seems to be that:
no rule of construction is more firmly established than this, that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards a matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment: Maxwell's Interpretation of Statutes, 6th Edn., p. 391.
14. Various cases are quoted therein in which even where the Act had laid down that no such suit shall be brought or maintained, etc., on account of some transaction, the Courts declined to give it a retrospective effect so as to make it applicable to suits brought after the Act in respect of transactions which had taken place before the Act was passed:
Every statute which prima facie takes away or impairs vested rights acquired under existing laws or creates new obligations, or imposes a new duty, or attaches a new disability in respect of transactions or considerations already past, must be presumed to be intended not to have a retrospective operation': p. 187.
15. Similarly Craies in his Statute Law, pp. 330-331 has quoted numerous authorities in support of the view that:
in the absence of anything in an Act to show that it is to have a retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act is passed: p. 330.
16. In Colonial Suhar Refining Co. Ltd. v. Irving (1905) A.C. 369 their Lordships of the Privy Council at p. 372 laid down that:
on the one hand, it was not in dispute 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 the 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.
17. The test laid down by their Lordships was that if the new Act touches a right in existence at the passing of the Act, then it should not be held to be applicable to a pending action. In Sheopujan Rai v. Bishnath Rai 1930 All. 706, a Bench of this Court held that the Amending Act (Act 9 of 1929) was not a declaratory Act with retrospective effect and that it could not affect the right of pre-emption which was a substantive right and not a mere rule of procedure. No doubt the question in that case was whether the second appeal in the High Court should be decided in view of the amendment which had in the meantime, come into effect; but the ratio decidendi of the case was that the defendant by acquiring a share in the village has a right to defeat the plaintiff's claim for preemption because he acquires the same status, and that a right to defeat the plaintiff's claim was a substantive right which could not be taken away by an Act passed after the right had accrued and while the action was still pending.
18. On the other hand, in Baldeo Singh v. Hargyan Singh 1933 All. 217 another Bench of this Court came to the conclusion that the amendment would apply to a case where the Amending Act came into force before the first Court's decree was passed. In point of fact, the Act had come in to force after the suit in that case had been actually decided by the Court below. But unfortunately the attention of the Bench was not drawn to the U.P. General Clauses Act, otherwise the appeal would have been decided in a different way and the question of the applicability of the Amending Act would not have arisen. But the decision, as it stands, is certainly an favour of the plaintiff-appellant. In Sheobalak v. Ram Saran 1933 All. 788, decided by a Bench of which one of the learned Judges who decided Baldeo Singh v. Hargayan Singh 1933 All. 217 was also a party, it was remarked in the course of the judgment on p. 1627 that:
this right acquired by the vendees was a substantive right and extinguished the preferential right as against them.
19. It seems to me that the right of preemption of a plaintiff as defined in Section 4(9), is a right to be substituted in place of the transferee by reason of his right. If therefore the vendee becomes a cosharer in the village and acquires an equal or superior status with the plaintiff, the plaintiff's right to be substituted in place of the transferee disappears. It altogether ceases to exist and is utterly destroyed, though, of course, not by any act of the plaintiff himself but on account of the circumstances that the defendant has acquired an equal right. The right of preemption is a right of preference only and as soon, as the position of both parties becomes identical and equal, the preference disappears. It also seems equally clear that in order that the plaintiff should be able to pre-empt successfully, lie must have a continuing and subsisting right of preference and should, at no interval of time, have lost his right either owing to his own act ox owing to an acquisition of the interest by the defendant, for at the moment when both the parties come on the same footing, the right of preference is gone and therefore the right of preemption of the plaintiff ceases to subsist. It cannot be disputed that if the plaintiff had a right of preemption at the time of the sale, but lost it for a short time and then by virtue of a fresh purchase became a cosharer, he could not maintain the suit. Similarly if after having filed the suit, he lost his right voluntarily and then re-acquired it, he would not be able to get a decree, the reason being that he has not a subsisting right at all, because his right has not continuously subsisted from the time of the original date of the cause of action in his favour.
20. It appears to me that the right of defendant to defeat the plaintiff's right is a substantive right and not a mere matter of procedure which can be regarded as a plea in defence like the bar of limitation. The defendant by virtue of the deed of gift becomes a cosharer in the village, who has a right to preempt other sales and he has an equal right to defeat the plaintiff's claim. This is a substantive right and is in no sense inferior to a right which a plaintiff may have to go in appeal to a particular forum. Their Lordships in Colonial Sugar Refining Co. Ltd. v. Irving (1905) A.C. 369 held that a right to go up in appeal to a particular forum was a substantive right, but not a mere matter of procedure. It seems to me that the right of a defendant to defeat the claim of the plaintiff on account of the defendant having himself become a cosharer and acquired an equal status under a registered deed is much more so a substantive right based on that document than a matter of procedure. That being so, the proviso in the Amending Act which obviously deals with voluntary transfers and is intended to deprive a defendant from successfully setting up his right under the transfer under Section 19 should not be so construed as to affect the defendant who had taken a transfer before 4th passing of the Act. By virtue of the transfer, the defendant acquired a substantive right which became vested in him and such right should not be deemed to have been taken away by an Act, which came into force subsequent to such an acquisition. I do not read the proviso as merely, ire-moving a prohibition to the Courts from passing a decree against a defendant. I rather take it that the legislature thought it fit to provide for an exception in cases of voluntary transfers, because it felt that the absence of such a provision opened a wide door for fraud and enabled defendants to defeat claims for pre-emption after suits had been instituted. The intention therefore seems to be that voluntary transfers should not be of any avail to defendants when they have been taken during the suit; but that involuntary transfers, e.g., purchase at auction, or succession by operation of law, e.g., by inheritance, would not deprive the defendant of his right to defeat the preemptor. The transfers which were taken before the Amending Act was passed are not at all governed by this Amending Act.
21. It seems to me that when the legislature by amending Sections 19 and 20 has obviously accepted the interpretation put upon them by this High Court, it is now too late in the day, to say that the Full Bench ruling was wrong and that the legislature wrongly supposed that it was right and has made changes accordingly. I cannot possibly imagine that the Full Bench, could in any way have over-looked Sections 10 and 11, Preemption Act. They have not discussed those sections because in their opinion they did not, in any way, alter their interpretation of Sections 19 and 20. Now to try to interpret Section 19 so that it should apply, only to cases where a vendee acquires an equal right of preemption before the institution of the suit would be to cause further confusion and would certainly nullify the intention of the legislature as disclosed by the limited scope of the proviso. The very fact that the legislature by the proviso has not altered the whole law, but had made a provision by way of an exception, indicates that the proviso could not have been intended to have a retrospective effect. The legislature would have said so clearly, if that had been the intention. Such an interpretation would make all transfers pen-dente lite utterly useless for vendees, whereas the proviso is deliberately confined to voluntary, transfers only and leaves the interpretation put upon Section 19 by the Full Bench unaffected as regards involuntary transfers, e.g., purchases at auctions, and inheritance. If an interpretation contrary to that put upon it by the Full Bench were to be put on Section 19, the result would be that even where a vendee acquires an interest hi the mahal by an auction purchase or by inheritance, he would not be able to defeat the plaintiffs' claim. Such a result is directly opposed to the intention; of the legislature. I do not see how the word 'defeat' (which has probably the same root as 'defeasance') used in the proviso can, in any way, suggest that the right was intended to be held in abeyance or in suspense only and not annulled, destroyed or extinguished. The position is similar to the case where a defendant after the sale deed lias become a cosharer. of an equal status with the plaintiff in which case the plaintiff's right to sue against Him is gone. The mere fact that the 'defendant at a subsequent stage but before the expiry of one year loses his status as a cosharer would not revive the plaintiff's right of preemption so as to enable him to bring a Suit. On the same reasoning, I am of the opinion that the plaintiff's right of preemption, having been once lost on account of the defendant's acquisition, cannot be revived by the subsequent passing of the Amending Act and that the new amendment does not revive extinguished rights. I would therefore dismiss the appeal.
22. I agree throughout with the judgment of the learned Chief Justice. One of the arguments addressed to us was that even if it be held that the Amending Act of 1929 has no retrospective effect generally, yet the wording of the proviso that has been added to Section 19 by the amending Act shows that it ought to be applied in the present case. That proviso is as follows:
Provided that no voluntary transfer made in favour of the vendee after the institution of a suit for pre-emption shall defeat any right which the plaintiff had at the date of such institution.
23. The argument is, if I understand it aright, that the words in the proviso 'after the institution of a suit for preemption' must be held to apply to any suit which was pending when the enactment came into force. The general rule of law however is that the status of the parties to a litigation must be considered to be the status which they possessed at the date of the institution of the suit:
In general when the law is altered pending;: an action the rights of the parties are decided according to the law as it existed when the Act was begun unless the new status shows a clear intention to vary such rights: Maxwell on the Interpretation of Statutes, 6th Edn., p. 395.
in the absence of anything in an Act to show-that, it is to have a retrospective effect, it cannot be so construed as to have the effect of altering; the law applicable to a claim in litigation at the time when the Act is passed : Craies on Statute-Law, 3rd Edn., p. 330.
24. This being the general rule, it must follow that nothing in the proviso will affect the status of the parties in the litigation which was pending when the proviso came into force, unless the proviso itself or the enactment of which, it is a part has a retrospective effect. It is true that in the present case the plaintiff's status was changed, after the institution of the suit, but that was brought about by a deed of gift executed in the defendant's favour, and not by an enactment. The enactment itself not being retrospective for the reasons given very fully by the learned Chief Justice, it follows that the defendant's status was not changed by it during the litigation, and I would therefore agree in-, dismissing the appeal.
25. I regret I have arrived at a different conclusion from, the one reached by my learned brothers. The facts of the case are fully set out in the order of the Hon'ble. Chief Justice, dated 14th November 1933, referring the case to a Division Bench, which in its turn referred it: to this Full Bench. I would repeat, such of them as are necessary for explaining my own views on the questions involved in the case.
26. The sale deed, which is sought to be preempted by the plaintiff-appellant, was executed on 9th November 1928. He filed his suit for preemption on the last day but one, i.e., 8th November 1929. On the facts as they existed OIL the date of suit, he had an unanswerable claim. The vendees set about to find a good defence, and managed to obtain a deed of gift on 6th February 1930, during the pendency of the preemption suit, conferring proprietary right which placed them on the same footing as the plaintiff in the matter of preemption. They pleaded that, by; virtue of their latest acquisition the plaintiff had no preferential claim to pre-empt and his suit was. therefore, liable to be dismissed. The plaintiff attempted to checkmate this move on the part of the vendees by instituting a suit for preemption in respect of the gifted property on the allegation that the transaction was not of gift but of sale. The first Court decreed both the suits, holding that the transaction of gift was a sale in disguise. That Court passed a decree for preemption on 20th December 1930, which is an important date. The plaintiff's suit for preemption in respect of the gifted property was eventually dismissed by the High Court on the finding that the transaction had not been established to be otherwise than gift. The position then was that the vendees had acquired proprietary rights during the pendency of the first instituted preemption suit, and the question was whether the suit was liable to be dismissed on that account.
27. Before the passing of the Preemption Act, the case law of this Court had laid down definitely that, where the preempt or and the vendee have equal rights in the matter of preemption, no suit for preemption can lie. The view was based on the broad ground that the object of preemption is to exclude strangers; and where the vendee is not a stranger, no preemption should be allowed. This rule opened a door for devices to defeat preemption, and the Courts were called ?upon to decide as to what is the effect of the vendee, who was a stranger at the time of sale deed, acquiring proprietary right after the sale and even after the institution of a suit for preemption. It was consistently held in this Court that no decree for preemption could be passed, unless the preemptor showed his preferential right not only at the dates of sales and the institution of the suit but also at the time of the decree, so that, if the vendee acquired the requisite status during the pendency of the suit for preemption, he could successfully prevent a decree for preemption being passed. See, for example, the case of Bihari Lal v. Mohan Singh 1920 All. 159.
28. These propositions are not disputed in this case, which is governed by a statute, viz., the Preemption Act, which was passed in 1922 and came into force on 17th February 1923. The question whether the vendee could defeat preemption by acquiring proprietary right during the pendency of the preemption suit based on the Preemption Act arose in Ramsaran Das v. Bhagwat Prasad 1929 All. 53. It was held by a Full Bench of this Court that the Act did not introduce any change in this respect. This view is based on Section 19, Pre-emption Act, which provides that:
No decree for preemption shall be passed in-favour of any person unless he has a subsisting right of pre-emption at the time of the decree.
29. It was held that the right of preemption does not subsist if the vendee obtained a proprietary right during the pendency of the suit. If the question had been res integra, I would have examined the various sections of the Preemption Act in order to answer it. I may however take-leave to point out, with great respect that the learned Judges did not consider the scheme of the Act and other relevant sections, and confined their attention to Sections 19 and 20, and attached too great importance to the view taken in decided cases before the law of pre-emption was embodied in a statute. The essence of a Code is to be exhaustive on matters it provides for, except so far that it lets in extrinsic rules. Where the language-of a statute makes two views equally possible, the rule of cursus; curiae may be applied to harmonies the statute with pre-existing law. Where-however the meaning of a statute is clear, interpretation thereof as does not fit in with the general scheme of the statute or is inconsistent with other provisions therein embodied is not justified by the excuse that the cursus curiae should be maintained. Sections 10 and 11, Preemption Act, to which the-attention of the Full Bench was not drawn, have, in my opinion, an important bearing on the question before us. They run as follows:
10. On a sale to, or foreclosure by, any of the persons named in Section 12, no right of pre-emption shall accrue to any person who has an equal or inferior right of pre-emption.
30. Subject to the foregoing provisions, a right of pre-emption shall accrue to the persons mentioned in Section 12 whenever a cosharer or petty proprietor sells any proprietary interest in land: forming part of any mahal or village in which a right of pre-emption exists, or when any such interest is foreclosed.
31. The effect of a vendee possessing an equal right of preemption is declared by Section 10 to be to prevent the-accrual of a right of pre-emption. It is quite clear that a right of preemption accrues to persons named in another section if the vendee has no-equal or inferior right of pre-emption. Section 16 permits a suit for preemption; by the person entitled to preempt. If there had been nothing in the Act, a right of pre-emption accruing under Section 11, could be enforced in spite of the vendee acquiring anequal, or inferior right of preemption after the date of sale; but the legislature thought it fit to extend protection to the vendee who obtains such right after the date of sale, and provided in Section 20:
No suit for pre-emption shall lie where prior to the institution of such suit the purchaser has transferred the property in dispute to a person having a right of pre-emption equal or superior to that of the plaintiff, or has acquired an indefeasible interest in the mahal which, if existing at the date of the sale or foreclosure, would have barred the suit.
32. There is room for argument that this section affords protection not only to a vendee acquiring an equal right of preemption before the institution of the suit, but also after it. This argument was dealt with by the Full Bench above referred to and negatived. We must therefore accept Section 20 as laying down in express terms that no suit for preemption shall lie where the vendee has acquired an equal right of preemption before the institution of the suit. If it was the intention of the legislature to afford protection to a vendee acquiring such right after the institution of the suit, it is inconceivable to me that no express provision was made in that behalf. It was pointed out by one of the learned Judges composing the Full Bench that Section 20 does not deal with the case of a vendee acquiring an equal right of preemption during the pendency of the suit, as its language will not fit in with such a case in view of the opening words of the section that 'no suit for pre-emption shall lie.' It is said that, if a suit has already been instituted, the words 'shall lie' are wholly inapplicable to the case of a vendee acquiring an equal right of pre-emption during the pendency of a suit. With all respects, I am unable to appreciate this reasoning. The legislature could easily have altered the language. Moreover, a suit may lie in its inception, but may cease to be maintainable during the pendency thereof. As soon as the vendee acquires an equal right, the suit would cease to be maintainable. Be that as it may we have to take it that Section 20 was not the proper place for giving protection to a vendee acquiring an equal right of preemption during the pendency of a suit, and the Full Bench thought that that matter had been provided for by Section 19, which, originally ran as follows:
No decree for pre-emption shall he passed in favour of any person unless he has a subsisting right of pre-emption at the time of the decree; but where a decree for pre-emption has been passed in favour of a plaintiff whether by a Court of first instance or of appeal, the right of such plaintiff shall not be affected by any transfer or loss of his interest occurring after the date of such decree.
33. The Full Bench imported into the interpretation of Section 19 the case law in which it had been held before the Act that a preemptor must show a subsisting cause of action at the date of the decree. They held accordingly that the preemptor's right does not subsist 'within the meaning of Section 19, if the vendee has acquired before the decree an equal right of preemption. It is conceded that there is nothing in the Act which lays down that the preemptor's right ceases to subsist on the vendee acquiring during the pendency of the suit an equal right of preemption. On the contrary, I am of opinion that there are clear indications in the Act which show otherwise. I have already referred to Sections 10 and 11, and the intention of the legislature underlying them. Consistently with that rule, Section 20 merely creates a bar against the preemptor if the vendee acquires an equal right after the sale, but before the suit. It is to be noted that the right of preemption, which previously accrued under Section 11, is not destroyed, by Section 20, which merely creates a bar by providing that no suit for preemption shall lie and does not lay down that the preemptor's right has ceased to exist. The law makes a clear distinction between the extinguishment of a right and a bar to the exercise of it. Section 20 clearly recognises the existence of the right which accrued under Section 11 but bars the enforcement thereof. To hold that under Section 19 the right of preemption is extinguished by the vendee acquiring a right after the institution of the suit is to put him on a different, if not a higher, footing than a vendee acquiring such right before the suit. There is no reason to suppose that the framers of the Act had any such distinction in their mind.
34. I have ventured to offer some observations on the view taken by the Full Bench because their judgment is silent on the points indicated above. In interpreting the Full Bench ruling I would take its effect to be that the case law, as it stood before the Preemption Act, is applicable so far as the vendee acquiring a right of preemption pendente lite is concerned. Though in different cases different languages have been employed, I have not been able to find any case which has gone to the length of holding that the right of preemption is extinguished. In most cases it has been said that the right of preemption is 'defeated.' In theory, at any rate, and as will presently appear, the distinction is important, there is a difference between a right being 'extinguished' and a right being 'defeated. In one case the right itself vanishes, while in the other the right exists but cannot be effectively exercised. A creditor, whose right is defeated by an alienation by his debtor, cannot be said to have lost his right. The word 'defeat' occurs in Section 53, T.P. Act; but it cannot be suggested that any extinction of the creditor's right is implied in that term. Similarly lapse of limitation defeats a right but does not destroy it, except within the limits of Section 28, T.P. Act. This distinction assumes some importance in applying the proviso which was added to Section 19 by the Amending Act 9 of 1929, passed not long after the Full Bench decision in 1928. That proviso runs as follows:
Provided that no voluntary transfer made in favour of the vendee after the institution of a suit for pre-emption shall defeat any right which the plaintiff had at the date of such institution.
35. If the proviso is applicable to the (circumstances of this case, there can be no difficulty in decreeing the plaintiff's suit, but the Amending Act was published in the official gazette on 15th February 1930, and it became operative from that date under Section 5, U.P. General Clauses Act 1 of 1924, that is to say, after the institution of the suit for preemption but before the suit was decided by the first Court. on 20th December 1930. It is argued that retrospective effect cannot be given to the proviso which can apply only to suits instituted after the Amending Act came into force. This contention has found favour with my learned brethren; but I am unable to accept it for two reasons: The first is that the proviso must be read with the section to which it is appended. It should not be taken as a rule standing apart from Section 19. If we read the section and the proviso together, it seems to me that the crucial date is the date of the decree; and as the Amending Act had come into force before the Court of first instance passed its decree, it should be applied, and no I retrospective effect is implied in at application to the present case. To make myself clear, I would reproduce the section with the proviso. They now run as follows:
No decree for pre-emption shall be passed in favour of any person, unless he has a subsisting right of pre-emption at the time of the decree...provided that no voluntary transfer made in favour of the vendee after the institution of a suit for pre-emption shall defeat any right which the plaintiff had at the date of such institution.
36. The section, is a direction to a Court. If the Court finds, when it, proceeds to pass a decree, that there is a certain rule of law laid down for its guidance, it must follow it in passing its decree. If the Amending Act had come into force after the first Court passed its decree, and the proviso is applied at the stage of the appeal, retrospective effect would be given to it but not if it was on the statute but when the decree is to be passed. The proviso does not create any right, nor does it divest anyone of his right. The right of pre-emption, which it is its object to protect accrued long before the institution of the suit; it did so under Section 11, when the sale-deed was executed. Nothing happened after the accrual of that right which might have had the effect of extinguishing it. As already observed, the acquisition of an equal right by the vendee operates as a bar to the Court passing a decree for pre-emption. Section 19, or any other section of the Pre-emption Act, or the case law before it, did not lay down that the right of pre-emption is destroyed in those circumstances, I emphasise this point, because it was mentioned in course of the arguments that the proviso could not revive a right which had been extinguished by the vendee acquiring an equal right by gift. This contention is based on an assumption which is wholly unwarranted. The right was neither extinguished, nor was in abeyance. It was a right which Section 19 as it stood before the Amending Act, did not allow the Court to give effect to. The proviso having been added before the Court proceeded to pass the decree must be given effect to.
37. The second ground, on which I base my conclusion, is that Section 19 is so worded as to make the rule therein contained as a rule of procedure rather than a rule of substantive law. Mark the similarity between the opening words of Section 11, Civil P.C. and Section 19. Both sections embody directions to the Court and have no reference to the substantive rights of the parties. Similarly, Section 3, Indian. Limitation Act, directs Courts not to entertain a suit instituted after the expiry of limitation provided therefor. None of these is a rule of substantive law. All of them provide the manner in which the ?Court is to act. To my mind, Section 19, read with the proviso, lays down how the Court is to act in passing a decree for pre-emption. It a well settled rule of law that an enactment which provides procedure applies to suits pending at its date. The proviso read with Section 19 is a direction to the Court to pass or not to pass a decree in certain cases. If the Court finds that a right of pre-emption had accrued to the plaintiff and the vendee did not acquire an equal right before the institution of the suit but acquired it by a voluntary transfer afterwards it must proceed to pass a decree. In the result, I would allow the appeal, set aside the decree of the lower appellate Court, and restore that of the Court of first instance.
38. The appeal is dismissed with costs.