M.P. Thakkar, J.
1. Two questions of an unprecedented nature relating to the interpretation of Section 281 A of the Indian Income Tax Act, 1961 as amended by the Taxation Laws (Amendment) Act, 1972 which came into force on November 15, 1972 have been raised in this revisional application by original defendants Nos. I and 2 whose contention that the suit instituted by respondent No. I-original plaintiff Hemkunverben was not maintainable was negatived by the trial Court which heard the relevant issue, being issue No. 12, as a preliminary issue. Aforesaid two questions are:
(1) Whether Section 281A of the aforesaid Act as amended is retrospective and applies to pending suits.
(2) Whether it applies to suits as against newly-added defendants who are impleaded subsequent to the enactment of aforesaid provision viz. Section 281 A which was incorporated with effect from November 15, 1972.
2. The basic facts, are not in dispute. The suit giving rise to this revision application viz. Special Suit No. 52/72 has been instituted by Hemkunverben on the premise that certain property (Fixed Deposit Receipts) standing in the joint names of Makuben, the paternal grandfather of defendants Nos. 1, 3,4and 5, and Savitaben (defendant No. 1) really belonged to the plaintiff and that Makuben and Savitaben were her benamidars. A declaration to this effect was sought along with a consequential injunction. The suit was resisted by petitioners (original defendants Nos. 1 and 2) inter alia on the ground that the suit was not mentionable in view of the aforesaid provision viz. Section 281A which in so far as material is in the following terms:
281A. (1) No suit to enforce any right in respect of any property held beanami. whether against the person in whose name the property is held or against any other person, shall be instituted in any court by or on behalf of a person (hereafter in this section referred to as the claimant) claiming to be the real owner of such property unless.
(a) the income, if any, from such property has been disclosed in any return of income furnished by the claimant under this Act; or
(b) such property has been disclosed in any return of net wealth furnished by the claimant under the Wealth-lax Act, 1957 (27 of 1957); or
(c) notice in the prescribed form and containing the prescribed particulars in respect of the property has been given by the claimant to the Income-tax Officer.
(2) The Income-tax Officer shall, on an application made by any person in the prescribed manner and on payment of the prescribed fees, issue for the purposes of a suit referred to in Sub-section (1), relevant extracts from the return furnished by such person under this Act or the Wealth-tax Act, 1957 (27 of 1957) or a certified copy of any notice given by such person under Clause (c) of Sub-section (1), within fourteen days from the date of receipt of the application therefore.
That the suit is of the nature specified in Section 281A is obvious and is not in dispute. The only question is whether the provision concerned is prospective in nature as contended by the plaintiff or retroactive as contended by the petitioners. The Trial Court has taken the view that the provision concerned is prospective and not retrospective. The suit as originally framed was instituted on March 13, 1972 impleading petitioner No. I Savitaben alone as a party defendant. Section 281A came into force some eight months thereafter on November 15, 1972. The suit would, therefore, be maintainable if Section 281 A is construed as prospective. It must, however, fail as being not maintainable if it is interpreted as having retrospective operation as contended by the petitioners. On a plain, reading of Section 281A it is evident that it can have only prospective effect and it cannot have retrospective operation so as to apply to pending suits instituted prior to the enactment of the said provision. In the first place Sub-section (1) of Section 281A has employed the expression 'shall her instituted' which obviously has a reference to the initial institution of a suit. In the second place Clause (c) of Sub-section (1) of Section 281A would become otiose and meaningless if the section were to be construed as having retrospective operation. A citizen can institute a suit of the nature contemplated by Section 281A (1)(e) after giving a notice in the prescribed form to the Income-tax Officer. If Section 281A is construed as having retrospective effect, in order to institute a suit a citizen would be required to give a notice conforming to a provision which was unborn on the date of institution. A citizen cannot be expected to be gifted with provision and to be able to read the future by anticipating the provision that may be enacted by the Legislature in future. It therefore, needs no argument to hold that the provision concerned is prospective in nature. There is no express provision giving retroactive effect and it cannot be said that by necessary implication the Legislature wanted to give retrospective effect to the said provision. In fact the Legislature could never have contemplated making it retrospective in operation having regard to the aforesaid aspect. The view taken by the trial Court on this point must, therefore, be confirmed.
3. The grievance of the Learned Counsel for the petitioners in regard to the view taken by the trial Court that the aforesaid provision (Section 281 A) will not apply even as against newly-added defendants who are impleaded for the first time subsequent to the enactment of the said provision (it was enforced on November 15, 1972) appears to be well-founded. The suit was initially instituted against only one person, namely, petitioner No. 1 Savitaben. The rest of the defendants, namely, petitioner No. 2 Tribhovandas an4 opponents Nos. 2(a) to 2(c) were impleaded later on pursuant to an order passed by the learned trial Judge on February 21, 1975 i.e some 31 years after the enforcement of Section 281A The learned trial Judge-has taken the view that since the suit as against original defendant No. 1 Savitaben had been instituted prior to the enforcement of Section 281A and since the rest of the defendants were only formal parties, there was no bar to the maintainability of the suit as against the newly added defendants who were impleaded for the first time after the enforcement of Section 281 A. The learned trial Judge has overlooked the provision contained in Sub-rule 5 of Rule 10 of Order I of the Code of Civil Procedure of 1908 in reaching this conclusion. It is provided by the sub-rule that subject to the provisions of the Indian Limitation Act of 1875, Section 22, a proceeding as against any person added as defendant shall be deemed to have begun only on the service of the summing. It is therefore, evident that so far as the newly added defendants are concerned, the suit can be treated as having been instituted only on the date on which the summons of the amended plaint was served i.e. some 25 years subsequent to the enforcement ofisec 281A. The suit as against them cannot, therefore, be considered as maintainable unless the case falls within Clause (a),(b) or (c) of (c) of Section 281 A(1). It is not contended on behalf of the plaintiff that either of the aforesaid three clauses is attracted. Under the circumstances, as the matter stands today, there is no escape from the conclusion that, the suit as against the newly added defendants is not maintainable. The learned trial Judge has committed an obvious error in proceeding on the assumption that the newly-added defendants are formal parties. The newly added defendants are the grandsons of Makuben in whose name along with the name of Savitaben the Fixed Deposit Receipts stand (defendant No. 2 is the son of Makuben and defendants No. 3, 4 & 5 are the grandsons of Makuben). The declaration sought by the plaintiff would bind the newly added defendants as well. Under the circumstances, it cannot be said that they are formal parties. The view taken by the learned trial Judge cannot, therefore, be sustained. It must beheld that the suit as against defendants Nos. 2 to 5 is not maintainable as the matter stands today.
4. It will, however, be open to the plaintiff to show that the matter falls within either Clause (a) or Clause (b) or Clause (c) of Section 281A (1) by showing that the income of such property was disclosed in her return under the income-Tax Act or that it was disclosed in the return of net wealth furnished by her. It will also be open to the plaintiff to give the notice contemplated by Clause (c) of Section 281 A(1) and to make a request to the Court to treat the newly added defendants as having been impleaded with effect from the date of the service of the notice to the Income-tax Officer as contemplated by Section 281A(c). It will also be open to the plaintiff to delete the newly added defendants as parties. Subject to these reservations the finding recorded by the learned trial Judge that the suit is maintainable as against the newly added defendants must be reversed and set aside.
5. The petition is allowed. Rule is made absolute to the aforesaid extent. There will be no order regarding costs.
C.R.A. No. 1037/76:
6. The point raised in this petition is identical. The facts are also by and large similar. The only point of distinction in this allied matter, being Civil Suit No. 125/72, giving rise to the present revisional application is that there Were two defendants at the inception. Defendants Nos. 3 to 6 were subsequently added. The revision must for the same reasons be allowed and it must be held that the suit as against original defendants Nos. 1 and 2 is maintainable where against the rest of the defendants is not maintainable as the matter stands today subject to the reservations indicated in the judgment rendered in the main matter viz. Civil Revision Application No. 989 of 1976.
The petition is allowed. Rule is made absolute to the aforesaid extent. There will be no order regarding costs.