C.Y. Anjaneyalu Chetty vs Messrs. Seth Sheonarain and Sons, Mohunta

Ramaprasada Rao, J.—The landlord is the petitioner in both there civil revision petitions. A common preliminary question was argued before

the appellate authority under the Madras Buildings (Lease and Rent Control Act, 1960, as to whether certain new rules in the matter of fixation of

fair rent which came into force in March 1965 substituting the old rules which were effective since 1961 ought to be applied or the existing rules

before substitution ought to prevail. It is not in dispute that the new rules prescribe a totally, different mode of ascertainment of fair rent and deal

with different methods of classification of buildings, specifications thereto and other details. The learned appellate authority has noted such details

and it is unnecessary to repeat them. When the application for fixation of fair rent was filed by the petitioner, the old rules were in force. By the

time the appeal came up for hearing, the new rules were passed. The landlord petitioner urged in appeal that the court is bound to apply the new

rules for fixation of fair rent and no longer the old rules can be looked into for purposes of fixation of fair rent. Learned counsel for the tenant,

however, arguing contra contended that the appellate court is not bound to take notice of the amended law in as much as it was not made

retrospective either expressly or by necessary implication. The lower court, after hearing elaborate arguments on both sides, was of the view that

the new rules passed in 1965 cannot be applied to the case and that the determination of fair rent has to be done in accordance with the rules

which were in force at the time of the Institution of the petition. As against this order the landlord has filed the above two revision petitions. The

statutory provisions relevant to the enquiry may immediately be noted. They are S. 4 of the Madras Buildings (Lease and Rent Control) Act, 1960,

hereinafter referred to as the Act, the Madras Buildings (Lease and Rent Control) Rules 1961, hereinafter referred as the old rules, and the

Madras Buildings (Lease and Rent Control) Rules 1965, hereinafter referred to as the new rules. It is not in dispute that the new rules prescribe a

different and an independent method of valuation of properties to arrive at the fair rent, which is totally different from the method prescribed under

the old rules. What is the scope of S. 4 of the Act? In the ultimate analysis, S. 4 enables the hierarchy of tribunals constituted under the Act to fix

fair rent in accordance with the said section and the rules prescribed therein. No doubt, guide lines are provided in the rules. But no decision can

be arrived at without reference to the rules which have an impact on the section itself. In such circumstances, the point for consideration is whether

the rules framed by the delegated authority under S. 34 of the Act, are merely prescribing procedure or laying down substantial law or dealing with

both, I shall advert to this aspect later.

Mr. P. Venkataswami, learned Counsel for the petitioner, on the basis of several judicial precedents cited before me, contends firstly that the

new rules framed in 1965 which substituted the old rules of 1961 are purely procedural in scope and they are therefore retrospective in operation;

secondly, even if the rules read with the section are meant to lay down new rules, substantive rights not being inviolable, the new law should be

deemed to be retrospective, at least by necessary implication and such is the subject of the amendment; thirdly, if the rules are to be interpreted as

dealing with the substantive rights and procedure, even then they could be applied retrospectively in view of the avowed object of the Act and the

later amendment; fourthly, the appellate court has power while considering an appeal which arose from a proceeding decided under the old law to

apply the later supervening and modified law, as it ought to, subject however to the general principles of interpretation of statutes. Mr. K.G.

Manickavasagam, learned counsel for the respondent, contending contra would state that the rules framed by the State Government under S. 34

for purposes of elucidating the prescription contemplated under S. 4, are by themselves equitable to substantive law, as no application for fixation

of fair rent can be decided under S. 4 of the Act without reference to the prescribed explanatory rules, which furnish the key to arrive at such a

decision. As a decision under S. 4 read with the relevant prescribed rules affects vested rights of parties 10 the application, any modification of the

prescription by substituting new rules thereto, unless made expressly retrospective, cannot be lightly so made. The argument proceeds that there

are no telling circumstances or social features which compel the court to draw the inference that such new rules are to be retroactively applied by

necessary implication. He therefore desires to sustain the order of the lower court.

In interpreting statutes and the modifications or alterations made thereto by the legislature either by itself or through delegation and in particular

while considering whether a later amendment of a statute or a rule is retrospective in operation, certain fundamental concepts have to be borne in

mind. No person has a vested right in any course of procedure. This is not disputed by the learned counsel for the respondent, but his case is that

the new rules and their content do not concern themselves with procedure. Mr. P. Venkataswami however would hesitantly say that they do relate

to procedure. While analysing S. 4 of the Act, I have made it clear that it involves the determination of rights of parties. It is idle to state that the

new rules or for the matter of that the old ones art purely guide lines prescribing procedure to be followed. It is not to be overlooked that without

resort to such rules, no fair rent under the Act can be fixed at all. It would be illegal to do so. In such a perspective, it is difficult to hold that the

elucidatory prescription as contained in the rules and as required by S. 4 are purely procedural in scope. No doubt, as observed by Lord

Blackbarn in Gardner v. Lucas (1873) 3 A.C. 582, at 603:

It is perfectly settled that if the Legislature intended to frame a new procedure that, instead of proceeding in this form or that, you should proceed

in another and a different way clearly then by gone transactions are to be sued for and enforced according to the new form of procedure.

Alterations in the form of procedure are always retrospective, unless there is some good reason or other why they should not be.

In the view that I hold that the new rules do not formulate a new procedure only, such rules are not retrospective. The other but an alternative

contention of Mr. P. Venkataswami is that the new rules are retrospective by necessary implication; whether such rules are considered as

substantive law or an admixture of law and procedure.

The ordinary rule is that a statute affecting vested rights in prospective in its scope and application though substantive rights by themselves are

not inviolable. It would be disrespectful to the legislature, if it is presumed that in cases where the new law intrudes into the region of final rights

created under the old law and if it impairs legal rights and legal obligations which have become vested and workable, that even in such cases the

supervening law is retroactive in operation. While considering whether a later provision in a statute is retrospective, there is no scope for baggling

with one''s imagination. If there is no express provision giving the new law retroactive operation, it should be crystal clear that the intendment is to

so operate. Unless the intention is clear and beyond doubt, it would be difficult for the courts, which are expected to interpret law and not declare

them, to give such a revised new law retrospective effect. In the instant case there is no express indication that the rules made in 1965 are

retrospective. The new rules only substituted the old rules. In spite of a deep probe into the content of the new rules, it is not clear that the

legislature intended that they should have retrospective effect. The utmost that could be said is that when the new rules were framed, they were

slovenly expressed, but it cannot be said with certainty that the intention was to give effect to them retrospectively. Even in cases where rights and

procedure are mixed up and dealt with by legislature either in its primary capacity or by virtue of statutory delegation, the normal intention of the

legislature in such cases is that the old rights are to be governed by the old procedure and the new rights under the substituted provisions are to be

dealt with by the new procedure.

Quilter v. Mapleson 9 Q.B.D. 673, cannot help the petitioner. That was a case where Jessel M.R. observed that the particular section

considered by him was manifestly retrospective. That is not the case here. The new rules are silent about this. Even so Stovin v. Fairbrass L.J.

Rep. 1919 = 88 K.B.D, 1004, is a case where there was no dispute about the retrospective nature of the amended Act. The point is pressed very

strenuously that by necessary implication the new rules are retrospective. I do not agree for the reason already stated. Mr. P. Venkataswami does

not seriously dispute that the proceedings under S. 4 of the Act result in the determination of rights and one or the other party acquire vested rights

as a result thereof. But reliance is placed on Gnanaprakasa v. Mahboob Bi (1962) 1 M.L.J. 254 at 257. Srinivasan, J., in my view, did not lay

down, as contended, a proposition that all amending acts are retrospective in operation. The following passage in the above case is pressed for

acceptance:

Unless there is an express provision to the contrary, the presumption is that an amendment of a provision in an existing Act is deemed to have been

part of the Act since the date of the passing of the original Act.

But the learned Judge rightly followed it up by saying:

It is true that this is subject to the general principle regarding retrospective operation of any provision.

In that case, considering the object of the peculiar legislation, and the nature of rights conferred by the Madras City Tenants Protection Act, to

the tenants, the learned Judge was of the view that the amendment therein was to be retrospectively applied to avoid unjust enrichment on the part

of the tenant and expropriation of the landlord''s interest in his land without just compensation. No such impact of public policy, on facts, arises in

this case. Here in a case where certain rights are created under the old rules and the new rules when applied would obviously disturb such rights to

the prejudice or advantage of one or the other party. It may be that the tenant may be benefited or the landlord. Intrusion into vested rights cannot

be escaped. In such circumstances, the court is not called upon by boggling reasoning that the new rules ought to be made necessarily

retrospective. It would be straining the language of the Act to do so. On the last contention reference was made to Lachmeshwar v. Keshawlal

AIR 1941 F.C. 5. In that case the question of retrospectively of law did not directly arise. The Federal Court was considering the right of an

appellate court to administer a new law. It is not clear whether the new law was expressly retrospective or was so by necessary implication. The

case in Dayawati v. Inderjit (1966)2 S.C. J. 787 throws considerable light on the question as to how far an appellate court can take cognisance of

a modified law, which did not govern the proceeding when it was disposed of by the trial Judge.

Now as a general proposition, It may be admitted that ordinarily a court of appeal cannot take into account a new law, brought into existence after

the judgment appealed from has been rendered because the rights of the litigants in an appeal are determined under the law in force at the date of

the suit. Even before the days of Coke, whose maxima new law ought to be prospective, not retrospective in its operation is oft-quoted, courts

have looked with disfavour upon laws which take away vested rights or affect pending cases. Matters of procedure are, however, different and the

law affecting procedure is always retrospective. But it does not mean that there is an absolute rule of inviolability of substantive rights. If the new

law speaks in language, which, expressly or by clear intendment, takes in even pending matters, the court of trial as well as the Court of appeal

must have regard to an intention so expressed, and the court of appeal may give effect to such a law even after the judgment of the court of first

instance. The distinction between laws affecting procedure and those affecting vested rights does not matter when the court is invited by law to

take away from a successful plaintiff, what he had obtained under a judgment.

It is therefore clear that not every amended law has to be administered, as a matter of course by the appellate court. It is that modified law

which expressly or by necessary implication takes in pending matters and if such law invites the court to administer it, then the appellate court is

bound to follow up the new law. I have already strongly expressed that the new rules are not retrospective either expressly or by necessary

intendment. Even Jessel MR. in Quilten v. Mapleson 9 Q.B.D. 672 at 675 said:

We must, therefore, in furtherance of the object of the Act, hold the enactment to apply to pending proceedings, unless there is something in the

words to prevent our doing so.

Everything in the new rules prevents the adoption of the same by the appellate court to pending proceedings. The application to fix fair rent

was filed in 1964. Any fair rent fixed under the Act would take effect from the date of the application. The new rules came in 1965. They are silent

about its operation retrospectively. Public policy or the objects of the Act do not compel an intention on the part of the legislature to do so. It is not

therefore necessary for the court of appeal to apply the new rules. Said Lord Denning in Attorney General v. Vernazza (1960) 3 A.E.R. 97 at

101.

It is, of course, clear that, in the ordinary way, the court of appeal cannot take into account a statute which has been passed in the interval since the

case was decided at first instance, because the rights of litigants are generally to be determined according to the law in force at the date of the

earlier proceedings.........But it is different when the statute is retrospective either because it contains clear words to that effect or because it deals

with matters of procedure only; for then Parliament has shown an intention that the Act should operate on pending proceedings, and the court of

appeal are entitled to give effect to this retrospective intent as well as a court of first instance...These decisions seem to me to show that the court

of appeal can give effect to a retrospective Act passed in the interval since the case was at first instance, no matter whether it deals with vested

rights or with procedure only.

The matter can be viewed slightly in a different perspective as well.

S. 8-a of the Madras General Clauses Act, 1891, reads:

Where any Act to which this chapter applies, repeals any enactment by which the text of any previous enactment was amended by the express

omission insertion or substitution of any matter then, unless a different intension appears, the repeal shall not affect the continuance of any such

amendment made by the enactment so repealed and in operation at the time of such repeal.

I am of the view that the new rules substituted in 1965 partake the character of law, which has to be read into S. 4 of the new Act.

Consequently the law is amended by substitution by the new rule. Then according to S. 8-A it is not retrospective. In a similar context in

Strawboard Manufacturing Co. v. Gutta Mill Workers Union AIR 1953 S.C. 95 at 97 the learned Judges of the Supreme Court observed:

Learned Advocate for the intervener, the Stale of Uttar Pradesh, draws our attention to S. 21 U.P. General Clauses Act 1904, and contends that

the order of 26th April, 1950 should be taken as an amendment or modification, within the meaning of that section, of the first order of 18th

February, 1950. It is true that the order 26th April, 1950 does ''ex facie'' purport to modify the order of 18th February, 1950 but m view of the

absence of any distinct provision in S. 21 that the power of amendment and modification conferred on the State Government may be so exercised

as to give retrospective operation the order of 26th April, 1950, viewed merely as an order of amendment or modification, cannot, by virtue of S.

21, have that effect.

The above reasoning is equally applicable to a case where both the substance and procedure of law are together amended by substitution or

otherwise at one time Mukherjea, J., in Dhirendra Nath v. Ijjotali Miah AIR 1940 Cal. 423 at 425 dicta may be usefully referred to:

.........where the repealing enactment repeals a substantive right as well as the procedure by which it was enforced and in such cases if the rights are

saved in respect of transactions completed prior to the repeating of the statute, the remedies in respect of such rights as laid down in the repealed

statute are also saved and the litigant can institute or continue proceedings in the same way for the enforcement of his rights as if the repealing Act

had not come into force.

The lower court rightly discussed the question involved as a preliminary issue and found that as the principles governing the fixation of fair rent

partake the character of substantive law, the tenant secured a vested right for such fixation on the basis of the old rules and not under the amended

provisions. The conclusion arrived at by the learned Chief Judge, Court of Small Causes, is therefore correct. Both the civil revision petitions are

dismissed and they are remitted back to the appellate Court for disposal in accordance with the observations made above and on the basis of the

old rules. There will be no order as to costs.