K.B. Irani and another vs The Custodian of Evacuee Property, Hyderabad

This is a petition for the issue of a Writ of Certiorari against the Custodian, Evacuee Property, Hyderabad, and against the Custodian. General Evacuee Property who has in revision confirmed the Order of the Custodian.

The material facts relating to this case are that the petitioners before us purchased building No. 90, Marredpalli, Secunderabad, from one Baghali Malik through his General Power Agent Mir Haji Mohamad Khan for a sum of Rs. 30,000/-The sale-deed was executed on the 29th of March 1949. The First Evacuee Property Regulation being Regulation No. 71 of 1358P, came into force in this State on the 22nd August 1949 and Baghali Malik was declared an evacuee under the said Regulation on the 15th of September 1949. Subsequent to this the Second Regulation being Regulation No. 12 of 1359 F. Hyderabad Administration of Evacuee Property Regulation came into force on the 20th of December 1949. The petitioners submitted the petition for confirmation of the sale before the Custodian on the 16th February 1950. The Assistant Custodian (Legal) who dealt with the matter rejected the sale on the ground that the Attorney or General Power Agent who sold the said house was an "unauthorised person" within the meaning of the Evacuee Property Regulation and refused to confirm the sale by his Order dated the 12th April 1950. He seems to have been of the opinion that there was nothing objectionable in the transaction of sale. He recorded the statement on oath of the applicant K. B. Irani that he purchased the property in good faith and for valuable consideration, and the trend of his order shows that he did not disbelieve this allegation. On appeal the case was heard by the Deputy Custodian u/s 30, Clause 3 of the Evacuee Property Regulation of 1359 P. The appeal was disallowed. The Assistant Custodian upheld the finding under appeal that the sale was by an "unauthorised person." He cited a further new ground, viz. that the application for confirmation was filed beyond two months from the date of the First Evacuee Property Regulation, and therefore was barred by limitation. Against the latter order the petitioner filed a revision petition before the Custodian General Evacuee Property, India, which was rejected on the same grounds.

In this case two points need consideration. The first point is whether the General Power Agent of the Vendor was an "unauthorised person" for the purpose of the sale in question. The term "unauthorised person" has been defined in the two Regulations and also in the Administration of Evacuee Property Act 1950, and it is substantially the same in all these three legislations. Under, Section 2 (j) of the Act of 1950, "unauthorised person" has been defined as any person whether duly empowered in this behalf by the evacuee or otherwise, who after the 14th day of August 1947 has been occupying, supervising or managing the property of an evacuee without the approval of the Custodian. The first thing that strikes one''s mind in this connection is whether it was possible for a General Power Agent managing the property on behalf of the owner to obtain the approval of the Custodian at a period when the Custodian''s office was neither created nor was it in existence. The first Regulation which created the said office is dated the 22nd August 1949, and the sale in question took place on the 29th of March 1949. Thus, it was not possible for the General Power Agent to get the approval of the Custodian for the sale and prior management of the property in question. The obvious meaning of getting approval is that if the General Power Agent managed and supervised the property at a time when any of the Evacuee Property Laws came into operation, a subsequent management or sale of the property would not be valid unless approved by the Custodian, Thus, it is clear that the term "unauthorised person" cannot be applied to the person who executed the sale in question taking into view the context of the transaction and the Evacuee Property Laws. That is probably the reason why Section 2 begins with the words that unless the context otherwise requires, the meaning given in the definition is to be followed. It is clear in our judgment that the context in this particular case requires that the definition given in Clause (j) and the word 4'' unauthorised person" is not to be followed. We need not lay further stress on this point any further as the Custodian himself has in a subsequent judgment changed his opinion and. has expressed the view that the definition of "unauthorised person" as given in the Act does not apply to sales prior to the E. P. Laws (see rulings of the Custodian General Vol. I, page 172, Case No. 58 ''Rachappa v. Custodian, Evacuee Property of Hyderabad'', Wherein at page 173 he has held:

that if under the ordinary law a person can be said to be properly vested with authority to represent the evacuee in any transaction the definition of "unauthorised person" as given in Clause (j) cannot prejudicially affect either his authority or the scope of such authority.

We are, therefore, of the opinion that the sale in question cannot be challenged on the ground of its being executed by an "unauthorised person"

The second point is one of limitation. Section 25 of the First Evacuee Property Regulation of 1358 Fasli laid down that no transfer of any right or interest in any evacuee property shall be effective unless it was confirmed by the Custodian. Clause 2 provided that an application for confirmation of such transfer must be made to the Custodian within two months from the date of the registration of the deed of transfer or within two months of the commencement of the Regulation whichever is later. The petition for confirmation was submitted on the 16th of February 1950. Thus, it is clear that it is beyond two months from the 22nd of August on which date the said Regulation came into force. But it is stated that the vendor was declared an evacuee on the 15th September 1949; even from that date it is beyond two months. Counsel for the petitioner relied upon the subsequent Evacuee Property Regulation No. 12 of 1359 F which came into force on the 20th of December 1949. Section 37 of the said Regulation provided that an application for confirmation should be submitted within two months of the coming into force of the said Regulation or within two months from the date of the transfer. It is argued that this Section gives two months time from the 20th of December 1949 and the petition dated 16-2-1950 is therefore within two months, in view of the provisions of the said Section No. 37. It is further contended that Section 40, Clause (2) of the Administration of Evacuee Property Act of the Union Parliament of 1950 gives two months time for filing the application from the commencement of the 1950 Act which came into force on the I7th of April 1950 and that the petition in this case which is submitted long before cannot be considered as being beyond time. We have, therefore, to consider what is the effect of the wording of Section 37, Clause (2) Evacuee Property Regulation of 1359 F and also of Section 40, Clause (2) of the Act of 1950; whether a fresh period of limitation has been provided in the said Sections, and whether the Section is retrospective or prospective.

Mr. B. Narahari Sastri, the learned Advocate, on behalf of the respondents has argued that the benefit of Section 37, Clause (2) of the Evacuee Property Regulation of 1359 F cannot be given to the petitioner as the petition was time-barred under the Regulation of 1358 F and the subsequent 1359 F Regulation cannot revive the cause which was already barred by limitation. In support of his contention he has cited Karbalai Gulam Vs. Haji Ebrahim Busheri and Co., and ''Ramayya v. Lakshmayya'', 1942- 2 Mad L J 249 (PC) . These two rulings discuss the principle that as a general rule an Act is to be supposed to be prospective and not retrospective. Thus, in Karbalai Gulam Vs. Haji Ebrahim Busheri and Co., , it has been held that where under Article 5 of the Limitation Act one year''s limitation was provided for the filing of the suit and the cause of action had become time-barred before the amendment of the Article in 1938 prescribing a period of three years for the institution of the suit, the Court had come to the conclusion that the amendment did not revive the cause of action already barred. In ''Ramayya v. Lakshmayya'', 1942 2 Mad LJ 249, their Lordships were considering the case of a reversioner filing a suit for the recovery of the immovable property against an alienee. It was held that ordinarily a suit by reversioner for the recovery of immovable property would be governed by the provisions of the Limitation Act in force when the suit is instituted, wherein the defendants are able to show that the right of action had already become barred under the earlier Limitation Act then the title they had acquired cannot be defeated by invoking the subsequent Limitation Act. The principle is the same viz., that if according to the law in force a suit got barred by limitation then subsequent amendments cannot revive the barred cause of action unless there was anything in the new Act which revived the remedy which was barred. There is nothing in Article 140 of the Indian Limitation Act of 1908 which either by express words or necessary implication revives the cause of action already barred. Mr. Sastri has also referred to Chitaley''s Law of Limitation Vol. I, page 58 (1938 Edn) which discusses the general rules with regard to the interpretation of Statutes. The two cases referred to above cited by Mr. Sastri do not discuss the question of a fresh right of suit being given by a subsequent Act of Limitation or retrospective effect being given to such an Act and hence are not very helpful. In ''Sachindra Nath v. Maharaj Bahadur Singh", 48 Ind App 335: 74 Ind Cas 660, their Lordships had, to consider the effect of the Indian Limitation Act of 1908 as compared with the Limitation Act of 1877 with regard to its effect on applications for execution of a decree ''nisi made in the mortgage suit and they were of the opinion that:

there is no provision in this later Statute so retrospective in its effect as to revive and make effective a judgment or decree which, before that date has become unenforceable by lapse of time.

Thus, we have to consider what is the effect of the provisions of Section 37, Clause (2) of the 1359 P Evacuee Property Regulation. Is it so retrospective in its effect as to give a fresh period of limitation for filing of petns. for confirmation before the Custodian? In this connection we may discuss the general principles which serve as a guide for arriving at a decision whether a particular Statute is to be regarded to have retrospective or prospective operation. The general rule is that all Statutes are to have prospective operation, and no Statute should be considered to have retrospective operation unless such a consideration appears clearly in the terms of the Act or arises by necessary and distinct implication; (Maxwell''s Interpretation of Statutes 9th Edition page 221.) Maxwell further states at page 222 (referring to the judgment of Lord Wright, In re: ATHULMNEY; Ex Parte WILSON'', (1898) 2 Q B 547 at p 552) that if the enactment is expressed in a language which is fairly capable of either Interpretation - it ought to be construed as prospective only. But he further states that if the language is plainly retrospective it must be so interpreted. Another rule of interpretation makes a distinction with regard to retrospective effect between Statutes which deal with procedural matters and Statutes which deal with substantive rights. In AIR 1946 20 (Lahore) , it was held that no Statute, unless it be a Statute dealing with procedure only, should be construed as having retrospective effect, unless the Statute expressly made its provision retrospective or that retrospective effect had to be given to it by necessary implication or intendment. Thus, we have to look to the intendment of the legislature or the implication of the Statute to find out whether it has retrospective operation, and for that purpose the Court must look at the relevant Sections and its language. Another principle is to keep in mind the general scope and purview of the Statute and the remedy sought to be applied to it should be looked at and it should be considered as to what the legislature contemplated.

Further whenever an intention is clear that an Act should have a retrospective operation, it mast be so construed even though the Sections may appear unjust or hard.

Now we shall examine the provisions of Section 37, Clause (2) of the Evacuee Property Regulation of 1359 F in the light of the above principles. The said clause runs as follows:

Clause (2): An application for confirmation of such transfer may be made by the transferor or the transferee or any person claiming under or lawfully authorised by either of them to the Custodian within two months from the commencement of this. Regulation.

The words "within two months from the commencement of this regulation" are very clear. An application for the confirmation of a transfer may be made within two months from the commencement of the Regulation. In our opinion this clause will cover all transfers made prior to the Regulation and two months for the period of confirmation of such prior transfers is allowed under the Clause from the commencement of the Regulation, i.e., 20th December 1949. The words are very wide. There is nothing in them to show that petitions for the submission of which two months time under the prior Regulation had. elapsed cannot be revived or that they should be regarded as time barred, and the benefit of the clause should not be given to such cases. Moreover, prescribing the period of limitation of two months is the law of procedure so far as this law is concerned, and the general rule that procedural law should be applied retrospectively applies to this case. We have here a ruling on this point by the Custodian himself (see rulings of the Custodian General page 193 Case No. 66. The "Union of India v. Tarachand K. Gupta and Miss Parpati Jagtiani.'' The facts of that case were that on the 2nd of December 1947 one Siddiqi who was the owner of the building in dispute, sold the same to Miss Parpati Jagtiani for a consideration of rupees one lakh. On the 20th January 1948, Miss Jagtiani sold the property to Shri Tarachand Gupta for a sum of Rs. 1,25,000/-. Siddiqi had in the meanwhile migrated to Pakistan. On the 4th of October 1948, an application was made by Shri Tarachand Gupta u/s 5 (a) of the East Panjab Act 14 of 1947 and it was contended that the said application ought to have been made on or before the 31st of March 1948 under the said Section 5 (a); and as it was beyond time, it should be dismissed. In this connection reference was made to a subsequent Ordinance No. 12 of 1949 which provided a period of limitation of two months for application of confirmation to be computed from the date of the transfer or from the date of the publication of the Notification whichever was later. The learned Custodian General was of the opinion that even if the said application of Shri Tarachand Gupta had been dismissed" by reason of the provisions of Section 5 (a), a fresh application for confirmation could have been made as provided in Section 25 of the Ordinance and in the circumstances of the case, there was no point in dismissing the application already pending as offending against the provisions of Section 5 (a), and then compelling the transferee to make a fresh application for confirmation.

Section 5 (a) of the East Punjab Administration of Evacuee Property Act 14 of 1947 is very much similar to the provisions of Section 25 of the Hyderabad Evacuee Property Regulation of 1358 P. Thus Clause 3 of Section 5 (a) of the Punjab Act is very much similar to the later portion of the Clause (2) Section 25 of the above Hyderabad Regulation and both lay down that an application for confirmation of a transfer may be made within two months from the date of the transaction. According to the principle laid down in ''TARACHAND GUPTA''S CASE'', (Custodian General Rulings p. 191, Case No. 66) a person who filed a petition for confirmation under the Punjab Act after the prescribed period, was entitled to have his right of submitting a petition, revived by the subsequent Ordinance of 1949. The same rule would apply to the petitioner in the case before us whose right though barred under the 1358 F Regulation has been revived by Section 37 of the 1359 P Regulation, and there is no point in requiring him to file a petition under the 1359 P Regulation.

The general principle is thus clear that Section 37, Clause (2) inasmuch as it gives two months period for filing an application from the commencement of the 1359 F Regulation is retrospective in its operation and its benefit will be available to transfers made prior to the commencement of the said Regulation.

If the intention of the legislature with regard to Clause (2) was to have only prospective operation, there was no necessity of adding the words "within two months from the commencement of this Regulation." Clause (2) could have been simply enacted by saying that "an application for confirmation of such transfer may be made by the transferor or transferee or any person claiming under or lawfully authorised by either of them, to the Custodian within two months from such transfer." But instead of this when the Clause gives two months period from the commencement of the Regulation it is clear that it will cover transfers which took place prior to the commencement of the Regulation. It was not necessary to insert these later words as the old Regulation had already given two months time u/s 25 of tile old Regulation for the purpose of confirming transfers pertaining to a period during which the old Regulation was in force. The intention of the law making body seems to be that as the Evacuee Property Regulation was altogether a new piece of legislation, it should not work hardships upon bona fide transferees and if for some reason or other such transferees had no knowledge of the 1358 F Regulation, they could get their transfers confirmed by filing petitions for such purpose under the new 1359 F Regulation within two months from the commencement, of the same, and that retrospective effect can be given in view of the language of an enactment and intention of the legislature as made clear in a number of rulings.

In Benares Bank Ltd. Vs. Shri Sri Prakasha Bhagwan Das and Others, , it was held that:

Section 235 (1) of the Companies Act 1913 as amended in 1936, is a Section of procedure containing the rule of Limitation which together with the rule of Limitation contained in the old unamended Section is "adjective" and not "subjective" law and has therefore retrospective operation.

In '' Mt. Begam Sultan Vs. Sarvi Begam , it was held that the law of Limitation applicable to a suit or proceeding is the law in force at the time of institution of the suit or proceeding unless there be a distinct provision to the contrary.

Crawford in his "Statutory Construction" at page 566, Section 278 (1940 ''Edn) discusses the principle as to why a construction with regard to retrospective operation of a Statute should not generally be given. He states:

the rule that statutes should not be given a construction which will give them retrospective effect, is as already indicated especially applicable to Statutes where such a construction will either destroy or impair vested rights.

In the case before us there is no question of destroying or impairing vested rights. In fact the vested right of the petitioner in the suit will be protected by giving the Regulation retrospective construction. It is also fairly clear that if a Statute which provides some new procedure is brought into operation while a case is pending the benefit of the new Statute will be given to the pending case. Crawford at page 568 Section 279 refers to the case of ''Aetna Insurance Co. v. O''Malley'', in which it was held that:

no person can claim a vested right in any particular mode of procedure for the enforcement of his rights. Where a new Statute deals with procedure only, prima facie, it applies to all actions - those which have accrued or are pending and future actions,

Thus the petition in the case before us which was filed before the Custodian on the 16th February 1949 ought to be considered as one submitted under the 1359 F Regulation and in our opinion, must be deemed to be within time. We are therefore of the opinion that the decision of the Custodian and the Custodian General on the point of limitation cannot be sustained and must be set aside. Thus, in our Judgment the petition is both within time and the sale is valid and enforceable as having been executed by an "authorized person." The petition on the merits must therefore be allowed. We direct accordingly.