Mst. Mohan Kaur vs Custodian MEP and Another

Chopra, J.—This petition for revision is directed against an order of the executing Court setting aside a court-sale on an application by the Custodian under Section17(2), Administration of Evacuee Property Act

The facts are brief and simple. Mst. Harnam Kaur obtained a money decree against Bakhshi and Budra. In execution thereof Mst. Mohan Kaur, a transferee of the decree, got an Ahata of the judgment-debtors attached on 27-H-1945. In a court auction, the Ahata was knocked down to Mohan Kaur on 10-5-1948. The sale in her favour was confirmed on 12-5-1948 and a month or so thereafter she got possession of the property sold.

After satisfaction of the decretal amount and payment of Rs. 245/- as Nazrana, the balance of Rs. 265/- was directed to be paid to the Custodian, since the judgment-debtors happened to be muslim evacuees. On 7-7-1950, the Custodian presented an application for setting aside the sale u/s 17(2), Administration of Evacuee Property Act.

The executing Court accepted the application, set aside the sale and. directed that posses-s elori" be restored to the Custodian and the amount paid" to! him as Nazrana remitted to the- . decree-holder and that the latter, if permitted by law, would be entitled to realise the decretal amount from the Custodian.

The petition for revision against this order has been referred to a Division Bench, along with another case of a similar nature, because of the importance of the law points involved. Por proper appreciation of the points raised, it is (2) necessary to quote the relevant law. After, several successive local Ordinances providing for administration - of evacuee property, the central Ordinance No. 27 of 1949 (hereinafter to be re-r ferred as the Ordinance) came into force on 18-10-1949. Section 17 of this Ordinance says.

17(1) Save as otherwise exp''ressly provided in this Ordinance, no, property which has vested in the Custodian shall be liable to attachment, distress or sale in execution of an order of a Court or of any other authority, and no injunction in respect of any such property shall be granted by any Court or other authority.

Save as otherwise expressly provided in this Ordinance, any attachment or injunction subsisting on the commencement of this Ordinance in respect of any evacuee property which has vested in the Custodian shall cease to have effect on such commencement, and any transfer of evacuee property. under orders of a Court or any other authority made after the 14th day of August, 1947, shall be set aside, if an application is made to such court or authority by or at the instance of the Custodian within three months from the commencement of this Ordinance.

The sale in question took place on 10-5-1948, and it is not disputed that the house in question was an "evacuee property" as defined by the Ordinance and that it ought to have vested in the Custodian. The above provision of the Ordinance, therefore, clearly applied and the sale could have been set aside if an application to that effect was made by the Custodian within three months of 18-10-1949, the date of the commencement of the Ordinance.

The Ordinane was replaced by the Administration of Evacuee Property Act, 1950, (hereinafter to be referred to as the Act), which came into force on 17-4-1950. Section 17 of the Act, which corresponds to Section 17 of the Ordinance, reads

17(1) Save as otherwise expressly provided in this Act, no property which has vesetd in he Custodian shall be liable to attachment, distress or sale in execution of an order of a court or of any other authority, and no injunction in respect of any such property shall be granted by any court or other authority.

Save as otherwise expressly provided in this Act, any attachment or injunction subsisting on the commencement of this Act In respect of any evacuee property which has vested in the-'' Custodian shall cease to have effect on such commencement, and any transfer of evacuee property under orders of a court or any other authority made after the 1st day of March, 1947, shall be set aside, if an application is made to such court or authority by or at the instance of the Custodian within six months from the commencement of this Act.

The main changes brought in by this provision of the Act are (1) that any transfer '' of evacuee property under orders of a Court or any other authority made after 1-3-1947, (instead of 14-8-1947), shall be set aside and (2) that an application for the purpose can be presented by the Custodian within six months of 17-4-1950, -when the Act came into force.

Section 17 of the Act was subsequently amended with retrospective effect by Section 3 of Act ''22 of 1951 and the amended section now reads as follows:-

17 (1) Save as otherwise expressly provided In this Act, no evacuee property which has vested or is deemed to have vested in the Custodian under the provisions of this Act shall, so long, as it remains so vested, be liable to be proceeded against in any manner whatsoever in execution of any decree or order of any court or other authority, and any attachment or injunction or order for the appointment of a receiver in respect of any such property subsisting on the commencement of the Administration of Evacuee, Property (Amendment) Act, 1951, shall cease to have effect on such commencement and shall be deemed to be void.

Where, after the 1st day of March, 1947, any evacuee property which has vested in the Custodian or is deemed to have vested in the Custodian under the provisions of this Act has been sold in execution of any decree or order of any court or of other authority, the sale shall be set aside if an application in that behalf has been made by the Custodian to such court or authority on or before the 17th day of October, 1950." The change relevant for the purpose of this case effected by the substituted section is that it has been made applicable not only to property that has vested in the Custodian (under any previous law) but also to property that shall be deemed to have vested in him by virtue of Section 8 of the Act.

In the first instance, Shri D.S. Nehra, learned Counsel for the Petitioner, contended that the application (dated 7-7-1950) for setting aside the sale having been presented by the Custodian more than three months after the commence ment of the Ordinance was barred by time.

It is argued that the period of limitation for such an application provided by the Ordinance expired before the Act came into force on 18-4-1950, and before the application was actually presented, and therefore, the subsequent law could not revive the right by providing a further or larger period of limitation for a similar application.

Reliance in this connexion is placed on Km. Kr. Kr. Ramanathan Chettiar Vs. N.M. Kandappa Goundan (died) and Others, , and a judgment of - the Custodian General of Evacuee Property, New Delhi, in "K. B. Irani etc. of Hyderabad v. Cusdian of E.P. Hyderabad'', (Case No. 53, at page 159 of Rulings of the Custodian General, Volume I, published by the Federal Law Depot, Delhi;.

Where a claim was within limitation according to an earlier Act on the date when the new Act came, into force and the proceeding is commenced after the coming into force of new Act, it is the new Act which would govern the decision on the point of limitation. Right of action which was barred by limitation at the time when the new Act or amendment came into force cannot be revived by the subsequent change in law. This is a principle which is generally recognised.

But it is always subject to the proviso that there is nothing in the later Act or amendment which can be deemed to apply retrospectively so as to revive the claim that had already become barred. As a general proposition and in the absence of any expression of intention by the legislature to the contrary, it is well established that the section does not exclude from its operation sales for which provision was also made under the Ordinance and limitation with respect to which had already expired. The language of the statute is plain and unambiguous and the section is enacted to occupy the whole field. That makes the intention of the legislature abundantly clear mere extension of the period of limitation for a suit or an application by the new Act does not revive a right which had already been barred by the repealed Act.

It cannot, however, be denied that the legislature has unrestricted power to resuscitate even a lapsed right by making a special law which distinctly allows such a revival.

It has then to be seen whether Section 17(2) of the Act makes any such provisions or there is anything in the Act to unequivocally express this intention of the legislature. The object of successive evacuee legislations was to keep the property of an evacuee in fact and safe from any orders of. a court or other authority.

This was not merely to give protection to the judgment-debtors, but also to -preserve the evacuee property ultimately for relief to the refugees for the vast properties they had to abandon at their own places. It is with this back ground that the provisions of the Act have to be looked into and interpreted. Section 17 (2) of the Act sets out two outside limits: the sales to set aside which an application lies should have been effected after 1-3-1947, and the application may be presented at any time before 17-10-1950.

Under the Ordinance repealed by the Act sales after 14-8-1947, could only be challenged. The right to challenge was thus extended by the Act to sales effected between 1st March and 14th August, 1947, as well. Section 17(2) is expressly made applicable to every sale effected after 1-3-1974.

The section does not exclude from its operation sales for which provision was also made under the Ordinance and limitation with respect to which had already expired. The language of the statute is plain and unambiguous and the section is enacted to occupy the whole field. That makes the intention of the legislature abundantly clear.

The Act is not meant simply to provide limitation for any existing or recognised right. The Act itself creates a right and specifies the time for enforcement of that right. To be more precise, right to get the specified sales set aside is created by the Act and it also provides the period within which that right can be exercised. The remedy provided by the earlier enactment might have gone when the Act came into force, but the Act expressly created the same right again arid laid down a fresh limitation for it.

In other words, the remedial procedure as well as the limitation for it are provided by one and the same Act. There is nothing in the Act to restrict its application to sales not covered by Section 17 of the Ordinance. Obviously, the legislature contemplated the application of the provisions of Section 17 (2) of the Act to all transactions prior to its commencement and they should be taken to apply equally even to those which were covered by the Ordinance. Right to set aside sales, limitation for which had already expired under the Ordinance, was recreated and the right was again made actionable.

In Km. Kr. Kr. Ramanathan Chettiar Vs. N.M. Kandappa Goundan (died) and Others, , amendment of Section 20 of the Limitation Act by the Amending Act No. 15 of 1942 was in question. it was held that the right to sue, which had become barred by provisions of the Limitation Act on the date of the coming into force of the Amending Act,'' could not be revived by application of the new, enactment. This was so because there was no provision in the latter Act so retrospective in its effect as to revive and make effective rights which had already become unenforceable by lapse of time. The decision is, therefore, of no help to the Petitioner.

In the other case relied upon by Mr. Nehra, an application for confirmation of the sale of his property by an evacuee was dismissed on merits as, well on the point of limitation.

In-revision against this order, the Custodian General refused to accept the contention that limitation for the application was saved by a later Regulation the ground that the Regulation .came into force after the application had become harred by limitation under the then extant- Regulation. As regards the later Regulation the learned Custodian General observed

There can be no question of its applying retrospectively to cases In which the right of action had become, lost by reason of the operation of the statute of limitation then in force. I can discover nothing the language of the second Hyderabad-Regulation or, for the matter of that in Section 40 of Act 31 of 1950, to take the present case out of the operation of this well recognised rule." Reference to Section 40 of the Act was by no means necessary since the application was in fact presented .under the Hyderabad Regulation before the commencement, of the, Act. As to the interpretation, of the Hyderabad Regulation, we are not here'' .concerned, The observation with respect to Section 40 the Act was not only but laws not bases on full considerate of the points referred to above, In any case, the observation .is not very, ''much helpful for the interpretation of. Section 17 (2) of the Act.

13.Section 6 General Clauses Act, to which only a passing reference was made, is also of no help to ''the Petitioner.'' By virtue of Clause (a) of this section, "a repealing ''enactment does not "revive anything not in force or existing at the time at which the repeal takes effect". But this is expressly made subject to the proviso, "unless different intention appears" from the repealing statute.

In my view, limitation provided by Section 17(2) of the Act shall govern the case and the fact that the application had already become barred by limitation under the Ordinance when the Act came into force does not create any difference. The contention on the point of limitation therefore fails and is over-ruled.

It is next urged that since the attachment took place in the year 1945 nothing contained in any subsequent law, could save the property from being sold in execution of the decree Attachment of any property in execution of a decree, according to the learned Counsel,, creates, in favour of the decree-holder a right to get the property sold, of which he cannot be deprived by any subsequent legislation.

It is difficult to accept any such general proposition. The right or privilege already acquired may not be taken away merely by the passing of a subsequent enactment which does not recognise any such right, but if the enactment expressly or -by necessary intendment takes away that right or privilege there can be nothing wrong in it. Undoubtedly, the legislature has ample powers to enact a law of the kind.

Section 17 of the Act not only prohibits an evacuee property from being proceeded against in any manner in execution of a decree or order of any court, but further empowers the Custodian to have a. sale of an evacuee property, made in execution of a decree or order by any court or other,authority, set aside.

The section also lays down that any attachment etc. in respect of such property subsisting on the commencement of the Act shall cease to; have effect on such commencement and shall be deemed to be void. Nothing could be more expressive to show that the intention was to take away the decree-holder''s right, if any, to proceed against the property that was attached, in execution of the decree in his favour, prior to the coming into force of the Act.

Copy of an unreported judgment dated11-8-1950 of Kapur J. of the Punjab High Court in K. B. Haji Mohd. Ullah v. Punjab National Bank Ltd.'', Ex. P.A. No. 69 of 1949 (Punj) (B) is placed on the record & relied upon by Mr. Nehrain support of his contention that a sub sequent legislation cannot take away the decree-holder''s, right to proceed against the property attached prior to the coming into force of the enactment. In th at case, attachment took place on 26-8-1947. Section 8(2), East Punjab Act, No. 14 of 1947, provided that

all subsisting attachments of evacuees property effected after 13-9-1947, under orders of a civil court ........ shall cease to have any effect.

The learned Judge placed his reliance on this section and also referred to Section 17(2) of the General Ordinance No. 27 of 1949 and Act 31 of 1950, and observed

In the present case the attachment took, place on the 26th of August, 1947, and there is. no provision in any of the various ordinances and Acts which affects attachment made before the 13th September, 1947. In my opinion, therefore the rights of the decree-holder were not affected in any manner arid the Bank. could proceed to have the property sold in execution of its decree.

In a subsequently decided case, Ratan Lal Vs. The Custodian of Evacuee Property, Delhi and Another, , the same learned Judge took the view that attachment of evacuee property effected on 12-6-1946 ceased to have any effect, and the property could not be proceeded against, in execution of the decree, on the coming into force of the Ordinance and the Act.

Constitutionality of Section 17(2) of the Act is then questioned on the basis of the fundamental rights guaranteed by Articles. 14, 19(1) (l) and 31 of the Constitution. It is now well established that equal protection of law guaranteed by Article 14 does not mean that all laws must be general in character and universal in application or that the State no longer has the power of distinguishing and classifying persons or things for the purpose of legislation.

All that the article requires is that legislative classification must not be arbitrary but should be based on an intelligible principle having a reasonable relation to the object which the legislature seeks to attain, Kedar Nath Bajoria Vs. The State of West Bengal, .For the purpose of dealing with complex problems or to meet certain contingencies and eventualities, the legislature can enact laws which may only be applicable to well-defined class of persons or their properties.

The evacuee laws were enacted to meet the unparalleled situation that arose in the country on its partition into two Dominions. A large number of persons migrated from one Dominion to the other, and the people who fled left vast properties behind. For the protection of those properties and the management thereof some legislation became necessary.

Evacuees were, therefore, treated as a class laws affecting their rights and properties were enacted. In view of the peculiar circumstances that existed at the time, it cannot be said that the classification was in any way arbitrary or unreasonable.

Mr. Nehra contends that Section 17(2) of the Act offends in spirit the provisions of Article 14 inasmuch as it confers upon the Custodian an unfettered discretion to apply or not to apply for setting aside any particular sale of evacuee property.

Counsel maintains that the law is bad because it does not lay down any principles or rules for the exercise of that discretion by the Custodian and authorises him to make an arbitrary discrimination. I have not been able to understand how any question of unequality before the law arises in this case.

The law applies equally to every sale of evacuee property effected after 1-3-1947. As between these sales the law makes no discrimination. It provides that the sale shall be set aside on an application in that behalf by the Custodian. The application lies with respect to every such sale.

The fact that the Custodian while taking action in respect of some of the sales, may intentionally or by inadvertence, refrain from doing so in respect of others is of no consequence so far as the constitutionality of the Act is concerned. The Act assumes that the Custodian will exercise the discretion bona fide and not arbitrarily or capriciously. The law itself would not be bad if in administering it an officer may act improperly or dishonestly.

It is next urged that Article 19(1)(f) guarantees to every citizen of India the right to acquire, hold and dispose of property. The purchaser of evacuee property in a court sale becomes its absolute owner and acquires the right to hold and dispose of it at his own will and pleasure. By enacting Section 17(2), the legislature deprives him of his property and consequently of his right to hold and dispose of that property.

It is further argued that since such total deprivation cannot be regarded as a reasonable restriction on the person''s fundamental rights the law is not saved by Clause (5) of Article 19. On Mr. Nehra''s own showing, Article 19(1) (f) can have no application to the provisions of Section 17 (2) of the Act, for in a case of total deprivation of property it is Article 31 that is attracted.

While Article 19(1)(f) speaks of general rights of a citizen to acquire, hold and dispose of property, Article 31 deals with the specific rights of a person (whether a citizen or not) in the property that he owns. Article 31 prescribes the conditions under which a person may be deprived of his property by the State or under which the property may be acquired or taken possession of by the State for public purpose.

Where a person is deprived of his property, or where his property has been acquired or taken possession of by the State, validity of the proceedings can be tested only with reference to Article 31 and not with reference to Article 19 (1)(f). such a case falls within the specific provisions contained in Article 31 and therefore will not be covered by the general provisions of Article 19 (D(f).

The matter now stands finally settled by their Lordships of the Supreme Court in - The State of Bombay Vs. Bhanji Munji and Another, . Bose J. delivering the unanimous judgment of the Court observes-

Article 19(1)(f) read with Clause (5) postulates the existence of property which can be enjoy-ed and over which rights can be exercised because '' otherwise the reasonable restrictions contemplated by Clause (5) could not be brought into play. If there is no property which can be ac-quird, held or disposed of, no restriction can. be-placed on the exercise of the right to acquire,, hold and dispose of it, and as Clause (5) contemplates-the placing of reasonable restrictions on the exercise of those rights it must follow that the-Article postulates the existence of property over which these rights can be exercised.

In our opinion, this was decided in principle in - A.K. Gopalan Vs. The State of Madras, , where it was held that the freedoms relating to the person of a citizen guaranteed by-Art. 19 assume the existence of a free citizen and1 can no longer be enjoyed if a citizen is deprived of his liberty by. the law of preventive or punitive detention. In the same way, when there is a substantially total deprivation of property which is already held and enjoyed, one must turn to-Article 31 to see how far that is justified.

In the case before us, it is not only conceded but strenuously urged that the effect of Section 17 (2) of the Act is a total deprivation of the purchaser''s property, and that, in fact also, is the correct position. The result, therefore, is that the case-is taken out of the application of Article19 (1) (f).

It has then to be seen if the right guaranteed by Article 31 is in any way infringed by Section 17(2) of the Act. Clauses (1) and (2) of Article 31 say

No person shall be deprived of his property save by authority of law.

(2) No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking; shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession of such acquisition, unless the-law provides for compensation for the property taken possession of or acquired and either fixes-the amount of the compensation, or specifies the principles on which, and the manner in which the compensation is to be determined and given.

Clause (5) of this article exempts from operation of Clause (2) inter alia the provisions of any law which the State may hereafter make and which, falls under the categories specified in the three sub-divisions of its Sub-cluase. (b). One of these is an enactment made in pursuance of an agreement entered into between the Government of" the Dominion of India or the Government of India and the Government of any other country, or otherwise, with respect to property to be declared by law to be evacuee property.

The parenthesis "or otherwise" connotes that the law need not necessarily be based on an agreement with a foreign country but may be made'' unilaterally by the Government of India. It is within the competency of the Parliament to define-what "evacuee property" is and then to legislate with regard to the management, custody and possession of that property.

The exception created by Clause (5) means that the law falling under this category need not be aimed at securing any public purpose or provide for payment of compensation, even if the law relates to compulsory acquisition of taking possession of property by the State.

The Act in question, including Section 17(2), is a law made by the Government of India, in pursuance of some agreement or unilaterally with respect to property declared by law to be evacuee property. Undoubtedly, therefore, it falls under the exception. The result of setting aside a court-sale of evacuee property u/s 17(2) enatle the State to take possession of the erty. The provisions of the section are in con-,nce with the object and spirit of the Act there is nothing unconstitutional about.

In ''Sampuran Singh v. Competent er'', (S) AIR 1955 Pepsu 148 (G), vires of Section. 9 he Evacuee Interest (Separation) Act, 1951, similarly challenged on the ground that it repugnant to,the provisions of Articles 14, 19 (f) and 31 of the Constitution.

Clause (1) of Section 9 of that Act provides that mortgaged property of an evacuee shall be le to pay interest at a rate higher than 5 p.c. annum on the principal, and according to its (2)" a usufructuary mortgage of agricultural I is deemed to be extinguished, without any ment on termination of the period for which mortgage was'' effected or twenty years, which- is earlier from the date of execution of the tgage-deed

In view of the object of the legislation sification of evacuee mortgagors or non-eva-e mortgagees into distinct groups was held to e a reasonable basis and to be by no means itrary or capricious. As regards the object based .upon Article 19;(1), Passey C.J., ) delivered the judgment of the Division which to which I was a member, observed -

If Article 31 has any applicability then the it recognised, by Article 19 cannot be stressed, obviously If the, property has been lawfully aired in the terms of Article 31 then it can be no avail to contend that the right guaranteed Article 19(1) must all the same remainable,

section regarding infringement of the right iranteed by Article 31 was turned down inter alia the ground that the enactment falls under the eption contained in Clause (5)(b) (iii) of the Article.

Validity of the provisions of the Act generally, vis-a-vis the fundamental rights guaran- by. Articles 14, 19(1) (f) and 31 of the Constitution, was questioned before some of the High irts in India and, all of them have held that y do not violate any of those rights, vide M.B. Namazi Vs. Deputy Custodian of Evacuee Property and Others, , Abdul Majid Haji Mahomed Vs. P.R. Nayak, ; Asiatic Engineering Co. Vs. Achhru Ram and Others, and S.M. Zaki v. State of Bihar AIR 3 Pat 112 (K).

In Sheikh Mohd. Din, Sheikh Mehtab Din Vs. Thakar Singh, Gurmukh Singh and Another, , vires of S. 17 of the Act was in estion. On; the basis of the Bombay and dras decisions referred to above it was held

It cannot be said that Section 17 imposes any reactions upon the right of- any citizen to hold prou ty and these restrictions are in any case reas-ble and in the interest of the general public, it carcely necessary for me to dilate on this matter ther and it is sufficient to draw attention to reasons given in the two decisions of the Bom-and Madras High Courts respectively.

Section 40 of the Act contains an almost an-gous provision, except that it relates to trans-s of evacuee property by the evacuee himself, lays down that no such transfer made after 8-1947, shall be effective so as to confer any hts or remedies in respect of the transfer on parties thereto, unless the transfer is con-firmed by the Custodian in accordance with the provisions of the Act.

In Dhirajlal Vithalji Vs. Dy. Custodian of Evacuee Property, South Kanara, Mangalore, , validity of this section was impeached on the ground that It did not satisfy the requirements of Article 31(2) of the Constitution. The impugned section was held to be a law falling under Clause (5) (b) (iii) of the Article and the objection was therefore overruled.

Lastly, it is urged that Clause (5)(b) (iii) of Article 31 does not exempt the law falling with in its purview from being impeached on the ground that it authorises the compulsory acquisi tion or taking possession of property by the State for a purpose other than public purpose.

The argument is that clauses (1) and (2) of the Article are to be read together; the element of ''public purpose'' being inherent in the definition of the power of compulsory acquisition it does not form subject of specific enactment in Clause (2); and therefore the prohibition conferred by Clause (5) (b) will not apply to defect in an enactment due to the absence of public purpose.

In "State of Bihar v. Kameshwar Singh AIR 1952 SC 252 (N), the majority view of their Lordships is that Clause (2) of Article 31 provides for both, the conditions, namely the existence of a public purpose and obligation to pay just compensation. The exemption, therefore, will apply to the element of public purpose as well.

Moreover, the question whether the element of public purpose is a provision of Clause (2) of Article 31 or is one that is to be assumed as in here not in every law of the kind, may be of some importance, if at all, for the purpose of interpretation and determining the effect of Clause (4) of the Article.

The opening phrase of Clause (5), "Nothing in Clause (2) shall affect", leaves no doubt that to Judge the validity of a law failing under this clause Article 31 has to be read as if Clause (2) of the article was never enacted. That leaves Clause (1) alone to be looked into and complied with. Clause (1) of the article precludes deprivation of property of any person other than by authority of law. It simply enjoins that it is only by a valid law passed by a competent legislature that a person can be deprived of his property and not by any executive act or flat.

If for all intents and purposes Clauses (1) and (2) of Article 31 must always stand or go together, & deprivation in Clause (1) means nothing more than compulsory acquisition or taking possession of property mentioned in clause, (2) then exemption of a particular law falling under Clause (5) from being challenged on the ground that it is repugnant to Clause (2) would exclude it from the operation of Clause (1) as well. Looked that way too, Section 17(2) of the Act cannot be regarded as contravening the provision of Article 31.

All the points having been decided against the Petitioner, the petition fails and is dismissed. In view of the facts of the case; the part ies are left to bear their own costs.

Gurnam Singh, J.

I agree with the conclusions arrived at by my learned brother.