Sylhet Co-operative Central Bank Ltd. vs Dhirendra Nath De

Ram Labhaya, J.—This miscellaneous first appeal is directed against an order of the Subordinate Judge, Shillong dated 9-2-1953 by which the objection of judgment-debtor 1 to the execution of the decree against him was allowed and the decree-holder was directed to take steps against judgment-debtor 2. The decree-holder has appealed.

The relevant facts of the case may be briefly stated. The suit in which the decree was passed was instituted in the Court at Sylhet on 12-5-1947. Sylhet is now in East Pakistan. The decree in question against both the defendants was passed on 31-5-1949. The suit was pending oil the appointed day, 15-8-1947.

The application for transfer of execution was made in the Pakistan Court on 19-2-1952 after the Constitution of India came into force. Non-satisfaction certificate was sent to the Court at Shillong, and the decree-holder applied for execution on 1-3-1952. Judgment-debtor 1 objected to the execution on 4-12-1952, and the order appealed from was passed on 9-2-1953.

The objection raised in the Com-t below was that the judgment-debtor was an officer of the Co-operative department. He was acting under the authority of the Registrar, Co-operative Societies and u/s 73, Assam Co-operative Societies Act (Act 1 of 1950) he stood indemnified from the consequences of acts by him in good faith in the discharge of his duties.

The objecting judgment-debtor was placed by the Registrar in the exclusive control of the Sylhet Co-operative Central Bank Limited as its managing body had been superseded by him. During the period that he was in charge of the Bank another officer of the Bank-judgment-debtor 2-com-mltted criminal breach of trust with respect to a sum of Rs. 15,000/-. It was for the first time in the execution proceeding that the judgment-debtor invoked the protection of Section 73 of the Act read with Section 88.

The learned Subordinate Judge found that the objecting judgment-debtor acted in good faith and could seek the protection which the sections relied on afforded.'' He pointed out that cash was being kept by the Bank instead of being credited to the treasury contrary to the rules and there was no proof of any bad faith on the part of the judgment-debtor. He further pointed out that the judgment-debtor himself detected the defalcation and reported the same. He found on facts before him that the judgment-debtor was all along acting in good faith and was therefore entitled to protection under the Assam Co-operative Societies Act (Act 1 of 1950).

On behalf of the decree-holder his learned Counsel has argued that Sections 73 and 88 of the Act do not assist the judgment-debtor-respondent. They have no application to the facts of the case and in any case no retrospective effect could be given to the provisions, in execution particularly in view of the fact that the executing Court has no jurisdiction to go behind the decree.

The learned Counsel for the respondent has tried to support the view of the learned Subordinate Judge. He has also argued that the execution cannot proceed as the Indian Independence (Legal Proceedings) Order, 1947 hereinafter, called the Legal Proceedings Order, stood repealed in consequence of the express repeal of the Indian Independence Act by virtue of the provisions contained in Article 395 of the Constitution of India. He urged further that the decree-holder could not take advantage of Section 6, General Clauses Act also, for continuing the execution as it could not be utilised for the interpretation of the Constitution.

Mr. Choudhuri the learned Counsel for the appellant has taken a double stand in answer to this contention. He argued that if the Indian Independence (Legal Proceedings) Order stood repealed by reason of the repeal of the Indian Independence Act, Section 6, General Clauses Act was available for the interpretation of the Article as was provided by Article 367. If the section applied the decree could have been transferred for execution. The repeal would not stand in the way. In the alternative he urgent that the Legal Proceedings Order has not been repealed. It was saved by virtue of the provisions contained in Article 372 of the Constitution of India.

I take up first the contention of Mr. Ghose that the execution cannot proceed now by reason of the fact that the Order stood repealed'' by reason of the repeal of the Indian Independence Act. He argues that Article 395 of the Constitution of India repealed the Indian Independence Act. The Order was promulgated u/s 9. Indian Independence Act by the Governor General.

The effect of the repeal of the Act was to repeal the Legal Proceedings Order unless it was expressly saved. No such saving was made by Article 395. The Order, therefore, has ceased to exist and even & pending execution proceeding could not continue, the Order itself having been completely wiped out. He points out that in the absence of any express saving clause, a pending execution proceeding could continue only by virtue of the provision of Section 6, General Clauses Act, if that section could be applied for the interpretation of the Constitution; but urges that Section 6, General Clauses Act does not apply for the interpretation of the Constitution as held by their Lordships of the Supreme Court in ''State of Uttar Pradesh v. Jagamander Das'' AIR 1954 SC 383 (A).

There is no manner of doubt that if Article 395 had stood alone the effect of the repeal of the Indian Independence Act would have been to repeal the Order in question. The legal position on the point is stated in Craies on Statute Law in the following terms:

When an Act of Parliament is repealed said Lord Tenterden in ''Surtees v. Ellison'' (1829) 9 B & C 750 : 7 LJKB 335 (B), ''it must be considered (except as to transactions past and closed) as if it had never existed. That is the general rule.'' Tindal, C.J. states the exception more widely. He says (in ''Kay v. Goodwin'' (1830) 6 Bing 576 : 8 LJCP 212 (C). The effect of repealing a statute is to obliterate it as completely from the records of the Parliament as if it had never been passed: and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law. (p. 350).

The repeal completely wipes out the law which is the subject matter of the repeal. It is to be deemed as having existed only for those actions which were commenced, prosecuted and concluded. Even pending actions cannot continue. Mr. Ghose is right in contending that if the Order of the Governor-General relating to Legal Proceedings has not been saved by any provision in the Constitution, or some other law, repeal of the Indian Independence Act would kill it also.

Assuming that the Order has not been saved and stands repealed, the next question is whether Section 6, General Clauses Act could be availed of for the interpretation of Article 395. If that section could be applied, the decree passed in a suit pending on the appointed day would be capable of execution and a pending execution could continue as the right to execute it would accrue before the repeal.

Article 367 Clause (1) provides that unless the context otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein, under Article 372, apply for the interpretation of this Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India, This provision of the Constitution was interpreted in Protap Kumar Sen and Another Vs. Nagendra Nath Mazumdar, It was held in this case by the learned Judges that the effect of the repeal, as contained in Article 395, of, the Constitution, is not to affect the rights and liabilities already accrued under the Indian Independence Act and the Orders passed by the Governor. General there under.

Section 6, Indian General Clauses Act which is attracted under Article 367 of the Constitution provides that the repeal of the Act will not affect the rights and liabilities which had accrued already. An earlier decision of the Calcutta High Court reported in Iswar Madan Gopal Jiu and Others Vs. Province of West Bengal, was also referred to in this connection. In the same year (1951) the question of the applicability of Section 6, General Clauses Act for the interpretation of the Constitution arose in Seth Jugmendar Das and Others Vs. State, Desai J. held that S.C., General Clauses Act would not apply to the repeal of any enactment by the Constitution. Government of India Act 1935 he held was certainly an enactment.

Any Act of the British Parliament amending it is referred to as an enactment in Article 395. There are no words in Section 6, General Clauses Act to qualify the words "any enactment", they include all enactments whether passed by the Central Legislature or any other Legislature. They would, therefore, apply to the repeal of the Government of India Act also.

But that fact is not sufficient to save the effect of anything clone or omitted to be done. For the applicability of Section 6 it ought to have been repealed by any Central Act or Regulation. Article 367 does not require any one to read "Constitution" for "any Central Act or regulation" wherever those words occur in the General Clauses Act.

In ''Ayud Ali v. Hari Narayan Kanu'' ILR (1955) 7 Assam 147 (G), this Court was confronted with the same question. I was a party to the decision. There were two sides of the problem. The conclusion reached was that the Constitution, for the purposes of Section 6, General Clauses Act, is to be treated as though it were a Central Act, for, it is expressly provided that the General Clauses Act shall apply for the interpretation of the Constitution, as it applies for the interpretation of an Act of the Legislature of the Government of India.

The Constitution is to be treated as an Act of the Legislature of the Government of India; or in other words, as a Central Act, for purposes of Section 6, General Clauses Act. It is, therefore, not necessary that Section 6. General Clauses Act should have contained the word "Constitution". By a legal fiction, the Constitution has been placed on a par with Central Acts for purposes of interpretation. The need for Article 367 arose from the fact that, without it, the General Clause; Act, including Section 6, could not be applied for the interpretation of the Constitution.

The Calcutta view was thus preferred. The conclusion will receive support from the fact that even after its adaptation the word "Constitution" has not been introduced in any section of the Act. Nearly all the provisions of the Act refer to Central Acts or Regulations. They, therefore, could'' cease to apply, if the argument which prevailed with Desai J. was pushed to its logical conclusion.

His view that Section 6 cannot be utilised for the interpretation of the Constitution takes out Section 6 from the rest of the Act, It is difficult to hold that this was the intention of the framers of the Constitution. If the whole of the General Clauses Act was to apply except Section 6, it should have been indicated.

Mr. Chaudhuri has relied on the Assam and Calcutta decisions. He has argued that the Allahabad view does not give full effect to Article 367. If the question had not been dealt with and decided by their Lordships of the Supreme Court, we would have been inclined to adhere to the view taken in MLR (1955) 7 Assam 147 (G) It had been arrived at after a full consideration of the reasoning which prevailed with Desai J. in the Allahabad case.

But in view of the decision of their Lordships of the Supreme Court in The State of Uttar Pradesh Vs. Seth Jagamander Das and Others, the matter must now be regarded as concluded by authority. Their Lordships held that Section 6, General Clauses Act has no application to the repeal of a statute made by Parliament in England and the repeal of which has been brought about by the Constitution of India. This settles the matter so far as we are concerned.

Mr. Chaudhuri points out that the matter re-Quires reconsideration. This is, however, a matter for their Lordships of the Supreme Court We are bound by the decision and give effect to it with profound respect. The result is that if the Legal Proceedings Order stood repealed and was not saved by any provision in the Constitution, the pending execution could not be saved by applying Section 6 for the interpretation of Article 395.

We have still to consider whether apart from Article 395, there is any provision in the Constitution, which may have kept alive the Legal Proceedings Order. Mr. Chaudhuri urges in the alternative that Article 372 expressly provides that "all the law" in force immediately before the Constitution came into force notwithstanding the repeal of the two enactments by Article 395 would continue to have effect till repealed or modified by competent authority. The repeal he argues was limited to the two Acts, namely the Government of India Act and the Indian Independence Act.

All other laws in force immediately before the commencement of the Constitution were saved. The Legal Proceedings Order was in force on 25-1-1950, and was thus completely saved from, the effect of repeal under Article 395.

Article 372 Clause (1) provides that notwithstanding the repeal by this Constitution of the enactments referred to in Article 395 but subject to the other provisions of this Constitution, "all the law" in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority.

Clause (2) invests the President with power to make adaptations and modification''s of the law in force in order to bring it into accord with the provisions of the Constitution. Clause (3) is not relevant for our purposes. Explanation I to this Article has the effect of including within its scope a law passed or made by a Legislature or other competent authority in the territory of India before the commencement of the Constitution and not previously repealed, notwithstanding that it or parts of it may not have been then in operation either at all or in particular areas. Explanation II deals with laws with extra-territorial effect.

Explanation III provides that nothing in this Article shall be construed as continuing any temporary law in force beyond the date fixed for its expiration or the date on which it would have expired if the Constitution had not come into force.

The provision of Clause (1) of Article 372 is that all the "law in force" in the territory of India immediately before the commencement of this Constitution shall continue to remain in force notwithstanding the repeal of the enactment by the Constitution of the Indian Independence Act. Article 372 thus takes full account of the repeal of the Indian Independence Act by Article 395.

Notwithstanding that repeal it saves �all the law in force" immediately before the commencement of the Constitution. If the Legal Proceedings Order with which we are concerned in this case was a part of the law in force in the territory of India on 25th of January, it would not stand repealed: merely as the consequence of the repeal of the Indian Independence Act. If the framers of the Constitution had intended that the repeal of the Indian. Independence Act should result in the usual consequences of such repeal, it would not Save been necessary to say that notwithstanding the repeal by the-Constitution of the enactments referred to in Article 395 "all the law in force" in the territory of India immediately before the commencement of the Constitution shall continue to be in force.

The use of the words "notwithstanding the repeal by this Constitution" is significant. It shows: that it was realised that the legal consequence of the repeal of the Indian Independence Act and the; Government of India Act would be to sweep away all legislation passed or promulgated by competent-authorities under the two Acts. A considerable-body of the law in force then would have been wiped out of the statute book, and this would have-been disastrous. It was necessary that the legislation which owed its existence to the Indian Independence Act and the Government of India Act should continue subject to necessary adaptations and modifications.

Article 372 Clause (1) thus provided for its continuance. It therefore operates as a saving clause to Article 395 and limits the operation of Article 395 to the two enactments specifically mentioned therein. Acts or laws which came to be passed, or made, or promulgated by competent authority under the provisions of these Acts and which formed part of the "law in force" in the territory of India on 25-1-1950 were saved from the normal consequences of the repeal of the Indian Independence Act and the Gov'' eminent of India Act with all Acts supplementing or amending it.

The next question is whether the Order in question was a part of the law in force in the territory of India immediately before the commencement of the Constitution. The expression "law in force" has not been defined. Explanation I has the effect of including within the scope of the expression "law in force" any law passed by a Legislature or other competent authority in the territory of India even though the law or any part of it was not then in actual operation.

The expression "law in force" would cover all laws even though not of statutory origin. Explanation I only adds to the scope of the expression. In the absence of any definition the expression "law in force" would bear its natural and grammatical I meaning and would cover the Legal Proceedings Order promulgated by the Governor General u/s 9, Indian Independence Act. If the Legal Proceedings Order was not a temporary law within the meaning of Explanation III of Article 372 Clause (1) would limit the effect of the repeal by Article 395 to the Indian. Independence Act and would not extend to the repealing of Orders of the Governor General not specifically covered by Article 395.

It is not Mr. Ghose''s case that the Legal Proceedings Order was specifically repealed. Some-Orders of the Governor General which modified the; Government of India Act were so repealed but not the Legal Proceedings Order. It was in force the territory of India immediately before the Constitution came into force and was thus saved.

It is difficult to bring the "Legal Proceedings Order within the scope of explanation III it is limited in its application to a temporary law with a fixed duration. It provides that Article 372 Clause (1) would not be utilised for continuing a temporary law in force on 25-1-1950 beyond the date fixed for its duration or on the date on which it would have expired if this Constitution had not come into force. The Legal Proceedings Order was in actual operation immediately before the commencement of the Constitution. It was not expired on any specified date, nor would it have expired automatically if the Constitution had not come into force.

In fact it would have continued if the Constitution had not come into force. The question, bout its expiry or repeal arises from the provision of the Constitution. The provision in Explanation III strengthens the view that the laws which were not temporary within its meaning were meant to continue in force even after the Constitution subject to valid adaptations till such time that they were altered or amended by competent authority.

The expression "existing law" has been defined in Article 366, Clause (10). It means any law, Ordinance, order, bye-law, rule or regulation. It is obvious that "existing law" refers to statutes. It was the statutory law that was meant, for, in order to be existing law it must be any law, Ordinance, order etc. passed or made by the Legislature or other competent authority. It does not include, for instance, the personal laws of the Hindus or Muslims nor would it embrace within its scope customs or usages which had acquired the force of law.

Article 372 has a different purpose. It occurs in part 21 which provides for temporary and transitional provisions. It was necessary that the law in force should continue and therefore the expression "existing law" was not used in Article 372. Instead the words used were "all the law in force" in the territory of India. These words obviously had Wider implication. The Legal Proceedings Order would fall within their ambit and being in force immediately before the commencement of the Constitution would escape extinction.

The decisions in Protap Kumar Sen and Another Vs. Nagendra Nath Mazumdar, assumed that the Legal Proceedings Order stood repealed. It was not contended in those cases that the Act itself was subsisting and in force. They were decided on the assumption that the Legal Proceedings Order has ceased to exist. The contention now raised was not dealt with in those cases.

In support of his contention that the Legal Proceedings Order is still alive Mr. Chaudhuri has relied on Naresh Chandra Bose Vs. Sachindra Nath Deb and Others, After carefully considering the two relevant Articles we find ourselves in full agreement with the conclusion reached in this decision by the learned Judges of the Calcutta High Court.

As observed by Guha Roy, J. the underlying assumption of Act 9 of 1952 namely the Indian Independence Pakistan Court (Pending Proceedings) Act is that the Legal Proceedings Order (1947) and the other Orders all of which were made under different provisions of the Indian Independence Act except which amended or supplemented the Government of India Act, 1935, subsisted in 1952. This Is a legislative assumption and though not conclusive would lend support to and be supported also by the view which we have adopted.

It is not disputed that the execution proceeding against the respondent can continue if the Legal Proceedings Order is still alive. We have found that it is still in operation. The result of this view is that the execution proceeding does-not lapse. It can validly continue.

It is not possible to give the respondent tne> protection which may be available to an officer acting under the Assam Co-operative Societies Act No. 1 of 1950, assuming that the sections relied on (Ss. 7& and 88) are attracted by the facts of the case. The Act came into force long after the decree was passed. The contention now raised was not available, to the judgment-debtor at any time before the decree was passed.

Section 78 on the strength of which the protection is now claimed, was no part of the Co-operative'' Societies Act which was in force when the decree-was passed. Protection which is now sought therefore was not at all available at the time the cause of action arose, on the date of the institution of the suit and even on the date of the decree. Even when Section 78 is read with Section 88, the decree which was passed in the suit cannot be annulled and the case-reopened. Section 88(2) provides that

all appointments, rules and orders made, notifications and notices issued, all transactions entered; into and all suits and other proceedings instituted, under the said Act shall continue and shall, so far as may be, be deemed to have been respectively made, issued, entered into or instituted under this. Act.

In this case the decree was passed before the Act. came into force. The execution proceeding commenced after the passing of the Act (No. 1 of 1950) which is now in force. Section 88 therefore has no application to the circumstances of this case. There is no provision in the Act which would authorise are, executing Court to reopen a case by annulling or ignoring the decree passed under the repealed Act.

Without an express provision to that effect a decree passed by a Court must be executed by the: executing Court. It has got no jurisdiction to go-behind the decree. The principle is axiomatic. The authority or jurisdiction for reopening a decree cart be provided only by the legislature. But the Act does not show that the legislature intended to authorise the reopening of the decree expressly or by necessary intendment.

The reopening of the decree involves retrospective effect being given to the provisions of the Act. The legislature may provide that an Act may operate retrospectively. This however has to-appear in the Act either in express terms or by necessary implication.

Not only there is no justification for reopening the case, we do not see anything in the language of the provisions relied on or other provisions of the-Act which may authorise retrospective effect being given to Section 78 on the basis of which it is contended that respondent was exempt from responsibility. The executing Court, particularly when the execution is transferred by the Court which passed the decree to it, will have no jurisdiction to go into the a question whether a certain defendant can claim exemption from liability on the basis of the provisions contained in Section 78.

Section 78 provides that

no suit, proceeding or prosecution whatever shall lie against the Registrar or any person acting: on his authority, or against any liquidator in respect of anything done or purporting to be done in good faith under this Act.

As shown above the defence which Section 78 provides to* a Registrar or any person acting under his authority was not available to the respondent upto the stage of the decree. Mr. Ghose contends that not merely suits but other proceedings also are not competent. The execution is a proceeding and therefore it also is within the ambit of the section. This view does not appear to be correct. A suit is distinguished from a proceeding.

Where a suit ends in a decree, the executing Court cannot go into the validity of the decree by considering defences not actually raised in the suit whatever the reason for the omission. It is not possible to refuse to execute a decree validly passed. Relief to the respondent could have been given only if the act out of which the liability arose was done or purported to be done in good faith under the Act.

These matters cannot be raised by a judgment debtor in execution for the first time. If the legislature had intended to apply this provision to cases where decrees had been passed, express provision would have been made for reopening the case notwithstanding the existence of a decree. The plea of good faith therefore is not available to the respondent in execution.

The result of the foregoing discussion is that this appeal succeeds. It is allowed. The case shall go back to the court below with the direction that the execution should proceed against the respondent (judgment-debtor 1). Parties shall bear their own costs in this appeal.

Leave to appeal to the Supreme Court under Article 132 of the Constitution allowed.

Deka, J.

I agree.