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1965 DIGILAW 290 (KER)

Peter v. Ramakrishnan Nair

1965-10-01

S.VELU PILLAI, T.S.KRISHNAMOORTHY IYER

body1965
Judgment :- 1. The appellant sued the respondent and another, to redeem a mortgage Ex. P-3, of the year 1118. The property mortgaged was at the time in the possession of another, under a pattapanayam Ex. P-1, of the year 1094, which for the present purpose may be deemed to be a mortgage. Provision was made in Ex. P-3, by which, the respondent was to redeem Ex. P-1, and to be in possession of the property for 10 years, at the end of which, was to submit to redemption, on receipt only of the actual amount paid to the prior mortgagee at the time of redemption on account of the value of improvements, in addition to the mortgage amount and the value of improvements made by him after redemption. The respondent sued the prior mortgagee for redemption of Ex. P-1 and obtained a decree Ex. P-2, under which he paid only a sum of Rs. 14 for improvements. When the appellant instituted the suit out of which this second appeal arises, after having taken an assignment of the equity of redemption, for redemption of Ex. P-3, he was met with the contention, despite the provision in Ex. P-3 limiting the claim for the prior improvements, that the respondent is entitled to be paid the present value of such improvements in full. That value has been assessed during the trial of the suit by a'Commissioner' at Rs. 591.30 p. The first court, relying on the provision in Ex. P-3, allowed only Rs. 14 the amount actually paid to the respondent, but the Subordinate judge in appeal allowed the claim in full. 2. The question arising for decision in this second appeal, turns chiefly on the construction and the application of S.17 in relation to S.4 (1) of Act 29 of 1958. The latter section, so far as it is relevant, is as follows: "Every tenant shall, on eviction be entitled to compensation for improvements which were made by him, his predecessor-in-interest ... and for which compensation had not already been paid;" Under this section, the tenant sought to be evicted, is entitled to compensation, not only for improvements made by him but also by his predecessor-in-interest. and for which compensation had not already been paid;" Under this section, the tenant sought to be evicted, is entitled to compensation, not only for improvements made by him but also by his predecessor-in-interest. Though a prior mortgagee cannot be considered, to be a predecessor-in-interest of a puisne mortgagee for all purposes, we think, that so far as the claim for the value of improvements is concerned, he may be held to be such predecessor-in-interest within the meaning of S.4(1). It can hardly be, that a puisne mortgagee who redeems a prior mortgagee and is surrogated to his rights, is disentitled under S.4 (1) to the value of improvements made by the latter, on eviction. It was never the case of the appellant, that the respondent is not entitled to the value of the improvements which were made by the prior mortgagee, the controversy being solely with respect to the amount of such claim, which can be decreed. 3. S.4 has be given effect to in conjunction with S.17. The relevant part of S.17 is as follows: "Nothing in any contract entered into whether before or after the commencement of this Act shall take away or limit the right of a tenant to make improvements and to claim compensation for them in accordance with the provisions of this Act." Speaking with respect, we cannot find our way to agree with the conclusion reached by the learned judge in Cheeramma v. Karthiayani 1962 KLT. 593, that the main part of S.17 can operate only with respect to improvements made after the commencement of Act 10 of 1956, which preceded Act 29 of 1958 and which contained a similar provision but with slight modifications. While taking note of the two parts of the phrase, "the right of a tenant to make improvements and to claim compensation for them" occurring in S.17, the ratio of that decision was stated thus by the learned judge: "The use of the auxiliary word 'shall' indicate that only prospective effect is contemplated in the section. It indicates that'whatever be the covenant between the parties, after the commencement of the Act there shall be no restraint on the right of a tenant to make improvements on the land and to claim compensation therefor at eviction. Obviously, this new state of affairs is ushered in only by the commencement of the Act, with effect from such commencement. It indicates that'whatever be the covenant between the parties, after the commencement of the Act there shall be no restraint on the right of a tenant to make improvements on the land and to claim compensation therefor at eviction. Obviously, this new state of affairs is ushered in only by the commencement of the Act, with effect from such commencement. The word 'shall' is conclusive in this respect." Mr. Justice P. T. Raman Nayar has, in the order of reference in S. A. 1218 of 1963, doubted the correctness of Cheeramma v. Karthiayani 1962 KLT. 593 and indicated a different approach as follows: "S. 4 of the Act does not confer on the tenant a right to make improvements. What it does confer on him is the right to claim compensation for improvements actuary effected; and is despite the provisions of S.63-A and S.108 (h) of the Transfer of Property Act which latter provision limits the tenant's right to the removal of the improvements. Nor is there any other provision of the Act, or, so far as I know, of any other law which gives the tenant the right as such to effect improvements. The right is to obtain compensation for improvements actually effected, and, as I read it, S.17 of the Act deals only with this right to claim compensation. The words, 'make improvements' are in the section only for the purpose of showing what the tenant must have done to entitle him to compensation, in other words, to show on what account he can claim compensation .... The words, 'to make improvements and to claim compensation for them' in effect only mean'to claim compensation for improvements effected by him.'" The learned judge has also observed: " ... the prospective character of the clause, 'shall takeaway or limit' should 'be' related to the date of the contract, in the case of contracts entered into before the commencement of the Act as in the case of contracts entered into after that, rather than to the date of the commencement of the Act." 4. To us it seems, that subject to the two provisos, S.17 purports to nullify the restrictions or limitations which may have been imposed by contract on the right of a tenant to make improvements and on his right to claim compensation for improvements. To us it seems, that subject to the two provisos, S.17 purports to nullify the restrictions or limitations which may have been imposed by contract on the right of a tenant to make improvements and on his right to claim compensation for improvements. The provisos refer distinctly, both to the right to make improvements of a particular nature and to the right to claim compensation, by the use of the word 'or'. Restrictions or limitations on the right to make improvements were not uncommon, in contracts relating to leases, which in the Travancore area carried no fixity of tenure until recently, and in contracts relating to mortgages, not only with respect to buildings as the second proviso suggests, but also with respect to other improvements, such as trees. A provision that rubber trees shall not be planted on the property leased or mortgaged on account of special considerations is a familiar instance. - In some of the contracts, there were clauses which prohibited absolutely the making of improvements of any kind. 5. However, we do not think it necessary for the decision of this case to pursue this reasoning. The following commentary on the words "shall be held" by Bindra on Interpretation of Statutes, 4th edition at page 781 is useful in interpreting the word "shall", occurring in S.17: "Where this expression occurs in a statute, the intention of the Legislature is directed more towards its imperative character, to show command than point towards its futurity. The decisions sometimes say that 'shall' is used in remedial statutes to include both past and future. There might be something in the context of an Act or to be collected from its language which might give to words 'prima facie prospective', a larger operation, but they ought not to receive a larger operation unless some reason for giving such effect thereto is found therein." The following rule of interpretation formulated in Craies on Statute Law, 6th edition at page 395, also seems to be applicable: "Sometimes a statute, although not intended to be retrospective, will in fact have retrospective operation. For instance, if two persons enter into a contract, and afterwards a statute is passed, which, as Cockburan, C. J. said in Duke of Devonshre v. Barrow, etc., Co. For instance, if two persons enter into a contract, and afterwards a statute is passed, which, as Cockburan, C. J. said in Duke of Devonshre v. Barrow, etc., Co. (1887) 2 Q. B. D. 286, at p. 289 'engrafts an enactment upon existing contracs' and thus operates so as to produce a result which is something quite different from the original intention of the contracting parties, such a statute has, in effect a retrospective operation." 6. S.17 in the main part has virtually provided, that nothing in the contract shall take away or limit the right of the tenant. The plain meaning of this is, that in adjudging claims after the date of the Act, the restrictive provisions in the contract shall not be heeded. This implies that the contract is repealed from the inception and that to that extent the Act is retrospective. Applying the rule of interpretation formulated in Craies on Statute Law, the word 'shall' being applicable both to the past and the future, we think that such retrospective operation is permissible, consistent as it is, in our opinion, with the meaning and intendment of the Act. This view is reinforced by the difference in the language of the two provisos to S.17, the first proviso saving only future contracts, and the second saving past contracts as well. This difference in language is more consistent with the retrospective operation of the main part of S.17 and was not necessary if the operation of the contract from the date of the Act was alone intended to be done away with. We therefore hold that Cheeramma v. Karthyayani 1962 KLT. 593 was not correctly decided. 7. One more point remains. The relevant clause in Ex. P-3 is in relation to improvements made by the prior mortgagee and not by the respondent. As observed, the respondent has become entitled in his own right to claim the compensation for such improvements. There is no reason to restrict the operation of S.17 to a claim for compensation for improvements made by the claimant himself; his claim may well relate in part or whole, to improvements made by his predecessor-in-interest, as provided in S.4, the right to which has passed to him by assignment or has accrued to him on redemption. There is no reason to restrict the operation of S.17 to a claim for compensation for improvements made by the claimant himself; his claim may well relate in part or whole, to improvements made by his predecessor-in-interest, as provided in S.4, the right to which has passed to him by assignment or has accrued to him on redemption. In the present case, S.17 is attracted to a part only of the respondent's claim for compensation, viz., that which relates to the improvements made by the prior mortgagee and is not for that reason, to be ruled out. The relevant clause in Ex. P-3 is hit by the section. 8. The result is, that the decree of the Subordinate Judge is affirmed and this second appeal is dismissed, but in the nature of the questions raised, without costs in this court. Dismissed.