P L D 1967 Lahore 828 (PLP)

7. Section 8 of the Punjab Urban Rent Restriction Act, VI of 1947 contained a provision for the recovery by the tenant of the rent which should not have been paid by him. In Lala Krishan Lall Malhotra and 2 others v. Sheikh Muhammad Sadiq (P L D 1955 Lah. 288) the question arose whether the amount of rent already paid by the lessee to the lessor in excess of the fair rent fixed later by the Rent Controller was recoverable by the lessee in consequence of the determination of fair rent. The landlord had contended that the order of the Rent Controller fixing fair rent became operative from the day that it was passed and the rent paid by the lessee before that day was not governed by this order. Their Lordships observed as follows: "The sums which become due at any time before the fixing of the fair rent but remain unpaid until thereafter become irrecoverable because the section forbids the landlord from `claiming' or `receiving', after fair rent is fixed, any of the three sums specified in clause (a) irrespective of the fact whether they fall due before or after the crucial event, namely, the fixation of fair rent. The test laid down is the claiming and receiving and not the becoming due."

8. In Haji Ghulam Muhammad and another v. Ali Siraj (P L D 1964 Lah. 15) my learned brother Anwarul Haq, J., following the dictum of Akhlaque Hussain, J., quoted above, expressed himself at page 22 as follows: "To put it differently, any rent in excess of the fair rent, which has already been paid by the tenant before the fixation of the fair rent, does not become irrecoverable retrospectively by reason of the provisions of section 6, as at the time it was paid, according to the terms of the tenancy between the parties, it was not irrecoverable by reason of any of the provisions of the Ordinance. The claiming or receiving by the landlord of any rent in excess of the fair rent is prohibited only after the fixation of the fair rent." To put it shortly, the West Pakistan Urban Rent Restriction Ordinance VI of 1959 does not prohibit the parties from agreeing to any amount of rent unless a fair rent of the property has been fixed by the Rent Controller in exercise of the powers conferred upon him by section 4 of the Ordinance. All sums of money paid as rent by a tenant to the landlord under such a contract are, therefore, valid receipts by the landlord. It is only after the fair rent is fixed by the Rent Controller that pursuant to the provisions of section 5 of the Ordinance‑ "no further increase in such fair rent shall be permis sible . . . . ." The prohibition is, therefore, only in respect of the period following the fixation of fair rent and not of that antecedent to it.

9. This line of reasoning finds strong support from the fact that, conscious as it was of the legal position, the Legislature added clause (c) to section 6 (1) by section 3 of Ordinance XXI of 1965 which is in the following words:‑ "Any sum in excess of the fair rent paid in respect of any use or occupation of the building or rented land from the date of application for the fixation of fair rent shall be refunded to the person by whom it was paid or at the option of such person, otherwise adjusted." Section 1 (2) of the amending Ordinance lays down that it shall come into force at once. This amendment does not enjoy retrospective effect. This makes the intention of the Legislature more clear. Since it found that no provision existed for the recovery of any sum paid as rent after the filing of the application for fixation of fair rent but before its fixation and in excess of the fair rent so fixed, it inserted such a provision by Ordinance XXI of 1965. By doing so, it made its intention manifest that without the insertion of this provision in the Ordinance the effect sought to be created by it could not be produced. By not giving retrospective effect to the Amendment the Legislature further made it clear that it had only prospec tive effect.

10. It, therefore, now falls for determination whether a right created by a non‑retroactive law during the pendency of litigation can affect such litigation. The accepted principle of law with regard to operation of laws is that if they pertain to procedural matters, they affect pending proceedings, but if they affect rights of individuals they do not affect such proceedings which have perforce to be carried on under the old law.

11. Maxwell in his book on Interpretation of Statutes (11th Edn.) at p. 212 formulated the general principle of law on this point in the following words:‑ "In general, when the law is altered during the pendency of an action, the rights of the parties are decided according to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights." And Craies in his book on Statute Law (6th Edn.) observed at p. 400‑ "In other words, if a statute deals merely with the procedure in an action, and does not affect the rights of the parties, `it will be held to apply prima facie to all actions pending as well as future'," Similarly Lord Denning in his speech before the House In Attorney‑General v. Vernazza ((1960) A C 965 at p. 978), remarked that‑ "It is, of course, clear that in the ordinary way the Court of Appeal cannot take into account a statute which has bean 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, see In re A Debtor (No. 490 of 1935), New Brunswick Railway Co. v. British and French Trust Corporation Ltd. 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 proceed ings, and the Court of Appeal are entitled to give effect to this retrospective intent as well as a court of first instance, see Quilter v. Mapleson and Stovin v. Fairbrass. Those 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, for, as Harman L. J. pointed out, the retrospective Act in Quilter v. Mapleson affected the vested right of the landlord to recover possession. And the retrospec tive Act in Stovin v. Fairbrass affected the vested right of the statutory tenant to remain in possession. Applying this principle, the Act of 1959 was, as I have said, retrospective. So the Court of Appeal could give effect to it. And they should, I think, have done so. When Mr. Vernazza appealed to the Court of Appeal, seeking a finding that he was not a vexatious litigant, and asking that no order should be made against him, he thereby opened up the case for a rehearing, and by so doing, he let in the rule of Court which authorises the Court of Appeal to make such order as the case may require. And the case required certainly this, that if he was found by the Court of Appeal to be a vexatious litigant, he should be prohibited then and there from continuing his pending litigation unless he obtained the leave of the court. It would be a work of supererogation to require the Attorney General to go back to the High Court for an order when the Court of Appeal had seisin of the whole case and could make the order themselves." Right to receive rent is as much a substantive right under a contract as any can be.

12. All these judicial decisions are based upon the fundamental postulate that the rights of a citizen are inviolate except by act of Legislature and by the further canon that the Legislature respects these rights, but if in given circumstances it has to temper them it would do so by making its intent clear in the Act itself. It is now axiomatic that nobody has a vested right in procedure and it is for this reason that laws regulating procedure are presumed to be retrospective unless declared to be otherwise because they do not affect vested rights. The amend ment in question cannot be dubbed as a procedural amendment without doing violence to the concept of procedural law. For `omins nova constitutio futuris forman imponere debet, et non praeteritio' (retrospective laws are, as a rule, of questionable policy, and contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought to deal with future acts, and ought not to change the character of past transactions carried on upon the feel of the then existing law") has been the rule through the ages.

13. Learned counsel appearing for the respondent relied upon a decision of the Dacca High Court in Ahmad Husain v. Sher Bano Ali Bai (P L D 1962 Dacca 112) in support of the contention that an order is operative from the date of the application in which it has been passed if not otherwise specified. This decision is not opposite to cases under the rent law applicable to this part of the country before the amendment by Ordinance XXI of 1965. The reason is that according to section 15 (1) of the Act of the East Pakistan, Premises Rent Control Act (XVI of 1953) "When in fixing the standard rent under section 14 of the Act if the rent which was being paid at the time of the application is decreased by the Controller, the standard rent fixed shall be payable from the month next after the date of application, unless for reasons to be recorded by the Controller he decides that such rent should operate from any earlier or later date."

14. My conclusions, therefore, are that‑ (a) Section 3 of Ordinance XXI of 1965 whereby clause (c) was added to section 6(1) of Ordinance VI of 1959, is not retrospec tive in operation so as to affect cases for the fixation of fair rent pending on the date of its enactment, and (b) that in cases of fixation of fair rent to which Ordinance XXI of 1965 is not attracted, any amount recovered by the landlord as rent in excess of the fair rent fixed by the Court but before such fixation was done is not recoverable by the tenant.

15. The appeal is accepted and the order of the learned Appellate Authority is set aside. In the circumstances of the case the parties are left to bear their own costs. A. H. Appeal accepted.