India: Principles of Retrospective Operation of Law and Ultra Vires

Last Updated: 4 December 2002
Article by Shivaji Rao

RETROSPECTIVE OPERATION OF LAW:

In Maxwell on the Interpretation of Statutes, 12th Edn. the statement of law in this regard is stated thus:

"Perhaps no rule of construction is more firmly established than thus - that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. The rule has, in fact, two aspects, for it, "involves another and subordinate rule, to the effect that a statute is not to be construed so as to have a greater retrospective operation than its language renders necessary. "

In Francis Bennion's Statutory Interpretation, 2nd Edn, the statement of law is stated as follows :

"The essential idea of legal system is that current law should govern current activities. Elsewhere in this work a particular Act is likened to a floodlight switched on or off, and the general body of law to the circumambient air. Clumsy though these images are, they show the inappropriateness of retrospective laws. If we do something today, we feel that the law applying to it should be the law in force today, not tomorrow's backward adjustment of it. Such, we believe, is the nature of law. Dislike of ex-post facto law is enshrined in the United States Constitution and in the Constitution of many American States, which forbid it. The true principle is that lex prospicit non respicit (law looks forward not back). As Willes, J. said retrospective legislation is 'contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts, and ought not to change the character of past transaction carried on upon the faith of the then existing law."

In Garikapati Veeraya v. N. Subbiah Choudhry, AIR 1957 SC 540 the SC observed as thus : (Para 25 of AIR) "The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed."

In Smt. Dayawati v. Inderjit (AIR 1966 SC 1423, in Para 10, it is held thus :

"Now as a general proposition, it, may be admitted that ordinarily a Court of appeal cannot take into account a new law, brought into existence after the judgment appealed from has been rendered, because the rights of the litigants in an appeal are determined under the law in force at the date of the suit. Even before the days of Coke whose maxim - a new law ought to be prospective, not retrospective in its operation - is off-quoted, Courts have looked with dis-favour upon laws which take away vested rights or affect pending cases. Matters of procedure are, however, different and the law affecting procedure is always retrospective. But it does not mean that there is an absolute rule of inviolability of substantive rights. If the new law speaks in language, which, expressly or by clear intendment, takes in even pending matters, the Court of trial as well as the Court of appeal must have regard to an intention so expressed, and the Court of appeal may give effect to such a law even after the judgment of the Court of first instance."

In Hitendra Vishnu Thakur v. State of Maharashtra (1994) 4 SCC 602 : (1994 AIR SCW 3699 : AIR 1994 SC 2623 : 1995 Cri LJ 517) this Court laid down the ambit and scope of an amending Act and its retrospective operation as follows :

"(i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits.

(ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature.

(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law.

(iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished:

(v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in Operation unless otherwise provided, either expressly or by necessary implication."

In K. S. Paripoornan v. State of Kerala (1994) 5 SCC 593 @ p. 636 : (1995 AIR SCW 1004 : AIR 1995 SC 1012), this Court while considering the effect of amendment in the Land Acquisition Act in pending proceedings held thus in Para 47 thereof as:

‘‘...In the instant case we are concerned with the application of the provisions of Sub-sec. (1-A) of S.23 as introduced by the Amending Act to acquisition proceedings which were pending on the date of commencement of the Amending Act. In relation pending proceedings, the approach of the Courts in England is that the same are unaffected by the changes in the law so far as they relate to the determination of the substantive rights and in the absence of a clear indication of a contrary intention in an amending enactment, the substantive rights of the parties to an action fall to be determined by the law as it existed when the fiction was commenced and this is so whether the law is change before the hearing of the case at the first instance or while an appeal is pending ( Halsbury's Laws if England, 4th Edn. Vol. 44, para 922)."

In State of M.P. and another, vs.. G.S. Dall & Flour Mills, AIR 1991 SC 772, The Apex Court in Para 21 of the judgment the Apex Court has observed that

"the notification of 3/71187 amending the 1981 notification with retrospective effect so as to exclude what may be described in brief as 'traditional industries' though, like Rule 14 of the deferment rules, the exclusion extends' even to certain other non-traditional units operating in certain situations. Though this notification purports to be retrospective, it cannot be given such effect for a simple reason. We have held that the 1981 notification clearly envisages no exclusion of any industry which fulfils the terms of the notification from availing of the exemption granted under it. In view of this interpretation, the 1987 amendment has the effect of rescinding the exemption granted by the 1981 notification in respect of the industries mentioned by it. S. 12 is clear that, while a notification under it can be prospective or retrospective, only prospective operation can be given to a notification rescinding an exemption granted earlier. In the interpretation we have placed on the notification, the 31, 7 87 notification cannot be treated as one merely clarifying an ambiguity in the earlier one and hence capable of being retrospective; it enacts the rescission of the earlier exemption and, hence, can operate only prospectively. It cannot take away the exemption conferred by the earlier notification".

In the case of Mithilesh Kumari and another, vs. Prem Behari Khare, AIR 1989 SC 1247, the Apex Court in Para 21 of its judgment as:

"A retrospective operation is not to be given to a statute so as to impair existing right or obligation, otherwise than as regards matter of procedure unless that effect cannot be avoided without doing violence to the language of the enactment. Before applying a statute retrospectively the Court has to be satisfied that the statute is in fact retrospective. The presumption against retrospective operation is strong in cases in which the statute, if operated retrospectively, would prejudicially affect vested rights or the illegality of past transaction, or impair contracts, or impose new duty or attach new disability in respect of past transactions or considerations already passed, However, a statute is not properly called a retrospective statute because a part of the requisites for its action is drawn from a time antecedent to its passing. The general scope and purview of the statute and the remedy sought to be applied must be looked into and what was the former state of law and what the legislation contemplated has to be considered. Every law that impairs or takes away rights vested agreeably to existing laws is retrospective, and is generally unjust and may be oppressive. But laws made justly and for the benefit of individuals and the community as a whole may relate to a time antecedent to their commencement. The presumption against retrospectivity may in such cases be rebutted by necessary implications from the language employed in the statute. It cannot be said to be an invariable rule that a statute could not be retrospective unless so expressed in the very terms of the section which had to be construed. The question is whether on a proper construction the legislature may be said to have so expressed its intention".

In the case of Hukam Chand etc. vs.. Union of India and others, AIR 1972 SC 2472 the Apex court had occasion to deal with the following aspects of the subject under context and held:

In the Displaced Persons (Compensation and Rehabilitation) Act (44 of 1954), S.40 & 49 of it. There is nothing in S. 40 from which power of the Central Government to make retrospective rules may be inferred. In the absence of any such power, the Central Government acted in excess of its power in so far as it gave retrospective effect to the Explanation to Rule 49. The Explanation could not operate retrospectively and would be effective for the future from the date it was added. - Paras 5, 6, 7, 10 of the judgment.

The fact that the rules framed under the Act have to be laid before each House of Parliament would not confer validity on a rule if it is made not in conformity with S. 40 of the Act. The laying referred to in S. 40 (3) is of the category of 'laying subject to negative resolution' because the above sub-section contemplates that the rule would have effect unless modified or annulled by the House of Parliament. The act of the Central Government in laying the rules before each House of Parliament would not, however, prevent the courts from scrutinizing the validity of the rules and holding them to be ultra vires if on such scrutiny the rules are found to be beyond the rule making power of the Central Government. - Para 11 of the judgment.

CONSTITUTIONAL PROVISO:

Constitution of India, Art.245 - Subordinate legislation - Extent of power - Rule making authority has to act within limits of power delegated to it. Unlike Sovereign Legislature which has power to enact laws with retrospective operation, authority vested with the power of making subordinate legislation has to act within the limits of its power and cannot transgress the same. The initial difference between subordinate legislation and the statute laws lies in the fact that a subordinate law making body is bound by the terms of its delegated or derived authority and that court of law, as a general rule, will not give effect to the rules, thus made, unless satisfied that all the conditions precedent to the validity of the rules have been fulfilled. Further, retrospective effect cannot be given to a subordinate legislation unless it is authorized by the parent statute or a validating statute.

THE CONCEPT OF ULTRA VIRES: In India, when the Legislature delegates legislative power to an administrative authority without offering any guide lines, the validity of the relevant statute may be attacked on following grounds, viz;

  1. The statute offends against Arts. 14 & 19 of the Constitution on the ground of unreasonable or arbitrary on the part of the legislature to confer uncontrolled discretionary power upon an administrative authority.
  2. That the statute is invalid because of excessive delegation of abdication of legislative power by the legislature.
  3. retrospective effect cannot be given to a subordinate legislation unless it is authorized by the parent statute or a validating statute

CONCLUSION:

It is crystal clear that the Statutes dealing with substantive rights - is prim facie / generally prospective unless it is expressly or by necessary implications made to have retrospective operation. But the rule in general is applicable where the object of the statute is to affect the vested rights or impose new burdens or to impair existing obligations. Statutes dealing with procedure - In contrast to statutes dealing with substantive rights, statutes dealing with merely matters of procedure are presumed to retrospective unless such a construction is textually inadmissible. According to Lord Dennig:

"The rule that an Act of Parliament is not be given retrospective effect applies only to statutes which affect vested rights. It does not apply to statutes which only alter the form of procedure or the admissibility of evidence, or the effect which the courts give to evidence"

In the light of the above judgments, and the principles laid down therein that the new Act / Rule affecting, existing rights or creating new obligations, is presumed to be prospective only.

This article is not intended to be a definitive analysis of legislative or other changes and professional advice should be taken before any course of action is pursued.

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