India: Procedural Amendments Affecting Vested Substantive Right Of A Litigant Are Prospective In Application Unless Specifically Made Applicable Retrospectively

Law is meant to adapt to changing society. Apart from substantive laws, procedural laws play a pivotal role in a country with overburdened Courts to make dispute resolution expeditious and cost effective. Any amendment to the procedural law raises several issues primarily relating to interpretation and applicability, and applicability of amended procedural law retrospectively is one of them. The general rule for applicability of procedural laws is that it would be applicable retrospectively whereas substantive laws are applicable prospectively, unless otherwise provided. Adjudication of proceedings before a court/ forum in the usual circumstances is not a matter of substantive right of a litigant. However, amendments particularly dealing with change of forum which affect pending proceedings before a court/ forum do not remain merely procedural as they affect the vested substantive right of a litigant and are an exception to the general rule of retrospective application of procedural laws. Therefore, such amendments dealing with change of forum with respect to pending proceedings cannot be applied retrospectively unless there is a specific provision in the amendment to that effect. This article discusses the above exception to the general rule of retrospective applicability of such procedural amendment in law relating to change of forum and the approach taken by the Indian judiciary on the subject.

BACKGROUND

Statutes are bifurcated basis the ones dealing with procedure and others dealing with substantive rights. It is a well-argued principle that procedural amendment to a law is applicable retrospectively in the absence of anything. Maxwell on Interpretation of Statutes, 11th Edition provides "No person has a vested right in any course of procedure. He has only the right to prosecution or defence in the manner prescribed for the time being by or for the court in which the case is pending, and if, by an Act of Parliament the mode of prosecution is altered, he has no other right than to proceed according to the altered mode"1. Further, it provides that "the general principle however, seems to be that alteration in procedure are retrospective, unless there be some good reason against it"2. Besides it has also been stated that statutes that are merely dealing with matter of procedure are presumed to be retrospective in nature unless such construction is textually inadmissible3.

In addition to the afore said principle, a position has been taken in a judgment delivered by a five-judge Bench of the Hon'ble Supreme Court in the matter of Memon Abdul Karim Haji Tayab Vs. Dy. Custodian-General4 that "It is well settled that procedural amendments to a law apply in absence of anything to the contrary, retrospectively in the sense that they apply to all actions after the date they come into force even though the action may have begun earlier or the claim on which the action may be based may be of an anterior date."

The Hon'ble Supreme Court in Keshvan v. State of Bombay5 held that it is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation.

This principle of law follows from the legal maxim 'Nova constitution futuris formam imponere debet non praeteritis', i.e. a new law ought to regulate what is to follow, not the past. The same view point has been taken in Monnet Ispat & Energy Ltd. V. Union of Indian & Ors.6 where the Hon'ble Supreme court held that this principle operates until and unless there is an express provision in the statute stating/indicating retrospective applicability of the statutes.

As observed by Lord Denning in Blyth v Blyth7 "The rule that an Act of Parliament is not to 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 evidence."

Further, Lopes L.J. in Re, Pulborough Parish School Board Election, Bourke V. Nutt8, observed that "Every Statute, it has been said which takes away or impair vested rights acquired under existing law, or creates a new obligation or imposes a new duty, or attaches a new disability in respect of transactions already past, must be presumed to be intended not to have a retrospective effect".

The other aspect of procedural law that needs to be seen in light of any amendment being a change of forum. It is a well settled principle that amendments in law relating to forums and limitations are procedural in nature whereas amendments in law relating to right of action and right of appeal are substantive in nature. Change of forum is considered as a form of procedure so amendment in law relating to forum typically amounts to procedural in nature. However, a stand has been taken by the judiciary that change in forum in pending proceeding would not remain procedural in nature, but it would create a substantive right. Therefore, any new law or amendment bringing in change in forum does not affect pending actions or proceeding in court of law, unless the new law or amendment has a provision in it providing a clear indication that the pending actions or proceeding are to be affected. 

The legal principle with respect to change is forum is reiterated in Commissioner of Income Tax, Orissa v. Dhadi Sahu9 the Hon'ble Supreme Court observed, that "it was true that no litigant had any vested right in the matter of procedural law, but where the question is of the change of 'forum', it ceases to be a question of procedure only, with reference to pending matter". The 'forum' of appeal or proceedings, it was held, was a vested right as opposed to pure procedure to be followed before a particular 'forum'. It was therefore concluded, that a right becomes vested when the proceedings are initiated, in spite of change of jurisdiction/ forum by way of amendment thereafter.

Additionally, the principle of prospective application of statutes dealing with vested rights has been reiterated in the matter of Videocon International Limited v. Securities and Exchange Board of India10strong>. In this case, the Hon'ble Supreme Court held that the general legal principle is that the law which introduces in a change in forum is not applicable on the pending actions or proceedings unless the intention to the contrary is clearly shown. The court further observed that one of the modes for showing such intentions could be by incorporating a provision of change-over proceedings from the court where they are pending to the court which now has the jurisdiction to try such cases. Additionally, the court held that no litigant has a vested right in the matter of procedural law but when there is a change of forums then it is no longer a question of procedural law but becomes a vested right.

A similar view has been taken by Hon'ble Supreme Court in a recent judgment in the matter of Securities and Exchange Board of India v. Classic Credit11.

Upon perusal of the precedents cited above, it can be deduced that procedural amendment in law are applicable retrospectively to acts/ actions that may have begun earlier or on the claims on which the actions may be accrued on an anterior date. Hence, the applicability of procedural amendments would not be deemed to be retrospective in cases where a claim has already been filed or a substantive right has been exercised to avail a legislative remedy.

KHAITAN COMMENT

The construction of statutes is very complex, and interpretation of statutes relies on the intention of the legislature. The bifurcation of statutes basis the ones dealing with procedure and others dealing with substantive rights simplifies the interpretation of statutes.

The elementary rule followed with respect to statutes dealing with substantive right is that the construction of every statute is prima facie prospective until and unless there is a necessary implication which makes the same to have a retrospective effect.

With respect to law or amendment related to change of forum, it is a settled principle that a change of forum except in pending proceedings is a matter of procedure and is applicable retrospectively.

Hence, as rightly remarked by authorities on interpretation of statutes and upheld in a catena of judgments, statutes dealing with substantive right would be statutes which create a vested right and the same cannot ipso facto be made retrospective in nature in the absence of any specific prescription or necessary implication. In divergence thereof, the statutes dealing with the minimal and limited scope of 'procedural change' or 'change on procedure' are presumed to retrospective unless such a construction is textually inadmissible.

Footnotes

1  Maxwell on Interpretation of Statutes, 11th Edition page 216

2 Maxwell on Interpretation of Statutes, 11th Edition page 217

3  Gardner V Lucas, (1878) 3 AC 582

4  (1964) 6 SCR 837

5 AIR 1951 SC 128

6  (2012) 11 SCC 1

7  (1966) 1 All ER 524

8  (1894) 1 QB 725

9 (1992) SCR 3 168

10 (2015) 4 SCC 33

11 2017 SCCOnline SC 961

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com

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