Interpretation Of Statutes

National Law University, Odisha

Retrospective Operation of Statutes in India

Under the Guidance ofMr. Abhik MajumdarAssistant professor (Law)National Law University, Odisha

This project is Authored by-Diksha Goyal (2011/ BbA LlB/ 020)Nilanjan Bhattacharjee (2011/BbA LlB/ 032)

Table of Contents

Objectives2Hypothesis2Scope2Research Methodology2Concept of Retrospective Operation of Statutes4Test for Determining Retrospectivity5Competency to enact retrospective laws8Competency of Legislature8Executive rules not retrospective8Existing Rights Usually Not Affected9Applicability of the rule to substantive rights9Presumption against Retrospectivity10Exception11Where two interpretations are possible12Effect Must Be Given to Language Irrespective of Consequences12How far Prior State of Law Relevant13Conclusion14Bibliography15

ObjectiveThe objective of this project is to analyze the retrospective operation of statutes through various case laws and to understand the current position of laws with respect the same.HypothesisThe approach that has been adapted by the judiciary is in the benefit of law and in consonance with the objective law seeks to achieve. The decisions that is being given by the judiciary and interpreted by various jurists all over the world would be limited to the objectives and aims of law. Discretion that is taken into account is minimal.ScopeThis project will delve upon the concept of Retrospective Operation of Statutes in India. The paper will also analyse the development of this concept with respect to various judicial pronouncements. The various tests used to judge the scope of retrospectivity and its extent of application will also be discussed in the paper at hand.Research MethodologyWe, while constructing this project, have relied on both primary and secondary sources for research while placing main reliance on primary sources. We have looked into various books, articles, documents and cases relating to the Interpretation of Statutes. Cases will be analysed so as to find what is the extent and current position of retrospectivity in this regard.

Introduction

Any kind of statute operates in two ways, i.e., a prospective operations where a statute seeks to govern current activities and a retrospective operation where a statute seeks to operate on past events and activities. Though retrospective operation is not favoured in law rather there is a presumption against retrospective operation of statutes. Acts, enactments and administrative rules will not be construed to have retrospective effect unless their language requires this result.[footnoteRef:2] [2: A.B.Kafaltiya, Interpretation of Statutes (Universal Law Publishing, 2008), pp.216.]

The use of the term retrospective operation of statutes is at times bleary & obscure. In a wider sense it would be right enough to say that statute has retrospective operation when it purports to operate over those facts or events which took place before the provision come in to force. It is sometimes used in a divergent sense when vested rights are sought to be affected. Also, it is at times loosely used in context of certain functions of law which the law maker deems it necessary to introduce in existing laws for the purpose of setting certain matters rightly or avoiding certain mischief which might be possible for change in law; and this is done by penning down that certain facts or things which did not exist.[footnoteRef:3] In this project we have discussed concept of retrospective operation of statutes, general principles relating to retrospective operation of statutes and retrospectively of other statutes with special reference to various statutes with the help of recent case laws and with reference to some basic rules enunciated by prominent authors on the construction of statutes. [3: http://www.legalservicesindia.com/article/article/prospective-vs-retrospective-517-1.html last visited on 20-2-2014 at 11 p.m.]

Concept of Retrospective Operation of Statutes

Retrospective operation is an inaccurate term and somewhat ambiguous. Since it is very cloudy it is open to interpretations. Literal meaning of the word retrospective is to look backward; contemplating what is past; having reference to a state of things existing before the Act in question.[footnoteRef:4] Thus a retrospective law would be a law which goes back into the past, contemplates over it, affects acts or facts occurring, or right occurring before it came into force. The best instances of retrospective laws are those, in which the date of commencement is earlier than enactment, or which validates some invalid law; otherwise, every statute affects rights which would have been in existence but for the statute. [4: Vepa P. Sarthi, Interpretation of Statutes (Eastern Book Company, 5th ed, 2010), pp. 326.]

In the case of Nemi Chand vs. State of Rajasthan[footnoteRef:5], the court said that a statute does not become a retrospective one because a part of the requisites for its action is drawn from a time antecedent to its passing. All what it means is that save in cases where the law creates a new offence or increases a penalty, a legislature is not prevented from enacting an ex post facto law but if any such law takes away or impairs any vested right acquired under an existing law, or creates a new obligation,[footnoteRef:6] imposes a new duty or attaches a new disability in respect to transactions on considerations already past, it must so provide in express terms or such should be a necessary implication from the language employed. [5: Nemi Chand v State of Rajasthan, (1977) Raj LW 430. ] [6: Ram Prakash v Savitri Devi, AIR (1958) Punj 87.]

Test for Determining Retrospectivity

The question whether a statute operates retrospectively or not is one of legislative intent. Unless it is provided in the statute expressly or impliedly, retrospective operation is generally presumed to be unjust and oppressive.[footnoteRef:7] If however, the terms of statute do not of themselves make the intention of legislature certain or clear, the statute will be presumed to operate prospectively[footnoteRef:8]. There are occasions when a law may be held to be retrospective; however, retrospection of the statute is not to be presumed, for the presumption is in favour of the prospective operation of law. Conclusively, court will consider following factor if the retrospective operation is not expressly given in the statute[footnoteRef:9]: [7: Mithilesh Kumari v Prem Behari Khare, (1989) 2 SCC 95.] [8: Rashid Ahmed (Mhd) v State of Uttar Prades, AIR 1979 (SC) 592.] [9: Zile Singh v State of Haryana, AIR 2004 (SC) 5100.]

They will look into the general scope and purview of the statute. The remedy sought to be applied. The former state of law. What, it was that the legislature contemplated.The courts also, while considering the question of the retrospective operation of statute, considers the nature of the right affected. Where there is no vested right, an amendment will be considered as prospective so as not to affect the vested right. If the right is merely procedural then normally there is no vested right.[footnoteRef:10] In case of Shah Bhojraj Mills v Subhas Chandra[footnoteRef:11], it was also ruled by the Supreme Court that the statute may be prospective in some parts and retrospective in other parts. [10: Debi Butta Moody v Bellan, AIR 1959 (Cal) 567.] [11: Shah Bhojraj Mills v Subhas Chandra, AIR 1961 (SC) 1596.]

Generally remedial or curative statutes are always regarded as prospective, but declaratory statutes are considered as retrospective. Those statutes that only relates to matters of procedure or of evidence, are prima facie prospective and retrospective operation not to be given to them unless, by express words or necessary implications it appears that this was the intention of the legislature.[footnoteRef:12] [12: Halsbury Laws of England, Vol. 36 (3rd Ed), pp.423.]

In State of Bombay v Vishnu Ram Chandra[footnoteRef:13], dealing with the question as to how an enactment may be construed as retrospective, the Supreme Court states that the question has to be decided in accordance with the following principles: [13: State of Bombay v Vishnu Ram Chandra, AIR 1961 (SC) 307.]

Penal Statutes are always prospective, but can also interpreted retrospectively; of there is a clear intendment that they are to be applied to past events. Statutes, which create new punishments, but authorize some actions based on past conducts, if expressed in language showing retrospective operation, would be applied retrospectively. Acts designed to protect the public against acts of harmful character may be construed retrospectively if the language admits such an interpretation, even though it may equally have prospective meaning. Statute which takes away or impairs vested rights under existing laws is presumed not to have retrospective operation.Thus, the principles that have to be applied for interpretation of statutory provisions are well settled. The first of these is that statutory provisions creating substantive rights or taking away substantive rights are ordinarily perspectives, they are retrospective only if by express words or by necessary implication, the legislatures has made them retrospective[footnoteRef:14]; and the retrospective operation will be limited only to the extent to which it has been so made by express words, or necessary implications. [14: Associated Cement Co ltd v State of Bihar, 1979( Pat) LJ 429.]

The second rule is that the intention of the legislature has always to be gathered from the words used by it, giving to the words their plain, normal and grammatical meaning.The third rule is that if any legislation, the general object of which is to benefit a particular class of persons, any provision is ambiguous so that it is capable of two meaning, one which would preserve the benefit and another, which would take it away, the meaning which preserves the benefit should be adopted.The fourth rule is that if strict grammatical interpretation gives rise to an absurdity or inconsistency, such interpretation should be discarded and an interpretation which gives effect to the purpose of legislature may reasonably be considered to have had, will be put on the words, if necessary, and even by modification of the language used.[footnoteRef:15] [15: State of M.P. v Poonam Chnd 1968 (Jab) LJ 116.]

The fifth rule is that where a statute is not clear as to whether it has retrospective effect and can be interpreted either way on this point, the court should not give it retrospective effect.[footnoteRef:16] Except where necessary, a statute should not be read retrospectively.[footnoteRef:17] Pending actions are not affected by new statute, unless the latter are expressly made applicable to the former.[footnoteRef:18] [16: Govind Das v Income-tax officer, AIR 1977 (SC) 552. ] [17: State of Kerela v Philomina, (1976) 4 SCC 314.] [18: Kapen v Provident Investment Co, AIR 1976 (SC) 2910.]

Competency to enact retrospective laws

Competency of LegislatureThe Union Parliament and State Legislatures have plenary powers of legislation within the fields assigned to them. Subject to certain constitutional and judicially recognized restrictions[footnoteRef:19] legislature can legislate prospectively as well as retrospectively. Under the constitution there is only one restriction imposed upon the power of retrospective legislation under Article 20.[footnoteRef:20] Competence to make a law for a past period on a subject depends upon present competence to legislate on that subject. The power to make retrospective legislation enables the Legislature to obliterate an amending Act completely and restore the law as it existed before the amending Act.[footnoteRef:21]This power has also often been used for validating prior executive and legislative acts by retrospectively curing the defect which led to their invalidity and thus even making ineffective judgments of competent courts declaring the invalidity. It is not necessary that the invalidity must be cured by the same Legislature which had passed the earlier invalid Act. Thus if a state Legislature passes an Act subject which fails outside its competence and the same is within the competence of Parliament and is for that reason held invalid, Parliament can by passing retrospective Act which incorporates the State Act can cure the invalidity. [19: T.Bhattacharyya, The Interpretation of Statutes, (Allahabad Law Agency Publication, 4th edn, 2001),pp.423.] [20: Bihar Cotton Mills v Union of India, AIR 1956 (Pat) 131.] [21: State of Tamil Nadu v. Arooran Sugars Ltd., AIR 1997 (SC ) 1815.]

Executive rules not retrospectiveA legislature can certainly give retrospective effect to pieces of legislation passed by it but an executive government exercising subordinate and delegated powers cannot make legislation retrospective in effect unless that power is expressly conferred by the parent enactment.[footnoteRef:22] Hence, the rule is well-established that even in a case where the executive government, acts as a delegate of legislative authority, it has no plenary power to provide for retrospective operation unless and until power is expressly conferred.[footnoteRef:23] [22: Modi Food Products Ltd v Commr of Sales-tax, AIR 1956 (All) 35.] [23: Calicut Wynad Motor Service Pvt Ltd v State of Kerela, AIR 1959 (Ker) 247.]

Existing Rights Usually Not Affected

A retrospective operation is not to be given to a statute so as to impair an 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.[footnoteRef:24] A statute which impairs vested rights or the legality of past transactions or the obligations of contract should not prima facie be held to be retrospective. Every statute which takes away or impairs vested rights acquired under existing laws, creates a new obligation, imposes a new duty, attaches a new disability in respect of transactions already past, must be presumed to be intended not to have retrospective effect. It is well settled that a statute is not to be construed to operate retrospectively so as to take away a vested right, unless that intention is made manifest by language so plain and unmistakable that there is no possibility of any choice of meaning.[footnoteRef:25] [24: Rao and Dhanda, N S Bindras Interpretation of Statutes ( Lexis Nexis Publication, 10th edn, 2012), pp. 1432.] [25: KL Gupta v Municipal Corporation, AIR 1968 (SC) 303.]

Applicability of the rule to substantive rights

When the law is altered during the pendency of an action, the rights if the parties are decided according to law, as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights. In the case of Khubi Singh Yadava v Dist Judge, Allahabad[footnoteRef:26], no vacancy in the accommodation was created on account of transfer of the tenant, according to the law in force prior to the commencement of the amending act of 1976. The amending act did not indicate that any retrospective operation was to be given to sub-s (3A) of S-12 of the Uttar Pradesh Urban Building (Regulation of Letting, Rent and Eviction) Act 1972, therefore, it was held that no vacancy was created by the transfer which took place before the amending Act came into force. The question of prospectivity and retrospectivity might arise in pending suits, suits which were pending on the date when the amendment Act came into force, to contend that the amending provision would never be applicable even in future to a sitting tenant would not be a tenable contention.[footnoteRef:27] [26: Khubi Singh v Dist Judge Allahabad, 1980 (All) LJ 233.] [27: Atar Sing v Third Addl District Judge 1982 All Rent Cas 624.]

Whether a person has a right to recover property is a question of substantive law.[footnoteRef:28] [28: Bireswar v Indu Bhusan, AIR 1954 (Cal) 573-74.]

An enactment conferring substantive rights cannot be given a retrospective unless the legislature has made an explicit and express provision to that effect therein or such a consequence inevitably follows by necessary intendment.[footnoteRef:29] [29: Mohari v Chukli, AIR 1960 (Raj) 82-83.]

Presumption against Retrospectivity

As a general rule, every statute is deemed to be prospective, unless by express provision or necessary implication is to have a prospective effect. Whether a statute is to have retrospective effect depends upon its interpretation having regard to well-settled rules of construction.[footnoteRef:30] A statute is presumed to be prospective in its operation and no further retrospective effect should be given to the provisions of a statute then is expressly provided therein.[footnoteRef:31] Retrospection is not to be presumed; but many statutes have been regarded as retrospective without declaring so. The statute would operate retrospectively when the intent that it should so operate clearly appears from a consideration of the Act as a whole, or from the terms thereof, which unqualifiedly gave the statute a retrospective operation or imperatively require such a consideration, or negate the idea that is to apply only to future cases. Retrtospectivity is liable to be determined on few grounds[footnoteRef:32]; [30: Municipal Corporation v Charanjit Law, 1980 (PLR) 7.] [31: Ram Dayal v Ganga Prasad, 1983 (All LJ) 255.] [32: Rao and Dhanda, N S Bindras Interpretation of Statutes ( Lexis Nexis Publication, 10th edn, 2012), pp. 1432.]

The words used must expressly provide, or clearly imply retrospective operation. The retrospectivity must be reasonable and not excessive or harsh otherwise it runs the risk of being struck down as unconstitutional. Where the legislation is introduced to overcome a judicial decision, the power cannot be used to subvert the decision without removing the statutory basis of the decision.

ExceptionSometimes a statute, although not intended to be retrospective, will, as a matter of fact, have a retrospective operation. For instance, if two persons enter into a contract, and afterwards a statute is passed, engrafts an enactment upon an existing contract, and thus operates so as to produce a result which something quite different from the original intention of the contracting parties, such a statute has, as a matter of fact, a retrospective operation. It is a familiar rule that no statute is construed to be of retrospective operation unless the terms of the statute expressly state that it is retrospective or such a construction arises by necessary implication. The rule is based on the presumption that the legislature does not intend what is unjust or that transactions which have already vested title to property should be reopened or thrown into doubt.[footnoteRef:33] [33: Ibid.]

It is well recognised that the canon against retrospective interpretation does not apply to a statute dealing with an adjective law, i.e., procedure, and we think that a statute abolishing old legal fictions is so nearly akin to a procedural statute that the canon can have little if any, application.[footnoteRef:34] [34: Kishri Lal v Devi Prasad , AIR 1950 (Pat) 50.]

Where two interpretations are possible

If an enactment is expressed in language, which is fairly capable of either interpretation, it ought to be construed as prospective only.[footnoteRef:35] Even in construing a section which is to a certain extent retrospective the maxim must be borne in mind as applicable whenever the line is reached at which words of the section cease to be plain.[footnoteRef:36] The question as to whether a statute should have a prospective and retrospective as well can only arise only when the words of the statute are capable of giving the enactment both prospective and retrospective effect. The question can never arise if the words of the statute make it clear that it should have prospective effect only.[footnoteRef:37] Even admittedly retrospective legislation is limited by the clearness of its retrospectivity; and, also, rights that have passed from the original contractual or relational character into rights measured by judicial determination are prima facie, outside retrospection, which usually applies to rights not yet so determined.[footnoteRef:38] [35: Daulat singh v State, AIR 1950 (MB) 112-113.] [36: Abdul Ruzak v Kuldip Narain, AIR 1944 (Pat) 147.] [37: Firoz Ahmed v Akbar Ali, AIR 1943 (Lah) 238.] [38: Fedrated Assn of Australia v Broken Hill Proprietary Co Ltd, 16 (LRC) 245.]

Effect Must Be Given to Language Irrespective of Consequences

If the meaning of words used indicates an intention that the Act is to have retrospective operation, then, no matter, what the consequences this operation must be given to the provisions.[footnoteRef:39] No doubt whenever the intention is clear that the Act shall have retrospective operation, it must unquestionably be so construed even if the consequences may appear unjust and hard.[footnoteRef:40] If there are words in the enactment which either expressly or by necessary intendment (eg from the object of the statute) imply that the statute is to be given retrospective operation even in respect of substantive rights or pending actions, the courts have no other alternative than to give such operation to the statutes even though the consequence may appear to be unjust or hard.[footnoteRef:41] In determining whether any provisions of an Act was intended to be retrospective or not, the consequences of holding that it is not retrospective must be looked at.[footnoteRef:42] [39: Rashid Bibi v Tuftail Muhammad, AIR 1941(Lah) 291-92.] [40: Gopal Vakta v Gopal Munshi, AIR 1941(Cal) 432.] [41: M L Bagga v Murher Rao, AIR 1956 (Hyd) 35.] [42: Jagdamba Prasad v Anadi Nath, AIR 1951(MB)1.]

How far Prior State of Law Relevant

When the question for consideration is whether a statute is retrospective so as to affect existing rights, it is impossible to determine the question without considering the prior state of the law.[footnoteRef:43] The courts have sometimes taken into consideration the state of law which was there at the time when the Amendment act was passed.[footnoteRef:44] In fact, we must look at the general scope and purview of the statute, and at the remedy sought to be applied, and consider what the former state of law was and also what was that the legislature contemplated.[footnoteRef:45] But laws made justly and for the benefit of individuals and the community as a whole, as in this case, may relate to a time antecedent to their commencement. [43: Gulab Chand v Kudilal, AIR 1943 (SC) 423.] [44: Supra note 41.] [45: Pardo v Bingham, AIR 1991 (SCW) 1651.]

Conclusion

Every other statutes leaving those which are merely declaratory or which relate only to procedural laws or in which evidence are prima facie prospective and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless the 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. Where the language of statutes is susceptible of both interpretation then prospective interpretation must be preferred which provide for moderate & harmonious position.

Bibliography

Statutes Referred

Constitution of India, 1950 Criminal Procedure Code, 1973. Indian Penal Code, 1860.

Books

A.B.Kafaltiya, Interpretation of Statutes (Universal Law Publishing, 2008). Vepa P. Sarthi, Interpretation of Statutes (Eastern Book Company, 5th ed, 2010). Halsbury Laws of England, Vol. 36 (3rd Ed). T.Bhattacharyya, The Interpretation of Statutes, (Allahabad Law Agency Publication, 4th edn, 2001). Rao and Dhanda, N S Bindras Interpretation of Statutes (Lexis Nexis Publication, 10th edn, 2012). D.N. Mathur, Introduction to Interpretation of Statutes, (Wadhwa publication, 2nd edn, 2005). V.P.Sarthi, Interpretation of statutes, (Eastern Book Company Publication, 4th edn, 2005). G.P. Singh, Principles of Statutory Interpretation, (Lexis Nexis Butterworths Publication, 11th edn, 2008). St. J. Langan, Maxwell on the Interpretation of Statutes, (12th edn., 1969).

Web Sources

http://corporatelawsupdates.blogspot.in/2010/08/retrospective-operation-of statutes.html http://www.legalservicesindia.com/article/article/prospective-vs-retrospective-517-1.html http://www.mondaq.com/india/x/19039/Principles+of+Retrospective+Operation+of+Law+and+Ultra+Vires http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=981 http://www.heinonline.org/HOL/Page?handle=hein.journals/ubclr29&div=9&collection=journals&set_as_cursor=3&men_tab=srchresults&terms=retrospective%7Claw&type=matchall

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