Operation of Retrospective and Prospective Statutes. | Study Guides, Projects, Research Law

Introduction

According to Section 3, sub-section 13 of General Clauses Act, 1897 the word Commencement is

used with reference to an Act or Regulation, shall mean the day on which the Act or Regulation

comes into force. Further, Section 5 of the General Clauses Act, 1897 provides for coming into

operation of enactments. Indeed, from this provision it could be inferred that unless provided

otherwise, a Central Act comes into operation on the day it receives the Presidential assent and is

construed as coming into operation immediately on the expiration of the day preceding its

commencement. Thus, if a Central Act is assented to by the President on 26th January at 10:30 am,

it would be construed to have come into operation on the midnight between 25th and 26th January.

Moreover, under the various State General Clauses Acts a State Act comes into force on the day

when the assent of the Governor or the President as the case may be, is first published in the

Official Gazette of the State.

The Parliament in respect of Central law and the State Legislature in respect of State law, it may

appoint a future date from which effectuation of the law is intended. Such a date is expressly

mentioned in the Act itself. Giving effect to an enactment is called “operation of statute”. and the

day from which the statute becomes operative is called “commencement of statute”. Thus, where

a specific date is provided in the statute itself, it commences from that date, but in absence any

date , a law commences from the date of receiving President`s or Governor assent , as the case

may be. In fact, the operation of statute could either retrospective or prospectively.

According to Black law Dictionary, prospective statute is a law that applies to future events and

retrospective statute a law that applies to past events. In Sangam Spinners v. Regional Provident

Commissioner (2008) 1SCC 391 it was held that it is cardinal principle of construction that every

statute is prima facie prospective unless it is expressly or by necessary implication made to have

retrospective operation. The absence of a saving clause in a new enactment preserving the rights

and liabilities under the repealed law is neither material nor decisive of the question. In terms of

Section 6 (c ) of General Clauses Act, 1897 unless a different intention appears the repeal shall not

affect any right, privilege or liability acquired ,accrued or incurred under the enactment repealed.

Moreover, in State Bank`s Staff Union (Madras Circle) V. Union of India (2005) 7 SCC 584, the

meaning of retrospective law was defined as law takes away or impairs vested rights acquired

under existing law or creates new obligation ,imposes new duty or attaches new disability , in

respect to transactions or considerations already past.

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Introduction According to Section 3, sub-section 13 of General Clauses Act, 1897 the word Commencement is used with reference to an Act or Regulation, shall mean the day on which the Act or Regulation comes into force. Further, Section 5 of the General Clauses Act, 1897 provides for coming into operation of enactments. Indeed, from this provision it could be inferred that unless provided otherwise, a Central Act comes into operation on the day it receives the Presidential assent and is construed as coming into operation immediately on the expiration of the day preceding its commencement. Thus, if a Central Act is assented to by the President on 26th^ January at 10:30 am, it would be construed to have come into operation on the midnight between 25th^ and 26th^ January. Moreover, under the various State General Clauses Acts a State Act comes into force on the day when the assent of the Governor or the President as the case may be, is first published in the Official Gazette of the State. The Parliament in respect of Central law and the State Legislature in respect of State law, it may appoint a future date from which effectuation of the law is intended. Such a date is expressly mentioned in the Act itself. Giving effect to an enactment is called “operation of statute”. and the day from which the statute becomes operative is called “commencement of statute”. Thus, where a specific date is provided in the statute itself, it commences from that date, but in absence any date , a law commences from the date of receiving Presidents or Governor assent , as the case may be. In fact, the operation of statute could either retrospective or prospectively. According to Black law Dictionary, prospective statute is a law that applies to future events and retrospective statute a law that applies to past events. In **Sangam Spinners v. Regional Provident Commissioner (2008) 1SCC 391** it was held that it is cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. The absence of a saving clause in a new enactment preserving the rights and liabilities under the repealed law is neither material nor decisive of the question. In terms of Section 6 (c ) of General Clauses Act, 1897 unless a different intention appears the repeal shall not affect any right, privilege or liability acquired ,accrued or incurred under the enactment repealed. Moreover, in State Banks Staff Union (Madras Circle) V. Union of India (2005) 7 SCC 584, the meaning of retrospective law was defined as law takes away or impairs vested rights acquired under existing law or creates new obligation ,imposes new duty or attaches new disability , in respect to transactions or considerations already past.

CANONS OF CONSTRUCTION

In Jagdamba Prasad v. Anandi Nath (AIR 1938 Pat 337) , following were the observations of Manohar Lal J.:- “It is necessary to keep in mind the following well-known canons of construction which are laid down by highest authorities, in order to decide whether an Act is retrospective or prospective: i. There is no presumption that the statute which takes away any existing right is intended to apply to a state of facts which came into existence before its commencement. ii. When the effects of the statute would be to make a transfer valid which was previously invalid ,to make an instrument, which had no effect at all and from which the party had liberty to depart as long as he pleased, binding the prima facie construction of the Act is that is not be retrospective. iii. If it is necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the courts will give it such an operation because it is obviously competent for the legislature if it pleases in its wisdom to make the provisions of an Act retrospective.. iv. But if, on the other hand, the language employed by the legislature is ambiguous or not clear and explicit, the court must not give a construction to the new Act which would take away vested rights, in other words should be prospective.” RETROSPECTIVE OPERATION The Union Parliament and State Legislatures have plenary powers of legislation within the fields assigned to them and subject to certain constitutional and judicially recognized restrictions can legislate prospectively as well as retrospectively. Further, by retrospective legislation, the Legislature may make a law which is operative for a limited period prior to the date of its coming into force and is not operative either on that date of its coming into force and is not operative either on that date or in future. Retrospective means from past date. Therefore, “retrospective operation” means the operation from a past date. Generally every enactment is operated from a future date but Legislature is competent to give effect to a law from back date that is retrospectively. The result of retrospective operation is that the retrospective law is legitimately applied to pending proceedings also. If the legislature intends to give retrospective effect to an enactment, such intendment has to be expressly declared. In the absence of such declaration, the law is deemed to be prospective.

• OPERATION OF VARIOUS KINDS OF STATUTES

(a) Statutes dealing with substantive rights are presumed to be prospective :- The statutes which deal with substantive rights are deemed to be prospective only. They should not be presumed to be retrospective .An enactment which seeks to take away any vested rights cannot be given retrospective effect unless it is expressly intended. The retrospective operation is not taken to be intended unless that intention is manifested by express words or necessary implication. Therefore, a close attention is required to be paid to the language of the statutory provision. LORD BLANEBURG observed that the provisions which touch a right in existence at the passing of the statute are not be applied retrospectively in the absence of express enactment or necessary intendment. State of Punjab v. Bhajan Kaur (2008)12SCC It was held that a substantive law is presumed to be prospective. It is one of the facets of the rule of law. Section 92-A of the Motor Vehicle Act,1939 ,created a right and a liability on the owner of the vehicle. It is a statutory liability, not a tortious liability. Where a right is created by an enactment , in the absence of a clear provision in the statute , it is not to be applied retrospectively. (b) Statutes dealing with procedure are presumed to be retrospective The statutes which deal with the procedure are presumed to be retrospective. In other words , these statutes which modify the existing procedures or provide for new procedures are given retrospective effect. If new Act affects the matter of procedure only, then it applies to all actions pending as well as future. MAXWELL says that no person ahs vested right in any course of procedure. He has only the right to prosecution or defence in the manner prescribed. if the procedure is altered, he has not other right than to proceed according to altered mode. In Arvind Kumar v. State of M.P (2007)12SCC 681 it was held that a provision which does not create any new offence but is merely procedural in nature is normally retrospective in operation. (c) Statutes regulating transfers and contracts are not retrospectively operated Where a statute is enacted prescribing new formalities for effecting a transfer, any transfer after commencement of such statute shall have to be made in accordance with the provisions of the act and any contravention thereto would render the transfer invalid but the transfers made prior to coming into force of such statute remain unaffected. They are not declared void even though the new formalities prescribed in later enactment. therefore, the law regulating transfers is not applied to past cases.

Tahkoor Hurdeo Bux v. Tahkoor Jowahir Singh (1879) 6 IA 161 , it was held that statutes prescribing formalities for effecting transfers are nor applicable to transfer made prior to their enforcement. (d) Statutes prescribing limitation are prospective but may have retrospective operation of certain matters Certain statutes prescribe period of limitation for initiating legal action.Such statutes do not create any right .The object is to prescribe period of limitation. After expiry of period of limitation, the right to sue comes to an end. An subsequent limitation act which provides a longer period of limitation cannot be applied to the cases which are time barred .Once a particular action becomes barred under earlier limitation act, recourse to later Act cannotbe taken to revive the extinguished right. The larger period of limitation provided by the later Act is of no help. In New Insurance Co. Ltd. v. Shanti Misra (AIR 1976 SC 237), it was held that when later Act provides shorter period of limitation than that provided by earlier act and if a right of suit is subsisting according to earlier act on the date when the later Act came into operation, will not be taken to be extinguished. However, if the curtailed time to file a suit as per later Act is not expired, the right is to be availed of within that period and benefit of earlier Act is not available. (e) Fiscal statute are prospective in respect of charging provisions but are retrospective in respect of provisions dealing with procedure Fiscal statutes are presumed to be prospective only and not retrospective. However, this rule has no application in respect of procedural part. Procedural bpart of taxing statute is retrospective and applies to pending proceedings also. Certain consideration s as to operation of fiscal statutes are as under

The fiscal statutes are so operated as not to effect finality of tax assessment.
Assesse cannot be subjected to reassessment.
A provision which is retrospective and opens up time barred liability shall be strictly construed.
Tax authorities cannot be authorized to commence proceedings which before new act , had become time barred.
A change in law which seeks to vary the tax liability and which has been brought after beginning of assessment year , does not affect the assessment made last year. In C.I.T Bombay v. Scindia Steam Navigation Co. Ltd (AIR 1961 SC 1633) , it was held that as the income tax liability is computed according to law in force at beginning of assessment

Further, in Shakti Tubes Ltd. v. State of Bihar (2009) 7SCC 673 it was held that general presumption against retrospectivity is also applicable to sentences welfare legislation. (h) Statutes dealing with appeals are prospective only An appeal may be defined as a process of moving a superior court against the order passed by an inferior court. Right to prefer an appeal is considered to be substantive right. It is judicially recognized right vesting in the suitor at the time of institution of original proceedings. Some statutes or their certain provisions provide for an appeal against the order passed a court. Since right to appeal is the vested right , any statute affecting it cannot be retrospectively operated. If after commencement of original proceedings, the law relating to appeal is amended so as to adversely affect this vested right to appeal, it is presumed to be prospective only. In Garikapati Veerya v. N. Subbiah Choudhary (AIR 1957 SC 450) , the Supreme court deduced following propositions

The legal pursuit of remedy ,suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceedings.
The right of appeal is not mere a matter of procedure but is a substantive right.
The institution of the suit carries with the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the carrier of the suit.
The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date of lis commences and although it may be actually exercised when the adverse judgment is pronounced, such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of filing of appeal.
This is vested right of appeal can be taken away only by a subsequent enactment of if it provides or by necessary intendment and not otherwise.

(i) Pending proceedings alterations : alterations in procedure can be applied but alterations affecting substantive right cannot be applied If any alteration as to procedure takes place in the law during pendency of a legal proceeding, then such alteration may be retrospectively operated. It means that the alteration in procedural part may be applied to the pending proceedings as well but were the alterations affects substantive rights of the parties to suits, they cannot be applied on pending proceedings unless otherwise is provided expressly or legislative intent to that effect can be drawn by necessary implication.

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CANONS OF CONSTRUCTION

• OPERATION OF VARIOUS KINDS OF STATUTES