Author: Naveen Talawar, V Year of B.A.,LL.B(Hons.) From KSLU’s Law School.
A Central Law usually takes effect on the day it is signed by the President. A State Law, similarly, becomes effective on the day the Governor grants his assent. The process of giving effect to a law is known as the operation of statute, and the date the law begins to take effect is known as the commencement of statute. The operation of statutes is of two types, i.e. the Prospective operation which seeks to govern current activities, and events & the Retrospective operation of statutes which seeks to govern past acts and events as to impair an existing right or obligation.
The term "retrospective operation of law" describes the application of a legal provision to actions or facts that took place prior to the enactment of the relevant law. These laws alter or change the legal consequences of actions that occurred before they were passed. A retrospective law removes or impairs an existing right by creating or imposing a new liability for an act committed prior to the enactment of a law. However, penal provisions are exempted from the retrospective application of the law. A retrospective law is against the general rule of prospective operation of law, which regulates future actions without altering the nature of past transactions conducted in reliance on the then applicable law.
Unless there is a necessary implication in the law stating that the law is retrospective in nature, the Indian Constitution prohibits the retrospective application of an Act or a law. A law that is applied retrospectively but isn't expressly implied by the Act would be deemed invalid or unconstitutional. Article 20 (1) of the Indian constitution protects citizens from ex post facto law, also known as retrospective operation of the law, which alters the legal consequences of actions taken prior to the enactment of the law. Whether a statute or law should be given a retrospective effect that eliminates or impairs an existing right or imposes a new liability is the question that is raised during the application of retrospectivity.
Meaning of retrospective operation of statutes
Every law is generally applied as of a future date. The legislature, on the other hand, has the authority to implement a law retrospectively. The retrospective operation has the effect of validly applying retrospective law to ongoing proceedings as well. The legislature must expressly state that it intends to give a law retrospective effect. In the absence of such a declaration, the law is assumed to be prospective. The term "retrospective operation" is ambiguous and subject to different interpretations. Retrospective refers to looking backward and making reference to a situation that existed prior to the relevant Act. A retrospective statute considers the past and grants prior transaction legal consequences that differ from those that applied at the time it occurred or transpired.
A statute must be deemed prospective if it takes away or otherwise impairs a vested right that was acquired under existing law, or if it establishes a new duty, imposes a new obligation, or attaches a new disability to transactions or considerations that have already occurred. A retrospective law is one that goes back in time and changes the legal consequences of a past transaction from those that were applicable at the time it occurred. An Act is deemed to be retrospective if it specifies that the law shall be deemed to have been the opposite of what it actually was as of a previous date.
The meaning of retrospective law was highlighted in the case of State Bank's Staff Union (Madras Circle) v. Union of India. While referring to enactment, it was noted that the word "retrospective" could refer to a number of different things, including altering an existing contract, reopening a previously closed transaction, altering accrued rights and remedies, or altering a procedure. A law that is retrospective takes away or otherwise affects vested rights that have been acquired under existing laws, or it creates new obligations, imposes new duties, or attaches new disabilities to past transactions or considerations.
In Zile Singh v. State of Haryana, it was observed that it is a fundamental rule of construction that every statute is prima facie prospective unless it is made to have retrospective application expressly or by necessary implication. However, the general rule is applicable whenever the main objective of a statute is to affect vested rights, impose new burdens, or undermine existing obligations. Unless the statute expressly states that the legislature intended for it to affect pre-existing rights, it is assumed to be prospective only.
General principles of retrospective operation of statutes
Legislation cannot be implemented retrospectively to affect pre-existing rights unless expressly stated otherwise or by necessary implication. Whether a law is applied in the future or in the past depends entirely on the legislative intent. If the terms of the statute are unambiguous and it is obvious that the legislature intended for it to apply retrospectively, then it must without a doubt be interpreted as written. However, if the terms of a statute do not by themselves make the intention clear or certain, the statute will be presumed to operate prospectively, where it is in derogation of a common law right or where it would interfere with an existing contract, destroy a vested right, create a new liability in connection with a past transaction, or invalidate a defense that was valid at the time the statute was passed.
While considering the question of the statute's retrospective application, the nature of the affected right must be considered first. In cases where a vested right exists, an amendment will be viewed as prospective in order to protect the vested right. Normally, there is no vested right if the right is only procedural.
In Arjan Singh v. State of Punjab, Justice Hegde stated "It is a well-established rule of construction that no provision in a statute should be given retrospective effect unless the Legislature has made it retrospective by express terms or by necessary implication, and that where a provision has been made retrospective, care should be taken not to extend its retrospective effect beyond what was intended”.
Power to make retrospective laws
The legislative authority granted to the Union Parliament and State Legislatures to enact legislation on the various topics covered by the three Lists can be exercised both prospectively and retrospectively. Of course, there are some constitutional restrictions. Where the legislature has the authority to enact a valid law, it may provide not only for the prospective application of the material provisions of the law but also for the retrospective application of the same provisions. State legislatures are free to enact laws that would apply to a specific period of time in the past, and their power to do so depends on their present legislative power rather than what they had at the time the law would take effect. Subject to the limitation imposed by Article 20(1), which states that a legislature cannot pass retrospective penal laws, the power to make a law includes the power to give it retrospective effect.
The ability to enact laws retrospectively is frequently used to uphold earlier legislative and executive Acts. This rectifies the flaws that rendered the earlier Acts and laws invalid. The legislature, which had previously passed the unconstitutional or flawed Act, is not required or required to legislate the Act's validity. When a law is retrospectively amended, all subsequent actions must be based on the assumption that the law as amended has always been the law in force.
Statutes dealing with substantive rights
According to LORD BLANESBURG, "provisions that affect a right that already existed at the time the statute was passed may not be applied retrospectively in the absence of express enactment or necessary intendment". The statutes that deal with substantive rights are deemed to be prospective only, and this is a fundamental tenet of construction. They must not be taken as being retrospective. Except when expressly intended, a law that seeks to take away a vested right cannot be applied retrospectively. Unless the intention is made explicit through express words or necessary implication, the retrospective operation is not assumed to be intended. As a result, careful attention must be paid to the statutory provision's language.
Statutes dealing with procedure
In contrast to statutes addressing substantive rights, statutes addressing merely procedural issues are generally presumed to be retrospective unless a different interpretation is prohibited by the text. Generally, a procedural statute should not be applied retrospectively if doing so would result in the creation of new limitations or obligations or the imposition of new obligations with regard to transactions that have already been accomplished.
In Shyam Sunder v. Ram Kumar, the Supreme Court stated "No person has a vested right in any course of the procedure. He only has the right to prosecute or defend in the way currently prescribed by or for the court where the case is pending, and if by an Act of Parliament, the mode of procedure is altered, he has no other right but to proceed in accordance with the altered mode”.
In New India Insurance Co. Ltd. v. Shanti Misra, it was decided that if a new Act mandates that certain types of original proceedings be brought before a special tribunal instead of civil courts, then all such proceedings, regardless of whether they are based on previous or new causes of action, must be brought before that tribunal.
It is evident from the aforementioned that statutes dealing with substantive rights are presumed to be prospective, whereas statutes dealing with procedures are presumed to be retrospective. However, whether a statute applies prospectively or retrospectively is not determined by how it is divided into substantive and procedural laws. A procedural statute cannot be applied retrospectively just because it is procedural. The outcome of the application of the statute has to be observed. A procedural law, such as the statute of limitations on past causes of action, cannot be applied retrospectively if it results in the revival or extinction of a right to sue.
Limitations on enacting retrospective laws
Retrospective operation is generally only limited to the extent that it has been explicitly stated as such or necessary implications have been made. However, there is no set method for retrospectively expressing the legislative intent. Therefore, when a statutory provision's retrospective application is obvious, the simple lack of a validating clause would not affect that application. Even in the absence of a provision, a statute may be deemed retrospective when it is passed for the benefit of the community as a whole.
In the National Agricultural Coop. Mktg. Federation of India Ltd. v. Union of India limitations were laid out on the legislature's power to enact new laws or amend existing ones retrospectively. Therefore, such power is not only subject to the issue of competence but is also subject to a number of judicially recognized limitations, such as the requirement that retrospective operation is expressly provided for or clearly implied, that it be reasonable and not excessive or harsh and that it not be used to subvert a judicial decision without removing the statutory basis for it.
It is now settled that a statute should not be given retrospective effect in order to alter or impair an existing right, create a new obligation, or impose a new liability other than as it relates to procedural matters unless the terms of the statute expressly provide for it or necessarily require it. This is the general rule for all statutes other than those that are merely declaratory or that only deal with matters of procedure or evidence.
D.N. Matur, Interpretation of statutes 299 (2nd ed. 2008).
N.S. Bindra, Interpretation of statutes (10th ed. 2007).
G.P. Singh, Principles of statutory interpretation 493 (11th ed. 2008).
B.M. Gandhi, Interpretation of statutes (2nd ed. 2017)