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APPLICABILITY OF RETROSPECTIVE LAWS IN INDIA

Author: Dhatchayanni. V, IV year of B.B.A., LL.B.(Hons.) from SASTRA University

Co-author: Rahul. B, IV year of B.B.A., LL.B.(Hons.) from SASTRA University


INTRODUCTION

Laws can be of two categories, namely, Prospective and Retrospective. In the Indian legal system, the words prospective and retrospective have its literal meaning. A prospective law creates rights and obligations on the parties ensuing in the future. whereas a retrospective law applies backwards in time. It is constitutionally known as ex post facto law. Ordinarily, any new enactment or amendment in law is always considered prospective, except when the language of the statute expressly mentions it to be retrospective. With the presence of Article 20(1) in the Indian constitution, a bar is laid down on framing retrospective criminal law.


The article makes it clear that a person shall not be tried or convicted twice for the same criminal act, conviction of a person must ensue due to the violation of an existing law only. The act done by a person in the past cannot be deemed to be an offence based on a new statute that criminalised such activities. Also, the article bars the retrospective infliction of enhanced penalty on an accused charged with any offence. However, beneficial construction of a statute is the acceptable implication in the legal system. If the retrospective law is aimed to reduce the studious sentence for an offence, then the subsequent law shall be applied retrospectively for the welfare of people. However, retrospective laws that give rise to civil liability for a past act are allowed and valid in our legal system.


Therefore, the civil rights or obligations that arrived from a law existing during the commission of the act, maybe altered with a retrospective law. When substantial rights of parties are under question, there is a presumption that it is prospective, unless expressly conveyed by the law-makers as otherwise. However, procedural law is always considered retroactive, the law is deemed to be effective from a past date.

In the famous case of Hitendra Vishnu Thakur V. State of Maharashtra, the bench comprising Judges Anand A.S and Faizan Uddin, following generally followed principles were laid:


(i) when a statute is of the effect that it alters the substantive rights of the parties, then a presumption as to prospective applicability prevails unless the lawmakers establish their intentions through the words of the legislation. However, a law that impacts procedure, is upfront treated retrospective within the defined limits unless they are impossible to be construed in the manner listed in the text of the legislation.


(ii) the second principle aims to distinguish substantive and procedural laws, laws that relate to forum and limitation are procedural, whereas laws that create right of action or right of appeal even if it is remedial is substantive law.


(iii) Substantive law is capable of creating vested rights on the parties, whereas, a procedural law does not vest rights over the parties, only is capable of showing how and where such rights vested by substantive law can be enforced.


(iv) Retrospective application of procedural law in general notion, should not be applied to completed transactions if it is of the effect that new or altered duties and obligations will arise on its application.


(v) the presumption of prospective applicability is also applicable for a statute which has the effect of creating rights and obligations on the parties in addition to making changes to the procedures of the law.


In addition to this, a recent judgement by Kerala HC, in the district Collector Alappuzha v. District Legal Service Authority, Alappuzha and others state that a substantive provision, though not retrospective, can be given prospective benefits for antecedent facts.


EFFECTS OF RETROSPECTIVE LAWS IN CLOSED CASES

The application of a retrospective law in India has never had a definitive scope with its use and applications. There is no straight-jacket formula as to circumstances to which retrospective laws apply or otherwise. Since 1950, several cases have been presented across the courts in India, questioning the validity of reopening of closed cases concerning a retrospective law.


An excerpt in Francis Bennion's Statutory Interpretation, 2nd Edn, in his view, in a legal system, the present activities of a person should be regulated and governed by existing law and not by the law that might come into force tomorrow. Such retrospective application of law adjusted with time is against the natural principles of law.


It is believed that, concerning retro spectivity, various judgments would be challenged by the aggrieved parties, who lost their stance in that case, before the particular retrospective law was framed. The reopening of closed cases, whose transaction is wholly complete, is completely based on the facts and circumstances of the case and the scope of the retrospective law.

In the case of Esther Industries Ltd. Vs Union of India And Ors. (Delhi High Court)


The case was about challenging the validity of reopening of an assessment that was complete. The original assessment was done in 2006 case based on section 143(3) of the Income-tax act. The insertion of Explanation 1(h) to Section 115JB retrospectively from 2001, the clause aimed at including the amount of deferred tax into the book profit. The assessment was reopened within four years from the relevant financial year, and the assessing officer had to show a 'tangible material' that formed the basis of his belief that income taxable has escaped assessment.


The bench referred to the judgments of two other cases, Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1 (SC) and M.K. Venkatachalam v. Bombay Dyeing & Manufacturing Co. Ltd. [1958] 34 ITR 143 (SC), in which the court held that reopening of cases can be permitted based on the retrospective amendment for rectification of error apparent on the record.


In Tamil Nadu Electricity Board vs R, Veeraswamy And Ors, it was quoted by the bench that the pension scheme for the retired personnel would not apply retrospectively as if it had to be applied retroactively, then the court would have to face various cases to be reopened from 1950-1990 and would also have to pay more than 200 crores to compensate the petitioners from olden cases.


RETROSPECTIVE LAW IN ONGOING CASES

In light of ongoing cases, retrospective law has its effect based on the rights and obligations of the parties vested by the existing law. This effect can be best explained by quoting the case of Madhavrao Balwant Patil V. State of Maharashtra and Ors. In this case, the issue was on the applicability 4th provision to Sec 88(1) of the Maharashtra Cooperative Societies Act which was added through an amendment. The court decided that the 4th proviso is retrospective in operation, and the government is empowered to extend the period of inquiry proceedings that remained incomplete due to insufficiency of time, on account of expiry of 2 years (Period stipulated for inquiry proceedings), as on date of commencement of the amendment act in 2017.


In the case of State of Gujarat and Another V. Raman Lal Keshav Lal Soni and Others the judges cleared the air by stating the following:

As the legislature is empowered to make laws, they are very well competent to make laws that are retrospective in nature too. The legislature is vested with such powers as to make laws that can alter or take away rights and obligations vested by any previous law. As the powers of the legislature are drawn from the constitution, which is written, there has to be conscious effort as to not infringe any rights or obligations bestowed by the constitution itself. Neither perspective nor retrospective laws can be made to prevail if it violates the fundamental rights accrued or acquired on parties through the constitution.


It depends on the rights and obligations arising out of individual cases. However, it should be noted that the retrospective law is capable of altering the result of cases thereto.


CONCLUSION

The scope of the retrospective in the Indian Judicial system is always a question mark, on whether a retrospective law would work in tandem with the legal framework, or be declared as ultra vires. Jurists all over India have had their opinion on retrospective laws. As time progresses, new laws are added and existing laws are amended as per the need of the hour. As stated already, the law is prospective, unless provided expressly otherwise. The legislature is empowered to make retrospective laws having the frameworks of the constitution in mind, without infringing the fundamental rights. Such laws that fall within the required framework are good in law and are capable of affecting the accrued rights and liabilities under a pre-existing law. [i]


[i][i] Laasya Priya Ponnada, “Prospective V. Retrospective”, Prospective Vs. Retrospective (legalservicesindia.com)


[i] Rattan Lal v. State of Punjab, 1965 AIR 444, 1964 SCR (7) 676, Supreme Court Rattan Lal vs State Of Punjab on 10 April 1964 (indiankanoon.org)


[i]Hitendra Vishnu Thakur vs State of Maharashtra, 1994 AIR 2623, 1994 SCC (4) 602, Supreme Court Hitendra Vishnu Thakur vs State Of Maharashtra on 12 July, 1994 (indiankanoon.org)

[i] Sanjeev Sirohi, “Section 357A(4) CrPC Is A Substantive Provision; Victims Entitled To Compensation Even For Crimes That Occurred Before Its Enactment”

http://www.legalservicesindia.com/law/article/1783/5/Section-357A-4-CrPC-Is-A-Substantive-Provision;-Victims-Entitled-To-Compensation-Even-For-Crimes-That-Occurred-Prior-To-Its-Enactment, December 28, 2020


[i] Francis Bennion, “Statutory Interpretation: A Code”, 1984


[i]Ester Industries Ltd. Vs Union of India And Ors., [2013] 215 TAXMAN 673 (DEL), Delhi High Court, Ester Industries Ltd. vs Union Of India And Ors. on 28 January ... indiankanoon.org › doc (google.com)


[i]Tamil Nadu Electricity Board vs R, Veeraswamy And Ors, 1999 (2) SCR 221, Supreme Court, Tamil Nadu Electricity Board vs R, Veeraswamy And Ors on 26 March 1999 (indiankanoon.org)


[i] Madhavrao Balwant Patil V. State of Maharashtra and Ors., WP 4887 of 2018, Madhavrao Balwant Patil vs The State Of Maharashtra And Ors on 2 May 2019 (indiankanoon.org)


[i] State of Gujarat and Another V. Raman Lal Keshav Lal Soni and Others, 1981 AIR 53 = 1981 (1) SCR 144 = 1980 (4) SCC 653, Supreme Court. State Of Gujarat & Ors vs Raman Lal Keshav Lal & Ors on 30 July 1980 (indiankanoon.org)


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