INTERPRETATION OF STATUTES

NATIONAL LAW UNIVERSITY, ODISHA

RETROSPECTIVE OPERATION OF STATUTES

IN INDIA

UNDER THE GUIDANCE OF

MR. ABHIK MAJUMDAR

ASSISTANT PROFESSOR (LAW)
NATIONAL LAW UNIVERSITY, ODISHA

THIS PROJECT IS AUTHORED BY-

DIKSHA GOYAL (2011/ BBA LLB/ 020)
NILANJAN BHATTACHARJEE (2011/BBA LLB/ 032)

1
 TABLE OF CONTENTS

OBJECTIVES ............................................................................................................................... 3

HYPOTHESIS .............................................................................................................................. 3

SCOPE ........................................................................................................................................ 3

RESEARCH METHODOLOGY...................................................................................................... 3

CONCEPT OF RETROSPECTIVE OPERATION OF STATUTES ...................................................... 5

TEST FOR DETERMINING ‘RETROSPECTIVITY’ ........................................................................ 6

COMPETENCY TO ENACT RETROSPECTIVE LAWS ..................................................................... 9

COMPETENCY OF LEGISLATURE ........................................................................................... 9

EXECUTIVE RULES NOT RETROSPECTIVE ............................................................................. 9

EXISTING RIGHTS USUALLY NOT AFFECTED......................................................................... 10

APPLICABILITY OF THE RULE TO SUBSTANTIVE RIGHTS ........................................................ 10

PRESUMPTION AGAINST RETROSPECTIVITY .......................................................................... 11

EXCEPTION .......................................................................................................................... 12

WHERE TWO INTERPRETATIONS ARE POSSIBLE ..................................................................... 13

EFFECT MUST BE GIVEN TO LANGUAGE IRRESPECTIVE OF CONSEQUENCES ...................... 13

HOW FAR PRIOR STATE OF LAW RELEVANT ......................................................................... 14

CONCLUSION ........................................................................................................................... 15

BIBLIOGRAPHY ........................................................................................................................ 16

2
 OBJECTIVE

The 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.

HYPOTHESIS

The 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.

SCOPE

This 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 METHODOLOGY

We, 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.

3
 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.1

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.2 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.

1A.B.Kafaltiya, Interpretation of Statutes (Universal Law Publishing, 2008), pp.216.

2http://www.legalservicesindia.com/article/article/prospective-vs-retrospective-517-1.html last visited
on 20-2-2014 at 11 p.m.

4
 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.3 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.
In the case of Nemi Chand vs. State of Rajasthan4, 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,5
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’.

3 Vepa P. Sarthi, Interpretation of Statutes (Eastern Book Company, 5th ed, 2010), pp. 326.
4Nemi Chand v State of Rajasthan, (1977) Raj LW 430.

5 Ram Prakash v Savitri Devi, AIR (1958) Punj 87.

5
 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.6 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 prospectively7. 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 statute8:
 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.9 In
case of Shah Bhojraj Mills v Subhas Chandra10, it was also ruled by the Supreme Court
that the statute may be prospective in some parts and retrospective in other parts.
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

6 Mithilesh Kumari v Prem Behari Khare, (1989) 2 SCC 95.

7 Rashid Ahmed (Mhd) v State of Uttar Prades, AIR 1979 (SC) 592.
8 Zile Singh v State of Haryana, AIR 2004 (SC) 5100.

9 Debi Butta Moody v Bellan, AIR 1959 (Cal) 567.

10 Shah Bhojraj Mills v Subhas Chandra, AIR 1961 (SC) 1596.

6
operation not to be given to them unless, by express words or necessary
implications it appears that this was the intention of the legislature.11
In State of Bombay v Vishnu Ram Chandra12, 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:
 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 retrospective13; and the retrospective operation will be
limited only to the extent to which it has been so made by express words, or
necessary implications.
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.

11 Halsbury Laws of England, Vol. 36 (3rd Ed), pp.423.

12 State of Bombay v Vishnu Ram Chandra, AIR 1961 (SC) 307.

13 Associated Cement Co ltd v State of Bihar, 1979( Pat) LJ 429.

7
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.14
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.15 Except where necessary, a statute should not be read
retrospectively.16 Pending actions are not affected by new statute, unless the latter
are expressly made applicable to the former.17

14 State of M.P. v Poonam Chnd 1968 (Jab) LJ 116.

15 Govind Das v Income-tax officer, AIR 1977 (SC) 552.
16 State of Kerela v Philomina, (1976) 4 SCC 314.

17 Kapen v Provident Investment Co, AIR 1976 (SC) 2910.

8
 COMPETENCY TO ENACT RETROSPECTIVE LAWS

COMPETENCY OF LEGISLATURE
The Union Parliament and State Legislatures have plenary powers of legislation
within the fields assigned to them. Subject to certain constitutional and judicially
recognized restrictions18 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 20.19 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.20This 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.

EXECUTIVE RULES NOT RETROSPECTIVE

A 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

18 T.Bhattacharyya, The Interpretation of Statutes, (Allahabad Law Agency Publication, 4th edn,
2001),pp.423.
19 Bihar Cotton Mills v Union of India, AIR 1956 (Pat) 131.

20 State of Tamil Nadu v. Arooran Sugars Ltd., AIR 1997 (SC ) 1815.

9
conferred by the parent enactment.21 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.22

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.23 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.24

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

21 Modi Food Products Ltd v Commr of Sales-tax, AIR 1956 (All) 35.
22CalicutWynad Motor Service Pvt Ltd v State of Kerela, AIR 1959 (Ker) 247.
23 Rao and Dhanda, N S Bindra’s Interpretation of Statutes ( Lexis Nexis Publication, 10th edn, 2012), pp.

1432.
24 KL Gupta v Municipal Corporation, AIR 1968 (SC) 303.

10
Yadava v Dist Judge, Allahabad25, 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.26
Whether a person has a right to recover property is a question of substantive law.27
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.28

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.29 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.30 Retrospection is not to be presumed;

25 Khubi Singh v Dist Judge Allahabad, 1980 (All) LJ 233.

26 Atar Sing v Third Addl District Judge 1982 All Rent Cas 624.
27 Bireswar v Indu Bhusan, AIR 1954 (Cal) 573-74.

28 Mohari v Chukli, AIR 1960 (Raj) 82-83.

29 Municipal Corporation v Charanjit Law, 1980 (PLR) 7.

30 Ram Dayal v Ganga Prasad, 1983 (All LJ) 255.

11
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 grounds31;
 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.

EXCEPTION
Sometimes 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.32

31 Rao and Dhanda, N S Bindra’s Interpretation of Statutes ( Lexis Nexis Publication, 10th edn, 2012), pp.
1432.
32 Ibid.

12
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.33

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.34 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.35 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.36 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.37

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

33 Kishri Lal v Devi Prasad , AIR 1950 (Pat) 50.

34 Daulat singh v State, AIR 1950 (MB) 112-113.
35 Abdul Ruzak v Kuldip Narain, AIR 1944 (Pat) 147.

36 Firoz Ahmed v Akbar Ali, AIR 1943 (Lah) 238.

37 Fedrated Assn of Australia v Broken Hill Proprietary Co Ltd, 16 (LRC) 245.

13
must be given to the provisions.38 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.39 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.40 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.41

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.42 The courts have sometimes taken into consideration
the state of law which was there at the time when the Amendment act was
passed.43 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.44 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.

38 Rashid Bibi v Tuftail Muhammad, AIR 1941(Lah) 291-92.

39 Gopal Vakta v Gopal Munshi, AIR 1941(Cal) 432.
40 M L Bagga v Murher Rao, AIR 1956 (Hyd) 35.

41 Jagdamba Prasad v Anadi Nath, AIR 1951(MB)1.

42 Gulab Chand v Kudilal, AIR 1943 (SC) 423.

43 Supra note 41.

44 Pardo v Bingham, AIR 1991 (SCW) 1651.

14
 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.

15
 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 Bindra’s 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
Butterworth’s Publication, 11th edn, 2008).
 St. J. Langan, Maxwell on the Interpretation of Statutes, (12th edn., 1969).

16
 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+O
peration+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=r
etrospective%7Claw&type=matchall

17