Often
this question arises as to whether Circulars can be made operational with
retrospective effect. The law laid down by the Apex Court in respect to this
question is not inside a straightjacket. A Circular issued by State Government
or Central Government is a form of Delegated Legislation. Various other
expressions and words are also used to denote similar and identical forms of
Delegated Legislation such as Order, Directions, Schemes, Notification,
bye-laws and Instructions etc. As mentioned above, there is no straight answer
to this question. However, following points are to be kept in mind before
answering it:
1. A
beneficial circular has to be applied retrospectively while an oppressive
circular has to be applied prospectively. Thus, when the circular is
against the respondents, they have a right to claim the enforcement of the same
prospectively. This was laid down in CCE v. Mysore Electricals Industries
Ltd.[1].
2. In ITO
v. M.C. Ponnoose[2],
it was stated that:
“The
courts will not, therefore, ascribe retrospectively to new laws affecting
rights unless by express words or necessary implication it appears that such
was the intention of the Legislature. Parliament can delegate its legislative
power within the recognised limits. Where any rule or regulation is made by any
person or authority to whom such powers have been delegated by the Legislature
it may or may not be possible to make the same so as to give retrospective
operation. It will depend on the language employed in the statutory
provision which may in express terms or by necessary implication empower the
authority concerned to make a rule or regulation with retrospective effect. But
where no such language is to be found it has been held by the courts that the
persons or authority exercising subordinate legislative functions cannot make a
rule, regulation or bye-law which can operate with retrospective effect.”
3. In
the same case, another Supreme Court Judgment, B.S. Vadera etc. v. Union
of India & Others[3],
was distinguished by the court in the following language:
“It
may be noticed that in a recent decision of the Constitution Bench of this
Court in B.S. Vadera etc. v. Union of India [AIR 1969 SC 118] it has
been observed with reference to rules framed under the proviso to Article 309
of the Constitution that these rules can be made with retrospective operation.
This view was, however, expressed owing to the language employed in the proviso
to Article 309 that ‘any rules so made shall have effect subject to the
provisions of any such Act’. As has been pointed out the clear and unambiguous
expressions used in the Constitution, must be given their full and unrestricted
meaning unless hedged in by any limitations. Moreover when the language employed
in the main part of Article 309 is compared with that of the proviso it becomes
clear that the power given to the Legislature for laying down the conditions is
identical with the power given to the President or the Governor, as the case
may be, in the matter of regulating the recruitment of government servants and
their conditions of service. The Legislature, however, can regulate the
recruitment and conditions of service for all times whereas the President and
the Governor can do so only till a provision in that behalf is made by or under
an Act of the appropriate Legislature. As the Legislature can legislate
prospectively as well as retrospectively there can be hardly any justification
for saying that the President or the Governor should not be able to make rules
in the same manner so as to give them prospective as well as retrospective
operation. For these reasons the ambit and content of the rule-making power
under Article 309 can furnish no analogy or parallel to the present case.
The High Court was consequently right in coming to the conclusion that the
action taken by the Tahsildar in attaching the shares was unsustainable.”
4. It
has been said in a plethora of cases, both by the Supreme Court and the various
High Courts that an enactment would not be construed as retrospective unless
the same were to have that effect by express language or by necessary
implication. The phrase “necessary implication” has also been elucidated
by the Supreme Court in Indramani Pyarelal Gupta v. W.R. Natu[4],
as follows:
“The
phrase “necessary implication”, as applied in the law of statutory
construction, means an implication that is absolutely necessary and unavoidable
that is to say, a court must come to the conclusion that unless such an
implication is made, the provisions of the section could not be given full
effect on the wording as expressed therein.”
Thus
we will have to see whether the Circular in question has been enacted under
some parent act or law by the Government or has it been independently enacted
by the Government. It is usually not the case that Government can enact a
Circular out of the blue and without any backing of a legislation. The power to
enact rules or circulars or bye-laws is usually derived from some parent law.
Only
in cases like that of Proviso to Article 309, can the Government enact a law
with retrospective operation and even in those cases, the rights of the parties
would be of significance in deciding the validity of retrospective operation.
The
Supreme Court has also said that a beneficial circular has to be applied
retrospectively while an oppressive circular has to be applied prospectively. This
clearly means that if a Circular is adversely affecting the rights of the
persons on whom it is applied, then it cannot be applied in retrospectivity.
The
judgments of the Supreme Court mentioned above have been cited by a number of
High Courts such Allahabad High Court, Karnataka High Court, Gujarat High Court
etc.
[1]
(2006) 12 SCC 448 at page 451.
[2]
(1969) 2 SCC 351 at page 354.
[3]
AIR 1969 SC 118.
[4]
, (1963) 1 SCR 721 : AIR 1963 SC 274.
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