UNDERSTANDING RETROSPECTIVE OR PROSPECTIVE APPLICATION OF PROVISIONS 

Retrospective & Prospective Law

Interpretation of Rules, Notifications etc can be either retrospective or prospective. The general rule is that the delegated legislation has to be construed prospectively unless expressly provided for to be in operation with stipulated retrospective effect. It is settled that just as the fact that a prospective disqualification under a statute results from anterior misconduct, is not always taken as sufficient to make the statute retrospective. The rule against retrospective construction is not always applicable to a statute merely because a part of the requisites for its action is drawn from time antecedent to its passing.

Literally defined, a retrospective law is a law that looks backward or on things that are past; and a retroactive law is one that acts on things that are past. In common use, as applied to statutes, the two words are synonymous, and in this connection may be broadly defined as having reference to state of things existing before the Act in question. A retroactive or retrospective law, in the legal sense, is one that takes away or impairs vested rights acquired under existing laws or creates a new obligation, imposes a new duty or attaches a new disability in respect to transactions or considerations already past.

While considering the question of the retrospective operation of the statute, the nature of the right affected must first be considered. Where there is a 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.

What are General Principles to decide

Following principles should be observed for deciding whether a law is to be considered as retrospective or prospective as stipulated by the Supreme Court in THE STATE OF MAHARASHTRA VERSUS VISHNU RAMCHANDRA - 1960 (10) TMI 91 - SUPREME COURT:

1. 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.
2. When the effects of the statue 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 it is not to be retrospective.
3. If it is a 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.
4. 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 treat the Act as prospective.