Retrospective penalty under partnership amendment rejected for pre-amendment alterations and omissions.

The Maharashtra State amendment inserting Section 69-A of the Indian Partnership Act, 1932 required intimation of changes in partnership particulars within 90 days and introduced a daily penalty for default, but it was not shown to operate retrospectively. Because the alleged omissions related to alterations made in 1972, 1975 and 1979, when the unamended law did not impose that time limit or penalty, the penal provision could not be applied to past acts. Penal amendments creating new liability must be construed strictly and, absent clear express words or necessary implication, cannot attach to prior transactions or omissions. The penalty orders were therefore liable to be quashed.

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Issues: Whether the Maharashtra State Amendment inserting Section 69-A of the Indian Partnership Act, 1932 could be applied retrospectively to levy penalty for non-intimation of alterations in partnership particulars that occurred before 1-1-1985.

Analysis: The amended scheme made intimation of changes in the name or address of partners and changes in constitution mandatory within 90 days and introduced a daily penalty for default. However, the amendment came into force only from 1-1-1985 and there was nothing to show that it operated retrospectively. The alterations and the alleged defaults in this case related to events of 1972, 1975 and 1979, when the unamended provisions did not impose such a time limit or penal consequence. Penal provisions creating new liability must be construed strictly and, unless the legislature has clearly expressed a contrary intention, they cannot be applied to past acts.

Conclusion: The penalty could not validly be levied for pre-amendment alterations, and the impugned penalty orders were liable to be quashed.

Ratio Decidendi: A penal amendment cannot be applied to past transactions or omissions unless retrospective operation is clearly provided by express words or necessary implication.

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