Retrospective Effect Given by Delegated Legislation

Legislature may enact laws with retrospective effect but a delegate cannot exercise a
similar power and give retrospectivity to the rules made by it unless the parent statute gives it
a power to do so either expressly or by necessary implication. In other words we can say that a
general power to make laws for the purpose of carrying out the purposes of the act, does not
entitle the government to make rules.1

Moreover in the Ashok Lanka case, it was held that ordinarily, a subordinate
legislation cannot be given retrospective effect but a clarificatory notification can be given
retrospective effect.2

The main intention lying behind the preposition is that retrospective rule may
prejudicially effect vested rights and so it is proper that only the Legislature, and not its
delegate, makes retrospective rules. And in accordance to this, the courts declare
retrospective rules invalid unless the authority making them has power to do so under the
parent statute.

i) In Hukam Chand3 case the court said that The government cannot amend the
rules with retrospective effect if no such power has been specifically given by the
parent statute.
ii) In Gurucharan Singh v. State4, a legislative order having been held invald, a fresh
order was issued. A clause in the new order stated that anything done or action
taken under the old order should be deemed to have been taken under the new
order. The court declared the clause invalid on the ground of retrospectivity.

The supreme court as clearly mentioned in most of the cases that;

1
Hukam chand v. union of india AIR 1972 SC 2427
2
Ashok Lanka v. Rishi Dikshit, 2006 9 SCC 90
3
Ibid
4
AIR 1974 SC 385
 the rules operate prospectively. Retrospective statute permits framing of rules with
retrospective effect, the exercise of power must not operate discriminately or in violation of
any constitutional rights so as to affect vested rights.

It is worthwhile to make a mention that the courts have relaxed the rule against
retrospectivity of rules, mainly because it was against the interest of the affected person.

For example in Mathra Pd. & sons v. State of Punjab5, when the Government issued a
notification exempting a commodity from sales tax in the middle of the financial year, but
failed to specify the date from which the notification was to be operative, the Supreme Court
ruled that it would be operative from the beginning of the financial year. The reason given in
this context by the Supreme Court was that the sales tax was a yearly tax under the law and it
was made payable on the annual taxable turnover of a dealer. Hence the exemption from tax
must operate for the whole year in the absence of any clear indication to the contrary. This
interpretation obviously confers a benefit on the taxpayers.

Retrospective Rules under Art. 309 of the Constitution

Under Art. 309 of the constitution, Government can make service rules for Government
servants. The rulemaking power conferred by Art. 309 has been held to be broad enough to
permit making of rules with retrospective effect. Thus, service rules can be made under Art.
309 with retrospective effect. A constitution bench of Supreme Court in B.S. Vadera v. Union
of India6 held that rules made under proviso to article 309 of the constitution of India are
legislative in character and therefore could be made with retrospective effect. The same
principle was reiterated in many other decisions
But retrospective rules made under Art. 309
cannot contravene Art. 14, 16 or 31 of the Constitution. Such rules cannot affect vested rights
of an employee.

5
(1962) 13 STC 180 (SC)
6
AIR 1969 SC 118
 A retrospective rule can be challenged under Art. 14 and 16 of the constitution if
it adversely affects vested rights and is discriminatory.

Art. 309 envisages legislation by the legislature as regards service mattes,

Governments rule making power is transient in nature. But it is surprising that even though
over fifteen years have passed by since the Constitution became operative, service mtters
continue to be governed by rules. The reason is that no Government wants to give up its large
leverage over its employees.

Art. 148(5) of the constitution also gives rule-making pwer to prescribe conditions of service
of persons serving in the Audit and Account Department. Subject to any law made by
Parliament, service rules can be made by the president in consultation with the Compeller and
Auditor-General. Because of the phraseology of Art. 148(5) being different from Art. 309, Art
148(5) has been interpreted as not authorizing making of retrospective rules.