The term “retrospective” is not entirely clear. Literally, it refers to a situation that existed before the relevant Act, or looking backwards. A retroactive statute considers the past and grants a prior transaction different legal consequences than those that were applicable to it at the time it occurred or transpired.

“A statute is to be deemed retrospective which takes away or impairs any vested right acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect of transactions or considerations already past.”

In the case of State Bank’s Staff union (Madras Circle) v. Union of India, the significance of retrospective law was brought to light. It was highlighted that when referring to enactment, the term “retrospective” could relate to a variety of different things, such as changing an existing contract, opening a transaction that was previously closed, changing accumulated rights and remedies, or changing a procedure. A legislation that is retroactive revokes or otherwise affects vested rights that have been gained in accordance with existing laws, or it imposes new responsibilities or obligations on prior transactions or considerations, or it establishes new obligations or disabilities.

GENERAL PRINCIPLES OF RETROSPECTIVE OPERATION OF STATUTES

1. POWER TO MAKE RETROSPECTIVE LAWS: The Union Parliament and State Legislatures have plenary powers of legislation within the fields assigned to them and subject to certain constitutional and judicially recognized restrictions can legislate prospectively as well as retrospectively. Competence to make a law for a past period on a subject depends upon present competence to legislate on that subject. By retrospective legislation, the Legislature may make a law which is operative for a limited period prior to the date of its coming into force and is not operative either oh that date or in future 3. 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.4 This power has also been often 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 within the competence of Parliament and is for that reason held invalid, Parliament can by passing retrospective Act which incorporates the State Act cure the invalidity .
2.  STATUTES DEALING WITH SUBSTANTIVE RIGHTS: It is a cardinal principle construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair Existing obligations. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is “deemed to be prospective only ‘nova constitutio futurisformam imponere debet non praeteritis’ The rule against retrospective construction is not applicable to a statute merely “because a part of the requisites for its action is drawn from a time antecedent to its passing”.If that were not so, every statute will be presumed to apply only to persons born and things come into existence after its operation and the rule may well result in virtual nullification of most of the statutes. An amending Act is, therefore, not retrospective merely be¬cause it applies also to those to whom pre-amended Act was applicable if the amended Act has operation from the date of its amendment and not an anterior date. 

Legal position with regard to retrospective operation of a statute

i) A statute that affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute that only affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning, and should strictly be confined to its clearly defined limits.

(ii) While remedy-oriented, the law relating to right of action and right of appeal is substantive in nature, whereas the law dealing to forum and limitation is procedural in nature.

(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law.

(iv) Generally speaking, a procedural statute should not be implemented retroactively if the outcome would be to impose new duties on previously completed transactions or establish new obligations or impairments..

(v) Unless specifically stated differently, either directly or by necessary implication, a statute that not only modifies the process but also creates new rights and obligations must be interpreted as prospective in application..

CASE NOTE

The Criminal Procedure Code (Madhya Pradesh Amendment) Act, 2007, is retroactive in how it operates; however, it will not have an impact on cases where the trial before the magistrate has progressed. A case’s trial is said to have advanced when any significant witness or witnesses have been questioned by the prosecution. Madhya Pradesh High Court, 30 March 2016; Dwarka Prasad vs. State of Madhya Pradesh

CASE LAWS

In Francis Bennion’s Statutory Interpretation, 2nd Edn, the statement of law is stated as follows :

“The essential idea of legal system is that current law should govern current activities. Elsewhere in this work a particular Act is likened to a floodlight switched on or off, and the general body of law to the circumambient air. Clumsy though these images are, they show the inappropriateness of retrospective laws. If we do something today, we feel that the law applying to it should be the law in force today, not tomorrow’s backward adjustment of it. Such, we believe, is the nature of law. Dislike of ex-post facto law is enshrined in the United States Constitution and in the Constitution of many American States, which forbid it. The true principle is that lex prospicit non respicit (law looks forward not back). As Willes, J. said retrospective legislation is ‘contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts, and ought not to change the character of past transaction carried on upon the faith of the then existing law.”

In Garikapati Veeraya v. N. Subbiah Choudhry, AIR 1957 SC 540 the SC observed as thus “The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed.”

Limitations on enacting retrospective laws

Retrospective operation is typically only restricted to the degree that it has been made expressly clear to do so or when it has been given the requisite repercussions. However, there is no standard procedure for articulating the legislative intent in retrospect. As a result, the simple absence of a validating phrase would not impact the evident retrospective application of a statutory provision. A statute may be considered retrospective even in the absence of a provision if it is passed for the benefit of the entire community.

In National Agricultural Coop.Mktg. Federation of India Ltd. Vs. Union of India The legislature’s authority to pass new laws or change existing ones retroactively was subject to restrictions. As a result, this power is not only subject to the question of competence but also to a number of judicially recognized limitations, such as the requirement that retrospective operation be expressly provided for or clearly implied, that it be reasonable and not excessive or harsh, and that it not be used to overturn a judicial decision without removing the statutory basis for it.