Supreme Court Summarises Principles On Retrospective Application Of Laws

In a recent judgment, the Supreme Court summarised the principles on retrospective application of legislations.

A bench comprising Justice JB Pardiwala and Justice R Mahadevan made the discussion while holding that the 2016 amendment to Section 13(8) of the SARFAESI Act will apply to loans taken before the amendment came into force, if the default took place after the amendment.

The bench summarised the principles as follows :

(i) Presumption against retrospectivity is not applicable to enactments which merely affect procedure or change forum or are declaratory;

(ii) Retroactive/retrospective operation can be implicit in a provision construed in the context where it occurs ;

(iii) Given the context, a provision can be held to apply to cause of action after such provision comes into force, even though the claim on which the action may be based may be of an anterior date ; and

(iv) A remedial statute applies to pending proceedings and such application may not be taken to be retrospective if application is to be in future with reference to a pending cause of action ;

(v) SARFAESI Act is a remedial statute intended to deal with problem of pre-existing loan transactions which need speedy recovery.

Cause Title: M. RAJENDRAN & ORS. VERSUS M/S KPK OILS AND PROTIENS INDIA PVT. LTD. & ORS.

SARFAESI Act | 2016 Amendment To S. 13(8) Applies To Pre-Amendment Loans If Default Occurred After That: Supreme Court