Case: Hukam Chand Etc, Vs. Union Of India &amp; Others(With Connected Appeal)

laws lies in the fact that a subordinate law making body is bound by the terms of its delegated or derived authority and that Court of law, as a general rule, will not give effect to the rules, thus made, unless satisfied that all the conditions precedent to the validity of the rules have been fulfilled (see Craies on Statute Law, p. 297 (Sixth Edition). 7. The learned Solicitor General has not been able to refer to anything in Section 40, from which power of the Central Government to make retrospective rules may be inferred. In the absence of any such power, the Central Government in our view, acted in excess of its power in so far as it gave retrospective effect to the Explanation to Rule 49. The Explanation, in our opinion, could not operate retrospectively and would be effective for the future from the date it was added in February 1960. 8. In the case of Cannanore Spinning and Weaving Mills Ltd. v. Collector of Customs and Central Excise, Cochin, (1970) 2 SCR 830 = (AIR 1970 SC 1950 ) this Court dealt with an explanation which had been added by the Central Government in purported exercise of the power vested under the Central Excises and Salt Act, 1944. Question arose whether the explanation had a retrospective effect. The Court referred in this context to the rule making power of the Central Government under the aforesaid Act and observed:"Dr. Seiyed Muhammad, learned Counsel for the department did not support the impugned demand on the basis of the retrospective effect purported to have been given to the explanation referred to earlier by the notification dated February 16, 1963 (Exh. P-12) for obvious reasons. The rule making authority had not been vested with the power under the Central Excises and Salt Act to make rules with retrospective effect. Therefore the retrospective effect purported to be given under Exh. P-12 was beyond the powers of the rule making authority. 9. In the case of Income Tax Officer, Alleppy v. M. C. Ponnoose, (1969) 2 SCC 351 = (AIR 1970 SC 385 ) this Court dealt with a notification dated August 14, 1963 which empowered the revenue officials, including the Tehsildar, to exercise the powers of a tax recovery officer under the Income Tax Act, 1961 in respect of arrears. The notification was given retrospective effect. Question which arose for determination was whether the State Government could invest the Tehsildar with such powers retrospectively. Answering this question in the negative, this Court observed:"The Parliament can delegate its legislative power within the recognized limits. Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the Legislature it may or may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be found it has been held by the Courts that the persons or authority exercising subordinate legislature functions cannot make a rule, regulation or bye-law which can operate with retrospective effect. Reference was made in the above cited case to an earlier decision of this Court in B. S. Vadera v. Union of India, (1968) 3 SCR 575 = (AIR 1969 SC 118 ) wherein it had been observed with reference to rules framed under the proviso to Articles 309 of the Constitution that those rules could be made with retrospective operation. Vaderas case was distinguished on the ground that the view expressed therein was based upon the language employed in the proviso to Article 309 that any rules so made shall have effect subject to the provisions of any such Act. It was also observed:"As the Legislature can legislate prospectively as well as retrospectively there can be hardly any justification for saying that the President or the Governor should not be able to make rules in the same manner so as to give them prospective as well as retrospective operation. For these reasons the ambit and content of the rule making power under Article 309 can furnish no analogy or parallel to the present case. 10. We are, therefore, of the opinion that the Explanation added to Rule 49 in the present case cannot be given retrospective operation. 11. The fact that the rules framed under the Act have to be laid before each House of Parliament would not confer validity on a Rule if it is made not in conformity with Sec. 40 of the Act. It would appear from the observations on pages 304 of 306 of the Sixth Edition of Craies on Statute Law that there are three kinds of laying: (i) Laying without further procedure: (ii) Laying subject to negative resolution: (iii) Laying subject to affirmative resolution. The laying referred to in sub-sec. (3) of Section 40 is of the second category because the above sub-section contemplates that the rule would have effect unless modified or annulled by the Houses of Parliament. The act of the Central Government in laying the rules before each House of Parliament would not, however, prevent the Courts from scrutinizing the validity of the rules and holding them to be ultra vires if on such scrutiny the rules are found to be beyond the rule making power of the Central Government. 12. It has also been submitted by the learned solicitor General that in case this Court finds that the Explanation to Rule 49 could not be given retrospective effect, the appeals may be allowed and the impugned orders about the cancellation of the allotment in favour of the appellants may be set aside. It has also been stated that this Court need not go in these appeals into the question as to whether the allotment in favour of the appellants could be cancelled under some other provision of law.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]5. Mr. Mehta on behalf of the appellants in the four appeals has argued in this Court that Rule 49 could not be amended with retrospective effect and that the Explanation added to the rule could not operate from a date prior to that on which is was added as a result of amendment made in February 1960.The view taken by the High Court, according to the learned counsel, was incorrect. As against that, the learned Solicitor General has canvassed for the correctness of the view taken by the High Court and has submitted that the Central Government could give retrospective effect to the Explanation added to Rule 49.In our opinion, the contention advanced by Mr. Mehta is well founded7. The learned Solicitor General has not been able to refer to anything in Section 40, from which power of the Central Government to make retrospective rules may be. In the absence of any such power, the Central Government in our view, acted in excess of its power in so far as it gave retrospective effect to the Explanation to Rule 49. The Explanation, in our opinion, could not operate retrospectively and would be effective for the future from the date it was added in February 19609. In the case of Income Tax Officer, Alleppy v. M. C. Ponnoose, (1969) 2 SCC 351   = (AIR 1970 SC 385  ) this Court dealt with a notification dated August 14, 1963 which empowered the revenue officials, including the Tehsildar, to exercise the powers of a tax recovery officer under the Income Tax Act, 1961 in respect of arrears. The notification was given retrospective effect. Question which arose for determination was whether the State Government could invest the Tehsildar with such powers retrospectively. Answering this question in the negative, this Court observed:"The Parliament can delegate its legislative power within the recognized limits. Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the Legislature it may or may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be found it has been held by the Courts that the persons or authority exercising subordinate legislature functions cannot make a rule, regulation orw which can operate with retrospective effect.Reference was made in the above cited case to an earlier decision of this Court in B. S. Vadera v. Union of India, (1968) 3 SCR 575   = (AIR 1969 SC 118  ) wherein it had been observed with reference to rules framed under the proviso to Articles 309 of the Constitution that those rules could be made with retrospective operation. Vaderas case was distinguished on the ground that the view expressed therein was based upon the language employed in the proviso to Article 309 that any rules so made shall have effect subject to the provisions of any such Act. It was also observed:"As the Legislature can legislate prospectively as well as retrospectively there can be hardly any justification for saying that the President or the Governor should not be able to make rules in the same manner so as to give them prospective as well as retrospective operation. For these reasons the ambit and content of the rule making power under Article 309 can furnish no analogy or parallel to the present case.10. We are, therefore, of the opinion that the Explanation added to Rule 49 in the present case cannot be given retrospective operation11. The fact that the rules framed under the Act have to be laid before each House of Parliament would not confer validity on a Rule if it is made not in conformity with Sec. 40 of the Act12. It has also been submitted by the learned solicitor General that in case this Court finds that the Explanation to Rule 49 could not be given retrospective effect, the appeals may be allowed and the impugned orders about the cancellation of the allotment in favour of the appellants may be set aside.It has also been stated that this Court need not go in these appeals into the question as to whether the allotment in favour of the appellants could be cancelled under some other provision of law.