Case: Sangam Spinners Vs. Regional Provident Fund Commissioner-I

The factual scenario lies into a very narrow compass. Appellant started production on 1.9.1995 and according to it, it was entitled to benefit under Section 16(1)(d) of the Act from that day. From August, 1998 appellant started to comply with the provisions of the Act as the three year fledging period as envisaged under Section 16(1)(d) of the Act came to an end. On 26.3.1999 enquiry under Section 7A of the Act was initiated to secure the compliance of the Act from September, 1995 to July, 1998. By order dated 27.7.2000 the Commissioner recorded a specific finding that the company was a new unit and was eligible for exemption under Section 16(1)(d) of the Act but since it was effaced from the statue from 22.9.1997 the benefit was available till that date and not thereafter. The writ petition filed was dismissed by the learned Single Judge, so was the special appeal.

Court's reasoning:
14. A Division Bench of Bombay High Court while considering the earlier amendment to Section 16(1)(d) curtailing the infancy period from 5 years to 3 years, held thus, in Magic Wash Industries (P) Ltd v. Assistant Provident Fund Commissioner, Panaji and Anr. (1999 Lab.I.C.is no doubt that the vested rights or benefits under the legislation could be retrospectively taken away by legislation, but then the statute taking away such rights or benefits must expressly reflect its intention to that effect. The infancy period prior to the amended provision Section 16(1)(d) was five years in the case of establishments employing 20 to 50 workers and in the event this infancy benefit was to be withdrawn, it was necessary that the intention of the Legislature should have been clearly reflected in the amended provision itself that the rights and benefits which had already accrued stood withdrawn. The amended clause 16(1)(d) came on the statute book on June 2, 1988, when it was assented by the President of India but the amended Section 16 was put into operation only with effect from August 1, 1988, which empowered the Central Government to appoint different dates for the coming into force of different provisions of the Act. We find it difficult in the circumstances, to conclude that the intention of the Legislature was to take away the benefit of infancy period which had already accrued to the existing establishments and this benefit has not been expressly taken away or by implication by the amended provision Section 16(1)(d). In the circumstances, we are of the opinion that the infancy period benefit of the petitioner for a period of five years with effect from May 26, 1986, is not taken away by the amended provision Section (1)(d) of the Act; and the petitioner could continue to enjoy the said infancy benefit for a period of five years till May, 1991. Therefore, the demand made by respondent 1 for the period up to May, 1991, has to be quashed. The petitioners are complying with the provisions of the Act with effect from June, 1991.The matter can be looked at from another angle. Section 6 of the General Clauses Act, 1897 (in short General Clauses Act) deals with effect of repeal. The said provision so far relevant reads asEffect of repeal.- Where this Act, or any (Central Act) or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not -(a) revive anything not in force or existing at the time at which the repeal takes effect; or(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid;and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.In terms of Clause (c) of Section 6 as quoted above, unless a different intention appears the repeal shall not affect any right, privilege or liability acquired, accrued or incurred under the enactment repeal. The effect of the amendment in the instant case is the same.17. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation (See Keshvan Madhavan Memon v. State of Bombay AIR 1951 SC 128 ). 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 futuris formam imponere debet non praeteritis. In the words of LORD BLANESBURG, "provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment." (See Delhi Cloth Mills & General Co. Ltd. v. CIT, Delhi AIR 1927 PCstatute, it has been said", observed LOPES, L.J., "which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty, or attaches a new disability in respect of transactions already past, must be presumed to be intended not to have a retrospective effect."(See Amireddi Raja Gopala Rao v. Amireddi Sitharamamma AIR 1965 SC 1970 ). As a logical corollary of the general rule, that retrospective operation is not taken to be intended unless that intention is manifested by express words or necessary implication, there is a subordinate rule to the effect that a statute or a section in it is not to be construed so as to have larger retrospective operation than its language renders necessary. (See Reid v. Reid, (1886) 31 Ch D 402). In other words close attention must be paid to the language of the statutory provision for determining the scope of the retrospectivity intended by Parliament. (See Union of India v. Raghubir Singh (AIR 1989 SC 1933 ). The above position has been highlighted in "Principles of Statutory Interpretation" by Justice G.P. Singh.(Tenth Edition, 2006) at PP. 474 andIn The State of Jammu and Kashmir v. Shri Triloki Nath Khosa & Others. (1974 (1) SCC 19 ) and in Chairman, Railway Board & Ors. v. C.R. Rangadhamaiah & Ors. (1997 (6) SCC 623 ), this Court held that provision which operates to affect only the future rights without affecting the benefits or rights which have already accrued or enjoyed, till the deletion, is not retrospective in operation.19. The above position was highlighted by this court in S.L. Srinivasa Jute Twine Mills (P) Ltd. v. Union of India and Anr. [2006(2) SCC 740].