Maharaja Chintamani Saran Nath Shahdeo v. State of Bihar (1999)

It is the case that ties the General Clauses Act module to the presumptions module. Section 6 protects accrued rights and liabilities when an Act is repealed; the presumption against retrospective operation protects them when an Act is amended. This judgment supplies the sentence that states the idea behind both, and it does so on facts every student can follow: the rate of compensation was changed, and the question was which rate applied.

It is also the case the General Clauses Act itself carries an editorial note about under s. 6, so expect it to be set alongside that section.

An amending Act changed the rate of compensation. The appellant's entitlement had arisen under the unamended provision. The amending Act said nothing about retrospective effect.

Compensation was to be determined under the provisions in force when it became payable — "unamended sub-section (4) of Section 25 of the Act would apply." There was nothing in the amending Act to show retrospective effect, and because the amendment affected the appellant's substantive right, it operated prospectively.

The proposition the case is quoted for:

"the essential idea of a legal system is that current law should govern current activities"

The Court described its approach as applying the golden rule of construction stated in Garikapatti Veeraya (AIR 1957 SC 540).

Three steps, and they are the steps to run in any problem about an amendment.

1. Classify the amendment. Does it affect a substantive right, or only procedure? Here it altered the rate of compensation — the measure of what the claimant gets — and so touched substance.

2. Look for an expression of retrospective intent. There was none. The governing principle is stated by the course as the presumption against impairing existing rights and obligations: a statute should be interpreted, if possible, so as to respect vested rights, and "No statute will be construed to have retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary implication" (P. Janardhan v. Union of India). Where the effect of a statute would be to alter a transaction already entered into, the prima facie construction is that it is not retrospective.

3. Apply the law in force when the right arose. Current law governs current activities; the law as it stood when the compensation became payable governs that compensation.

Where section 6 fits. Section 6 does for repeal what this presumption does for amendment. Unless a different intention appears, a repeal does not affect the previous operation of the repealed Act or things duly done under it; does not affect rights, privileges, obligations or liabilities acquired, accrued or incurred; does not affect penalties, forfeitures or punishments incurred for offences against it; and does not affect investigations, legal proceedings or remedies in respect of those matters, which may be instituted, continued or enforced as if there had been no repeal. Note that closing verb list: proceedings may be not only continued if pending but also instituted after the repeal, in respect of rights and liabilities that had accrued before it.

The test under clause (c) is whether, under the old Act, the right or liability had actually come into existence before the repeal took effect. A right that would only have matured later is not saved, because nothing had accrued. Section 6 is itself a default: the repealing Act may show a different intention, expressly or by its scheme, and it is customary for repealing clauses to state expressly that s. 6 applies so as to save accrued rights or continue liabilities.

The unifying idea, worth a closing sentence in a long answer: ss. 6, 6A, 7, 8 and 24 all protect the statute book against disruption when laws change — accrued rights and liabilities survive, amendments stay made, dead Acts stay dead, references are redirected and rules continue. They are the statutory form of the presumption that the legislature does not intend to impair existing rights and obligations.

It opens the s. 6 head of the General Clauses Act module, and it is the case to cite whenever a problem gives you an amendment and a right that arose before it. It also serves the presumption against retrospectivity in the presumptions module without any change of facts.

It disposes of the argument that a claimant takes the rate in force when the authority happens to make its order, where the entitlement arose earlier and the amending Act is silent.

It does not decide that no amendment can ever be retrospective — express words or necessary implication will make one so — and it does not deal with purely procedural amendments, which are not protected by the same presumption. It also does not decide the separate question of what counts as a right "acquired, accrued or incurred" in a difficult case; that turns on whether the right had actually come into existence before the change.