Supreme Court Summarises Principles On Retrospective Application Of Laws

In M. Rajendran & Ors. v. M/s KPK Oils & Proteins India Pvt. Ltd. & Ors., a bench of Justices J.B. Pardiwala and R. Mahadevan set out guidelines for when legislative amendments can operate retrospectively. The case involved the 2016 amendment to Section 13(8) of the SARFAESI Act: whether it applies to pre-amendment loans if the default occurs after the amendment’s commencement. The Court held yes, the amendment applies to such cases, since defaults after the amendment date invoke its provisions even if the loan was contracted before. The Court listed principles: (i) presumptions against retrospectivity do not apply to procedural or declaratory enactments; (ii) retrospective operation may be implied from context; (iii) a provision may apply to causes of action arising after enactment even if underlying claims are older; (iv) remedial statutes may apply to ongoing proceedings without being retrospective per se; (v) the SARFAESI Act is remedial, intended to address existing loan defaults and enable expeditious recovery. The decision clarifies that retrospective effect depends on legislative intent, subject-matter, and nature of change (substantive vs procedural).