Supreme Court: While a batch of civil appeals assailing the Himachal Pradesh High Court’s orders, whereby the Himachal Pradesh Passengers and Goods Taxation Act, 1955 (‘Act, 1955’) as amended from time to time by the Himachal Pradesh Passengers and Goods (Amendment and Validation) Act, 1997 (‘Amendment Act, 1997’) were upheld, the Division Bench of B.V. Nagarathna* and Ujjal Bhuyan, JJ. discussed the law around legislative power to abrogation and laid down certain inexhaustive principles to be followed in exercise of legislative devise of abrogation.
Analysis
The Court discussed the law around the adoption of the legislative device of abrogation, to remove the basis of a judgment of a Court in a legislation. The Court referred to Tirath Ram Rajendra Nath v. State of U.P., (1973) 3 SCC 585, wherein it was held that there is a distinction between encroachment on the judicial power and nullification of the effect of a judicial decision by changing the law retrospectively, the former is outside the competence of the legislature, but the latter is within its permissible limits. The Court also cited Indian Aluminium Co. v. State of Kerala, (1996) 7 SCC 637 and other catena of judgments wherein, the principles regarding the abrogation of a judgment of a Court of law by a subsequent legislation were culled out. It was noted that in Cheviti Venkanna Yadav v. State of Telangana, (2017) 1 SCC 283, it was held that held that the legislature has the power to legislate including the power to retrospectively amend laws, thereby removing causes of ineffectiveness or invalidity of laws. Further, when such correction is made, the purpose behind the same is not to overrule the decision of the court or encroach upon the judicial turf, but simply enact a fresh law with retrospective effect to alter the foundation and meaning of the legislation and to remove the base on which the judgment is founded.
Referring to Dr. Jaya Thakur v. Union of India, 2023 SCC OnLine SC 813, wherein it was held that a binding judicial pronouncement between the parties cannot be made ineffective with the aid of any legislative power by enacting a provision which in substance simply overrules a judgment unless the foundation of the judgment is removed, the Court said that a legislature cannot directly set aside a judicial decision. However, the Court added that it is a valid legislative exercise when a competent legislature retrospectively removes the substratum or foundation of a judgment to make the decision ineffective, provided it does not transgress on any other Constitutional limitation. The Court also said that such a legislative device which removes the vice in the previous legislation which has been declared unconstitutional is not considered to be an encroachment on judicial power, but an abrogation recognised under the Constitution of India. The Court also stated that “it is open to the legislature to alter the law retrospectively, provided the alteration is made in such a manner that it would no more be possible for the Court to arrive at the same verdict”.
Further, the Court said that the power of a legislature to legislate within its field, both prospectively and retrospectively, to a permissible extent, cannot be interfered with by the Courts provided it is in accordance with the Constitution. The legislature is also permitted to remove the defect, pointed out by the Courts both prospectively and retrospectively, however, if the legislature merely seeks to validate the Acts, struck down or rendered inoperative by a Court, by a subsequent legislation without curing the defects in such legislation, the subsequent legislation would also be ultra-vires. The Court also added that such instances would amount to an attempt to ‘legislatively overrule’ a Court’s judgment and would therefore be considered illegal and a colourable legislation. The Court stated that abrogation is not a device to circumvent any and all unfavourable judicial decisions.
The Court also observed that while it may be open to the legislature to alter the law retrospectively, to remove the basis of a judgment declaring such law to be invalid, it is essential that the alteration is made only so as to bring the law in line with the decision of the Court. The Court also added that simply setting a decision of a Court at nothing, without removing the defects pointed out in the said decision, would sound the death knell for the rule of law.
On legislative devise of abrogation, the Court said that it must be employed only with a view to bring the law in line with the judicial pronouncement, by enacting retrospective amendments to a legislation, to remove the basis of a judgment and validate the legislation set aside or declared inoperative by a Court. If it is only with the intent to defy judicial pronouncement, such an amendment Act may be declared to be ultra-vires and as a piece of ‘colourable legislation.’ The Court also added that an act of abrogation is permissible only in the interests of justice, effectiveness and good governance, and not to serve the oblique agenda of defying a Court’s order or stripping it of its binding nature.
Governing Principles for exercise of power of Abrogation
The Court said that the power of abrogation is to be exercised in the light of the Constitutional mandate, that the legislature is precluded from interfering with the administration of justice and judicial determination of the validity of a legislation. The Court laid down certain inexhaustive principles to be followed in exercise of legislative power of abrogation:
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There is no legal impediment to enact a law to validate a legislation, held invalid by a Court, provided, such a law cures the defects of the legislation as it stood before the amendment.
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The validating legislation may be retrospective. It must have the effect that the judgment pointing out the defect would not have been passed, if the altered position as sought to be brought in by the validating statute existed before the Court at the time of rendering its judgment.
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Retrospective amendment should be reasonable and not arbitrary and must not be violative of any Constitutional limitations.
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Setting at nothing a decision of a Court without removing the defect pointed out in the said decision is opposed to the rule of law and the scheme of separation of powers under the Constitution of India.
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Abrogation is not a device to circumvent an unfavourable judicial decision. If enacted solely with the intention to defy a judicial pronouncement, an enactment or amendment may be declared as ultra-vires.
[NHPC Ltd. v. State of Himachal Pradesh Secretary, 2023 SCC OnLine SC 1137, Decided on: 06-09-2023]
*Judgment Authored by: Justice B.V. Nagarathna
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*Deeksha Dabas, Editorial Assistant has reported this brief.
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