2024 Supreme(SC) 366

SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA, ARAVIND KUMAR, JJ.
Pernod Ricard India (P) Ltd. – Appellant
Versus
The State of Madhya Pradesh and Others – Respondents
Civil Appeal Nos. 5062-5099 of 2024, Arising Out of SLP (C) Nos. 26571-26608 of 2017
Decided On : 19-04-2024

IMPORTANT POINTS
(1) Amendment by Substitution – Substitution would have effect of amending operation of law during period in which it was in force – Repealed provision will cease to operate from date of repeal and substituted provision will commence to operate from date of its substitution – This principle is subject to specific statutory prescription.
(2) Standard principles formulated in interpretation statutes must be read into any and every enactment falling for consideration – Ultimate analysis, interpretation statutes or definitions in interpretation clauses are only internal aids of construction of a statute.

Headnote:

(A) Statute Law – Amendment by Substitution – Substitution would have effect of amending operation of law during period in which it was in force – Repealed provision will cease to operate from date of repeal and substituted provision will commence to operate from date of its substitution – This principle is subject to specific statutory prescription – Statute can enable repealed provision to continue to apply to transactions that have commenced before repeal – Similarly, a substituted provision which operates prospectively, if it affects vested rights, subject to statutory prescriptions, can also operate retrospectively – Principle governing subordinate legislation is slightly different in as much as operation of a subordinate legislation is determined by empowerment of parent act – Legislative authorization enabling executive to make rules prospectively or retrospectively is crucial – Without statutory empowerment, subordinate legislation will always commence to operate only from date of its issuance and at the same time, cease to exist from date of its deletion or withdrawal – Reason for this distinction is in supremacy of Parliament and its control of executive action, being an important subject of administrative law. (Paras 12.1, 13 and 14)

(B) Interpretation of Statute – Interpretation statutes such as General Clauses Act, 1897, are enactments intended to set standards in construction of statutes – Expression construction is of seminal importance as it is oriented towards enabling a seeker of text of a statute to understand true meaning of words and their intendment – Apart from setting coherent and consistent methods of understanding enactments, interpretation statutes also subserve purpose of reducing prolixity of legislations – Standard principles formulated in interpretation statutes must be read into any and every enactment falling for consideration – Ultimate analysis, interpretation statutes or definitions in interpretation clauses are only internal aids of construction of a statute – Interpretation is exclusive domain of Court – A Constitutional Court is tasked with sacred duty of interpreting Constitution, Acts of Parliament or States, subordinate legislations, regulations, instructions and even to practices having force of law – Whichever or wherever instrument, interpretation is exclusive province of Court. (Paras 24 and 27)

(C) Constitution of India – Article 20(1) – [Madhya Pradesh Foreign Liquor Rules, 1996 – Rule 19] – Substituted punishment – Regulatory process requires Government to deal with problem of diversion and unlawful sale of foreign liquor and also provide an appropriate penalty and punishment – Process of identifying a crime and prescribing an appropriate punishment is a complex and delicate subject that State has to handle while making rules and enforcing them – Gravity of offence, its impact on society and human vulnerability are taken into account to provide required measure of deterrence and reform – Day to day working of Rules, reposing their effectiveness, ineffectiveness, deficiency of deterrence, disproportionate penalty having a chilling effect on genuine businesses, are some routine factors which require executive to make necessary amendments to rules – In this context, depending on nature of offence, proportionate penalty is required to be modulated from time to time – Subject of administration of liquor requires close monitoring and amendment must be seen in this context of bringing about good governance and effective management – Seen in this context, principle of Section 10 of MP General Clauses Act, 1957, relating continuation of a repealed provision to rights and liabilities that accrued during subsistence of Rule does not sub-serve purpose and object of amendment – Rule 19 which was substituted on 29.03.2011 is made applicable to proceedings that have commenced with issuance of demand notice in November, 2011 – Rule operates retroactively and saves it from arbitrarily classifying offenders into two categories with no purpose to sub-serve – Substituted penalty only mollifies rigour of law by reducing penalty from four times duty to value of duty – Bar of Article 20(1) of imposing a penalty greater than one in force at the time of commission of offence has no application. (Paras 31, 33 and 34)

Facts of the case:

Short question for consideration is applicability of relevant rule for imposition of penalty; whether it is the rule that existed when violation occurred during license period of 2009-10 or rule that was substituted in 2011 when proceedings for penalty were initiated. As substituted rule reduced quantum of penalty, the appellant insists on its application but the statutory authorities as well as the Division Bench of the High Court rejected his case and imposed higher penalty under the old rule.

Findings of Court:

Single Judge as well as Division Bench have adopted two different approaches and we have not agreed with either of them. Single Judge was of the view that amendment by way of substitution has effect of repealing the law which existed as on the date of repeal. We have already explained the limitation in this approach. Division Bench on other hand, held that levy of penalty is substantive law, and as such, it cannot operate retrospectively. This again is a wrong approach. Substituted penalty only mollifies rigour of the law by reducing penalty from four times duty to value of duty.

Result : Appeals allowed.