Introduction
In a significant ruling, the Supreme Court of India has established the precedence that a repealed provision ceases to operate from the date of repeal, while the substituted provision starts operating as soon as it is substituted, subject to statutory stipulation. This landmark judgment, authored by Justice P.S. Narasimha, sheds light on the operation and applicability of repealed and substituted provisions in statutory frameworks.
Background
The case pertained to Pernod Ricard India (P) Ltd., a sub-licensee operating
under the M.P. Excise Act, 1915, for the manufacturing, import, and sale of
Foreign Liquor. The Madhya Pradesh Foreign Liquor Rules, 1996, governed the
regulations for this operation. Rule 16 specified the permissible limits of
loss of liquor in transit, while Rule 19 provided for penalties in case of a
breach.
During the license period of 2009-10, a violation occurred, but no
action was taken against the appellant at that time. Subsequently, in March
2011, Rule 19 was substituted through an amendment, reducing the penalty from
four times the maximum duty payable to an amount not exceeding the duty payable
on foreign liquor. A notice was then issued to the appellant for payment of the
penalty under the old Rule 19.
Court's Analysis
After thorough deliberation, the
Division Bench of Justices Narasimha and Aravind Kumar underscored the purpose
of the amendment, which aimed to strike a balance between crime and punishment.
The Court emphasized that subordinate legislations operate differently as they
depend on the parent act and are determined by its empowerment.
Referring to Section 63 of the M.P. Excise Act, 1915, which
governs the publication of rules and notifications, the Court observed that the
repealed provision would not operate for rights and responsibilities that
occurred while it was valid. The Court clarified that the government can issue
subordinate legislation with effect from a specified date, but in this case, no
such date was notified regarding the substituted Rule 19.
The Court highlighted the intention behind the amendment,
emphasizing the need for good governance and efficient liquor regulation. It
held that the amended provision should not be ignored, and the State cannot
recover the penalty as per the unamended rule if the purpose of the amendment
was to reduce the quantum of penalty for better administration and regulation
of foreign liquor.
Furthermore, the Court rejected the State's argument that the
substituted rule cannot be given retrospective effect. It reasoned that the
amended rule, applied to the case from the issuance of the demand notice in
November 2011, operated retroactively. This approach prevented arbitrary
classification of offenders into two categories without any purpose to serve.
Conclusion
The Supreme Court's landmark judgment clarifies the operation and applicability
of repealed and substituted provisions in statutory frameworks. By establishing
that the substituted provision prevails over repealed provisions, subject to
statutory stipulation, the Court ensures a fair and consistent interpretation
of laws. This decision emphasizes the importance of understanding the intended
purpose of laws and upholding the principles of good governance. It serves as a
significant precedent in cases involving the operation of repealed and
substituted provisions, promoting clarity and uniformity in legal
interpretations.
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