Interpretation of Statutes – Construction of Rules – Prospective or Retrospective – Any legislation said to be dealing with substantive rights shall be prospective in nature and not retrospective. [General Clauses Act, 1897, Section 6]

In the present case, a notification dated 09.10.1996 was published by the Appellant (Collector) inviting applications for grant of stone quarrying leases. This notification was issued under the provisions of Rule 8(8) of the Tamil Nadu Minor Mineral Concession Rules, 1959 and it was stated therein that lease would be granted for a period of five years. However, when these leases were still in operation and the said period of five years for which these leases were granted had not expired, rule came to be amended vide G.O. dated 17.11.2000. The amended rule provided that the period for quarrying stone in respect of virgin areas, which had not been subjected to quarrying earlier, shall be ten years whereas the period of lease for quarrying stone in respect of other areas shall be five years. On the basis of this amendment, the Respondents pleaded that since they were granted lease for quarrying stone in respect of virgin areas, amended provision was applicable in their cases and they were entitled to continue on lease for a period of ten years.

The Supreme Court held that, “though the Legislature has plenary powers of legislation within the fields assigned to it and can legislate prospectively or retrospectively, the general rule is that in the absence of the enactment specifically mentioning that the concerned legislation or legislative amendment is retrospectively made, the same is to be treated as prospective in nature. It would be more so when the statute is dealing with substantive rights. No doubt, in contrast to statute dealing with substantive rights, wherever a statute deals with merely a matter of procedure, such a statute/amendment in the statute is presumed to be retrospective unless such a construction is textually inadmissible. At the same time, it is to be borne in mind that a particular provision in a procedural statute may be substantive in nature and such a provision cannot be given retrospective effect. To put it otherwise, the classification of a statute, either substantive or procedural, does not necessarily determine whether it may have a retrospective operation”. It was thus held by the Hon’ble Supreme Court, that the right which is substantive in nature, accrued to the virgin areas for the first time by way of amendment only.

It was thus an unamended Rule under which the notification dated 09.10.1996 was issued and tenders were invited and auction held. Rule 8(8) of the 1959 Rules which prescribes period for grant of lease is not procedural but substantive in nature. It is only in respect of virgin areas that the period of lease stands enhanced to ten years whereas in respect of other areas the period of lease continues to be five years. This was clearly a substantive amendment which had nothing to do with any procedure. There was no concept of “virgin area” in the unamended rule which has been introduced for the first time by way of aforesaid amendment.

These appeals were accordingly allowed.