Administrative/Executive Order/Circular Cannot Be Given Retrospective Effect In The Absence Of Any Legislative Competence : Supreme Court

The Supreme Court observed that administrative/executive orders or circular cannot be made applicable with retrospective effect in the absence of any legislative competence.

The dispute in this case pertains to charges for infrastructure facilities which are being provided by the BSNL to the batch of telecom service providers, which were increased by a circular dated 12th June, 2012, w.e.f. 1st April, 2009. The Telecom Disputes Settlement and Appellate Tribunal, while upholding the right of the BSNL to revise the rates of the infrastructure facilities in question held that the circular dated 12th June, 2012 shall be applicable prospectively w.e.f. 1st April, 2013, instead of 1st April, 2009 and upto 31st March, 2013. 

Before the Apex Court, the BSNL (appellant) contended that the rate of infrastructure charges stood revised on the basis of the circular issued by the Government of India, Ministry of Finance, revising the classification of cities vide its circular dated 29th August, 2008 and that became effective from 1 st September, 2008 and it was the reason for which the circular dated 12th June, 2012 became effective in revising the infrastructure charges for telecom service providers w.e.f. 1st April, 2009. 

Rejecting this contention, the bench observed:

"It is a settled principle of law that it is the Union Parliament and State Legislatures that have plenary powers of legislation within the fields assigned to them, and subject to certain constitutional and judicially recognized restrictions, they can legislate prospectively as well as retrospectively. Competence to make a law for a past period on a subject depends upon present competence to legislate on that subject. By a retrospective legislation, the Legislature may make a law which is operative for a limited period prior to the date of its coming into force and is not operative either on that date or in future.. The power to make retrospective legislations enables the Legislature to obliterate an amending Act completely and restore the law as it existed before the amending Act, but at the same time, administrative/executive orders or circulars, as the case may be, in the absence of any legislative competence cannot be made applicable with retrospective effect. Only law could be made retrospectively if it was expressly provided by the Legislature in the Statute. Keeping in mind the afore­stated principles of law on the subject, we are of the view that applicability of the circular dated 12th June, 2012 to be effective retrospectively from 1st April 2009, in revising the infrastructure charges, is not legally sustainable and to this extent, we are in agreement with the view expressed by the Tribunal under the impugned judgment."

The court, partly allowed the appeal by granting BSNL the liberty to revise the notional rates based on 10% increase every year in terms of circular dated 12th June, 2012 as applicable on 1st April, 2013 and to raise its additional demand/bills based on notional increase of infrastructure charges effective as on 1st April, 2013 to the service providers/respondents.

Case details

Bharat Sanchar Nigam Ltd. vs Tata Communications Ltd. | 2022 LiveLaw (SC) 792 | CA 1699­ - 1723 OF 2015 | 22 Sept 2022 | Justices Ajay Rastogi and BV Nagarathna

Headnotes

Administrative Law - Administrative/executive orders or circulars, as the case may be, in the absence of any legislative competence cannot be made applicable with retrospective effect. Only law could be made retrospectively if it was expressly provided by the Legislature in the Statute. (Para 30)

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