The prospective statute operates from the date of its enactment conferring new rights. The retrospective statute operates backward and takes away or impairs vested rights acquired under existing laws. A retroactive statute is the one that does not operate retrospectively. It operates in futuro. However, its operation is based upon the character or status that arose earlier. Characteristic or event which happened in the past or requisites which had been drawn from antecedent events.
The concept of retrospective and retroactive statute was stated by the Court in Darshan Singh etc. v. Ram Pal Singh & Anr., (1992 Supp. (1) SCC 191, thus:
“35. Mr Sachar relies on Thakur Gokulchand v. Parvin Kumari, AIR 1952 Supreme Court 231, Garikapatti Veeraya v. N. Subbiah Choudhury, AIR 1957 Supreme Court 540, Jose Da Costa v. Bascora Sadasiva Sinai Narcornim, (1976) 2 SCC 917, Govind Das v. Income Tax Officer, (1976) 1 SCC 906, Henshall v. Porter, (1923) 2 KBD 193, United Provinces v. Mst. Atiga Begum, AIR 1941 Federal Court 16, in support of his submission that the Amendment Act was not made retrospective by the legislature either expressly or by necessary implication as the Act itself expressly provided that it shall be deemed to have come into force on January 23, 1973; and therefore there would be no justification to giving it retrospective operation.
The vested right to contest which was created on the alienation having taken place and which had been litigated in the court, argues Mr Sachar, could not be taken away. In other words, the vested right to contest in appeal was not affected by the Amendment Act. However, to appreciate this argument we have to analyse and distinguish between the two rights involved, namely, the right to contest and the right to appeal against lower court’s decision.
Of these two rights, while the right to contest is a customary right, the right to appeal is always a creature of statute. The change of the forum for appeal by enactment may not affect the right of appeal itself. In the instant case we are concerned with the right to contest and not with the right to appeal as such. There is also no dispute as to the propositions of law regarding vested rights being not taken away by an enactment which is ex facie or by implication not retrospective. But merely because an Act envisages a past act or event in the sweep of its operation, it may not necessarily be said to be retrospective.
Retrospective, according to Black’s Law Dictionary, means looking backward; contemplating what is past; having reference to a statute or things existing before the Act in question. Retrospective law, according to the same dictionary, means a law which looks backward or contemplates the past; one which is made to affect acts or facts occurring, or rights occurring, before it came into force. Every statute which takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability in respect to transactions or considerations already past.
Retroactive statute means a statute which creates a new obligation on transactions or considerations already past or destroys or impairs vested rights.
In Halsbury’s Laws of England (4th edn., Vol. 44, at paragraph 921) we find: “921. Meaning of ‘retrospective’.- It has been said that ‘retrospective’ is somewhat ambiguous and that a good deal of confusion has been caused by the fact that it is used in more senses than one. In general, however, the courts regard as retrospective any statute which operates on cases or facts coming into existence before its commencement in the sense that it affects, even if for the future only, the character or consequences of transactions previously entered into or of other past conduct. Thus a statute is not retrospective merely because it affects existing rights; or is it retrospective merely because a part of the requisites for its action is drawn from a time antecedent to its passing.”