TMI Blog2005 (9) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... noted in Indira Nehru Gandhi v. Raj Narain [ 1975 (11) TMI 165 - SUPREME COURT] rendering ineffective of judgments or orders of competent Courts or Tribunals by changing their basis by legislative enactment is a well known pattern of all validating Acts. Such validating legislation which removes the causes for ineffectiveness or invalidity of actions or proceedings is not an encroachment on judicial power. There is a distinction between encroachment on the judicial power and nullification of the effect of a judicial decision by changing the law retrospectively. As noted by this Court in M/s. Tirath Ram Rajindra Nath [ 1972 (12) TMI 65 - SUPREME COURT] , the former is outside the competence of the legislature but the latter is within its permissible limits. The amendment made by the impugned enactments is to the State Bank Act and other statutes relating to some other Banks. The Bank undoubtedly has power in terms of Section 7(1) of the State Bank Act to change the conditions of service of those of its employees, who had earlier served with Imperial Bank of India. By enforcement of the Act, the undertaking of Imperial Bank of India was transferred to the Bank. Employees of erstwhile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras High Court by filing a writ petition which was dismissed. 2. Factual position which is almost undisputed is as follows:- By the Amendment Act, State Bank of India Act, 1955 (in short the 'State Bank Act') and State Bank of India (Subsidiary Banks) Act, 1959 (in short the 'Subsidiary Act') and Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (in short 'the Undertakings Acts') were amended. By that amending Act, a new Section 43-A comprising of three sub sections (1), (2) and (3) and marginal heading Bonus was introduced in the State Bank Act. The said Section reads as under:- (1) No Officer, Adviser or other Employee (other than an employee within the meaning of Clause (13) of Section 2 of the Payment of Bonus Act, 1965 (21 of 1965) of the State Bank shall be entitled to be paid any bonus. (2) No employee of the State Bank, being an employee within the meaning of Clause (13) of Section 2 of the Payment of Bonus Act, 1965 (21 of 1965), shall be entitled to be paid any bonus except in accordance with the provisions of that Act. (3) The provisions of this Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecognition as in the case of conflict between the provisions of General Law i.e. State Bank Act and the Industrial Act the latter Act must prevail. The bonus which was directed to be paid was in the nature of deferred wages and the impugned legislation had the effect of freezing wages. Parliament is not vested with the power to reduce the wages and therefore the legislation is ultra vires. Effect of an award under the Industrial Act cannot be wiped out except in the manner provided under the Industrial Act and since in the instant case that has not been done, the award was binding on the parties concerned. The bonus being a customary bonus was peculiar to the employees of the Bank and mere fact that other public sector banks were not being paid such bonus is of really no consequence. Stand that financial implications were enormous is also of no consequence. The Union of India and the Bank took the stand that the Amendment Act was a valid piece of legislation. It was not merely intended to invalidate an award by acting as an Appellate Authority, and it is not a case of any judicial power being usurped by the legislation. The High Court negatived the contentions of the appellants and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also dealt with the Special Act and the deferred wages concept. The Amendment Act really brought in a curative provision, and no retrospective effect has been given to the Amendment Act. Section 9A of the Industrial Act has no application as the Parliament has the power to legislate on that aspect. A bare look at the impugned provision makes it clear that it is not a case of legislature by mere declaration or without anything more, overriding a judicial decision. On the other hand it is a case of rendering a judicial decision ineffective by enacting a valid law within legislative field of the legislature. Merely because a reference has been made to the award in the Statement of Objects and Reasons, that cannot in any way affect the plain intention in enacting the law under challenge and it is not correct to say that the intention was to declare the decision of Tribunal as invalid and as such judicial power has been usurped by legislation. 6. Following four circumstances have to be fulfilled in order to be entitled to payment of customary or traditional bonus, as was noted in M/s. Grahams Trading Co. v. Their Workmen (AIR 1959 SC 1151) and in Vegetable Products case (supra): (i) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintained, and in the anxiety to safeguard judicial power, it is unnecessary to be over-zealous and conjure up incursion into the judicial preserve to invalidate the valid law competently made. (see: Indian Aluminium Co. vs. State of Kerala 1996(7) SCC 637). 8. In Jalan Trading Co. vs. Mill Mazdoor Sabha (AIR 1967 SC 691) it was observed as follows: It is true that by the impugned legislation, certain principles declared by this Court e.g. in Express Newspapers (Private) Ltd. vs. Union of India, 1959 SCR 12: AIR 1958 SC 578) in respect of grant of bonus were modified, but on that account it cannot be said that the legislation operates as fraud on the Constitution or is a colourable exercise of legislative power. Parliament has normally power within the frame-work of the Constitution to enact legislation which modified principles enunciated by this Court as applicable to the determination of any dispute, and by exercising that power, the Parliament does not perpetrate fraud on the Constitution. An enactment may be charged as colourable, and on that account valid, only if it be found that the legislature has by enacting it trespassed upon a field outside its competence. 9. In the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Arooran Sugars case (supra). 13. The decision in Madan Mohan Pathak v. Union of India (1978 (2) SCC 50) which was one of the major planks of arguments before the High Court and this Court was explained in the last named case. It was rendered in the different factual background. This was categorically pointed out and the decision was explained in the said case. Every sovereign legislature possesses the right to make retrospective legislation. The power to make laws includes power to give it retrospective effect. Craies on Statute Law (7th Edn.) at p. 387 defines retrospective statutes in the following words: A statute is to be deemed to be retrospective, which takes away or impairs any vested right acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect to transactions or considerations already past. Judicial Dictionary (13th Edn.) K.J. Aiyar, Butterworth, p. 857, states that the word retrospective when used with reference to an enactment may mean (i) affecting an existing contract; or (ii) reopening up of past, closed and completed transaction; or (iii) affecting accrued rights and remedies; or (iv) affecting proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mic interest. It was admitted before the High Court that all amount payable under the award for the prior period has been paid. In Harvard Law Review, Vol. 73, p. 692 it was observed that it is necessary that the legislature should be able to cure inadvertent defects in statutes or their administration by making what has been aptly called 'small repairs'. Moreover, the individual who claims that a vested right has arisen from the defect is seeking a windfall since had the legislature's or administrator's action had the effect it was intended to and could have had, no such right would have arisen. Thus the interest in the retroactive curing of such a defect in the administration of government outweighs the individual's interest in benefiting from the defect . The above passage was quoted with approval by the Constitution Bench of this Court in the case of The Asstt. Commr. of Urban Land Tax v. The Buckingham and Carnatic Co. Ltd. (1969 (2) SCC 55). In considering the question as to whether the legislative power to amend a provision with retrospective operation has been reasonably exercised or not, various factors have to be considered. It was observed in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dating Acts. Such validating legislation which removes the causes for ineffectiveness or invalidity of actions or proceedings is not an encroachment on judicial power. There is a distinction between encroachment on the judicial power and nullification of the effect of a judicial decision by changing the law retrospectively. As noted by this Court in M/s. Tirath Ram Rajindra Nath, Lucknow v. State of U.P. and Anr. (1973 (3) SCC 585) the former is outside the competence of the legislature but the latter is within its permissible limits. 18. It has to be noted that the legislature, as a body, cannot be accused of having passed a law for extraneous purpose. If no reasons are stated as appear from the provisions enacted by it, its reasons for passing a law are those stated in the Objects and Reasons. Even assuming that the Executive, in a given case, has an ulterior motive in moving a legislation, that motive cannot render the passing of the law mala fide. This kind of Transferred malice is unknown in the field of legislation. (See K. Nagaraj and Ors. v. State of Andhra Pradesh and Anr. (AIR 1985 SC 551) and G.C. Kanungo v. State of Orissa (AIR 1995 SC 1655). 19. Learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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