VIDEOCON INTERNATIONAL LTD. v. SECURITIES & EXCHANGE BOARD OF INDIA

The Judgment of the Court was delivered by F JAGDISH SINGH KHEHAR, J. 1. The Securities and Exchange Board of India Act, 1992 (hereinafter referred to as, the SEBI Act) was enacted to protect the interests of investors in securities and to promote the development of, G and to regulate, the securities market. The Securities and Exchange Board of India (hereinafter referred to as, the Board) was vested with statutory powers to effectively deal with all matters relating to the capital market.

2Copy pinpoint2. The functions of the Board have been depicted in

VIDEOCON INTERNATIONAL LTD. v. SEBI 9 [JAGDISH SINGH KHEHAR, J.)

Section 11 of the SEBI Act. Under Section 11 of the SEBI A Act, the powers pf the Board include, the power to suspend the trading of any security in a recognized stock-exchange; the .-ower to restrain from access)ng the securities market and prohibit any person associated with the securities market from buying, selling or dealing in securities; the power to suspend any office-bearer of any stock-exchange or self-regulatory organization from holding such position; the power to impound and retain the proceeds or securities in respect of any transaction which is under investigation; the power to attach after passing of an order on an application made for approval (by the Judicial Magistrate of First Class having jurisdiction) for a period not exceeding one month, one or more bank account(s) of any intermediary or any person associated with the securities 0 market in any manner involved in violation of any of the provisions of the SEBI Act, or the rules/regulations framed thereunder; and the power to direct any intermediary or any person associated with the securities market in any manner not to dispose of or alienate an asset forming part of any transaction which is under investigation. If the Board finds (on investigation), that a person has violated (or is likely to violate) any provision of the SEBI Act, or any rules/ regulations made thereunder, the Board is authorized under \ Sectio~ 11 D of the SEBI Act, to pass an order requiring the person\concerned, to cease and desist from committing or causing such violation.

3Copy pinpoint3. Chapter VIA of the SEBI Act provides for penalties and adjudication. Under Chapter VIA, a penalty can be levied, fo.r failure to furnish information, return or report to the Board (Section 15A, inserted with retrospective effect from 25.¹:.1995); a penalty can be imposed, for failure by any person to enter into such agreement, as he may be required (Section 15B, inserted with retrospective effect H

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A from 25.¹.1995); a penalty can also be inflicted, for failure to redress investors' grievances (Section 1~c. inserted with retrospective effect from 29.10.2002); a penalty can be foisted, for certain defaults in case of mutual funds (Section 150, inserted with retrospective effect from 25.¹.1995); a B penalty can be levied, for failure to observe rules and regulations by an asset management company (Section 15E, inserted with retrospective effect from 25.¹.1995); a penalty can be inflicted, for default in case of stock brokers (Section 15F, inserted with retrospective effect from C 25.¹.1995); a penalty can be imposed, for insider trading (Section 15G, inserted with retrospective effect from 25.¹.1995); a penalty can be demanded, for non-disclosure of acquisition of shares and take-overs (Section 15H, inserted with· retrospective effect from 25.¹.1995/ 0 29.10.2002); a penalty can be levied, for fraudulent and unfair trade practices (Section 15HA, inserted wi.th retrospective effect from 29.10.2002); a penalty can be levied, for contravention, where no separate penalty has E . been provided (Section 15HB, inserted with retrospective effect from 29.10.2002). Under Section 15-1 of the SEBI Act, the Board is mandated to appoint ah 'adjudicating officer' (not below the rank of a Division Chief), for deciding the quantum of penalty to be imposed under Sections 15A to F 15HB of the SEBI Act.

4Copy pinpoint4. A remedy of appeal to the Securities Appellate Tribunal (established under Section 15K, by insertion of Chapter VIB int~ the SEBI Act, with retrospective effect from G 25.¹.1995) was provided for under Section 15T of ~he SEBI Act, to a person aggrieved of an order passed by the Board, or by an 'adjudicating officer' (for details, refer to the preceding two paragraphs). A further remedy of appeal, was provided from an appellate order passed by the Securities H ·Appellate Tribunal, vide Section 15Z (inserted with

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[JAGDISH SINGH KHEHAR, J.]

retrospective effect from 15.¹.1995). Section 15Z of the A SEBI Act (as has tieen referred to above), is being extracted hereunder:-

"15Z. Appeal to High Court- Any person aggrieved by any decision or order of the B Securities Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of th.e decision or order of the Securities Appellate Tribunal to him on anv question of fact or law arising out of such order." C (emphasis is ours)

A perusal of Section 15Z reveals, that when the second appellate remedy was made available to an aggrieved party 0 for the first time, the forum for the second appeal was the High Court. And second appellate remedy was available on questions of fact, as also, questions of law.

5Copy pinpoint5. Section 15Z of the SEBI Act as originally enacted, was amended with retrospective effect, from 29.10.2002. E The above amendment to Section 15Z, was brought into · force by the Securities and Exchange Board of India (Amendment) Ordinance, 2002. The Ordinance was replaced by the Securities and Exchange Board of India F (Amendment) Act, 2002. Section 15Z, as amended is reproduced hereunder:-

"15Z. Appeal to Supreme Court- Any person aggrieved by any decision or order of the G Securities Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Securities Appellate Tribunal to him on any question of law arising out of such order. H

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\. A Provided that the Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further perio9 not exceeding sixty days." (emphasis is ours) B A perusal of Section 15Z, as amended, reveals that the forum of the second appellate remedy was changed from ·the High Court, to the Supreme Court. And the second appellate remedy was limited to questions of law alone, and c not on questions of fact.

6Copy pinpoint6. Through the present Civil Appeal no. 117 of 2005 (arising out of Special Leave Petition (Civil) no. 3221 of 2004), the appellant has impugned the order passed by the D High Court of Judicature at Bombay (hereinafter referred to as, the High Court), on 13.10.2003: The High Court, through the impugned order had examined Section 15Z of the SEBI Act (as amended by the Securities and Exchange Board of India (Amendment) Act, 2002). The issue for determination before the High Court was, whether the aforesaid amendment to Section 15Z of the SEBI Act, would operate prospectively or retrospectively. Appeals had been preferred by the Board, before the High Court assailing the orders passed by the Securities Appellate Tribunal. All the orders under challenge, had been passed by the Securities Appellate Tribunal before 29.10.2002. Some appeals were preferred before 29.10.2002, and one of the appeals was preferred after 29.10.2002. ; The question which had arisen for adjudication before the High Court was, whether an appeal would lie to the High Court, after the amendment of Section 15Z oft.he SEBI Act. The Board which had preferred the appeals', asserted, that all the appeals were maintainable. The appellant before us, felt otherwise.

7Copy pinpoint7. The High Court by the impugned order arrived at the

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[JAGDISH SINGH KHEHAR, J.]

conclusion, that such of the appeals as had been filed A before the coming into force of the amended Section 15Z, would not be affected by the amendment, and the High Court had the jurisdiction to hear and dispose of the same. The High Court aiso concluded, that such of the appeals as had been filed aft.er the coming into force of the amended B Section 15Z, would not be maintainable.

8Copy pinpoint8. The instant appeal has arisen with reference to the appeals which have been held as maintainable by the High Court. According to the learned counsel for the appellant, C where the repealing Act provides for a new forum (as in the instant case), the original remedy (or legal proceedings) cannot be pursued after the repeal, the remedy before the new forum alone would be available. D

9Copy pinpoint9. lns['.>far as the factual aspect of the present matter is concerned, the impugned order which was assailed before the High Court, under the unamended Section 15Z was disposed of before 29.10.2002. And therefore it was felt, that the remedy available at the time when the E impugned order was passed, had to be pursued. Therefore, the pointed question to be determined by this Court, in the present appeal would be, whether an order passed by the S.ecurities Appellate Tribunal before 29.10.2002 would be appealable under the unamended provision of Section 15Z F of the SEBI Act before the High Court, or alternatively, whether the same would be appealable under the amended provision of Section 15Z of the SEBI Act before the Supreme Court. And also, whether the date on which the Board had preferred the appeals, was a relevant G consideration, in the facts and circumstances of the present case.

10Copy pinpoint10. In order to canvass the proposition which has arisen in the present controversy, learned counsel for the appellant H

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A has vehemently contended, that the amendment of Section 15Z, having only brought about a change in the forum, would be deemed to have amended a procedural provision. Accordingly it was the submission of the learned counsel, that the afore-stated amendment would be deemed to be B retrospective, specially because no vested right can be deemed to have been take'1 away. It was also the vehement contention of the learned counsel, that in the absence of a saving clause, the pending proceedings and jurisdiction of the High Court, cannot be deemed to have been saved. It C . was the contention of the learned counsel, that a case cannot be deemed to have been entertained by a Court, till the Court applies its mind, and as such, even the appeals preferred before the amended Section 15Z took effect retrospectively from 29.10.2002, would be governed by the 0 amended provision, rather than the unamended Section 15Z of the SEBI Act.

11Copy pinpoint11. In order to support his aforesaid contention, learned counsel for the appellant submitted, that Sections 15Y and E 15Z of the SEBi Act had to be considered together. Section 15Y is being extracted hereunder:-

"15Y. Civil court not to have jurisdiction- No civil court shall have jurisdiction to entertain any suit or proceeding in respect 'of any matter which an adjudicating officer appointed under this Act or a Securities Appellate Tribunal constituted under this Act is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act." (emphasis is ours) H On the basis of Section 15Y extracted above, it was

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[JAGDISH SINGH KHEHAR, J.]

tbe submission of the learned counsel for the appellant, that A the powers of civil courts to entertain issues emerging out of the provisions of the SEBI Act were expressly taken away. Section 15Y, according to the learned counsel for the appellant, excluded even the jurisdiction of the High Court, with respect to the civil jurisdiction vested in the High Court, B in respect of matters entrusted for adjudication, by the SEBI Act, with the adjudicating officer or with the Securities Appellate Tribunal. In fact, accorci\lig to the learned counsel, the mandate of Section 15Y of the SEBI Act, debarred a civil court from even' granting an injunction in respect of any C action taken (or to be taken) in pursuance of any power conferred by or under the SEBI Act. It was the contention of the learned counsel, that Section 15Z of the SEBI Act, should be examineq in the background of the intent 0 expressed by the legislature through Section 15Y.

12Copy pinpoint12. In conjunction with the above submission, learned counsel for the appellant invited the Court's attention to Sections 27 and 32 of the Securities and Exchange Board of India (Amendment) Act, 2002, which are reproduced E hereunder:-

"27. Substitution of new Section for.Section 15Z- For Section 15Z of the principal Act, the following section shall be substituted, namely:- "15Z. Appeal to Supreme F Court - Any person aggrieved by any decision or order of the Securities Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Securities Appellate Tribunal to him on any question of G law arising out of such order: Provided that the Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further H

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A period not exceeding sixty days.

32. Repeal and Saving-

1. The Securities and Exchange Board of India (Amendment) Ordinance, 2002 (Ord. 6 of 2002), is B hereby repealed.

2. Notwithstanding the repeal of the Securities and Exchange Board of India (Amendment) Ordinance, 2002 (Ord. 6 of 2002), anvthing done or any action c taken under the principal Act as amended by the said Ordinance. shall be deemed to have been done or taken under the principal Act. as amended by this Act."

(emphasis is ours) D Drawing the Court's attention to Section 32, the contention of the learned counsel for the appellant was, that in the absence of any saving clause, which may have had th,e effect of preserving, protecting, securing or sustaining the jurisdiction vested in respect of appeals pending before the High Court, all the pending appeals would have to be adjudicated by the substituted forum, after the amendment of Section 15Z of the SEBI Act. On the instant score, the further submission of the learned counsel was, that whilst amendment to procedure had generally retrospective effect, an amendment to a provision vesting a substantive right was generally prospective.

13Copy pinpoint13. In order to support his contentions, learned counsel for the appellant, placed reliance on the decision in Colonial Sugar Refining Co. Ltd. v. Irving, 1905 AC 369. In the judgment relied upon, a right of appeal was available from. the Supreme Court of Queensland, to the King in Council. The aforesaid right was taken away by the H

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(JAGDISH SINGH KHEHAR, J.]

Australian Commonwealth Judiciary Act, 1903 (hereinafter referred to as, the 1903 Act). Section 39(2) of the 1903 Act, provided for an appeal from the Supreme Court of Queensland, to the High Court of Australia. The question which arose for determination was, whether from a suit pending when the 1903 Act was enacted, a remedy of appeal would lie before the King in Council or before the High Court of Australia. In the judgment relied. upon, the Privy Council held as under:-

"As regards the general principles applicable to the case there was no controversy. On the one hand, it was not disputed that if the matter in question be a matter of procedure only, the petition is well founded. On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act, it was conceded that, in accordance with a long line of authorities extending ·.from the time of Lord Coke to the present day, the appellants would be entitled to succeed. The Judiciary E Act is not retrospective by exp.ress enactment or by necessary intendment. And therefore the only question is. was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the. Act. or was it a mere matter of procedure? It F seems to their ,Lordships that the question does not admit of doubt. To deprive a suitor iri a pending action of an appeal to a superior tribunal which belonged to him as the right is a very different thing from regulating procedure. In principle. their Lordships see no G difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In .either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless H

18 SUPREME COURT REPORTS [2015] 3 S.C.R.

•• A a clear intention to that effect is manifested."

(emphasis is ours)

14Copy pinpoint14. Learned counsel for the appellant pointed out, that the decision rendered by the Privy Council in Colonial Sugar 8 Refining Co. Ltd. case (supra) was followed by this Court in Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh, AIR 1953 SC 221. The issue which came up for consideration in Hoosein Kasam Dada (India) Ltd. case c (supra) was in respect of the return filed by the appellant under the Berar Sales Tax Act, 1947 (hereinafter referred to as, the 1947 Act). The 1947 Act was amended, requiring the payment of the entire assessed amount, as a condition precedent, to the admission of an appeal. The Assistant D Commissioner to whom the return was transferred for . disposal, made an assessment, against which the appellant preferred an appeal, without depositing the assessed tax. The Board of Revenue was of the view, that Section 22( 1) of the 1947 Act as amended, applied to the case, as the assessment was made, and the appeal had been preferred, after the amendment came into force. The appeal accordingly came to be rejected. In further appeal, this Court following the decision ofthe Privy Council in Colonial Sugar Refining Co. Ltd. case (supra), as well as certain other decisions held, that a right of appeal was not merely a matter of procedure. An appellate remedy, it was held, was a substantive right. The right of appeal from the decision of an inferior Tribunal, becomes vested in a party, when proceedings were first initiated before an inferior Court. G Such a vested right, it was held, could not be taken away ·except by an express enactment or by necessary intendment. Accordingly, it was concluded, that the earlier provision which created the right of appeal, would continue H to apply. The unamended provision was held, to govern the

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[JAGDISH SINGH KHEHAR, J.]

exercise and enforcement of the right of an appeal. It is thus A concluded, that there could be no question of the amended provision divesting the aggrieved party of its right to appeal.

15Copy pinpoint15. Eventually, the above proposition of law, according to learned counsel, came to be crystallized by the B Constitution Bench judgment in Garikapati Veeraya v. N. Subbiah Choudhary, AIR 1957 SC 540, wherein this Court recorded its conclusions in paragraph 23, which is being extracted hereunder:- c "23. From the decisions cited above the following principle clea(ly emerge :

(i) That the lepal pursuit of a remedy, suit. appeal and second appeal are really but steps in a series of 0 proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.

(ii) The right of appeal is not a mere matter of procedure but is a substantive right. E (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties there to till the rest __Qf the career of the suit. F (iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis c~mmences and although it may be· actually exercised when the adverse judgment is pronounced such right is to be G governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. H

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A (v) This vested right of appeal can be taken away only by a subsequent enactment. if it so provides expressly or by necessary intendment and not otherwise."

B (emphasis is ours)

The aforesaid conclusions, came to be applied in Garikapati Veeraya's case (supra), as is apparent from an ' of the judgment, which is being reproduced extract c hereunder:- ·

"24. In the case before us the suit was instituted on April 22, 1949, and on the principles established by the decisions referred to above the right of appeal vested in the parties thereto at that date and is to be governed D by the law as it prevailed on that date, that is to say, on that date the parties acquired the right, if unsuccessful, to go up in appeal from the sub-court to the High Court and from tlie High Court to the Federal E Court under the Federal Court (Enlargement of Jurisdiction) Act, 1947 read with Cl. 39 of the Letters Patent and Ss. 109 and 110 of the Code of Civil Procedure provided the conditions thereof were satisfied. The question for our consideration is whether F that right has been taken away expressly or by necessary intendment by any subsequent enactment. That respondents to the application maintain that it has been so taken away by the provisions of our Constitution." G In continuation with the conclusions drawn hereinabove, learned counsel for the appellant placed reliance on Jose Da Costa v. Bascora Sadasiva Sinai Narcornim, (1976) 2 sec 917, specially, the following observations recorded H therein:-

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[JAGDISH SINGH KHEHAR, J.]

"31. Before ascertaining the effect of the enactments aforesaid passed by the Central Legislature on pending suits or appeals, it would be appropriate to bear in mind two well-established principles. The first is that "while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible. have retrospective effect attributed to them. provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment" (see C Delhi Cloth and General Mills Co. Ltd. v. Income- tax Commissioner, AIR 1927 PC 242.

The second is that a right of appeal being a substantive right the institution of a suit carries with it the implication · D that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. There are two exceptions to the application of this rule. viz. (1) E when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect and (2) when the court to which appeal lay at the commencement of the suit stands abolished (see Garikapatti Veeraya v. N. Subbiah Chaudhry, AIR 1957 F SC 540, and Colonial Sugar Refining Co. Ltd. v. Irving, 1905 AC 369.

32. In the light of the above principles, these points arise for consideration: Are the provisions of the Portuguese Civil Code relating to reclamacao merely G matters of procedure? Or, do they create or affect vested rights and remedies? That is to say, does a reclamacao have all the attributes of a substantive right of appeal existing at the commencement of the suit? H

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A Did the superior Court of Appeal at Lisbon stand abolished as an appellate forum in relation to Goa, Daman and Diu from December 20, 1962? If so, what is its effect on the right of appeal given by Articles 677 and 722 of the Portuguese Civil Code and their B application to the present case? Was the Portuguese Supreme Court at Lisbon succeeded by the Supreme Court of India for the purpose of the aforesaid Articles 677 and 722 of the Portuguese Code? If so, did this position hold good after June 15, 1966? Does the c Central Act 30 of 1965 read with Notification No. S.O. 1597, issued thereunder, expressly or impliedly, make inapplicable the provisions of the Portuguese Civil Code in the matter of reclamacao in respect of a decision or D. Judgment rendered by the Court of Judicial Commissioner after June 15, 1966? That is to say, have the rights, remedies or obligations arising out of the Portuguese Law relating to reclamacao been saved by any of the Clauses (a), (b) or (c) of the first Proviso to E Section 4(1) of Act 30 of 1966?

33. It may be noted that while a right of appeal from court to court isa substantive right which under the then law, exists on and from the date of the institution of the suit, the same cannot be said with regard to reclamacao. The provisions of the Portuguese Civil Code relating to reclamacao lay down only special / rules of procedure which have to be gone through before a litigant is entitled to raise in appeal a material point left undecided by the lower court. The object of requiring a party aggrieved by a 'nullity' is to save the time of the appellate Court by precluding a party to reagitate in appeal pleas that had been left undecided by the lower court. It also minimizes the necessity of remands to the lower court for trial of particular issues

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[JAGDISH SINGH KHEHAR, J.]

and thus shortens litigation. The requirement or obligation to file a reclamacao is not an obligation in esse or/and from the institution of the suit. Nor is the procedural right to file reclamacao-if at all it can be called a 'right'- a vested right existing from the date of the suit. The filing of a reclamacao is dependent upon the happening of an uncertain event. It arises only when a Judgment suffering from a 'nullity' is passed. Such a contingency may or may not arise. On the other hand in the case of a suit it can be predicated that it would normally result in a decree entitling the aggrieved party to have the suit reheard and redecided in a higher forum by filing an appeal provided of course such a right is available under the law prevailing at the institution of the suit. D

34. In the present case, the Judgment of the Additional Judicial Commissioner in which the alleged "nullity" or "omission to adjudicate" on the point of prescription occurs was delivered on January 20, 1968, that is, long after the extension of Articles 132, 133 and 134 of the E Constitution, rules framed under Article 145 of the Constitution and Sections 109 and 116 of the Code of Civil Procedure to Goa, Daman and Diu. The procedural provisions of the Portuguese Code relating F to reclamacao, and appeal from a decision on reclamacao, from the High Court in Goa, Daman and Diu stood repealed and superseded by the extended Indian laws when the Judgment now under appeal was rendered." G On the instant proposition, learned counsel for the appellant last of all, placed reliance on Shyam Sunder v. Ram Kumar, (2001) 8 SCC 24, wherein after relying on the conclusions drawn by this Court in Dayawati v. lnderjit, AIR H

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"25. In Dayawati v. lnderjit, AIR 1966 SC 1423, it is held thus: c "10. Now as a general proposition, it may be admitted that ordinarily a court of appeal cannot take into account a new law., brought into existence after the judgment appealed from has been rendered, because the rights of the litigants in an appeal are determined under the law in force at the date of the suit. Even before the days of Coke whose maxim - a new law ought to be prospective, not retrospective in its operation - is oft- quoted, courts have looked with disfavour upon laws which take away vested rights or affect pending cases. Matters of procedure are, however, different and the law affecting procedure is always retrospective. But is does not mean that there is an absolute rule of inviolability of substantive rights. If the new law speaks in language, which, expressly or by clear .intendment, takes in even pending matters, the court of trial, as well as the court of appeal must have regard to an intention so expressed, and the court of appeal may give effect to such a law even after the judgment of the court of first instance."

26. In Hitendra Vishnu Tahkur v. state of Maharashtra, (1994) 4 SCC 602, this Court laid down the ambit and scope of an amending act and its retrospective option as follows:

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[JAGDISH SINGH KHEHAR, J.]

"(i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such as construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits.

(ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature.

(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law. o (iv) a procedural statute should not generally speaking be applied retrospective where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. E

(v) a statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation unless otherwise provided, either expressly or by necessary implication." F

27. In K.S. P"aripoornan v. State of Kerala, (1994) 5 sec 593, this ~ourt while considering the effect of amendment in the Land Acquisition Act in pending proceedings held thus: G "67. In the instant case we are concerned with the application of the provisions of sub-section (1-A) of Section 23 as introduced by the Amending Act to acquisition proceedings which were pending on the date of commencement of the Amending act. In relation H

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A to pending proceedings, the approach of the courts in England is that the same are unaffected by the changes in the law so far as they relate to the determination of the substantive rights and in the absence of a clear indication of a contrary intention in an amending B enactment, the substantive rights of the parties to an action fall to the determined by the law as it existed when the action was commenced and this is so whether the law is change before the hearing of the case at the first instance or while an appeal is pending (See c Halsbury's Laws of England, 4th Edn., Vol. 44, para 922)".

28. From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a fresh legislation. such legislation does not effect the substantive rights of the parties on the date of suit or adjudication of suit unless such a legislation is retrospective and a court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights of the parties in 1an appeal are determined under the law in force on the date of the suit. However, the position in law would be different in the matters which relate to procedural law but so far as substantive rights of parties are concerned they remain unaffected by the am~ndment in the enactment. We are. therefore. of the view that where a repeal of provisions of an enactment is followed by fresh legislation by an amending Act. such legislation is prospective in operation and does not effect substantive or vested rights of the parties unless made retrospective either expressly or by necessarv intendment. We are further of the view that there is a presumption against the retrospective operation of a statue and further a statute

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[JAGDISH SINGH KHEHflR, J.]

is not to be construed to have a greater retrospective A operation than its language renders necessary, but an amending act which affects the procedure is presumed to be retrospective. unless amending act provides otherwise. We have carefully looked into the new substituted section 15 brought in the parent Act by the B Amendment Act, 1995 but do not find it either expressly or by necessary implication retrospective in operation which may affect the rights of the parties on the date of adjudication of suit and the same is required to be taken into consideration by the appellate Court. In C Shanti Devi v. Hukum Chand, (1996) 5 SCC 768, this Court had occasion to interpret the substituted section 15 with which we are concerned and held that on a plain reading of section 15, it is clear that it has been 0 introduced prospectively and there is no question of such section affecting in any manner the judgment and decree passed in the suit for pre-emption affirmed by the High Court in the second appeal. We are respectfully in agreement with the view expressed in E the said decision and hold that the substituted Section 15 in the absence of anything in it to show that it is retrospective. does not effect the right of the parties which accrued to them on the date of suit or on the date of passing of the decree by the Court of first instance. F We are also of the view that present appeals are unaffected by change in law insofar it related to determination. of the substantive rights of the parties and the same are required to be decided in light of law of pre-emption as it existed on the date of passing of G the decree."

(emphasis is ours)

16Copy pinpoint16. Learned counsel for the appellant, however pointed H

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A out, that the conclusions drawn by this Court, on the issue of prospectivity and retrospectivity, with reference to substantive rights and procedural provisions, fully support the appellants' prayers in the instant appeal, for the simple reason, that the amendment to Section 15Z of the SEBI Act B does not deprive the appellant, of the right to second appeal. In this behalf it was submitted, that the right of first appeal is before the Securities Appellate Tribunal, whereas, the right to second appeal was before the High Court, prior to the amendment under consideration. Consequent upon the amendment of Section 15Z (with effect from 29.10.2002), the right to second appeal, which earlier lay before the High Court, has now been vested with the Supreme Court. According to learned counsel the right of second appeal, which was a vested substantive right, remains preserved, even after the amendment. It was therefore pointed out, that only the forum of the second appeal, had been altered, from the High Court (where it lay, under the unamended provision) to the Supreme·court of E India (where it now lies, after the amendment). It was contended, that whilst the right of second appeal was a vested substantive right; the forum before which an appeal lies had a procedural perspective, and had no similar connotation. F

17Copy pinpoint17. In support of his above submission, learned counsel for the appellant, in the first instance, placed reliance on Maria Cristina De Souza Sadder v. Amria Zurana Pereira Pinto, (1979) 1 SCC 92 and invited our attention to the G following observations recorded therein:-

"5. On the question as to where the appeal could be lodged we are clearly of the view that the forum was governed by the provisions of the Goa, Daman and Diu (Extension of Code of Civil Procedure, 1908 and H

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[JAGDISH SINGH KHEHAR, J.]

Arbitration Act, 1940) Act, 1965 (Central Act XXX of A 1965) read with the provisions of the Goa, Daman & Diu Civil Court Act, 1965 (Goa Act XVI of 1965) both of which came·into force simultaneously on June 15, 1966 and the appeal was required to be filed in the Judicial Commissioner's Court. Under the Central Act B XXX of 1965 with effect from June 15, 1966 the provisions of the Indian Civil Procedure Code were extended to the Union Territories of Goa, Daman and Diu and the corresponding provisions of the Portuguese Code were repealed while under the Goa Act XVI of C 1965 the instant suit which was pending before the Comarca Court at Margao was continued and decreed by corresponding Court of the Senior Civil Judge, who ultimately decreed it on March 8, 1968. Under the 0 Indian Civil Procedure Code read with Section 22 of the Goa Act since the property involved in the suit was of the value exceeding Rs.10,000/- the appeal clearly lay to the Judicial Commissioner's Court. The contention that since the right of appeal had been conferred by E Portuguese Code, the forum where it could be lodged was also governed by the Portuguese Code cannot be accepted. It is no doubt well-settled that the right of appeal is a substantive right and it gets vested in a litigant no sooner the lis is commenced in the Court of F the first instance. and such right or any remedy in respect thereof will not be affected by any repeal of the enactment conferring such right unless the repealing enactment either expressly or by necessary implication takes away such right or remedy in respect thereof. This G position has been made clear by Clauses (bl and (c) of the proviso to Section 4 of the Central Act XXX of 1965 which substantially correspond to Clauses (c) and (e) of Section 6 of the General Clauses Act. 1897. This position has also been settled by the decisions of the H

30 SUPREME COURT REPORTS [2015] 3 S.C.R.

A Privy Council and this Court (vide the Colonial Sugar Refining Company Ltd. v. Irving, 1905 AC 369 and . Garikapatti Veeraya v. N. Subbiah Choudhury, (1957) 1 SCR 488, but the forum where such appeal can be lodged is indubitably a procedural matter and. therefore. B the appeal. ·the right to which has arisen under a repealed the Act. will have to be lodged in a forum provided for by the repealing Act. That the forum of appeal. and also the limitation for it. are matters pertaining to procedural law will be clear from the c following passage appearing at page 462 of Salmond's Jurisprudence (12th Edn.):

Whether I have a right to recover certain property is a question of substantive law. for the determination and the protection of such rights are among the ends of the administration of justice: but in what courts and within what time I must institute proceeding's are questions of procedural law. for they relate merely to the modes in which the courts fulfill their functions.

It is true that under Clause (c) of the proviso to Section 4 of Central Act XXX of 1965 (which corresponds to Section 6(e) of the General Clauses Act, F 1897) it is provided that a remedy or legal proceeding in respect of a vested right like a right to an appeal may be instituted, continued or enforced as if this Act (meaning the repealing Act) had not been passed. But this provision merely saves the remedy or legal G proceeding in respect of such vested right which it is open to the litigant to adopt notwithstanding the repeal but this prpvision has nothing to do with the forum where the remedy or· legal proceeding has to be pursued. If the repealing Act provides new forum where H

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[JAGDISH SINGH KHEHAR, J.]

the remedy or the legal proceeding in respect of such A vested right can be pursued after the repeal, the forum must be as provided in the repealing Act. We may point, out that such a view of Section 6(e) of the General Clauses Act, .1897 has been taken by the Rajasthan High Court in the case of Purshotam Singh v. Narain B Singh and State of Rajasthan, AIR 1955 Raj. 203. It is thus clear that under the repealing enactment (Act XXX of 1965) read with Goa Enactment (Act XVI of 1965) the appeal lay to the judicial Commissioner's Court and the same was accordingly filed in the proper Court." C

On the same proposition, and to the same effect, learned counsel placed reliance on Hitendra Vishnu Thakur v. State of Maharashtra, (1994) 4 SCC 602, and invited our attention to the following conclusions D recorded therein:-

"25. We have already noticed that Clause (b) of Sub- section (4) of Section 20 was amended by the Amendment Act No. 43 of 1993 with effect from E 22.⁵.1993. Besides, reducing the maximum period during which an accused under TADA could be kept in custody pending investigation from one year to 180 days, the Amendment Act also introduced Clause (bb) to Sub-section (4) of Section 20 enabling the F prosecution to seek extension of time for completion of the investigation. Does the Amendment Act No. 43 of 1993 have retrospective operation and does the amendment apply to the cases which were pending investigation on the date when the Amendment Act G came into force? There may be cases where on 22.⁵.1993. the period of 180 days had already expired but the period of one year was not yet over. In such a case. the argument of learned Counsel for the H

32 SUPREME COURT REPORTS (2015] 3 S.C.R.

A appellant is that the Act operates retrospectively and applies to pending cases and therefore the accused should be forthwith released on bail if he-is willing to be so released and is prepared to furnish the bail bonds as directed by the court. an argument which is seriously B contested by the respondents.

26. The Designated Court has held that the amendment would operate retrospectively and would apply to the pending cases in which investigation was c not complete on the date on _which the Amendment Act came into force and the challan had not till then been filed in the court. From the law settled by this Court in various· cases, the illustrative though not exhaustive, principles which emerge with regard to the ambit and scope of an Amending Act and its retrospective operation may be culled out as follows:

(i) A statute which affects substantive rights is presumed to be prospective in operation' unless. rnade retrospective, either expressly or by necessary ' intendment, whereas a Statute which merely affects procedure, unless such a construction is texturally impossible, is presumed to be retrospective in its application, should not be given an extended meaning, and should be strictly confined to its clearly defined limits. '

(ii) Law relating to forum and limitation is procedural in nature. whereas law relating to right of action and right of appeal. even though remedial. is substantive in nature.

(iii) Everv litigant has a vested right in substantive law. but no such right exists in procedural law. H (iv) A procedural Statute should not generally speaking

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