Mohammed Haneefa Vs Saudath Ashraf

The 3^rd respondent before the learned Single Judge, who is one of the voters of the Grama Panchayat, is in appeal, challenging the judgment of the learned Single Judge accepting the retrospective operation of an amendment brought out under the Kerala Panchayat Raj Act, 1994 (hereinafter referred to as “the Act”) and thus setting at naught the order of disqualification passed by the 2^nd respondent, the State Election Commission of Kerala.

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The undisputed facts are that the 1^st respondent herein is an

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elected member of Ward No.V of the Varantharappilly Grama Panchayat and is the Convenor of the Grama Sabha as contemplated under the Act. The 1^st respondent was elected in the year 2010 and is a member of the Grama Panchayat, constituted on 01.11.2010. The 1^st respondent, being the Convenor of the Grama Sabha of his Ward and having failed to convene meeting of the Grama Sabha for two consecutive periods after January, 2011 attracted upon himself a disqualification under Section 35(1)(p) of the Act. The appellant approached the 2^nd respondent State

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Election Commission, who, by Exhibit P3, found the 1^st respondent to be disqualified from continuing as member of the respective ward of the Varantharappilly Grama Panchayat along with certain other members. Since majority of the members of the Panchayat stood disqualified, on similar grounds, the Government was directed to issue a notification dissolving the Panchayat and to inform the same to the Commission to facilitate the reconstitution of the dissolved Panchayat. Subsequently, an Ordinance was brought in, with express retrospective effect from 1.11.2010, the date of constitution of majority of the Panchayats, now existing in the State of Kerala, substituting the words “twice” in Section 35(1)(p) as “thrice”. Hence, the disqualification would apply only if the omission was to convene “three” consecutive Grama Sabhas and not “two”, thus presumably removing disability of the 1^st respondent and others similarly placed. That there was failure to convene two consecutive Grama Sabhas, is undisputed.

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The questions of law raised, on the Ordinance being brought into force, was whether it had retrospective effect and the retro activity could upset the final orders passed by the Election Commission especially in the absence of a validation

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clause; which would disable the 1^st respondent, who already suffered an order of disqualification by the Election Commission, from claiming the benefit of such retrospective operation of the amendment. The learned Single Judge, relying on the well heeled principle that the Legislature has the power to remove the substratum of any decision prospectively and retrospectively; in the latter event by express words or by necessary implication, found that the disqualification no longer survives and the Election Commission's order cannot be sustained. By the retrospective amendment the law that existed with effect from 1.11.2010 provides for disqualification only if omission to convene a Grama Sabha has occurred “thrice” consecutively and any order of disqualification made on the strength of the unamended provision could not be sustained.

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The retro activity of the amendment, by which the disqualification being attracted on the consecutive failure of not having convened Grama Sabha “twice” having been substituted to “thrice” calls for no adjudication. The intention of the Legislature is clear by the express words used in the amendment making it retrospective from 1.11.2010. This would place the issues arising in the matter in a very narrow compass of the

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nature and effect of the order passed by the State Election Commission, the consequence of a retrospective amendment on such order and the need for the amendment to be validated by a suitable validation clause.

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The learned Senior Counsel Sri.Ranjith Thampan, appearing for the appellant, would place before us the decisions reported in Dafedar Niranjan Singh & another v. Custodian, Evacuee Property (Pb) and another [AIR 1961 SC 1425], Sharif Ahmad and Others v. The Regional Transport Authority, Meerut and Others [AIR 1978 SC 209] and K.P.Mohammed v. Madhavi Amma [1963 KLT 688] to contend that the orders passed by the State Election Commission are final and to upset the same, necessarily the retrospective amendment should contain a validation clause; in the absence of which, as in the instant case, the same cannot apply to persons who already stood disqualified by the State Election Commission. This is especially so, since the provision, i.e: Section 36 of the Act, specifically say that the orders passed thereon shall be final and there is no appeal or revision provided in the Act against such orders. True, the powers of judicial review under Article 226 cannot be curtailed. But, as is trite, that does not militate against

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the finality of the order. All Party Hill Leaders Conference, Shillong Vs. Captain W.A. Sangma [(1977) 4 SCC 161] was urged to contend that the order of the State Election Commission is a judicial pronouncement. The learned counsel would also place reliance on P.Venugopal v. Union of India [(2008) 5 SCC 1] to contend that as disclosed from the facts of the said decision, in the present case also the legislation is actuated by motive only of protecting certain people.

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Per contra, the learned Advocate General would

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place reliance on the decision in Bakhtawar Trust v. M.D.Narayan [(2003) 5 SCC 298] and contend that the power to legislate retrospectively has been held to be valid by a catena of decisions of the Supreme Court. A retrospective amendment does not, on any count, lead to an inference that the legislature has gone against the judicial pronouncement, but only indicates that the essence, of separation of powers, inbuilt in the three pillars of democracy, being Legislature, Judiciary and Executive, is that the legislature would be competent to remove the disability or a lacuna in the law, on which a judicial pronouncement is based, and then dehors the judicial pronouncement, that would be the law of the land.

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Sri.N.Nandakumara Menon, learned Senior Counsel appearing for the 1^st respondent/writ petitioner, would place reliance on the following decisions of the Supreme Court - State of Orissa v. Bhupendra Kumar [AIR 1962 SC 945], Entertainment Tax Officer v. Ambae Picture Palace [(1994) 1 SCC 209], Bhubaneshwar Singh v. Union of India [(1994) 6 SCC 77], Indian Aluminium Co v. State of Kerala [(1996) 7 SCC 637], Meerut Development Authority v. Satbir Singh [(1996) 11 SCC 462] and Easland Combines, Coimbatore v. Collector of Central Excise Coimbatore [(2003) 3 SCC 410] , to further supplement the contention with respect to the powers of the legislature to make retrospective amendment removing the basis on which a judicial pronouncement is made. The learned Senior Counsel would further contend that Election Commission though has the trappings of a Court, cannot be considered to be “Court” as such and the orders made by such authority, by virtue of the statutory provisions, cannot by any stretch of imagination be termed as “judicial pronouncements”; the getting over of which is possible only by a validation clause. According to him, the substratum of the order of the Election Commission, being the disability on the failure to convene Grama Sabhas for two

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consecutive periods, has been removed by the amendment, substituting the word “twice” with “thrice”. The Legislature being competent to lay down the law, both prospectively and retrospectively, and the retrospectivity of such amendment being expressly stated in the Ordinance, there can be no doubt that the disability found by the State Election Commission stood effaced. He would place reliance on the decision in State of Gujarat v. Gujarat Revenue Tribunal Bar Association [(2012) 10 SCC 353] to buttress his contention that the State Election Commission is not a Court.

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Intention of the Legislature:

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Before we delve into the core issue we have to deal with the issue raised on the alleged intention of the legislature. The decision of the Hon'ble Supreme Court in P.Venugopal ( supra ) was also pressed into service. That was a case in which the Director of the All India Institute of Medical Sciences having been removed from service, challenged it successfully before the Delhi High Court. Subsequently an amendment was brought into the Act, which regulated the services of the employees and functionaries under the Institute, deeming a person who had

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attained the age of superannuation on the date of passing of the Amendment Act to have demitted his office only subject to his claim to compensation for three months pay and allowances. The major controversy in the said case was settled on the distinction drawn between a 'tenure appointment' and an 'appointment wherein the age of superannuation is relevant'. The Amendment Act was struck down inter alia on the finding that the amendment made was a “one-man” legislation, affecting only the appellant and not any other person or functionary working in the institute; presently or even in future.

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We have to notice that the facts in the instant case

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are not at all similar to the cited decision. Here the amendment was not to help any single individual; but a group of individuals, which according to the appellant, brings in the same effect. However we have to notice that the specific case of the disqualified member is that the grama sabhas were not convened since the model code of conduct declared by the Election Commission of India was in force; prior to the elections to the Legislative Assembly, from 01-03-2011 to 15-05-2011. Whether that be a valid reason or not the law makers took that into consideration and also the fact that the hatchet of

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dissolution was looming over the majority of Panchayaths by reason of the disqualification attracted by reason of this misapprehension. The legislative motives, on the grounds of it being malafide or ulterior, cannot be a basis or ground for challenge of a legislation made validly and within the competence of the legislature as has been held in K. Nagaraj Vs State of Andhra Pradesh [1985 (1) SCC 523] and reiterated in G.C. Kanungo Vs State Of Orissa [1995 (5) SCC 96] and State Bank's Staff Union (Madras Circle) v. Union of India [(2005) 7 SCC 584] . ' The motive of the legislature in passing a statute is beyond the scrutiny of Courts ' ( sic ). [T.Venkata Reddy v. State of A.P. (1985) 3 SCC 198].

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Going by the plain words employed in the Ordinance amending Section 35(1)(p) and substituting the words “twice” with “thrice”; and the express retro activity given with effect from 1.11.2010, we need not labour much on the intention of the legislature. There can be no dispute that the Legislature intended that the disqualification should arise only on three consecutive failures to convene a Grama Sabha and the Legislature was competent to legislate on this aspect. The Kerala Panchayat Raj Act, 1994 is an enactment which the State

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Legislature has enacted under item No. 5 of List II of the Seventh Schedule to the Constitution of India. The general presumption that every statute is prima facie prospective is qualified with the rider that the Legislature can, by express words or necessary intendment, make the statute retrospective in operation. The dominant intention of the Legislature being clearly and doubtlessly spelt out by the express words employed, the Ordinance is given retrospective operation from 1.11.2010. Neither was it argued before us that the retro activity calls for an adjudication looking at the intendment. What is canvassed before us in appeal from the impugned judgment, by the learned Senior Counsel for the appellant, is that the 1^st respondent has been disqualified by Exhibit P3 order of the Election Commission, which has acquired finality, and to get over the same, necessarily there should be a validation clause.

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Retrospective Amendments:

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The power of the legislature to bring in retrospective amendment and neutralize the effect of earlier decisions of the Court has been succinctly laid down in Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality [1969

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(2) SCC 283] :

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“If the Legislature has the power over the subject-matter and competence to make a valid law, it can at any time make such a valid law and make it retrospectively so as to bind even past transactions. The validity of a Validating Law, therefore, depends upon whether the Legislature possesses the competence which it claims over the subject-matter and whether in making the validation it removes the defect which the courts had found in the existing law and makes adequate provisions in the Validating Law for a valid imposition of the tax”.

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The powers of the Legislature to make a retrospective amendment, hence, is well established and is no longer res integra . It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations [ Zile Singh v. State of Haryana, (2004) 8 SCC 1]. The power of the Legislature to set at naught or render ineffective a judicial pronouncement by making a validating Act is fairly well trenched. The validity of a statute can be challenged on the ground that it is ultra vires the legislative

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competence of the Legislature which enacted it or is violative of any provision of the Constitution. The plenary powers of the Legislature to make valid legislation within the fields assigned to it, subject to constitutional limitations, prospectively as well as retrospectively, is well settled by the various decisions cited on behalf of the State and the 1^st respondent; noticed above. In the event of there being a judicial pronouncement, finding an executive act to be invalid for reason of there being no statutory sanction, then, if the lacuna is subsequently supplied or the disability removed by a valid legislation, having retrospective effect by express words or by necessary implication, then the same can be applied to validate even prior actions of the executive; if and only if there is a validation clause.

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The decisions cited by the learned Advocate General and the learned Senior Counsel for the 1^st respondent all point to the principle that, the declaration of an executive action to be ineffective or invalid, can be overcome validly by fundamentally altering the law on which the decision or declaration is based and by providing a validation clause. On such amendment removing the substratum, on the basis of which the decision is made and if on a fresh consideration by

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virtue of the law so brought in retrospectively no Court could validly hold the action to be invalid, then the effect of such declaration or decision would be set at naught. This is not to say that the Legislature has the power to merely set at naught a judicial decision or to sit in appeal over such a decision. But removing the infirmity upon which a decision is based and providing a legal basis on which, the action could be sustained and the power to validate earlier actions invalidated for reasons of absence of sanction of law; are well within the powers available to the legislature.

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We are, however, faced with the question as to whether the order of the Election Commission under Section 36 of the Act would amount to a judicial order and whether the Election Commission would be a “Court” and whether validation is required to get over the order, or under Article 226 is the High Court competent to look into the retrospective amendment made and proceed accordingly to set at naught the decision of the Election Commission; even in the absence of a validation clause. There is also the incidental question as to whether the disqualification automatically takes effect from the date of omission under Section 35(1)(p) or has to be so ordered by the

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State Election Commission under Section 36 of the Kerala Panchayat Raj Act.

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When does the disqualification come into effect?

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Though the learned Senior Counsel Sri.Ranjit Thampan appearing for the appellant, initially contended that the said disqualification is one which automatically operates on such failure, by rigour of the statute, it was fairly conceded to be not so, on the learned Senior Counsel Sri.N.Nandakumara Menon pointing out that Section 35 starts with “Subject to the provisions of Section 36 or 102 ...”. The disqualification under Section 35 is subject to Section 36; the provision which confers power on the State Election Commission to conduct an enquiry and pass an order of disqualification. Necessarily it is not by automatic operation of statute, but by an order passed under Section 36 that the disqualification takes effect.

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Consumer Education and Research Society v. Union of India [(2009) 9 SCC 648] dealt with the challenge of the inclusion of certain “offices of profit”, with retrospective effect, thus allegedly nullifying disqualification incurred on holding such offices of profit. The ancillary question which was

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dealt with was as to whether the disqualification incurred on account of holding offices of profit, creates a vacancy of a seat consequent to such disqualification; automatically, from the date of incurring of such disqualification or when the President finds the disqualification under Article 103(1). The controversy was triggered when a Member of the Rajya Sabha was appointed as Chairperson of the Uttar Pradesh Film Development Council and on a complaint made, that, this amounted to holding of an “office of profit”, a Presidential Order was passed under Article 103(1) of the Constitution, disqualifying the said Member. The Presidential Order was challenged unsuccessfully in Jaya Bachchan v. Union of India [(2006) 5 SCC 266]. The Parliament (Prevention of Disqualification) Amendment Bill, 2006 was, therefore, introduced adding 'offices' to the definition of “offices of profit” excluded for the purpose of disqualification. By Section 3, 55 'offices' in statutory and non-statutory bodies were deemed to have been inserted with effect from 4.4.1959. Section 4 of the Amendment Act also contained “special provisions as to validation and other matters”, as has been noticed in paragraph 18 of the said decision. It was categorically held that a question as to whether a Member of either House has become subject to

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any of the disqualifications under clause (1) of Article 102 has to be decided by the President and the question would be a mixed question of fact and law. It was also held that the seat occupied by an incumbent Member would fall vacant only after such a decision is rendered by the President (Paras 55 and 60). The power of the Legislature to remove the disqualification retrospectively was upheld by the Supreme Court relying on Kanta Kathuria v. Manak chand Surana [(1959) 3 SCC 268], Indira Nehru Gandhi v. Raj Narain [1975 Supp SCC 1] and Nongthombam Ibomcha Singh v. Leisangthem Chandramani Singh [(1976) 4 SCC 291]. The function of the President under Article 103(1) is in the nature of an adjudicatory function, which is to be exercised in the event of a dispute, giving rise to the question whether a Member of either House of Parliament has become subject to any of the disqualifications mentioned in clause (1) of Article 102.

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As has been noticed, Article 243-K confers the State Election Commission with similar powers and clause (4) of Article 243-K clothe the Legislature of a State with the power to make provision with respect to all matters relating to or in connection with the election to the Panchayats. Section 36 of the

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Act is one of such provisions conferring power on the State Election Commission to adjudicate upon the disqualifications of a Member of the Panchayat. Disqualification under Section 35; drawing strength from the decisions referred to above, as also the express words subjecting Section 35 to Section 36; would come into effect only on an order passed by the State Election Commission, under Section 36.

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Powers of the State Election Commission and whether it is a “Court” and whether the orders passed are judicial orders?

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We have to now look at the powers of the Election

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Commission and the status with which it is conferred. The State Election Commission, who has passed Exhibit P3 order , is a constitutionally appointed authority under Article 243-K. The status, power and role of the State Election Commission is akin to that of an Election Commission appointed under Article 324 of the Constitution, since both have been conferred with the power of superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to the respective law making bodies. The Election Commissions appointed under Article 324 and Article 243-K, are

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both conferred powers to adjudicate upon disputes touching upon the election and the continuance of members in the elected bodies. The Election Commission, thus, is a constitutional functionary and the breadth amplitude and depth of Article 324 has been dealt with succinctly by a Constitution Bench in Mohinder Singh Gill v. Chief Election Commissioner [(1978) 1 SCC 405]. Article 324 was held to be a plenary provision vesting the whole responsibility for conduct of National and State elections on the Election Commission, and, therefore, conferring the necessary powers to discharge that function, but subject to competent legislation enacted as visualized in Article 327. It was held:-

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“And the supremacy of valid law over the Commission argues itself. No one is an imperium in imperio in our constitutional order. It is reasonable to hold that the Commissioner cannot defy the law armed by Article 324. Likewise, his functions are subject to the norms of fairness and he cannot act arbitrarily. Unchecked power is alien to our system”.(Para 38).

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While holding that the Commission is not a law unto itself, the plenary power, which enables to act even in the absence of specific legislation though not contrary to valid legislation, was affirmed.

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It is the power that is exercised by the President under Article 103(2) of the Constitution, in consultation with the Election Commission, with respect to disqualification of Members of either House of the Parliament, that, the State Election Commission exercise under Section 36 of the Kerala Panchayat Raj Act. The provisions of the Kerala Panchayat Raj Act are statutory provisions made under sub-clause (4) of Article 243-K, with respect to matters relating to or in connection with elections to the Panchayats.

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The 1^st respondent relies on Gujarat Revenue Tribunal Bar Association ( supra ) to draw a distinction between Courts and Tribunals and a further distinction in so far as an order passed by a State Election Commission. There the challenge was with respect to the striking down of a rule which conferred power upon the State Government to appoint a Government Secretary as President of the Revenue Tribunal. That was the context in which the distinction with respect to “Court” and “Tribunal” was considered and though it was held that in all cases it cannot be said that the Tribunals are exercising judicial functions, examining the power conferred on the Revenue Tribunal and the enactments which would come under the

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scrutiny of the Tribunal, it was categorically held that the proceedings before such Tribunal shall be deemed to be judicial proceeding. In that view of the matter, the judgment of the High Court, annulling the appointment of the Secretary to Government as Chairman of the Tribunal, was upheld. We are not at all treading on the well paved pathways of the powers of the Legislature to render ineffective the pronouncement of a Court by removing or altering substantially the fundamental basis on which such order was passed. In conducting such exercise, the power of the Legislature to make retrospective amendment by express words or necessary implication also does not call for any elaboration. Nor is there scope for ventilating on the powers of the Legislature to validate acts of the executive, despite such judicial pronouncements striking them down. We are primarily concerned with the question whether the order of the State Election Commission impugned in the writ petition was one in the nature of a judicial proceeding and whether the benefit of the subsequent retrospective amendment would enure to the 1^st respondent only on a validation clause being provided.

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All Party Hill Leaders' Conference, Shillong v.

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Captain W.A.Sangma and Others [(1977) 4 SCC 161] placed

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before us by the learned Senior Counsel for the appellant is apposite in so far as it considers the nature of an order passed by the Election Commission under the Election Symbols (Reservation and Allotment) Order, 1968 (hereinafter referred to as the “Symbols Order”). The brief facts are that the appellant, a political party, in the composite State of Assam, suffered a split, by which a faction of the party joined the Indian National Congress and informed the Election Commission of the dissolution of the party along with a request to withdraw the election symbol reserved for the dissolved party. The faction which sought to retain the character of the original party asserted their right to membership in the party which, according to them, was still in existence and also the party's symbol. The Election Commission, after hearing the parties, passed an order under the Symbols Order, finding the dissolution of the party, deleting the party and its symbol from the list of recognized State parties and directing that the said symbol shall not be included as a free symbol in respect of the States of Meghalaya and Assam. An appeal was brought before the Supreme Court under Article 136 of the Constitution and a preliminary objection was raised on the ground of the Election Commission's order not

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being an order of a Tribunal as understood under Article 136 and, hence, was incapable of being challenged in Special Leave. The learned Judges of the Supreme Court having examined the several tests laid down in a conspectus of the decisions of the Apex Court as to the determination of a particular body or authority as a Tribunal; within the ambit of Article 136, the unfailing test was laid down as being the examination of whether the Tribunal was constituted by the State and invested with a function of some judicial power of the State. Associated Cement Companies Ltd. v. P.N.Sharma (AIR 1965 SC 1595) was extracted:-

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“As in the case of courts, so in the case of tribunals, it is the State's inherent judicial power which has been transferred and by virtue of the said power, it is the State's inherent judicial function which they discharge. Judicial functions and judicial powers are one of the essential attributes of a sovereign State, and on considerations of policy, the State transfers its judicial functions and powers mainly to the courts established by the Constitution; but that does not affect the competence of the State, by appropriate measures, to transfer a part of its judicial powers and functions to tribunals by entrusting to them the task of adjudicating upon special matters and disputes between parties”.

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Importing the said reasoning, it was held that the Election Commission is a creature of the Constitution appointed under Article 324 by the President for the specific purposes referred to in clause (1) of Article 324. The conduct of elections; incidentally and inseparably requiring decisions to be made with respect to various issues arising among the candidates and the political parties; resolution of such disputes was held to be one of the main functions of the Election Commission. Under Article 327 Parliament is empowered to make provisions with respect to all matters relating to or in connection with elections and it has been so done by The Representation of the People Act, 1951 which was found to contain no express provision with respect to symbols. However, noticing Section 169 of The Representation of the People Act, it was held that the Central Government being empowered to make rules and having promulgated the Conduct of Election Rules, 1961, the Election Commission had, in exercise of the power vested in the Commission under Article 324 and Rules 5 and 10 of the Conduct of Election Rules made the Symbols Order. The order of the Election Commission impugned before the Supreme Court was one passed under the Symbols Order. The Commission having thus framed its own procedure

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drawing from the power available under Article 325 and the aforementioned Rules 5 and 10 and the exercise made thereunder being a lis between two groups, the Commission was undoubtedly held to be the specified and conclusive adjudicating authority of the lis. The powers of adjudication conferred on the Commission, which itself is a creature of the Constitution to adjudicate the disputes, was held to be judicial power of the State conferred on the Commission. It was held so in paragraph 42:-

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“Thus the position that emerges from the above discussion is that the Commission is created under the Constitution and is invested under the law with not only administrative powers but also with certain judicial power of the State, however fractional it may be. The Commission exclusively resolves disputes, inter alia, between rival parties with regard to claims for being a recognised political party for the purpose of the electoral symbol”.

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23. G.C.Kanungo v. State of Orissa [(1995) 5 SCC

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96] was a case in which the contractors had approached the Supreme Court against a State amendment brought into the Arbitration Act, 1940 retrospectively and nullifying the awards passed prior to the amendment. The contractors were first

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before the Court of Sub Judge, which appointed Arbitrators for deciding each of the issues raised by them. Subsequently, on an amendment made by the State Legislature, a Special Arbitration Tribunal was constituted and the contractors were relegated to such remedy, which amendment was unsuccessfully challenged upto the Supreme Court. Later, before the Special Arbitration Tribunal constituted by the State Government, the disputes were decided and were made “Rules of Court” by the Court of Sub Judge as provided in the amending Act. Again the same reached the Supreme Court and when one of such awards was pending execution after dismissal of a Special Leave Petition and another was pending in Special Leave Petition, a State amendment was brought, invalidating the references made to Special Arbitration Tribunal inconsistent with sub-section (1-a) inserted in Section (1-A) by the Amendment Act of 1991. Sub-section (1-a) effectively thwarted the remedy of arbitration available to the contractors.

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The want of legislative competence on the part of

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the State Legislature and the ground of the amendment being actuated by mala fides , was rejected by the Supreme Court. The principal issues considered were as to the awards of the Special Arbitration Tribunal having been made “Rules of Court” by a Sub

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Court, whether it would result in a merger making the same the decision of a “Court of law” and whether the Legislature has the power to render ineffective the earlier judicial decisions by simply declaring the said decisions invalid or not binding and whether the awards made by the Special Arbitration Tribunals are made in exercise of the judicial power of the State. Considering the question of merger, it was held that when a Special Arbitration Tribunal makes an award though it binds the parties to the dispute and their privies, the provision for making it a “Rule of Court”, was one which only facilitates recovery by way of execution. It was held that there would be no merger and the award would not be a judgment or decree in the course of exercise of ordinary civil jurisdiction of the Sub Court. The power exercised by the civil Courts in making the awards of Special Arbitration Tribunal “Rules of Court”, was found to be not in exercise of their judicial power in rendering judgments and decrees and hence was not exercise of judicial power of State vested in the civil Courts under the Constitution. It was held that when the second Amendment Act nullified “Rules of Court”, it cannot be regarded as an encroachment or transgression upon the “judicial power of the State vested in Courts” to make it

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unconstitutional. However, the Supreme Court held that the awards made by the Special Arbitration Tribunal which was sought to be nullified by the second Amendment Act were made in exercise of judicial power of the State conferred upon such Tribunals by an enactment of the State Legislature itself.

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Such judicial power having been expressly conferred

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on the Special Arbitration Tribunal, it was held so in paragraphs 23 and 24:

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“23. From what we have stated hereinbefore, it becomes obvious that the Special Arbitration Tribunals had been constituted by the State Government in accordance with the 1984 Amendment Act to adjudicate upon or decide the disputes referred to them under that Act, by making reasoned awards. The power of deciding the disputes conferred upon those Special Tribunals was not conferred upon them by the parties to the disputes. Instead such power had been conferred upon them by the State under the provisions of the 1984 Amendment Act. Such Arbitration Tribunals had to make the reasoned awards because they were enjoined to do so under that Amendment Act itself. Though the Special Arbitration Tribunals themselves are entitled under the provisions of the said Amendment Act to evolve their own procedure for conducting its proceedings, ordinary norms of judicial procedure had to be adopted by them so as to conform to the principles of natural justice being Tribunals constituted

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under a legislative enactment with power conferred upon them to adjudicate upon disputes between parties.

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24. Thus, when under the 1984 Amendment Act, the Special Arbitration Tribunals had been constituted by the State Government and were conferred by that enactment the power of adjudicating upon the disputes between parties referred to them, conforming to the normal judicial procedure and by making reasoned awards, the awards so made by Special Arbitration Tribunals, we cannot but hold (sic) are those made in exercise of State's judicial power conferred upon them under the 1984 Amendment Act for deciding the disputes between the parties by having recourse of normal judicial process”.

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By virtue of the above findings, the second Amendment Act nullifying the arbitral award made by a Tribunal constituted by a valid enactment was held to be an abuse of the power of Legislature, encroaching upon the judicial power of the State vested in the Tribunal under the Act, which created the Tribunal.

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The subtle distinction drawn by the Hon'ble Judges of the Supreme Court was that though by making an award “Rule of Court” by a civil Court, such award does not amount to a judicial order passed under the “judicial power of the State vested in Courts” ; the Special Tribunals itself being conferred with such

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judicial power by an enactment of the State Legislature, the awards made are nonetheless “judicial pronouncements” .

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State Bank's Staff Union (Madras Circle) v.

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Union of India [(2005) 7 SCC 584] dealt with a retrospective amendment made, disentitling the employees of the State Bank of India and its subsidiaries from customary bonus awarded by the Central Government Industrial Tribunal. The award of the Tribunal had been challenged by the Management before the Madras High Court and despite the amendment brought in to the State Bank Act, the writ petition was dismissed, thus making the award final. The Amendment Act specifically referred to the award passed by the Central Government Industrial Tribunal, Madras, dis-entitling every employee of the State Banks from entitlement to any bonus other than in accordance with the provisions of the Payment of Bonus Act. The Amendment Act also contained a validation clause, wherein the effect of the amendment was declared to be notwithstanding anything contained in any judgment, decree or order of any court, Tribunal or other authority and notwithstanding anything contained in the provisions of the Industrial Disputes Act. It was held that the Amendment Act brought in a curative provision by

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which the intention disclosed was not merely the overriding of a judicial decision, but rendering of such decision ineffective by enacting a valid law within the legislative field prescribed. The entitlement of bonus for the employees was amended as being only under the provisions of the Payment of Bonus Act, thus disentitling them from any customary bonus granted by way of an award or order of a Court, Tribunal or other authority; the latter part made effective by a validation provision. Having substantially and fundamentally altered the law and having changed its character restrospectively the Court upheld the enactment, even in the teeth of the award of the Industrial Tribunal to the contrary; which was effectively got over by the validation clause.

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Looking at the instant case from the perspective of

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the ratio decided in the above cases, we have to notice, the State Election Commission is conferred with the power to determine the subsequent disqualification of a Member by Section 36 of the Panchayat Raj Act, whenever such a question arises. Such decision, by sub-section (2) of Section 36, is preceded by an enquiry, wherein the State Election Commission has also been granted the powers to pass an interim order with respect to the

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continuance of a Member in office till a final decision is taken under Section 36. Sub-section (3) also mandates that any petition or reference under Section 36 shall be disposed of in accordance with the procedure applicable under the Code of Civil Procedure, 1908 when trying a suit. Section 139 of the Panchayat Raj Act deals with the powers of the State Election Commission in deciding inter alia a question under Section 36 wherein, again, for specific matters enumerated thereunder the Commission was

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clothed with the powers of a Civil Court similar to that while trying a suit under the Code of Civil Procedure. Sub-section (2) of Section 139 confers power on the Commission to require any person, including a Government official, to furnish information on matters which, in the opinion of the Commission, is relevant for the subject matter of the inquiry. Sub-section (3) also deems the State Election Commission to be a “Civil Court”, with powers also to forward to the jurisdictional Magistrate to try any case, constituting an offence under Section 175, 178, 179, 180 or 228 of the Indian Penal Code, which is committed in the view or presence of the Commission. Going by the authoritative pronouncement in G.C.Kanungo ( supra ), though the State Election Commission is not a “Court” and the proceedings

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under it is not a “judicial proceeding which the State has conferred on Courts” , it nevertheless acts in exercise of State's judicial power conferred on it under the Kerala Panchayat Raj Act, 1994 as provided under sub-clause (4) of

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Article 243-K.

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Whether the Orders passed by the State Election Commission are final?

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On the question of finality, we have already noticed the decisions placed before us by the learned Senior Counsel for the appellant. Dafedar Niranjan Singh and K.P.Mohammed ( both supra ),were urged to assert the finality of orders and the inability of retrospective amendments to take away their effect. In the former an order passed by the Custodian under an Ordinance was sought to be revised by the delegate of Custodian General, which authority itself was a creature of a later statute. Specific reference to the finality provided in the Ordinance and Act to the orders passed by the Custodian, was made by the Court to refuse retrospectivity to the later enactment; especially in the context of no appeal or revision as provided in the Ordinance having been filed and the order

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having attained finality before the amendment was brought in. The latter was a case in which a proceeding under the Kerala Buildings (Lease and Rent Control) Act, 1959 having reached before this Court, a retrospective amendment was brought, substituting a new proviso to sub-section (2) of Section 11. Though the retrospective effect of the amendment was held to be applicable for all legal purposes, the proviso not being in contemplation of the tenant at that point of time and he having raised no such ground, he was treated as having abandoned the plea available thereunder for reason only of it being not raised specifically in the appeal or revision.

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The context in which Sharif Ahmad ( supra ) came , discloses that appeals filed by the applicants, who were denied permits earlier, were allowed, granting the permit and directing the concerned authority to issue the same on condition of production of roadworthy vehicle and an affidavit as to no conviction under the Indian Penal Code having been suffered for the preceding 5 years. On a subsequent change in policy, restricting the grant of permits, the Regional Transport Authority refused to issue the permits granted by the Appellate Tribunal. The issue decided therein was that in the teeth of the specific

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grant of the permits by the Appellate Tribunal it did not lie within the powers of the Regional Transport Authority to refuse them, since he was only required to do a ministerial job of issuing a permit on paper. The grant was already made by the Appellate Tribunal and had become final. The notification subsequently issued also only limited the grant of permits and not the issuance of permits already granted or revocation of the issued permits. It was in this context that the Hon'ble Supreme Court in the said case held that the retrospective change in law could not affect the issuance of permit, since the grant had already become final. The finality of orders, as provided in the statute or acquired by passage of time, cannot be easily upset and the retro-activity of an amendment too is circumscribed by such finality.

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The State Election Commission's order passed, going by the provisions of Section 36, available in the vernacular, is final. We notice that the English version of the Act does not contain stipulation that the order passed under Section 36 is “final”. However, going by the decision of another Division Bench of this Court reported in Abdul Samad v. State of Kerala [2007

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(4) KLT 473], we look at the vernacular version to understand

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the intention of the Legislature, which provides finality to the orders passed by the State Election Commission under Section 36. Exhibit P3 is that order passed by the State Election Commission disqualifying the 1^st respondent and which, as per the provisions of the statute, is final. Having found that the orders of the State Election Commission under Section 36 of the Act acquires finality and is passed in exercise of the judicial power conferred on it by statute, we are left with the task of examining the effect of a retrospective amendment made, as in the present case.

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Whether the orders passed under S 36 of the Kerala Panchayat Raj Act, 1994 can be set at naught by a retrospective amendment and whether to have retroactive effect a validating Act is necessary?

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Evidently from the discussion above, the Legislature could only alter the law, based on which the State Election Commission had passed the orders or a judicial decision was rendered and such decision itself cannot at all be nullified or

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negated. When there is a judicial decision rendering any action taken, under a particular statute, as illegal or as not sanctioned by law, then if an amendment is brought in to provide necessary

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sanction in law; retrospectively, the absence of which is the basis of judicial decision, even then to get over the decision passed in personam ; necessarily there should be a validation clause. Similarly, when a statutory obligation is cast on a person, the failure of which will invite disqualification, as in the instant case, and a judicial decision has been taken disqualifying such person, retrospective amendment can be brought in relaxing the obligations or totally effacing the same. But, when making such amendments if the omission, which crystallized into disqualification is not sought to be validated by a specific provision; by which notwithstanding such judicial decision the amendment is deemed to have been given effect to retrospectively, such retrospective operation cannot enure to the benefit of persons who have already suffered an order of disqualification. We have already found that the disqualification as such would not be automatic on the omission to comply a statutory mandate, but it would take effect only from the date of the order passed by the State Election Commission. The 1^st respondent herein is a Member against whom such an order has been passed by the State Election Commission and his disqualification has come into effect. Inter parties there is a

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decision of a competent forum finding disqualification on the ground of the omission to comply an obligation; statutorily prescribed. Any relaxation in such obligation can only enure to the benefit of those persons who have not been disqualified by an order under Section 36. To get over an order of disqualification and to make such relaxation applicable even to persons who had already been disqualified, there has to be a provision for validating the retrospective amendment.

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We are fortified in saying so by a decision of the Supreme Court reported in National Agricultural Coop. Marketing Federation of India Ltd. v. Union of India [(2003) 5 SCC 23]. Under the Income Tax Act, 1922 exemption was granted in respect of profits and gains of business of co-operative societies including societies engaged in the marketing of the agricultural produce of its members. Section 81(i)(c) provided such exemption to “a society engaged in the marketing of the agricultural produce of its members”. Subsequently, amendment was brought in, omitting Section 81 and providing Section 80-P, wherein income deductible from the gross total income included “the marketing of the agricultural produce of its members”. Even prior to the amendment, several

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High Courts and the Supreme Court had held that the benefit of exemption was available to all co-operative societies from the village to the apex level. However, the very same view taken by this Court in CIT v. Kerala State Coop. Marketing Federation Ltd. [(1992) 193 ITR 624 (Ker.)] was reversed by the Supreme court in Assam Coop. Apex Marketing Society Ltd. v. CIT [1994 Supp 2 SCC 96] . The Supreme Court held that the phrase “produce of its members” must refer to agricultural produce actually “produced by its members”. The view expressed in Assam Coop. Apex Marketing Society Ltd. ( supra ) was reconsidered by a larger Bench in 1998 in Kerala State Coop. Marketing Federation Ltd. v. CIT [(1998) 5 SCC 48] holding that the restrictive construction in Assam Coop. Apex Marketing Society Ltd. ( supra ) was not the intention of the Legislature. Immediately thereafter, the Income Tax (Second Amendment) bill 169 of 1998 was brought in, substituting “agricultural produce of its members” with “agricultural produce grown by its members”, i.e., in effect bringing in the interpretation taken by the Supreme Court in Assam Coop. Apex Marketing Society Ltd. ( supra ) and retrospectively amending the Act. The assessee, a Co-operative Marketing Federation,

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impugned the amendment before the Delhi High Court, which writ petition was dismissed, however, recording the statement of the Solicitor General that the amendment would apply only to pending assessments. The Supreme Court upheld the power of the Legislature to make retrospective amendments and enumerated the restrictions so, in paragraphs 15, 16 and 17:

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“15. The legislative power either to introduce enactments for the first time or to amend the enacted law with retrospective effect, is not only subject to the question of competence but is also subject to several judicially recognized limitations with some of which we are at present concerned. The first is the requirement that the words used must expressly provide or clearly imply retrospective operation. The second is that the retrospectivity must be reasonable and not excessive or harsh, otherwise it runs the risk of being struck down as unconstitutional. The third is apposite where the legislation is introduced to overcome a judicial decision. Here the power cannot be used to subvert the decision without removing the statutory basis of the decision.

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16. There is no fixed formula for the expression of legislative intent to give retrospectivity to an enactment.

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“Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. Sometimes the legislature gives its own meaning and interpretation of the law under

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which tax was collected and by legislative fiat makes the new meaning binding upon courts. The legislature may follow any one method or all of them ..... ” [Shri Prithvi Cotton Mills Ltd. (supra)].

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17. A validating clause coupled with a substantive statutory change is therefore only one of the methods to leave actions unsustainable under the unamended statute, undisturbed. Consequently, the absence of a validating clause would not by itself affect the retrospective operation of the statutory provision, if such retrospectivity is otherwise apparent”.

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With respect to the effect of a judicial decision becoming final between inter parties, the Supreme Court held so in paragraph 26:

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“26. The decision is an authority for the principle that a judicial decision which has become final inter partes, cannot be set at naught by legislative action, a principle that is well entrenched. Therefore, if, as has been contended by the appellant, the High Court in 1981 had in proceedings between the appellant and the Revenue held that the appellant was entitled to the benefit of the deduction under Section 80-P(2)(a)(iii) of the Act, and the Revenue has not impugned the High Court's decision, that decision binds the parties for the assessment years in question and cannot be reopened because of the 1998 Amendment. This principle, however, does not in any way

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detract from the principle that the legislature may “cure” the statute so that it more correctly represents its intention. Such curative legislation does not in fact touch the validity of a judicial decision which may have attained finality albeit under the pre-amended law”.

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In the said decision, despite there being no validation clause, it was held that the amendment was retrospective, but would apply only to pending assessments.

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Apposite would be, the very same reasoning.

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Though the retrospective amendment made is proper for all intents and purposes and the disqualification is a mandate only if there is a failure to convene three Grama Sabhas by virtue of the amendment brought about by the Ordinance with retrospective effect from 1.11.2010; those members who had already suffered an order of disqualification passed by the State Election Commission cannot wriggle out of the same unless and until there is a validation clause. Similarly, when a statutory obligation is cast on a person, the failure of which will invite disqualification, as in the instant case, and a judicial decision has been taken disqualifying such person, retrospective amendment can be brought in relaxing the

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obligations or totally effacing the same. But, when making such amendments if the prior conduct, being action or omission, is not sought to be validated by a specific provision by which notwithstanding such judicial decision the amendment is deemed to have been given effect to retrospectively, such retrospective operation cannot enure to the benefit of persons who have already suffered an order of disqualification. We have already found that the disqualification as such would not be automatic on the omission to comply a statutory mandate, but it would take effect only from the date of the order passed by the State Election Commission. The 1^st respondent herein is a Member against whom such an order has been passed by the State Election Commission and his disqualification has come into effect. Inter parties there is a decision of a competent forum finding disqualification on the ground of the omission to comply an obligation statutorily prescribed. We have also found that the said decision is one rendered under the judicial power of the State conferred as per statute on the State Election Commission. To get over an order of disqualification and to make such relaxation applicable even to persons who have already been disqualified, there has to be a provision for validating the

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retrospective amendment. Any relaxation in such obligation, though retrospective, can only enure to the benefit of those persons who have not been disqualified by an order under Section 36; in the absence of a validation clause.

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Hence, we answer the issues in the following manner: Exhibit P3 order of the State Election Commission, by virtue of the words employed in the Section, attains finality and cannot be disturbed by a subsequent amendment, even when express retrospective effect is given; without a validation clause. In an instance of the Legislature having provided a validation clause by which the amendment has the effect of retrospective operation notwithstanding any judgment, decree or order of any Court, Tribunal or other Authority, then the retro activity would enure also to the benefit of the persons who have suffered an order of disqualification and their disqualification would be erased by the fundamental alteration made in the law and they would be entitled to continue despite there being an order of disqualification, the basis of which has been removed retrospectively and validation provided thereof. We notice that the amendment effected by the Ordinance does not have a validation clause and in the case of the 1^st respondent, who has

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suffered an order of the State Election Commission, the retro activity can have no effect, without a validation clause.

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On the findings aforesaid, we are unable to sustain the impugned judgment and we reverse the same, upholding the order, Exhibit P3, of the State Election Commission and confirming the disqualification of the 1^st respondent. Writ Appeal is allowed. No costs.

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Sd/Manjula Chellur, Chief Justice

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vku/

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Sd/K.Vinod Chandran, Judge.

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true copy -

Mohammed Haneefa v. Saudath Ashraf

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Mohammed Haneefa v. Saudath Ashraf

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