In the case of M. Rajendran & Ors. v. M/s KPK Oils and Proteins India Pvt. Ltd. & Ors., a bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan clarified the principles regarding the retrospective application of legislations.

The bench considered the 2016 amendment to Section 13(8) of the SARFAESI Act, holding that the amendment applies to loans taken before the amendment if the default occurred after the amendment came into force.

The Court summarised the key principles as follows:

1. Presumption against retrospectivity does not apply to enactments that merely affect procedure, change the forum, or are declaratory.
2. Retroactive/retrospective operation can be implicitly inferred from the context of the provision.
3. A provision may apply to a cause of action arising after the enactment, even if the underlying claim relates to an earlier period.
4. A remedial statute applies to pending proceedings, and such application is not considered retrospective if it affects future actions with reference to a pending cause.
5. The SARFAESI Act is a remedial law, designed for speedy recovery of pre-existing loans, and therefore the amendment applies to defaults occurring after its enforcement.

This judgment reinforces that amendments to procedural or remedial statutes can operate prospectively on pre-existing transactions, particularly when the law aims to address ongoing problems efficiently.

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