The Supreme Court on Thursday held that the legislature cannot overrule judgments by amending a law retrospectively, saying this will amount to violation of the principle of separation of powers among the three organs of the state, which is impermissible.

Sending out a clear message to law-making bodies — Parliament and assemblies — that judicial pronouncements must be respected, a bench of Justices Madan B Lokur and Deepak Gupta said they were entitled to amend the law to remove defects pointed out in a judicial order but the new law could not be implemented retrospectively as it would amount to nullifying the judgment.

“The Legislature cannot set at naught the judgments which have been pronounced by amending the law not for the purpose of making corrections or removing anomalies but to bring in new provisions which did not exist earlier. The legislature may have the power to remove the basis or foundation of the judicial pronouncement but the legislature cannot overturn or set aside the judgment, that too retrospectively by introducing a new provision. The legislature is bound by the mandamus issued by the court,” said Justice Gupta who wrote the judgment.

“A judicial pronouncement is always binding unless the very fundamentals on which it is based are altered and the decision could not have been given in the altered circumstances. The legislature cannot, by way of introducing an amendment, overturn a judicial pronouncement and declare it to be wrong or a nullity. What the legislature can do is to amend the provisions of the statute to remove the basis of the judgment,” he said.

The court passed the order while examining the constitutional validity of amendment brought by the Karnataka assembly in Money Lenders Act and Pawn Brokers Act by inserting provision in the laws for nonpayment of interest on amount deposited by money lenders as security before the government agency for getting a licence for their business.

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The amendments were brought in 1998 but were implemented retrospectively to overrule the 1995 HC verdict, which held that the government should pay interest on security deposit as there was no provision to deny it to money lenders.

Examining the provisions, the bench said there is nothing wrong in amending the law to deny interest on security deposits as such provisions were not there when the HC delivered the verdict but the decision to implement them retrospectively is illegal as it was meant to set aside the HC’s judgment. “This would be a direct breach of the doctrine of separation of powers.... Therefore, the validating Acts in so far as they are retrospective, are held to be illegal,” it said.