A.V. Nachane v. Union of India (AIR 1982 SC 1126)

This case draws a firm line on retrospective rules. The Court protected bonus sums that LIC staff had already earned under the 1974 settlements. The 1981 Act and its Rules were upheld, but they could work only from 2 February 1981.

• Rights already earned stay safe—a later rule cannot wipe a binding writ.
• Delegation OK where Parliament sets policy and limits.
• Articles 14 & 19(1)(g) challenge failed; no proven arbitrariness.

1. Can retrospective law or rules nullify a binding Supreme Court writ and undo accrued rights?
2. Do the LIC (Amendment) Act, 1981, and its Rules breach Articles 14 and 19(1)(g)?
3. Is the delegation of power under the 1981 Act excessive or unguided?

• No undoing of accrued rights: Retrospective law cannot cancel a binding mandate or vested rights unless clearly authorised and constitutionally valid.
• Valid delegation: Parliament must give policy and limits; then rule-making is lawful.
• Article 14 & 19(1)(g): Classification must be reasonable; restrictions must serve public interest and be justified.

Held: The LIC (Amendment) Act, 1981, and the 1981 Rules are valid but operate only prospectively from 2 February 1981. Rule 3 cannot retrospectively bar bonus from 1 July 1979, as that would cut across the Supreme Court’s writ in D.J. Bahadur. Staff are entitled to bonus earned up to 1 February 1981. Articles 14, 19(1)(g), and 21 challenges failed. Petitions allowed in part; no costs.

• A legislature may change the law, but cannot, by a retrospective rule, erase rights already secured by a Court’s binding writ unless constitutionally permitted and clearly stated.
• Delegated legislation stands where the parent Act supplies policy, purpose, and limits.
• Equality and trade freedom claims need proof of arbitrariness or hostile treatment among equals; that proof was missing.

This case safeguards accrued labour benefits and keeps executive rule-making within clear legislative boundaries. It also strengthens respect for judicial writs against backdated undoing.

Mnemonic: “No Retro Wipe, Pay What’s Ripe.”

1. No Retro Wipe: Backdated rules cannot erase a Supreme Court writ.
2. Pay What’s Ripe: Bonus due till 1 Feb 1981 must be paid.
3. Guided Delegation: Rules stand if the Act gives policy and limits.

Issue

Can retrospective rules nullify a Supreme Court writ and wipe accrued bonus rights? Are the 1981 Act/Rules valid under Articles 14 & 19(1)(g), and is the delegation proper?

Rule

No retrospective erasure of vested rights or binding writs unless clearly authorised and constitutional; valid delegation needs policy and limits; equality needs reasonable classification.

Application

Rule 3’s backdating conflicted with D.J. Bahadur. The parent Act gave guidance; the Rules stayed within bounds. No proof of hostile discrimination among equals.

Conclusion

Act/Rules valid but only from 2 Feb 1981; bonus till 1 Feb 1981 payable; fundamental rights claims fail.

Accrued Rights

Benefits already earned under existing law or orders.

Delegated Legislation

Rules made by the executive under authority granted by an Act.

Writ of Mandamus

Court order directing a public body to perform a legal duty.