Statutory Amendments Affecting Substantive Rights Operate Prospectively Absent Express or Implicit Retroactive Legislative Intent

The Petitioner/Respondent No. 1 is a registered Tenant/Co-partnership Housing Society that constructed residential apartments in the 1970s for its members

Members were placed in exclusive possession via possession certificates without registered conveyance deeds

For decades, property tax was paid and accepted

In 2002, the BBMP issued a demand notice for differential property tax, contending that in the absence of registered conveyance deeds, the members remained "tenants" under the 2001 amendment to Section 38 of the Karnataka Co-operative Societies Act, 1959, and thus subject to additional levies

The learned Single Judge set aside the demand, holding the 2001 amendment prospective

The BBMP appealed this decision

Section 38 of the Karnataka Co-operative Societies Act, 1959, which originally exempted certain instruments from compulsory registration

The 2001 amendment (proviso) removed this exemption for instruments intended to transfer rights in immovable property by House Building Co-operative Societies

Any statute affecting substantive rights is prima facie prospective unless express words indicate otherwise, as established in Shyam Sunder v. Ram Kumar (2001) 8 SCC 202

Zile Singh v. State of Haryana (2004) 8 SCC 1, noting that the presumption against retrospectivity is strongest when a statute affects vested rights

Manish Kumar v. Union of India (2021) 5 SCC 1, which distinguishes between substantive law (prospective) and procedural law (ordinarily retrospective)

The Court observed that the 2001 amendment does not contain express language or a necessary implication suggesting retrospective application to past allotments

The rights of the members—accrued through financial contribution, allotment, and possession centuries prior to 2001—were held to be "vested rights"

The Court reasoned that Section 38 affects substantive rights regarding the transfer and recognition of immovable property interests, rather than merely changing procedural machinery

Consequently, members of a Tenant Co-partnership Society cannot be reclassified as "tenants" for tax purposes post-2001 simply because of a lack of registration for allotments made prior to the amendment, as such an interpretation would unlawfully unsettle long-standing proprietary rights

The Court affirmed that members who acquired possession before the amendment cannot be treated as tenants solely due to the non-execution of registered conveyance deeds

Accordingly, the Writ Appeal was dismissed, and the judgment of the learned Single Judge was upheld