PERNOD RICARD INDIA (P) LTD. versus THE STATE OF MADHYA PRADESH & ORS.

Citation: [2024] 4 S.C.R. 664 · Decided: 19-04-2024 · Supreme Court of India · Bench: PAMIDIGHANTAM SRI NARASIMHA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

* Author
[2024] 4 S.C.R. 664 : 2024 INSC 327
Pernod Ricard India (P) Ltd. 
v. 
The State of Madhya Pradesh & Ors.
(Civil Appeal Nos. 5062-5099 of 2024)
19 April 2024
[Pamidighantam Sri Narasimha* and Aravind Kumar, JJ.]
Issue for Consideration
Issue as regards the applicability of the relevant rule for imposition 
of penalty. Whether it was the rule that existed when the violation 
occurred during the license period of 2009-10 (rule 19 of Madhya 
Pradesh Foreign Liquor Rules, 1996, before the amendment) or 
the rule 19 that was substituted by an amendment in 2011 when 
proceedings for penalty were initiated.
Headnotes
Madhya Pradesh Foreign Liquor Rules, 1996 – r.19 – Penalties 
– Permissible limits of loss of liquor in transit due to leakage, 
evaporation, wastage etc. – During the relevant license period 
of 2009-2010 when the violation occurred, r.19 provided that 
if permissible limits of loss of liquor exceeded, imposition of 
penalty was to be about four times the maximum duty payable 
on foreign liquor – However, no action was initiated against 
the appellant during the relevant license period– r.19 was 
substituted by an amendment in 2011 reducing penalty to an 
amount not exceeding the duty payable on foreign liquor – 
Demand notice issued in 2011 – Payment of penalty, if to be 
as per the repealed r.19 or the substituted r.19:
Held: Penalty to be imposed on the appellants will be on the basis of 
r.19 as substituted on 29.03.2011 – A repealed provision will cease 
to operate from the date of repeal and the substituted provision 
will commence to operate from the date of its substitution, subject 
to specific statutory prescription – The operation of a subordinate 
legislation is determined by the empowerment of the parent act – 
The legislative authorization enabling the executive to make rules 
prospectively or retrospectively is crucial – Without a statutory 
empowerment, subordinate legislation will always commence to 
operate only from the date of its issuance and at the same time, 
cease to exist from the date of its deletion or withdrawal – Even 
[2024] 4 S.C.R. 
665
Pernod Ricard India (P) Ltd. v.  
The State of Madhya Pradesh & Ors.
s.63 of the M.P. Excise Act, 1915 does not provide continuation 
of a repealed provision to rights and liabilities accrued during its 
subsistence – Further, r.19 which was substituted on 29.03.2011 was 
not notified to operate from any other date by the Government – If 
the amendment by way of a substitution in 2011 was intended to 
reduce the quantum of penalty for better administration and regulation 
of foreign liquor, there is no justification to ignore the subject and 
context of the amendment and permit the State to recover the 
penalty as per the unamended Rule – Purpose of the amendment 
was to achieve a proper balance between crime and punishment or 
the offence and penalty – Classifying offenders into before or after 
the amendment for imposing higher and lower penalties does not 
serve any public interest – The substituted Rule alone will apply to 
pending proceedings – Impugned order of the Division Bench of the 
High Court set aside. [Paras 2.1, 13, 14, 17, 32, 35]
Administrative Law – Subordinate legislation – Operation of – 
Prospective/retrospective – Principles governing - Discussed. 
Madhya Pradesh General Clauses Act, 1957 – s.10 – Effect 
of Repeal – M.P. Excise Act, 1915 – Madhya Pradesh Foreign 
Liquor Rules, 1996 – r.19 – General Clauses Act, 1897 – s.6 – 
Violation occurred during the license period of 2009-10 – r.19 
substituted in 2011 imposed lesser penalty than the repealed 
r.19 if permissible limits of loss of liquor exceeded – Demand 
notice issued in 2011 – Payment of penalty, if to be as per the 
repealed r.19 or the substituted r.19 – Plea of the respondent 
that as s.10 states that where any Madhya Pradesh Act repeals 
any enactment then, unless a different intention appears, 
the repeal shall not affect any right, privilege, obligation or 
liability, acquired, accrued or incurred under any enactment 
so repealed; State of M.P. can continue to apply the repealed 
Rule for the transaction of 2009-2010 by virtue of specific 
provisions under the 1957 Act:
Held: s.10 of the MP General Clauses Act by itself would not make any 
difference as the Section is applicable only to enactments, i.e. when 
any M.P. Act repeals any enactment and not a subordinate legislation 
– Interpreting s.6, an identical provision of the General Clauses Act, 
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