In Brief
The Supreme Court dismissed the Union of India's appeals challenging a Division Bench decision on bank guarantees dated 1996. The issue was whether the 1997 amendment to Section 28 of the Indian Contract Act (which extended the section to cover contractual clauses extinguishing rights or discharging liability on expiry of specified periods) applied retrospectively. The Court held that the amendment is substantive and remedial, not clarificatory, and therefore operates prospectively only. Applied to the case, the unamended Section 28 governs the guarantees. Clauses requiring a claim within a specified time without curtailing statutory limitation periods for filing suit are not hit by Section 28, as they function as conditions precedent to asserting rights, not enforcing them in court.
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