Interpretation of various statutes

AN ASSIGNMENT SUBMITTED UNDER COURSE NO. LL.M.- 301 “ INTERPRETATION OF

STATUTES”, AS A PARTIAL FULFILLMENT FOR THE DEGREE OF

MASTER OF LAWS

BY

HIMANISH CHAKRABORTY
LL.M. Third Semester
Class Roll No.9.

Under supervision of

Sri. Pompita Paul

Assistant Professor
(Course Teacher)

DEPARTMENT OF LAW, ASSAM UNIVERSITY

SILCHAR, ASSAM
2021
 ACKNOWLEDGMENT

This is to state that, I HIMANISH CHAKRABORTY bearing Roll no.09 completed my

semester (3RD LLM) project work for Interpretation of statutes on the topic Interpretation of

various Statutes.

I hereby thank Assistant Prof. Sri Pompita Paul for supporting me throughout the work

and my friends and my parents for extending their support.

 CONTENTS
➢ Introduction
➢ Need for Interpretation
➢ Interpretation of Penal Statutes

➢ General Rule of Interpretation of Penal Statutes

➢ Strict Rule of Interpretation of Penal Statutes

➢ Basis of Strict Rule of Interpretation of Penal Statutes

➢ Procedure of Strict Rule of Interpretation of Penal Statutes

➢ Purposive Interpretation of Penal Statutes

➢ Suppression of the Mischief

➢ Principles of Constitutional Interpretation

➢ Historical interpretation

➢ Contemporary interpretation

➢ Harmonious Construction

➢ Interpretation of the preamble of the Constitution

➢ General rules of interpretation of the Constitution

➢ Principles of Constitutional Interpretation

➢ Principle of colourable legislation

➢ Principle of pith and substance

➢ Principle of eclipse

➢ Principle of Severability

➢ Principle of territorial nexus

➢ Principle of implied powers

➢ Interpretation of Taxing Statutes

➢ Basic Principles / Rules Of Interpretation Of Taxing Statute
 ➢ Intention of Legislature:

➢ Harmonious Interpretation

➢ the Mischief Rule of Interpretation (Heyden’s rule)

➢ Literal rule : Language of Statute should be read as it is

➢ The Golden Rule : Purposive interpretation

➢ Strict construction

➢ Remedial statutes

➢ Conclusion

➢ Bibliography
INTRODUCTION

“the essence of law lies in the spirit, not its letter, for the letter is significant only as being the

external manifestation of the intention that underlies it” - Salmond

Interpretation means the art of finding out the true sense of an enactment by giving the words of the
enactment their natural and ordinary meaning. It is the process of ascertaining the true meaning of the words
used in a statute. The Court is not expected to interpret arbitrarily and therefore there have been certain
principles which have evolved out of the continuous exercise by the Courts. These principles are sometimes
called ‘rules of interpretation’.

The object of interpretation of statutes is to determine the intention of the legislature conveyed expressly or
impliedly in the language used. As stated by SALMOND, "by interpretation or construction is meant, the
process by which the courts seek to ascertain the meaning of the legislature through the medium of
authoritative forms in which it is expressed."

Interpretation is as old as language. Elaborate rules of interpretation were evolved even at a very early stage
of the Hindu civilization and culture. The importance of avoiding literal interpretation was also stressed in
various ancient text books – “Merely following the texts of the law, decisions are not to be rendered, for, if
such decisions are wanting in equity, a gross failure of Dharma is caused.”

Interpretation thus is a familiar process of considerable significance. In relation to statute law, interpretation
is of importance because of the inherent nature of legislation as a source of law.

NEED FOR INTERPRETATION

Interpretation of something means ascertaining the meaning or significance of that thing or ascertaining an
explanation of something that is not immediately obvious. Construction and Interpretation of a statute is an
age-old process and as old as language.

Interpretation of statute is the process of ascertaining the true meaning of the words used in a statute. When
the language of the statute is clear, there is no need for the rules of interpretation. But, in certain cases, more
than one meaning may be derived from the same word or sentence. It is therefore necessary to interpret the
statute to find out the real intention of the statute.

Interpretation of statutes has been an essential part of English law since Heydon's Case in 1854 and although
it can seem complex, the main rules used in interpretation are easy to learn. Elaborate rules of interpretation
were evolved even at a very early stage of Hindu civilization and culture. The rules given by ‘Jaimini’, the
author of Mimamsat Sutras, originally meant for srutis were employed for the interpretation of Smritis also.

(Law Commission of India, 60th Report, Chapter 2, para 2.2).

The concept of interpretation of a Statute cannot be static one. Interpretation of statutes becomes an ongoing
exercise as newer facts and conditions continue to arise. We can say, interpretation of Statutes is required for
two basic reasons viz. to ascertain:

• Legislative Language - Legislative language may be complicated for a layman, and hence may require
interpretation; and

• Legislative Intent - The intention of legislature or Legislative intent assimilates two aspects:

i. the concept of ‘meaning’, i.e., what the word means; and

ii. the concept of ‘purpose’ and ‘object’ or the ‘reason’ or ‘spirit’ pervading through the statute.

Necessity of interpretation would arise only where the language of a statutory provision is ambiguous, not
clear or where two views are possible or where the provision gives a different meaning defeating the object
of the statute. If the language is clear and unambiguous, no need of interpretation would arise.

In this regard, a Constitution Bench of five Judges of the Supreme Court in R.S. Nayak v A.R. Antulay,
AIR 1984 SC 684 has held:

“... If the words of the Statute are clear and unambiguous, it is the plainest duty of the Court to give effect to
the natural meaning of the words used in the provision. The question of construction arises only in the event
of an ambiguity or the plain meaning of the words used in the Statute would be self defeating.” (para 18)

Again Supreme Court in Grasim Industries Ltd. v Collector of Customs, Bombay, (2002)4 SCC 297 has
followed the same principle and observed:

“Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the
legislature is clearly conveyed, there is no scope for court to take upon itself the task of amending or altering
the statutory provisions.” (para 10)

The purpose of Interpretation of Statutes is to help the Judge to ascertain the intention of the Legislature –
not to control that intention or to confine it within the limits, which the Judge may deem reasonable or
expedient.

Some Important points to remember in the context of interpreting Statutes:

• Statute must be read as a whole in Context

• Statute should be Construed so as to make it Effective and Workable – if statutory provision is ambiguous
and capable of various constructions, then that construction must be adopted which will give meaning and
effect to the other provisions of the enactment rather than that which will give none.
• The process of construction combines both the literal and purposive approaches. The purposive
construction rule highlights that you should shift from literal construction when it leads to absurdity.

INTERPRETATION OF PENAL STATUTES

Penal Statutes may be defined as those statutes that impose penal liability on a person who is guilty of any
offence. The word penal connotes some form of punishment imposed against the individual by mandate of
the State. In Halsbury’s laws of England a penal statute has been described as one whose primary object is
expressly enforceable by fine, imprisonment or other punishment. A statute is to be regarded as penal if it
imposes a fine, penalty or forfeiture other than a penalty in the nature of liquidated damages, or other
penalties that are of the nature of civil remedies.

General Rule of Interpretation of Penal Statutes

In a penal law if there appears to be a reasonable dubiety or ambiguity, it shall be decided in favour of the
person who would be liable to the penalisation. If a penal provision fairly be so construed as to avoid the
punishment, it must be so interpreted. If there can be two reasonable interpretations of a penal provision, the
more lenient should be made applicable.

Punishment can be meted to one only if the plain words extension of the meaning of the word is allowable.
A penalty cannot be imposed on the basis that the object of the statute so desired. According to Maxwell,
“the prerequisite of express language for the creation of an offence, in interpreting strictly words setting out
the elements of an offence in requiring the fulfilment to the letter of statutory conditions precedent to the
infliction of punishment; and in insisting on the strict observance of technical provisions concerning
criminal procedure and jurisdiction.” Unless the words of a statute clearly made an act criminal, it shall not
be construed as criminal. If there is any ambiguity in the words which set out the elements of an act or
omission declared to be an offence, so that it is doubtful whether the act or omission falls within the
statutory words, the ambiguity will be resolved in favour of the person charged. The court will inflict
punishment on a person only when the circumstances of the case fall unambiguously fall under the letter of
the law. Legislation which deals with the jurisdiction and the procedure relation to imposition of the
penalties will be strictly construed. Where certain procedural requirements have been laid down by a statute
to be completed in a statute dealing with punishments, the court is duty bound to see that all these
requirements have been complied with before sentencing the accused. In case of any doubt the benefit has to
go to the accused even up to the extent of acquitting him on some technical grounds. Penal provision cannot
be extended by implication to a particular case or circumstances. The rule exhibits a preference for the
liberty of the subject and in a case of ambiguity enables the court to resolve the doubt in favour of the
subject and against the Legislature which has failed to express itself clearly, but this rule is now-a-days of
limited application. The rule was originally evolved to mitigate the rigours of monstrous sentences of trivial
offences and although the necessity and that strictness have now vanished, the difference in approach made
to penal statute as against any other statute still persists.

A penal provision must be definite. It is a basic rule of legal jurisprudence that than an enactment is void for
vagueness if its prohibitions are not clearly defined. Pollock, CB said: “whether there be any difference left
between a criminal statute and any other statute not creating offence, I should say that in criminal statute you
must be quite sure that the offence charged is within the letter of the law.”

In Anup Bhushan Vohra v. Registrar General, High Court of Judicature at Calcutta on (2011) the
Apex Court held that the contempt proceedings being quasi-criminal in nature, burden and standard of proof
is the same as required in criminal cases. The charges have to be framed as per the statutory rules framed for
the purpose and proved beyond reasonable doubt keeping in mind that the alleged contemnor is entitled to
the benefit of doubt. Law does not permit imposing any punishment in contempt proceedings on mere
probabilities; equally, the court cannot punish the alleged contemnor without any foundation merely on
conjectures and surmises. As observed above, the contempt proceeding being quasi-criminal in nature
require strict adherence to the procedure prescribed under the rules applicable in such proceedings.

Strict Rule of Interpretation of Penal Statutes

It is a general rule that penal enactments are to be construed strictly and not extended beyond their meaning.
According to Crawford criminal and penal statutes must be strictly construed, that is they cannot be enlarged
or extended by intendment, implication, or by any equitable consideration. In other words, the language
cannot be enlarged beyond the ordinary meaning of its term in order to carry into effect the general purpose
for which the statute was enacted. The rule of strict construction requires that the language of a stature
should be so construed that no case shall be held to fall within it which does not come within the reasonable
interpretation of the statute. It has also been held that in construing a penal statute it is a cardinal principle
that in case of doubt, the construction favourable to the subject should be preferred. But these rules do not in
any way affect the fundamental principles of interpretation, namely that the primary test is the language
employed in the Act and when the words are clear and plain the court is bound to accept the expressed
intention of the legislature.

Basis of Strict Rule of Interpretation of Penal Statutes

The rule of strict construction of penal statutes is said to be founded on the tenderness of the law for the
rights of individuals and on the plain principle that the power to define a crime and ordain its punishment is
vested in the legislature and not in the judicial department. It is a reasonable expectation that legislature will
manifest its intention with reasonable clarity in penal statutes. It is not competent for a court to create an
offence by interpretation as this may operate to entrap the unwary and ignorant and threaten the rights of the
people generally. The rule that penal statutes must receive strict construction was originally evolved in
England at a time when English law prescribed exceedingly harsh penalties and monstrous sentences for
trivial offences. For instance penalty by public hanging was given for pick pocketing. The cutting down of a
cherry tree in an orchard was punishable with death. A person who flicked a handkerchief was punishable
with deportation to Australia.

The purpose of strict construction was to mitigate the rigour of such harsh sentences and sweeping
condemnations. Times have changed since and although the circumstances which necessitated it no longer
exist, the difference in approach made in respect of a penal statute as against any other statute still persists
and survives to this day. But this rule is now only of limited application and its role is confined to cases
where a selection of one construction is to be made out of the two or more constructions which are
reasonably open. According to Maxwell the rule of strict construction of penal statutes manifests itself in
four ways—

(1) Express language is necessary for creation of criminal offences, therefore, no act is to be deemed
criminal unless it is clearly made so by words of the statute concerned. But it is not necessary that a
particular penalty be specified in order that an act or omission may constitute an offence.

(2) The words setting out the elements of an offence are to be strictly construed . And if there is any
reasonable doubt or ambiguity it will be resolved in favour of the person charged. A reasonable
interpretation which will avoid the penalty must be adopted. If there are two reasonable constructions the
court must give the more lenient one. The court must always see that the person to be penalized comes
fairly and squarely within the plain words of the enactment.

(3) Punishments can be imposed only if the circumstances of the case fall clearly within the words of the
enactment.

(4) Similarly, statutes dealing with jurisdiction and procedure are, if they relate to the infliction of penalties,
strictly construed.

In London Railway Co. v Be& N. Eastern Berriman, (1946) Privy Council observed:

“ The Court must see that the thing charged as an offence is within the plain meaning of the words used, and
must not strain the words on any notion that there has been a slip, that there has been a casus omissus; that
the thing is so clearly within the mischief that it must have been included if thought of. On the other hand,
the person charged has the right to say that the thing charged, although within the words, is not within the
spirit, of the enactment. But where the thing is brought within the words, and within the spirit , there a penal
enactment is to be construed, like any other instrument , according to fair common sense of the language
used, and the court is not to find or make any doubt or ambiguity which would clearly is not to find or make
any doubt or ambiguity which would clearly not be found or made in the same language in any other
enactment”
Procedure of Strict Rule of Interpretation of Penal Statutes

Strict construction of a penal statue means that it is to be construed narrowly in favour of the person
proceeded against. This rule implies a preference for the liberty of the subject in case of ambiguity in the
language of the provision. It is well founded principle that if the words used in a criminal statute are
reasonably capable of two constructions, the construction which is favourable to the accused should be
preferred but in constructing the relevant words it is obviously necessary to have due regard to the context in
which they have been used.

Unless the words of a statute clearly an act criminal, it shall not be construed as criminal. If there is any
ambiguity in the word which set out the elements of an act or omission declared to be an offence so that it is
doubtful whether the act or omission in question in the case falls within the statutory words, the ambiguity
will be resolved in favour of the person charged. The court will inflict punishment on a person only when
the circumstances of a case unambiguously fall under the letter of the law.

In Seksaria Cotton Mill Limited Company v State of Bombay(1954) , as per a notification issued under
the Essential Supplies Act 1946, every manufacturer was required to submit true and accurate information
about his dealings; and delivery was defined to mean actual physical delivery. The appellant, who had sold
some bales to purchaser who did not take delivery because of some dispute with the appellant, asked his
agent to keep the bales in godown pending settlement. The appellant entered those bales as delivered in his
return book. The appellant was convicted by the High Court for not giving actual physical delivery.
Allowing the appeal, the Supreme Court said that when two reasonable interpretations are possible of a
penal statute, that which favours the accused should be accepted. It was held that since the goods were
actually delivered to the agent, the requirements under the Act were fulfilled without straining the language.

In Tolaram v State of Bombay(1954), the Supreme Court observed that:

“If possible and reasonable construction can be put upon a penal provision the court must lean towards the
construction which exempts the subject from penalty . It is not competent to the Court to stretch the meaning
of an expression used by the legislature in order to carry out the intention of the legislature”

In Alamgir v State of Bihar(1959) , the wife left her husband voluntarily and of her free will came to stay
with the appellant. On the question whether the appellant was guilty of an offence under section 498 IPC, it
was held—

“One of the ingredients of the section is that the offender must take or entice away or conceal of detain the
wife of another person.. The policy underlying the provision may no doubt sound inconsistent with the
modern notions of the status of women and of the mutual rights and obligations under marriage. That
however is a question of policy with which courts are not concerned. It is no doubt true that if the words
used in a criminal statute are reasonably capable of two constructions , the construction which is favourable
to the accused should be preferred; but in construing the relevant words, it is obviously necessary to have
due regard to the context in which they have been used... Detention in the context must mean keeping back a
wife from her husband or any other person having the care of her on behalf of her husband with the requisite
intention”.

In Sukhdev Singh v State of Haryana (2013)a search was conducted under Narcotic Drugs and
Psychotropic substances Act 1985 hours after receipt of the information and no effort was made by the
investigating officer to reduce the information into writing and inform his higher authorities instantly or
even after a reasonable delay. No evidence was produced to show as to what prevented him from recording
the information and sending the same to his superior. There was thus a total non-compliance of Section 42 of
the Act. The Supreme Court held that such defect is incurable and the accused was liable to be acquitted. It
is settled principle of interpretation of Criminal Jurisprudence that the provisions have to he strictly
construed and cannot be given a retrospective effect unless legislative intent and expression is clear beyond
ambiguity. The amendments to criminal law would not intent that there should be undue delay in disposal of
criminal trials or there should be retrial just because the law has changed. Such an approach would be
contrary to the doctrine of finality as well as avoidance of delay in conclusion of criminal trial.

Purposive Interpretation of Penal Statutes

It is not necessary that courts must always favour the interpretation which is favourable to the accused and
not the prosecution but it may also chose to go for the interpretation which is consistent with the object
provided in the law.

In State of Maharashtra v. Tapas D. Neogy (1999) the expression ‘any property’ in section 102 of Cr.P.C.
was interpreted to be inclusive of a ‘bank account’ and hence a police officer who was investigating the
matter was justified in seizing the same. This principle was first explained by James, L.J. who stated: “No
doubt all penal statutes are to be construed strictly, that is to say that the court must see that the thing
charged as an offence is within the plain meaning of the word used, and must not strain the words on any
notion that there has been a slip; that there has been a casus omissus; that the thing is so clearly within the
mischief that it must have been included if thought of.

It is a cardinal principle of construction of statute that when language of the statute is plain and
unambiguous, then the court must give effect to the words used in the statute and it would not be open to the
courts to adopt a hypothetical construction on the ground that such construction is more consistent with the
alleged object and policy of the Act.

When the legislature used the comprehensive terminology- to achieve the said purpose, it would be
appropriate not to limit the content by construction when particularly the spirit of the statute is in accord
with the words used there.
In Murlidhar Meghraj Loya v. State of Maharashtra, (1976) the SC had widely interpreted the Food
Adulteration Act, 1954, while expressing the strong disapproval of the narrow approach of construction to
ensure that the adulterators do not exploit the loopholes in the Act.

Suppression of the Mischief

The language of the penal statute can also be interpreted in a manner which suppresses the lacuna therein
and to sabotage the mischief in consonance with the Heydon’s Case. For instance in Ganga Hire Purchase
Pvt. Ltd. Vs. State of Punjab(2000), while interpreting the section 60(3) of Narcotic Drugs and
Psychotropic Substances Act, 1985, the word ‘owner’ was given a wider meaning for the purpose of
confiscation of the vehicle used in furtherance of the offence mentioned therein i.e. inclusive of the
registered owner where the vehicle was purchased under a hire purchase agreement when all the installments
were not paid by him.

In S.N. Dube vs. N.B. Bhoir(2000), the Apex Court observed that Section 15 of the TADA Act is an
important departure from the ordinary law and must receive that interpretation which would achieve the
object of that provision and not frustrate or truncate it and that correct legal position is that a confession
recorded under Section 15 of the TADA Act is a substantive piece of evidence and can be used against a co-
accused also, if held to be admissible, voluntary and believable.

In Reema Aggarwal v. Anupam Aggarwal (2004), a broader meaning was attributed to the application of
sections 304B and 498A of the Indian Penal Code, in light of the broader purpose which was sought to be
achieved through these provisions and the mischief which was required to be cured. It was also made
applicable to the case where the legitimacy of the marriage itself was in question to bring the accused within
the purview of the word ‘husband’ as used in the said provisions.

PRINCIPLES OF CONSTITUTIONAL INTERPRETATION

The letters of the constitution are fairly static and not very easy to change but the laws enacted by the
legislature reflect the current state of people and are very dynamic. To ensure that the new laws are
consistent with the basic structure of the constitution, the constitution must be interpreted in a broad and
liberal manner giving effect to all its parts and the presumption must be that no conflict or repugnancy was
intended by its framers. Applying the same logic, the provisions relating to fundamental rights have been
interpreted broadly and liberally in favor of the subject. Similarly, various legislative entries mentioned in
the Union, State, and Concurrent list have been construed liberally and widely. There are basically three
types of interpretation of the constitution.

Historical interpretation

Ambiguities and uncertainties while interpreting the constitutional provisions can be clarified by referring to
earlier interpretative decisions.
Contemporary interpretation

The Constitution must be interpreted in the light of the present scenario. The situation and circumstances
prevalent today must be considered.

Harmonious Construction

It is a cardinal rule of construction that when there are in a statute two provisions which are in such conflict
with each other, that both of them cannot stand together, they should possibly be so interpreted that effect
can be given to both. And that a construction which renders either of them inoperative and useless should
not be adopted except in the last resort.

The Supreme Court held in Re Kerala Education Bill that in deciding the fundamental rights, the court
must consider the directive principles and adopt the principle of harmonious construction so two possibilities
are given effect as much as possible by striking a balance.

Interpretation of the preamble of the Constitution

The preamble cannot override the provisions of the constitution. In Re Berubari, the Supreme Court held
that the Preamble was not a part of the constitution and therefore it could not be regarded as a source of any
substantive power.

In Keshavananda Bharati’s case, the Supreme Court rejected the above view and held the preamble to be a
part of the constitution. The constitution must be read in the light of the preamble. The preamble could be
used for the amendment power of the parliament under Art.368 but basic elements cannot be amended.

The 42 nd Amendment has inserted the words “Secularism, Socialism, and Integrity” in the preamble.

General rules of interpretation of the Constitution

1. If the words are clear and unambiguous, they must be given the full effect.

2. The constitution must be read as a whole.

3. Principles of harmonious construction must be applied.

4. The Constitution must be interpreted in a broad and literal sense.

5. The court has to infer the spirit of the Constitution from the language.

6. Internal and External aids may be used while interpreting.

7. The Constitution prevails over other statutes.

Principles of Constitutional Interpretation

The following principles have frequently been discussed by the courts while interpreting the Constitution:
1. Principle of colourable legislation

2. Principle of pith and substance

3. Principle of eclipse

4. Principle of Severability

5. Principle of territorial nexus

6. Principle of implied powers

Principle of Colourable Legislation

The doctrine of colourability is the idea that when the legislature wants to do something that it cannot do
within the constraints of the constitution, it colours the law with a substitute purpose which will still allow it
to accomplish its original goal.

Maxim: “Quando aliquid prohibetur ex directo, prohibetur et per obliqum” which means what cannot be
done directly cannot also be done indirectly.

The rule relates to the question of legislative competence to enact a law. Colourable Legislation does not
involve the question of bonafides or malfides. A legislative transgression may be patent, manifest or direct or
may be disguised, covert or indirect. It is also applied to the fraud of Constitution.

In India ‘the doctrine of colourable legislation’ signifies only a limitation of the law- making power of the
legislature. It comes into picture while the legislature purporting to act within its power but in reality, it has
transgressed those powers. So the doctrine becomes applicable whenever legislation seeks to do in an
indirect manner what it cannot do directly. If the impugned legislation falls within the competence of
legislature, the question of doing something indirectly which cannot be done directly does not arise.

In our Constitution, this doctrine is usually applied to Article 246 which has demarcated the Legislative
competence of the Parliament and the State Legislative Assemblies by outlining the different subjects under
list I for the Union, List II for the States and List III for the both as mentioned in the seventh schedule.

This doctrine comes into play when a legislature does not possess the power to make law upon a particular
subject but nonetheless indirectly makes one. By applying this principle the fate of the Impugned Legislation
is decided.

Principle of pith and substance

Pith means ‘true nature’ or essence of something’ and substance means ‘the most important or essential part
of something’. The basic purpose of this doctrine is to determine under which head of power or field i.e.
under which list (given in the seventh schedule) a given piece of legislation falls.
Union & State Legislatures are supreme within their respective fields. They should not encroach/ trespass
into the field reserved to the other. If a law passed by one trespass upon the field assigned to the other—the
Court by applying Pith & Substance doctrine, resolve the difficulty & declare whether the legislature
concerned was competent to make the law.

If the pith & substance of the law (i.e. the true object of the legislation) relates to a matter within the
competence of the legislature which enacted it, it should be held intra vires—though the legislature might
incidentally trespass into matters, not within its competence. The true character of the legislation can be
ascertained by having regard—to the enactment as a whole — to its object – to the scope and effect of its
provisions.

Case: State of Bombay v. FN Balsara

Bombay Prohibition Act, 1949 which prohibited sale & possession of liquors in the State, was challenged on
the ground that it incidentally encroached upon Imports & Exports of liquors across custom frontier – a
Central subject. It was contended that the prohibition, purchase, use, possession, and sale of liquor will
affect its import. The court held that act valid because the pith & substance fell under Entry 8 of State List
and not under Entry 41 of Union List.

Principle of eclipse

The Doctrine of Eclipse says that any law inconsistent with Fundamental Rights is not invalid. It is not dead
totally but overshadowed by the fundamental right. The inconsistency (conflict) canbe removed by a
constitutional amendment to the relevant fundamental right so that eclipse vanishes and the entire law
becomes valid.

All laws in force in India before the commencement of the Constitution shall be void in so far they are
inconsistent with the provisions of the Constitution. Any law existing before the commencement of the
Constitution and inconsistent with the provision of Constitution becomes inoperative on commencement of
Constitution. But the law does not become dead. The law remains a valid law in order to determine any
question of law incurred before the commencement of the Constitution. An existing law only becomes
eclipsed to the extent it comes under the shadow of the FR.

Case: Keshavan Madhava Menon v. The State of Bombay

In this case, the law in question was an existing law at the time when the Constitution came into force. That
existing law imposed on the exercise of the right guaranteed to the citizens of India by article 19(1)(g)
restrictions which could not be justified as reasonable under clause (6) as it then stood and consequently
under article 13(1)[8] that existing law became void “to the extent of such inconsistency”.
The court said that the law became void not in to or for all purposes or for all times or for all persons but
only “to the extent of such inconsistency”, that is to say, to the extent it became inconsistent with the
provisions of Part III which conferred the fundamental rights of the citizens.

Thus the Doctrine of Eclipse provides for the validation of Pre-Constitution Laws that violate fundamental
rights upon the premise that such laws are not null and void ab initio but become unenforceable only to the
extent of such inconsistency with the fundamental rights. If any subsequent amendment to the Constitution
removes the inconsistency or the conflict of the existing law with the fundamental rights, then the Eclipse
vanishes and that particular law again becomes active again.

Principle of Severability

The doctrine of severability provides that if an enactment cannot be saved by construing it consistent with its
constitutionality, it may be seen whether it can be partly saved. Article 13 of the Constitution of India
provides for Doctrine of severability which states that all laws in force in India before the commencement of
Constitution shall be void in so far they are inconsistent with the provisions of the Constitution.

The State shall not make any law which takes away/ shortens the rights conferred by Part III of the
Constitution i.e. Fundamental Rights. Any law made in contravention of the provisions of the Constitution
shall be void and invalid. The invalid part shall be severed and declared invalid if it is really severable. (That
is, if the part which is not severed can meaningfully exist without the severed part.) Sometimes the valid and
invalid parts of the Act are so mixed up that they cannot be separated from each other. In such cases, the
entire Act will be invalid.

Case: AK Gopalan v. State of Madras

In this case, the Supreme Court said that in case of repugnancy to the Constitution, only the repugnant
provision of the impugned Act will be void and not the whole of it, and every attemptshould be made to save
as much as possible of the Act. If the omission of the invalid part will not change the nature or the structure
of the object of the legislature, it is severable. It was held that except Section 14 all other sections of the
Preventive Detention Act, 1950 were valid, and since Section 14 could be severed from the rest of the Act,
the detention of the petitioner was not illegal.

Principle of Territorial Nexus

Article 245 (2) of the Constitution of India makes it amply clear that ‘No law made by Parliament shall be
deemed to be invalid on the ground that it would have extra-territorial operation’. Thus a legislation cannot
be questioned on the ground that it has extra-territorial operation. It is well-established that the Courts of our
country must enforce the law with the machinery available to them, and they are not entitled to question the
authority of the Legislature in making a law which is extra-territorial. The extra-territorial operation does not
invalidate a law. But some nexus with India may still be necessary in some of the cases such as those
involving taxation statutes.

The Doctrine of Territorial Nexus can be invoked under the following circumstances-

▪ Whether a particular state has extra-territorial operation.

▪ If there is a territorial nexus between the subject- matter of the Act and the state making

the law

It signifies that the object to which the law applies need not be physically located within the territorial
boundaries of the state, but must have a sufficient territorial connection with the state. A state may levy a tax
on a person, property, object or transaction not only when it is situated within its territorial limits, but also
when it has a sufficient and real territorial connection with it. Nexus test was applied to the state legislation
also

Case: Tata Iron & Steel Company v. Bihar State

The State of Bihar passed a Sales Tax Act for levy of sales tax whether the sale was concluded within the
state or outside if the goods were produced, found and manufactured in the state. The court held there was
sufficient territorial nexus and upheld the Act as valid. Whether there is sufficient nexus between the law and
the object sought to be taxed will depend upon the facts and circumstances of a particular case. It was
pointed out that sufficiency of the territorial connection involved a consideration of two elements- a) the
connection must be real and not illusory b) the liability sought to be imposed must be pertinent to that
connection.

Principle of Implied powers

Laws which are necessary and proper for the execution of the power or incidental to such power are called
implied powers and these laws are presumed to be constitutional. In other words, constitutional powers are
granted in general terms out of which implied powers must necessarily arise. Likewise, constitutional
restraints are put in general terms out of which implied restraints must also necessarily establish.This is a
Legal principle which states that, in general, the rights and duties of a legislative body or organization are
determined from its functions and purposes as specified in its constitution or charter and developed in
practice.

INTERPRETATION OF TAXING STATUTES

A taxing statute is one which imposes taxes on income or certain other kinds of transactions. It may be in the
form of income tax, wealth tax, sales tax, gift tax etc. A tax is imposed for public purpose raising general
revenue of the state. Both center and the state are entitled to Levi tax. The general rule is that a taxing statute
should be construed strictly, i.e., a person should not be taxed unless the words of the statute unambiguously
imposes tax on him.

Tax laws are highly complex, complicated and beyond understanding of a tax-payer. The words and
expressions used are not simple. Many sections contain sub-sections, clauses, sub-clauses. Many deeming
provisions have been inserted. Meaning of an expression is extended by way of Explanation and is curtailed
by way of proviso, sometimes more than one provisos and explanations meaning differently.

. BASIC PRINCIPLES / RULES OF INTERPRETATION OF TAXING STATUTE:

1. Intention of Legislature:

The dominant purpose of construction of any statutory provision is to ascertain the intention of the
legislature and the primary role is to ascertain the same by reference to the language used. The Supreme
Court in Doypack Systems Pvt. Ltd. v/s. UOI [1998 (2) SCC 299] laid down:

"It has to be reiterated that the object of interpretation of a statute is to discover the intention of Parliament
as expressed in the Act. The dominant purpose in construing a statute is to ascertain the intention of the
legislature as expressed in the statute, considering it as a whole and in its context that intention, and
therefore, the meaning of the statute, is primarily to be sought in the words used in the statute itself, which
must, if they are plain and unambiguous be applied as they stand". The object of all interpretation is to
discover the intention of Parliament, but the intention of Parliament must be deduced from the language
used."

A statute is an edict of the legislature and the conventional way of interpreting or construing a statute is to
seek the ₹intention' of its maker. A statute is to be construed according "to the intent of them that make it"
and "the duty of judicature is to act upon the true intention of the legislature - "the mens or sententia legis".
If a statutory provision is open to more than one interpretation the court has to choose that interpretation
which represents the true intention of the legislature, which is also referred to as the ₹legal meaning' of the
statutory provision.

The intention of the legislature assimilates two aspects :

(1) In one aspect it carries the concept of ₹meaning', i.e. what the words mean.

(2) In another aspect, it conveys the concept of ₹purpose and object' or the ₹reason and spirit' pervading
through the statute.

Therefore the process of construction combines both literal and functional approaches. In the case of GEM
Granites v. CIT (2004) 271 ITR 322 (SC) the Hon’ble court observed that what one may believe or think
to be the intention of Parliament cannot prevail if the language of the statute does not support that view, thus
object of the statute has to be gathered from language and not on what one believes or thinks.

2. Harmonious Interpretation:
The most common rule of interpretation is that every part of the statute must be understood in a harmonious
manner by reading and construing every part of it together. Further, L.J. Denning in Seaford Court Estates
vs. Asher [1949] 2 All ER 155 speaks as hereunder:

“A Judge must not alter the material of which the Act is woven but he can and should iron out the creases.
When a defect appears, a Judge cannot simply fold his hands and blame the draftsman. He must set to work
on the constructive task of finding the intention of the Parliament and then he must supplement the written
words so as to give force and life to the intention of the Legislature.”

Also referred in Nasiruddin v/s. Sita Ram Agarwal – [(2003) 2 SCC 577]

The art of correct interpretation would depend on the ability to read what is stated in plain language, read
between the lines, read ‘through’ the provision, examining the intent of the Legislature and call upon case
laws and other aids to interpretation.

Rules of interpretation are applied only to resolve the ambiguities. The object and purpose of interpretation
is to ascertain the mens legis, i.e., the intention of the law, as evinced in the statute. The key to the opening
of every law is the reason and spirit of law. To be literal in meaning is to see the body and miss the soul. The
judicial key to interpretation is the composite perception of the Deha (body) and the Dehi (Soul) of the
provision.

Wherever it is possible to do so, the provision must be harmoniously constructed by avoiding a conflict. A
construction which reduces the statute to a futility has to be avoided. A statute or any enabling provision
therein must be so construed as to make it effective and operative on the principle expressed in maxim “UT
RES MAGIS VALEAT QUAM PAREAT” i.e. a liberal construction should be put upon written instruments,
so as to uphold them, if possible and carry in to effect the intention of the parties. CIT v. Hindustan Bulk
Carrier (2003) 259 ITR 449 (SC)

The provisions of two enactments must be read harmoniously so as not to subject them to any strained
construction giving rise to an artificial inconsistency or repugnance. Sankaranarayanan Bhattathirpad
v/s. ITO – [(1985) 153 ITR 562, 567 – 68 (Ker)]

Every clause of a statute should be construed with reference to the context and other clauses of the statute so
as, as far as possible, to make a consistent enactment of the whole statute CIT v/s. R. M. Amin – [(1971) 82
ITR 194 (Guj)]

Parliament is normally presumed to legislate in the knowledge of, and having regard to, relevant judicial
decisions. If, therefore, Parliament has a subsequent opportunity to alter the effect of a decision on the legal
meaning of an enactment, but refrains from doing so, the implication is that Parliament approves of that
decision and adopts it. That was amply demonstrated by the amendment of Sec. 36 (1) (viii) made in 1985.
CIT v/s. West Bengal Industrial Development Corporation Ltd. – [(1993) 203 ITR 422, 430 (Cal)].

3 . Literal rule : Language of Statute should be read as it is :

The first and the most elementary rule of construction is that it is to be assumed that the words and phrases
of legislation are used in their technical meaning if they have acquired one, or otherwise in their ordinary
meaning, and the second is that the phrases and sentences are to be construed according to the rules of
grammar. Krishi Utpadan Mandi Samiti v. UOI (2004) 267 ITR 460 (All.) .

Pure, simple and grammatical sense of language used by Legislature is best way of understanding as to what
Legislature intended. Coal Mines Officers’ Association of India v. UOI (2004) 266 ITR 429 (Cal.).

If the language of the statute is clear and unambiguous, words must be understood in their plain meaning.
The wordings of the Act must be construed according to its literal and grammatical meaning, whatever the
result may be.

While interpreting tax statute, the function of the court of law is not to give words in the statute a strained
and unnatural meaning to cover and extent its applicability to the areas not intended to be covered under the
said statute. Vidarbha Irrigation Dev. Corpn. v/s ACIT [(2005) 278 ITR 521 (Bom)].

It is not permissible to construe any provision of a statute, much less a taxing provision, by reading into it
more words than its contains. CIT v/s. Vadilal Lallubhai [(1972) 86 ITR 2 (SC)]

Literal construction means that there is no room for any intendment. Nothing is to be read in, nothing is to
be implied. One can only look fairly at the language used.

ICAI vs. Price Waterhouse, (1997) 90 Comp. Case 113, 140, 141 (SC)

State of West Bengal vs. Scene Seven P. Ltd. AIR 2000 SC 3089, 3094

Harbajan Singh vs. Press Council of India (2002) 3 SCC 722, 727.

District Registrar and Collector v. Canara Bank, (2005) 1 SCC 496.

4. The Mischief Rule of Interpretation (Heyden’s rule)

A statute is to be construed so as to suppress the mischief in the law and advance the remedy. This was set
out in Heydon’s case (1584) 3 Co. Rep. 7a. Under this rule the judge will look at the Act to see what was its
purpose and what mischief in the common law it was designed to prevent.

Broadly speaking, the rule means that where a statute has been passed to remedy a weakness in the law, the
interpretation which will correct that weakness is the one to be adopted. This rule is also one of the cardinal
rules of interpretation when the words of a taxing statute are ambiguous and incapable of a literal
interpretation and generally takes into account four parameters, namely

i) What was the Law prior to enactment of the statute in question;

ii) What was the defect or mischief for which the earlier law did not provide;

iii) What remedy had the Legislature intended to remedy the defect;

iv) The true Legislative intent behind the remedy.

This rule would come into play only if the words of the taxing statute were silent or ambiguous on an issue
and the General Clauses Act also did not throw light on the interpretation
CIT vs. Shahzada Nand & Sons. (1966 ) 60 ITR 392 (SC)

Classic Builders & Developers vs. UOI (2001) 251 ITR 492, 497 (MP)

Reckitt Colman of India Ltd. vs. ACIT (2001) 252 ITR 550 (Cal.).

5) The Golden Rule : Purposive interpretation

This rule is to some extent an extension of the literal rule and Mischief Rule and under it the words of a
statute will as far as possible be construed according to their ordinary, plain, and natural meaning, unless this
leads to an absurd result. It is used by the courts where a statutory provision is capable of more than one
literal meaning and leads the judge to select the one which avoids absurdity, or where a study of the statute
as a whole reveals that the conclusion reached by applying the literal rule is contrary to the intention of
Parliament. One of the principle laid down by the courts is that regard should be given to the object and
purpose of the introduction of a particular provision in the Income-tax Act. It emerges that this rule of
interpretation has been often applied in India.

The object and the rules of Interpretation being what they are it is only natural that the rules of interpretation
should not be static but dynamic. Rules of interpretation are not the rules of law and have to evolve
constantly to ensure that they lie in sync with the march of the society. It is in this context that the Supreme
Court in Kehar Singh vs. State (A.I.R. 1988 Supreme Court 1883) gave a go-by to the golden rule by which
statutes were to be interpreted according to the grammatical and ordinary sense of the word.

The Golden rule implies that if a strict interpretation of a statute would lead to an absurd result then the
meaning of the words should be so construed so as to lead to the avoidance of such absurdity. A further
corollary to this rule is that in case there are multiple constructions to effect the Golden rule the one which
favours the assessee should always be taken. This rule is also known as the Rule of Reasonable
Construction. However the application of this rule in the interpretation of taxing statutes is rather limited
since the literal rule is more often applicable and it is oft remarked that equity and taxation are strangers.

A construction which would defeat the very object of the legislature should be avoided.

Keshavji Ravji & Co. vs. CIT (1990) 183 ITR 1 (SC)

CIT vs. Gwalior Rayon Silk Mfg. Co. Ltd. (1992) 196 ITR 149 (SC)

6) Strict construction :

A tax is imposed for public purpose for raising general revenue of the state. A taxing statute is to be strictly
construed. Lord Hasbury and Lord Simonds stated : "The subject is not to be taxed without clear words for
that purpose; and also that every Act of Parliament must be read according to the natural construction of its
words."

It is settled law that a taxation statute in particular has to be strictly construed and there is no equity in a
taxing provision. H.H. Lakshmi Bai v/s. CIT - [(1994) 206 ITR 688, 691 (SC)].

“The subject is not to be taxed without clear words for that purpose …..”
CIT vs. Provident Inv. Co. Ltd. (1954) 32 ITR 190 (SC)

J.K. Steel Ltd. vs. UOI AIR 1970 SC 1173

CIT vs. Indo Oceanic Shipping Co. Ltd. (2001) 247 ITR 247 (Bom)

Hansraj & Sons vs. State of J & K (2002) 6 SCC 227, 237-39

In A.V. Fernandez v/s. State if Kerala, [AIR 1957 SC 657] His Lordship Bhagwati J. has stated the
principle of taxing laws as follows :

“ In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the
strict letter of law. If the revenue satisfies the court that the case falls strictly within the provisions of the
law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the
provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into
the intentions of the legislature and by considering what was the substance of the matter."

In Associated Cement Co. Ltd. Vs. Commercial Tax Officer AIR 1981 SC 1887, E.S. Venkataramiah J.
of the Supreme Court, speaking for the majority said

"Tax, interest and penalty are three different concepts. Tax becomes payable by an assessee by virtue of the
charging provision in a taxing statute. Penalty ordinarily becomes payable when it is found that an assessee
has wilfully violated any of the provisions of the taxing statute. Interest is ordinarily claimed from an
assessee who has withheld payment of any tax payable by him and it is always calculated at the prescribed
rate on the basis of the actual amount of tax withheld and the extent of delay in paying it. It may not to be
wrong to say that such interest is compensatory in character and not penal."

Remedial statutes
Remedial statutes and statutes which have come to be enacted on demand of the permanent public policy
generally receive a liberal interpretation. On constructing a remedial statute the courts ought to give to it ‘the
widest operation which its language will permit. They have only to see that the particular case is within the
mischief to be remedied and falls within the language of the enactment.

The labour and welfare legislations should be broadly and liberally construed and while construing them due
regard to the Directive Principles of State Policy (Part IV) and to any international convention on the subject
must be given by the courts. In MC Mehta v. State of Tamil Nadu the Child Labour (Prohibition and
Regulation) Act, 1986 was construed. The Court, having regard to the Directive Principles in Arts 39(e),
39(f), 4(i), 45 and 47 of the Constitution, the fundamental rights in Art 24, the International convention on
the right of the child, not only directed a survey of child labour and its prohibition but also directed payment
of Rs. 25,000 as contribution by the employer to the Child Labour-Rehabilitation-cum-Welfare Fund or
alternative employment to parent/guardian of the child to ameliorate poverty and lack of funds for welfare of
the child which is the main cause of child labour.

In case of a social benefit oriented legislation like the Consumer Protection Act 1986 the provisions of the
consumer to achieve the purpose of the enactment but without doing violence to the language. If a section of
a remedial statute is capable of two constructions, that construction should be preferred which furthers the
policy of the Act and is more beneficial to those in whose intrest the Act may have been passed. The liberal
construction must flow from the language used and the rule does not permit placing of an unnatural
interpretation on the words contained in the enactment nor does it permit the raising of any presumption that
protection of widest amplitude must be deemed to have been conferred upon those for whose benefit the
legislation may have been enacted.

In case there is any exception in the beneficial legislation which curtails its operation, the Court in case of
doubt should construe it narrowly so as not to unduly expand the area or scope of exception. It has been held
that a law enacted essentially to benefit a class of persons considered to be oppressed may be comprehensive
in the sense that to some extent it benefits also those not within that class, for example, tenants and
landlords. The Control of Rent and Eviction Acts which drastically limit the grounds on which a tenant can
be evicted are essentially to benefit the tenants but they also to some extent benefit the landlord can file a
suit for eviction on the grounds mentioned in the Acts even though the tenancy has not been terminated in
accordance with the provisions of the Transfer of Property Act.

When contracts and transactions are prohibited by statutes for the sake of protecting one class of persons, the
one from their situation and condition being liable to be oppressed and imposed upon by the other, the
parties are not in pari delicto and a person belonging to the oppressed class can apply for redress even if he
was a party to a contract or transaction prohibited by the statute.

In Noor Saba Khatoon v. Mohd Qasim, it was held that effect of a beneficial legislation is not construed to
be defeated by a subsequent legislation except through a clear provision. Therefore, the rights of the minor
children, irrespective of their religion, to get maintenance from their parents as provided in Sec 127 of the
Criminal Procedure Code 1973 was construed not to have been taken away in respect of Muslims by the
Muslim Women (Protection of Rights on Divorce) Act 1986. Section 3(b) of the Act enables a divorced
Muslim woman to claim maintenance for the minor children up to the age of two years only from her former
husband. It has been held that the right of children to claim maintenance under Section 125 Cr PC is
independent of the right of divorced mother to claim maintenance for the infant children and the former is
not affected by the Muslim Women Act 1986.
not affected by the Muslim Women Act 1986.

(i) Sadhoo v. Haji Lal Mohd Biri Works

In this case the Supreme Court interpreted § 31(2) (a) of the Beedi and Cigar Workers (Conditions of
Employment) Act 1966. This § 31(2) (a) provides that the employees discharged, dismissed or retrenched
may appeal to the prescribed authority. It was held that by the liberal construction of the section there need
to be no written order of termination to enable the employee to appeal and that an employee who was
terminated by stopping him to enter the place of work could appeal to the prescribed authority.

(ii) Central Railway Workshop, Jhasi v. Vishwanath

In this case the question before the court was whether time-keepers, who prepared pay sheet of the workshop
staff, maintain leave account, dispose of settlement case and maintain records for other statistical purposes,
were workers as defined in the Factories Act 1948. § 2 defined ‘as a person employed directly or through
any agency, whether for wages or not in any manufacturing process used for a manufacturing process or any
other kind of work incidental to or connected with the manufacturing process.’ The court gave a liberal
construction to the definition of worker and held that time-keepers were workers being employed in a kind
of work incidental to or connected with the manufacturing process.

(iii) Motor Owner’s Insurance Co Ltd v. JK Modi

In this case, the words ‘any one accident’ occurring in § 95(2) (a) of the Motor Vehicles Act 1939 was
construed. Having regard to the beneficial purpose of the Act, the words were construed to signify as many
accidents as the number of persons involved in the accident tto enable the limit of Rs. 20,000 payable by the
insurance company to apply to each person injured.

(iv) Kuldip Kaur v. Surinder Singh

In this case the Supreme court dealt with § 125(3) of the Cr PC. This section provides for recovery of
maintenance granted in favour of a wife or minor child by issue of a warrant if the order for maintenance is
not complied with ‘without sufficient cause’ and enables the magistrate, if the amount still remains unpaid to
sentence the person against whom the order is made to imprisonment for a period of one month. The court
drew a distinction between ‘mode of enforcement’ and ‘mode of satisfaction’ and held that even after a
sentences of imprisonment, the person concerned remained liable for arrests of maintenance for non-
payment of which he was imprisoned and the liability for payment could be satisfied only by payment and
not by suffering the sentence.

(v) Bhagirath v. Delhi Administration

In this case the Supreme Court held that the beneficent provisions of § 428, Cr PC directing set-off of the
period of pre-conviction detention against the ‘term’ of imprisonment is applicable even to cases where the
sentence is imprisonment for life and that such a sentence is also imprisonment ‘for a term’ within the
section.

CONCLUSION

Enacted laws, Acts and Rules are drafted by legal experts and so it is expected that the language used will
leave little room for interpretation. Interpretation of statutes helps in finding of the meaning of ambiguous
words and expressions given in the statutes and resolving inconsistency lying therein. If any provision of the
statute is open to two interpretations, the Court has to choose that interpretation which represents the true
intention of the legislature. The best interpretation of statutes is possible by adoption of various guiding
rules of construction and aids to construction of statutes. The courts are the best interpreters. They strongly
lean against a construction which reduces the statute to a futility. A statute or any enacting provision therein
must be so construed as to make it effective and operative on the principle expressed in the maxim: ut res
magis valeat quam pereat.

BIBLIOGRAPHY

Statutes

1. Constitution of India, 1950

2. Indian Penal Code, 1860
3. Indian Income tax Act, 1922
4. Preventive Detention Act, 1950
5. Criminal Procedure Code, 1973

Books
1. KP Chakravarthy, “Interpretations of Statutes”, 2nd Ed., Allahabad : Central Law Agency, 2008
2. Prof. T. Bhattacharya, “The Interpretation of Statutes”, 8th Ed., Allahabad : Central Law Agency,
2012
3. RD Srivastava, “Text Book of Interpretation of Statutes and Legislation”, 5th Ed., Allahabad : Central
Law Agency, 2009
4. Vepa P Sarathi, “Interpretation of Statutes”, 5th Ed., Lucknow : Eastern Book Company, 2010
5. MP Jain, Indian Constitutional Law, Wadwa Nagpur, 5th Ed., 537
6. VN Shukla, “Constitutional Law”, 6th Ed., Wadhwa Nagpur: Lexis Nexis Butterworths, 2010