ASSIGNMENTS FOR ASSESSMENT

INTERPATATION OF STATUTES

[Submitted as a partial fulfillment of the requirements for B.A. LL.B (HONS) 5Year
IntegratedCourse]

Session: 2019-2020

Submitted On: 08 AUGUST, 2020

SubmittedBy: Submittedto:

Mr.Ravi prakash arya Prof. Dr.Radha Gupta

RollNo.:53 FACULTY

SEMESTER (VI)section(A) UNIVERSITY FIVE YEAR LAW

COLLEGE

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 CERTIFICATE

Prof. Dr, Radha Gupta Date:-08/08/2020

Faculty

University Five Year Law College

University of Rajasthan, Jaipur

This is to certify that Mr. Ravi prakash aryaof 6th Semester Section- A of University Five
Year Law College, University of Rajasthan has carried out the assignments under my
supervision and guidance. The student has completed work in my stipulated time and
according to the norms prescribed for the purpose.

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 DECLARATION

I, Ravi prakash, hereby declare that this assignment is carried out by me

under the guidance and supervision of Prof. Dr. Radha Gupta.

The interpretations put forth are based on my reading and understanding of the original
texts. The books, articles and websites etc. which have been relied upon by me have
been duly acknowledged at the respective places in the text.

For the present assignment which I am submitting to the university, no degree or

diploma has been conferred on me before, either in this or in any otheruniversity.

Date:08/08/2020 Signature

Raviarya

Roll no.53

Semester : VI A

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 ACKNOWLEDGMENTS

I have written this assignment under the supervision of Prof.Dr.. Radha Gupta , Faculty,
University Five Year Law College ,University of Rajasthan ,Jaipur. Her valuable
suggestions herein have not only helped me immensely in making this work but also in
developing an analytical approach to this work.

I found no words to express my sense of gratitude for Director Dr. Sanjula Thanvi for
constant encouragement at every step.

I am extremely grateful to librarian and library staff of college for the support extended
by them from time to time.

Ravi prakash arya

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 TABLE OF CONTENTS

Content Page No.

Certificate I

Declaration II

Acknowledgment III

Assignment-1

Literal meaning of interpatation

Assignment-2

Golden rule of interpatation

Assignment-3

Mischief rule of interpatation

Assignment-4

Internal aid to interpatation

Assignment-5

External aid to interpatation

Assignment-6

Interpatation of remedial statutes

Assignment-7

Interpatation of taxing statutes

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 ASSIGNMENT-1

LITERAL RULE OF INTERPRETATION

The term Interpretation has been derived from the Latin term interpretari which means to explain
or understand. Every statute has to be interpreted by the judge the way it is meant to be
understood.

The purpose of interpretation is always to find out what the statute stands for, what is the defect
it intends to remove and what is the remedy it seeks to advance[]. The basic principle of the
construction of statutes is that, the words have to be read and understood in their true literal
sense. The Literal Rule is the first rule applied by the judges. The literal rule is also called
grammatical rule by some jurists.

The literal rule means that a judge has to consider what the statute s, i.e its simple plain meaning
without any ambiguity. It is said that the words themselves best declare the intention of the law-
givers

The interpretation or construction means the process by which the courts seek to ascertain the
intent of the Legislature through the medium of the authoritative form in which it is
expressed[3]. In the literal rule of interpretation, the law has to be considered as it is and the
judges cannot go beyond ‘litera legis’. The literal interpretation is a means to ascertain the
’ratio legis’ of the statute.

In the literal rule, the intention of the parliament while framing the statute, is the ordinary
meaning of the words used. Justice Jervis, has described the meaning of literal rule in Abley v
Gale. Lord Diplock observed in Duport Steel Ltd v Sirsthat:

Where the meaning of the statutory words is plain and unambiguous it is not then for the judges
to invent fancied ambiguities as an excuse for failing to give effect to its plain meaning because
they consider the consequences for doing so would be inexpedient, or even unjust or immoral.

The words of a statute are to be first understood in their natural, ordinary or popular sense and
phrases and sentences are construed according to their grammatical meaning, unless that leads to
some absurdity or unless there is something in the context, or in the object of the statute to
suggest the contrary.

No judge can deviate from the meaning of the statute though decision maybe unjust. The words
of a statute must prima facie be given their ordinary meaning.

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The literal rule accepts supremacy of the Parliament: the right to make laws, even though
sometimes, they seem absurd. In the literal rule of interpretation, there is no contrary meaning
within the statute.

Where there is no ambiguity in words, the question of intention ought not to be admitted.[8] The
words are plain and clear under literal rule. The literal rule helps the judge in administering
justice in a neutral manner.

When the language of the statute is clear and unambiguous it is not necessary to look into the
legislative intent or object of the Act[9]. The literal rule puts a virtual boundary upon the judges
from not deviating from the ordinary or literal meaning of the words used in the statute.

When the language of the statute is uncertain or ambiguous on then the judge have the duty to
interpret. The literal rule appreciates precision and certainty which help the reduction of
litigation.

The judges have to act upon the true intention of the legislature. The judges have no liberty to
modify the law even if they feel that the true intention of the legislature have not been expressed
rightly in the law.

Though literal interpretation must be accepted, it should not be followed if the statute is
defective.

The advantages of the literal rule

The literal rule enables the common man to understand the statue.

The intent of the legislature is simple and clear.

The literal rule respects the parliamentary supremacy in administration of justice.

Under literal rule the law is quite predictable.

The dis-advantages of the literal rule:

The literal rule can lead to unreasonable decision making.

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The English language is ambiguous.

The application of literal meaning in all situations and circumstances is not possible.

The rule expects standards of unattainable perfection from the parliamentary draftsman.

Criticisms of literal rule of interpretation of statutes:

Literal rule claim that it rests on the erroneous assumption that words have a fixed meaning. The
literal rule of interpretation leads to injustice. There are chances of creating misleading
precedents while deciding cases. The courts do not have the power to alter the words of the
legislature, it is not open for judicial innovations. The words cannot be understood properly
without the context in which it is used.

The strict adherence to this principle may cause injustice and sometimes it might give results
which are quite contrary to general intention of statute or common sense[15]. Due to the
absurdity that is prevalent in literal rule of interpretation, the court may ascertain a literal
meaning which was not intended by the legislature. If the court applies literal rule and feels that
the interpretation is morally wrong then they cannot avoid giving the interpretation[16].

With changing and adopting of new policies and legislature, the statutes cannot be interpreted in
their traditional way i.e, taking the literal meaning of the words used. Hence these make literal
rule not suitable to present situation. 1

1
http://www.legalserviceindia.com/legal/article-1730-the-literal-rule-of-interpretation-of-statute.html

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Cases studies relating to literal rule of interpretation of statute:

R v. Harris (1863) 7C

In this case, the defendant bit the plaintiff’s nose. The statute made it an offence 'to stab cut
or wound' the court held that under the literal rule the act of biting did not come within the
meaning of stab cut or wound as these words implied an instrument had to be used. Therefore the
defendant was acquitted.

Fisher v. Bell (1961) 1 QB 394

In this case, the defendant displayed flick knife with price tag in his shop. The statute made it a
criminal offence to 'offer' such flick knives for sale. His conviction was quashed as goods on
display in shops are not 'offers' in the technical sense but an invitation to treat. The court applied
the literal rule of statutory interpretation in this case.

CIT v. T. V Sundaram Iyyengar (1975) 101 I.T.R 764 SC

The meaning of Literal Rule was given in this case as, "If the language of the statute is clear and
unambiguous, the Court cannot discard the plain meaning, even if it leads to an injustice."

Keshavji Ravji and Co. v. CIT (1990) Taxmann 87 SC

The meaning of literal rule is stated that, As long as there is no ambiguity in the statutory
language, resort to any interpretative process to unfold the legislative intent becomes
impermissible.

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 ASSIGNMENT-2

GOLDEN RULE OF INTERPRETATION

What is Golden Rule ?

Golden rule is a modification of literal rule, Golden rule allows departure from strict literal Rule
By recourse to consequences of applying a natural and ordinary meaning. The golden rule is used
to remove absurdity. It comes into existence where some doubt existed as to the meaning of a
world.

Origin of Golden rule -

In the year 1857, for the first time, Lord Wensleydale propounded the golden rule of
interpretation, in Grey Vs. Pearson.

TherMeaning of Golden rule -

The golden rules departs from its strictly literal rules, it is elaboration or extension of literal rule.
Golden rule of interpretation allows judges to depart from a word normal meaning in order to
avoid an absurd result

According to Maxwell, "The golden rule is that words of Institute must prima facie be given
their ordinary meaning. According to the golden rule in the construction of a statute, the Court
Must Adhere to the ordinary meaning and grammatical construction of the words used.eafter this
rule has become famous by the name of Wensleydale's Golden rule.

It is known as the golden rule because it solves all the problems of interpretation. The rule says
that to start with we shall go by the literal rule, however, if the interpretation given through the
literal rule leads to some or any kind of ambiguity, injustice, inconvenience, hardship, inequity,
then in all such events the literal meaning shall be discarded and interpretation shall be done in
such a manner that the purpose of the legislation is fulfilled.

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The literal rule follows the concept of interpreting the natural meaning of the words used in the
statute. But if interpreting natural meaning leads to any sought of repugnance, absurdity or
hardship, then the court must modify the meaning to the extent of injustice or absurdity caused
and no further to prevent the consequence.

This rule suggests that the consequences and effects of interpretation deserve a lot more
important because they are the clues of the true meaning of the words used by the legislature and
its intention. At times, while applying this rule, the interpretation done may entirely be opposite
of the literal rule, but it shall be justified because of the golden rule. The presumption here is that
the legislature does not intend certain objects. Thus, any such interpretation which leads to
unintended objects shall be rejected.

Importance of Golden rule of Interpretation -

1) it departs from its strictly literal rules

2) the court adopt the golden rule of interpretation in order to arrive at a perfect interpretation
which would bring out the true meaning of the language, in the process of giving effect to the
real intention of the Legislature.

Application of Golden Rule –

Application of golden rule depends upon the consequences. Where the situation demands the
application of the golden rule it is important to consider the effect or consequences, which would
result come out from it, for the of one point out the real meaning of the words. 2

2
https://www.iilsindia.com/blogs/golden-rule-of-interpretation/

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Advantages of Golden rule -

With the help of golden rule errors in drafting can be corrected immediately.

Decisions are made more in line with Parliament intentions.

Disadvantages of golden rule -

Infringe separation of powers.

Judges have no power to intervene for Pure justice where there is no absurdity.

Lee Vs Knapp 1967 (2) QB 422-

In this case, interpretation of the world 'stop' was involved. Under section 77(1) of the road
traffic Act, 1960 a driver causing an accident shall stop after the accident. In this case, the driver
stopped for a moment after causing an accident and then moved away. Applying the golden rule
the Court held that requirement of the section had not been followed by the driver as he had not
stopped for a reasonable time of period Requiring interested persons to make necessary inquiries
for him about the accident

State of Madhya Pradesh v. Azad Bharat Financial Company, AIR 1967 SC 276, Issues of

the case are as follows.

A transporting company was carrying a parcel of apples was challenged and charge-sheeted. The
truck of the transporting company was impounded as the parcel contained opium along with the
apples. At the same time, the invoice shown for the transport consisted of apples only.

Section 11 of the opium act 1878, all the vehicles which transport the contraband articles shall
be impounded and articles shall be confiscated. It was confiscated by the transport company that
they were unaware of the fact that opium was loaded along with the apples in the truck.

The court held that although the words contained in section 11 of the said act provided that the
vehicle shall be confiscated but by applying the literal rule of interpretation for this provision it is
leading to injustice and inequity and therefore, this interpretation shall be avoided. The words
‘shall be confiscated’ should be interpreted as ‘may be confiscated’.

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State of Punjab v. Quiser Jehan Begum, AIR 1963 SC 1604, a period of limitation was

prescribed for, under section 18 of land acquisition act, 1844, that an appeal shall be filed for the
announcement of the award within 6 months of the announcement of the compensation. Award
was passed in the name of Quiser Jehan. It was intimated to her after the period of six months
about this by her counsel. The appeal was filed beyond the period of six months. The appeal was
rejected by the lower courts.

It was held by the court that the period of six months shall be counted from the time when Quiser
Jehan had the knowledge because the interpretation was leading to absurdity. The court by
applying the golden rule allowed the appeal.

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 ASSIGNMENT-3

MISCHIEF RULE OF INTERPRETATION

Mischief Rule was originated in Heydon’s case in 1584. It is the rule of purposive construction
because the purpose of this statute is most important while applying this rule. It is known as
Heydon‟s rule because it was given by Lord Poke in Heydon‟s case in 1584. It is called as
mischief rule because the focus is on curing the mischief.

In the Heydon‟s case, it was held that there are four things which have to be followed for true
and sure interpretation of all the statutes in general, which are as follows

1. What was the common law before the making of an act.

2. What was the mischief for which the present statute was enacted.

3. What remedy did the Parliament sought or had resolved and appointed to cure the disease of
the commonwealth.

4. The true reason of the remedy. The purpose of this rule is to suppress the mischief and
advance the remedy.

Case laws:-

Smith v. Hughes, in this case around the 1960s, the prostitutes were soliciting in the streets of
London and it was creating a huge problem in London. This was causing a great problem in
maintaining law and order. To prevent this problem, Street Offences Act, 1959 was enacted.
After the enactment of this act, the prostitutes started soliciting from windows and balconies.

Further, the prostitutes who were carrying on to solicit from the streets and balconies were
charged under section 1(1) of the said Act. But the prostitutes pleaded that they were not
solicited from the streets.

The court held that although they were not soliciting from the streets yet the mischief rule must
be applied to prevent the soliciting by prostitutes and shall look into this issue.Thus, by applying
this rule, the court held that the windows and balconies were taken to be an extension of the
word street and charge sheet was held to be correct.

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 Pyare Lal v. Ram Chandra, the accused in this case, was prosecuted for selling the sweeten
supari which was sweetened with the help of an artificial sweetener. He was prosecuted under
the Food Adulteration Act. It was contended by Pyare Lal that supari is not a food item. The
court held that the dictionary meaning is not always the correct meaning, thereby, the mischief
rule must be applicable, and the interpretation which advances the remedy shall be taken into
consideration. Therefore, the court held that the word „food‟ is consumable by mouth and orally.
Thus, his prosecution was held to be valid.

Kanwar Singh v. Delhi Administration, Issues of the case were as follows- Section 418 of Delhi
Corporation Act, 1902 authorised the corporation to round up the cattle grazing on the
government land. The MCD rounded up the cattle belonging to Kanwar Singh. The words used
in the statute authorised the corporation to round up the abandoned cattle. It was contended by
Kanwar Singh that the word abandoned means the loss of ownership and those cattle which were
round up belonged to him and hence, was not abandoned. The court held that the mischief rule
had to be applied and the word abandoned must be interpreted to mean let loose or left
unattended and even the temporary loss of ownership would be covered as abandoned.

Regional Provident Fund Commissioner v. Sri Krishna Manufacturing Company , Issue in this
Case was that the respondent concerned was running a factory where four units were for
manufacturing. Out of these four units one was for paddy mill, other three consisted of flour mill,
saw mill and copper sheet units. The number of employees there were more than 50. The RPFC
applied the provisions of Employees Provident Fund Act, 1952 thereby directing the factory to
give the benefits to the employees.

The person concerned segregated the entire factory into four separate units wherein the number
of employees had fallen below 50, and he argued that the provisions were not applicable to him
because the number is more than 50 in each unit. It was held by the court that the mischief rule
has to be applied and all the four units must be taken to be one industry, and therefore, the
applicability of PFA was upheld. 3

3
http://e-lawresources.co.uk/Mischief-rule.php

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 ASSIGNMENT-4

INTERNAL AIDS TO INTERPRETATION

1.Title

1.1 Short Title

The short title of the Act is only its name and is given solely for the purpose of facility of
reference.

It is merely a name given for identification of the Act and not for description and generally ends
with the year of passing of the Act, such as the Indian Contract Act, 1872, the Indian Penal Code,
1860, the Indian Evidence Act, 1872.

Even though it is a part of the statute, it has no role to play while interpreting a provision of the
Act. Neither can it extend nor can it delimit the clear meaning of a particular provision.

1.2 Long title

A statute is headed by a long title whose purpose is to give a general description about the bject
of the act. Normally, it begins with the words An Act to…

For instance, the long title of the Code of Criminal Procedure, 1973 says: An Act to

consolidate and amend the law relating to criminal procedure, and that of the Prevention of
Corruption Act, 1988 says: „An Act to consolidate and amend the law relating to the prevention
of corruption and matters connected therewith‟.

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In the olden days the long title was not considered a part of the statute and was, therefore, not
considered an aid while interpreting it.

There has been a change in the thinking of courts in recent times and there are numerous
occasions when help has been taken from the long title to interpret certain provisions of
thestatute but only to the extent of removing confusions and ambiguities. If the words in a statute
are unambiguous, no help is derived from the long title.

In Poppatlal Shah v. State of Madras, the title of the Madras General Sales Tax, 1939, was
utilised to indicate that the object of the Act is to impose taxes on sales that take place within the
province.

2. Preamble:-

The Preamble to the Act contains the aims and objectives sought to be achieved, and istherefore,
part of the Act. It is a key to unlock the mind of the law makers.

Therefore, in case of any ambiguity or uncertainty, the preamble can be used by the courts to
interpret any provision of that statute. But there is a caution here. The apex court has held in
Maharishi Mahesh Yogi Vedic Vishwavidyalaya v. State of M.P. the court cannot have resort to
preamble when the language of the statute is clear and unambiguous.

Another important example is found in Kesavananda Bharati v. State of Kerala, wherein the apex
court strongly relied on the Preamble to the Constitution of India in reaching a conclusion that
the power of the Parliament to amend the constitution under Article 368 was not unlimited and
did not enable the Parliament to alter the Basic Structure of the Constitution.

3. Marginal Notes:-

Marginal notes are those notes which are inserted at the side of the sections in the Act and
express the effect of the sections. These are also known as side notes.

In the olden times help used to be taken sometimes from the marginal notes when the clear
meaning of enactment was in doubt. But the modern view of the courts is that marginal notes
should have no role to play while interpreting a statute.

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The basis of this view is that the marginal notes are not parts of a statute because they are not
inserted by the legislators nor are they printed in margin under the instructions or authority ofthe
legislature. These notes are inserted by the drafters and many times they may be inaccurate too.

However, there may be exceptional circumstances where marginal notes are inserted by the
legislatures and, therefore, while interpreting such an enactment help can be taken from such
marginal notes. The Constitution of India is such a case. The marginal notes were inserted by the
Constituent Assembly and, therefore, while interpreting the Indian Constitution, it is always
permissible to seek guidance and help from the marginal notes.

In Bengal Immunity Company v. State of Bihar, the Supreme Court held that the marginal notes
to Article 286 of the Constitution was a part of the Constitution and therefore, it could be relied
on for the interpretation of that Article.

In S.P. Gupta v. President of India

The Supreme Court held that if the relevant provisions in the body of a statut. firmly point
towards a construction which would conflict with the marginal note, the marginal note has to
yield.

If there is any ambiguity in the meaning of the provisions in the body of the.statute, the
marginal note may be looked into as an aid to construction.

4.Headings:- In all modern statutes, generally headings are attached to almost each section, just
preceding the provisions. For example, the heading of Section 437 of the Code of Criminal
Procedure, 1973 is “When bail may be taken in case of non- bailable offence”.

Headings are not passed by the Legislature but they are subsequently inserted after the Bill has
become law.

Headings are of two kinds- one which are prefixed to a section and the other which are prefixed
to a group or set of sections. These headings have been treated by courts as preambles to those
sections or set of sections.

Naturally, the rules applicable to the preamble are followed in case of headings also while
interpreting an enactment. Therefore, if the plain meaning of enactment is clear, help from
headings cannot be taken by the courts.

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 However, if more than one conclusion are possible while interpreting a particular provision, the
courts may seek guidance from the headings to arrive at the true meaning.

A heading to one set of sections cannot act as an aid to interpret another set of sections– Shelly
v. London County Council.

5.Illustrations

Illustrations are sometimes appended to a section of a statute with a view to illustrate the
provision of law explained therein. A very large number of Indian Acts have illustrations
appended to various sections.

They being the show of mind of the legislature are a good guide to find out the intention of the
farmers. But an enactment otherwise clear cannot be given an extended or a restricted meaning
on the basis of illustrations appended therein.

The Supreme Court in Mahesh Chand Sharma v. Raj Kumari Sharma observed that illustration is
a part of the section and it helps to elucidate the principle of the section.

However, illustrations cannot be used to defeat the provision or to modify the language of the
section. This is reflected by a legal maxim “Exampla illustrant, non-restringent legem” which
means examples only illustrate but do not narrow the scope of rule of a law.

6.Exceptions and Saving Clauses:-

Exceptions are generally added to an enactment with the purpose of exempting something which
would otherwise fall within the ambit of the main provision.

For instance, there are ten exceptions attached to section 499, IPC which defines „Defamation‟.
These ten exceptions are the cases which do not amount to defamation.

Similarly there are five exceptions attached to section 300 of the Indian Penal Code which
defines „murder‟. These five exceptions are the cases which are not murders but culpable
homicide not amounting to murder.

An exception affirms that the things not exempted are covered under the main provision.

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In case a repugnancy between an operative part and an exception, the operative part must be
relied on.

Some decisions have, however, been given on the principle that an exception, being the latter
will of the legislature, must prevail over the substantive portion of the enactment.

In Director of Secondary Education v. Pushpendra Kumar, the Supreme Court held that a
provision in the nature of an exception cannot be so interpreted as to subserve the main
enactment and thereby nullify, the right conferred by the main enactment.

In Collector of Customs v. M/s. Modi Rubber Limited, the Supreme Court held that whenever
there is a provision in the nature of an exception to the principal clause thereof; it must be
construed with regard to that principal clause.

Saving clauses are generally appended in cases of repeal and re-enactment of a statute.

By this the rights already created under repealed enactment are not disturbed nor new rights are
created by it. A saving clause is normally inserted in the repealing statute. In case of a clash
between the main part of statute and a saving clause, the saving clause has to be rejected.

In Shah Bhojraj Kuverji Oil Mills v. Subhash Chandra Yograj Sinha, the Supreme Court did not
allow the use of a saving clause, which was enacted like a proviso, to determine whether a
section in an Act was retrospective in operation.

In Agricultural and Processed Food Products v. Union of India, the Supreme Court while
interpreting the saving clause in the Export Control Order, 1988 held that the clause only 13
saved the rights which were in existence before the order was issued and it did not confer any
new rights which were not in existence at that time.

7. Schedules:-

Schedules attached to an Act generally deals with as to how claims or rights under the Act are to
be asserted or as to how powers conferred under the Act are to be exercised. The Schedules are
appended towards the end of the enactment.

Sometimes, a schedule may contain some subjects in the form of a list as is the case with the
Constitution of India to enable the Union and the states to legislate in their respective fields.

Schedules are parts of the Statute itself and may be looked into by the courts for the purpose of
interpreting the main body of the statute.

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Similarly, while interpreting the schedules help may always be taken from the main body of the
Act to find out the true spirit of the Act.

Sometimes, a schedule may contain transitory provisions also to enable an Act to remain in
existence till the main provisions of the Act begin to operate, such as the Ninth Schedule of the
Government of India Act, 1935.

In M/s. Aphali Pharmaceuticals Limited v. State of Maharashtra, the Supreme Court held that in
case of a clash between the schedule and the main body of an Act, the main body prevails and
the schedule has to be rejected.

In Jagdish Prasad v. State of Rajasthan and others, the Supreme Court ruled that the purpose of a
schedule is to advance the object of the main provision and deletion of schedule cannot wipe out
provisions of an Act in effect and spirit.

8. Punctuation:-

In ancient times, statutes were passed without punctuation and naturally, therefore, the courts
were not concerned with looking at punctuation.

But in modern times statutes contain punctuation. Therefore, whenever a matter comes before
the courts for interpretation, the courts first look at the provision as they are punctuated and if
they feel that there is no ambiguity while interpreting the punctuated provision, they shall so
interpret it.

However, while interpreting the provision in the punctuated form if the court feels repugnancy
or ambiguity, the court shall read the whole provision without any punctuation and if the
meaning is clear will so interpret it without attaching any importance whatsoever to the
punctuation

. In Aswini Kumar v. Arabinda Bose, the Supreme Court held that a punctuation cannot be
regarded as a controlling element and cannot be allowed to control the plain meaning of a text.

Therefore, in Shambhu Nath Sarkar v. State of West Bengal, the Supreme court held that the
word „which‟ used twice in Article 22(7) of the Constitution, followed by a comma after each,
was to be read conjunctively because the context so required.

9. Explanations:-

Explanations are inserted with the purpose of explaining the meaning of a particular provision
and to remove doubts which might creep up if the explanation had not been inserted.

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 It does not expand the meaning of the provision to which it is added but only ties to remove
confusion, if any, in the understanding of the true meaning of the enactment.

A large number of Indian Acts have explanations attached to various sections. For instance,
Section 108 of the Indian Penal Code which defines the word „abettor‟ has five explanations
attached to it. Sometimes, explanations are inserted not at the time of enactment of a statute but
at a later stage. For instance, the two explanations to Section 405 of the Indian Penal Code,
which defines the crime of „Criminal breach of trust‟, were inserted in 1973 and 1975
respectively.

There may be a case where in spite of many clauses in a section only one explanation is attached
to the section as is the case with Section 20 of the Code of Civil Procedure, 1908. In such a case
it must be seen as to which clause the explanation is connected with– Patel Roadways limited v.
Prasad Trading Company.

In Bengal Immunity Company v. State of Bihar, the Supreme Court has observed that an
explanation is a part of the section to which it is appended and the whole lot should be read
together to know the true meaning of the provision.

In Bihar Co-operative Development Cane Marketing Union v. State of Bihar, the Supreme Court
said that in case of a conflict between the main provision and the explanation attached to it, the
general duty of the court is to try to harmonise the two.

10. Definition or Interpretation Clauses:-

Definition or interpretation clauses are generally included in a statute with the purpose of
extending the natural meaning of some words as per the definition given or to interpret such
words, the meanings of which are not clear, by assigning them the meaning given in the
definition clause.

Generally, the meaning given to a particular word in the interpretation clause will be given to
that word wherever it is used in that statute.

The only exception to this rule is that if the court feels that in the context of a particular
provision the definition clause, if applied will result in an absurdity, the court will not apply the
definition clause while interpreting that provision.

Similarly, the definition clause of one Act cannot be used to explain the same word used in
another statute. However, if both the statutes are in pari materia and the word has been defined in
one Act, the same meaning may be assigned to the word in the other Act also.

Whenever the words means or means and includes are used in the definition clause, they afford
an exhaustive explanation of the word in the statute.

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The language in which both words „includes and shall not include‟ are used, such definitions are
inclusive and exclusive. The word includes is generally used in the definition clause to enlarge
the ordinary and natural meaning of that particular word.

In M/s. Hamdard (Wakf) Laboratories v. Deputy Labour Commissioner, the Supreme Court
observed that when an interpretation clause uses the word „includes‟, it is prima facie extensive.

When it uses the words „means and includes‟, it will afford an exhaustive explanation to the
meaning which for the purposes of the Act must invariably be attached to the word or
expression.

In Ramanlal Bhailal Patel v. State of Gujarat, the Supreme Court observed that the use of the
word „includes‟ indicates an intention to enlarge the meaning of the word used in the statute.

The use of the word denotes in the interpretation clause shows that the expressions denoted
therein are covered within the ambit of that particular word.

The expression deemed to be in the interpretation clause creates a fiction. The use of the phrase
that is to say in the definition clause is illustrative of the meaning and not restrictive.

In State of Bombay v. Hospital Mazdoor Sabha, the JJ Group of Hospitals was held by the
Supreme Court an industry within the meaning of the Industrial Disputes Act, 1947. The court
observed that Section 2 (J) of the Act of 1947 is an inclusive definition clause and is, therefore,
liable to be interpreted in an extended way and not in a restrictive way.

In State of Madhya Pradesh v. Saith and Skelton Private Limited, the Supreme Court, while
interpreting the word „Court‟ in Section 14 (2) of the Arbitration Act, 1940, held that its
meaning given in Section 2 (c) of the Act that it means a Court which would entertain a suit on
the subject-matter, cannot be accepted in the light of the context, and that „Court‟ in the present
instance must mean a court which appoints the arbitrator.

11. Proviso:-

In some sections of a statute, after the main provision is spelled out, a clause is added, with the
opening words “provided that…”.

The part of the section commencing with the words “Provided that…” is called Proviso.

A proviso is a clause which is added to the statute to accept something from enacting clause or
to limit its applicability.

As such, the function of a proviso is to qualify something or to exclude, something from what is
provided in the enactment which, but for proviso, would be within the purview of enactment.

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The general rule about the interpretation of a proviso is that proviso is not to be taken absolutely
in its strict literal sense but is of necessity limited to the ambition of the section which it
qualifies.

The court is not entitled to add words to a proviso with a view to enlarge its scope. The proviso
must reasonably be conveyed by the words used therein.

Where the proviso is directly repugnant to a section, the proviso shall stand and be held a repeal
of the section as the proviso speaks the latter intention of the makers.

The real nature and function of a proviso has been effectively laid down in following case laws:

In Union of India v. Sanjay Kumar Jain, the function of proviso was declared that it qualifies or
carves out an exception to the main provision.

In Vishesh Kumar v. Shanti Prasad, the Supreme Court held that a proviso cannot be permitted
by construction to defeat the basic intent expressed in the substantive provision.

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 ASSIGNMENT-5

EXTERNAL AIDS TO INTERPRETATION

Interpretation means the process of ascertaining the true meaning of the words used in a statute.
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.”

When internal aids are not adequate, courts have to take recourse to external aids. They are very
useful tools for the interpretation or construction of statutory provisions. In B. Prabhakar Rao
and others v. State of A.P. and others, O. Chennappa Reddy J. has observed: “Where internal
aids are not forthcoming, we can always have recourse to external aids to discover the object of
the legislation. External aids are not ruled out. This is now a well settled principle of modern
statutory construction.”

Further, in the case of District Mining Officer and others v. Tata Iron & Steel Co. and another ,
the Supreme Court has observed: “It is also a cardinal principle of construction that external aids
are brought in by widening the concept of context as including not only other enacting provisions
of the same statute, but its preamble, the existing state of law, other statutes in pari materia and
the mischief which the statute was intended to remedy.”

Some of the External Aids are –

Parliamentary History, Historical Facts and Surrounding Circumstances

If the wordings are ambiguous, the historical setting may be considered in order to arrive at the
proper construction, which covers parliamentary history, historical facts, statement of objects and
reasons, report of expert committees.

a) Parliamentary history means the includes conception of an idea, drafting of the bill, the
debates made, the amendments proposed, speech made by mover of the bill, etc. Papers
placed before the cabinet which took the decision for the introduction of the bill are not
relevant since these papers are not placed before the parliament.

Cases

1. The Supreme Court in S.R. Chaudhuri v. State of Punjab and others has stated that it is a
settled position that debates in the Constituent Assembly may be relied upon as an aid to

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 interpret a Constitutional provision because it is the function of the Court to find out the
intention of the framers of the Constitution.
But as far as speeches in Parliament are concerned, a distinction is made between speeches
of the mover of the Bill and speeches of other Members.
2. Regarding speeches made by the Members of the Parliament at the time of consideration of a
Bill, it has been held in K.S. Paripoornan v. State of Kerala and othersthat they are not
admissible as extrinsic aids to the interpretation of the statutory provision. However,
speechesmade by the mover of the Bill or Minister may be referred to for the purpose of
finding out the object intended to be achieved by the Bill.
b) Historical facts of the statute are the external circumstances in which it was enacted. The
object is to understand whether the statute in question was intended to alter the law or leave
it where it stood.
c) Statement of objective and reasons provides why the statute is being brought to
enactment. It is permissible to refer to it for understanding the background, the antecedent
state of affairs, the surrounding circumstances in relation to the statute and the evil which the
statute sought to remedy.
Cases
But, as held in Devadoss (dead) by L. Rs, v. Veera Makali Amman Koil Athalur, it cannot
be used to ascertain the true meaning and effect of the substantive provision of the statute.

d) Reports of Commissions including Law Commission or Committees including

Parliamentary Committees preceding the introduction of a Bill can also be referred to in the
Court as evidence of historical facts or of surrounding circumstances or of mischief or il
intended to be remedied.

Cases
The Supreme Court in Rosy and another v. State of Kerala and others considered Law
Commission of India, 41st Report for interpretation of section 200 (2) of the Code of
Criminal Procedure, 1898.

Social, Political and Economic Developments and Scientific Inventions A Statute must be
interpreted to include circumstances or situations which were unknown or did not exist at the
time of enactment of the statute. Any relevant changes in the social conditions and
technology should be given due weightage. il intended to be remedied.

Cases
In S.P. Gupta v. Union of India, it was stated – “The interpretation of every statutory
provision must keep pace with changing concepts and values and it must, to the extent to
which its language permits or rather does not prohibit, suffer adjustments through judicial
interpretation so as to accord with the requirement of the fast changing society which is

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undergoing rapid social and economic transformation … It is elementary that law does not
operate in a vacuum. It is, therefore, intended to serve a social purpose and it cannot be
interpreted without taking into account the social, economic and political setting in which it
is intended to operate. It is here that the Judge is called upon to perform a creative function.
He has to inject flesh and blood in the dry skeleton provided by the legislature and by a
process of dynamic interpretation, invest it with a meaning which will harmonise the law
with the prevailing concepts and values and make it an effective instrument for delivery of
justice.”

Therefore, court has to take into account social, political and economic developments and
scientific inventions which take place after enactment of a statute for proper construction of
its provision.

Reference to Other Statutes

For the purpose of interpretation or construction of a statutory provision, courts can refer to
or can take help of other statutes. It is also known as statutory aids. For e.g. the General
Clauses Act, 1897.

The application of this rule helped to avoid any contradiction between a series of statutes
dealing with the same subject as it allows the use of an earlier statute to throw light on the
meaning of a phrase used in a later statute in the same context.

Dictionaries
When a word is not defined in the statute itself, it is permissible to refer to dictionaries to
find out the general sense in which that word is understood in common parlance. For e.g.
Black’s Law Dictionary.
Judicial Decisions Decisions by courts on the same manner act as precedents for the
interpretation of statutes. Indian judicial pronouncements may have binding value when
issued by a higher court, and have persuasive value when issued by a court having same or
lower authority. These foreign decisions from countries following the same system of
jurisprudence have persuasive value only and cannot be used to contradict binding Indian
judgements.

Other materials Courts also refer passages and materials from eminent text books, articles
and papers published in journals.

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ASSIGNMENT-6

INTERPRETATION OF REMEDIAL STATUTES

The term interpretation means “To give meaning to”. Governmental power has been divided into
three wings namely the legislature, the executive and the judiciary. Interpretation of statues to
render justice is the primary function of the judiciary. It is the duty of the Court to interpret the
Act and give meaning to each word of the Statute. 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. The maxim “A Verbis legis non est recedendum” means that you must
not vary the words of the statute while interpreting it. The object of interpretation of statutes is to
determine the intention of the legislature conveyed expressly or impliedly in the language used.
To ensure that justice is made available to all, the judicial system has been evolved in all nations.
It is extremely important and in fact necessary also that the Courts interpret the law in such a
manner that ensures ‘access to justice’ to the maximum. For this purpose, the concept of ‘Canons
of Interpretation’ has been expounded. The Canons are those rules that have been evolved by the
Judiciary to help Courts determine the meaning and the intent of legislation.

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.

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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 § 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. § 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 § 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.

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

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 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.

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.

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. 4

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 ASSIGNMENT-7
INTERPRETATION OF TAXING STATUTES

Tax Systems in India

The tax system of British India reflected characteristics of a traditional agriculture economy.
Revenues of the central government were dominated by custom duties as domestic
requirements for manufactured goods were dominated by custom duties as domestic
requirements for manufactured goods were met mostly from imports, chiefly from Britain
and other commonwealth countries. Import duties were levied on all most all items of
imports whereas major items subject to export duties were jute and tea in which India
enjoyed near monopoly in the world market. Various custom and tariff enactments were
passed from time to time.

Principle of Interpretation

Principle of interpretation which have evolved are those based on plain meaning of the
words used and their grammatical meaning and those based on the intention or purpose of
the legislature.

In India tax law provides a useful set of cases for exploring the interpretative approaches of
the judiciary in India. Some general observations made by the courts are first mentioned
before analyzing the cases on different approaches. Interpretation of statute means that the
court has to ascertain the facts and then interpret the law to apply to such facts. It is the
function of the legislature to say what shall be the law and it is for the court to say that what
the law is. Where the language is plain and unambiguous and admits of only one meaning no
question of construction of statute arises for the statute speaks for itself.

The term interpretation means “to give meaning to” there are three bodies which divided
government power namely legislature, the executive and the judiciary. Interpretation of
statutes to render justice is primary function of the judiciary. 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.

The maxim “A Verbis legis non est recedendum” means that you must not very the words of
the statute while interpreting it.

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Principle of Strict Construction

The manner in which the Income-Tax Act has been drafted leaves great scope for litigation.
For this purpose, principles of interpretation have to be applied. These principles themselves
are not infallible and would depend on the facts of each case. The two well-settled principles
of interpretation, as applicable in taxing statutes, are:

(1) There is no equity in tax, and the principle of strict or literal construction applies in
interpreting tax statutes. Hence, on the plain language of the statute, if the assessee is entitled
to two benefits, he has to be granted both these benefits; and

(2) If there are two reasonable interpretations of taxing statutes, the one that favors the
assessee has to be accepted.

The principle of strict interpretation of taxing statutes was best enunciated by Rowlatt J. in
his classic statement in Cape Brandy Syndicate v I.R.C. (1 KB 64, 71): "In a taxing statute
one has to look merely at what is clearly said. There is no room for any intendment. There is
no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is
to be implied. One can look fairly at the language used." In the revenue satisfied 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 covered within the four corners of the provision of the taxing statute,
no tax can be imposed by inference or by analogy or by trying to probe into the intention of
the legislature and by considering what was the substance of the matter. Tax relief
application is a mandatory requirement for refund purpose. It is well settled principle that tax
exemptions are strictly against taxpayers. Tax refunds in the nature of tax exemption, are
resolved strictly against the claimant.

Recently, in the case of Manila North Tollways Corporation vs. Commissioner of Internal
Revenue,

The Court of Tax Appeals (CTA) had an occasion to apply again this principle of strict
construction of tax exemption and reiterated its position that an application for tax treaty
relief must be filed prior to any availment of tax treaty provision.

The claimant in this case simultaneously filed both its application for relief from double
taxation and its claim for refund with the International Tax Affairs Division (ITAD) more
than one year from the payment of its dividends to stockholders. The court noted that the
claimant did not comply clearly with the requirement provided under Revenue

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 Memorandum Order (RMO) No. 1-2000 that the availment of tax treaty relief should be
preceded by such application at least 15 days before the payment of dividend. Consequently,
the court denied the claimant’s application for tax refund for failure to comply with such
conditions.

It is a strict principle of interpretation that a statute should be read in its ordinary, natural and
grammatical sense.

In Innamuri Gopalam and Maddala Nagendrudu v State of A. P., the exemption was denied
to the assessee on the ground that the intention of the notification was to avoid double
taxation, and as this was not a case of double taxation no exemption could be granted.

The Supreme Court held that on the plain language of the notification, the assessee was
entitled to exemption, and since the intention was not reflected in plain words, it could not be
taken into consideration.

As observed by the apex court: "In construing a statutory provision the first and foremost
rule of construction is the literary construction. All that the court has to see at the very outset
is what does the provision say. If the provision is unambiguous and if from the provision the
legislative intent is clear, the court need not call into aid the other rules of construction of
statutes. The other rules of construction are called into aid only when the legislative intent is
not clear."

Exemption Clause - Strict Construction

Exemption Clause - Strict Construction

The law is well settled that a person who claims exemption or concession has to establish
that he is entitled to that exemption or concession. A provision providing for an exemption,
concession or exception, as the case may be, has to be construed strictly with certain
exceptions depending upon the settings on which the provision has been placed in the Statute
and the object and purpose to be achieved. If exemption is available on complying with
certain conditions, the conditions have to be complied with. The mandatory requirements of
those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be
shown, if there is a failure to comply with some requirements which are directory in nature,
the non-compliance of which would not affect the essence or substance of the notification
granting exemption. 5

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In Hansraj Gordhandas v. H.H. Dave held that such a notification has to be interpreted in the
light of the words employed by it and not on any other basis. This was so held in the context
of the principle that in a taxing statute, there is no room for any intendment, that regard must
be had to the clear meaning of the words and that the matter should be governed wholly by
the language of the notification, i.e., by the plain terms of the exemption. some of the
provisions of an exemption notification may be directory in nature and some are of
mandatory in nature. A distinction between provisions of statute which are of substantive
character and were built in with certain specific objectives of policy, on the one hand, and
those which are merely procedural and technical in their nature, on the other, must be kept
clearly distinguished. The principles as regard construction of an exemption notification are
no longer res integra. Whereas the eligibility clause in relation to an exemption notification
is given strict meaning where for the notification has to be interpreted in terms of its
language, once an assessee satisfies the eligibility clause, the exemption clause therein may
be construed literally.

Exemption from Custom Duty

Exemptions from custom duties are provided through provision of customs act, while some
are provided under Custom Tariff Act. Besides, Central government can grant partial or full
exemption from duty under section 25 of Customs Act.

Section 25(1) of custom act, 1962 authorizes Central Government to issue notifications
granting exemptions from duty. Such exemption may be unconditional or subject to
conditions. Such conditions may be required to be fulfilled before or after clearance.
Government can also grant exemption by special order in exceptional circumstance. The
exemption notification should be published in gazette. The notification can be issued only in
‘public interest’.

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