Statutory Interpretation

by D.P. Mittal

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Contents

CHAPTER 1

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Law - Introduction

1.1 Law - Meaning	1
1.2 Kinds of law	2
1.3 Supreme legislation	2
1.4 Subordinate legislation	2
1.5 Referential legislation	2
1.6 Judge-made law	2

CHAPTER 2

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Statutory Law - Supreme Legislation

2.1 Supremacy of Parliament	4
2.2 Power of legislature subject to constitutional limits	4
2.3 Taxation, a prerogative of legislature	4

SUBORDINATE LEGISL

2.4 Subordinate legislation - Necessity	5
2.4.1 Valid delegation of legislative power - Tests	6
2.4.2 Subordinate legislation - Guidelines	6
2.4.3 Subordinate legislation - Legislative Control	8
2.5 Subordinate legislation - Extent and limits of delegation	11
2.6 Subordinate legislation - Powers of rule making authorities	12
2.7 Rules have effect as if enacted in the Act	13
2.8 Rules are mandatory	13
2.9 Rules interpretation	14

REFERENTIAL LEGISL

2.10 Referential legislation - Convenient legislative device	15
2.11 Referential legislation - Kinds of	16
2.12 Referential legislation - Effect of repeal, modification or amendment of	18

RAG-BAG LEGISLATION OR COMPOSITE LEGISLATION

2.13 Rag-Bag Legislation - Legislative competence	19

CHAPTER 3

Judge-Made Law Rule of Precedents

3.1 Legislature - Delegation of responsibility to courts to make law through interpretative process	21
3.1.1 Judges not only declare but also make laws	22
3.1.2 Supreme Court and High Courts’ decisions - As important as statutes	24
3.2 Interpretation is fundamental role of a Judge	25
3.3 Judicial Interpretation to Adapt Law to Suit the Needs of Society	25

PRECEDENTS - MEANING AND SCOPE

3.4 Doctrine of Precedent	27
3.4.1 Ratio Decidendi	28
3.4.2 Obiter Dicta	31
3.4.3 Judicial Dicta	32

RULES OF PRECEDENTS

3.5 Precedent provides a Guide as to Future Course of Law	32
3.6 Precedents binding - Reasons	33
3.6.1 Stare decisis- Long Standing precedents	33
3.7 Precedents – Guidelines	34

EXCEPTIONS TO RULE OF PRECEDENT

3.8 Precedent - Decision given in per incuriam not binding	36
3.9 Precedent - followed not mechanically	39
3.10 Every observation not to be followed	40
3.11 Precedent - Sub Silentio	41

CHAPTER 4

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Law - Constitutional Validity

4.1 All laws flow from Constitution	44
4.2 Constitutionality of provisions - Principles of interpretation	45
4.2.1 Constitution - Interpretation	45
4.2.2 Aspect doctrine	49
4.3 Reading down an enactment	51
4.3.2 Construction to maintain constitutionality	52
4.3.3 Constitutionality - Presumptions	53
4.3.4 Constitutionality - Judged from the generality of the provisions of an Act	54
4.4 Constitutionality - Subordinate legislations	55

CONSTITUTIONALITY - COMPETENCE OF PARLIAMENT TO ENACT LAWS

4.5 Legislative competence to enact laws - Articles 245 and 246 of the Constitution	56
4.6 Power of legislation and list of legislation	56
4.7 Power of Parliament to enact laws - Limitations	58
4.9 Judicial review	59
4.10 Legislative competence - Pith and substance of a statute	59
4.11 Colourable Legislation - Constitutionality	61
4.12 Competence of Parliament to impose taxes	62

CHAPTER 5

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Interpretation - General Principles

5.1 Interpretation/Construction - Meaning	63
5.2 Statute not drafted with divine prescience	63
5.3 Statutory construction - an exercise in legal reasoning	64
5.4 Interpretation - General observations	64
5.5 Three rules for interpretation	67
5.6 Rules of construction not the rules of law	69
5.7 Ascertainment of Legislative Intention - Sources	71

CONSTRUCTION - SCOPE AND EFFECT OF STATUTE

5.8 Rules of construction - Scope and Effect of the statute	73
5.9 Construction - Internal and external aids	75

CONSTRUCTION - STATUTE READ AS A WHOLE

5.10 ex visceribus actus - Within the four corners of the statute	76
5.10.1 Understanding of real meaning	78
5.10.2 Statute should be read as a whole even when language is clear and explicit	79
5.10.3 Textual interpretation should match the contextual	80
5.10.4 Statute must be read as a whole - In case of conflict	81
5.11 Summing up - Rules of interpretation (construction) of statute	82
5.12 Statutory text and intention of the Parliament	84

CHAPTER 6

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Interpretation of Words - Contextual

6.1 Contextual interpretation of words	86
6.2 Meaning of words be derived from the context	87
6.3 Shorn of context - Words are slippery customers	89
6.4 Context - which it means	90
6.5 Same word in different enactment	91
6.6 Same words in different places in the same section or statute	92
6.7 Words in social welfare legislation	93
6.8 Words have not only meaning but also contents	93
6.9 No word has absolute meaning and defined without reference to context	94
6.10 Words speak for themselves concept has been exploded	96
6.11 Meaning of sentence may be more than of the separate words	97

CHAPTER 7

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Interpretation - Sententia legis

7.1 Sententia legis - The intention of the Legislative statute repository of legislative will	98
7.2 Intention of the legislation a slippery phrase	99
7.3 Actual and implied intention of parliament - ascertainment of	101
7.4 Intention gathered from social conditions and the mischief to be remedied	102
7.5 Primary and secondary statutory intention	104

CHAPTER 8

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Interpretation - Casus Omissus

8.1 Casus omissus	107
8.2 Casus omissus supplied in case of necessity	108
8.3 Judges to expound and not legislate in providing casus omissus	109

CHAPTER 9

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Interpretation - Ongoing Act

9.1 Interpretation of Ongoing Act	111
9.2 Law never reaches consistency as man’s concept of state changes over years	115
9.3 Law cannot remain immutable as society changes	116
9.4 Laws used as an instrument of distributive justice	117

CHAPTER 10

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Interpretation - Literal rule

10.1 Literal rule	119
10.2 Literal construction - when words are plain and unambiguous	121
10.2.1 Plain meaning - judicial disagreement	122
10.2.2 Plain and unambiguous meaning - a delusion	122
10.2.3 Plain and unambiguous meaning — No extrinsic aid for construction	123
10.2.4 Plain and unambiguous - given effect irrespective of inconvenience or hardship	123
10.3 Literal construction — Corollary to the general rule - Nothing added or taken from and nothing surplusage	124
10.4 Literal rule deviated - in case of ambiguity, absurdity and injustice	125
10.5 Ambiguity - Meaning and scope	125
10.6 Absurd result	126
10.7 Ridiculous and harsh is not the legislative purpose	127
10.8 Literal rule—Summing up	128
10.9 Literal interpretation - Not to be followed slavishly as to stultify the manifest purpose	129

LITERAL INTERPRETATION - TERMS, EXPRESSIONS AND TECHNICAL WORDS

10.10 Literal interpretation - Terms and expressions	129
10.11 Words of legal import	131
10.12 Words in a general statute - popular meaning	131
10.13 Ordinary and natural meaning of words	132
10.14 Standard test for ascertaining meaning of words in common parlance	133
10.15 Expressions used in trade and industries	133
10.16 Expressions in popular sense and not in technical sense	134
10.17 Literal or dictionary meaning	136
10.18 Composite expressions are not to be interpreted with the aid of dictionary	138
10.19 Dictionaries meaning may sometimes be diffused	139
10.20 ejusdem generis	140
10.21 Distributive construction (plurals are broken into component singulars)	140

CHAPTER 11

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Purposive Interpretation vis-à-vis Literal Interpretation

11.1 Introduction	142
11.2 Purposive and mischief rule	143
11.3 Purposive interpretation	144
11.4 Purposive interpretation to resolve ambiguity - Parliament never intends to enact ambiguity	145
11.5 Purposive interpretation - Essence	146
11.6 Purposive approach means purposive construction of statute	147
11.7 Purposive interpretation - Undue importance not given	149
11.8 Purposive interpretation not applied when the Act has been amended from time to time	149
11.9 Purposive and literal approach combined	149
11.10 Reading down meaning of words	150
11.11 Purposive interpretation and tax laws	150
Principles summarised	153

CHAPTER 12

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Interpretation - Golden rule (Meaning modified)

12.1 Golden Rule - Literal meaning modified	155
12.2 Words presumed to be correctly and exactly used and interpreted contextually	155
12.3 Violence to the language used	157
12.4 Omissions and gaps supplied	158
12.5 Meaning of the word may be extended	158
12.6 Arm Chair Rule - Judges stepping into shoes of legislatures	159
12.7 Judicial legislation	160
12.8 Court’s competence in supplying omissions	161

CHAPTER 13

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Interpretation – Mischief Rule (Heydon’s case)

13.1 Mischief Rule - Heydon’s case	164
13.2 Ironing out the creases	168

CHAPTER 14

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Interpretation - noscitur a sociis and ejusdem generis

14.1 noscitur a sociis - a word is judged by the company it keeps	170
14.2 ejusdem generis	173
14.3 Genus - Narrower than the words it regulates	174
14.4 Ejusdem generis - Aid to construction	174
14.5 ejusdem generis - Non-application if defeats the intention of legislature	175

CHAPTER 15

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Interpretation - Taxing statute

15.1 Interpretation - Taxing Statutes General Observations	176
15.2 Interpretation of taxing provisions - Principle	178
15.3 Taxing statutes - Strict Interpretation	179
15.4 Taxing statutes - Doctrine of equity	180
15.5 Strict interpretation does not rule out reasonable construction	181
15.6 Strict interpretation charging section of income-tax Act	182
15.6.1 Tax not to be charged by inference or analogy	184
15.6.2 Taxing provision - Construction in favour of the subject in case of ambiguity	185
15.7 Tax Avoidance - Strict interpretation	186
15.8 Penal provisions - Strict interpretation	187
15.9 Limitation provisions - Strict interpretation	192
15.9.1 Limitation bars the remedy but does not extinguish the debt	194
15.9.2 Limitation cessation or remission of statutory liability	195
15.9.3 Proceedings barred by limitation not revived by amending provisions	196
15.10 Exception clause - Strict interpretation	196
15.11 Form or substance of a transaction - Strict interpretation	198
15.12 Doctrine of substance of the transaction - meaning and scope	200
15.13 Form or legality of the transaction	203
15.14 Doctrine of ‘fiscal nullity’	206

CHAPTER 16

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Interpretation - Liberal

16.1 Liberal interpretation	208
16.2 Liberal construction - welfare legislation	208
16.3 Liberal interpretation - Beneficial provisions	21
16.4 Liberal construction - Exemption provisions	212
16.5 Liberal versus literal construction	214
16.5.1 Literal or liberal construction yields way to reasonable construction	214
16.6 Liberal construction - to make a provision effective and operative	217

CHAPTER 17

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Interpretation - Internal Aidse

17.1 Internal aids	222

INTERPRETATION - PREAMBLE AND TITLE

17.2 Preamble	222
17.2.1 Preamble Key to the understanding of a statute	222
17.2.2 Preamble - Disregarded where the language is clear	224
17.2.3 Preamble - Application, two classes of cases	224
17.2.4 Preamble followed by a long title	224

INTERPRETATION - MARGINAL NOTES FOR HEADINGS

17.3 Marginal notes not referred for construction	224
17.3.1 Marginal notes - Legislative and not editorial exercise indicating drift of the section	225
17.3.2 Heading is a clue to understanding section	225

DEFINITION - PURPOSE AND FUNCTIONS

17.4 Definition	226
17.5 Definition - Types	226
17.6 Definition - function	227
17.7 Definition clause - Ordinary meaning not taken away	228
17.8 Definition clause - Interpretation	228
17.9 Referential definition	230
17.10 Referential provision - Interpretation	231
17.11 “So far as may be, apply�, “as far as applicable�	233
17.12 Definition clause - Some qualifying expressions	233
17.12.1 ‘Unless the context otherwise requires’	234
17.12.2 ‘In relation to’	235
17.12.3 ‘Means’; ‘includes’	236
17.12.4 ‘Includes and means’ or ‘deems’	239
17.12.5 ‘Deemed’	240
17.12.6 Purpose	240
17.12.7 ‘For the purpose of’	241
17.12.8 ‘For the purpose of business’	241
17.12.9 ‘Any’	242
17.12.10 ‘Where’, ‘when’, ‘if’, ‘etc.’	242
17.12.11 ‘Hereafter’	243
17.12.12 ‘Wholly’	243
17.12.13 ‘Similar’	243
17.12.14 ‘Liable’	243
17.12.15 ‘As the case may be’	243
17.12.16 ‘So far as may be’	243
17.12.17 ‘Without prejudice’	243
17.12.18 ‘In the prescribed manner’	244
17.12.19 Notwithstanding	244
17.12.19a Two Non Obstante Clauses—Generalia Specialibus Non Derogant	247
17.12.20 Otherwise	250
17.12.21 Subject to	250
17.12.22 Namely or “that is to say�	251
17.12.23 So far as may be, apply	251
17.12.24 Law for the time being in force	252
17.12.25 Reasonable cause	252

CHAPTER 18

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Interpretation – Internal aids Setting of the Act

18.1 Interpretation - Sections and sub-sections	254

PROVISO—FUNCTION AND INTERPRETATION

18.2 Proviso - Function	255
18.2.1 Proviso - construction	256
18.2.2 Proviso - An independent provision	257
18.2.3 “Provided further�	258
18.2.4 Proviso - whether refers to the last or all paragraphs	259

EXPLANATION - FUNCTIONS AND INTERPRETATION

18.3 Explanation — Function	259
18.3.1 Explanation is not amendment provision	260
18.3.2 Explanations not a substantive provision	260
18.3.3 Explanation - Effect and intendment	261
18.3.4 Explanation - Construction	262

EXCEPTION - INTERPRETATION

18.4 Exception	263

SCHEDULE INTERPRETATION

18.5 Schedule	263

PUNCTUATION - PURPOSE AND FUNCTION

18.6 Punctuation	266
18.6.1 Comma	267
18.6.2 Semi-colon	268
18.6.3 Colon and dash	269
18.5.4 Full stop	270
18.5.5 Parentheses	270

CHAPTER 19

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Interpretation - Rule of Language

19.1 Rules of Language	271

RULE OF LANGUAGE - MANDATORY OR DIRECTORY

19.2 ‘May’ and ‘shall’ directory or mandatory	271
19.2.1 Simultaneous use of ‘May’ and ‘shall’	274
19.3 Mandatory or directory depends on intention of legislature	274
19.4 Mandatory - Use of word ‘shall’ not conclusive	275
19.5 “Shall� and “may� - Inter-changeable	275
19.6 Factors other than use of “shall� or “May� taken into account	276
19.7 Negative or prohibitive word mandatory	277
19.8 Provisions for performance of a duty - rarely mandatory	278
19.9 Provision pertaining to avoidance of public mischief not mandatory	279
19.10 Procedural rule not mandatory	279
19.11 Mode of performing a duty has to be mandatorily followed	282
19.12 Conditions of a provision should be mandatorily followed	282
19.13 Whether all conditions mandatory	283
19.14 Prescription of time-frame for the act to be done not mandatory	284
19.15 Requirement of filing declaration or audit report along with return of income-tax directory	285
19.16 Rules are mandatory	286
19.17 Non-compliance of mandatory provisions - Consequence of	286

RULE OF LANGUAGE - LEGAL FICTION

19.18 Legal fiction	287
19.19 Legal fiction - strictly construed	289
19.20 Legal fiction - all facts on which it operates assumed	290
19.21 Legal fiction - casus omissus not supplied	290
19.22 Legal fiction - illustrative cases	290

RULE OF LANGUAGE - RETROSPECTIVELY

19.23 Retrospective operation	292
19.24 Retrospectivity, legislative intent no fixed formula	294
19.25 Retrospectivity - legislative power limitations	294
19.26 Retrospectivity-expressly mentioned or be implied	295
19.27 Retrospectivity presumption against	295
19.28 Retrospective or prospective - Tests	296
19.29 Retrospectivity - law of procedure or substantive law	297
19.30 Procedural law and substantive law	298
19.31 Retrospectivity - Amending Acts	299
19.32 Retrospectivity - declaratory act	300
19.33 Retrospectivity - Clarificatory act	302
19.34 Clarificatory and declaratory acts - distinction between	305
19.35 Retrospectivity - repealing, repealed Act	305
19.36 Implied repeal	307

CHAPTER 20

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Interpretation - External Aids

20.1 External aids - Meaning	309
20.2 External aids - Dictionary Meaning	309
20.2.1 Dictionary meaning - Overriding reasons to justify departure	310
20.2.2 Dictionary meaning - Sometimes diffused	311
20.3 External AID - Reference to other acts	311
20.3.1 External aids - References to statutes pari materia	313
20.3.2 Incorporation/reference of other Acts in the statute	314
20.4 External aid - Reference to General Clauses Act	315
20.5 External aid - Reference to complementary statutes	315
20.6 Words in popular sense	316
20.7 Words having scientific or technical meaning and also having an ordinary meaning	318
20.8 General words	318
20.9 Words dealing with matters relating to general public	318
20.10 Words used in Income-tax Act	319
20.11 Words used in the schedule, notification for exemption	319
20.12 ‘Expression’, meaning of - What is legal and not what is right	321
20.13 External aids - Process of legislation	321
20.14 External aids - Subsequent legislation	322
20.15 External aids - History of Legislation	323
20.16 External aids - Objects and Reasons	325
20.17 External aids - Speech of the Minister	328
20.18 External aids - Parliamentary Material	329
20.19 External aids - Law Commission Report	330
20.20 External aids construction - contemporanea expositio (the administrative)	330

CHAPTER 21

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Maxims and Proverbs

21.1 Maxim - Statement of guiding principle	332
21.2 Maxim is empiric	332
21.3 Maxim or proverb - not unalterable if the context requires	334
21.4 Maxims explained	334

About the Author

D.P. Mittal

D.P. Mittal-D.P. Mittal is an advocate, tax and business law consultant. He has authored about two hundred articles in Indian and foreign magazines and journals and also books on various law subjects; some of them are as follows: Interpretation of Taxing Statutes, Wills, Deeds and Documents; Laws relating to Copyrights, Patents, Trade Marks and GATT; Business and Commercial Laws; Law of Arbitration, ADR and Contract in India; Indian Patents Law; Natural Justice, Judicial Review & Administrative Law; Law of Trade Marks; Law of Information Technology (Cyber Law); Law of Arbitration (2002); Indian Patents Law and Procedure (2002); Trade Marks Passing off and Geographical Indications of Goods - Law and Procedure (2002); Competition Law; Law relating to Sick Industries; Interpretation of Statutes; Law Dictionary

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