inadequate; it needs to be broadened and adopted to meet the conditions

of today.

Law has to be interpreted according to the current societal

standards – needs. The functional method must, in fact, supplement the
idealistic approach, by laying bare possible discrepancies between legal
ideology and social reality.

The interpretation of laws has to be purposive. This means the

interpretation must sub serve the object of the enactment of the law
keeping in view the supreme law, the constitution. Every law has to
accord with the constitution, otherwise it suffers the defect of invalidity
or unconstitutionality and, therefore, even while interpreting statute law,
one must always bear in mind the provisions of the constitution, the
constitutional goals and the constitutional purpose which is sought to be
achieved.

The text and the context of the entire Act must be looked into while
interpreting any of the expressions used in a statute. The courts must look
to the object which the statute seeks to achieve while interpreting any of
the provisions of the Act. A purposive approach for interpreting the Act is
necessary.597 Court has to give effect to true object of the Act by adopting
a purposive approach.598 The approach here laid down clearly
contemplates inquiry into the policy and purpose behind the statute.

Purposive interpretation must be such as to preserve

constitutionality of the statute where two interpretations are possible.599 It
is obvious that ‘meaning’ with reference to this ‘rule’ connotes purpose,

                                                            
597
S. Gopal Reddy v. State of Andhra Pradesh, AIR 1996 SC 2184
598
Chinnama George v. N. K. Raju, AIR 2000 SC 1565
599
Tejkumar Balakrishna Ruia v. A. K. Menon, AIR 1997 SC 442

252 

 
i.e. what the statue ‘means’ to accomplish. This canon also harmonises
with the modern tendency to see how words are used.

5 INTERPRETATION ACCORDING TO NATURE OF

STATUTE
A statute is the will of the legislature. In India, the statute is an act
of Central Legislature or of a State Legislature. It includes Acts passed by
the Imperial or Provincial Legislatures in pre-independence days, Acts
passed after the independence, subordinate legislatures. The Constitution
of India is also sometime a subject to interpretation.

The Legislatures enacts various types of Statutes in consonance

with the necessity of the time. It is presumed that such laws are enacted
which the society considers as honest, fair and equitable and the object of
the every Legislature is to advance public welfare.

A Statute only enacts its substantive provisions, but, as a necessary

result of legal logic it also enacts, as a legal proposition, everything
essential to the existence of the specific enactments.600 To interpret the
statutes, there are rules of interpretation viz. Grammatical rule of
interpretation, Golden rule of interpretation and Mischief rule of
interpretation, which is also known as Purposive-Social Engineering-
Logical rule of interpretation. These rules are being applied by the Courts
for interpretation of various types of statutes as per the nature of the
legislation. The various types of statutes are dealt with as under.

5.1 PENAL STATUTE

Criminal law connotes only the quality of such acts or omissions as

are prohibited under appropriate penal provisions by authority of the
State. Ordinarily every crime which is created by a statute, however,
                                                            
600
Anand Prakash v. Narain Das, AIR 1931 All 162

253 

 
comprehensive and unqualified the language used is always understood
as requiring the element of mens rea or a blameworthy state of mind on
the part of the actor. But there may be cases in which Legislature
completely rules out the principle of mens rea while providing for
penalty.601 One class of cases in which the legislature may insist on strict
liability rule, excluding the applicability of mens rea, are statutes which
deal with public welfare, e.g. statutes regulating the sale of food and
drink.602 From early times it has been held that penal statutes must be
strictly construed.603

The rule of strict construction requires that the language shall be so

construed that no cases shall be held to fall within it which do not fall
both within the reasonable meaning of its terms and within the spirit and
scope of the enactment.604 Thus, before a person can be convicted under
section 176, IPC, the prosecution are bound to prove (a) that the accused
person was legally bound to furnish a certain information to a public
servant, and (b) that he intentionally omitted to give such information.605
Likewise, every ‘distinct’ offence in section 233 (now sec.218), Cr.P.C.,
cannot be treated as having the same meaning as every offence. The only
meaning that the word ‘distinct’ can have in the context in which it
occurs is to indicate that there should be no connection between the
various acts which give rise to criminal liability. The fact that three
houses were looted one after the other cannot have the effect of proving

                                                            
601
N.S. Bindra: Ibid, pp.709, 710
602
N.S. Bindra: Ibid, p.710
603
Steel Authority of India Ltd. v. Bihar Agricultural Produce Market Board, AIR
1990 Pat 146 (FB)
604
Ram Sran v. King-Emperor, 4 Cri LJ 293: Hyder Ali v. State of Hyderabad, AIR
1950 Hyd. 128 (FB): Dattatraya v. Emperor, AIR 1937 Bom pp.28, 30; Rahmat
Aslam v. Crown, AIR Lah. 232
605
Shridhar v. State, AIR 1954 H.P. 67

254 

 
three ‘distinct’ offences. There may even in such a case be sufficient
continuity of purpose to make it one offence.606

Where an enactment entails penal consequences, no violence

should be done to its language to bring people within it but rather care
must be taken to see that no one is brought within it, who is not within the
express language.607 Clear words of an Act of Legislature, conveying a
definite meaning in the ordinary sense of the words used, cannot be cut
down or added to so as to alter that meaning.608 It is not merely unsound
but unjust to read words and infer meanings that are not found in the
text.609 It would not be proper for the courts to extend the scope of a penal
provision by reading into it words which are not there, and thereby widen
the scope of the provision.610

It is to interpreted on the basis of literal or grammatical meaning.

All the provisions of penal law must be interpreted in favour of the
subject, and most of all, the provisions relating to the offence of murder.
In case of ambiguity the benefit of interpretation must go to the
accused.611 But it may be noted that the existence of an ambiguity in the
words to be construed does not necessarily create a doubt. It is then
necessary to opt for an examination of the context, the scope and object
of the enactment. But that meaning may satisfy the court beyond all doubt
as to the meaning to be placed on an expression which is on its face
ambiguous. In the interpretation of a penal statute mere ambiguity of
expression or loose or inaccurate language will not prevent a court from

                                                            
606
Ali Chunno v. State, AIR 1954 All 795
607
N.S. Bindra: Ibid, p. 721
608
Hari Singh v. Crown, ALR 7 Lah. pp.348, 354
609
Pyndah Venkatanarayana v. Sudhakar Rao, AIR 1967 A.P. 111
610
Motibhai Fulabhai Patel & Co. v. Collector of Central Excise, AIR 1970 S.C. 829
611
King v. Aung The Nyun, AIR 1940 Rang 259 (FB); Shaikh Abdul Azees v. State of
Karnataka, AIR 1977 SC 1485

255 

 
giving effect to the meaning of the Legislature if, by the application of the
ordinary rules of construction applicable to all other statutes, that
meaning can be ascertained. If, notwithstanding a careful examination by
the aid of these rules of the words to be interpreted, a doubt still remains
as to their meaning, the court is not at liberty to resolve the doubt against
the accused by the application of any principle of public policy or general
intent of the enactment, but in such a case must give him the benefit of
the doubt.612

While interpreting a prohibitive clause leading to penalties, no

addition is permissible613 the court observed that a provision drastically
restricting citizens’ fundamental rights, especially when it leads to quasi-
penal consequences, must be construed strictly.614 The well-settled rule is
that the subject should be held to be free unless he can be found guilty
according to the clear and unambiguous language of the statute.615

True, penal statutes should always be very strictly construed.

However, it must be remembered that no rule of construction requires that
a penal statute should be unreasonably construed or construed so as to
defeat the obvious intention of the legislature or construed in a manner as
would lead to absurd results; on the other hand, it is of the utmost
important that the court should endeavour to ascertain the intention of the
legislature and to give effect thereto.616 While dealing with a penal
provision, it would not be proper for the courts to extend the scope of that

                                                            
612
Chandler & Co. v. Collector of Customs, 4 CLR pp.1719, 1935 as referred in N. S.
Bindra: Ibid, p. 714
613
Wasudeo v. State, AIR 1977 Bom 94
614
State of U.P. v. Lalai Singh, AIR 1977 SC 202: Maharaja Book Depot v. Gujarat
State, (1979) 1 SCC 295
615
Bansraj v. State, AIR 1956 All pp.27, 29
616
Teja Singh v. State, AIR 1952 Punj. 145; Fakir Mohan v. State, AIR 1958 Ori.
pp.118, 122

256 

 
provision by reading into it words which are not there and thereby widen
the scope of that provision.617

When it is said that all penal statutes are to be construed strictly it

only means that the court must see that the thing charged is an offence
within the plain meaning of the words used and must not strain the words.
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.618 A penal Act must be
read plainly,619 in an atmosphere free from all bias,620 and in a manner
consistent with commonsense.621

No law can be interpreted so as to frustrate the very basic rule of

law. It is settled principle of interpretation of criminal jurisprudence that
the provisions have to be strictly construed and cannot be given
retrospective effect unless legislative intent and expression is clear
beyond ambiguity. The amendments to criminal law would not intend
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.622

                                                            
617
Motibhai Fulabhai v. Collector, Central Excise, AIR 1970 SC 829; State of A.P. v.
Andhra Pradesh Potteries, AIR 1973 SC 2429; Dilip Kumar Sharma v. State of
M.P., 1975 Cri LR (SC) 624
618
M.V. Joshi v. M.U. Shimpi, AIR 1961 SC pp.1494, 1498; Narendra Bhogi Lal v.
State of Maharashtra, 73 Bom LR pp.828, 834
619
Chedi Mala v. King Emperor, 1 CrLJ pp.205, 207 (Cal)
620
Madho Saran Singh v. Emperor, AIR 1943 All 379
621
Jogendra Chandra Roy v. Superintendent; Dum Dum Special Jail, AIR 1933 Cal.
pp.280, 282; Gamadia v. Emperor, AIR 1926 Bom., pp.57, 59; State v. Hyder Ali,
AIR 1950 Hyd. 128 (FB)
622
Sukhdev Singh v. State of Haryana, AIR 2013 SC pp.953, 958

257 

 
 In the case of G.N.Verma v. State of Jharkhand and another623, the
Supreme Court of India has observed as under:

“The law is well settled by a series of decisions beginning with

the Constitution Bench decision in W.H.King v. Republic of
India624 that when a statute creates an offence and imposes a
penalty of fine and imprisonment, the words of the section must
be strictly construed in favour of the subject. This view has
been consistently adopted by this Court over the last, more than
sixty years.”

In the case of Rupak Kumar v. State of Bihar & Anr.,625 the

Supreme Court was dealing with the interpretation of word “store” used
in Section 7 & 16 of the Prevention of Food Adulteration Act, 1954. The
fact was that the petitioner was Superintendent of District Jail, Bihar
Sharif where from the Food Inspector collected samples of various
materials including haldi and rice. These articles were stored for
consumption of the prisoners. The samples collected were found to be
adulterated and therefore, two separate prosecution reports were
submitted before the Trial Court which took cognizance of the offence
and directed for issuance of process in both the cases. The petitioner
assailed both the orders in separate revision applications before the
Sessions Judge which were also dismissed and thereafter, he approached
the Hon’ble High Court, which has also dismissed his applications.
Therefore, he approached the Hon’ble Supreme Court. The Supreme
Court took the notice of Section 7, 10 and 16 of the Act. Section 7 of the
Act inter alia prohibits manufacture for sale, or store, sell or distribute of
certain articles of food. Whereas Section 10 of the Act provides of the
                                                            
623
(2014) 4 SCC 282
624
AIR 1952 SC 156 : 1952 Cri. L.J. 836 : 1952 SCR 418
625
(2014) 4 SCC 277

258 

 
power of Food Inspector under which he is empowered to take sample of
any article of food from any person selling such article. Whereas Section
16 of the Act provides for the penalties for manufacture for sale or store
or sells any adulterated articles. On the basis of the use of the word
“store” in Section 7 and 16, the Hon’ble Supreme Court has observed as
follows:

“In the present case, according to the prosecution, the appellant,

a Superintendent of Jail, had stored rice and haldi and,
therefore, his act comes within the mischief of Section 7 and 16
of the Act. In view of the aforesaid, what needs to be decided is
as to whether the expression “store” as used in Section 7 and
Section 16 of the Act would mean storage simpliciter or storage
for sale. We have referred to the provisions of Section 7,
Section 10 and Section 16 of the Act and from their conjoint
reading, it will appear that the Act is intended to prohibit and
penalise the sale of any adulterated article of food. In our
opinion, the term “store” shall take colour from the context and
the collocation in which it occurs in Section 7 and 16 of the Act.
Applying the aforesaid principle, we are of the opinion, that
“storage” of an adulterated article of food other than for sale
does not come within the mischief of Section 16 of the Act.”

In the case of MCD v. Laxmi Narain Tandon,626 the Supreme Court

has held that:

“14. From a conjoint reading of the abovereferred provisions, it

will be clear that the broad scheme of the Act is to prohibit and
penalise the sale, or import, manufacture, storage or distribution

                                                            
626
(1976) 1 SCC 546 : 1976 SCC (Cri) 76

259 

 
 for sale of any adulterated article of food. The terms ‘store’ and
‘distribute’ take their colour from the context and the
collocation of words in which they occur in Sections 7 and 16.
‘Storage’ or ‘distribution’ of an adulterated article of food for a
purpose other than for sale does not fall within the mischief of
this section.”

5.2 FISCAL STATUTE

In interpreting a fiscal statute the court cannot proceed to make

good the deficiencies, if there be any in the statutes, it shall interpret the
statute as it stands and in case of doubt, it shall interpret it in a manner
favourable to the tax payer. In a considering a taxing Act the word is
justified in straining the language in order to hold a subject liable to
tax.627 In a Taxing Act one has to look nearly 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 only look fairly at the language used. In a case of
reasonable doubt, the interpretation most beneficial to the subject is to be
adopted. But even so, the fundamental rule of interpretation is the same
for all statutes, whether fiscal or otherwise. The underlying principle is
that the meaning and intention of a statute must be collected from the
plain and unambiguous expression used there in rather than from any
motions which may be entertained by the court as to what is just or
expedient. The expressed intentions must guide the court. The maxim
"generalia speci alibus non derogent" means that where there is a conflict
between a general and a special provision, the later shall prevail. But this
rule of interpretation is not of universal application. It is subject to the
condition that there is nothing in the general provision, expressed or
                                                            
627
State of Punjab v. M/s. Jallander Begetables Syndicates - AIR 1966 SC 1295

260 

 
implied, indicating and intention to the contrary. To arrive at the real
meaning it is always necessary to get an exact conception of the aim,
scope and object of the whole Act to consider - (1) What was the law
before the Act was passed? (2) What is mischief or defect for which law
had not provided ? (3) What remedy Parliament has appointed? and (4)
The reason of the remedy.628

It has been said and said on numerous occasions that fiscal laws
must be strictly construed, words must say what they mean, nothing
should be presumed or implied, these must say so. The free test must
always be the language used.629 However, strict interpretation does not
mean full effect should not be given to exemption notification.630 The
expressions in the schedule to the fiscal statute and in the notification for
exemption should be understood by the language employed therein
bearing in mind the context in which the expressions occur. The words
used in the provisions, imposing taxes or granting exemption should be
understood in the same way in which they are understood in ordinary
parlance in the area in which the law is in force or by the people who
ordinarily deal with them. A notification issued under the provisions of
Rules has to be read along with the Act. The notification must be read as
a whole in the context of the other relevant provisions. When a
notification is issued in accordance with power conferred by the statute, it
has statutory force and validity and, therefore, the exemption under the
notification is as if it were contained in the Act itself. It is well settled
that when two views of a notification are possible, it should be construed
in favour of the subject as notification is part of a fiscal enactment.
However, that is so in the event of there being a real difficulty in
                                                            
628
I.T. Commissioner, Patiala v. Shahzada Nand & Sons - AIR 1966 SC 1342
629
M/s. Goddyear India Ltd. v. State of Haryana - AIR 1990 SC 781
630
M/s. Swadeshi Polytex Ltd. v. Collectors of Central Excise AIR 1990 SC 301

261 

 
ascertaining the meaning of a particular enactment that the question of
strictness or of liberality of interpretation arises. While interpreting an
exemption clause, liberal interpretation should be imparted to the
language thereof, provided no violence is done to the language employed.
It must, however, be borne in mind that absurd results of interpretation
should be avoided.631

In Commissioner of Income-tax v. Orissa State Warehousing

Corporation,632 the court has held that:

“While interpreting a taxing statute, equitable considerations are

entirely out of place. The court must look squarely at the words
of the statute and interpret them. It must interpret a taxing
statute, in the light of what is clearly expressed; it cannot imply
anything which is not expressed; it cannot import provisions in
the statute so as to supply any assumed deficiency. One has to
look 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 has to be read in, nothing is to
be implied. One can only look fairly at the language used. In
case of reasonable doubt, the construction most beneficial to the
subject is to be adopted. But even so, the fundamental rule of
construction is the same for all statutes, whether fiscal or
otherwise. The underlying principle is that the meaning and
intention of a statute must be collected from the plain and
unambiguous expression used therein rather than from any
notions which may be entertained by the court as to what is just
or expedient. The expressed intention must guide the court. If
                                                            
631
Collector of Central Excise, Bombay v. M/s Parle Exports (P) Ltd. AIR 1989 SC
644
632
[1993] 201 ITR 729 (Orissa)

262 

 
 the intention of the Legislature is clear and beyond doubt, then
the fact that the provisions could have been more artistically
drafted cannot be a ground to treat any part of a provision as
otiose. Though in recent times there has been change from
emphasis on grammatical meaning to intention of the
Legislature or purpose of statute, yet if the words are
ambiguous, uncertain or any doubt arises as to the terms
employed, the court has a paramount duty to put upon the
language of the Legislature a rational meaning. In the past, the
judges and lawyers spoke of a golden rule by which statutes
were to be interpreted according to the grammatical and
ordinary sense of the word. They took the grammatical or literal
meaning unmindful of the consequences. Even if such a
meaning gave rise to unjust results which the Legislature never
intended, the grammatical meaning alone was held to prevail.
They said that it would be for the Legislature to amend the Act
and not for the court to intervene by its innovation. During the
last several years, the golden rule has been given a farewell.
Now the words of the statute are examined rationally. If the
words are precise and cover the situation at hand, there is no
necessity to go any further. The court expounds those words in
the natural and ordinary sense of the words.

Literally, exemption is freedom from liability, tax or duty.

Fiscally, it may assume varying shapes, especially in a growing
economy. For instance, tax holiday to new units, concessional
rate of tax to goods or persons for limited period or with the
specific objective, etc. That is why its construction, unlike
charging provision, has to be tested on a different touchstone. In

263 

 
 fact, an exemption provision is like any exception and on
normal principles of construction or interpretation of statutes, it
is construed strictly either because of legislative intention or on
economic justification of inequitable burden or progressive
approach of fiscal provisions intended to augment State
Revenue. But once exception or exemption becomes applicable,
no rule or principle requires it to be construed strictly. Truly
speaking, a liberal and strict construction of an exemption
provision is to be invoked at different stages of interpreting it.
When the question is whether a subject falls in the notification
or in the exemption clause, then it being in the nature of
exception, it is to be construed strictly and against the subject
but once ambiguity or doubt about applicability is lifted and the
subject falls in the notification then full play should be given to
it and it calls for a wider and liberal construction.

The language used in Section 10(29) is so clear and

unambiguous that there is no scope for accepting the submission
of the assessee that the plain meaning is to be given a go-by.”

In Commissioner of Income-tax, Karnataka-I v. Shambulal

Nathalal and Company.,633 the court has held that:

“If a statutory provision relating to tax law is reasonably

capable of two constructions, the one which leads to evasion of
tax, should be avoided. The rule laid down in Cape Brandy
Syndicate v. IRC,634 that in a taxing statute one has to merely
look at what is clearly said, was accepted by the Supreme Court

                                                            
633
(1984) 39 CTR 195 (Kar)
634
[1921] 1 KB 64

264 

 
 in A.V. Fernandas v. State of Kerala,635 where it was laid down
that ‘if.... the case is not 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 intentions
of the Legislature and by considering ‘what was the substance
of the matter’. The object of this rule is to prevent a taxing
statute being construed ‘according to its intent, though not
according to its words.’

In CWT v. Smt. Hashmatunnisa Begum,636 the Supreme Court

while dealing with the exemption of property comprised of gift under
Section 4(1)(a) of the Wealth-tax Act and proviso to Section 5 of the
Gift-tax Act, held that on a reading of the plain words of the proviso to
Section 4(1)(a) of the Wealth-tax Act, 1957, the clause “for any
assessment year commencing after the 31st day of March, 1964” can only
be read as relating to gift-tax assessments and not to wealth-tax
assessments. The exemption under the proviso, from inclusion in the net
wealth, is attracted to assets which were the subject-matter of such gifts
as were chargeable to gift-tax or not chargeable to tax under Section 5 of
the Gift-tax Act, 1958, for any assessment year commencing after March
31, 1964, but before April 1, 1972. Gifts made earlier would not attract
the benefit of the exemption.

The Supreme Court in Mohammad Ali Khan v. CWT,637 while

dealing with a case of Section 5(1)(iii) of the Wealth-tax Act, 1957
exempting any one building in the occupation of the ruler declared as his
official residence, held that a fair reading of this section would reveal that
only the building or the part of the building in the occupation of the Ruler
                                                            
635
[1957] 8 STC 561
636
MANU/SC/0140/1989
637
[1997] 224 ITR 672

265 

 
which had been declared by the Central Government to be the official
residence under the Merged States (Taxation Concession) Order, 1949
will not be included in the net wealth of the assessee and therefore, the
buildings of Khas Bagh Palace which were let to different persons and for
which rent was received, were not in the occupation of the assessee
within the meaning of Section 5(1)(iii) of the Act and in that context the
Supreme Court observed that the intention of the Legislature is primarily
to be gathered from the language used. Just as it is not permissible to add
words or to fill in a gap or lacuna, similarly it is of universal application
that effort should be made to give meaning to each and every word used
by the Legislature.

The Supreme Court in Orissa State Warehousing Corpn. v.

CIT,638 while dealing with a case under Section 10(29) of the Act granting
exemption to the income which is derived from letting out of godown or
warehouse for storage, processing or facilitating marketing of
commodities, held that the Legislature has been careful enough to
introduce in the section itself a clarification by using the words “any
income derived therefrom”, meaning thereby obviously for marketing of
commodities by letting out of godowns or a warehouse for storage,
processing or facilitating the same. If the letting out of godowns or
warehouses is for any other purpose, the question of exemption would not
arise. In that context, the court dealt with the interpretation of fiscal
statute and observed that “Artificial and unduly latitudinarian rules of
construction, which with their general tendency to ‘give the taxpayer the
breaks’, are out of place where the legislation has a fiscal mission.”

                                                            
638
MANU/SC/0234/1999

266 

 
 In Vikrant Tyres Ltd. v. First ITO,639 the Supreme Court while
dealing with the levy of interest under Section 220(2) in respect of the
demand which was paid on the issue of the notice under Section 156 but
refunded to the assessee due to appellate order, but restored by the High
Court order held that interest can be levied under this section only when
there was a default of the assessee and there can be no revival of the
demand if the original notice of demand was satisfied by the assessee
within the prescribed time even though the demand was restored by the
subsequent order of the High Court. In that connection, the Supreme
Court observed that: “Admittedly, on a literal meaning of the provisions
of Section 220(2) of the Act, such a demand for interest cannot be made.”

In this connection, the Supreme Court observed as under: -

“It is settled principle in law that the courts while construing

‘revenue Acts have to give a fair and reasonable construction to
the language of a statute without leaning to one side or the
other, meaning’ thereby that, no tax or levy can be imposed on a
subject by an Act of Parliament without the words of the statute
clearly showing an intention to lay the burden on the subject. In
this process, the courts must adhere to the words of the statute
and the so-called equitable construction of those words of the
statute is not permissible. The task of the court is to construe the
provisions of the taxing enactments according to the ordinary
and natural meaning of the language used and then to apply that
meaning to the facts of the case and in that process if the
taxpayer is brought within the net he is caught, otherwise he has
to go free!”

                                                            
639
[2001] 247 ITR

267 

 
 In V.V.S. Sugars v. Government of A.P.,640 it was reiterated that:

“The Act in question is a taxing statute must be interpreted as it

reads, with no additions and no subtractions, on the ground of
legislative intendment or otherwise.”

In Mathuram Agrawal v. State of Madhya Pradesh,641 the court has

held that:

“Intention of Legislature in municipal taxation statute has to be

gathered from language of provisions particularly where
language is plain and unambiguous. In taxing Act it is not
possible to assume any intention or governing purpose of statute
more than what stated in plain language. The statute should
clearly convey three components of tax law – subject of tax,
person who is liable to tax and rate at which tax to be paid.”

In V.M. Syed Mohamed and Co. and Anr. v. The State of Madras
represented by the Secretary to Government, Revenue Department, Fort
Saint George, Madras and Anr.,642 the court has held that:

“The Madras General Sales Tax is a measure of taxation and in

respect of taxing statutes, the Legislature enjoys wide powers of
classification. It has the power to determine which class of
persons or properties shall be taxed and such determination is
not open to question on the ground that the tax is not levied on
all persons or on all properties.”

                                                            
640
MANU/SC/0321/1999
641
AIR 2000 SC 109
642
AIR 1953 Mad 105

268 

 
 In CIT v. Cellulose Products of India Ltd.,643 the Supreme Court
has held that:

“Liberal construction of statute so as to effectuate the object

thereof can be taken recourse to while interpreting a particular
provision when two opinions are capable of being held.”

In Goodyear India Ltd. v. State of Haryana,644 the court has held

that:

“Fiscal laws must be strictly construed, words must say what

they mean, nothing should be presumed or implied, these must
say so. The true test must always be the language used.”

In United Receland Limited and Anr. v. The State of Haryana and

Ors.,645 the court has held that:

“The Courts cannot substitute their opinion for the declared

economic and social policy of the State expressed through the
duly elected Legislature. It has been rightly held by various
Courts that in a democratic system the power of taxation vests
in the Legislature and not in the executive or the judiciary. Tax
cannot be equated with fee or other contributions. Sales tax is a
tax which includes within its scope and business as well as all
tangible personal property at either the retailing, wholesaling or
manufacturing stage with the exceptions noted in the taxing
law.”

                                                            
643
AIR 1991 SC 2285
644
[1991] 188 ITR 402
645
(1996) 14 PLR 227

269 

 
 In K.P. Sons v. Sales Tax Officer and Anr.,646 the court has held
that:

“Though the taxing statute has to be construed strictly, yet, none

the less, it must be borne in mind that the construction does not
suffer from any vices of rigid rule of interpretation.”

In Shree Sajjan Mills Ltd. v. Commissioner of Income Tax, M.P.,

Bhopal and Anr.,647 the Supreme Court has held that:

“In interpreting a taxing statute, it was submitted on behalf of

the assessee, equitable considerations were entirely out of place,
not could taxing statute be interpreted on any presumptions or
assumptions. The Court must look squarely at the words of the
statute and interpret these. It should interpret a taxing statute in
the light of what was clearly expressed and it could not imply
anything which was not expressed; it could not Import
provisions into the statute so as to supply any assumed
deficiency, not could it refuse to give effect to the plain and
clear meaning of the words on the ground that strange and
anomalous consequences might arise.”

In CCE v. Usha Martin Industries,648 while dealing with exemption

notification issued under the Central Excise and Salt Act, 1994, the
Supreme Court in paras 19 and 20 observed as follows:

“19. No doubt the court has to interpret statutory provisions and

notifications thereunder as they are with emphasis to the
intention of the legislature. But when the Board made all others

                                                            
646
[1987] 67 STC 38 (MP)
647
AIR 1986 SC 484
648
(1997) 7 SCC 47

270 

 
 to understand a notification in a particular manner and when the
latter have acted accordingly, is it open to the Renenue to turn
against such persons on a premise contrary to such instructions?

20. Section 37-B of the Act enjoins on the Board a duty to issue
such instructions and directions to the excise officers as the
Board considers necessary or expedient ‘for the purpose of
uniformity in the classification of excisable goods or with
respect to levy of duty excised on such goods.’ It is true that
Section 37-B was inserted in the Act only in December 1985
but that fact cannot whittle down the binding effect of the
circulars or instructions issued by the Board earlier. Such
instructions were not issued earlier for fancy or as rituals. Even
the pre-amendment circulars were issued for the same purpose
of achieving uniformity in imposing excise duty on excisable
goods. So the circular whether issued before December 1985 or
thereafter should have the same binding effect on the
Department.”

In Commr. of Customs v. Indian Oil Corpn. Ltd.,649 the Supreme

Court culled out the following principles in relation to the circulars issued
by the Government under the fiscal laws (Income Tax Act and Central
Excise Act) as follows:

“(1) Although a circular is not binding on a court or an assessee,

it is not open to the Revenue to raise a contention that is
contrary to a binding circular by Board. When a circular
remains in operation, the Revenue is bound by it and cannot be

                                                            
649
(2004) 3 SCC 488

271 

 
 allowed to plead that it is not valid nor that it is not valid nor
that it is contrary to the terms of the statute.

(2) Despite the decision of this Court, the Department cannot be

permitted to take a stand contrary to the instructions issued by
the Board.

(3) A show-cause notice and demand contrary to the existing

circulars of the Board are ab initio bad.

(4) It is not open to the Revenue to advance an argument or file

an appeal contrary to the circulars.”

In Union of India and Anr. v. Azadi Bachao Andolan and Anr.,650

the Supreme Court was concerned with a statutory power exercised by
the Board of Direct Taxes in issuing directions to the income Tax
Officers as to how they should deal with the cases falling with the
purview of the Indo-Mauritius Double Taxation Avoidance Convention,
1983. The Court itself held that the principles adopted in interpretation of
treaties are not the same as those in interpretation of a statutory
legislation on the ground that the principle which needs to be kept in
mind in the interpretation of the provisions of an international treaty,
including one for double taxation relief, is that treaties are negotiated and
entered into at a political level and have several considerations as their
basis; whereas a statute has to be interpreted keeping in mind the well
known principles or canons of interpretation of statute.

In the case of State of Haryana and others v. Bharti Teletech

651
Limited , the Supreme Court of India has, while dealing with Haryana

                                                            
650
[2004] 10 SCC 1
651
(2014) SCC 556

272 

 
General Sales Tax Rules, 1975, on the applicability of exemption with
regard to Interpretation of taxing/ fiscal statute, observed that:

“It is clear as crystal that a statutory rule or an exemption

notification which confers benefit on the assessee on certain
conditions should be liberally construed but the beneficiary
should fall within the ambit of the rule or notification and
further if there are conditions and violation thereof are
provided, then the concept of liberal construction would not
arise. Exemption being an exception has to be respected regard
being had to its nature and purpose. There can be cases where
liberal interpretation or understanding would be permissible, but
in the present case, the rule position being clear, the same does
not arise.”

In Hansraj Gordhandas v. CCE and Customs652, it has been held as

follows:
“It is well established that in a taxing statute there is no room
for any intendment but regard must be had to the clear meaning
of the words. The entire matter is governed wholly by the
language of the notification. If the pay-payer is within the plain
terms of the exemption it cannot be denied its benefit by calling
in aid any supposed intention of the exempting authority. If
such intention can be gathered from the interpretation of the
words of the notification or by necessary implication therefrom,
the matter is different.”

                                                            
652
AIR 1970 SC 755

273 

 
 In CST v. Industrial Coal Enterprises653, after referring to CIT v.
Straw Board Mfg. Co. Ltd.654 and Bajaj Tempo Ltd. v. CIT655, the Court
ruled that an exemption notification, as is well known, should be
construed liberally once it is found that the entrepreneur fulfils all the
eligibility criteria. In reading an exemption notification, no condition
should be read into it when there is none. If an entrepreneur is entitled to
the benefit thereof, the same should not be denied.

In T.N.Electricity Board v. Status Spg. Mills Ltd656, it has been

held therein:

“It may be true that the exemption notification should receive a

strict construction as has been held by this Court in Novopan
India Ltd. v. CCE and Customs657, but is also true that once it is
found that the industry is entitled to the benefit of exemption
notification, it would receive a broad construction. A
notification granting exemption can be withdrawn in public
interest. What would be the public interest would, however,
depend upon the facts of each case.”

If in construing a taxing statutes, there are two interpretations

possible, then effect is to be given to the one that impress a burden on
him.658

                                                            
653
(1999) 2 SCC 607
654
1989 Supp (2) SCC 523 : 1990 SCC (Tax) 158
655
(1992) 3 SCC 78
656
(2008) 7 SCC 353 : (2005) 4 SCC 272 : (2007) 2 SCC 725
657
1994 Supp (3) SCC 606
658
Express Mills v. Municipal Committee Wardha - AIR 1958 SC pp.341, 344

274 

 
 In interpreting a fiscal statuti, the court cannot proceed to make
good deficiencies if there be any; the court must interpret the statute as it
stands and in case of doubt in a manner favourable to the tax-payer. But
where by the use of words capable of comprehensive import, provisions
is made for imposing liability for penalty upon tax-payer guilty of fraud ,
gross negligence or contumacious conduct, an assumption that the words
were used in a restricted sense. So as to defeat the avowed object of the
Legislative qua a certain class will not be lightly made.659

In interpreting a taxing statutes, equitable consideration are entirely

out of place. Nor can taxing statutes be interpreted on any presumptions
or assumptions. The court must look squarely at the words of the statute
and interpret them. It must interpret a taxing statute in the light of what is
clearly expressed; it cannot import provisions in the statutes so as to
supply and assumed deficiency.660

Literally exemption is freedom from liability, tax as duty. Fiscally

it may assume varying shapes, specially in a growing economy. That is
why its interpretation unlike charging provision, has to be tested on
different touchstone. In fact an exemption provision is like any exception
and on normal principle or interpretation of statutes it is construed strictly
either because of legislative intention or on economic justification of
inequitable burden or progressive approach of fiscal provisions intended
to augment state revenue. But once exception or exemption becomes
applicable no rule or principle requires it to be interpreted strictly. Truly
specking, liberal and strict interpretations of an exemption provision are
to be invoked at different stages of interpreting it. When the question is
whether a subject falls in the notification or in the exemption clause then

                                                            
659
C.A. Abraban v. I.T. Officer - AIR 1961 SC 609
660
Sales Tax Commissioner of U.P. v. Modi Sugar Mills Ltd - AIR 1961 SC 1047

275 

 
it being in nature of exception is to be interpreted strictly and against the
subject but once ambiguity or doubt about applicability is lifted and the
subject falls in the notification then full play should be given to it and it
calls for a wider and liberal interpretation.661 A distinction has to be made
by court while interpreting the provisions of a taxing statute between the
charging provisions which impose the charge to tax and machinery
provisions which provide the machinery for the qualification of the tax
and the levying and collection of the tax so imposed. While charging
provisions are interpreted strictly, machinery sections are not generally
subject to a rigorous interpretation. The courts are expected to interpret
the machinery sections in such a manner that a charge to tax is not
defeated.662 Absolute equality and justice is not attainable in taxing laws.
A statute has to be interpreted in light of the mischief it was designed to
remedy.663

5.3 PROCEDURAL STATUTE

According to Salmond,664 the law of procedure may be defined as
that branch of the law which governs the process of litigation. It is the
law of actions – using the term action in a wide sense to include all
proceeding, civil or criminal.

In Krishnaji Dattatraya Bapat v. Krishnaji Dattatraya Bapat,665 it

was held that: -

“Statutes pertaining to a right of appeal should be liberally

construed.”

                                                            
661
Union of India v. Wood Paper Ltd, AIR 1991 SC 2049
662
Associated Cement Co. Ltd v. Commercial Tax Officer, Kota, AIR 1981 SC 1887
663
1990 (4) J.T 131 SC: 1963 SC 1062 : AIR 1940 PC 124 : India United Mills Ltd v.
Commissioner of Excess Profits Tax, Bombay - AIR 1955 SC 79
664
Salmond: Jurisprudence, 10th Ed. pp. 475-476
665
MANU/SC/0456/1969

276 

 
 In Gurdev Kaur and Ors. v. Kaki and Ors.,666 the court has held
that:

“Judges must administer law according to the provisions of law.

It is the bounden duty of judges to discern legislative intention
in the process of adjudication. Justice administered according to
individual’s whim, desire, inclination and notion of justice
would lead to confusion, disorder and chaos. Indiscriminate and
frequent interference under Section 100 C.P.C. in cases which
are totally devoid of any substantial question of law is not only
against the legislative intention but is also the main cause of
huge pendency of second appeals in the High Courts leading to
colossal delay in the administration of justice in civil cases in
our country.”

In Khan Gul v. Lakha Singh,667 Tek Chand, J., has observed that:

“This brings us to the remaining but really substantial point,

viz., whether the specific provision of the substantive law
(section 11 of the Contract Act), which declares a minor’s
contract to be void, can be rendered nugatory by a general
provision embodying the rule of estoppel found in a procedural
Code like the Evidence Act. In order to find a satisfactory
answer to this question two fundamental principles must be
borne in mind. The first is embodied in the great maxim
generalia specialibus non derogant which has frequently been
applied to resolve the apparent conflict between provisions of
the same statute or of different statutes. In such cases, the rule is
that wherever there is a particular enactment and a general
                                                            
666
AIR 2006 SC 1975
667
ILR 9 Lah (FB) pp.701, 742 : 1928 Lah (FB) pp.609, 625

277 

 
 enactment and the latter, taken at its most comprehensive sense,
would overrule the former, the particular statute must be
operative, and its provisions must be read as excepted out of the
general.”

In Habu v. State of Rajasthan,668 the court held that:

“Inherent powers under Section 482 Cr.P.C. are always inherent

in a court and if (not) specifically provided by the legislature,
all pervasive and comprehensive enough to arm the Court for
advancing the cause of justice and to prevent the abuse of the
process of the Court.”

In Sachida Nand Singh and Anr. v. State of Bihar and Anr.,669 the
court considering the interpretation and scope of Sections 195(1)(b)(ii)
and 340(1) of the Criminal Procedure Code held:

“to interpret Section 195(1)(b)(ii) as containing a bar against

initiation of prosecution proceedings merely because the
document concerned was produced in a Court albeit the act of
forgery was perpetrated prior to its production in the Court. Any
such construction is likely to ensure unsavoury consequences.
For instance, if rank forgery of a valuable document is detected
and the forgerer is sure that he would imminently be embroiled
in prosecution proceedings he can simply get that document
produced in any long-drawn litigation which was either
instituted by himself or somebody else who can be influenced
by him and thereby pre-empt the prosecution for the entire long
period of pendency of that litigation. It is a settled proposition

                                                            
668
AIR 1987 Raj 83
669
(1998) 2 SCC 493

278 

 
 that if the language of legislation is capable of more than one
interpretation, the one which is capable of causing mischievous
consequences should be averted.”

The Supreme Court in Bhagwant Singh v. Commr. of Police,670

while giving interpretation to Section 173(2)(ii) Cr.P.C. held:

“(i) the power of re-call is different than the power of altering or

reviewing the judgment and (ii) powers under Section 482 Cr.
P.C. can be and should be exercised by this Court for re-calling
the judgment in case the hearing is not given to the accused and
the case falls within one of the three conditions laid down under
Section 482 Cr. P.C.”

In Abdul Aziz v. State.,671 the court held that:

““Shall be written by Presiding Officer” – is to be interpreted to

mean that the judgment must be in the handwriting of the
presiding officer it would mean that even if the presiding officer
types a judgment himself it would offend against the provisions
of this law. The Code of Criminal Procedure was enacted in
1898 and those who framed the Code perhaps did not know that
typewriters would be available to courts and judgments could be
typed. At that time they were only safeguarding against
someone else other then the presiding officer writing out the
judgment and the presiding officer merely signing that
judgment. They only reason for making the provisions seems to
be that as it was a non-appealable order it was considered

                                                            
670
AIR 1985 SC 1285
671
AIR 1956 All 637

279 

 
 necessary that the record should contain a clear indication that
the Magistrate fully considered the evidence led in the case
before pronouncing his final order. There is no reason to believe
that the accused stands in any danger of being prejudiced if the
Magistrate instead of writing the evidence in his own hand kept
a type-written record. The risk of someone else typing out the
record and the Magistrate merely signing it is in my opinion
negligible and not worthy of consideration. Another ridiculous
situation, if this interpretation is accepted, would be taht if a
Magistrate suffers from some disability either temporary or
permanent which prevents him from writing himself he would
become unfit for conducting summary trials. The law surely
could not mean that such an officer is disqualified from tying
cases summarily under Section 263 or Section 264, Cr. P.C.”

In Dhondhey Prasad v. Sewak and Ors.,672 it was argued that the

word ‘decree holder’ must include the plural, ‘decree holders’, hence
payment must be made to all the decree-holders jointly at one time. The
court held that:

“The interpretation sought to be given to this provision of law

by if accepted might result in hardship in certain cases where a
joint decree is passed in favour of a number of decree-holders
having separate and divisible shares in the decretal amount. If,
for example, one of the decree-holders has gone abroad or is
untraceable for the time being, then according to the
interpretation placed by the learned Counsel for the appellant, it
would not be possible for the judgment-debtor to pay off the

                                                            
672
AIR 1954 All 739

280 

 
 share or shares of the remaining decree-holders out of Court.
Nor would it be possible for the remaining decree-holders to
accept out of court payment of their shares in the decretal
amount in partial satisfaction of the decree. It would also not be
possible for the Court to record satisfaction of such payment in
Court. Further where partial payment of the respective shares of
other decree-holders has been made by the judgment-debtor, it
would enable the remaining decree-holders to still insist on the
payment of the entire amount and to ask the Court to disregard
such payment in execution proceedings. This is exactly what
has happened in this case. The situation created would certainly
be inequitable.

It would, therefore, be open to the Court in such a case to

impose a condition that the entire money be deposited in Court
and that out of it the applicant decree-holder should be allowed
to be paid only one-third of the amount of the decree and not the
remaining two-thirds which has already been paid off. In this
particular easel there seems to be a conflict between the three
decree-holders and a direction like that would be justifiable
under provisions of Order 21, Rule 15(2), C.P.C. If the Court
could impose a condition like that and stop in the end the
eventual payment of two thirds of money realized as a result of
execution there seems to be no reason why the Court should not
allow the satisfaction of two-thirds of the decree to be recorded
in Court and allow the execution proceedings to go on only with
respect to the remaining one-third from the very beginning. This
is certainly a more convenient and expeditious mode of
achieving the same purpose which is both just and equitable.”

281 

 
5.4 BENEFICIAL-SOCIAL-WELFARE STATUTE

A statute which purports to confer a benefit on individuals or a

class of persons, by relieving them of onerous obligations under contracts
entered into by them or which tend to protect persons against oppressive
act from individual with whom they stand in certain relations, is called a
beneficial legislation.

In interpreting such a statute, the principle established is that there

is no room for taking a narrow view,673 but that the Court is entitled to be
generous towards person on whom the benefit has been conferred.674

It is a well settled canon of construction that in construing the

provision of beneficial enactments, the court should adopt that
construction which advances, fulfills and furthers the object of the Act
rather than the one which would defect the same and render the protection
illusory.675

Welfare statute is an enactment which is intended to promote the

welfare of society or class of society e.g. The Industrial Disputes Act is
an Act enacted as a welfare legislation intended to promote the welfare of
the working class by ensuring to them reasonable conditions of service
which obligation under the constitution is cast upon the state by Articles
38 and 43 thereof.

All legislation in a welfare state is enacted with the object of

promoting general welfare, but certain types of enactments are more
responsive to some urgent social demands and also have more immediate

                                                            
673
Modern Movies v. S.B. Tiwari, [1966] Lab LJ 763
674
Union of India v. Pradeep Kumari, [1995] 2 SCC 736
675
Chinnamar Kathian alias Muthu Gounder v. Ayyavoob alias Periana Gounder,
AIR 1982 SC 137

282 

 
and visible impact on social vices by operating more directly to achieve
social reforms. Factories Act is a example thereof.

It demand an interpretation liberal enough to achieve the legislative

purpose, without doing violence to the language.676

In the case of Suhas H. Pophale v. Oriental Insurance Company

Limited.,677 the Supreme Court has laid down that:

“If there are rights created in favour of any person, whether they
are property rights or rights arising from a transaction in the
nature of a contract, and particularly if they are protected under
a statute, and if they are to be taken away by any legislation,
that legislation will have to say so specifically by giving it a
retrospective effect. This is because prima facie every
legislation is prospective.”

In Banerjee v. Anita Pan678, the facts were that poor landlords were
selling their properties and the transferees were resorting to large scale
eviction on the ground of rebuilding for personal use and resorting to re-
letting on rack-rents or rebuilding for rich returns. To get over such a
situation West Bengal Premises Tenancy Act, 1956 was amended in
1969, and Section 13(3-A) as introduced prohibiting the transferee
landlords from instituting suits of eviction within three years of the
transfer and the section was made retrospective. The respondent however,
who had purchased the premises, before the amendment, filed a suit for
eviction within three years of the transfer. The High Court upheld the
amended provision but not its retrospective effect and gave relief to the

                                                            
676
Central Railway Workshop v. Vishwanath, (1970) 2 SCR 720
677
(2014) 4 SCC 657; Janardhan Reddy v. State, AIR 1951 SC 124 : (1951) 52 Cri LJ
391
678
(1975) 1 SCC 166

283 

 
respondent. Allowing the appeal of the aggrieved tenant, it was held (per
majority) : there is a presumption of constitutionality in favour of a
legislation and hardship in a few instances would not affect the
constitutionality of social legislation. Where to interpretations are
possible that which validates the statute and shortens litigation should be
preferred to any literal, pedantic, legalistic or technically correct
interpretation which invalidates the enactment or proliferates litigation.
Promotion of public justice and social gain at the cost of straining
language of a statute is permissible. Statutory construction relating to
complex problems of the community cannot be hide bond by orthodox
textbooks canons. In interpreting social legislation court can refer to
legislation proceedings and common knowledge and other relevant
factors including the statement of object and reasons. A reasonable
interpretation which can avoid invalidation is preferable. Humanist
considerations, public policy and statutory purpose provide guide-lines of
construction within reasonable limits. Hardship has no relevance to
constitutionality though it may influence the ultimate solution that the
court may arrive at by interpretation.

In Gurcharan Singh v. Kamla Singh,679 the Court while dealing

with Tenancy law observed: interpretation of socio-economic legislation
should further the object and purpose of the legislation and legislative
history becomes irrelevant when the Act seeks to usher in a new order.

In State of M.P. v. Galla Tilhan Vyapari Sangh,680 the court while

holding that Section 37)5)(a) of the M.P. Krishi Upaj Mandi Adhiniyam,
1972, in imposing on every commission agent the liability to keep in safe
custody the agricultural produce of the principal does not imposed

                                                            
679
(1976) 2 SCC 152
680
(1977) 1 SCC 657

284 

 
unreasonable retractions, observed: the main purpose of the Act is to
secure a scientific method of storage, sale distribution and marketing of
agricultural produce and to cut out, as far as possible, the middleman’s
profit. The Act therefore, contains provisions of a beneficial nature. It
does not impose any hardship that can be termed as unreasonable as the
agent is fully compensated. The Act being a social piece of legislation
should be liberally construed so as to advance the object of the Act and
fulfil the aims to be achieved thereby.

In Hutchiah v. Karnataka State Road Transport Corporation.,681

the plea of the Corporation was: “A probationer is no workman within the
meaning of that expression defined in S.2(s) of the Act. Therefore, the
discharge from service of a probationer is no retrenchment within the
meaning of that expression defined in S.2(oo) of the Act. Consequently,
the pre-conditions required to be complied with before effecting the
retrenchment of a workman prescribed under S.25-F of the Act, are
inapplicable. On the other hand the plea of the employees were: “Every
person, who is employed in an industry, is a workman as defined in S.2(s)
of the Act, irrespective of the fact, whether he is called a temporary
workman, permanent workman or a probationer. Whatever be the nature
of tenure, every person employed in an industry is a workman and the
moment he puts in a continuous service of one year within the meaning of
S.25-B of the Act, he would become entitled to the protection afforded
under S.25-F of the Act in respect of retrenchment. Termination of
service of such a workman, in whatsoever manner, would amount to
retrenchment unless it falls within the excepted categories specified in
clauses (a), (b) and (c) of S.2(oo) of the Act.”

                                                            
681
(1983) ILLJ 30 Kant

285 

 
 The Court has held that:

“It is the duty of the Court to interpret the provisions of a

welfare legislation so as to promote and not to demote its
intention.”

In Sant Ram v. Rajinder Lal,682 the lessee was a cobbler for over a
decade running a small shop and was cooking food and was sometime
staying on the premises at night. There was no mention of the purpose in
the lease deed. The lessor sought eviction on the ground of the use of a
shop for a purpose other than for which it was leased. The Supreme Court
held: The degree of precision in drafting of deeds or statutes should be
such that a person reading even in bad faith cannot misunderstand. The
intention of parties from which the purpose of the lease is spelt out is to
be gathered from the social milieu. The actual life situations and urban
conditions of India, especially where poor tradesmen like cobblers,
candlestick makers, cycle repairs and tanduri bakers, take out small
spaces on rent, do not warrant in irresistible inference that if the lease is
of a shop the purpose of the lease must be commercial. They take on
lease little work places to trade and to live, the two being interlaced for
the lower, larger work places to trade and to live, the two being interlaced
for the lower, larger bracket of Indian humanity. Thus viewed, it is
difficult to hold, especially when the lease has not been spelt it out
precisely, that the purpose was exclusively commercial and incompatible
with any residential use, even of a portion. Statutory construction, so long
as law is at the service of life, cannot be divorced from the social setting.
That is why, welfare legislation like the present one must be interpreted
in a Third World perspective. It should be borne in mind that the present
case is concerned with a hilly region of an Indian town with indigents
                                                            
682
(1979) 2 SCC 274

286 

 
struggling to live and huddling for want of accommodation. The law itself
is intended to protect tenants from unreasonable eviction and is, therefore,
loaded a little in favour of that class of beneficiaries. When interpreting
the text of such provisions – and this holds good in reading the meaning
of documents regulating the relations between the weaker and the
stronger contracting parties – the court should favour the weaker and
poorer class.

It is the duty of the court to interpret a provision, especially a

beneficial provision, liberally so as to give it a wider meaning, instead of
giving a restrictive meaning which would negate the very object of the
provision.683 Relevant rule in this case entitling an army officer to
disability pension if he suffered disability “which is attributable to or
aggravated by “ military service – The rules further providing that “A
person is also considered to be on duty when proceeding to his leave
station or returning to duty from his leave station at public expense” –
Appellant, while on casual leave, travelling at his own expenses to his
home station and during journey, meeting with an accident which resulted
in amputation of his hand – Disability pension denied to him on the
ground that he was not on duty because the journey being performed by
him on leave was not “at public expense” – Held, appellant could not be
denied disability pension by giving a literal interpretation to the
expression “at public expense” – The expression read down to mean that
the army officer has been authorized to undertake journey for leave
station – Appellant, therefore, held entitled to disability pension.

                                                            
683
Madan Singh Shekhawat v. Union of India, (1999) 6 SCC 459

287 

 
 Interpretation which provides beneficial purpose of the provision
should be adopted.684 Remedial Act should be given beneficial
interpretation.685

In interpreting a welfare legislation, the court should adopt a

beneficent rule of construction; if a section is capable of the
constructions, that construction should be preferred which furthers the
policy of the Act and is more beneficial to those in whose interest the Act
has been passed.686

In Hindustan Lever Ltd. v. Ashok Vishnu Kate,687 the Supreme

Court has succinctly summed up as follows:

“In interpreting a social welfare legislation such a construction

should be placed on the relevant provisions which effectuates
the purpose for which such legislation is enacted and does not
efface its very purpose.”

Welfare statutes must, of necessity, receive a broad interpretation.

Where legislation is designed to give relief against certain kinds of
mischief, the court is not to make inroads by making etymological
excursions.688

5.5 GENERAL AND SPECIAL STATUTE

What is a general statue and what is a special statue is often a

question of difficulty to solve in most cases; but the classification has to
be made with reference to the context in each case and the subject-matter

                                                            
684
Ghantesher Ghose v. Madan Mohan Ghosh, (1996) 11 SCC 446
685
Vijaynath v. Guramma, AIR 1999 SC 555
686
Rajaram Bhivandiwala v. Nand Kishore, 1975 MPCJ 225
687
(1955) 6 SCC 326
688
Surendra Kumar Verma v. Central Government Industrial Tribunal, AIR 1981 SC
422

288 

 
dealt with by each statute. As Justice Ramesan has pointed out in
Thammayya v. Rajah Tyadapusapati,689 most Acts can be classed as
General Acts from one point of view and Special Act from another. For
example, it may be argued as he says that the Contract Act which is
applicable to all is general in relation to the Labour Act which is limited
to the relationship of the employer and the employee; and in another
sense the Labour Act which applies to all concerns will be general in
relation to the labour employed in concerns engaged in supplies as
essentials. “A General Act prima facie, is that which applies to the whole
community. In the natural meaning of the term it means an Act of
Parliament which is unlimited both in its area and, as regards the
individual, in its effects.” A special law must be taken as exhaustive in
the subject it enacts. Rights not expressly conferred by it cannot be
allowed to be spelled out by means of analogy nor can considerations of
expediency and convenience unwarranted by the term of the statute be
called in aid to enlarge the scope of its provisions. If there is a Special
Act and a General Act, dealing with the same matter, the Special Act
overrides the General Act.690

A general statute is presumed to have only general cases in view,

and not particular cases which have been already otherwise provided for
by special Act. The rule that general provisions will not abrogate special
provisions cannot be pressed too far. A general statute may repeal a
particular statute, and there is not rule of law which prevents this. If the
provisions of the special Act are wholly repugnant to the general statute,
it would be possible to infer that the special Act was repealed by the
general statute.691 There may be facts and circumstances showing that the
                                                            
689
AIR 1930 Mad 963
690
N.S. Bindra: Ibid, p. 567
691
Municipal Counsel v. T.J. Joseph, AIR 1963 SC 1561

289 

 
legislature intended to repeal the special Act. Each case is to be decided
on its own facts and circumstances.692 A general statute may repeal a
prior special Act, without expressly naming it, when the provisions of
both cannot stand together, and it is clear the legislature intended to
effectuate such repeal. A general law does not abrogate an earlier special
one by mere implication.693 Where there are general words in a later act
which are capable of reasonable and sensible application without
extending them to subjects specially dealt with by earlier legislation, the
earlier and special legislation cannot be held to have been indirectly
repealed, altered or derogated from merely by force of such general
words, without indication of a particular intention to do so.694

In Pune Municipal Corporation & Anr. v. Harakchand Misirimal

Solanki & Ors.,695 the Supreme Court has held that:

“The Land Acquisition Act, 1894 being an expropriatory

legislation has to be strictly followed. The procedure, mode and
manner for payment of compensation are prescribed in Part V
(Sections 31-34) of the 1894 Act. The Collector, with regard to
the payment of compensation, can only act in the manner so
provided. It is settled proposition of law (classic statement of
Lord Roche)696 that where a power is given to do a certain thing
in a certain way, the thing must be done in that way or not at all.
Other methods of performance are necessarily forbidden.”

                                                            
692
Maharaj Shree Umaid Mills v. Union of India, AIR 1960 Raj. 92
693
N. S. Bindra:, Ibid, p. 569
694
Barsay v. State, AIR 1958 Bom 354; Pratap Singh v. Manmohan Dey, AIR 1966
SC 1931
695
(2014) 3 SCC 183
696
Nazir Ahmad v. King Emperor, (1935-36) 63 IA 372 : (1936) 44 LW 583 : AIR
1936 PC 253 (2)

290 

 
 When the Legislature has given its attention to a separate subject,
and made provision for it, the presumption is that a subsequent general
enactment is not intended to interfere with the special provision unless it
manifests that intention very clearly.697

It is but a particular application of the general presumption against

an intention to alter the law beyond the immediate scope of the statute to
say that a general Act is to be construed as not repealing a particular one
by mere implication. A general later law does not abrogate an earlier
special one. It is presumed to have only general cases in view, and not
particular cases, which have been already provided for by a special or
local Act, or, what is the same thing, by custom. Having already given its
attention to the particular subject, and provided for it, the legislature is
reasonably presumed not to intend to alter that special provision by a
subsequent general enactment, unless it manifests that intention in
explicit language.698

Where there is a conflict between a special Act and a general Act,

the provisions of the special Act prevail.699

If the Legislature make a special Act dealing with a particular case

and later makes a general Act, which by its terms would include the
subject of the special Act and is in conflict with the special Act,
nevertheless unless it is clear that in making the general Act, the
Legislature has had the special Act in its mind and has intended to
                                                            
697
N.S. Bindra: Ibid, p. 149
698
Maxwell: Ibid, 9th Ed., p.183
699
Collector of Bombay v. Kamalawahooji, AIR 1934 Bom 162; Bhana Makan v.
Emperor, AIR 1936 Bom 256; Gwalior R.S. M. Co. v. Union of India, AIR 1960 M
330; Abdul Halim v. State of M.P., 1962 MP LJ 183; Patna Improvement Trust v.
Laxmi Devi, AIR 1963 SC 1077; Jogender Lal Saha v. The State of Bihar, AIR
1991 SC 1148

291 

 
abrogate it, the provisions of the general Act do not override the special
Act. If the special Act is made after the general Act, the position is even
simpler. Having made the general Act if the legislature afterwards makes
a special Act in conflict with it, we must assume that the Legislature had
in mind its own general Act when it made the special Act and made the
special Act which is in conflict with the general Act, as an exception to
the general Act.700

5.6 EMERGENCY STATUTE

Where the provisions of a statute are of exceptional character

meant to be in force for a specified period during which the Legislature
thought it advisable and expedient to provide for extraordinary remedies
which are inroads upon the freedom of action of a particular class of
persons, such provisions have to be construed strictly in accordance with
the words actually used by the legislation and they cannot be given an
extended meaning701. Legislature enacted for the purpose of alleviating
grave conditions which result from economic disaster and public calamity
is deserving of a generous interpretation so that its purposes may be
accomplished.702 War-time measures which often have to be enacted
hastily to meet a grave pressing national emergency in which the very
existence of the State is at stake, should be construed more liberally in
favour of the Crown or the State than peace-time legislation.703 Lord

                                                            
700
Corporation of Madras v. Madras Electric Tramways, Ltd., AIR 1931 Mad pp.
152, 156 : ILR 54 Mad 364
701
K.C. Momin v. Indumati Potdar, AIR 1958 SC pp.444, 447
702
Sutherland: Statutory Construction, 3rd Ed., Vol.3 p.442
703
State of Bombay v. Vir Kumar, AIR 1952 SC 335

292 

 
Macmillan in Liversidge v. Anderson,704 in interpreting the words of
Regulation 18-B of the Defence (General) Regulations, 1939, observed :

"In the first place, it is important to have in mind that the

regulation in question is a war measure. This is not to say that
the Courts ought to adopt in wartime canons of construction
different from those which they follow in peacetime. The fact
that the nation is at war is duly observed, specially in a matter
so fundamental as the liberty of the subject- rather the contrary.
But in a time of emergency when the life of the whole nation is
at stake it may well be that a regulation for the defence of the
realm may quite properly have a meaning which because of its
drastic invasion of the liberty of the subject the Courts would be
slow to attribute to a peacetime measure. The purpose of the
regulation is to ensure public safety, and it is right so to
interpret emergency legislation as to promote rather than to
defeat its efficacy for the defence of the realm. That is in
accordance with a general rule applicable to the interpretation of
all statutes or statutory regulations in peacetime as well as in
war-time."

Lord Romer in the said case observed:

"It was, indeed, said on behalf of the appellant in Greens's
case705 that wherein an Act of Parliament is capable of more
than one construction, the Courts will adopt that construction
which is the least likely to lead to an invasion of the liberty of
the subject. That in general is a very salutary rule, but we are

                                                            
704
1942 AC 266 : (1941) 3 All ER 338: 1943 FCR 49, ILR 1943 Nag 154: AIR 1943
Nag 26, ILR 1943 Nag 73 : AIR 1943 Nag 36.
705
R. v. Home Secretary Ex Parte Green, (1943) 3 All ER 104

293 

 
 dealing here with an Act passed and regulations made under it
in times of a great national emergency, and in view of this
circumstance and of the objects which that Act and those
regulations so plainly had in view, the Courts should, in my
opinion , prefer that construction which is the least likely to
imperil the safety of this country."706

An ordinance or an emergency measure is usually drafted in hurry

to meet unexpected contingencies or to meet some immediate need. In
view of such circumstances and the speed with which such legislation is
brought out, it would be unfair to criticize it in the way that a statute
might be criticized. The proper course is to take such an Ordinance as a
whole and in the light of the surrounding circumstances construe it so as
to give effect to what appears to be its proper meaning.707

The Legislature may make temporary laws for the purpose of

meeting an emergency in which case it may fix the period of expiration
either expressly or it may fix no period and in such a case the temporary
laws may expire otherwise. They cannot be allowed to outlast the
emergency which brought it forth.708

The general rule is that on the expiration of a temporary provision

which repeals an earlier Act, the earlier Act is revived after the temporary
provision is spent. This rule will prevail except in cases where the
intention of the temporary Act is clearly expressed for the purpose of
repealing the earlier Act permanently.709

                                                            
706
Basanta Chandra v. Emperor, ILR 23 Pat 968 : AIR 1945 Pat pp.44, 50
707
Sushil Kumar v. Emperor, AIR 1943 Cal pp.489, 493
708
Panna Lal Lahoti v. State of Hyderabad, AIR 1954 Hyd 129
709
Govindswami Naidu v. Additional Commercial Tax Officer, ILR (1962) 2 Mad
294.

294 

 
5.7 SUBSTANTIVE AND ADJECTIVE STATUTE

Law defines the rights which it will aid and specifies the way in
which it will aid them. So far as it defines, thereby creating it is
‘Substantive law’. So far as it provides a method of aiding and protecting,
it is ‘Adjective law’.710 Adjective law are also called Procedural law.

There is difference in the matter of interpretation between a law

dealing with substantive rights and dealing with procedure. There is no
vested right in procedure but the case of vested right is different. The
statute dealing with the substantive rights is to be interpreted in a way
that the substantive right available to the subject is not lost. Generally,
substantive statutes is treated as prospective in a nature. Whereas, rules of
procedure may be respective in nature.

Rule of procedure are not by themselves an end but the means to

achieve the ends of justice. They are tools forged to achieve justice and
not hurdles to obstruct pathway to justice. Interpretation to rule of
procedure which promotes justice and prevents its miscarriage by
enabling the court to do justice in myriad situations, all of which cannot
be envisaged, acting within the limits of permissible construction must be
preferred to that which is rigid and negatives the ends of justice. The
reason is obvious. Procedure is a means to subserve and not rule the cause
of justice.711 A rule of procedure enacted in a statute must, moreover be
liberally construed; so as to lead to the smooth working of the scheme of
the statute.712

                                                            
710
Holland: Jurisprudence, Chapter 8 end as referred to in N. S. Bindra: Ibid, p. 581
711
M.V. Vali Press v. Fernandee Lopez, AIR 1989 SC 2206
712
Quazi Vemat Ullah v. 6th Additional District Judge, Gorakhpur, AIR 1993 All 126

295 

 
 It is a general rule relating to interpretation of statute that in the
absence of an expressed provision, an adjective law cannot control the
provisions of substantive law.713 While interpreting a procedural law, the
court takes into a consideration also the impact it is calculated to have on
the course of litigation and decision making.714

Substantive law is concerned with the ends which the

administration of justice seeks; procedural law deals with the means and
instruments by which those ends are to be attained. The latter regulates
the conduct and relations of courts and litigants in respect of the litigation
itself, the former determines their conduct and relations in respect of the
matters litigated.715

5.8 AMENDING, CODIFYING AND CONSOLIDATING

STATUTE

AMENDING STATUTE

A law is amended when it is, in whole or in part, permitted to

remain, and something is added to or taken from it, or it is in someway
changed or altered to make it more complete or perfect, or to treat it the
better to accomplish the object or purpose for which it was made, or some
other object or purpose. It is an alteration or change of something
established as law.716

It frequently happens that legislative changes are made in order to

reverse decisions of the courts; sometime, indeed the courts themselves
invite the change. The decision is then the occasion of the enactment.

                                                            
713
Collector of Broach v. Ochhavlal, AIR 1941 Bom 158
714
Ram Jas v. Surinder Nath, AIR 1980 All 385
715
N. S. Bindra: Ibid, p. 581
716
N.S. Bindra, Ibid, p. 621

296 

 
 The question may, consequently arise whether the new enactment
is confined to dealing with the particular situation with which the court
was concerned or whether it goes further and covers a wider field; and if
so, how much wider. This is no general rule or presumption as to this.
Often Parliament, or its expert advisers, may take the opportunity to
review the whole matter in principle and make broad changes.

Legislative time is a precious commodity and it is natural that

opportunities, when they arise, will be used. Or, and this happens in the
fiscal field, the draftsman, faced with some loophole in a taxing Act
which the courts have recognised, will not merely close that particular
loophole but will use general language extending much more widely,
sometimes so as to sweep the honest and conscientious taxpayer up in the
same net as the evader.

On the other hand, there may be cases where Parliament takes a

narrow and piecemeal view of the matter; time may not admit of an
extensive review which may involve wide policy questions, or necessitate
consultation with other interests.

All these possibilities must be taken into account by courts in

assessing legislative intention.

In performing that task, the help can be gained from setting down
the two main elements which the draftsman has in the mind: the pre-
existing law and the decision of the court rendered earlier.

CODIFYING STATUTE

Codifying Acts are Acts passed to codify the existing law. This is
not merely to declare the law upon some particular point, but to declare in
the form of Code, the whole of the law upon some particular subject.

297 

 
Codification contemplates, implies and produces continuity of existing
law in clarified form rather than its interpretation.717

The purpose of a codifying statute is to present an orderly and

authoritative statement of the leading rules of law on a given subject,
whether those rules are to be found in statute law or common law.718 The
principles applicable to the construction of such a statute are well stated
in an off quoted passage of LORD HERSCHELL: “I think the proper
course, in the first instance, to examine the language of the statute and to
ask what is its natural meaning, uninfluenced by any considerations
derived from the previous state of law, and not to start with inquiring how
the law previously stood, and then, assuming that it was probably
intended to leave it unaltered, to see if the words of the enactment will
bear an interpretation inconformity with this view.”719

It is not the province of a Judge to disregard or go outside the letter

of the enactment according to its true construction.720

The first step taken should be to interpret the language of the

statute, and that an appeal to earlier decisions can only be justified on
some special ground.721

CONSOLIDATING STATUTE

Consolidation is the combination in a single measure of all the

statutes relating to a given subject matter and is distinct from codification

                                                            
717
N.S. Bindra, Ibid, p. 638
718
HALSBURY: Laws of England, (3rd Ed.) Vol. 36, p. 366
719
Bank of England v. Vagliano Brothers, (1891) AC 107 (HL) p. 144, as referred to
by Justice G.P. Singh: Ibid, p. 214
720
Joseph Peter v. State of Goa, Daman and Diu, AIR 1977 SC 1812
721
Bank of England v. Vagliano Brothers, (1891) AC 107 : Ravulu Subbarao v. CIT,
Madras, AIR 1956 SC 604

298 

 
in that the later systematizes case law as well as statutes.722 A
Consolidating Act may further be an amending Act. This additional
purpose is usually indicated in the Preamble or in the long title by use of
the words ‘an Act to consolidate and amend’.723

For the purpose of interpreting a statute which is a consolidating as

well as amending Act, the proper course is to have a “reasonable
interpretation of its provisions”724 and to apply the normal rule of
interpretation “so as to give each word the meaning proper to it in its
context”.725

It is not a sound cannon of interpretation to refer to the provisions

in repealed statutes when the consolidating statute contends enactment
dealing with the same subject in different terms.726 Even when a section
from an earlier Act is repeated in a consolidation Act in identical terms
the framework in which it is placed may be different.727

5.9 DELEGATED OR SUBORDINATE STATUTE

The nomenclature of delegated legislation is confused. The Act of

Parliament which delegates the power may in so many words lay down
that ‘regulations’, ‘rules’, ‘orders’, ‘warrants’, ‘minutes’, ‘schemes’,
‘byelaws’, or other instruments for delegated legislation appears under all
these different names – may be ‘made’ or ‘approved’ under defined
conditions.728

                                                            
722
Paton: Jurisprudence, 4th Edition, First Indian Reprint, 2004, p. 186
723
Justice G.P. Singh: Ibid, p.217
724
Ramdas Vitthaldas Durbar v. Amarchand & Co., (1916) ILR 40 Bom. 630 (PC)
725
Thakur Amar Singhji v. State of Rajasthan, AIR 1955 SC 504
726
Administrator General of Bengal v. Premlal Mullick, ILR 22 Cal. 788 (PC)
727
Justice G.P. Singh: Ibid, p.217
728
N.S. Bindra: Interpretation of Statutes, Ibid, p. 737

299 

 
 The power to legislate, when delegated by Parliament, differs from
Parliament’s own power to legislate. In subordinate legislation the
legislature delegates to some person or body of persons the duty of
framing regulations for carrying out the policy and objects of the statute.

A piece of subordinate legislation is not as immune as a statute

passed by a competent legislative and is liable to be challenged on any of
the grounds on which plenary legislation is questioned.729 The courts
should make a cautious approach in interpreting the subordinate
legislation and adopt almost the same standard as adhered to in
interpreting legislative enactments.730

By reason of any legislation whether enacted by the legislature or

by way of subordinate legislation, the State gives effect to its legislative
policy. Such legislation, however, must not be ultra vires the
Constitution. A subordinate legislation apart from being intra vires the
Constitution, should not also be ultra vires the parent Act under which it
has been made. A subordinate legislation must be reasonable and in
consonance with the legislative policy as also give effect to the purport
and object of the Act and in good faith. Where two interpretations of a
delegated legislation are possible, the one that makes it unworkable
should be avoided.731 If the language used in the delegated legislation
leads to one irresistible result it would not be proper to read it differently
only for purpose of finding out the same to be valid.732

                                                            
729
Indian Express Newspapers Private Ltd. v. Union of India, AIR 1986 SC 515
730
P. V. Mani v. Union of India, AIR 1986 Ker. 86
731
N.C. Singhal v. Union of India, AIR 1980 SC 1257
732
Tara Chand v. State of U.P., 1975 ALR 39; Mark Netto v. Govt. of Kerala, AIR
1979 SC 83

300 

 
 In P.J. Irani v. The State of Madras,733 the Court has held that:

“A subordinate legislation can be challenged not only on the

ground that it is contrary to the provisions of the Act or other
statutes; but also if it is violative of the legislative object. The
provisions of the subordinate legislation can also be challenged
if the reasons assigned therefore are not germane or otherwise
mala fide. The said decision has been followed in a large
number of cases by this Court.”

In Secretary, Ministry of Chemicals& Fertilizers, Government of

India v. Cipla Ltd. and Ors.,734 the court has opined that:

“The Central Government which combines the dual role of

policy-maker and the delegate of legislative power, cannot at its
sweet will and pleasure give a go-by to the policy guidelines
evolved by itself in the matter of selection of drugs for price
control.”

In Maharashtra State Board of Secondary and Higher Secondary

Education and Anr. v. Paritosh Bhupesh Kumar Sheth and Ors.,735 the
court has held that:

“The court was concerned with a regulation laying down the

terms and conditions for revaluating the answer papers.
Indisputably, there exists a distinction between regulations,
rules and bye-laws. The sources of framing regulations and bye-
laws are different and distinct but the same, in our opinion,

                                                            
733
MANU/SC/0080/1961
734
MANU/SC/0514/2003
735
MANU/SC/0055/1984

301