10 Landmark Judgments of Interpretation of Statute

Article '10 Landmark Judgments of Interpretation of Statute' explains significant case laws, issues, and the manner in which the court has given its interpretation while deciding the case. It contains topics related to external aid, internal aid, Heydon's rule, etc. The author's idea is to make the readers well-versed in the various topics of the interpretation of statutes, along with the help of case laws decided by either the High Court or the Supreme Court.

1. R.S. Nayak & Ors v. A.R. Antulay, 1984 AIR 684

In this case, R.S. Nayak, who was a political person, filed a complaint before the court of the special judge against A.R. Antulay, who was then, Chief Minister of Maharashtra under Section 161/165 of IPC and Section 5 of the Prevention of Corruption Act, 1947 alleging abuse of the office of Chief Minister. The Court of Special Judges discharged A.R. Antulay on the ground that he is a public servant under section 21 of IPC and for proceeding against him, sanction from competent authority (legislative assembly in the instant case) is required and therefore, the court of the special judge is not bound to take cognizance of offence.

In this case, the issue that arose for consideration was whether sanction from a competent authority is required for the prosecution of a public servant for offence committed him.

The Court held in the following words,

"If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provisions. Whenever a question of construction arises upon ambiguity or where two views are possible of a Provision, it would be the duty of the court to adopt that construction which would advance the object underlying the Act."

Thus, the holding of the special judge for the requirement of sanction for proceeding against the respondent is quashed and proceedings were resumed from the stage where the respondent was discharged.

2. Prabhakar Rao & Ors. v. State Of Andhra Pradesh & Ors, AIR 1986 SC 210

The facts of this case are that the State of Andhra Pradesh first increase the age of superannuation of employees from 55 years to 58 years in 1979 and then again change it from 58 years to 55 years by 1983 Amendments effected by Ordinance No. 24 of 1984 and section 4(1) of Act 3 of 1985. The issue that arose for consideration, in this case, was whether when making legislation to right a wrong or remedy a mischief, a group of persons who had also been wronged and suffered the mischief could be excluded by the mere mechanics of delayed legislation. The Court observed that

"Where internal aids are not forthcoming, we can always have recourse to external aids to discover the object of the legislation".

External aids are not ruled out. This is now a well-settled principle of modern statutory construction.

3. K.P. Varghese v. Income Tax Officer, Ernakulum, AIR 1981 SC 1982

The assessee sold his house in Ernakulam to his daughter-in-law and five of his children for the same price of Rs. 16,500 which he purchased in the year 1958. However, the Income Tax officer issued a notice under Section 148 of the Income Tax Act seeking to reopen the assessment of the assessee, and an order of reassessment was passed by the Income Tax officer including the sum of Rs. 48,500 as capital gains and bringing it to tax under sub-section (2) of Section 52.

The issue that arose for consideration, in this case, was whether understatement of consideration in a transfer of property is a necessary condition for attracting the applicability of section 52 sub-section (2) of the Income Tax Act 1961

The Court observed that

"We must not adopt a strictly literal interpretation of section 52 sub-section (2) but we must construe its language having regard to the object and purpose which the legislature had in view in enacting that provision and in the context of the setting in which it occurs"

4. Municipal Board v. State Transport Authority, Rajasthan, AIR 1965 SC 458

In this case, the location of a bus stand was changed by the Regional Transport Authority. An application could be moved within 30 days of receipt of the order of the regional transport authority according to section 64 A of the Motor vehicles Act, 1939. However, the application was moved after 30 days on the contention that the statute must be read as "30 days from the knowledge of the order". It was held that

"it was well settled that equitable considerations have no place in interpreting provision of limitation and their strict grammatical meaning has to be adhered to. The expression "date of the order" in the first proviso to Section 64 A of the Act, therefore, could not mean the date of the knowledge of the order."

5. Tata Consultancy Services v. State of Andhra Pradesh, AIR 2005 SC 317

The appellant is a computer consultancy services and also sells custom-made software which is uploaded on the computers of the customers (uncanned software) and computer software packages off-the-shelf (canned software). The appellants are licensees for the canned software since the owner thereof is another person. In the case of canned software, the assessing officer under the Andhra Pradesh General Sales Tax Act held that they were "goods" liable to sales tax.

The issue that arose for consideration, in this case, was whether intellectual property contained in floppies, disks, or CD- ROMs would be 'goods' within the meaning of the Andhra Pradesh General Sales Tax Act, 1957, to which the court held that A literal construction would not be denied only because the consequences to comply with the same may lead to a penalty. The courts should not be over zealous in searching for ambiguities or obscurities in words that are plain.

6. CIT v. Sundaradevi, AIR 1957 SC 832

The common question of law for determination, in this case, was whether the word 'individual ' in Section 16(3) of the 'Indian Income-tax Act, 1922, as amended by Act IV of 1937, includes a female and whether the income of minor sons from a partnership, to the benefits of which they were admitted, was liable to be included in computing the total income of the mother who was a member of the partnership.

The Court held that

"Where the Legislature uses ambiguous language in enacting a statute, as it has undoubtedly done in the instant case, recourse must necessarily be had, for a clarification of such ambiguity, to the pre-existing state of the law in order to see what defect or mischief therein was being sought to be remedied, the remedy that was prescribed by the statute and the reason for it."

7. Prithipal Singh v. Union of India, AIR 1991 SC 915

The facts of this case are that Prithipal Singh joined Central Government Service and at the time of his retirement he was working as Staff Car Driver in the Ministry of Surface Transport (Transport Wing), Government of India. He was informed by an order that on attaining the age of 58 years he was due to retire. He filed representation claiming that he could not be retired at the age of 58 years as in terms of Fundamental Rule 56(b) his age of superannuation was 60 years. The representation was rejected.

By applying the rule of literal construction, the court held that there is a presumption that the words are used in an Act of Parliament correctly and exactly and not loosely and inexactly.

8. Heydon's Case, 76 ER 637

The facts of this case are that Ottery College, a religious college, gave a tenancy to a man and his son, also referred to as Ware. The tenancy was established by copyhold. Later, the college leased the same parcel to another man, named Heydon, for a period of eighty years in return for rent equal to the traditional rent for the components of the parcel. Less than a year after the parcel had been leased to Heydon, Parliament enacted the Suppression of Religious Houses Act 1535 (Act of Dissolution).

The statute had the effect of dissolving many religious colleges, including Ottery College, which lost its lands and rents to Henry VIII. However, a provision in the Act kept in force, for a term of life, any grants that had been made more than a year before the enactment of the statute. The Court of Exchequer found that the grant to the Wares was protected by the relevant provision of the Act of Dissolution, but that the lease to Heydon was void.

In this case, it was stated that there were four points to be taken into consideration when interpreting a statute:

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

2. What was the "mischief and defect" for which the common law did not provide?

3. What remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth?

4. What is the true reason for the remedy?

9. Siddeshwari Cotton Mills Private Limited v. Union of India, 1989 AIR 1019

The appellant manufactures cotton fabric on power looms. By virtue of two notifications issued under Rule 8(1) of the Central Excise Rules 1944 unprocessed cotton fabric was exempt from excise duty as also additional duties. Since the appellant was using the process of 'calendering', the Central Excise authorities held that the cotton fabric manufactured by it ceases to be "unprocessed". The collector of Central Excise, directed the appellant to pay levy on the manufacture of the calendered cotton fabric, and also levied a penalty of Rs. 1,00,000 under Rule 173.

The issue that arose for consideration in the instant case was whether such cotton-fabric ceases to be "unprocessed" cotton fabric if it is subjected to calendering.

The court held that "The expression ejusdem-generis, 'of the same kind or nature'--signifies a principle of construction whereby words in a statute which are otherwise wide but are associated in the test with more limited words are, by implication, given a restricted operation and are limited to matters of the same class or genus as preceding."

10. Bengal Immunity Company v. State of Bihar, AIR 1955 SC 661

The appellant company is an incorporated company carrying on the business of manufacturing and selling various sera, vaccines, biological products, and medicines. It is registered as a dealer under the Bengal Finance (Sales Tax) Act. Its products have extensive sales throughout the Union of India and abroad. The goods are dispatched from Calcutta by rail, steamer, or air against orders accepted by the appellant company in Calcutta. The appellant company has neither any agent or manager in Bihar nor any office, godown, or laboratory in that State. On the 24th October 1951 the Assistant Superintendent of Commercial Taxes, Bihar wrote a letter to the appellant company to get their firm registered under the Bihar Sales Tax Act and to deposit Bihar Sales Tax dues in any Bihar Treasury.

The principal question is whether the tax threatened to be levied on the sales made by the appellant company and implemented by delivery in the circumstances and manner mentioned in its petition is leviable by the State of Bihar, i.e., Whether the explanation to Article 286(1)(a) confers authority on the State Legislatures to impose a tax on sales falling within its purview?

The Court held that the marginal note appended to Article 286, i.e. "Restrictions as to the imposition of tax on the sale or purchase of goods" being a part of the Constitution as passed by the Constituent assembly prima facie furnishes a clue as to the meaning and purpose of the Article.

Thus, the Court held that the marginal note, as well as the language of the article, makes it clear that the article's object is to impose restrictions on the states' legislative powers with respect to the imposition of tax on sales and purchases of goods.

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