Unit II

Internal and external aids of construction -

Use of travaux preparatories -
parliamentary discussion, parliamentary
history, public opinion- Policies of
construction - Beneficial construction,
liberal construction, restrictive
construction, construction to prevent abuse
and evasion, equitable construction, bonam
partem.
 Multiple External Aids to
Interpretation
• Travaux preparatories
• Statutes in pari materia
• contemporanea expositio
• Inquiry Commission Reports
• Law Commisssion Reports
 TRAVAUX PREPARATOIRES
• Travaux Preparatoires is a • While there are several internal
French term meaning aids, the need of external aid;
Travaux Preparatories comes
preparatory works. into play in certain strenuous
• It includes all the materials circumstances, when internal
used in the preparation of a aids breaks down.
• Travaux Preparatories majorly
statute. comprises of the
• It acts as a secondary form of Parliamentary History,
interpretation which can be official records of
used to clarify the intention of negotiations, reports of
selection committee, speeches
the makers. and surrounding
• It is the consists of records of circumstances, speeches made
during debate on the bill etc.
negotiations before the
conclusion of a treaty
• Travaux préparatoires is the name used to
describe the documentary evidence of the
negotiation, discussions, and drafting of a final
treaty text.
• Travaux préparatoires is the most commonly used
name for these types of documents, but they may
sometimes also be referred to as:
– negotiating history
– drafting history
– preparatory documents
• Article 32 Vienna Convention on the Law of Treaties 1969
- Supplementary means of interpretation
– Article 32 Supplementary means of interpretation Recourse may be
had to supplementary means of interpretation, including the
preparatory work of the treaty and the circumstances of its conclusion,
in order to confirm the meaning resulting from the application of
article 31, or to determine the meaning when the interpretation
according to article 31:
– (a) leaves the meaning ambiguous or obscure; or
– (b) leads to a result which is manifestly absurd or unreasonable.
• Drafting histories, also known as travaux préparatoires or
preparatory works,
 PEPPER V. HART-
• THE DAWN OF A NEW ERA OF
INTERPRETATION
• Pepper v Hart overturned the rule that travaux
préperatoires cannot be taken into consideration by the
judges.
• This landmark case in UK law that addressed the issue
of whether statements made in Parliament could be
used to interpret legislation
• Pepper v. Hart [1992] UKHL 3 where Lord Brown
Wilkinson abolished the exclusionary rule and replaced
it with the inclusionary rule of accepting parliamentary
materials as an external aid to construction in order to
overcome the lacunae of statutory interpretation.
• The commission reviewed certain case laws such as B. Prabhakar
Rao and others v State of A.P. and others , AIR 1986 SC 120 where
Justice [Link] Reddy observed that in cases where internal
aids are not sufficient to discover the object of legislation, then
external aids can always be used in such matters.
• In District Mining Officer and others v. Tata Iron & Steel Co. and
another (2001) 7 SCC 358 SC has observed that external aids can be
resorted to in order to ascertain the true meaning and intent of
legislature.
• In A.K Gopalan v. State of Madras, [1950] S.C.R. 88. it was pointed
out that external aids are not permissible unless statute was vague or
ambiguous. It was settled that proceedings or discussions in
assembly, reports, and debates are to be used.
• In Anandji Hari Das And Co. Pvt Ltd. v. Engg. Majdoor Sangh, AIR
1975SC 946 external aids are used when a statute is not clear,
cloudy, uncertain or susceptible to one or more meanings or shades
of meaning
• Parliamentary History – (Travaux
Preparatoires)
– a. Parliamentary Debates and Speeches
– b. Bills introduced in the Parliament as external aid
– c. Statement of Objects and Reasons as External
Aid
– d. Parliamentary Committee and Law Commission
Reports
 PARLIAMENTARY HISTORY
• Pepper v. Hart
• proposals of bills, debates, speeches, amendments
helps us read the actual mind of the framers of the
statute and the prevailing necessities for the
enactment of such statutes.
• Before the approval of parliamentary history as an
aid to interpretation, two objections were made :
– 1. Parliamentary materials are not readily available.
– 2. Recourse to Parliamentary material will amount to
questioning the freedom of speech and debates in
Parliament
 EVIDENTIARY VALUE OF
PARLIAMENTARY DEBATES AND
SPEECHES
• It Cannot Be Used To Cut Down Generality Of Enactment:
– Earlier, the courts posited the view that such speeches are completely
inadmissible (Ashwini Kumar Ghose v. Arabinda Bose, AIR 1953 SC
75) and it only indicates the subjective intent of the speaker (State of
West Bengal v. Union of India (1964) 1 SCR 371.)
– Debates might be very subjective and are actually the personal
individual opinions of the framers and such statement of opinion and
beliefs cannot be admissible. (R. v. West Riding of Yorkshire County
Council, (1906)2 KB 676.)
– Golakhnath v. state of Punjab, (1967) 2 SCR 762: The courts in
various judicial pronouncements have refrained from using debates as
a means for interpretation of statutes.
– Also, individual opinion of members of convention cannot be referred
as a purpose for construction of statutes (A.K..Gopalan v. Union of
India, [1950] S.C.R. 88.)
• Later on, in Shyamlal Mohanlal v. State of
Gujarat (AIR 1965 SC 1251.), J. Shah in his
dissenting opinion relied on such speeches for
finding out the historical background of the
statute.
• In B. Banerjee v. Anita Pan((1975) 1 SCC 166.),
J. Krishna Iyer held that we cannot ignore the
concerns voiced during parliamentary debates and
it becomes important to lend an ear to what the
legislative draftsmen have to say
• II. It Can Be Used To Gather True Intention Of
Legislative Authors
– In Abhiram Singh v. C.D. Commachen ((2017) 2 SCC
629.), the court had to interpret Section 123(3) of the
Representation of People Act, 1951. The question was
whether the word "his" used in the section refers to the
religion of candidate or voters? To resolve this, speech
given by then Law Minister A.K. Sen was considered
to find out the mischief intended to be remedied. In
this manner, statute was constructed to conclude that it
refers to candidate's religion
 B. BILLS
• Earlier, the notion was that debates on bills in the parliament were
not held admissible as an external aid to interpretation since these
debates were considered as subjective approach and thus not
reliable. (State of Travancore v Bombay Co Ltd, 1952 SCR 1112. )
• In Chiranjit Lal Chowdhary v Union of India, (AIR 1951 SC 41) the
apex court observed that during the introduction of a bill in
parliament, debates and speeches are encouraged in order to arrive at
the most authentic form of statute.
• Hence, the court opined it as an admissible source of interpretation.
• Subsequently, the Supreme Court had time and again referred to Dr.
Ambedkar‟ s speech to aid interpretation by observing „that the
debates in the Constituent Assembly could be relied upon as an aid
to interpretation of a constitutional provision is borne out by a series
of decisions of the Court.(Indira Sawhney v Union of India, AIR
1993 SC 477.)
• In [Link] v State of Kerala (AIR
1992 SC 1488.) the apex court conclusively
held that although there might be subjectivity
in the speeches of the mover of bills and that it
cannot be conclusively taken as a source of
interpretation of statute, yet, it can be used to
find out the object and intent of the mover of
the bill and thus, can be used in a limited and
cautious sense.
• Statement of Objects and Reasons as External
Aid
• Parliamentary Committee and Law
Commission Reports
 STATUTES IN PARI MATERIA
• Statutes in pari materia, means the statutes dealing
with the same subject matter or forming part of the
same system.
• The meaning of the phrase pari materia has been
explained in an American case United Society v Eagle
Bank, (1829) in the following words: Statutes are in
pari materia which relate to the same person or thing, or
to the same class of persons or things.
• “where a term is used without definition in one Act, but
is defined in another Act that is in pari materia with the
first Act, the definition may be treated as applicable to
the use of the term in the first Act.
 Elements of pari materia act

– The Acts which have been given a collective title

– The acts need to be interpret.
– The acts that are being identical in brief titles.
– Some Acts which are dealt with same lines &
subject matter
• This doctrine gives all regulations concerning
labour, administrative authorities, or taxation,
inter alia, others can be used to analyse the
regulations attached to the same genre.
• Ahmedabad Pvt Primary Teachers Association
v Administrative Officer, AIR 2004 SC 1426
• Sarva Shramik Sangh v Indian Smelting and
Refining Co Ltd, AIR 2004 SC 269
• State of Madras v A Vaidyanath Ayer, AIR
1958 SC 61
• Bangalore Turf Club Case
CONTEMPORANEA EXPOSITIO
• Usage or practice developed under a statute plays a very
important role in interpretation.
• Contemporanea expositio is a Latin term that means
"contemporaneous exposition." It refers to the doctrine that
the best interpretation of a statute or document is the one
given by those who enacted or signed it.
• Contemporanea expositio est optima et fortissinia in lege:
meaning Contemporaneous exposition is the best and
strongest in law
• Contemporanea exposition, i.e., the effect of usage and
practice means that words of a statute will generally be
understood in the sense which they bore when it was passed.
• The principle of contemporanea expositio is not
applicable to modern statutes.
• The doctrine is confined to the construction of
ambiguous language used in very old statutes
where indeed the language itself had a rather
different meaning in those days. (Governors of
Campbell College etc v Commissioner of
Valuation, [1964] 1 All ER 705)
• The principle of contemporanea expositio cannot
be said to have universal application. Each case
must be considered on its own facts.
• The Supreme Court refused to apply the principle
of contemporanea expositio to the Telegraph Act,
1885 (Sr Electric Inspector v Laxminarayan
Chopra, AIR 1962 SC 159) and the Evidence Act,
1872, (Raja Ram Jaiswal v State of Bihar, AIR
1964 SC 828) but it was referred to in the case of
RS Nayak v AR Antuley, (AIR 1984 SC 684) in
construing section 21 of the Indian Penal Code,
1860, and it was held that an MLA is not a
“public servant”, as this expression is defined
therein
• In Supreme Court Advocates-on-Record
Association v UOI, (AIR 1994 SC 268) the
Supreme Court also referred to the actual practice
in the matter of appointment of judges of Supreme
Court and High Courts in context of interpreting
Articles 74 and 124 of the Constitution and
observed that the practice being in conformity
with the constitutional scheme should be accorded
legal sanction by permissible constitutional
interpretation.
• In State of MP v GS Dall & Flour Mills (AIR
1991 SC 772) It was held that the principle of
contemporarea expositio is invoked where a
statute is ambiguous, but is shown to have
been clearly and consistently understood and
explained by the administration of law in a
particular manner. However, its applicability
in the construction of recent statutes and that
too in the first few years of their enforcement,
has been doubted
• In Ajeet Singh Singhvi v State of Rajasthan,
1991 Supp (1) SCC 34, Where the government
itself interprets a rule, reflecting its policy,
contemporaneous exposition of similar rule in
another set of rules cannot play their part to
influence either the court or the government to
give the same interpretation or exposition to
the rules
•
• The doctrine of contemporanea exposition is
applicable only to interpretation given by courts
and not to views taken by Government or its
officials.
• It was held by the Supreme Court in the case of
Bhuwalka Steel Industries Ltd v Bombay Iron &
Steel Labour Board, ((2010) 2 SCC 273) that
erroneous interpretation of section 2(11) of
Maharashtra Mathadi, Hamal and other Manual
Workers (Regulation of Employment and
Welfare) Act, 1969, adopted by Mathadi Board
could not bar the Board from changing its stance
for correct interpretation of the said provision
• Construction: it is a process of drawing
conclusions of the subjects which are beyond
the direct expression of the text. The courts
draw findings after analyzing the meaning of
the words used in the texts or the statutes.
This is process of legal expositions.
• RESTRICTIVE CONSTRUCTION, CONSTRUCTION
TO PREVENT ABUSE & EVASION
STRICT & LIBERAL INTERPRETATION
Strict and Liberal Construction of Statute
• Strict Construction means each of the words in
Statute should be interpreted by letter, and no regard
should be had to the spirit beyond the statute.
• Liberal or beneficial Construction means the
interpretation should be made liberally with the
intention to advance the purpose or object of the
statute.
• Thus, in the case of strict interpretation, Courts may
prefer the literal rule while liberal construction courts
may prefer the golden rule or mischief rule
• Generally, taxing and penal statutes are
strictly construed
• while beneficial or benevolent legislation like
ESI, Contract Labour Act or P.E should be
liberally construed.
• Even in the case of taxing statutes, beneficial
provisions should be liberally construed.
 Rule of Restrictive / Strict
Interpretation
• Also known as restrictive Construction
• The concept of strict construction is one of the
numerous ideas that the English common law
left behind for the American legal system.
Prominent individuals, such as Chief Justice
John Marshall in Marbury v. Madison (1803)
[2], emphasised the need to interpret the
Constitution strictly.
• According to the legal principle of strict
construction, contracts and laws should be
interpreted strictly and literally by their exact
language. It emphasizes reading the language
literally and narrowly, without considering the
intent, spirit, or larger context of the law or
contract, only the plain meaning of the text.
• It involves narrow interpretation of a statute, clause or
other legal writing.
• This methodology uses the plain meaning of the words
themselves, what is stated literally or what the meaning
was at the time and place when originally written.
• It refers to a particular legal philosophy of judicial
interpretation that limits or restricts judicial
interpretation.
• Judges in this view should avoid drawing inferences
from a statute or constitution and focus only on the text
itself.
• Critics of strict construction contend that this approach
does not always produce a just or reasonable result.
 Strict Interpretation of Penal Statutes
• In Halsbury’s laws of England a
• Penal Statutes may be penal statute has been
defined as those statutes described as one whose
primary object is expressly
that impose penal liability enforceable by fine,
on a personwho is guilty of imprisonment or other
any offence. punishment.
• The word penal connotes • A statute is to be regarded as
some form of punishment penal if it imposes a fine,
imposed against the penalty or forfeiture other than
individual by mandate of a penalty in the nature of
liquidated damages, or other
the State.
penalties that are of the nature
of civil remedies
 Actus non-facit reum, nisi mens sit
rea
• The maxim means an act does not make an
offence unless there be guilty mind.
• There is a presumption that mens rea is an
essential ingredient in every offence, but that
presumption is liable to be displaced either by
words of the statute creating the offence or
by the subject matter with which it deals and
both must be considered.
• In Sarjoo Prasad v. State of Uttar Pradesh AIR 1961 SC 631,
the Court emphasized the view that mens rea is not needed
when prohibition is imposed in larger public interest. The
case involved interpretation of Sections 7,16 and 19 of the
Prevention of Food Adulteration Act, 1954. The Court held
that in prosecution for an offence pertaining to the sale of
any adulterated article of food, it is no defence merely to
allege that the vendor was ignorant of the nature of the
substance or quality of food sold by him. Prohibition of sale
of adulterated food is evidently imposed in the larger
interest of maintenance of public health.
• In M. Narayanan Nambiar v.
State of Kerala AIR 1963 SC 1116,
Section 5(1)(d) of • The contention before the
• the Prevention of Corruption Act, SC was that obtaining
1947 provided that “A public pecuniary advantage from
servant is said to commit the govt funds is not covered
offence of criminal misconduct in within this clause and it was
the discharge of his duty (d) if he
suggested that construing
by corrupt and illegal means or
by otherwise abusing his position strictly it covers taking
as a public servant , obtains for advantage from third party
himself or for any other person only. The contention was
any valuable things or pecuniary rejected on the ground that
advantage”. it goes against the policy
and spirit of the Act.
 Rule of lenity
• As a general guideline of criminal statutory
interpretation, the rule of lenity, sometimes known
as the rule of strict construction, directs courts to
apply the law in the defendant’s favour where it is
vague or ambiguous.
• It is a principle in criminal law that says if a law is
unclear or confusing, the court should interpret it in
a way that helps the defendant. This is because the
court doesn't want to make up new laws or
punishments that the legislature didn't intend.
 Basis of Strict Rule of
Interpretation of Penal Statute
• The rule of strict construction of penal
statutes is said to be founded on the
tenderness of the law for the rights of
individuals and on the plain principle that the
power to define a crime and ordain its
punishment is vested in the legislature and
not in the judicial department.
• the rule of strict construction of
• A reasonable interpretation
penal statutes manifests itself in
four ways— which will avoid the penalty
• (1) Express language is necessary must be adopted. If there
for creation of criminal offences, are two reasonable
therefore, no act is to be deemed constructions the court
criminal unless it is clearly made so must give the more lenient
by words of the statute concerned.
one. The court must always
• (2) The words setting out the see that the person to be
elements of an offence are to be penalized comes fairly and
strictly construed . And if there is squarely within the plain
any reasonable doubt or ambiguity words of the enactment
it will be resolved in favour of the
person charged.
3) Punishments can be imposed only if the circumstances of
the case fall clearly within the words of the enactment.
(4) Similarly, statutes dealing with jurisdiction and
procedure are, if they relate to the infliction of penalties,
strictly construed.
• The general rule is that a penal statute should be strictly
interpreted, that is if two possible and reasonable
constructions can be put upon a penal provision , the
court must lean towards that construction which exempts
the subject from penalty rather than the one which
imposes a penalty.
 POINTS TO REMEMBER
• A penal Statute should be construed strictly in favour of the
accused.
• No person shall be punished unless he comes within the plain
meaning of the words creating an offence.
• If the Statute is capable of two constructions, then that which
is favourable to the accused should be adopted.
• If there is a reasonable doubt in the statutory provision the
benefit of that should go to the accused.
• It is for the Legislature and not the Court to create an offence.
• The Court should construe a penal provision according to the
object and purpose for which it is enacted.
• Express language is necessary for the creation of an
offence.
• Words setting out the offence must be strictly construed.
• Before inflicting punishment the conditions precedent
should be strictly complied with.
• Technical provisions concerning criminal procedure and
jurisdiction must be strictly observed
• There is a Presumption that mens rea is a necessary
element in every offence, but this presumption can be
rebutted by express words or if the legislative intention is
clear and unambiguous
 Judicial Decisions
• Tolaram v. State of Bombay AIR 1954 SC 496. If two
possible and reasonable constructions can be put upon
a penal provision, the court must lean towards that
construction which exempts the subject from penalty
rather than the one which imposes the penalty.
• Iqbal Singh Marwah v. Meenakshi Marwah AIR 2005 SC
2119, the SC said that the rule of strict construction is
not of universal applicability. Penal statutes should be
construed in a manner as shall suppress the mischief
and advance the remedy
 Interpretation of Taxing Statutes
• Legislature derives its power of imposing
taxes from Article 265 of the Constitution of
India which states that “No tax can be levied
or collected unless it has the authority of law”
• It is through this article that the legislature
acquires the right to impose tax and prescribe
various conditions under which such tax is
applicable.
• Taxation statute is a fiscal statute which
imposes the pecuniary burden on the
taxpayer.
• Such statutes are construed strictly. Plain,
clear and direct grammatical meaning is given
• Where there are two possible outcomes then
that interpretation is given which is in favour
of assessee
• The legislature enjoys wide powers in the
matters of taxation as long as it satisfies the
principles of reasonable classification and
intelligible differentia, given under Article 14.
• In ITO v. N. Takin Roy Rymbai, the Supreme
Court held that the Legislature has ample
freedom to select and classify persons, districts,
goods, properties, incomes and objects which it
would tax, and which it would not tax.
• Tax laws are highly complex, complicated and
beyond understanding of a tax-payer.
• A tax is imposed for public purpose for raising
general revenue of the state.
• A taxing statute is to be strictly construed.
Lord Hasbury and Lord Simonds stated: "The
subject is not to be taxed without clear words
for that purpose; and also that every Act of
Parliament must be read according to the
natural construction of its words.“
• In H. H. Lakshmi Bai vs. CIT - [(1994) 206 ITR
688, 691 (SC)]: It is settled law that a taxation
statute in particular has to be strictly construed
and there is no equity in a taxing provision
• In a taxing statute, one has to look at what is
clearly said. There is no equity about a tax.
There is no intendment. There is no
presumption as to tax. Nothing is to be read in,
nothing to be implied.
• Basic principle for a charge under Tax Statutes
is that : “No tax can be imposed on the subject
without words in the Act clearly showing an
intention to lay a burden upon him”.
• Burden of Proof to bring someone under a
charge is on the revenue and that of bringing
assessee under exemption/deduction on
assessee.
 Formulation of Tax Policies

• The apex body in direct taxes is the Central Board of

Direct Taxes and in indirect taxes is the Central Board
of Indirect Taxes and Customs.
• Since independence, many taxation laws have been
enacted by the parliament.
• the Income Tax Act of 1961 is primarily based on the
12th report of the Law Commission of India.
• A new structure of indirect taxes in the form of the
Goods and Services Tax Act came into effect in 2017.
Legislative Process: Drafting of Tax
Proposals
• A tax proposal for direct taxes is prepared under
the supervision of a joint secretary in the tax
planning and legislation division, central board
of direct taxes.
• A proposal for indirect taxes is prepared in the
tax research unit division in the central board of
indirect taxes and customs.
• Every tax proposal is required to be approved
by the minister of finance, government of India
• Based on all the tax proposals of direct and indirect taxes, a
draft bill is prepared in the Legislative Department of the
Ministry of Law and Justice in consultation with the officers of
the Ministry of Finance.
• Every bill is accompanied by a statement of object and reasons
signed by the Minister of Finance, Government of India.
• Once a draft bill is finalized in the legislative department, it is
sent to the Lok Sabha secretariat for its introduction.
• The copies of a bill are circulated before the date of
introduction at least two days in advance so that the members
may be aware of the contents of the bill.
• A taxation proposal after its introduction in
some cases is referred to a committee of
parliament known as the select committee or
a joint committee.
• The recommendations of the committee are
not binding on the government as it may
accept all or some of the recommendations of
the committee.
• When the bill is taken up for consideration and
passing, at that point official amendments by the
government and non-official amendments by the
private members may be moved.
• After the amendments are accepted by the house
the bill amended is passed by the Lok Sabha and
then it is sent to the Rajya Sabha. On the
concurrence of parliament, the bill is sent for assent
to the President. After the assent of the President,
the bill is published in the Official Gazette.
 Rules of Interpretation of Taxing
Statutes:
• Statutes relating to taxation are required to undergo strict
interpretation. When a person clearly falls within the scope of
a taxing provision, he should not be allowed to escape but if
he does not, he should not be drawn into the net by assigning
an extended meaning to the language or otherwise.
• Interpretation must be done in such a way that it prevents tax
evasion.
• In case of two possible interpretations of a taxing statute, the
interpretation favorable to the taxpayer should be preferred.
• It is the responsibility of the taxpayer to prove any tax
exemption by bearing the burden of proof.
 Judicial Interference
• The Supreme Court of India in its various
pronouncements has given a wide discretion in the
matter of tax policies.
• In many cases, provisions of tax legislation have been
held constitutional.
• RK Garg vs Union of India. In this case, the special
bearer bond privileges and Immunities Act 1981 was
challenged before the Supreme Court. This act
provided immunity to persons purchasing special
bearer bonds. It was held constitutional.
• Equitable considerations are not relevant in
interpreting the provision of a taxing Statute
(CIT V C I Industries Ltd 1972)
• According to Nani Palkivala, Tax and equity
are strangers and an equitable construction
cannot be put upon the words of a taxing
Statute“
 Commissioner of Wealth Tax v
Kripa Shanker 1971
• Taxing provisions must receive a strict construction at
the hands of the Courts and if there is any ambiguity,
the benefit of that must go to the assessee. But at the
same time a taxing provision should receive a
reasonable construction. If the intention of the
Legislature is clear and beyond doubt then the fact
that the provision could have been more artistically
drafted cannot be a ground to treat any part of
provision as otiose. So long as the legislative intention
is clear and beyond doubt, the Courts have to carry
out that intention.
Only in a few cases, a provision of the tax law
was held unconstitutional.
• The National Tax Tribunal Act 2005 was held
unconstitutional. [Madras Bar Association v. Union of
India (2014) 10 SCC 1]
• a provision denying benefits to Sikkimese women
marrying non-sikkimese was held unconstitutional.
The deficiency pointed out by the Supreme Court
was removed by making necessary changes in
Section 10( 26aaa) of the Income Tax Act 1961 by the
Finance Act 2023.
 THE GENERAL PRINCIPLES ARE:
• The words used in the taxation law should be given
meaning which is understood by general public in daily
routine and one which is popular.
• Such meaning should be given to words which people
to whom law is applicable are familiar with
• Charging Section must be clearly worded
• •Substance of matter approach is not applicable
• •Court cannot make good any deficiency in the statute
• •External aids not permitted
• In case of ambiguity benefit should go to the
taxpayer
• Common parlance i.e., in their commercial
sense
• Double taxation should be avoided
• Tax exemptions
 Beneficial Construction in
Interpretation of Statutes
• Beneficial Construction in the Interpretation
of Statutes is an approach where courts
interpret legislation broadly to fulfil its
intended protective purpose. This principle is
applied when a statute aims to benefit a
specific class or group, ensuring that
ambiguities are resolved in favour of the
beneficiaries.
• Beneficial rule of interpretation also known as the rule
of beneficial construction which involves the two or
more possible ways of interpreting a section or words
or rule or guideline which will provide benefit, relief or
protect a single class or a classes of people.
• Maxwell commented that the beneficial construction is
based on the principal of human tendency, instead of
restricting people from getting the benefit of the
statute, the court tends to include as many classes as it
can while being faithful at a time of constructing a
statue.
• when a statue is made for the benefit of the
people of a specific class or classes and a word
is used in a statue which is representing two
different meaning then the meaning which is
providing the benefit shall be adopted and
should be followed by the court.
 Application Across Jurisdictions
• Different jurisdictions have adopted beneficial construction in
interpretation of statutes to varying extents:
• United States: In U.S. legal doctrine, purposive interpretation plays an
important role in areas like employment law and environmental
regulation, where the broad goals of the legislation might be
undermined by a narrow interpretation of its provisions.
• United Kingdom: The U.K. judiciary often employs the purposive
approach as encouraged by the Human Rights Act 1998, which mandates
that legislation be interpreted in a way that is compatible with human
rights norms.
• India: Indian courts frequently utilise this method, especially in
interpreting constitutional provisions and laws related to labour, welfare
and consumer protection, to ensure the spirit of the law is honoured.
• in a case, Alembic Chemical Work v Workmen, an
industrial tribunal awarded more number of paid
leave to worker than what mentioned in section of
79(1) of factories act recommended.
• This was challenged by appellant. Supreme Court
held that enactment being welfare legislation for the
workers, it has to be beneficially constructed in the
favor of the workers and thus, if the words are
capable of two meaning, the one who gives benefit
to the workers should be used
• In the case of Hindustan Level Ltd v Ashok
Vishnu Kate, the court held that in a case
related to prevention of unfair labor practice,
during interpreting social welfare legislation, a
construction should be placed on the relevant
provisions which furthers the purpose for
which such legislation was enacted.
• Socio-economic legislation which are aimed at social or economic
policy changes, the interpretation should not be narrow.
• Justice Krishna Iyer in a case relating to agrarian reforms
observed that “the judiciary is not a mere umpire but also an
active catalyst in the constitutional scheme”.
• In the case of Sant Ram v Rajinderlal, the Supreme Court said
that a welfare legislation must be interpreted in a third World
perspective favouring the weaker and poor class.
• In State Bank of India v MS Money, it has also been laid down in
the case of labour legislation that courts should not stick to
grammatical constructions but also have regard to ‘teleological
purpose and protective intendment’ of the legislation.
• In State of Karnataka v Vishwabhrathi House Building Co-op
Society (2003), in case of a social benefit oriented legislation
like the Consumer Protection Act, 1986 the provisions are
construed as broadly as possible.
• In Spring Meadows Hospital v Harjol Ahluwalia JT 1998,
Interpreting a section of the Act, it was held that parents who
hire the services of a hospital and their child for whom the
service are hired are both consumers and can independently
claim damage.
Workmen of Indian Standards Institution v
Management of Indian Standards Institution, (1976)

• Industrial Disputes Act 1947 is one of welfare statute which

intends to bring about peace and harmony between
management and labour in an industry and improve the
service conditions of industrial workers which in will turn
accelerate productive activity of the country resulting in its
prosperity. As a result the prosperity of the country in turn
will help to improve the conditions of the workmen.
• Therefore this statute should be interpreted in such a way
that it advances the object and the purpose of the legislation
and gives it a full meaning and effect so that the ultimate
social objective is achieved.
• In Ajaib Singh v Sirhind Co-op Marketing –
cum-Processing Service Society Ltd. AIR 1999
SC 1351: The courts while interpreting labour
laws have always stressed on the doctrine of
social justice as enshrined in the Preamble of
Constitution.
 Beneficial construction & J J Act
• Pratap Singh v. State of Jharkhand, 2005
• The earlier act of 1986 was replaced with a new act in 2000.
Whereas the 1986 act defined the term ‘juvenile’ as a boy not
having attained sixteen years of age or a girl not having attained the
age of eighteen years, the 2000 act defined juvenile to mean a
person who has not completed eighteen years of age.
• The Court looked into the object of the act, which is to provide for
the care, protection treatment, development and rehabilitation of
neglected and delinquent juveniles. Further the acts were passed in
discharge of obligation to follow the United Nations Minimum Rules
for the Administration of Juvenile justice. Since the acts were
remedial in nature, beneficial construction was given to promote the
beneficent object behind them.
• In the landmark case of B Shah v Presiding Officer, Labour
Court court applied beneficent rule of construction in
construing section 5 of the Maternity Benefit Act, 1961.
• In Union of India v Prabhakaran Vijay Kumar (2008):
– interpretation of Section 123 © of Railways Act 1989
which defined ‘untoward accident’ to include ‘accidental
falling of a passenger from a train carrying passengers’.
– The question in contention before the court was whether
‘untoward accident’ will cover the instance of a passenger
who fell down and died while trying to board the train.
– the court said that there are couple of interpretations of
‘accidental falling’; first one being that it only applies when
a person is inside the train while second includes a
situation where person is trying to board a train and falls
down.
– The relevant provision was deemed as a beneficial piece of
legislation and hence received liberal and wide
interpretation and hence the definition was expanded to
include a passenger who fell off the train in the process of
boarding it
• In Noor Saba Khatoon v Mohd. Quasim (1997)
– The effect of a beneficial legislation should not be
construed to be defeated by subsequent
legislation except through a clear provision.
– It was held by the court that the right of children
to claim maintenance under CrPC was
independent of right of divorced mother to claim
maintenance for the infant children and former is
not affected by 1986 Act.
• National Insurance Co. Ltd. v Swarn Singh (2004)
– The principle of liberal construction can be taken to
extreme limits at some times in order to achieve the
object of the legislation.

• The Bangalore Turf Club Ltd. Vs. Regional Director,

Employees State Insurance Corporation (2012)
– the Supreme Court judged the ESIC act on beneficial
grounds and emphasized that the beneficient construction
is being preferred to help the intended beneficiaries.
 Limitations of beneficial legislations
• principle of beneficial construction has to be applied with a few
safeguards.
• It can only be applied without “rewriting or doing violence to the
enactment”.
• In Steel Authority of India Ltd, National Union Water Front Workers
(2001): When the language is clear and explicit, it leaves little scope for
any bending of interpretation
• In Maruti Udyog Ltd. v Remlap (2005): Sympathy cannot be a sole
principle guiding interpretation
• In Secretary State of Karnataka v Umadevi (2006): SC held that those
employed on daily wages temporarily or on contractual basis by State or
its instrumentalities cannot be said to be holders of a post and have no
right to regularization simply because they have worked for a number of
years.
• Nasiruddin v Sita Ram (2003): The Control of Rent and
Eviction Acts seek to protect tenants from unjust
evictions and it is a principle that in case of doubt, such
Acts should be interpreted to lean in favour of tenants.
• In the United States, in the case of Huntington v Attrill,
the Supreme Court said that whether a statute is
remedial or penal ‘depends upon the question whether
its purpose is to punish the offense against the public
justice of the state, or to afford a private remedy to a
person injured by the wrongful act’.
• In Minister Administering the Crown Lands Act v
NSW Aboriginal Land Council (2008):
– the Aboriginal Land Rights Act, 1983 was enacted to give
important rights to the representatives of the Aboriginal
people. Justice Kirby reiterated the principle that the act
should be given the most beneficial operation compatible
with the language. Further, he stated that any ambiguity
should be resolved in favour of Aboriginal people and any
attempt by Parliament to restrict those rights must be
plain and clear
 Equitable construction
• Equitable construction is interpretation in conformity with the
principles and rules of equity. It is the construction of a statute by either
restraining or enlarging the letter of the statute
– Suppose a contract for the sale of goods states that delivery should
occur "within 30 days." If unforeseen circumstances (like natural
disasters) prevent timely delivery, equitable construction might
allow for a reasonable extension of time rather than strictly
enforcing the 30-day limit, thereby preventing undue hardship on
the seller.
– In cases of child custody, statutory law might prioritize parental
custody. However, if the child's best interests clearly lie with a close
relative or family friend due to particular circumstances, equitable
construction might grant custody to that person despite the statute's
language.
 Exceptional Construction

• The rule of exceptional • ‘may’ has a mandatory force

construction stands for the where subject involves discretion
elimination of words that make coupled with obligation. But
no sense, or defeat the real when ‘may’ is used for pure
objective of the statute conventional courtesy it defeats
• • ‘and’ is normally considered the objective of the statute.
conjunctive so that both • ‘shall’ has mandatory force and
provisions of a statute can be is used in cases of statutes
satisfied providing specific penalty.
• ‘or’ is used to satisfy either of • ‘Must’ has a directory force.
the provisions in a statute. Any usage contrary to these
objectives creates absurdities and
may be omitted.
 Reasonable Construction
• Every statute has a purpose, an objective. If the literal meaning
collides with the reason of enactment of the statute then the
intention of the law should be taken up so that the actual
meaning of the statute can be properly understood.
This rule mainly stresses upon the intention of the legislature to
bring up the statue and the sensible and not the prima facie
meaning of the statute.
• The rule of reasonable construction clear the errors caused due
to faulty draftsmanship. However this rule also has its own
limitations. The intent of the statute is in itself a surmise and the
rule is usually avoided to complete the quest for interpretation
unless the intent in itself can be interpreted properly.
 Contextual Construction
• Contextual construction looks • The context may be ascertained by
1. reading the statue as a whole
at the context, in situations 2. ascertaining the previous and
when two or more existing related statues
interpretations may be 3. considering other statues in pari
correct or reasonable. It hold materia (= on the same subject
that word has an absolute matter)
eg: Assam Tea workers tenancy act
meaning, or could be
is not same a Bombay Rent Control
interpreted in a vacuum. Act though both deal with tenants
• The rule of contextual 4. Looking into general cope of the
construction seeks to statue
5. Examining the mischief the
interpret an ambiguous word
statue aims to remedy
by looking at the context of
the provision.
 CONSTRUCTION TO PREVENT EVASION
• It is permissible to evade an Act of Parliament in the sense
that a person may not do that which the Act prohibits but
he is free to do anything which though equally
advantageous to him as that which is prohibited is
nevertheless outside the prohibition, penalty or burden
imposed by the Act.
• The taxing laws have constantly been the subject of evasion
in the sense of avoiding something disagreeable and there
are many dicta to the effect that a citizen is entitled to so
arrange his affairs that the tax burden does not fall on him
and that there is nothing illegal or immoral in adopting such
a course.
 CONSTRUCTION TO PREVENT ABUSE
• General principle of construction is that whenever a statute c
onfers discretionary power on an adjudicatory authority, it
should be so construed that such discretionary power is not
abused.
• Thus authority whether it be administrative, quasi-judicial or
administrative, upon whom the discretionary power is
conferred must exercise it in good faith and must taken in
account the object of the statute
• As a matter of fact, discretionary power given to an authority
by a statute does not imply absolute of unqualified power,
but implies a power exercised in accordance with the rules of
reason and justice.
• Whenever a statute empowers exercise an
authority to exercise discretion, the authority
must exercise it to achieve justice. However, the
exercise of discretion must be fair and honest.
• Whenever a discretionary power is conferred
upon any statutory authority,
it must be exercised reasonably and no
authority is at liberty to decide what the law is
according to their notion
• In Nalini Mohan Vs. District Magistrate, AIR 1967 Cal 346, the
High Court of Calcutta held an order ultra vires and illegal
because the power given by enabling statute for the purpose of
rehabilitating the persons displaced from their residence within
the state as a result of communal violence was used for a person
who came from Pakistan due to communal riots in that country.
• Whenever an authority exercises its discretion, it must be exercis
ed in conformity with the spirit with which the statute was
enacted.
– As the basic principle of construction of any statute is to give
effect to the intention of the legislature and not to defeat it
• It has been firmly established that the discretionary
powers given to the governmental or quasi-
governmental authorities must be hedges by policy, s
tandards, procedural safeguards or guidelines
failing which the exercise of discretion and its
delegation may be quashed by the court.
• The discretionary power conferred
upon any authority under any statute must not
be construed as arbitrary fanciful which is influenced
by extraneous considerations.
 IN BONAM PARTEM
• The word “Bonam Partem” means
that words used in the statute are to • Diametrically opposite to this
be taken in their lawful sense and are the premises of ‘Malam
rightful sense. Partem’ and ‘Malo Sensu’,
• Bonam = Lawful and Partem = Taking
which are known to mean the
the part
• According to the rule of In Bonam
acceptance of words in their
Partem, the words of a statute are to most aggravated
be construed in their ‘lawful’ and comprehension.
‘rightful’ sense.(Lawful sense implies
what is legitimate and recognised by
• It gives effect to the adage –
law.) “Interpretationem in Bonam
partem faciendum esse”
which means that things must
be interpreted in their better
sense.
• It is presumed that, the legislature never intended
the words to be construed in illegal sense.
• If there are two interpretations, legal and illegal,
then this rule requires that, the interpretation
giving the words legal sense must be given effect.
• Any construction that takes away the legality of
the words of statute, must be avoided.
• Example : If Act refers, a thing to be done means it
refers to the thing to be done lawfully.
What is “Lawful Sense”?
• The word “Lawful sense” implies what is
legitimate and recognised by the law.
•
Article 19(1) of the constitution guarantees
right to take up any profession. The
implication is lawful profession and not
unlawful profession.
 Bonam Partem construction is connected to
three distinct legal principles
1. The first rule is that no one should ever profit
from their own wrongdoing.
2. The second principle prevents him
from succeeding if he has to prove an illegal
act inorder to claim the statutory benefit.
3. The third principle is that whenever a grant is
made in general terms, there is always an
implicit provision that it shall not include
anything that is unlawful or immoral
• R. v. Hulme : Whenever the legislature under the Act
requires a person to answer the question, it means
that he shall answer those questions truly and to the
best of his knowledge & belief.
• Mehboob Basha v. Tamil Nadu Wakf Board
• Words are prima facie to be taken in their lawful and
rightful sense. Where an Act for instance, gave a
certain efficacy to a fine levied on land, it referred
only to a fine lawfully levied.
• In India, the interpretation of words in Bonam
partem is to mean the interpretation of the words of
a statute are to be interpreted in their rightful and
lawful sense, with the provisions of Income Tax Act,
1961 being filled out as an exception.
• In order to prevent profiteers from escaping liability,
illegal profits need to come under the purview of the
Income Tax Act, 1961, and therefore, a visible non-
applicability of the rule of Bonam partem is seen in
this realm. A