Ashik Ios Project

INTRODUCTION Purposive Construction and Beneficial Construction are two varied principles among the Primary rules of Interpretation. Interpretation of Statutes should generally be made through the Literal rule, but when there arises any ambiguity with understanding the meaning of the Statutes, i.e. when the provision of the Statute defeats the object of the Statute, then either one of the Primary rules of Interpretation is to be applied. Purposive approach of construction is one such method, which is considered to be an evolution of the Heydon’s or Mischief rule of common law or as a by-product of Harmonious Construction. By applying this approach, it is possible for the Courts to restrict the wide meaning of a word used in a statute to be limited to the purpose of it or seeking the mischief it intends to eliminate. Purposive Construction is applied to ensure that true intent of the Statute is carried on. This paper also tries to provide an insight as to the ambiguity of relating this method to the Mischief rule or Harmonious Construction. The Second Category discussed in the project, Beneficial Construction, is method which are applicable to Beneficial Legislations (Example: Labour Laws). A Beneficial Legislation is one which seeks to relieve a class of people from the onerous obligations which they have entered into by way of any contract (Say, an EmployeeEmployer relationship). By this approach of Beneficial or Beneficent Construction, when there exists two possibilities of interpreting a Statute, One which extends the benefit should be preferred rather than the one that curtails it. The primary objective of the Project is to establish the distinct character of both the approaches, manner and circumstances in which the Courts utilise them, by way of studying recent cases.(i.e. post 2002 Judgments) AIM/OBJECTIVE: To aim of the paper is to study the concepts of Purposive construction and Beneficial construction, and to compare their determination and applicability by Courts in Interpreting Legislations.

RESEARCH METHODOLOGY: The methodology adopted for this research is purely doctrinal in nature. It involves a critical analysis of both the principles by way of comparison through studying Judgements of cases post 2002. The Primary Sources are Case laws, Judgements & text books and the Secondary sources including Articles, and journals.

RESEARCH QUESTIONS 1. What are the Core differences between Purposive and Beneficial Construction and the Circumstances in which they are applied? 2. What are the methodology in which these rules are applied by the Courts in Interpreting Statutes? 3. Whether Purposive Construction should be considered as an equivalent of Mischief’s rule or Harmonious Construction? HYPOTHESIS: The Project seeks to ascertain the province of the two Approaches of rules of Interpretation and determine the circumstance under which they are deployed by the Courts and make a note of the shortcomings of the same.

PURPOSIVE CONSTRUCTION

One of the method of interpretation of statute is ‘purposive construction’ of the enactment which gives effect to the legislative purpose/intendment, if necessary must be followed and applied. The doctrine of purposive construction is well accepted. It has been applied in India by the Supreme Court following the English law on the subject. Lord Smith in ‘R.(Haw) V. Secretary of State for the Home Department’ 1 - observed that a purposive construction of an enactment is one which gives effect to the legislative purpose by- following the lieral meaning of the enactment where that meaning is in accordance with the legislative purpose (in this code called a purposive and literal construction); or Applying a strained meaning where the literal meaning is not in accordance with the legislative purpose (in the code called a purposive and strained construction).The Supreme Court quoted the passage from Bennion - “I am not reluctant to adopt a purposive construction where to apply the literal meaning of the legislative language used would lead to results which would clearly defeat the purposes of the Act. But in doing so the task on which a court of justice is engaged remains one of construction, even where this involves reading into the Act words which are not expressly included in it. The case law “kammins Ballromm Co. Limited V. Zenith Investments (Torquay) Limited’ 2 provides instance of this; but in that case the three conditions that must be fulfilled in order to justice this course were satisfied. 1. It was possible to determine from a consideration of the provisions of the Act read as a whole preciously what the mischief was that it was the purpose of the Act to remedy; 2. It was apparent that the draftsman and Parliament had by inadvertence overlocked, and so omitted to deal with, an eventually that required to be dealt with if the purpose of the Act was to be achieved;

1 (2006) 3 All ER 428 2 (1971) AC 850)

3. It was possible to state with certainty what were the additional words that would have been inserted by the draftsman and approved by the Parliament had their attention been drawn to the omission before the Bill passed into law. Unless the third condition is fulfilled any attempt by a court of justice to repair the omission in the Act cannot be justified as an exercise of its jurisdiction to determine what is the meaning of a written law which Parliament has passed. The term 'purposive construction' is not new, its entry into fashion betokens a swing by the appellate courts away from literal construction13. The literal Interpretation is now completely out of date and has been replaced by the purposive approach referred to by Lord Diplock in Kommins Ballrooms Co. v. Zenith investments Ltd.,3 Lord Diplock said in 1975: 'If one looks back to the actual decisions of the [House of Lords] on questions of statutory construction overthe last 30 years one cannot fail to be struck by the evidence of a trend away from the purely literal towards the purposive construction of statutory provisions'Lord Diplock summed stating that "...I am not reluctant to adopt a purposive construction where to apply the literal meaning of the legislative language use would lead to results which would clearly defeat the purposes of the Act. But in doing so the task on which a court of justice is engaged remains one of construction, even where this involves reading into the Act words which are not expressly included in it.Kammins Ballrooms Co Ltd V Zenith Investments (Torquay) Ltd 4 provides an instance of this; but in that case the three conditions that must be fulfilled in order to justify this course were satisfied. First, it was possible to determine from a consideration of the provisions of the Act read as a whole precisely what the mischief was that it was the purpose of the Act to remedy; secondly, it was apparent that the draftsman and Parliament had by inadvertence overlooked, and so omitted to deal with, an eventuality that required to be dealt with if the purpose of the Act was to be achieved; and thirdly, it was possible to state with certainty what were the additional words that would have been inserted by the draftsman and approved by parliament had their attention been drawn to the omission before the Bill passed into law. Unless this third condition is fulfilled any attempt by a court of justice to repair the omission in the Act cannot be justified as an exercise of its jurisdiction to determine what is the meaning of a 3 (1971) AC 850 (881). 4 Supra note 2.

written law which parliament has passed” - Francis Bennion in his book on Statutory Interpretation 5th Edition at page 945.But in the case of Vacher v.The London Society of Compositors,5 all the three methods were employed. The question was whether under section 4(1) of the Trade Disputes Act, 1906, any tortuous act by trade unions was protected or only such tortuous acts as were committed in contemplation or furtherance of trade dispute. The House of Lords took the former view and in delivering the opinion Lord Macnaghten adopted the golden rule,

BENEFICIAL CONSTRUCTION

Beneficent construction involves giving the widest meaning possible to the statutes. When there are two or more possible ways of interpreting a section or a word, the meaning which gives relief and protects the benefits which are purported to be given by the legislation, should be chosen. A beneficial statute has to be construed in its correct perspective so as to fructify the legislative intent. Although beneficial legislation does receive liberal interpretation, the courts try to remain within the scheme and not extend the benefit to those not covered by the scheme. It is also true that once the provision envisages the conferment of benefit limited in point of time and subject to the fulfillment of certain conditions, their noncompliance will have the effect of nullifying the benefit. There should be due stress and emphasis to Directive Principles of State Policy and any international convention on the subject. There is no set principle of construction that a beneficial legislation should always be retrospectively operated although such legislation such legislation is either expressly or by necessary intendment not made retrospective. Further, the rule of interpretation can only be resorted to without doing any violence to the language of the statute. In case of any exception when the implementation of the beneficent act is restricted the Court would construe it narrowly so as not to unduly expand the area or scope of exception. The liberal construction can only flow from the language of the act and there cannot be placing of unnatural interpretation on the words contained in the enactment. Also, beneficial construction does not permit rising of any presumption that protection of widest amplitude must be deemed to have 5 [1913] AC 107

been conferred on those for whose benefit the legislation may have been enacted. Beneficial Construction of statutes have enormously played an important role in the development and beneficial interpretation of socio – economic legislations and have always encouraged the Indian legislators to make more laws in favour of the backward class of people in India. Beneficial Construction in Socio – Economic legislations Socio-economic legislation which is 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 welfare legislation must be interpreted in a third World perspective favoring the weaker and poor class. It has also been laid down in the case of labor legislation that courts should not stick to grammatical constructions but also have regard to ‘teleological purpose and protective intendment of the legislation. Interpretation of labor legislations should be done by the courts with more concern with the colour, the context and the content of the statute rather than its literal import.

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. The courts while interpreting labour laws have always stressed on the doctrine of social justice as enshrined in the Preamble of Constitution. Beneficial Construction – A tendency rather than a rule It is said by Maxwell, that Beneficial Construction is a tendency and not a rule. The reason is that this principle is based on human tendency to be fair, accommodating, and just. Instead of restricting the people from getting the benefit of the statute, Court tends to include as many

classes as it can while remaining faithful to the wordings of the statute. For example, in the case of Alembic Chemical Works v Workman, an industrial tribunal awarded more number of paid leaves to the workers than what Section 79(1) of Factories Act recommended. This was challenged by the appellant. SC held that the enactment being welfare legislation for the workers, it had to be beneficially constructed in the favor of worker and thus, if the words are capable of two meanings, the one that gives benefit to the workers must be used. When a statute is meant for the benefit of a specific class, and if a word in the statute is capable of two meanings, one which would preserve the benefits and one which would not, then the meaning that would preserve the benefits must be adopted and shall be followed by the court of law. It is important to note that omissions will not be supplied by the court. Only when multiple meanings are possible, can the court shall pick the beneficial one. Thus, where the court has to choose between a wider mean that carries out the objective of the legislature better and a narrow meaning, then it usually chooses the former meaning carrying out the objective of the legislation. Similarly, when the language used by the legislature fails to achieve the objective of a statute, an extended meaning could be given to it to achieve that objective, if the language is fairly susceptible to the extended meaning. Limitation On The Application Of Beneficial Construction If on the application of the rule of beneficial construction, the court finds that it is doing complete justice and delivering a fair judgment then there is no question of why should not such rule is applied? But there are certain restrictions which the court has to take care of which at the time of application have to be adhered to – 1. Where the courts find that by the application of the rule of beneficial construction, it would be re legislating a provision of statute either by substituting, adding or altering any provision of the act. 2. Where any word in a statute confers to a single meaning only. Then the courts should refrain from applying the rule of benevolent construction to the statute. 3. When there is no ambiguity in a provision of a statute so construed. If the provision is plain, unambiguous and does not give rise to any doubt, the rule of beneficial construction cannot be applied.

ILLUSTRATIONS ON BENEFICIENT LEGISLATIONS AND INTERPRETATION There are different kind of legislations which receive beneficent construction. Laws which are enacted with the object of promoting general welfare and facing urgent social demands receive beneficial legislations. Examples of statutes include The Factories Act, Industrial Disputes Act etc. In case of legislations which have may two different interpretations, the legislation which favours the class of persons for which it is purported should be preferred. In the case of Hindustan Level Ltd v Ashok Vishnu Kate 6, 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 Rajinderlal7, the Supreme Court said that a welfare legislation must be interpreted in a third World perspective favouring the weaker and poor class. 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.8 Interpretation of labour legislations should be done by the courts with more concern with the colour, the context and the content of the statute rather than its literal import.9 In case of a social benefit oriented legislation like the Consumer Protection Act, 1986 the provisions are construed as broadly as possible. 10 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 6 Hindustan Level Ltd v Ashok Vishnu Kate (1995) SCC 1385 (L&S) 7 Sant Ram v Rajinderlal AIR 1978 SC 1601 8 State Bank of India v MS Money AIR 1976 SC 1111 9 Workmen v American Express International Banking Corporation (1985) 4 SCC 71, 10 State of Karnataka v Vishwabhrathi House Building Co-op Society (2003) 2 SCC 412

are both consumers and can independently claim damage. 11 The clause regarding jurisdiction has been liberally interpreted to empower the consumer fora to entertain claims irrespective of whether other courts or for a have jurisdiction to entertain claims unless jurisdiction is expressly barred .12 Further, the liberal interpretation has been taken in holding that although the forum is a judicial authority, they are not hampered by section 34 of Arbitration Act and are not obliged to stay proceedings before them because the Act provides a cheap and speedy remedy to the consumer.13 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.14The courts while interpreting labour laws have always stressed on the doctrine of social justice as enshrined in the Preamble of Constitution.15

11 Spring Meadows Hospital v Harjol Ahluwalia JT 1998 (2) SC 620 12 Kishor Lal v Chairman, Employees’ State Insurance Corpn, (2007) 4 SCC 579 13 Fair Air Engineers Pvt. Ltd. v NK Modi AIR 1997 SC 533 14 Workmen of Indian Standards Institution v Management of Indian Standards Institution, (1976)1 LLJ 33,39 (SC)

15 Ajaib Singh v Sirhind Co-op Marketing –cum-Processing Service Society Ltd. AIR 1999 SC 1351

JUDICIAL INTERPRETATION

In the case of Pratap Singh v State of Jharkhand16. 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. Union of India v Prabhakaran Vijay Kumar (2008) 9 SCC 52717 One of the leading examples of liberal construction is in the interpretation of Section 123of 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. In deciding the case, the court said that there are couple of interpretations of ‘accidental falling’; first one being that it only applies when a person is 16 Pratap Singh v State of Jharkhand (2005) 3 SCC 551 17 (2008) 9 SCC 527.

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 the case of National Insurance Co Ltd v Swarn Singh18 In the case relating to insurance aspect of motor vehicles, the Supreme court held that to prove its defence the insurer has to prove: (i)breach of condition by the insured was done knowingly or resulted due to his negligence and (ii)breach was fundamental and had contributed to cause of accident. It was also held that even in cases where the insurer is able to prove the defence of breach of condition, it will have to satisfy the award against the insured but it can recover the amount paid to the claimant from the insured in the same proceedings before the tribunal.

Smt. Vanmala Manoharrao Kamdi v. The Deputy Charity Commissioner 19 - Letters Patent Appeal No.226/2011 order dt. 4 May, 2012 (Bom.) Bombay Public Trust Act: In order to prevent any mischief in the administration or income or property of Trust or before any order under Section 41E or 41D or other enabling provisions of the B.P.T. Act, 1950 is passed, the provision of Section 41A of the B.P.T. Act, 1950 has been inserted. In other words, in order to act urgently to prevent any mischief to the properties or income of the Trust or in order to prevent any mischief or damage in the matter of proper administration of the Trust or from causing disappearance of evidences etc. the said provision has been inserted in Chapter VI of the B.P.T. Act, 1950. DLF Universal Limited v. Director, Town and Country Planning Department, Haryana, 20 (2010) 14 SCC 1 18 AIR 2004 SC 1531. 19 Letters Patent Appeal No.226/2011 order dt. 4 May, 2012 (Bom.). 20 (2010) 14 SCC 1.

Interpretation of Contracts: It is a settled principle in law that a contract is interpreted according to its purpose. The purpose of a contract is the interests, objectives, values, policy that the contract is designed to actualise. It comprises the joint intent of the parties. Every such contract expresses the autonomy of the contractual parties' private will. It creates reasonable, legally protected expectations between the parties and reliance on its results. Consistent with the character of purposive interpretation, the court is required to determine the ultimate purpose of a contract primarily by the joint intent of the parties at the time the contract so formed. It is not the intent of a single party; it is the joint intent of both the parties and the joint intent of the parties is to be discovered from the entirety of the contract and the circumstances surrounding its formation.

In New India Assurance Company Ltd. Versus Nusli Neville Wadia and another21 the Supreme Court referred to Aharon Barak, Purposive Interpretation in Law (2007) at Page 87 and quoted the following passage: “Hart and Sachs also appear to treat ‘purpose’ as a subjective concept. I say ‘appear’ because, although Hart and Sacha claim that the interpreter should imagine himself or herself in the legislator’s shoes, they introduce two elements of objectivity: 

The interpreter should assume that the Legislature is composed of reasonable people seeking to achieve reasonable goals in a reasonable manner;



The interpreter should accept the non-rebuttable presumption that members of the legislative body sought to full fill their constitutional duties in good faith.

21 2007 (12) TMI 410