This article is written by Anshuman Kumar Upadhyay. 

An introduction to the purposive interpretation of statute                      

The legal system of any society is developed for the achievement of certain purposes or objectives, that is to establish an ordered and systematic society. The world around us comprises of a whole lot of things, many of which have been existing since time immemorial, but, it was only because of gradual development in Science and Technology that one could understand about their utility and usability and only, when one could understand as to what is what and what purpose does it seeks to fulfil, one could appropriately use or operate any particular thing. An idea of the purpose of any particular thing gives a direction and a set of general guidelines that must be taken into account in the application or operation of such a particular thing. On a similar note, it can be inferred that any legislation which has been enacted by the legislature must have been so enacted, keeping into consideration a particular objective or purpose for the fulfilment of which such legislative exercise took place. 

Among the various rules of interpretation, the one which gives the highest priority to the object of the legislation and advances such interpretation of statute, which helps in the fulfilment of the object of such statute, is the rule of purposive interpretation of statute. In the celebrated case of Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, the Hon’ble Supreme Court of India held that the words of a statute, whenever there is a doubt about their meaning, have to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in its view. It was stated that “the meaning of the statute is not found in a strict grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained.” It has been recognised by the Supreme Court of India on multiple occasions that whenever two interpretations are feasible the court will prefer such interpretation which advances the remedy and suppresses the mischief as it was envisioned by the legislature. It has been provided that the Court should adopt an object-oriented approach keeping in mind the principle that legislative futility is to be ruled out so long as interpretative possibility permits. Thus, it can be inferred that to the extent to which there is interpretive flexibility, the Court must seek to give such an interpretation to the statute which helps in the fulfilment of its ultimate objective and thereby prevents the same from becoming futile.                                                                                                           

Origin of the Rule of Purposive Interpretation of Statute                  

The origin of this rule of interpretation can be traced back to the 16th Century when in the year 1584 the celebrated Heydon’s Case was decided. The rule laid down in Heydon’s case firmly thereafter, laid the foundation stone for the purposive rule of interpretation and consequently it is also referred to as Heydon’s rule. 

This rule has been adequately explained in the case of Bengal Immunity Co v. the State of Bihar wherein it was stated that it was a sound rule of construction of statute which was firmly established in England as before as in 1584 when Heydon’s case was decided. It was explained that for the sure and true interpretation of all statutes in general be they penal or beneficial, restrictive or enlarging of the common law, four things are to be discerned and considered, firstly, what was the common law before the making of the Act, secondly, what was the mischief and defect for which the common law did not provide, thirdly, what remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth, and lastly, the true reason of the remedy and then the office of all the Judges is always to make such construction as shall suppress the mischief, and advance the remedy, and suppress subtle inventions and evasions for the continuance of the mischief, and pro privato commodo (for private benefit), and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico (for the public good).

Judicial Application of the Rule

The best practice for understanding any rule of interpretation is by looking into relevant judicial decisions. With regard to this rule, the Indian Judiciary, especially in recent times, has given a lot of decisions in which it has gone behind the underlying purpose of any enactment or statute and has invoked this rule to give such an interpretation to the provisions of any Act, whereby the mischief that it sought to prevent is suppressed and the remedy that was brought to do away with such mischief is advanced. There are a plethora of cases which can be stated this regard, however, for the purpose of having an understanding of this rule, in particular, the following are some of the important judgments given by the Supreme Court, which could be perused and looked forward to in appreciating as to how this rule is actually brought to use in real factual circumstances. 

Lanco Anpara Power Limited v. State of U.P.

Facts

In this case, the Hon’ble Supreme Court of India had the task of determining the legality of the liability to pay building cess that was foisted upon Factory owners (who were registered under Section 6 of the Factories Act) under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and the Building and Other Construction Workers Welfare Cess Act, 1996. The Court fundamentally had to interpret the exclusionary clause provided under section 2 (1)(d) of the BOCW Act, which defined “building and construction work”, the clause inter alia stated that it does not include “any building or other construction work to which the provisions of the Factories Act, 1948, or the Mines Act, 1952 applies.” For the purpose of interpretation, the Supreme Court at first took into consideration the underlying purposes of both these statutes. As per the Statement of Objects and Reasons contained in the BOCW Act, since the purpose of this Act was to take care of a particular necessity i.e. welfare of unorganised labour class involved in construction activity (who were not protected under the provisions of the Factories Act), that had to be achieved and not to be discarded. It was observed that despite having registration under the Factories Act, the respective Factory would come under its provisions and the workers could get the necessary rights and protections, only after the commencement of its manufacturing process. Consequently, the construction workers employed therein for the purpose of constructing that factory, would not come under the said Act and could not be accorded the respective rights and protections provided thereunder.

Judgment

Thus, acknowledging BOCWWC Act, 1996 as social legislation, aimed to protect the interests of construction workers, the Court gave a purposive interpretation to the clause and held that registration under the Factories Act served a different purpose and the respective factory would not come under the scope of the exclusionary clause and the liability to pay building cess under the BOCWWC Act could be legally foisted on them.

Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate

In this case, which is one of the landmark cases in the Labour Law jurisprudence, the Hon’ble Supreme Court had to take recourse to the rule of purposive interpretation. In this case the question was with respect to the scope and manner in which the phrase “any person” used in the definition of “industrial dispute” provided under Section 2(k) of the Industrial Disputes Act, 1947 (ID Act), has to be construed and whether this phrase made a dispute with respect to the employment, non-employment, terms or conditions of work of “any person”, an industrial dispute. In order to decide this case, the Court appreciated the object and scheme of the ID Act and found out that the Act was primarily meant for regulating the relations of employers and workmen–past, present and future. The Act also drew a distinction between “workmen” as such and the managerial or supervisory staff, and conferred benefit on the former only. With regard to this context itself Section 2(k) has to be interpreted.  The Court acknowledged that if the expression “any person” is construed with respect to its ordinary meaning, then the definition will become so wide, as to become inconsistent with the objects, other provisions and also with the other parts of that very clause itself. Such a broad interpretation would empower the workers to raise a dispute about a person in whose employment they have no possible community of interest and they might also raise a dispute about the employment of a person in another industry or establishment, a dispute in which the employer would be in no position to provide any relief. 

Thus, with regard to the scheme, objects, other provisions of the Act and the limitations and qualifications provided in the initial portion of the definition itself, the phrase “any person” must be interpreted as concerning such a person, who has a real dispute with the employers, so as to be capable of settlement or adjudication by one party to the dispute giving relief to the other party and such person, regarding whom the dispute is raised must be one, in whose employment, non-employment, terms of employment, or conditions of labour the parties involved in the dispute, have a direct and substantial interest. In the absence of such an interest, the dispute cannot be regarded as a real dispute between the parties. Though, where the workmen raise a dispute as against their employer, the person regarding whose employment, non-employment, terms of employment or conditions of labour the dispute is raised need not strictly come within the definition of the word “workman” under the Act, but he must be one in whose employment, non-employment, terms of employment or conditions of labour such workers as a class have a direct and substantial interest.

K.P. Varghese v. Income Tax Officer

This is another important judgment of the Supreme Court, where a great use of the rule of Purposive interpretation was made to save an innocent assessee from the rigours of the Income Tax law. In this case, an assessee sold a house, purchased by him in 1958 at the price of Rs 16,500, in 1965 at the same price of Rs16,500. In this regard, the tax authorities had fixed the market price of the property at Rs 65,000 and had alleged that the assessee had understated or concealed the consideration actually received by him. The question that was involved in the present case was with respect to the interpretation of Section 52(2) of the Income Tax Act. On a plain reading of the clause, the only condition for attracting the applicability of that provision was that the fair market value of the capital asset transferred, on the date of transfer, exceeds the full value of the consideration declared by the assessee in respect of the transfer, by an amount not less than 15 per cent of the value so declared. Once the Income Tax Officer became satisfied that this condition existed, he could proceed to invoke the section.

The Court, however, stated that such literal construction of the section was not acceptable. The section had to be interpreted with respect to the object and purpose, the legislature had in view, in enacting the provision and the context of the setting in which it occurred. In order to ascertain the intention of the legislature the Court, took into consideration the speech of the Finance Minister, wherein it was stated by him that Section 52(2) was brought to deal with such cases where the actual consideration received for the transfer was “considerably more” than that declared or showed by the assessee, it was not to strike at honest and bona fide transactions. Thus, it was concluded by the Court, that sub-section (2) would have no application in the present case and the assessee cannot be made liable for an honest and bona fide transaction undertaken by him, where he has fully declared the consideration that was received by him.

MSR Leathers v. S. Palaniappan

Another application of this rule can be seen in this case, which is concerned with the interpretation of Section 138 of the Negotiable Instruments Act. In this case, the respondent issued four cheques to the appellant, however on presentation, they were returned by the Bank with an endorsement “not arranged funds for”. At the request of the respondent, the appellant did not present those cheques again since the respondent agreed to settle the dispute. However, later on, he failed to settle the dispute. In these circumstances, the appellant sent a notice to the respondent under Section 138(b) of the Negotiable Instruments Act, 1881, though beyond the period of limitation, which was duly received by him. Subsequent thereto, those cheques were again presented before the Bank but were dishonoured for want of sufficient funds. Again a statutory notice was sent, which was duly received by the Respondent. The question which arose for the consideration of the Court was whether, the Appellants could prosecute the respondents, on the basis of the second or subsequent dishonour of the instrument, when he did not prosecute the respondent in the first instance itself. Whether an offence under Section 138, can be committed only once? In deciding the case the approach of the Court was guided by the rule of purposive interpretation, for which it also reiterated the words of the Supreme Court in the case Nathi Devi v. Radha Devi Gupta wherein it was stated that “even if there exists some ambiguity in the language or the same is capable of two interpretations, it is trite the interpretation which serves the object and purport of the Act must be given effect to. In such a case the doctrine of purposive construction should be adopted.”

Hence, in light of this rule, the Court acknowledged that the entire purpose of Section 138 was to compel the drawers to honour their commitments, made in the course of their business or other affairs and also that there was no substantial difference between a case where the default was committed and prosecution was launched immediately and another where prosecution was deferred till the cheque presented again got dishonoured for the successive time. Thus, after every dishonour, a fresh cause of action arose and the prosecution based on successive dishonour was legally sustainable, provided that it satisfied all the requirements stipulated in Section 138.

Use of the Rule of Purposive Interpretation: Limitations and Precautions     

After an appreciation of the aforesaid judicial precedents, the application of the rule of Purposive interpretation has become considerably clear, however, it is equally imperative for one to also take note of a couple of limitations and precautions that should be kept in mind when this rule is applied. There are various judicial pronouncements and decisions where the Courts have recognised certain limitations of this rule, various precautions and restraints, that must be kept in mind by the Courts, such that they perform the same function as is essentially desired of them in the Constitution.

In the case of Rananjaya Singh v. Baijnath Singh, the Hon’ble Court observed that “the spirit of the law may well be an elusive and unsafe guide and the supposed spirit can certainly not be given effect in opposition to the plain language of the sections of the Act and the Rules made thereunder. If all that can be said of these statutory provisions is that construed according to the ordinary, grammatical and natural meaning of their language they work injustice by placing the poorer candidates at a disadvantage the appeal must be to Parliament and not to the Court.”

Another case where the Courts expressed certain concerns or cautions with respect to the rule of purposive interpretation was in the case of Sri Ram Saha v. State of W.B. where the Court held that if due to a plain reading of the Statute any doubt or difficulty arises, or the objects and purpose of the statute might get defeated or frustrated, the Courts can interpret, with regard to the objects sought to be achieved and the purpose which such provision intended to achieve. However, it was categorically cautioned that the Courts should not at any rate, in the guise of purposive interpretation, rewrite the provisions of any statute. The rule of purposive interpretation permitted a reading of a provision consistent with the purpose and object of the Act but the Courts cannot legislate by themselves, either by taking away or creating away substantial rights by stretching any piece of legislation.

Besides, there are some other safeguards as well, which must be kept in mind. Although the purposive rule has been an important tool of interpretation, it is generally accepted that its application is limited. In theory, there are two limits. Firstly, this approach should only be applied where there is uncertainty in the words of the statute and secondly, it should only be used to employ such a meaning that the respective words of the statute would be reasonably capable of bearing. The courts should not use the purposive approach to make a law consistent with Parliamentary intent if Parliament has failed to effectively state that intent in the statute.

Furthermore, it is also worth noting that the words of Sir Ian Mackay where he stated that “a purposive approach should not be made an excuse for starting with the underlying purpose, and then forcing the words into a preconceived and strained construction to fit that assumption”. Ordinarily, the stage of applying this rule arrives after a plain meaning has been given to the words of the statute and the same leads to absurdity, injustice or anomaly. This should be the course of action, rather than the other way round, where one, initially itself perceives the statute, from the eyes wearing spectacles tainted with the objects and purposes of the statute.

The Court, in the aforesaid cases, fundamentally, indicated the difficulty as well as the responsibility that is imposed on the Hon’ble Judges while interpreting the provisions of any statute. It envisages the level of uncertainty that may be infused in this process and eventually, impede the basic purposes of the interpretation of the rules, which seek to instil an element of objectivity in the process of interpretation, to the best possible extent, such that there is a sense of certainty and uniformity, in the meaning of the statute. The Court, further, envisaging, the difficulty in clearly ascertaining the intention of the legislature, which comprises of hundreds of people and their very own intentions, considered the plain language of the statute as the best indicator of the intention of the legislature, as acknowledging the limitations of language, the vastness of imagination and thought process of the human mind and interpretive flexibility, it would help in preventing the judges from stepping into the shoes of the legislators, and causing abeyance of the universally accepted and recognised doctrine of Separation of Powers. 

Conclusion                         

After appreciating the aforesaid texts, judicial precedents and materials one can understand what basically is the rule of purposive construction and how the same is applied by the Courts while interpreting the statutes. This rule can be understood, without much effort, as such a rule of interpretation, which in case of uncertainty in interpretation, gives primacy to the interpretation which serves better in accomplishing the objects and purposes for which the respective Act or its provisions were enacted. This rule takes its cues from the mischief rule, which was laid down in Heydon’s case, where it was stated that such an interpretation should be accorded to a statute which, helps in suppressing the mischief (which was present in the old law and to tackle which, the legislation was enacted) and advancing the remedy (which was given by the legislature, by enacting the new law) thereby at its outset, fulfilling the underlying object and purpose of that legislation.

Nevertheless, this rule has to be applied keeping in mind various limitations, precautions and safeguards which aims in infusing and sustaining an element of certainty in the law and prevents the Judges from crossing their contours designed and determined by the universally recognised Doctrine of Separation of powers. The Courts, for instance, should take recourse of this rule, ordinarily, in cases where a plain literal meaning of the words leads to absurdity or anomaly and should also take note of the fact as to whether the words of the Statute are capable enough to bear the meaning that is assigned by them, as in no circumstances, the Courts can rewrite the provisions of the law in the guise of Purposive interpretation and encroach into the domain of the legislature, but should traverse in and around the words that have been used by Statute.

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