Interpretation of Statutes, Deeds and Documents​

Question 1.
What is a Document as per the Indian Evidence Act, 1872? (May 2018, 2 marks)
Answer:
Document as per Indian Evidence Act, 1872:
According to Sec. 3 of the Act document means any matter expressed or described upon any substance by means of letters, figures or marks or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter.

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Question 2.

How will you interpret the term “Instrument” used in a statutes? (Nov 2019, 3 marks)
Answer:
Instrument:
In common parlance, instrument means a formal legal document which creates or confirms a right or records a fact. It is a formal writing of any kind, such as an agreement, deed, charter or record, drawn up and executed in a technical form. It also means a formal legal document having legal effect, either as creating liability or as affording evidence of it. Section 2 (14) of the Indian Stamp Act, 1899, States that ‘instrument’ includes every document by which any right or liability is or purports to be created, transferred, extended, extinguished or recorded.

Question 3.
Attempt:
Explain the principles of Grammatical Interpretation” and logical Interpretation” of a Statute. What are the duties of a Court in this regard? (May 2012, 4 marks)
Answer:
  

Question 4.
Define Grammatical Interpretation. What are the exceptions to grammatical interpretation? (May 2018, 4 marks)
Answer:
Grammatical Interpretation:
Meaning:
Interpretation is the process by which the real meaning of an Act and the intention of the legistature enacting it is ascertained.

Interpretation may be:

• Grammatical or
• Logical

Grammatical interpretation concerns itself exclusively with the verbal expression of the law. It does not go beyond the letter of the law. In all ordinary cases, it s the sole form allowable. The Court cannot taco from or add to modify the letter of the law.

Exceptions:
1. Where the letter of law is logically defective on account of ambiguity inconsistency or incompleteness.

Duty of Court:
(i) Logically defective on account of ambiguity:
The Court is under duty to travel beyond the letter of law so as to determine from other sources the true intention of the legislature.
(ii) Logically detective on account of Inconsistency:
The Court must ascertain the spirit of law.

2. It the text leads to a result which is so unreasonable that it is self-evident that the legislature could not mean what it says.
Duty of Court:
The Court may inter logically the intention of the legislature.

Question 5.
Sohel, a director of a Company, not being personally concerned or interested, financially or otherwise, in a matter of a proposed motion placed before the Board Meeting, did not disclose his interest although he has a knowledge that his sister is interested in that proposal. He restrains from making any disclosure of his interest on the presumption that he is not required by law to disclose any interest as he is not personally interested or concerned in the proposal. He made his presumption relying on the ‘Rule of Literal Construction’. Explaining the scope of interpretation under this rule in the given situation, decide whether the decision of Sohel is correct? (Jan 2021, 3 marks)

Question 6.
Answer the following:
Explain the Rule of Reasonable Construction with regard to interpretation statutes. (Nov 2008, May 2015, 4 marks)
OR
Attempt any:
Explain the Rule of “Reasonable construction under the interpretation of Statute, Deeds etc. (Nov 2010, 4 marks)
Answer:

Question 7.
Differentiate Mandatory Provision iron a Drecory Provision. What factors decide whether a provision is a directory or mandatory? (May 2018, 4 marks)
Answer:
Difference between Mandatory Provision and directory:
Provision:

Question 8.
Answer the following:
“When two or more provisions of the same statute are repugnant to each other, the Court will try to construe the provisions in such a manner, if possible, as to give effect to all. Examine the statement with reference to the provisions of Sec. 96 and 129 of the Companies Act, 2013 which appear to be seemingly contradictory to each other for compliance. (Nov 2007, 8 marks)
Answer:
Rule of Harmonious Construction of Statutes
The statement in question Is related to an important rule of interpretation that is Rule of Harmonious Construction of Statute. According to this rule when there is doubt about the meaning of the words of a statute, these should be understood in the sense in which they harmonize with the subject of the enactment and the object which the legislature had in view.

According to Sec. 96 of the Companies Act, 2013 there must be not more than fifteen months gap between two consecutive annual general meetings of a company. Sec. 129 requires the Board of Directors to lay at every annual general meeting of a company the financial statement for the financial year. For some special reasons, however, the Registrar may give an extension for not more than 3 months to hold the meeting. In such a case, the accounts must relate to a period not earlier than the date of the meeting by more than six months plus the extension period.

Therefore, to give effect to both the provisions of Sec.. they are to be interpreted harmoniously and in fixing the date of the annual general meeting Sec. 96 as well as Sec. 129 are to be taken into account.

From this, it can easily be made out that except the first annual general meeting which Is subject to different rules an annual general meeting is to be held subject to the following rules under Sec. 96(i) of Companies Act, 2013.

Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next.

Provided that in case of the first annual general meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year.

Provided further that if a company holds its first annual general meeting as aforesaid, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation.

Provided also that the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first annual general meeting, shall be held, by a period not exceeding three months.

Note: These requirements are cumulative and separate, failure to comply with any of them constitutes an offence. Thus even where a company may hold its annual genera? meeting within the time limit of 15 months (or 18 months, if extension is granted) it may still be guilty of contravention of Sec. 129.

Question 9.
Attempt
Briefly explain the meaning and application of the rule of Harmonious Construction in the Interpretation of statutes. (Nov 2012, 4 marks)
Answer:

Question 10.
There is an apparent difference between Sec, 179 of the Companies Act, which permits the Board to delegate its power to grant Loans, and Sec. 186 of the Companies Act, which requires approval of Loan by a resolution passed at a Board Meeting with the consent of all the Directors present at the Meeting. How would you interpret these provisions applying the rule of Harmonious Construction?
Answer:
Every Loan falling within the purview of Sec. 186. must be sanctioned by a resolution of the Board of Directors passed at its Meeting. Every such Resolution must be passed with the consent of all the Directors present at the Board Meeting, i.e. unanimous consent.

Every Loan covered by Sec. 186 falls within the purview of Sec. 179. Power of the Board u/s 179, can be delegated subject to conditions there in.

However, by harmonious interpretation of both the provisions of Sec. 179 and Sec. 186 and in the absence of specific prohibition in Sec. 186 against delegation, the Board’s power u/s 186 may be delegated in accordance with the provisions of Sec. 179 by passing the unanimous resolution of the Board. Any other interpretation will make provisions of Sec. 179 redundant.

Question 11.
Explain the principles of Rule of Beneficial Interpretation. (May 2009, 6 marks)
Answer:

Question 12.
Explain Mischieve Rule’ for interpretation o? statute. Also, give four matters it considers in construing an Act. (Nov 2018, 4 marks)
Answer:
Mischieve Rule:
‘Nhere the language used in a statute is capable of more than one interpretation, the most firmly established rule for construction is the principle Paid down in the Heydon’s case (1584) 3 co. Rep 7a, 76 ER 637, it s knowns purposive construction’ or mischieve’ Rule.

It considers the following four matters in constructing an Act.

1. What was the law before the making of the Act:
2. What was the mischief or defect for which the law did not provide:
3. What is the remedy that the Act has provided; and
4. What is the reason for the remedy.

Question 13.
Explain very briefly the significance of conjunctive and disjunctive words “or” “and” in the matter of interpretation of statutes. (Nov 2016, 4 marks)
Answer:
The significance of two words “or” “and” in the matter of interpretation of statutes are as follows:
(a) If two provisos are separated by use of conjunction ‘and’, they have to be read jointly. Requirement of both the provisos should be satisfied;

(b) Word “Or” is used as disjunctive. If word “or” is used to divide or separate the provisions. If two clauses are separated by use of ‘or’. comply with any of them will be sufficient;

(c) In ordinary usage. “and” is conjunctive and “or” is disjunctive. Normally, ‘and’ has cumulative effect, requiring fulfillment of all conditions, while ‘or’ is antithesis of ‘and’. However. ‘and’ can be read disjunctively to mean ‘or’ to carry out the intention of legislature.

Question 14.
How will you understand whether a provision in a statute is ‘mandatory’ or ‘directory’? (May 2019, 3 marks)
Answer:
Practically speaking, the distinction between a provision which is ‘mandatory’ and one which is ‘directory’ is that when it is mandatory, it must be strictly observed; when it is ‘directly’ it would be sufficient that it ¡s substantially complied with. However, we have to look into the substance and not merely the form: an enactment in mandatory farm might substantially be directly and conversely a statute in directory form may in substance be mandatory.

Hence, it is the substance that counts and must take precedence over mere form. It a provision gives a power coupled with a duty, it is mandatory:
whether it is or is not so would depend on such considerations as

• the nature of the thing empowered to be done
• the object for which it is done, and
• the person for whose benefit the power is to be exercised.

Question 15.
Briefly discuss the Rule of ‘ejusdem generis’ as applied in the interpretation of statute. (Nov 2009, 6 marks)
Answer:

Question 16.
At the time of interpreting a statutes what will be the effect of ‘Usage’ or ‘Practice’? (Nov 2019, 3 marks)
Answer:
Effect of usage or practice:
Usage or practice developed under the statute is indicative of the meaning recognized to its words by contemporary opinion. A uniform notorious practice continued under an old statue and inaction of the ‘legislature to amend the same are important factors to show that the practice so followed was based on correct understanding of the law when the usage or practice receives judicial or legislative approval it gains additional weight.
In this connection, we have to bear in mind two Latin maxims:

• ‘Optima Legum interpresest Consuetudo’ (the custom is the best interpreter of the law); and
• contemprarea expositoest optima etc. fortissima in lege’ (the best way to interpret a document is to read It as it would have been read when made). Therefore, the best interpretation/construction of a statue or any other document is that which has been made by the contemporary authority. simply statutes and documents should be interpreted as they would have been at the time when they ware enacted! written.

Contemporary official statements throwing light on the Construction of a statute and statutory instruments made under it have been used as contemporane a exposition to interpret not only ancient but even recent statutes in India.

Question 17.
“Associate words to be understood in common sense manner. Explain this statement with reference to rules of interpretation of statutes. (Nov 2020, 3 marks)

Question 18.
Attempt:
Explain the importance of “Preamble” and “Proviso being internal aids to interpretation. (Nov 2011, 4 marks)
OR
Attempt the following:
Explain the usefulness of following terms in interpreting/constructing a statute:
(i) Preamble (Nov 2015, 2 marks)
Answer:
 
Question 19.
The definition of a word in a statute may be either restrictive or extensive. Elaborate this with reference to the definition of ‘Managing Director’ in the Companies Act, 2013. (Nov 2013, 4 marks)
Answer:

Question 20.
Answer the following:
How will you interpret the definitions in a statute, if the following words are used in a statute?
(i) Means,
(ii) Includes
Give one illustration for each of the above from statutes you are familiar with. (May 2016, 4 marks)
Answer:
(i) Means: When in definition, word ‘Means are used, its‘ prime fade’ restrictive and exhaustive, we must restrict the meaning of the word to that given in the definition. e.g. Company means company incorporated as per Companies Act.

(ii) Includes: When in definition, word Includes’, the definition prime fade extensively here word is not restricted to the meaning assigned to it but has extensive meaning which also includes meaning assigned it in the definition. e.g. Ad includes Companies Act, 2013.

Question 21.
Write short note on:
(i) Proviso
(i) Explanation, with reference to interpretation of Statutes, Deeds, and Documents. (Nov 2018, 2 marks each)
Answer:
(i) Proviso:
The normal function of a proviso is to except something Out of the enactment or to qualify something stated ¡n the enactment which would be within its purview ¡f the proviso were not there. The effect of the proviso is to qualify the preceding enactment which Is expressed in terms which are too general. As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment. Ordinarily, a proviso is not interpreted as stating a general rule.

It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other. (Ram Narain Sons Ltd. Vs. Assistant Commissioner of Sales Tax, AIR 1955 SC 765).

(ii) Explanation:
An explanation is at times appended to a section to explain the meaning of the text of the section. An explanation may be added to include something within the section or to exclude something from it.

An explanation should normally be sa read as to harmonize with and clear up any ambiguity in the main section. It should not be so constructed as to widen the ambit of the section. In Sundaram Pillai V. Patlabiraman, Fazal Ali, J. gathered the following objects of an explanation to a statutory provision:

• Explain the meaning and intendment of the Act. itself.
• Clarity and obscurity and vagueness (if any) in the main enactment to make it consistent with the object.
• Provide an additional support to the object of the Act to make it meaningful and purposeful. Fill up the gap which is relevant for the purpose of the explanation to suppress the mischief and advance the object of the Act.
• Cannot take away a statutory right

However, it would be wrong to always construe an explanation limited to the aforesaid objects. The meaning to be given to an explanation will really depend upon Its terms and not on any theory of its purpose.

Question 22.
Preamble does not override the plain provision of the Act.’ Comment. Also give suitable example. (May 2019, 3 marks)
Answer:
The preamble expresses the scope, object, and purpose of the Act, more comprehensively than the Long Title. The preamble may recite the ground and the cause of making a statute and the evil which is sought to be remedied by it.

Like the Long Tile, the Preamble of a statute is a part of the enactment and can legitimately be used for constructing it. However, the preamble does not override the plain provision of the Act but if the wording of the statute gives rise to doubts as to its proper construction. For e.g., where the words or phrase has more than one meaning and a doubt arises as to which of the two meanings is intended in the Act, the preamble can and ought to be referred to in order to arrive at the proper construction.

In short, the Preamble to an Act discloses the primary the primary intention of the legislature but can only be brought in as an aid to construction it the language of the statute is not clear. However, it cannot override the provisions of the enactment.

Example:
Use of the word ‘may’ in Section 5 of the Hindu Marriage Act, 1955 provides that a marriage may be solemnized between two Hindus has been construed to be mandatory in the sense that both parties to the marriage must be Hindus as defined in Section 2 of the Act. It was held that a marriage between a Christian male and a Hindu temple solemnized under the
Hindu Marriage Act was void. This result was reached also having regard to the preamble of the Act which reads. ‘An Act to amend and codify the law relating to marriage among Hindus. [Gullipoli Sowria Raj V. Bandaru Pavani, (2009) 1 S.C.C. 714].

Question 23.
If it is defined as :
(i) “Company means a company incorporated under the Companies Act, 2013 or under any previous company Law”.
(ii) ‘Person’ includes ………………. under the Consumer Protection Act, 1986. How would you interpret/construct the nature and scope of the above definitions? (May 2019, 3 marks)
Answer:
(i) As per Section 2(20) of the Companies Act, 2013, company means a company incorporated under this Act or under any previous company law. Previous company law as defined under section 2(67) means any of the laws specified below:

• Act relating to companies in force before Indian Companies Act, 1866.
• the Indian Companies Act, 186e
• the Indian Companies Act, 1882
• the Indian Companies Act, 1913
• the Registration of Transferred companies ordinance, 1942
• the Companies Act, 1956; and
• Any law corresponding to any of the aforesaid Acts or the ordinances and in force:

(a) in the merged territories or in a Part B State (other than the State of J&K), or any part thereof, before the extension there to of the Indian Companies Act, 1913; or
(b) In the state of J&K or any part thereof, before the commencement of the Jammu and Kashmir (Extension of laws) Act, 1956, in so far as banking, insurance, and financial corporations are concerned before the commencement of the central laws (Extension to Jammu and Kashmir) Act, 1968 in so far as other corporations are concerned; (viii) the Registration of Companies (Sikkim) Act, 1961.

(ii) Section 2(m) of the Consumer Protection Act, 1986, contains an inclusive definition of ‘Person’. It has been held to include a ‘company’ although it is not specifically named therein [Karnataka Power Transmission Corporation V. Ashok Iron Works Pvt. Ltd. (2009)3 Sec 240].

Question 24.
Write a short note on Proviso” with reference to the rules of interpretation. (Nov 2020,3 marks)

Question 25.
The Statute should be read as a Whole’. Explain the statement.
Answer:
‘Read the Statute as a Whole’: It is the elementary principle that construction of a statute is to be made of all its parts taken together and not of one part only. The deed/ statute must be read as a whole in order to as certain the true meaning of its several clauses, and the words of each clause should be so interpreted as to bring them Into harmony with other provisions if that interpretation does no violence to the meaning of which they are naturally susceptible. And the same approach would apply with equal force with regard to Acts and Rules passed by the legislature.

One of the safest guides to the Construction of sweeping general words is to examine other words of like import in the same enactment or instrument to see what limitations must be imposed on them. If we find that a number of such expressions have to be subjected to limitations and qualifications and that such limitations and qualifications are of the same nature, that circumstance forms a strong argument for subjecting the expression in dispute to a similar limitation and qualification.

Question 26.
Attempt the following:
Explain the usefulness of following terms in Interpreting/construing a statute:
(ii) Use of Foreign Decisions (Nov 2015, 2 marks)
Answer:
Use of Foreign Decisions:
Foreign Decisions are useful by no. of ways. It has an effect on micro as well as macro Economics as a whole, Export, Import and Exchange. Investment of Foreign Currency transactions are based on Foreign Decisions. It will effect on decision taken by quantum.

Question 27.
Explain how Dictionary Definitions’ can be of great help in interpreting/constructing an Act when the statute Is ambiguous. (Nov 2018, 2 marks)
Answer:
Dictionary Definitions:
First we have to refer to the Act in question to find out if any particular word or expression is defined to it. Where we find that a word is not defined in the Act itself, we may refer to dictionaries to find out the general sense in which the word is commonly understood.

However, in selecting one out of the several meanings of a word, we must always take into consideration the context in which it is used in the Act. It is the fundamental rule that the meanings of words and expressions used in an Act must take their colour from the context in which they appear. Further, judicial decisions laying down the meaning of words in constructing statutes in ‘pari materia’ will have greater weight than the meaning furnished by dictionary. However, for technical terms reference may be made to technical dictionaries.

Question 28.
What is External Aid to interpretation? Explain how the Dictionary definitions are the External Aids to Interpretations? (Jan 2021, 3 marks)

Question 29.
The word “misfeasance” is used in the Companies Act at several places but the same has not been defined. Explain as to how the meaning of the said word is ascertained in the absence of any definition.
Answer:
1. Where a word is not defined in the Act itself, dictionaries may be referred to find out the general sense in which that word is commonly understood. However, in selecting one out of the several meanings of a word, we must always take into consideration the context in which it is used in the Act.

2. Meanings of Words and Expressions used in an Act must take their colour from the context in which they appear. Further, judicial decisions laying down the meaning of words in construing statutes in ‘pari materia’ will have greater weight than the meaning furnished by dictionaries. However, for meanings of technical ternis, reference may be made to technical dictionaries.

3. The term “misfeasance” refers to improper performance of a lawful Act. For attracting liability of misfeasance under the Companies Act, it must be proved that there has been dishonesty or fraud or at least gross and culpable negligence. On the other hand, a honest mistake not amounting to culpable negligence or breach of duty, will not be regarded as
misfeasance.

Multiple Choice Question

Question 1.
………………… has been defined as the written Will of the legislature solemnly expressed according to the from necessary to constitute It the law of the State.
(a) Statute
(b) Document
(c) Instrument
(d) Deed
Answer:
(a) Statute

Question 2.
………………………. of the Indian Evidence Act, 1872 states that document mean any matter expressed or described upon any substance by means of letters. figures or marks or by more than one of those means intended to be used, or which may be used, for the purpose of recording that matter.
(a) Section 1
(b) Section 2
(c) Section 3
(d) Section 4
Answer:
(c) Section 3

Question 3.
An instrument in writing purporting to effect some legal disposition, known as ……………….. .
(a) Statute
(b) Document
(c) Instrument
(d) Deed
Answer:
(d) Deed

Question 4.
………………… is meant the process by which the Courts seek to ascertain the meaning of the legislature through the medium of the authoritative form in which it is expressed.
(a) Document
(b) Instrument
(c) Interpretation
(d) Documentation
Answer:
(c) Interpretation

Question 5.
…………………….. is of finding out the true sense of any form and the construction is the drawing of conclusion respecting subjects that i.e beyond the direct expression of the text.
(a) Document
(b) Instrument
(c) Deed
(d) Interpretation
Answer:
(d) Interpretation

Question 6.
The subject of the interpretation of a statute, seems to fall under
(a) What are the principles which govern the construction of the language of an Act of Parliament?
(b) What are those principles which guide the interpreter in gathering the intention on those incidental points on which the legislature is necessarily presumed to have entertained and opinion but on which it has not expressed any?
(c) Seems to fall under (a) above
(d) Seems to fall under two head (a) and (b).
Answer:
(d) Seems to fall under two head (a) and (b).

Question 7.
Interpretation may be either ……………….. or …………………… .
(a) grammatical; comprehensive.
(b) grammatical; logical
(c) logical; corporations
(d) None of the above.
Answer:
(b) grammatical; logical

Question 8.
It is the cardinal rule of construction that words, sentences and phrases of a statute should be read in their ordinary, natural and grammatical meaning so that they may effect in …………………….. .
(a) simplest way
(b) broad aspect
(c) widest area
(d) widest amplitude.
Answer:
(d) widest amplitude.

Question 9.
Different headings for literal construction:
(a) Natural and grammatical meaning and Explanation of the Rule.
(b) Exact meaning, leading to loose meaning and Technical words in technical sense.
(c) Either (a) or (b)
(d) Both (a) and (b)
Answer:
(b) Exact meaning, leading to loose meaning and Technical words in technical sense.

Question 10.
Where the language used in a statute is capable of more than one interpretation, the most firmly establishment rule for construction ¡s the principle laid down in the Heydon’s case. The rule which is also known as
(a) Mischieve rule;
(b) Purposive construction
(c) Harmonious construction
(d) Either (a) or (b)
Answer:
(d) Either (a) or (b)

Question 11.
The term ‘ejusdem genens’ means
(a) of the different kind
(b) of the same kind
(c) Species
(d) Either (b) or (c)
Answer:
(d) Either (b) or (c)

Question 12.
The Rule of ……………… means that where specific words are used and after those specific words, some general words are used, the general words would take their colour from the spedfic words used earlier.
(a) Disjunctive
(b) Heycion
(c) Mischieve
(d) Ejusdem Generis.
Answer:
(d) Ejusdem Generis.

Question 13.
Which among the following is the cardinal rule of construction of statutes:
(a) Beneficial Rule of construction
(b) Literal Rule of construction
(c) Harmonious Rule of construction
(d) Reasonable Rule of construction.
Answer:
(b) Literal Rule of construction

Question 14.
Rule of Reasonable Construction is based on the maxim
(a) Utlres magis valeat quam pereat
(b) Absoluta asentenia expositore non indigent
(c) Quo tacit per alium tacit per se
(d) Contemporanea expositio
Answer:
(a) Utlres magis valeat quam pereat

Question 15.
Identify the odd one out of the following aids to interpretation:
(a) Proviso
(b) Usage
(c) Preamble
(d) Marginal Notes
Answer:
(b) Usage

Question 16.
Rule of Beneficial Construction is also known as:
(a) Heydon’s Rule
(b) Mischieve Rule
(c) Purposive Construction
(d) All of the above
Answer:
(d) All of the above

Question 17.
An aid that express the scope, object, and purpose of the Act:
(a) Definitional Sections
(b) Preamble
(c) Heading of the Chapter
(d) Title of the Act
Answer:
(b) Preamble

Question 18.
An internal aid that may be added to include something within the section or to exclude something from it. is:
(a) Proviso
(b) Illustration
(c) Explanation
(d) Schedule
Answer:
(c) Explanation

Question 19.
Which rule of construction is applicable where there is a real and not merely apparent conflict between the provisions of an Act, and oria of that has not been made subject to the other:
(a) Rule of Harmonious construction
(b) Rule of Beneficial construction
(c) Rule of Literal construction
(d) Rule of Exceptional Construction.
Answer:
(a) Rule of Harmonious construction