Beneficient Statutes and Beneficient Rules of Construction

By Abhishek Mohanty, WBNUJS

Editor’s Note: A beneficial statute is a class of statute which seeks to confer benefit on individuals or class of persons by relieving them of onerous obligation under contracts entered into by them or which tend to protect persons against oppressive act from individuals with whom they stand in certain relations. The established principle in the construction of such statutes is there should not be any narrow interpretation[1]. The court should attempt to be generous towards the persons on whom benefit should be conferred. When a statute is interpreted liberally to give the widest possible meaning to it, it is called beneficent construction. Beneficial construction is an interpretation to secure remedy to the victim who is unjustly denied of relief. The interpretation of a statue should be done in such a way that mischief is suppressed and remedy is advanced.[2]

PRINCIPLES OF BENEFICIENT 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.[3] A beneficial statute has to be construed in its correct perspective so as to fructify the legislative intent. Although beneficial legislation do receive liberal interpretation, the courts try to remain within the scheme and not extend the benefit to those not covered by the scheme.[4] 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 non-compliance will have the effect of nullifying the benefit.[5] There should be due stress and emphasis to Directive Principles of State Policy and any international convention on the subject.[6]

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.[7] Further, the rule of interpretation can only be resorted to without doing any violence to the language of the statute.[8] 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.[9] 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 raising of any presumption that protection of widest amplitude must be deemed to have been conferred on those for whose benefit the legislation may have been enacted.[10]

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[11], 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[12], 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.[13] 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.[14]

In case of a social benefit oriented legislation like the Consumer Protection Act, 1986 the provisions are construed as broadly as possible.[15] 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.[16] 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 .[17] 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.[18]

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.[19] The courts while interpreting labour laws have always stressed on the doctrine of social justice as enshrined in the Preamble of Constitution.[20]

Another example of beneficial construction of a statute is the Juvenile Justice Act. 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. This issue came up for a consideration before the Constitution Bench in the case of Pratap Singh v State of Jharkhand[21]. 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[22], court applied beneficent rule of construction in construing section 5 of the Maternity Benefit Act, 1961, which makes the employer liable to pay maternity benefit to woman worker at the rate of average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for six weeks immediately following that day. The court held that Sundays must also be included and held that the Act was intended not only to subsist but also make up for her dissipated energy and take care of child. The Act was read in the light of Article 42

One of the leading examples of liberal construction is in the 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. 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 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.[23]

Justice Krishna Iyer exhorted Mahatma Gandhi’s talisman in interpreting legislation which dealt with the relation between weaker and stronger contracting parties. His advice was “Recall the face of the poorest and the weakest man whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him.”[24] Due regard to Article 16(4) and Article 46 is advocated in interpreting directives aims at making reservations and relations in favour of members of the scheduled castes and scheduled tribes.[25]

The effect of a beneficial legislation should not be construed to be defeated by subsequent legislation except through a clear provision.[26] The rights of minor children to get maintenance from their father as provided in Section 127 of CrPC was construed not to have been taken away in respect of Muslims by the Muslim Women (Protection of Rights on Divorce) Act, 1986 section 3(b) which enabled a Muslim woman to claim maintenance for the minor children upto the age of two years only from her former husband. 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.

The principle of liberal construction can be taken to extreme limits at some times in order to achieve the object of the legislation. In the case of National Insurance Co Ltd v Swarn Singh[27]

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.

In a recent judgment in the case of The Bangalore Turf Club Ltd. Vs. Regional Director, Employees State Insurance Corporation[28], the Supreme Court judged the ESIC act on beneficial grounds and emphasized that the beneficient construction is being preferred to help the intended beneficiaries.

Illustrations on the limitations of beneficial legislations

It is important to note that the 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”. When the language is clear and explicit, it leaves little scope for any bending of interpretation.[29] Sympathy cannot be a sole principle guiding interpretation.[30] In the Maruti Udyog case[31], the Constitution Bench held that no provisions of act provided for absorption of contract labour on issuance of a notification under Section 10 prohibiting employment of contract labour. In the Employess State Insurance Act 1948, Section 53 provided that an insured person or his dependents will not be entitled to ‘any compensation or damages’ under the Workmen’s Compensation Act 1923 or any other law for the time being in force or otherwise in respect of an employment injury. This was held to bar even claim for compensation of damages in Torts although the Act is a beneficial legislation.[32]

In the Umadevi[33] case, the Supreme Court 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. This decision shows that sympathy or sentiment cannot be the sole ground for passing a favourable order when there is no legal right to support such an order.

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. However, it is a restriction that the benefit conferred on the tenants under these Acts can only be enjoyed on strict compliance of statutory provisions contained in them.[34]

The beneficial legislation should not be construed such that it brings within its ambit a benefit which was not contemplated by legislature.[35] Hence where the insurance company had rescinded the contract of insurance and informed all parties before the accident after the cheque issued to satisfy the premium due is dishonoured.

Illustrations from foreign jurisdictions

In Australia, 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.[36]

In a similar case of anti-discrimination legislation, Grescher and Norman have held that the way in which a judge should read a human rights statute should ‘stand apart from and on higher ground’ than other canons and principles.[37] In the case of British Coal Corporation v King[38], Lord Sankey approached the act to beneficially construct it. He held that, “In interpreting a constituent or organic statue such as the Act, construction most beneficial to the widest amplitude possible amplitude of its powers must be adopted.”

In the United States, in the case of Huntington v Attrill[39], 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’. Liberal construction has been allowed in cases relating to providing, regulating worker benefits[40], antitrust[41], securities[42], and unfair competition legislation[43]. The remedial purpose canon is also found in cases  interpreting legislation designed to protect and promote public health and safety[44]. The canon has also been used to further social well-being of general public by protecting individuals against race, gender, age and disability discrimination.[45]

CONCLUSION

The courts must be vigilant to ensure that benefits conferred by welfare legislation must not be defeated by subtle devices. It is duty of the court to get behind the smoke screen and discover the true state of affairs. It can go behind the form and see the substance of the transaction.[46]

The strict and narrow jacket concept of law is no longer available for the purpose of interpreting a social welfare piece of legislation especially after the new millennium. The policy of a democratic Government should run in conjunction with the dynamic interpretation offered by the courts. The courts exist for the society and in the event the courts feel the requirement in accordance with principles of justice, equity and good conscience, courts must rise up to the occasion to do complete justice and meet expectation of the people.

The way the US and Australian courts have strived to protect the rights of the marginalized and vulnerable, the Indian courts have also started emulating them as is seen through various judgments like Olga Tellis.[47] It must be recognised that the principle of beneficent construction cannot be a rule but only a principle. The Indian courts should look into more principles of natural law, a movement which was started by Justice Krishna Iyer during his time at the Supreme Court. This approach has led to several landmark and timely judgments which have been extremely progressive and far-reaching.

Edited by Hariharan Kumar

[1] Modern Movies v SB Tiwari (1966) 1 Lab LJ 763

[2] G. Granville Sharp, Maxwell on interpretation of statutes, pg 68 (10th ed. 1953),Sweet & Maxwell Limited, London

[3] Hanumant, On Beneficial Construction available at  http://hanumant.com/IOS-Unit7 BeneficialAndStrictConstruction.html last visited on August 8, 2014

[4] Har Sharan Varma v State of Uttar Pradesh AIR 1985 SC 378

[5] Noor Hussain & Anr v Financial Commr AIR 1995 J&K 102

[6] B Shah v Presiding Officer, Labour Court AIR 1978 SC 12

[7] Shyam Sunder & Ors v Ram Kumar & Anor (2001) 8 SCC 24

[8] Transport Corpn of India v Employees’ State Insurance Corpn & Anr (200) 1 SCC 426

[9] Shaikh Gulfan v Sanatkumar, AIR 1965 SC 1839

[10] ESIC v MM Suri and Associates Ltd JT 1998 (7) SC 336

[11] Hindustan Level Ltd v Ashok Vishnu Kate (1995) SCC 1385 (L&S)

[12] Sant Ram v Rajinderlal AIR 1978 SC 1601

[13] State Bank of India v MS Money AIR 1976 SC 1111

[14] Workmen v American Express International Banking Corporation (1985) 4 SCC 71, p 76

[15] State of Karnataka v Vishwabhrathi House Building Co-op Society (2003) 2 SCC 412

[16] Spring Meadows Hospital v Harjol Ahluwalia JT 1998 (2) SC 620

[17] Kishor Lal v Chairman, Employees’ State Insurance Corpn, (2007) 4 SCC 579

[18] Fair Air Engineers Pvt. Ltd. v NK Modi AIR 1997 SC 533

[19] Workmen of Indian Standards Institution v Management of Indian Standards Institution, (1976)1 LLJ 33,39 (SC)

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

[21]Pratap Singh v State of Jharkhand (2005) 3 SCC 551

[22] Supra note 6

[23] Union of India v Prabhakaran Vijay Kumar (2008) 9 SCC 527

[24] Supra, note 12

[25] Comptroller and Auditor General of India v KS Jagannathan (1986) 2 SCC 679

[26] Noor Saba Khatoon v Mohd. Quasim AIR 1997 SC 3280

[27] National Insurance Co. Ltd. v Swarn Singh AIR 2004 SC 1531

[28]The Bangalore Turf Club Ltd. Vs. Regional Director, Employees State Insurance Corporation Civil Appeal Nos. 2416 of 2003, 49 and 1575/2006, 3421, 3422 and 6212/2012

[29] Steel Authority of India Ltd, National Union Water Front Workers AIR 2001 SC 3527

[30] Maruti Udyog Ltd. v Remlap (2005) 2 SCC 638

[31] ibid

[32] Western India Plywood Ltd. v P Ashokan AIR 1997 SC 3883

[33] Secretary State of Karnataka v Umadevi (2006) 4 SCC 1

[34] Nasiruddin v Sita Ram (2003) 2 SCC 577

[35] Dedappa v National Insurance Co LTD (2008) 2 SCC 595

[36] Minister Administering the Crown Lands Act v NSW Aboriginal Land Council (2008) 82 ALJR 1505

[37] Donna Greschner and Ken Norman 63 Can Bar Rev (1985) 805, 808-809

[38] British Coal Corporation v the King [1935] AC 500

[39] Huntington v Attrill 146 US 657, 673-74 (1892)

[40] Bill Johnson’s Restaurants, Inc. v NLRB 461 US 731, 740 (1983)

[41] Northern Sec. Co. v United States, 193 US 197, 358-60 (1904) (Sherman Act)

[42] Central Bank of Denver v First Interstate Bank 114 S. Ct. 1439, 1457-58 (1994)

[43] Warner Bros v Gay Toys 658 F.2d 76,79 (2nd Cir 1981)

[44] United States v Bacto-Undisk 394 US 784, 798-99 (1969); Hull Co. v Hauser’s Foods Inc., 924 F.2d 777,782 (8th Circuit 1991)

[45] Chrisom v Roemer 501 U.S. 380,403 (1991); Dennis v Higgins 498 US 439,443 (1991)

[46] Workmen v Associated Rubber Industry Ltd (1985) 4 SCC 114

[47] Olga Tellis v. Bombay Municipal Corporation [1982] 2 SCR 365

Leave a Reply

Your email address will not be published. Required fields are marked *