1. Presentation
SEMINAR Number: - SN/CL/MNRS/002/2014
DATE: - 22nd of Feb, 2014
TOPIC: - How to Read & Interpret Law
MNRS & ASSOCIATES
Chartered Accountants
By : Akhil Agarwal
2. Content
Abbreviation
Glossary of Legal Terms
Para Starting Words
Rules of Interpretation of Law
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3. GOI – Government of India
CG – Central Government
SG – State Government
DCA – Department of Company Affairs
MCA – Ministry of Companies Affairs
CLB – Company Law Board
ROC – Registrar of Companies
MD – Managing Director
WTD – Whole Time Director
GM – General Meeting
NBFC – Non Banking Financial Companies
SEBI – Security Exchange Board of India
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4. o ab-initio: From the Beginning
o ad-hoc: for the particular purpose
o generalia specialibus non derogant: General things do not
derogate from special
o ex-gratia: with out any legal obligation
o ad idem: at the same point
o in lieu of: instead of
o ignorantia juris had excusat: Ignorance of Law is no excuse
o ex-lege: according to Law
o ad infinitum: without limit
o caveat emptor: Let the buyer beware
o infra: see below
o malafide: in bad faith
o mutatis mutandis: with necessary changes
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Legal Terms
5. o In Personam: Directed toward a particular person
o per pro: on behalf of another
o Intra vires: within power of
o Ultra vires: beyond the power
o per se: by itself
o prima facia: at First sight
o Adjourn: to defer the hearing of a case another date
o vice-versa: the order being reversed
o pari passu: without preference
o Injunctions: a order a court requiring a party not to do
something or to do something.
o Proviso: a clause started with “provided that”
o Writ: a command issued by a court
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6. o Bequeath: to dispose off personal property by will
o De facto: in fact
o nemo dat quo non habet: No one can give what does
not belogn to him
o Onus oprbandi: burden of proof
o sans recourse: With out Liability
o Qua: in capacity of
o Suo motu: on its own motion
o Supra: above
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7. Para Starting With….
Notwithstanding anything to the contrary
a) This type of provision which overrides any other provision
is
called as non-obstante clause
b)If one provision overrides another provision, it shall prevail
over
the later provision
c) A provision may have over riding effect over
- one or more provision of the same act
- the entire act
- any law for time being in force
Subject to:
a) A provision made subject to another provision, shall not
apply if
it is inconsistent with later provision i.e. an over riding
effect is
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8. Without prejudice
a)The word ‘without prejudice’ means without affecting.
i.e.
without affecting the thing which is prejudice against
the
provision.
b) It may be used as follow
- The word ‘without prejudice to the provision of the
section
…’ means that the provision specified therein shall
also
apply along with such provision
- The word ‘without prejudice to the power of CLB,
any order
of CLB may provided for …’ means the power of
CLB is
not limited to the provided in the provision.
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9. Rules of Literal Construction
Principal to Interpret Statute
Applicability:
i) First rule of interpretation.
ii) Used when statute is clear, plain and unambiguous.
iii) It is adopted, whatever is the consequences, where
only
one meaning is possible for a provision.Application:
i) Court can not legislate or no reference can be
made to
legal decision.
ii) No word shall be added, altered or modified.
Omission
are not to be inferred.
Methodology:
i) Read every word with its single literal meaning.
ii) Gather the meaning of all words.
iii) Derive a clear cut meaning of provision.
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10. Non applicability or limitation:
i) one word may have different or alternate meanings.
ii) The intention of law is ignored.
iii) Language of a statute can not be so precise to cover
each
and every possible situation
Rules of Reasonable construction
Applicability:
i) when ordinary meaning is absurd.
ii) Where literal interpretation fails to achieve the
purpose.
Application:
i) The interpretation must be according to the
purpose,
policy, object and spirit of the law.
ii) Interpretation should give rational, fair and
sensible
meaning.
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11. Non applicability or limitation:
i) If literal interpretation is possible
ii) If intention of the law can not be gathered precisely
Methodology:
i) Whether reasonable construction is required.
ii) Discover the meaning of relevant portion.
iii) Analyse if the provision can be applied as it is or to be
molded to resolve the current issue.
iv) If modulation is required, consider the intention of law
and modify the meaning of the words.
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12. Application:
i) Interpret provision in a statute in accordance with the
scheme and object of the act.
ii) If action is required, inaction means default.
Rules of Beneficial construction/ Purposive
Construction/
Hydeon’s rule/ Mischief Rule
Applicability:
i) Where words used in law is ambiguous.
ii) When literal Interpretation fails to achieve its
purpose.
iii) When Extended meaning is required.
e.g. Where object of a statute is public safety
Words in a Penal Statute
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13. Non-Application/ Limitation:
i) Where literal interpretation is possible
ii) This rule is not applied in fiscal statute.
Methodology:
i) Consider the background
- What was law before making act
- What was mischief for which law did not provide any
remedy
- What is the remedy that the act has provided
- What is the reason for the remedy/ intention of law
maker.
ii) Adopt the interpretation which will
- Suppress the mischief
- Advance the remedy
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14. Rules of Harmonious Construction
Applicability:
This rule is applied if there is a conflict between two or
more provision. The conflict may be
- Within a section
- Between two or more section of a statute
- Between two or more section of different statute
Application:
i) As per this rule, one section shall not be allowed to
defeat
the other Provision.
ii) An interpretation which reduces one of the provision to
a
dead letter is not harmonious interpretation.
iii) Read the statute as whole and find out true meaning
of
each section, clause and word.
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15. Course of action if not possible to harmonize:
i) If one provision override another provision, it shall prevail
over the
later provision.
ii) If a provision is made subject to another provision, the later
provision shall prevail
iii) If no provision is made subject to another provision, and no
provision has an overriding effect then
a) The provision enacted or amended later in point of
time
shall prevail
b) The provision appearing later in the act shall prevail,
if all
Methodology:
i) Harmonize the conflicting provision i.e. an attempt must
be
made to give full effect to all the provision.
ii) if not possible, they should be so interpret that effect is
given to all of them partially. i.e. one provision shall be
so
constructed as to exclude the other provision.
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16. Rules of ‘EJUSDEM GENERIS’
Applicability:
a) The specific word must constitute a class or category
b) The general word follow the specific word
c) there is nothing to show that a wider sense was
intended.
IF THERE IS A CONFLICTION OF PROVISION OF
ANY LAW WITH ANY PROVISION OR INTENTION
OF CONTITUTION OF INDIA THEN
CONSTITUTION OF INDIA SHALL ALWAYS
PREVAIL. e.g. Section 23 of Income tax act,
deemed let out.
In case of Deed or Agreement, Provision appearing before shall
prevail.
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17. Non-applicability:
a) The court has discretion to apply or not to apply this
rule
b) The rule should be avoided where, it is departing from
natural meaning of the words.
Application:
a) The term ‘ejusdem generis’ means ‘of the same class or
species’
b) The meaning of general word shall be restricted. The
general
word shall be constructed with reference to the specific
word.
Rules of ‘Expressio unius est exclusio alterius’
a) The term ‘Expressio unius est exclusio alterius’ means
‘Express
mention of one thing implies the exclusion of the other’.
b) If two or more things belonging to a particular class are
mentioned, other members of that class are silently
excluded.
c) there is nothing to show that a wider sense was
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18. Rules of ‘Noscitur a sociis’
a) The term ‘noscitur a sociis’ means ‘construction of
associated word’
b) If two or more words which are capable of analogous
(similar
or parallel) meaning are grouped together, they should be
understood in cognate sense
c) A word shall be given the same meaning throughout the
statute., except
- where word is used in different sense e.g. use of plant
with
‘plant and machinery’ or ‘plant and trees’.
- where is would cause injustice or absurdity.
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