Golden Rule of Interpretation

Meaning

Justice Holmes stated, “A word is not crystal, transparent and unchanged. It is the skin of the
living thought and it may vary greatly in colour and content according to the circumstances and
the time in which the word is used.”

Maxwell on The Interpretation of Statutes deals with the Golden Rule in the following words:

“The so called golden rule is really a modification of the literal rule. It was stated in this way by
Parke B – ‘it is a very useful rule, in the construction of a statute, to adhere to the ordinary
meaning of the words used, and to the grammatical construction, unless that is at the variance
with the intention of the legislature, to be collected from the statute itself, or leads to any
manifest absurdity or repugnance, in which case the language may be varied or modified, so as
to avoid such inconvenience, but no further.’ Brett L.J. further added, ‘ the inconvenience is not
only great, but what I may call an absurd inconvenience, by reading an enactment in its ordinary
sense, whereas if you read it in a manner in which it is capable, though not its ordinary sense,
there would not be any inconvenience at all, there would be reason why you should not read it
according to its ordinary grammatical meaning’”

The golden rule is a rule of statutory interpretation of English law that is traditionally been
applied by English Courts. The rule is generally used to avoid the consequences of literary
interpretation where it can cause absurdity or contradiction with the public policy.

The rule can be applied in a narrow manner where there is some ambiguity in the words of law
or it can also be applied in a wider manner in a way to prevent obnoxiousness to principles of
public policy even when words are not ambiguous.

Significance
The significance of this method or rule of interpretation can be explained as follows:

 It becomes the duty of the Court to give effect to meaning of a law when it can lead to
absurdity or defeat the ends of the enactment. The law requires the courts sometimes
to go to the extent of modification in the grammatical and ordinary sense of the words.
 The court shall not go in the path that defeats the provision of a law whose meaning is,
prima facie, reasonably plain and lucid. However, this does not mean that a law could be
recast. It must be possible to find the meaning contended for out of the words that are
being used.
 Unless the words of law are absurd, ambiguous or without a proper meaning, it is
preferable to construe them through their natural and ordinary meaning.

Usage

The golden rule can be put forward as a compromise between the literal rule and the mischief
rule. It follows the path of literal interpretation by giving the statute its ordinary meaning. At
the same time, when the literal interpretation leads to an irrational result unlikely to the ends
of the act, the court can deviate from the literal sense. Also while using the golden rule the
court takes into consideration the interest of the public at large and hence, abides by the public
policy.

An illustration of the use of the rule in its wider as well as its narrower sense is given below:

If there is a sign that say – “Do not use the elevators in case of fire”, the literal interpretation
would mean never to use the elevator while there is a fire. However, this interpretation is
absurd and what the sign truly tries to convey is to prevent using the elevators when a fire is
nearby.

While using the wider approach, the golden rule avoids a result that would go against the public
policy. For example, A son murders his mother and commits suicide. According to the law, the
heirs of the mother’s property would be either the mother’s family or the son’s descendants.
Since there is a question of profiting from the crime, the court is likely to favour the mother’s
family in the interest of public policy.
 CASE ANALYSES

 Nokes v. Doncaster (1940) AC 1014

Brief Facts

Mr Nokes the appellant was an employee of Hickleton Main Co. Ltd until 4 June 1937. The
Chancery Court gave an order under Section 154(1) of the Companies Act, 1929 to transfer the
business on arrangements and reconstructions to Doncaster Amalgamated Collieries Ltd. On 7 th
October 1937 the appellant was absent from his duties. According to Section 4 of the Act he
would be liable for his action if he had a service with the company. Nokes denied any service
contract with the new company. The Divisional Court and the Court of Appeal ruled against his
favour and ordered him to pay costs and damages. The present case is an appeal to the House
of Lords.

Issue

When the court has passed an order of transfer of all properties and liabilities from the
transferor to the transferee company, under the provisions S.154 of the Act, does it result in
the contract of service between an employee and the transferor company to become a service
of contract between that employee and the transferee company?

Contentions

The appellant contended that a contractual right to personal service was a personal right
entitled to the employer and it cannot be capable of being transferred to anyone else. The
counsel argued that the duty to serve a master could not be a property or right of the master
capable of being transferred to someone else. Furthermore it also contended that the
contention of the respondent in this case would deviate from the fundamental principle of
common law i.e. the right of a free citizen to choose an employer wherein the employee cannot
assign another employer without his assent. It also contended that the only transfer that the
Section authorizes is the transfer of the undertaking of the company.

The respondents on the other hand argued that S.154 constitutes a modern and simpler
machinery for transfer of the undertaking of the company, wherein the meaning of “transfer”
shall be construed in a wider manner. The counsel for respondents argued on the lines that the
change involved for a wage earner in case of transfer of undertaking is no greater than any
other change in the that can take place in the company.

Ratio

The court held that it is not possible to give a wider interpretation to S.154 in such a manner
that it would automatically transfer every kind of contract by merely substituting the name of
the old company with a new one. The court said that the word “contract” does not appear in
the Section at all and hence, with close attention and considering the consequences it cannot
construe the Section to automatically transfer contracts of personal services. In short, S. 154
that talks about transfer only provides for the transfer of those rights that are not incapable of
being transferred and not for the transfer of such rights with respect to personal service.

The appeal was allowed with costs and the issue raised was answered by saying that a contract
of service did not exist between the appellant and respondents.

Case Comment/Analysis:

The arguments presented on both sides were powerful and the house was left with the task of
putting the proper construction on the S. 154 of the Act. The principles of constructions are
well established but the difficulty lied in the adaptability in incorporation of a particular
principle to the case at hand. The House of Lords went ahead with the Golden Rule of
Interpretation. The words of the statute were given their ordinary meaning. It did not shrink
from an interpretation which may reverse the previous law as the purpose of the whole statute
taken into consideration is to make lawful that which would not be otherwise. Furthermore, the
Court also took into consideration the wider interest of the public by protecting the right of an
employee to choose his employer by not assigning transfer of the contract of employment
without the consent of the employee.

 Lee v. Knapp (1967) 2 Q.B. 442

Brief Facts

The defendant drove a vehicle round the block in the area where his company was situated for
the purpose of demonstrating his own van driver that a new van that the company bought was
easy to handle. The unfortunate car that was run into was owned by one Mr. Strachan. He
heard the noise of the impact of his car which was parked. He went down at once and by the
time he reached the defendant had gone. Only the transport manager came up shortly
afterwards and exchanged particulars with Mr. Strachan. When Mr. Strachan met the
defendant at his office, he duly admitted to the accident committed by him and the fact that he
had not personally given the name and address as required by S 77 (1) of the Road Traffic Act,
1960.

Issue

According to the section 77 (1) of the Road Traffic Act a motor vehicle involved in the accident
and subsequent damage to another vehicle must stop and the driver is required to give his
name address, or that of the owner, or any identification mark of the vehicle. The question of
law that lay in front of the court is whether or not by leaving the van, the defendant driver
committed a breach of the aforementioned section. The interpretation of the word “stopped”
in the Section was to be considered by the court and had to be construed in a manner
appropriate for the case at hand.

Contention

The counsel of the respondent contended that the momentary pause will exempt the driver of
the motor car which is involved in an accident from the necessity for stopping to give the
particulars contemplated by the Section in question. It argued that upon the Section’s view, the
obligation is to stop for such a period as may be reasonable to enable the questions to be put, if
there is anybody in the vicinity who desires to put them.

Ratio

The Hon’ble Court stated that the phrase in Section 77 (1): “the driver of the motor vehicle shall
stop” of the Act mandates that the driver shall stop and remain where he stops for such a
period of time as the circumstances require taking into consideration the character of the road
or place, will provide sufficient time to enable persons with the right to do so and reasonable
grounds for doing so, to require of him direct and personally the information which may be
required under the section.

The Hon’ble Court also stated that it would be wholly unsatisfactory if there were not a
personal duty laid upon the driver in his capacity. Also, subsequent dispute may arise if some
other person directed by the defendant were to purport to take the requisite steps according to
the law on behalf of the driver.

The Court held that the defendant did not remain at the scene of the accident long enough to
give Mr. Strachan or anyone else with reasonable grounds for requiring the said particulars, any
opportunity to require them of him, and that the defendant did not personally do the same.

The Court ruled in favour of the appellant and the defendant was convicted in the present case.

Case Comment/Analysis

The section 77(1) of the Road Traffic Act, 1960, provided that the driver causing an accident
shall stop and convey the name and address of the driver and/or of the owner, and also any
identification mark of the vehicle. The use and interpretation of the word “stop” was the main
issue in front of the court. The driver in the present case stopped for a moment but asked
another person to do the requisite and then ran away. The court applied the Golden Rule and
held that the objectives of the Section had been violated as he did not stop for a reasonable
period as to make necessary inquiries according to the law. The court construed the meaning of
the word “stop” in an ordinary manner so as to avoid absurdity and obnoxiousness. Also
principles of public policy were taken into consideration which is an essence of the Golden Rule
of interpretation.

 G. Narayanaswami v. G. Pannerselvam and Ors. (AIR1972SC 2284)

Brief Facts

The appellant in the present case stood in an election of the Madras Legislative Council from
the Madras District Graduates’ Constituency to be held on 11th April 1970. The appellant’s
election was set aside by the Madras High Court. The appellant had only passed the High School
Leaving Examination which did not make him a “Graduate” and hence the order of the court.
The ground of setting aside the election, according to the Hon’ble High Court was the absurdity
and destructiveness of the very concept of representation of “especially qualified persons”.

Issue

The term “electorate”, used in Article 171(3), (a), (b) and (c) has neither been defined in the
constitution or by any enactment of the legislation. However, Section 2(1) (a) of the
Representation of People Act defines “elector” in relation to a constituency as a person whose
name is enrolled in the constituency’s electoral roll and is not subject to disqualifications
mention in Section 16 of the Act. Section 16 of the Act did not include any element that was the
ground of setting aside set b the Madras High Court

Hence, the main issue in front of the Apex Court was; whether the representative of the
Graduates should also be a graduate to stand in the election?

Ratio

The Apex court stated that the language and the legislative history of Article 171 and 173 of the
Constitution as well as the Section 6 of the Representation of People Act enables it to presume
a deliberate omission of the qualificational requirement of a representative. It further added
that no absurdity arises as a result of such presumption. The Hon’ble court held that by adding
a necessary or implied condition to become a representative of graduates, the High Court had
invaded the legislative sphere and added that such defect could only be removed by law made
by any enactment of the Parliament. The court concluded by saying that the appellant
possesses all the qualifications laid down for such a candidate and set aside the Madras High
Court’s Judgment.

Case Comment/ Analysis

The Hon’ble Apex Court incorporated the Golden Rule of interpretation to interpret the laws at
issue and subsequently deviate from the judgment of the High Court. The court construed the
term “electorate” in a plain and ordinary manner to mean a body of persons who elect. It held
in its judgment that within its ambit, the term does not contain any extended notion. Thus the
court interpreted the law in a way by which the term “electorate” in the Constitution, could
not, by itself impose a limit upon the field of choice of members of the electorate by requiring
that the person to be chosen must also be a member of the electorate.