Page |1

______________________________________________________________________________

SUBJECT – Interpretation of Statutes.

TOPIC – Analyze the principle of literal rule of

interpretation in light of the judgment, High Court Of
Judicature for Rajasthan V. P.P. Singh AIR 2003 SC 1029.

Research Asst. in Law

SRUTI DAS GUPTA..

NAME: RATUL KHANDAKAR

ROLL NO.: 24
COURSE: 3YRARS L.L.B 3RD SEMESTER
 Page |2

ACKNOWLEDGEMENT

With profound gratitude and sense of indebtedness I place on record my sincerest thanks to Sruti

Das Gupta, Assistant Professor in Law, Indian Institute of Legal Studies, for her invaluable

guidance, sound advice and affectionate attitude during the course of my studies.

I have no hesitation in saying that he/she molded raw clay into whatever I am through his/her

incessant efforts and keen interest shown throughout my academic pursuit. It is due to his/her

patient guidance that I have been able to complete the task.

I would also thank the Indian institute of Legal Studies Library for the wealth of information

therein. I also express my regards to the Library staff for cooperating and making available the

books for this project research paper.

Finally, I thank my beloved parents for supporting me morally and guiding me throughout the

project work.

DATE : RATUL KHANDAKAR

3 YEARS L.L.B 3RD SEMESTER

 Page |3

TABLE OF CONTENTS
__________________________________________________________

Acknowledgement…………………………………………………….……………………………………..…………………2
Research Methodology……………………………………….………………………………..……………………….4 - 5
A. Aims and Objectives……………………………………………………………………..……………………………4
B. Statement of Problem……………………………………………………………………….……………………….4
C. Research Hypothesis…………………………………………………….…………………….……………………..4
D. Research Questions……………………………………………………….….……………..………………………4
E. Methodology of Research…………………………………………….……………….……………………………5
F. Scope and Limitations……………………………………………………………………..………………………..5
G. Review of Literature…………………………………………………………..…………….…………………………5
H. Mode of Citation…………………………………………………………………………….…………………………..5
Table of Cases……………………………………………………………………………………………….…………………….6
Chapter – I: Introduction……………………………………………………………..…………….………………………7
Chapter II: Project Topic
A. Sub Categorizatoin
B. Sub Categorizatoin
C. Sub Categorizatoin
Chapter III: project Topic
Chapter IV: Case Study
A. Provisions of Law
B. Facts of the case
C. Issues Involved
D. Judgments referred by the parties
E. Judgments referred by the Court
F. Maxims Used
G. Judgment
H. Own Observation
I. Conclusion
Chapter V: Conclusion…………………………………………………………………….…………………………....23
 Page |4

Bibliography

RESEARCH METHODOLOGY
___________________________________________________________

A. AIMS AND OBJECTIVES

The aims and objectives of this project are to understand the concepts of Capital Gains, the
purpose of having provisions which gives inclusive concept of Direct Taxes. One of the aims of
the project is to have a comparative study on the topic, concept of Capital Rains with respect of
Direct Taxes in India.

B. STATEMENT OF PROBLEM

Despite the laws and Acts, the current systems do not give an equal chance to access and
flourish. Though we have various Laws and Statutes yet essential things are missed out and very
few literates know the proper meaning and nature of Capital Gains. As such many of us are still
in dark as to what includes the term Assets on which Capital gains is to be computed and how to
compute the same.

C. RESEARCH HYPOTHESIS

This research work is an attempt to distill lessons from the concept of Capital Gains. It is an
attempt to know the concept of various terminologies within the concept of Capital Gains and
how they are very much needed in our present Taxation system prevailing.

D. RESEARCH QUESTIONS

Based on the statement of problem and research hypothesis aforementioned, the following
research questions have been formulated:
1. What Assets are to be taken into account for computing Capital Gains?
2. How is Income from Capital Gains computed as per Indian Taxation System?
 Page |5

3. How is the Residential status of an assessee determined for computation of income arising
from capital gains?

E. METHODOLOGY OF RESEARCH

“Methodology” implies more than simply the methods the researcher used to collect data. It is
often necessary to include a consideration of the concepts and theories which underlie the
methods. The methodology opted for the study on the topic is Doctrinal. Doctrinal research in
law field indicates arranging, ordering and analysis of the legal structure, legal frame work and
case laws by extensive surveying of legal literature but without any field work.

F. SCOPE AND LIMITATIONS

The research work discusses the key points that the Learned Court observed as well as what is
deduced after going through the research work. Capital Gains topic being very vast like ocean,
the work is limited to the project topic.

G. REVIEW OF LITERATURE

The researcher while writing this project has taken recourse to various primary and secondary
sources. Primary sources would include various laws, books and articles. Secondary sources
would include reports and websites.

H. MODE OF CITATION

A uniform Blue Book Mode of citation has been adopted throughout the project.
 Page |6

TABLE OF CASES

1. Cutter v Eagle Star Insurance Co Ltd (1997

2. Whiteley v Chappell 

3. Bangalore University v St John's Medical College,

4. Namit Sharma Vs Union of India

 Page |7

CHAPTER – I : INTRODUCTION

Salmond defines “interpretation” as “a process by which the Court seeks the meaning of
Legislature through the medium of authoritative forms in which it expresses”. The purpose of
interpretation is always to find out what the statute stands for, what is the defect it intends to
remove and what is the remedy it seeks to advance. Judges are not at liberty to add or take from
or modify the letter of the law, simply because they have reason to believe that the true sententia
legi is not completely or correctly expressed by the law. The duty of the Court is to discover and
act upon the true intention of the legislature.

            The Supreme Court in Institute of Chartered Accountants of India vs. M/s. Price
Waterhouse, while lamenting the scant attention paid by draftsman to the language of statutes,
referred to the British jingle “I am the Parliamentary draftsman. I compose the country’s laws.
And of half of the litigation, I am undoubtedly the cause”. Reference was also made to Kirby vs.
Leather, where the Court observed that the provision of the (UK) Limitation Act, 1939 was so
obscure “that the draftsman must have been of unsound mind”. Construction of statutes and
interpretation of laws should obviously cover all areas affecting the rights of the citizens
.
            The art of judicial interpretation, according to Krishna Iyer, J., Supreme Court, is imbued
with creativity and realism …. Legal Darwinism adapting the rule of law to new societal
developments, so as to survive and serve the social order, is necessary
 Page |8

CHAPTER II

The Literal Rule of Interpretation

The literal rule is a type of statutory construction, which dictates that statutes are to be
interpreted using the ordinary meaning of the language of the statute unless a statute explicitly
defines some of its terms otherwise. In other words, the law is to read, word for word and should
not divert from its true meaning. According to the plain meaning rule, absent a contrary
definition within the statute, words must be given their plain, ordinary and literal meaning. If the
words are clear, they must be applied, even though the intention of the legislator may have been
different or the result is harsh or undesirable. In this case Lord Esher said (in applying a literal
approach) "If the words of an Act are clear then you must follow them even if they lead to a
manifest absurdity. The court has nothing to do with the question whether the legislature has
committed an absurdity." The literal rule - developed in the early nineteenth century - has been
the main rule applied ever since then. However, there are variations on this (the golden rule and
mischief rule). Fisher V Bell a shopkeeper displayed a flick-knife in his window. The Restriction
of Offensive Weapons Act 1959 made it an offence to offer such a knife for sale. The defendant
argued that a display of anything in a show window is simply an offer to treat and this means
that, under contract law, it is the customer who makes the offer to buy the knife. Here the court
considered that Parliament knew the technical law, at Common Law, of the term 'offer'. Whitely
V Chappell in this case the defendant was charged under a section that made it an offence to
impersonate 'any person entitled to vote'. D had pretended to be a person whose name was on the
voter's list, but had died. The Court held that he was not guilty since a dead person is not, in the
literal meaning of the words, 'entitled to vote'. Cheeseman V DDP 'willfully and indecently
exposing his person in a street to the annoyance of passengers'. Police Officers were stationed in
a public lavatory in order to apprehend persons who were committing acts which had given rise
 Page |9

to earlier complaints. The police officers were not resorting to that place of public resort in the
ordinary way but for a special purpose and thus they were not passengers. This is also an
example of the literal rule to statutory interpretation. 

2.1 DEFINITION

The literal rule involves applying the ’plain, ordinary literal meaning’ of words – even if this could lead
to a manifest absurdity.  (Lord Esher in R v City of London Court).  The judge will be assisted by
references to a dictionary as these will give the plain ordinary meaning of words.  It is likely that
reference will be made to a dictionary in common use such as the Oxford English Dictionary.

In addition some care will need to be taken to use a dictionary in use at the time the legislation was
passed.  This is because the courts recognise that the meaning of words may change with the passing of
time.  Once the meaning of the particular word has been ascertained at the time the Act was passed, the
court will then need to consider how this meaning relates to present day usage and circumstances.  This
was so in the case of R v Cheeseman which involved acts of indecency in some public toilets which is an
offence under the Town Police Clauses Act 1847.  The court had to determine the meaning of the
words ‘street’ and ‘passenger’. It  found that the meaning of 'passenger' did not extend to include police
officers who, acting upon complaint, were waiting for the defendant at the scene, and were therefore not
passengers in the sense of persons using the toilets. Whilst this may be the case some would argue that
such a literal and narrow approach fails to look at the wider picture and purpose for the legislation.
 P a g e | 10

CHAPTER:III

Advantages and Disadvantages of the Literal Rule

Advantages

 the literal rule respects the soverignty of parliament

 the rule encourages certainty and people know where they stand.

 quick decisions can be made

Disadvantages
 it can lead to an unfair or absurd result

 nor does it seem fair that someone would be guilty if they cheated by impersonating a live
person but not if they impersonated a dead person 'Whitely v Chappell'

 it is hard to apply if words have more than one meaning

 the literal rule is inflexible and does not allow judges to use common sense
 P a g e | 11

CHAPTER:IV

Case study

High Court Of Judicature For

vs
P.P. Singh & Anr on 27 January, 2003

The effect of the recommendations of a Committee of two Judges as regards criteria for grant of
selection scale appointed by an Acting Chief Justice which have subsequently been approved by
a Full Court of the High Court is in question in these appeals which arise out of a judgment and
order passed by a Division Bench of Rajasthan High Court dated 23rd November, 2000 in D.B.
Civil Writ Petitions No. 671 of 2000, 987 of 2000 and 1263 of 2000. The High Court of
Rajasthan in exercise of its power conferred upon it under Section 46 of the Rajasthan High
Court Ordinance 1949 read with Article 225 of the Constitution of India and all other powers
enabling it in that behalf made Rules known as Rules of the High Court of Judicature for
Rajasthan, 1952 (hereinafter called and referred to as "the Rules").

The Rules came into force on or about 1st October, 1952. Chapter 3 of the said Rules refers to
Administrative Business of the High Court.

The Rules of the High Court were amended by a Resolution of the Full Court of the High Court
on 26.11.1966; and the relevant portion of the Minutes thereof are as under :-

"Minutes of the proceedings of the Full Court Meeting held on Saturday, the 26th November,
1966, at 11 A.M. in the Chamber of the Hon'ble the Chief Justice.
 P a g e | 12

CHAPTER – V: CONCLUSION

Pepper v. Hart means that the will of Parliament will more frequently be followed, thus
reinforcing parliamentary supremacy. However, it the inevitable result is increased costs as more
research is conducted into Hansard and other sources. Hansard is, of course, not binding on the
courts - there is no reason why they should not ignore the intent of Parliament unless it is
expressed in a statute. Hansard has the same legal status as any other interpretative aid. The
question arises whether Pepper v. Hart affects stare decisis, that is to say whether a court can
overrule an otherwise binding case on the basis of Hansard showing that the previous
construction was wrong. If this question were to be answered in the affirmative, magistrates
courts could overrule the House of Lords. Common sense might suggest that incorrect
interpretations should be overruled, but there is the issue of separation of powers - according to
the traditional doctrine of the separation of powers the judiciary must be free to reject the
Hansard material, since it is nothing more than an interpretative aid, which were it to be binding,
would make Parliament both legislator and interpretor: legislation has traditionally been seen as
an abstract document not tailored to particular situtations, but rather being a list of abstract
principles interpreted and applied in individual cases by the judiciary. Taken this way, to give
Hansard such as status would apparently contravene HA Hayek's conception of the rule of law.
On the other hand it seems rather futile for Parliament to make laws if the courts are not going to
enforce them according to its intention. Other aids Dictionary definitions - this implies a literalist
construction of statutes, since a purposive approach would seek to enforce what Parliament
intended, rather than enforce the meaning of what it said. Legal textbooks Treaties (e.g. EU
treaties), where the law was intended to enact the treaty EU directives
 P a g e | 13

BOBLIOGRAPHY

1. Kafaltiya A.B.,Interpretatation of Statutes, Universal Law Publishing, 2008

2. Bindra, N.S., The Interpretation of Statutes And General Clauses Acts (Central and State)
with Phrases and Words, Law Publishers, Allahabad, 1961.

3. Gandhi, B.M., Interpretation of Statutes, Eastern Book Co., Lucknow, 2006.

4. Singh,G.P., Principles of Statutory Interpretation, Wadwa and Co., Nagpur, 2006.

5. Yog, A.K., Interpretation of Statutes, Modern Law Publishers, New Delhi, 2009.

6. Maxwell, Interpretation of Statutes, P.St. Langan, Lexis Nexis, 10th Edition,New Delhi,
2004

7. Bakshi P.M. , Interpretation of Statutes, Orient Publications., New Delhi (2008)

8. Bhattacharyya. T, The Interpretation of Statutes, Central Law Agency, Allahabad (2009)