ASSIGMENT ON…

Recent Judgments Pronounced by the Supreme court On Literal Rule

of Interpretation

Submitted To Submitted By
Dr. Rakesh Meena Name- Ashish Kumar
Roll. No- 210602
Sub- Interpretation of Statues
Class- LL.M
Course- Department of Law
Session- 2021-2022
Semester- 1st
 INTRODUCTION

The art or process of determining the intended meaning of a written document, such as a
constitution, statute, contract, deed, or will.

The interpretation of written documents is fundamental to the process and PRACTICE OF

LAW. Interpretation takes place whenever the meaning of a legal document must be
determined. Lawyers and judges search for meaning using various interpretive approaches
and rules of construction. In constitutional and statutory law, legal interpretation can be a
contentious issue.

Legal interpretation starts from certain input, such as legal texts and practices, actions and
mental states of certain legal actors, and customs. (It is controversial exactly what the input
should include, though certain texts are central.) And legal interpretation yields an output –
“an interpretation.” The familiar debate concerns which method of getting from the input to
the output is correct. But the more basic issue concerns what the output is supposed to be –
what legal interpretation seeks. (For brevity, I will often write simply of what legal
interpretation seeks; the qualification “by its nature” should be understood.) In the case of
constitutional and statutory provisions, for example, is it the linguistic meaning of the text of
the relevant provision? The provision’s contribution to the content of the law?
The best resolution of disputes? Or something else?

 Literal Rule of Interpretation

The Literal Rule of Interpretation is the oldest rule and is followed to date by the Judges
across the globe. The rationale behind the Literal Rule is that it prevents courts from making
biased decisions when the issue is relating to political matters. This rule also restricts the
Courts from creating new laws through the interpretation of the existing ones. This rule
follows the words of the Legislature and implication of this rule brings certainty in
interpretation as the law would be interpreted exactly as it is provided by the Legislature. As
every coin has two sides, there are some disadvantages of applying the Literal Rule of
Interpretation. This at times results in the provisions being vague and absurd and inconsistent
with the intention of the framers of the Statute. There cannot be a fixed rule for Interpretation
and similarly, a statute cannot be drafted without having multiple interpretations.
Interpretation of statutes is a craft as much as a science and the judges, as craftsmen, select
and apply the appropriate rules as the tools of their trade”.

CASES

1. M/s. Dr. Jaishri Laxmanrao Patil Vs. The Chief Minister & Ors.

Facts of the Case:

 The above appeals have been filed challenging the common judgment of the High
Court dated 27.06.2019 by which judgment several batches of writ petitions have
been decided by the High Court. 
 The state of Maharashtra promulgated an ordinance dated 09.07.2014 providing 16%
reservation in education and public employment to the Maratha community and 5%
reservation to 52 Muslim Communities. The Bombay High Court issued an interim
order staying the ordinance’s implementation. 
 Then, the state of Maharashtra enacted the Socially and Educationally Backward
Classes Act, 2014. This granted 16% reservation to educationally and socially
backward classes, among whom the Maratha community was counted. The Bombay
High Court stayed the implementation of the Act by the order dated 07.04.2016 due to
its semblance to the ordinance.
 Justice Gaikwad Commission recommended 12% and 13% reservation for Marathas
in educational institutions and appointments in public services, respectively. Upon the
recommendations of Justice Gaikwad, Maharashtra passed the Socially and
Educationally Backward Classes Act, 2018 on 29.11.2018. The Act exceeds the
recommended quotas, granting 16% reservation for Marathas in Maharashtra’s state
educational institutions and appointments to public service.

 The constitutional validity of the Socially and Educationally Backward classes Act,
2018 was challenged before the Bombay High Court by several writ petitions. The
Bombay High Court by the order dated 27.06.2019 upheld the constitutional validity
of the Act by reasoning that State governments have the power to increase reservation
beyond the ceiling limit of 50% in extraordinary circumstances justified by
quantifiable data. The Bombay High court held that the Act should not prescribe
 reservations exceeding the Commission’s recommended 12% and 13% in education
and public employment respectively.
 An Appeal was filed before the Supreme Court challenging the socially and
Educationally Backward Classes Act, 2018 passed by the State of Maharashtra. 

Issues:

 Whether Maharashtra State Reservation for Socially and Educationally Backward

Classes (SEBC) Act, 2018 as amended in 2019 granting 12% and 13% reservation for
Maratha community in addition to 50% social reservation is covered by exceptional
circumstances as contemplated by Constitution Bench in Indra Sawhney’s case?

Supreme Court held:

 The Supreme Court held that 50% Limit reservations should not be reconsidered. The
Gaikwad commission, the Bombay HC judgment or the SEBC Act all fail to lay out
an ‘extraordinary situation’ to fall within the exception to this limit. So, the SEBC
Act, insofar as it identifies and grants reservations to Marathas, is struck down.
 The Hon’ble Supreme Court held that the 102nd Constitutional Amendment did take
away States’ powers to identify backward classes. Only the President can notify a list
that identifies them which Parliament can amend thereafter. States can only make
recommendations. However, until that notification is published, which should be done
expeditiously, the existing setup would continue. The Amendment also did not violate
the basic structure of the Constitution. 
 The Hon’ble Supreme Court stated that the Maharashtra Act violates the principle of
equality as embedded in Article 16 of the Indian Constitution. The exceeding of the
reservation limit without there being any extraordinary circumstances violates the
Article 14 and article 16 of the Indian Constitution which makes the enactment ultra
vires, it added. In view of the above, the Hon’ble Supreme Court disposed of the
appeals.
 2. M M Aqua Technologies Ltd Vs. Commissioner Of Income Tax,
Delhi-

Court: Supreme Court of India

Brief:

The appellant company had challenged the order of the High Court that had errored in
interpreting the facts of the case and applicability of Explanation 3C and Section 43B of the
Income Tax Act, 1961, and the impugned judgement of the HC was set aside by this Court
and the appellant was given relief in claiming deductions under Section 43B of the Act.
Citation : LL 2021 SC 373

Date of judgment: August 11, 2021

Judges: RF Nariman, J. BR Gavai, J.

Parties: Appellant: M.M. AQUA TECHNOLOGIES LTD

Respondents: COMMISSIONER OF INCOME TAX, DELHI-III

Subject Whether interest can be said to have been actually paid by the mode of issuing
debentures and can the deduction be claimed for the same under Section 43B of IT Act,
1961?

Overview

 In November 1996, the appellant filed for income tax returns with a loss of
Rs.1,03,18,572/- for the assessment year 1996-1997 and claimed deduction of
Rs.2,84,71,384/- under Section 43B based on the issue of debentures in exchange of
interest to him and payable to financial institutions.
 In 1998, the assessing officer rejected the contention of the appellant on the ground
that it was contrary to Section 43B (d) of the IT Act, 1961 and ineligible for the
deduction.
 The appellant filed an appeal before the Commissioner of Income Tax (Appeals)
(CIT) which was allowed by the CIT and it stated that the creditor of the appellant
had accepted the debentures in lieu of the liability for the outstanding interest, which
was no longer payable by the appellant and it was equal to actual payment under
Section 43B of the Act.
 The CIT allowed the deductions under Section 43B of the IT Act.
 In an appeal by the Income Tax Department, the order of the CIT was upheld by
Income Tax Appellate Tribunal and it was held that Section 43B was introduced in
order to prevent tax evasion by way of not paying interest and also claiming the
deduction.
 The ITAT held that where the two parties have agreed that interest will be paid in the
form of converted debenture, such agreement will be taken as the actual discharge of
liability and the order to invoke the provisions of Section 43B cannot be invoked in
this case.
 The order of the ITAT was challenged by the Revenue Department before the High
Court and the question that came before the HC was whether the funding of the
interest amount by way of a term loan is equal to actual payment as mentioned under
Section 43B of the Act.
 The High Court accepted the plea of the Revenue Department and it dismissed the
review petition of the assesse/appellant by referring to Explanation 3C of Section
43B and holding that it had a retrospective effect and will be applicable to FY 1996-
1997.
 The Senior Advocate appearing on behalf of the Appellant before the Supreme Court
submitted that the question framed by the HC was wrong and therefore it led to the
wrong conclusion.
 He also brought the court’s attention to the fact that Explanation 3C will not be
applicable in this case as interest had not been converted into any loan or borrowing.
Legal Provisions
Section 43B of IT Act, 1961
 Section 43B of the Income Tax Act lays down a list of expenses that are allowed as
deduction from the income under income from business and profession. It allows
some expenses that can be claimed as deduction only in the present year and not in
the year when liability arises towards those expenses.
Explanation 3C to Section 43B Explanation 3C was added to Section 43B
in 2006 to curb the practice of tax evasion, where the assesses were claiming
deduction under Section 43B by converting the interest payable on an existing loan
into a new loan and misusing the Section and this explanation allowed certain
deductions only on actual payments.
Judgment Analysis
 The Court first and foremost looked into the meaning and purpose of Section 43B
and Explanation 3C under the Income Tax Act.
 It remarked into the object of Section 43B and stated that this Section allows certain
deductions on actual payment and that incurring of liability cannot allow a deduction,
but only “actual payment” can allow claiming the deduction.
 The Court referred to the orders passed by the CIT and the ITAT and remarked that
the appellant paid the interest by issuing debentures, which extinguished his liability
to pay interest.
 It was also observed that there was no misuse found of Section 43B and the Court
agreed with the observations of the CIT and the ITAT and Explanation 3C cannot be
applied to this case.
 The Court aimed to clear the ambiguity of the retrospective nature of Explanation 3C
by laying down three major interpretations.
 Firstly, Explanation 3C was added in 2006 with the aim to remove the loopholes in
Section 43B but it was not meant to affect bonafide transactions.
 Secondly, a retrospective provision in a Tax Act, which is "for the removal of
doubts", cannot be presumed to be retrospective, even where such language is used.
 Thirdly, if there is any ambiguity as to the language of Explanation 3C, it will
always be in the favour of the assesse as per the case of Brandy Syndicate v. Inland
Revenue Commissioner.
 The Court noted that the judgement of the High Court, that concluded that the interest
was converted into, was errored and not as per the facts of the case.
  The bench allowed the appeal and set aside the impugned judgement of the High
Court and restored the judgement and order of the ITAT.
Conclusion
The Supreme Court looked into the meaning and definition of Section 43B of the
Income Tax Act, 1961 and the purpose of Explanation 3C that was added to the
Section in 2006. According to the Court’s findings, the Explanation was added to the
Section to prevent the loopholes in the said Section and stop people from evading tax
by turning the interests into fresh loans. The Court also cleared the ambiguity in the
language of Explanation 3C and laid down three interpretations to understand the
language of the said provision.
3. National Spot Exchange Limited ("NSEL") V Mr. Anil Kohli,
Resolution Professional for Dunar Foods Limited

Introduction:
Aggrieved by the order of the National Company Law Appellate Tribunal (NCLAT) refusing
to condone a delay of 44 (forty-four) days in filing an appeal against the order passed by the
National Company Law Tribunal (NCLT), the Appellant (i.e., National Spot Exchange
Limited) preferred an appeal before the Hon'ble Supreme Court of India.

The Division Bench of the Hon'ble Supreme Court, however, dismissed the appeal
stating, inter alia, that the limitation provisions in a special statute (such as the Insolvency
and Bankruptcy Code 2016 (IBC), in the instant set of facts) would not only have to be
construed strictly, but would also override conflicting provisions, if any, of the Limitation
Act 1963 (Limitation Act). Therefore, the Court upheld the order of the NCLAT.

Facts:
The State Bank of India (SBI) had initiated corporate insolvency proceedings before the
NCLT under Section 7 of the IBC against Dunar Foods Limited (Corporate Debtor). The
NCLT admitted the petition and commenced the corporate insolvency resolution process
(CIRP) against the Corporate Debtor. An Interim Resolution Professional (IRP) was
appointed, in line with the established procedure. Thereafter, when the creditors of the
Corporate Debtor were called upon to make their claims by the IRP, the Appellant submitted
its own claims of approximately INR 673.85 crores.  However, the IRP rejected the same in
its entirety (citing that there was no privity of contract between the Appellant and the
Corporate Debtor). Aggrieved by the same, the rejection of claims was challenged by the
Appellant before the NCLT. The NCLT, however, dismissed the application preferred by the
Appellant and upheld the decision of the IRP vide its order dated 6 March 2019.

Being dissatisfied with the said order, the Appellant preferred an appeal before the NCLAT.
However, there was a delay of 44 (forty four) days in filing the said appeal beyond the
statutorily permitted timeline of 30 (thirty) plus15 (fifteen) days, in terms of section 61(2) of
the IBC. The NCLAT, therefore, dismissed the appeal on the grounds of limitation, citing
lack of power to condone delay beyond the period of 45 (forty-five) days.

Points for determination:

The primary question for determination before the Hon'ble Supreme Court was whether the
NCLAT could have condoned the delay beyond the statutory limitation period of 30 (thirty)
plus 15 (fifteen) days and whether, in the alternative, the Hon'ble Supreme Court could
exercise its inherent powers under Article 142 of the Constitution of India to condone such
delay.

Held:
The Hon'ble Supreme Court held that in a situation where the statute itself commands that a
forum cannot condone delay beyond a certain period or can condone a delay up to a certain
number of days but not more, then the same would come under the ambit of legislation and,
therefore, would not be condonable even by taking recourse of the provisions of Article 142
of the Constitution of India. If the legislature intended to allow for the condonation of delay
to any extent, clear provisions contrary to that intent would not exist.

The Court observed that the law (i.e., the IBC), as it stands, does not carve out an exception
for any possible genuine reasons that may hinder the filing of an appeal by a party beyond the
condonable period and, hence, the Courts must necessarily be bound by the same. Hardship,
too, is no ground for the Court to override the Parliamentary mandate.

To reach the aforesaid conclusion, reliance was placed by the Hon'ble Court on, inter alia,
the judgment passed in ONGC Limited v Gujarat Energy Transmission Corporation
Limited1, wherein a delay beyond 120 (one hundred and twenty) days was held non-
condonable as per section 125(2) of the Electricity Act, 2003. The Hon'ble Court also relied
upon the judgments / orders passed in Teri Oat Estates (P) Ltd. v U.T. Chandigarh 2, Popat
Bahiru Govardhane v Special Land Acquisition Officer 3, and in Rohitash Kumar v Om
Prakash Sharma4 and stated that mere hardship, sympathy or sentiment by itself cannot be a
ground for passing an order where no legal right stands due to clear intent of a statute.

On the question of whether the provisions of the IBC would prevail over the provisions of the
Limitation Act, the Court unequivocally held that the provisions of the IBC, being a special
statute, would prevail over the provisions of the Limitation Act, which is a general statute.
Reliance was placed on the decision in Union of India v. Popular Construction
Co.5 wherein, in a similar set of facts, it was held that the Arbitration & Conciliation Act,
1996 being of special nature, the period of limitation specified thereunder (under section 34)
would prevail over the general limitation period of appeal under section 5 of the Limitation
Act.

The Supreme Court held that in view of the settled propositions of law, it cannot be said that
the NCLAT committed any error in dismissing the appeal on the ground of limitation. The
Court also observed that even in the merits of the instant case, the application for the certified
copy of the order passed by the NCLT was made after 34 (thirty-four) days of it being passed
(i.e., beyond the initial 30 (thirty) day limitation period). Thus, the appeal was dismissed.

Conclusion
This verdict continues in the long line of decisions of the Supreme Court and other
subordinate courts providing clear jurisprudence and making it clear that in matters of
limitation, strict interpretation of statute is a must. Even in a genuine situation wherein an
applicant is not able to file an appeal within the statutory period of limitation (and also the
extended timelines), Courts do not have any authority to carve out an exception – as the same
would tantamount to judicial overreach

4. Mr. Anurag Mittal v. Mrs. Shaily Mishra Mittal

In the case, the Appellant was earlier married to one, Ms. Rachna Aggarwal. Following on
the marriage was suspended among the Appellant and Ms. Rachna Aggarwal, nevertheless
the Appellant filed appeals counter to order of dissolution of marriage. Through the pendency
of the appeal, a conclusion was reached between the Appellant and Ms. Rachna Aggarwal on
basis of which the Appellant filed for withdrawal of appeal not in favour of the judgment of
dissolution of marriage. The trigger of action in the case started when the Appellant married
the Respondent even prior to the appeal withdrawn by the High Court in the case.

Thus, the Respondent requested for divorce in the case on the ground that her marriage with
the Appellant was invalid as appeal counter to the decree of divorce in his earlier marriage
was unresolved on the date of their marriage. The Family Court rejected the petition filed by
the Respondent, nevertheless the High Court announced the marriage between the Appellant
and the Respondent held on 06.12.2011 as null and void. Wronged by the judgment of the
High Court, the Appellant has come up to this Court.

Bench’s Verdict

The two-Judge Bench of the Supreme Court while disembarking at its judgment made
reference to the stipulation of Divorced Persons. When marry again as itemized
under Section 15 of the Hindu Marriage Act, 1955.

According to the provision when a marriage has been thawed by a decree of divorce and
moreover there is no right of appeal in contradiction of the decree or, if there is such a right
of appeal, the time for appealing has terminated without an appeal having been presented, or
an appeal has been presented but has been terminated, it shall be lawful for whichever party
to the marriage to marry again.

The Court noted that the prerequisite to Section 15 of the Act stated that it shall not be lawful
for the respective parties to marry again unless at the time of such marriage at least one year
has intervened from the date of the decree in the Court of the first instance. Though, the said
Provision was abolished w.e.f. 27.05.1976.

 The Supreme Court opined that as per the constitutional provision, in case of a
dissolution of marriage, a second marriage shall be lawful merely after dismissal of
the appeal. Still, the Supreme Court has held in the case that the limitation placed on
a second marriage in Section 15 of the Acttill the dismissal of an appeal would not be
relevant to a case where parties have resolved and decided not to carry out the
appeal.
  The Apex Court in the case while expounding on the legitimacy of second marriage in
case of divorce in earlier marriage stated that The Hindu Marriage Act is social
welfare legislation and a beneficent legislation has to be inferred in a manner which
enhances the object of the legislation.
 The Court was of the opinion that the Act proposes to bring about social amendments
and it is well known that this Court cannot deduce a socially beneficial legislation on
the foundation as if the words within are cast in stone.
 When is it Legalized to Marry over for Divorced Persons- While illuminating on the
legislative intent behind presentation of Section 15 of the Act, the Supreme Court
harangued that it shall be lawful for either party to marry again after dissolution of a
marriage if there is no right of appeal in contradiction of the decree. A second
marriage by either party shall be permitted only after release of an appeal counter to
the decree of divorce, if filed. If there is no right of appeal, the decree of divorce stays
definitive and that either party to the marriage is free to marry again. In case an
appeal is submitted, any marriage prior to dismissal of the appeal shall not be lawful.
 Object of Section 15 of the Hindu Marriage Act, 1955– The Court also remarked that
the object of the provision is to deliver protection to the person who has filed an
appeal in opposition to the decree of disbanding of marriage and to guarantee that the
said appeal is not exasperated. The objective of Section 15 of the Act is to avoid
complications that would occur due to a second marriage in the course of the
pendency of the appeal, in case the decree of dissolution of marriage is overturned.
The protection that is provided by Section 15 is principally to a person who is
opposing the decree of divorce.
5. STATE (NCT OF DELHI) V. BRIJESH SINGH @ARUN
KUMAR AND ANR.

FACTS

 The case falls under Maharashtra Control of Organised Crimes Act, 1999 (here in
after referred to as ‘MCOCA’) Respondent No.1 was involved in committing
unlawful activities along with other members of a crime syndicate since 1985 in an
organised manner. 
  Considering the Magnitude of criminal activities of the respondents and their
organised crime syndicate, the special cell (SB) PS felt that it was necessary to invoke
the stringent provisions of MCOCA. 
 After obtaining the sanction under Section 23(2) of MCOCA from the competent
authority, the Special Court was requested to take cognizance of the offence under

 Sections 3/4 of MCOCA. The Special held that criminal cases of which cognizance
was taken by Courts situated outside Delhi cannot be taken into account for the
purpose of satisfying the ingredients of ‘continuing unlawful activity’ under Section
2(1)(d) of MCOCA. 
 The Appellate-State preferred an appeal before the High Court of Delhi. The High
Court rejected the appeal and hence the appeal before the Apex Court.
ISSUE 

 Whether charge sheets filed in competent Courts outside the National Capital
Territory of Delhi can be taken into account for the purpose of constituting a
“continuing unlawful activity” and
 Whether there can be prosecution under MCOCA without any offence of organised

 Crime being committed within Delhi.

WHAT WAS HELD

 The Court discussed various Judgements on Doctrine of Territorial Nexus. In the case
of Chua Han Mow v. United State the United States Courts of Appeal held that where
the prosecution is justified under the objective territorial and protective principles as
the Petitioner intended to create detrimental effect in the United States and commit
acts which resulted in such effected when heroin was unlawfully brought into the
United States.
 In the case of State of Bombay v. RMD ChamarBaugwala the court recognised the
existence of two elements to establish territorial nexus which are:
 The connection much be real and not illusory, and 
 The liabilities sought to be imposed must be pertinent to that connection.
  The Court held that the charge sheet filed in State of Uttar Pradesh shows clear nexus
between them and the National Capital Territory of Delhi where prosecution was
launched under MCOCA.
 It was of the opinion that there is no distinction between the applicability of the
aforesaid principle to civil or criminal statutes. It was further held that it is sufficient
to examine whether there is a territorial nexus between the charge sheets filed in
competent Court within the State of Uttar Pradesh and the State of NCT. 
 The Court came to the conclusion that such prosecution cannot be said to be invalid
on the ground of extra-territoriality in case the nexus is sufficiently established and
also held that ‘Competent Courts’ in the definition of ‘continuing unlawful activity’ is
not restricted to Courts in Delhi alone.