DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE:
INTERPRETATION OF PENAL STATUTES

SUBJECT: INTERPRETATION OF STATUTES

NAME OF THE FACULTY: Pr0f. Bharat Kumar

NAME OF THE CANDIDATE - POLAM KRISHNA CHAITHANYA

REDDY

ROLL NUMBER - 2017064

SEMESTER - VI
 ACKNOWLEDGEMENT

I w0uld like t0 express my special thanks 0f gratitude t0 my teacher Pr0fess0r Bharat Kumar
wh0 gave me the g0lden 0pp0rtunity t0 d0 pr0ject 0f “INTERPRETATION OF PENAL
STATUTES” which c0vers different aspects 0f which als0 helped me in d0ing a l0t 0f
research and field w0rk and I came t0 kn0w ab0ut s0 many new things I am really thankful t0
sir.
 INTERPRETATION OF PENAL STATUTES
ABSTRACT
The penal statutes pr0vide penalties f0r dis0bedience 0f laws making th0se wh0
dis0bey liable t0 punishment. These type 0f statutes d0esn’t merely redress the victim, but
punishes the wr0ngd0er, s0 that this kind 0f behavi0r will n0t be repeated by him 0r any0ne
else in the s0ciety.
The principle that a statute enacting an 0ffence 0r imp0sing a penalty is t0 be strictly
c0nstrued is n0t 0f universal applicati0n which must necessarily be 0bserved in every case. It
is n0w 0nly 0f limited applicati0n and it serves in the selecti 0n 0f 0ne when tw0 0r m0re
c0nstructi0ns are reas0nably 0pen. The rule was 0riginally ev0lved t0 mitigate the rig0ur 0f
m0nstr0us sentences f0r trivial 0ffences and alth0ugh that necessity and that strictness has
n0w alm0st vanished, the difference in appr0ach made t0 a penal statute as against any 0ther
statute still persists.
Acc0rding t0 L0rd Esher, MR, the settled rule 0f c0nstructi0n 0f penal secti0ns is
that ‘if there is a reas0nable interpretati0n which will av0id the penalty in any particular case
we must ad0pt that c0nstructi0n. If there are tw0 reas0nable c0nstructi0ns we must give the
m0re lenient 0ne.’
Interpretati0n 0f penal pr0visi0ns must be in c0ns0nance with the principles
underlying fundamental rights. Any pr0visi0n which visits an accused with adverse
c0nsequences with0ut aff0rding him any remedy t0 dispr0ve an item 0f evidence which
stands against his inn0cence, is inc0nsistent with the phil0s0phy enshrined in Art 21. It was
held by the Supreme C0urt that they sh0uld s0 interpret such a pr0visi0n as t0 dilute it t0
make it amenable t0 Art 21 0f the C0nstituti0n.
When w0rds empl0yed in a penal statute are n0t clear the principle ‘against d0uble
penalisati0n’ w0uld be applied. Failure t0 c0mply with a statute may attract penalty. But 0nly
because a statute attracts penalty f0r failure t0 c0mply with the statut0ry pr0visi0ns, the same
in all situati0ns w0uld n0t call f0r a strict c0nstructi0n. An interpretati0n which strikes a
balance between enf0rcement 0f law and pr0tecti0n 0f valuable human right 0f accused
(right 0f privacy) must be res0rted t0 Sec. 105 0f the Evidence Act 1872 says that the burden
t0 pr0ve that the case 0f the accused falls within an excepti0n t0 a statut0ry 0ffence lies 0n
him. But the questi0n whether the defence set up by an accused is really a defence 0f an
excepti0n 0r a defence setting up n0n-existence 0f a fact which is an ingredient 0f the
0ffence t0 be pr0ved by the pr0secuti0n depends up0n the c0nstructi0n 0f the particular
statute.
 CHAPTERISATION

1. INTRODUCTION
2. GENERAL RULE
3. STRICT CONSTRUCTION OF PENAL STATUTES
4. PURPOSIVE INTERPRETATION APPROACH
5. RELEVANT CASE LAWS
6. CONCLUSION
7. BIBLIOGRAPHY
 1. INTRODUCTION

The term interpretati0n means “T0 give meaning t0”. G0vernmental p0wer has been
divided int0 three wings namely the legislature, the executive and the judiciary. Interpretati 0n
0f statues t0 render justice is the primary functi0n 0f the judiciary. It is the duty 0f the C0urt
t0 interpret the Act and give meaning t 0 each w0rd 0f the Statute. The m0st c0mm0n rule 0f
interpretati0n is that every part 0f the statute must be underst00d in a harm0ni0us manner by
reading and c0nstruing every part 0f it t0gether. The maxim “A Verbis legis n0n est
recedendum” means that y0u must n0t vary the w0rds 0f the statute while interpreting it. The
0bject 0f interpretati0n 0f statutes is t0 determine the intenti0n 0f the legislature c0nveyed
expressly 0r impliedly in the language used. T0 ensure that justice is made available t0 all,
the judicial system has been ev0lved in all nati0ns. It is extremely imp0rtant and in fact
necessary als0 that the C0urts interpret the law in such a manner that ensures ‘access t 0
justice’ t0 the maximum. F0r this purp0se, the c0ncept 0f ‘Can0ns 0f Interpretati0n’ has
been exp0unded. The Can0ns are th0se rules that have been ev 0lved by the Judiciary t0 help
C0urts determine the meaning and the intent 0f legislati0n.
In a penal law if there appears t 0 be a reas0nable dubiety 0r ambiguity, it shall be
decided in fav0ur 0f the pers0n wh0 w0uld be liable t0 the penalisati0n. If a penal pr0visi0n
fairly be s0 c0nstrued as t0 av0id the punishment, it must be s0 interpreted. If there can be
tw0 reas0nable interpretati0ns 0f a penal pr0visi0n, the m0re lenient sh0uld be made
applicable.
Punishment can be meted t0 0ne 0nly if the plain w0rds extensi0n 0f the meaning 0f
the w0rd is all0wable. A penalty cann0t be imp0sed 0n the basis that the 0bject 0f the statute
s0 desired. Acc0rding t0 Maxwell, “the prerequisite 0f express language f0r the creati0n 0f
an 0ffence, in interpreting strictly w0rds setting 0ut the elements 0f an 0ffence in requiring
the fulfilment t0 the letter 0f statut0ry c0nditi0ns precedent t0 the inflicti0n 0f punishment;
and in insisting 0n the strict 0bservance 0f technical pr0visi0ns c0ncerning criminal
pr0cedure and jurisdicti0n.”
Unless the w0rds 0f a statute clearly made an act criminal, it shall n 0t be c0nstrued as
criminal. If there is any ambiguity in the w0rds which set 0ut the elements 0f an act 0r
0missi0n declared t0 be an 0ffence, s0 that it is d0ubtful whether the act 0r 0missi0n falls
within the statut0ry w0rds, the ambiguity will be res0lved in fav0ur 0f the pers0n charged.
The c0urt will inflict punishment 0n a pers0n 0nly when the circumstances 0f the case fall
unambigu0usly fall under the letter 0f the law. Legislati0n which deals with the jurisdicti 0n
and the pr0cedure relati0n t0 imp0siti0n 0f the penalties will be strictly c0nstrued. Where
certain pr0cedural requirements have been laid d0wn by a statute t0 be c0mpleted in a statute
dealing with punishments, the c0urt is duty b0und t0 see that all these requirements have
been c0mplied with bef0re sentencing the accused. In case 0f any d0ubt the benefit has t0 g0
t0 the accused even up t0 the extent 0f acquitting him 0n s0me technical gr0unds. Penal
pr0visi0n cann0t be extended by implicati0n t0 a particular case 0r circumstances. The rule
exhibits a preference f0r the liberty 0f the subject and in a case 0f ambiguity enables the
c0urt t0 res0lve the d0ubt in fav0ur 0f the subject and against the Legislature which has
failed t0 express itself clearly, but this rule is n 0w-a-days 0f limited applicati0n. The rule was
0riginally ev0lved t0 mitigate the rig0urs 0f m0nstr0us sentences 0f trivial 0ffences and
alth0ugh the necessity and that strictness have n0w vanished, the difference in appr0ach
made t0 penal statute as against any 0ther statute still persists.
 2. GENERAL RULE

The general rule g0verning the interpretati0n 0f penal statute is that it must be strictly
c0nstrued. Strict interpretati0n in the w0rds 0f Crawf0rd c0nn0tes:
“If a statute is t0 be strictly c0nstrued, n0thing sh0uld be included within its sc0pe that d0es
n0t c0me clearly within the meaning 0f the language used. Its language must be given exact
and technical meaning with n0 extensi0n 0n acc0unt 0f implicati0ns 0r equitable
c0nsiderati0ns; 0r has been aptly asserted, its 0perati0n must be c0nfined t0 cases c0ming
clearly within the letter 0f the statute as well as within its spirit and reas 0n. Or stated perhaps
m0re c0ncisely, it is cl0se and c0nservative adherence t0 the literal 0r textual interpretati0n”
Interpretati0n 0f penal pr0visi0ns must be in c0ns0nance with the principles
underlying fundamental rights. Any pr0visi0n which visits an accused with adverse
c0nsequences with0ut aff0rding him any remedy t0 dispr0ve an item 0f evidence which
stands against his inn0cence, is inc0nsistent with the phil0s0phy enshrined in Art 21. It was
held by the Supreme C0urt that they sh0uld s0 interpret such a pr0visi0n as t0 dilute it t0
make it amenable t0 Art 21 0f the C0nstituti0n.
If a statute laid a mandat0ry duty but pr0vided n0 m0de f0r enf0rcing it, the
presumpti0n in ancient days was that the pers0n in breach 0f the duty c0uld be made liable
f0r the 0ffence 0f c0ntempt 0f the statute. This rule 0f c0nstructi0n is 0bs0lete and n0w has
n0 applicati0n t0 a m0dern statute. Clear language is n0w needed t0 create a crime. “A penal
pr0visi0n must be definite”. It is a basic rule 0f legal jurisprudence that than an enactment is
v0id f0r vagueness if its pr0hibiti0ns are n0t clearly defined. P0ll0ck, CB said: “whether
there be any difference left between a criminal statute and any 0ther statute n0t creating
0ffence, I sh0uld say that in criminal statute y 0u must be quite sure that the 0ffence charged
is within the letter 0f the law.”
In the case 0f Feroze N. Dotivalaz v. P.M Wadhwani and co.,1 this c0urt stated:
“Generally, 0rdinary meaning is t0 be assigned t0 any w0rd 0r phrase used 0r defined in a
statute. Theref0re, unless there is any vagueness 0r ambiguity, n0 0ccasi0n will arise t0
interpret the term in a manner which may add s0mething t0 the meaning 0f the w0rd which
0rdinarily d0es n0t s0 mean by the definiti0n itself, m0re particularly, where it is a restrictive
definiti0n. Unless there are c0mpelling reas0ns t0 d0 s0, meaning 0f a restrictive and
1
2002 Supp(4) SCR 416
exhaustive definiti0n w0uld n0t be expanded 0r made extensive t0 embrace things which are
strictly n0t within the meaning 0f the w0rd as defined.”

3. STRICT CONSTRUCTION OF PENAL STATUTES

Anticipati0n 0f future events leads t0 the use 0f indeterminate terms. The imp0ssible
task 0f anticipating every p0ssible scenari0 als0 leads t0 the use 0f indeterminate language.
Judges theref0re have t0 interpret statutes because 0f the gaps in law. Examples 0f
indeterminate language include w0rds such as “reas0nable”. In this case the c0urts are
resp0nsible f0r determining what c0nstitutes the w0rd “reas0nable”.
A statute enacting an 0ffence 0r imp0sing a penalty is strictly c0nstrued. This
rule serves in the selecti0n 0f 0ne when tw0 0r m0re c0nstructi0ns are reas0nably 0pen. The
rule exhibits a preference f0r the liberty 0f the subject and in a case 0f ambiguity enables the
c0urt t0 res0lve the d0ubt in fav0ur 0f the subject and against the Legislature which has
failed t0 express itself clearly.
Virtual Soft Systems Ltd. v. Commissioner of Income Tax (2007) 2 In this case it
was 0bserved that Secti0n 271, Inc0me Tax Act, 1961 is a penal pr 0visi0n and there are well
established principles f0r the interpretati0n 0f such a penal pr0visi0n. Such a pr0visi0n has t0
be c0nstrued strictly and narr0wly and n0t widely 0r with the 0bject 0f advancing the 0bject
and intenti0n 0f the legislature. The statue creating the penalty is the first and the last
c0nsiderati0n and must be c0nstrued within the term and language 0f the particuparticular
statute.
Two interpretations
When w0rds empl0yed in a penal statute are n0t clear the principle ‘against d0uble
penalisati0n’ w0uld be applied. Failure t0 c0mply with a statute may attract penalty. But 0nly
because a statute attracts penalty f0r failure t0 c0mply with the statut0ry pr0visi0ns, the same
in all situati0ns w0uld n0t call f0r a strict c0nstructi0n. An interpretati0n which strikes a
balance between enf0rcement 0f law and pr0tecti0n 0f valuable human right 0f accused
(right 0f privacy) must be res0rted t0. § 105 0f the Evidence Act 1872 says that the burden t0
pr0ve that the case 0f the accused falls within an excepti0n t0 a statut0ry 0ffence lies 0n him.
But the questi0n whether the defence set up by an accused is really a defence 0f an excepti0n
0r a defence setting up n0n-existence 0f a fact which is an ingredient 0f the 0ffence t0 be
pr0ved by the pr0secuti0n depends up0n the c0nstructi0n 0f the particular statute.
2
(2007) 9 SCC 665
 When there are tw0 p0ssible c0nstructi0ns, the c0urt must lean t0wards that
c0nstructi0n which exempts the subject fr0m penalty, rather than the 0ne which imp0ses
penalty.
It is n0t c0mpetent t0 the c0urt t0 stretch the meaning 0f an expressi0n used by the
legislature in 0rder t0 carry 0ut the intenti0n 0f the legislature. [T0laram Relumal v. State
0f B0mbay (1954)]3
The effect 0f the rule 0f strict c0nstructi0n might alm0st be summed up in the remark
that, where an equiv0cal w0rd 0r an ambigu0us sentence leaves a reas0nable d0ubt 0f its
meaning which the can0ns 0f interpretati0n fail t0 s0lve, the benefit 0f the d0ubt sh0uld be
given t0 the subject and against the legislature which has failed t0 explain itself.

4. PURPOSIVE INTERPRETATION APPROACH

3
1954 AIR 496
 It is n0t necessary that c0urts must always fav0ur the interpretati0n which is
fav0urable t0 the accused and n0t the pr0secuti0n but it may als0 ch0se t0 g0 f0r the
interpretati0n which is c0nsistent with the 0bject pr0vided in the law. In State of
Maharashtra v. Tapas D. Neogy,4 the expressi0n ‘any pr0perty’ in secti0n 102 0f Cr.P.C.
was interpreted t0 be inclusive 0f a ‘bank acc0unt’ and hence a p0lice 0fficer wh0 was
investigating the matter was justified in seizing the same. This principle was first explained
by James, L.J. wh0 stated: “N0 d0ubt all penal statutes are t 0 be c0nstrued strictly, that is t0
say that the c0urt must see that the thing charged as an 0ffence is within the plain meaning 0f
the w0rd used, and must n0t strain the w0rds 0n any n0ti0n that there has been a slip; that
there has been a casus 0missus; that the thing is s0 clearly within the mischief that it must
have been included if th0ught 0f.
In the case 0f Union of India v. Harsoli Devi,5 a C0nstituti0n Bench 0f this c0urt
laid d0wn: - “Bef0re we embark up0n an inquiry as t0 what w0uld be the c0rrect
interpretati0n 0f Secti0n28A, we think it appr0priate t0 bear in mind certain basic principles
0f interpretati0n 0f statute. The rule stated by Tindal, CJ in Sussex Peerage case, (1844) 11
Cl & p.85, still h0lds the field. The af0resaid rule is t0 the effect: “If the w0rds 0f the statute
are in themselves precise and unambigu 0us, then n0 m0re can be necessary than t0 exp0und
th0se w0rds in their natural and 0rdinary sense. The w0rds themselves d0 al0ne in such cases
best declare the intent 0f the lawgiver.”
It is a cardinal principle 0f c0nstructi0n 0f statute that when language 0f the statute is
plain and unambigu0us, then the c0urt must give effect t0 the w0rds used in the statute and it
w0uld n0t be 0pen t0 the c0urts t0 ad0pt a hyp0thetical c0nstructi0n 0n the gr0und that such
c0nstructi0n is m0re c0nsistent with the alleged 0bject and p0licy 0f the Act.
In Kirkness v. John Hudson & Co. Ltd., 6 L0rd Reid p0inted 0ut as t0 what is the
meaning 0f ‘ambigu0us’ and held that – “a pr0visi0n is n0t ambigu0us merely because it
c0ntains a w0rd which in different c0ntext is capable 0f different meanings and it w0uld be
hard t0 find anywhere a sentence 0f any length which d0es n0t c0ntain such a w0rd. A
pr0visi0n is, in my judgment, ambigu0us 0nly if it c0ntains a w0rd 0r phrase which in that
particular c0ntext is capable 0f having m0re than 0ne meaning.” It is n0 d0ubt true mat if 0n
g0ing thr0ugh the plain meaning 0f the language 0f statutes, it leads t0 an0malies, injustices

4
(1997) 7 SCC 685
5
2002 ( 2 ) Suppl. SCR 324
6
[1955] 2 All ER 345
and absurdities, then the c0urt may l00k int0 the purp0se f0r which the statute has been
br0ught and w0uld try t0 give a meaning, which w0uld adhere t0 the purp0se 0f the statute.
Alth0ugh, the pers0n charged has a right t0 say that the thing charged alth 0ugh within
the w0rds, is n0t within the spirit 0f enactment. But where the thing is br 0ught within the
w0rds, and within the spirit, there a penal enactment is t0 be c0nstrued, like any 0ther
instrument, acc0rding t0 the fair c0mm0nsense meaning 0f the language used, and the c0urt
is n0t t0 find 0r make any d0ubt 0r ambiguity in the language 0f the penal statute, where
such a d0ubt 0r ambiguity w0uld clearly n0t be f0und 0r made in the same language in any
0ther enactment.” Subbara0, J., has 0bserved: “the Act (Preventi0n 0f C0rrupti0n Act, 1947)
was br0ught in t0 purify public administrati0n.
When the legislature used the c0mprehensive termin0l0gy- t0 achieve the said
purp0se, it w0uld be appr0priate n0t t0 limit the c0ntent by c0nstructi0n when particularly
the spirit 0f the statute is in acc0rd with the w0rds used there.” On the same lines H 0n’ble
Supreme C0urt had widely interpreted the F00d Adulterati0n Act, 1954, while expressing the
str0ng disappr0val 0f the narr0w appr0ach 0f c0nstructi0n t0 ensure that the adulterat0rs d0
n0t expl0it the l00ph0les in the Act. Similarly, such pedantic interpretati 0n has n0t been
given in the cases relating t0 secti0n 498A 0f Indian Penal C0de, secti0n 12(2) 0f F0reign
Exchange Regulati0n Act, 1947 etc. The laws which have been framed f 0r supp0rting the
cause 0f 0ffences against w0men have t0 be sternly implemented t0 set an example bef0re
the 0thers which may deter the pr0spective criminals.
Wide and Comprehensive language
If the language used in the statute is c 0mprehensive en0ugh, it can’t be subjected t0 a
strict meaning 0n the pretext that a penal statute is t 0 be c0nstrued strictly. In Eldert0n v.
Kingd0m T0talist0r C0. Ltd. (1945) 2 All ER 624 , it was 0bserved that wide and
c0mprehensive language is used t0 c0ver a particular 0perati0n in questi0n can’t be
restricted.
Suman Sethi v. Ajay K. Churiwal,7
While referring t0 the Preventi0n 0f C0rrupti0n Act 1947, the c0urt laid d0wn that
the Act was br0ught in t0 purify public administrati0n. When the legislature used
c0mprehensive termin0l0gy t0 achieve the said purp0se, it w0uld be appr0priate n0t t0 limit
the c0ntent by c0nstructi0n when particularly the spirit 0f the statute is in acc 0rd with the
w0rds used therein.

7
AIR 2000 SC 828.
Scientific advancements and current meaning -
The rule 0f strict c0nstructi0n d0es n0t als0 prevent the c0urt in interpreting a statute
acc0rding t0 its current meaning and applying the language t0 c0ver the devel0pments in
science and techn0l0gy n0t kn0wn at the time 0f passing the statute.
It is a well settled rule 0f penal jurisprudence that a l00ph0le in the statute can’t be
supplied by the c0urt. In Spicer v. Holt,8the HL made it clear that if in a penal statute a
l00ph0le is f0und, it is n0t f0r the judges t0 cure it, f0r it is danger0us t0 der0gate fr0m the
principle that a citizen has a right t 0 claim that h0ws0ever much his c0nduct may seem t0
deserve punishment, he sh0uld n0t be c0nvicted unless that c0nduct falls fairly within the
definiti0n 0f crime 0f which he is charged.

8
(1976) 3 All ER 71
 6. RELEVANT CASE LAWS

Case 1 : U.P bhumi sudhar nigam v. CIT (2005) 280 ITR 197
FACTS :
Assessee is U.P Bhumi sudhar nigam, a c0mpany 0wned by the State G0vt.. The state
G0vt. has been giving grant in aid t 0 the assessee f0r funding vari0us pr0jects. The assessee
received the grants and placed them in the bank despite the G 0vt. stipulated that the grants
shall be placed in a Pers 0nal Ledger. He received the interest fr 0m the bank f0r the am0unt
placed, and after which the assessee put in separate in this inc0me tax returns as the diversi0n
0f inc0me and the present interest am0unt g0es t0 the g0vt., but he had n0t given it t0 the
g0vt., the assessee argued it is a diversi0n 0f inc0me and it must be exempted fr0m tax as he
is mere h0lder 0f the interest am0unt, he als0 c0ntended that the state G0vt. gave a
stipulati0n that if the m0ney was placed in the bank, the interest w 0uld bel0ng t0 the state.
But the assessee was unable t0 pr0ve the state has issued such stipulati 0n. The A.O
c0ntended that the am0unt is n0t diversi0n 0f inc0me it is applicati0n 0f inc0me as it is
reaching the hands 0f the assessee bef0re g0ing t0 the G0vt.
ISSUES :
1. whether the interest amount is diversion of income or application of income ?
REASONING :
The c0urt interpreted the present case in a clear cut manner and als 0 pr0viding s0me
directi0ns as t0 what am0unts t0 diversi0n and applicati0n 0f inc0me. The c0urt said that the
present inc0me is n0t diversi0n 0f inc0me because the assessee has n0t transferred the
m0ney t0 the g0vt. and neither d0es an 0verriding title 0ver the interest am0unt lies here as
the g0vt. has n0t claimed the interest rate in any stipulati 0n n0r the assesse is h0lding it f0r
the sake 0f g0vt. he just merely categ0rized the inc0me as he sh0uld send it t0 the g0vt., but
he didn’t. The c0urt held that the tax was rightly charged.
CONCLUSION :
The c0urt here has interpreted the present d 0ctrine in its best f0rm as it helps the
c0rrect pers0ns t0 claim exempti0n fr0m this interpretati0n, it has been in relati 0n t0 the
facts and the pr0visi0n, the present facts als0 helped the c0urt t0 interpret the d0ctrine in a its
best f0rm t0 understand the d0ctrine.
CASE 2 : Sujit Tiwari v. State of Gujarat and ors. MANU/SC/0097/2020
FACTS :
The Indian C0ast Guard intercepted the vessel. It was alleged that the Master 0f ship
when questi0ned admitted that they were carrying c 0ntraband substance in the nature 0f
narc0tics in the ship. Inf0rmati0n in this regard was given t0 the Narc0tics C0ntr0l Bureau.
The NCB carried 0ut investigati0n and after c0mpleting s0me investigati0n, filed a
c0mplaint bef0re the Special Judge, NDPS C0urt against the Master and the crew members
and 0ther pers0ns including the Appellant, wh0 was the br0ther 0f the Master 0f the ship. In
the c0mplaint it was menti0ned that a substance which was a light br0wnish p0wder which
0n testing gave p0sitive result f0r her0in f0und fr0m the ship. Thereafter, all the pers 0ns i.e.,
Master and crew 0f the ship were detained and the c0ntraband substance was 0ff-l0aded fr0m
the vessel and taken t0 the premises 0f the p0lice auth0rities. Thereafter, the narc0tic
substance was weighed, samples were taken and further investigati 0n was d0ne. The
allegati0n against the Appellant was that he was part 0f the c0nspiracy t0 smuggle the huge
quantity 0f c0ntraband int0 India and theref0re he sh0uld n0t be granted bail.
ISSUES
1. Can Bail be given under sec 37 0f NDPS act 1985 t0 the appellant wh0 is a part 0f
the c0nspiracy t0 smuggle c0ntraband ?
REASONING
At this stage, with0ut g0ing int0 the merits, this c0urt feel that the case 0f the
Appellant was t0tally different fr0m the 0ther Accused. Reas0nable p0ssibility was there that
he may be acquitted. He had been behind bars since his arrest i.e. f 0r m0re than tw0 years
and he was a y0ung man. He was a B. Tech. Graduate. Theref0re, under facts and
circumstances 0f this case, this was a fit case where the Appellant is entitled t 0 bail because
there was a p0ssibility that he was unaware 0f the illegal activities 0f his br0ther and the
0ther crew members. The case 0f the Appellant was different fr0m that 0f all the 0ther
Accused, whether it be the Master 0f the ship, the crew members 0r the pers0ns wh0
intr0duced the Master t0 the pr0spective buyers and the pr0spective buyers.
COCNLUSION
Even th0ugh the case is still preliminary, and merits n0t have b00k l00ked yet the
appellant’s case is Prima Facie a different 0ne t0 the case 0f the accused, s0 the appellant has
been released, but with stringent measures. Here c0urt interpreted the penal statute in a
reas0nable manner as per the facts. Had it been the accused, the c0urt w0uld never have
granted the bail as the statute f0rbids it.
CASE 3 : Sukhdev Singh v State of Haryana AIR 2013 SC 953
FACTS :
A search was c0nducted under Narc0tic Drugs and Psych0tr0pic substances Act 1985
h0urs after receipt 0f the inf0rmati0n and n0 eff0rt was made by the investigating 0fficer t0
reduce the inf0rmati0n int0 writing and inf0rm his higher auth0rities instantly 0r even after a
reas0nable delay. N0 evidence was pr0duced t0 sh0w as t0 what prevented him fr0m
rec0rding the inf0rmati0n and sending the same t0 his superi0r. There was thus a t0tal n0n-
c0mpliance 0f Secti0n 42 0f the Act.
ISSUES :
1. whether the accused can be acquitted on the ground that the investigation officer
failed to collect evidence ?
REASONING
The Supreme C0urt held that such defect is incurable and the accused was liable t0 be
acquitted. Acc0rding t0 sec. 42 0f the NDPS act 1985, the 0fficer if he receives any
inf0rmati0n, he shall take it 0n rec0rd and shall submit it t0 his 0fficial superi0r within 72
h0urs, here the 0fficer has n0t d0ne it. The rec0rding 0f such inf0rmati0n is a part 0f the
investigati0n pr0cedure and n0t rec0rding it is fatal t0 the investigati0n, the act als0 clearly
pr0vides it as a pr0cedure which was ign0red by the 0fficer.
CONCLUSION
It is settled principle 0f interpretati0n 0f Criminal Jurisprudence that the pr0visi0ns
have t0 he strictly c0nstrued and cann0t be given a retr0spective effect unless legislative
intent and expressi0n is clear bey0nd ambiguity. The amendments t0 criminal law w0uld n0t
intent that there sh0uld be undue delay in disp0sal 0f criminal trials 0r there sh0uld be retrial
just because the law has changed. Such an appr0ach w0uld be c0ntrary t0 the d0ctrine 0f
finality as well as av0idance 0f delay in c0nclusi0n 0f criminal trial.
CASE 4 : Ashok Kumar v State of Haryana
FACTS
There was an allegati 0n that the accused husband and in-laws 0f the deceased used t0
harass and beat her and 0n the fateful day they burnt her f0r n0t bringing en0ugh d0wry.
ISSUES :
1. Can every demand by the husband 0r his family members cann0t be termed as
`d0wry demand' within the meaning 0f Secti0n 2 read with Secti0n 4 0f the D0wry
Pr0hibiti0n Act, 1961?
2. Can the death 0f the deceased be termed as a `d0wry death' within the ambit and
sc0pe 0f Secti0n 304-B 0f the Indian Penal C0de?
REASONING
The Supreme C0urt held that the expressi0n ‘in c0nnecti0n with any demand f0r
d0wry’ in Secti0n 304-B 0f the Indian Penal c0de cann0t be given a restricted 0r narr0wer
meaning. The 0bject being that everything which is 0ffending at any time, that is t0 say, at ,
bef0re 0r after marriage , w0uld be c0vered under this definiti0n , but the demand 0f d0wry
has t0 be ‘in c0nnecti0n with the marriage’ and n0 s0 cust0mary that it w0uld n0t attract the
pr0visi0ns 0f this secti0n. The expressi0n ‘s00n bef0re her death’ must be underst00d in
c0mm0n parlance. The c0ncept 0f reas0nable time is the best criteri 0n t0 be applied. There
must be existence 0f pr0ximate link between the acts 0f cruelty al0ng with demand f0r
d0wry and death 0f the victim. In view 0f the accused pers0ns were c0nvicted under secti0n
304-B, Indian Penal C0de.
CONCLUSION
It is a settled can0n 0f criminal jurisprudence that the questi0n 0f law has t0 be
examined in light 0f the facts and circumstances 0f a given case. This penal secti 0n clearly
spells 0ut the basic ingredients as well as the matters which required t0 be c0nstrued strictly.
CASE 5 : Appasaheb v State of Maharashtra AIR 2007 SC 763
FACTS :
The deceased Bhimabai was daughter 0f PW.1 Tukaram Eknath Tambe resident 0f
village Sanjkheda and she was married t0 appellant n0. 1 Appasaheb s0n 0f Sheshra0
Palaskar ab0ut tw0 and half years pri0r t0 the date 0f incident which t00k place 0n
15.9.1991. The appellant n0. 2, Kadubai is the m 0ther 0f the appellant n0. 1 and b0th the
appellants were residing in the same h0use in village Palshi. Acc0rding t0 the case 0f
pr0secuti0n, a sum 0f Rs. 5000 and s0me g0ld 0rnaments had been given at the time 0f
marriage 0f Bhimabai. F0r ab0ut six m0nths Bhimabai was treated well but thereafter the
accused started asking her t0 bring Rs. 1,000-1,200 fr0m her parents t0 meet the h0useh0ld
expenses and als0 f0r purchasing manure. Whenever Bhimabai went t0 her parental h0me,
she used t0 tell her parents that her husband and m0ther-in-law (accused appellants) were
harassing her and used t0 0ccasi0nally beat her. Her father PW.1 Tukaram al0ng with s0me
0f his relatives went t0 the h0use 0f the accused and tried t0 persuade them n0t t0 ill-treat
Bhimabai. Thereafter, the accused treated Bhimabai pr0perly but after ab0ut f0ur m0nths
they again started harassing her. A few days bef0re Nag Panchami festival Bhimabai came t0
her parental h0me and c0mplained that the accused were n0t giving her pr0per f00d,
cl0things and even f00twear. She als0 t0ld her parents that her husband had asked her t 0
bring an am0unt 0f Rs.1,000-1,200 f0r the purp0se 0f h0useh0ld expenses and manure. The
case 0f the pr0secuti0n futher is that in the evening 0f 15.9.1991 a pers0n came fr0m village
Palshi 0n a m0t0rcycle and inf0rmed PW.1 Tukaram that Bhimabai was unwell. PW.1 then
immediately went t0 the h0use 0f the accused al0ng with s0me 0f his relatives. There he saw
that Bhimabai was lying dead and fr0th was c0ming 0ut 0f her m0uth which indicated that
she had c0nsumed s0me p0is0n0us substance.
ISSUES
Whether the accused were held liable under secti0n-304B 0f IPC read with Secti0n 2
0f D0wry Pr0hibiti0n Act?
REASONING
Definiti0n 0f the w0rd "d0wry" under sec. 2 0f the d0wry pr0hibiti0n act any
pr0perty 0r valuable security sh0uld be given 0r agreed t0 be given either directly 0r
indirectly at 0r bef0re 0r any time after the marriage and in c 0nnecti0n with the marriage 0f
the said parties. Theref0re, the giving 0r taking 0f pr0perty 0r valuable security must have
s0me c0nnecti0n with the marriage 0f the parties and a c0rrelati0n between the giving 0r
taking 0f pr0perty 0r valuable security with the marriage 0f the parties is essential. Being a
penal pr0visi0n it has t0 be strictly c0nstrued. D0wry is a fairly well kn 0wn s0cial cust0m 0r
practice in India. There is n0 evidence t0 pr0ve that d0wry was taken and there is n0
evidence 0f murder and death due t0 d0wry.
CONCLUSION
The facts we n0 adequate t0 pr0ve the case by the pr0secuti0n, s0 the c0urt acquitted
the accused by interpreting the penal statute which d 0esn’t penalize the accused in the present
scenari0.

CASE 6 : Ranjitsing Brahmajeetsing Sharma v State of Maharashtra and Another,

(2005) 5 SCC 294
FACTS
One Abdul Karim Ladsa Telgi (hereinafter referred t0 as 'Telgi') was
arrested and pr0ceeded against f0r alleged c0mmissi0n 0f 0ffence 0f printing c0unterfeit
stamps and f0rgery in vari0us States including the State 0f Maharashtra. He was l0dged in
Bangal0re Jail since N0vember, 2001. During the Appellant's tenure as C0mmissi0ner
0f P0lice, Pune, fake stamp papers w0rth Rs. 2.98 lacs were seized. On the basis 0f the
inf0rmati0n received by the Appellant and 0n his directi0n t0 intercept the car and 0n his
teleph0nic instructi0n thereab0ut, a first inf0rmati0n rep0rt dated 7.6.2002 was l0dged.
During the c0urse 0f the investigati0n 0f the said case, number 0f places were raided and
huge quantity 0f stamps, printing machinery w0rth Rs. 21,28,47,63,824/- were seized fr0m
several accused pers0ns.
The pr0visi0ns 0f the MCOCA were inv0ked against Telgi wh0 figured as accused
N0. 23 and Mr. Shabir Sheikh, accused N0. 25 0n the gr0und that a peri0d 0f 90 days was
c0ming t0 an end 0n 3.9.2002. On 0r ab0ut 22.11.2002, Mr. Jaiswal, DIG, SRPF, Mumbai
granted an appr0val t0 inv0ke the pr0visi0ns 0f the MCOCA whereup0n DCP, Dr. Jai
Jadhav t00k 0ver investigati0n 0f the said case. Bef0re the High C0urt, the r0le 0f the
Appellant was said t0 be renditi0n 0f help and supp0rt t0 0rganized crime syndicate by
certain acts 0f 0missi0n and c0mmissi0n, i.e., by rendering help 0r supp0rt t0 Mulani, a c0-
accused when he was C0mmissi0ner 0f P0lice, Pune and thr0ugh API- Dilip Kamat, c0-
accused while he was the C0mmissi0ner 0f P0lice, Mumbai.
ISSUES :
Whether interpretati0n 0f Secti0n 21 0f MCOCA have wider interpretati0n?
REASONING :
 It is thus clear 0n a reading 0f English, U.S., Australian and 0ur 0wn Supreme C0urt
judgments that the 'Lakshman Rekha' has in fact been extended t 0 m0ve away fr0m the
strictly literal rule 0f interpretati0n back t0 the rule 0f the 0ld English case 0f Heyd0n, where
the C0urt must have rec0urse t0 the purp0se, 0bject, text, and c0ntext 0f a particular
pr0visi0n bef0re arriving at a judicial result. In fact, the wheel has turned full circle. It started
0ut by the rule as stated in 1584 in Heyd 0n's case, which was then waylaid by the literal
interpretati0n rule laid d0wn by the Privy C0uncil and the H0use 0f L0rds in the mid 1800s,
and has c0me back t0 restate the rule s0mewhat in terms 0f what was m0st felicit0usly put
0ver 400 years ag0 in Heyd0n's case. The pr0visi0ns 0f the said Act, theref0re, must receive
a strict c0nstructi0n s0 as t0 pass the test 0f reas0nableness. The w0rding 0f S. 21(4), in
c0urts 0pini0n, d0es n0t lead t0 the c0nclusi0n that the C0urt must arrive at a p0sitive
finding that the applicant f0r bail has n0t c0mmitted an 0ffence under the Act. If such a
c0nstructi0n is placed, the c0urt intending t0 grant bail must arrive at a finding that the
applicant has n0t c0mmitted such an 0ffence. In such an event, it will be imp 0ssible f0r the
pr0secuti0n t0 0btain a judgment 0f c0nvicti0n 0f the applicant. Such cann0t be the intenti0n
0f the Legislature. S. 21(4) 0f MCOCA, theref0re, must be c0nstrued reas0nably. It must be
s0 c0nstrued that the C0urt is able t0 maintain a delicate balance between a judgment 0f
acquittal and c0nvicti0n and an 0rder granting bail much bef0re c0mmencement 0f trial.
Similarly, the C0urt will be required t0 rec0rd a finding as t0 the p0ssibility 0f his
c0mmitting a crime after grant 0f bail. H0wever, such an 0ffence in futur0 must be an
0ffence under the Act and n0t any 0ther 0ffence. Since it is difficult t 0 predict the future
c0nduct 0f an accused, the c0urt must necessarily c0nsider this aspect 0f the matter having
regard t0 the antecedents 0f the accused, his pr0pensities and the nature and manner in which
he is alleged t0 have c0mmitted the 0ffence.
CONCLUSION :
Here the statute Maharashtra Control of Organised Crime Act, 1999 has been
interpreted in a strict way by giving bail to the appellant.

CASE 7 : Swedish Match Ab & Anr. v Securities & Exchange Board, India & Anr.,
(2004) 11 SCC 641
FACTS :
Wimc0 Limited (Wimc0) is a target c0mpany. Its shares are listed 0n the st0ck
exchanges at Mumbai, Delhi, Calcutta, Kanpur as als0 0n the Nati0nal St0ck Exchange. It is
engaged in the business 0f manufacture and sale 0f a br0ad range 0f safety matches. The
Appellant N0. 1 herein (Swedish Match) is inc0rp0rated in Sweden. It is a h0lding c0mpany
0f the Appellant N0. 2 (S.M.S) h0lding its entire paid up capital. It is als0 a h0lding c0mpany
0f Harav0n Investments Private Limited (Harav0n) and Seed Trading Private Limited . These
f0ur c0mpanies hereinafter w0uld be called and referred t0 as the Swedish Match Gr0up. It
had acquired in the target c0mpany 52.11% shares, i.e., 46.18% by Harav0n and 5.93% by
Seed. AVP Trading Private Limited (AVP) and Plash Fl 00ds P. Ltd. (Plash) were Indian
pr0m0ters 0f the target c0mpany. They bel0ng t0 0ne Jatia Gr0up 0f c0mpanies h0lding
24.11% 0f the share capital 0f the target c0mpany, i.e., AVP h0lding 6.03% and Plash
h0lding 18.08%. The Swedish Match entered int0 an agreement with the Jatia Gr0up t0
acquire maj0rity shareh0lding in Harav0n and Seed and t0 make a public ann0uncement 0f
0ffer t0 acquire 20% shares in Wimc 0. The 0bligati0n t0 make a public ann0uncement 0f
0ffer ar0se in view 0f indirect acquisiti0n 0f m0re than 10% shares in Wimc 0 (in view 0f the
law as prevailing thence) attracting the pr0visi0ns 0f Regulati0n 10 0f the SEBI (Substantial
Acquisiti0n 0f Shares and Take0vers) Regulati0ns, 1997.
ISSUES
The c0re issue which falls f0r 0ur determinati0n is the interpretati0n 0f Regulati0ns
10, 11 and 12. the SEBI (Substantial Acquisiti 0n 0f Shares and Take0vers) Regulati0ns,
1997.
REASONING
held regulati0ns. 10, 11 and 12 0perate in different fields, h0wever where regulati0ns
11 and 12 may 0verlap with each 0ther, in which event, it w 0uld be 0pen t0 the acquirer t0
issue a c0mbined n0tice fulfilling the requirement 0f b0th regulati0ns 11 and 12 - Except in a
situati0n which w0uld bring the case within 0ne 0r the 0ther 'excepti0n clause', the
requirement 0f c0mplying with the mandat0ry requirements t0 make public ann0uncement
cann0t be dispensed with. it is a fit case where this C0urt sh0uld exercise its jurisdicti0n
under Article 142 0f the C0nstituti0n t0 direct the B0ard t0 f0rbear fr0m pr0ceedings with
the adjudicati0n pr0ceeding against the Appellants. This may n0t, h0wever, be treated t0 be a
precedent. These appeals are all0wed in part and t0 the extent menti0ned hereinbef0re.
CONCLUSION
A penal statute indisputably is required t0 be strictly c0nstrued. But a different
situati0n may arise if the penalty is s0ught t0 be levied as a result 0f failure 0n the part 0f the
pers0n statut0rily 0bliged t0 c0mply with the statut0ry pr0visi0ns which are imperative in
nature. There may n0t be any d0ubt 0r dispute as regard the pr0p0siti0n that when w0rds
empl0yed in a penal statute empl0ys are n0t clear, the principle 'against d0ubtful
penalisati0n' w0uld be applied.
CASE 8 : M/S. Govind Impex Private Limited And Others v Appropriate Authority,
Income Tax Department, (2011) 1 SCC 529
Facts:
Appellants, 0wners 0f impugned pr0perty, let 0ut the same at a m0nthly rental 0f
Rs.2,50,000/- w.e.f. 1.06.1991 f0r a peri0d 0f nine years renewable f0r a further peri0d 0f
nine years - Resp0ndent issued sh0w cause n0tice t0 the appellants alleging that since the
lease is f0r a peri0d 0f nine years extendable f0r a further peri0d 0f nine years, it was a lease
f0r a peri0d 0f m0re than 12 years and hence the pr0visi0n 0f Chapter XXC 0f the 1961 Act
w0uld be attracted and the less0r and the lessee were 0bliged t0 submit F0rm 37-1 within 15
days 0f the draft agreement.
Issues:
Whether impugned lease was f0r a peri0d 0f m0re than 12 years and the pr0visi0n 0f Chapter
XXC 0f the 1961 Act w0uld be attracted?
REASONING
There is n0 seri0us dispute in regard t0 the interpretati0n 0f explanati0n t0 Secti0n
269UA(f) 0f the Act and in fact, the c0urt is pr0ceeding 0n an assumpti0n that it will c0ver
0nly such cases where exists pr0visi0n f0r extensi0n in lease deed. In the 0pini0n 0f the
c0urt, what we are required t0 c0nsider is the terms and c0nditi0ns 0f lease. The terms 0f
lease are n0t t0 be interpreted f0ll0wing strict rules 0f c0nstructi0n. One term 0f the lease
cann0t be taken int0 c0nsiderati0n in is0lati0n. Entire d0cument in t0tality has t0 be seen t0
decipher the terms and c0nditi0ns 0f lease. Here in the present case, Clause 1 in n 0 uncertain
term pr0vides f0r extensi0n 0f peri0d 0f lease f0r a further peri0d 0f nine years and clause 12
there0f pr0vides f0r renewal 0n fulfillment 0f certain terms and c0nditi0ns. Theref0re, when
the d0cument is c0nstructed as a wh0le, it is apparent that it pr0vides f0r the extensi0n 0f the
term. If that is taken int0 acc0unt the lease is f0r a peri0d 0f n0t less than twelve years. Once
it is held s0 the explanati0n t0 Secti0n 269UA(f)(i) is clearly attracted.
CONCLUSION
Penal statute which make an act a penal 0ffence 0r imp0se penalty is t0 be strictly
c0nstrued and if tw0 views are p0ssible, 0ne fav0urable t0 the citizen is t0 be 0rdinarily
preferred but this principle has n0 applicati0n in the facts 0f the present case. The
interpretati0n 0f the c0urt here is t0 read the penal statutes strict as they are meant t 0 be
enf0rced whatever the situati0n is present.
CASE 9 : Kishan Chand vs State Of Haryana, (2013) 2 SCC 502
Facts:
The accused/appellant Kishan Chand and Ramphal, the 0ther accused, used t0 smuggle
0pium 0n their Sc00ter N0. HR 31 B 1975. On that day, they were c 0ming 0n Kakrala-
Kakrali R0ad and were 0n their way t0 Bhagal. It was further inf0rmed that up0n nakabandi,
they c0uld be caught red handed and a large quantity 0f 0pium c0uld be rec0vered fr0m the
sc00ter. Kaptan Singh, PW7, then reached T-P 0int, turning Theh Banehra and made the
nakabandi. After 20-25 minutes, b0th the accused came 0n sc00ter fr0m the side 0f Kakrala-
Kakrali. Accused Kishan Chand was driving the sc00ter, whereas accused Ramphal was the
pilli0n rider. Suspecting the presence 0f narc0tic substance in the sc00ter 0f the accused, a
n0tice u/s. 50 0f the Act, Ext. PC was given t 0 b0th the accused and they were asked t 0 get
the sc00ter searched in the presence 0f a Gazetted Officer 0r a Magistrate. The sc00ter was
having a Diggi (T00l b0x) and up0n checking the same, 0pium was rec0vered which was
wrapped in a p0lythene. Fr0m the rec0vered 0pium, 50 grams 0pium was separated f0r the
purp0ses 0f sample and a separate parcel was made 0f the same. On weighing, the residue
0pium was f0und t0 be 3 kg and 750 grams.
Issue:
Whether Secti0n 42 in The Narc0tic Drugs and Psych0tr0pic Substances Act, 1985 was
f0ll0wed during search and seizure?
REASONING
The language 0f Secti0n 42 d0es n0t admit any ambiguity. These are penal pr0visi0ns
and prescribe very harsh punishments f 0r the 0ffender. The questi0n 0f substantial
c0mpliance 0f these pr0visi0ns w0uld am0unt t0 misc0nstructi0n 0f these relevant
pr0visi0ns. It is a settled can0n 0f interpretati0n that the penal pr0visi0ns, particularly with
harsher punishments and with clear intendment 0f the legislature f0r definite c0mpliance,
0ught t0 be c0nstrued strictly. The d0ctrine 0f substantial c0mpliance cann0t be called in aid
t0 answer such interpretati0ns. The principle 0f substantial c0mpliance w0uld be applicable
in the cases where the language 0f the pr0visi0n strictly 0r by necessary implicati0n admits
0f such c0mpliance.
COCNLUSION
Here the penal statute was interpreted strictly and acquitted the accused because 0f
inadequate evidence.
CASE 10 : M/S Virtual Soft Systems Ltd v Commissioner Of Income Tax, Delhi-I
(2007) 9 SCC 665
Facts:
F0r the assessment year 1996-97, the assessee-appellant returned an inc 0me 0f Rs.
1,32,44,507.29 subject t0 depreciati0n. The depreciati0n claimed f0r the year was
Rs.1,47,97,995.01. Acc0rdingly, the appellant filed a ‘nil’ return. By the assessment 0rder
dated 30.03.1999, the Deputy C0mmissi0ner 0f Inc0me-Tax assessed the appellant’s inc0me
at a figure 0f Rs. 47,03,120.00. The C0mmissi0ner 0f Inc0me Tax set aside the 0rder 0f
assessment and directed the Assessing Officer t0 frame a fresh assessment and fresh
pr0ceedings c0ncluded with an 0rder 0f assessment dated 19.03.2002 in which it was f 0und
that the appellant had a l0ss 0f Rs. 11,02,255.00. The Deputy C0mmissi0ner 0f Inc0me Tax
levied a penalty 0f Rs. 31,71,692.00. The C0mmissi0ner 0f Inc0me Tax c0nfirmed the 0rder
0f the assessing 0fficer 0n 24.12.2002. The Tribunal by its 0rder dated 11.05.2004 reversed
the 0rder 0f the C0mmissi0ner 0f Inc0me Tax. Revenue filed an appeal under Secti0n 260A
0f the Act which was all 0wed by the High C0urt by the impugned 0rder. And thus the appeal
t0 Supreme C0urt.
ISSUES:
1. Whether the ITAT was right in deleting the penalty imp0sed u/s. 271(1)(c) 0f the Inc0me
Tax Act, 1961 0n the gr0und that the t0tal inc0me 0f the assessee has been assessed at a
minus figure/l0ss?
REASONING
S. 271 0f the Act is a penal pr 0visi0n and there are well established principles f 0r the
interpretati0n 0f such a penal pr0visi0n. Such a pr0visi0n has t0 be c0nstrued strictly and
narr0wly and n0t widely 0r with the 0bject 0f advancing the 0bject and intenti0n 0f the
legislature. This C0urt as well as the vari0us High C0urts 0f the c0untry have c0nsistently
held that the statute creating the penalty is the first and the last c 0nsiderati0n and must be
c0nstrued within the term and language 0f the particular statute. “Strict c0nstructi0n is the
general rule 0f penal statutes. If tw0 p0ssible and reas0nable c0nstructi0ns can be put up0n a
penal pr0visi0n, the c0urt must lean t0wards that c0nstructi0n which exempts the subject
fr0m penalty rather than the 0ne which imp0ses penalty. It is n0t c0mpetent t0 the c0urt t0
stretch the meaning 0f an expressi0n used by the Legislature in 0rder t0 carry 0ut the
intenti0n 0f the Legislature. The pr0visi0ns 0f S. 271(1)(c)(iii) pri0r t0 1.4.1976, and after its
amendment by the Finance Act, 1975 with effect fr 0m 1.4.1976, later pr0visi0ns being
applicable t0 the assessment year in questi0n, being substantially the same except that in
place 0f the w0rd 'inc0me' in sub cl. (iii) t0 sub cl. (c) 0f S. 271 pri0r t0 its amendment by
Finance Act, 1975, the expressi0n "am0unt 0f tax s0ught t0 be evaded" have been
substituted. The return filed declaring l0ss and assessment made at a reduced l0ss did n0t
warrant any levy 0f penalty within the meaning 0f S. 271 (1)(c)(iii).
Conclusion:
The Appeals are accepted and the impugned judgment is set aside, it is held that pri 0r
t0 its amendment by Finance Act, 2002 in the absence 0f any p0sitive inc0me and n0 tax
being levied, penalty f0r c0ncealment 0f inc0me c0uld n0t be levied. And c0urt has taken
strict interpretati0n.

CASE 11 : Lalita Jalan And Anr v Bombay Gas Co. Ltd. And Ors (2003) 6 SCC 107
Facts:
B0mbay Gas C0. Ltd. resp0ndent n0.l had taken 0n lease a flat in a building kn0wn
as "Hari Bhavan", 64 Pedder R0ad, B0mbay. Shri N.K. Jalan, in his capacity as Direct0r 0f
the C0mpany, was all0tted the said flat. Ash0k Kumar Jalan (accused n0. 1 and resp0ndent
n0.2 in the present appeal) is s0n 0f Shri N.K. Jalan. Appellant n0. 1 Smt. Lalita Jalan
(accused n0. 2) is wife 0f Ash0k Kumar Jalan and appellant n0.2 Siddharth Jalan (accused
n0. 3) is his s0n. Shri N.K. Jalan died in 1967. The c 0mpany purchased the flat and became
0wner there0f in April, 1991. It fled a criminal c 0mplaint under Secti0n 630 0f the
C0mpanies Act, 1956 hereinafter referred t0 as 'the Act' against Ash0k Kumar Jalan, Smt.
Lalita Jalan and Siddharth Jalan 0n March 16, 1994. The pr 0ceedings 0f the c0mplaint case
were stayed in a c0mpany petiti0n and finally s0metime in the year 2001, the learned
Magistrate issued pr0cess against the accused. The appellants m0ved an applicati0n f0r recall
0f the pr0cess issued against them and f0r their discharge, which was rejected by the
Metr0p0litan Magistrate, 14th C0urt, Girgaum, Mumbai by 0rder dated December 1, 2001.
Thereafter, the appellants preferred a petiti0n under Secti0n 482 Cr.P.C. and Article 227 0f
the C0nstituti0n in the High C0urt 0f B0mbay, which was dismissed by the impugned 0rder
dated January 18, 2002.
Issues:
Whether Secti0n 630 0f the Act can apply 0nly t0 an 0fficer 0r empl0yee 0f the c0mpany?
Reasoning:
 The C0mpanies Act is entirely different fr0m th0se statutes which basically deal with
0ffences and punishment like Indian Penal C 0de, Terr0rist and Disruptive Activities
(Preventi0n) Act, etc. It makes pr0visi0n f0r inc0rp0rati0n 0f the c0mpanies, its share capital
and debentures, management and administrati0n, all0tment 0f shares and debentures,
c0nstituti0n 0f B0ard 0f Direct0rs, preventi0n 0f 0ppressi0n and mismanagement, winding-
up 0f the c0mpany etc. The heading 0f part XIII 0f the C0mpanies Act is "General" and a
few pr0visi0n therein, namely, Secti0n 628 t0 631 create 0ffences and als0 prescribe penalty
f0r the same. Having regard t0 the purp0se f0r which Secti0n 630 has been enacted viz. t0
retrieve the pr0perty 0f the c0mpany and the salient features 0f the statute (C0mpanies Act) it
is n0t p0ssible t0 h0ld it as a penal pr0visi0n as the n0rmal attributes 0f crime and
punishment are n0t present here. It cann0t be said t0 be an 0ffence against the s0ciety at large
n0r the 0bject 0f awarding sentence is preventive 0r ref0rmative. In such circumstances the
principle 0f interpretati0n relating t0 criminal statutes that the same sh0uld be strictly
c0nstrued will n0t be applicable. It was further held that the pr0visi0ns have t0 be specially
c0nstrued in a manner which will suppress the mischief and advance the 0bject which the
legislature had in view. The c0ntenti0n raised by learned c0unsel f0r the appellant 0n strict
interpretati0n 0f the Secti0n cann0t theref0re be accepted.
Conclusion:
All th0se wh0 have c0me in p0ssessi0n 0f the premises with the express 0r implied
c0nsent 0f the empl0yee and have n0t vacated the premises w0uld be withh0lding the
delivery 0f the pr0perty t0 the c0mpany and, theref0re, they are liable t0 be pr0secuted under
Secti0n 630 0f the Act. This will include any0ne else wh0 has been inducted in p0ssessi0n 0f
the pr0perty by such pers0ns wh0 c0ntinue t0 withh0ld the p0ssessi0n 0f the premises as
such pers0n is equally resp0nsible f0r withh0lding and n0n- delivery 0f the pr0perty 0f the
c0mpany.Appeal is dismissed.

CASE 12 : Balram Kumawat v Union Of India & Ors., (2003) 7 SCC 628
Facts:
The appellants M/s Unigems had imp0rted mamm0th f0ssil said t0 be 0f an extinct
species in the year 1987. The st0ck 0f mamm0th f0ssil held by the appellants is said t0 be
peri0dically checked by the statut0ry auth0rities. The appellant in the 0ther case Balram
Kumawat is a carver. Mamm0th is said t0 be pre-hist0ric animal which disappeared due t 0
climatic c0nditi0ns prevailing in Alaska and Siberia. Acc0rding t0 the appellants the
distincti0n between mamm0th and elephant iv0ry is that whereas mamm0th bel0ngs t0 an
extinct species, the iv0ry 0f elephant is 0f an extant living animal. The appellants state that
mamm0th iv0ry is distinguishable by visual and n0n-destructive means vis-à-vis elephant
iv0ry and even in C0nventi0n 0n Internati0nal Trade in Endangered Species (CITES) their
distinguishing features have been p0inted 0ut.
Issue:
Whether 'mamm0th iv0ry' imp0rted in India answers the descripti0n 0f the w0rds
'iv0ry imp0rted in India' c0ntained in Wild Life (Pr0tecti0n) Act, 1972 as amended by Act
N0. 44 0f 1991 is the questi0n inv0lved in these appeals which arise 0ut 0f a c0mm0n
judgment and 0rder dated 20.3.1997 passed by a Divisi0n Bench 0f the Delhi High C0urt?
Reasoning:
Even in relati0n t0 a penal statute any narr 0w and pedantic, literal and lexical
c0nstructi0n may n0t always be given effect t0. The law w0uld have t0 be interpreted having
regard t0 the subject matter 0f the 0ffence and the 0bject 0f the law it seeks t0 achieve. The
purp0se 0f the law is n0t t0 all0w the 0ffender t0 sneak 0ut 0f the meshes 0f law. Criminal
Jurisprudence d0es n0t say s0. G.P. Singh in his celebrated treatise 'Principles 0f Statut0ry
Interpretati0n' distinguished between strict c0nstructi0n 0f penal statutes which deals with
crimes 0f aggravated nature vis-à-vis the nature 0f the activities 0f the accused which can be
checked under the 0rdinary criminal law. The rule 0f strict c0nstructi0n d0es n0t als0 prevent
the c0urt in interpreting a statute acc0rding t0 its current meaning and applying the language
t0 c0ver devel0pments in science and techn0l0gy n0t kn0wn at the time 0f passing 0f the
statute. Thus psychiatric injury caused by silent teleph0ne calls was held t0 am0unt t0
'assault' and 'b0dily harm' under secti0ns 20 and 47 0f the Offence Against the Pers0n Act,
1861 in the light 0f the current scientific appreciati0n 0f the link between the b0dy and
psychiatric injury.”
Conclusion:
There is als0 n0 quarrel 0n the pr0p0siti0n 0f law laid d0wn therein f0r the purp0se
0f judging the c0nstituti0nality 0f the statut0ry pr0visi0ns in the light 0f Art. 19 0f the
C0nstituti0n 0f India. The impugned acts fulfill the said criteria. And appeals were dismissed.

CASE 13 : Collector of Central Excise, Ahmedabad v Orient Fabrics Private Limited,

(2004) 1 SCC 597
Facts:
The resp0ndents herein carry 0n business 0f manufacture 0f man made fabrics. They
have alleged t0 have misdiscl0sed the c0mp0siti0n 0f certain s0rts 0f fabrics. They were
further alleged t0 have under valued g00ds by n0t paying duty 0n the am0unt realised
thr0ugh debit n0tes. The C0llect0r, by his 0rder dated 17th N0vember, 1987, c0nfirmed the
levy 0f duty, am0unting t0 Rs. 1,19,453,59. The C0llect0r held that 35 bales 0f Fabric 0f
S0rt N0s. 1200 and 1300 are liable t0 be c0nfiscated, but since the g00ds had already been
released, he appr0priated a sum 0f Rs. 10,000 t0wards the value 0f g00ds. He als0 imp0sed
the penalty 0f Rs. 50,000. Aggrieved, the resp 0ndents preferred appeals bef0re the Central
Excise and G0ld (C0ntr0l) Appellate Tribunal.
Issue:
Whether it is permissible t0 res0rt t0 penalty pr0ceedings 0r f0rfeiture 0f g00ds f0r
n0n-payment 0f additi0nal duty under Secti0n 3(3) 0f Additi0nal Duties Act?
Reasoning:
We are, h0wever, n0t 0blivi0us 0f the fact that p0tential public mischief cann0t be a
gr0und t0 inv0ke the c0urt's interpretative r0le t0 make a new 0ffence. Making 0f legislati0n
is n0t the j0b 0f the judiciary. Making 0f a penal legislati0n by the judiciary is strictly 0ut 0f
its b0und. H0wever. when the law w0rking in the field is clear then what is necessary f 0r it is
t0 find 0ut as t0 whether any 0ffence has been created 0r n0t. Once it is held that the subject-
matter c0mes within the purview 0f the law, the c0urt may n0t d0 further and say by
interpretive reas0ning that the same is n0t s0 created. It is further trite that a penal statute
must receive strict c0nstructi0n. The matter may be c0nsidered fr0m an0ther angle. The
Parliament by reas0n 0f the Amending Act 32 0f 1994 c0nsci0usly br0ught in the expressi0n
'0ffences and penalties' in sub-secti0n (3) 0f Secti0n 3 0f the Act. The mischief rule, if
applied, w0uld clearly sh0w that such amendment was br0ught with a view t0 remedy the
defect c0ntained in the unamended pr0visi0ns 0f sub-secti0n (3) 0f Secti0n 3 0f the Act.
Offences having regard t0 the pr0visi0ns c0ntained in Article 20 0f the C0nstituti0n 0f India
cann0t be given a retr0spective effect. In that view 0f the matter t00 sub-secti0n (3) 0f
Secti0n 3 0f the Act as amended cann0t be said t0 have any applicati0n at all.
Conclusion:
It is held that by applicati0n 0f Strict c0nstructi0n, the c0nfiscati0n pr0ceedings taken
against the resp0ndents and the penalty imp0sed up0n them were t0tally with0ut the
auth0rity 0f law and were rightly set aside by the Tribunal.

CASE 14 : Achal Industries v State of Karnataka, 2019 Indlaw SC 383.

FACTS:
 The appellant is a manufacturer and registered dealer 0f the cashew kernels cashew
shell 0il, etc. Assessments were made f0r the years 1990-91 t0 1999-2000 by the respective
assessing auth0rities under Secti0n 12(3) 0f the Act. Against the assessment 0rders 0f the
assessing auth0rities, appeals/revisi0n petiti0ns were preferred bef0re the appellate/revisi0nal
auth0rity and the c0ntenti0n advanced by the learned c0unsel f0r the appellant was that levy
0f tax under Secti0n 6-B 0f the Act, 0n the t0tal turn0ver is a misc0nstructi0n 0f the
pr0visi0n and it has t0 be 0n the "taxable turn0ver" which may be in c0nf0rmity with Article
286 0f the C0nstituti0n 0f India but that was neither accepted by the assessing auth0rity n0r
at the appellate/revisi0nal stage against which the present appeals have been preferred
impugning the assessments made f0r the years 1990-91 t0 1999-2000 in the instant appeals.
Issue:
Whether Secti0n 6-B(1) includes the ‘turn0ver'?
Reasoning:
The ec0n0mic superi0rity principle f0r the purp0se 0f levy 0f turn0ver tax while
h0lding that the interpretati0n 0f statute w0uld n0t depend up0n c0ntingency. It is trite law
which the C0urt w0uld 0rdinary take rec0urse t0 g0lden rule 0f strict interpretati0n while
interpreting taxing statutes. In c0nstruing penal statutes and taxati0n statutes, the C0urt has t0
apply strict rule 0f interpretati0n. In c0nstruing penal statutes and taxati0n statutes, the C0urt
has t0 apply strict rule 0f interpretati0n. The penal statute which tends t0 deprive a pers0n 0f
right t0 life and liberty has t0 be given strict interpretati0n 0r else many inn0cents might
bec0me victims 0f discreti0nary decisi0n-making. Ins0far as taxati0n statutes are c0ncerned,
Article 265 0f the C0nstituti0n pr0hibits the State fr0m extracting tax fr0m the citizens
with0ut auth0rity 0f law. It is axi0matic that taxati0n statute has t0 be interpreted strictly
because the State cann0t at their whims and fancies burden the citizens with 0ut auth0rity 0f
law. In 0ther w0rds, when the c0mpetent Legislature mandates taxing certain pers0ns/certain
0bjects in certain circumstances, it cann0t be expanded/interpreted t0 include th0se, which
were n0t intended by the legislature.
Conclusion:
The ‘t0tal turn0ver’ in Secti0n 6-B(1) is can’t be read as ‘taxable turn0ver’ and the
determinati0n 0f the rate 0f the turn0ver tax is t0 be ascertained 0n the 'taxable turn0ver' 0n
the face 0f it is unsustainable.

CASE 15 : National Small Industries Corporation Limited v Harmeet Singh Paintal

And Another, (2010) 3 SCC 330.
Facts:
The appellant-Nati0nal Small Industries C0rp0rati0n Limited against the c0mm0n
judgment and 0rder dated 24.10.2007 passed by the High C0urt 0f Delhi at New Delhi in a
batch 0f cases whereby the High C0urt quashed the summ0ning 0rders passed by the trial
C0urt against resp0ndent N0.1 - Harmeet Singh Paintal, u/s. 138 read with S. 141 0f the
Neg0tiable Instruments Act, 1881. The appellant - Nati 0nal Small Industries C0rp0rati0n
Ltd. had filed 12 criminal c 0mplaints u/s. 138 read with Ss. 141 and 142 0f the Act against
M/s Jay Rapid R0ller Limited, a C0mpany inc0rp0rated under the C0mpanies Act, its
Managing Direct0r - Shri Sukhbir Singh Paintal, and its Direct0r - Shri Harmeet Singh
Paintal. It is the claim 0f the appellant that s0 as t0 make the Managing Direct0r and Direct0r
0f the C0mpany liable t0 be pr0secuted under the pr0visi0ns 0f the Act, they had specifically
averred in the c0mplaint that all the accused pers0ns appr0ached it f0r financing 0f bill
integrated market supp0rt pr0gramme. The appellant, 0n 11.01.1999, filed a c0mplaint
bef0re the Metr0p0litan Magistrate, New Delhi against resp0ndent N0.1 and 0thers u/s. 138
read with S. 141 0f the Act. By 0rder dated 04.02.1999, the Metr0p0litan Magistrate, New
Delhi, after rec0rding evidence summ0ned the accused pers0ns including resp0ndent N0.1
herein. Resp0ndent N0.1 filed an applicati0n bef0re the Additi0nal Sessi0ns Judge, Delhi f0r
dr0pping 0f pr0ceedings against him. By 0rder dated 08.09.2004, the Metr0p0litan
Magistrate dismissed the said applicati 0n. Aggrieved by the said 0rder, the resp0ndent filed a
petiti0n u/s. 482 0f the Criminal Pr0cedure C0de bef0re the High C0urt f0r quashing 0f the
c0mplaint. The High C0urt, after finding that the averments against resp0ndent N0.1 are
unspecific and general and n0 particular r0le is assigned t0 the appellant, quashed the
summ0ning 0rder ins0far as it c0ncerned t0 him.
Issues:
Whether the 0rder 0f the High C0urt quashing the summ0ning 0rders ins0far as the
resp0ndents are c0ncerned is sustainable and what sh0uld be the averments in the c0mplaint
u/s. 138 read with S. 141 0f the Act against the Direct 0r 0f a C0mpany bef0re he can be
subjected t0 criminal pr0ceedings?
Reasoning:
Secti0n 141 is a penal pr0visi0n creating vicari0us liability, and which, as per settled
law, must be strictly c0nstrued. It is theref0re, n0t sufficient t0 make a bald curs0ry statement
in a c0mplaint that the Direct0r (arrayed as an accused) is in charge 0f and resp0nsible t0 the
c0mpany f0r the c0nduct 0f the business 0f the c0mpany with0ut anything m0re as t0 the
r0le 0f the Direct0r. But the c0mplaint sh0uld spell 0ut as t0 h0w and in what manner
Resp0ndent 1 was in charge 0f 0r was resp0nsible t0 the accused C0mpany f0r the c0nduct
0f its business. This is in c 0ns0nance with strict interpretati0n 0f penal statutes, especially,
where such statutes create vicari0us liability. A c0mpany may have a number 0f Direct0rs
and t0 make any 0r all the Direct0rs as accused in a c0mplaint merely 0n the basis 0f a
statement that they are in charge 0f and resp0nsible f0r the c0nduct 0f the business 0f the
c0mpany with0ut anything m0re is n0t a sufficient 0r adequate fulfilment 0f the requirements
under Secti0n 141.

Conclusion:
By applying many legal principles and strict interpretati 0n Supreme C0urt is in
agreement with the c0nclusi0n arrived at by the High C 0urt and in the absence 0f specific
averment as t0 the r0le 0f the resp0ndents and particularly in view 0f the acceptable materials
that at the relevant time they were in n0 way c0nnected with the affairs 0f the c0mpany.

CASE 16 : State (NCT of Delhi) v Brijesh Singh @ Arun Kumar and another, AIR 2017
SC 4866
Facts:
Resp0ndent N0.1 was inv0lved in c0mmitting unlawful activities al0ng with 0ther
members 0f a crime syndicate since 1985 in an 0rganized manner. The particulars 0f eight
crimes, the c0gnizance 0f which was taken by the c0mpetent criminal C0urts in and 0utside
Delhi were referred t0. It was als0 menti0ned that Resp0ndents manipulated a fake identity
f0r themselves and have fl0ated several c0mpanies fr0m the ill-g0tten wealth. Several
pr0perties were acquired by these c0mpanies, the details 0f which have been specified in the
pr0p0sal. C0nsidering the magnitude 0f the criminal activities 0f the Resp0ndents and their
0rganised crime syndicate, the inf0rmant felt that it was necessary t0 inv0ke the stringent
pr0visi0ns 0f MCOCA. The particulars 0f 14 members 0f the syndicate was given in the
pr0p0sal and appr0val was s0ught f0r c0nducting a th0r0ugh investigati0n int0 the r0le 0f
each 0f them f0r 0ffences under Secti0n 3 and 4 0f MCOCA.
The Resp0ndents were discharged by the Special Judge MCOCA, New Delhi District,
Patiala H0use, New Delhi in S.C. N0.139 0f 2013 dated 5th February, 2014 pertaining t0
0ffences under Secti0ns 3 and 4 0f the Maharashtra C0ntr0l 0f Organised Crime Act, 1999
(hereinafter referred t0 as 'MCOCA'). The Appellant- State 0f NCT 0f Delhi filed an appeal
under Secti0n 12 0f MCOCA bef0re the High C0urt 0f Delhi which was dismissed 0n 16th
April, 2015. Aggrieved, the Appellant-State has appr0ached this C0urt by filing the ab0ve
Appeal.
Issues:
Whether there c0uld be pr0secuti0n under the Maharashtra C0ntr0l 0f Organised
Crime Act, 1999 with0ut any 0ffence 0f 0rganized crime being c0mmitted within State?
Reasoning:
The principles 0f strict c0nstructi0n have t0 be ad0pted f0r interpretati0n 0f the
pr0visi0ns 0f MCOCA, which is a penal statute9. H0wever, it is n0 m0re res integra that
even a penal pr0visi0n sh0uld be interpreted t0 advance the 0bject which the legislature had
in view. The interpretati 0n 0f Secti0n 2(1)(d) 0f the Pr0tecti0n 0f Children fr0m Sexual
Offences Act, 2012 came up f0r c0nsiderati0n bef0re Supreme C0urt. The c0mmissi0n 0f
crimes like c0ntract killings, ext0rti0n, smuggling in c0ntrabands, illegal trade in narc0tics,
kidnappings f0r rans0m, c0llecti0n 0f pr0tecti0n m0ney and m0ney laundering, etc. by
0rganised crime syndicates was 0n the rise. T0 prevent such 0rganised crime, an immediate
need was felt t0 pr0mulgate a stringent legislati0n. The G0vernment realized that 0rganised
crime syndicates have c0nnecti0ns with terr0rist gangs and were f0stering narc0tic terr0rism
bey0nd the nati0nal b0undaries. MCOCA was pr0mulgated with the 0bject 0f arresting
0rganised crime which was p 0sing a seri0us threat t0 the s0ciety. The interpretati0n 0f the
pr0visi0ns 0f MCOCA sh0uld be made in a manner which w0uld advance the 0bject 0f
MCOCA.
Conclusion:
The w0rds 'c0mpetent C0urt' in Secti0n 2(d) 0f MCOCA is n0t restricted t0 C0urts in
Delhi and charge sheets filed in C0urts in 0ther States can be taken int0 acc0unt f0r the
purp0se 0f c0nstituting c0ntinuing unlawful activity. There cann0t be a pr0secuti0n under
MCOCA with0ut an 0rganised crime being c0mmitted within Delhi.

CASE 17 : Pooja Ravinder Devidasani v State of Maharashtra and another, AIR 2015
SC 675
Facts:
Resp0ndent N0. 2, a finance C0mpany, filed seven c0mplaints under the N.I. Act
against the appellant and 0thers. In all the c0mplaints the allegati0n was that the Resp0ndent
N0. 2 C0mpany had extended trade finance facility t 0 M/S Elite Internati0nal Pvt. Ltd. t0
which the appellant was a Direct0r at the relevant time and several Cheques (119 in number)
issued by M/S Elite Internati0nal Pvt. Ltd. aggregating t0 Rs.8,64,58,810-16, in discharge 0f
its liability t0wards part payment, st00d dish0n0ured with the banker's remarks "insufficient
funds". Acc0rding t0 the c0mplainant, at the material time, the accused (appellant) was in
charge and at the helm 0f affairs 0f M/S Elite Internati0nal Pvt. Ltd. and theref 0re she is
vicari0usly liable f0r the default 0f the C0mpany as she is resp0nsible f0r the c0nduct 0f its
business. Metr0p0litan Magistrate, 12th C0urt, Bandra, Mumbai t00k c0gnizance 0f the
c0mplaints and issued pr0cess against the accused (appellant) f0r the 0ffence punishable u/s.
138 0f the N.I. Act.
Issue:
Whether Direct0r 0f a c0mpany will be vicari0usly liabe=le f0r the acts 0f c0mpany
under secti0n 141 0f NI Act?

Reasoning:
S. 141 is a penal pr0visi0n creating vicari0us liability, and which, as per settled law,
must be strictly c0nstrued. It is theref0re, n0t sufficient t0 make a bald curs0ry statement in a
c0mplaint that the Direct0r (arrayed as an accused) is in charge 0f and resp0nsible t0 the
c0mpany f0r the c0nduct 0f the business 0f the c0mpany with0ut anything m0re as t0 the
r0le 0f the Direct0r. But the c0mplaint sh0uld spell 0ut as t0 h0w and in what manner
Resp0ndent 1 was in charge 0f 0r was resp0nsible t0 the accused C0mpany f0r the c0nduct
0f its business. This is in c 0ns0nance with strict interpretati0n 0f penal statutes, especially,
where such statutes create vicari0us liability. A c0mpany may have a number 0f Direct0rs
and t0 make any 0r all the Direct0rs as accused in a c0mplaint merely 0n the basis 0f a
statement that they are in charge 0f and resp0nsible f0r the c0nduct 0f the business 0f the
c0mpany with0ut anything m0re is n0t a sufficient 0r adequate fulfillment 0f the
requirements u/s. 141.
Conclusion:
Bef0re a Magistrate taking c0gnizance 0f an 0ffence under Secti0n 138/141 0f the
N.I. Act, making a pers 0n vicari0usly liable has t0 ensure strict c0mpliance 0f the statut0ry
requirements.

CASE 18: Excel Crop Care Ltd. v. Competition Commission of India, (2017) 8 SCC 47
Facts:
F00d C0rp0rati0n 0f India wr0te a letter t0 the C0mpetiti0n C0mmissi0n 0f India 0n
February 4, 2011 c0mplaining 0f an anti-c0mpetitive agreement arrived at between M/s.
Excel Cr0p Care Limited, M/s. United Ph0sph0r0us Limited, M/s. Sandhya Organics
Chemicals (P) Ltd, and Agr0synth Chemicals Limited, in relati0n t0 the tenders issued by the
FCI f0r Aluminium Ph0sphide Tablets 0f 3 gms. between the years 2007 and 2009. It was
alleged in this c0mplaint that these f0ur manufactures 0f APT had f0rmed a cartel by
entering int0 an anti-c0mpetitive agreement am0ngst themselves and 0n that basis they had
been submitting their bids f0r the last eight years by qu0ting identical rates in the tenders
invited by the FCI f0r the purchase 0f APT. The appeals arise 0ut 0f the c0mm0n judgement
and 0rder dated Oct0ber 29, 2013 passed by COMPAT. Three appeals are filed by these
manufacturers/suppliers against the findings 0f the COMPAT h0lding that there was
vi0lati0n 0f Secti0ns 3(3)(a), 3(3)(b) and 3(3)(d) 0f the Act 0n the part 0f the appellants t0
declare the findings as untenable and t0 set aside the penalty imp0sed. On the 0ther hand, the
CCI has als0 preferred an appeal against that part 0f the impugned 0rder whereby penalty
imp0sed up0n these suppliers is restricted t0 `relevant turn0ver’ instead 0f `t0tal turn0ver’.
Issues:
Whether penalty under Secti0n 27(b) 0f the Act has t0 be 0n t0tal/entire turn0ver 0f
the 0ffending c0mpany 0r it can be 0nly 0n “relevant turn0ver“, i.e., relating t0 the pr0duct
in questi0n?
Reasoning:
The C0urt finally l00king int0 the matter with reference t0 `turn0ver’ 0f the pers0n 0r
enterprise held that Secti0n 2(y) which defines `turn0ver’ d0es n0t pr0vide any clarity t0 the
af0resaid issue. It 0nly menti0ns that turn0ver includes value 0f g00ds 0r services. In the
absence 0f specific pr0visi0n as t0 whether such turn0ver has t0 be pr0duct specific 0r entire
turn0ver 0f the 0ffending c0mpany, we find that ad0pting the criteria 0f `relevant turn0ver’
f0r the purp0se 0f imp0siti0n 0f penalty will be m0re in tune with eth0s 0f the Act and the
legal principles which surr0und matters pertaining t0 imp0siti0n 0f penalties. F0r the
imp0siti0n 0f penalties, the c0urt emphasized 0n the d0ctrine 0f pr0p0rti0nality h0lding that
the penalties imp0sed 0n ‘t0tal turn0ver’ w0uld n0t have equitable and pr0p0rti0nate results.
The c0urt further applied ‘the d0ctrine 0f strict c0nstructi0n’ arguing that there is n0
justificati0n t0 include 0ther pr0ducts/services 0f an enterprise when imp0sing penalties f0r
c0ntraventi0ns c0mmitted in respect 0f 0nly 0ne pr0duct/service.
Conclusion:
Supreme C0urt gave a tw0 step calculati0n which has t0 be f0ll0wed while imp0sing
the penalty under Secti0n 27 0f the Act i.e., Determinati0n 0f Relevant Turn0ver and
Determinati0n 0f appr0priate percentage 0f penalty based 0n aggravating and mitigating
circumstances. This interpretati0n was br0ught by applying strict rule.
Case 19 :Sakshi v Union Of India, (2004) 5 SCC 518
Facts:
This writ petiti0n u/art. 32 0f the C0nstituti0n has been filed by way 0f public interest
litigati0n by Sakshi, which is an 0rganisati0n t0 pr0vide legal, medical, residential,
psych0l0gical 0r any 0ther help, assistance 0r charitable supp0rt f0r w0men, in particular
th0se wh0 are victims 0f any kind 0f sexual abuse and/0r harassment, vi0lence 0r any kind 0f
atr0city 0r vi0lati0n and is a vi0lence interventi0n centre. The resp0ndents arrayed in the
writ petiti0n are (1) Uni0n 0f India; (2) Ministry 0f Law and Justice; and (3) C 0mmissi0ner
0f P0lice, New Delhi. It is set 0ut in the writ petiti 0n that the petiti0ner has n0ticed with
gr0wing c0ncern the dramatic increase 0f vi0lence, in particular sexual vi0lence against
w0men and children as well as the implementati 0n 0f the pr0visi0ns 0f Indian Penal C0de
namely Secti0ns 377, 375/376 and 354 by the resp0ndent auth0rities.
Issue:
Whether w0rd ‘sexual interc0urse’ has wider ambit in IPC?
Reasoning:
It is well settled that a statute enacting an 0ffence 0r imp0sing a penalty is strictly
c0nstrued. The fact that an enactment is a penal pr0visi0n is in itself a reas0n f0r hesitating
bef0re ascribing t0 phrases used in it a meaning br 0arder than that they w0uld 0rdinarily
bear.
Definiti0n 0f rape, cann0t be enlarged t0 include all f0rms 0f 'penetrati0n'. But definiti0n 0f
rape is restricted 0nly t0 cases 0f penile, vaginal penetrati0n and the w0rd ‘sexual
interc0urse’ 0ccurring in definiti0n 0f rape must be applied strictly. W0rds and phrases in
penal statutes are t0 be c0nstrued strictly.
Conclusion:
Th0ugh in present situati0n the sc0pe 0f rape is wide en0ugh, back then it was strictly
f0ll0wed as per definiti0n.

CASE 20 : CIT V. RANI SHANKAR MISHRA (2010) 320 ITR 542

FACTS :
Assessee was a w0man wh0 applied f0r a j0b in V0ice 0f America (a state 0wned
br0adcasting agency. She cleared c0mpetetive exam, but was n0t 0ffered a j0b. She was 0ne
0f a class wh0 filed a class acti0n law suit 0n the State f0r discriminating 0n basis 0f sex f0r
empl0yment. A settlement was reached up0n by the state paying the w0men inv0lved 508
milli0n USD and empl0yment, fr0m which assessee has als0 g0tten her share. Till the date 0f
receiving the assessee was a resident 0f India, s0 the assessing 0fficer charged Tax f0r the
am0unt received fr0m the settlement under the heading 0f salary.
ISSUES
1. whether the said am0unt w0uld be a salsry under sec. 17(3)(iii) 0f the Inc0me tax
Act 1961
REASONING
The salary menti0ned under sec. 17 w0uld indicate that the receipt w0uld be 0nly in
empl0yment. The receipt can be bef0re 0r after 0r during empl0yment, but the assessee was
nevewr even empl0yed t0 classify the receipts as salary. The c0ncept 0f the salary is reward
f0r the w0rk d0ne. Capital receipts are when 0ne l0ses his right 0n a rightful asset by the way
0f transfer 0r in the present case it is due t0 illegal discriminati0n. Here the assessee is n0t
liable t0 pay any tax.
CONCLUSION
In the present case the c0urt rightly interpreted the penal statute t0 uph0ld the
meaning 0f the statute which was wr0ngly interpreted by the assessing 0fficer.
 6. CONCLUSION

In applying and interpreting a penal statute, public p 0licy is als0 taken int0
c0nsiderati0n. A statute may in certain aspects be a penal enactment and in certain 0thers a
remedial 0ne. In respect 0f th0se pr0visi0ns which are sancti0ned 0n the pain 0f punishment
f0r a crime the rule 0f strict c0nstructi0n in the limited sense may be applied. At any rate, as
undue eff0rt t0 c0nstrue such a pr0visi0n liberally t0 pr0m0te the beneficent purp0se behind
it may be effectively c0unter balanced 0n c0nsiderati0n that a breach there0f leads t0 penal
c0nsequences.
Strict C0nstructi0n means each 0f the w0rds in Statute sh0uld be interpreted by letter
and n0 regard sh0uld be had t0 the spirit bey0nd the statute. Liberal 0r beneficial
c0nstructi0n means the interpretati0n sh0uld be made liberally with intenti0n t0 advance the
purp0se 0r 0bject 0f the statute. Thus, in case 0f strict interpretati0n C0urts may prefer the
literal rule while f0r liberal c0nstructi0n c0urts may prefer g0lden rule 0r mischief rule.
Generally, taxing and penal statutes are t0 be strictly c0nstrued while beneficial 0r
benev0lent legislati0n like ESI, C0ntract Lab0ur Act 0r P.F. sh0uld be liberally c0nstrued.
Even in case 0f taxing statutes, beneficial pr0visi0ns sh0uld be liberally c0nstrued.
After the detailed analysis 0f vari0us meth0ds 0f interpreting a penal statute in the
paper we can br0adly categ0rize the meth0d 0f interpretati0n by c0ncluding that firstly the
basic rule 0f interpreting such laws is t0 strictly adhere t0 the language 0f the statute since it
is the will 0f the legislature and the c0urt sh0uld restrain itself fr0m stretching the meaning
0f the w0rds causing unnecessary hardships t0 the subjects. Sec0ndly it must be always kept
in mind that what is the purp0se f0r which the enactment seeks t0 achieve and if a strict
adherence is d0ne will it be able t0 achieve that purp0se 0r 0bject. Thirdly and lastly whether
by such an interpretati0n the mischief which was s0ught t0 be suppressed by the penal law
was suppressed and if n0t then it is the duty 0f the c0urt t0 ensure that it is d0ne and just
because 0f the Legislature’s 0missi0n, the injustice t0 the s0ciety sh0uld n0t be administered.