INTRODUCTUON

A beneficial statute is a class of statute which seeks to confer benefit on individuals or class

of persons by relieving them of onerous obligation under contracts entered into by them or

which tend to protect persons against oppressive act from individuals with whom they stand

in certain relations. The established principle in the construction of such statutes is there

should not be any narrow interpretation1. The court should attempt to be generous towards

the persons on whom benefit should be conferred. When a statute is interpreted liberally to

give the widest possible meaning to it, it is called beneficent construction. Beneficial

construction is an interpretation to secure remedy to the victim who is unjustly denied of

relief. The interpretation of a statue should be done in such a way that mischief is suppressed

and remedy is advanced2.

1
Modern Movies v SB Tiwari (1966) 1 Lab LJ 763.
2
G. Granville Sharp, Maxwell on interpretation of statutes, pg 68 (10 th ed. 1953),Sweet & Maxwell Limited,
London.

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PRINCIPLES OF BENEFICIENT CONSTRUCTION

Beneficent construction involves giving the widest meaning possible to the statutes. When

there are two or more possible ways of interpreting a section or a word, the meaning which

gives relief and protects the benefits which are purported to be given by the legislation,

should be chosen.3 A beneficial statute has to be construed in its correct perspective so as to

fructify the legislative intent. Although beneficial legislation do receive liberal interpretation,

the courts try to remain within the scheme and not extend the benefit to those not covered by

the scheme.4 It is also true that once the provision envisages the conferment of benefit limited

in point of time and subject to the fulfillment of certain conditions, their non-compliance will

have the effect of nullifying the benefit.5 There should be due stress and emphasis to

Directive Principles of State Policy and any international convention on the subject.6

There is no set principle of construction that a beneficial legislation should always be

retrospectively operated although such legislation such legislation is either expressly or by

necessary intendment not made retrospective.7 Further, the rule of interpretation can only be

3
Hanumant, On Beneficial Construction
4
Har Sharan Varma v State of Uttar Pradesh AIR 1985 SC 378.
5
Noor Hussain & Anr v Financial Commr AIR 1995 J&K 102.
6
B Shah v Presiding Officer, Labour Court AIR 1978 SC 12.
7
Shyam Sunder & Ors v Ram Kumar & Anor (2001) 8 SCC 24

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resorted to without doing any violence to the language of the statute.8 In case of any

exception when the implementation of the beneficent act is restricted the Court would

construe it narrowly so as not to unduly expand the area or scope of exception. 9 The liberal

construction can only flow from the language of the act and there cannot be placing of

unnatural interpretation on the words contained in the enactment. Also, beneficial

construction does not permit raising of any presumption that protection of widest amplitude

must be deemed to have been conferred on those for whose benefit the legislation may have

been enacted.10

ILLUSTRATIONS ON BENEFICIENT LEGISLATIONS AND INTERPRETATION

There are different kind of legislations which receive beneficent construction. Laws

which are enacted with the object of promoting general welfare and facing urgent social

demands receive beneficial legislations. Examples of statutes include The Factories Act,

Industrial Disputes Act etc. In case of legislations which have may two different

interpretations, the legislation which favours the class of persons for which it is purported

should be preferred. In the case of Hindustan Level Ltd v Ashok Vishnu Kate11, the court held

that in a case related to prevention of unfair labor practice, during interpreting social welfare

legislation, a construction should be placed on the relevant provisions which furthers the

purpose for which such legislation was enacted.

8
Transport Corpn of India v Employees’ State Insurance Corpn & Anr (200) 1 SCC 426
9
Shaikh Gulfan v Sanatkumar, AIR 1965 SC 1839
10
ESIC v MM Suri and Associates Ltd JT 1998 (7) SC 336.
11
(1995) SCC 1385 (L&S).

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 Socio-economic legislation which are aimed at social or economic policy changes, the

interpretation should not be narrow. Justice Krishna Iyer in a case relating to agrarian reforms

observed that “the judiciary is not a mere umpire but also an active catalyst in the

constitutional scheme”. In the case of Sant Ram v Rajinderlal12, the Supreme Court said that

a welfare legislation must be interpreted in a third World perspective favouring the weaker

and poor class. It has also been laid down in the case of labour legislation that courts should

not stick to grammatical constructions but also have regard to ‘teleological purpose and

protective intendment’ of the legislation.13 Interpretation of labour legislations should be

done by the courts with more concern with the colour, the context and the content of the

statute rather than its literal import.14

In case of a social benefit oriented legislation like the Consumer Protection Act, 1986

the provisions are construed as broadly as possible.15 Interpreting a section of the Act, it was

held that parents who hire the services of a hospital and their child for whom the service are

hired are both consumers and can independently claim damage.16 The clause regarding

jurisdiction has been liberally interpreted to empower the consumer forum to entertain claims

irrespective of whether other courts or for a have jurisdiction to entertain claims unless

jurisdiction is expressly barred.17 Further, the liberal interpretation has been taken in holding

that although the forum is a judicial authority, they are not hampered by section 34 of

12
AIR 1978 SC 1601.
13
State Bank of India v MS Money AIR 1976 SC 1111.
14
Workmen v American Express International Banking Corporation (1985) 4 SCC 71, p 76.
15
State of Karnataka v Vishwabhrathi House Building Co-op Society (2003) 2 SCC 412
16
Spring Meadows Hospital v Harjol Ahluwalia JT 1998 (2) SC 620
17
Kishor Lal v Chairman, Employees’ State Insurance Corpn, (2007) 4 SCC 579

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Arbitration Act and are not obliged to stay proceedings before them because the Act provides

a cheap and speedy remedy to the consumer.18

Industrial Disputes Act 1947 is one of welfare statute which intends to bring about

peace and harmony between management and labour in an industry and improve the service

conditions of industrial workers which in will turn accelerate productive activity of the

country resulting in its prosperity. As a result the prosperity of the country in turn will help to

improve the conditions of the workmen. Therefore this statute should be interpreted in such a

way that it advances the object and the purpose of the legislation and gives it a full meaning

and effect so that the ultimate social objective is achieved. 19 The courts while interpreting

labour laws have always stressed on the doctrine of social justice as enshrined in the

Preamble of Constitution.20

Another example of beneficial construction of a statute is the Juvenile Justice Act.

The earlier act of 1986 was replaced with a new act in 2000. Whereas the 1986 act defined

the term ‘juvenile’ as a boy not having attained sixteen years of age or a girl not having

attained the age of eighteen years, the 2000 act defined juvenile to mean a person who has not

completed eighteen years of age. This issue came up for a consideration before the

Constitution Bench in the case of Pratap Singh v State of Jharkhand.21. The Court looked

into the object of the act, which is to provide for the care, protection treatment, development

and rehabilitation of neglected and delinquent juveniles. Further the acts were passed in

discharge of obligation to follow the United Nations Minimum Rules for the Administration

18
Fair Air Engineers Pvt. Ltd. v NK Modi AIR 1997 SC 533.
19
Workmen of Indian Standards Institution v Management of Indian Standards Institution, (1976)1 LLJ 33,39
(SC).
20
Ajaib Singh v Sirhind Co-op Marketing –cum-Processing Service Society Ltd. AIR 1999 SC 1351.
21
(2005) 3 SCC 551.

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of Juvenile justice. Since the acts were remedial in nature, beneficial construction was given

to promote the beneficent object behind them.

In the landmark case of B Shah v Presiding Officer, Labour Court22, court applied

beneficent rule of construction in construing section 5 of the Maternity Benefit Act, 1961,

which makes the employer liable to pay maternity benefit to woman worker at the rate of

average daily wage for the period of her actual absence immediately preceding and including

the day of her delivery and for six weeks immediately following that day. The court held that

Sundays must also be included and held that the Act was intended not only to subsist but also

make up for her dissipated energy and take care of child. The Act was read in the light of

Article 42.

One of the leading examples of liberal construction is in the interpretation of Section

123 © of Railways Act 1989 which defined ‘untoward accident’ to include ‘accidental falling

of a passenger from a train carrying passengers’. The question in contention before the court

was whether ‘untoward accident’ will cover the instance of a passenger who fell down and

died while trying to board the train. In deciding the case, the court said that there are couple

of interpretations of ‘accidental falling’; first one being that it only applies when a person is

inside the train while second includes a situation where person is trying to board a train and

falls down. The relevant provision was deemed as a beneficial piece of legislation and hence

received liberal and wide interpretation and hence the definition was expanded to include a

passenger who fell off the train in the process of boarding it.23

Justice Krishna Iyer exhorted Mahatma Gandhi’s talisman in interpreting legislation which

dealt with the relation between weaker and stronger contracting parties. His advice was

22
Supra note 6.
23
Union of India v Prabhakaran Vijay Kumar (2008) 9 SCC 527.

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“Recall the face of the poorest and the weakest man whom you may have seen, and ask

yourself, if the step you contemplate is going to be of any use to him.”24 Due regard to Article

16(4) and Article 46 is advocated in interpreting directives aims at making reservations and

relations in favour of members of the scheduled castes and scheduled tribes.25

The effect of a beneficial legislation should not be construed to be defeated by

subsequent legislation except through a clear provision.26 The rights of minor children to get

maintenance from their father as provided in Section 127 of CrPC was construed not to have

been taken away in respect of Muslims by the Muslim Women (Protection of Rights on

Divorce) Act, 1986 section 3(b) which enabled a Muslim woman to claim maintenance for

the minor children upto the age of two years only from her former husband. It was held by

the court that the right of children to claim maintenance under CrPC was independent of right

of divorced mother to claim maintenance for the infant children and former is not affected by

1986 Act.

The principle of liberal construction can be taken to extreme limits at some times in

order to achieve the object of the legislation. In the case of National Insurance Co Ltd v

Swarn Singh27.

In the case relating to insurance aspect of motor vehicles, the Supreme court held that

to prove its defence the insurer has to prove: (i)breach of condition by the insured was done

knowingly or resulted due to his negligence and (ii)breach was fundamental and had

contributed to cause of accident. It was also held that even in cases where the insurer is able

to prove the defence of breach of condition, it will have to satisfy the award against the

24
Supra, note 12
25
Comptroller and Auditor General of India v KS Jagannathan (1986) 2 SCC 679
26
Noor Saba Khatoon v Mohd. Quasim AIR 1997 SC 3280
27
. AIR 2004 SC 1531.

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insured but it can recover the amount paid to the claimant from the insured in the same

proceedings before the tribunal.

In a recent judgment in the case of The Bangalore Turf Club Ltd. Vs. Regional Director,

Employees State Insurance Corporation28, the Supreme Court judged the ESIC act on

beneficial grounds and emphasized that the beneficient construction is being preferred to help

the intended beneficiaries.

ILLUSTRATIONS ON THE LIMITATIONS OF BENEFICIAL LEGISLATIONS

It is important to note that the principle of beneficial construction has to be applied with a

few safeguards. It can only be applied without “rewriting or doing violence to the

enactment”. When the language is clear and explicit, it leaves little scope for any bending of

interpretation.29 Sympathy cannot be a sole principle guiding interpretation.30 In the Maruti

Udyog case31, the Constitution Bench held that no provisions of act provided for absorption

of contract labour on issuance of a notification under Section 10 prohibiting employment of

contract labour. In the Employees State Insurance Act 1948, Section 53 provided that an

insured person or his dependents will not be entitled to ‘any compensation or damages’ under

the Workmen’s Compensation Act 1923 or any other law for the time being in force or

otherwise in respect of an employment injury. This was held to bar even claim for

compensation of damages in Torts although the Act is a beneficial legislation.32

28
. Civil Appeal Nos. 2416 of 2003, 49 and 1575/2006, 3421, 3422 and 6212/2012
29
Steel Authority of India Ltd, National Union Water Front Workers AIR 2001 SC 3527
30
Maruti Udyog Ltd. v Remlap (2005) 2 SCC 638
31
ibid
32
Western India Plywood Ltd. v P Ashokan AIR 1997 SC 3883

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 In the Umadevi33 case, the Supreme Court held that those employed on daily wages

temporarily or on contractual basis by State or its instrumentalities cannot be said to be

holders of a post and have no right to regularization simply because they have worked for a

number of years. This decision shows that sympathy or sentiment cannot be the sole ground

for passing a favourable order when there is no legal right to support such an order.

The Control of Rent and Eviction Acts seek to protect tenants from unjust evictions

and it is a principle that in case of doubt, such Acts should be interpreted to lean in favour of

tenants. However, it is a restriction that the benefit conferred on the tenants under these Acts

can only be enjoyed on strict compliance of statutory provisions contained in them.34

The beneficial legislation should not be construed such that it brings within its ambit a

benefit which was not contemplated by legislature.35 Hence where the insurance company

had rescinded the contract of insurance and informed all parties before the accident after the

cheque issued to satisfy the premium due is dishonoured.

ILLUSTRATIONS FROM FOREIGN JURISDICTIONS

In Australia, the Aboriginal Land Rights Act, 1983 was enacted to give important rights to

the representatives of the Aboriginal people. Justice Kirby reiterated the principle that the act

should be given the most beneficial operation compatible with the language. Further, he

stated that any ambiguity should be resolved in favour of Aboriginal people and any attempt

by Parliament to restrict those rights must be plain and clear.36

33
Secretary State of Karnataka v Umadevi (2006) 4 SCC 1.
34
Nasiruddin v Sita Ram (2003) 2 SCC 577.
35
Dedappa v National Insurance Co LTD (2008) 2 SCC 595.
36
Minister Administering the Crown Lands Act v NSW Aboriginal Land Council (2008) 82 ALJR 1505

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 In a similar case of anti-discrimination legislation, Grescher and Norman have held

that the way in which a judge should read a human rights statute should ‘stand apart from and

on higher ground’ than other canons and principles.37 In the case of British Coal Corporation

v King38, Lord Sankey approached the act to beneficially construct it. He held that, “In

interpreting a constituent or organic statue such as the Act, construction most beneficial to the

widest amplitude possible amplitude of its powers must be adopted.”

In the United States, in the case of Huntington v Attrill39, the Supreme Court said that

whether a statute is remedial or penal ‘depends upon the question whether its purpose is to

punish the offense against the public justice of the state, or to afford a private remedy to a

person injured by the wrongful act’. Liberal construction has been allowed in cases relating to

providing, regulating worker benefits40, antitrust41, securities42, and unfair competition

legislation43. The remedial purpose canon is also found in cases interpreting legislation

designed to protect and promote public health and safety44. The canon has also been used to

further social well-being of general public by protecting individuals against race, gender, age

and disability discrimination.45

37
Donna Greschner and Ken Norman 63 Can Bar Rev (1985) 805, 808-809
38
[1935] AC 500.
39
Huntington v Attrill 146 US 657, 673-74 (1892)
40
Bill Johnson’s Restaurants, Inc. v NLRB 461 US 731, 740 (1983).
41
Northern Sec. Co. v United States, 193 US 197, 358-60 (1904) (Sherman Act)
42
Central Bank of Denver v First Interstate Bank 114 S. Ct. 1439, 1457-58 (1994)
43
Warner Bros v Gay Toys 658 F.2d 76,79 (2 nd Cir 1981)
44
United States v Bacto-Undisk 394 US 784, 798-99 (1969); Hull Co. v Hauser’s Foods Inc., 924 F.2d 777,782
(8th Circuit 1991)
45
Chrisom v Roemer 501 U.S. 380,403 (1991); Dennis v Higgins 498 US 439,443 (1991).

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CONCLUSION

The courts must be vigilant to ensure that benefits conferred by welfare legislation must not

be defeated by subtle devices. It is duty of the court to get behind the smoke screen and

discover the true state of affairs. It can go behind the form and see the substance of the

transaction.46

The strict and narrow jacket concept of law is no longer available for the purpose of

interpreting a social welfare piece of legislation especially after the new millennium. The

policy of a democratic Government should run in conjunction with the dynamic interpretation

offered by the courts. The courts exist for the society and in the event the courts feel the

requirement in accordance with principles of justice, equity and good conscience, courts must

rise up to the occasion to do complete justice and meet expectation of the people.

The way the US and Australian courts have strived to protect the rights of the

marginalized and vulnerable, the Indian courts have also started emulating them as is seen

through various judgments like Olga Tellis.47 It must be recognised that the principle of

beneficent construction cannot be a rule but only a principle. The Indian courts should look

into more principles of natural law, a movement which was started by Justice Krishna Iyer

during his time at the Supreme Court. This approach has led to several landmark and timely

judgments which have been extremely progressive and far-reaching.

46
Workmen v Associated Rubber Industry Ltd (1985) 4 SCC 114.
47
Olga Tellis v. Bombay Municipal Corporation [1982] 2 SCR 365.

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