Case Analysis:

New Okhla Industrial Development Authority & Anr

v. B.D. Singhal & Ors
AIR 2021 SC 3457

Interpretation of Statutes
PSDA

Submitted by: Submitted to:

Kanishka Ms. Ritika Juneja
Enrollment No-09717703820
Semester-8
Section-B

Vivekananda School of Law and Legal Studies

INDEX

Sr. No. Particulars Page No.

1. Introduction 03

2. Facts of the case 05

3. Issues 06

6. Judgement 06

7. Significance 08
Introduction to Interpretation of Statutes &
Rules of Interpretation Involved in this Case:

The term interpretation literally means “To give meaning to” a particular thing.
Governmental power has been divided into three tiers namely the legislature, the
executive and the judiciary. The primary function of the judiciary is the
Interpretation of Statutes in the manner in which they were intended. It is the duty
of the Court to interpret the Act and give meaning to each and every word of the
Statute.
In the words of Blackstone, “The most fair and rational method for interpreting a
statute is by exploring the intention of the legislature through texts, the subject-
matter, the effect and consequences, or the spirit and reason of the law.”
The House of Lords in Maunsell v. Olins (1975) observed, “In fulfilling their task
of applying the law to the facts before them, the Courts frequently have to interpret
i.e. decide the meaning of the Statutes” However, the most common rule of
interpretation must be kept in mind i.e. the maxim “A Verbis legis non est
recedendum” means that you must not vary the words of the statute while
interpreting it.
The object of interpretation of statutes is to determine the intention of the
legislature which was conveyed expressly or impliedly in the language used.
Hence, while interpreting it, there should be no departure from the words of law.
Necessity of interpretation would arise only where the language of a statutory
provision is ambiguous and not clear or where two views are possible or where the
provision gives a different meaning that is pertaining to defeat the object of the
statute.
Where the words are clear and there is no obscurity, and there is no ambiguity and
the intention of the legislature is clearly conveyed, there is no scope for the court to
take upon itself the task of amending or altering the statutory provisions. The
purpose of Interpretation of Statutes is to help the Judge to ascertain the intention
of the Legislature and not to control that intention or to confine it within the limits,
which the Judge may deem reasonable or expedient.
Rules of Interpretation Involved:
Literal Rule- The Literal Rule of interpretation is a principle used by courts to
interpret statutes based solely on the plain and ordinary meaning of the words used
in the statute. According to this rule, judges must give effect to the legislative
intent as expressed through the actual words of the statute, without considering the
purpose behind the law or the consequences of a literal interpretation.
In essence, under the Literal Rule, judges are bound to apply the law exactly as it is
written, even if doing so leads to an absurd or undesirable outcome. This rule is
based on the notion that the role of the judiciary is to interpret the law, not to make
it, and that any necessary changes or improvements to legislation should be
addressed by the legislature rather than the courts.
Golden Rule- The Golden Rule of interpretation is a principle used by courts to
interpret statutes when the literal meaning of the words would lead to an absurd or
unreasonable result. Under this rule, judges are permitted to depart from the strict
literal interpretation of the words in a statute and instead interpret them in a
manner that aligns with the intention of the lawmakers, while still adhering to the
overall purpose of the law.
Unlike the Literal Rule, which requires judges to interpret statutes based solely on
the plain and ordinary meaning of the words used, the Golden Rule allows for a
more flexible approach. It enables judges to consider the purpose behind the law
and the broader context in which it was enacted, in order to ensure that the statute
is applied in a manner that is fair and just.
The Golden Rule is typically applied when the literal interpretation of a statute
would lead to absurd, unjust, or undesirable consequences. By departing from the
strict language of the statute in such cases, courts aim to uphold the spirit of the
law and achieve a more reasonable outcome. However, the Golden Rule is applied
cautiously, and judges are generally expected to use it sparingly and only when
necessary to avoid an absurd result.
Facts of the Case:

• The Appellant ‘New Okhla Industrial Development Authority’ sent a

proposal to the Government of Uttar Pradesh to enhance the age of
superannuation of its employees from fifty-eight to sixty years, prospectively. The
Government of Uttar Pradesh agreed to this proposal.
• The New Okhla Industrial Development Authority is constituted under the
provisions of the UP Industrial Area Development Act, 1976. The object
of this Act is to constitute authorities for the development of certain areas of
the State into industrial and urban townships. The legislation provides for
the constitution of the authority, its functions, powers, and for the
appointment of the staff members. The administrative head of such authority
is appointed by the State government.
• Section 19 of the Act enables the authority, with the previous approval of
the State government, to frame regulations for the administration of the
affairs of the authority and for the term of employment.
• Section 19(f) states that “An employee shall retire at the age of fifty-eight
years.”
• On 28 November 2001, the State government, after accepting the proposal of
the Appellant, issued a notification enhancing the age of retirement of
‘Government servants’ from fifty-eight to sixty years.
• To this notification, some employees of the New Okhla Industrial
Develpoment Authority had queries, which they raised before the Allahabad
Hight Court via writ petition. The issue was regarding the superannuation
age i.e. whether this notification is to be given a retrospective effect or
prospective effect?
• The Allahabad High Court applied the Golden Rule of Interpretation, and
interpreted Section 19 of the UP Industrial Area Development Act, 1976.
The hon’ble High Court set aside the decision of the State government, and
held that as per Section 19, such notification shall be given a retrospective
effect; And here, the HC exercised its power of judicial review under Article
226 of the Indian Constitution.
Issues:

1) The appeals by Appellant No 1 ‘New Okhla Industrial Development

Authority’ and by Appellant No 2 ‘State of Uttar Pradesh’ question the
correctness of this Interpretation, when the Govt. notification clearly stated
that the effect shall be prospective in nature.
2) Whether the Allahabad High Court has transcended the limits of its power of
judicial review.

Judgement:

• The High Court has granted relief which was not prayed. The HC ordered
that the increase in the age of retirement shall have a retrospective effect.
The 1st and 2nd respondents have admitted before the Supreme Court that
retirement notification was implemented with effect from 9 July 2012. Thus,
the direction contained in the impugned judgment that the increase in the age
of retirement would be effective from 29 June 2002 is unsustainable.
• The impugned decision has resulted in demands from dozens of employees
of such authorities, who had retired decades ago. For example, in September
2004, employees made demands seeking arrears of pay and allowances
considering the retirement age as 60 years for them as well. The
interpretation given in the impugned judgment has a cascading effect and is
unsustainable in law.
• Whether the age of superannuation should be enhanced is a subject matter of
the policy makers. If a decision has been taken to enhance the age of
superannuation, the date with effect from which the enhancement should be
made falls within the realm of policy. The infirmity in the judgment lies in
the fact that the High Court has trenched upon the realm of policy making
and has assumed to itself jurisdiction over a matter which lies in the domain
of the legislature. Whether the age of superannuation should be increased
and if so, the date from which this should be implemented is a matter of
policy makers, into which, the High Court ought not to have entered.
• In the impugned judgment, the hon’ble High Court incorrectly applied the
Golden Rule of Interpretation, because such Interpretation is required when
the intention of the law makers is unclear or when the literal meaning of the
words would lead to an absurd or unreasonable result. However, in this case,
the intention of the Government’s Notification regarding the enhancement of
retirement age & its prospective effect is very much clearly mentioned.
• Now, this is also true that some of the employees would face some amount
of hardship because of this notification. Some employees would stand on
one side of the line while the others would be positioned otherwise. This
element of hardship cannot be a ground for the High Court to hold that since
the literal meaning of the words of notification is leading towards an absurd
or unreasonable result, we should apply the Golden Rule. This interpretation
was arbitrary.
• In this case, the Literal Rule of Interpretation shall be applied.
• The government notification clearly and in unambiguous terms states that
the order shall come into force prospectively. The government’s order can
be given retrospective application only if expressly stated or inferred
through necessary implication. Therefore, the respondent/employees could
not have claimed a vested right that the enhancement in the age of retirement
should have had a retrospective effect.
• Hon’ble Supreme Court held that the High Court’s decision has no substance
and that they have transcended the limits of its power of judicial review.
• For the above reasons, the Supreme Court allowed the appeals and set aside
the impugned judgment of the Allahabad High Court. And the Petition was
dismissed.
Significance:

The Golden rule of Interpretation prevents absurd results in some cases containing
situations that are completely unimagined by the law makers.
It focuses on imparting justice instead of blindly enforcing the law.
But, there are some disadvantages of this rule of interpretation:
The golden rule provides no clear means to test the existence or extent of an
absurdity. It seems to depend on the result of each individual case. Whilst the
golden rule has the advantage of avoiding absurdities, it therefore has the
disadvantage that no test exists to determine what is an absurdity.
This rule tends to let the judiciary overpower the legislature by applying its own
standards of what is absurd and what is not.
Lord Wensleydale said: “The literal rule shall be used first, but if it results in
absurdity, the grammatical and ordinary sense of the words may be modified, so as
to avoid absurdity and inconsistency, but no further.”

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