of Kerala & Ors Vs. Unni & Anr  Insc
890 (1 December 2006)
Sinha & Makandey Katju
out of S.L.P. (Civil) No.3612 of 2005] W I T H CIVIL APPEAL NOS. 5301, 5299,
5298, 3973, 5297 and 5296 OF 2006 [Arising out of S.L.P. (Civil) Nos. 5130,
6769-6775 of 2005, 7003, 14142 and 14189 and 18142 of 2006] S.B. SINHA, J :
condoned in S.L.Ps.
Act (for short, 'the Act') was enacted by Maharaja of Cochin By Act No.10 of
1967, it was extended to the whole of Kerala. By reason of the provisions of
the said Act, manufacture or sale of liquor, including country liquor is
regulated. The regulatory statute, indisputably, is made in terms of Entry 8 of
List II of the 7th Schedule of the Constitution of India. A licence is granted
under the Act. The licensee is indisputably required to carry out the
manufacture or sale of country liquor in terms of the provisions of the Act,
rules framed thereunder as also the terms and conditions of the licence.
has been defined in Rule 2(b) of the Kerela Rectified Spirit Rules, 1972 in the
following terms :
means ethyl alcohol of any strength and purity having the chemical composition
C2 H2 OH." "Country Liquor" has been defined in Section 3(12) of
the Act to mean 'toddy or arrack'.
has been defined in section 3(8) of the Act to mean :
means fermented or unfermented juice drawn from coconut, palmyra, date, or any
other kind of palm tree." Rules were framed by the State of Kerala in exercise of its rule making
power conferred upon it under Section 5 of the Act, pursuant whereto or in
furtherance whereof 'Kerala Abkari Shops (Disposal in Auction) Rules, 2002 were
framed. Rule 9(2) of the said Rules reads as under :
toddy other than that drawn from the Coconut Plamyrah or Choondapana palms
shall be sold by the licensees. All toddy kept or offered for sale should be of
good quality and unadulterated. Nothing shall be added to it to increase its
intoxicating power or for any other purpose. The ethyl alcohol content of toddy
kept or offered for sale drawn from Coconut, Palmyrah and Choondapana palms
should not exceed 8.1% v/v 5.2% v/v and 5.9% v/vrespectively." Violation
of any of the provisions of the Rules, inter alia, attract the penal provisions
of Section 56 of the Act, clause (b) whereof reads as under:
For misconduct by licensee, etc. Whoever, being the holder of a licence or
permit granted under this Act or being in the employ of such holder and acting
on his behalf (a) (b) Willfully does or omits to do anything in breach of
any of the conditions of his licence or permit not otherwise provided for in
this Act; or shall, on conviction before a Magistrate, be punished for each
such offence with imprisonment for a term which may extend to six months, or
with fine which may extend to two thousand rupees, or with both." Section
57 of the Act, however, provides for a penal provision for adulteration of
liquor by a licenced vendor or manufacturer, in the following terms :
For adulteration etc. by licensed vendor or manufacturer Whoever being the
holder of a licence for the sale or manufacture of liquor or of any
intoxicating drug under this Act.
mixes or permits to be mixed with the liquor or intoxicating drug, other than a
noxious drug or any foreign ingredient likely to add to its actual or apparent
intoxicating quality or strength, or any article prohibited other than an
article which the Government shall deem to be noxious by any rule made under
Section 29, clause (k), when such admixture shall not amount to the offence of
adulteration under Section 272 of the Indian Penal Code; or (b) (c) (d) shall
on conviction before a competent court, be punished for each such offence with
imprisonment for a term which may extend to five years, or with fine which may
extend to fifty thousand rupees, or which both." The State of Kerala published Excise Manual, the
relevant provisions whereof are as under :
liquors : Toddy, Beer, Wines, etc. come under the category of fermented
liquors. The maximum self-generated alcohol content that will be present in a
fermented liquor, which is not fortified is only 12% by volume. Because when
alcohol reaches this volume, the yeast responsible for the fermentation is destroyed
by its own bye-product and no further alcohol formation is possible."
Paragraphs 4, 5 and 6 of Chapter X contained in volume II of the Manual read as
The toddy yield from each kind of tree and the alcoholic strength of toddy
varies according to the season of the year, the time during which it is drawn
and other attendant circumstances. The daily average yield for Excise
Departmental purposes may be taken as 1 = litres per coconut tree, 4 = litres
per palmyrah tree and 6 > litres per sago tree.
Alcoholic fermentation of toddy which is self generated by the action of wild
yeasts starts in the collecting pot itself and this continues for a limited
period say a maximum period of 3 days. Subsequent to this, bacterial (acetic)
fermentation starts, bringing down the alcohol content. The bacteria and pseudo
yeasts are responsible for the rather strong smell of toddy and the acidity
developed. If toddy is left over a period of time, (without even any other
foreign matter being added to it), alcohol content comes down and acetic acid
is formed and this is how vinegar (Acetic acid) is manufactured in many of the
parts of Kerala. At the peak point of fermentation, the average alcoholic
strength of fermented toddy may be taken as follows :
8.1% by volume Palmyrah 5.2% " " Date 4.9 " " Sago 5.9
Toddy is claimed to be having considerable nutritive value and is rich in
sugars and vitamins. It is also claimed that "Toddy improves the quality
of blood and supplies the necessary vitamins for all the organs, nerves and
tissues of the body, that it is good diuretic and has been utilized effectively
in cases of Lithasis, that it is preventive for the occasional diseases, such
as silicosis and pneumoconioisic which is a fibrous of the lungs caused by the
inhalation of silicious particles of dust of grit". It can be consumed in
reasonable amounts without harm to the system." In State of Kerala and Others v. Maharashtra
Distilleries Ltd. and Others. [(2005) 11 SCC 1], the history of the said Act
and its subsequent amendments were noticed by a Constitution Bench of this
obtaining samples of toddy taken from the business premises of the licensees,
it was, inter alia, found that ethyl contained therein was 9.50% v/v. They were
prosecuted under Section 57(a) of the Act.
not in dispute that if a prosecution is instituted under Section 57(a) of the
Act, renewal of the licence shall not be granted, whereas renewal of the licence
would not be a bar if the licensee is prosecuted under Section 56 thereof.
petitions were filed, inter alia, questioning the validity or otherwise of Rule
9(2) of the Rules and/or applicability of Section 57(a) of the Act, in the
event sample of toddy was found to be exceeded 8.1%.
learned Single Judge of the Kerala High Court by a judgment and order dated
31.03.2003 held the said rules to be ultra vires. The learned Single Judge,
however, did not consider it necessary to go into the question of
interpretation of the two penal provisions viz. Section 56(b) and Section 57(a)
of the Act. The criminal proceedings as against the licensee were quashed. In
an intra-court appeal, the Division Bench, however, upheld the validity of Rule
9(2) of the Rules, opining that it had not imposed any condition which was
unworkable and/or was impossible to be performed.
construction of Section 56(b) and Section 57(a), it was opined that having
regard to the fact that ethyl alcohol is an essential component or ingredient
of toddy, only because percentage of ethyl alcohol found to be more, it would
not amount to addition of a foreign ingredient as envisaged under Section 57(a)
of the Act. It was, therefore, held :
the result, the challenge against the vires of Rule 9(2) of the Abkari Shops
(Disposal in Auction) Rules, 2002 is repelled. Prosecution proceedings against
the Respondents under Section 56(b) of the Abkari Act are not liable to be
declared illegal. Proceedings to prosecute the Respondents under Section 57(a)
of the Act are quashed." The Division Bench of the High Court in
subsequent cases followed its earlier orders.
the licensees as also the State of Kerala are before us.
K.N. Bhat, the learned Senior Counsel appearing on behalf of the State, would
submit that the provisions of Section 57(a), in view of its purport and object
must receive a purposive construction as even in a case of fermentation; once
the percentage of ethyl alcohol is found to be in excess of the permissible
limit, the same would amount to addition of foreign material so as to attract
the provision of Section 57(a) of the Act. Strong reliance, in this behalf, has
been placed on S. Sundaram Pillai and Others etc. v. V.R. Pattabiraman and
Others etc. [(1985) 1 SCC 591].
learned counsel would furthermore submit that the law must receive strict
interpretation where adulteration of an edible commodity is alleged. Reliance,
in this behalf, has been placed on Bhagwan Das Jain v. State of Punjab [(1993) Supp. 3 SCC 736].
learned counsel appearing on behalf of Respondents, on the other hand, would
submit that Rule 9(2) should have been declared ultra vires as it is
unworkable. It was urged that there does not exist any mechanical equipment to
measure the contents of ethyl alcohol in toddy. Even the Excise Department, it
was contended, did not have any facility in this behalf and each sample is sent
to the laboratory for chemical analysis.
Manual has been made by the State of Kerala itself. It is presumed to have been prepared upon making scientific
studies. It has defined 'fermented liquor', which states that the maximum
self-generated alcohol content that would be present in a fermented liquor,
which is not fortified, is only 12% by volume. It is not the case of the State
that the licensees had added any foreign material. Paragraph 5 occurring in
Chapter X of the Excise Manual, however, provides that average alcoholic
strength of fermented toddy may be taken as follows :
: 8.1% by volume Palmyrah : 5.2% " " Date : 4.9% " " Sago :
5.9% " " [Emphasis supplied] It, therefore, does not rule out the
possibility of fermented toddy containing ethyl alcohol of more 8.1% v.v. It is
accepted that the fermentation is a natural process. No scientific data is
available on records, nor the State could furnish any information as to how
much time would it require for toddy to become fermented which would contain
more than 8.1% of ethyl alcohol. Toddy, as noticed hereinbefore, has been
defined in Section 3(8) of the Act, to include fermented or unfermented juice
drawn from coconut tree.
9(2) of the said Rules, in our opinion, should be given a plain meaning. It
should be read in its entirety. It is in two parts. The intention of the
legislature must be gathered having regard to the expressions used therein.
Rule 9(2) read in its entirety, states the context that thereby what is
essentially sought to be prevented is adulteration of toddy. It is aimed at
prevention of adulteration. The penal provision contained in first part not
only directs that all toddy kept or offered for sale should be of good quality
and unadulterated but also provides that nothing shall be added to it to
increase its intoxicating power or for any other purpose. If the second part
prescribing the contents of the ethyl alcohol in toddy is read in the context
of the first part vis-`-vis Section 57(a) of the Act, it would be evident that
prohibition is aimed at adulteration by addition of any foreign substance to
increase its intoxicating power or for any other purpose.
of Rule 9(2), therefore, can be saved if the said provision is read in its
entirety and rule of harmonious construction is resorted to. If, however, Rule
9(2) is sought to be invoked even for the purpose of initiating a prosecution
as against a licensee even he does not add any foreign substance to it, the
same, in our opinion, would render the same ultra vires, as would appear from
the discussions made hereinafter.
not in dispute that there does not exist any mechanical devise to measure the
contents of ethyl alcohol present in toddy. It also stands admitted that
contents of ethyl alcohol in toddy would depend upon various factors including
weather, season or pot in which it is kept etc.
notice can be taken of the fact that each village would not have a chemical
laboratory where the process of analysis of ethyl alcohol can be carried out.
For example, if a sample is taken in a village, by the time sample is sent for
and is analyzed, the volume of ethyl alcohol may increase. Although we are
informed that some chemical is mixed when a sample is taken, no material has
been placed in that behalf.
validity or otherwise of Rule 9.2 must be considered from this point of view.
constitutionality of a statute is presumed in view of the principles laid down
in 'ut rest magis valeat quam pareat'.
principles on which constitutionality of a statute is judged and that of a
subordinate legislation are different.
have noticed the definition of 'toddy'. It does not limit the extent of
fermentation. Fermented toddy would, therefore, come within the purview of
definition of toddy. Manufacture and sale of toddy, which is fermented, is not
prohibited. Excise Manual clearly points out that the contents of ethyl alcohol
by reason of fermentation in toddy can go upto 12%, whereafter only it ceases
to be a toddy. While laying down the norms in Excise Manual, the State had used
the words 'average yield'. The percentage specified therein, thus, is only
reason of the rule making power, the State intended to impose a condition, the
same was required to be reasonable one. It was required to conform to the
provisions of the statute as its violation would attract penal liability. It
was expected to be definite and not vague. Indisputably, the State having
regard to the provisions of Article 47 of the Constitution of India, must
strive hard to maintain public health. While, however, imposing conditions in
regard to the prescription of norms, it was expected of the State to undertake
a deeper study in the matter. It should have undertaken actual experiments. It
should have specified mode and manner in which the percentage of ethyl alcohol
can be found out by the licensee. A subordinate legislation can be questioned
on various grounds. It is also well-known that a subordinate legislation would
not enjoy the same degree of immunity as a legislative act would. [See Vasu Dev
Singh & Ors. v. Union of India & Ors. 2006 (11) SCALE 108].
Samsthana Chethu Thozhilali Union v. State of Kerala and Others [(2006) 4 SCC 327], this Court while
interpreting the provisions of the same Act, opined :
Rules in terms of sub-section (1) of Section 29 of the Act, thus, could be
framed only for the purpose of carrying out the provisions of the Act. Both the
power to frame rules and the power to impose terms and conditions are,
therefore, subject to the provisions of the Act. They must conform to the
legislative policy. They must not be contrary to the other provisions of the
must not be framed in contravention of the constitutional or statutory
scheme." It was furthermore held :
the terms and conditions which can be imposed by the State for the purpose of
parting with its right of exclusive privilege more or less have been
exhaustively dealt with in the illustrations in sub-section (2) of Section 29
of the Act. There cannot be any doubt whatsoever that the general power to make
rules is contained in sub-section (1) of Section 29. The provisions contained
in sub-section (2) are illustrative in nature. But, the factors enumerated in
sub-section (2) of Section 29 are indicative of the heads under which the
statutory framework should ordinarily be worked out.
Section 18-A nor sub-sections (c) and (d) of Section 24 of the Act confer power
upon the delegatee to encroach upon the jurisdiction of the other department of
the State and take upon its head something which is not within its domain or
which otherwise would not come within the purview of the control and regulation
of trade in liquor. The conditions imposed must be such which would promote the
policy or secure the object of the Act.
grant employment to one arrack worker in each toddy shop in preference to the
toddy workers neither promotes the policy nor secures the object of the Act. It
is not in dispute that the purport and object of such Rules is to rehabilitate
the former employees of arrack shops.
of the employees is not within the statutory scheme and, thus, the Rules are
ultra vires the provisions of the Act. "Unreasonableness is one of the
grounds of judicial review of delegated legislation. Reasonableness of a
statute or otherwise must be judged having regard to the various factors which,
of course, would include the effect thereof on a person carrying on a business.
we are not oblivious of the fact that nobody has any fundamental right to carry
on business in toddy or liquor, but all the licensees are entitled to be
treated equally. If the matter of validity or otherwise of the subordinate
legislation is to be considered, Article 14 of the Constitution of India shall
be attracted. [See State of Punjab and Another v. Devans Modern
Breweries Ltd. and Another (2004) 11 SCC 26, Ashok Lanka and Another v. Rishi Dikshit
and Others (2005) 5 SCC 598 and Ashok Lanka-II v. Rishi Dikshit (2006) 9 SCC
90] When a statute provides for a condition which is impossible to be
performed, unreasonableness of a statute shall be presumed. It would be for the
State in such a situation to justify the reasonableness thereof.
Division Bench has, in our opinion, posed a wrong question unto itself when it
proceeded on the premise that availability of a mechanical instrument to
measure the contents of ethyl alcohol is of no moment. When a subordinate
legislation imposes conditions upon a licensee regulating the manner in which
the trade is to be carried out, the same must be based on reasonable criteria.
A person must have means to prevent commission of a crime by himself or by his
employees. He must know where he stands. He must know to what extent or under
what circumstances he is entitled to sell liquor. The statute in that sense
must be definite and not vague. Where a statute is vague, the same is liable to
be struck down. [Hamdard Dawakhana (Wakf) Lal Kuan, Delhi and Another v. Union of India and
Others AIR 1960 SC 554].
learned Single Judge although did not deal with the matter in details, but was
of the opinion that the statute is not workable.
of a statute vis-`-vis the question as to whether it is vague or otherwise must
also be considered having regard to the question as to whether it is at all
must state that where two interpretations are possible, having regard to the
workability or unworkability of a statute, the one which leads to the
workability of the statute must be preferred than the other, keeping in view
the principle 'ut rest magis valeat quam pereat'. [See State of Tamil Nadu v. M.K. Kandaswami and Others
(1975 (4) SCC 745].
may, however, notice some precedents operating in the field :
Kandawami (supra), this Court observed :
may be remembered that Section 7-A is at once a charging as well as a remedial
provision. Its main object is to plug leakage and prevent evasion of tax. In
interpreting such a provision, a construction which would defeat its purpose
and, in effect, obliterate it from the statute book, should be eschewed. If
more than one construction is possible, that which preserves its workability,
and efficacy is to be preferred to the one which would render it otiose or sterile.
The view taken by the High Court is repugnant to this cardinal canon of
interpretation." In Commissioner of Sales Tax, Delhi and Others v. Shri Krishna Engg.
Company and Others [(2005) 2 SCC 692], it was opined :
State of T.N. v. M.K. Kandaswami this Court held that where the object of a
provision is to plug leakage and prevent evasion of tax, in interpreting such
provision, a construction which would defeat its purpose and, in effect,
obliterate it from the statute-book should be eschewed. If more than one
construction is possible, that which preserves its workability and efficacy is
to be preferred to the one which would render it otiose or sterile." The
said decision was on a interpretation of a taxing statute.
a rent control legislation, Lahoti, J. (as His Lordship then was) in Rakesh Wadhwani
and Others v. Jagdamba Industrial Corporation and Others [(2002) 5 SCC 440],
are two means of resolving the riddle: firstly, by placing such meaningful
interpretation on the provision as would enable the legislative intention being
effectuated; and secondly, by devising such procedure without altering the
structure as would enable the substantive law being meaningfully implemented.
Let us see whether the expression "assessed by the Controller"
qualifies only "the cost of application" or qualifies the entire
preceding expression i.e. "the arrears of rent and interest at six per
cent per annum on such arrears together with the cost of application". As
there is ambiguity and the provision is susceptible to two meanings, the court
should interpret it in the manner which will best serve the object sought to be
achieved" Here, no two interpretations are possible for upholding the
validity of statute. Applying the principle of law as enunciated by this Court
in the decisions noticed hereinbefore, no interpretation would make the statute
workable or definite and thereafter, valid in law.
concerned herein with construction of a penal statute.
possible for a licensee to apply for renewal of his licnece in terms of Section
57 of the Act is the core question.
ferments automatically after sun rise. If it is permitted to be sold within a
timeframe after toddy is tapped, reasonableness can be inferred; but at what
point of time precisely ethyl alcohol content would exceed 8.1% in a toddy is
not known. It will bear repetition to state that the same would depend upon
several factors including the climate. It is reasonable to expect that the
State would frame rules in consonance with equity and good conscience. A rule
may not be worked out if it imposes a condition which, unless some other
guidelines are issued, would become impossible to be performed. We must remind
ourselves that the consequences of a single violation may be disastrous. If the
contention of the State is correct, it would not only result in penal
consequences, but would also lead to non-renewal of the licence. The licensee,
thus, for all intent and purport looses his right to carry on business.
Carrying on trade of liquor may not be a fundamental right, but it is a
contractual right given to him in terms of the provisions of a statute. The
terms and conditions are governed by statute. The violation thereof would lead
to penal consequences. Interpretation of statute in the aforementioned
situation rests on the principle of reasonableness, equity as well as good
exists a presumption that the framers of the statute intended to make it
reasonable. [See Bharat Hydro Power Corporation Ltd. & Others v. State of
Assam and Another (2004) 2 SCC 553; and Bombay Dyeing & Manufacturing Co.
Ltd. (3) v. Bombay Environmental Action Group &
Others. and (2006) 3 SCC 434 Paras 201 & 214].
person may be held to be guilty even if the contents of ethyl alcohol exceed
8.1% marginally. He must, therefore, be in a position to know as to what extent
he can go and to what extent he cannot. The matter cannot, thus, be left to an
act of nature. A penal provision must be definite. Unless the statutory
intention otherwise provides, existence of mens rea must be read into a penal
statute. It must be a deliberate act and not an unintentional one, unless the
statute says so explicitly or by necessary implication. The Act or the Rules do
not say either. It is in that sense vague or unreasonable.
thus, it is found to be ex facie unreasonable and unworkable, the court would
not hesitate to strike down the said rule. We do so.
the reasons aforementioned, hold Rule 9(2) to be unworkable being vague in
nature, unless read in the manner as suggested supra.
now consider interpretation of Sections 56(b) and 57(a) of the Rules.
56 and 57 operate in different fields. They lead to different consequences.
They provide for different punishments. Whereas Section 56 contemplates penal
action in the event terms and conditions of a licence are found to have been
violated; Section 57 of the Act speaks of adulteration. The contention of the
State, therefore, must be judged from the aforementioned context.
may violate rule, but thereby may not adulterate liquor.
violation of the rule may be intentional or unintentional attracting penal
provisions of Section 56 of the Act. Violation of the provisions of Section 57
rests on existence of mens rea or actus reus
on the part of the offender. In a case where extract of juice is subject to
automatic fermentation, one does not have to mix anything for increase of
contents of ethyl alcohol. It is not the case of the State that the licensee
has deliberately mixed additional ethyl alcohol in the liquor so as to increase
the potency thereof.
57 provides for graver offence. If one act attracts two offences, the one
providing for higher punishment cannot be presumed to apply unless ingredients
thereof are satisfied.
penal statute must receive strict construction. Only in exceptional cases the
principles of purposive construction shall apply to a penal statute.
Indian Handicrafts Emporium and Others v. Union
of India and Others [(2003) 7 SCC 589] and Balram
Kumawat v. Union of India and Others (2003) 7 SCC 628].
this case we are satisfied that the High Court was correct in its view that the
ingredients of Section 57 of the Act are not attracted in the instant case.
Singh v. State of Jharkahnd and Another [(2005) 3 SCC 551],
this Court opined :
of a statute depends upon the text and context thereof and having regard and
object with which the same was made." In Mathai v. State of Kerala [(2005) 3 SCC 260], distinguishing
between a charge under Section 325 and a charge under Section 326, this Court held
hurts which are not like those hurts which are mentioned in the first seven
clauses, are obviously distinguished from a slight hurt, may nevertheless be
more serious. Thus a wound may cause intense pain, prolonged disease or lasting
injury to the victim, although it does not fall within any of the first seven
a conviction for the sentence of grievous hurt can be passed, one of the
injuries defined in Section 320 must be strictly proved, and the eighth clause
is no exception to the general rule of law that a penal statute must be
construed strictly." We are not oblivious that there are certain
exceptions to the said rule.
Singh Marwah and Another v. Meenakshi Marwah and Another [(2005) 4 SCC 370], a
Constitution Bench of this Court held :
Singhvi has also urged that since we are dealing with a penal provision it
should be strictly construed and in support of his proposition he has placed
reliance upon a Constitution Bench decision in Tolaram Relumal v. State of
Bombay wherein it was held that it is well-settled rule of construction of
penal statutes that if two possible and reasonable constructions can be put
upon a penal provision, the court must lean towards that construction which
exempts the subject from penalty rather than the one which imposes penalty and
it is not competent for the court to stretch out the meaning of expression used
by the legislature in order to carry out the intention of the legislature. The
contention is that since Section 195(1)( b )( ii ) affords protection from
private prosecution, it should not be given a restrictive interpretation to
curtail its scope. We are unable to accept such broad proposition as has been
sought to be urged. In Craies on Statute Law (1971 Edn., Chapter 21), the
principle regarding penal provisions has been stated as under:
penal statutes must never be construed so as to narrow the words of the statute
to the exclusion of cases which those words in their ordinary acceptation would
comprehend.' But where the thing is brought within the words and within the
spirit, there a penal enactment is to be construed, like any other instrument,
according to the fair common-sense meaning of the language used, and the court
is not to find or make any doubt or ambiguity in the language of a penal
statute, where such doubt or ambiguity would clearly not be found or made in
the same language in any other instrument'." In Lalita Jalan v. Bombay Gas
Co. Ltd. this question was examined in considerable detail and it was held that
the principle that a statute enacting an offence or imposing a penalty is to be
strictly construed is not of universal application which must necessarily be
observed in every case. The Court after referring to Murlidhar Meghraj Loya v.
State of Maharashtra, Kisan Trimbak Kothula v. State of Maharashtra, Supdt. and Remembrancer of Legal
Affairs to Govt. of W.B. v. Abani Maity and State of Maharashtra v. Natwarlal Damodardas Soni held
that the penal provisions should be construed in a manner which will suppress
the mischief and advance the object which the legislature had in view." We
are, however, dealing with a different situation. Section 57 must also receive
strict construction, having regard to the fact that thereby an offence proved
would lead to a higher penalty; although on the self-same fact another penal
provision involving a minor punishment, viz., Section 56 would be attracted. It
has to be read having regard to the constitutional protection available to an
accused as also other civil consequences, if any, entailing therefor. While
construing a penal statute, in a case of this nature, it is necessary to apply
the rule of strict construction.
Standard Chartered Bank and Others v. Directorate of Enforcement and Others
[(2005) 4 SCC 530], yet again a Constitution Bench in a case where two
different interpretations were possible, opined :
counsel for the appellant contended that the penal provision in the statute is
to be strictly construed.
was made to Tolaram Relumal v. State of Bombay, SCR at p. 164 and Girdhari Lal
Gupta v. D.H. Mehta. It is true that all penal statutes are to be strictly
construed in the sense that the court must see that the thing charged as an
offence is within the plain meaning of the words used and must not strain the
words on any notion that there has been a slip that the thing is so clearly
within the mischief that it must have been intended to be included and would
have been included if thought of. All penal provisions like all other statutes
are to be fairly construed according to the legislative intent as expressed in
the enactment. Here, the legislative intent to prosecute corporate bodies for
the offence committed by them is clear and explicit and the statute never
intended to exonerate them from being prosecuted. It is sheer violence to
common sense that the legislature intended to punish the corporate bodies for
minor and silly offences and extended immunity of prosecution to major and
grave economic crimes." The matter may have to be considered from another
angle. Renewal of a licence is a valuable right. [See D. Nataraja Mudialiar v.
The State Transport Authority, Madras - AIR
1979 SC 114].
not in dispute that whereas if an offence is committed under Section 56 of the
Act, renewal of licence is permissible; but in a case where a licensee faces a
prosecution under Section 57, renewal of licence would be denied to him.
Consequences of attracting the provisions of Section 57, thus, must also be
judged from the said angle.
placed by Mr. Bhat upon Sundaram Pillai (supra), in our opinion, is wholly
misplaced. The court therein was considering a rent control statute. It laid
down law with regard to the interpretation of 'proviso' and 'explanation'. It
was while so doing referred to the well- known decision of Seaford Court
Estates Ltd. v. Asher [(1949) 2 All ER 155 : (1969) 2 KB 481 (CA)], stating :
has been observed that statutory provisions must be so construed, if it is
possible, that absurdity and mischief may be avoided. Where the plain and
literal interpretation of a statutory provision produced a manifestly absurd
and unjust result, the court might modify the language used by the Legislature
or even do some violence to it so as to achieve the obvious intention of the
Legislature and produce rational construction and just results. See in this
connection, the observations in the case of Bhag Mal v. Ch. Parbhu Ram. Lord
Denning in the case of Seaford Court Estates Ltd. v. Asher has observed :
the makers of the Act had themselves come across this ruck in the texture of
it, they would have straightened it must not alter the material of which the
Act is woven, but he can and should iron out the ceases." Ironing out the
creases is possible but not rewriting the language to serve a notation of
public policy held by the Judges. Legislature must have legislated for a
purpose by Act 23 of 1973 and used the expression "shall be
construed" in Explanation in the manner it did." It, however, added a
note of caution that a purposive construction can be applied if the statute is
read as a whole, requires such application.
upon Bhagwan Das Jain (supra), in our opinion, is also misplaced. In fact, upon
construction of a statute, we have held that the licensees are not guilty of
any adulteration. The said decision has, therefore, no application.
the reasons aforementioned, Civil Appeals arising out of Special Leave Petition
(Civil) Nos. 3612 of 2005, 6769-75 of 2005 and 7003 of 2006 filed by the State
of Kerala are dismissed and Civil Appeals
arising out of Special Leave Petition (Civil) Nos. 5130 of 2005, 14189 of 2006
and 18142 of 2006 are allowed. No costs.