Utkal Contractors & Joinery (P) Ltd. v. State of Orissa

MISCHIEF RULE

INTRODUCTION

Mischief Rule is applicable where the language is capable of more than one meaning. When the question arises as to the meaning of a certain provision in a statute, it is proper to read that provision in its context. The context means “the statute as a whole, the previous state of law, other statutes in pari materia, the general scope of the statute and the mischief that it was intended to remedy.” Further, it is the duty of the court to make such construction of a statute which shall suppress the mischief and advance the remedy. This rule was established in England when Heydon’s Case was decided that for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered:

1. What was the common law before the making of the Act,

2. What was the mischief and defect for which the common law did not provide,

3. What remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth,

4. The true reason of the remedy.

For an application of the mischief rule:

• Firstly, it must be possible to determine from a consideration of the provisions of the Act read as a whole what the mischief was that was the purpose of the Act to remedy;

• Secondly, it must be apparent that the draftsman and Parliament had by inadvertence overlooked, and so omitted to deal with, an eventuality that required to be dealt with if the purpose of the Act was to be achieved; and

• Thirdly, it must be possible to state with certainty what were the additional words that would have been inserted by the draftsman and approved by Parliament had their attention been drawn to the omission before the Bill passed into law.

Unless these three conditions are fulfilled any attempt by a court of justice to repair the omission in the Act and to determine what is the meaning of a written law, which Parliament has passed cannot be justified as an exercise of its jurisdiction.

{1.11 Mischief Rule, Avatar Singh} {6.3.2 Mischief rule of interpretation, N.S. Bindra}

FACTS

In December, 1967, the State of Orissa granted ‘a licence for collection of sal seeds’ from eleven Forest Divisions to M/s Utkal Contractors and Joinery Private Limited. The agreement provided for the sale and purchase of sal seeds falling on the ground naturally in the forests. There was a stipulation that the company should establish solvent extraction units in the backward areas of Mayurbhanj and Sambalpur. There was also an option for renewal of the lease for a further period of ten years. Orissa Oil Industries Limited, a public limited company, was floated by the Utkal Contractors and Joinery Private Limited and it was agreed that the State Government should also contribute to the share capital of the company. In furtherance to this, another agreement was formulated between the Utkal Contractors and Joinery Private Limited and the Orissa Oil Industries Limited for the supply of the entire collection of sal seeds from the eleven Forest Divisions by the Utkal Contractors to the Orissa Oil Industries. Simultaneously, the Orissa Forest Produce (Control of Trade) Bill, 1981 was introduced in the Legislative Assembly of Orissa State.

ISSUE

Whether the above act and the notification applies to forest produce, including sal seeds, grown in government forests.

ACT IN QUESTION

The Orissa Forest Produce (Control of Trade) Act, 1981.

OBJECT AND REASONS OF THE ACT AND THE OBSERVATIONS OF THE COURT

• It aims to prevent smuggling of forest produce like Mahua flowers, Tamarind, Charmaji, Karanja, etc. which were grown both in private holdings and government forests and to provide for State monopoly therein. Further, it was observed that the Statement of Objects and Reasons expressly mentions sal seeds as a forest produce which is grown in government forests and not in private holdings.

• Once the act came into force in 1981, a notification was issued by the Government of Orissa on December 9, 1982 directing that the Act shall come into force at once in the whole of the State of Orissa in relation to sal seeds. It was observed by the court that the notification introduced Section 1(3) of the Act irrespective of the fact that the object and reasons of the act clearly specify that sal seeds was not a forest produce grown in government forests. The notification was introduced only for the introduction of Sal seeds and no other produce.

JUDGEMENT AND ANALYSIS

• The court observed that a statute is best understood if the reason for it is known. The reason for a statute is the safest guide to its interpretation. The reason for the statute is discovered by external and internal aids. The external aids are Statement of Objects and Reasons when the Bill is presented to Parliament, the reports of committees which preceded the Bill and the reports of Parliamentary Committees. Occasional excursions into the debates of Parliament are permitted. Internal aids are the preamble, the scheme and the provisions of the Act. it was observed that no provision or word belonging to a statute must be read in isolation. Every provision and every word must be looked at generally before any provision or word is attempted to be construed. The setting and the pattern are important. Therefore, the context and the words of every act are equally important.

• For instance, in Attorney-General v. H.R.H. Prince Ernest Augustus, it was observed that words cannot be read in isolation. Here, their colour and content are derived from their context. Further, rules of construction were presented by Lord Reid in Maunsell v Olins. They are not rules in the ordinary sense of having some binding force. They are our servants not our masters. They are aids to construction, presumptions or pointers. Not infrequently one ‘rule’ points in one direction, another in a different direction. In each case we must look at all relevant circumstances and decide as a matter of judgement what weight to attach to any particular ‘rule’.

• It was observed that 'grower of forest produce’ was defined to include the State Government but on an examination of the remaining provisions of the Act, the expression ‘grower of forest produce’ was not found in any other provision except Section 5(2)(a) and Section 10. Since, neither Section 5(2)(a) nor Section 10 have any application to the government, the circumstance that “grower of forest produce” is defined to include the government has no consequence in determining whether the Act is applicable to forest produce grown on government lands.

• Further it was observed by the court that it wasn’t proper to construe the words of Section 5(1)(a) in their literal sense. Rather it was proper to construe Section 5(1)(a) a restricted meaning to the wide and general words there used so as to fit into the general scheme of the Act. Since the two clauses were connected by “and” the court observed that clauses (a) and (b) must be construed in such a way as to reflect each other. It was stated that the contracts related to specified forest produce which stood rescinded were contracts in relation to forest produce grown in private holdings only.

• Viewing Sections 5(l)(a) and 5(1)(b) together and in the light of the preamble and the Statement of Objects and Reasons and against the decor of the remaining provisions of the Act, this honble court had no doubt that Section 5(1), like the rest of the provisions, applies to forest produce grown in private holdings and not to forest produce grown on government lands.

• Hence, it was declared that the Act and the notification issued under the Act do not apply to forest produce, including sal seeds, grown in government forests and that it was not, therefore, open to the government to treat the contract dated May 25, 1979 as rescinded.

{pg 261, The Interpretation of Statutes by Bhattacharyya}