Statutes: Meaning and Classification

"Regulation", section 3(50): a Regulation made by the President under article 240 of the Constitution, including one made under article 243, and a Regulation made by the Central Government under the Government of India Acts of 1870, 1915 or 1935.

"Rule", section 3(51): a rule made in exercise of a power conferred by any enactment, and it includes a Regulation made as a rule under any enactment.

"Indian law", section 3(29): any Act, Ordinance, Regulation, rule, order, bye-law or other instrument which before the commencement of the Constitution had the force of law in any Province of India or part of it, or since then has the force of law in the specified States, but not an Act of the United Kingdom Parliament or an Order in Council.

"Commencement", section 3(13): used with reference to an Act or Regulation, the day on which the Act or Regulation comes into force.

"Section", section 3(54), and "schedule", section 3(52), each mean a section or a schedule of the Act or Regulation in which the word occurs.

How a Bill becomes an Act

Worth four lines, because it explains the dates a statute carries.

A Bill is introduced in either House. It is read, referred to committee if the House so decides, debated and voted on. Under articles 107 to 108 it must be passed by both Houses. Under article 111 it is then presented to the President, who declares that he assents or withholds assent, and may return a Bill other than a Money Bill for reconsideration, though if it is passed again he shall not withhold assent. On assent the Bill becomes an Act and is given a year and a number, as in "Act 10 of 1897".

Commencement is a separate question from assent, and is the subject of [Commencement of Statutes].

Article 123 allows the President to promulgate an Ordinance when Parliament is not in session, which has the same force as an Act but ceases to operate at the expiry of six weeks from the reassembly of Parliament unless approved.

The parts of a statute

Named here in one line each, because [Internal Aids to the Interpretation of a Statute] works them all.

Short title, long title, preamble, enacting formula, extent and commencement clause, definitions clause, the substantive sections, provisos, Explanations, exceptions and illustrations, saving and repeal clauses, and the Schedules. Sections are grouped into Chapters and Parts, and each section carries a marginal note.

The classification

By the width of what they cover

A codifying statute states the whole law on a subject in one place, replacing the earlier statute law, case law and custom on it. The Code of Civil Procedure 1908 is the standard example. The presumption is that a code is exhaustive, so a court starts from the assumption that everything on the subject is inside it.

A consolidating statute collects the existing statutory provisions scattered over several Acts into one Act, without intending to change the law. The presumption is that it does not alter the law, so an older decision on the earlier provision remains in point.

An amending statute changes an existing Act. Once it takes effect, the amendment is read into the principal Act as though it had always been in that form, so far as its operation goes. Section 6A of the General Clauses Act 1897 deals with the consequence of repealing an Act that made a textual amendment: unless a different intention appears, the repeal shall not affect the continuance of the amendment.

A declaratory statute does not change the law but declares what it always was, usually to remove a doubt or to correct what the legislature thinks was a judicial error. Its language is characteristically "shall be deemed always to have meant".

The importance of the last class is that it escapes the presumption against retrospective operation. In Commissioner of Income Tax v. Vatika Township Private Limited, decided on 15 September 2014, the Constitution Bench set that out. Facts. A proviso added to section 113 of the Income Tax Act 1961 by the Finance Act 2002 imposed a surcharge on block assessments, and the Revenue applied it to periods before it came into force. Held. Legislation modifying accrued rights or imposing new obligations or disabilities is prospective unless a contrary intent is clear; where a benefit is conferred without a corresponding detriment a purposive construction may make it retrospective, which is why procedural provisions are treated as retrospective; and the presumption does not apply to declaratory statutes, an Act being declaratory where it removes doubts as to the meaning or effect of an earlier law, the words "shall be deemed always to have meant" being in plain terms retrospective. The proviso here was onerous, so it operated prospectively. Why it matters. It ties this classification directly to the rules in [Prospective Application and Retrospective Effect].

By what they do to rights

A remedial or beneficial statute is passed to remedy a defect or to confer a benefit on a class, typically workers, tenants, consumers or women. It is construed liberally in favour of the class, and this is the family dealt with in [Taxing Statutes, Penal Statutes and Welfare Legislation].

A penal statute creates an offence and prescribes punishment. It is construed strictly. Tolaram Relumal v. State of Bombay, AIR 1954 SC 496, is the Indian authority and is worked in that chapter.

A taxing or fiscal statute imposes a tax. Its rules of construction are their own subject, and Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company, AIR 2018 SC 3606, settled the modern position on exemptions.

An enabling statute empowers something to be done that could not lawfully be done before, and it carries with it whatever is necessary to make the power effective.

A disabling statute restricts or takes away a right that existed before.

A directory statute lays down a procedure whose breach does not invalidate what was done, as against a mandatory one whose breach does. That distinction is worked in [Interpretation of Directory and Mandatory Provisions].

By duration

A permanent statute continues until it is repealed. Most Acts are permanent, and a statute is not repealed by disuse however long it lies unused.

A temporary statute carries its own expiry date, or expires on the happening of an event. Two consequences follow and both are examinable. On expiry, section 6 of the General Clauses Act does not apply, because that section speaks of a repeal and not of an expiry, so whether pending proceedings survive depends on the Act's own saving clause. And a temporary Act can be kept alive only by a further Act extending it.

By what they operate on

Substantive statutes create, define or extinguish rights and duties. Adjective or procedural statutes prescribe how those rights are enforced. The distinction decides whether an amendment reaches a pending case, and it is worked in [Interpretation of Substantive and Adjective Statutes].

Two more classes that are often asked

A consolidating and amending statute, which is a hybrid and is very common: the long title says so in terms. Where an Act says it is to consolidate and amend, the presumption that the law is unchanged is weakened.

Statutes in pari materia, meaning Acts on the same subject matter, which may be read together as one system. That is an external aid and is worked in [External Aids to the Interpretation of a Statute].

A worked example

Parliament passes the fictitious Street Vendors Welfare Act, whose long title says it is "An Act to consolidate and amend the law relating to street vendors, to provide for their registration and for the recovery of licence fees, and to punish obstruction of a designated vending zone".

Read the long title and the classification falls out. It is a consolidating and amending Act, so the presumption that the law is unchanged is weakened and the earlier decisions must be checked against the new text. It is a welfare Act as regards registration and the vendors' rights, so those provisions are read beneficially in favour of vendors. It is a taxing Act as regards the licence fee, so the charging provision is construed strictly and any exemption in it is construed against the person claiming it. And it is a penal Act as regards obstruction, so that provision is construed strictly in favour of the accused.

One Act, four rules of construction, applied provision by provision. That is the point of the classification, and it is why "classify the statute" is never a merely decorative first paragraph.

Now suppose section 40 of the Act says the licence fee provisions "shall be deemed always to have applied from 1 April 2020". That is a declaratory form of words, and on Vatika Township the presumption against retrospectivity does not apply to a declaratory provision. Whether it truly is declaratory, or is an onerous new charge dressed up, is the argument.

Distinctions table

What these words do NOT mean

A statute is not repealed by disuse. However long an Act lies unused, it remains law until repealed or held unconstitutional. This is the practical form of the warning in [Legal Maxims: the Remaining Seven] that cessante ratione legis has no application to a statute.

"Enactment" is not a synonym for "Act". Section 3(19) makes it wider, reaching Regulations, and it also means a single provision.

A consolidating Act does not necessarily leave the law untouched. The presumption is rebuttable, and an Act described as "to consolidate and amend" announces the rebuttal on its face.

A classification is not exclusive. One Act is very often penal, welfare and fiscal in different provisions, and the rule of construction is chosen provision by provision.

An Ordinance is not a lesser law while it lasts. Under article 123 it has the same force and effect as an Act; what is different is its duration.

Limits and criticism

The classification is old and the categories overlap. Almost every modern Act is a hybrid, and treating the classes as boxes produces bad answers.

Consolidation is rarely pure. The presumption that a consolidating Act does not change the law was developed when consolidation really was mechanical, and it fits modern drafting less well.

"Declaratory" is easy to abuse. A legislature that dislikes a judicial decision can undo it retrospectively by calling the amendment declaratory, and the only check is the court's willingness to look at substance rather than at the label, which Vatika Township expressly requires.

Quick revision

Statute: a written law enacted by a competent legislature; articles 245 and 246 and the Seventh Schedule. Enactment: General Clauses Act 1897, s.3(19), includes a Regulation and any provision in an Act. Central Act, s.3(7); Regulation, s.3(50); rule, s.3(51); Indian law, s.3(29); commencement, s.3(13). Article 13(3)(a) for Part III.

Bill to Act: passed by both Houses, articles 107 and 108; assent, article 111; then a year and a number. Ordinance, article 123, six weeks from reassembly.

Classification: codifying, consolidating, amending, declaratory; remedial or beneficial, penal, taxing, enabling, disabling; mandatory and directory; permanent and temporary; substantive and adjective; consolidating and amending; in pari materia.

Why it matters: the class fixes the rule of construction. Penal, strict. Beneficial, liberal. Taxing, strict, and strict against the assessee on an exemption. Declaratory, retrospective, Vatika Township. Temporary, s.6 does not apply on expiry.

Test yourself

1. Define "enactment" and say how it differs from "Act".

Section 3(19) of the General Clauses Act 1897 provides that "enactment" shall include a Regulation and any Regulation of the Bengal, Madras or Bombay Code, and shall also include any provision contained in any Act or in any such Regulation. It is wider than "Act" because it reaches Regulations, which are not Acts of a legislature, and it is also used of a single provision, so that one may properly speak of the enactment contained in a particular section.

2. Distinguish a codifying statute from a consolidating statute.

A codifying statute states the whole law on a subject in one place, replacing the earlier statute law, case law and custom, and it is presumed to be exhaustive, so a court begins by assuming the answer is inside it. A consolidating statute merely collects existing statutory provisions scattered over several Acts into one Act, and is presumed not to change the law, so decisions on the earlier provisions remain in point. The presumption is rebuttable, and an Act whose long title says it is to consolidate and amend announces its own rebuttal.

3. What is a declaratory statute, and why does it escape the presumption against retrospectivity?

A declaratory statute does not change the law but declares what it always was, usually to remove a doubt or to correct what the legislature regards as a judicial error, and its characteristic language is "shall be deemed always to have meant". It escapes the presumption because there is nothing retrospective about stating what the law already was; as the Constitution Bench put it in Commissioner of Income Tax v. Vatika Township Private Limited, the presumption against retrospective operation is not applicable to declaratory statutes, and a court must look at substance rather than the label.

4. Why does the classification of a statute matter in practice?

Because the class fixes the rule of construction. A penal provision is construed strictly, so a doubt goes in favour of the subject. A beneficial or welfare provision is construed liberally in favour of the class it protects. A charging provision in a taxing Act is construed strictly, and since Commissioner of Customs v. Dilip Kumar an ambiguous exemption is construed against the assessee. A consolidating Act is presumed to leave the law unchanged. One Act may be penal in one provision and beneficial in another, so the classification is applied provision by provision.

5. What happens to proceedings under a temporary Act when it expires?

Section 6 of the General Clauses Act 1897 does not assist, because it speaks of the repeal of an enactment and an expiry is not a repeal. What survives therefore depends on the temporary Act's own saving clause: if it contains one, effect is given to it, and if it does not, proceedings under it ordinarily cannot be continued after expiry. This is the practical reason a temporary Act is drafted with a saving clause and why a further Act is needed to extend its life.

6. Trace a Bill to an Act, and say why assent is not commencement.

A Bill is introduced in either House, debated and passed by both Houses under articles 107 and 108, and is then presented to the President under article 111, who declares that he assents or withholds assent and may return a Bill other than a Money Bill for reconsideration, though if it is passed again he shall not withhold assent. On assent it becomes an Act with a year and a number. Assent is not commencement because section 3(13) of the General Clauses Act 1897 defines commencement as the day on which the Act comes into force, and section 5 supplies the default only where the Act itself is silent about that day.