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Understanding the Principle of Ejusdem Generis and its Application for Analysing Indian Statues

Pranaya Sahay,

Jindal Global Law School


Abstract

This short piece attempts to delve into the principle of Ejusdem Generis which is a major aid for interpretating statues. Ejusdem Generis means ‘a group which are of the same kind or form a same class.’ This piece differentiates between the principles of Ejusdem Generis and Noscitur a sociis and lastly, the author concludes the write-up by applying Ejusdem Generis for analyzing and understanding different statues and would use SARFAESI Act, 2002 to elaborate on the same.


Introduction:

The principle ‘Ejusdem Generis’ is a Latin term which means ‘of the same kind’. However, in legal sphere, it has evolved as a full-fledged tool for statutory interpretation and refers to things/words/persons pertaining to a similar class. It derives its basis from the principle of Noscitur a sociis but is fundamentally different from it, as Noscitur a sociis recognizes a statutory term by its associated words. Therefore, when general words are juxtaposed with specific words, the general words cannot be read in isolation and their colour and contents have to be derived from their context. However, like all other linguistic canons of construction, Ejusdem Generis applies only when a contrary intention does not appear. [I] “This rule provides that where words of specific meaning are followed by general words, then the general words will be construed as being limited to persons or things of the same general kind as those enumerated by the specific words.” [II]

M. Kumar v. Bharat Earth Movers Limited, [III] established that to invoke the application of the Ejusdem Generis rule, a distinct category should exist. If an attempt is made to apply the specific words to different objects of the widely different character, then it amounts to an incorrect application of the rule. With this understanding, in Jiyajirao Cotton Mills Ltd v. Madhya Pradesh Electricity Board, [IV] the court faced a challenge of interpreting the words 'any other relevant factors'. In this case, the Electricity Board as per Section 49 (3) of the Electricity Supply Act, 1948 was empowered “to fix deposit tariff for the supply of electricity to any person having regard to the geographical position of any area, the nature of the supply and the purpose for which the supply is required and any other relevant factors. The Supreme Court did not apply the principle of Ejusdem Generis” [v] as the preceding words did not belong to a distinct category.

In lawmaking, there is a general presumption that statutes would be interpreted to ensure that they are internally consistent. If there is a provision which is inconsistent from the rest of the statute, then that particular section cannot be read in isolation. The legislative intent and purpose with which the law was created has to be intact and the doctrine of Ejusdem Generis attempts to resolve this problem by “giving meaning to groups of words where one of the words is ambiguous or unclear”. [VI] The doctrine is governed by the fundamental rule that statutes ought to be construed so as to carry out the object it sought to accomplish. Secondly, often in statutes, there is a term ‘whatever nature’ used and a suitable way of interpreting it would be by using the whole act rule of statutory interpretation which states that the term/phrase in question should be interpreted in a consistent manner if used multiple times in a statute. Lastly, a construction which renders any expression of legislature as mere surplusage should be avoided. [VII] If one expression is exhaustive of the meaning falling in its broader sense, there will not be any requirement of another expression to either widen or limit the scope of the first expression and the latter expression would be mere surplusage. [VIII]

For example, the Securities Act of 1933 defines the term “prospectus” as “any prospectus, notice, circular, advertisement, letter, or communication, written or by radio or television, which offers any security for sale or confirms the sale of any security.” Here, if the term “communication” was interpreted to include any type of written communication, then the words “notice, circular, advertisement, letter” would serve no independent purpose in the statute. However, if “communication” were interpreted to include oral statements made through radio or television, then all the words in this section of the statute would contribute something to its meaning, and nothing would be considered as surplusage. Hence, a statute should be so construed that all its provisions are in consonance with each other, making no part inoperative or superfluous. [IX]


There are a set of important aspects of this doctrine, as enumerated in the case Amar Chandra v. Collector of Excise. [X] They are:


(1) the statute contains an enumeration of specific words

(2) the subjects of enumeration constitute a class or category

(3) that class or category is not exhausted by the enumeration

(4) the general terms follow the enumeration

(5) there is no indication of a different legislative intent

Let’s understand the application of the principle via analysing the SARFAESI ACT, 2002:

The SARFAESI Act, 2002 was passed to allow financial institutions to action properties of defaulters to recover loans and for this purpose the Asset Reconstruction Companies (ARC) [XI] [1] were set up u/s 5(4) of the Act which also stated that if on the date of acquisition of the financial asset, any suit, appeal or other proceeding of whatever nature relating to the said financial asset is pending by or against the financial institution, the same shall not be discontinued or affected by reason of the acquisition of the financial asset by the ARC. [XII] Here, to ensure that the entire provision does not go against the spirit of the SARFAESI Act, the expression ‘other proceedings of whatsoever nature’ used in section 5(4) of the Act, must be read as Ejusdem Generis with the words ‘suit’ and ‘appeal’ preceding it. SARFAESI Act, 2002 is a civil act, thus, all the cause of actions arising from the said Act will be heard as civil proceedings. Specifically, Section 5(4) of the Act talks about continuation of legal proceedings. Hence, these proceedings “must be related to the financial assets and should not have anything to do with offences of any kind committed by the transferor”. [XIII]

Apart from the above example, an important case where the concept of Ejusdem Generis was applied was in Commissioner of Income Tax, Kolkata v. Smifs Securities Ltd [XIV]. In this case, “Section 32 of the Income-tax Act, 1961 was under question which allowed “depreciation on both tangible and intangible assets and clause (ii) thereof ” [XV] enumerated intangible assets on which depreciation was allowable. “The assets which were included in the definition of ‘intangible assets’ given in clause (ii) were; technical know-how, patents, copyrights, trademarks, licenses, franchises, etc., and any other business or commercial rights of similar nature are also included. Goodwill, is a bundle of rights which included, inter alia, patents, trademarks, licenses, franchises, etc. Therefore, all these rights were [XVI] similar to the rights under goodwill”. [XVII] Hence, applying the principle of Ejusdem Generis the meaning was extended to the phrase ‘other business or commercial rights of similar nature’.


Conclusion:

The rule of Ejusdem Generis was constructed to help courts interpret ambiguous provisions in statutes. [XVIII] In this rule a specific class needs to be mentioned so that the whole statute revolves around it, but the specific class should not have a wide approach as that would exhaust the whole statute. Further, it is best that this principle is applied in such a way that there is no room for any ambiguity in the section of an act and this principle should help a particular provision being worded in such a way that it adequately establishes the legal objective.


Endnotes:

[I] Ashvin Achatya and Arpita Acharya - Mukherjee, Interpretation of Statues: The Doctrine of Ejusdem Generis / Noscitur a Sociis, AIFTPJ 15, 16 (2014).

[II] M. Govindarajan, Interpretation of Statues (Mar. 20, 2021, 11:00 am), https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=8825

[III] M. Kumar v. Bharat Earth Movers Limited, 1999 (5) KarLJ 193

[IV] Jiyajirao Cotton Mills Ltd v. Madhya Pradesh Electricity Board, 1989 AIR 788

[V] Jayant Bhatt, Construction Ejusdem Generis (Mar. 21, 2021, 01:35 pm), http://www.legalserviceindia.com/articles/edjem.htm

[VI] Ashvin Achatya and Arpita Acharya - Mukherjee, Interpretation of Statues: The Doctrine of Ejusdem Generis / Noscitur a Sociis, AIFTPJ 15, 15 (2014).

[VII] Montclair v. Ramsdell, 107 U.S. 147, 152

[VIII] State of Bombay v. Ali Gulshan, AIR 1955 SC 810.

[IX] Hibbs v. Winn, 542 U.S. 88, 101.

[X] Amar Chandra Chakraborty v. Collector of Excise, Government of Tripura & Ors, 1972 AIR 1863

[XI] Joanna Joshua, Uncertainty in Application of Doctrine of Ejusdem Generis in Civil Suits with Special Refernce to the SARFAESI Act, Supremo Amicus 1, 6 (2020).

[XII]Section 5(4), Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

[XIII] Brijlal Suri v. State of Uttar Pradesh, AIR 1958 All 621.

[XIV] Commissioner of Income Tax, Kolkata v. Smifs Securities Ltd, GA No. 1466 of 2010

[XV] Sujit Talukdar, Depreciation on Goodwill of a Business or Profession Not Allowed and to be taxed as Capital Gains on transfer: Budget 2021 (Mar. 21, 2021, 2:45pm), https://www.taxcorner.co.in/2021/02/depreciation-on-goodwill-of-a-business-or-profession-not-allowed-and-to-be-taxed-as-capital-gains-on-transfer-budget-2021.html

[XVI] Sujit Talukdar, Depreciation on Goodwill of a Business or Profession Not Allowed and to be taxed as Capital Gains on transfer: Budget 2021 (Mar. 21, 2021, 2:45pm), https://www.taxcorner.co.in/2021/02/depreciation-on-goodwill-of-a-business-or-profession-not-allowed-and-to-be-taxed-as-capital-gains-on-transfer-budget-2021.html

[XVII] Ashvin Achatya and Arpita Acharya - Mukherjee, Interpretation of Statues: The Doctrine of Ejusdem Generis / Noscitur a Sociis, AIFTPJ 15, 16 (2014).

[XVIII] Joanna Joshua, Uncertainty in Application of Doctrine of Ejusdem Generis in Civil Suits with Special Refernce to the SARFAESI Act, Supremo Amicus 1, 12 (2020)


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