Cal HC | Rule of Ejusdem Generis restricts interpretation only when the words of a statute are categorical in their application

Calcutta High Court: A Division Bench of Soumen Sen and Saugata Bhattacharyya, JJ. allowed an appeal and set aside the order of a Single Judge Bench.

In the present case, the respondent-writ petitioners – a charitable and educational Society – challenged two notifications of the West Bengal Government wherein exercise of powers conferred under Section 1(5) of the Employees’ State Insurance Act were extended to educational institutions run by individuals, trusts, societies. The respondent-writ petitioners also paid certain sums to the Employees’ State Insurance Corporation in accordance with the notification.

Counsel appearing for the appellants submitted that the act was enacted by Parliament under Entry 23, 24 of List III of the 7th Schedule and the said Act was enacted with a social welfare objective in mind. Applicability of the Act, which is a beneficial legislation, has to be interpreted for the benefit of the employees of any given institution in cases of ambiguity, not including the institutions of the respondent-writ petitioners’ within the Act is contrary to the settled principle that interpretation of beneficial legislation should give effect to the intent of the legislator and the purpose of the Act, as has been held in Indian Handicrafts Emporium v. Union of India, (2003) 7 SCC 589.

Counsel on behalf of the respondent writ petitioners submitted that Section 1(4) of the Act primarily applies to factories as through Amending Act. 29 of 1989 that it’s applicability to an ‘establishment’ other than factories was introduced. ‘Establishment’ must be understood in the context of Section 1(5) to mean a place where such activities are commercial, industrial, or agricultural in nature, educational institutions are not within the ambit of the act as education is a charitable activity, as held in T.M.A. Pai Foundation v. State of Karnataka,  (2002) 8 SCC 481, the expression “or otherwise” must receive ejusdem generis noscitur a sociis interpretation.

The Calcutta High Court held that rule of ejusdem generis operates only to give a rebuttable presumption that the words of the statute are restricted in application to a certain ‘genus’ of things because the statute is not able to exhaustively provide all the elements that would conceivably fall within that genus, cannot contradict legislative intent and must either give way to a purposive interpretation if such an interpretation is found to run contrary to the rule  In  Bangalore Turf Club Ltd. v. Employees’ State Insurance Corpn., (2014) 9 SCC 657, it has been held that establishment includes an institution which is engaged in achieving certain public purpose (including education) and  Amendment Act 1989 tells us that the applicability to different kinds of establishments is meant to be wide and expansive rather than narrow or restricted, said act must be interpreted liberally as it has a welfare objective, and can be extended to include educational institutions. The Court explained that ‘education’ in even being welfare activity was not free from regulation relying on Justice Bhanumati’s separate opinion in  Modern Dental College and Research Centre v. State of M.P., (2016) 7 SCC 353, and such regulation could be extended to private educational institutions.

The Court allowed the appeal setting aside the Judgement of a Single Judge  Bench dated 13-09-2018. [Principal Secretary, Department of Labour v. Om Dayal Educational & Research Society, 2019 SCC OnLine Cal 5174, decided on 24-12-2019]

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