Time to reintroduce illustrations in laws for clear understanding, less litigation: Karnataka HC

The High Court of Karnataka has urged lawmakers to review the practice of including illustrations in legislation, observing that examples would help stakeholders in the justice delivery system, make laws easier for the common man to understand, and indicate whether amendments are prospective, retrospective or retroactive in nature.

Justice Anant Ramanath Hegde made the observation while delivering a judgment in a case involving a priority dispute between Omkara Assets Reconstruction Private Limited and the Commercial Tax Department of Telangana over the recovery of dues from the defunct BPL Engineering Limited.

Although the court ruled in favour of the tax department, holding that its statutory first charge over the property takes precedence over the secured creditor’s claim, the judge also underscored the importance of simplifying legislative drafting to make laws easier to comprehend and implement.

“The importance of illustrations found in several enactments, such as the Indian Penal Code, 1860, the Indian Contract Act, 1872, the Transfer of Property Act, 1882, the Specific Relief Act, 1963 the Bharatiya Nyaya Sanhita, 2023 and the Bharatiya Sakshya Adhiniyam, 2023 and the like, in capturing the true import of a provision is well known,” the court pointed out.

However, the court said, “Perhaps unknowingly or unintentionally, such a worthy practice has been forgotten. It is high time it was revived. Wherever needed and appropriate, the incorporation of illustrations while enacting or amending legislation may greatly assist all stakeholders in the justice delivery system.”

“After all, the law is meant for the common man and should be drafted in the simplest possible way. It should never be a puzzle,” Justice Hegde observed.

Prospective or retrospective

The court also suggested that it would be desirable for the Legislature, while introducing an amendment, to indicate in clear terms whether the law or amended provision is prospective, retrospective or retroactive, and, more importantly, prescribe how the amended provision is intended to apply to transactions and events that occurred prior to the amendment, pending judicial proceedings, and future transactions.

The court made these suggestions while noting that whenever a statute is amended, disputes frequently arise over how the amendment applies to concluded transactions that are the subject of pending proceedings, as well as concluded transactions that become the subject of disputes in proceedings initiated after the amendment comes into force. Quite often, different High Courts have taken divergent views on whether a particular amendment operates prospectively, retrospectively or retroactively, the court said.

Whether a statute or a provision of law or amended provision of law has prospective or retrospective or any other kind of application, should not be a subject matter of debate, the court suggested.

Meanwhile, the court made it clear that these observations were only intended to draw attention to the issue and to legislative practices which, if adopted, may reduce uncertainty. It said the observations should not be understood as an attempt by the court to legislate or to issue directions on legislative policy.