A Guide to Interpretation of Non-obstante clause

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non-obstante clause

Meaning of non-obstante clause (“Notwithstanding anything contained”)

Notwithstanding means despite; in spite of; without being opposed or impeded by; nevertheless; however, regardless of. A “non-obstante” provision is a provision in a statute that begins with the words ‘Notwithstanding anything contained’ and is often used in a statute to give an overriding effect to a particular section or the statute as a whole. A non-obstante clause is used in legislative drafting to make an exemption to or override the provision or Act that this phrase follows.

A notwithstanding clause in a statute makes the provision independent of all other provisions in the law or other laws for the time being in force, even if the other laws stipulate to the contrary. The Supreme Court in Brij Rai Krishnav. S.K. Shaw and Brothers (1951) has ruled that the phrase “notwithstanding anything contained in any other law” precludes reliance on any other law to the contrary.

Example of non-obstante clause in Section 149(12) of the Companies Act, 2013

Section 149(12) of the Companies Act, 2013 is a non-obstante clause. It states that an independent director and a non-executive director who is not a promoter or key managerial personnel of a company will be held liable, only in relation to those acts of omission or commission by a company, which have occurred with his knowledge, attributable through Board processes, and with his consent or connivance or where he did not act diligently.

This section starts with a non-obstante clause, i.e., “Notwithstanding anything contained in this Act”, hence it shall have an overriding effect on any other provision contained in the Companies Act whatsoever. In case of conflict, this section shall prevail over all other provisions of the Act.

The section stipulates that the independent directors and non-executive directors of a company (not being promoter or KMP) must not be held liable for any criminal or civil proceedings under the Act except when the above-mentioned criterion is met. Unless it is known that an act of omission/commission has occurred with their knowledge, they cannot be held liable even when some other provision of the Act holds them accountable on similar grounds.

How is it different from “subject to”?

The effect of any statute including a non-obstante clause, as well as the ambit and extent of a provision which is made ‘subject to’ another provision or law, and the differentiation between the two, are well established.

When a provision of an enactment is made ‘subject to’ another provision, it implies that the provision in question will adhere to the other provision to which it is subject. A non-obstante clause, on the other hand, is a legislative device for giving overriding effect to certain provisions over some contrary provisions found in the same or another law, in order to avoid the operation and effect of all such contrary provisions in respect of which the non-obstante provision has been given overriding effect. [Jawahar Sons Enterprises Pvt. Ltd. vs. State and Ors., 2002]

What happens when two or more laws contain such a clause? [Case laws]

It is mostly seen that while making judgements in cases involving the interpretation of non-obstante clauses, Courts consider the following aspects:

  • The object and purpose of the laws
  • The timing of the enactments
  • The nature (general or special) of the enactments 

 As per Sarwan Singh v. Kasturi Lal (1977), when two or more laws operate in the same area and each has a non-obstante clause indicating that its provisions would override those of any other law, the case of such conflict must be decided by reference to the intent and purpose of the laws under discussion.

In the above-mentioned case law, it was seen that the special and specific purpose that motivated the enactment of Section 14A and Chapter IIIA of the Delhi Rent Control Act would be completely defeated if the provisions of the Slum Areas (Improvement and Clearance) Act, 1956, requiring permission to the competent authority, were to take precedence over them. As a result, despite anything to the contrary in the Slum Clearance Act, the newly enacted provisions of the Delhi Rent Control Act must be given full effect. Due to the lack of a standard protocol for statutory interpretation, cases of such conflict must be resolved in light of the object and purpose of the laws under discussion.

When two or more laws contain a non-obstante clause, another view that Courts take is to give attention to the timing of enactments.

In the case of Sharat Babu Digumarti vs Govt. of NCT of Delhi (2017), the Supreme Court of India, among other things, ruled that where two special statutes have non-obstante clauses, the later statute must take precedence. Since at the time of passing of the later statute, the Legislature was aware of the earlier legislation & its non-obstante clause, and the fact that the Legislature still confers the later enactment with a non-obstante clause indicates that the Legislature desired that the later enactment prevails. In case the Legislature did not want the later enactment to take precedence, it could have stated in the later legislation that the provisions of the previous enactment take precedence, which implies that in the event of a disagreement between two enactments, the earlier enactment takes precedence.

Further, it is also essential that the nature of enactments is also considered by Courts before arriving at a decision. In the case of R.S. Raghunath versus State of Karnataka (1992), the court decided that a special regulation or legislation cannot be found to be superseded by a subsequent general statute just because the latter begins with a non-obstante clause. Before giving effect to the non-obstante clause, there should be a significant discrepancy between the two.

In the case of ITO vs. Gwalion Rayon Silk Manufacturing Co. (1976), it was established that while interpreting a non-obstante clause, the court must determine the extent to which the legislature intended to grant it an overriding effect. As a result, it is not prudent to include a non-obstante clause in any statute without first considering the appropriateness of such a tough provision. Instead of applying the non-obstante clause, it will be justifiable and advantageous for the successful enforcement of law if the legislation is drafted after conducting extensive and critical research, adopting an integrated scheme, and using suitable and perceivable wordings.

Conclusion

From the above judgements, it is clear that the interpretation of non-obstante clauses has been evolving through Court judgements and the Courts will continue to make use of these profound decisions as well as develop new ones. It can be seen that a non-obstante clause shall normally mean that it will have an overriding effect on all other laws or provisions. Also, whenever there is a conflict between two statutes that both contain such clauses, importance is given to the object and purpose of the Acts depending upon the facts & circumstances of each case.

List of references:

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Published by Finlawportal Team

The author enjoys to write informational content in the domain of company law and allied laws. They take interest in doing thorough and analytical research on legal topics.

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