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CA Intermediate · Corporate and Other Laws · Interpretation of Statutes

A statute says that 'a director shall not hold office in more than twenty companies.' A clause in the same statute provides: 'Provided that nothing in this section applies to a director of a private company which is a small company.' A person argues the proviso removes small private company directors from the limit entirely. How does a proviso generally operate in interpretation?

A proviso carves out an exception from, or qualifies, the main provision and is read in relation to it. It is not an independent enactment, a repeal of the section, or a preamble. So it works as an exception confined to the scope of the section it follows.

  1. AIt carves out an exception from the main provision and is read in relation to it, without enlarging or being independent of itCorrect
  2. BIt always creates a separate and independent enactment unconnected with the main section
  3. CIt repeals the main provision to the extent of any conflict and is therefore the dominant rule
  4. DIt is a mere preamble and has no effect on the operation of the section

Explanation

A proviso ordinarily qualifies or excepts something from the main enactment and must be read in connection with it. It does not generally stand as an independent enactment, nor does it repeal the main section. It is also not a preamble, which is the introductory statement of purpose. So the proviso excludes the stated class from the limit as an exception to the section.

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