The Principle of "Two Possible Views" in Indian Judicial Adjudication

Introduction

The administration of justice in India, as in any mature legal system, frequently confronts situations of interpretative ambiguity in statutes or factual uncertainty arising from evidence presented. In navigating these complexities, the judiciary has developed and consistently applied certain guiding principles. Among these, the doctrine of "two possible views" stands as a cornerstone of judicial reasoning. This principle dictates that where two reasonable or plausible interpretations of law or conclusions from facts emerge, the choice between them is not arbitrary but is governed by established legal standards, often favouring outcomes that uphold fundamental rights, ensure fairness, or respect the findings of lower judicial forums. This article seeks to examine the definition, jurisprudential underpinnings, application, and implications of the "two possible views" principle across various branches of Indian law, drawing extensively from key pronouncements of the Supreme Court of India and various High Courts.

Defining the "Possible View": Distinction from Erroneous or Wrong Views

A critical precursor to understanding the application of the "two views" principle is the precise definition of what constitutes a "possible view" as distinct from one that is merely "erroneous" or "wrong." The Supreme Court of India has provided clarity on this distinction. In Murugesan S/O Muthu (A-5) v. 2. Paramasivam S/O Muthu (A-2) (Supreme Court Of India, 2012), and reiterated in SIJU KURIAN v. THE STATE OF KARNATAKA (Supreme Court Of India, 2023), the Court elaborated:

“The said expression is in contradistinction to expressions such as “erroneous view” or “wrong view” which, at first blush, may seem to convey a similar meaning though a fine and subtle difference would be clearly discernible. The expressions “erroneous”, “wrong” and “possible” are defined in Oxford English Dictionary in the following terms: “erroneous.— wrong; incorrect. wrong.—(1) not correct or true, mistaken. (2) unjust, dishonest, or immoral. possible.—(1) capable of existing, happening, or being achieved. (2) that may exist or happen, but that is not certain or probable.” It will be necessary for us to emphasize that a possible view denotes an opinion which can exist or be formed irrespective of the correctness or otherwise of such an opinion. A view taken by a court lower in the hierarchical structure may be termed as erroneous or wrong by a superior court upon a mere disagreement. But such a conclusion of the higher court would not take the view rendered by the subordinate court outside the arena of a possible view. The correctness or otherwise of any conclusion reached by a court has to be tested on the basis of what the superior judicial authority perceives to be the correct conclusion. A possible view, on the other hand, denotes a conclusion which can reasonably be arrived at regardless of the fact where it is agreed upon or not by the higher court. The fundamental distinction between the two situations have to be kept in mind.”

This distinction, also affirmed in Murugesan v. State (Supreme Court Of India, 2012), underscores that a "possible view" is one that is reasonably tenable, even if a higher court might ultimately disagree with it or prefer an alternative. It is not necessarily the *correct* view, but a view that *could* be legitimately held based on the material on record or the statutory language.

Application in Criminal Jurisprudence

The "two possible views" principle finds its most pronounced application in criminal law, particularly in the context of appeals against acquittal and the overarching presumption of innocence.

Appeals Against Acquittal: Upholding Judicial Restraint

The appellate power to interfere with an order of acquittal is significantly circumscribed. The Supreme Court has consistently held that if the view taken by the trial court, leading to an acquittal, is a "possible view" based on the evidence, the appellate court should not substitute its own view merely because it finds a conviction more probable. As observed in THE STATE OF RAJASTHAN v. KISTOORA RAM (2022 SCC ONLINE SC 984, Supreme Court Of India, 2022), "Unless it is found that the view taken by the Court is impossible or perverse, it is not permissible to interfere with the finding of acquittal. Equally if two views are possible, it is not permissible to set aside an order of acquittal, merely because the Appellate Court finds the way of conviction to be more probable." This principle acknowledges that the trial court has the advantage of observing witness demeanor and that an acquittal reinforces the presumption of innocence.

Similarly, in Bhaiyamiyan Alias Jardar Khan And Another v. State Of Madhya Pradesh (2011 SCC 6 394, Supreme Court Of India, 2011), the Court reiterated that "if the view taken by the trial court was possible on the evidence, the High Court should stay its hands and not interfere in the matter in the belief that if it had been the trial court, it might have taken a different view." This sentiment was echoed in Kalyan Singh v. State Of M.P. (2006 SCC 13 303, Supreme Court Of India, 2006), where the Court emphasized that if two views are possible, the appellate court should not ordinarily interfere with a judgment of acquittal. The High Court, when dealing with an appeal against acquittal, must reach the conclusion that "no two views are possible" if it seeks to reverse the acquittal. The case of S. Rama Krishna v. S. Rami Reddy (Dead) By His Lrs. And Others (2008 SCC 5 535, Supreme Court Of India, 2008) further reinforced that in an appeal against acquittal, if two views are possible, the judgment of acquittal should not ordinarily be interfered with.

The Supreme Court in MALLAPPA v. STATE OF KARNATAKA (Supreme Court Of India, 2024) lucidly explained the 'two-views theory': "It may be noted that the possibility of two views in a criminal case is not an extraordinary phenomenon. The 'two-views theory' has been judicially recognized by the Courts and it comes into play when the appreciation of evidence results into two equally plausible views. However, the controversy is to be resolved in favour of the accused. For, the very existence of an equally plausible view in favour of innocence of the accused is in itself a reasonable doubt in the case of the prosecution. Moreover, it reinforces the presumption of innocence."

Presumption of Innocence and Benefit of Doubt

The "two views" principle is intrinsically linked to the presumption of innocence and the doctrine of benefit of doubt. In cases resting on circumstantial evidence, such as those discussed in Sharad Birdhichand Sarda v. State Of Maharashtra (1984 SCC 4 116, Supreme Court Of India, 1984) and Kali Ram v. State Of Himachal Pradesh (1973 SCC 2 808, Supreme Court Of India, 1973), the prosecution must establish a chain of evidence so complete as to exclude every hypothesis of innocence. If the evidence is capable of yielding a "possible view" consistent with the accused's innocence, that view must be adopted. The very existence of a plausible alternative explanation (a second possible view) injects reasonable doubt into the prosecution's narrative, the benefit of which must accrue to the accused.

Considerations at the Stage of Discharge

The principle also finds relevance at earlier stages, such as the framing of charges or discharge. As noted in KRISHNA KUMAR v. UNION OF INDIA THROUGH ITS S P C B I E O W (Jharkhand High Court, 2023), referencing M.E. Shivalingamurthy v. Central Bureau Of Investigation, Bengaluru ((2020) 2 SCC 768), "If two views are possible and one of them gives rise to suspicion only as distinguished from grave suspicion, the trial Judge would be empowered to discharge the accused." This implies that for a trial to proceed, the view pointing towards guilt must be more than just one of two equally tenable possibilities; it must rise to the level of grave suspicion.

Application in Statutory Interpretation and Civil/Tax Law

While prominent in criminal law, the "two possible views" principle also informs judicial decision-making in civil matters, particularly in statutory interpretation and the review of decisions by other adjudicatory bodies.

Interpreting Fiscal Statutes: The Assessee-Favouring Rule (with Caveats)

A long-standing canon of interpretation for fiscal statutes, particularly penal or charging provisions, is that if two reasonable constructions are possible, the one that favours the assessee should be adopted. This was affirmed in Commissioner Of Income-Tax, West Bengal-I v. Vegetable Products Ltd. (1969 SCC ONLINE CAL 128, Calcutta High Court, 1969), where the court, faced with ambiguity in calculating penalties, preferred the interpretation more lenient to the assessee.

The Supreme Court's decision in K.P Varghese v. Income Tax Officer, Ernakulam And Another (1981 SCC 4 173, Supreme Court Of India, 1981) illustrates a nuanced application. The Court chose a purposive interpretation of Section 52(2) of the Income Tax Act, 1961, over a literal one to avoid absurd and unjust outcomes. This involved selecting one "possible view" (the purposive one, requiring understatement of consideration) that aligned with legislative intent and fairness, over another "possible view" (a literal reading based merely on market value difference). The Court reasoned that a literal interpretation would lead to taxing legitimate transactions where no tax avoidance motive existed.

However, this assessee-favouring rule in ambiguity has a significant caveat in the context of tax *exemption* notifications. In Commissioner Of Customs (Import), Mumbai v. Dilip Kumar And Company And Others (2018 SCC 9 1, Supreme Court Of India, 2018), a Constitution Bench overruled the earlier principle (from *Sun Export Corpn. v. Collector of Customs (1997)*) that ambiguities in exemption notifications should favour the assessee. The Court held that "any ambiguity in a tax exemption provision/notification must be interpreted in favour of the Revenue." This creates a specific context where, if two views on an exemption's applicability are possible due to ambiguity, the view favouring the Revenue prevails, placing the onus on the assessee to prove clear entitlement.

Judicial Review of Arbitral Awards

In the realm of arbitration, judicial interference with arbitral awards is limited. The Supreme Court in Navodaya Mass Entertainment Limited v. J.M Combines (2015 SCC 5 698, Supreme Court Of India, 2014) held that "Once the arbitrator has applied his mind to the matter before him, the court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the arbitrator would prevail," unless there is an error apparent on the face of the record or the arbitrator has not followed the statutory legal position. This respects the autonomy of the arbitral process and the arbitrator's chosen interpretation if it is a "possible view."

Navigating Conflicting Judicial Precedents and Statutory Interpretations

Courts often encounter situations where different High Courts or even different benches of the same court have taken divergent "views" on a legal provision. In Commissioner Of Income Tax, Bombay And Others v. Podar Cement Pvt. Ltd. And Others (1997 SCC 5 482, Supreme Court Of India, 1997), the Supreme Court resolved conflicting High Court interpretations of "owner" under Section 22 of the Income Tax Act, 1961. It endorsed the view that beneficial ownership, rather than mere legal title, was determinative, thereby establishing a uniform "possible view" based on a purposive interpretation of the statute.

Similarly, in Gulamrasool Sarfuddin Malek And Others v. Dulhanbibi And Others (Gujarat High Court, 1979), the High Court, when faced with conflicting judicial opinions on the interpretation of a statutory provision, chose the liberal construction that achieved the statute's object, effectively selecting one "possible view" over another based on interpretative principles.

The doctrine of "per incuriam" also plays a role. As discussed in Commissioner Of Income Tax, Andhra Pradesh-I, Hyderabad v. B.R. Constructions, Hyderabad (Andhra Pradesh High Court, 1992) and Irfana Ahmad v. State Of J&K And Another (Jammu and Kashmir High Court, 2018), a prior judgment rendered "per incuriam" (in ignorance of a relevant statute or binding precedent) may be disregarded. This means that a "view" expressed in such a judgment, even if seemingly possible on its face, loses its binding authority if its foundational basis was flawed.

Substance Over Form in Complex Transactions

In complex commercial and tax matters, a transaction might be susceptible to two views: one based on its formal structure and another based on its underlying substance. In Vodafone International Holdings B.V Petitioner. v. Union Of India & Anr. (2010 SCC ONLINE BOM 1328, Bombay High Court, 2010), the court looked at the substance of an offshore transaction (transfer of shares of a foreign company) to determine if it effectively transferred control over Indian assets, thereby creating a tax nexus with India. By preferring the substantive view, the court chose one "possible view" of the transaction's implications over a purely formalistic one for taxation purposes.

Rationale and Foundational Underpinnings

The principle of "two possible views" is not merely a rule of convenience but is rooted in several fundamental legal and equitable considerations:

• Presumption of Innocence: In criminal law, it directly supports the presumption that an accused is innocent until proven guilty beyond a reasonable doubt. If a view consistent with innocence is plausible, it must prevail.
• Benefit of Doubt: It operationalizes the benefit of the doubt, ensuring that ambiguities are not resolved to the detriment of the individual where liberty or significant rights are at stake.
• Judicial Propriety and Hierarchy: It fosters respect for the findings of lower courts or adjudicatory bodies, especially where they have had the opportunity to assess evidence firsthand. Appellate courts exercise restraint, intervening only if the lower forum's view is impossible or perverse.
• Fairness and Justice: It aims to prevent arbitrary decision-making and ensures that interpretations of law align with legislative intent, equity, and the avoidance of undue hardship (as seen in *K.P Varghese* and *Vegetable Products Ltd.*).
• Rule of Law: By providing a degree of predictability in how courts approach ambiguity, it reinforces the rule of law. Litigants can anticipate that if their position represents a "possible view," it will be given due consideration.

However, as demonstrated by the *Dilip Kumar* case concerning tax exemptions, the application of this principle is not monolithic and can be tailored to specific legislative policies and contexts. The onus may shift, and the favoured view in ambiguity can change based on the nature of the provision being interpreted.

Conclusion