Statutory interpretation is process of interpreting and practicing law made by the legislature.  Generally, words of a statute do not have plain and straightforward meaning.  In cases where there is ambiguity or vagueness in a statutory language that must be resolved by judges in a fair and just manner.

Legislatures bestow powers to administrative agencies to decide matters that need specialization and expertise.  Administrative agencies are to consider logically relevant factors not precluded from application by statutes when making a decision.  Agencies are provided flexibility to interpret statutes in a purposive manner taking into account background principles from relevant fields of law.

the deference rule is one of the rules that guide courts in interpreting statutes.  The deference rule instruct courts to defer to reasonable interpretation by an administrative agency.  Generally, when a statute is ambiguous with respect to a specific issue, and that is interpreted by administrative agencies, courts will defer to the agency’s reasonable interpretation of the statute[i].  Permissible construction of statute by the agency should not be irrational or unreasonable.  Although a different reasonable interpretation can be provided to an ambiguous law, if an administrative agency has resolved the ambiguity based on the facts of the case in a reasonable manner, courts are bound to respect the judgment of the agency.

Courts are not bound by administrative construction of a statute when it is evidently wrong, arbitrary, or unreasonable[ii].  Such decisions will not be followed by courts.  Ultimately it is the function of judiciary to interpret how a statute should apply in a particular case.  While courts are bound to weigh seriously administrative agency’s interpretation of statutes, they are not conclusive[iii].  Judicial deference to administrative interpretation of statutes will be accorded less weight when the legislative intent is clear from the words of the statute.  When the language used in the statute is special or technical and does not consist of clear meaning then courts can defer to an administrative agency’s reasonable interpretation of a statute.

[i] Evansville v. Southern Indiana Gas & Electric Co., 167 Ind. App. 472 (Ind. Ct. App. 1975)

[ii] Beer Distributor of Indiana, Inc. v. State, 431 N.E.2d 836 (Ind. Ct. App. 1982)

[iii] Whitcomb Hotel, Inc. v. California Employment Com., 24 Cal. 2d 753, 757 (Cal. 1944)