IN RE: DELHI LAWS ACT, 1912, THE AJMER-MERWARA (EXTENTION OF LAWS) ACT, 1947

AND THE PART C STATES (LAWS) ACT, 1950

CASE ANALYSIS CONSTITUTIONAL GOVERNANCE - II TOWARDS PARTIAL FULFILMENT OF THE EVALUATION IN THE SUBJECT

NATIONAL LAW UNIVERSITY, JODHPUR 21ST FEBRUARY, 2013 WINTER SESSION (JANUARY MAY 2013)

SUBMITTED BY: AABHAS KSHETARPAL ROLL NO.: 856 IV SEMESTER B.B.A. LL.B. (HONS.)

SUBMITTED TO: PROF. K.L. BHATIA SENIOR PROFESSOR FACULTY OF LAW NATIONAL LAW UNIVERSITY, JODHPUR

IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II TABLE OF CONTENTS

I. II. III. IV.

ABSTRACT ...................................................................................................... 3 INTRODUCTION............................................................................................. 3 STATUS BEFORE THE CONSTITUTION ........................................................... 3 AFTER THE ADVENT OF THE CONSTITUTION: IN RE DELHI LAWS ACT CASE:

ANALYSIS OF FACTS AND JUDGEMENT .................................................................. 5 A. Was section 7 of the Delhi Laws Act, 1912, or any of the provisions thereof ultra vires? If so, then

in what particular or particulars or to what extent? ................................................................................. 5 B. Was the Ajmer-Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof ultra vires

and in what particular or particulars or to what extent was the same ultra vires the Legislature which passed the said Act? ............................................................................................................................... 5 C. Is Section 2 of the Part C States (Laws) Act, 1950, or any of the provisions thereof ultra vires and

in what particular or particulars or to what extent was it ultra vires the Parliament? ................................ 6
V. VI.

ANALYSIS OF THE VARIOUS OPINIONS WITH REGARDS THE CORE ISSUE ...... 6 VIEWS FROM THE BENCH ............................................................................................ 8

i. ii. iii. iv. v.

The Source of Power to Delegate...................................................................................... 8 Ultima Thule: Limits of Delegation................................................................................... 9 Delegation of power to make modifications and alterations ......................................... 9 Repeal of Law ..................................................................................................................... 10 Impact of the In Re: Delhi Laws Act Case .................................................................... 10
VII.

CONCLUSION ................................................................................................................. 11

REFERENCES AND BIBLIOGRAPHY .................................................................................. 13

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II i. ABSTRACT

If we notice the evolution of the concept of a state in India, we can realize that due to the shift towards a welfare state, there has been increase in the administrative functions of the country. After independence there were a lot of misperceptions regarding delegation of legislative power to the executive. To clarify this, the president under Article 143 of the Constitution referred the matter to the apex court and it laid down certain guidelines clarifying the position. This case analysis delves into this landmark judgment delivered by a 7 judge bench of the Supreme Court. It may be noted here that, in this case, though the majority of judges concurred on the conclusion, all of them had an inconsistent set of reasons for the arriving at the same. ii. INTRODUCTION

Delegated legislation is one of the most inevitable parts of administration.1 Along with being most significant, it was one of the most debatable issues in India. According to the traditional theory, the function of the executive is administering the law enacted by legislature and in an ideal state the legislative power must be exclusively dealt by the legislature.2 But due to an increase in administrative functions and the subsequent shift towards the concept of a welfare state, they have to perform certain legislative functions for a smooth functioning of the government.3 iii. STATUS BEFORE THE CONSTITUTION

A multitude of decisions by Privy Council and Supreme Court deal with the model of delegated legislation. In the pre-constitution era, the Privy Council was the highest court of appeal from any Indian decision. It was at this time that the question of constitutionality of delegation of legislative power came before the same court in the case of Queen v Burah4. The act in dispute gave extensive powers to the Lieutenant Governor.5 The foremost among which was the power to bring the Act in effect, determine what laws were to be applicable and power to extend the application of the

B.K. Srinivasan and Ors. v. State of Karnataka and Ors., (1987)1SCC658, 18 [Hereinafter Srinivasan]. S.P. Sathe, Administrative Law, (3rd Edn., Lexis Nexis Butterworths), p. 39 [Hereinafter Sathe]. 3 C.K. Takwani, Lectures on Administrative Law (3rd Edn., Eastern Book Company), p 23. 4 1878 3 AC 889 [Hereinafter Burah]. 5 Id., at 2.
1 2

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II Act.6 The Act was enacted to remove garo hills from the jurisdiction of civil and criminal courts and extend all or any provisions of the Act in Khasi, Jaintia and Naga Hills in Garo Hills.7 The principal question before the court was whether giving the Lieutenant Governor power to extend the application of the law is delegation of power?8 Privy Council observed that Indian legislature is not an agent or delegate as against Calcutta High Court but was intended to have plenary powers of legislation, and of the same nature of the parliament itself.9 It was observed that Indian legislature had exercised its judgment as to the place, person, law, powers and what the governor was required to do was to make it effective upon fulfilment of certain conditions.10 This is called conditional legislation which was upheld by the court.11 The question of permissible limits of legislative power became important in Independent India. Just on the eve of independence, the federal court, in Jatindra Nath12 , had held that there could be no delegated legislation in India beyond conditional legislation.13 It was held that the Provincial Government could not be allowed to extend the time for which the Bihar Maintenance of Public Order Act 1948 was to remain.14 The court held this power to be non-delegable.15 This led to a lack clarity regarding the extent of delegated legislation.16 The moot question was whether the legislature of Independent India should be restricted to the rules laid down in the abovementioned or should the legislature be given a greater degree of freedom to determine the extent of delegation? It was left open to the courts to follow either the model in the United States where the extent of delegation was to strictly defined or the one in the United Kingdom where the extent of delegation was considered a matter of policy and therefore the courts were not obliged

9, Act No. XXII. of 1869. Preamble, Act No. XXII. of 1869. 8 Burah, supra note 4, at 9. 9 Id., at 20. 10 Id., at 22. 11 See State of Kerala and Ors. v. Mar Appraem Kuri Company Ltd. and Anr. , (2012)7SCC106, 17. 12 Jatindra Nath v Province of Bihar, (1949) 2 FCR 595. 13 Id., at 66. 14 Id., at 69. 15 Id., at 73. 16 Srinivasan, supra note 1, at 42.
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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II to interfere.17 Further, Indian constitution is silent on the issue whether legislature can delegate or not and hence, such issues could not possible be decided keeping the text of the constitution as the sole basis.18 iv. AFTER THE ADVENT OF THE CONSTITUTION: IN RE DELHI LAWS ACT CASE: ANALYSIS OF FACTS AND JUDGEMENT In order to clear doubts regarding the validity of a number of laws which contained such delegation of legislative power, the president of India under Article 143 of the Constitution invoked the Supreme Court's advisory jurisdiction seeking opinion on three questions submitted for its consideration and report.19 The three questions were as follows:

A. Was section 7 of the Delhi Laws Act, 1912, or any of the provisions thereof ultra vires? If so, then in what particular or particulars or to what extent?
The said provision provided that "The Provincial Government may, by notification in the official gazette, extend with such restrictions and modifications as it thinks fit to the Province of Delhi or any part thereof, any enactment which is in force in any part of British India at the date of such notification."20 This Act delegated to the Provincial Government the power to extend to Delhi area with such restrictions and modification any law in force in any part of British India. This was held valid by the majority but citing different reasons.

B. Was the Ajmer-Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof ultra vires and in what particular or particulars or to what extent was the same ultra vires the Legislature which passed the said Act?
The impugned section stated that "Extension of Enactments to Ajmer-Merwara. - The Central Government may, by notification in the official gazette, extend to the Province of Ajmer-Merwara with such restrictions and

M.P. Jain & S.N. Jain, Principles of Administrative Law (LexisNexis Butterworths, 6th ed., Reprint 2011), pp. 49-54. Id., at 55. 19 Srinivasan, supra note 1, at 42. 20 7, Delhi Laws Act, 1912.
17 18

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II modifications as it thinks fit any enactment which is in force in any other Province at the date of such notification."21 This act delegated the power to the Government to extend to the province with such modification and restriction as it may deem fit. This was also held valid by the court. The different reasons provided would be analysed subsequently.

C. Is Section 2 of the Part C States (Laws) Act, 1950, or any of the provisions thereof ultra vires and in what particular or particulars or to what extent was it ultra vires the Parliament?
The provision up for consideration before the court stated that "Power to extend enactments to certain Part C States. - The Central Government may, by notification in the Official Gazette, extend to any Part C State (other than Coorg and theAndaman and Nicobar Islands) or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a part A State at the date of the notification and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State.22 Part C were states directly under the control of the Central Government without having a legislature of their own and hence, Parliament had to legislate for them. This act delegated the power to the Central Government to extend to Part C States with such modification and restriction as it may deem fit any enactment which was in force in any Part A states. It also empowered the Government to repeal or amend any corresponding law which was applicable to Part C States. Section 2 of the Act was held valid but the power to repeal or amendment of any corresponding law which was for the time being applicable to part C was void and was held to be excessive delegation. v. ANALYSIS OF THE VARIOUS OPINIONS WITH REGARDS THE CORE ISSUE

The seven judges that presided over the case provided us with 7 different opinions for the final adjudication. The importance of the case cannot be under estimated in as much as, on one hand

21 22

2, The Ajmer-Merwara (Extension of Laws) Act, 1947. 2, Part C States (Laws) Act, 1950.

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II it permitted delegated legislation, while on the other, it demarcated the extent of such permissible delegation of power.23 The question was with regards the extent to which the legislature in India can delegate its legislative power. There were two extremist views put forth by the two counsels. M. C. Setalvad took the argument that power of delegation is a necessary implication of the power of legislation and the same does not result in abdication of the powers. The opposing counsel took the view that there exists a separation of powers in the country and India follows the doctrine of delegates non potest delegare. Therefore, there is an implied prohibition on delegation of power. As both the views were radical, the court took a view that sought to harmonize the two and provided the following dicta: 1. Separation of powers is not a part of the Indian Constitution. 2. Indian parliament was never considered as an agent of anybody. Therefore, the doctrine of delegates non potest delegare is not applicable. 3. The Parliament completely cannot abdicate itself by creating a parallel legislative body. 4. The Power of delegation is ancillary to the power of legislation. 5. There is a limitation on delegation of power. Legislature cannot delegate its essential legislative power. Essential legislative power means the power to lay down the policy of the law and enacting that policy into a binding rule of conduct. To arrive at these common conclusion, the Supreme Court gave 7 different pathways. There was unity of outlook on two points. Firstly, keeping the exigencies of modern government in view, Parliament and state legislatures have to delegate the power in order to deal with multiple problems prevailing in India, as it is impossible to expect them to come with complete and comprehensive legislation on all subjects sought to be legislated on. Secondly, since the legislature derives its power from the Constitution, excessive freedom like in the case of British constitution cannot be granted and limitations are required.

23

Sathe, supra note 2, at 42.

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II The Honble Judges differed on the question as to what were the permissible limits within which the Indian legislature could delegate its legislative powers. One view advocated that the legislature can delegate power to the extent that it does not abdicate its own power to have control over the delegate i.e. it must retain in its hands the ultimate control over the authority so as to be able to withdraw the delegation whenever delegate did something wrong. The second view reasoned that the legislature cannot delegate its essential functions which comprised the formulation of policy etc. This meant that the legislature should lay down the standards or policy in the delegating Act and the delegate may be left with power to execute the policy. vi. i. VIEWS FROM THE BENCH

The Source of Power to Delegate

It was concurred upon that the legislation should essentially be enacted by the Legislature such that the intention of the same is manifested, the Legislature cannot retire and leave the task of law making to any other body or class of bodies. Therefore, delegation, in respect of delegating law making authority by one legislature to another is, by necessary implication, forbidden by the Constitution. In this backdrop, it was claimed by the learned Attorney General, M. C. Setalvad that the Parliament could delegate because of the legislative power carried with it is power to delegate. This was reject out rightly by Chief Justice Kania, Justice Mahajan and Justice Mukherjea opining that constitution had never per se warranted delegation powers at any stage and all of them agreed on the outlook that legislature can however, conditionally legislate. . In doing so it may, in addition, lay down conditions, or state facts which on being fulfilled or ascertained according to the decision of another body or the execution authority, the legislation may become applicable to a particular area. This was described as conditional legislation. Justice Bose who was in favour of delegated legislation, also concurred with the opinion above. However, Justice Sastri and Justice Das, acceded to the contention of the Attorney General and

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II therefore differed from the majority. Their decision was based on the theory of Parliamentary sovereignty and they observed that power to make law comes along with the power to delegate. To provide a more holistic perspective, the author may point out that this case was decided in 1951 and since then the law on the subject has changed drastically. It is now judicially conceded that power of delegation is constituent element of legislative power, and the power resides in the legislature.24 ii. Ultima Thule: Limits of Delegation

The present position is that the legislative function in its true and intrinsic sense cannot be delegated. Therefore what can be delegated are only the non-essential functions. Only functions ancillary to the essential functions of the legislature. According to the opinion of Justice Mukherjea, if the policy laid down in an Act is in broad terms, the formulation of the details of the policy can generally to be passed to the executive. Justice Mahajan, added that essential matters cannot be delegated by the legislature. Chief Justice Kania opined that legislature cannot delegate to lay down policy underlying a rule of conduct. Discretion to make modifications and alterations in an Act while extending it to a given area, and to effect consequential amendments or changes in an existing law is again conditioned with the proposition that essential functions cant be delegated. The question on amount of discretion exercisable by delegated authority cannot be defined and is a question that depends on the facts and circumstances of each case. iii. Delegation of power to make modifications and alterations

The questions stated in this case is already stated above. Most of the judges answered these questions in affirmative. Only Chief Justice Kania and Justice Mahajan differed. They observed that only the legislature has the authority to modify and alter the law in any substantive sense. Justice Fazel Ali added that the power to change necessary things is incidental to applying the law.

24

Gramophone Company of India Ltd. v.Birendra Bahadur, (1984)2SCC534, 40.

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II If modifications are done within the framework and does not change the identity or structure no objection could be taken. Justice Mukherjea observed that modification does not mean change of policy but it is confined to alterations which keeps the policy intact and introduces changes appropriate to suit the local conditions. Justice Bose also was of the same opinion. In this way, the majority felt that the executive authority could be authorised to modify the law but not in essential and intrinsic sense. iv. Repeal of Law

The power to repeal a law is essentially a legislative power and hence, delegating that to the Government is at once ultra vires the power to delegate. Justices Fazl Ali, Das and Sastri held all the sections to be perfectly valid. The majority based its opinion on the maxim of unis est exclusion alterious and ruled that an express provision permitting delegation contained in Article 357 would mean that unrestrained legislation was not permitted under the constitution. Essential functions could not be delegated under any condition. The minority based its view of the theory of legislative omnipotence of the British Parliament, and its reflection in the Australian, the Canadian and the Indian Constitutional systems, which include the power to delegate legislative functions, subject to the condition of non-abdication. The author would note here that, in essence, the variance between the views of the minority and majority was not antagonistic. To say that legislature should not abdicate its power is not entirely opposed to saying that the legislature should not delegate its essential powers. v. Impact of the In Re: Delhi Laws Act Case

After In Re Delhi Laws Act25, the question which arose was related to the limits of delegation and the grounds for such limitation. The first case which encountered this question was Gwalior Rayon.26 Here, Section 8(2)(b) of Central Sales Tax Act. 1956 authorised levying of sales tax on interstate

In Re: The Delhi Laws Act, 1912, the Ajmer-Merwara (Extension of Laws) Act, 1947 and the Part C States (Laws) Act, 1950, [1951]2SCR747. 26 Gwalior Rayon Silk Manufacturing Co. v Assistant Commissioner of Sales Tax, (1974)4SCC98.
25

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II sales @ 10% or at the rate applicable to sale or purchase of goods in that state, whichever is higher. This was challenged as excessive delegation on the grounds that no policy was laid down in the parent act. The validity of the Act was upheld. Justice Khanna propounded the Standard Test which provided that when legislature confers powers on an authority to make delegated legislation it must lay down policy, principle or standard for the guideline for the authority concerned. Justice Matthew, in his separate opinion, endorsed the Abdication Test i.e. as long as the legislature can repeal the parent act conferring power on the delegate, the legislature does not abdicate its powers. The majority refused to accept this test. Justice Mathew, in the case of N. K. Papiah27 held the legislation valid based on the Abdication Test. The question was whether the Act which conferred power on the Government to fix the rate of excise duty28 and lay them before the legislature, was valid or not. Further in the case of Brij Sunder29 the court even allowed the extension of future laws of another state to which the adopting state legislature never had an opportunity to exercise its mind. In addition to this, in K. Kanjambu30, the court propounded the Policy and Guideline test. It is fascinating here to note that all these cases upheld the constitutional validity of the delegated legislation in question. vii. CONCLUSION

The case has materially contributed in the development of the concept of delegated legislation by clarifying certain areas of confusion. One of it was laying down that the British model of Delegated Legislation cannot be implemented in India because of the difference in certain basic tenets of the Constitution and system of administration. Moreover, it laid down that delegation is possible and necessary due to increase in burden on the legislature and increase in administrative activities. This cleared the confusion surrounding conditional delegation and delegation. This case increased the scope of the delegated legislation to the extent of ancillary powers i.e. non-abdication of own

N. K. Papiah v Excise Commisioner, (1975)1SCC492. 122, Karnataka Excise Tax Act, 1965. 29 Brij Sunder v First Additional District Judge, (1989)1SCC561. 30 Registrar of Co-operative Societies v K. Kanjambu, (1980)1SCC492.
27 28

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II power and non-transferring of main and essential functions. A Majority of the judges were in favour of delegated legislation. Only Justice Mahajan and Chief Justice Kania were in disagreement with the same. The latter emphasized on the concept conditional delegation. As the opposition counsel built on the argument of separation of powers and the concept of non potest delegare, the court observed that separation of powers is not a part of Indian constitution. Courts are clear on the status of delegated legislation being allowed.31 The only question the courts must appreciate in such cases is whether the power delegated is excessive or within the ambit of the parent act.32 In culmination, this case achieved 2 material ends. Firstly, it legitimized delegation of legislative power by the legislature to administrative organs. Secondly, it imposed an outer limit on delegation by the legislature. It may also be noted here that the present case shows lack of judicial consensus. The ghost of Jatinder Nath was hovering over the judges who presided over both these cases and they could not be expected to change their opinion as such short notice. In the contemporary scenario, it is a well-accepted concept and delegation of power is allowed as long as it is reasonable.

31 32

Agricultural market Committee v Shalimar Chemical Works, (1997)5SCC516. I. P. Massey, Administrative Law (7th Edn., Eastern Book Company), p. 103.

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IN RE: DELHI LAWS ACT, 1912| CASE ANALYSIS | CONSTITUTIONAL GOVERNANCE - II REFERENCES AND BIBLIOGRAPHY CASES 1. Agricultural market Committee v Shalimar Chemical Works, (1997)5SCC516 -------------------- 12 2. B.K. Srinivasan and Ors. v. State of Karnataka and Ors., (1987)1SCC658 --------------------3, 4, 5 3. Brij Sunder v First Additional District Judge, (1989)1SCC561 ------------------------------------- 11 4. Gramophone Company of India Ltd. v.Birendra Bahadur, (1984)2SCC534 -------------------------9 5. Gwalior Rayon Silk Manufacturing Co. v Assistant Commissioner of Sales Tax, (1974)4SCC98 - 10 6. In Re: The Delhi Laws Act, 1912, the Ajmer-Merwara (Extension of Laws) Act, 1947 and the Part C States (Laws) Act, 1950, [1951]2SCR747 ------------------------------------------------- en passim 7. Jatindra Nath v Province of Bihar, (1949) 2 FCR 595 ----------------------------------------------4, 9 8. N. K. Papiah v Excise Commisioner, (1975)1SCC492 ---------------------------------------------- 11 9. Queen v Burah, 1878 3 AC 889 ----------------------------------------------------------------------3, 4 10. Registrar of Co-operative Societies v K. Kanjambu, (1980)1SCC492 --------------------------------- 11 11. State of Kerala and Ors. v. Mar Appraem Kuri Company Ltd. and Anr., (2012)7SCC106 ---------4 STATUTES 1. Act No. XXII. of 1869 ---------------------------------------------------------------------------------4 2. Delhi Laws Act, 1912 ----------------------------------------------------------------------------1, 2, 5 3. Karnataka Excise Tax Act, 1965 ------------------------------------------------------------------- 11 4. Part C States (Laws) Act, 1950 -----------------------------------------------------------------1, 2, 6 5. The Ajmer-Merwara (Extension of Laws) Act, 1947 ---------------------------------------------6 TREATISES 1. C.K. Takwani, Lectures on Administrative Law -------------------------------------------------------3 2. M.P. Jain & S.N. Jain, Principles of Administrative Law-------------------------------------------4, 5 3. S.P. Sathe, Administrative Law ----------------------------------------------------------------------3, 6

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