Administrative Discretion

 Discretion in layman’s language means choosing from amongst the various available
alternatives without reference to any predetermined criterion, no matter how fanciful
that choice may be.
 But the term ‘discretion’ when qualified by the word ‘administrative’ has somewhat
different overtones. Discretion in this sense means choosing from amongst the various
available alternatives but with reference to the rules of reason and justice and not
according to personal whims.

Judicial behaviour and administrative discretion in India

 Judicial control mechanism of administrative discretion is exercised at two stages:
o Control at the state of delegation of discretion-
 The court exercises control over delegation of discretionary powers to
the administration by adjudicating upon the constitutionality of the law
under which such powers are delegated with reference to the FR
enunciated in Part III of the Indian Constitution.
o Control at the state of exercise of discretion-
 The formulations may be conveniently grouped in two broad
generalisations:
 That the authority is deemed not to have exercised its discretion
at all, or there is failure on its part to exercise discretion.
 That the authority is deemed to have exercised its
discretion at all:
 Under this categorisation, courts exercise
judicial control over administrative discretion if
the authority has either abdicated its power or
has put fetters on its exercise, or the
jurisdictional facts are either non-existent or
have been wrongly determined.
 In PURTABPORE CO. LTD. v. CANE COMMR.
Of BIHAR:
In this case the Cane Commissioner, who
had the power to reserve sugarcane areas
for the respective sugar factories, at the
dictation of the CM, excluded 99 villages
from the area reserved by him in favour
of appellant company.
The court quashed the exercise of
discretion by the Cane Commissioner on
the ground that he abdicated his power
by exercising it at the dictation of some
other authority; therefore, it was deemed
that the authority had not exercised its
discretion at all.

1|Page
 Administrative Discretion

Thus, the exercise of discretion in

compliance with instructions of some
other person amounts to failure to
exercise the discretion altogether.
 However, this does not mean that the
administrative authority cannot fame broad
policies for the exercise of its discretion.
 In SHRE RAMA SAGAR INDUSTRIES LTD. v.
STAT OF A.P.:
Sec. 21 of the A.P. Sugarcane
(Regulation of supply and purchase) Act,
1961 gave power to the administrative
authority to exempt from payment of tax
any new factory which has substantially
expanded.
The government framed a policy
granting exemption only to factories in
the cooperative sector.
The SC, negativing the contention that
the adoption of this policy has fettered
the exercise of discretion, held that a
body endowed with a statutory discretion
may legitimately adopt general rules or
principles to guide itself in the exercise
of its discretion provided such rules are
not arbitrary and not opposed to the aims
and objectives of the Act.
 That the authority has not exercised its discretion properly, or
there is an excess or abuse of discretion
 That the authority has not exercise its discretion
properly-
 Improper exercise of discretion includes
everything which English court include in
‘unreasonable’ exercise of discretion and
American courts include in ‘arbitrary and
capricious’ exercise of discretion.
 Improper exercise of discretion includes such
things as ‘taking irrelevant consideration into
account’, ‘acting for improper purpose’, ‘asking
wrong question’, ‘ acting in bad faith’,
‘neglecting to take into consideration relevant
factors’ or ‘acting unreasonably’.

2|Page
 Administrative Discretion

 In INDIAN RLY. CONSTRUCTION CO. LTD. v.

AGAY KUMAR:
Elaborating the law on this point, the
court held that in general, discretion
must be exercised only by the authority
to which it is committed.
The authority must genuinely address
itself to the matter before it; it must not
act under the dictates of another body or
disable itself from exercising discretion
in each individual case.
It must act in good faith, must have
regard to all relevant considerations and
must not be influenced by irrelevant
considerations, must not seek to promote
purposes alien to the letter and spirit of
the legislation that gives it power to act,
and must not act arbitrarily or
capriciously.
One can classify these grounds of
judicial control of administrative
discretion into ‘illegality’, ‘irrationality’
and ‘procedural impropriety’.
To characterise an exercise of discretion
as ‘irrational’, the court apply
Wednesbury test of reasonableness and
see whether discretion is ‘so outrageous’
as to be in total defiance of logic and
moral standards.

Notable instances: Administrative discretion and Art. 14:

 In STATE OF WB v. ANWAR ALI SARKAR:
o In this case, in order to speed up the trial for certain offences, Sec. 5(1) of the
WB Special courts Act, 1950 conferred discretion on the SG to refer any
offence for trial by the special court.
o Since the procedure before the special courts was stringent in comparison with
that for normal trials, the respondents asserted its unconstitutionality on the
ground that it violates the equality clause in Art. 14
o The court held that the law invalid on the ground that the use of vague
expression, like ‘speedier trial’, confers a wide discretion on the government
and can be basis of unreasonable classification.

3|Page
 Administrative Discretion

 In MANHAR LAL v. STATE OF MAHARASHTRA:

o In this case and many others, signs of judicial humility or withdrawal in
judicial behaviour on accounts of administrative convenience are strikingly
visible.
o In this case, Sec. 187-A of the Sea Customs Act, 1878 gave wide discretionary
powers to the authorities to either refer a case of smuggled goods to a
magistrate or to look into the matter themselves.
o The court upheld the constitutionality of the statute on the ground that as this
discretion is to be exercised by senior officers that will stand as a guarantee
against its misuse. This kind of judicial behaviour aimed at preserving wide
discretionary powers may ultimately end up in destroying it.
 In MONARCH INFRASTRUCTURE (P) LTD v. ULHASNAGAR MUNICIPAL
COPRN:
o In this case, Municipal Corporation has invited tenders for appointment of
agents for the collection of octroi. However, one of the eligibility conditions
was deleted after the expiry of time for submission of tenders but before
opening thereof.
o Thereafter, the tender was awarded to ne who did not fulfil the deleted
condition.
o The SC held award of tender arbitrary and discriminatory.

Notable Instances: Administrative discretion and Art. 19

 The courts have always taken the view that the vesting of wide discretionary power in
the administrative authorities to curtail these freedoms is unreasonable and hence
unconstitutional.
 In HIMAT LAL K SHAH v. COMMR. Of POLICE:
o Sec. 15(2) (b), Criminal Amendment Act, 1908 as amended by Madras Act,
1950 gave wide discretionary powers to the SG to declare any association as
unlawful.
o The court struck down Sec. 15(2) (b) as being unconstitutional because it
allows the administrative authority to exercise this discretion on subjective
satisfaction without permitting the grounds to be judicially tested.
 In HARAKCHAND RATANCHAND BANTHIA v. UOI:
o The Gold Control Act, 1968 invested administrative authority with blanket
discretionary power to grant or refuse licence to any dealer in gold ornaments.
o Though the act had provided that such power was to be exercised with
reference to the number of existing dealers, anticipated demand, suitability of
the applicant and public interest, the court struck down the law on the ground
that such vague expressions may result in the arbitrary exercise of power.

4|Page
 Administrative Discretion

Notable Instances:
 In M.A. RASHEED v. STATE OF KERALA:
o In this case, Kerala government issued a notification to prevent high
consumption of coir in mechanised industry because the traditional sector was
starving, causing unemployment.
o The court observed:
 Whenever a public authority is invested with the power to make an
order which prejudicially affects the rights of an individual, then,
whatever may be the nature of the power, whatever may be the
procedure prescribed and whatever may be the nature of the authority,
the proceedings of the public authority must be regulated by the
analogy of rules governing judicial determination of disputed
questions.
 Administrative decision in exercise of powers even if conferred in
subjective terms is to be made in good faith based on relevant
considerations.
 The standard of reasonableness may range from the court’s own
opinion of what is reasonable to the criterion of what a reasonable man
might have decided.
 In S.R. VENKATRAMAN v. UOI:
o The appellant, a Central Government officer, was prematurely retired from
service in ‘public interest’ under Rule 56(j) (i) on attaining the age of 50 years.
o The SC, quashing the order of the government, held that if a discretionary
power has been exercised for an unauthorised purpose, it is generally
immaterial whether its repository was acting in good faith or bad faith.
o An administrative order based on a reason or facts that do not exist must be
held to be infected with an abuse of power.
 In RAMANA DAYARAM SHETTY v. INTERNATIONAL AIRPORT AUTHORITY OF
INDIA:
o In this case the issue was the awarding of a contract for running a second-class
restaurant and two snack bars by the IAA, which is a statutory corporation.
o The tenders were invited from ‘registered second-class hoteliers’, and it was
clearly stipulated that the acceptance of the tender would rest with the Airport
director who would not bind himself to accept any tender and reserved to
himself the right to reject all or any of the tenders receive without assigning
any reason.
o The highest tender was accepted. The only snag was that the tenderer was not
hotelier at all.
o The SC accepted the plea of locus standi in challenging the administrative
action. BHAGWATI J, who delivered the judgement of the court held:
 Exercise of discretion is an inseparable part of sound administration,
and, therefore, the state, which is itself a creature of the constitution,
cannot shed its limitation at any time in any sphere of state activity.

5|Page
 Administrative Discretion

 It is well-settled rule of administrative law that an executive authority

must be rigorously held to the standards by which it professes its
actions to be judged, and it must scrupulously observe those standards
on pain of invalidation of an act in violation of them.
 Every action of the executive government must be informed with
reason and should be free from arbitrariness. That is the very essence
of the rule of law and its bare minimal requirements.
 The courts have also insisted that before the exercise of discretion, the administrative
authority must also frame rules for the proper exercise of the discretion.
 Nevertheless, in order to meet the challenge of arbitrariness, clear and unequivocal
guidelines, criteria, rules or regulations must be predetermined and published for the
public and action should be taken accordingly.
 Reason and justice and not arbitrariness must inform every exercise of discretion. In
the same manner when no guidelines were prepared for the selection of dealers of fair
price ships, and the selection was left entirely to the whims of the individual officer
holding interview, the court held that the exercise of such unbridled power is violative
of Art. 14 of the Constitution.
 Nevertheless, the SC has reiterated that the judicial invigilation of administrative
decision should not extend as far as reviewing the actions on merit.
 In P.S.G. COLLEGE OF TECHNOLOGY/:
o The court held that a HC transgresses its jurisdiction under Art. 226 if it enters
upon the merits of the controversy by embarking upon an enquiry into the
facts.
 Elaborating the same principle, the SC in AIR INDIA LTD v. COCHIN
INTERNATIONAL AIRPORT LTD. observed that it is the decision making process
and not decision which is amenable to judicial review.
 Following the same line of reasoning which allows administration necessary
flexibilities, the SC in MUNI SUVRAT-SWAMI JAIN S.M.P. SINGH v. ARUN
NATHURAM GAIKWAD held that it cannot direct administrative authority to exercise
its discretionary powers in a particular manner.
 In HARDEV MOTOR TRANSPORT v. STATE OF M.P.:
o The SC right stressed that the possibility of abuse of discretionary power
cannot ipso facto be considered as violative of Art. 14 of the constitution on
ground of arbitrariness.
 The court has developed a kind of caste-based hierarchic view of administrative
responsibility when it presumes that ‘high’ authority is unlikely to use its
discretionary power injudiciously or arbitrarily. This presumption is certainly
conjectural and hence not tenable.
 However, even where the court would not look into exercise of discretionary power
by a high functionary on merit, it would certainly interfere if the exercise of power is
arbitrary, mala fide or in absolute disregard of constitutionalism. Thus in SEARAN
SINGH v. STATE OF UP, the court remanded the case back to the governor who had

6|Page
 Administrative Discretion

granted remission of sentence in a situation when adverse material against the

petitioner was not brought to his notice.

7|Page