QUESTION OF LEGISLATIVE POLICY IN DELEGATED LEGISLATION—RECENT CASES

Author(s): K. C. Joshi
Source: Journal of the Indian Law Institute, Vol. 18, No. 3 (July-September 1976), pp. 509-
514
Published by: Indian Law Institute
Stable URL: https://www.jstor.org/stable/43950444
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 QUESTION OF LEGISLATIVE POLICY IN DELEGATED
LEGISLATION- RECENT CASES

DICEY'S RULE of law or Montesquieu's separation of powers ha

to check the growth of delegated legislation. Today, subordinate l
is not only a matter of practice but it has also become a 'matter of
Therefore, while 'it is no more difficult to justify it,'2 it is impr
make any constitution work without delegated legislation.3 In Ind
gated legislation was sustained in pre-independence period. T
Council, which till 1949 was the highest Court of Appeal for appe
India, evolved a formula to sustain the subordinate character of the
legislature as well as to meet the exigencies of administration d
delegation. It applied the doctrine of conditional legislation to den
what was being delegated was of minor importance. In Queen v
the Privy Council laid down that the Indian legislature has plenar
to legislate on the subjects falling within its powers; that the max
gatus non protest delegare did not apply, and, the powers were
limited by the Act of British Parliament which created it. But th
of conditional legislation was interpreted rather restrictively by th
Court5 in Jatindra Nath Gupta v. Province of Bihar* The po
changed in India after independence and the question of the valid
delegated legislation was referred to by the President to the Supr
The court considered it in the famous case of In re Delhi Laws Act
etc.7 Although no clear cut rules were laid down in the seven
lengthy opinions of the court, yet there was, however, consensus th
practical working of the Constitution, Parliament (it also included
legislatures) should have power of delegation. As to the extent of th
there was a divergence of opinion. One view was that the Indian l
could delegate its powers to any extent subject to the limit that i
abdicate its legislative functions. The other view propounded was

1. Griffith and Street, Principles oj AdminLtrative Law 37 (5th ed., 1973).

2. H.W.R. Wade, Administrative Law 291 (2nd ed., 1967).
3. Sir Carleton Allen observes that the rigid ad herance to the doctrine o
of powers (which has been used against the delegated legislation there) would
the American Constitution unworkable. See Bernard Schwartz, An Introduction to A meri'
can Administrative Law 30 (2nd ed., 19t>2).
4. 5 I.A. 178 (1878).
5. See Cases and Materials on Administrative Law in India 207 (I.L.I., 1966).
6. A.I.R. 1949 F.C 175.
7. A.I.R. 1951 S.C. 332.

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Sio JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 18:3

legislature should not delegate its essential legislative func

prised the formulation of policy and enacting it into a rule
meant that the legislature should lay down the policy, stan
lines in the delegating Act.
The second view which insisted on clear enunciation of le
or standard in the parent Act was adopted by the court
were decided on the basis. The delegation was upheld w
found the legislative policy9 or the guidelines provided in
but it was struck down where these were missing.10 Th
disapproved by A.N. Ray, C.J., and Mathew, J., in Gwalior
Assistant Commissioner of Sales Tax}1 Mathew, J., who
concurrent judgment was of the view that :

The hunt by the Court for legislative policy or guid

crevices of a statute or the nook and cranny of its prea
an edifying spectacle.12

In this case, the validity of section 8(2 ){b) of the Centra

1956 was questioned on the ground of excessive delegation.
authorises levy of sales tax on interstate sales at a rate of t
the rate applicable to the sale or purchase of such goods in
priate state, whichever is higher. The contention of the ap
fixation of rate of tax was a legislative function and Pa
fixing the rate had abdicated its legislative functions. The
consisting of A.N. Ray, C.J., Khanna, Mathew, Alagiriswam
JJ., upheld the validity of section 8(2)0) but sharply differe
the delegation of powers. While the concurring opinion deliv
J., went on to concede wide delegating power subject to th
that Parliament should not eilace or abdicate its legislat
majority view insisted upon the legislative policy or stand
down by Parliament. Khanna, J., who spoke for the major
sidering section 8(2)(Z>) of the impugned Act held that it w
clear policy to prevent erosion of the central sales tax.
only when the central rate is not lower than the rate of ta
Parliament had thus not abdicated its legislative functions.

8. Jain and Jain, Principles of Administrative Law 32 (2nd ed., 1973

9, See , Harishanker Bagla v. State oj M.P., A.I.R. 1954 S.C. 465;
Ltd . v. The Union of India, A.I.R. 1957 S.C. 478; Edward Mills Co. v. St
1955 S.C. 25.
10. Hamdard Dawakhana v. Union of Indio, A. T. R. 1960 S.C. 554; R
Chairman , Patna Administration Committee , A.I.R. 1954 S.C. 659;
Territory of Pondicherry, A.I.R. 1967 S.C. 1480.
11. A.I.R. 1974 S.C. 1660*
12. Id. at 1678*

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1976] QUESTION OF LEGISLATIVE POLICY IN DELEGATED LEGISLATION 511

This observation of Khanna, J., was sufficient to dispose of the case.

But Mathew, J., tried to resurrect an argument which the Supreme Court
had considered in 1951 in the Delhi Law Act case13 Mathew, J., viewed
abdication of the legislative function only when Parliament deprived itself of its
repealing power. Since, Parliament could always repeal section 8(2)(¿?) of
the Act, there was no abdication of the legislative function.14 This view com-
pelled the majority to examine the relevance of the legislative policy or stan-
dard. Khanna, J., therefore, observed :

We are also unable to subscribe to the view that if the legislature

can repeal an enactment, as it normally can, it retains enough con-
trol over the authority making the subordinate legislation and, as
such it is not necessary for the legislature to lay down legislative
policy, standard or guidelines in the statute. The acceptance of this
view would lead to startling results.15

Khanna, J., thought that the legislative power should not only be
exercised in the name of the people, but also by their representatives.
Therefore, 4 'it is not permissible," he stated "to substitute in the matter
of legislative policy the views of individual officers or other authorities how-
ever competent they may be for the popular will as expressed by the repre-
sentatives of the people."16

The view expressed by Mathew, J., was followed in N.K. Papfah v.

Excise Commissioner.11 In this case, the validity of section 22 of the Mysore
Excise Act, 1965 was challenged on the ground of abdication of essential
legislative functions. This section provides for levy of excise duty at such rate
or rates as the government may prescribe on exisable articles manufactured
or produced in the state under any licence or permit granted under the Act.
The contention of the appellant was that the power given to the government
to fix the rates of excise duty without any guidance was bad in law. The
High Court had, however, located the legislative policy behind section 22
in the preamble of the Act as raising revenue and discouraging consump-
tion of liquor. The Supreme Court (Mathew, Krishna Iyer and Goswami,
JJ.,) through Mathew, J., observed :

We are not certain whether the preamble of the Act gives any
guidance for fixing the rate of excise duty. But that does not

13. Supra note 2.

14. Supra note 1 1 at 1682.
15. Id, at 1670.

16. Id. at 1667. The majority view gets support from M.P. Jain and S N Jain See
XA.S.LL. Administrative Law, 505 at 509-510(1974) and X A.S.I.L . Law of Sales' Tax
473 at 494-495 respectively.
17. AJ.R. 1975 S.C. 1007.

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512 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 1$ : 3

mean that the legislature here has no control ove

The legislative control over delegated legislation m
forms.18

Thus, substituting the doctrine of excessive delegation19 for legislative

control, the court went in search of the legislative control in the Act. It ulti-
mately caught hold of section 71 of the Act, which provided that "the rules
made under the Act shall be laid before each House of the State legislature,
which may modify the rules, if necessary." This was taken as a sufficient
check upon the power of the government to fix the rates of tax.

However, in this case, the second form of the legislative control, viz , the
repealing power of the legislature, which was noted in the views expressed by
Mathew, J., - concurred by Ray, C.J., - in the Gwalior Rayon Mills case,20 was
referred to. ßut instead of the Gwalior Rayon Mills case, the court relied on
the Privy Council decision in Cobb and Co. v. Kropp}1 In this case the Queens-
land legislature had conferred power on the Commissioner of Transport to
impose and levy licence and permit fees. This power was upheld on the grou-
nd that the legislature retained perfect control over him. Thus, the established
rule that the legislature can delegate its legislative power provided it lays
down the policy or standard was disturbed.

Before N.K. Paj aiah's rule22 ignoring the legislative policy or standard
requirement could gain ground, the rule was again examined by the Supreme
Court in Kerala Slate Electricity Board v. Indian Aluminium Co.23 In this case
the validity of the Kerala State Electricity Supply (Kerala State Electricity Board
and Licenses Areas) Surcharge Order, 1968 was questioned. The order was
made under section 3 of the Kerala Essential Articles Control (Temporary
Powers) Act, 1961. Section 2 ( a ) of the Act defines 'essential article' as
meaning any article (not being an essential commodity under the Essetial
Commodities Act, 1955) which may be declared by the government by a
notified order to be an essential article. Section 3 empowers the government,
if it is of the opinion, that it is necessary or expedient to do so for maintaining
or increasing the supplies of essential articles or for securing their equitable
distribution and availability at fair prices, to make notified orders. The gov-
ernment declared electricity as an essential article in 1965 and the board
was obliged to levy surcharge on supplies of electricity made to bulk consu-
mers notwithstanding any contract with the consumers fixing the supply

18. Id. at 1009.

19. Jain and Jain, supra note 3 at 83.
20. Supra note 11.
21. (1967) i A.C. 141.
22. Supra note 18.
23. A.I.R. 1976 S.C. 1031,

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1976] QUESTION OF LEGISLATIVE POLICY IN DELEGATED LEGISLATION 513

rates of electricity. This power was challenged as being excessive delegati

or abdication of legislative powers.
The court referred to the Privy Council decision in Queen v. Burah 24 with
approval and held that the power given by the Kerala Act was conditional
Consequently, the validity of the Act, the declaration and the surcharge ord
was sustained.

The majority of four judges, however, proceeded to examine the relevan-

ce of the legislative policy and standard in judging the validity of the delegated
legislation. It may be pointed out here that this question was not necessary
for deciding the case. It referred to the Gwalior Rayon Mills case.20 As poin-
ted out earlier,27 the majority (Khanna, Alagiriswami and Bhagwati, JJ.,) in
that case had rejected the rule of repealing power of the legislature as a suffi-
cient control over the delegated legislation in the absence of the legislative
policy, standard or guidelines. The court also examined Cobb and Co. v. Kropp *
as this was heavily relied on by Mathew, J., in the Gwalior Rayon Mills and
N.K. Papialïs cases. The Court in the Kerala Stai e Electricity Board case
pointed out that in Cobb and Co. v. Kropp , the Commissioner of Transport
was made only an agent of the legislature to carry out the designated objects
and purposes which the legislature had in mind.29 In other words the court
read legislative policy in the Cobb and Co. case. Consequently, the majority
view of the Gwalior Rayon Mills case was endorsed by the court. One word
about the dissenting view of A.C. Gupta, J., in the Kerala State Electricity
Board case is essential to be mentioned. He disagreed to consider the dele-
gation as conditional. He found no legislative policy, standard or guidelines
in the Kerala Act. Thus, he also supported the majority on this point.
It may be noted that N.K. Papia/i v. Excise Commissioner 30 was not
cited anywhere in this case. It reasonably appears that Mathew, J., had
supported the doctrine of legislative control over the delegated legislation to the

24. Supra note 4.

25. It was observed by Alagiriswami, Bhagwati, Goswami and Sarkaria, JJ., (Gupta, y '
J., dissenting) that : y '
The various types of powers
rated in it. Only the article
exercised is left to be determ
to time.. ..It is the executive
what circumstances an artic
1048].
26. Supra note 11.
27. Supra note 15.
28. Supra note 21.
29. Supra note 23 at 1049-50,
30. Supra note 17<

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514 JOURNAL OF THE INDIAN LAW INSTÌTU1É [Vol. 18 : 3

exclusion of the doctrine of excessive delegation both in Gwali

and Papiah's cases. Goswami, J., who had voted with Mathew, J., in
N.K. Papiah v. Excise Commissioner 31 voted with the majority in Kerala
State Electricity Board v. Indian Aluminium Co.32 The views of concurring
minority in Gwalior Rayon M it Is and of the court in Kerala Electricity Board
are contradictory on the question of legislative policy or standard. Goswami,
J., had not made any clarification on the point. In any case, the view of three
judges as expressed in N.K. Papiah v. Excise Commissioner 33 impliedly stands
rejected in the Kerala State Electricity Board case.
The question of legislative policy or standard was not directly in issue
in the two cases34 and as such the debate may not be considered conclusive.
The legal position, thus remains somewhat fluid. The wiews of Mathew, J., in
the Gwalior Rayon Mills and N.K. Papiah cases certainly have opened the issue
for which support exists in the Delhi Laws Act opinion of the court. While
one may agree with Mathew, J., that reading the legislative policy in each statute
may not be desirable, yet its total abdication may also lead to executive exce-
sses.35 The court in N.K Papiah v. Excise Commissioner upheld the
validity of the delegated legislation on the sole ground that the legislature excer-
cised control over the executive through the device of 'laying' the rules on
the tables of both the Houses of legislature. This rule is not necessarily follo-
wed in all the statutes. The court examined this view in the Kerala State
Electricity Boai d case but rejected by observing that such process did not
represent proper legislative process.36 Therefore, while legislative control39
may be made more effective to check the delegated legislation, the judicial
control through the device of legislative policy or standard remains ger-
mane in view of the various limitations on modern legislatures.
K. C. Joshi

31. Ibid.
32. Supra note 23.
33. Supra note 17.
34. The Gwalior Rayon Mills and the Kerala State Electricity Board cases.
35. In support of this view, see M.r. Jain, Administrative Law a a.ò.i.l. :>uy-3iu
(1974).
36. Supra note 23 at 1046-1047.
37. The insufficiency of legislative control was pointed out to the court in N.K.
Papiah's case ( suprc note 17 at 1011) but the court simply deplored it without suggesting
any wayout (id. at 1012).
# LL.M., Ph.D., Lecturer, Faculty of Law, Kurukshetra University, Kurukshetra*

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