Constitutionality of Administrative Rule Making

The phrase ‘constitutional validity of administrative rule making’ means the permissible extent of the Constitution of any country within which the legislature, which strictly speaking is the sole authority of law making power, can validly delegate rule making powers to other administrative agencies. In today’s world, there has been a tremendous expansion of the government’s authority due to the shift from the laissez faire regime to a welfare state concept. As a result, the new role of the state can only be fulfilled through the use of greater power in the hands of the government which is best suited to carry out the social and economic tasks before the country. The task of increasing the power of the government to successfully deal with the problems of social and economic reconstruction has been accomplished by delegating the legislative power to it. [1] This is commonly known as the concept of delegated legislation. The history of delegation of powers can be traced from the charter stage of 1833 when the East India Company was regaining political influence in India. It vested the legislative powers exclusively in Governor General, which was an administrative body. He was empowered to make laws and regulations for repealing, amending or altering any laws or regulations, which were in force for all persons irrespective of their nationality. In 1935, the Government of India Act was passed which contained an intensive scheme of delegation. [2] Though, our constitution was based on the principal of separation of powers, a complete separation of powers was not possible, hence, it has maintained the sanctity of the doctrine in the modern sense. The Indian Constitution does not prohibit the delegation of powers. [3]  However, delegated legislation gives rise to a natural question, i.e. its constitutionality.

The major problem associated with constitutional validity of administrative rule-making is regarding the permissible limit of delegation of powers by legislature. This paper endeavours to elaborate on following issues:

Is there a difference between jurisprudence related to administrative rule-making between pre-independence and post-independence India? If yes, what is it?

What has been the trend of judiciary in determining questions related to constitutionality of administrative rule-making in the past sixty years?

Hypothesis: There is a considerable difference in the positions adopted by Privy Council, Federal Court and the Supreme Court. Courts have recognised the legality of administrative rule-making but have differed on the permissible extent of delegation. Such questions have been settled on a case to case basis.

Scope: The scope of this study is limited to analysing the Indian position on administrative rule-making and does not extend beyond it.

Methodology: The researcher has followed a historical and analytical method of research, relying on primary sources which include case laws and the Constitution of India. Also, secondary sources including books and articles by eminent scholars have been referred to.

1: Validity of administrative rule making in pre-independence and post-independence India

Three sets of periods describe the question of permissible limits within the Constitution, within which delegated legislation is permissible. This chapter does a cross sectional analysis judgements by the three highest courts of appeal in India during these three different periods.

Period I – Privy Council as the highest court of appeal.

The nature and extent of legislative power and the possibility of its delegation was considered by the Privy Council in the case of R. v. Burah.

R v. Burah [4] 

The Act under consideration was the Act XXII of 1869 Act of the Council of the Governor-General. It removed Garo hills from the civil and criminal jurisdiction of Bengal and placed its administration under an officer appointed by the Lt. Governor. Section 9 of the Act, authorized the Lt. Governor, to extend the provisions of the Act, to Khasi and Jantia Hills, with incidental changes. Burah was tried for murder by the Commissioner of Khasi and Jaintia Hills and was subsequently sentenced.

Calcutta HC, relying on the doctrine of ‘delegates non potest delegare,’ held that the Indian Legislature, itself being a delegate of the Imperial Parliament, could not further sub-delegate its power under Section 9.

On appeal, Privy Council reversed the judgment of the Calcutta HC. It held that the Council of the Governor-General was a supreme legislature with plenary powers and entitled to transfer certain powers to the Provincial Executive. Laws passed by the subordinate executive authority on the basis of such transfer of power were held to be valid.

It is, however, characteristic that delegated legislation was carefully termed conditional legislation by the Privy Council. The Privy Council considered a similar state of affairs in two Canadian cases, in Russel v. the Queen [5] and in Ilodge v. the Queen, [6] in which powers transferred from a legislature to the subordinate authority were also called powers of ‘conditional’ or of ‘ancillary’ legislation. [7] The same reluctance to call delegation of legislative power by name may be found in a number of other cases of Privy Council. [8] Thus, the Privy Council, the highest judicial authority for India, accepted transfer of legislative power to the executive, though it was not called delegation sensu stricto.

Period II – Federal Court as the highest court of appeal.

Federal Court of India, the predecessor of the present Supreme Court, examined the problem of delegation of legislative power to an extraneous authority in the case of Jatindra Nath Gupta v. the Province of Bihar.

Jatindra Nath Gupta v. Province of Bihar [9] 

In this case, the provincial government was authorized to extend the applicability of The Bihar Maintenances of Public Order Act, 1948 for one year, under Section 1(3) of the Act. The extension could be made with such modifications as it may deem fit. This was challenged on the grounds of excessive delegation.

The Federal Court held that the delegation of power of extension with modification is ultra vires the Bihar Provincial Legislature as it is an essential legislative function. A dissenting opinion was delivered by J.Faizal Ali, wherein, he held that the delegation of power of extension was constitutional as it only amounted to continuation of the Act. [10] 

This judgment marks a shift from the position adopted by the Privy Council in R v. Burah. This decision is of great importance, as it implies the acceptance of a rigid theory of separation of powers by the Federal Court.

Period III – Supreme Court as the highest court of appeal.

In Re Delhi Laws Act [11] 

This was a Presidential reference under Article 143 of the Constitution. Constitutional validity of 3 laws – Section 7 the Delhi Laws Act, 1912, Section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, and Section 2 of the Part C States (Laws) Act, 1950 were in question.

Section 7, Delhi Laws Act, empowered the Provincial Government to extend to the Province of Delhi, any law in force in any part of British India, with such restrictions and modifications as it deemed fit. Section 2, Extension of Laws Act, empowered the Central government to extend to the Province of Ajmer-Mewar, any law in force in any other province, with such restrictions and modifications as it deemed fit. Under Section 2 of the Part C States Act, the Central government was provided a similar power as in the above two instances. However, additional power to repeal or amend any corresponding law which was applicable to Part ‘C’ States was also delegated.

Section 7 of the Delhi Laws Act, 1912 and Section 2 of the Ajmer-Merwara (Extension of Laws) Act, 1947 were held to be valid. Section 2 of the Part C States (Laws) Act, 1950 was also held valid except that part of the section which delegated the power of repeal and amend any existing law.

Though, each of the seven participating judges delivered separate opinions, on two points there was unity of outlook amongst all. Firstly, that delegation of legislative power by the legislature to the administrative organs was necessary & legitimate and secondly, that there was a need to impose an outer limit on delegation by the legislature. The disagreement between the judges was on the question of permissible limits of delegation. The judges repeatedly emphasized that in India, the theory of separation of powers does not operate in the area of legislative-executive relationship. None of the organs of the State can divest itself of the essential functions which belong to it under the Constitution. This is based on the doctrine of Constitutional Trust.

In settling this case, the Supreme Court had, apart from general principles, little guidance from the Constitution. This advisory opinion constitutes an impressive survey of the history of delegation in Great Britain and other Commonwealth countries, and in the United States. [12] It shows that by now the previously distant lines of development of the parliamentary and presidential regimes began at least in certain respects to run parallel and the court relied on the experience of both systems without excessive difficulties in reconciling some of the differences which tend to fade on the common background of democracy. This chef-d'oeuvre of expediency resulted finally in the acceptance of delegation of legislative power as such without allowing it in Mr. Justice Cardozo's words to “run riot" but confining it “within banks that keep it from overflowing." [13] 

2: Judiciary on constitutionality of administrative law making

After the decision of the In re Delhi Laws case, the primary issue in all the subsequent cases has been to determine, whether the power delegated was an essential legislative function or not. It includes inquiry into certain factors such as preamble of the statute, impugned provisions, subject matter of law, and circumstantial background of enacting the law. [14] Essential legislative power means laying down the policy of the law and enacting it in a binding rule of conduct.

There is always the presumption of validity of a law in the court and in between two different interpretations, court chooses the one which makes the law constitutional. This may include reading down of a law. [15] 

The legislative policy has to be ascertained by the court from the provisions of the Act, including its Preamble, [16] and, where the impugned Act replaces another Act, the court may even look into the provisions of that Act in order to determine whether the Legislature has conferred unguided power to the Executive. [17] The very nature of the body to which the power has been delegated [18] , and the context in which it has been exercised [19] are also some factors to be taken into consideration in determining whether the guidance offered is sufficient. It is not necessary for legislative policy to be mentioned in the section providing for delegation of power. [20] 

As stated above, the decisions of the court are uniform to the extent of allowing for administrative rule-making, as long as standards are set by the legislature. They are not uniform as to the adequacy of the standards that the legislature is constitutionally bound to provide. In the case of Rajnarain Singh v. Chairman, Patna Administration, [21] it was held that the power to extend laws and modify a section for application to another area amounts to delegating the power to change the policy of the Act, which is an essential legislative function, and hence cannot be delegated.

Legislative policy can be found from the purpose of an enactment. In Harishankar Bagla v. State of MP, [22] the court declared Section 3 of the Essential Supplies (Temporary Powers) Act, 1946 to be intra vires as it held that the legislative policy has been laid down. It read the policy from the preamble of the Act. A similar view was adopted in the case of Edward Mills v. State of Ajmer, [23] wherein, power was delegated to the administrative authority to add any industry within the ambit of the Minimum Wages Act, 1948. The court held that there is no excessive delegation as the purpose of the Act, which was to avoid exploitation of labour due to unequal bargaining power, provided sufficient policy guideline for executive to act. Similarly, in Charan Lal Sahu v. Union of India, [24] legislative policy was read in the purpose of the Act. The case was related to the Bhopal Gas Disaster (Processing of Claims) Act, 1985, which was challenged on the ground that government was authorized to enter into compromises without providing any legislative policy guideline.

However, an exception can be seen in Hamdard Dawakhana v. Union of India, [25] wherein, the apex court held that the delegation of power to include any disease within the list of diseases for whom advertisement were banned, to be excessive in nature. The court held that nowhere in the legislation, any policy has been laid down to guide the conduct of the administrative authorities. It is noticeable that the preamble of the impugned act stated that the act was to prevent mischief done to patients suffering from incurable diseases through advertisements claiming magic remedies. This decision of the court is not in consonance with its earlier position. Title and preamble of the Act could have been read to determine the legislative policy. Also, certain diseases already mentioned under the act could have served as a standard for inclusion of other diseases.

In Gammon India Ltd. v. Union of India, [26] Section 34 of the Contract Labour (Regulation and Abolition) Act, 1970 provided power to the Central government to make provisions to give effect to the provisions of the Act, as appeared to it to be necessary for removing the difficulty. The Supreme Court held that there is no excessive delegation under Section 34 as it does not contemplate any alteration in the Act, but merely provides for its proper implementation.

In Avinder Singh v. State of Punjab, [27] imposition of tax by the State government under Section 90(5) of the Punjab Municipal Corporation Act, 1976 was challenged on the grounds of excessive delegation. It was argued that the Act does not provide any policy for fixing of the rate of tax, amounting to abdication of essential legislative functions by the legislature. The Court took a very liberal view and held that in light of the limited functions performed by the Municipal Corporation, and language of the section, “collection for the purpose of the Act," to be sufficient policy guideline. This decision is criticised as going too far to determine legislative policy.

In M/S Devi Das v. State of Punjab, [28] Section 5 of the Punjab General Sales Tax Act, 1948, was invalidated since an uncontrolled power was conferred on the Provincial Government to levy a tax on turnover of a dealer at such rates as the said Government might direct. Under this Section, legislature practically effaced itself in the matter of fixation of rates and it did not give any guidance either under that Section or under any provisions of the Act.

In Harakchand v. Union of India, [29]  a clause in Gold Control Act was declared invalid on the ground of excessive delegation. The Act empowered Administrator to authorize such person as he thinks fit to also exercise all or any powers exercised by him under the Act and different persons may be authorized to perform different powers. Reviewing the various provisions of the Act, the Court found out that the power conferred on the Administrator is legislative in character and extremely wide and suffered from excessive delegation of legislative power.

Thus, we can observe that the trend of judiciary is towards validation of delegated legislations. Courts have held broad general statements to be providing sufficient legislative policy. The legislative policy may be express or implied and can be inferred from a variety of sources including the title, preamble, purpose, and nature of the Act.

Conclusion