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Download Case materials of university of delhi and more Study notes Law in PDF only on Docsity! i LL.B. IV TERM LB-402 Administrative Law Cases Selected and Edited by Sarbjit Kaur Alka Chawla Anu Maotoshi Ao Parveen Shankar Singh Yadav Mercy K Khaute Anjay Kumar Ajay Sonawane Shikha Sharma Shakti Kumar Agarwal Shilpi FACULTY OF LAW UNIVERSITY OF DELHI, DELHI- 110007 January, 2023 (For private use only in the course of instruction) ii LL.B. IV Term Paper : LB - 402 - Administrative Law Prescribed Books: 1. M.P. Jain and S.N. Jain’s Principles of Administrative Law Revised by Amita Dhanda (7th ed., 2017) 2. I.P. Massey, Administrative Law (7h ed., 2008) 3. S.P. Sathe, Administrative Law (7h ed., 2004) 4. H.W.R. Wade and C.F. Forsyth, Administrative Law (8th ed., 2000) 5. S.N. Jain, Administrative Tribunals in India (1977). Additional Readings: 1. Harry Woolf, Jeffery Jowell and Andew Le Sueur, De Smith’s Judicial Review (6th ed., 2007) 2. Report of the Committee on Ministers’ Powers (Donoughmore Committee), (Cmd. 4060) (1932) Topic 1 – Nature and Scope of Administrative Law 1.1 Definition and Scope of Administrative Law 1.2 Rule of Law – Dicey’s Rule of Law 1.3 Theory of Separation of Powers H.M. Seervai “The Supreme Court of India and the Shadow of Dicey The Position of the Judiciary under the Constitutional of India, 83-96 (1970) 01 Cases 1. Rai Sahib Ram Jawaya Kapur v. State of Punjab, AIR 1955 SC 549. 08 2. Asif Hameed v. State of J. & K., AIR 1989 SC 1899. 17 3. State of M.P. v Bharat Singh, AIR 1967 SC 1170. 21 4. 5. ADM Jabalpur v. Shivkant Shukla, AIR 1976 SC 1207. Indira Gandhi (smt.) v. Raj Narian AIR 1975 SC 2299 Recommended Readings: 1. Justice H.R. Khanna, Rule of Law, (1977) 4 SCC (Jour) 7. 2. Lord Bingham, The Rule of Law, The Cambridge Law Journal, Vol. 66, No. 1 (March 2007), pp. 67-85. v 32. State of W.B. v. Shivananda Pathak (1998) 5 SCC 513. 195 33. Hira Nath Mishra v. Principal, Rajendra Medical College, (1973) 1 SCC 805: AIR 1973 SC 1260. 201 34. J.K. Aggarwal v. Haryana Seeds Development Corpn. Ltd. , (1991) 2 SCC 283: AIR 1991 SC 1221. 205 35. Bharat Petroleum Corpn. Ltd. v. Maharashtra General Kamgar Union, (1999) 1 SCC 626. 209 36. Maneka Gandhi v. Union of India (1978) 1 SCC 248. 215 37. H.L. Trehan v. Union of India, AIR 1989 SC 568. 223 38. K I Shepherd v. Union of India, AIR 1988 SC 686. 39. S.N. Mukherjee v. Union of India, AIR 1990 SC 1984. 227 40. Managing Director, ECIL, Hyderabad v. B. Karunakar, (1993) 4 SCC. 727 245 Topic 5 – Judicial Review 5.1 Review and Appeal 5.2 Power of Judicial Review of the Supreme Court and the High Courts – Articles 32, 136, 226 and 227 of the Constitution of India 5.3 Writs – Certiorari, Mandamus, Prohibition, Habeas Corpus, Quo Warranto 5.3.1 Certiorari – (to decide the legality of an order/decision already passed/given) and for that purpose to produce all records of the case before the writ court - Grounds on which issued 5.3.2 Jurisdictional Errors – Excess of jurisdiction, Exercising jurisdiction not vested; Non-exercise of jurisdiction. The court exercising power does not act as an appellate court and therefore neither the merits of the case nor re-appraisal of evidence is allowed; Errors of law alone can be subject of judicial review but not the errors of fact howsoever grave they may be; Review possible if a decision/order was based on ‘no evidence’ or on irrelevant considerations; 5.3.3 Non-compliance with the prescribed procedure or the rules of natural justice; 5.3.4 Errors of law apparent on the face of record can be corrected – that may occur when the conclusion of law recorded by the lower court/tribunal is based on an obvious mis-interpretation of the relevant statutory provision, or sometimes in ignorance of it or even in disregard of it or is expressly founded on reasons which are wrong in law. vi 5.4 Mandamus – To command the performance of a statutory or public duty; not issued for exercise of discretionary power or against the legislature/legislators; can be issued both against the executive authorities as well as private individuals/persons. 5.5 Prohibition – To decide the legality of pending proceedings 5.6 Habeas Corpus – To decide the legality of an arrest/detention. It is necessary to produce the arrested/detained person in the court and if dead, the dead body must be produced in the court. 5.7 Quo warranto – To decide the legal authority of a person to hold a public office. 5.8 Ouster clauses (constitutional and statutory exclusion) 5.9 Curative Petition 41. Syed Yakoob v. K.S. Radha Krishanan (1964) 5 SCR 64: AIR 1964 SC 477. 252 42. Surya Dev Rai v. Ram Chander Rai, AIR 2003 SC 3044: (2003) 6 SCC 675. 261 43. Anadi Mukta Sadguru S.M.V.S.S.J.M.S. Trust v. V.R. Rudani, (1989) 2 SCC 691 : AIR 1989 SC 1607. 274 44. Common Cause v. Union of India, AIR 2003 SC 4493. 279 45. Rupa Ashok Hurra v. Ashok Hurra, AIR 2002 SC 1771. 280 Topic 6 – Right to Information 6.1.Transparency and accountability of the administration; Right to Information under the Constitution of India; 6.2.The Right to Information Act, 2005 - Object of the legislation – effective and responsive Government/public authorities; Scope of the right to information – Obligation of public authorities to supply information; Grounds of refusal to disclose information 46. 47. Secretary General, Supreme Court of India v. Subhash Chandra Agarwal, 166 (2010) DLT 305 (FB). Disclosure of Accounts and Funding of Political Parties, CIC Order Dated 3rd June 2013. 287 Topic 7 – Tribunals 7.1. Concept; Justice by Tribunals – Advantages: Openness, Fairness, Impartiality, Absence of Technicalities of Evidence and Procedure, Cheapness; 7.2. Constitution of India, Articles 323A and 323B; vii 7.3. Overview of Tribunals in India with particular reference to Administrative Tribunals established under the Administrative Tribunals Act, 1985; 48. L. Chandra Kumar v. Union of India and others, AIR 1997 SC 1125 318 49. 50. Union of India v. R. Gandhi, President, Madras Bar Association 2010 (5) SCALE 514 Rojer Mathew v. South Indian Bank Ltd. & Ors. (2020) 6 SCC 1 Recommended Reading 272 Law Commission of India Report on Assessment of Statutory Framework of Tribunals in India (October, 2017) 328 335 Topic 8 – Commissions of Inquiry & Central Vigilance Commission 8.1. The Commissions of Inquiry Act, 1952 - Object and Scope of the legislation – ‘to inquire into any definite matter of public importance’; 8.2. Power of Central/State Government to appoint a Commission of Inquiry – discretionary and mandatory nature of power; 8.3. Powers and Procedure of the Commission of Inquiry; Compliance with the principles of natural justice; 8.4. Submission of report and follow up action – effectiveness. 8.5. The Central Vigilance Commission Act, 2003 – Constitution, Powers and Functions. Topic 9 – Regulatory Agencies Need of Regulatory Bodies; Composition, powers, functions and procedure; of the Regulatory Bodies including the securities and exchange board of India; The Securities and Exchange Board of India Act, 1992; Telecom Regulatory Authority of India Act, 1997; The Insurance Regulatory and Development Authority Act, 1999; Electricity Commission); Competition commission of India under the Competition Act, 2002 1 RULE OF LAW* Constitution of India: Article 14. “Equality before law. – The State shall not deny to any person equality before law or equal protection of laws within the territory of India.” Dicey’s Rule of Law** Dicey said: “It means, in the first place, the absolute supremacy or predominance of regular law as opposed to the influence of arbitrary power, and excludes the existence of arbitrariness, of prerogative, or even of wide discretionary authority on the part of the government. Englishmen are ruled by the law, and by the law alone; a man may with us be punished for a breach of law, but he can be punished for nothing else. It means, again, equality before the law, or the equal subjection of all classes to the ordinary law courts; the ‘rule of law’ in this sense excludes the idea of any exemption of officials or others from the duty of obedience to the law which governs other citizens or from the jurisdiction of the ordinary tribunals; there can be with us nothing really corresponding to the ‘administrative law’ (droit administratif) or the ‘administrative tribunals’ (tribunaux administratifs) of France. The notion which lies at the bottom of the ‘administrative law’ known to foreign countries is, that affairs or disputes in which the Government or its servants are concerned are beyond the sphere of the civil courts and must be dealt with by special and more or less official bodies. This idea is utterly unknown to the law of England, and indeed is fundamentally inconsistent with our traditions and customs.” According to Dicey, the Rule of Law, as he formulated it, was a principle of the English Constitution. The preface to the first edition says that the book “deals with only two or three guiding principles which pervade the modern Constitution of England,” and the book shows that the Rule of Law is one such principle. This is important, for the modern version of that rule does not assert that it is a principle of the English Constitution, but that the rule is an ideal by reference to which that Constitution must be judged. Dicey’s “Rule of Law” has been criticised by eminent writers. I will, however, make certain observations about Dicey’s “Rule of Law” which would be generally accepted today. (a) Dicey wrote in the hey-day of laissez-faire and he dealt with the rights of individuals not with the powers of the administration. (b) It is tempting to say that the welfare state has changed public law, and consequently delegated legislation and the exercise of judicial functions by administrative bodies have increased. But the true view is that Dicey’s Rule of Law, which was founded on the _____________________ * H.M. Seervai, “The Supreme Court of India and the Shadow of Dicey” in The Position of the Judiciary under the Constitution of India, pp. 83-96 (1970). ** A.V. Dicey, Law of the Constitution (1885). 2 separation of powers, fixed public attention on administrative law and delegated legislation. Dicey dealt with individual liberty and criticised administrative discretion. But he did not deal with the administration as such, and he failed to distinguish between discretion given to public officials by statute and the arbitrary discretion at one time claimed by the King. (c) Administrative law existed in England when Dicey’s book was published in 1885. the “prophetic vision” of Maitland saw in 1887 that even as a matter of strict law it was not true the executive power was vested in the King. England, he said, was ruled by means of statutory powers which could not be described as the powers of the King. All that we could say was that the King had powers, this Minister had powers and that Minister had powers. In oft quoted words, Maitland said that England was becoming a much governed nation, governed by all manner of councils and boards and officers, central and local, high and low, exercising the powers which had been committed to them by modern statutes. And Prof. Wade has come to the same conclusion in his appendix to the ninth edition of Dicey’s Law of the Constitution. (d) In his Law of the Constitution, Dicey did not refer to the prerogative writs of mandamus, prohibition and certiorari by which superior courts exercised control over administrative action and adjudication. These writs belong to public law and have nothing to do with private law, and had he noticed those writs he could not have denied the existence of administrative law in England. (e) Dicey’s picture of the Englishmen protected by the Rule of Law, and the Frenchmen deprived of that protection because public authorities in France enjoyed privileges and immunities is now recognised as a distorted picture. This recognition is not confined to academic lawyers. An eminent judge, Lord Denning, has said that far from granting privileges and immunities to public authorities, the French Administrative Courts exercise a supervision and control over public authorities which is more complete than which the Courts exercise in England. And that is also the view of leading writers on Constitutional and Administrative Law today. Dicey himself showed “a change of heart” in his long Introduction to the eighth edition of the Law of the Constitution. There, he doubted whether law courts were in all cases best suited to adjudicate upon the mistakes or the offences of civil servants, and he said that it was for consideration whether a body of men who combined legal knowledge with official experience, and who were independent of government, would not enforce official law more effectively than the High Court. It is a measure of Dicey’s intellectual integrity that he abandoned the doctrine of a lifetime and recognized official law, and a special tribunal substantially on the lines of the Couseil d’Etat, as better suited to enforce that law than the High Court. It is unfortunate that Dicey did not re-write the book in the eighth edition, but contended himself with a long Introduction which marked a real change in his thinking. The text remained unchanged, and the Introduction was forgotten or ignored, so that an intemperate judge like Lord Hewart L.C.J. could speak of “the abominable doctrine that, because things are done by officials, therefore some immunity must be extended to them.” Coming from a Lord Chief Justice, these words seen ironic, for, on grounds of public policy, the most malicious words of judges of superior courts in the discharge of their judicial duties enjoy absolute immunity. But Lord Hewart would have been shocked had anyone spoken of 3 “the abominable doctrine that because things are done by judges in their judicial capacity, therefore, some immunity must be extended to their most malicious words.” (f) When Dicey maintained that the Rule of Law required “the equal subjection of all classes to the ordinary law of the land administered by ordinary courts” and that the Rule of Law was inconsistent with administrative law and administrative tribunals, he created a false opposition between ordinary and special law, and between ordinary courts and special tribunals. The two kinds of laws existed even in his day, and ordinary courts, as well as special tribunals, determined the rights of parties. His antithesis was false in fact and untenable in principle. A law administered by the courts and by special tribunals is equally the law of the land; the determinations of courts and of special tribunals are determinations under the law. As we have seen, Dicey himself came to recognise that it may be necessary to create a body of persons for adjudicating upon the offences or the errors of civil servants as such adjudication may be more effective in enforcing official law. This effectively destroyed the opposition between ordinary law administered by ordinary courts and special law administered by special tribunals. As Devlin J., speaking of England, put it, it does not matter where the law comes from: whether from equity, or common law or from some source as yet untapped. And it is equally immaterial whether the law is made by Parliament, or by judges or even by ministers, for what matters is “the Law of England.” That courts alone are not the best agencies for resolving disputes is shown by the history of the Commercial Court in England. When it was established, it first proved popular and succeeded in arresting the trend in favour of arbitration. After the First World War two judges were sitting full time on the Commercial List. In 1957, out of twenty-six cases only sixteen were actually tried, the rest being stayed, withdrawn or settled, and the question arose whether there was any point in retaining the Commercial Court. In 1960 the Lord Chancellor took an unusual step – he called a Commercial Court Users’ Conference. The Conference presented a Report which is important because it shows why people preferred arbitration to adjudication by the Commercial Court. Mr. Justice Megaw, who was appointed to the Commercial Court, gave a practice direction which went back to an earlier and simpler procedure. The calling of the Commercial Users’ Conference, and the emphasis in the practice direction on the service which the court rendered, is a timely reminder that judicial power is not property which belongs to the law courts and which therefore can be “usurped” by others, but that judicial power exists to render a service, and if the service is not good enough it will be ignored. Prof. Robson has given an even more striking example. Before the Committee on Ministers’ Powers evidence was given by the National Federation of Property Owners and Ratepayers representing the owners of more than £1,000 million capital invested in industrial, trading and residential property throughout the United Kingdom. The Federation demanded that the appellate jurisdiction of ministers and their departments should cease. But the Federation did not demand the transfer of such jurisdiction to ordinary courts of law but to a special tribunal consisting of a full-time salaried legal member appointed by the Lord Chancellor, and two part-time honorary members who could bring administrative experience to bear on administrative matters. The Federation also suggested that the special tribunal should also take over the jurisdiction of the country court judges and the courts of summary 6 Discussing Prof. Morgan’s remark that the acquisition of judicial functions by the executive was “all the more unwarrantable” because courts of law had not in their turn encroached on the functions of the executive, Prof. Robson said: “(Prof. Morgan) writes as though the executive and the judiciary were riparian owners bargaining over a strip of land or European powers carving up an African colony.” And he adds “Neither the executive nor the judiciary has any immutable ‘right’ to a particular province....” Applying this to Nanavati case, if judicial power were “property,” the release of a convicted person on a bail of Rs. 10,000 would be legal exercise of a right of property, and the nullification of that order by the Governor’s reprieve would violate a legal right and thus appear to be against the Rule of Law. But if we lay aside Dicey and the separation of powers, it is clear that Nanavati case raised no question of the rule of law. Judicial power to try and punish an accused person and the executive power to exercise clemency and to pardon the accused, or to commute or remit his punishment, or to suspend his sentence by a reprieve or respite, is part of our Constitutional scheme. The power to pardon, said Taft C.J., exists to ameliorate or avoid particular criminal judgments. It is a check entrusted to the Executive for special purposes. It requires no argument to show that occasionally miscarriage of justice does take place; that occasionally a judge enters the arena of conflict and his vision is blinded by the dust of controversy. Among other reasons, the power of pardon exists to remedy the miscarriage of justice or to remedy the consequence of human failings in a judge. Such miscarriage can take place in passing a sentence of death; it can take place equally in keeping an appellant in prison by refusing him bail. If, as the Supreme Court admits, the Rule of Law is not violated if the sentence of death is in effect wiped out by a free pardon, surely it is fanciful to say that the Rule of Law is violated if release on a bail of Rs. 10,000 by a Court is wiped out by a reprive or respite which suspends the sentence. The Rule of Law, like the name of God, can sometimes be invoked in vain. The State of M.P. v. Bharat Singh [AIR 1967 SC 1170] also did not raise any question about Dicey’s Rule of Law, though it did raise a question about the Rule of Law in the strict legal sense. In Bharat Singh case, it was contended that as the executive power of the State was co-extensive with its legislative power, an executive order restricting the movements of a citizen could be passed without the authority of any law, and the Supreme Court’s decision in Kapur case [Ram Jawaya Kapur v. State of Punjab (1955) 2 SCR 225] was relied upon to support the contention. The Supreme Court could have pointed out, but did not, that the principle of Kapur case directly negatived the contention when that case held that though the authority of law was not necessary for Government to carry on trade, such authority was necessary when it became necessary to encroach upon private rights in order to carry on trade. The Supreme Court distinguished Kapur case on the ground that it involved no action prejudicial to the rights of others. Even so, Bharat Singh case is really disposed of by the court’s observation that “every act done by the Government or by its officers must, if it is to 7 operate to the prejudice of any person be supported by some legislative authority,” for that is the strict legal meaning of the Rule of Law. For reasons which I have already given, it was wholly unnecessary to refer to the first meaning which Dicey gave to the Rule of Law, or to Dicey’s contrast between the English and the Continental systems. * * * * * 8 SEPARATION OF POWERS Constitution of India: “Article 73. Extent of executive power of the Union. – (1) subject to the provisions of this Constitution, the executive power of the Union shall extend – (a) to the matters with respect to which Parliament has power to make laws…” “Article 162. Extent of executive power of the State. - Subject to the provisions of this Constitution, the executive power of a State shall extend to the matters with respect to which the legislature of the State has power to make laws….” Note: The theory of separation of powers envisages: (i) personnel separation; (2) non- interference in the working of one organ by another; and (3) non-usurpation of powers of one organ by another organ. * * * * * Rai Sahib Ram Jawaya Kapur v. State of Punjab (1955) 2 SCR 225 MUKHERJEA, C.J. - This is a petition under Article 32 of the Constitution, preferred by six persons, who purport to carry on the business of preparing, printing, publishing and selling text books for different classes in the schools of Punjab, particularly for the primary and middle classes, under the name and style “Uttar Chand Kapur & Sons”. It is alleged that the Education Department of the Punjab Government has in pursuance of their so-called policy of nationalisation of text books, issued a series of notifications since 1950 regarding the printing, publication and sale of these books which have not only placed unwarrantable restrictions upon the rights of the petitioners to carry on their business but have practically ousted them and other fellow-traders from the business altogether. It is said that no restrictions could be imposed upon the petitioners’ right to carry on the trade which is guaranteed under Article 19(1)(g) of the Constitution by mere executive orders without proper legislation and that the legislation, if any, must conform to the requirements of clause (6) of Article 19 of the Constitution. Accordingly, the petitioners pray for writs in the nature of mandamus directing the Punjab Government to withdraw the notifications which have affected their rights. 2. To appreciate the contentions that have been raised by the learned counsel who appeared for the parties before us, it will be necessary to narrate certain relevant facts. In the State of Punjab, all recognised schools have got to follow the course of studies approved by the Education Department of the Government and the use, by the pupils, of the text books prescribed or authorised by the Department is a condition precedent to the granting of recognition to a school. For a long period of time prior to 1950, the method adopted by the Government for selection and approval of text books for recognised schools was commonly known as the alternative method and the procedure followed was shortly this: Books on relevant subjects, in accordance with the principles laid down by the Education Department, were prepared by the publishers with their own money and under their own arrangements and they were submitted for approval of the Government. The Education Department after proper 11 respective lists that the Union or the State executive, as the case may be, can proceed to function in respect to them. On the other hand, the language of Article 172 clearly indicates that the powers of the State executive do extend to matters upon which the State Legislature is competent to legislate and are not confined to matters over which legislation has been passed already. The same principle underlies Article 73 of the Constitution. These provisions of the Constitution therefore do not lend any support to Mr Pathak’s contention. 8. The Australian cases upon which reliance has been placed by the learned counsel do not, in our opinion, appear to be of much help either. In the first [Commtmonwwealth and the Central Wool Committee v. Colonial Combing, Spinning and Weaving Co Ltd., 31 CLR 421] of these cases, the executive Government of the Commonwealth, during the continuance of the war, entered into a number of agreements with a company which was engaged in the manufacture and sale of wool-tops. The agreements were of different types. By one class of agreements, the Commonwealth Government gave consent to the sale of wool-tops by the company in return for a share of the profits of the transactions (called by the parties “a licence fee”). Another class provided that the business of manufacturing wool-tops should be carried on by the company as agents for the Commonwealth in consideration of the company receiving an annual sum from the Commonwealth. The rest of the agreements were a combination of these two varieties. It was held by a Full Bench of the High Court that apart from any authority conferred by an Act of Parliament or by regulations there under, the executive Government of the Commonwealth had no power to make or ratify any of these agreements. The decision, it may be noticed, was based substantially upon the provision of Section 61 of the Australian Constitution which is worded as follows: “The executive power of the Commonwealth is vested in the Queen and is exercised by the Governor-General as the Queen’s representative and extends to the execution and maintenance of the Constitution and of the laws of the Commonwealth.” In addition to this, the King could assign other functions and powers to the Governor- General under Section 2 but in this particular case no assignment of any additional powers was alleged or proved. The court held that the agreements were not directly authorised by Parliament or under the provisions of any statute and as they were not for the execution and maintenance of the Constitution they must be held to be void. Isacs, J., in his judgment, dealt elaborately with the two types of agreements and held that the agreements, so far as they purported to bind the company to pay to the government money, as the price of consents, amounted to the imposition of a tax and were void without the authority of Parliament. The other kind of agreements which purported to bind the Government to pay to the company a remuneration for manufacturing wool-tops was held to be an appropriation of public revenue and being without legislative authority was also void. 9. It will be apparent that none of the principles indicated above could have any application to the circumstances of the present case. There is no provision in our Constitution corresponding to Section 61 of the Australian Act. The Government has not imposed anything like taxation or licence fee in the present case nor have we been told that the appropriation of public revenue involved in the so-called business in text books carried on by the Government has not been sanctioned by the legislature by proper Appropriation Acts. 12 10. The other case [Vide Attorney-General for Victoria v. Commonwealth, 52 CLR 533] is of an altogether different character and arose in the following way. The Commonwealth Government had established a clothing factory in Melbourne for the purpose of making naval and military uniforms for the defence forces and postal employees. In times of peace the operations of the factory included the supply of uniforms for other departments of the Commonwealth and for employees in various public utility services. The Governor-General deemed such peace time operations of the factory necessary for the efficient defence of the Commonwealth inasmuch as the maintenance intact of the trained complement of the factory would assist in meeting wartime demands. A question arose as to whether operations of the factory for such purposes in peace: time were authorised by the Defence Act. The majority of the court answered the question in the affirmative. Starke, J. delivered a dissenting opinion upon which Mr Pathak mainly relied. The learned Judge laid stress on Section 61 of the Constitution Act according to which the executive power of the Commonwealth extended to the maintenance of the Constitution and of the laws of the Commonwealth and held that there was nothing in the Constitution or any law of the Commonwealth which enabled the Commonwealth to establish and maintain clothing factories for other than Commonwealth purposes. The opinion, whether right or wrong, turns upon the particular facts of the case and upon the provision of Section 61 of the Australian Act and it cannot and does not throw any light on the question that requires decision in the present case. 11. A question very similar to that in the present case did arise for consideration before a Full Bench of the Allahabad High Court in Motilal v. Government of the State of Uttar Pradesh [AIR 1951 Allah. 257]. The point canvassed there was whether the Government of a State has power under the Constitution to carry on the trade or business of running a bus service in the absence of a legislative enactment authorising the State Government to do so. Different views were expressed by different Judges on this question. Chief Justice Malik was of opinion that in a written Constitution like ours the executive power may be such as is given to the executive or is implied, ancillary or inherent. It must include all powers that may be needed to carry into effect the aims and objects of the Constitution. It must mean more than merely executing the laws. According to the Chief Justice the State has a right to hold and manage its own property and carry on such trade or business as a citizen has the right to carry on, so long as such activity does not encroach upon the rights of others or is not contrary to law. The running of a transport business therefore was not per se outside the ambit of the executive authority of the State. Sapru, J. held that the power to run a Government bus service was incidental to the power of acquiring property which was expressly conferred by Article 298 of the Constitution. Mootham and Wanchoo, JJ., who delivered a common judgment, were also of the opinion that there was no need for a specific legislative enactment to enable a State Government to run a bus service. In the opinion of these learned Judges an act would be within the executive power of the State if it is not an act which has been assigned by the Constitution of India to other authorities or bodies and is not contrary to the provisions of any law and does not encroach upon the legal rights of any member of the public. Agarwala, J. dissented from the majority view and held that the State Government had no power to run a bus service in the absence of an Act of the legislature authorising the State to do so. The opinion of Agarwala, J. undoubtedly supports the contention of Mr Pathak but it appears to us to be too narrow and unsupportable. 13 12. It may not be possible to frame an exhaustive definition of what executive function means and implies. Ordinarily the executive power connotes the residue of governmental functions that remain after legislative and judicial functions are taken away. The Indian Constitution has not indeed recognised the doctrine of separation of powers in its absolute rigidity but the functions of the different parts or branches of the Government have been sufficiently differentiated and consequently it can very well be said that our Constitution does not contemplate assumption, by one organ or part of the State, of functions that essentially belong to another. The executive indeed can exercise the powers of departmental or subordinate legislation when such powers are delegated to it by the legislature. It can also, when so empowered, exercise judicial functions in a limited way. The executive Government, however, can never go against the provisions of the Constitution or of any law. This is clear from the provisions of Article 154 of the Constitution but, as we have already stated, it does not follow from this that in order to enable the executive to function there must be a law already in existence and that the powers of the executive are limited merely to the carrying out of these laws. 13. The limits within which the executive Government can function under the Indian Constitution can be ascertained without much difficulty by reference to the form of the executive which our Constitution has set up. Our Constitution, though federal in its structure, is modelled on the British parliamentary system where the executive is deemed to have the primary responsibility for the formulation of governmental policy and its transmission into law though the condition precedent to the exercise of this responsibility is its retaining the confidence of the legislative branch of the State. The executive function comprises both the determination of the policy as well as carrying it into execution. This evidently includes the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, the direction of foreign policy, in fact the carrying on or supervision of the general administration of the State. 14. In India, as in England, the executive has to act subject to the control of the legislature; but in what way is this control exercised by the legislature? Under Article 53(1) of our Constitution, the executive power of the Union is vested in the President but under Article 75 there is to be a Council of Ministers with the Prime Minister at the head to aid and advise the President in the exercise of his functions. The President has thus been made a formal or constitutional head of the executive and the real executive powers are vested in the Ministers or the Cabinet. The same provisions obtain in regard to the Government of States; the Governor or the Rajpramukh, as the case may be, occupies the position of the head of the executive in the State but it is virtually the Council of Ministers in each State that carries on the executive Government. In the Indian Constitution, therefore, we have the same system of parliamentary executive as in England and the Council of Ministers consisting, as it does, of the members of the legislature is, like the British Cabinet, “a hyphen which joins, a buckle which fastens the legislative part of the State to the executive part”. The Cabinet enjoying, as it does, a majority in the legislature concentrates in itself the virtual control of both legislative and executive functions; and as the Ministers constituting the Cabinet are presumably agreed on fundamentals and act on the principle of collective responsibility, the most important questions of policy are all formulated by them. 16 for sale to the pupils. So long as this system was in vogue the only right which publishers like the petitioners had, was to offer their books for inspection and approval by the Government. They had no right to insist on any of their books being accepted as text books. So the utmost that could be said is that there was merely a chance or prospect of any or some of their books being approved as text books by the Government. Such chances are incidental to all trades and businesses and there is no fundamental right guaranteeing them. A trader might be lucky in securing a particular market for his goods but if he loses that field because the particular customers for some reason or other do not choose to buy goods from him, it is not open to him to say that it was his fundamental right to have his old customers for ever. On the one hand, therefore, there was nothing but a chance or prospect which the publishers had of having their books approved by the Government, on the other hand the Government had the undisputed right to adopt any method of selection they liked and if they ultimately decided that after approving the text books they would purchase the copyright in them from the authors and others provided the latter were willing to transfer the same to the Government on certain terms, we fail to see what right of the publishers to carry on their trade or business is affected by it. Nobody is taking away the publishers’ right to print and publish any books they like and to offer them for sale but if they have no right that their books should be approved as text books by the Government it is immaterial so far as they are concerned whether the Government approves of text books submitted by other persons who are willing to sell their copyrights in the books to them, or choose to engage authors for the purpose of preparing the text books which they take up on themselves to print and publish. We are unable to appreciate the argument of Mr Pathak that the Government while exercising their undoubted right of approval cannot attach to it a condition which has no bearing on the purpose for which the approval is made. We fail to see how the petitioners’ position is in any way improved thereby. The action of the Government may be good or bad. It may be criticised and condemned in the houses of the legislature or outside but this does not amount to an infraction of the fundamental right guaranteed by Article 19(1) (g) of the Constitution. 21. As in our view the petitioners have no fundamental right in the present case which can be said to have been infringed by the action of the Government, the petition is bound to fail on that ground. This being the position, the other two points raised by Mr Pathak do not require consideration at all. As the petitioners have no fundamental right under Article 19(1)(g) of the Constitution, the question whether the Government could establish a monopoly without any legislation under Article 19(6) of the Constitution is altogether immaterial. Again a mere chance or prospect of having particular customers cannot be said to be a right to property or to any interest in an undertaking within the meaning of Article 31(2) of the Constitution and no question of payment of compensation can arise because the petitioners have been deprived of the same. The result is that the petition is dismissed. * * * * * 17 Asif Hameed v. State of J. & K. AIR 1989 SC 1899 [Has the High Court power to issue directions to the State Government to constitute “statutory body” for making admissions?] Jyotshana Sharma and a number of other unsuccessful candidates for admission to the two medical colleges of Jammu & Kashmir for the year 1986-87 challenged the selection by filing writ petitions. A Division Bench of the High Court upheld the selection in general but allowed some individual writ petitions on different grounds. The bench, after adjudicating upon the points involved in the writ petitions, made the following observations: “In future State Government shall entrust the selection process of the two medical colleges to a statutory independent body who will be vested with the power to conduct examination of written as also of viva voce. Therefore, it is ideal that an independent statutory body is constituted for conduct of entrance test for the MBBS/BDS course in the State which body shall be kept free from executive influence. Till that is done, State may entrust the process of selection to such a body which will be free from executive influence. At any rate we do not approve Training Branch, or any other department of the State Government under the control of administration or associated with the process of selection for the MBBS/BDS course in the State Medical Colleges. Selection Committee, till a statutory body is constituted, shall consist of such persons who are academicians of high calibre and with the process of selection principals of the two medical colleges shall necessarily be associated”. KULDIP SINGH, J. - 17. Before adverting to the controversy directly involved in these appeals we may have a fresh look on the inter se functioning of the three organs of democracy under our Constitution. Although the doctrine of separation of powers has not been recognised under the Constitution in its absolute rigidity but the Constitution makers have meticulously defined the functions of various organs of the State. Legislature, executive and judiciary have to function within their own spheres demarcated under the Constitution. No organ can usurp the functions assigned to another. The Constitution trusts to the judgment of these organs to function and exercise their discretion by strictly following the procedure prescribed therein. The functioning of democracy depends upon the strength and independence of each of its organs. Legislature and executive, the two facets of people’s will, they have all the powers including that of finance. Judiciary has no power over sword or the purse nonetheless it has power to ensure that the aforesaid two main organs of State function within the constitutional limits. It is the sentinel of democracy. Judicial review is a powerful weapon to restrain unconstitutional exercise of power by the legislature and executive. The expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and executive is subject to judicial restraint, the only check on our own exercise of power is the self-imposed discipline of judicial restraint. 18. Frankfurter, J. of the U.S. Supreme Court dissenting in the controversial expatriation in case of Trop v. Dulles [356 US 86], observed as under: 18 “All power is, in Madison’s phrase, “of an encroaching nature”. Judicial power is not immune against this human weakness. It also must be on guard against encroaching beyond its proper bounds, and not the less so since the only restraint upon it is self-restraint.... Rigorous observance of the difference between limits of power and wise exercise of power - between questions of authority and questions of prudence - requires the most alert appreciation of this decisive but subtle relationship of two concepts that too easily coalesce. No less does it require a disciplined will to adhere to the difference. It is not easy to stand aloof and allow want of wisdom to prevail to disregard one’s own strongly held view of what is wise in the conduct of affairs. But it is not the business of this Court to pronounce policy. It must observe a fastidious regard for limitations on its own power, and this precludes the court’s giving effect to its own notions of what is wise or politic. That self-restraint is of the essence in the observance of the judicial oath, for the Constitution has not authorized the judges to sit in judgment on the wisdom of what Congress and the executive branch do.” 19. When a State action is challenged, the function of the court is to examine the action in accordance with law and to determine whether the legislature or the executive has acted within the powers and functions assigned under the Constitution and if not, the court must strike down the action. While doing so the court must remain within its self-imposed limits. The court sits in judgment on the action of a coordinate branch of the government. While exercising power of judicial review of administrative action, the court is not an appellate authority. The Constitution does not permit the court to direct or advise the executive in matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of legislature or executive, provided these authorities do not transgress their constitutional limits or statutory powers. 20. Now coming to the judgment under appeal the High Court says that its directions issued in Jyotshana Sharma case have not been complied with thereby rendering the State action in making selections for admission to the medical colleges invalid. To examine the High Court reasoning we have to see as to which of the three organs of the State is entrusted, under the Constitution, with the function of taking a policy decision regarding management and admissions to medical colleges in the State. Both the medical colleges at Jammu and Srinagar are government institutions. Entry 25 List III of Seventh Schedule, Article 246(2) and Article 162 of the Constitution of India and Section 5 of the Constitution of Jammu & Kashmir which are relevant, are reproduced hereinafter: “Entry 25. Education, including technical education, medical education and universities, subject to the provisions of entries 63, 64,65 and 66 of List I; vocational and technical training of labour.” “Article 246. Subject-matter of laws made by Parliament and by the legislatures of States. - (2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the “Concurrent List”).” 21 State of M. P. & Another v. Thakur Bharat Singh 1967 AIR 1170: 1967 SCR (2) 454 SHAH, J. – On April 24, 1963, the' State of Madhya Pradesh made an order in exercise of powers conferred by s. 3 of the Mad Pradesh Public Security Act, 1959 – hereinafter called 'the Act directing the respondent Thakur Bharat Singh - (i) “that he shall not be in any place in the Raipur district; (ii) that he shall reside in the municipal limits of Jhabua town, district Jhabua, Madhya Pradesh, and shall proceed there, immediately on the receipt of this order ; and (iii) that he shall notify his movements and report himself personally every day at 8 a.m. and 8 p.m. to the Police Station Officer, Jhabua.” The respondent moved a petition in the High Court of Madhya Pradesh under Arts. 226 & 227 of the Constitution challenging the order on the grounds, inter alia, that Ss. 3 & 6 and other provisions of the Act which authorised imposition of restrictions on movements and actions of person were ultra vires in that they infringed the fundamental freedoms guaranteed under Art. 19(1) (d) & (e) of the Constitution of India and that the order was "discriminatory, illegal and violated principles of natural justice." Shivdayal, J., declared cl. (i) of the order valid, and declared cls. (ii) and (iii) invalid. In the view of the learned Judge the provisions of s. 3(1)(a) of the Act were valid and therefore the directions contained in cl. (i) of the order could lawfully be made by the State, but cls. (b) & (c) of s. 3(1) of the Act were invalid because they contravened the fundamental freedom of movement guaranteed under Art. 19 of the Constitution, and therefore the directions contained in cls. (ii) & (iii) of the order were invalid. Against the order passed by Shivdayal, J., two appeals were filed under the Letters Patent of the High Court. A Division Bench of the High Court held that cls. (a) & (c) of s. 3(1) of the Act were valid, but in their view cl. (b) of s. 3(1) was not valid because it violated the fundamental guarantee under Art. 19(1) (d) of the Constitution. The High Court however confirmed the order of Shivdayal, J., since in their view the direction contained in cl. (iii) of the order was "inextricably woven" with the directions in cl. (ii) and was on that account invalid. Against the order of the High Court, the State of Madhya Pradesh has appealed to this Court. The relevant provisions of the Act may be briefly set out. Section 3 of the Act provides: (1) “If the State Government or a District Magistrate is satisfied with respect to any person that he is acting or is likely to act in a manner prejudicial to the security of the State or to the maintenance of public order, and that, in order to prevent him from so acting it is necessary in the interests of the general public to make an order under this section' the State Government or the District Magistrate, as the case may be, may make an order - (a) directing that, except in so far as he may be permitted by the provisions of the order, or by such authority or persons as may be specified therein, he shall 22 not be in any such area or place in Madhya Pradesh as may be specified in the order (b) requiring him to reside or remain in such place or within such area in Madhya Pradesh as may be specified in the order and if he is not already there to proceed to that place or area within such time as may be specified in the order (c) requiring him to notify his movements or to report himself or both to notify his movements and report himself in such manner, at such times and to such authority or person, as may be specified in the order ; (d) imposing upon him such restrictions as may be specified in the order, in respect of his association or communication with such persons as may be mentioned in the order ; (e) prohibiting or restricting the possession or use by him of any such article or articles as may be specified in the order: x x x (4) If any person is found in any area or place in contravention of a restriction order or fails to leave any area or place in accordance with, the requirements of such an order, then, without prejudice to the provisions of sub- section (5), he may be removed from such area or place by any police officer. (5) If any person contravenes the provisions of any restriction order, he shall be punishable with imprisonment for a term which may extend to One year, or with fine which may extend to one thousand rupees, or with both." Section 4 authorises the State to revoke or modify "the restriction order", and S. 5 authorises the State to suspend operation of the "restriction order" unconditionally or upon such conditions as it deems fit and as are accepted by the person against whom the order is made. Section 6 requires the State to disclose the grounds of the "restriction order". Section 8 provides that in every case where a "restriction order" has been made, the State Government shall with in thirty days from the date of the order place before the Advisory Council a copy thereof together with the grounds on which it has been made and such other particulars as have a bearing on the matter and the representation, if any, made by the person affected by such order. Section 9 provides for the procedure of the Advisory Council, and s. 16 requires the State to confirm, modify or cancel the "restriction order" in accordance with the opinion of the Advisory Council.” By cl. (ii) of the order the respondent was required to reside within the municipal limits of Jhabua town after proceeding to that place on receipt of the order. Under cl. (b) of s. 3(1) the State is authorised to order a person to reside in the place, where he is ordinarily residing and also to require him to go to any other area or place within the State and stay in that area or place. If the person so ordered fails to carry 'out the direction, he may be removed to the area or place designated and may also be punished with imprisonment for a term which may extend to one year, or with fine, or with both. The Act it may be noticed does not give any opportunity to the person concerned of being heard before the place where he is to reside or remain in is selected. The place selected may be one in which the person concerned may have no residential accommodation, and. no means of subsistence. It may not be possible for the 23 person concerned to honestly secure the means of subsistence in the place selected. Sub- section 3(1)(b) of the Act does not indicate the extent of the place or the area, its distance from the residence of the person extended and whether it may be habitated or inhabitated; the clause also nowhere provides that the person directed to be removed shall be provided with residence, maintenance or means of livelihood in the place selected. In the circumstances we agree with the High Court that cl. (b) authorised the imposition of unreasonable restrictions insofar as it required any person to reside or remain in such place or within such area in Madhya Pradesh as may be specified in the order. Counsel for the State did not challenge the view that the restrictions which may be imposed under cl. (b) of s. 3(1) requiring a person to leave his hearth, home and place of business and live and remain in another place wholly unfamiliar to him may operate seriously to his prejudice, and may on that account be unreasonable. But he contended that normally in exercise of the power under cl. (b) a person would be ordered to remain in the town or village where he resides and there is nothing unreasonable in the order of the State restricting the movements of a person to the town or place where he is ordinarily residing. It is true that under cl. (b) an order requiring a person to reside or remain in a place where he is ordinarily residing may be passed. But in exercise of the power it also open to the State to direct a person to leave the place of his ordinary residence and to go to another place selected by the authorities and to reside and remain in that place. Since the clause is not severable, it must be struck down in its entirety as unreasonable. If it is intended to restrict the movements of a person and to maintain supervision over him, orders may appropriately be made under cls. (c) and (d) of S. 3(1) of the Act. Counsel for the State urged that in any event so long as the State of emergency declared on October 20, 1962, by the President under Art. 352 was not withdrawn or revoked, the respondent could not move the High Court by a petition under Art. 226 of the Constitution on the plea that by the impugned order his fundamental right guaranteed under Art. 19(1)(d) of the Constitution was infringed. But the Act was brought into force before the declaration of the emergency by the President. If the power conferred by s. 3(1) (b) authorised the imposition of unreasonable restrictions, the clause must be deemed to be void, for Art. 13(2) of the Constitution prohibits the State from making any law which takes away or abridges the rights conferred by Part III, and laws made in contravention of Art. 13(2) are to the extent of the contravention void. Section 3(1) (b) was therefore void when enacted and was not revived when the proclamation of emergency was made by the President. Article 358 which suspends the provisions of Art. 19 during an emergency declared by the President under Art. 352 is in terms prospective: after the proclamation of emergency nothing in Art. 19 restricts the power of the State to make laws or to take any executive action which the State but for the provisions contained in Part III was competent to make or take. Article 358 however does not operate to validate a legislative provision which was invalid because of the constitutional inhibition before the proclamation of emergency. Counsel for the State while conceding that if s. 3(1)(b) was, because it Infringed the fundamental freedom of citizens, void before the proclamation of emergency, and that it was not revived by the proclamation, submitted that Art. 358 protects action both legislative and executive taken after proclamation of emergency and therefore any executive action taken by an officer of the State or by the State will not be liable to be challenged on the ground that it Infringes the fundamental freedoms under Art. 26 In re Delhi Laws Act AIR 1951 SC 332 [Is it permissible for the legislature to delegate legislative power to a subordinate authority – limits within which this could be done] Reference was made by the President of India under Article 143 of the Constitution asking the Court’s opinion on three questions: “(1) Was Section 7 of the Delhi Laws Act, 1912, or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the legislature which passed the said Act?” Section 7 of the Delhi Laws Act, 1912 read: “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.” “(2) Was the Ajmer-Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the legislature which passed the said Act?” Section 2 of the Ajmer-Merwara (Extension of Laws) Act, 1947 read: “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 modifications as it thinks fit any enactment which is in force in any other Province at the date of such notification.” “(3) Is Section 2 of the Part ‘C’ States (Laws) Act, 1950, or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the Parliament?” Section 2 of the Part ‘C’ States (Laws) Act, 1950 read: “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 the Andaman 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.” MUKHERJEA, J. - 273. The necessity of seeking the advisory opinion of this Court is stated to have arisen from the fact that because of the decision of the Federal Court in Jatindra Nath Gupta v. Province of Bihar [AIR 1949 FC 175], which held the proviso to sub-section (3) of Section 1 of the Bihar Maintenance of Public Order Act, 1947, ultra vires the Bihar Provincial Legislature, by reason of its amounting to a delegation of its legislative powers to an extraneous authority, doubts have arisen regarding the validity of the three legislative provisions mentioned above, the legality of the first and the second being actually called in question in certain judicial proceedings which are pending before some of the High Courts in India. 274. The Delhi Laws Act, 1912 was passed by the Governor-General-in-Council at its legislative meeting that being the legislature constituted for British India at that time, under the provisions of the group of statutes known as Indian Councils Acts (1861-1909). Delhi, which up till the 17th of September, 1912, was a part of the province of the Punjab, was 27 created a Chief Commissioner’s Province on that date and on the following date the Governor-General’s Legislative Council enacted the Delhi Laws Act, 1912 which came into force on and from the 1st of October, 1912. 277. It will be noticed that in all the three items of legislation, mentioned above, there has been, what may be described, as conferment by the legislatures, which passed the respective enactments, to an outside authority, of some of the powers which the legislative bodies themselves could exercise; and the authority in whose favour the delegation has been made has not only been empowered to extend to particular areas the laws which are in force in other parts of India but has also been given a right to introduce into such laws, any restrictions or modifications as it thinks fit. The controversy centres round the point as to whether such delegation was or is within the competency of the particular legislature which passed these enactments. 278. The contention of the learned Attorney-General, who represents the President of India, in substance is that a legislature which is competent to legislate on a particular subject has the competence also to delegate its legislative powers in respect of that subject to any agent or external authority as it thinks proper. The extent to which such delegation should be made is entirely a matter for consideration by the legislature itself and a court of law has no say in the matter. There could be, according to the learned Attorney-General, only two possible limitations upon the exercise of such right of delegation by a competent legislative body. One is that the legislature cannot abdicate or surrender its powers altogether or bring into existence a new legislative power not authorised by the constitutional instrument. The second is that if the constitutional document has provided for distribution of powers amongst different legislative bodies, one legislature cannot delegate to another, powers, which are vested in it, exclusively under the Constitution. It is argued that, save and except these two limitations, the doctrine of inhibition of delegation by legislative authority has no place in a Constitution modelled on the English system which does not recognise the principle of separation of powers as obtains in the American system. These questions are of great constitutional importance and require careful consideration. 279. In America the rule of inhibition against delegation of legislative powers is based primarily upon the traditional American doctrine of “separation of powers.” Another principle is also called in to aid in support of the rule, which is expressed in the well-known maxim of private law, “delegatus non potest delegare”, the authority for the same, being based on one of the dicta of Sir Edward Coke. The modern doctrine of “separation of powers” was a leading tenet in the political philosophy of the 18th century. It was elaborated by Montesquieu in his “L’esprit des lois” in explanation of the English political doctrine and was adopted, in theory at least in all its fulness and rigidity by the constitution-makers of America. The Constitution of America provides for the separation of the governmental powers into three basic divisions - the executive, the legislative, and the judicial and the powers appertaining to each department have been vested in a separate body of public servants. It is considered to be an essential principle - underlying the Constitution that powers entrusted to one department should be exercised exclusively by that department without encroaching upon the powers confided to others. As is said by Cooley, “The different classes of power have been apportioned to different departments; and as all derive their authority from the same 28 instrument, there is an implied exclusion of each department from exercising the functions conferred upon the others.” 280. The other doctrine that is invoked in support of the anti-delegation rule is the well- accepted principle of municipal law, which prevents a person upon whom a power has been conferred, or to whom a mandate has been given, from delegating his powers to other people. The legislature is supposed to be a delegate deriving its powers from the “people” who are the ultimate repository of all powers, and hence it is considered incapable of transferring such powers to any other authority. 281. These doctrines, though well recognised in theory, have a restricted and limited application in actual practice. Mr Justice Story said- “But when we speak of a separation of the three great departments of Government and maintain that separation is indispensable to public liberty, we are to understand this maxim in a limited sense. It is not meant to affirm that they must be kept wholly and entirely separate and distinct, and have no common link of connection or dependence, the one upon the other, in the slightest degree. The true meaning is that the whole power of one of these departments should not be exercised by the same hands which possess the whole power of either of the other departments: and that such exercise of the whole would subvert the principles of free Constitution.” 282. As regards the maxim delegatus non potest delegare, its origin and theoretical basis are undoubtedly different from those of the doctrine of separation of powers. But, for practical purposes, both these doctrines are linked together and are used as arguments against the Congress attempting to invest any other authority with legislative powers. According to Willis, the disability of the Congress to delegate its legislative powers to the executive, purports to be based upon the doctrine of “separation of powers”; while its incapacity to bestow its authority upon an independent body like a board or commission is said to rest on the maxim delegatus non potest delegare. 283. As said above, a considerable amount of flexibility was allowed in the practical application of these theories even from early times. The vast complexities of social and economic conditions of the modern age, and the ever growing amount of complicated legislation that is called for by the progressive social necessities, have made it practically impossible for the legislature to provide rules of law which are complete in all their details. Delegation of some sort, therefore, has become indispensable for making the law more effective and adaptable to the varying needs of society. 284. Thus in America, despite the theory which prohibits delegation of legislative power, one comes across numerous rules and regulations passed by non legislative bodies in exercise of authority bestowed on them by the legislature in some shape or other. The legislature has always been deemed competent to create a municipal authority and empower it to make bye- laws. In fact, such legislation is based upon the immemorial Anglo-Saxon practice of leaving to each local community the management and control of local affairs. The Congress can authorise a public officer to make regulations, or the Judges of the court to frame rules of procedure which are binding in the same way as laws proper. It can authorise some other body to determine the conditions or contingencies under which a statute shall become operative and can empower administrative functionaries to determine facts and apply standards. “The separation of powers between the Congress and the Executive,” thus 31 kingdoms”. The British Parliament can not only legislate on any subject it likes and alter or repeal any law it likes, but being both “a legislative and a constituent assembly”, it can change and modify the so-called constitutional laws and they can be changed by the same body and in the same manner as ordinary laws; and no act of the Parliament can be held to be unconstitutional in a British court of law. 291. This sovereign character was not, and could not be, predicated of the Legislative Council of British India as it was constituted under the Indian Councils Act, even though it had very wide powers of legislation and within the scope of its authority could pass laws as important as those passed by the British Parliament. It is not present also in the Indian Parliament of the present day which is a creature of the Indian Constitution and has got to exercise its legislative powers within the limits laid down by the Constitution itself. Acting in its ordinary capacity as a legislative body, the Indian Parliament cannot go beyond the Constitution or touch any of the constitutional or fundamental laws, and its acts can always be questioned in a court of law. Consequences of great constitutional importance flow from this difference and they have a material bearing on the question before us. The contention of the learned Attorney-General in substance is that the power of delegation of legislative authority without any limitation as to its extent is implicit in the exercise of the power itself, and in support of his contention he refers to the unrestricted rights of delegation which are exercised by the British Parliament. But the validity or invalidity of a delegation of legislative power by the British Parliament is not and cannot be a constitutional question at all in the United Kingdom, for the Parliament being the omnipotent sovereign is legally competent to do anything it likes and no objection to the constitutionality of its acts can be raised in a court of law. Therefore, from the mere fact that the British Parliament exercises unfettered rights of delegation in respect of its legislative powers, the conclusion does not follow that such right of delegation is an inseparable adjunct of the legislative power itself. The position simply is this that in England, no matter, to whichever department of the powers exercisable by the British Parliament the right of delegation of legislative authority may be attributed - and there is no dispute that all the sovereign powers are vested in the Parliament - no objection can be taken to the legality of the exercise of such right. But in India the position even at the present day is different. There being a written constitution which defines and limits the rights of the legislature, the question whether the right of delegation, either limited or unlimited, is included within, and forms an integral part of, the right of legislation is a question which must be answered on a proper interpretation of the terms of the Constitution itself. We need not for this purpose pay any attention to the American doctrine of separation of powers; we must look to the express language of our own Constitution and our approach should be to the essential principles underlying the process of law-making which our Constitution envisages. According to the Indian Constitution, the power of law-making can be exercised by the Union Parliament or a State Legislature which is to be constituted in a particular manner and the process of legislation has been described in detail in various articles. Powers have been given to the President in Article 123 and to the Governor of a State under Article 213 to promulgate Ordinances during recess of the respective legislatures. Specific provisions have also been made for exercise of the legislative powers by the President on proclamation of emergency and in respect of Part-D territories. Law-making undoubtedly is a task of the highest importance and responsibility, and, as our Constitution has entrusted this 32 task to particular bodies of persons chosen in particular ways, and not only does it set up a machinery for law-making but regulates the methods by which it is to be exercised and makes specific provisions for cases where departure from the normal procedure has been sanctioned, the prima facie presumption must be that the intention of the Constitution is that the duty of law-making is to be performed primarily by the legislative body itself. The power of the Parliament to confer on the President legislative authority to make laws and also to authorise the President to delegate the power so conferred to any other authority has been recognised only as an emergency provision in Article 357 of the Constitution. Save and except this, there is no other provision in the Constitution under which the legislature has been expressly authorised to delegate its legislative powers. “It is a well-known rule of construction that if a statute directs that certain acts shall be done in a specified manner or by certain persons, then performance in any other manner than that specified or by any other persons than those named is impliedly prohibited” It has been observed by Baker in his treatise on “Fundamental Laws” that quite apart from the doctrine of separation of powers, there are other cogent reasons why legislative power cannot be delegated. “Representative Government,” thus observes the learned author, “vests in the persons chosen to exercise the power of voting taxes and enacting laws, the most important and sacred trust known to civil Government. The representatives of the people are required to exercise wise discretion and a sound judgment, having due regard for the purposes and the needs of the executive and judicial department, the ability of the taxpayer to respond and the general public welfare. It follows as a self-evident proposition that a responsible Legislative Assembly must exercise its own judgment”. In the same strain are the observations made by Cooley in his “Constitutional Law” that the reason against delegation of power by the legislature is found in the very existence of its own powers. “This high prerogative has been entrusted to its own wisdom, judgment and patriotism, and not to those of other persons, and it will act ultra vires if it undertakes to delegate the trust instead of executing it.” 292. The same considerations are applicable with regard to the legislative bodies which exercised the powers of law-making at the relevant periods when the Delhi Laws Act of 1912 and the Ajmer-Merwar Act of 1947 were enacted. Under the Indian Councils Act, 1861, the power of making laws and regulations was expressly vested in a distinct body consisting of the members of the Governor-General’s Council and certain additional members who were nominated by the Governor-General for a period of two years. The number of such additional members which was originally from 6 to 12 was increased by the subsequent amending Acts and under the Indian Councils Act of 1909; it was fixed at 60, of which 27 were elected and the rest nominated by the Governor-General. It was this legislative body that was empowered by the Indian Councils Act to legislate for the whole of British India and there were certain local legislatures in addition to this in some of the provinces. 293. Section 18 of the Indian Councils Act of 1861 empowered the Governor-General to make rules for the conduct of business at meetings of the Council for the purpose of making laws; Section 15 prescribed the quorum necessary for such meetings and further provided that the seniormost ordinary member could preside in the absence of the Governor-General. This was the normal process of law-making as laid down by the Indian Councils Act. Special provisions were made for exceptional cases when the normal procedure could be departed from. Thus Section 23 of the Act of 1861 empowered the Governor-General to make 33 ordinances having the force of law in case of urgent necessity; and later on under Section 1 of the Indian Councils Act of 1870 the executive Government was given the power to make regulations for certain parts of India to which the provisions of the section were declared to be applicable by the Secretary of State. Besides these exceptions for which specific provisions were made, there is nothing in the parliamentary Acts passed during this period to suggest that legislative powers could be exercised by any other person or authority except the Legislative Councils mentioned above. 294. The Ajmer-Merwar Act was passed by the Dominion Legislature constituted under the Government of India Act, 1935, as adapted under the Indian Independence Act of 1947. The provisions of the Constitution Act of 1945 regarding the powers and functions of the legislative bodies were similar to those that exist under the present Constitution and no detailed reference to them is necessary. 295. The point for consideration now is that if this is the correct position with regard to exercise of powers by the legislature, then no delegation of legislative function, however small it might be, would be permissible at all. The answer is that delegation of legislative authority could be permissible but only as ancillary to, or in aid of, the exercise of law- making powers by the proper legislature, and not as a means to be used by the latter to relieve itself of its own responsibility or essential duties by devolving the same on some other agent or machinery. A constitutional power may be held to imply a power of delegation of authority which is necessary to affect its purpose; and to this extent delegation of a power may be taken to be implicit in the exercise of that power. This is on the principle “that everything necessary to the exercise of a power is implied in the grant of the power. Everything necessary to the effective exercise of legislation must therefore be taken to be conferred by the Constitution within that power.” But it is not open to the legislature to strip itself of its essential legislative function and vest the same on an extraneous authority. The primary or essential duty of law- making has got to be discharged by the legislature itself; delegation may be resorted to only as a secondary or ancillary measure. 296. Quite apart from the decisions of American courts, to some of which I will refer presently, the soundness of the doctrine rests, as I have said already, upon the essential principles involved in our written Constitution. The work of law-making should be done primarily by the authority to which that duty is entrusted, although such authority can employ an outside agency or machinery for the purpose of enabling it to discharge its duties properly and effectively; but it can on no account throw the responsibility which the Constitution imposes upon it on the shoulders of an agent or delegate and thereby practically abdicate its own powers. 297. The learned Attorney-General in support of the position he took up placed considerable reliance on the observations of the Judicial Committee in the case of Queen v. Burah, which I have referred to already and which has been repeated almost in identical language in more than one subsequent pronouncement of the Judicial Committee. The Privy Council made those observations for the purpose of clearing up a misconception which prevailed for a time in certain quarters that the Indian or the colonial legislatures were mere agents or delegates of the imperial Parliament, and being in a sense holder of mandates from the latter, were bound to execute these mandates personally. This conception, the Privy Council pointed out, was wrong. The Indian Legislature, or for the matter of that the Colonial Parliament could, of 36 said O’Conner, J. in Baxter v. Ah Way “is to project their minds as far as possible into the future and to provide in terms as general as possible for all contingencies likely to arise in the application of the law. But it is not possible to provide specifically for all cases and therefore legislation from the very earliest times, and particularly in more modern times, has taken the form of conditional legislation, leaving it to some specified authority to determine the circumstances in which the law shall be applied or to what its operation shall be extended, or the particular class of persons or goods or things to which it shall be applied”. In spite of the doctrine of separation of powers, this form of legislation is well recognised in the legislative practice of America, and is not considered as an encroachment upon the anti-delegation rule at all. As stated in a leading Pennsylvania case, “the legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend. To deny this would be to stop the wheels of Government. There are many things upon which wise and useful legislation must depend, which cannot be known to the law-making power and must, therefore, be a subject of inquiry and determination outside the halls of legislation”. 303. One of the earliest pronouncements of the Judicial Committee on the subject of conditional legislation is to be found in Queen v. Burah. In that case, as said already, the Lieutenant-Governor of Bengal was given the authority to extend all or any of the provisions contained in a statute to certain districts at such time he considered proper by notification in the Official Gazette. There was no legislative act to be performed by the Lieutenant-Governor himself. The Judicial Committee observed in their judgment: “The proper legislature has exercised its judgment as to place, persons, laws, powers, and the result of that judgment has been to legislate conditionally as to those things. The conditions being fulfilled, the legislation is now absolute.” 304. Just four years after this decision was given, the case of Russell v. Queen came up before the Judicial Committee. The subject-matter of dispute in that case was the Canadian Temperance Act of 1878, the prohibitory and penal provisions of which were to be operative in any county or city, only if upon a vote of the majority of the electors of that county or city favouring such a course the Governor-General by order-in-council declared the relative part of the Act to be in force. One of the contentions raised before the Judicial Committee was that the provision was void as amounting to a delegation of legislative authority to a majority of voters in the city or county. This contention was negatived by the Privy Council, and the decision in Queen v. Burah was expressly relied upon. “The short answer to this question,” thus observed the Judicial Committee, “is that the Act does not delegate any legislative powers whatsoever. It contains within itself the whole legislation on the matter with which it deals. The provision that certain parts of the Act shall come into operation only on the petition of a majority of electors does not confer authority or power to legislate. Parliament itself enacts the condition and everything which is to follow upon the condition being fulfilled. Conditional legislation of this kind is in many cases convenient and is certainly not unusual and the power so to legislate cannot be denied to the Parliament of Canada when the subject of legislation is within its competency”. 305. The same principle was applied by the Judicial Committee in King v. Benoari Lal Sarma. In that case, the validity of an emergency ordinance by the Governor-General of India was challenged inter alia on the ground that it provided for setting up of special criminal 37 courts for particular kinds of offences, but the actual setting up of the courts was left to the Provincial Governments which were authorised to set them up at such time and place as they considered proper. The Judicial Committee held that “this is not delegated legislation at all. It is merely an example of the not uncommon legislative power by which the local application of the provisions of a statute is determined by the judgment of a local administrative body as to its necessity”. 306. Thus, conditional legislation has all along been treated in judicial pronouncements not to be a species of delegated legislation at all. It comes under a separate category, and, if in a particular case all the elements of a conditional legislation exist, the question does not arise as to whether in leaving the task of determining the condition to an outside authority, the legislature acted beyond the scope of its powers. 307. I now come to the other and more important group of cases where admittedly a portion of the law-making power of the legislature is conferred or bestowed upon a subordinate authority and the rules and regulations which are to be framed by the latter constitute an integral portion of the statute itself. As said already, it is within powers of Parliament or any competent legislative body when legislating within its legislative field, to confer subordinate administrative and legislative powers upon some other authority. The question is what the limits within which such conferment are or bestowing of powers could be properly made? It is conceded by the learned Attorney-General that the legislature cannot totally abdicate its functions and invest another authority with all the powers of legislation which it possesses. Subordinate legislation, it is not disputed, must operate under the control of the legislature from which it derives its authority, and on the continuing operation of which, its capacity to function rests. As was said by Dixon, J. “a subordinate legislation cannot have the independent and unqualified authority,which is an attribute of true legislative power”. It is pointed out by this learned Judge that several legal consequences flow from this doctrine of subordinate legislation. An offence against subordinate legislation is regarded as an offence against the statute and on the repeal of the statute the regulations automatically collapse. So far, the propositions cannot, and need not, be disputed. But, according to the learned Attorney-General all that is necessary in subordinate legislation is that the legislature should not totally abdicate its powers and that it should retain its control over the subordinate agency which it can destroy later at any time it likes. If this is proved to exist in a particular case, then the character or extent of the powers delegated to or conferred upon such subordinate agent is quite immaterial and into that question the courts have no jurisdiction to enter. This argument seems plausible at first sight, but on closer examination, I find myself unable to accept it as sound. In my opinion, it is not enough that the legislature retains control over the subordinate agent and could recall him at any time it likes, to justify its arming the delegate with all the legislative powers in regard to a particular subject. Subordinate legislation not only connotes the subordinate or dependent character of the agency which is entrusted with the power to legislate, but also implies the subordinate or ancillary character of the legislation itself, the making of which such agent is entrusted with. If the legislature hands over its essential legislative powers to an outside authority, that would, in my opinion, amount to a virtual abdication of its powers and such an act would be in excess of the limits of permissible delegation. 38 308. The essential legislative function consists in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of conduct. It is open to the legislature to formulate the policy as broadly and with as little or as much detail as it thinks proper and it may delegate the rest of the legislative work to a subordinate authority who will work out the details within the framework of that policy. “So long as a policy is laid down and a standard established by statute no constitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the legislation is to apply” 342. It will be noticed that the powers conferred by this section upon the Central Government are far in excess of those conferred by the other two legislative provisions, at least in accordance with the interpretation which I have attempted to put upon them. As has been stated already, it is quite an intelligible policy that so long as a proper legislative machinery is not set up in a particular area, the Parliament might empower an executive authority to introduce laws validly passed by a competent legislature and actually in force in other parts of the country to such area, with each modifications and restrictions as the authority thinks proper, the modifications being limited to local adjustments or changes of a minor character. But this presupposes that there is no existing law on that particular subject actually in force in that territory. If any such law exists and power is given to repeal or abrogate such laws either in whole or in part and substitute in place of the same other laws which are in force in other areas, it would certainly amount to an unwarrantable delegation of legislative powers. To repeal or abrogate an existing law is the exercise of an essential legislative power, and the policy behind such acts must be the policy of the legislature itself. If the legislature invests the executive with the power to determine as to which of the laws in force in a particular territory are useful or proper and if it is given to that authority to replace any of them by laws brought from other provinces with such modifications as it thinks proper, that would be to invest the executive with the determination of the entire legislative policy and not merely of carrying out a policy which the legislature has already laid down. Thus the power of extension, which is contemplated by Section 2 of Part-C States (Laws) Act, includes the power of introducing laws which may be in actual conflict with the laws validly established and already in operation in that territory. This shows how the practice, which was adopted during the early British period as an expedient and possibly harmless measure with the object of providing laws for a newly acquired territory or backward area till it grew up into a full-fledged administrative and political unit, is being resorted to in later times for no other purpose than that of vesting almost unrestricted legislative powers with regard to certain areas in the executive Government. The executive Government is given the authority to alter, repeal or amend any laws in existence at that area under the guise of bringing in laws there which are valid in other parts of India. This, in my opinion, is an unwarrantable delegation of legislative duties and cannot be permitted. The last portion of Section 2 of Part-C States (Laws) Act is, therefore, ultra vires the powers of the Parliament as being a delegation of essential legislative powers in favour of a body not competent to exercise it and to that extent the legislation must be held to be void. This portion is however severable; and so the entire section need not be declared invalid. 343. The result is that, in my opinion, the answer to the three questions referred to us would be as follows: 41 On December 7, 1957, in the Gazette of India Extraordinary there appeared a notification, which read as below: SR0 3908 - In exercise of the powers conferred by Section 2 of the Union Territories (Laws) Act, 1950 (30 of 1950), the Central Government hereby makes the following amendment in the notification of the Government of India in tne Ministry of Home Affairs No. S. R. 0. 615, dated the 28th April, 1951 [extending to the Union Territory of Delhi the Bengal Finance (Sales Tax) Act, 1941 subject to certain modifications] namely:- In the said notification, the modifications to the Bengal Act aforesaid in item 6 [relating to sub-section (2) of Section 6], after sub-item (a) the following sub-item shall be inserted, namely:- (aa) for the words “not less than three months’ notice”, the word; “such previous notice as it considers reasonable” shall be substituted. R. S. SARKARIA, J. - 10. The vires of this notification dated December 7, 1957, is the subject of primary challenge in these appeals (the impugned notification). 11. Item 17 in the Second Schedule of the Bengal Act was amended with effect from December 14, 1957 by Notification No. SRO 3958, as under: 17. All varieties of cotton, woollen, rayon or artificial silk fabric but not including real silk fabrics. Conditions subject to which tax shall not be payable: In respect of tobacco, cotton fabrics, rayon or artificial silk fabrics and woollen fabrics as defined in items 9, 12, 12A, 12B at the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), included in entries (a) and (e) above, no tax under the Bengal Finance (Sales Tax) Act, 1941, shall be payable in the Union Territory of Delhi only it additional duties of excise have been levied on them under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. 12. The aforesaid condition was withdrawn by notification No. GSR 203, dated April 1, 1958. [By various notifications issued between 1958 and 1970, exemption was withdrawn from the country liquor, of all varieties of cotton fabrics, rayon, or artificial silk fabrics and woollen fabrics but not including durries, druggets and carpets. The appellants included the dealers of durries, knitting wool, pure silk, kirana and country liquor who were aggrieved on account of various notifications withdrawing exemption on the items in which they were dealing]. 27. In the High Court, the validity of the withdrawal of the exemptions was challenged on these grounds: (1) The power given by Section 2 of the Laws Act to the Central Government to extend enactments in force in a State to a Union territory, with such restrictions and modifications, as it thinks fit, could be exercised only to make such modifications in the enactment as were necessary in view of the peculiar local condition. The modification in Section 6(2) of the Bengal Act made by SRO 3908, dated October 7, 1957, was not necessitated by this reason. It was therefore, ultra vires to the Section 2 of the Laws Act. (2) Such a modification could be made only once when the Bengal Act was extended to Delhi in 1951. No modification could be made after such extension. (3) The modification could not change the policy of the legislature reflected in the Bengal Act. The impugned modification was contrary to it, and (4) The modifications giving notice to withdraw the exemptions and the notifications issued pursuant thereto withdrawing the exemptions from sales tax with respect to durries, ghee, 42 (and other items relevant to these petitions) were void as the statutory notice of ‘not less than three months’ as required by Section 6(2) prior to its modification by the impugned notification of December 7, 1957, had not been given. 28. Finding on all the four grounds in favour of the writ petitioners, the learned Single Judge declared: that the purported modification of Section 6(2) of the Bengal Finance (Sales Tax) Act, 1941, by the Government of India’s notification No. SRO 3908, dated December 7, 1957, was ineffective and Section 6(2) continues to be the same as before as if it was not so modified at all. In consequence, he quashed the government notifications Nos. GSR 964, dated June 16, 1966 and GSR 1061, dated June 29, 1966, because they were not in compliance with the requirement of Section 6(2) of the Bengal Act. 29. The contentions canvassed before the learned Single Judge was repeated before the appellate Bench of the High Court. The Bench did not pointedly examine the scope of the power of modification given to the Central Government by Section 2 of the Laws Act with specific reference to the purpose for which it was conferred and its precise limitations. It did not squarely dispel the reasoning of the learned Single Judge that the power of modification is an integral part of the power of extension and “cannot therefore be exercised except for the purpose of the extension”. It refused to accept that reasoning with the summary remark, from the extracts quoted by the learned Single Judge from the judgment of the Supreme Court in Re Delhi Laws Act [AIR 1951 SC 332] and from the judgment in Rajnarain Singh v. Chairman, Patna Administration Committee, Patna [AIR 1954 SC 569], the principle deduced by the learned Judge does not appear to follow. We are therefore not inclined, as at present advised, to support the above observations. The Bench, however, hastened to add: However, since the matter was not argued at great length and the appellants’ Counsel rested his submissions on the other aspects of the case, we would not like to express any definite opinion on the question as to whether the power of making any modifications or restrictions in the Act can only be exercised at the time of extending the Act and that it cannot be done subsequently by the Central Government in exercise of its power. 32. Apart from the grounds taken in their writ petitions, the learned Counsel for the appellants have tried to raise before us another ground under the garb of what they styled as “merely an additional argument”. They now seek to challenge the vires of the notification No. SRO 615, dated April 28, 1951, in so far as it relates to the insertion in subsection (2) of” Section 6 of that Act, between the words “add to” and “the Schedule”, of the words “or omit or otherwise amend”. It is argued that this insertion was beyond the power of modification conferred on the Central Government by Section 2 of the Laws Act. The point sought to be made out is that if the insertion made by the notification dated April 28, 1951, in Section 6(2) was ineffective and non est in the eye of law, the Central Government would have no power to “omit” anything from the exempted goods itemised in the schedule. It is argued that under Section 6(2) sans this insertion, the Central Government was empowered only to “add to” and not “omit” from the exempted items enumerated in the schedule, and consequently, the withdrawal of the exemptions in question was ultra vires the Central Government. 34. In the present appeal, the Bengal Act as extended by SRO 615, dated April 28, 1951, did not suffer from any infirmity. It is conceded by the learned Counsel for the respondent that 43 the Central Government at the time it extended the Bengal Act was competent to introduce such modifications and restrictions as it thought fit. 36. On behalf of the appellants, it is contended that the power of modification conferred on the Central Government by Section 2 of the Laws Act is not an unfettered power of delegated legislation but a subsidiary power conferred for the limited purpose of extension and application to a Union territory, an enactment in force in a State. It is maintained that only such modifications are permissible in the exercise of that power which are necessary to adapt and adjust such enactment to local the conditions. 37. According to Shri Ashok Sen, the power given by Section 2 is a power of ‘conditional legislation’ which is different from the power of ‘delegated legislation’. It is submitted that it is not a recurring power; it exhausts itself on extension, and in no case this power can be used to change the basic scheme and structure of the enactment or the legislative policy ingrained in it. The submission is that the impugned notification, dated December 7, 1957, is bad because it has been issued more than 6½ years after the extension of Bengal Act, and it attempts to change the requirement of Section 6(2) as to “not less than three months’ notice” which is the essence of the whole provision. 39. Shri Ashok Sen further submits that by the amending Act 20 of 1959, Parliament did not put its seal of approval on the impugned notification or the changes sought to be made by it in Section 6 of the Bengal Act. It is stressed that the amending Act of 1959, did not touch Section 6 at all and therefore, it could not be said, by any stretch of imagination, that Parliament had referentially or impliedly incorporated or approved the purported change made by the impugned notification, in the Bengal Act. 40. As against the above, Shri B. Sen, the learned Counsel for the Revenue submits that the impugned notification does not change the essential structure or the policy embodied in Section 6(2) of the Bengal Act. According to Counsel, the policy underlying Section 6(2) is that reasonable notice of the Government’s intention to add to or omit anything from the Second Schedule must be given by publication in the Official Gazette. It is maintained that the requirement as to “not less than three months’ notice” in the section was not a matter of policy but one of detail or expedience, it was only directory, and the modification made by the impugned notification did not go beyond adjusting and adapting it to the local conditions of Delhi. Bengal, it is pointed out, is a big, far-flung State while the territory of Delhi is a small, compact area and therefore, it would not be necessary or unreasonable to give a notice of less than three months for every amendment of the schedule. It is argued that the power to add or omit from the Second Schedule conferred on the Government is in consonance with the accepted practice of the legislature; that it is usual for the legislature to leave a discretion to the Executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be levied or rates at which it is to be charged in respect of different classes of goods and the like. 41. Shri B. Sen further contends that the power of modification given by Section 2 of the Laws Act, does not exhaust itself on first exercise; it can be exercised even subsequently if through oversight or otherwise, at the time of extension of the enactment, the Central Government fails to adapt or modify certain provisions of the extended enactment for bringing it in accord with local conditions. In this connection support has been sought from the observations of Fazal All, J. at p. 850 of the report in Re Delhi Laws Act. Our attention has 46 The power to “restrict and modify” does not import the power to make essential changes. It is confined to alterations of a minor character such as are necessary to make an Act intended for one area applicable to another and to bring it into harmony with laws already in being in the State, or to delete portions which are meant solely for another area. To alter the essential character of an Act or to change it in material particulars is to legislate, and that, namely, the power to legislate, all authorities are agreed, cannot be delegated by a legislature which is not unfettered. 55. Mukherjea, J. was of the view that the “essential legislative functions” which consist in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of conduct cannot he delegated. Dealing with the construction of the words “restrictions” and “modifications” in the Laws Act, the learned Judge said, at pages 1004- 1006: The word “restrictions’… connotes limitation imposed on a particular provision so as to restrain its application or limit its scope; it does not by any means involve any change in the principle. It seems to me that in the context and used along with the word “restriction” the word “modification” has been employed also in a cognate sense, and it does not involve any material or substantial alteration. The dictionary meaning of the expression “to modify” is to “tone down” or to “soften the rigidity of the thing;” or “to make partial changes without any radical alteration”. It would be quite reasonable to hold that the word “modification” in Section 7 of the Delhi Laws Act (which is almost identical with the present Section 2. Laws Act) means and signifies changes of such character as are necessary to make the statute which is sought to be extended suitable to the local conditions of the province. I do not think that the executive Government is entitled to change the whole nature or policy underlying any particular Act or to take different portions from different statutes and prepare what has been described before us as “amalgam” of several laws … these things would be beyond the scope of the section itself, (emphasis supplied) 56. S. R. Das, J. (as he then was) delineated the scope of the power of “modification” given under Section 7 of the Delhi Laws Act, 1912 at p. 1089 as follows: It may well be argued that the intention of Section 7 of the Delhi Laws Act was that the permissible modifications were to be such as would, after modification, leave the’ general character of the enactment intact. One of the meanings of the word “modify” is given in the Oxford Dictionary, Vol. I, page 1269 as “to alter without radical transformation”. If this meaning is given to the word “modification” in Section 7 of the Delhi Laws Act, then the modifications contemplated thereby were nothing more than adaptations which were included in the expressions mutatis mutandis and the “restrictions, limitations or proviso” mentioned in the several instances of’ conditional legislation referred to by the Privy Council (in Burah’s case). 57. It is to be noted that the language of Section 7 of the Delhi Act was substantially the same as that of the first portion of Section 2 of the Part C States Laws Act, as it then stood. What Das, J. said about the scope of “restrictions and modifications” in the context of Section 7 of the Delhi Act, substantially applies to the ambit and meaning of these words occurring in Section 2 of the Laws Act. 47 58. Again, in Rajnarain Singh case, Vivian Bose, J. speaking for the Court, summed up the majority view in regard to the nature and scope of delegated legislation in Re Delhi Laws, thus: In our opinion the majority view was that an executive authority can be authorised to modify either existing or future laws but not in any essential feature. Exactly what constitutes an essential feature cannot be enunciated in general terms, and there was some divergence of view about this in the former case, but this much is clear from the opinions set out above: it cannot include a change of policy. 59. Bearing in mind the principles and the scope and meaning of the expression “restrictions and modifications” explained in Re Delhi Laws Act; let us now have a close look at Section 2. It will be clear that the primary power bestowed by the section on the Central Government, is one of extension that is bringing into operation and effect, in a Union territory, an enactment already in force in a State. The discretion conferred by the section to make ‘restrictions and modifications’ in the enactment sought to be extended, is not a separate and independent power. It is an integral constituent of the powers of extension. It cannot be exercised apart from the power of extension. This is indubitably clear from the preposition “with” which immediately precedes the phrase ‘such restrictions and modifications’ and conjoins it to the principal clause of the section which gives the power of extension. 60. The power given by Section 2 exhausts itself on extension of the enactment; it cannot be exercised repeatedly or subsequently to such extension. It can be exercised only once, simultaneously with the extension of the enactment. This, if one dimension of the statutory limits which circumscribe the power. The second is that the power cannot be used for a purpose other than that of extension. In the exercise of this power, only such “restrictions and modifications can be validly engrafted in the enactment sought to be extended, which are necessary to bring it into operation and effect in the Union territory. “Modifications” which are not necessary for, or ancillary and subservient to the purpose of extension, are not permissible. And, only such “modifications” can be legitimately necessary for such purpose as are required to adjust, adapt and make the enactment suitable to the peculiar local conditions of the Union territory for carrying it into operation and effect. In the context of the section, the words; “restrictions and modifications” do not cover such alterations as involve a change in any essential feature, of the enactment or the legislative policy built into it. This is the third dimension of the limits that circumscribe the power. 61. It is true that the word “such restrictions and modifications as it thinks fit”, if construed literally and in isolation, appear to give unfettered power of amending and modifying the enactment sought to be extended. Such a wide construction must be eschewed lest the very validity of the section becomes vulnerable on account of the vice of excessive delegation. Moreover, such a construction would be repugnant to the context and the content of the section, read as a whole, and the statutory limits and conditions attaching to the exercise of the power. We must, therefore, confine the scope of the words “restrictions and modifications” to alterations of such a character which keep the inbuilt policy, essence and substance of the enactment sought to be extended, intact, and introduce only such peripheral or insubstantial changes which are appropriate and necessary to adapt and adjust it to the local conditions of the Union territory. 48 62. The impugned notification, dated December 7, 1957, transgresses the limits which circumscribe the scope and exercise of the power conferred by Section 2 of Laws Act, at least, in two respects. 63. Firstly, the power has not been exercised contemporaneously with the extension or for the purposes of the extension of the Bengal Act to Delhi. The power given by Section 2 of the Laws Act had exhausted itself when the Bengal Act was extended, with some alterations, to Delhi by notification, dated April 28, 1951. The impugned notification has been issued on December 7, 1957, more than 61/ 2 years after the extension. 64. T here is nothing in the opinion of this Court rendered in Re Delhi Laws Act to support Mr B. Sen’s contention that the power given by Section 2 could be validly exercised within one year after the extension. What appears in the opinion of Fazi Ali, J. at page 850, is merely a quotation from the report of the Committee on Ministers’ Powers which considered the propriety of the legislative practice of inserting a “Removal of Difficulty Clause” in Acts of British Parliament, empowering the Executive to modify the Act itself so far as necessary for bringing it into operation. This device was adversely commented upon. While some critics conceded that this device is “partly a draftsman’s insurance policy, in case he has overlooked something”, others frowned upon it, and nicknamed it as “Henry VIII clause” after the British monarch who was a notorious personification of absolute despotism. It was in this perspective that the Committee on Ministers’ Powers examined this practice and recommended: It can only be essential for the limited purpose of bringing an Act into operation and it should accordingly be in most precise language restricted to those purely machinery arrangements vitally requisite for that purpose; and the clause should always contain a maximum time-limit of one year after which the power should lapse. 65. It may be seen that the time-limit of one year within wh ich the power under a ‘Henry VIII clause’ should be exercisable, was only a recommendation, and is not an inherent attribute of such power. In one sense, the power of extension-cum- modification given under Section 2 of the Laws Act and the power of modification and adaptation conferred under a usual Henry VIII clause are kindred powers of fractional legislation, delegated by the legislature within narrow circumscribed limits. But there is one significant difference between the two. While the power under Section 2 can be exercised, only once when the Act is extended, that under a ‘Henry VIII clause’ can be invoked, if there is nothing to the contrary in the clause - more than once, on the arising of a difficulty when the Act is operative. That is to say, the power under such a clause can be exercised whenever a difficulty arises in the working of the Act after its enforcement, subject of course to the time-limit, if any, for its exercise specified in the statute. 66. Thus, anything said in Re Delhi Laws Act, in regard to the time-limit for the exercise of power under a ‘Henry VIII clause’, does not hold good in the case of the power given by Section 2 of the Laws Act. Fazal Ali, J. did not say anything indicating that the power in question can be exercised within one year of the extension. On the contrary, the learned Judge expressed in unequivocal terms, at page 849: Once the Act became operative any defect in its provision cannot be removed until amending legislation is passed. 51 on such a plea would be violative of the fundamental principle of natural histice, according to which, a party cannot be allowed to take advantage of its own lapse or wrong. The statute has imposed a peremptory duty on the Government to issue notice of not less than three months, of its intention to amend the Second Schedule. It therefore cannot be allowed to urge that since it had disobeyed this mandate on an earlier occasion when it granted the exemptions it can withdraw the exemptions in the same unlawful mode. Two wrongs never make a right. 83. Nor could the respondents derive any authority or validity from Section 21 of the General Clauses Act, for the notifications withdrawing the exemptions. The source from which the power to amend the Second Schedule, comes from Section 6(2) of the Bengal Act and not from Section 21 of the General Clauses Act. Section 21, as pointed out by this Court in Gopi Chand v. Delhi Administration [AIR 1959 SC 609] embodies only a rule of construction and the nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification. The power, therefore, had to be exercised within the limits circumscribed by Section 6(2) and for the purpose for which it was conferred. 84. For all the foregoing reasons, we are of opinion that the impugned notification, dated December 7, 1957, purporting to substitute the words “such previous notice as it considers reasonable” for the words “not less than three months’ notice” in Section 6(2) of the Bengal Act, is beyond the powers of the Central Government, conferred on it by Section 2 of the Laws Act. In consequence, the notifications, dated April 1, 1958, September 19, 1959, June 29. 1966 and July 31, 1970 in so far as they withdrew the exemptions from tax in the case of durries, pure silk, country liquor, kirana articles etc. without complying with the mandatory requirement of not less than three months’ notice enjoined by Section 6(2) of the Bengal Act, are also invalid and ineffective. 85. In the result, we allow these appeals, set aside the judgment of the appellate bench of the High Court and declare the notification dated December 7, 1959, and the subsequent notifications in so far as they withdrew the exemptions from tax mentioned above, to be unconstitutional. la the circumstances of the case, we leave the parties to bear their own costs. * * * * * The students are also advised to read Brij Sunder Kapoor v. Ist Addl. Dist. Judge, AIR 1989 SC 572 and Ramesh Birch v. Union of India, AIR 1990 SC 560 * * * * * 52 Darshan Lal Mehra v. Union of India (1992) 4 SCC 28 : AIR 1992 SC 714 [Delegation of taxing powers on local bodies – effacement, discrimination] The relevant provisions of the U.P. Nagar Mahapalika Adhiniyam, 1959 reads: Section 2.: Definitions - In this Act unless there be something repugnant in the subject or context - (77) ‘theatre tax’ means a tax on amusement or entertainments. “172. Taxes to be imposed under this Act.- (1) For the purposes of this Act and subject to the provisions thereof and of Article 285 of the Constitution of India, the Mahapalika shall impose the following taxes, namely,- (a) property taxes, (2) In addition to the taxes specified in sub-section (1) the Mahapalika may for the purposes of this Act and subject to the provisions thereof impose any of the following taxes, namely,- (a) a tax on trades, callings and professions and holding of public or private appointments; (i) a theatre tax; and (j) any other tax which the State Legislature has the power under the Constitution of India to impose in the State: (3) The Mahapalika taxes shall be assessed and levied in accordance with the provisions of this Act and the rules and bye-laws framed thereunder. (4) Nothing in this section shall authorise the imposition of any tax which the State Legislature has no power to impose in the State under the Constitution of India.” Sub-section (1) of Section 199 of the Act required the Nagar Mahapalika to make a preliminary proposal specifying the tax which it desired to impose under Section 172(2) of the Act, the persons or class of persons to be made liable, the amount or rate leviable for each such person or class of persons and any other information which the Government required. It further required the executive committee of the Nagar Mahapalika to draft the rules in that respect which were finally to be framed by the State Government. The draft rules were to be published in the prescribed manner to enable the affected public to file objections. Section 200 of the Act made it obligatory for the Nagar Mahapalika to consider the objections so received and to re-publish the draft rules in case any change was made as a result of such consideration. After considering all the objections the draft rules were finalised by the Nagar Mahapalika and forwarded to the State Government along with the objections. Section 201 of the Act empowered the State Government to reject, modify or to accept the proposed rules. Under Section 202 of the Act it was only after the rules were finalised by the State Government that the Nagar Mahapalika could pass a special resolution imposing the tax from the date to be specified. Under Section 203 the special resolution was to be sent to the Government and the tax was to be imposed on the publication of the resolution in the Government Gazette. Section 540(4) of the Act provided that all rules made under the Act shall be laid for not less than 14 days before each House of the State Legislature as soon as they were made and they were subject to such modifications as the legislature might make during the session they were so laid. The proposal of the Nagar Mahapalika, Lucknow to levy theatre tax, @ Rs 5 per cinema show held in a building assessed on annual rental value of Rs 10,000 or more and @ Rs 3 per 53 cinema show held in a building assessed on annual rental value of less than Rs 10,000, was accepted by the State Government by following the procedure laid down under the Act. The rules called The Lucknow Nagar Mahapalika Theatre Tax Rules were framed and enforced with effect from December 15, 1965 and thereafter the tax was levied with effect from June 1, 1967. The rate of tax was increased from time to time and finally by a notification dated October 30, 1979 published in the U.P. Government Gazette dated October 31, 1979 the theatre tax was enhanced to Rs 25 per show on all Class I cinemas with annual rental value of more than Rs 10,000 and Rs 20 per show on all Class II cinemas with annual rental value of Rs 10,000 or less. KULDIP SINGH, J. – 7. The learned counsel for the petitioners has contended that Section 172(2) of the Act is unconstitutional because the legislature has abdicated its function by delegating the essential legislative powers upon the Nagar Palikas to levy all or any of the taxes enumerated in the section. According to him the said power is unguided and uncanalised. We do not agree with the learned counsel. Section 172(2) of the Act authorises the Mahapalikas to impose the taxes mentioned therein, “for the purposes of this Act”. The obligations and functions cast upon the Mahapalikas are laid down in various provisions of the Act. The taxes under Section 172(2) of the Act, therefore, can be levied by the Mahapalikas only for implementing those purposes and for no other purpose. The Mahapalikas have to provide special civic amenities at the places where cinemas/theatres are situated. So long as the tax has a reasonable relation to the purposes of the Act the same cannot be held to be arbitrary. The rate of tax to be levied and the persons or the class of persons liable to pay the same is determined by inviting objections which are finally considered and decided by the State Government. There is no force in the argument that the legislature has abdicated its function to the Mahapalikas. The tax is levied in accordance with the statutory rules framed by the State Government and the said rules are laid before each House of the State Legislature for not less than 14 days and are subject to such modifications as the legislature may make during the session they are so laid. We, therefore, reject the contention raised by the learned counsel for the petitioners. 8. The second contention raised by the learned counsel for the petitioners is that the classification of cinemas on the basis of annual rental value for the purpose of fixing the rate of tax is arbitrary and as such is violative of Article 14 of the Constitution of India. According to him the classification has no nexus with the objects sought to be achieved. We do not agree. In Western India Theatres Ltd. v. Cantonment Board, Poona Cantonment [AIR 1959 SC 582], the Cantonment Board, Poona imposed entertainment tax on cinemas. Rs 10 per show was levied on the two cinemas of Western India Theatres Ltd. and Rs 5 per show in other cases. The argument raised before this Court to the effect that the Cantonment Board had singled out the two cinema houses for discriminatory treatment by imposing higher rate of tax, was answered as under: “It may not be unreasonable or improper if a higher tax is imposed on the shows given by a cinema house which contains large seating accommodation and is situate in fashionable or busy localities where the number of visitors is more numerous and in more affluent circumstances than the tax that may be imposed on shows given in a smaller cinema house containing less accommodation and situate in some localities where the visitors are less 56 (3) The Director shall also send a copy of the notification to each of the local authorities functioning in the area specified in the notification with a request to submit its objections and suggestions if any, in writing to the Director within the period specified in the notification. 6. Declaration of market areas - (1) After the expiry of the period specified in the notification issued under Section 5 (hereinafter referred to in this section as ‘the said notification’), and after considering the objections and suggestions received before its expiry and holding such inquiry as may be necessary, the Director may, by notification in the Official Gazette, declare the area specified in the said notification or any portion thereof to be a market area for the purposes of this Act in respect of all or any of the kinds of agricultural produce specified in the said notification. A notification under this section shall also be published in Gujarati in a newspaper having circulation in the said area and in such other manner, as may be prescribed. (5) After declaring in the manner specified in Section 5 his intention of so doing, and following the procedure therein, the Director may, at any time by notification in the Official Gazette, exclude .any area from a market area specified in a notification issued under sub- section (1), or include any area therein and exclude from or add to the kinds of agricultural produce so specified any kind of agricultural produce. By Section 8, no person can operate in the market area or any part thereof except under and in accordance with the conditions of a license granted under the Act. Section 36 of the Act provides, to the extent material, that whoever without holding a license uses any place in a market area for the purchase or sale of any agricultural produce and thereby contravenes Section 8 shall on conviction be punished with the sentence mentioned therein. 7. Rule 3 of the Gujarat Agricultural Produce Markets Rules, 1965 provides that a notification under Section 5(1) or Section 6(1) shall also be published by affixing a copy thereof at some conspicuous place in the office of each of the local authorities functioning in the area specified in the notification. 8. The simple question, though important, is whether the notification issued under Section 6(5) of the Act, covering additional varieties of agricultural produce like ginger and onion, must not only be published in the official gazette but must also be published in Gujarati in a newspaper. The concluding sentence of Section 6(1) says that a notification under “this section” “shall also be published in Gujarati in a newspaper” having circulation in the particular area. The argument of the appellant is twofold: Firstly, that “this section” means “this sub-section” so that the procedure in regard to publication which is laid down in sub- section (1) of Section 6 must be restricted to notifications issued under that sub-section and cannot be extended to those issued under sub-section (5) of Section 6; and secondly, assuming that the words “this section” are wide enough to cover every sub-section of Section 6, the word “shall” ought to be read as “may”. 9. First, as to the meaning of the provision contained in Section 6(1) of the Act. It means what it says. That is the normal rule of construction of statutes, a rule not certainly absolute and unqualified, but the conditions which bring into play the exceptions to that rule do not exist here. Far from it; because, the scheme of the Act and the purpose of the particular provision in Section 6(1) underline the need to give to the provision its plain, natural meaning. It is not reasonable to assume in the Legislature and ignorance of the distinction between a “section” of the statute and the “sub-sections” of that section. Therefore the requirement laid down by Section 6(1) that a notification under “this section” shall also be published in Gujarati in a 57 newspaper would govern any and every notification issued under any part of Section 6, that is to say, under any of the sub-sections of Section. 6. It is this requirement was to govern notifications issued under sub-section (1) of Section 6 only, the Legislature would have said so. 10. But the little complexity that there is in this matter arises out of a known phenomenon, judicially noticed but otherwise disputed, that sometimes the Legislature does not say what it means. That has given rise to a series of technical rules of interpretation devised or designed to unravel the mind of the law-makers. If the words used in a statute are ambiguous, it is said, consider the object of the statute, have regard to the purpose for which the particular provision is put on the statute-book and then decide what interpretation best carries out that object and purpose. The words of the concluding portion of Section 6(1) are plain and unambiguous rendering superfluous the aid of artificial guidelines to interpretation. But the matter does not rest there. The appellant has made an alternative argument that the requirement regarding the publication in Gujarati in a newspaper is directory and not mandatory, despite the use of the word “shall”. That word, according to the appellant, really means “may”. 11. Maxwell, Crawford and Craies abound in illustrations where the words “shall” and “may” are treated as interchangeable. “Shall be liable to pay interest” does not mean “must be made liable to pay interest”, and “may not drive on the wrong side of the road” must mean “shall not drive on the wrong side of the road”. But the problem which the use of the language of command poses is: Does the Legislature intend that its command shall at all events be performed? Or is it enough to comply with the command in substance? In other words, the question is: is the provision mandatory or directory? 12. Plainly, “shall” must normally be construed to mean “shall” and not “may”, for the distinction between the two is fundamental. Granting the application of mind, there is little or no chance that one who intends to leave a leeway will use the language of command in the performance of an act. But since, even lesser directions are occasionally clothed in words of authority, it becomes necessary to delve deeper and ascertain the true meaning lying behind mere words. 13. The governing factor is the meaning and intent of the Legislature, which should be gathered not merely from the words used by the Legislature but from a variety of other circumstances and considerations. In other words, the use of the word ‘shall’ or ‘may’ is not conclusive on the question whether the particular requirement of law is mandatory or directory. But the circumstance that the Legislature has used a language of compulsive force is always of great relevance and in the absence of anything contrary in the context indicating that a permissive interpretation is permissible, the statute ought to be construed as peremptory. One of the fundamental rules of interpretation is that if the words of a statute are themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the Legislature. Section 6(1) of the Act provides in terms, plain and precise, that a notification issued under the section “shall also” be published in Gujarati in a newspaper. The word ‘also’ provides an important clue to the intention of the Legislature because having provided that the notification shall be published in the Official Gazette, Section 6(1) goes on to say that the notification shall also be published in Gujarati in a newspaper. The additional 58 mode of publication prescribed by law must, in the absence of anything to the contrary appearing from the context of the provision or its object, be assumed to have a meaning and a purpose. In Khub Chand v. State of Rajasthan [AIR 1967 SC 1074], it was observed that: The term ‘shall’ in its ordinary significance is mandatory and the court shall ordinarily give that interpretation to that term unless such an interpretation leads to some absurd or inconvenient consequence or be at variance with the intent of the Legislature, to be collected from other parts of the Act. The construction of the said expression depends on the provisions of a particular Act, the setting in which the expression appears, the object for which the direction is given, the consequences that would flow from the infringement of the direction and such other considerations. The same principle was expressed thus in Haridwar Singh v. Bagun Sumbrui [(1973) 3 SCC 889, 895]: Several tests have been propounded in decided cases for determining the question whether a provision in a statute, or a rule is mandatory or directory. No universal rule can be laid down on this matter. In each case one must look to the subject-matter and consider the importance of the provision disregarded and the relation of that provision to the general object intended to be secured. 14. The scheme of the Act is like this: Under Section 5(1) the Director of Marketing and Rural Finance may by a notification in the Official Gazette declare his intention of regulating purchase, and sale of agricultural produce in the specified, area. Such notification is also required to be published in Gujarati in a newspaper having circulation in the particular area. By the notification, the Director under Section 5(2) has to invite objections and suggestions and the notification has to state that any such objections or suggestions received by the Director within the specified period, which shall not be less than one month from the date of the publication of the notification, shall be considered by the Director. After the expiry of the aforesaid period the Director, under Section 6(1), has the power to declare an area as the market area in respect of the particular kinds of agricultural produce. This power is not absolute because by the terms of Section 6(1) it can only be exercised after considering the objections and suggestions received by the Director within the stipulated period. The notification under Section 6(1) is also required to be published in Gujarati in a newspaper. The power conferred by Section 5(1) or 6(1) is not exhausted by the issuance of the initial notification covering a particular area or relating to a particular agricultural produce. An area initially included in the market area may later be excluded, a new area may be added and likewise an agricultural produce included in the notification may be excluded or a new variety of agricultural produce may be added. This is a salutary power because experience gained by working the Act may show the necessity for amending the notification issued under Section 6(1). This power is conferred by Section 6(5). 15. By Section 6(5), if the Director intends to add or exclude an area or an agricultural produce, he is to declare his intention of doing so in the manner specified in Section 5 and after following the procedure prescribed therein. Thus, an amendment to the Section 6(1) notification in regard to matters described therein is equated with a fresh declaration of intention in regard to those matters, rendering it obligatory to follow afresh the whole of the procedure prescribed by Section 5. That is to say, if the Director intends to add or exclude an area or an agricultural produce, he must declare his intention by notification in the Official 61 which was issued under Section 6(5) of the Act and by which new varieties of agricultural produce like onion, ginger, sun hemp and jowar were added to the old list. The High Court set aside the acquittal by following the judgment dated February 12, 1971 rendered by A. D. Desai, J. in Cr. Appeal No. 695 of 1969. That judgment has no application because it arose out of the Bombay Act and the question before Desai, J. was whether Section 4(1) of the Bombay Act was mandatory or directory. That section, as noticed earlier, provided that the notification “may” also be published in the regional languages of the area in a newspaper circulated in that area. The High Court, in the instant case, was concerned with Section 6(5) of the Act which has made a conscious departure from the Bombay Act in important respects. The High Court did not even refer to the provisions of the Act and it is doubtful whether those provisions were at all brought to its notice. Everyone concerned assumed that the matter was concluded by the earlier judgment of Desai, J. 22. For these reasons we set aside the judgment of the High Court and restore that of the learned Judicial Magistrate, First Class, Godhra. Fine, if paid, shall be refunded to the appellant. * * * * * 62 Sonik Industries, Rajkot v. Municipal Corporation of the City of Rajkot (1986) 2 SCC 608 : AIR 1986 SC 1518 R.S. PATHAK, J. -This appeal by special leave raises the question whether the rules for the levy of a rate on buildings and lands can be said to be published under Section 77 of the Bombay Municipal Boroughs Act, 1925 if the notice published in a newspaper reciting the sanction of the State Government to the rules mentions that the rules themselves are open to inspection in the municipal office and that copies of the rules can also be purchased there. 2. The Rajkot Borough Municipality framed draft rules for the levy of rates on buildings and lands in Rajkot. The draft rules were published and objections were invited, and thereafter the State Government accorded its sanction to the rules. In the issue dated November 28, 1964 of “Jai Hind”, a Gujarati newspaper published from Rajkot, a notice was published purporting to be under Section 77 of the Bombay Municipal Boroughs Act, 1925 as adopted and applied to the Saurashtra area of the State of Gujarat for the information of persons holding buildings and immovable property within the municipal limits of Rajkot that the municipality had resolved to enforce the “Rules of the Rajkot Borough Municipality for the levy of the Rate (Tax) on Buildings and Lands” sanctioned by the State Government of Gujarat with effect from January 1, 1965. The notice recited the date and serial number of the sanction. It also stated: These rules can be inspected at the office of the municipality on all days other than holidays during office hours; moreover copies of the rules can be purchased at the municipal office. It appears that thereafter an assessment list was prepared and steps were taken to demand the tax. 3. The appellant, a registered partnership firm, instituted a suit in the court of the learned Civil Judge, Senior Division, Rajkot, praying for a declaration that the aforesaid rules were invalid, and that the consequent assessment list and the related notices of demand were without authority of law. A permanent injunction was also sought to restrain the municipality from giving effect to the rules. The trial court decreed the suit and granted the declaration and injunction prayed for. An appeal against the decree of the trial court was dismissed by the learned Extra Assistant Judge, Rajkot. A second appeal was filed by the Municipal Corporation of Rajkot (the Municipal Borough of Rajkot having been so renamed) in the High Court, and at the time of admission a learned Single Judge of the High Court formulated three questions of law arising in the appeal. The appeal was referred subsequently to a larger Bench. A Bench of three learned Judges of the High Court took up the case and observed at the outset that the only question which required consideration at that stage was whether the courts below had erred in striking down the rules on the ground that they had not been published as required by Section 77 of the Act. The learned Judges held that the courts below had taken an erroneous view of the statute and that, in their opinion, the conditions of Section 77 of the Act had been satisfied in the case. The case was sent back to the learned Single Judge with that opinion for disposal in accordance with law. 4. Chapter VII of the Act provides for municipal taxation. While the different taxes which can be levied by a municipality are enumerated in Section 73, Sections 75 to 77 detail the procedure to be observed when the municipality proposes to levy a tax. Before imposing a tax the municipality is required by Section 75 to pass a resolution deciding which one or other of the taxes specified in Section 73 would be imposed and to approve rules specifying the 63 classes of persons or property or both which are proposed to be made liable, the amount or rate proposed for assessment, the basis of valuation on which such rate on buildings and lands is to be imposed and other related matters. The rules so approved by the municipality are required to be published with a notice in a prescribed form. Objections are invited from the inhabitants of the municipal borough, and the municipality is required to take the objections into consideration, and if it decides to pursue tile levy it submits the objections with its opinion thereon and any modifications proposed by it, together with the notice and rules to the State Government. Section 76 empowers the State Government to sanction the rules with or without modification, or to return them to the municipality for further consideration. Section 77 provides: 77. Rules sanctioned under Section 76 with the modifications and conditions, if any, subject to which the sanction is given shall be published by the municipality in the municipal borough, together with a notice reciting the sanction and the date and serial number thereof; and the tax as prescribed by the rules so published shall, from a date which shall be specified in such notice and which shall not be less than one month from the date of publication of such notice, be imposed accordingly,. . . 6. In the case of municipal taxation, the conventional procedure enacted in most statutes requires publication of the proposed rules providing for the levy and inviting objections thereto from the inhabitants of the municipality. Thereafter when the rules are finalised and sanctioned by the State Government, it is mandatory that they be published so that the inhabitants of the municipality should know how the levy affects them in its final form. The rules, and consequently the levy, take effect only upon publication in accordance with the statute. The object of the requirement is that a person affected’ by the levy must know precisely the provisions of the levy and its consequences for him. Section 77 requires that the sanctioned rules should be published by the municipality in the municipal borough together with the notice reciting the sanction. The notice published in the newspaper mentioned that the “Rules of Rajkot Borough Municipality for the levy of Rate (Tax) levied on Buildings and Lands” had been sanctioned by the State Government and the notice recited also the date and serial number of the sanction. It was open to the municipality to publish the sanctioned rules also in the newspaper, but what it did was to state in the notice that the rules could be inspected in the municipal office, and also that copies of the rules could be purchased at the municipal office. In our opinion, the requirement of Section 77 was complied with inasmuch as information was thereby given to all persons holding buildings and immovable property within the municipal limits of Rajkot that the rules mentioned therein had been sanctioned by the State Government and that the rules could be inspected in the municipal office. The mandatory requirement of Section 77 was that the rules should be published and it seems to us that the notice satisfies that requirement. The mode of publishing the rules is a matter for directory or substantial compliance. It is sufficient if it is reasonably possible for persons affected by the rules to obtain, with fair diligence, knowledge of those rules through the mode specified in the notice. Had the Act itself specified the mode in which the rules were to be published, that mode would have to be adopted for publishing the rules. In the opinion of the legislature, that was the mode through which the inhabitants of the municipality could best be informed of the rules. But the Act is silent as to this. Section 102 specifies the modes in which service of a notice contemplated by the Act should be served. There is nothing in the section 66 grounds that the Control Order and the Notification which formed the basis of their prosecution did not have the force of law as they had not been laid before the Houses of Parliament within a reasonable time as required under Section 3(6) of the Act; that the Control Order and the Notification fixing the maximum selling price of the commodity in question for the contravention of which the appellants had been hauled up were invalid as the same did not appear to be preceded by the formation of the requisite opinion under Section 3(1) of the Act which was a sine qua non for issue of any order by the Central Government or by the Controller; that none of the 18 concerns which, according to the prosecution, sold the aforesaid B.P. sheets to the appellants and who were equally guilty of the offence under Section 7 of the Act having been proceeded against in the Court of the competent jurisdiction, the prosecution of the appellants was violative of Article 14 of the Constitution and that the purchase of the aforesaid B.P. sheets having been openly made and entered in the account books of Appellant 1, the mens rea which was a necessary ingredient of the offence under Section 7 of the Act was totally lacking in the case. 3. In the return statement filed by it in opposition to the writ petition, the respondent while denying that the Control Order had not been placed before both Houses of Parliament, as required by sub-section (6) of Section 3 of the Act or that the issue of the Control Order or the Notification fixing maximum selling prices of various categories of iron and steel including the commodity in question was not based on the formation of the opinion envisaged by sub- section (1) of Section 3 of the Act conceded that the notification fixing the maximum selling prices of the categories of iron and steel including the commodity in question had not placed before both Houses of Parliament but contended that the provisions of sub-section (6) of Section 3 of the Act requiring the placing of the order contained in the aforesaid notification before both Houses of Parliament were directory and not mandatory and the omission to comply with that requirement did not have the effect of invalidating the notification. The respondent further contended that the notification fixing the maximum selling prices of various categories of iron and steel including the black plain iron sheets being a part of the Control Order and a piece of delegated legislation, it was not necessary to lay it before the Houses of Parliament. It was also pleaded by the respondent that the mens rea of the accused was manifested from various manipulation resorted to by them as also from the fact that they wanted to increase their production and earn more profits. The respondent also averred that launching of prosecution against any person depended on the availability of sufficient guidance and that non-prosecution of the sellers of the iron sheets in question did not involve any discrimination as envisaged by Article 14 of the Constitution but was due to non- availability of adequate and reliable evidence against them. 4. After careful consideration of the rival contentions of the parties, the High Court by its elaborate judgment and order dated May 31, 1974 dismissed the petition overruling the contentions of the appellants. One of the learned Judges of the High Court constituting the Bench which dealt with the writ petition also observed that the Notification in question had not in reality been issued under Section 3 of the Act which required it to be laid before both Houses of Parliament but was issued in exercise of the power conferred by Section 4 of the Act which plainly related to issue of incidental orders arising out of the nature of the powers conferred and duties imposed thereunder and the purpose whereof was to enable the various authorities mentioned therein to provide the details to fill up gaps in the Control Orders issued 67 under Section 3 of the Act so as to ensure the harmonious and rational working of the orders. The High Court, however, being of the opinion that the case involved a substantial question of law relating to the vires of the notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question certified the case as eminently fit for appeal to this Court. This is how the case is before us. 5. At the hearing of the appeal though the learned Counsel for the appellants have reiterated all the contentions raised by them in the aforesaid writ petition, the only substantial question of law which we are concerned with at the present stage is whether the aforesaid notification fixing the maximum selling price of the commodity in question is void for not having been laid before both Houses of Parliament. 7. Section 2 is a glossary of the Act. According to clause (a)(vi) of the said section, iron and steel and manufactured products thereof fall within the ambit of the expression “essential commodity”. 8. Sub-section (1) of Section 3 of the Act confers on the Central Government the general power of making and issuing orders providing for regulating or prohibiting the production, supply and distribution of on essential commodity and trade and commerce therein if it is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operations. 9. Sub-section (2) of Section 3 of the Act specifies the orders which without prejudice to the generality of the powers conferred by sub-section (1) of Section 3 can be issued thereunder. 10. Clause (c) of sub-section (2) of Section 3 of the Act authorises the issue of an order for controlling the price at which any essential commodity may be bought or sold. 11. Sub-section (6) of Section 3 of the Act ordains that every order made under this section by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be, after it is made. 12. Section 4 of the Act lays down that an order made under Section 3 may confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central Government or State Government and may contain directions to any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such duties. 13. Section 5 of the Act deals with delegation of powers. It provides that the Central Government may, by notified order, direct that the power to make orders or issue notifications under Section 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by (a) such officer or authority subordinate to the Central Government, or (b) such State Government or such officer or authority subordinate to a State Government, as may be specified in the direction. 14. Section 6 of the Act which embodies a non obstante clause lays down that any order made under Section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act. 15. Section 7 of the Act lays down the penalties which any person contravening any order made under Section 3 shall entail. 68 16. Section 10 of the Act which deals with offences by the companies provides as follows: 10. (1) If the person contravening an order made under Section 3 is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.- For the purposes of this section,- (a) “company” means any body corporate, and includes a firm or other association of individuals; and (b) “director” in relation to a firm means a partner in the firm. 17. We may also at this stage advert to the Control Order which was issued by the Central Government vide S.R.0. 1109/ESS. COMM/IRON AND STEEL dated May 8, 1956 in exercise of the powers conferred on it by Section 3 of the Act. Sub-clause (1) of Clause 15 of this Order authorises the Controller to fix by notification in the Gazette of India the maximum prices at which any iron and steel may be sold (a) by a producer, (b) by a stockholder including a controlled stockholder and (c) any person or class of persons. Sub-clause (3) of Clause 15 of ^he Control Order which is material for the purpose of the case provides: 15. (3) No producer or stockholder or other person shall sell or offer to sell, and no person shall acquire, any iron or steel at a price exceeding the maximum prices fixed under sub- clause (1) or (2). 18. It was under sub-clause (1) of Clause 15 of the Control Order that the notification in question was issued. 19. Though sub-section (6) of Section 3 of the Act provides that every order made by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be after it is made, the important point to be considered in the absence of analogous statutes like the Statutory Instruments Act, 1946 and the Laying of Documents Before Parliament (Interpretation) Act, 1948 prescribing the conditions, the period and the legal effect of the laying of order before the Parliament is whether the provision is directory or mandatory. It is well to remember at the outset that the use of the word ‘shall’ is not conclusive and decisive of the matter and the Court has to ascertain the true intention of the Legislature, which is the determining factor, and that must be done by looking carefully to the whole scope, nature and design of the statute. Reference in this connection may be made to the decision of this Court in State of U. P. v. Manbodhan Lal Srivastava [AIR 1957 SC 912. Reference in this behalf may also be made with advantage to another decision of this Court in the State of Uttar Pradesh v. Babu Ram Upadhya [AIR 71 passed on June 27, 1872 “to protect the royal parks from injury, and to protect the public in the enjoyment of those royal parks and other royal possessions for the purpose of innocent recreation and exercise” it was provided that any rules made in pursuance of the first schedule to the Act shall be forthwith laid before both Houses of Parliament, if Parliament be sitting, or if not, then within three weeks after the beginning of the then next ensuing session of Parliament; and if any such rules shall be disapproved by either House of Parliament within one month of the laying, such rules, or such parts thereof as shall be disapproved shall not be enforced and rules for Hyde Park were made and published on September 30, 1872 when Parliament was not sitting and in November 18, 1872, the appellant was convicted under Section 4 of the Act for that he did unlawfully act in contravention of Regulation 8 contained in the first Schedule annexed thereto by delivering a public address not in accordance with the rules of the said Park but contrary to the Statute, and it was inter alia contended on his behalf that in the absence of distinct words in the statute stating that the rules would be operative in the interval from the time they were made to the time when Parliament should meet next or if Parliament was sitting then during the month during which Parliament had an opportunity of expressing its opinion upon them, no rule made as supplementing the schedule could be operative so as to render a person liable to be convicted for infraction thereof unless the same had been laid before the Parliament, it was held by overruling the contention that the rules became effective from the time they were made and it could not be the intention of the Legislature that the laying of the rules before Parliament should be made a condition precedent to their acquiring validity and that they should not take effect until they are laid before and approved by Parliament. If the Legislature had intended the same thing as in Section 4, that the rules should not take effect until they had the sanction of the Parliament, it would have expressly said so by employing negative language. 24. In Jan Mohammad Now Mohammad Bagban v. State of Gujarat [AIR 1966 SC 385], where it was urged by the petitioner that the rules framed by the Provincial Government in 1941 in exercise of the powers conferred on it under Section 26(1) of the Bombay Agricultural Produce Markets Act (22 of 1939) had no legal validity as they were not !aid before each of the Houses of the Provincial Legislature at the session thereof next following as provided by sub-section (5) of Section 26 of the Act, this Court rejected the contention and upheld the validity of the said rules. The following observations made in that case by Shah. J. (as he then was) on behalf of the Constitution Bench are apposite: The rules under Act 22 of 1939 were framed by the Provincial Government of Bombay in 1941. At that time there was no Legislature in session, the Legislature having been suspended during the emergency arising out of World War II. The session of the Bombay Legislative Assembly was convened for the first time after 1941 on May 20, 1946 and that session was prorogued on May 24, 1946. The second session of the Bombay Legislative Assembly was convened on July 15, 1946 and that of the Bombay Legislative Council on September 3. 1946 and the rules were placed on the Assembly Table in the second session before the Legislative Assembly on September 2, 1946 and before the Legislative Council on September 13, 1946. Section 26(5) of Bombay Act 22 of 1939 does not prescribe that the rules acquired validity only from the date on which they were placed before the Houses of Legislature. The rules are valid from the date on which they are made under Section 26(1). It is true that the Legislature has prescribed that the rules shall be placed before the Houses of Legislature, but failure to 72 place the rules before the Houses of Legislature does not affect the validity of the rules, merely because they have not been placed before the Houses of the Legislature. Granting that the provisions of sob-section (5) of Section 26 by reason of the failure to place the rules before the Houses of Legislature were violated, we are of the view that sub-section (5) of Section 26 having regard to the purposes for which it is made, and in the context in which it occurs, cannot be regarded as mandatory. (Emphasis supplied.) The rules have been in operation since the year 1941 and by virtue of Section 64 of the Gujarat Act 20 of 1964 they continue to remain in operation. 25. In D. K. Krishnan v. Secretary, Regional Transport Authority, Chittoor [AIR 1956 AP 129], where the validity of Rule 134A of the Madras Motor Vehicles Rules, 1940, made under the Motor Vehicles Act, 1939 empowering the Regional Transport Authority to delegate its functions to the Secretary was challenged on the ground that it was not laid before the Legislature of the Madras State as required, by Section 133(3) of the Act which provided that the rules, shall be laid for not less than fourteen days before the Legislature as soon as possible after they are made and shall be subject to such modification as Parliament or such Legislature may make during the session in which they are so laid, Subba Rao, J. (as he then was) after an exhaustive review of the case law and the text books on constitutional law by eminent jurists repelled the contention. 26. In State v. Karna [(1973) 24 RLW 487], where the very question with which we are concerned in the present case cropped up in connection with the Rajasthan Food grains (Restrictions on Border Movement) Order, 1959, a bench of Rajasthan High Court said as follows: It is important to note that laying the Order before both the Houses of Parliament is not a condition precedent for bringing into force the Order , all that sub-section (6) provides is that every Order made under Section 3 of the Essential Commodities Act by the Central Government or by any officer or authority of the Central Government shall be laid before both the Houses of Parliament, as soon as may be, after it is made. It is significant that the Order is valid and effective from the date it is duly promulgated. Even the limit or period within which it must be placed before the Parliament has not been specified. It is, therefore, not possible to hold that sub-section (6) of Section 3 of the Essential Commodities Act is mandatory. If the Legislature intended that in order to provide an adequate safeguard it was necessary to make the said provision mandatory it could have done so in express words. We are, therefore, of the opinion that the Order cannot be considered as invalid merely because the State was not able to put on record proof of the fact that the Order was laid before both the Houses of Parliament. 27. In Mathura Prasad Yadava v. Inspector General, Railway Protection Force, Railway Board, New Delhi [(1974) 19 MPLJ 373], where it was contended that Regulation 14 of the Railway Protection Force Regulations, 1966 made under Section 21 of the Railway Protection Force Act (23 of 1957) was invalid as it was not laid before both Houses of Parliament as required by sub-section (3) of Section 21 of the Act, it was held: What then is the consequence of failure to lay the regulation?.... A correct construction of any particular laying clause depends upon its own terms If a laying clause defers the coming into force of the rules until they are laid, the rules do not come into force before laying and the requirement of laying is obligatory to make the rule operative so the requirement of laying in 73 a laying clause which requires an affirmative procedure will be held to be mandatory for making the rules operative, because, in such cases the rules do not come into force until they are approved, whether with or without modification, by Parliament. But in case of a laying clause which requires a negative procedure, the coming into force of the rules is not deferred and the rules come into force immediately they are made. The effect of a laying clause of this variety is that the rules continue subject to any modification that Parliament may choose to make when they are laid; but the rules remain operative until they are so modified. Laying clauses requiring a negative procedure are, therefore, construed as directory. The matter is put beyond controversy by the decision of the Supreme Court in Jan Mohd. v. State of Gujarat. Our conclusion, therefore, is that the laying requirement enacted in Section 21(3) of the Act is merely directory: It logically follows that failure to lay Regulation 14 has no effect on its validity and it continues to be effective and operative from the date it was made. 30. The decision of this Court in Narendra Kumar v. Union of India [AIR 1960 SC 430], on which counsel for the appellants have heavily leaned is clearly distinguishable. In that case, the Non-ferrous Metal Control Order, 1958 was held to be invalid essentially on the ground that the principles specified by the Central Government in accordance with Clause 4 of the Order were not published either on April 2, 1958 on which the order was published in the Government Gazette or any other date. It would be noticed that while considering the effect of non-publication of the aforesaid principles which formed an integral part of the order by which alone the Central Government could regulate the distribution and supply of the essential commodities, it was only incidentally that a mention was made by the Court to the effect that the principles had not been laid before both Houses of Parliament. 32. From the foregoing discussion, it inevitably follows that the Legislature never intended that non-compliance with the requirement of laying as envisaged by sub-section (6) of Section 3 of the Act should render the order void. Consequently non-laying of the aforesaid notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification. Accordingly, we answer the aforesaid question in the negative. In view of this answer, it is not necessary to deal with the other contention raised by the respondent to the effect that the aforesaid notification being of a subsidiary character, it was not necessary to lay it before both Houses of Parliament to make it valid. 33. In the result, the appeal fails and is dismissed. * * * * * 76 The petitioners were a firm of traders carrying on the business of retail sellers of coal at a coal depot held by them in the town of Kanpur. The District Magistrate of Kanpur as well as the District Supply Officer had been for a considerable time past issuing directives upon the petitioners as well as other coal depot holders of the town, imposing restrictions of various kinds upon the sale of coal, soft coke, etc. Prior to the 14th of February, 1953, the prices that were fixed by the District Officers left the coal dealers a margin of 20 per cent profit upon the sale of soft coke and 15 per cent profit on the sales of hard coke and steam coal, such profits being allowed on the landed costs of the goods up to the depot. The landed costs comprised several items and besides ex-colliery price, the middleman’s commission and the railway freight, there were incidental expenses of various kinds including labour duty, loading and unloading charges, cartage and stacking expenses. After making a total of these cost elements, an allowance was given for shortage of weight at the rate of 5 Mds. and odd seers per ton in the case of soft coke and 3 Mds. and odd seers in the case of hard coke and steam coal, and it was on the basis of the net weight thus arrived at that the price was calculated. On the 14th of February, 1953, the District Supply Officer issued a directive reducing the selling prices of coke, coal, etc., much below the existing rates. This reduction was effected in a three-fold manner. In the first place, the allowance for shortage of weight was made much less than before; secondly, a sum of Rs 4-12-0 only was allowed for all the incidental expenses, and thirdly, the margin of profit was cut down to 10 per cent. On the 22nd of May, 1953, a representative petition was filed by seven colliery depot holders of Kanpur including the present petitioners challenging the validity of the executive order, dated the 14th of February, 1953, mentioned above inter alia on the ground that it infringed the fundamental rights of the petitioners under Articles 14 and 19 of the Constitution. There was an application for ad interim stay in connection with this petition which came up for hearing before the learned Vacation Judge of this court on the 1st of July, 1953. On that day an undertaking was given by the State of Uttar Pradesh to the effect that they would withdraw the order of the 14th February, 1953, and apparently the consideration that weighed with the State in giving this undertaking was that it was a purely executive order without any legislative sanction behind it. The order of the 14th February was in fact withdrawn, but on the 10th of July, 1953, the State of Uttar Pradesh promulgated by a notification an order entitled “The Uttar Pradesh Coal Control Order, 1953” purporting to act in exercise of the powers conferred upon it by Section 3(2) of the Essential Supplies Act, 1946, read with the notified order of the Government of India issued under Section 4 of the Act. As the constitutionality of this Coal Control Order is the main object of attack by the petitioners in the present proceeding, it would be convenient to set out the material provisions of that order in respect of which the controversy between parties primarily centers: On 16th July, 1953, Respondent issued a declaration whereby he fixed the retail rates for the sale of soft coke, coal, etc. at precisely the same figures as they stood in the directive issued on 14th February, 1953. The result allegedly was that the selling prices were reduced so much that it was not possible for the coal traders to carry on their business at all. In accordance with the provision of clause 11 of the Control Order, the petitioners’ name appeared in the list B of license-holders and they did apply for a license in the proper form as required by clause (4). The license was prepared, though not actually’ delivered over to the petitioners. By a letter dated the 3rd of October, 1953, the Area Rationing Officer, Kanpur, 77 accused the petitioners of committing a number of irregularities in connection with the carrying on of the coal depot. The charges mainly were that there were two other depots held and financed by the petitioners themselves in the names of different persons and that the petitioners had entered into agreements for sale of coal at more than the fixed rates. The petitioners submitted an explanation which was not considered to be satisfactory and by an order dated 13th October, 1953, the District Supply Officer, Kanpur, cancelled the petitioners’ license. The petitioners challenged the validity of the Coal Control Order of the 10th of July, 1953, the declaration of prices made on 16th July and also the order cancelling the petitioners’ license on the 13th of October, 1953. B.K. MUKHERJEA, J. - This is an application presented by the petitioners under Article 32 of the Constitution, complaining of infraction of their fundamental rights guaranteed under Article 14 and clauses (f) and (g) of Article 19(1) of the Constitution and praying for enforcement of the same by issue of writs in the nature of mandamus. 5. The constitutional validity of the Uttar Pradesh Coal Control Order has been assailed before us substantially on the ground that its provisions vest an unfettered and unguided discretion in the licensing authority or the State Coal Controller in the matter of granting or revoking licenses, in fixing prices of coal and imposing conditions upon the traders; and these arbitrary powers cannot only be exercised by the officers themselves but may be delegated at their option to any person they like. It is argued that these provisions imposing as they do unreasonable restrictions upon the right of the petitioners to carry on their trade and business conflict with their fundamental rights under Article 19(1)(g) of the Constitution and are hence void. With regard to the order dated the 16th of July, 1953, by which the prices of coke, coal, etc. were fixed, it is pointed out that it was not only made in exercise of the arbitrary power conferred upon the licensing authority by the Coal Control Order, but the prices as fixed, are palpably discriminatory as would appear from comparing them with the prices fixed under the very same Control Order in other places within the State of Uttar Pradesh like Allahabad, Lucknow and Aligarh. The order of the 13th October, 1953, cancelling the petitioners’ license is challenged on the ground that the charges made against the petitioners were vague and indefinite and that the order was made with the ulterior object of driving the petitioners out of the coal business altogether. It is said further that as a result of the cancellation order, the petitioners have been made incapable of disposing of the stocks already in their possession, though at the same time the holding of such stock after the cancellation of their license has become an offence under the Coal Control Order. 6. It is not disputed before us that coal is an essential commodity under the Essential Supplies (Temporary Powers) Act of 1946, and by virtue of the delegation of powers by the Central Government to the Provincial Government under Section 4 of the Act, the Uttar Pradesh Government was competent to make provisions, by notified order, for regulating the supply and distribution of coal in such a way as they considered proper with a view to secure the objects as specified in Section 3 of the Act. All that is necessary is that these provisions should not infringe the fundamental rights of the citizens guaranteed under Part III of the Constitution and if they impose restrictions upon the carrying on of trade or business, they must be reasonable restrictions imposed in the interests of the general public as laid down in Article 19(6) of the Constitution. 78 7. Nobody can dispute that for ensuring equitable distribution of commodities considered essential to the community and their availability at fair prices, it is quite a reasonable thing to regulate sale of these commodities through licensed vendors to whom quotas are allotted in specified quantities and who are not permitted to sell them beyond the prices that are fixed by the controlling authorities. The power of granting or withholding licenses or of fixing the prices of the goods would necessarily have to be vested in certain public officers or bodies and they would certainly have to be left with some amount of discretion in these matters. So far no exception can be taken; but the mischief arises when the power conferred on such officers is an arbitrary power unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. A law or order, which confers arbitrary and uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable. As has been held by this court in Chintaman v. The State of Madhya Pradesh [1950 SCR 759], the phrase “reasonable restriction” connotes that the limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. Legislation, which arbitrarily or excessively invades the right, cannot be said to contain the quality of reasonableness, and unless it strikes a proper balance between the freedom guaranteed under Article 19(1)(g) and the social control permitted by clause (6) of Article 19, it must be held to be wanting in reasonableness. It is in the light of these principles that we would proceed to examine the provisions of this Control Order, the validity of which has been impugned before us on behalf of the petitioners. 8. The provision contained in clause 3(1) of the Order that “no person shall stock, sell, store for sale or otherwise utilise or dispose of coal except under a license granted under this Order” is quite unexceptional as a general provision; in fact, that is the primary object which the Control Order is intended to serve. There are two exceptions engrafted upon this general rule: the first is laid down in sub-clause (2)(a) and to that no objection has been or can be taken. The second exception, which is embodied in sub-clause (2)(b) has been objected to by the learned counsel appearing for the petitioners. This exception provides that nothing in clause 3(1) shall apply to any person or class of persons exempted from any provision of the above sub-clause by the State Coal Controller, to the extent of such exemption. It will be seen that the Control Order nowhere indicates what the grounds for exemption are, nor have any rules been framed on this point. An unrestricted power has been given to the State Controller to make exemptions, and even if he acts arbitrarily or from improper motives, there is no check over it and no way of obtaining redress. Clause 3(2)(b) of the Control Order seems to us, therefore, prima facie to be unreasonable. We agree, however, with Mr Umrigar that this portion of the Control Order, even though bad, is severable from the rest and we are not really concerned with the validity or otherwise of this provision in the present case as no action taken under it is the subject-matter of any complaint before us. 9. The more formidable objection has been taken on behalf of the petitioners against clause 4(3) of the Control Order which relates to the granting and refusing of licenses. The licensing authority has been given absolute power to grant or refuse to grant, renew or refuse to renew, suspend, revoke, cancel or modify any license under this Order and the only thing he has to do is to record reasons for the action he takes. Not only so, the power could be exercised by 81 III fixes the profit at 10 per cent upon the landed costs with the exception of Item 5 and as this is not the maximum, it would have to be allowed in all cases and under clause 8(1), the ‘B’ licensees are to sell their stocks of coal according to the prices fixed under Schedule III. Clause 8(2) indeed is not very clearly worded, but we think that all that it provides is to impose a disability upon all holders of coal stocks to charge prices exceeding the landed costs and a profit upon the same not above 10 per cent as may be determined by the licensing authority. The determination spoken of here must be in accordance with what is laid down in Schedule III and that, as has been said above, does specify a fixed rate and not a maximum and does not allow the licensing authority to make any reduction he likes. On the whole we are of the opinion that clauses (7) and (8) of the Control Order do not impose unreasonable restrictions upon the freedom of trade enjoyed by the petitioners and consequently the declaration of the 16th of July, 1953, cannot be held to be invalid. The result is that, in our opinion, clause 4(3) of the Control Order as well as the cancellation of the petitioners’ license should be held to be invalid and a writ in the nature of mandamus would issue against the respondents opposite parties preventing them from enforcing the cancellation order. The rest of the prayers of the petitioners are disallowed. We make no order as to costs. * * * * * 82 A.N. Parasuraman v. State of Tamil Nadu (1989) 4 SCC 683 : AIR 1990 SC 40 [Conferment of unguided power not permissible] Section 3 of Tamil Nadu Private Educational Institutions (Regulation) Act, 1966mandatorily required a private educational institution to obtain the permission of the competent authority for the purpose of running it. Section 4 of the Act required the manager of a private educational institution to make an application for permission in the prescribed form. “4. Application for permission - (2) Every such application shall - (c) contain the following particulars, namely: (i) the name of the private educational institution and the name and address of the manager; (ii) the certificate, degree or diploma for which such private educational institution prepares, trains or guides or proposes to prepare, train or guide its students or the certificate, degree or diploma which it grants or confers or proposes to grant or confer; (iii) the amenities available or proposed to be made available to students; (iv) the names of the members of the teaching staff and the educational qualifications of each such member; (v) the equipment, laboratory, library and other facilities for instructions; (vi) the number of students in the private educational institution and the groups into which they are divided; (vii) the scales of fees payable by the students; (viii) the sources of income to ensure the financial stability of the private educational institution; (ix) the situation and the description of the buildings in which such private educational institution is being run or is proposed to be prescribed; (x) such other particulars as may be prescribed.” “6. Grant of permission - On receipt of an application under Section 4 the competent authority may grant or refuse to grant the permission after taking into consideration, the particulars contained in such application: Provided that the permission shall not be refused under this section unless the applicant has been given an opportunity of making his representation: Provided further that in case of refusal of permission the applicant shall be entitled to refund of one-half of the amount of the fee accompanying the application” The competent authority was empowered under Section 7 to cancel the permission in certain circumstances. One of the conditions for exercise of power was contravention of any direction issued by the competent authority under Section 15. The power to exempt any institution from the provisions of the Act was vested in the State Government under Section 22, which read: “22. Power to exempt - Notwithstanding anything contained in this Act, the government may, subject to such conditions as they deem fit, by notification exempt any private educational institution or class of private educational institutions from all or any of the provisions of this Act or from any rule made under this Act.” L.M. SHARMA, J. - The question involved in these appeals relates to the vires of the Tamil Nadu Private Educational Institutions (Regulation) Act, 1966, hereinafter referred to as ‘the Act’. The appellants are interested in running educational institutions, which are covered by 83 the expression “private educational institution” within the ‘meaning of Section 2(f) of the Act. The main challenge is directed against Sections 2(c), 3(a), 3(b), 6, 7 read with Sections 15, 22 and 28. The High Court struck down Section 28 and upheld the other sections. That part of the judgment where Section 28 has been declared to be invalid has not been impugned by the respondent-State. 3. The Act is impugned on the ground that it does not lay down any guideline for the exercise of the power by the delegated authority, as a result of which the authority is in a position to act according to his whims. The Act having failed to indicate the conditions for exercise of power, the decision of the competent authority is bound to be discriminatory and arbitrary. It has also been argued that the restrictions put by the Act on the appellants, who are running tutorial institutions are unreasonable and cannot be justified under sub-clause (g) of Article 19(1) of the Constitution. 4. The learned counsel appearing for the respondent has attempted to defend the Act on the ground that sufficient guidance is available to the authority concerned from sub-section (2)(c) of Section 4 which enumerates the particulars required to be supplied in the application for permission. They are 10 in number. 5. The point dealing with legislative delegation has been considered in numerous cases of this Court, and it is not necessary to discuss this aspect at length. It is well established that determination of legislative policy and formulation of rule of conduct are essential legislative functions which cannot be delegated. What is permissible is to leave to the delegated authority the task of implementing the object of the Act after the legislature lays down adequate guidelines for the exercise of power. When examined in this light the impugned provisions miserably fail to come to the required standard. 6. The purpose of the Act is said to regulate the private educational institutions but does not give, any idea as to the manner in which the control over the institutions can be exercised. The Preamble which describes the Act “for regulation” is not helpful at all. Learned counsel for the State said that the Object and the Reasons for the Act are to eradicate corrupt practices in private educational institutions. The expression “private educational institution” has been defined as meaning any college, school or other institution “established and run with the object of preparing, training or guiding its students for any certificate, degree or diploma”, and it can, therefore, be readily inferred that the purpose of the Act is to see that such institutions do not exploit the students; and while they impart training and guidance to the students of a standard which may effectively improve their knowledge so as to do well at the examination, they do not charge exorbitantly for their services. But the question is as to how this objective can be achieved. Section 6 which empowers the competent authority to grant or refuse to grant the permission for establishing and running an institution does not give any idea as to the conditions which it has to fulfill before it can apply for permission under the Act, nor are the tests indicated for refusing permission or cancelling under Section 1 of an already granted permission. The authority concerned has been left with unrestricted and unguided discretion which renders the provisions unfair and discriminatory. 7. It was argued on behalf of the State that since an application for permission has to supply the particulars as detailed in Section 4(2)(c) (quoted above in paragraph 4), the Act must be deemed to have given adequate guidelines. Special emphasis was given by the learned counsel on the sub-clauses (iii), (iv) and (v) of Section 4(2)(c), which ask for information 86 J. R. Raghupathy v. State of A. P., AIR 1988 SC 1681. AIR 1988 SC 1681; 1988 (4) SCC 364 [No powers to the Judiary to issue writs when there is nothing on record to show that the decision of the Government was arbitrary or capricious or was one not reached in good faith or actuated with improper considerations or influenced by extraneous considerations.] Sen, J. – These appeals by special leave and the connected special leave petitions directed against the various judgments and orders of the Andhra Pradesh High Court involve a question of principle, and relate to location of Mandal Headquarters in the State of Andhra Pradesh under s. 3(5) of the Andhra Pradesh Districts (Formation) Act, 1974. The main issue involved is whether location of Mandal Headquarters was a purely governmental function and therefore not amenable to the writ jurisdiction of the High Court under Art. 226 of the Constitution. In the present cases we are concerned with the location of 12 Revenue Mandal Headquarters. The avowed object and purpose of the Andhra Pradesh District (Formation) Act, 1974, as amended by the Andhra Pradesh District (Formation) Amendment Act, 1985 as reflected in the long title, was to bring about a change in the Revenue Administration with a view to ‘bring the administration nearer to the people and to make all public services easily available to them’. The change in the Revenue Administration was so achieved by the creation of Revenue Mandals in place of taluks and firkas. The purpose of the legislation is brought out in the Statement of Objects and Reasons, a relevant portion whereof is as under: “On a careful review of the socio-economic development of the State for the last 20 years the State Government felt it necessary to take the administration nearer to the people. It was of the opinion that the only method to be adopted by the Government for a better Revenue Administration and to serve the interests of the people in a more effective and suitable manner was by formation of the Mandals in place of taluks and firkas. It was of the view that a decentralisation of administration and reduction in its levels would be conducive to a more efficient implementation of administration which brings the involvement of the people, particularly in the implementation of several welfare measures of the Government, and especially to uplift the conditions of the weaker sections of the society. It also felt that there was urgent necessity to review its activities and services and welfare programmes and that they should be extended to the interior regions and that the creation of Mandals with a population ranging from 35,000 to 55,000 based upon density of population would be an effective method for providing better facilities to the people at lesser cost and greater convenience. The avowed object was therefore to ‘bring the administration nearer to the people and to make all public services easily available to them’. This was achieved by the creation of Revenue Mandals in place of taluks and firkas.” To implement the decision of the Government, on 11th January, 1984 the Governor of Andhra Pradesh accordingly promulgated Ordinance No. 22 of 1984. This Ordinance was later replaced by Ordinance No. 5 of 1985 inasmuch as the earlier Ordinance could not be reintroduced due to dissolution of the Legislative Assembly. The Ordinance was later replaced by Act No. 14 of 1985. The change in administration was brought about by amending s. 3 of the Act by introducing the word ‘mandals’ in place of taluks and firkas. Pursuant to their powers under sub-s. (1) of s. 3 of the Andhra Pradesh Districts (Formation) 87 Act, as amended by Act 14 of 1985, the State Government, by notification published in the official gazette, after following the procedure laid down in sub-s.(5) thereof divided the State for the purpose of revenue administration into 23 Revenue District with such limits as specified therein. Each such district consisted of Revenue Divisions and each Revenue Division consisted of Revenue Mandals. The 23 districts now comprise of 1104 Revenue Mandals. As many as 124 petitions under Art. 226 of the Constitution were filed in the High Court by individuals and gram panchayat questioning the legality and propriety of the formation of certain Revenue Mandals, and particularly location of Mandal Headquarters, abolition of certain Mandals or shifting of Mandal Headquarters, as notified in the preliminary notification issued under sub-s. (5) of s. 3, deletion and addition of villages to certain mandals. Some of the writ petitions were heard by one Division Bench and the others by another, both the Benches being presided over by Reghuvir, J. who has delivered all the judgments. Incidentally, there is no statutory provision relating to location of Mandal Headquarters and the matter is governed by GOMs dated 25th July, 1985 issued by the State Government laying down the broad guidelines for the formation of Mandals and also for location of Mandal Headquarters. The learned Judges upheld the validity of formation of Mandals as also the aforesaid GOMs and in some cases they declined to interfere with the location of Mandal Headquarters holding that the Government was the best judge of the situation or on the ground that there was a breach of the guidelines, and directed the Government to reconsider the question of location of Mandal Headquarters. However, in other cases the learned Judges have gone a step further and quashed the final notification for location of Mandal Headquarters at a particular place holding that there was a breach of the guidelines based on the system of marking and also on the ground that there were no reasons disclosed for deviating from the preliminary notification, and instead directed the Government to issue a fresh notification for location of Mandal Headquarters at another place. One of the arguments advanced before us in the cases where the High Court has declined to interfere is that both the High Court and the State Government should have applied a uniform standard in dealing with the question and generally it is said that the State Government should at any rate have adhered to the guidelines in fixing the location of Mandal Headquarters without being guided by extraneous considerations. Myriad are the facts. It is not necessary for us to delve into the facts in any detail. It would suffice for our purposes to touch upon the facts in some of the cases to present the rather confusing picture emerging as a result of conflicting directions made by the High Court. It appears that Raghuvir, J. relied upon the underlying principle emerging from his earlier decision delivered on behalf of himself and Sriramulu, J. in the Gram Panchayat, Chinna Madur & Ors. v. The Government of Andhra Pradesh, [1986] 1 Andhra Weekly Reporter 362 which he calls as the ‘Chandur principle’. In that case following the earlier decision of the High Court where a place called Chandur was not shown in the preliminary notification for formation of a taluk, but was chosen to be the place of location of the Taluk Headquarters in the final notification, it was held that in such a case publication of the final notification could not be sustained and it was for the Government to give reasons for such deviation. The decision proceeded on the principle that where guidelines are issued regulating the manner in which a discretionary power is to be exercised, the Government is equally bound by the 88 guidelines. If the guidelines were violated, it was for the Government to offer explanation as to why the guidelines were deviated from. We are afraid, there is no such inflexible rule of universal application. The learned Judges failed to appreciate that the guidelines issued by the State Government had no statutory force and they were merely in the nature of executive instructions for the guidance of the Collectors. On the basis of such guidelines the Collectors were asked to forward proposals for formation of Revenue Mandals and for location of Mandal Headquarters. The proposals so forwarded by the Collectors were processed in the Secretariat in the light of the suggestions and objections received in response to the preliminary notification issued under s. 3(5) of the Act and then placed before a Cabinet Sub Committee. The ultimate decision as to the place of location of Mandal Headquarters was for the Government to take. It cannot be said that in any of the cases the action of the Government for location of such Mandal Headquarters was mala fide or in bad faith or that it proceeded on extraneous consideration. Nor can it be said that the impugned action would result in arbitrariness or absence of fair play or discrimination. We must next refer to the facts in a few illustrative cases. In the Gram Panchayat, Chinna Madur’s case, although in the preliminary notification issued under s. 3(5) of the Act for formation of Devaruppalla Mandal, Chinna Madur was proposed as the Mandal Headquarters, the Revenue authorities in the final notification declared Devaruppalla as the Mandal Headquarters. In the writ petition, the High Court produced the records and it showed that both Devaruppalla and Chinna Madur provided equal facilities as to communication, transport, veterinary hospital, bank, school, etc., and secured 15 marks each. The Government preferred Devaruppalla as Chinna Madur was inaccessible in some seasons as that village was divided by two rivers from rest of the villages. Devaruppalla besides is located on Hyderabad- Suryapet Highway which was considered to be a factor in its favour. After reiterating the Chandur principle that it is for the Government to give reasons for such deviation, the learned Judges declined to interfere, observing: “In the instant case, the record produced shows the authorities considered the comparative merits of Devaruppalla and Chinna Madur. The Revenue authorities applied the correct indicia of accessibility in all seasons. Other facilities of the two villages were discussed at length in the record. Having regard to the overwhelming features in favour of Devaruppalla the village was declared as headquarters” We have referred to the facts of this case because it highlights the approach of the High Court and it has assumed to itself the function of the Government in weighing the comparative merits and demerits in the matter of location of the Mandal Headquarters. The same infirmity unfortunately permeates through some of the judgments where the High Court has interfered…. It will serve no useful purpose to delineate the facts in all the cases which follow more or less on the same lines. We are of the opinion that the High Court had no jurisdiction to sit in appeal over the decision of the State Government to locate the Mandal Headquarters at a particular place. The decision to locate such Headquarters at a particular village is dependent upon various factors. The High Court obviously could not evaluate for itself the comparative merits of a particular place as against the other for location of the Mandal Headquarters. In some of the cases the High Court declined to interfere saying that the Government was the best judge of the situation in the matter of location of Mandal Headquarters. However, in a