169

(b) The need for amplifying the main provisions of social

legislation to meet unforeseen contingencies or to facilitate
adjustments to new circumstances arises all too frequently and while
the Parliamentary process involves delays, delegated legislation offers
rapid machinery for amendment.
(c) Many rules which have to be made to effectuate the policy
of the Act are of technical nature and require expert’s consultations.
(d) In some cases, such a change in rationing schemes of
imposition of import duty or exchange control, public interest requires
that the provisions of the law should not be known until the time fixed
for it to come into operation.
(e) An emergency may create on account of war, insurrection,
floods, epidemics, economic depression and the like, against which
the Executive must have power that may be used instantly.46
(a) Constitutionality of Delegated Legislation
The question generally arises whether any limitations or checks
have been laid down under the Indian Constitution against the
delegation of powers by the legislature to an outside authority. As a
matter of fact, in a state having a written constitution which forms the
fundamental and paramount law of the nation, the legislature must act
within the ambit of the powers defined by the constitution and subject
to the limitations prescribed thereby. Every Parliamentary Act or the
legislation which is against or contrary to the provisions of the
Constitution is null and void, and the duty of keeping the legislature
within its bounds, in systems incorporating the doctrine of judicial

46
Ibid,
 170

review, devolves upon the courts. Our Indian Constitution

incorporate the doctrine of judicial review of legislation as to its
conformity with the constitution.47
On the other hand, there is no written constitution in England
which circumscribes the powers of Parliament which is sovereign in
the eyes of law. There does not exist in any part of the British
Empire any person or body of persons, executive, legislative or
judicial, which can pronounce void any enactment passed by the
British Parliament on the ground of such enactment being opposed to
the Constitution, or on any ground whatever, except, of course, its
being repealed by Parliament.48 The British Constitution has entrusted
to the two Houses of Parliament, subject to the assent of the King, on
absolute power untrammelled by any written instrument obedience to
which may be compelled by some judicial body.49 Parliament may
accordingly delegate to any extent its powers of law-making to an
outside authority. As a matter of law, Parliament may surrender all its
power in favour of another body as it actually did in 1807, when the
English and Scottish Parliament passed Acts of Union providing for
the coming into existence of a new body, Parliament of Great Britain.
The limits of delegate legislation in the English Constitution, if there
are to be any, must, therefore, remain a question of policy and not a
justiciable issue for the courts.50

See Article 13 and also State ofMadras v. V.G. Rao, AIR 1952 SC 196, 198 : 1952, SCR.,
957.
48 Dicey, A.V., “An Introduction to the Study of the Law of the Constitution”, Tenth Edn., 1959,
pp. 90-91.
49 R. v. Holliday, 1917, A C. 260.
50 Shukla, V.N., “Constitution ofIndia", op.cit., p. 456.
 171

Before discussing the limiting principle, it is necessary to refer

to a mode of classification of delegated legislation. It is usual with the
American writers to classify delegated legislation as contingent and
subordinate.51
A similar division (except that the word ‘constitutional’ is
substituted for the word ‘contingent’ has in some cases been alluded
to by the courts in India. This mode of classification is primarily
linked up with the American doctrine of delegation. In the leading
case of Field v. Clark,52 the impugned Act authorised the President by
r

proclamation to suspend the operation of an Act permitting free

introduction into the U.S. of certain products upon his finding that the
duties imposed upon the products of the U.S. were reciprocally
unequal and unreasonable. The U.S. Supreme Court held the Act
valid on the ground that the President was a mere agent of Congress to
ascertain and declare the contingency upon which the will of Congress
was to take effect. The delegated authority did not conflict with the
rule against delegation since such authority, in the view of the Court,
had no legislative character. The Court quoted with approval the
following form a 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 intends to

51 E.G., delegation of the following types of power:

i) to extend the duration of the Act.
ii) to extend the application of the Act.
iii) to suspend or dispense with Acts, and
iv) to make alteration in the Act.
52
143 U.S. 694.
 172

make its own action depends.53 Based on these

decisions, contingent legislation is defined as “statute
that provides control but specifies that they are to come
into effect only when a given administrative authority
finds the existence of conditions defined in the statutes.54
In subordinate legislation, on the other hand, the process
consists of a discretionary elaboration of rules and
regulations.55 The distinction between the two types is
said to be based on the point of discretion. In contingent
or conditional legislation the delegation is of fact-finding
and in subordinate legislation it is of discretion. In other
words, by delegated or subordinate legislation the
delegate completes the legislation by supplying details
within the limits prescribed by the statute and in the case
of conditional legislation the power of legislation is
exercised by the legislature conditionally leaving to the
discretion of an external authority, the time and manner
of carrying its legislation into effect as also the
determination of the area to which it is to extend.56
If the underlying purpose of the above classification is to
distinguish between the two types of delegated legislation, there is no
objection. But the difficulty arises when it is assumed that

53 Locke’s Appeal, 72 Pa 491. .

54 Hart, “An Introduction to Administrative Law with Selected Cases", p. 310.
55 Ibid.
56 Hamdard Dawakhana v. Union ofIndia, AIR 1960, SC 554: 566 (1960) 2 SCR. 671, see also
K.S.E.Board. v. Indian Aluminium Co., AIR 1976, SC 1031 (Para 27), Chinai v. State of
Gujarat, AIR 1970, SC 1188 (1190); Arnolds. State ofMarashatra, AIR 1966, SC 1788.
 173

confidential legislation does not involve either the exercise of

discretion or legislative will. It must not be forgotten that contingency
formula is nothing but a fiction employed by the U.S. Supreme Court
to get away from the “doctrine of separation of powers”. It is
submitted that in India there is no compelling necessity to resort to the
fiction. Moreover, it is not easy to draw a dividing line between
“conditional legislation or “subordinate legislation”. In any case the
need for safeguards against the abuse of delegations classified in the
artificial category of conditional legislation is as great as in the case of
the other type, namely, subordinate legislation.57
(b) Limitations on Delegation of Legislative Powers
So far as limitations are concerned, it is now settled by the
majority judgement in re Delhi Laws Act, 191258 that there is a limit
beyond which may not go. The limit is that essential powers of
legislation cannot be delegated. The essential legislative power
consists of the determination or choice of the legislative policy and of
formally enacting that policy into a binding rule of conduct. The
legislature, therefore, may not delegate its function of laying down
legislative policy to an outside authority in respect of a measure and
its formulation as a rule of conduct. So long as a policy is laid down
and a standard or limit established by statute no unconstitutional
delegation of legislative power is involved in leaving to the executive
the making of subordinate rules within the prescribed limits and the

57 Shukla, V.N., “The Constitution ofIndia” Tenth Edn., p. 635.

58 AIR 1951 SC 332, 345,387,401 : 1951 SCR. 747.
 174

determination of facts to which the legislation is to apply. Mukherjea,

J. said.59
“The policy may be- participated in as few or as many
words as the legislature thinks proper and it is enough if
intelligent guidance is given tot he subordinate authority.
The court can interfere if no policy is discernible at all or
the delegation is of such an indefinite character as to
amount to abdication, but as the discretion vests with the
legislature in determining whether there is necessity for
delegation or not, the exercise of such discretion is not to
be disturbed by the courts except in clear cases of abuse.”
The next question arises as to what is the constitutional basis on
which prohibition of delegation of law-making powers rests. There is
no specific provision in the Constitution prohibiting the delegation.
The Constitution of U.S.A. embodies the doctrine of separation of
powers, which prohibits the executive being given law-making
powers.. But does such a doctrine form part of the Constitution of
India? There is a divergence of opinion. (See Sastri, J.’s judgement
in Delhi Laws Act, 1912, Re).60 Mukherjea, C.J., in Ram Jawaya v.
State of Punjab , however, based the prohibition on some sort of
doctrine of separation of powers. He said :
“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

59 Id. At pp. 400-401.

60 AIR 1951 SC 332 : 1951 SCR 747.
61 AIR 1955 SC 549, 556 : (1955) 2 SCR 225.
 175

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.”
However, in Edward Mills Co. v. State of Ajmer , it was
explained that where a legislature is given plenary powers to legislate
on a particular subject that where also be an implied power to make
laws incidental to the exercise on such power. It is a fundamental
principle of constitutional law that everything necessary to the
exercise of a power is included in the grant of power. A legislature
cannot certainly strip itself of its essential legislative functions, and
vest the same in an extraneous authority. The primary duty of law­
making has to be discharged by the legislature itself but delegation
may be resorted to as a subsidiary or an ancillary measure.

In Devi Das Gopal Krishan v. State of Punjab63, Subba Rao,

CJ. provided another justification for delegated legislation that the
Constitution confers a power and imposes a duty on the legislature to
make laws, but in view of the multifarious activities of a welfare
State, it cannot presumably work out all the details to suit the varying
aspects of a complex situation. The legislature must necessarily

62 AIR 1955 SC 25 : (1955) 1 SCR 735.

63 AIR 1967 SC 1895, 1901: (1967) 3 SCR 557. See also Kalawativ. C.I.T., AIR 1968 SC 162 :
(1967) 3 SCR 833, per Sikri, C.J., 168 ; Tata Iron & Steel Co. v. Workmen, (1972) 2 SCC 383
: AIR 1973 SC 1401.
 176

delegate the working out of details to the executive or any other

agency. It may, therefore, be said that taking it for granted that the
institution of delegated legislation has the sanction of the Constitution,
the term constitutionality in reference thereto seeks to determine the
vires of the ‘output’ and not the ‘institution’ itself on the anvil of the
Constitution. Upon this hypothesis the touchstone for determining
the constitutionality of delegated legislation is ‘essential legislative
function’ as the determination of the legislative policy and its
formulation as a rule of conduct. Essentially, the constitutionality of
delegated legislation consists in whether the legislature retains
material control over the delegated authority in matters of legislation,
(c) Application- In the famous reference on delegated legislation,
Delhi Laws Act etc., 1912, Re, the Supreme Court was invited to give
its opinion on the validity of the delegatory provisions contained in
three Central Acts, namely, Section 7 of the Delhi Laws Act, 1912,
Section 2 of the Ajmer Marwar (Extension of Laws) Laws Act, 1947
and Section 2 of the Part C States (Laws), Act, 1950.
Section 7 of the Delhi Laws Act empowers the Provincial
Government to 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 India at the date of such notification.
In similar terms by Section 2 of the Ajmer Marwar (Extension
of Laws) Act, 1947, the Central Government is empowered to extend
with restrictions and modifications, any enactment which is in force in
any other province at the date of the notification. Section 2 of the
Part C States (Laws) Act, 1950, in addition to empowering the Central
 177

Government to extend laws to any Part C State in terms similar to the

Ajmer Act, provides:
“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.”
It will be noted that in each case the Central Legislature had
empowered an executive authority under its legislative control to
apply, at its discretion, the laws to an area which was also under the
legislative sway of the Centre. Variations occur firstly, in the type of
laws which the executive authority was authorised to select, and
secondly, in the modifications which it was empowered to make in
them. The following decisions may be held to have been taken on
those variations64:
(a) Power can validly be delegated to the executive authority, at its
discretion to apply without modification (save incidental
changes such as the name and the place) the whole of any
Central Act already in existence in any part of India under the
legislative sway of the Centre to the new area. (See Section 7,
Delhi Laws Act, 1912).
(b) Power can be delegated to an executive authority to select and
apply a Provincial Act in similar circumstances. [See Section 2
of the Aj mer Marwar (Extension of Laws) Act, 1947].

64 Rajnarain Singh v. Chairman, P.A.C., AIR 1954 SC 569( 573): (1955)1 SCR 290.
 178

(c) Power can be delegated to the executive authority to select

future Central laws and apply them in a similar way. (See
Section 7, Delhi Laws Act etc., 1912).
(d) Power can be delegated to select future provincial laws and
apply them. [Section 2, Ajmer Marwar (Extension of Laws)
Act, 1947].
(e) Power cannot be delegated to an executive authority to repeal a
law existing in the area and either to make no law in its place,
or to substitute some other law therefore. [See Section 2 of the
Part C States (Laws) Act, 1950.]
(f) On the question of modification and alternation permitted in all
the three Acts, the majority view was that an executive
authority can be authorised to modify an existing or future law
but not an essential feature. Exactly what constitutes an
essential feature, it was admitted, cannot be enunciated in
general terms, and there was divergence of opinion among the
judges, but this much is clear that it cannot include a change of
policy. The minority judgement took the view that there are no
constitutional inhibitions against the delegation of powers by
the legislature provided that the delegating legislature retains
the power to withdraw the delegated authority. There is no
prohibition, therefore, relating to the extent to which the
legislature may delegate, provided that the grant remains
revocable. (See judgements of Patanjali Sastri and Das, JJ.)
 179

In Harishankar Bagla v. State of M.P.,65 Section 3 of the

Essential Supplies (Temporary Powers) Act, 1946, was challenged on
the ground of excessive delegation of legislative power. Section 3 of
the Essential Supplies (Temporary Powers) Act reads as follows:
“The Central Government, so far as it appears to it to be
necessary or expedient, for maintaining or increasing supplies of any
essential commodity, or for securing the equitable distribution and
availability at fair prices, may, by notified Order, provide for
regulating or prohibiting the production, supply and distribution
thereof, and trade and commerce therein.”
It was contended that unregulated legislative power was
conferred on the Central Government by this section. No policy was
disclosed and no standards had been set for the guidance of the
authorities which would execute the law. But the Court upheld the
delegation on the ground that the legislature has laid down the
essential principles or policy of the law, namely “maintenance or
increase of supply of essential commodities and securing equitable
distribution and availability at fair prices”. Mahajan, C.J., who
delivered the judgement of the Court, observed :
“The preamble and the body of the sections sufficiently
formulate the legislative policy and the ambit and
character of the Act is such that the details of that policy
can only be worked out by delegating them to a certain
authority within the framework of that policy.”66

w AIR 1954 SC 465 : (1955) 1 SCR 380.

66 Harishankar Bagla v. State o/M.P., AIR 1954 SC 465 : (1955) 1 SCR 380,468.
 180

Section 6 of the Essential Supplies (Temporary Powers) Act

was also challenged on the ground of unconstitutional delegation of
powers to the executive. Section 6 declares that an order made under
Section 3 shall have effect notwithstanding anything contained in any
Act or instrument other than this Act. It was contended that the power
would have the effect to repeal, by implication, an existing law and,
therefore, such a wide power could not be delegated on the authority
of Delhi Laws Act, etc. 1912, Re.. The Court rejecting the contention
held that Section 6 does not, either expressly or by implication, repeal
any of the provisions of the pre-existing law, nor does it abrogate
them. The object is to simply bypass them where they are
inconsistent with the provisions of the Essential Supplies (Temporary
Powers) Act. The only effect is that during the continuance of the
Order made under Section 3 the existing law does not operate in that
field for the time being. The ambit of its operation being thus limited,
there was no direct repeal of any of the existing laws.
In the case of Rajnarain Singh v. Chairman, P.A.C. , the
impugned Act had empowered the local government to extend to
Patna the provisions of any section of the Bengal Municipal Act, 1884
“subject to such restrictions and modifications as the local
government may think fit.” The Government of Bihar picked Section
104 out of the Act, modified it and extended it in its modified form to
the town of Patna. Both the Act and the notification were challenged
on the ground of transgressing the constitutional limits of permissible
delegation. The Court held that while power can be delegated to

67
AIR 1954 SC 569, 573 : (1955) 1 SCR 290.
 181

extend the whole or any part of the Act, and also to pick out a section
and apply the same to the new area, the legislature cannot permit an
executive authority to modify either existing or future laws in any
essential features. Changing the policy of the law would amount to
modification in the essential features of the Act In the instant case,
the Court held the notification invalid since the extension of only one
section amounted to change in the legislative policy embodied in the
Act.
In Edward Mills Co. v. State ofAjmer68, the Supreme Court was
invited to invalidate the delegation of power to vary the schedule
forming part of the impugned Act. The Act authorised the setting up
of minimum wages for certain specified industries by notification. It
was argued that there was no legislative policy to guide the officials
charged with the duty of adding to the list of industries covered. The
Court held that the legislative policy, which was to guide in the
selection of industries, was clearly indicated in the Act, namely, to
avoid exploitation of labour by setting minimum wages in industries
where due to unequal bargaining power or other reasons wages were
inadequate. The Court emphasized the necessity to allow flexibility
for adaptation to local conditions. The Edward Mills case is further to
be noted for clarifying two points. First, it concedes that there is an
element of delegation in every case where the legislature empowers an
outside authority to do something which it might do itself. The
fiction that there is no delegation of legislative powers in what may be

68
AIR 1955 SC 25 : (1955) 1 SCR 735. See also Babu Ram Jagdish Kumar & Co. v. State of
Punjab, (1979) 3 SCC 616 : AIR 1979 SC 1475.
 182

called conditional or contingent legislation is thus rejected. Secondly,

the rule that primary or essential legislation is to be retained by the
legislature is applicable to all types of delegated legislation. The
Court said: “Whether a provision like this strictly comes within the
description of what is called ‘conditional legislation’ is not very
material, the question is, whether it exceeds the limits of permissible
delegation.”
Hamdard Dawakhana v. Union of India69 is the first clear case
which held a Central Act unconstitutional because of excessive
delegation authorised thereunder. Parliament passed an Act, the
Drugs and Magic Remedies (Objectionable) Advertisements Act,
1954, to control the advertisements of certain drugs. The Act
prohibited, among other things, the publication of any advertisement
referring to any during in terms which suggested the use of that drug
for diagnosis, cure, mitigation or treatment or prevention of any
venereal disease. Power was delegated under Section 3 of the Act to
the Central Government to specify by rules ‘any other disease or
condition to which the provisions of the Act were to be applied’.
Section 3 was challenged on the ground of permitting excessive
delegation. The Court held Section 3 invalid because no proper
guidance or standard was supplied to the rule-making authority in
determining what other diseases were to be brought within the
operation of the Act. Kapur, J., who delivered the majority judgement
said:70

69 AIR I960 SC 554: (I960) 2 SCR 671.

70 Id. AIR 568.
 183

“Parliament has established no criteria, no standards and

has not prescribed any principle on which a particular
disease or condition is to be specified in the schedule. It
is not stated what facts or circumstances are to be taken
into consideration to include a particular condition or
disease.”
In Harakchand R. Banthia v. Union ofIndia71, Section 5(20)(b)
of the Gold Control Act, 1968, empowering the administrator so far as
it appeared to him to be necessary or expedient for carrying out the
provisions of the Act, by order, to regulate by licences, permit or
otherwise, the manufacture, distribution, transport, acquisition,
possession, transfer, disposal, use or consumption of gold, was
declared invalid on the ground of excessive delegation. The Supreme
Court held that the power conferred on the administrator was
legislative in character. There was no guidance indicated in the Act
for having any control over the exercise of power, nor was there any
stipulation for legislative supervision.

In JalanTrading Co. v. Mill Mazdoor Union , constitutional

validity of Section 37 of the Payment of Bonus Act, 1965, which
authorised the Central Government to provide by order for removal of
doubt or difficulties in giving effect to the provisions of the Act, was
challenged. The only condition of the applicability of Section 37 was
the arising of the doubt or difficulty in giving effect to the provision

71 (1969) 2 SCC 166 : AIR 1970 SC 1453.

72 AIR 1967 SC 691 : (1967) 1 SCR 15. The use of such a clause, commonly called the Henry
VIII clause in England, has been criticised by the Committee on Ministers Powers; CMP
Report, pp. 39, 59-61 (1932).
 184

of the Act. The order made was, however, not to be inconsistent with
the purpose of the Act. The Court held Section 37 of the Act ultra
vires on the ground of excessive delegation.
“The section authorises the Government to determine for itself
what the purposes of the Act are and to make provisions for removal
of doubts or difficulties... The power ... would in substance, amount
or exercise of legislative power and that cannot be delegated to an
executive authority.”73
The authority of Jalan Trading Co. has, however, been diluted,
rather indirectly rejected, in subsequent cases where the courts have
upheld removal of difficulty clauses either by distinguishing that case
or without reference to it.74
The legislature must declare the policy of the law and fix the
legal principles which are to control in given cases and must provide
the standard to guide rule-making authorities. This standard or
guidance must not be indefinite or general. But it an be laid down in
broad, general terms. As Mukherjea, J. said :

“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 the details
within the framework of that policy.”75

73 Id. At p. 703.
74 See Gammon India Ltd. v. Union ofIndia, (1974) 1 SCC 596: AIR 1974 SC 960; M. U. Sinai v.
Union ofIndia, (1975) 3 SCC 765: AIR 1975 SC 797 and I.N. Rao v. State, AIR 1977 AP 178.
75 Delhi Laws Act, Re, AIR 1951 SC 332,400: 1951 SCR 747.
 185

A statute challenged on the ground of excessive delegation

must therefore be subjected to two tests : (i) whether it delegates
essential legislative function or power, and (ii) whether the legislature
has enunciated its policy and principle for the guidance of the
delegate. Thus in Vasantlal Maganbhai v. Stae ofBombay , Section
6(2) of the impugned Act had provided that the ‘Provincial
Government may, by notification in the Official Gazette, fix a lower
rate of maximum rent payable by the tenants of lands situate in any
particular area or may fix on any other suitable basis’. The only
guidance ‘any other suitable basis’ read along with the preamble and
other provisions of the Act was held to provide a sufficient standard
for the exercise of delegated power. In Sri ram Ram Narain v. State
of Bombay77, power was delegated tot he State Government vary the
ceiling area and economic holding ‘if it was satisfied that it was
expedient so to do in the public interest’, regard being had to certain
specified matters. This broadly expressed standard for the exercise of
executive discretion was considered sufficient to satisfy the
constitutional rule. The declaration of the legislative policy, namely,
to make essential goods ‘available for equitable distribution’ was held
or canalise sufficiently the administrative discretion in making the
subordinate legislation under the Act, and likewise the guidance
provided by the words, “the maintenance of essential supplies” was
held sufficient to validate the delegation made by the impugned Act.78

76 AIR 1961 SC 4: (1961)1 SCR 341.

77 AIR 1959 SC 459: 1959 Supp(l) SCR 489; Ram Dial v. State of Punjab, AIR 1965 SC 1518:
(1965) 2 SCR 858.
78 Harishankar Bagla v. State ofM.P., AIR 1954 SC 465: (1955) 1 SCR 380.
 186

In Bhatnagars & Co. Ltd. v. Union of India79, the object set forth in
the preamble of another Act (predecessor of the impugned Act),
namely, ‘to maintain supplies and services essential to the life of the
community’ was held to offer sufficient guidance for the exercise by
delegated legislation control over the export and import trade of India
under the Imports and Exports (Control) Act. But the said liberal
construction should not be carried by the courts to the extent of
always trying to discover a dormant or latent legislative policy to
sustain an arbitrary power conferred on executive authorities. 80
The legislature can delegate its power to the executive even in
matters relating to taxation laws provided there are necessary
guidelines regarding such fixation on the ground that in a modem
society, taxation is one of the methods by which economic and social
goals of the State can be achieved and the power to tax, therefore,
shall be a flexible power and capable of being easily altered to meet
the exigencies of circumstances. Such delegation cannot amount to
delegation of essential legislative function. In Baku ram Jagdish
O I

Kumar & Co. v. State of Punjab , it was held that the delegation of
power under Section 31 of the Punjab Central Sales Tax Act, 1948 to
the State Government to determine whether any class of goods should
be included or excluded from Schedule ‘C’ to the Act cannot be
considered unconstitutional.

w AIR 1957 SC 478.

80 Devi Das Gopalkrishnan v. State ofPunjab, AIR 1967 SC 1895, per Subba rao, J., at p. 1971.
81 (1979) 3 SCC 616: A.I.R .1979 SC 1415.
 187

82
In Devi Das Gopalkrishnan v. State of Punjab , the
constitutional validity of Section 5 of the East Punjab General Sales
Tax Act, 1948 was challenged on the ground of excessive delegation.
Section 5 reads thus : “Subject to the provisions of this Act there shall
be levied on the taxable turnover every year of a dealer a tax at such
rates as the Provincial Government may by notification direct.” The
Court held the section invalid, because an uncontrolled power was
conferred on the Provincial Government to levy every year on the
taxable turnover of a dealer a tax at such rate as the said Government
might direct. The legislature effaced itself in the matter of fixing of
rates as it did not give any guidance under that section or under any
other provision in the Act. The Chief Justice in the course of the
judgement, said:
“The minimum we expect of the legislature is to lay down in
the Act conferring such a power of fixation of rates clear legislative
policy or guidelines in that regard. As the Act did not prescribe any
such policy, it must be held that Section 5... was void.”83
But in subsequent cases tax laws authorising the executive to
fix the rate of tax subject to the limit laid down in the law have been
upheld.84

82 AIR 1967 SC 1895: (1967) 3 SCR 557.

83 Devi Das Gopalkrishnan v. State ofPunjab, AIR 1967 SC 1895, 1901
84 V Nagappa v. I.O. Mines Cess Commr., (1975) 2 SCC 1 : AIR 1973 SC 1374; D. Ramaraju v.
State ofA.P., (1972) 1 SCC 421: AIR 1972 SC 828; Gwalior Rayon Mills v. C.S.T., (1974) 4
SCC 985: AIR 1974 SC 1660. Also see the Delhi Municipal Corporation case, discussed
below where the law was upheld even though it did not lay down the maximum limit of the
rate of tax to be imposed.
 188

In S.B. Dayal v. State of UP.85, the Supreme Court reiterated

that the power to fix the rate of sales tax could validly be delegated,
provided a reasonable upper limit is fixed. The upper limit of five
paise in a rupee fixed by Section 3-D(i) of the U.P. Sales Tax Act of
1948 was held to be reasonable.

Where the legislative policy is enunciated with sufficient

clarity, or a standard is laid down, the courts would not interfere.
However, what guidance should be given and to what extent and
whether guidance has been given depends upon the circumstances of
each statute under consideration. For example, in Delhi Municipal
Q/T

Corporation v. Birla Cotton, S. & W. Mills , looking at the nature of

guidance necessary in the field of taxation, Wanchoo, C.J. pointed
out: (at p. 1244).
“The guidance may take the form of providing maximum
rates of tax up to which a local body may be given the
discretion to make its choice, or it may take the form of
providing for consultation with the people of the local
area, and their fixing the rates after such consultation. It
may also take the form of subjecting the rate to be fixed
by the local body to the approval of government which
act as a watchdog on the actions of the local body in this
matter on manner thereof, is to see that the local body

85 (1972) 4 SCC 485.

85 AIR 1968 SC 1232 : (1968) 3 SCR 251. See also Corporation of Calcutta v. Liberty Cinema,
AIR 1965 SC 1107 : (1965) 2 SCR 477; Municipal Board v. Raghuvendra Kripal, AIR 1966
SC 693: (1966)1 SCR 950.
 189

fixes a reasonable rate of taxation for the local area

concerned.”
In the Delhi Municipal Corporation case, the Supreme Court
found thp delegation of power to the Delhi Municipal Corporation to
fix rates of tax for the consumption of electricity without limits
uncanalised, arbitrary or without guidance of policy and, therefore,
upheld it. Though the delegation thus made was certainly wide,
Wanchoo, C.J. pointed out that: (i) the delegation had been made to
an elected body responsible to the people including those who pay
taxes, (ii) the money that had to be found, though large, by taxation is
not unlimited as the limit is circumscribed by the need to finance the
functions which it may undertake to perform under the Act, (iii)
another limit or guidance is provided by the necessity of adopting
budget estimates each year as laid down under the Act, (iv) the
maximum rates fixed by the corporation are subject to Government
control under the Act, and (v) the courts can hold that such exercise is
void for unreasonableness.
In Delhi Municipal Corporation case of the Supreme Court in a
way reconsidered its stand taken in Delhi Laws Act, 1912, Re, opinion
and applied since then. Although the Court did not totally abandon
that stand, the majority substantially moved in the direction of
recognising greater freedom for the legislature to delegate its
legislative powers to the executive. Some of the judges took a clear
stand that since the Constitution does not prohibit delegation of
legislative power, the legislature must be free to delegate to any extent
so long as it does not efface itself and retains its control on the
 190

o*7
delegate in the form of power to revoke the delegation at its will.
This tendency has found its clear reflection in the Court’s
pronouncements since then. Again in Gwalior Rayon Mills v.
C.S.T.88, an attempt was made to give up even in principle the stand
taken in Delhi Laws Act, 1912, Re, opinion. In Gwalior Rayon Mills
case the Court unanimously upheld Section 8(2)(b) of the Central
Sales tax Act, 1956, which allowed the calculation of tax in certain
cases at the rate of ten per cent or at the rate applicable in the
appropriate State. While three judges led by Khanna, J. reiterated
their faith in the Court’s stand in Delhi Laws Act, 1912, Re89 , Mathew
J. speaking for himself and Ray, C.J., strongly pleaded that the
legislature must be free to delegate its powers to any extent so long as
it has the power to repeal the delegation.90 Later, speaking for a three-
Judge Bench of the Supreme Court in N.K. Papiah & Sons v. Excise
Commr.91 , Mathew J. stuck to his ground in Gwalior Rayon Mills,
though without any reference to it, and upheld Section 22 of the
Mysore Excise Act, 1965 which authorised the Government to
prescribe the rate of excise duty on articles manufactured or produced
in the State under any licence or permit granted under the Act.
Subsequently, without any reference to Rapiah and without much
discussion on Gwalior Rayon Mills, the Supreme Court in K.S.E.
Board v. Indian Aluminium Co. 92, expressed its agreement with the

87 Delhi Municipal Corporatiion v. Birla Cotton. S. & W. Mills, AIR 1968 SC 1232, 1253
(Hidayatullah & Ramaswami, JJ.).
88 (1974) 4 SCC 98: AIR 1974 SC 1660.
89 Id. At SCC p. 114, para 28 : AIR p. 1671. ,
90 Id. At SCC pp. 121 and 126 : AIRpp. 1678 & 1682.
91 (1975) 1 SCC 492 : AIR 1975 SC 1007.
92 (1976) 1 SCC 466: AIR 1975 SC 1007.
 191

majority in Gwalior Rayon Mills93. Again, upholding Section 60 of

the Madras Co-operative Societies Act, 1932 which authorised the
State Government to exempt any registered society from any of the
provisions of the Act or to direct that such provisions shall apply to a
society with such modifications as may be specified, the Supreme
Court observed:94
“We do not wish, in this case, to search for the precise
principles decided in the Delhi Laws Act case, nor to
consider whether N.K. Papiah & Sons v. Excise
Commissioner... beats the final retreat from the earlier
position. For the purpose of this case we are content to
accept the ‘policy’ and ‘guidelines’ theory...”
From some of the subsequent cases also it appears that though
in practice the Court would uphold widest, possible delegation of
legislative powers, in theory it would not give up its insistence on
policy and guidelines in order to retain its power of supervision over
the actions of the executive in the form of delegated legislation.95 So
long as the Court can find some limits in the delegating statute to
determine the vires of the delegated legislation made under it, it would
uphold the statute. But if no such limits can be found or ascertained
the delegating statute would fall. The Court would be willing to read
such limits in any of the provisions of the statute, its preamble,
surrounding circumstances, objectives or the nature of the subject-

93 Id. at p. 490, para 29 : AIR p. 1050.

94 For more cases see Ajay Kumar v. K. Kunjabmu, (1980) 1 SCC 340 : A.IR. 1980 SC 350, 351.
95 For more cases see Ajay Kumar v. Union of India, (1984) 3 SCC 127 : AIR 1984 SC 1130,
1141; D.C.G.M. CO. Ltd v. Union of India, (1983) 4 SCC 166 : AIR 1983 SC 937 ; Lohia
Machines Ltd. v. Union ofIndia, (1985) 2 SCC 197 : AIR 1985 SC 421.
 192

matter it deals with as well as in the procedural safeguards such as the

requirement of laying of the delegated legislation before the
legislature.96
(d) State of the rule - It will be convenient here to state the
principles governing delegation of legislative power which emerge out
of the decisions analysed above:
(a) The primary duty o
(b) flaw-making has to be discharged by the legislature itself. The
legislature cannot delegate its primary or essential legislative
function to an outside authority in any case.
(c) The essential legislative function consists in laying down ‘the
policy of the law and making it a binding rule of conduct’. The
legislature, in other words, must itself lay down the legislative
policy and principles and must afford sufficient guidance to the
rule-making authority for carrying out the declared policy.
(d) If the legislature has performed its essential function of laying
down the policy of the law and providing guidance for carrying
out the policy, there is no constitutional bar against delegation
of subsidiary or ancillary powers in that behalf to an outside
authority.
(e) It follows from the above that an Act delegating law-making
powers to a person or body shall be invalid, if it lays down no
principles and provides np standard for the guidance of the rule-
making body.

96
See, for example, the cases in the preceding note.
 193

(f) In applying this test the court could take into account the
statements in the preamble to the Act and if the said statements
afford a satisfactory basis for holding that the legislative policy
j

or principle has been enunciated with sufficient accuracy and

clarity, the preamble itself would satisfy the requirements of the
relevant tests.
(g) In every case, it would be necessary to consider the relevant
provisions of the Act in relation to the delegation made and the
question as to whether the delegation made is intra vires or not
will have to be decided by the application of the relevant tests.
(h) Delegated legislation may take different forms viz., conditional
legislation, supplementary legislation, subordinate legislation,
etc., but each form is subject to the one and same rule that
delegation made without indicating intelligible limits of
authority is constitutionally incompetent.
(e) Publication of Delegated Legislation - Subordinate legislation
may not take effect unless published. In Harla v. State of
Rajasthan , the accused had been convicted for an offence under the
Jaipur Opium Act, 1924.98 It was proved that the resolution enacting
the law had not been published by any means open to the public. At
the time there was no law or custom regarding the coming into force
of enactments made by that State. The Court quashed the conviction
and ruled:99

97 AIR 1951 SC 467 : 1952 SCR 110.

98 The State was not then part of British India.
99 AIR 1952 S.C 467 at 468.
 194

“In the absence of any special law or custom, we are of

opinion that it would be against the principle of natural
justice to permit the subjects of a State to be penalised by
laws of which they had no knowledge and of which they
could not even with the exercise of reasonable diligence
have acquired any knowledge. Natural justice required
that before a law can become operative it must be
promulgated or published.”
Again Bose, J., said :
“There must, therefore, be promulgation and publication in their
cases. The mode of publication can vary... But reasonable publication
of some sort there must be.”100
On the authority of this decision we may say that statutory rules
and orders, as opposed to Acts of Parliament,101 do not come into
operation until they have been published, although there is no rule as
to any particular kind of publication. In State ofMaharashtra v. M.H.
George102, Ayyangar, J. formulated guidelines regarding the mode of
publication of delegated legislation thus : (i) where there is statutory
requirement as to the mode or form of publication and they are such
that, in the circumstances, the court holds to be mandatory, a failure or
comply with those requirements might result in there being no
effective order the contravention of which could be the subject of
prosecution, (ii) where there is no statutory requirement, it is
necessary that it should be published in the usual form, i.e., by

100 Id. at p. 469.

101 For Acts of Parliament see S. 5, General Clauses Act, 1897.
102 AIR 1965 SC 722 : (1965) 1 SCR 123.
 195

publication within the country as generally adopted to notify all the

persons the making of rules, and (iii) in India, publication in the
Official gazette, viz. Gazette of India is the ordinary method of
bringing a rule or subordinate legislation to the notice of the person
concerned. Thus in Govind Lai v. Agricultural Produce Market
Committee103 the Supreme Court held that the requirement in Section
6 of the Gujarat Agricultural Produce Markets Act, 1964 requiring the
rules to be published in Gujarati in a newspaper, in addition to the
Official Gazette, was mandatory and its non-compliance made the
rules invalid.
(f) Sub-delegation - The common law maxim “delegatus non potest
delegare” makes sub-delegation unauthorised unless a person or body
on whom the power is conferred is permitted to delegate, expressly or
by necessary intendment.104 A delegate who has received the authority
from the principal cannot, in turn, delegate his own authority to a
delegate of his own. If, however, the administrative authority named
in the statute has and retains in its hands general control over the
activities of the person to whim it has entrusted in part the exercise of
its statutory power, and the control exercised by the administrative
authority is of substantial degree, there is in the eye of the law no
‘delegation’ at all and the maxim “delegatus non potest delegare"
does not apply.105

103 AIR 1976 SC 263: (1975) 2 SCO 482.

104 R. Veerayya v. State, AIR 1967 AP 265; Mangulal Chunilal v. Manilal, AIR 1968 SC 822 :
(1968) 2 SCR 401.
105
Union ofIndia v. P.K. Roy, AIR 1968 SC 850 (857): (1968) 2 SCR 186.