National Law Institute University

A Project
On
“Colourable Exercise of Power:
Exercise of Discretion”

Submitted by: Robin Quadros

Roll No. – 2007 BA.LL.B.-07
Enrollment No. – A-0695
Class – 4th Year
Trimester – Tenth Trimester
Subject – Administrative Law 2
 Declaration

The text reported in this project is the outcome of my own efforts and no
part of this report has been copied in any unauthorized manner and no part
in it has been incorporated without due acknowledgement.

Name: Robin Quadros

Signature:

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Introduction:

Since time immemorial civilizations and citizens had always desired and urged for the
people who could lead them in various sphere of life which sublimes the importance of
administration. At that era the need for administration began which gave birth to
administrators, at that point of time state was considered as a “Police State” which now
has became welfare state. No modern government however can function without the
grant of discretionary power to administrative authorities. This laid the administrators
with greater power and enhanced their discretionary limits.

For instance in the leading case of Julius v. Lord Bishop of Oxford 1, the Bishop had the
authority to issue a commission of inquiry in case of alleged misconduct by a clergyman,
either on an application by someone or suo motu and when such an application was
made, the question was whether the bishop had a right to refuse the commission. The
House of Lords held that the Bishop has the discretion to act pursuant to the compliant
and no mandatory duty was imposed upon him.

Definitions:

The definition of Administrative Discretion is given by many of the thinkers but there are
few notable definitions

The definition of ‘administrative discretion’ given by Professor Freund as follows:

“When we speak of administrative discretion, we mean that a determination may be
reached, in part at least, upon the basis of consideration not entirely susceptible of proof
or disproof…. It may be practically convenient to say that discretion includes the case in
which the ascertainment of fact is legitimately left to administrative determination.”
Coke proclaims “Discretion” as “it is a science or understanding to discern between
falsity and truth, between right and wrong, between shadows and substance, between

1
[1880] UKHL 1

3
equity and colourable glosses and pretences, and not to do according to their will and
private affection”

Thus it can be said that decision taken by the administrative authorities are not only based
on the evidence but in accordance to the policy and also in accordance to the
discretionary power conferred on the authority.

Meaning:

Administrative discretion is not a term provided by statutes, thus to understand it we

separate the term, where ‘Administration’ in public law means, the practical management
and direction of executive department and its agencies. Whereas ‘Discretion’ in this sense
means choosing from amongst the various available alternatives but with reference to the
rule of reason and justice and not according to personal whims.

Discretionary powers conferred on the administration are of different type. They may
range from simple ministerial function like maintenance of birth and death register to
powers which seriously affect the rights of an individual, e.g. acquisition of property,
regulation of trade, industry or business, investigation, seizer, confiscation and
destruction of property, detention of a person on subjective satisfaction of an executive
authority and the like.

In short Administrative Discretion is a powers or authorities provided to the executive by

which freedom given to maintain system government, society, rights and solely to satisfy
people aim to live alive a freedom. Even administration could not bind in formal but, in
visible handcuffs they are to be given discretion for their best service to serve citizens.

Needs and Justifications:

In today’s complex art of governance, discretion is unavoidable evil. Administrative

authority has to use discretion conferred upon them by the Legislature in many ways. For
e.g. they have to reside whether the activities of a person are like likely to be prejudicial

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to security of State, whether permission should be given to do an act or a license be given
to conduct an activity or exemption be granted.

Whether an action is required depends upon the happening of certain events or arising of
certain situations that cannot be anticipated. Some of the actions depends on the personal
assessment of the situation by the administrative authority which may be true in his
perspective but which may sometime cross the limit conferred upon him and which may
seen arbitrary to other.

This administration discretion has not imposed for a individual to be hold up with but for
the satisfaction of the society, where a complex art of modern government exist, with
which to accommodate is difficult and even impossible to continue in today’s prevailing
condition.

For a ‘welfare state’ it has become more stressful for government to exercise their
discretion to large extent and because of that reason it has become the duty of
administrators to satisfy subjectively with laying down the statutory guidelines or
imposing condition. Thus the need for judicial correctness of unreasonable exercise of
administrative discretion cannot be overemphasized.

DOCTRINE OF COLORABLE  LEGISLATION:  A TREND TO ESTABLISH

LEGISLATIVE ACCOUNTABILITY
                               This doctrine states that “if the Constitution of a State distributes the
legislative spheres marked out by specific legislative entries, or if there are limitations on the
legislative authority in the shape of fundamental rights, question do arise as to whether
the legislation in a particular case has not, in respect to the subject-matter of the statute or in
the method of enacting it, transgressed the limits of its Constitutional powers”2.
                   Such transgression may be patent, manifest or direct, but may also be disguised,
covered and indirect and it is to this latter class of cases that the expression
“Colorable Legislation” has been applied in certain judicial pronouncements. It is also
sometimes called as “Legislative Fraud”. In a federal Constitution transgression of its limits
of power by legislation may be i) open, direct and overt OR ii) disguised, indirect and covert.
The latter is termed as Colorable Legislation.  
2
K.C. Gajpati Narain Dev v. State of Orissa AIR 1953 SC 375

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         The doctrine has no application where the powers of a Legislature are not fettered
by any Constitutional limitation.
        The doctrine is also not applicable to subordinate legislation.
                               Doctrine of Colorable Legislation signifies not to identify the color of
the legislation but to identify that whether legislation is making the law under power given
by the law under power given by the Constitution or it is usurping power to make law. So,
laws made in disguise or in coward manner wherein legislature is expressly prohibited in
making such law but law is made in different pretext to achieve the same objective; it is
identified as colorable exercise of legislative power. The simple outcome of the aforesaid
doctrine can be stated as whatever Legislature can’t do directly, he can’t do indirectly.  In
this way Doctrine of Colorable  Legislation take note of Legislative Accountability.

Cases & Justification:

In the leading case of Susannah Sharp v. Wakefield3, Lord Halsbury stated ; “ Discretion
means when it is said that something is to be done with within the discretion of the
authorities that something is to be done according the rules of reason and justice not
according to private opinion….. according to law and not humor. It is to be, not arbitrary,
vague and fanciful, but legal and regular. And it must be exercised within the limits, to
which honest men competent to the discharge of his office ought to confine himself…..”

When a statute uses the word ‘may’ before describing power for e.g. ‘the collector may
confiscate goods’ or ‘the commissioner of police may detain a person’ the word ‘may’
includes freedom of authorities either to act or not to act or to act in one way or the other.

The main Concern of Administration Discretion is the discretionary powers given to the
authorities must be exercised properly in accordance with and within the limits of law
from which it derives the power. As the function of the state becomes increasingly
complex, judicial control of administrative actions has advanced. The courts have to
perform the difficult task of allowing maximum freedom to administrative authorities in
the choice of their responses without letting them act arbitrarily.

3
(1891) AC 173, 179)

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Judicial Review of Administration Discretion has also expanded the match of increasing
power and increasing subtlety of administrative actions implicit in the complex
regulatory function of modern State. The Court of House of Lord in England had laid
down the tests to be met for the exercise of administrative discretion in wednesbury’s
case and later on proportionality test which came in through doors of European
Convention of Human Rights. Courts in India has also travelled the same path with the
exception that proportionality test was a part of Indian law. The Court has extended scope
of Judicial Review by virtually obliterating the distinction between “error of law” and
“error apparent on face of law.”

Merits:

The Doctrine of Administrative Discretion implies power to make a choice between an

alternative course of action or inaction . E.g. A civil servant has discretion whenever the
effective stoppage of authority gives him chance to opt for choice among possible course
of action or inaction. Thus Administrative Discretion is not considered as pure or
absolute evil by it creates room for it.

The Term (discretion) itself implies vigilance, care, caution and circumspection. When
the legislation confers discretion on a court of law or on an administrative authority, it
also imposes responsibility that such discretion is exercised honestly, properly and
reasonably.

Further looking this aspect, few more merits and uses of Administrative Discretionn
could be discovered as such—

a) Speedy enforcement of the object, of giving them such power:

It would be great help to the system of government and is at administrative goal, if the
person whom the power or discretion of power is given with a object, which is achieved
then this indirect evil be considered as an tool to success.

b) One of the celebrated Justice P. N. Bhagwati has narrated his views of discretion in
case of R. D. Shetty v. International Airport Authority of India4, as obiter dicta that,
4
1979 (3) SCR 1014; AIR 1979 SC 1628

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“exercise and discretion is an inseparable part of sound administration and, therefore, the
State which is itself a creation of Constitution, cannot shed its limitation at any sphere of
state activity.”

c) The decision making must be permitted to enjoy as much freedom as possible to

exercise his discretionary power conferred on him by the legislature, with which
executive could excel and could be beneficiary for people on the subject matter related to
development of State. (Infrastructure, Education, Economy, Communication,
Technology, Peace Making, Planning and administration, etc.)

d) Effective mode for speedy trial as we look in current scenario the pendency of cases in
courts is very high and even one of its reason falls executive liable as they play a vital
role in proceedings of a trial. Thus, if discretion is given to them then there are
possibilities of easiness for executives’ administration.

e) Reasonable and Reason makes more effective and constructive—

If the administrators are given discretionary power which oath to be reasonable which
does not exceed their post or suppresses others and does not affect the independency of
organs and suppression of power is maintained. The other side, powers authorized must
be with reason and also its enforcement to be reasoned with infringes the right of other
and creates a climate of burocracy. If these two sides are secured then administrative
discretion would be as Kohinoor in Queen’s Crown.

Abuses or Limitations of Administrative Discretion:

It is more destructive of freedom than any of man’s other invention.

When discretionary powers are submitted to any administrative authority than it must be
handled lawfully. But as Morkose says, “when the mode of exercising a valid power is
improper or unreasonable, there is an abuse of the power.

Eg:- When power is conferred to a officer for some purpose and which is been exercise
by that officer on its own malafied discretion for improper purpose or act in bad faith is
considered as abuse of the power.

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Administrative field is a vast area of work which is necessarily be hold by an office and
to be authorized by discretionary power for making the system running, which does not
means that it to be kept on a thrash hold of total freedom. A sets of control to be imposed
upon it whether it might be Judiciary or Legislative. The wider administrative discretion
delegated to administrator the more chance of occurrence of its limitations. As it is
rightly said, ‘every power tends to corrupt and absolute power tends to corrupt
absolutely.’

Limitations or Abuses of discretion may be inferred in various circumstances:-

a) Vacuum in Jurisdiction –

Exercising power allowed by or delegated to use it would in a given manner or condition,

which is to be followed by the authorities in ambit of law. If discretion in exercising this
power has no limit, than what so ever done to society or with society would be void
For instance even Supreme Court ruled that the University and other like institutes had no
power to compel a minority institute to adopt a particular medium of instruction in
education.

b) Ultra Vires Act –

An administrative authority has been declared his discretionary power and subject matter
that how to apply, where to apply, at what level to apply. But if this authority exceeds
what has been provided in the statutes or provisions enacted for their discretion in sense
of the delegating power. It is the duty of the court to find out whether this authority is
working under a statute and the limit of its power that to be exercised.
For instance, if the relevant regulation and powers the management to dismiss a teacher,
the power cannot be exercised to dismiss the principle.

c) Mala fide Mindset –

Administrative authority must not be exercising their power against the law provided or
exceeds the reasonableness of its substance. Further it must be good faith, in the benefit
of people and lawful. Power exercise is bona fide that it is fine, but if exceed it is
considered bad.

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A power may be exercised maliciously, out of personal animosity, ill-will or vengeance
or fraudulently with intent to achieve an object foreign to the statute.

This malice is classified in two type

1. Malice in fact and

2. Malice in law.

Further the burden of proof will be falling on the person who alleges and the burden is
‘very heavy’. Even benefit of presumption is in favour of administration is a requisite.
But it is the duty of court to consider those allegations; material placed on record against
the administration, the reason is very simple. Principal of natural justice require that no
person should be condemned unheard.

Now question may arise whether this control on Administrative Discretion, can be
applied on pure legislative or quasi-legislative act? The decision of the Supreme Court is
not uniform on that point. It depends upon the malice done in effect of the law or fact.

d) Natural Justice and its Avoidance –

By now, it is well-settled law that even if the exercise of power is purely administrative
in nature if it adversely any person, the principals of natural justice must be observed and
the person concerned must be heard. Violation of the principle of natural justice makes
the exercise of power ultra vires and void.

e) Arbitrary Action—

If the administrative discretion is not profound or under said principle or rule or action
complain of is arbitrary, discriminatory, irrationally, unreasonable or perverse, it can be
set aside in exercise of power of judicial review.

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The absence of arbitrary power is the first essential of rule of law, discretion, when
conferred on executive authorities, must be confined within clearly defined limits. If a
decision is taken without any principle or provision of rule, it cannot be sustain.

f) Collateral Purpose : Improper Object –

Here administrative has a purpose which collateral to improper object. That mean if the
purpose by which it is done is malice and also it is bona fide than the object must not be
ill-will otherwise it may be set aside, if not to be honest.

g) Colourable Legislation –

Colourable Legislation or fraud on constitution means that the Legislature is really not
competent to enact such law under the scheme of the constitution. As explained by
Gajendragadhkar J., the doctrine of Colourable Legislation really postulates that
Legislation attempts to do indirectly what it cannot do directly. In other words, though
the letter of the law is within the limits of the power of the Legislation in substance and in
reality, it has transferred those powers.

h) Unreasonableness –

One of the other destructive tools for abuse of administrative discretion can be considered
as unreasonableness of the administrative authority to administer discretion. The power
conferred by this authority must be reasoned and if not than that act to be considered ultra
vires or void.

Further it is to be understand; is about the term ‘unreasonable’, which is ambiguous and

may be taken in with different things. ‘Reasonableness’ differs according to the
individual to individual, facts to facts, condition to condition, etc.

Unreasonableness may include the malice and evil, which does not, covers the
reasonableness of a normal being. Thus, the expression “unreasonableness” covers a
multitude of sins. Even the onus of proof, that whether act done by Administration was
reasonable, is to be again the court by the petitioner. This means, the burden of proof
remains with the person who brings in the point or challenges such decision as
unreasonable.

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Two reasonable person can reasonably come to opposite conclusion on the same set of
fact without forfeiting their title to regarded as reasonable.

Cases:

Instances when Court has favoured Administrative Discretion (Positive effect)

In Bharat Heavy Electricals Ltd. v. M. Chandrasekhar Reddy5 , in this instant case an
employee has taken an housing loan from the company by depositing the title deeds of
the land, later he tried to get the deed back on forged documents with the intention of
selling the property. The documents were found by the company as forged and after
enquiry the services of the employee was terminated. Nevertheless the Labour Court in
exercise of its discretion quashed the dismissal order on three mitigating circumstances;
(i) there was no previous instance of misconduct (ii) employee is a cultural activist (iii)
punishment of dismissal was harsh. Reversing the order of labour Court for
reinstatement, Supreme Court held that the mitigating circumstances held by the court for
the exercise of its discretion are neither reasonable nor judicious. Exercise of discretion
must be reasonable and within the bounds of Law. Having regard to the above principles,
authority must act in a bona fide manner. The decision could be one of the many choices
but it is for the authority to make choice. Court cannot substitute its choice, no matter a
little play in the joints is certainly possible while dealing with subjective satisfaction.
In M/s Diwan Suger Mills Co Ltd v. India 6a notification issued under SS 4 and 5 of the
suger (Control) Order 1955, compelling factories to sell sugar at a fixed price was upheld.
The prices fixed were neither below the cost of production nor arbitrary. The enabling
Act was also upheld, as it provided for adequate safeguard against abuse of power. The
Central Government was required to give consideration to the factors enumerated in the
Act and this, in the opinion of the court, helped check abuse of power. Where power is
vested in a high official, it is presumed that it will be exercised objectively and hence a
law vesting such power is held to be a reasonable on the rights to carry on trade or

5
2005 (2) SCC 481
6
AIR 1959 SC 626

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business.
In Muni Suvrat-Swami Jain S.M.P Sangh v. Arun Nathuram Gaikwad 7the Supreme Court
held that it cannot direct administrative authority to exercise its discretionary powers in a
particular manner. In the said case a writ petition was filed in the high court against
action of Municipal Corporation in demolishing an unauthorized structure. The high court
issuing the writ of Mandamus directed the authority to demolish the entire illegal and
unauthorized structure. Appealing before the Supreme Court the Municipal Corporation
contended that the Temple Trust has filed a fresh application for registration of Structure
and the same would be disposed off in accordance with the Law. The Supreme Court held
that Municipal Corporation Act gives the authority discretion whether or not to demolish
the unauthorized construction therfore court cannot impend the exercise of that discretion
by a mandatory order. Thus exercise of discretion cannot be clogged by any mandatory
order of the Court though Court can compel the authorities to exercise its discretionary
power when it refuses to exercise.

In Manohar Lal v. State of Maharastra, In this Case Sec. 187-A of the Sea Custom Act
gave wide discretionary powers to the authority to either refer a case of smuggled goods
to a magistrate or to look into matters themselves. The court upheld the constitutionality
of the statute on the ground that as this discretion is to be exercised by senior officer, that
will stand a guarantee against its misuse. This kind of judicial behaviour aimed at
preserving wide discretionary powers may ultimately end up in destroying it.

Instances when Court has not favoured Administrative Discretion (Negative effect)
In G. Sadanandan v. State of Kerala8 , the petitioner challenged his detention order by the
Government on the ground of mala fide exercise of discretion. The facts were brought the
Court to show that the Deputy Superintendent of Police made a false report against the
petitioner who was a wholesale dealer in Kerosene, in order to benefit his relative in the
same trade but eliminating the petitioner from the trade. In absence of a counter affidavit
from the side of the Government the court quashed the order.

7
(2006) 8 SCC 590
8
AIR 1966 SC 1925

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In Himat Lal K Shah v. Commissioner of Police 9 , Rule 7 under Sec 44 of Bombay Police
Act, 1951 gave unguided discretionary power to the police commissioner to grant or
refuse permission for any public meeting held on a public street. The Supreme Court
struck down Rule 7 as being an unreasonable restriction on the exercise of Fundamental
Rights.
In State of Madras v. V.G. Row 10 , Section 15 (2) (b), Criminal Law Amendment Act,
1908 as amended by Madras Act 1950 gave wide discretionary power to the State
Government to declare any association as unlawful. The Court Struck down the section as
being unconstitutional because eit allows the administrative authority to exercise its
discretion on subjective satisfaction without permitting the grounds to be judicially
tested.
In Harakchand Ratanchand Banthia v. Union Of India 11 The Gold Control Act, 1986
gave the administrative authority with a wide discretionary power to grant or refuse to
grant license to any dealer in gold ornaments. Though the act has provided that such
power has to be exercised with reference to the number of existing dealers, anticipated,
demanded, suitability of the application and public interest, the court struck down the law
on the ground that such vague expression may result in the arbitrary exercise of power.
In West Bengal v. Anwar Ali 12 the West Bengal statute provided for special courts to try
cases or classes of cases or offence or classes of offence for speedy trial. Sec 5 (1) of the
special Court’s act was challenged on the ground of equality clause of Art. 14. The Court
held that the said Act did not lay down what types of offences or cases were to be tried by
Special Court. The executive authorities could arbitrarily select a case for trial by the
special court. The court invalidated the law on the ground that the use of vague
expression like ‘speedier trial’ confers a wide discretion on the government and can be
basis of unreasonable classification.

In Satwant Singh v. Associate passport officer13 , the plaintiff’s application for passport
was rejected by the passport officer as the passport Act which gave powers to passport
9
AIR 1973 SC 87 23
10
1952 SCR 597 ; AIR 1952 SC 196
11
[1970] 1 SCR 479
12
AIR 1952 SC 75
13
AIR 1967 SC 1836

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officer to grant or to refuse any passport without any justification or guidelines. The court
held that the exercise of such power was held invalid and the court asked the parliament
to specify the criteria in accordance with which the passport officer was supposed to use
his discretion.

In Sunil Batra v. Delhi Administration14 , the court has pointed out that the detenue or a
prisoner was not denued of all fundamental rights and are entitled to such fundamental
rights as were directly withdrawn as a result of incarceration. The court further provided
the guidelines that the detenue can not exercise the freedom to move throughout the
territory of India [Art 19 (1) (d)] or freedom to reside and settle in any part of territory of
India [Art 19 (1) (e)]. The court further held that the freedom should not be curtailed
beyond what is permissible by prison laws.

In Barium Chemicals Ltd. v. Company Law Board 15, in case of a company the Company
Law Board can under Sec 237 of the Companies Act, 1956 order an investigation into the
affairs of the company if it is of the opinion that the business of the company is being
conducted with intent to defraud its creditors or members or the management of the
company is guilty of fraud, misrepresentation or any other misconduct or the members of
the company have not been given the full information about the affairs of the company.
Company Law Board under Sec 237 ordered an investigation into the affairs of the
plaintiff company. Here the basis of the exercise of discretion for ordering investigation
was that due to faulty planning, the company incurred loss and the value of shares of the
company had fallen and many of the eminent persons resigned from Board of Directors.
The court quashed the order of the Board on the ground that the basis of exercise of
discretion is extraneous to the factors mentioned in Sec 237 for exercise of the discretion.
In S.R. Vennkataraman v. Union of India16 , The appellate was a central Government
officer, he was made prematurely retire from his service in ‘public interest’ under Rule
56 (j) (i) on attaining the age of 50 years. The contention of the appellate was that the

14
(1978) 4 SCC 409
15
AIR 1967 SC 295
16
1979 SCC  (2) 491; 1979 SCR  (2) 202

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government did not apply its mind to her service record and that in the facts and
circumstances of the case the discretion vested under the said rule was not exercised in
furtherance of public interest and that the order was based on extraneous circumstances.
The Government contended that there was nothing on record to justify the order. The
Supreme Court quashed the order of the government and held if a discretionary power
has been exercised for an unauthorized purpose, it is immaterial whether its repository
was acting in good faith or not. An administration action based on reason or fact that does
not exist must be held to be an abuse of the power.

In Rampur Distillery Co. Ltd. v. Company Law Board 17 , The Company Law Board has
wide discretionary powers under Sec 326 of the Companies Act 1956; regarding renewal
of managing agencies. The Company Law Board did not approve the renewal of the
managing agents of the Rampur Distillery. The reason given by the Company Law Board
for their actions was the past conduct of the managing agencies. The company Law
Board held that the Vivian Bose Enquiry Commission has found this managing agency
guilty of gross Misconduct during the year of 1946-1947. The Supreme Court held that it
did not find any fault in taking into consideration the past conduct of the company, but
the court held that the order was bad because the Company Law Board did not take into
consideration the present acts of the managing agency which were very relevant factors
for judging suitability.

Conclusion:

In every field, every sphere, each substance has to be in a reasonable format, by which it
can serve and without which it can extinct.

‘Wide discretion must be in all administrative activity but it should be discretion define in
term which can be measured by legal standards lest cases of manifest injustice go
unheeded and unpunished. Thus, there must be control on the discretionary power of
administration by which law and justice could be up hold as we need ‘Government Laws
and not Government of Men’. This would even be in public interest to; it is not to say that
17
ILR 1969 Delhi 220; [1983] 140 ITR 725

16
Administrative Discretion must be restrained by any of the organ of Government but a
check and balance system must be organized, though this system is found by American
courts. Thus, it is the need for Indian courts to develop as they lack activism of American
courts. In India as like USA there is no Administrative Procedure Act providing for
judicial review on the exercise of Administrative discretion.’

With the rapid growth of administrative law and the need and necessity to control
possible abuse of discretionary power by various administrative authorities, certain
principles have been evolved by courts. If an action taken by any authority is contrary to
law, improper, unreasonable, or irrational, a court of law can interfere with such action by
exercising power of Judicial Review. Thus, the orthodox approach of Indian courts that
they have no power to interfere with the order passed by the administrative authority in
exercise of discretionary power , must be kept aside and new way of dealing this
limitation of Administrative Discretionary to be concentrated for growth and
development of a country.

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