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PETITIONER: REGISTRAR OF CO-OPERATIVE SOCIETIES, TRIVANDRUM AND ANR.

       Vs.

RESPONDENT: K. KUNHAMBU & ORS

DATE OF JUDGMENT27/11/1979

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) SARKARIA, RANJIT SINGH

CITATION:  1980 AIR  350            1980 SCR  (2) 260  1980 SCC  (1) 340  CITATOR INFO :  R          1990 SC 560  (13,15)  RF         1991 SC2160  (23)

ACT:      Administrative law-Delegation  of legislative power-Act confers power  on Government  to exempt co-operative society from  operation   of  Act-Delegation   if   excessive-Madras Cooperative Societies Act 1932, S. 60-Whether void.

HEADNOTE:      Section 60  of the  Madras Cooperative  Societies  Act, 1932, empowers  the State  Government to exempt a registered society from  any of  the provisions of the Act or to direct that  such  provision  shall  apply  to  such  society  with specified modifications.      In the  appeal to  this Court  on the  question whether Section  60   of  the   Act  is   void  on   the  ground  of unconstitutional delegation of legislative power. ^      HELD: 1.  Section 60  is not  void  on  the  ground  of excessive delegation of legislative power. [267 C]      2. The  power given  to the Government under section 60 of the  Act is  to be  exercised so as to advance the policy and  objects   of  the  Act,  according  to  the  guidelines enunciated in  the preamble  and the other provisions of the Act.[267 B]      3. The  Act, a  welfare legislation,  to facilitate the formation and  working of  cooperative societies consists of numerous provisions, dealing with registration of societies, rights and  liabilities of  members,  duties  of  registered societies, privileges  of registered societies, property and funds  of  registered  societies,  inquiry  and  inspection, supersession of  committees  of  societies,  dissolution  of societies, surcharge  and attachment,  arbitration etc.  The too rigorous  application of  some of  the provisions of the Act may  itself occasionally  result in frustrating the very objects of the Act instead of advancing them. To provide for such situations,  the Government  was invested by section 60 with  a   power  to  relax  the  occasional  rigour  of  the provisions of  the Act  and to  advance the  objects of  the Act.[266 D, G; H 277 A]      4.  (i)  Parliament  and  the  State  Legislatures  are

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endowed with  plenary power  to legislate  upon any  of  the subjects entrusted  to them  by the Constitution, subject to the limitations  imposed by  the  Constitution  itself.  The power to  legislate carries  with it  the power to delegate. While  excessive   delegation  may   amount  to  abdication, delegation unlimited  may invite  despotism uninhibited. The theory has  therefore  been  evolved  that  the  legislature cannot delegate its essential function. [262 H-263 A]      (ii) The  Parliament and the State Legislatures are not bodies of  experts or  specialists. They  are skilled in the art of discovering the aspirations, the expectations and the needs, the  limits to  the patience and the acquiescence and the articulation  of the  views  of  the  people  whom  they represent. They  function best  when they concern themselves with general principles, broad objectives and 261 fundamental issues  instead  of  technical  and  situational intricacies which  are better  left to  better equipped full time expert executive bodies and specialist public servants. Parliament and  the State Legislatures have neither the time nor the expertise to be involved in detail and circumstance. Nor can  Parliament and the State Legislatures visualise and provide  for  new,  strange,  unforeseen  and  unpredictable situations arising  from the  complexity of  modern life and the ingenuity  of modern  man. That is the raison d’etre for delegated legislation. [262 E-G]      (iii)  The   Legislature  may  guide  the  delegate  by speaking through the express provision empowering delegation or the  other provisions  of the  statute, the preamble, the scheme or  even the  very subject  matter of the statute. If guidance there  is, wherever  it may be found the delegation is valid.  A  generous  degree  of  latitude  must  be  held permissible in the case of welfare legislation, particularly these statutes  which are  designed to further the Directive Principles of State Policy. [263 B]      Delhi Laws  Act 1912,  [1951] SCR  747: M.  K. Papiah & Sons v.  Excise Commissioner  [1975] 3  SCR 607: Harishankar Bagla and  Anr. v.  The State  of Madhya  Pradesh  [1955]  1 S.C.R., p.  380 @  388: The Edward Mills Co. Ltd., Beawar v. The State  of Ajmer  [1955] 1 S.C.R. 735: Pandit Banarsi Das Bhanot v.  The State  of Madhya  Pradesh [1959]  S.C.R. 427: Sardar Inder  Singh v.  The State of Rajasthan, [1959] S.C.R 605: Vasantlal  Maganbhai Sanjanwala v. The State of Bombay, [1961] 1  S.C.R. 341:  Jyoti Prasad v. The Administrator for the Union  Territory of  Delhi [1962] 2 S.C.R. 125: Mohammad Hussain Gulam  Mohammad v.  The State  of Bombay,  [1962]  2 S.C.R. 659, referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1258 of 1969.      From the  Judgment and  Decree dated  17-2-1969 of  the Kerala High Court in Writ Appeal No. 45 of 1968.      V. A.  Seyid  Mohammed  and  K.  M.  K.  Nair  for  the Appellant.      Ex-Parte for the Respondent.      The Judgment of the Court was delivered by      CHINNAPPA REDDY,  J.-The perennial,  nagging problem of delegated legislation  and the  so-called Henry  VIII clause have again  come up for decision in this appeal by the State of Kerala.  Section 60  of the  Madras Cooperative Societies Act 1932 and a notification issued under that provision were struck down  by the  High Court  of Kerala  on the ground of

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unconstitutional delegation  of legislative  power.  Certain consequential directions  were issued  by  the  High  Court. Those directions  have long  since worked themselves out and so the  party who invoked the jurisdiction of the High Court under Article  226 of  the Constitution  has no  longer  any surviving  interest.   The  State  of  Kerala  is,  however, interested in  sustaining the validity of Section 60 and has filed this appeal.      Lawyers and  judges have  never ceased to be interested in the question of delegated legislation and since the Delhi Laws Act case, we 262 have been  blessed(?) by  an  abundance  of  authority,  the blessing not  necessarily unmixed.  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(1) beats the final retreat from the earlier  position. For  the purposes of this case we are content to  accept the  "policy" and "guidelines" theory and seek such  assistance as we may derive from cases where near identical provisions have been considered.      It is  trite to  say that the function of the State has long since  ceased to be confined to the preservation of the public peace,  the exaction  of taxes and the defence of its frontiers. It  is now the function of the State to secure to its citizens  ’Social, economic  and political  justice’, to preserve ’liberty  of thought, expression, belief, faith and worship,’  and   to  ensure   ’equity  of   status  and   of opportunity’ and  ’the dignity  of the  individual’ and  the ’unity of  the nation.  That is  what the  Preamble  to  our Constitution says  and that is what is elaborated in the two vital chapters of the Constitution on Fundamental Rights and Directive Principles  of State  Policy. The desire to attain these  objectives   has  necessarily   resulted  in  intense legislative activity  touching every  aspect of  the life of the citizen  and the nation. Executive activity in the field of delegated  or subordinate  legislation has  increased  in direct, geometric  progression. It has to be and it is as it should be. The Parliament and the State Legislatures are not bodies of  experts or  specialists. They  are skilled in the art of discovering the aspirations, the expectations and the needs, the  limits to  the patience and the acquiescence and the articulation  of the  views  of  the  people  whom  they represent. They  function best  when they concern themselves with general  principles, broad  objectives and  fundamental issues instead  of  technical  and  situational  intricacies which are  better left  to better  equipped full time expert executive bodies  and specialist public servants. Parliament and the  State Legislatures  have neither  the time  nor the expertise to be involved in detail and circumstance. Nor can Parliament and  the State Legislatures visualise and provide for new,  strange, unforeseen  and unpredictable  situations arising from the complexity of modern life and the ingenuity of modern  man. That  is the  raison  d’etre  for  delegated legislation.  That   is  what  makes  delegated  legislation inevitable and  indispensable. The Indian Parliament and the State  Legislatures   are  endowed  with  plenary  power  to legislate upon  any of the subjects entrusted to them by the Constitution, subject  to the  limitations  imposed  by  the Constitution itself.  The power to legislate carries with it the power  to delegate.  But excessive delegation may amount to abdication. Delegation unlimited may invite 263 despotism uninhibited.  So the  theory has been evolved that the legislature  cannot delegate  its essential  legislative

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function. Legislate  it  must  by  laying  down  policy  and principle and  delegate it  may to  fill in detail and carry out policy.  The  legislature  may  guide  the  delegate  by speaking through the express provision empowering delegation or the  other provisions  of the  statute, the preamble, the scheme or  even the  very subject  matter of the statute. If guidance there  is, wherever it may be found, the delegation is valid.  A good  deal of  latitude has  been  held  to  be permissible in  the case  of taxing statutes and on the same principle a  generous degree of latitude must be permissible in the  case  of  welfare  legislation,  particularly  those statutes  which   are  designed  to  further  the  Directive Principles of State Policy.      In Harishankar  Bagla and  Anr. v.  The State of Madhya Pradesh,(1) the  question arose  whether Section  3  of  the Essential  Supplies  (Temporary  Powers)  Act,  1946,  which empowered the  Central Government  to make  orders providing for the  regulation or prohibition of the production, supply and distribution  of essential  commodities  and  trade  and commerce therein  was void  for  excessive  delegation.  The Court said it was not and observed:           "....the legislature  cannot delegate its function      of laying  down legislative  policy  in  respect  of  a      measure and  its formulation  as a rule of conduct. The      Legislature must  declare the policy of the law and the      legal principles  which are  to control any given cases      and must  provide a  standard to guide the officials or      the body  in power  to execute  the law.  The essential      legislative function  consists in  the determination or      choice  of  the  legislative  policy  and  of  formally      enacting that policy into a binding rule of conduct. In      the present  case the  legislature has laid down such a      principle and  that principle  is  the  maintenance  or      increase in  supply of  essential  commodities  and  of      securing equitable  distribution  and  availability  at      fair  prices.   The  principle   is  clear  and  offers      sufficient  guidance   to  the  Central  Government  in      exercising its powers under section 3".      In The  Edward Mills  Co. Ltd.,  Beawar v. The State of Ajmer(2), this  Court considered  the question whether s. 27 of the  Minimum Wages Act under which power was given to the Government to  add  to  either  part  of  the  schedule  any employment in  respect of  which it  was in its opinion that minimum wages should be fixed exceeded the 264 limits  of   permissible  delegation   and  was,  therefore, unconstitutional. The Court held that the legislative policy was apparent on the face of the enactment which aimed at the statutory fixation  of minimum  wages with a view to obviate the chance  of exploitation  of labour. The intention of the Legislature was  not to  apply the Act to all industries but only to  those industries  where by  reason  of  unorganised labour  or   want  of   proper  arrangements  for  effective regulation of  wages  or  for  other  causes  the  wages  of labourers  in  a  particular  industry  were  very  low.  In enacting s.  27  there  was,  therefore,  no  delegation  of essential legislative power.      In Pandit  Banarsi Das  Bhanot v.  The State  of Madhya Pradesh(1), this Court held that it was not unconstitutional for  the  Legislature  to  leave  it  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 laid, the  rates at  which it is to be charged in respect of different classes  of goods  and the  selection of  goods in respect of  which exemption  from taxation  might be granted

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etc. etc.      In Sardar Inder Singh v. The State of Rajasthan(2), the validity of  s.15 of  the Rajasthan  (Protection of Tenants) Ordinance which  authorised the  Government  to  exempt  any person or class of persons from the operation of the Act was upheld  and   the  argument  that  there  was  impermissible delegation of  legislative power  was repelled on the ground that the  Preamble to  the Ordinance set out with sufficient clarity the policy of the Legislature.      In  Vasantal  Maganbhai  Sanjanwala  v.  The  State  of Bombay(3), s.  6 (2)  of the  Bombay Tenancy  & Agricultural Lands Act  was challenged as permitting excessive delegation of legislative  power as  it enabled the Government to fix a lower rate  of the  maximum rent  payable by  the tenants of lands situate  in any particular area or to fix such rate on any suitable  cases as  it thought  fit. This  Court noticed that the  Act was undoubtedly a beneficent measure, as shown by the  Preamble which stated that the object of the Act was to improve  the economic  and social  conditions of peasants and  ensure   the  full   and  efficient  use  of  land  for agricultural. Bearing  in mind the Preamble and the material provisions of  the Act, it was held that the power delegated was within permissible limits. 265      In Jyoti  Pershad v.  The Administrator  for the  Union Territories of  Delhi,(1) Rajagopala  Ayyangar, J. made some useful observations which may be extracted here:           "In regard  to this  matter we  desire to make two      observations. In  the context  of modern conditions and      the variety  and complexity  of  the  situations  which      present themselves for solution, it is not possible for      the Legislature to envisage in detail every possibility      and make provisions for them. The Legislature therefore      is forced  to leave  the authorities  created by  it an      ample discretion  limited,  however,  by  the  guidance      afforded by  the Act.  This is  the ratio  of delegated      legislation, and  is a  process which has come to stay,      and which  one may  be  permitted  to  observe  is  not      without  its  advantages.  So  long  therefore  as  the      Legislature indicates,  in the  operative provisions of      the statute  with certainty,  the policy and purpose of      the enactment,  the mere  fact that  the legislation is      skeletal, or  the fact  that a  discretion is  left  to      those entrusted  with administering the law, affords no      basis either  for the contention that there has been an      excessive delegation  of legislative power as to amount      to  an   abdication  of  its  functions,  or  that  the      discretion vested  is uncanalised  and unguided  as  to      amount to  a carte  blanche to discriminate. The second      is that  if the  power or discretion has been conferred      in a manner which is legal and constitutional, the fact      that Parliament  could possibly have made more detailed      provisions,  could   obviously  not  be  a  ground  for      invalidating the law."      In Mohammad  Hussain Gulam  Mohammad v.  The  State  of Bombay,(2) the  question was about the vires of s. 29 of the Bombay Agricultural  Produce Markets  Act. It  gave power to the State  Government to  add to, or amend, or cancel any of the items  of agricultural produce specified in the schedule in accordance  with prevailing  local conditions. The attack was on  the ground that legislative power had been delegated to an  extent not permissible. The Court while noticing that s.  29   itself  did  not  provide  for  any  criterion  for determining which item of agricultural produce should be put into the  schedule, nevertheless  upheld its  vires  on  the

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ground  that   guidance  was   writ  large  in  the  various provisions and  the scheme  of the Act. It was observed that in each  case the  State Government  had to consider whether the 266 volume of  trade in  the produce  was of such a nature as to give rise to wholesale trade so as to merit inclusion in the schedule.      Let us  now turn  to s.  60 of  the Madras  Cooperative Societies Act,  1932 whose vires is in question and which is as follows:-           "S. 60:  The State  Government may,  by general or      special order,  exempt any  registered society from any      of the  provisions of  this Act or may direct that such      provisions  shall  apply  to  such  society  with  such      modifications as may be specified in the order." The provision  is a near Henry VIII clause. But to give it a name is  not to  hang it.  We must examine the preamble, the scheme and  other available material to see if there are any discernible guidelines.  Sure the  Cooperative Societies Act is a welfare legislation. Its preamble proclaims:           "Whereas it is expedient further to facilitate the      formation and working of co-operative societies for the      promotion of  thrift, self-help  and mutual  aid  among      agriculturists and  other persons  with common economic      needs so  as  to  bring  about  better  living,  better      business and  better methods of production and for that      purpose to  consolidate and  amend the  law relating to      co-operative societies in the State of Madras."      The  policy  of  the  Act  is  there  and  so  are  the guidelines.  Why   the  legislation  ?  "To  facilitate  the formation and working of Cooperative Societies". Cooperative Societies, for  what purpose ? "For the promotion of thrift, self-help  and   mutual  aid".   Amongst   whom   ?   "Among agriculturists  and   other  persons  with  common  economic needs". To  what end ? "To bring about better living, better business and  better methods  of production". The objectives are clear;  the guidelines  are there.  There  are  numerous provisions  of   the  Act   dealing  with   registration  of societies, rights  and liabilities  of  members,  duties  of registered societies,  privileges of  registered  societies, property and  funds of  registered  societies,  inquiry  and inspection,  supersession   of  committees   of   societies, dissolution  of   societies,   surcharge   and   attachment, arbitration etc. We refrain from referring to the details of the  provisions  except  to  say  that  they  are  generally designed to  further the objectives set out in the preamble. But, numerous as the provisions are, they are not capable of meeting the  extensive demands  of  the  complex  situations which may  arise in the course of the working of the Act and the formation and the functioning of the societies. In fact, the too  rigorous application  of some  of the provisions of the Act may itself occasionally result 267 in frustrating  the very  objects  of  the  Act  instead  of advancing them.  It is  to provide  for such situations that the Government  is invested  by s.  60 with a power to relax the occasional  rigour of  the provisions  of the Act and to advance the  objects of  the Act.  Section 60  empowers  the State Government  to exempt a registered society from any of the provisions  of the  Act or to direct that such provision shall apply  to such  society with  specified modifications. The power  given to the Government under s. 60 of the Act is to be  exercised so  as to advance the policy and objects of the Act,  according to the guidelines as may be gleaned from

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the preamble  and other  provisions which  we  have  already pointed out, are clear.      We are  therefore of the view that s. 60 is not void on the ground  of excessive delegation of legislative power. We so declare and otherwise dismiss the appeal. N.V.K.                                     Appeal dismissed. 268