Cooperative Societies v. K. Kunhamu (Chinnappa Reddy, J.)

260 REGISTRAR OF CO-OPERATIVE SOCIETIES, TRIVANDRUM AND ANR. _v._ K. K~BU & ORS. B _November_ 2 7, 1979 [R. S. S.ARKARIA AND 0. CHJNNAPPA REDDY, JJ.] _Administrative law-Delegation_ _of_ _legislative_ _power-A ct_ _confers power on_ _Govern1nent to exempt co-operative society from operation_ _of_ _Act-Delegation_ _if_ _excessive-Madras Cooperatire Societies Act_ 1932, _S._ _60-Whether_ _void._ 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 toi such society with specified modifications. . d In the appeal to this Court on the question whether Se~tion 60 of the Act is void on the ground of unconstitutio_nal delegation of legislative power. HELD : 1. Section 60 is not void on the ground of' excessive delegation of legislative power. [267 CJ 2. The po\vcr given to 11le 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 Bl E 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 1nembers, 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 F 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 Al \, _{_ G 4. (i) Parliament and the State Legislatures are endowed \Vith plenary power to legislate upon any of the subjects entrusted to them by the Constitution, subjectl to the limitations Unposed by the Constitution itself. The· power to legislate carries with it the power to delegate. While excessive delegation may amount to abdication, delegaotion unlimited may invitei despotism uninhibited. The theory has therefore been evolved that the legislature cannot delegate its essential function. [262 H-263 Al (ii) The Parliament and the State Legislatures are not bodies of experts or specialists. They are 8killed in the art of discovering the aspirations, the exB pectations and the needs, the limits to the patience and the aquiescence and the articulation of the views of the people whom they represent. They function best when they concern themselves witli general principles, broad objectives and COOPERATIVE SOCIETIES _v._ K. KUNHAMBU _(Chinnappa_ _Reddy,_ _l.)_ 261 fundamental issues in.stead &f 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 modem life and the ingenuity of modern' man. That is the _raison d'etre_ for delegated legislation. (262 E-G] 8: (iii) The Legislatw·e may guide the delegate by speaking through the express provision empowering delegation or the other provisions of the statute, the pre amble, 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 c: ~tata Policy. (263 BJ _Delhi I.Aws_ _Act_ 1912, [1951J SCR 747 : _M. K. Papiah_ & _Sons_ v. _Excise Com-_ _mwioner_ [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 A/mer_ [19551 1 S.C.R. 735 : _Pandit Banarsi Das Bhanot_ v. _The State_ _of Madhya Pradesh_ Cl.959] S.C.R. 427: _Sardar Inder Singh_ v. _The_ I> _Stale_ _of_ _Rajasthan,_ (1959) S.C.R. 605: _Vasantlal Maganbhai Sanjanwala_ v. _The State_ _of_ _Bombay,_ [1961] 1 S.C.R. 341 : _Jyoti_ _Parslzad_ v. _The Administrator_ _for the Union Territory_ _of_ _Del/Ji_ [1962] 2 S.C.R. 125 : _Mohammad Hussain_ _Gul'lm Mohammad_ v. _The State_ _of_ _Bombay,_ [1962) 2 S.C.R. 659, referred to. CIVIL APPELLATE JURISDICTION: Civil·Appeal No. 1258 of 1969. From the Judgment and Decree dated 17-2-1969 of the Kerala E· 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 stru.ck down by the High Court of Kerala on the ground of 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 jurisdicti~n of the High Court under Article 226 of the Constitution has no longer any surviving interest. The State of Kerala is, however, interested in sus~g the validity of Section 60 and bas fikd. this appeal. Lawyers and judges have never ceased to be interested in the qu~s­ tion of delegated Iegislatioa and since the Delhi Laws Act case, we c. 262 SUPREME COURT REPORTS [1980) 2 S.C.R. l\ have been blessed(?) by an abundance of authority, the blessing no~ necessarily unmixe~. We do not wish, in this case, to search fllr the precise principles decided .in the Delhi Laws Act case, nor to consider whether _N._ _K._ _Papiah_ & _Sons_ v. _Excise· Commissioner(_ _[1]_ _)_ beats t!:t.e final retreat from the earlier position. For the purposes of this case we are content to accept the "policy" and "guidelines". theory and seek 1l 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 ex.action of taxes and the defence of its frontiers. _It_ is now the function of the -C State to secure to its citizens 'Social, economic and political justice', to preserve 'liberty of thought, expression, belief, faith and worship,' arid 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 ·D Principles of State Policy. The desire! to attain these objectives has necessarily resulted in intense legislative activity touching every ~pect 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 Par liament and the State Legislatures are not bodies of experts or special' rE ists. They are skilled in the art of discovering the aspirations, the expectations and the needs, the limits to the patience and the acquiescence and tlie articulation of the views of the people whom they re present. 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 bclter ··P 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 com-G plexity of modem life and the ingenuity of modem m?n. That is the raison _d'etre_ for delegated legislation. That is what makes delegated legislation inevitable and indispensable. The Indian Parliament and the Stafu 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 ,R legislate cirries with it the power to delegate. But excessive delegation may amount to abdication. Delegation unlimited may invite (1) [1975} 3 S.C.R. 607. ### . ?Jo~-13· Tl'i <:OOPERATJVf SOCIETIES~- K. KUN°!iAMBU _(Chinnappa_ _Reddy,!.)_ 263 despotism uninhibited. So the theory has been evolved that the legislature cannot delegate its essential legislative 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 guid~ the delegate by speaking through the express provision empowering delegation or the other provisions of the statute, the preamble, the scheme or ~ven 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 ~~ 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_ _Pra-_ _desh,_ (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: A B c D E G ###### e " .... the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formuhi.tion as ·a rule of conduct. The Legislature must declare the policy of the law and the legal principles which oce control any given cases and must provide a standard #### '° ~ 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 pre- . sent 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". Iri _The_ _Edward Mills_ _Co._ _Ltd.,_ _Beawar_ v. _The_ _State_ _of Ajmer('),_ •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 whicl1 it was in its opinion that minimum wages should be fixed exceeded th~ - (J) [1955] 1 S.C.R. p. 380 at 388. (2) [1959] 1 S.C.R. 735. A B ##### c D E F G 264 SUPREME COURT REPORTS [1980] 2 s.c.R. limits of permissible delegiition 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 ve.."'j · low. In enacting s. 27 there was, therefore, no delegation of essential legislative power. . In _Pandit Banarsi_ _Das_ _Bhanot_ v. _The State of Madhya_ Prades/z(')~ this Court held that it was not unconstitutional for the Legislature to leave it to the Executive tc> 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 chruged in respect of different classes of goods and the selection of goods in respect of which exemption from taxation might be granted etc. etc. In _Sardar lnder 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 t.'iat there was impermissible delegation of legislative power was repelled on the ground. that the Preamble to t!he Ordinance set out with sufficient clarity the policy of the Legislature. nomic and social conditions of peasants and ensure the full and efficient nse 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. In _Vasantal Maganbhai Sanjanwala_ v. _The State_ _of_ Bombay(•);-~ s. 6 (2) of the Bombay Tenancy & Agricultural Lands Act was challenged as. permitting excessive delegiition of legislative power as it enabled the Government to fix a lower rate of the maximum rent pay .. able by the tenants of lands situate in any particular area or to lb: such rate on any snitable cases as it thought fit. This Court noticed that the Act was undonbtedly a beneficent measure, as shown by the Preamble which stated that the object of the Act was to improve the eco ' (1) [1959! S.C.R. 427 (2) [1957] S.C.R. 605. (3) [1961] 1 S.C.R. 341. COOl'UATIVE SOCIETIES _V·_ K. KUNHAMBU _(Chinnappa Reddy,_ J.) 265 _**In**_ _Jyoti Pershad_ v. _The Administrator_ _for_ _the Union Te"itories of_ **A** _Delhi,(')_ Rajagopala Ayyangar, J. made some useful observations which may be extracted here _:_ In _Mohammad Hussain Gulam Mohammad_ v. _The State_ _of_ _Bam-_ _by,(')_ 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 pfocluce specified in the schedule in accordance with prevailing local conditions, The attack was on the gronnd 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 "In regard to this matter we desire to make two observations. In the context of modem tonditions and the variety and complexity of the situations which present themselves for wlution, 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 Jong therefore as the Legislature in~icates, in the operative provisions of the st>atute 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, a.IIords no basis either for the contention that there has been an excessive delegation of legislative power 11s to amount to an abdication of its functions, or that the discretion vested is uncanalised and unguided as to amonnt to a _carte blanche_ to discriminate. The second is tl:rat if the power or discretion has been conferred in a manner which is legal and constitutional, tho fact that Parliament could possibly have made more detailed provisions, could obviously not be a ground for invalidating the law." ,) ' ,, ' **B** **c** **D** **F** G **H** - 1 [1 item of agricultural produce should be put into the schedule, never-] -,Meless upheld its vires on the 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 (I) [1962] 2 S.C.R. 125. \( (2l [I 0~21 2 S.C.R. _659_ 18--'-868SCI/79 •~ _**!!!At.I.•**_ .. '' ' _A_ B ###### c D E F G H tered 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 ex- f -. cept to say that they are generally designed to further the objectives ## s• ' • out in the oreamble. But, numerous as the provisions are, they are no~- · · capable of meeting the extensive demands of the complex situations which may arise in the course of the working of the Act and the forma- tion and the functioning of the societies. In fact, the too rigorous application of some of the provisions of the Act may itself occasionaly result 266 SUPREME COURT REPORTS [1980] 2 s.c.R. 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 [1] general or special order, exenipt any registered society from any of the provisions of this Act or may direct that such provisions shall apply to such society with such' modifiC'ations 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 _' .. t"i_ 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 regis L COOPERATIVE SOCIETIES _v._ K. KUNHAMBU _(Chinnappa Reddy,_ _J.)_ 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 relaoc the oreasional 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 gleoaned from the preamble and other provisions which we have --. ~'already pointed **out,** **are** **clear.**, : . **·J** We are therefore of the view that s. 60 is not void on the ground **B** **c** of excessive delegation of legislative power. We so declare and otherwise dismiss the appeal, N.V,K. _Appeal dismissed ._ ##### • ##### •