Excessive Delegation: Permissible and Impermissible Delegation

Impermissible delegation

The following may not be delegated.

1. The essential legislative function, that is, the determination of policy and its formulation as a rule of conduct.
2. Repeal of an Act. The power to repeal is legislative in the fullest sense.
3. Modification touching policy. Modification is permissible as machinery; it becomes impermissible when it alters the essential character of the Act.
4. Power to impose a tax, except that the rate may be left within limits fixed by the legislature and on a stated principle.
5. Ouster of jurisdiction of the courts.
6. Retrospective operation, unless the parent Act expressly confers it, since a rule made under a general power ordinarily operates prospectively only.
7. A wide Henry VIII clause, permitting the delegate to modify the parent Act itself without limit.

The cases, worked

Delegation struck down for want of any standard

Facts. Hamdard Dawakhana (Wakf) Lal Kuan v. Union of India, AIR 1960 SC 554, concerned the Drugs and Magic Remedies (Objectionable Advertisements) Act 1954, which prohibited advertisements commending drugs for the treatment of the diseases and conditions listed in section 3. Clause (d) of section 3 covered venereal disease "or any other disease or condition which may be specified in the rules made under this Act", and section 16 conferred the rule making power, sub-section (2)(a) authorising the specification of diseases to which section 3 would apply. A manufacturer of Ayurvedic medicines challenged the Act.

Held. The Act as a whole was upheld: its object was to prevent self-medication and self-treatment, a commercial advertisement of one's own business is not part of the freedom of speech under Article 19(1)(a), and the restrictions were otherwise reasonable. But the words "or any other disease or condition which may be specified in the rules made under this Act" in clause (d) of section 3 were ultra vires as conferring uncanalised and uncontrolled power on the executive. Parliament had established no criteria and no standards, had prescribed no principle on which a particular disease was to be specified, and had not stated what facts or circumstances were to be taken into account. The specification therefore went beyond the permissible boundaries of valid delegation, and the Schedule to the rules fell with it. The words were severable, so the rest of section 3 stood.

Why it matters. It is the standard example of delegation struck down, and note precisely what was struck down: not the rule making power in section 16, but the substantive words in section 3 that gave the executive the choice of what the Act should cover. That is the policy question.

Delegation upheld because the policy was in the section

Facts. Gwalior Rayon Silk Mfg (Wvg) Co. Ltd v. Assistant Commissioner of Sales Tax, AIR 1974 SC 1660, concerned section 8(2)(b) of the Central Sales Tax Act 1956, which provided that tax on inter-State sales of goods other than declared goods, not falling within section 8(1), should be calculated at ten per cent or at the rate applicable inside the appropriate State, whichever was higher. Four appeals raised the single question whether that suffered from excessive delegation, on the ground that Parliament had not fixed the rate itself but had adopted the State rate, and so had laid down no policy and had abdicated.

Held. The appeals were dismissed. There is a clear legislative policy in section 8(2)(b) itself: where the local rate is below ten per cent the dealer pays ten per cent, and where it exceeds ten per cent the Central rate matches it, so that the Central rate is in no event less than the local rate. The object is to prevent an unregistered dealer purchasing in inter-State trade from being better placed than an intra-State purchaser.

Why it matters. It shows the test being applied the other way, and it shows where policy may be found: inside the impugned provision itself, read for its object. Set it against Hamdard Dawakhana and the difference is visible at once. In Hamdard Dawakhana nothing in the Act told the executive which diseases to choose. In Gwalior Rayon the section told the reader exactly what result was intended in every case.

The foundation

Facts. In re The Delhi Laws Act, 1912, AIR 1951 SC 332, was a Presidential reference under Article 143(1) on three provisions empowering the executive to extend to a territory, with such restrictions and modifications as it thought fit, enactments in force elsewhere; the third, section 2 of the Part C States (Laws) Act 1950, went further and allowed an extended enactment to repeal or amend a corresponding law already applicable.

Held. The first two provisions were wholly intra vires. The later portion of section 2 of the Part C States (Laws) Act 1950 was ultra vires. Kania CJ held that the essentials of a legislative function are the determination of the legislative policy and its formulation as a rule of conduct, that once the legislature has made its law the detail of working it out may be left to a subordinate agency, and that an abdication by a legislature need not be complete effacement and may be partial.

Why it matters here. It is the source of the test, and its treatment of the repeal power is the source of the rule that repeal may not be delegated.

A worked example: four rule making sections compared

The State legislature enacts the Maharashtra Private Coaching Classes (Regulation) Act. Consider four possible sections.

Section A. "No person shall conduct a coaching class except under a licence. A licence shall be granted to an applicant who has premises of not less than the prescribed area, a fire safety certificate and the prescribed teacher to student ratio. The State Government may make rules prescribing the area, the ratio and the form of application." Valid. The legislature has decided the policy, that coaching classes shall be licensed and on what kinds of criteria. The delegate fills in figures.

Section B. "The State Government may make rules regulating coaching classes in such manner as it thinks fit." Bad. The Act contains no policy at all. Whether classes should be licensed, taxed, capped or left alone is left entirely to the delegate. This is Hamdard Dawakhana in a different subject.

Section C. "The State Government may, by notification, exempt any coaching class or class of coaching classes from all or any of the provisions of this Act." Bad as framed, because no criterion is given for exemption, so the delegate decides who the Act applies to, which is the policy. It would be saved by adding "where it is satisfied that the class is conducted solely for students from families below the poverty line", because that is a standard.

Section D. "The State Government may make rules, and such rules may modify any provision of this Act so far as may be necessary to remove any difficulty in giving effect to it, provided no such rule shall be made after two years from the commencement of this Act and every such rule shall be laid before the State legislature." Valid, though at the edge. It is a Henry VIII clause, but it is confined to removing difficulties, limited to two years and subject to laying. Compare an unqualified power to modify the Act, which would be abdication.

What beginners get wrong

Confusing an attack on the Act with an attack on the rule. Excessive delegation attacks the parent Act: it says the legislature gave away too much. Ultra vires attacks the rule: it says the delegate took more than it was given. A question asking whether a rule is valid because it goes beyond the Act is not a question about excessive delegation at all. See [Judicial Control over Delegated Legislation].

Thinking a wide power is automatically bad. Very wide powers are regularly upheld. Gwalior Rayon upheld a provision that adopted a rate fixed by another legislature altogether. Width is evidence; absence of policy is the test.

Looking for the policy only in the impugned section. It may be in the preamble, the long title or the scheme of the Act as a whole.

Assuming that because the Act is valid the rule must be. They are separate questions with separate answers.

Distinctions worth having straight

Quick revision

1. Delegation is excessive when the legislature leaves the delegate to determine policy.
2. Two formulations, one test: the essential legislative function, and policy with guidelines.
3. Permissible: commencement, extension, inclusion in a schedule on stated criteria, suspension, detail, modification not touching policy, and a confined removal of difficulties clause.
4. Impermissible: the essential legislative function, repeal, modification touching policy, taxation without limits or principle, ouster of the courts, retrospectivity without express authority, and an unlimited Henry VIII clause.
5. In re The Delhi Laws Act, 1912, AIR 1951 SC 332: the source of the test; the power to repeal an existing law could not be delegated.
6. Hamdard Dawakhana (Wakf) Lal Kuan v. Union of India, AIR 1960 SC 554: words allowing the executive to add "any other disease" were uncanalised and uncontrolled and were struck down; no criteria, no standards, no principle.
7. Gwalior Rayon Silk Mfg (Wvg) Co. Ltd v. Assistant Commissioner of Sales Tax, AIR 1974 SC 1660: policy was found in the impugned section itself, so the provision was upheld.
8. Excessive delegation attacks the Act; ultra vires attacks the rule.

Test yourself

1. Explain the doctrine of excessive delegation with decided cases. A legislature may delegate rule making power but may not delegate its essential legislative function, which is the determination of the legislative policy and its formulation as a rule of conduct: In re The Delhi Laws Act, 1912, AIR 1951 SC 332. Delegation is excessive where the Act supplies no policy, standard or guideline, so that the delegate must settle the policy itself. In Hamdard Dawakhana (Wakf) Lal Kuan v. Union of India, AIR 1960 SC 554, words in section 3(d) of the Drugs and Magic Remedies (Objectionable Advertisements) Act 1954 which allowed the executive to specify "any other disease or condition" were struck down as conferring uncanalised and uncontrolled power, because Parliament had established no criteria, no standards and no principle. By contrast, in Gwalior Rayon Silk Mfg (Wvg) Co. Ltd v. Assistant Commissioner of Sales Tax, AIR 1974 SC 1660, section 8(2)(b) of the Central Sales Tax Act 1956 was upheld, because the policy, that the Central rate should never be less than the local rate, was apparent in the section itself.

2. What may and may not be delegated? Permissible: the power to appoint the date of commencement; to extend the Act to areas or classes on stated criteria; to add to or remove from a schedule where the Act supplies the basis; to suspend a provision in stated circumstances; to prescribe forms, fees, procedure and other detail; to apply an existing law with modifications not touching policy; and to remove difficulties, if the power is confined and time limited. Impermissible: the essential legislative function; the power to repeal an Act; modification which alters the policy or essential character of the Act; the imposition of a tax without limits or a stated principle; the ouster of the jurisdiction of the courts; retrospective operation absent express authority; and an unlimited power to modify the parent Act.

3. Where can a court find the policy of an Act? In the impugned section itself read for its object, as in Gwalior Rayon Silk Mfg (Wvg) Co. Ltd v. Assistant Commissioner of Sales Tax, AIR 1974 SC 1660; and otherwise in the preamble, the long title, the definitions, and the scheme of the Act read as a whole. An Act is therefore not invalid merely because the enabling section is brief, and a delegation is not saved merely because the enabling section is long.

4. Distinguish excessive delegation from a rule being ultra vires. Excessive delegation is an attack on the parent Act: the complaint is that the legislature failed to lay down policy and so handed its essential function to the delegate. If it succeeds, the delegating provision is void and the rules made under it fall with it. A rule being ultra vires is an attack on the rule: the complaint is that the delegate exceeded the power conferred. If it succeeds, the rule is void but the Act stands. The two are frequently confused and require different arguments.

5. Is a Henry VIII clause always bad? No. A clause allowing the executive to modify the Act itself is the most criticised form of delegation, because it lets the delegate alter the instrument that confines it, and an unlimited power of that kind is abdication. But a narrow removal of difficulties clause, confined to what is necessary to give effect to the Act, limited in time and subject to laying before the legislature, is ordinarily valid. The Committee on Ministers' Powers recommended precisely that such powers be used only where essential and for a limited period.