Colourable Legislation and Incidental Encroachment
Chapter Eight
Syllabus topic 1, "Federalism".
Pages 34 to 38 of 304
In one line
A legislature cannot do indirectly what it cannot do directly, so a law dressed up as being about its own subject, while really being about somebody else's, is void; but a law genuinely about its own subject is not void merely because it spills over.
In the wording a student can write in an exam: the doctrine of colourable legislation rests on the maxim that what cannot be done directly cannot be done indirectly. Where a legislature lacks competence over a subject, it cannot acquire competence by giving its law the appearance of legislation on a subject within its own field. The doctrine does not enquire into the bona fides or the motive of the legislature; it asks only whether the legislature had the power to enact what, in substance, it has enacted. It is therefore the negative counterpart of the doctrine of pith and substance: pith and substance saves a law whose true nature is within power, colourable legislation strikes down a law whose true nature is outside it.
The maxim, and what it actually means
The doctrine is usually introduced with the Latin: quando aliquid prohibetur ex directo, prohibetur et per obliquum, when anything is prohibited directly, it is prohibited also indirectly.
Applied to a federal constitution the idea is simple. Legislative power is limited by subject matter. If a limit could be avoided by drafting, the limit would be worth nothing, because any competent draftsman can make a law about A look like a law about B. So the court looks past the form to the substance.
But two clarifications have to be made straight away, because both are examined.
"Colourable" does not mean dishonest. The word describes the law, not the legislators. A legislature may act in perfect good faith, believing the subject to be its own, and still produce colourable legislation, because the question is one of competence and not of conduct. The standard judicial formulation is that the whole doctrine resolves itself into the question of whether the legislature possessed the power to make the law, and that the idea of colourability has nothing to do with the motive or bona fides of the legislature.
Motive is irrelevant, and so is the merit of the law. A court examining competence does not ask whether the law is wise, necessary or fair. If the legislature had power, a bad law is valid; if it had none, a good law is void.
Colourable legislation and pith and substance are one enquiry
Students often learn these as two doctrines and then cannot say how they differ. They are better understood as the two possible answers to a single question.
The question is: to which List does this law, in its true nature and character, belong?
Colourable Legislation and Incidental Encroachment
If the answer is "the List belonging to the legislature that made it", the law is valid, and whatever else it touches is an incidental encroachment. That is pith and substance.
If the answer is "the List belonging to the other legislature", the law is void, and the fact that it was drafted to look like something else does not save it. That is colourable legislation.
So the two doctrines share the whole of their reasoning and differ only in the outcome. An answer that says so is stronger than one which treats them as separate tests to be applied one after the other.
The classic illustration
The case cited in every account of this doctrine is K.C. Gajapati Narayan Deo v. State of Orissa, decided by the Supreme Court in 1953. Orissa amended its agricultural income-tax law shortly before acquiring estates under its estates abolition legislation, in a way that raised the assessed income of large landholders and so reduced the compensation payable to them, compensation being calculated by reference to that income. The landholders argued that the amendment was not really a tax law at all but a device to cut compensation, and therefore colourable.
The Court upheld the amendment, holding that the State was competent to legislate on agricultural income-tax and that the motive with which it exercised a power it undoubtedly had could not affect the validity of the law. In the course of doing so it gave the classical exposition of the doctrine, including the proposition that the idea conveyed by the expression colourable legislation is that although apparently a legislature in passing a statute purports to act within the limits of its powers, yet in substance and in reality it transgresses those powers, the transgression being veiled by what appears on proper examination to be a mere pretence or disguise.
The report of this judgment could not be opened from the sources this book is built from, so no citation is printed for it here. The account above is given as the standard textbook account and should be checked against the report before it is relied on in a written answer. The doctrine itself does not depend on it: the reasoning is fully stated in Prafulla Kumar, below, and in the modern restatements.
The other half: incidental encroachment
The positive side of the same coin, and the one that decides far more cases.
An incidental or ancillary encroachment is an effect a law has on a field outside its own, which follows naturally from doing what the law is properly about. Because a power to legislate on a subject carries with it the power to legislate on matters reasonably ancillary to it, such an encroachment does not invalidate.
Colourable Legislation and Incidental Encroachment
Facts. Prafulla Kumar Mukherjee v. Bank of Commerce Ltd, Khulna, (1947) 49 Bom LR 568, also reported at [1947] FCR 28, Privy Council, 11 February 1947. The Bengal Money-Lenders Act 1940 limited what a money-lender could recover, including on a promissory note. Money-lending was Provincial; promissory notes and banking were Federal.
Held. The Act was valid. Where subjects overlap the court asks what in pith and substance the enactment is, and in what List its true nature is to be found. The extent of the invasion into the Federal field is important as evidence of what the law is about, and not because validity turns on discriminating between degrees of invasion. The question is not whether the Act has trespassed more or less, but whether the trespass shows that the pith and substance of the Act is promissory notes or banking rather than money-lending. The priority of the Federal List does not prevent a Provincial legislature from dealing with a matter that incidentally affects a Federal entry.
Why it matters. It supplies the test for incidental encroachment as well as for pith and substance, and it makes clear that the two are the same test producing different answers.
How to tell the two apart in a problem
Four questions, in order, will resolve almost any problem on this material.
Is the encroachment necessary to the operation of the law? If the law cannot do its own work without touching the other field, the encroachment is ancillary and the law survives. A money-lending law that could not reach promissory notes would not be a money-lending law at all.
Does the law provide for the other subject in its own right? If the statute contains machinery that only makes sense as regulation of the other subject, that is evidence its true nature lies there.
Would the law still make sense with the encroaching part removed? If yes, the encroachment is probably incidental. If the whole scheme collapses, the encroachment may be the point of the law.
Is the form of the law doing work that its substance does not? If the statute is labelled and structured as one thing but every operative provision does another, that is the disguise the doctrine is aimed at.
Where the doctrine applies, and where it does not
It applies to any limit on legislative power, not only to the Lists. A legislature is limited by subject matter, and it is also limited by the fundamental rights and by any express constitutional prohibition. Any of those limits may be evaded by drafting, and the doctrine reaches all of them.
Colourable Legislation and Incidental Encroachment
It does not apply where the legislature has plenary power over the subject. If the subject belongs to the legislature, there is no limit to evade, and the enquiry stops. This is why Gajapati failed on its facts: Orissa was competent to tax agricultural income, so its reason for doing so was beside the point.
It does not apply to a delegated instrument in the same form. Subordinate legislation is tested for whether it is within the enabling Act, which is the ordinary doctrine of ultra vires and is dealt with in [Ultra Vires].
A worked example
A State is competent to tax agricultural income. It is also acquiring land under a land reform statute which fixes compensation as a multiple of the landholder's assessed agricultural income. Shortly before the acquisitions, it amends its agricultural income-tax law in a way that sharply increases the assessed income of large holders, so that the compensation payable to them falls.
The landholders' argument. The amendment is not really a tax measure at all. Its purpose and effect are to cut compensation, which the State could not have done directly without breaching the compensation provisions. It is therefore colourable.
The first question is competence, not motive. Is the State competent to tax agricultural income? Yes, it is a State entry. That is the beginning and, on the standard reasoning, the end.
Why motive does not save the challenge. The doctrine has nothing to do with the bona fides of the legislature. Where the legislature possesses the power, the reason it exercised the power is irrelevant, and a court will not enquire into it. This is the reasoning by which the Supreme Court upheld the Orissa amendment in Gajapati.
When would the answer differ? If the amendment had no operation as a tax at all: if it applied only to the persons whose land was being acquired, or only for the period of the acquisitions, or if its machinery could not function as a tax. Then the form would be doing work the substance did not, and the pith and substance would be compensation, not taxation.
The lesson. Colourable legislation is about what the law IS, not about why it was passed.
Quick revision
- Quando aliquid prohibetur ex directo, prohibetur et per obliquum: what cannot be done directly cannot be done indirectly.
- The doctrine asks about competence, never about motive or bona fides.
- It is the negative face of pith and substance: same enquiry, opposite outcome.
- An incidental or ancillary encroachment never invalidates, because a power over a subject carries power over what is reasonably ancillary to it.
- Prafulla Kumar supplies the test: not more or less trespass, but whether the trespass shows the law is really about the other subject.
- Gajapati is the standard illustration and is named here without a citation because its report could not be read.
Colourable Legislation and Incidental Encroachment
Test yourself
1. State the maxim on which the doctrine rests and explain what "colourable" describes.
2. Why is the doctrine of colourable legislation the negative face of pith and substance rather than a separate test?
3. "The doctrine has nothing to do with the motive or bona fides of the legislature." Explain, with the Orissa example.
4. Give four questions that will separate an incidental encroachment from a colourable exercise of power.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.