Unreasonableness and Manifest Arbitrariness in Subordinate Legislation
Chapter -Six
Syllabus topic 8, "Judicial Review Delegated Legislation"
Pages 405 to 407 of 430
In one line
An English court would strike down a bye-law for being unreasonable; an Indian court took longer to say so, and now says it through Article 14.
In the wording a student can write in an exam: subordinate legislation may be struck down for manifest arbitrariness or unreasonableness, that is where it is so unreasonable that the court can say the legislature never intended to give authority to make such a rule, or where it offends Article 14; the traditional English rule allowed a bye-law of a local body to be struck down for unreasonableness, and Indian courts, after some hesitation, now apply manifest arbitrariness to rules and regulations generally.
The hesitation, and the reason for it
The objection was structural. A rule is legislative, and a court does not review the wisdom of legislation; if unreasonableness were a ground, the court would be doing exactly that. So Indian courts long said that a rule could be struck down for being outside the Act or unconstitutional, but not simply for being unreasonable.
Two things dissolved the objection. Article 14, because after E.P. Royappa v. State of Tamil Nadu, AIR 1974 SC 555, arbitrariness is unconstitutional and not merely unwise. And the practical difficulty of distinguishing a rule which is manifestly arbitrary from one which is beyond the power, since a rule no reasonable authority could have made is unlikely to be within the purposes of the Act.
The modern position
State of Tamil Nadu v. P. Krishnamurthy, AIR 2006 SC 1622, includes among the grounds manifest arbitrariness or unreasonableness to a degree at which the court might well say that the legislature never intended to give authority to make such rules. That formula is the Indian version of the English bye-law rule, and it is deliberately high.
Cellular Operators Association of India v. Telecom Regulatory Authority of India, AIR 2016 SC 2336, applies it.
Facts. By the Ninth Amendment to the Telecom Consumers Protection Regulations 2015, made under sections 36 and 11 of the Telecom Regulatory Authority of India Act 1997, every service provider was required to credit one rupee to the calling consumer for each dropped call within its network, up to three a day, whatever the cause of the drop and without any enquiry into it.
Held. The regulation was struck down. Subordinate legislation can be struck down not only for being ultra vires the parent Act but also for manifest arbitrariness under Article 14. Requiring the operator to pay for every dropped call regardless of whether the fault lay with the network, with the consumer's handset or with radio conditions, and without any hearing on causation, was arbitrary and unreasonable, and the payment bore no relation to fault. A regulation cannot impose on a licensee a liability the statute did not authorise.
Unreasonableness and Manifest Arbitrariness in Subordinate Legislation
Why it matters here. It is the most recent Indian case in which a regulation was struck down on this ground, and it shows the two grounds, ultra vires and arbitrariness, running together.
The English bye-law rule
English courts have long held that a bye-law of a local authority may be held invalid if it is manifestly unjust, made in bad faith, partial and unequal in its operation between classes, or so oppressive or gratuitously interfering with rights that it could find no justification in the minds of reasonable men. The formula is deliberately narrow and it was confined to bye-laws of subordinate bodies rather than to rules made by a Government.
Indian courts adopted the vocabulary and, through Article 14, extended the substance beyond bye-laws.
What is not a ground
That the rule is harsh. A rule may be severe and valid.
That a better rule was possible. St. Johns Teachers Training Institute v. Regional Director, National Council for Teacher Education, AIR 2003 SC 1533.
That the rule is economically unwise. Shri Sitaram Sugar Co. Ltd. v. Union of India, AIR 1990 SC 1277, confines review of an economic instrument to the four corners of the Act, the statutory factors and gross arbitrariness.
A worked example
A university regulation provides that a student who fails in any one subject shall be required to repeat the entire year, and that a student who is absent from any examination for any reason whatever, including illness certified by a government hospital, shall be treated as having failed.
The first is severe but not arbitrary: repeating a year is a rational academic response to failure, and the court will not weigh it. The second is manifestly arbitrary: treating certified illness in the same way as wilful absence is a classification of unlike cases as like, it bears no relation to any academic object, and on Cellular Operators it is exactly the vice of imposing a consequence without regard to cause.
What this does NOT mean
It does not mean a court reviews the policy of a rule. The threshold is manifest arbitrariness, not disagreement.
It does not mean the English rule applies as such. Its substance now comes through Article 14.
It does not mean a rule within the Act is safe. Cellular Operators shows a regulation failing on both grounds together.
Quick revision
The old objection was that a rule is legislative and its wisdom is not reviewable; Article 14 and the practical overlap with ultra vires dissolved it. P. Krishnamurthy states the modern ground as manifest arbitrariness or unreasonableness to a degree at which the court can say the legislature never intended to authorise such a rule. Cellular Operators applies it: a liability imposed regardless of fault and without any enquiry into causation is arbitrary, and a regulation cannot impose a liability the statute did not authorise. Not grounds: harshness, the availability of a better scheme, or economic unwisdom.
Unreasonableness and Manifest Arbitrariness in Subordinate Legislation
Test yourself
1. State the Indian formula. Manifest arbitrariness or unreasonableness to a degree at which the court might well say that the legislature never intended to give authority to make such rules.
2. Why was the call drop regulation arbitrary? Because it made the operator pay for every dropped call regardless of the cause and without any enquiry into causation, so the liability bore no relation to fault, and it imposed a liability the statute did not authorise.
3. Is unwisdom a ground? No. A rule may be severe, or capable of improvement, and still valid; the threshold is manifest arbitrariness.
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.