The theory of “discretionary powers” is central to the operation of contemporary administrative and judicial systems. It recognizes the fact that tight rules and procedure cannot always suffice to meet adequately the subtleties and niceties of factual situations. To this end, legislative enactments and legal ordinances frequently grant divergent authorities scope for making selections and exercising sound judgment within the parameters of powers delegated to them.
Meaning of Discretionary Powers
Discretionary power, in its very nature, means the power entrusted to a person or a group of persons to decide between two or more legally valid alternatives without being strictly tied down by a pre-existing rule requiring a specific result. The exercise of discretion is a matter of judgment, balancing relevant considerations, and applying reason within the parameters set by the enabling statute or legal doctrine.
Scope:
- Wide Discretion: Where the authority has considerable latitude in making decisions, often guided by broad policy objectives or subjective satisfaction (e.g., deciding on the “public interest”).
- Narrow Discretion: Where the choices are more limited, often involving the application of specific criteria or standards to a given set of facts (e.g., granting a license upon fulfillment of prescribed conditions).
Discretionary powers are not absolute and are always subject to legal limitations. The authority exercising discretion must act within the confines of its jurisdiction, adhere to the principles of natural justice, and avoid acting arbitrarily, capriciously, or mala fide.
A discretionary power is conferred on an administrative authority must be exercised by that authority reasonably. If the power is exercised unreasonably, there is an abuse of power and the action of the authority will be ultra vires. A decision of the administrative authority shall be considered as irrational:
– if it is without the authority of law;
– if it is based on evidence;
– if it is based on irrelevant and extraneous consideration;
– if it is so outrageous in its detiance to logic or accepted norms of moral standard that no sensible person, on the given facts and circumstances, could arrive at such a decision.
– it is so unreasonable that it may be described as done in bad faith.
Fettering Discretion: When a public authority fetters its discretion, it can either be said to have failed to exercise its discretionary power or to have been subject to external influences.
Importance of Discretionary Powers:
- Flexibility and Adaptability: Laws tend to be stated in broad terms. Discretion enables officials to apply the broad principles to the varied and often unexpected individual situations that occur in practice.
- Expertise and Specialization: In most technical or specialized areas, the delegation of discretion to individuals or groups with the necessary expertise enables more knowledgeable and efficient decision-making.
- Efficiency and Expediency: Strict adherence to rules in all cases can cause bureaucratic inefficiencies and delays. Discretion can facilitate quicker and more realistic responses.
- Individualized Justice: In the context of courts, discretion enables judges to make outcomes specific to the individual facts and circumstances of a case, resulting in a more nuanced and equitable resolution.
Judicial Review
Judicial review is a cornerstone of the doctrine of constitutionalism and a cornerstone of the separation of powers. Judicial review is the exercise of power by the judiciary to scrutinize the actions of the legislative, executive, as well as the judicial branches of government and hold them accountable in terms of compliance with the supreme law of the land – the Constitution. If any action is discovered to be in violation of the Constitution, then the judiciary can pronounce it unconstitutional, hence null and void.
Grounds for Judicial Review
- Ultra Vires
- Violation of Fundamental Rights
- Constitutional Validity
- Arbitrariness and Unreasonableness
- Procedural Impropriety
- Legitimate expectation
Importance of Judicial Review
- a. Upholding Constitutional Supremacy: It ensures that the Constitution remains the supreme law of the land and that all other laws and actions are subordinate to it.
- b. Safeguarding Fundamental Rights: It acts as a bulwark against legislative or executive encroachment on the fundamental rights of individuals and minorities.
- c. Maintaining Separation of Powers: It helps to maintain the balance of power between the three organs of government by preventing any one branch from becoming overly dominant.
- d. Promoting the Rule of Law: By ensuring that governmental actions are in accordance with the law, judicial review reinforces the principle that everyone, including the state, is subject to the law.
- e. Providing a Check on Tyranny of the Majority: It offers a mechanism for protecting the rights and interests of those who might be marginalized or overlooked by the political majority.
- f. Ensuring Accountability: It holds the government accountable for its actions and decisions, promoting transparency and good governance.
- g. Interpreting the Constitution: The process of judicial review often involves the interpretation of constitutional provisions, allowing the Constitution to adapt to changing social and political realities (a “living document”).
Limitations of Judicial Review
Self-Restraint: Courts generally exercise self-restraint and do not interfere with policy decisions of the legislature or executive unless they are clearly unconstitutional or arbitrary.
Doctrine of Separation of Powers: Courts respect the functional autonomy of the other branches of government and avoid encroaching upon their legitimate domains.
Locus Standi: Generally, only those whose rights are directly affected can challenge the validity of a law or action. However, the concept of Public Interest Litigation (PIL) has broadened this rule in India.
Presumption of Constitutionality: There is a presumption that laws enacted by the legislature are constitutional, and the burden of proving otherwise lies on the challenger.
Policy Matters: Courts are generally reluctant to interfere with economic, social, and political policies unless they are manifestly arbitrary or violate constitutional provisions.
Judicial Review of Judicial Decisions (Limited): Review of judicial decisions is usually limited to appellate processes and the correction of errors of law.
Article 13: Laws inconsistent with or in derogation of Fundamental Rights
(1) any law inconsistent with the fundamental rights shall be void to the extent of such inconsistency.
(2) the state shall not make any law that takes away or abridges fundamental rights, and if such a law is made, it shall be void.
This provision empowers courts to review and invalidate any legislation, including delegated legislation, that violates fundamental rights. It forms the constitutional basis for judicial review in India. Example: A.K. Gopalan vs State of Madras, the court held that any delegated legislation infringing upon fundamental rights could be struck down under article 13. There are also many provisions for judicial review like, article 32, 226 131-136, 246 of the constitution.
Case Laws
Dwarka Prasad Laxmi Narain v. State of U. P.
Facts: Coal traders in Kanpur, the petitioners, faced a reduction in their profit margin from 20% to 10% due to an executive order by the District Magistrate, which lacked legislative authority, setting lower coal prices. This made their business unsustainable, leading to a legal challenge. Consequently, the Uttar Pradesh government withdrew the order. However, the government later issued “The Uttar Pradesh Coal Control Order, 1953” under delegated powers from the Essential Supplies Act, 1946. Section 4(3) of this order granted the District Magistrate broad discretionary power to manage licenses, requiring only that reasons be recorded. The petitioners’ licenses were subsequently cancelled under this section for selling coal above the fixed price. The petitioners challenged the validity of the 1953 order, Section 4(3), and the license cancellations.
Issue: Whether the Coal Control Order, promulgated by the State Gov. & Sec. 4(3) mentioned therein valid?
Whether the cancellation of Petitioner’s license, under the above mentioned section 4(3) valid?
Judgement: The court stated that coal, being an essential commodity under the Essential Supplies (Temporary Powers) Act of 1946, allowed the Uttar Pradesh Government, through delegated powers, to regulate its supply and distribution via notified orders. These regulations, however, had to respect citizens’ fundamental rights, ensuring trade restrictions were reasonable and in the public interest, as per Article 19(6) of the Constitution. Laws granting arbitrary executive power over trade in readily available commodities were deemed unreasonable.
Clause 3(1)(b) allowed the coal controller to grant exemptions without specified grounds, creating unrestricted power with no oversight. Clause 4(3) gave the licensing authority absolute power over licenses, requiring only recorded reasons. The court invalidated Section 3(2)(b) due to the lack of criteria for exemptions, leaving room for arbitrary action. Clause 4(3) was also struck down because it granted unguided discretion to licensing authorities. The requirement to record reasons was insufficient as there was no mechanism to review those reasons or the decisions made, providing no recourse for aggrieved parties. The recorded reasons were merely for the licensing authority’s own satisfaction, not to provide a remedy. The court held that Clause 4(3) was void for unreasonably restricting trade under Article 19(1)(g), and the entire Control Order was invalidated because of its integral nature. Thus, the license cancellations under the void Clause 4(3) were also void.
A.N. Parasuraman v. State of Tamil Nadu
Facts: The Appellants, operating private educational institutions within the state of Tamil Nadu, initiated a legal challenge against the constitutional validity of the Tamil Nadu Private Educational Institutions (Regulation) Act, 1966. Their primary contention centered on the assertion that the Act conferred excessively broad and arbitrary discretionary powers upon the designated administrative authorities. Specifically, they directed their challenge towards provisions of the Act that mandated prior permission for the establishment and operation of such institutions, as well as those provisions that vested in the government the power to grant exemptions. The crux of their argument lay in the Act’s failure to provide sufficiently clear and defined guidelines for the competent authority to follow, thereby creating a significant risk of arbitrary and capricious decision-making.
Issue: Whether through the impugned Act the authority is in a position to act according to his whims and hence is invalid?
Whether sections of the act violated Article 14 and 19(1)(g) of the Indian constitution?
Judgement: The Supreme Court observed that the Act conferred unfettered and arbitrary discretion upon the State Government in the selection of the ‘competent authority’ under Section 2(2)(c), as well as in the arbitrary selection of institutions for exemption under Section 22. Similarly, Sections 6 and 7 of the Act were found to suffer from the same vice. Specifically, Section 27(6)(a), concerning the issuance or renewal of licenses, mandated that the ‘Administrator shall have regard to the number of dealers existing in the region in which the applicant intends to carry on business as a dealer.’ The ambiguity lay in the undefined term ‘region.’ Further, Section 27(6)(b), which required the Administrator to consider ‘the anticipated demand, as estimated by him, of ornaments in the region,’ compounded the problem of arbitrary discretion. Additionally, provisions like ‘suitability of the applicant’ in Section 27(6)(e) and ‘public interest’ in Section 27(6)(g) were deemed to lack any objective standard or norm, thereby failing to provide a legal framework that would prevent arbitrary decision-making.
Consequently, the Court concluded that the impugned sections of the Act were invalid due to the absence of discernible and objective guidelines. These defective provisions were inextricably intertwined with the remaining parts of the Act, forming an indivisible legislative scheme. Severance was deemed impossible without fundamentally altering the Act’s purpose and structure. Therefore, the entire Act was declared ultra vires the Constitution, as it violated the fundamental principles of rule of law and the prohibition against arbitrary state action. The court allowed the appeal and making the entire Act unconstitutional.
J. R. Raghupathy v. State of A. P
Facts: The Government of Andhra Pradesh initiated a reorganization of revenue mandals, which involved the establishment of new mandal headquarters. This administrative decision precipitated a series of legal challenges, with various stakeholders contesting the government’s chosen locations for these headquarters. Numerous writ petitions were filed before the High Court of Andhra Pradesh, alleging that the government’s determination of mandal headquarters was arbitrary and in contravention of established administrative guidelines. The High Court rendered divergent judgments, in some instances upholding the government’s decisions, and in others, intervening to alter the designated locations. Subsequently, the Supreme Court of India entertained appeals against these conflicting judgments of the High Court.
Issue: Whether the location of Mandal Headquarters was a purely governmental function and therefore not amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution?
Judgement: The Supreme Court affirmed that the determination of mandal headquarters locations constituted a matter of governmental policy and administrative discretion. The Court reiterated that while judicial review is a legitimate mechanism to scrutinize administrative actions for arbitrariness, mala fides, or abuse of power, it does not extend to the substitution of the Court’s policy judgment for that of the executive branch.
The Court drew a clear distinction between statutory rules, which possess the force of law, and administrative guidelines, which serve as internal directives. Consequently, the Court held that a mere deviation from administrative guidelines, without evidence of arbitrariness or mala fides, does not automatically provide a basis for judicial intervention.
The Supreme Court determined that the High Court had exceeded the permissible scope of judicial review by attempting to enforce non-statutory administrative guidelines as if they had the force of law. The Court emphasized that absent clear evidence of arbitrariness or mala fide intent, the judiciary should refrain from interfering with the government’s administrative decisions, particularly those involving policy considerations. The court dismissed the petition.
Coimbatore District Central Cooperative Bank v.Coimbatore District Central Coop. Bank Employees Assn.
Facts: The Coimbatore District Central Co-operative Bank’s management received a strike notice from the Employees Association regarding employee suspensions and withheld salaries. A settlement led 134 employees to return to work, but 53 continued their illegal strike and misconduct. Disciplinary proceedings were initiated, resulting in their suspension and an ex parte inquiry. The inquiry found them guilty, leading to punishments of increment stoppage and withheld suspension salary. The employees resumed work on January 17, 1973, and subsequently appealed, which was dismissed.
Issue: Whether the High Court can reduce the quantum of punishment imposed by the administrative authority i.e. District Central Co-operative Bank?
Whether the High Court can substitute the decision of the administrative body by its own decision under Article 226 of the Constitution?
Judgement: The Supreme Court ruled that the High Court’s reduction of the punishment was unjustified. The High Court had based its decision on compassionate grounds, which the Supreme Court deemed an invalid basis for applying the doctrine of proportionality. Consequently, the Supreme Court overturned the decisions of both the single judge and the division bench of the High Court. Furthermore, the Supreme Court emphasized that the High Court, under Article 226 of the Constitution, cannot substitute its own discretionary decisions for those properly vested in administrative bodies. The Court held that the High Court cannot replace administrative discretion with its own under Article 226. Appeal allowed.
PRESENT PROBLEM
1.(a) The conferment of discretion here is invalid unless it is read down or supplemented with objective guidelines and procedural safeguards. Unchecked and absolute power can be struck down as arbitrary and violative of article 14.
(b) Conferment of such power is valid, provided:
– there is a rational basis for selecting cooperative sugar industries
– the power is exercised uniformly and non-arbitrarily
– the exemption policy is transparent and adheres to the object of the law.
2. The allotment made by the Minister are hereby declared as null and void. The following directions are issued:
– all 55 allotment are quashed
– the govt is directed to frame fresh guidelines and issue a public notice inviting applications from eligible members of weaker sections
– all future allotments must follow the principles of transparency, equality, and non-discrimiantion
– the matter is referred to the Lokayukta/ Vigilance Commission for inquiry into the Minister’s conduct.
