Cossijurah case

This article is written by Srijita Adak, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho.

Introduction

India has a federal form of government and has been a united country for over seven decades with power being divided between the Centre and the States on the account of federal structure of governance. Federal form of government has two or more levels of government. Each level of government has its own jurisdiction (area of control). The jurisdiction of the respective levels of government is specified in the Constitution. The main feature of federalism is the segregation of power between the Centre and the states. The fundamental provisions of the Constitution cannot be unilaterally changed by one level of government. Federal system has the objective to safeguard and promote unity and accommodate regional diversity. 

There was consensus on power sharing even before independence. Leaders were aware of the regional and linguistic diversity. The Constituent Assembly decided to form a government that would be based on the principles of unity and cooperation between the Centre and the states which was to have constitutional status and a clearly identified area of activity.. However, if a legislative body isn’t allowed to make laws in a particular area and does so anyway indirectly under the grab of another legislation, the doctrine of colourable legislation comes into play. The doctrine of colourable legislation is applied to see whether they are competent to enact the specific law or not. Through this article the author seeks to answer the question whether this doctrine creates an impediment to the legislative authority or not.

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Colourable legislation

Separation of powers means dividing or sharing of powers. In order to prevent the misuse of power by anyone organ of the government, the Constitution says that each of these organs should exercise different powers. This develops a system of checks and balances. The Constitution has divided powers between the Centre and the states with their particular subject matters. But sometimes, the legislative body enacts legislation which falls outside its area of competence. This means that it has transgressed  its powers and has indirectly done something which could not have been done directly.This is called colourable exercise of legislative power or indirectly making laws when prohibited from doing so directly. So, to check the transgression of legislative authorities, the doctrine of colourable legislation came into existence. 

Suppose you have a fruit garden and beside that there is a playground. There are truants playing in the playground and every time they throw their ball into your garden and come to take it back, they take some fruits from there as well. But they escape by saying that they had only come to collect the ball. Here, the truants seem to engage in one act under the garb of another as collecting their own balls from the premises is permissible and cannot be prohibited. The colourable legislation also deals with such questions wherein one law is supposedly passed under the garb of another. Colourable legislation comes from a legal maxim- “Quando aliquid prohibetur ex directo, prohibetur et per obliquum” which means which is prohibited directly is also prohibited indirectly. It means when a legislature does not have the power to make laws on a particular subject directly, it cannot make laws on it indirectly. Colourable legislation is one of the doctrines under the Indian Constitution. It basically means coloured legislation which is not its true colour. So, whenever the Union or state encroaches their respective legislative competence and makes such laws, colourable legislation comes into the picture to determine legislative accountability of that law. 

Division of legislative power between the Centre and states 

Article 246 of the Indian Constitution is about subject matter legislation referring to who has power with regards to which subject matter to make laws. We know that the power has been distributed under three lists. The powers that Centre and States have been categorised by the 7th schedule under 3 lists- Union list (List I), State list (List II), Concurrent list (List III) which is mentioned under Article 246 of the Constitution. The Union list incorporates areas which are of national importance like defence, foreign affairs, currency, atomic energy and so forth. It has a total of 97 items on which the Parliament has exclusive right to make laws. Similarly, those items are covered in State list which are of local importance like trade, agriculture, police etc. There are a total of 61 items on which the State has exclusive power to make laws. Concurrent list contains 52 items like education, adulteration, adoption etc. concerning the Union and State both and pertaining to which both can make laws. Another set of powers is residuary powers which include all other matters not mentioned in any of the lists like cyber laws. The States and Union are both required to operate within their respective legislative competence. 

If the legislature makes law in colour or under guise on a subject without having required competency to make laws on that particular subject then the Supreme Court can invalidate the entire law. Colourable legislation comes into question when there is a question of competency of a particular legislation to enact a particular law. It challenges the accuracy of an enacted law with regards to the body that passed the law and analyzes whether the legislative body has the power to make laws on that subject or not. In case the legislature is not competent on the said subject, then the law is said to be ultra vires. When a legislature makes a law which appears to be within its authority but in reality, it is not, then the law would not have any validity. Even though a colour is given to the law for bringing it under competency it would be declared as void. Colourable legislation emerges whenever the legislative bodies had no power to create laws on an item because either it was not included in the list as per Schedule 7 or for the limitations of Part III of the Constitution or any other provision of the Constitution. When the legislature indirectly disobeys the terms of the Constitution and claims any Act to be within its power then it is a fraud on the Constitution.

Concerns and limitations on the application of the doctrine of colourable legislation

The doctrine does not apply to subordinate legislation. It is based only on the question of competency of a particular legislative body to enact a particular law. The presumption is always in favour of the constitutionality of the law and the burden is on the person who wants to show that there has been a clear violation of constitutional principles. Whoever is taking any new law to the court and claiming that to be a colourable legislation, he has to prove how the law is a colourable legislation. 

It has no application where there is no constitutional limitation and where powers of a legislature are not bound by any limitation. For example, there will be no application of colourable legislation if such power works only according to the Constitution. The legislation is not actionable for extraneous consideration. The doctrine is not related to bona fide or mala fide intention of the legislature. It only sees whether the enacted law is under the competency of the legislature or not.

It is not concerned about whether the law is relevant or irrelevant. If there is an absence of competency, then the relevance of motive is dead. Thus, the constitutionality of the statute is completely a question of legislative competency.

Case laws 

  • In the case of Ram Krishna Dalmia v. S.R. Tendolkar, the petitioner had challenged Section 3 of Commission of Enquiry Act,1952 and the notification under which an enquiry commission was set up by the Central Government under S.R. Tendolkar was on the ground that it was a denial of equality. Inquiry commission was appointed under the Act against the company of the petitioner. But Supreme Court held that the notification and the Act were valid as they were only for enquiry and do not impose dictatorial possession of the government and the petitioner could not show discrimination. It also held that the burden is on the person who wants to show that there has been a clear violation of constitutional principles. It is an important case of reasonable classification under Article 14. As not only a law has to be reasonable but its application must also provide equal protection of laws, it did not come in the ambit of colourable legislation.
  • In K.C. Gajapati Narayan Deo v. State of Orissa, the constitutional validity of Orissa Agricultural Income Tax (Amendment) Act,1950 was challenged on the ground that it is a colourable piece of legislation. The real object of which is to reduce the net income of intermediaries, so that the compensation paid under the Orissa Estate Abolition Act, 1952 might be kept down to a low figure. The court held that it would be a colourable legislation only if it is shown that the real object is not attainable to it by reason of any constitutional limitation or that it lies within the exclusive field of another legislature. This Act falls within the ambit of the state legislature as Agriculture is the matter of State List and reduction of compensation is just another facet of the Act. So, it is not colourable legislation and not invalid.
  • In the case of R.S. Joshi v. Ajit Mills, the respondent was not enlisted as a dealer of Sale Tax, which was gathered from different clients, and this adds up to infringement of Section 46 and Section 37(1) of Sales Tax Act, 1955. The High Court struck down Section 37(1) of the Act. The question was, if any tax has been collected wrongfully by a taxable person from his customer, then whether the amount of tax should be paid to the government or not and also whether it will be lawful to retain the money when it is known that the amount is not a tax or not. It was held that the Section 37(1) of the Act is valid and the law is the same for both the taxpayer and tax administrator and if the tax cannot be levied by the law, then it is not leviable by the government as well. If the tax is not lawful then its collection cannot be lawful. Thus, colourable legislation was applied in this case.
  • In State of Bihar v. Kameshwar Singh, the Bihar Land Reforms Act, 1950 was enacted to remove the landlord custom from the state. The State gave half of the arrears of rent due as compensation to the landlord. The compensation for property acquired comes under Concurrent List’s Entry 42. So, here it was to be determined whether the Act is for a public purpose or not. The Supreme Court held that the Act instead of determining the compensation, indirectly removes the petitioner from his property without any compensation. In reality the Act purported to lay down a principle for determining compensation and indirectly deprived the petitioner of claiming compensation. Thus, the Act was colourable legislation and was held invalid. 
  • In the case of K.T. Moopil Nair v. State of Kerala, the petitioner was the owner of a 25,000-acre forest land. Due to the Preservation of Private Forest Act,1949 the yearly income of petitioners was only 3,100 Rs per year. Then the Travancore-Cochin Land Tax Act, 1955 came into existence and Section 4 of the Act imposed yearly tax liability of Rs. 2 per acre and as a result, the petitioner had to give a tax of Rs. 50,000 per year. Also, Section 7 exempted 78 types of land from the operation of this Act after notification. Then through an amendment Section 5A came which was the Provisional Assessment of the basic tax in respect of land which had not been surveyed and no time for the conduct of the survey was fixed. In this case, tax liability was greater than the petitioner’s income. It held that Section 4 and Section 7 of the Act violated Articles 14 and 19(1)(f) of the Indian Constitution. The Travancore-Cochin Land Tax Act,1955 was held to be invalid on the ground that the Act apparently purported to be a Taxing Act but in reality, it was not Taxing Act but was confiscatory in nature. 
  • In the case of M.R. Balaji v. The state of Mysore, an order of the Mysore Government was challenged under Article 15(4) for reserving seats for admission to the State medical and engineering colleges. The state issued an order that all the communities except  the Brahmin community, fell within the classes of educationally and socially backward classes and scheduled castes and scheduled tribes and 75% seats were reserved for them. On July 31, 1962 the State of Mysore passed another order which superseded all the previous orders and left only 32% seats for the merit pool. The petitioner said that the classification made by the state was irrational and reservation of 68% was a fraud on the Article 15(4) of the Constitution. The question was whether Article 15(4) gives constitutional power to the States to pass such reservation power or not. The court held that the reservation is a fraud on the constitutional power conferred on the state by Article 15(4).

In view of these cases, it can be summarised that if a legislative body has the competence to make a law, it also has the power to make ancillary laws to ensure that the law it made is effective as long as such ancillary laws aren’t a colourable exercise of power.

Conclusion

Colourable legislation suggests an encroachment on the legislative power. The doctrine of colourable legislation strictly prohibits doing indirect things when it is not allowed to do so directly. It tests whether the legislature has enacted a law as per its authorised competency or not. So, wherever there is a restriction to make laws, the legislature has to follow the same otherwise it would be declared as ultra vires of legislative power. If any law is made out of any guise, then the colourable exercise would be imposed on legislative authority.

Legislative authority is the body which legislates laws. They are elected by the people and work on behalf of the people. The doctrine of colourable legislation acts like a check on them and if it finds incompetency then the law becomes invalid without there arising a need to determine its necessity and requirements. It only checks the competency of the law-making body and restricts overstretching power. As this doctrine doesn’t check whether the law is mala-fide or bona-fide and only examines the competency of its legislative authority, it becomes an impediment to the functions of legislative authority.

References

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