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This article is written by Aditya Singh from Symbiosis Law School, Noida. This article deals with the analysis of the laying procedure which was observed in this case and is considered a landmark judgment to determine if the laying procedure is directory or mandatory in nature. The article also deals with the provisions of the Essential Commodities Act, 1955, and its applicability.

Introduction

Delegated or subordinate legislation can be described as the legislation made under the authority of a Parliament’s Act. While the law is to be made by the Legislature, the Legislature can delegate its power to other persons or bodies by statute. Such a statute is generally referred to as the “enabling act” which sets out general principles that leave the precise rules to be laid down by legislation made by a minister or other persons. There exists delegated legislation in the form of rules, regulations, orders, and by-laws.

The reasons responsible for delegated legislation are, pressure on Parliamentary time, the technicality of subject matter, an opportunity for experimentation, unforeseen contingencies and emergency powers. The Indian Constitution permits subordinate legislation by delegation. Article 13(3) provides that “law” includes any ordinance, order, bye-law, rule, regulation, notification, customs, or usages having in the territory of India the force of law. 

It is the Legislature’s primary responsibility to regulate and monitor the exercise of delegated authority by the executive authorities. A parliamentary review of the approved legislation takes place in three phases. This is also known as the Laying Procedure or ‘Laying on the Table’. This serves to inform the legislature as to what all rules were formulated by the executive authorities in the process of delegated legislation. Furthermore, this provides a platform for legislators to question or challenge the rules that have been made or proposed.

Background facts

On 29 December 1964, the Development Officer of the Directorate-General, Technical Development, New Delhi, carried out a spot review of the balance sheet. From a review of the books of accounts of the said appellant, it was discovered that from 1 January 1964 to 12 January 1965, the company had purchased 60.03 metric tons of plain iron sheets from multiple suppliers at a rate higher than the maximum permissible price set for such sheets by the Iron and Steel Controller, by the authority conferred by the Iron and Steel Control Order, 1956.

Similar charges under Section 120B of Indian Penal Code read with Section 7 of the Essential Goods Act and Section 7 read with Section 15(3) of the Control Order are imposed by a special magistrate. The Appellants applied under Section 251 of the Code of Criminal Procedure because the allegations had already been presented before the Court. They also responded to their prosecution, claiming that the notification from the government that set the maximum selling prices of different Iron & Steel categories, including the product in question in the present case, was not put before the parliament, and was therefore not valid. The order framing the charge was also contended to be a nullity. The application was, however, dismissed by the Trial Court vide its order dated June 4, 1970.

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Aggrieved by the above order of the Special Magistrate, the appellant submitted a written petition, in accordance with Articles 226 and 227 of the Constitution, to the High Court of Punjab and Haryana. The appeal was rejected by the high court and held that, since the legislature never intended that non-compliance with Section 3(6) of the Essential Commodities Act would make the order invalid, therefore, the non-laying of the notification before both Houses of Parliament cannot be the justification for the nullification of the notice. Even though it is specified in Section 3(6) of the Act that any order issued by the central government or by any officer shall be introduced in both the houses. Also, It is significant to understand whether the provision in question is directory or mandatory in nature. Further, the use of the word “shall” is not conclusive and the legislature’s intent has to be interpreted by the court.

The High Court referred to two grounds on which the provision is a directory in nature can be concluded which are, Firstly, if the clause is not complied with, the absence of any clause specifying the contingency. Secondly, the inconvenience and discrimination will impact the general public if the act or any instrumentality was found invalid due to failure to comply with a particular provision. Therefore, it is directory in nature and not mandatory as the making of orders was not prohibited without the approval of both the houses according to Section 3(6) of the Essential Commodities Act.

Dissatisfied with the ruling given by Punjab and Haryana High Court, the appellants appealed to the Supreme Court under its Criminal Appellate Jurisdiction. In which the counsel from both the parties restated all the arguments they had raised in the writ petition before the Punjab and Haryana High Court. 

Major issues

There were two major issues in question:

  • Whether the notification attempting to set the commodity’s maximum selling price is void for not being laid before both parliamentary houses? 
  • Whether the laying provision incorporated in Section 3(6) of the Essential Commodities Act, 1955 is mandatory?

Relevant provisions

The major provisions of the Essential Commodities Act, 1955 are:

  • Section 2 performs the function of the glossary for the act. Under clause (a)(vi) of that section, iron and steel and their manufactured products fall within the scope of the phrase “essential commodity”.
  • Sub-section (1) of Section 3 of the Act gives the Central Government general authority to make and issue orders regulating or prohibiting the manufacture, supply, and distribution of an essential commodity and trade and trade therein if it considers it necessary or expedient to do so in order to maintain or increase the supply of any essential commodity or to ensure its equal distribution and availability at reasonable prices, or to obtain any necessary resources for India’s defence or the successful conduct of military operations.
  • Sub-section (2) of Section 3 of the Act defines certain orders which may be given thereunder without prejudice to the generality of the powers conferred by sub-section (1) of Section 3. 
  • Clause (c) of sub-section (2) of Section 3 of the Act provides for the issue of an order for the regulation of the price at which any necessary product can be purchased or sold.
  • Sub-section (6) of Section 3 of the Act specifies that any order made with respect to this section by the Central or any Central Government officer or authority shall be put before both Parliament Houses as soon as possible after it has been made.
  • Section 4 of the Act provides that an order made in accordance with Section 3 may confer powers and impose duties on the Central Government or on the Government of the State or on officials and authorities of the Central Government or Government of the State and may contain instructions to any Government of the State or to its officers and authorities as to the exercise of any such powers or the performance of any such functions.
  • Section 5  of the Act provides for delegation of powers. It provides that, by notified order, the Central Government may direct that, in connection with such matters and subject to certain conditions, the power to issue orders or notifications defined in section 3 may also be exercised by (a) that officer or authority subordinate to the Central Government or (b) that State Government or that officer or authority as may be specified in the Direction and is subordinate to the State Government.
  • Section 6 of the Act embodying the non-obstante clause stipulates that every order made in accordance with section 3 shall have force in spite of anything conflicting, found with it in any statute other than this Act or any instrument having an effect with respect to any statute other than this Act.
  • Section 7 of the Act provides for the penalties that are to be levied on any person who contravenes any order made under section 3.
  • Section 10 of the Act which deals with offences by the companies provides as follows-

If the person who contravenes with the order made in accordance with Section 3 is a company, every person who was responsible for the conduct of the business of the company as well as the company at the time the contravention was committed shall be deemed guilty of the contravention and shall be liable to be prosecuted and punished accordingly, provided that nothing in this sub-section makes any such person liable for any punishment if he proves that the contravention occurred without his knowledge or if he has exercised all due diligence in order to prevent such contravention.

Notwithstanding the provisions of sub-section (1), where an offence under this Act has been committed by a corporation and that company’s owner, manager, secretary or other officers shall also be considered guilty of that offence and shall be liable for and punished accordingly.

Arguments and Proceedings

The appellants put their prosecution into question on the grounds that the control orders and notifications did not have legal force because they were not introduced within a reasonable period before the House of Parliament under the Essential Commodities Act. The respondents, on the other hand, contended that the provisions of sub-section (6) of Section 3 of the act, requiring that an order be placed before the House of Parliament, are directory and not mandatory, and the failure to comply with that requirement did not invalidate the notification and that the accused’s men’s rea was evident from various manipulations recorded by them as well as from the fact that they wanted to increase their production and make more profit.

Further, in the case three kinds of Laying procedures were also observed:

  1. Laying without an additional procedure: it may also be called simple laying, in this prior to the concept of laying down was introduced, there was a provision for laying down rules for the duration for which the regulations were not in effect and could be discarded without ever coming into operation. It is however not used now.
  2. Laying subject to negative resolution: in this, the instruments thus laid come into operation as soon as they are laid before the parliament but are subject to annulment in lieu of a resolution by either House of Parliament, if not disapproved within 40 days. It is the most common type of laying procedure followed.
  3. Laying subject to affirmative resolution: this procedure has two parts, the first part, states that unless approved by a resolution of each house of parliament, the regulation will have no effect or force and the second part, states that the rules will cease to have effect until approved by an affirmative resolution.

In India, there is no constitutional requirement that allows all delegated legislation to be ‘laid down.’ Therefore, in the absence of any general law governing the laying procedure:

  1. All Parliament’s acts should generally be required to lay down the rules on the table of the Houses ‘as soon as may be possible’.
  2. The laying duration should be thirty days uniformly from the date of final publication of the rules;
  3. The rule shall be subject to the amendments that the House may wish to make.

                    

Judgment

It should be noted that sub-section (6) of Section 3 of the Act generally requires that any order made in accordance with Section 3 by the Central Government or any officer or authority of the Central Government shall be brought before both Houses of Parliament and laid down as soon as possible after it has been made. But it does not provide whether it would be subject to negative or affirmative resolution by either House of the Parliament.

It further does not specify as to the time during which the order has to be laid down before both the houses nor does it specify the penalty for the non-compliance or non-observance with the instructions for laying the order before both the Houses of the Parliament.

From the cases and provisions cited it can be clearly concluded that the legislature’s intention was never to make the order or notification void by failing to comply with section 3(6) of the Essential Commodities Act. Consequently, failure to submit the order or notification before both Parliament Houses can not result in the notification being annulled. Due to this, it becomes unnecessary for the court to deal with the other claim raised by the respondent to the effect that the aforementioned notification was of a subsidiary character, it was not necessary to make it valid by laying it before both Houses of Parliament. Therefore the appeal was dismissed.

Conclusion

The provisions of Section 4(2) of the Statutory Instruments Act, 1946 make the laying requirement mandatory for the validity of statutory instruments in England. However, in India, the effects of non-compliance with the laying provisions depend on whether the provisions found in the enabling act are directory or mandatory in nature.

In Narendra Kumar v. Union of India, the Supreme Court held that the provisions of Section 3(5) of the 1955 Essential Commodities Act, which provided that the regulations provided in the Act were to be laid before both Houses of Parliament, were mandatory and that, consequently, Clause 4 of the 1958 Non-Ferrous Control Order had no effect unless it had been brought before Parliament. However, the court deviated from its previous stand-in Jan Mohammad v. The State of Gujarat. Section 26(5) of the Bombay Agricultural Produce Markets Act, 1939 contained a laying down clause, but the rules set out in the Act could not be laid before the Provincial legislature at its first session, since there was no functional legislature at that time due to the emergency of World War II. During the second session, the rules were laid down.  Court held that the rules continued to remain valid because the legislature did not provide that the non-laying of rules in the first session would invalidate the rules.

Even if the laying requirement is just directory and not mandatory in nature, the rules established by the administrative authority without complying with the laying requirement should not be allowed if the rule-making mode has been breached.

References

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