149

CHAPTER - IV
DISTRIBUTION OF LEGISLATIVE POWERS BETWEEN
UNION AND STATES

1. Introduction
Lord Action is rightly accorded the pride of place for his eternal
words. “Power corrupts and absolute power corrupts absolutely”,
which are heard echoing throughout the history of mankind. In order
to prevent such power corruption, there have been attempts during
every period, for division of power. Indeed, power, politics and
conflicts are eternal, intimate contemporaries. The division of
authority is only a solution to keep such conflicts within limits. The
possibility of friction and conflict can never be totally ruled out.
Therefore, different solutions are sought at different times in order to
ensure that both sets of government function harmoniously.1
It is natural that every federal constitution should contain
provisions regulating Centre-State relation. In India past experience
with constitutional government, British traditions, public opinion and
more than all this, the understanding of the developing political
situation brought by powerful leaders at both levels have conditioned
the relationship between New Delhi and the State capital.2 They have
been conditioned by specific political pressures, personalities and the
organization of various interests. The most relevant facts shaping the
unitary development of India’s federalism were the lopsided
dominance of the Congress in the country’s politics and the lopsided

1 Das, H.H. and Mohapatra, S., “Centre-State Relations in India”, p. 112.

2 Rajni Kothari, “Politics in India” Orient Longman Ltd., 1970, p. 117.
 150

dominance of Nehru within the Congress. Therefore, it is said the

Indian Constitution is structurally a unitary document. But seldom
there is a whole-hearted agreement between law and practice. No
hard and fast rules exist about the division of power between different
power centres. Indeed, there cannot be any fixed taxonomic approach
for studying the power balance and its dynamics. The Indian
Constitution though heavily written, is massively ambivalent on
certain crucial matters. It seems at times that for answers to
contemporary problems and crises it is worse than useless to delve
into the statements and intentions of the founding fathers of the
constitution.3 “Given another chance, the Indian people will opt for a
different and certainly better constitution, not because old framers
were unwise and the new ones will have a touch of genesis but
because the situation and problems have undergone a sea of change.4
The relations between any two power centres are not totally
autonomous but are jointly determined alongwith other power
relationship in the system as a whole. Nevertheless, they have their
internal dynamics. To borrow a phrase from mathematical statistics,
the functional relationships within a subject can be put in
decomposable matrix, i.e., there are certain relationships internal to
the sub-set that are inter-dependent with as well as independent of
other sub-sets. A power set is a union or inter-section of other sets.5

3 Das, H.H. and Mohaptra, S., “Centre State Relations in Indid', (1986), p. 86.
4 Sethi, J.D., “Union State Relations " — A Balance ofPower Approach in “The Union and the
States" by Jain, kashyap, Sriniavasan, National Publishing House, (1972), p. 92.
5 Ibid.
 151

It is in this light the constitutional division of powers in every

country should be examined.6 7 A critical study of various federations
of the world reveals that the division of powers in each federation was
done in accordance with the peculiar political condition prevailing in
the country concerned. Federations, as is often found, emerge from
some sort of a contract among independent and sovereign State who
possessed full powers of legislation and administration prior to the
formation of a general Government. In such cases it is natural that the
federation is given such power as are considered appropriate for
fulfilment of the purposes for which the new structure is devised.
Two distinct principles underlie this division of authority. Firstly, all
contracting units are juridically accepted on an equal footing for
participation in the formation of the general will of the federation
irrespective of the size of their territory, population and resources.
Secondly, as the powers transferred to the federal government
originally belonged to the States, they will make, to some extent a
willing concession of rights to the new government, the residual
authority lying with them.8 This was the principle underlying the
division of power in the United States of America. In the United
States, the sovereign States which were keen to federate did not like
the Central Government to have an upper hand. They desired to
entrust subjects of common interest to the Central Government while
retaining the rest with themselves. Thus the American Constitution
enumerated a list of Legislative powers which were given to the

6 Das, H.H. and Mohapatra, “Centre-State Relations in India”, p. 87.

7 Ibid.
8 Ibid.
 152

Centre leaving the residuary powers for the States.9 On the other
hand, the Canadian constitution-makers were conscious of unfortunate
happenings in U.S.A. culminating in civil war of 1861. As such they
aware of pitfalls of a weak centre. Hence they opted for a strong
centre. They divided the subjects into two lists - Federal and
Provincial and left the residuary subjects for the centre.10
The framers of our constitution defined, in great detail, the
powers of both the Union and the States. This is in reality a legacy of
the past, for the Act of 1935 which had imported the federal ideal to
India had contained three lists also - Federal, Provincial and
concurrent and the residuary powers were given to the Governor-
General in his discretion.11 The method of distribution of powers
adopted was neither American nor Canadian. It was necessitated by
the political conditions then prevailing in India. In the three Round
Table Conferences preceding the enactment of the Act of 1935, there
was a substantial differences of opinion between the Hindus and
Muslims with regard to the allocation of residuary powers. The
Hindus, favouring a strong Centre, insisted that residuary powers
should be given to it, whereas the Muslims favoured strong provinces
and demanded that residuary powers should go to them. To solve
these conflicting claims, the device adopted was to enumerate
exhaustively the exclusive powers of the Centre and the Provinces so
as to reduce “the residue to proportions so negligible that the
apprehensions which have been felt on one side or the other are

11 Section 104,The Government of India Act, 1935.

 153

without foundation.12 The Joint Parliamentary Committee explained

the need for having a concurrent list. It said, experience has shown
both in India and elsewhere, that there are certain matters which
cannot be allocated exclusively either to a Central or to a Provincial
Legislature, and for which, though it is often desirable that Provincial
Legislature should make provision, it is equally necessary that the
Central Legislature should also have a legislative jurisdiction to
enable it in some cases to secure uniformity in the main principles of
law throughout the country, in others to guide and encourage
provincial efforts and in others again to provided remedies for
mischiefs arising in the provincial sphere but extending or liable to
13
extend beyond the boundaries of a single province.
The scheme and principle of distribution of powers in the
Constitution of India substantially remain the same as it was under the
Government of India Act, 1935. The Act recognized three classes of
subjects : (i) exclusively federal, having 59 items of national
importance like defence, foreign relations, etc., (ii) exclusively
Provincial, having 54 items relating to public health, police, law and
order, education, etc., and (iii) concurrent, having 36 items like
criminal law and criminal procedure; marriage and divorce, etc.14
The system of distribution of legislative powers between the
Union and State Legislatures under the Indian Constitution is unique,

12 J.P.C. report, para 49.

13 Ibid.
14 Anirudh Prasad, “Centre-State Relations in India”, op. cit., p. 43.
 154

in so far as the enumeration of subjects in the 7th Schedule is three­

fold. Several outstanding features mark this system.15
(a) By enumerating as many as 211 subjects in the three lists, it
aims at exhaustion, in order to minimise litigation over conflict of
jurisdiction as between the Union Parliament and a State legislature.
(b) Secondly, wherever any conflict could be anticipated, the
Constitution has given predominance to the Union jurisdiction so as to
given the federal system a strong Central bias. Thus :
(1) In case of overlapping of a matter as between the three lists,
predominance has been given to the Union Legislature, as under the
Government of India Act, 1935. Thus, the power of the State
Legislature to legislate with respect to matters enumerated in the State
list has been made subject to the power of the Union Parliament to
legislate in respect of matters enumerated in the Union and concurrent
lists16, and the entries in the State List have to be interpreted
17
accordingly.
(2) In the concurrent-sphere, in case of repugnancy between a
Union and a State law relating to the same subject, the former
prevails. If, however, the State law was reserved for the assent of the
President and has received such assent, the State law may prevail
notwithstanding such repugnancy, but it would be competent for

15 It is from India that the later Constitution of Malaysia, 1957, has adopted the pattern of three
lists.
16 Subramanyam v. Muthuswami, A. 1941 F.C. 47; I.T.C. v. State ofKarnataka, (1985) Supp.
SCC. 476 (Para 19); Sudhtr v. W.T.O., AIR 1969, SC 59 (Para 9(31)).
17 K.S.E.Board. v. Indian Aluminium Co., (1976)1SCC466:AIR 1976 SC 1031 (1036-37); I.T.C.
•v. State of Karnataka, (1985) Supp. SCC. 476 (Para 19); Sudhir v. W.T.O., AIR 1969 SC 59
Para 7(3).
 155

Parliament to override such State law by subsequent legislation

[Article 254 (2)(1)].18,19
(3) The vesting of residual power under the Constitution follows
the precedent of Canada, for it is given to the Union instead of the
States (as in U.S.A. and Australia). The Constitution of India vests
the residuary power, i.e., the power to legislate with respect to any
matter not enumerated in any one of the three lists - in the Union
Legislature, but the final determination as to whether a particular
matter falls under the residuary power or not is that of the Courts. 20
It is should be noted, however, that since the three Lists attempt
at an exhaustive enumeration of all possible subjects of legislation,
and the courts interpret the ambit of the enumerated powers liberally,
the scope for the application of the residuary power will be narrow. It
is not strange therefore that during the fifty years of the working of
the Constitution there have not been many reported decisions where a
01
Union legislation has been attributed solely to the residuary power.
Thirdly, even apart from the Central bias in the normal
distribution of powers, there are certain extraordinary provisions in
the Constitution which provide for expansion of the federal power in
cases of emergency or other predominating national interests, instead

18 Zaverbhai v. State ofBombay, AIR 1954 SC 752 (756-57) .

19 U.P.E.S. v. Shukla, AIR 1970 SC 237 (239); Western Coalfied v. S.A.D.A., AIR 1982 SC 697
(Para 17).
20 Union ofIndia v. HS.Dhillon, AIR 1972 SC 1061.
21 Mithan v. State of Delhi, (1959), SCR. 445 ; Dimond Sugar Mills v. State of U.P., AIR 1961
SC 652 (658); Hare Krishna v. Union of India, A. 1966 SC 619 (622); Second G.T.O. v.
Hazareth, AIR 1970 SC 999; Azam Jha Bahadur v. Expenditure Tax Officer, Hyderabad
(1971) 3 SCC. 621 (629); Union of India v. H S.Dhillon, AIR 1972 SC 108961; Sable v.
Union ofIndia, AIR 1975 SC 1172 (Para 13).
22
Articles 249, 250,252, 253,The Constitution of India.
 156

of leaving it to judicial interpretation as in the U.S.A., Australia or

Canada. These provisions, therefore, constitute additional limitations
upon the powers of the State Legislatures. These exceptional
circumstances are: The National Interest, Proclamation of Emergency,
Legislation by agreement between States, to implement treaties and
when President’s rule is imposed.23
But, it must not be supposed that the Indian Constitution
imposes no limits to the federal power or leaves nothing to the State
Legislatures. By the application of the doctrine of ‘Pith and
substance’ and of liberal interpretation of both the Union and the State
Lists, the Supreme Court has carved out an area for State Legislation,
even in cases of apparent overlapping.24 Once it is determined that a
subject belongs to the exclusive State jurisdiction any legislation
made by the Union Parliament must give way, though, illustrations on
this point are rare.
2. Legislative Powers of Union and States
We, earlier, have observed that India is a federation having a
federal Constitution. In a federation there are two sets of
Governments. All powers are divided among them. The Union, 28
States and 7 Union Territories derive their powers from the
Constitution. It is the Constitution that confers powers on these units.
The States do not owe their powers to the Union. Rather both of them
derive the powers from the same source - the Constitution. The

23 Basu. D.D., “Comparative Federalism”, (1983), pp. 267-68.

24 Ishwari v. State ofU.P., AIR 1980 SC 1955 (Paras 6, 23-24); I.T.C. v. State of Haryana, AIR
1981 SC 774 (Para 8); Tara Prasad v. Union of India , AIR 1980 SC 1682 (Paras 14, 30, 30);
State ofT.N. v. Hind Stone, A. 1981 SC 711 (Para 1); Ghouse v. State of Kerala, A. 1980 SC
 157

Constitution divides all powers between the two - the Union and the
States. It is the mark and essential feature of a federal polity that
powers are divided and distributed between the National Government
and the States. The powers which are so shared are generally of four
types (a) Legislative (b) Executive (c) Financial (d) Judicial. When
the country faces some danger owing to war or external aggression or
where the internal situation in the country demands an action to
protect the Constitution the distribution of powers suffers
modification during the period such unusual situations exist. Even in
normal times certain services must not be dependent on the whims of
the States, e.g. Railways, Communications etc. Hence the division of
powers must have an amount of in-built flexibility. It also follows
that neither the Union nor the States are sovereign. Both are subject
to and controlled by the Constitution. Each must perform its functions
and exercise its powers within the limits set by the Constitution.
No Division of Judicial Power
In India we have a unified judiciary. In other words the judicial
power has not been divided between the Union and the States. We
have a common set of courts for the States as well as the Union.
Basic Postulate of Distribution of Legislative Powers between
Union and States

The division of legislative powers between the Union and the

States is a characteristic of all federal Constitutions though the actual
distribution varies from country to country and depends on the

271 (Paras 7,8, 43); Union of India v. Dhillon, A. 1972 SC 1061 (Paras 63, 65); State of
Bombay v. Balsara (1951) SCR. 682 (685); State ofHatyanav. Channan, AIR 1976 SC 1654.
 158

historical and political forces operating in the country. But the

common factor visible in all Constitutions is that the division is with
reference to, -
(a) The territory over which Union and the States will exercise
authority and
(b) The subject - matter over which their authority will extend.
(i) Territorial Limits
Powers of legislation in a federal or quasi-federal constitution,
are divided between the Centre and the States. The division is in
respect of both the territory and topics of legislation. Article 245
defines the ambit or territorial limits of the legislative powers vested
in Parliament and the Legislatures of the States; Article 246 defines
the respective jurisdictions of the Union and the State legislatures as
regards subjects or topics of legislation. The prevalent view is that
not only the territorial jurisdiction but also the substantive law-making
powers of Parliament and State legislatures emanate from Article 245
and that those powers are “subject to the provisions of this
Constitution” as stated in the opening words of that article. On this
view judicial review of legislation is justified in the opening words of
Article 245. That is, every law of Parliament and State legislatures
must conform to the provisions of the Constitution and if it does not, it
must be unconstitutional and must be so declared by the courts in
appropriate proceedings.25 While apparently this view seems to be

25 See A.K. Gopalan v. State of Madras, AIR 1950 SC 27; Atiabari Tea Co.Ltd. v. State of
Assam, AIR 1961 SC 232; Golak Nath v. State of Punjab, AIR 1967 SC 1643; State of Bihar
v.Bal Mukund Sah, (2000) 4 SCC 640, 683; V.S. Deshpande: Judicial Review of Legislation,
(1975) p.55; D.D. Basil: Limited Government and Judicial Review, (1972), p. 291.
 159

sound and natural, on a careful reading of Article 245 and other

related provisions, particularly Article 246, it is very plausible to hold
that Article 245 is concerned exclusively with the territorial division
of law-making powers of the Union and the States and the subject-
matters with respect to which those powers can be exercised are
enumerated in other articles, particularly in Article 246. Thus the
power to legislature is given by Article 246 and some other articles of
the Constitution and not by Article 245. And the subjection of
legislative power to the Constitution is not because of the opening
words of Article 245 but rather it is inherent in our constitutional
system. Basing judicial review of legislation only in the opening
words of Article 245 may cause complications because the
Constitution also confers legislative powers on bodies other than
Parliament and State legislatures without any qualifying such as the
one in the opening words of Article 245.27
There is enough, therefore, almost conclusive, justification for
the view that Article 245 is concerned only with territorial jurisdiction
of Parliament and State Legislatures. Its clause (1) states an obvious
proposition that the laws of Parliament may apply or extend to the
whole or any part of the territory of India while the laws of a State
Legislature may apply or extend to the whole or any part of that State.
By virtue of the opening words of clause (1) the application or extent
of the laws of Parliament, as the case may be, is subject to the

26 See Synthetics and Chemicals Ltd. v. State ofU.P. , AIR 1990 SC 1927(1951).
27 See e.g., Art. 240 and para 5(2) of the Sch. V. to the Constitution for a detailed discussion that
Art. 245 concerns territorial limits and not substantive legislative power, see. M.P. Singh :
“Legislative Power in India: Some clarifications”, 4 & 5 Delhi L. Rev. 73 (1975-76).
 160

provisions of the Constitution in this regard. Thus, for example, the

application of the laws of Parliament to the States of Jammu and
Kashmir and Naglanad is subject to the provisions of Articles 370 and
371A respectively. Similarly, for example, the territorial application
of the laws of certain State Legislatures is subject to the provisions of
the Sixth Schedule to the Constitution.
Under Article 245 (1) only Parliament or the State Legislature,
as the case may be, determines the territorial application of law. The
Courts cannot order Parliament or a State Legislature, as the case may
be, the application or non-application of law to any territory or part of
it.28
Clause (2) makes it clear that a law passed by Parliament shall
not be deemed to be invalid on the ground that it has extra-territorial
operation, i.e., is effective outside the territorial of India.29 To
illustrate, suppose Parliament passes an Act to the effect that if a
person domiciled in the territory of India marries wheresoever while
his former wife is alive and has not been divorced by a competent
court, he shall be guilty of the offence of bigamy and shall be liable to
penal servitude for seven years. A citizen of India goes to France and
marries a French woman while his first wife is alive. He can be
prosecuted in India for the offence of bigamy committed in France.

28 Panchugopal Barua v. Umesh Chandra Goswami, AIR 1997 SC 1041.

29 Formerly, the Dominions possessed no general power to pass legislation having extra-territorial
operation or purposes of punishing crimes committed abroad. Maclead v. Att.-Gen. For New
South Wales, 1919 A.C. 455. The extent of this limitation was difficult to define; see Croft v.
Dumphy, 1933 A.C. 156. Whatever have been the limitations, they were removed by the
Statute of Westminster, 1931. S. 3 states : “It is hereby declared and enacted that the
Parliament of a Dominion has full power to make laws having extra-territorial operation.”
Similarly S. 6(i) of the Indian Independence Act, 1947, enacts : “The Legislature of each of
 161

The Act cannot be challenged on the ground of extra-territorial

operation, i.e., it makes an act done in France an offence under the
Indian enactment. “In the case of a sovereign Legislature,” said
Kania, C.J. in A.H. Wadia v. C.I.T.30, “questions of extra-territoriality
of any enactment can never be raised in the municipal courts as a
ground for challenging its validity. The legislation may offend the
rules of international law, may not be recognised by foreign courts, or
there may be practical difficulties in enforcing it but these are
questions of policy with which the domestic tribunals are not
concerned. This was recognised in Ashbury v. Ellis and Croft v.
Dumphy”.32 The Supreme Court has, however, clarified that the
sovereign power of Parliament to make laws with extra-territorial
operation must respect the sovereignty of other States also and,
therefore, provocation for the law must be found within India itself.
Such a law may have extra-territorial operation in order to subserve
the object, and that object must be related to something in India.33
(ii) Territorial nexus
The power to make a law having extra-territorial operation is
conferred only on Parliament and not on the State Legislatures.
Hence, an Act of the State Legislature, if it gives extra-territorial
operation to its provisions, can successfully be challenged in the court,
unless the extra-territorial operation can be sustained on the ground of

the new Dominions shall have full power to make laws for that Dominion, including laws
having extra-territorial operation.”
30 AIR 1949 F.C. 18,25.
3! 1893 A.C. 339.
32 1933 A.C. 156.
33 Electronics Corpn. ofIndia Ltd. v. C.I. T., AIR 1989 SC 1707.
 162

territorial nexus.34 This means that a State law is not invalid so long
as there is a sufficient nexus or connection between the State making
that law and the subject-matter of legislation. In other words,
although the object to which the law applies may not physically be
located within the territorial limits of a State, yet the State law will be
valid if there exists a connection or nexus between the State and that
object.
State tax legislations have frequently been challenged on the
ground of their extra-territoriality and the courts have in determining
the validity of such legislations applied “the doctrine of nexus”: if
there is a territorial nexus or connection between the person sought to
be charged and the State seeking to tax him, the taxing statute is
upheld. But the connection must be sufficient. Sufficiency of the
territorial connection involves a consideration of two elements,
namely : (i) the connection must be real and not illusory, and (ii) the
liability sought to be imposed must be pertinent to that connection.
In Raleigh Investment Co. case , the assessee was a company
incorporated in England. Its registered office was in England and it
held shares in nine sterling companies incorporated in England.
Those sterling companies carried on business in British India and
earned income, profits or gains in British India and declared and paid
divides in England to its shareholders including the assessee company.
The assessee company was charged to income tax under Section 4(1)
of the Income Tax Act. It should be noted that the assessee company

34 Kochuni v. States ofMadras & Kerala, AIR 1960 SC 1080 : (1960) 3 SCR 887.
35 State ofBombay v. R.M.D. Chamarbaugwala, AIR 1960 SC 699 : 1957 SCR 874.
36 Governor General v. Raleigh Investment Co., 1944 FCR 229: AIR 1944 FC 51.
 163

was not resident Jn British India, nor did it carry on any business in
British India and made no income out of any business carried on by it
in British India. It invested its money and acquired shares in England
in the nine sterling company which were English companies. It was
only when those nine companies declared and paid dividends in
England that the assessee company really earned its income, profits or
gains out of its investments in England in the shares of nine sterling
companies. The fact that the nine sterling companies derived their
income, profits or gains out of business carried on by them in British
India out of which they paid dividends to the assessee company was
regarded as sufficient nexus so as to fasten the tax liability on the
assessee company in respect of the income, profits or gains it derived
from the nine sterling companies.
In Wallace Bros. & Co. Ltd. v. C.I.T.37, the assessee company
which was incorporated in England and had its registered office there,
was a partner in a firm which carried on business in British India.
This connection of the assessee company with British India was
considered sufficient to tax not only the income or profits made by the
assessee as a partner in the firm but also its income or profits which
accrued out of British India. Again, in A.H. Wadia v. C.I.T.38, the
principle of territorial nexus was applied in upholding Section 4 of the
Income Tax Act. The Gwalior Government in that case had loaned at
Gwalior large sums of money to a company in British India on the
mortgage of debentures over property in British India. The interest

AIR 1948 PC 118.

AIR 1949 FC 18.
 164

on loan was payable at Gwalior. The Indian Income Tax authorities

assessed income tax on the interest received by the Gwalior
Government under Section 4(2) of the Income Tax Act. The Federal
Court of India held that the assessee was rightly taxed as there was
sufficient nexus between British India and the person sought to be
taxed.
The nexus test so laid down in these pre-Constitution cases
involving Central legislation has been applied by the Supreme Court
to the State legislations. In Tata Iron & Steel Company v. Bihar
State39, the doctrine of nexus was applied to sales tax and in State of
Bombay v. R.M.D. Chamarbaugwala40 to a tax on gambling. In the
Tata Iron & Steel Company Case, it was observed that the nexus
theory doe not impose the tax, it only indicates the circumstances in
which a tax imposed by an Act of the legislature may be enforced in a
particular case. In a sale of goods, the goods must of necessity play
an important part, for it is the goods in which was a result of the sale,
the property will pass. The presence of the goods at the date of the
agreement for sale in the taxing State or the production or
manufacture in that State of goods, the property wherein eventually
passed as a result of the sale wherever that might have taken place,
constituted a sufficient nexus between the taxing State and the sale.
In the R.M.D.C. case, the Bombay Legislature passed an Act, the
Bombay Lotteries and Prize Competitions Control and Tax Act, 1948,
which imposed tax on prize competitions carrying on business in the

39 AIR 1958 SC 452: 1958 SCR 1355. Also see Popatlal Shal v. State ofMadras, AIR 1953 SC
274 and Tikaram & Sons Ltd. et. v. C.S.T., AIR 1968 SC 1286.
40
AIR 1957 SC 699: 1957 SCR 874.
 165

State. The question for decision before the Supreme Court was if the
respondent, the organiser of the competition, who was outside the
State of Bombay, could be validly taxed under the Act. The
circumstances were as follows : A newspaper by the name of
‘Sporting Star’ printed and published in Bangalore had wide
circulation in the State of Bombay. The respondent through this paper
conducted and ran prize competitions for which the entries were
received from the State of Bombay through agents and depots
established in the State to collect entry forms and fees for being
forwarded to the head office in Bangalore. The competitors filled up
the entry forms and either left them along with entry fees at the
collection depots or sent the same by post from Bombay. Thus, it
could well be said that all the activities which the competitor is
ordinarily expected to undertake took place mostly, if not entirely, in
the State of Bombay. In other words, the standing invitations, the
filling up of the forms and the payment of money took place within
the State of Bombay. In these circumstances, it was held that there
existed a sufficient territorial nexus to enable the Bombay Legislature
to tax the respondent who was residing outside the State.
The doctrine of territorial nexus is not confined to taxing
statutes alone. In State of Bihar v. Charusila Das41, it has been held
that a State legislature has the power to legislate with respect to
charitable and religious trusts situate within its territory even though
any part of the trust property, small or large, is situated in another

AIR 1959 SC 1002 : 1959 Supp 2 SCR 601, followed in Anant Prasad v. State ofA.P., AIR
1963 SC 853.
 166

State. The trust being situated in a particular State, the State has
legislative power over it and also over its trustees or their servants and
agents who must in that State to administer the trust. Similarly, in
Shrikant Karulkar v. State of Gujarat?2 the Court upheld the Gujarat
Agricultural Land Ceiling Act, 1960 on the principle of territorial
nexus in so far as that Act took into account the agricultural land held
by a person outside the State of Gujarat for the purpose of determining
the ceiling of agricultural land in the State of Gujarat.
The territorial limit on State legislation under Article 245(1)
does not apply either to State executive schemes such as
nationalization of inter-State road transport under the Motor Vehicles
Act (a Central legislation) or to trade and business carried on by a
State under the authority of Article 298.43
(iii) Sufficiency of Nexus

The most important consideration for invoking the doctrine is

that the connection between the State and the subject-matter of the
law must be real and not illusory. Thus, if you are allowed to tax a
dog it must be within the territorial limits of your taxable jurisdiction.
You cannot tax it if it is bom elsewhere and remains there simply
because its other was with you at some point of time during he period
of gestation. Equally, after birth you cannot tax it simply because its
tail is cut off and sent back to the fond owner. These illustrations
bring out very clearly the distinction between what is a real as

42 (1994) 5 see 459.

43 See Khazan Singh v. State of U.P., (1974) 1 SCC 295 : AIR 1974 SC 669 where a U.P.
scheme nationalizing certain routes between that State of Rajasthan was upheld against the
challenge of extra-territoriality.
 167

opposed to what is only an illusory connection. There is a nexus of

some kind in both cases, but this kind of relation is unreal and cannot
be the basis of a valid law. Secondly, the territorial nexus is not
sufficient unless the law selects some fact which provides some
relation or connection with the State and adopts that as the ground for
its interference. If the connection is not the reason for applying the
law to persons or things outside the State, there is no sufficiency of
territorial connection.
A valid State law, therefore, must have a sufficient territorial
nexus with the legislating State although one cannot lay down the
precise circumstances or fact situations when the nexus will be
considered sufficient. It will be for the court to determine in each
case if the test of sufficiency of nexus is satisfied.
(iv) Delegation of Legislative Powers
A number of legislations takes place outside the Legislature in
governmental departments. It may be executive and the
administrative. Such kind of legislations are nomenclature, rules,
regulations, bye-laws, schemes, orders, notifications, etc. There is no
general power with the Executive to supplement the laws made by the
Legislature. The Executive derives whatever power in this behalf,
only from delegation made under specific enactments. This kind of
activity, i.e., the power to supplement legislation, has been described
as delegated or subordinate legislation.
It is a matter of common observation that in recent years there
has been enormous increase in delegated legislation. The development
is not an isolated fact but rather a concomitant to the increased
 168

til
functions of the State individualism which dominated the 19 century
political thought, believed that an individual was the best judge of his
own interests and that the greatest service which the State could do to
him was to let him alone. The only legitimate functions for the State
were the maintenance of order both within and without the country.
Such a State has rightly been called as a negative State.44
The modem State has along since ceased to regard its role in the
social economic life of the community as that of a “glorified
policeman”. It is assuming more and more responsibility in promoting
the welfare of its citizens, supervising their health, education and
employment, regulating trade, industry and commerce, and providing
a great variety of other services. The negative State has transformed
into a welfare State. All this has involved entrusting the Executive
with great powers and functions, including that of delegated
legislation. The following factors and circumstances are responsible
for delegated legislation.45
(a) Parliament, the apex law-making body, is not competent to
enact every type of law. It has many other businesses and thus it is
too busy a body. It is spend its time in entering into minor and
subsidiary details and attempts to law down all rules itself, all its time
will be taken over by only a few Acts. The time factor prevents
Parliament from providing all the details and, therefore, has to confer
on the Executive rule-making powers to supplement the Act.

44
Shukla, V.N., “Constitution ofIndia, Seventh Edn., p. 455.
45
Ibid., pp. 457-58.
 169

(b) The need for amplifying the main provisions of social

legislation to meet unforeseen contingencies or to facilitate
adjustments to new circumstances arises all too frequently and while
the Parliamentary process involves delays, delegated legislation offers
rapid machinery for amendment.
(c) Many rules which have to be made to effectuate the policy
of the Act are of technical nature and require expert’s consultations.
(d) In some cases, such a change in rationing schemes of
imposition of import duty or exchange control, public interest requires
that the provisions of the law should not be known until the time fixed
for it to come into operation.
(e) An emergency may create on account of war, insurrection,
floods, epidemics, economic depression and the like, against which
the Executive must have power that may be used instantly.46
(a) Constitutionality of Delegated Legislation
The question generally arises whether any limitations or checks
have been laid down under the Indian Constitution against the
delegation of powers by the legislature to an outside authority. As a
matter of fact, in a state having a written constitution which forms the
fundamental and paramount law of the nation, the legislature must act
within the ambit of the powers defined by the constitution and subject
to the limitations prescribed thereby. Every Parliamentary Act or the
legislation which is against or contrary to the provisions of the
Constitution is null and void, and the duty of keeping the legislature
within its bounds, in systems incorporating the doctrine of judicial

46
Ibid,
 170

review, devolves upon the courts. Our Indian Constitution

incorporate the doctrine of judicial review of legislation as to its
conformity with the constitution.47
On the other hand, there is no written constitution in England
which circumscribes the powers of Parliament which is sovereign in
the eyes of law. There does not exist in any part of the British
Empire any person or body of persons, executive, legislative or
judicial, which can pronounce void any enactment passed by the
British Parliament on the ground of such enactment being opposed to
the Constitution, or on any ground whatever, except, of course, its
being repealed by Parliament.48 The British Constitution has entrusted
to the two Houses of Parliament, subject to the assent of the King, on
absolute power untrammelled by any written instrument obedience to
which may be compelled by some judicial body.49 Parliament may
accordingly delegate to any extent its powers of law-making to an
outside authority. As a matter of law, Parliament may surrender all its
power in favour of another body as it actually did in 1807, when the
English and Scottish Parliament passed Acts of Union providing for
the coming into existence of a new body, Parliament of Great Britain.
The limits of delegate legislation in the English Constitution, if there
are to be any, must, therefore, remain a question of policy and not a
justiciable issue for the courts.50

See Article 13 and also State ofMadras v. V.G. Rao, AIR 1952 SC 196, 198 : 1952, SCR.,
957.
48 Dicey, A.V., “An Introduction to the Study of the Law of the Constitution”, Tenth Edn., 1959,
pp. 90-91.
49 R. v. Holliday, 1917, A C. 260.
50 Shukla, V.N., “Constitution ofIndia", op.cit., p. 456.
 171

Before discussing the limiting principle, it is necessary to refer

to a mode of classification of delegated legislation. It is usual with the
American writers to classify delegated legislation as contingent and
subordinate.51
A similar division (except that the word ‘constitutional’ is
substituted for the word ‘contingent’ has in some cases been alluded
to by the courts in India. This mode of classification is primarily
linked up with the American doctrine of delegation. In the leading
case of Field v. Clark,52 the impugned Act authorised the President by
r

proclamation to suspend the operation of an Act permitting free

introduction into the U.S. of certain products upon his finding that the
duties imposed upon the products of the U.S. were reciprocally
unequal and unreasonable. The U.S. Supreme Court held the Act
valid on the ground that the President was a mere agent of Congress to
ascertain and declare the contingency upon which the will of Congress
was to take effect. The delegated authority did not conflict with the
rule against delegation since such authority, in the view of the Court,
had no legislative character. The Court quoted with approval the
following form a Pennsylvania case :
The legislature cannot delegate its power to make a law;
but it can make a law to delegate a power to determine
some fact or state of things upon which the law intends to

51 E.G., delegation of the following types of power:

i) to extend the duration of the Act.
ii) to extend the application of the Act.
iii) to suspend or dispense with Acts, and
iv) to make alteration in the Act.
52
143 U.S. 694.
 172

make its own action depends.53 Based on these

decisions, contingent legislation is defined as “statute
that provides control but specifies that they are to come
into effect only when a given administrative authority
finds the existence of conditions defined in the statutes.54
In subordinate legislation, on the other hand, the process
consists of a discretionary elaboration of rules and
regulations.55 The distinction between the two types is
said to be based on the point of discretion. In contingent
or conditional legislation the delegation is of fact-finding
and in subordinate legislation it is of discretion. In other
words, by delegated or subordinate legislation the
delegate completes the legislation by supplying details
within the limits prescribed by the statute and in the case
of conditional legislation the power of legislation is
exercised by the legislature conditionally leaving to the
discretion of an external authority, the time and manner
of carrying its legislation into effect as also the
determination of the area to which it is to extend.56
If the underlying purpose of the above classification is to
distinguish between the two types of delegated legislation, there is no
objection. But the difficulty arises when it is assumed that

53 Locke’s Appeal, 72 Pa 491. .

54 Hart, “An Introduction to Administrative Law with Selected Cases", p. 310.
55 Ibid.
56 Hamdard Dawakhana v. Union ofIndia, AIR 1960, SC 554: 566 (1960) 2 SCR. 671, see also
K.S.E.Board. v. Indian Aluminium Co., AIR 1976, SC 1031 (Para 27), Chinai v. State of
Gujarat, AIR 1970, SC 1188 (1190); Arnolds. State ofMarashatra, AIR 1966, SC 1788.
 173

confidential legislation does not involve either the exercise of

discretion or legislative will. It must not be forgotten that contingency
formula is nothing but a fiction employed by the U.S. Supreme Court
to get away from the “doctrine of separation of powers”. It is
submitted that in India there is no compelling necessity to resort to the
fiction. Moreover, it is not easy to draw a dividing line between
“conditional legislation or “subordinate legislation”. In any case the
need for safeguards against the abuse of delegations classified in the
artificial category of conditional legislation is as great as in the case of
the other type, namely, subordinate legislation.57
(b) Limitations on Delegation of Legislative Powers
So far as limitations are concerned, it is now settled by the
majority judgement in re Delhi Laws Act, 191258 that there is a limit
beyond which may not go. The limit is that essential powers of
legislation cannot be delegated. The essential legislative power
consists of the determination or choice of the legislative policy and of
formally enacting that policy into a binding rule of conduct. The
legislature, therefore, may not delegate its function of laying down
legislative policy to an outside authority in respect of a measure and
its formulation as a rule of conduct. So long as a policy is laid down
and a standard or limit established by statute no unconstitutional
delegation of legislative power is involved in leaving to the executive
the making of subordinate rules within the prescribed limits and the

57 Shukla, V.N., “The Constitution ofIndia” Tenth Edn., p. 635.

58 AIR 1951 SC 332, 345,387,401 : 1951 SCR. 747.
 174

determination of facts to which the legislation is to apply. Mukherjea,

J. said.59
“The policy may be- participated in as few or as many
words as the legislature thinks proper and it is enough if
intelligent guidance is given tot he subordinate authority.
The court can interfere if no policy is discernible at all or
the delegation is of such an indefinite character as to
amount to abdication, but as the discretion vests with the
legislature in determining whether there is necessity for
delegation or not, the exercise of such discretion is not to
be disturbed by the courts except in clear cases of abuse.”
The next question arises as to what is the constitutional basis on
which prohibition of delegation of law-making powers rests. There is
no specific provision in the Constitution prohibiting the delegation.
The Constitution of U.S.A. embodies the doctrine of separation of
powers, which prohibits the executive being given law-making
powers.. But does such a doctrine form part of the Constitution of
India? There is a divergence of opinion. (See Sastri, J.’s judgement
in Delhi Laws Act, 1912, Re).60 Mukherjea, C.J., in Ram Jawaya v.
State of Punjab , however, based the prohibition on some sort of
doctrine of separation of powers. He said :
“The Indian Constitution has not indeed recognised the
doctrine of separation of powers in its absolute rigidity
but the functions of the different parts or branches of the

59 Id. At pp. 400-401.

60 AIR 1951 SC 332 : 1951 SCR 747.
61 AIR 1955 SC 549, 556 : (1955) 2 SCR 225.
 175

Government have been sufficiently differentiated and

consequently it can very well be said that our
Constitution does not contemplate assumption, by one
organ or part of the State, of functions that essentially
belong to another. The executive indeed can exercise the
powers of departmental or subordinate legislation when
such powers are delegated to it by the legislature.”
However, in Edward Mills Co. v. State of Ajmer , it was
explained that where a legislature is given plenary powers to legislate
on a particular subject that where also be an implied power to make
laws incidental to the exercise on such power. It is a fundamental
principle of constitutional law that everything necessary to the
exercise of a power is included in the grant of power. A legislature
cannot certainly strip itself of its essential legislative functions, and
vest the same in an extraneous authority. The primary duty of law­
making has to be discharged by the legislature itself but delegation
may be resorted to as a subsidiary or an ancillary measure.

In Devi Das Gopal Krishan v. State of Punjab63, Subba Rao,

CJ. provided another justification for delegated legislation that the
Constitution confers a power and imposes a duty on the legislature to
make laws, but in view of the multifarious activities of a welfare
State, it cannot presumably work out all the details to suit the varying
aspects of a complex situation. The legislature must necessarily

62 AIR 1955 SC 25 : (1955) 1 SCR 735.

63 AIR 1967 SC 1895, 1901: (1967) 3 SCR 557. See also Kalawativ. C.I.T., AIR 1968 SC 162 :
(1967) 3 SCR 833, per Sikri, C.J., 168 ; Tata Iron & Steel Co. v. Workmen, (1972) 2 SCC 383
: AIR 1973 SC 1401.
 176

delegate the working out of details to the executive or any other

agency. It may, therefore, be said that taking it for granted that the
institution of delegated legislation has the sanction of the Constitution,
the term constitutionality in reference thereto seeks to determine the
vires of the ‘output’ and not the ‘institution’ itself on the anvil of the
Constitution. Upon this hypothesis the touchstone for determining
the constitutionality of delegated legislation is ‘essential legislative
function’ as the determination of the legislative policy and its
formulation as a rule of conduct. Essentially, the constitutionality of
delegated legislation consists in whether the legislature retains
material control over the delegated authority in matters of legislation,
(c) Application- In the famous reference on delegated legislation,
Delhi Laws Act etc., 1912, Re, the Supreme Court was invited to give
its opinion on the validity of the delegatory provisions contained in
three Central Acts, namely, Section 7 of the Delhi Laws Act, 1912,
Section 2 of the Ajmer Marwar (Extension of Laws) Laws Act, 1947
and Section 2 of the Part C States (Laws), Act, 1950.
Section 7 of the Delhi Laws Act empowers the Provincial
Government to extend with such restrictions and modifications as it
thinks fit to the Province of Delhi or any part thereof, any enactment
which is in force in any part of India at the date of such notification.
In similar terms by Section 2 of the Ajmer Marwar (Extension
of Laws) Act, 1947, the Central Government is empowered to extend
with restrictions and modifications, any enactment which is in force in
any other province at the date of the notification. Section 2 of the
Part C States (Laws) Act, 1950, in addition to empowering the Central
 177

Government to extend laws to any Part C State in terms similar to the

Ajmer Act, provides:
“And provision may be made in any enactment so extended for
the repeal or amendment of any corresponding law (other than a
Central Act) which is for the time being applicable to that Part C
State.”
It will be noted that in each case the Central Legislature had
empowered an executive authority under its legislative control to
apply, at its discretion, the laws to an area which was also under the
legislative sway of the Centre. Variations occur firstly, in the type of
laws which the executive authority was authorised to select, and
secondly, in the modifications which it was empowered to make in
them. The following decisions may be held to have been taken on
those variations64:
(a) Power can validly be delegated to the executive authority, at its
discretion to apply without modification (save incidental
changes such as the name and the place) the whole of any
Central Act already in existence in any part of India under the
legislative sway of the Centre to the new area. (See Section 7,
Delhi Laws Act, 1912).
(b) Power can be delegated to an executive authority to select and
apply a Provincial Act in similar circumstances. [See Section 2
of the Aj mer Marwar (Extension of Laws) Act, 1947].

64 Rajnarain Singh v. Chairman, P.A.C., AIR 1954 SC 569( 573): (1955)1 SCR 290.
 178

(c) Power can be delegated to the executive authority to select

future Central laws and apply them in a similar way. (See
Section 7, Delhi Laws Act etc., 1912).
(d) Power can be delegated to select future provincial laws and
apply them. [Section 2, Ajmer Marwar (Extension of Laws)
Act, 1947].
(e) Power cannot be delegated to an executive authority to repeal a
law existing in the area and either to make no law in its place,
or to substitute some other law therefore. [See Section 2 of the
Part C States (Laws) Act, 1950.]
(f) On the question of modification and alternation permitted in all
the three Acts, the majority view was that an executive
authority can be authorised to modify an existing or future law
but not an essential feature. Exactly what constitutes an
essential feature, it was admitted, cannot be enunciated in
general terms, and there was divergence of opinion among the
judges, but this much is clear that it cannot include a change of
policy. The minority judgement took the view that there are no
constitutional inhibitions against the delegation of powers by
the legislature provided that the delegating legislature retains
the power to withdraw the delegated authority. There is no
prohibition, therefore, relating to the extent to which the
legislature may delegate, provided that the grant remains
revocable. (See judgements of Patanjali Sastri and Das, JJ.)
 179

In Harishankar Bagla v. State of M.P.,65 Section 3 of the

Essential Supplies (Temporary Powers) Act, 1946, was challenged on
the ground of excessive delegation of legislative power. Section 3 of
the Essential Supplies (Temporary Powers) Act reads as follows:
“The Central Government, so far as it appears to it to be
necessary or expedient, for maintaining or increasing supplies of any
essential commodity, or for securing the equitable distribution and
availability at fair prices, may, by notified Order, provide for
regulating or prohibiting the production, supply and distribution
thereof, and trade and commerce therein.”
It was contended that unregulated legislative power was
conferred on the Central Government by this section. No policy was
disclosed and no standards had been set for the guidance of the
authorities which would execute the law. But the Court upheld the
delegation on the ground that the legislature has laid down the
essential principles or policy of the law, namely “maintenance or
increase of supply of essential commodities and securing equitable
distribution and availability at fair prices”. Mahajan, C.J., who
delivered the judgement of the Court, observed :
“The preamble and the body of the sections sufficiently
formulate the legislative policy and the ambit and
character of the Act is such that the details of that policy
can only be worked out by delegating them to a certain
authority within the framework of that policy.”66

w AIR 1954 SC 465 : (1955) 1 SCR 380.

66 Harishankar Bagla v. State o/M.P., AIR 1954 SC 465 : (1955) 1 SCR 380,468.
 180

Section 6 of the Essential Supplies (Temporary Powers) Act

was also challenged on the ground of unconstitutional delegation of
powers to the executive. Section 6 declares that an order made under
Section 3 shall have effect notwithstanding anything contained in any
Act or instrument other than this Act. It was contended that the power
would have the effect to repeal, by implication, an existing law and,
therefore, such a wide power could not be delegated on the authority
of Delhi Laws Act, etc. 1912, Re.. The Court rejecting the contention
held that Section 6 does not, either expressly or by implication, repeal
any of the provisions of the pre-existing law, nor does it abrogate
them. The object is to simply bypass them where they are
inconsistent with the provisions of the Essential Supplies (Temporary
Powers) Act. The only effect is that during the continuance of the
Order made under Section 3 the existing law does not operate in that
field for the time being. The ambit of its operation being thus limited,
there was no direct repeal of any of the existing laws.
In the case of Rajnarain Singh v. Chairman, P.A.C. , the
impugned Act had empowered the local government to extend to
Patna the provisions of any section of the Bengal Municipal Act, 1884
“subject to such restrictions and modifications as the local
government may think fit.” The Government of Bihar picked Section
104 out of the Act, modified it and extended it in its modified form to
the town of Patna. Both the Act and the notification were challenged
on the ground of transgressing the constitutional limits of permissible
delegation. The Court held that while power can be delegated to

67
AIR 1954 SC 569, 573 : (1955) 1 SCR 290.
 181

extend the whole or any part of the Act, and also to pick out a section
and apply the same to the new area, the legislature cannot permit an
executive authority to modify either existing or future laws in any
essential features. Changing the policy of the law would amount to
modification in the essential features of the Act In the instant case,
the Court held the notification invalid since the extension of only one
section amounted to change in the legislative policy embodied in the
Act.
In Edward Mills Co. v. State ofAjmer68, the Supreme Court was
invited to invalidate the delegation of power to vary the schedule
forming part of the impugned Act. The Act authorised the setting up
of minimum wages for certain specified industries by notification. It
was argued that there was no legislative policy to guide the officials
charged with the duty of adding to the list of industries covered. The
Court held that the legislative policy, which was to guide in the
selection of industries, was clearly indicated in the Act, namely, to
avoid exploitation of labour by setting minimum wages in industries
where due to unequal bargaining power or other reasons wages were
inadequate. The Court emphasized the necessity to allow flexibility
for adaptation to local conditions. The Edward Mills case is further to
be noted for clarifying two points. First, it concedes that there is an
element of delegation in every case where the legislature empowers an
outside authority to do something which it might do itself. The
fiction that there is no delegation of legislative powers in what may be

68
AIR 1955 SC 25 : (1955) 1 SCR 735. See also Babu Ram Jagdish Kumar & Co. v. State of
Punjab, (1979) 3 SCC 616 : AIR 1979 SC 1475.
 182

called conditional or contingent legislation is thus rejected. Secondly,

the rule that primary or essential legislation is to be retained by the
legislature is applicable to all types of delegated legislation. The
Court said: “Whether a provision like this strictly comes within the
description of what is called ‘conditional legislation’ is not very
material, the question is, whether it exceeds the limits of permissible
delegation.”
Hamdard Dawakhana v. Union of India69 is the first clear case
which held a Central Act unconstitutional because of excessive
delegation authorised thereunder. Parliament passed an Act, the
Drugs and Magic Remedies (Objectionable) Advertisements Act,
1954, to control the advertisements of certain drugs. The Act
prohibited, among other things, the publication of any advertisement
referring to any during in terms which suggested the use of that drug
for diagnosis, cure, mitigation or treatment or prevention of any
venereal disease. Power was delegated under Section 3 of the Act to
the Central Government to specify by rules ‘any other disease or
condition to which the provisions of the Act were to be applied’.
Section 3 was challenged on the ground of permitting excessive
delegation. The Court held Section 3 invalid because no proper
guidance or standard was supplied to the rule-making authority in
determining what other diseases were to be brought within the
operation of the Act. Kapur, J., who delivered the majority judgement
said:70

69 AIR I960 SC 554: (I960) 2 SCR 671.

70 Id. AIR 568.
 183

“Parliament has established no criteria, no standards and

has not prescribed any principle on which a particular
disease or condition is to be specified in the schedule. It
is not stated what facts or circumstances are to be taken
into consideration to include a particular condition or
disease.”
In Harakchand R. Banthia v. Union ofIndia71, Section 5(20)(b)
of the Gold Control Act, 1968, empowering the administrator so far as
it appeared to him to be necessary or expedient for carrying out the
provisions of the Act, by order, to regulate by licences, permit or
otherwise, the manufacture, distribution, transport, acquisition,
possession, transfer, disposal, use or consumption of gold, was
declared invalid on the ground of excessive delegation. The Supreme
Court held that the power conferred on the administrator was
legislative in character. There was no guidance indicated in the Act
for having any control over the exercise of power, nor was there any
stipulation for legislative supervision.

In JalanTrading Co. v. Mill Mazdoor Union , constitutional

validity of Section 37 of the Payment of Bonus Act, 1965, which
authorised the Central Government to provide by order for removal of
doubt or difficulties in giving effect to the provisions of the Act, was
challenged. The only condition of the applicability of Section 37 was
the arising of the doubt or difficulty in giving effect to the provision

71 (1969) 2 SCC 166 : AIR 1970 SC 1453.

72 AIR 1967 SC 691 : (1967) 1 SCR 15. The use of such a clause, commonly called the Henry
VIII clause in England, has been criticised by the Committee on Ministers Powers; CMP
Report, pp. 39, 59-61 (1932).
 184

of the Act. The order made was, however, not to be inconsistent with
the purpose of the Act. The Court held Section 37 of the Act ultra
vires on the ground of excessive delegation.
“The section authorises the Government to determine for itself
what the purposes of the Act are and to make provisions for removal
of doubts or difficulties... The power ... would in substance, amount
or exercise of legislative power and that cannot be delegated to an
executive authority.”73
The authority of Jalan Trading Co. has, however, been diluted,
rather indirectly rejected, in subsequent cases where the courts have
upheld removal of difficulty clauses either by distinguishing that case
or without reference to it.74
The legislature must declare the policy of the law and fix the
legal principles which are to control in given cases and must provide
the standard to guide rule-making authorities. This standard or
guidance must not be indefinite or general. But it an be laid down in
broad, general terms. As Mukherjea, J. said :

“It is open to the legislature to formulate the policy as

broadly and with as little or as much detail as it thinks
proper and it may delegate the rest of the legislative work
to a subordinate authority who will work the details
within the framework of that policy.”75

73 Id. At p. 703.
74 See Gammon India Ltd. v. Union ofIndia, (1974) 1 SCC 596: AIR 1974 SC 960; M. U. Sinai v.
Union ofIndia, (1975) 3 SCC 765: AIR 1975 SC 797 and I.N. Rao v. State, AIR 1977 AP 178.
75 Delhi Laws Act, Re, AIR 1951 SC 332,400: 1951 SCR 747.
 185

A statute challenged on the ground of excessive delegation

must therefore be subjected to two tests : (i) whether it delegates
essential legislative function or power, and (ii) whether the legislature
has enunciated its policy and principle for the guidance of the
delegate. Thus in Vasantlal Maganbhai v. Stae ofBombay , Section
6(2) of the impugned Act had provided that the ‘Provincial
Government may, by notification in the Official Gazette, fix a lower
rate of maximum rent payable by the tenants of lands situate in any
particular area or may fix on any other suitable basis’. The only
guidance ‘any other suitable basis’ read along with the preamble and
other provisions of the Act was held to provide a sufficient standard
for the exercise of delegated power. In Sri ram Ram Narain v. State
of Bombay77, power was delegated tot he State Government vary the
ceiling area and economic holding ‘if it was satisfied that it was
expedient so to do in the public interest’, regard being had to certain
specified matters. This broadly expressed standard for the exercise of
executive discretion was considered sufficient to satisfy the
constitutional rule. The declaration of the legislative policy, namely,
to make essential goods ‘available for equitable distribution’ was held
or canalise sufficiently the administrative discretion in making the
subordinate legislation under the Act, and likewise the guidance
provided by the words, “the maintenance of essential supplies” was
held sufficient to validate the delegation made by the impugned Act.78

76 AIR 1961 SC 4: (1961)1 SCR 341.

77 AIR 1959 SC 459: 1959 Supp(l) SCR 489; Ram Dial v. State of Punjab, AIR 1965 SC 1518:
(1965) 2 SCR 858.
78 Harishankar Bagla v. State ofM.P., AIR 1954 SC 465: (1955) 1 SCR 380.
 186

In Bhatnagars & Co. Ltd. v. Union of India79, the object set forth in
the preamble of another Act (predecessor of the impugned Act),
namely, ‘to maintain supplies and services essential to the life of the
community’ was held to offer sufficient guidance for the exercise by
delegated legislation control over the export and import trade of India
under the Imports and Exports (Control) Act. But the said liberal
construction should not be carried by the courts to the extent of
always trying to discover a dormant or latent legislative policy to
sustain an arbitrary power conferred on executive authorities. 80
The legislature can delegate its power to the executive even in
matters relating to taxation laws provided there are necessary
guidelines regarding such fixation on the ground that in a modem
society, taxation is one of the methods by which economic and social
goals of the State can be achieved and the power to tax, therefore,
shall be a flexible power and capable of being easily altered to meet
the exigencies of circumstances. Such delegation cannot amount to
delegation of essential legislative function. In Baku ram Jagdish
O I

Kumar & Co. v. State of Punjab , it was held that the delegation of
power under Section 31 of the Punjab Central Sales Tax Act, 1948 to
the State Government to determine whether any class of goods should
be included or excluded from Schedule ‘C’ to the Act cannot be
considered unconstitutional.

w AIR 1957 SC 478.

80 Devi Das Gopalkrishnan v. State ofPunjab, AIR 1967 SC 1895, per Subba rao, J., at p. 1971.
81 (1979) 3 SCC 616: A.I.R .1979 SC 1415.
 187

82
In Devi Das Gopalkrishnan v. State of Punjab , the
constitutional validity of Section 5 of the East Punjab General Sales
Tax Act, 1948 was challenged on the ground of excessive delegation.
Section 5 reads thus : “Subject to the provisions of this Act there shall
be levied on the taxable turnover every year of a dealer a tax at such
rates as the Provincial Government may by notification direct.” The
Court held the section invalid, because an uncontrolled power was
conferred on the Provincial Government to levy every year on the
taxable turnover of a dealer a tax at such rate as the said Government
might direct. The legislature effaced itself in the matter of fixing of
rates as it did not give any guidance under that section or under any
other provision in the Act. The Chief Justice in the course of the
judgement, said:
“The minimum we expect of the legislature is to lay down in
the Act conferring such a power of fixation of rates clear legislative
policy or guidelines in that regard. As the Act did not prescribe any
such policy, it must be held that Section 5... was void.”83
But in subsequent cases tax laws authorising the executive to
fix the rate of tax subject to the limit laid down in the law have been
upheld.84

82 AIR 1967 SC 1895: (1967) 3 SCR 557.

83 Devi Das Gopalkrishnan v. State ofPunjab, AIR 1967 SC 1895, 1901
84 V Nagappa v. I.O. Mines Cess Commr., (1975) 2 SCC 1 : AIR 1973 SC 1374; D. Ramaraju v.
State ofA.P., (1972) 1 SCC 421: AIR 1972 SC 828; Gwalior Rayon Mills v. C.S.T., (1974) 4
SCC 985: AIR 1974 SC 1660. Also see the Delhi Municipal Corporation case, discussed
below where the law was upheld even though it did not lay down the maximum limit of the
rate of tax to be imposed.
 188

In S.B. Dayal v. State of UP.85, the Supreme Court reiterated

that the power to fix the rate of sales tax could validly be delegated,
provided a reasonable upper limit is fixed. The upper limit of five
paise in a rupee fixed by Section 3-D(i) of the U.P. Sales Tax Act of
1948 was held to be reasonable.

Where the legislative policy is enunciated with sufficient

clarity, or a standard is laid down, the courts would not interfere.
However, what guidance should be given and to what extent and
whether guidance has been given depends upon the circumstances of
each statute under consideration. For example, in Delhi Municipal
Q/T

Corporation v. Birla Cotton, S. & W. Mills , looking at the nature of

guidance necessary in the field of taxation, Wanchoo, C.J. pointed
out: (at p. 1244).
“The guidance may take the form of providing maximum
rates of tax up to which a local body may be given the
discretion to make its choice, or it may take the form of
providing for consultation with the people of the local
area, and their fixing the rates after such consultation. It
may also take the form of subjecting the rate to be fixed
by the local body to the approval of government which
act as a watchdog on the actions of the local body in this
matter on manner thereof, is to see that the local body

85 (1972) 4 SCC 485.

85 AIR 1968 SC 1232 : (1968) 3 SCR 251. See also Corporation of Calcutta v. Liberty Cinema,
AIR 1965 SC 1107 : (1965) 2 SCR 477; Municipal Board v. Raghuvendra Kripal, AIR 1966
SC 693: (1966)1 SCR 950.
 189

fixes a reasonable rate of taxation for the local area

concerned.”
In the Delhi Municipal Corporation case, the Supreme Court
found thp delegation of power to the Delhi Municipal Corporation to
fix rates of tax for the consumption of electricity without limits
uncanalised, arbitrary or without guidance of policy and, therefore,
upheld it. Though the delegation thus made was certainly wide,
Wanchoo, C.J. pointed out that: (i) the delegation had been made to
an elected body responsible to the people including those who pay
taxes, (ii) the money that had to be found, though large, by taxation is
not unlimited as the limit is circumscribed by the need to finance the
functions which it may undertake to perform under the Act, (iii)
another limit or guidance is provided by the necessity of adopting
budget estimates each year as laid down under the Act, (iv) the
maximum rates fixed by the corporation are subject to Government
control under the Act, and (v) the courts can hold that such exercise is
void for unreasonableness.
In Delhi Municipal Corporation case of the Supreme Court in a
way reconsidered its stand taken in Delhi Laws Act, 1912, Re, opinion
and applied since then. Although the Court did not totally abandon
that stand, the majority substantially moved in the direction of
recognising greater freedom for the legislature to delegate its
legislative powers to the executive. Some of the judges took a clear
stand that since the Constitution does not prohibit delegation of
legislative power, the legislature must be free to delegate to any extent
so long as it does not efface itself and retains its control on the
 190

o*7
delegate in the form of power to revoke the delegation at its will.
This tendency has found its clear reflection in the Court’s
pronouncements since then. Again in Gwalior Rayon Mills v.
C.S.T.88, an attempt was made to give up even in principle the stand
taken in Delhi Laws Act, 1912, Re, opinion. In Gwalior Rayon Mills
case the Court unanimously upheld Section 8(2)(b) of the Central
Sales tax Act, 1956, which allowed the calculation of tax in certain
cases at the rate of ten per cent or at the rate applicable in the
appropriate State. While three judges led by Khanna, J. reiterated
their faith in the Court’s stand in Delhi Laws Act, 1912, Re89 , Mathew
J. speaking for himself and Ray, C.J., strongly pleaded that the
legislature must be free to delegate its powers to any extent so long as
it has the power to repeal the delegation.90 Later, speaking for a three-
Judge Bench of the Supreme Court in N.K. Papiah & Sons v. Excise
Commr.91 , Mathew J. stuck to his ground in Gwalior Rayon Mills,
though without any reference to it, and upheld Section 22 of the
Mysore Excise Act, 1965 which authorised the Government to
prescribe the rate of excise duty on articles manufactured or produced
in the State under any licence or permit granted under the Act.
Subsequently, without any reference to Rapiah and without much
discussion on Gwalior Rayon Mills, the Supreme Court in K.S.E.
Board v. Indian Aluminium Co. 92, expressed its agreement with the

87 Delhi Municipal Corporatiion v. Birla Cotton. S. & W. Mills, AIR 1968 SC 1232, 1253
(Hidayatullah & Ramaswami, JJ.).
88 (1974) 4 SCC 98: AIR 1974 SC 1660.
89 Id. At SCC p. 114, para 28 : AIR p. 1671. ,
90 Id. At SCC pp. 121 and 126 : AIRpp. 1678 & 1682.
91 (1975) 1 SCC 492 : AIR 1975 SC 1007.
92 (1976) 1 SCC 466: AIR 1975 SC 1007.
 191

majority in Gwalior Rayon Mills93. Again, upholding Section 60 of

the Madras Co-operative Societies Act, 1932 which authorised the
State Government to exempt any registered society from any of the
provisions of the Act or to direct that such provisions shall apply to a
society with such modifications as may be specified, the Supreme
Court observed:94
“We do not wish, in this case, to search for the precise
principles decided in the Delhi Laws Act case, nor to
consider whether N.K. Papiah & Sons v. Excise
Commissioner... beats the final retreat from the earlier
position. For the purpose of this case we are content to
accept the ‘policy’ and ‘guidelines’ theory...”
From some of the subsequent cases also it appears that though
in practice the Court would uphold widest, possible delegation of
legislative powers, in theory it would not give up its insistence on
policy and guidelines in order to retain its power of supervision over
the actions of the executive in the form of delegated legislation.95 So
long as the Court can find some limits in the delegating statute to
determine the vires of the delegated legislation made under it, it would
uphold the statute. But if no such limits can be found or ascertained
the delegating statute would fall. The Court would be willing to read
such limits in any of the provisions of the statute, its preamble,
surrounding circumstances, objectives or the nature of the subject-

93 Id. at p. 490, para 29 : AIR p. 1050.

94 For more cases see Ajay Kumar v. K. Kunjabmu, (1980) 1 SCC 340 : A.IR. 1980 SC 350, 351.
95 For more cases see Ajay Kumar v. Union of India, (1984) 3 SCC 127 : AIR 1984 SC 1130,
1141; D.C.G.M. CO. Ltd v. Union of India, (1983) 4 SCC 166 : AIR 1983 SC 937 ; Lohia
Machines Ltd. v. Union ofIndia, (1985) 2 SCC 197 : AIR 1985 SC 421.
 192

matter it deals with as well as in the procedural safeguards such as the

requirement of laying of the delegated legislation before the
legislature.96
(d) State of the rule - It will be convenient here to state the
principles governing delegation of legislative power which emerge out
of the decisions analysed above:
(a) The primary duty o
(b) flaw-making has to be discharged by the legislature itself. The
legislature cannot delegate its primary or essential legislative
function to an outside authority in any case.
(c) The essential legislative function consists in laying down ‘the
policy of the law and making it a binding rule of conduct’. The
legislature, in other words, must itself lay down the legislative
policy and principles and must afford sufficient guidance to the
rule-making authority for carrying out the declared policy.
(d) If the legislature has performed its essential function of laying
down the policy of the law and providing guidance for carrying
out the policy, there is no constitutional bar against delegation
of subsidiary or ancillary powers in that behalf to an outside
authority.
(e) It follows from the above that an Act delegating law-making
powers to a person or body shall be invalid, if it lays down no
principles and provides np standard for the guidance of the rule-
making body.

96
See, for example, the cases in the preceding note.
 193

(f) In applying this test the court could take into account the
statements in the preamble to the Act and if the said statements
afford a satisfactory basis for holding that the legislative policy
j

or principle has been enunciated with sufficient accuracy and

clarity, the preamble itself would satisfy the requirements of the
relevant tests.
(g) In every case, it would be necessary to consider the relevant
provisions of the Act in relation to the delegation made and the
question as to whether the delegation made is intra vires or not
will have to be decided by the application of the relevant tests.
(h) Delegated legislation may take different forms viz., conditional
legislation, supplementary legislation, subordinate legislation,
etc., but each form is subject to the one and same rule that
delegation made without indicating intelligible limits of
authority is constitutionally incompetent.
(e) Publication of Delegated Legislation - Subordinate legislation
may not take effect unless published. In Harla v. State of
Rajasthan , the accused had been convicted for an offence under the
Jaipur Opium Act, 1924.98 It was proved that the resolution enacting
the law had not been published by any means open to the public. At
the time there was no law or custom regarding the coming into force
of enactments made by that State. The Court quashed the conviction
and ruled:99

97 AIR 1951 SC 467 : 1952 SCR 110.

98 The State was not then part of British India.
99 AIR 1952 S.C 467 at 468.
 194

“In the absence of any special law or custom, we are of

opinion that it would be against the principle of natural
justice to permit the subjects of a State to be penalised by
laws of which they had no knowledge and of which they
could not even with the exercise of reasonable diligence
have acquired any knowledge. Natural justice required
that before a law can become operative it must be
promulgated or published.”
Again Bose, J., said :
“There must, therefore, be promulgation and publication in their
cases. The mode of publication can vary... But reasonable publication
of some sort there must be.”100
On the authority of this decision we may say that statutory rules
and orders, as opposed to Acts of Parliament,101 do not come into
operation until they have been published, although there is no rule as
to any particular kind of publication. In State ofMaharashtra v. M.H.
George102, Ayyangar, J. formulated guidelines regarding the mode of
publication of delegated legislation thus : (i) where there is statutory
requirement as to the mode or form of publication and they are such
that, in the circumstances, the court holds to be mandatory, a failure or
comply with those requirements might result in there being no
effective order the contravention of which could be the subject of
prosecution, (ii) where there is no statutory requirement, it is
necessary that it should be published in the usual form, i.e., by

100 Id. at p. 469.

101 For Acts of Parliament see S. 5, General Clauses Act, 1897.
102 AIR 1965 SC 722 : (1965) 1 SCR 123.
 195

publication within the country as generally adopted to notify all the

persons the making of rules, and (iii) in India, publication in the
Official gazette, viz. Gazette of India is the ordinary method of
bringing a rule or subordinate legislation to the notice of the person
concerned. Thus in Govind Lai v. Agricultural Produce Market
Committee103 the Supreme Court held that the requirement in Section
6 of the Gujarat Agricultural Produce Markets Act, 1964 requiring the
rules to be published in Gujarati in a newspaper, in addition to the
Official Gazette, was mandatory and its non-compliance made the
rules invalid.
(f) Sub-delegation - The common law maxim “delegatus non potest
delegare” makes sub-delegation unauthorised unless a person or body
on whom the power is conferred is permitted to delegate, expressly or
by necessary intendment.104 A delegate who has received the authority
from the principal cannot, in turn, delegate his own authority to a
delegate of his own. If, however, the administrative authority named
in the statute has and retains in its hands general control over the
activities of the person to whim it has entrusted in part the exercise of
its statutory power, and the control exercised by the administrative
authority is of substantial degree, there is in the eye of the law no
‘delegation’ at all and the maxim “delegatus non potest delegare"
does not apply.105

103 AIR 1976 SC 263: (1975) 2 SCO 482.

104 R. Veerayya v. State, AIR 1967 AP 265; Mangulal Chunilal v. Manilal, AIR 1968 SC 822 :
(1968) 2 SCR 401.
105
Union ofIndia v. P.K. Roy, AIR 1968 SC 850 (857): (1968) 2 SCR 186.
 196

(v)The Subject - Matter of Legislation over which Union and

States have power to Legislate

(1) Notwithstanding anything in clauses (2) and (3) of Article 246

Parliament has exclusive power to make laws with respect to any of
the matters enumerated in List I in the Seventh Schedule (in this
Constitution referred to as the “Union List”).
(2) Notwithstanding anything in clause (3), Parliament, and,
subject to clause (1), the Legislature of any State106 also, have power
to make laws with respect to any of the matters enumerated in List III
in the Seventh Schedule (in this Constitution referred to as the
“Concurrent List”).
(3) Subject to clauses (1) and (2), the Legislature of any State107
has exclusive power to make laws for such State or any part thereof
with respect to any of the matters enumerated in List II in the Seventh
Schedule (in this Constitution referred to as the “State List”).
(4) Parliament has power to make laws with respect to any matter
for any part of the territory of India not included [in a State]
notwithstanding that such matter is a matter enumerated in the State
List.
Distribution of law-making Power - The Constitution, in making
the distribution of legislative powers between the Union and the
States, follows the Government of India Act, 1935. Various items of
legislation have been enumerated in three lists :

106 The words and letters “specified in Part A or Part B of the First Schedule” omitted by the
Constitution (Seventh Amendment) Act, 1956, S. 29. and Sch.
107 The words and letters “specified in Part A or Part B of the First Schedule” omitted by the
Constitution (Seventh Amendment) Act, 1956, S. 29. and Sch.
108 Subs. By 29 and Sch., ibid., for “in Part A or Part B of the First Schedule”.
 197

List I - The Union List; List II - the State List : List III - the
Concurrent List. Parliament has exclusive powers of legislation with
respect to 97 items in List I. The State Legislatures have exclusive
powers with respect to 66 items enumerated in List II. The powers in
respect of the 47 items in List II are Concurrent, i.e., both Parliament
and the State Legislatures can make laws in respect of the subjects
enumerated in the Concurrent List. Tax items are included in List I
and List II only. They are separate and independent of other subjects.
List III has no tax item.109
However, the three Lists do not exhaust all the legislative
subjects. In addition, the residuary subjects covered in Article 248
and Entry 97 of List I, legislative subjects and powers can be found in
other provisions of the Constitution also such as Articles 119, 209 and
262.110 In case of conflict or overlapping between such power and
an entry in any of the three Lists the former would prevail.*111*
3. Role of Judiciary in Interpreting Entries
A famous aphorism asserts, federalism connotes a legalistic
government.112 There being a division of powers between the Centre
and the States, none of the governments can step out of its assigned
field; if it does so, the law passed by it becomes unconstitutional.
Questions constantly arise whether a particular matter falls within the
ambit of one or the other government. It is for the courts to decide

109 Entry 35 of List III, however, speaks of “principles on which taxes on” mechanically
propelled vehicles are to be levied and Entry 44 speaks of stamp duties.
110 See State of Punjab v. Satyapal, AIR 1969 SC 903 (914); In the matter of Cauvery Water
Disputes Tribunal, 1993 Supp (1) SCC 96 : AIR 1992 SC 522. Also see, M.P. Singh
“Legislative Power in India: Some Classifications", 4 % 5 Delhi L. Rev. 73,96 (1975 & 76).
111 In the matter of Cavery Water Disputes Tribunal, 1993 Supp (1) SCC 96 : AIR 1992 SC 522.
112 M.PJain, Indian Constitutional Law, ed. (2001) pp. 264-265.
 198

such matters for it is their function to see that no government exceeds

its powers. Since the inauguration of the Indian Constitution, a large
number of such cases have come before the courts, but keeping in
view the fact that the Constitution has three elaborate Lists
enumerating over 200 entries, significant controversies in this area
have been rather few. A point which deserves to be noted is that,
hitherto, most of the disputes regarding division of powers have been
raised by private parties. The matter arises when a person raises a
plea in a court that a particular legislation affecting his rights falls
outside the legislative ambit of the government which has enacted it,
and, therefore, it is unconstitutional. In other federations,
intergovernmental legal controversies area quite frequent, but such
has not been case in India so far. There have been only a few
intergovernmental controversies. It needs to be underlined,
however, that the judicial interpretative process has been such as to
uphold most of the impugned legislation and it is only rarely that
courts declare a law invalid on the ground that the legislature has
exceeded its powers. The courts have developed several norms to
interpret the Lists.
(i) Each Entry to be Interpreted Broadly : The entries in the
three Lists are not always set out with scientific precision. It is
practically impossible to define each item in a List in such a way as to
make it exclusive of every other item in that List. The framers of the
Constitution wished to take a number of comprehensive categories

113 State of West Bengal v. Union of India, AIR 1963 SC 1241: (1964)1 SCR371 ;State of
Rajasthan v. Union of India, AIR 1977 SC 1361; State of Karnataka v. Union of India AIR
1978 SC 68.
 199

and describe each of them by a word of broad and general import. For
example, in matters like ‘Local Government’, ‘Education’ ‘Water’,
‘Agriculture’, and ‘Land’, the entry opens with a word of general
import, followed by a number of examples or illustrations or words
having reference to specific subheads or aspects of the subject-matter.
The effect of the general work, however, is not curtailed, but rather
amplified and explained, the what follows thereafter. An important
principle to interpret the entries is that none of them should be read in
a narrow or restricted sense, that the ‘widest possible’ and ‘most
liberal’ construction be put on each entry, and that each general word
in an entry should be held to extend to all ancillary or subsidiary
matters which can fairly and reasonably be said to be comprehended
in it. The justification for this approach is that the entries set up a
‘machinery of government’; they are ‘heads’ or fields’ of legislation
and, therefore, they must be given the widest scope of which their
meaning is fairly capable.114 The entries in the same List are not
mutually exclusive and each entry comprises within its scope all
matters incidental thereto. The entries demarcate the area over which
the concerned legislatures operate. In the words of the Supreme
Court, the entries “are to be regarded as enumeration simplex of broad
categories” and that “the power to legislate on a topic of legislation
carries with it the power to legislate on an ancillary matter which can
be said to be reasonably included in the power give.”115 The Supreme

114 United Provinces v. Atiqa Begum, AIR 1941 FC 16; Calcutta Gas Co. v. State of West
Bengal, AIR 1962 SC 1044; Harakchand Ratanchand Banthia v. Union of India, AIR 1970
SC 1453.
115
State ofRajasthan v. G. Chawla AIR 1959 SC 544:1959 Supp 1SCR 904.
 200

Court has often emphasized that the entries are not powers but are
only fields of legislation, and that the widest import and significance
must be given to the language used therein.116 Thus, power to
legislate includes power to legislate includes power to legislate
retrospectively as well as prospectively. If a law passed by a
legislature is struck down by the courts for one infirmity or another,
the legislature can cure the infirmity by passing a law, as so to
validate the earlier law. Such legislation is necessarily to be regarded
as subsidiary or ancillary to the power of legislation on the particular
subjects.118 Thus, entry 30, List II, runs as: “Money lending and
money-lenders : relief of agricultural indebtedness”. This entry has
been broadly interpreted so as to include relief against loans by
scaling down, discharging, reducing interest and principal, and staying
the realisation of debts. The whole gamut of money lending and debt
liquidation is thus within the State’s legislative competence,”
Narrowly interpreted, the entry would refer only to agricultural
indebtedness. But by giving a broad interpretation, it could include
debts by non-agriculturists as well.119

116 Baldeo Singh v. Commr ofIncome Tax AIR 1961 SC 736; Balaji v. I. T. 0., AIR 1962 SC 123;
Mark Ram v. Union ofIndia AIR 1980 SC2147.
117 S. T. Swaminar v. Commr HRE AIR 1963 SC 966; Udai Ram v. Union ofIndia, AIR 1968 SC
1138; Tirath Ram v. State ofU. P. AIR 1970 SC 405 Krishna Chandra v. Union ofIndia, AIR
1975 SC 1389 I. N. Saxena v. State ofMadhya Pradesh AIR 1976 SC 2250; Misri Lai Jain v.
State of Orissa, AIR 1977 SC 1668.
118 Rai Ramkrishna v. State of Bihar AIR 1963 SC 1667 ; Khyerbari Tea Co. Ltd. v. State of
Assam AIR 1964 SC 925: (1964) 5 SCR 975; Misri Lai Jain v. State of Orissa (1977)3 SCC
212: AIR 1983 SC 473.
119 Fateh Chand Himmat Lai v. State ofMaharashtra, AIR 1977 SC 1825; Pathumma v. State of
Kerala,{1978) 2SCC 1:AIR 1978 SC 771; Saiyedbhai Kadarbhai v. Saiyed Intajam Hussen
AIR 1981 Guj. 154.
 201

In R.S. Rekhchand Mohota Spg. & Wvg. Mills Ltd. v. State of

Mahrashtra120, it is held that the entries in the three lists of Seventh
Schedule conferring legislative power under Art. 246 should be
widely and liberally construed. The interpretation of the statute would
apply to the interpretation of the entries subject to a reservation that
their application is of necessity conditioned by the subject-matter of
the enactment itself. Legislative entries cannot be read in a narrow or
restricted sense. Each general word should be held to extend to all
ancillary or subsidiary matters which can fairly and reasonably be said
to be comprehended to it. It is, therefore, clear that in construing an
entry in a iist conferring legislative powers, the widest possible
construction, according to their ordinary meaning, must be put upon
the words used therein. Reference to legislative practice may be
admissible for cutting down the meaning of a word in order to
reconcile two conflicting provisions in two legislative lists. The
cardinal rule of interpretation, however, is that words should be give
their ordinary, natural and grammatical meaning subject to the rider
that legislative entries are required to be interpreted broadly and
widely so as to give powers to the legislature to enact the law with
respect to matters enumerated in the legislative entries.
Again in Jaya Gokul Educational Trust v. Commr. & Secy, to
Government Higher Education Department121, Art. 246, Seventh

120 (1997) 6 SCC 12 : AIR 1997 SC 2591; The word ‘Land’ has been widely interpreted: The
Legislative Entry 45 of List II of the Seventh Schedule of the Constitution brings within the
ambit power of the legislature under Article 246 to levy cess on use of the water even from
flowing river.
121 (2000) 5 SCC 231 : AIR 2000 SC 1614 : (2000)2 KLT 267; State of Tamil Nadu v. Adhiyaman
Educational & Research Institute, (1995) 4 SCC 104; Thirumuruga Kirupananda Variyar
 202

Schedule, List I, Entry 66 and List III, Entry 25 - All India Council
for Technical Education Act, 1987 - S. 10 (k) - a State cannot have a
policy contrary to a Central Act.
Therefore, in this matter of granting approval to new technical
institutions and introduction of new courses or programmes, no State
Government can have a policy outside the AICTE Act - Such a policy
cannot be used as a ground for refusing permission for setting up of a
technical institution, when the Council set up under AICTE Act has
already granted approval - However, prior to grant of such approval
State may place its policy before the Council for consideration. The
State could not have any “policy” outside the AICTE Act and if it had
a policy, it should have placed the same before AICTE and that too
before the latter granted permission. Once that procedure laid down
in the AICTE Act and Regulations had been followed under
Regulation 8(4), and the Central Task Force had also given its
favourable recommendations, there was no scope for any further
objection or approval by the State. However, if thereafter, any fresh
facts came to light after an approval was granted by AICTE or if the
State felt that some conditions attached to the permission and required
4

by AICTE to be complied with, were not complied with, then the

State Government could always write to AICTE, to enable to take
appropriate action.
The University ought to have considered the grant of final or
further affiliation without waiting for any approval from the State

Thavathiru Sundara Swamigal Medical Educational and Charitable Trust v. State of Tamil
Nadu, (1996) 3 SCC 15.
 203

Government and should have acted on the basis of the permission

granted by AICTE and other relevant factors in the University Act or
statutes, which are not inconsistent with the AICTE Act or its
Regulations.
In Associated Timber Industries v. Central Bank of India122,
Article 246, Schedule VII List I Entry 45 and List II Entry 30 -
Distribution of legislative powers - “Banking” being included in
Union List, held, banks cannot come within purview of Assam Money
Lenders Act, whose subject-matter money-lending and moneylenders”
is covered in the State List.
Interpreting a U.P. State notification No. 2174/XXIII - SN-II-
62/1976 dated 2.6.1976 and Constitution of India, Art. 246 and
Schedule VII List II Entry 59 in State of U.P v. Devi Dayal Singh123 ,
S.P. Barucha, S.N. Phukan and Ruma Pal, JJ. Held that in Jiya Lai
case, the High Court erred in holding that for the purposes of levy of
tolls under Section 2 of the Tolls Act, 1851, only in cases “where in
order to construct a bridge or a road, the Government or its
instrumentality borrows money from a financial institution and agrees
to pay interest thereon.... The interest paid by the Government or its
instrumentality can be said to be included in the cost of the
construction of the bridge or road.” Apart from such observations of
the High Court being contrary to the express language of the 1976
notification issued by the State Government, the limitation on the
power of the State Government to recoup fully the investment made

122 (2000) 7 SCC 93 : AIR 2000 SC 2689.

123 (2000) 3 SCC 5 : AIR 2000 SC 961 : 2000 All LJ 618;Jiya Lai State ofU.P., AIR 1981 All
72 ; 1981 UPTC 470, overruled on this point.
 204

overlooks the power conferred on the State Government generally to

levy toll as a means of revenue collection under Article 246 Entry 59
of List II Schedule VII of the Constitution. The notification in terms
allows toll to be levied so as to recover the cost of construction
including interest on the “total expenditure” of the bridge. No
distinction has been drawn between expenditure incurred out of the
State Government’s own revenue and expenditure incurred by
borrowing money from financial institutions and others. Para III (b)
also allows the Government to recover interest on all “amounts
invested” in the construction of the bridge. (Paras 19 and 20).
Again currently in another case ITC Ltd. v. Agricultural
Produce Market Committee & Ors. while interpreting Articles 246,
254 - Seventh Schedule, entry 52 of the union list - Entries 24, 27, 28
and 66 of the state list and entry 33 of the concurrent list - Tobacco
Board Act, 1975 - Section 32 - Bihar Agricultural Produce Markets
Act, 1960- Sections 4(2), 8(2)(cc), 15 - Karnataka Agricultural
Produce Marketing (Regulation) Act, 196 - Industries (Development
and Regulation ) Act, 1951 - Section 2 - Market fee - Levy of fee by
market committees on sale and purchase of tobacco within the market
area under state legislations - validity - Competency of the state to
enact provisions entitling the market committees to levy such fee -
Effect of enactment of the Tobacco Board Act has the effect of
denuding the states of their power to legislate on matters relating to
sale of agricultural produce of tobacco in market area and for levy and
collection of market fee thereon - validity of the Market Acts enacted
by the states - Whether the Central Act and the state legislations to
 205

the extent they relate to sale of tobacco in market areas can co-exist -
Whether ITC’s case [1985 Supp. (1) SCC 476] correctly decided.
Held, by Court (per majority) state Legislatures competent to enact
legislation providing for the levy and collection of a market fee on the
sale of tobacco in a market area. Consequently the Market Acts
enacted by the states are valid. State legislations and the Tobacco
Board Act, to the extent they relate to the sale of tobacco in market
areas, cannot co-exist and therefore the state legislations prevail over
the Central Act. ITC’s case (1985) striking down the Karnataka Act of
1966 therefore not correctly decided.124
As per G.B. Patnaik, J. (minority view) The term ‘industry’
cannot be given a restricted meaning - Tobacco Board Act enacted by
the union is constitutionally valid and all the provisions therein are
within the legislative competence of the Parliament. Therefore, the
Tobacco Board Act will prevail over the Markets Acts enacted by the
states. In view of the inconsistency between the Central Act and
States Act, it is the Central Act which will prevail and the majority
judgement in ITC’s case (1985) correctly decided.
Y.K. Sabharwal, J. (Brijesh Kumar, J. agreeing fully) held that
State legislations and the Tobacco Act, tot he extent of sale of tobacco
in the market area cannot co-exist - state Legislatures are competent
to enact legislations providing for sale of agricultural produce of
tobacco in market area and for levy and collection of market fee on
that - Parliament not competent to enact legislation in respect of sale

124
In the matter of I.T.C. Limited v. Agricultural Produce Market Committee & Ors. JT 2002 (1)
SC 294.
 206

of tobacco in market areas while legislating in the field of matters

covered by entry 52 of the union list under which the Parliament can
legislate only in respect of industries and the activity of sale of raw
tobacco as provided in the Tobacco Board Act cannot be considered
as ‘industry’ - ITC’s case (1985) not correctly decided.
Ruma Pal, J. said ‘Industry’ means manufacture or production’
and nothing else - The definition propounded in Tika Ramji’s decision
(1956) SCR 393] holds good and in view of that decision the word
‘industry’ in entry 24 of list II and consequently entry 52 of list I
cannot be read to include entries 28 and 66 of list II - Setting up of
market areas and levy of market fee are matters covered by entry 28
of list II and therefore within the legislative competence of the states
only - Markets Acts of the states will prevail over the Tobacco Act in
the matter of market areas and the levy of market fee.
Recently the Supreme Court while deciding a Water Dispute of
S.Y.L. Canal in the case State of Haryana v. State of Punjab125 held
that the meaning of ‘water dispute’ - When jurisdiction of court is
ousted - Agreement between the State of Punjab and the State of
Haryana for construction Sutlej - Yamuna link canal running through
both the states under the scheme for sharing of waters between the
states - State of Haryana completing the construction of the canal
falling within its territory - State of Punjab, however, refusing to
complete the construction of the canal falling within its territory and
making it functional for release of water though ninety per cent of the
construction had been completed - Suit by State of Haryana seeking

125
JT 2002(1) SC 123.
 207

injunction for compelling the State of Punjab for discharging its

obligations arising under the agreement between the two states -
Maintainability of suit - Whether the dispute is a water dispute and
hence should be resoled only by the water tribunal and not court.
Held, even if a wider meaning is given to the term ‘water dispute’ the
dispute with regard to construction of the Sutlej Yamuna link canal
between Punjab and Haryana cannot be considered to be a water
dispute so as to oust the jurisdiction of the court. Therefore, suit filed
by the State of Haryana not barred under Article 262 read with section
11 of Water Disputes Act.126
(ii) Retrospectivity
The legislative power can be exercised both prospectively and
retrospectively. Where a legislature can make a valid law, it may
provide not only for the prospective operation of that law, but it can
also provide for its retrospective operation. The power to make law
includes the power to make law prospectively or retrospectively.
The appropriate legislatures can also make validating laws
called the Validation Acts. A validation Act is enacted to remove the
causes for ineffectiveness or invalidity of executive actions or of other
proceedings which were not valid at the time they were taken.129
Generally the validating Acts are passed after the Courts have
declared such actions or proceedings invalid. But a Court decision is

126 State ofHaryana v. State ofPunjab and Anr. JT 2002 (1) SC 123.
527 Rai Ramkrishna v. State of Bihar, AIR 1963 SC 1667, 1673: (1964) 1 SCR 897. See also
Jawaharmal v. State ofRajasthan, AIR 1966 SC 764: (1966) 1 SCR 890; Harilal Rattanlal v.
State ofU.P., (1971) 1 SCC 216, 222: AIR 1973 SC 1034.
128 J.K. Jute Mills v. State ofU.P., AIR 1961 SC 1534; Jilubhai Nanbhai Kachchar v. State of
Gujarat, 1995 Supp (10 SCC 596: AIR 1995 SC 142.
 208

not a condition precedent for making a validating Act. A validating

law is upheld first by finding out whether the legislature possesses
competence over the subject-matter, the secondly, whether by
validation the legislature has removed the defect which the courts
have found in the previous law. Where an impugned Act passed by a
State Legislature is invalid on the ground that the State Legislature did
not have legislative competence to deal with the topic covered by it,
then even Parliament cannot validate such an Act, because the effect
of such attempted validation, in substance, would be to confer
legislative competence on the State Legislature in regard to a field or a
topic which is outside its jurisdiction.130
If a law passed by a legislature is struck down by the courts for
one infirmity or another, it would be competent for the appropriate
legislature to cure the said infirmity and pass a validating law so as to
make the said provisions of the earlier law effective from the date of
enactment of that earlier law.131 Retrospective application of the law
removes the basis of the earlier judicial decision which is a valid
exercise of legislative power and cannot be considered an
encroachment on the judicial power. But the legislature has no
power to enact a provision, the effect of which is to overrule an
individual decision inter partes and affect their rights and liabilities
alone. Such an act on the part of the legislature amounts to

129 Hari Singh v. Military Estate Officer, (1972) 2 SCC 239,248: AIR 1972 SC 2205. See also
Krishnamurthi & Co. v. State ofMadras, (1973) 1 SCC 75 : AIR 1972 SC 2455.
130 Jaora Sugar Mills v. State ofM.P., AIR 1966 SC 416,421: (1966) 1 SCR 523.
131 Rai Ramkrishna v. State ofBihar, AIR 1963 SC 1667,1673: (1964) 1 SCR 897.
132 Tirath Ram v. State ofU.P., (1973) 3 SCC 585: AIR 1973 SC 405; IN. Saksena v. State of
M.P. (1976) 4 SCC 750: AIR 1976 SC 2250; Misri Lai Jain v. State of Orissa, (1977) 3 SCC
212: AIR 1977 SC 1686.
 209

exercising the judicial power of the State and to functioning as an

appellate court or tribunal.133 “A court’s decision must always bind
unless the conditions on which it is based are so fundamentally altered
that the decision could not have been given in the altered
circumstances.”134
If under a law two procedures exist of which one is followed
and the other discarded, there may in a given case be found
discrimination. But the legislature has still the competence to put out
of action retrospectively one of the procedures leaving one procedure
only available, namely, the one followed, and thus to make the
» oc

discrimination disappear. In State of Mysore v. D. Achiah Chetty ,

proceedings for acquisition of property of the petitioner had been
taken under the Mysore Land Acquisition Act, 1894 instead of the
City of Bangalore Improvement Act, 1945. The procedure under the
latter Act was more favourable to the owner than under the former
Act. The petitioner complained of discrimination under Article 14.
Thereafter a retrospective Validating Act was passed validating the
order passed and proceedings held under the Mysore Act,
notwithstanding the Bangalore Act, thereby in effect making
retrospectively a single law for acquisition of land. Upholding the
Validating Act, the Supreme Court rejected the contention that such a

133 In the matter ofCauvery Water Disputes Tribuna, 1993 Supp (1) SCC 96: AIR 1992 SC 522;
State ofHaryana v. Karnal Co-op. Farmers’ Society Ltd., (1993) 2 SCC 363, 380; State of T.N.
v. Rayappa Gounder, (1971) 3 SCC 1, 3 : AIR 1971 SC 231; Madan Mohan Pathak v. Union
ofIndia, (1978) 2 SCC 50.
134 G.C.Kanungo v. State of Orissa, (1995) 5 SCC 96.

135 (1969) 1 SCC 248: AIR 1969 SC 477.

 210

law could not remove the discrimination which had already been
taken place.
In this regard, the power to levy a tax is no different from other
legislations. If the legislature decides to levy a tax, it may levy such
tax either prospectively or even retrospectively. Ordinarily a court
holds a tax to be invalidly imposed because the power to tax is
wanting or the statute or the rules or both are invalid or do not
sufficiently create jurisdiction. Validation of a tax so declared illegal
may be done only if the grounds of illegality or invalidity are capable
of being removed and are in fact removed. But the legislature must
have the power over the subject-matter and competence to make a
valid law. The validity of a validating law, therefore, depends upon
whether the legislature possesses the competence which it claims over
the subject-matter and whether in making the validation it removes the
defect which the courts have found in the existing law and makes
adequate provision in the validating law for a valid imposition of the
tax.136

The power to make retrospective laws is also subject to any

limitations on that power in the Constitution. One of such limitation
is laid down in Article 20 (1) which prohibits creation of offences and
enhancement of penalty for any offence retrospectively. The other
limitation which has emerged through judicial decisions in the context
of civil servants is found in Article 14 read with Article 16. In Union

136 Prithvi Cotton Mills v. Broach Borough Municipality, (1969) 2 SCO 283, 286,287: AIR 1970
SC 192. Se also Chandarana v. State ofMysore, (1972) 1 SCC 17: AIR 1972 SC 217;
Shetkari Sahakari Sakkar Karkhana Ltd v. Collector, (1980) 1 SCC 381: AIR 1979 SC 1972.
 211

of India v. Tushar Ranjan Mohanty137, invalidating the retrospective

application of the rules made under Article 309, the Court held:
“The legislatures and the competent authority under Article 309
of the Constitution of India have the power to make laws with
retrospective effect. This power, however, cannot be used to justify
the arbitrary, illegal or unconstitutional acts of the Executive. When a
person is deprived of an accrued right vested in him under a statute or
under the Constitution and he successfully challenges the same in the
court of law, the legislature cannot render the said right and the relief
obtained nugatory by enacting retrospective legislation.”
The limitation of Article 14 read with Article 6 is applicable as
much to prospective laws as to retrospective laws. The only thing
that the retrospectivity contributes towards the invoking of this
limitation is that while the same action could be justified as fair and
reasonable if it were prospective, it ceases to be so if it is applied
retrospectively, particularly to nullify a judicial decision. To that
extent this limitation is capable of being extended to matters other
than civil services also. However, in a land acquisition matter the
Court declined to invalidate the retrospective validating law under
Article 14. “In every case,” the Court said “it cannot be urged that the
exercise by the legislature while introducing a new provision or
deleting an existing provision with retrospective effect per se shall be
violative of Article 14 of the Constitution.138

137 (1994) 5 SCC 450.

138 State ofT.N. v. Arooran Sugars Ltd, (1997) 1 SCC 326, 338.
 212

The third limitation, which is already mentioned, is not strictly

a limitation of legislative power, but rather is lack of it. That is, the
legislature cannot exercise judicial power in the name of legislative
power and, therefore, cannot simply overrule a judicial decision
without doing anything more, i.e. without changing the legal basis of
1
the judicial decision.
(iii) Predominance of the Union List and Inter-relation of the
Lists

The three Lists are very detailed and the constitution-makers

have made an attempt to make the entries in one List exclusive of
those in other Lists. But, as no drafting can be perfect, at times some
conflict or overlapping between an entry in one List and an entry in
the other comes to the surface. This gives rise to the question of
determining inter-relationship between such entries. To meet such a
situation, the scheme of Article 246 is to secure the predominance of
the Union List over the other two Lists, and that of the Concurrent
List over the State List. Thus, in case of overlapping between an
entry in the Union List and an entry in the State List, the former
prevails to the extent of overlapping; the subject-matter falls
exclusively within the Union jurisdiction and the States cannot
legislate on it. In case of any overlapping between an entry in the
Union List and an entry in the Concurrent List, the former prevails
over the' latter and the subject-matter again is treated as being
exclusively Central, so as to debar the States from legislating on it, to
the extent of overlapping. If there is an overlapping between an entry

139 Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality, (1969) 2 SCC 283,286-87.
 213

in the Concurrent List and one in the State List the former prevails
and the subject would fall within the Concurrent List, thus, giving
both Parliament and the State Legislatures jurisdiction to legislate
with respect to it rather than making it exclusively a State matter.
This result is inherent in the wordings of Article 246. Article 246 (1)
confers exclusive power on Parliament to legislate regarding matters
in List I ‘notwithstanding anything in clauses (2) and (3).’ This is
known as the non-obstante clause and its effect is to make the Union
power prevail in case the Union and State powers overlap. The non-
obstante clause has been further strengthened by clause (2) and (3) of
Article 246. According to clause (2), ‘notwithstanding anything in
clause (3)’. Parliament is entitled to legislate regarding matters in the
Concurrent List, and the State Legislatures may legislate in the field
‘subject to CL (1)’. Thus in case of overlapping between the Union
and the Concurrent Lists, the power of the States is subject to the
Union List. Further Cl. (3) of Art. 246 authorises the States to
legislate regarding matters in the State List but ‘subject to clauses (1)
and (2),’ which means subject to the Union List and the Concurrent
List.

However, the principle of supremacy of the Union List over the

State List, as enunciated above, is not to be applied automatically or
mechanically as soon as some conflict of legislative jurisdictions
becomes apparent. The non-obstante clause is the ultimate rule which
is to be invoked only as a last resort, in case of inevitable or
irreconcilable conflict between the Lists. Before applying the rule,
 214

however, the court should make an attempt to reasonably and

practically construe the entries so as to reconcile the conflict and
avoid overlapping. To harmonise and reconcile conflicting entries in
the Lists, it may be necessary to read and interpret the relevant entries
together, and, where necessary, restrict the ambit of the broader entry
in favour of the narrower entry so that it is not eaten up by the former.
It may be necessary to construe a broad entry in a somewhat restricted
sense that it is theoretically capable of. If one entry is general, and the
other limited or specific, then the former may be restricted to give
sense and efficacy to the latter which may be treated as particularised
and something in the nature of an exception to the general entry. If,
indeed, a reconciliation between the conflicting entries should prove
impossible, then, and only then, the non-obstante clause is to be
invoke to give primacy to the federal power over the State or
Concurrent power.140 The non-obstante clause “ought to be regarded
as a last resource, a witness to the imperfections of human expression
and the fallibility of legal draftsmanship.” The rationale of such an
approach is that the framers of the Constitution could not have
intended that there should exist any conflict among the Lists, and
therefore, it is necessary to adopt a process of construction which
would give effect to all entries and not nullify or render futile or
otiose any entry.

140
K.S.E. Board v. Indian Aluminium Co., AIR 1976 SC 1031.
 215

The working of the above rule may be illustrated here. In re

the C.P. and Berar Act,141 in which the principle was propounded for
the first time, has been discussed below under the ‘Taxing Powers’.
In Bombay v. Balsara,142 a conflict was sought to be made out
between entry 41, list I and entry 8, List II. Arguing for a broader
view of the central entry, it was suggested that ‘import’ of intoxicating
liquors would not end with mere landing of goods on the shore but
would also imply that the imported goods reach the hands of the
importer who should be able to possess them. Therefore, it was that
the State could not prohibit the possession and sale of intoxicating
liquors as that would amount to a power to prohibit their import into
the country, as one is a necessary consequence of the other. To
reconcile the entries, the Supreme Court gave a limited meaning to the
word ‘import’ in the Central entry in order to give effect to the State
entry. It held that ‘import’ standing by itself, could not include sale
or possession of the article imported into the country by a person
residing in the territory in which it was imported. The State entry has
no reference to import and export but merely deals with production,
manufacture, possession, transport, purchase and sale of intoxicating
liquors; the State Legislature could, therefore, prohibit the possession,
use and sale of intoxicating liquors. Thus, entry 8 (List II) was given
effect by narrowing down the scope of the central entry which could
otherwise be broadly interpreted. Similarly, it has been held that the

141 Gwyer, C.J., in In re C.P. & Bearar Act No. XIV of 1938, AIR 1939 FC 1. Also G.G. in
Council v. Madras, AIR 1943 FC 11; AIR 1945 PC 98; Waverly Jute Mills v. Ravman Co.,
AIR 1963 SC 90.
142
AIR 1951 SC 318.
 216

power conferred by entry 26, List III, was general and that conferred
by entiy 78, List I, was limited to persons entitled to practise before
the High Courts, and so the general power must be read subject to the
specific power. Consequently, a State Legislature cannot enact any
legislation with respect to “persons entitled to practise before the High
Courts.” The legislative power relating to powers entitled to practise
before the Supreme Court and the High Courts is carved out of the
general power relating to professions in entry 26, List III, and given
exclusively to Parliament. Apart from them, legislative power with
respect to other practitioners would fall under entry 26 of List III.

The inter-relation between entries 52 of List I, 24 and 27 of List

II, and 33 of List III becomes important as all these entries deal with
various aspects of industry. Sugar has been declared to be a
‘controlled’ industry by Parliament under entry 52 in List I. For this
purpose, Parliament has enacted the Industries (Development and
Regulation) Act under which many other industries have been taken
under central control. The State of U.P. enacted an Act to regulate
the supply of sugar-cane to the sugar factories. The U.P. Act was
challenged as being ultra vires the State on the ground that sugar
being ‘controlled’ industry, sugarcane also fell within the scope of
Parliament. The word ‘industry’, it was contended, had a very wide
import and included not only the process of manufacture but also all
things which were necessarily incidental to it, viz., acquisition of the
raw materials of the industry and the disposal of the finished products
thereof and so sugarcane, as the raw material of the sugar industry,
 217

fell in the Parliamentary sphere. Applying the principle of reconciling

the entries in the various Lists, the Supreme Court held in Tika Ramji
v. State of Uttar Pradesh143 that the U.P. Act was valid. Entries 52 of
List I and 24 of List II indicate that generally industries fall within the
exclusive sphere of the States except those which are controlled by
Parliament. Entries 27 of List II and 33 of List II indicate that the
production, supply and distribution of products of the controlled
industries fall within the Concurrent jurisdiction under entry 33 (a) of
List III. The word ‘industry’ in entries 52 of List I and 24 of List II
connotes only the process of manufacture, the raw materials of all
industries being ‘goods’ fall within the State sphere under entry 27,
List II, except to the extent they may fall under entry 33, List III. The
sugar industry being controlled, legislation with regard to its process
of manufacture falls within the exclusive jurisdiction of Parliament.
Distribution, supply and production of the product of this controlled
industry, viz., sugar as a finished product, falls within entry 33 of List
III. Sugarcane, its raw material, being ‘goods’ falls within entry 27 of
List II, but being food-stuff could also fall within entry 33 of List III,
and in either case, the State Legislature may legislate with respect to
it. It may be interesting to note that under the Sugarcane Control
Order, promulgated by the Central Government, the Centre controls
the price of sugarcane at which it is supplied to the sugar mills.
Obviously, this is possible because sugarcane being food-stuff is a
concurrent matter. The U.P. Act and the Central Order can stand
together for while the former regulates only the supply and purchase

143
AIR 1956 SC 676.
 218

of sugarcane required by the sugar mills, the latter regulates the price
of sugarcane and so they did not overlap. The Supreme Court has not
defined ‘industry’ as such or stated exhaustively all its ingredients.
On the interpretation of the various entries in the Tika Ramji case, the
position appears to be as follows. The States have a comprehensive
regulatory power covering all aspects of any industry falling within
the State sphere. The States can regulate raw materials for such
industries under entry 27, List II, as ‘goods’, and also the finished
products of the same. As regards the Centrally-controlled industries,
the process of manufacture fails within the Central domain under
entry 52, list I; control over finished products of these industries also
falls under Central jurisdiction under entry 33 in List III. As regards
the raw materials of these industries, power lies mainly with the States
under entry 27, List II except for the commodities specified in entry
33, List III, which the Centre may regulate. Regulatory power
regarding centrally controlled industry would thus appear to be
somewhat fragmented insofar as some raw materials pertaining to
these industries may fall outside the Central purview which may
create problems of Centre-State co-ordination. Failure by a State to
ensure adequate supply of raw-materials to an industry may hamper
the same and the Centre may be unable to take any corrective
measures. Under entry 33, List III, the Centre can regulate the
cultivation and sale of sugarcane.144
In Ishwari Khetain Mills v. State of Uttar Pradesh, the Supreme
Court held that in spite of sugar being a centrally controlled industry

144 A. KJain v. Union ofIndia, AIR 1970 SC 267.

 219

under entry 42, List I, the State of Uttar Pradesh can pass legislation
acquiring some sugar mills and vesting them in the State Sugar
Corporation. The court said that when a declaration is made in
respect of an industry under entry 52, List I, that industry as a whole is
not taken out of the purview of entry 24, List II, but only to the extent
of the declaration. To demarcate the power of the State Legislature,
the scope of the declaration of the Centre ought to be assessed, as that
will indicate the extent of control assumed by the Centre. The extent
of Central control over sugar is contained in the Industries
(Development and Regulation) Act through which the Centre has
made the requisite declaration. To the extent the Centre ahs acquired
control over the sugar industry under this Act, the State Legislature is
denuded of its power to legislate under entry 24, but not beyond that.
On the question of inter-relation between 52, List I, and entry 24, List
II, the Supreme Court observed : “... legislative power of the States
under entry 24, List II, is eroded only to the extent control is assumed
by the Union pursuant to a declaration made by Parliament in respect
of declared industry as spelt out by legislative enactment and the field
occupied by such enactment is the measure of erosion. Subject to
such erosion, on the remainder, the State Legislature will have power
to legislate in respect of declared industry, without in any way
trenching upon the occupied field.”145 As regards the impugned law,
the court held that in pith and substance it was for acquisition of the
scheduled undertakings by transfer of ownership tot he corporation
and, therefore, does not come in conflict with the said Central Act.

145
Ibid at 1969.
 220

The State Act refers to entry 42, List III, under which both the Centre
and the States can acquire property. The Central Act (IDRA) does not
occupy the field of acquisition and it can apply effectively even to an
undertaking acquired by the State.
The State power to levy ‘vend-fee’ on denatured spirit under
entry 8, List II, is not excluded by Parliamentary legislation under
entry 52, List I, with regard to ethyl alcohol. Had there been only 52
in List I and entry 24 in List II, Parliament might have had an
exclusive power to legislate in respect to industries notified by it
because entry 24 is subject to 52. But there are other entries as well,
entry 26 in List II and entry 33 in List III, which make it clear that the
power to regulate the notified industries is not exclusively with
Parliament.146
Interpreting entries 24 and 25 of List II harmoniously, the
Supreme Court held that ‘gas works’ being a specific entry would not
fall under the general entry 24. If the word ‘industry’ in entry 24 were
to include ‘gas and gas works’, then entry 25 would become
redundant. On that interpretation, ‘gas industry’ would not fall under
entry 52 of List I either, for the term ‘industry’ in entries 52 and 24
should have a uniform interpretation.147
Parliament can validly enact the Forward Contracts
(Regulation) Act, 1952 which seeks to prevent speculation in forward
contracts, where the intermediate buyer and seller do not pay the
actual price, but only the difference, and where no delivery is required

146 State of Uttar Pradesh v. Synthetics & Chemicals Ltd., AIR 1980 SC 614, Also see, State of
Haryana v. Jage Ram, AIR 1980 SC 2018.
147 Calcutta Gas Co. Ltd. v. State of West Bengal, AIR 1962 SC 1044.
 221

to be given. The words “futures markets” in entry 48, List I, mean

not only the “place of business” but also “business”, for in modem
commerce, more often bargains are concluded through
correspondence. Therefore, the law relating to is a legislation on
“futures markets”. Entry 26, List II, being general and board, and
entry 48, List I; being specific, therefor, the general entry should be
interpreted restrictively so that the specific entry is kept alive. The
words ‘trade and commerce’ in entry 26 could on be interpreted so
broadly as to make the words ‘futures markets’ in entry 48 nugatory
or futile. Entry 7 of list III, is also general in its terms and cannot
prevail as against a specific entry like entry 48 in list I or entry 26 in
list II.
Education is a divided area between the centre and the states,
the relevant entries being List I, entries 63, 64, 65, 66, and list III,
entry 25. The word ‘education’ in entry 25 is so wide import so as to
include “all matters relating to imparting and controlling education”.
Out of this the area entmsted to the centre under items 63 to 66 in list
I has been carved out. A state legislature could, therefore, make laws
with respect to all matters relating to education except the matters
excluded. Item 25, List III, and item 66, List I, overlap to some extent
and, therefor, should be construed harmoniously. To the extent of
overlapping, the central power item 66 must prevail over the state
power under item 25. The power of centre to legislate in respect of
the medium of instruction arises under item 66 to 65 in list I to the
extent it has a direct bearing and impact upon ‘co-ordination and
determination of standards’ that is, to ensure maintenance or
 222

improvement of standards, in institutions of higher education.

Parliament has an overriding legislative power to ensure that the
syllabi, courses of study, and the medium selected by the State do not
impair standards of education or render the co-ordination of such
standards either on an all-India or other basis difficult. Even if the
Centre refrains from legislation to the full extent of its powers, the
States do not become authorised to legislate in respect of a matter
assigned to the Union. The validity of a State law on university
education would, therefore, depend on whether it prejudicially affects
‘co-ordination’ and ‘determination’ of standards, even though the
Centre may not have enacted any legislation to achieve that purpose.
If there be a Central law in respect of that matter, it would have
paramountcy over the State law under Art. 254(1), but even when the
Centre does not exercise its power, a State law trenching upon the
exclusive Union field would still be invalid.
The power to ‘co-ordinate’ is not merely a power to ‘evaluate’
standards, but to ‘harmonise’, and the power could be used to legislate
for preventing the occurrence, or for removal, of disparities in
standards. The exercise of the Central power to co-ordinate is not
conditional upon the existence of unequal standards; it must of
necessity imply the power to prevent what would make co-ordination
difficult. The power is absolute and unconditional. The validity of a
State law fixing a regional language or Hindi as an exclusive medium
of instruction and examination in the universities, superseding English
to that extent, depends on the question whether it would necessarily
result in the falling of standards. If it does, then the legislation would
 223

necessarily fall within item 66 and would be excluded, to that extent,

from the State power under item 25, List III. The power under entry
66, List I, is thus preventive as well as curative. It prevents the States
from doing anything which may adversely affect, or create a disparity
of, standards in higher education. Or else, the Centre can take steps
when such a disparity comes into existence. It can law down
conditions subject to which only States may adopt regional languages
as media of instruction. If the Centre remains inactive and makes no
legislation with respect to these matters, the courts may still adjudge
State law pertaining to university education to see whether or not it
would affect standards adversely. The courts can thus act as the
sentinel, in the absence of Central legislation, to keep a watch on State
action having a tendency to lower standards of higher education. To
judge whether prescription of a regional language as an exclusive
medium of instruction will result in falling of standards or not, the
Court has applied such tests as existence of adequate text-books,
journals etc.; availability of competent instructors in the medium
through which instruction is to be imparted; capacity and ability of the
students to receive or imbibe instructions through the medium
proposed etc. A duty has thus been cast on the State seeking to
prescribe a regional language as an exclusive medium for higher
education to see whether there are adequate text books available,
whether there are qualified instructors, whether the students have
developed a capacity to comprehend the instruction in that medium.
Thus, in the Gujarat case,148 an expansive interpretation was given to

14S
Gujarat University v. Sri Krishna, AIR 1963 SC 707.
 224

the Central entry so as to contain the linguistic ehaunivism of the

States.149
The impact of the Gujarat University case appears to have been
diluted somewhat by Chitralekha v. Mysore.150 The question was
whether giving of a weightage to extra-curricular activities as
compared to academic record for admission to medical and
engineering colleges would affect the central power in entry 66 in List
I. The crux of the Gujarat case was explained to be that if the impact
of the State law providing for such standards on entry 66, List I, “is so
heavy or devastating as to wipe out or appreciably abridge the Central
field, it may be struck down.” The Court refused to hold that if a
State Legislature prescribed higher percentage of marks for extra­
curricular activities in the matter of admission to colleges, it would be
directly encroaching on the field covered by entry 66 of List I. Justice
Subba Rao thus sought to restrict the ratio of the Gujarat University
case. In that case, what the Court had said was that any State law
would be bad as “prejudicially affecting” the Union power of “co­
ordination and maintenance of standards”, if it seeks to lower
standards in institutions of higher education. Nowhere in the Gujarat
University case, had the majority said that a State law would be bad
only if it destroyed the Union power. It was rightly pointed out by the
minority Judge (Mudholkar J.) in Chitralekha that admission of less
qualified students in preference to more qualified ones was bound to

149 Jain, Constitutional Aspects of Language Problem in India, (1967/68) Yearbook ofthe South
Asia Institute, Heidelberg University 116.
150 AIR 1964 SC 1823. The Judgement in Chitralekha was pronounced by Subba Rao, J. who
had given a dissenting Judgement in the Gujarat University case.

I
 225

impair academic standards.151 It was held again in D.A. V College v.

State of Punjab152 that no State has the legislative competence to
prescribe any particular medium of instruction in respect of higher
education or research and scientific or technical instructions if it
interferes with Parliament’s power under entry 66, List I, to co­
ordinate and determine the standards in such institutions. One thing
however is quite clear from these cases. If the Centre were to lay
down an all-India basic standard for admission, examination etc. for
institutions of higher education, that law would be good under entry
66, List I, and any State law or practice inconsistent herewith would
be invalid.
(iv) Rule of Pith and Substance
Parliament or a State Legislature should keep within the domain
assigned to it, and not trespass into domain reserved to the other, and
a law made by one which trespasses or encroaches upon the field
assigned to the other is invalid. But before the legislation with respect
to a subject in one List, and touching also on a subject in another List,
is declared to be had, the courts apply the rule of pith and
substance.153 This rule envisages that the legislation as a whole be
examined to ascertain its ‘true nature and character’ in order to
determine what List it falls. If according to its ‘true nature and

151 Also see, Nayak, The Centre-State Legislative Relationship in Education, 14 562;
P.K. Tripathi, Legislative Relations between the Union and the States & Educational
Planning, Spotlight on Constitutional Interpretation, (1972), p. 153.
152 AIR 1971 SC 1731.
153 The rule has been borrowed from Canada. Some Canadian cases on the ruler are : Citizens
Insurance Company v. Parsons, 7 A.C. 96 : Russell v. The Queen, 7 A.C. 829 ; Alt. Gen for
Canada v. Alt. Gen. For British Columbia, 1930 A.C. Ill; Alt. Gen. For Sanskatchewan”,
Alt. Gen. For Canada, AIR 1949 P.C. 190.
 226

character’ the legislation substantially falls within the powers

conferred on the Legislature which has enacted it, then it is not invalid
‘merely because it incidentally’ trenches or encroaches on matters
assigned to another Legislature. To ascertain the true character of a
law, it must be looked into as an organic whole. It would be a wrong
approach to view the statute as a mere collection sections, to
disintegrate it into parts and then to examine under which entry each
part would fall and then to determine which part of it is valid and
which invalid. Instead, the Act should be taken in one piece and then
its true character determined. The doctrine saves the incidental
encroachment if only the law in pith and substance falls within an
entry within the legislative field of the particular legislature which has
made it. The validity of legislation is not determined by the degree of
invasion into the field assigned to the other legislature though it is a
relevant factor to determine its ‘pith and substance’, as the legislation
in question may advance so far into the other sphere as to show that its
true nature and character is not concern with a matter falling within
the domain of the enacting legislature, in which case it will not be
valid. Once it is found that in pith and substance a law falls within the
permitted field any incidental encroachment by it on a forbidden field
does not affect the competence of the legislature to enact the law.
“Effect is not the same thing as subject-matter. If a State Act,
otherwise valid, has effect on a matter in List I it dies not cease to be a
legislation with respect to an entry in List II or III”154

154 State of Bombay v. Narottamdas, AIR 1951 SC 69(96); Atlabari Tea Co. v. State of Assam,
AIR 1961 SC 232; Kannan D.H.P. CO. v. State of Kerala, AIR 1972 SC 2301. Also Sita
Ram v. Rajasthan, AIR 1974 SC 1373; K.E.S. Board v. Indian Aluminium, AIR 1976 SC
 227

The practical working of the rule can be appreciated by

referring to a few decided cases. The Bengal Money Lenders Act
passed to scale down debts owed by the agriculturists, was challenged
on the ground that being a provincial (State) law, it affected the
promissory notes, a Central subject (Entry 46, List I). The Privy
Council found that in its true nature and character, the legislation dealt
with money-lenders and money-lending (Entry 30, List II), and not
with promissory notes. The money-lending commonly take a
promissory note as security for a loan. A legislature would not, in
any real sense, be able to deal with money lending if it cannot limit
the liability of a borrower in respect of a promissory note given by
him. The Act was held valid even though as an ancillary effect it
affected the negotiable instruments - a Central subject.155
Applying the rule of pith and substance, it has been held that -
(i) A State law enforcing prohibition is valid because it prohibits
purchase, use, possession, transport and sale of liquor (Entry 8, List
II), and it only incidentally encroaches on the central power on
imports (Entry 41, List I).156 (ii) A State prohibition law is valid even
though it also deals with some aspects of evidence and criminal
procedure which fall in the Concurrent List, for the law deals, in
substance, with intoxicating liquors and only incidentally with
evidence and criminal procedure.157 (iii) The Industrial Disputes Act

1031; State of Karnataka v. Rangamtha Reddy, AIR 1973 SC 251; Southern

Pharmaceuticals and Chemicals v. State ofKerala, AIR 1981 SC 1863.
135 Prafulla Kumar v. Bank of Commerce, Khulna, 74 I.A. 23, Also Subrahmanyan v.
Muttuswami, AIR 1941 FC 47.
156 State ofBombay v. Balsara, AIR 1951 SC 318.
157 Krishna v. State ofMadras, AIR 1957 SC 297.
 228

enacted by Parliament, even though it applies to employees of

municipalities, is valid as, in substance, it deals with ‘industrial and
labour disputes’ (Entry 22, List III), and not with ‘local government’
(Entry 5, List II).158 (iv) A State law banning use of amplifiers after 10
P.M. is valid as it seeks to control use of amplifiers in the interests of
health (Entry 6, List II), and it only incidentally touches upon entry
31, List I.159 (v) A State law dealing with cooperative societies
engaged in banking business falls under entry 32, List II mid not under
Entry 44 or 45, List I.160 A State Law dealing with chit funds falls
under Entry 7, List III, and not under Entries 26 or 30 of List II. It
does not fall under Entry 34, List II, as there is no element of
gambling in running chits, nor under Entry 45, List I, as the essence of
banking in absent is running chits.161 (vii) A State law reducing
arrears of rent or debts due from agriculturists falls under Entries 18
and 30, List II. (viii) The Central Reserve Police Force Act enacted
by Parliament falls under Entry 2, List I, and Entries 1 and 2, List III,
and not under Entry 2, List II. (ix) The object of the Advocates Act,
1961, is to constitute one common Bar for the whole country and to
provide machinery for its regulated functioning. Though the Act
relates to legal practitioners, in its pith and substance it concerns itself
with the qualifications, enrolment and discipline of the persons

158 D.N. Banerjee v. P.R. Mukherjee, AIR 1953 SC 58.

159 State ofRajasthan v. G.Chawla, AIR 1959 SC 544.

160 Central Co-op. Bank, Nagpur, v. Divisional Jt. Registrar, AIR 1971 Bom 365; Sultan Singh
v. Asstt. Registrar, AIR 1972 All 159.
161 C.C.Fund v. Pondicherry, AIR 1972 Mad 99.
162 K. W. Estates v. State ofMadras, AIR 1971 SC 161.

163 State of West Bengal v. Tarun Kumar, AIR 1975 Cal 39.
 229

entitled to practise as advocates before the Supreme Court or High

Courts. The Act thus falls under items 77 and 78 of List I. The power
to legislate in regard to such persons is excluded from entry 26 of List
III..164
(v) Harmonious Construction
The doctrine of harmonious construction was put in a beautiful
manner by Sir Montague Smith while speaking on behalf of the
Judicial Committee of Privy Council in Citizens Insurance Company
of Canada v. Farson.165 Referring to sections 91 and 92 of the British
North America Act, 1867 which respectively define the legislative
jurisdictions of Central and State legislatures in Canada, he said that
in cases of overlapping or conflict it was the duty of the courts to
ascertain and define the precise scope of the power of each legislature
by reading the two sections together and whenever necessary the
scope of one must be held to have been modified by the other.166
According to Venkatarama Aiyar, J., the rule of construction
is well settled that when there are in an enactment two provisions
which cannot be reconciled with each other, they should be so
interpreted that, if possible, effect should be given to both. This is
what is known as the rule of harmonious construction.168 That effect
should be given both, is the gist of the rule. Thus a construction that
reduces one of the provisions to a “useless lumber”169 or “dead

164 O.N. Mohindroo v. Bar Council, AIR 1668 SC 888; Bar Council, U.P. v. State of Uttar
Pradesh, AIR 1973 SC 231.
165 (1882) 7 App. Car. 96.
166 Anirudhi Prasad, “Centre-State Relations in India”, op.cit., p. 134.
167 Singh, G.P., “Principles ofStatutory Interpretation", 3rd Ed., p. 105.
168 Venkatarama Devaru v. State ofMysore, AIR 1958 SC 225(268).
169 Calcutta Gas CO. (Proprietary) Ltd. v. State ofW.B., AIR 1962 SC 1044(1174).
 230

letter”170 is not harmonious construction. To harmonise is not to

destroy.171 A familiar approach in all such cases is to find out which
of the two apparently provisions is more general and which is more
specific to construe the more general one as to exclude the more
specific.
In Calcutta Gas Co. v. State of West Bengal172, the Supreme
Court said : It is also well settled that widest amplitude should be
given to the language of entries, but some of the entries in the
different lists... may overlap and sometimes may also appear to be in
different conflict with each other. It is then the duty of this Court to
reconcile the entries and bring about harmony between them. In this
way it may, in most cases, be found possible to arrive at a reasonable
and practical construction of the language of the sections, so as to
reconcile the respective powers they contain and to give effect to all
of them.” It is only when such a reconciliation proves impossible,
then and only then, should be overriding power of the Union
Legislature, the non-obstante clause operate and the Union
prevails.174

170 J.K. Cotton Spinning and Weaving Mills v. State of UP., AIR 1961 SC 1170(1174).
171 Ibid.

172 AIR 1962 SC 1044 : 1962 Supp 3 SCR 1.

173 The Clause “Notwithstanding anything in clauses (2) and (3)” is known as non-obstante
clause. The effect of such a clause in the beginning of the sections is to make the power
conferred thereunder prevail notwithstanding any other provision in the law. Speaking of the
need to apply the non-obstante clause, the Federal Court said : “for the clause ought to be
regarded as a last resource, a witness to the imperfections of human expression and the
fallibility of legal draftsmanship.”
174 State ofBombay v. F.N. Balsara, AIR 1951 SC 318 : 1951,SCR. 682 ; ReC.P. Motor Spirit
Act, AIR 1939, F.C. 131 : 1939 F.C.R. 18 ; Durgeshwar Dayal v. Secretary, Bar Council'
AIR 1954 ALL 728.
 231

175
A question arose in Gujarat University v. Krishna, whether
the Gujarat State Legislature was competent to make the Gujarat
University Act, 1949 and the statute made thereunder, which
prescribes an exclusive medium in which instruction is to be imparted
in the State” Universities. By Item 11 of List II of the Seventh
Schedule, the State Legislature was empowered to legislate in respect
of “education including Universities subject to Items 63, 64, 65 and
66 of List I” ... By Item 66 of List I of the Seventh Schedule power is
entrusted to Parliament to legislate for “coordination and
determination of standards in institutions of higher education”... It
was urged by the counsel for the State that the legislation prescribing
medium of instruction in the university always falls within Item 11 of
List II (now Item 25 of List III). The Supreme Court, speaking
through Shah, J. for the majority, did not accept this contention and
invalidated the states made under the Act insofar as they purported to
impose an exclusive medium of instruction for the university. Shah, J.
explained that the power to legislate with respect to medium of
instruction is not a distinct legislature head. However, it resides with
the State legislatures in which the power to legislate on education is
vested, unless it is taken away by necessary intendment to the
contrary. Also under Item 66 the power to legislate in respect of
medium of instruction insofar as it has a direct bearing and impact
upon the legislative head of co-ordination and determination of
standards in institutions of higher education, must be deemed to be

AIR 1963 SC 703 : 1963 Supp. 1 SCR. 112. See also R. Chitralekha v. State ofMysore, AIR
1964 SC 1823 (1964).

-*■ r
 232

vested in the Union. The two entries undoubtedly overlap and must,
therefore, be harmoniously construed. Thus to the extent of
overlapping the power conferred b Item 66 of List I must prevail over
the power of the State under Item 11 of List II; insofar as the medium
of instruction is a necessary incident of the power under Item 66 of
List I, it must be deemed to be included in that item and excluded
from Item 11 of List II. However, it was pointed out, that how far die
State legislation relating to medium of instruction in institutions has
impact upon co-ordination of higher education is a matter which is not
susceptible, in the absence of any concrete challenge to a specific
statute, of a category answer. Nevertheless, it was realised that while
imparting instruction in certain subjects, medium may have
subordinate important and little bearing on standards whereas in
certain others its importance will be vital. Yet the final outcome of
the majority opinion appears to be that a statute, such as one which
prescribes exclusive medium in the university, cannot be sustained as
it encroaches upon the jurisdiction of the Union by virtue of Item 66
of List I.
The Gujarat University case was quoted with approval in
D.A. V College v. State of Punjab176, where constitutional validity of
the provisions of the Punjab University Act, 1961 prescribing Punjabi
„*r

as the sole medium of instruction and examination in all affiliated

colleges to the University was challenged as the power in this regard
vested in Parliament under Item 66 of List I. The Supreme Court held
that no State has the legislative competence to prescribe any particular

176
(1971) 2 SCC 261 : AIR 1971 SC 1731.
 233

medium of instruction in respect of higher education, if it interferes

with the power of Parliament under Item 66 of List I. On the other
hand, in State of A.P. v. Lavu Narendranath177, the Supreme Court
held that Entry 66 of List I has no relation to a test prescribed by the
State Government for selecting a limited number of students out of a
large number of students applying for admission to a particular course
of study in a university or an institution for higher education.
The rule of avoidance of conflict was also applied to O.N.
Mahindroo v. Bar Council178, where the question involved was the
constitutionality of the Advocates Act of 1961, a Union law, which
concerned the qualifications, enrolment, right to practice and
discipline of the advocates. The relevant entries were 77 and 78 of
List I - ‘persons entitled to practise before the Supreme Court and
High Court’ and Entry 26 in List III - ‘legal, medical and other
professions’. The Supreme Court applied the rule of harmonious
construction and held that the Union Parliament is exclusively
empowered to legislate in respect of persons entitled to practise in the
Supreme Court or High Court, and power to legislate in respect of the
rest of the practitioners falls under Entry 26 of List III.
In D.G. Bose & Co. v. State of Kerala , the word ‘assets’ in
Entry 86 of List I was given the meaning as ‘property in general’ so
that if a tax is levied on all that one owns, or his total assets, it would
fall within the purview of Entry 86 of List I. On the other hand, if a

177 (1971) 1 SCC 607 : AIR 1971 SC 2560.

178 AIR 1968 SC 888. See also Sudhir Chandra Nawn v. W. T.O., AIR 1969 SC 59 : (1969) 1
SCR 108.

179 (1979) 2 SCC 410,421,422.

 234

tax is directly imposed on ‘buildings’, it will bear a direct relation to

the buildings owned by the assessee and it would fall within ‘lands
and buildings’ in Entry 49 of List II. It may be that the building
owned by an assessee may be a component of his total assets, but a
tax under Entry 86 will not bear any direct or definable relation to his
building. One’s building may imperceptibly be the subject-matter of
tax as a component of his assets under Entry 86 of List I and also may
be subjected to direct tax under Entry 49 of List II, but as the two
taxes are separate and distinct imposts, they cannot be said to overlap
each other, and would be within the competence of the legislature
concerned.

(vi) Ancillary Legislation

It is well settled that the power to legislate on a topic of
legislation carries with it the power to legislate on an ancillary matter
which can be said to be reasonably included in the power given. 1 BO
Thus the power to legislate with respect to collection of rent includes
the power to legislate with respect to remission of rent.181 The power
to legislate with respect to land includes the power to legislate with
respect to mortgages of land as a subsidiary subject.182 Likewise,
legislation relating to tax on agriculture also bestows competence to
enact a law relating to a tax on agricultural income.183

180 United Provinces v. A tiga Begum, AIR 1941 FC 16; State of Rajasthan v. G. Chawla, AIR
1959 SC 544, 546: 1959 Supp 1 SCR 904; Edward Mills v. State ofAjmer, AIR 1955 SC 25 :
(1955) 1 SCR 735; Express Hotels (P) Ltd. v. State of Gujarat, (1989) 3 SCC 677: AIR 1989
SC 1949; Tripura Goods Transport Assn. v. Commr. of Taxes, (1999) 2 SCC 253: AIR 1999
SC 719.
181 United Provinces v. Atiq Begum, AIR 1941 FC 16 : 1940 FCR 110.
182 Megh Raj v. Allah Rakha, AIR 1947 PC 72 : 74 IA 12.
183 C.P.Appanna v. State of Coorg, AIR 1958 Mys 102.
 235

The power to impose taxes includes the power of raising

revenue by imposing licence fee.184 The power to make laws on a
subject includes the power to pass a valid law retrospectively, if the
existing law on the subject is struck down as unconstitutional. The
power to levy tax, it has been held, would include the power to enact
provisions to check evasion of tax.186 The power to make laws with
respect to the entry ‘money-lending and money-lenders, relief to
agricultural indebtedness’ includes the power to make a law relating
to debt of agriculturists already paid by sale of property in execution
of the decree and it no longer being a subsisting debt, and any
measure to provide relief and recompense in such situations would fall
151*7
within the purview of the entry.
The power to make laws for labour welfare will justify the State
to take over and utilise for the benefit of workers as a class the unpaid
accumulations belonging to the employees, but which were not
1
claimed by them.
In justification of the doctrine of ancillary powers,
Gajendragadkar, J. observed:
“It is an elementary cardinal rule of interpretation that the
words used in the Constitution which confer legislative
power must receive the most liberal construction and if
they are words of wide amplitude, they must be
interpreted so as to give effect to that amplitude. It

184 Chaturbhuj v. Union ofIndia, AIR 1960 SC 424 : (1960) 2 SCR 362.
185 Rai Ramkrishna v, Stale ofBihar, A.I.R 1963 SC 1667 ; (1964) 1 SCR 897.
186 Commissioner of Commercial Taxes v. R.S. Jhavar, AIR 1968 SC 59: (1968) 1 SCR 148.
187 Pathumma v. State ofKerala (1978) 2 SCC 1 : AIR 1978 SC 771.
188 Arvind Sugar Mills Ltd. v. State of Gujarat, ILR 1966 Guj 313.
 236

would be out of place to put a narrow or restricted

construction on words of wide amplitude in a
Constitution. A general word used in an entry ... must
be construed to extend to all ancillary or subsidiary
matters which can fairly and reasonably be held to be
included in it.”189
While the heads of legislation in the various Lists in the
Seventh Schedule are to be interpreted widely so as to take in all
matters which are of incidental character to the topics mentioned
therein, but there must be a head or entry or cover a legislation. In
Abdul Quadar & Co. v. S.T.O.190, it was held that a law permitting
realisation of the amount wrongfully imposed as sales tax by an
ordinary dealer has no indicia of tax since it is illegal and its recover
by the State from the dealer is in no way fairly and reasonably
connected to the topic of tax on sale of goods. Nor can the doctrine of
ancillary power be used as a cloak for extending the power of a
legislature so as to include a matter which is specifically provided in a
separate entry or to cover a tax under general entry or vice versa.
Thus, the power with respect to betting and gambling in Entry 34 of
List Entry 62 of List II.191 Similarly, the power to levy tax would not
include the power to confiscate goods as ancillary thereto.192 The
power to tax, which also includes the power to prevent evasion of tax,
^____________
189 Jagannath BakshSingh v. State ofU.P., AIR 1962 SC 1563(1568) : (1963) 1 SCR220,
following Navinchandra Mafatlal v. C.I.T., AIR 1955 SC 58 : (1955) 1 SCR 829. See also
State ofW.B. v. Union ofIndia, AIR 1963 SC 1241, para 68. (1964) 1 SCR 371.
190 AIR 1964 SC 922 ; (1964) 6 SCR 867.
191 R.M.D. Chamarbaugwala v. State ofMysore, AIR 1962 SC 594 : (1962) 3 SCR 230.
192 C.P. Officer v. K.P. Abdulla & Bros., AIR 1971 SC 792. Cf. Commissioner ofCommercial
Taxes v. R.S. Jhaver, AIR 1968 SC 59 : (1968) 1 SCR 148.
 237

cannot be used to cover those who have nothing to do with the

transaction on which tax is imposed. Thus the power to impose sales
tax cannot be used to net within that law merely transporters of
goods.193
(vii) Colourable Legislation
If the Constitution of a State distributes the legislative powers
amongst different bodies, which have to act within their respective
spheres marked out by specific legislative entries, or if there are
limitations on the legislative authority in the shape of fundamental
rights, questions do arise as to whether the legislature in a particular
case has or has not, in respect of the subject-matter of the statute, or in
the method of enacting it, transgressed the limits of its constitutional
powers. Such transgression may be patent, manifest or direct, but it
may also be disguised, covert and indirect and it is to this latter class
of cases that the expression “colourable legislation” has been applied
in certain judicial pronouncements. The idea conveyed by the
expression is that although 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. In
other words, it is substance of the Act that is material and not merely
the form or outward appearance and if the subject-matter in substance
is something which is beyond the powers of that legislature to
legislate upon, the form in which the law is clothed would not save it
from condemnation. The legislature cannot violate the constitutional

193 State ofHaryana v. Sant Lai, (1993) 4 SCC 3 80.

 238

prohibition by employing an indirect method.194 “You cannot do

indirectly what you cannot do directly.” It may be pointed out here
that the doctrine of “colourable legislation” does not impute dishonest
motive or mala fides to the legislature making the law. The court will
scrutinise the law to ascertain whether the legislature by device
purports to make a law, which though in form appears to be within its
sphere, in effect and substance reaches beyond it. If, in fact, it has
power to make the law, its motives in making the latter are
irrelevant.195 The rule of colourable legislation has no application if
the legislature making the law has the competence to make that law.196
The doctrine of colourable legislation is relevant only in
connection with the question of legislative competence. Objections
based on colourable legislation have relevance only in situations when
the power is restricted to particular topics, and an attempt is made to
escape legal fetters imposed on its powers by resorting to forms of
legislation calculated to mask the real subject-matter. Whether less
than what was done might have been enough, whether more drastic
provision was made than occasion demanded, whether the same
purpose could have been achieved by provisions differently framed or
by other means, they are wholly irrelevant considerations for testing

194 K.C. Gajapati Narayan Deo v State of Orissa, AIR 1953 SC 375 : 1954 SCR 1 ; Anil Kumar
v. Deputy Commissioner, AIR 1959 Ass 147 ; Collector of Customs v. Dass & Co., AIR 1966
SC 1577.
195 G. Nageshwar v. A.P.S.R.T.C., AIR 1958 SC 308,314; B.R. Shankaranarayana v. State of
Mysore, AIR 1966 SC 1571(1575).
196 K.C. Gajapati Narayana Deo v. State of Orissa, AIR 1953 SC 375 ; 1954 SCR 1 ; Hari
Krishna Bhargava v. Union of India, AIR 1966 SC 619 ; Lokmanya Mills v. Barsi
Municipality, AIR 1968 Bom 229. For a clear and emphatic statement of law on this aspect
see R.S. Joshi, S.T.O. v. Ajit Mills Ltd, (1977) 4 SCC 98 : AIR 1977 SC 2279, 2286; Naga
People's Movemenet ofHuman Rights v. Union ofIndia, AIR 1998 SC 431.
197
B.R. Shankaranarayana v. State ofMysore, AIR 1966 SC 157.
 239

the validity of the law. They do not touch the ambit of the power but
only the manner of its exercise.
In K.C. Gajapati Narayana Deo v. State of Orissa198, there was
the question of the validity of the Orissa Agricultural Income tax
(Amendment) Act of 1950 which greatly enhanced the rate of tax on
agricultural income. It was argued that the Act is not a bona fide
taxation statute at all, but is a colourable piece of legislation, the real
object of which is to reduce by artificial means the net income of
intermediaries, so that the compensation payable to them under the
Orissa Estates Abolition Act, 1952 be kept as low a figure as possible,
agricultural income tax being deducted from the gross income in order
to arrive at the net income on the basis of which the amount of
compensation is to be determined. The Supreme Court did not accept
this contention and declared the Act as valid. It was observed that the
Act is certainly a legislation on “taxing of agricultural income”, as
described in Entry 46 of List II of the Seventh Schedule. The State
legislature has undoubted competency to legislate on agricultural
income tax, and the Act purports to increase the existing rates of
income tax. The increase in rates may be unjust or inequitable, but
that does not affect the competency of the legislature. Even if it is
assumed that the Act was made under the guise of a taxation statute
with a view to accomplish an ulterior purpose, namely, to reduce the
amount of compensation, still it cannot be regarded as a colourable
piece of legislation. Under Entry 42 of List III, the legislature can

198
AIR 1953 SC 375 : 1954 SCR 1. See also State ofBihar v. Kameshwar Singh, AIR 1952 SC
952: 1952 SCR 889.
 240

adopt any principle of compensation in respect of properties acquired.

Whether the deductions are large or small, inflated or deflated, they
do not affect the constitutionality of a legislation under this entry. It
would be colourable legislation only if it is shown that the real object
is to attain something which is beyond any constitutional limitation or
that it lies within the exclusive field of another legislature. It could be
noticed that the two Acts did not make any reference to each other and
were in no way interconnected. Taking each Act on its merit, the
Court had no hesitation to declare them valid as being within the
competence of the legislature. It was made very clear that the motives
which impelled to enact the law are irrelevant. However, if there was
some mention of one Act in the other or the two Acts were expressly
interconnected, the Court could have read the ulterior purpose and in
such a case motive would have become purpose, namely to bypass the
constitutional limitation of the payment of compensation as provided
in Article 31(1), thereby characterising the taxation statute as a
colourable legislation, the purpose being to overcome the payment of
compensation.
In relation to constitutional prohibitions binding a legislature it
is clear that the legislature cannot obey the prohibitions merely by
employing indirect methods of achieving exactly the same result.
Therefore, in all such cases the Court has to look behind the names,
forms and appearances to discover the true character and nature of the
legislation.199

199 Dwarkadas v. Sholapur Spinning & Weaving Co. Ltd., AIR 1954 SC 119(123) : 1954 SCR
674.
 241

The doctrine of colourable legislation applies to taxation laws

as well as other laws. But a challenge on the basis of colourable
legislation, which is not a legitimate exercise of power, can succeed
not merely by showing that the tax levied is unreasonably high or
excessive, which is a legitimate exercise of power, but by providing
other relevant circumstances which justify the conclusion that the
statute is colourable and as such amounts to a fraud.200 As an
illustration of such a statute though ostensibly passed in exercise of
the legislative power conferred on the legislature but struck down as a
colourable exercise of the, said power, reference may be made to K.T.
Moopil Nair v. State of Kerala201, where the provisions of the
Travancore Cochin Land Tax Act of 1955 were declared to be
unconstitutional in view of Articles 14 and 19 (1) (f). It was found
that a person making an income of Rs. 3,100 per year was liable to
pay Rs. 54,000 under its operative provisions, so the Supreme Court
held that the provisions of the Act were confiscatory in character, and
reached the conclusion that in passing the Act, the legislature had
merely adopted a device and a cloak to confiscate the property of the
citizen taxed.
In an American case , under the Child Labour Act, a tax on
10% on the net profits of the year could be imposed upon an employer
who knowingly, during any operation of the taxable period, employed
children within a certain age-limit, irrespective of whether one child
was employed or several. This was held not to be a valid exercise by

200 Jagannath Baksh Singh v. Stale ofU.P., AIR 1962 SC 1563 : (1963) 1 SCR 220.
201 AIR 1961 SC 552 : (1961) 3 SCR 77.
202 J. W. Bailey v. Drexal Furniture Co., (1922) 66 L Ed 817.
 242

Congress of power of taxation, but an unconstitutional regulation by

the use of the tax as a penalty for the employment of child labour in
the State which was exclusively a State function. That case was one
in which the Congress exercised its power of regulation by imposing a
tax by way of penalty in order to prevent the employment of child
labour and thus by the exercise of the power which it possessed, i.e.,
of taxation, it tried to regulate a subject over which it had no
jurisdiction.
(viii) Residuary Power of Parliament
If Act enacted by Parliament is not covered by List II, then
Parliament competent to enact the same under Art. 248 r/w Entry 97
of List I and it would not be necessary to consider whether it falls
under any specific entry in List II or List III.
As per majority decision while examining the question of
legislative competence of Parliament to make a law, the proper
approach is to determine whether the subject-matter of the legislation
falls in the State List which Parliament cannot enter. If the law does
not fall in the State List, Parliament would have the legislative
competence to pass the law by virtue of the residuary powers under
Art. 248 read with Entry 97 of the Union List and it would not be
necessary to go into the question whether it falls under any entry in
the Union List or Concurrent List. In Krishna v. State ofMadras,
applying the rule of pith and substance, the Supreme Court upheld the
Madras Prohibition Act, even though it laid down procedure and

203 Kartar Singh v. State ofPunjab (1994) 3 SCC 569 : 1994 SCC (Cri) 899 : 1994 Cri LJ 3139.
204 AIR 1957 SC 297.
 243

principles of evidence for trial of offences under the law in question

very different from those contained in the Criminal Procedure Code
and the Indian Evidence Act, both Central Acts in the Concurrent
field; in this case, the Court appears to have gone rather too far in
upholding the State law. In the Ukha case,205 the Court had held that
provisions in the State law in question concerning criminal procedure
and evidence fell under entries 2 and 12 of List III : The only
difference in the situations in the two cases appears to be that while in
the Ukha case the State law had received the Presidential assent, the
law involved in the Krishna case had not been so reserved, and this
perhaps explains the dichotomy in the judicial attitudes, for to take the
same view in the Krishna case, as was done in the Ukha case, would
have been to hold the law bad on the ground of repugnancy with a
Central law. The danger in taking the Krishna doctrine too far is that
the uniformity achieved in the procedural areas may be destroyed; the
Cr. P.C. would become limited to offences under the I.P.C., and the
States would be free to lay down their own brand of procedure and
evidence for trial of offences created by their own laws under List II.
The doctrine of pith and substance introduces a degree of
flexibility into the otherwise rigid scheme of distribution of powers. It
gives an additional dimension to the powers of the Centre as well as
the States. The reason behind the rule is that if every legislation were
to be declared invalid, however, slight or incidental the encroachment
of the other field, then the power of each legislature will be drastically
circumscribed to deal effectively with the subjects entrusted to it.

205
AIR 1963 SC 1531.
 244

Though the rule applies to both, the Centre and the States, and helps
both, yet since Parliament is the more dominant legislature and its
powers are more generally worded, the State Legislature benefit much
more by the rule than Parliament, for the rule enables them to
incidentally trespass into the much larger, and comparatively more
important, Central Area. The doctrine gives quite a good deal of
manoeuvrability to the Courts and furnishes them with a tool to
uphold legislation, for it is for them to decide its true nature and
character and thus they have a number of choices open to them and
most often the courts by putting a favourable interpretation on the
legislation in question use their power to support the same. 206
Provisions of Sections 7-D, 7-C, 7-B of the Act not applicable
to banks - “Banking” is covered by Item 45 of Union List of Seventh
Schedule of Constitution, while “moneylending and moneylenders;
relief of agricultural indebtedness” comes under Item 30 of State List
- Banks are financial institutions engaged in facilitating increased
trade and improving socio-economic conditions of the people; they
are guided by policies of Central Govt, and their activities are
controlled by RBI- Whereas moneylenders are engaged in money­
making and are guided only by personal profit- Respondent Bank
filing suit for recovery of sums advanced to appellants- Trial court
dismissing suit as not maintainable on ground that Bank was not a
registered “moneylender” under the Act therefore its suit was barred
under S. 7-D- Held, High Court in first appeal rightly set aside the
judgement of trial court and rightly directed disposal of suit on merits

206 Also see, Kannan D.H.P. Co. v. State of Kerala, AIR 1972 SC 2301.
 245

- Constitution of India, Arts. 245 and 246. In construing the

provisions of the statute purposive and meaningful interpretation was
adopted.
If subject-matter does not fall in the State List Parliament will
have legislative competence under Art.248 r/w Entry 97 of List I.
While examining the legislative competence of Parliament to make a
law what is required to be seen is whether the subject-matter falls in
the State List which Parliament cannot enter. If the law does not fall
in the State List, Parliament would have legislative competence to
pass the law by virtue of the residuary powers under Article 248 read
with Entry 97 of the Union List and it would not be necessary to go
into the question whether it fall sunder any entry in the Union List or
the Concurrent List.
4. Review
The scheme of division of legislative powers between the
Union and the States, as analysed above, reveals that there is crystal
clear constitutional tilt in favour of making the Centre strong over the
States. But, in spite of long enumeration of powers between the
Union and State Legislatures, it may be asserted that the scheme of
distribution of powers lays stress more on powers sharing to bring
about a larger amount of interaction and inter-dependence between the
Centre and the States.208

207 Naga People’s Movement ofHuman Rights v. Union ofIndia, (1998) 2 SCC 109 : 1998 SCC
(Cri) 514: AIR 1998 SC 431.
208 See State of West Bengal v. Union of India, AIR. 1963 S.C. 1241; State of Karantaka v.
Union ofIndia, AIR 1978 SC 68.
 246

Article 245 distributes the legislative power between the Union

and the States with reference to the territory. Article 246 divides the
subject matter of legislation. Article 246 divides the subject matter of
legislation. In the U.S.A. and in Australia the Constitution contains
only the powers of the Federal Legislature. The remaining powers
vest in the States. In Canada there are two lists, the Union list and the
State list. The Government of Act, 1935 made a novel approach. It
classified all possible topics of legislation in three lists. The Federal
list, the Provincial list and the Concurrent list. We have in this regard
also, as in many others, adopted the 3-fold list system of the
Government of India Act, 1935. List I of Schedule 7 called the
Union List contain 99 topics.209 These Entries include matters of
national importance e.g. Defence of India, Armed Forces of the
Union, Foreign Affairs, War and Peace, Railway, Airways, Posts and
Telegraphs, Telephones, Currency and coinage, Reserve Bank of
India, etc. List II of Schedule 7 called the State List contains
-SJA

61 Entries. The list comprises of topics over which the State has
exclusive power to legislate. These include Public Order, Police,
Local Government, Agriculture, Prisons, Betting and Gambling,
Theatres, Estate Duty, Duties of excise on alcoholic liquors. List III
of Schedule 7 is the Concurrent List. It comprises of 52 Entries.211 By

209 The last topic is numbered as 97 but a close reading would reveal that entries numbered as 2A,
92A and 92B have been added and entry 33 has been omitted. Thus the total number of
entries is 99.
210 The last entry is numbered 66. It should be noted that by the Seventh Amendment entry 36
was omitted. After that by the 42nd Amendment entries 11, 19, 20 and 29 were omitted. Thus
the number of entries is 61.

211
Originally the list had 47 entries. By subsequent amendments 5 entries were added. They are
11 A, 17A, 17B, 20A and 33A. The total now is 52.
 247

amending the Constitution 5 Entries which include Administration of

Justice, Population control, Weights and measures, Forests and
Education have been made concurrent. Both Union and the States are
competent to make laws in relation to these Entries. But the Union
has the power to repeal or substitute State laws.
The Parliament and the State legislatures derive their power to
legislate from Article 246(1) and (3) respectively. In case of
Concurrent List the source of power is Article 246(2). There are other
provisions in the Constitution which confer power upon the
Parliament to legislate e.g. Articles 2 and 3 (Formation of New States
etc.), Article 11 (Citizenship), Article 247 (establishment of additional
courts), Article 262 (River water disputes), Article 343 (Official
Language), Article 348 (Language of Supreme Court and High
Courts). Similarly Article 194 empowers the State Legislature to
define privileges and immunities of the Houses of State Legislatures.
The entries only demarcate the legislative fields of the respective
legislature. The entries are not the source of power to make a law.212
Where there is overlapping between the Union List and the State List
the Union List will have predominance. Article 246 (1) and (3) leave
no manner of doubt on this account. Thus between the Union List and
the State List the former shall prevail.
In case of overlapping between the Union List and the
Concurrent List and the Union List must be preferred. Where there is
conflict between the Concurrent List and the State List the Concurrent

212
Vijay v. State ofKarnataka (1990) 2 SCC 562; Indian Aluminium v. Karnataka Electricity
Board{1992) 3 SCC.580.
 248

List shall prevail.213 In short, if any matter falls under an Entry in

List I and also in List II the Entry in List I shall prevail. This is called
the principle of Federal Supremacy. The Federation has predominant
legislative power. The State and Concurrent List are subordinate to
it.
The Rule of Federal Supremacy is applied as a last resort. It is
the duty of the court to read the Entries of the two lists together, to
arrive at a reasonable and practical construction of the language, to
reconcile Entries and bring harmony. It is only when such
reconciliation proves impossible; then the overriding power of the
Parliament should prevail.214 This is the Rule of Harmonious
Construction.
Human expression is imperfect and all legislative draftsmen are
fallible. Even after making all-out attempts to make the lists
exhaustible some topics may escape attention or some new matters
may arise in future which could not be foreseen. To cope with such
situations the residuary power of legislation, that is to say, all those
topics which do not fall in any list are vested either in the Union or the
States. In the U.S.A. and Australia the residuary powers are given to
the States. In Canada they vest in the Union. In the Government of
India Act, 1935 the residuary powers were given neither to the
Federation nor to the States but were vested in the Governor-General.
Our Constitution confers upon the Union the exclusive power to
legislate on all matters not enumerated in any list (Article 248). In

2,3 Profulla Kumar v. Bank of Commerce, AIR. 1947 P.C. 60; Union ofIndia v. H.S. Dhillon,
AIR 1972 SC 061.
214
Calcutta Gas v. State ofW.B., AIR. 1962 SC 1044.
 249

exercise of this residuary power the Parliament enacted The Gift-tax

Act, the Wealth-tax Act and some other Acts. Entry 97 of List-I gives
effect to Article 248.
In trying to find out the meaning of an Entry and its scope the
courts have evolved certain principles. They are described below :
1. The Union List has the predominant place.
2. Each Entry to be given the widest meaning.
Each Entry must be interpreted liberally and given the widest
import that its words are capable of without rendering any other Entry
nugatory.
3. An Entry covers ancillary and subsidiary matters.
A general word used in an Entry must be construed to include
in it all ancillary and subsidiary matters.
4. Harmonious construction.
The courts should reconcile the Entries, try to bring harmony
between them and avoid conflict.
5. Pith and substance, 6. Ancillary powers, 7. Colourable
legislation, 8. Reading down.
Some constitutional experts accuse that the legislative relations
in the Indian Constitution show, undoubtedly, characteristics of over-
centralization. The Memorandum adopted by the West Bengal
government, further says that the Indian Constitution that came into
effect in 1950, was described as federal, but in its true colour is
unitary. Thus, various interesting questions may be raised here. Is
there some truth in these allegations? Does the scheme of distribution

215 See Ivor Jennings, Some Characteristics of the Indian Constitution, 1957, p. 66.
 250

of legislative powers amounts to undue weightage in favour of the

Centre? Can it really be said that, taking into consideration the
nation’s needs, the Centre’s powers are excessive or that the situation
has so changed as to call for the radical change in the Constitution as
proposed by the West Bengal Memorandum? The need to maintain
the unity of country is as important as it was 55 years ago. Population,
regionalism, religion, diversity and political demands are as great
factors as they were in 1950. The Constitution, however, cannot be
accused of violating the federal principle. If the Constitution showed
strain in its working, the fault perhaps lies more with those who have
worked it than with the Constitution itself.
o