# ST ATE OF RAJASTHAN AND ORS v. BASANT NAHATA

- **Citation:** [2005] Supp. 3 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2005-09-07
- **Case number:** Civil Appeal No. 7800 of2001
- **Bench:** Ashok Bhan, S.B. Sinha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/st-ate-of-rajasthan-and-ors-v-basant-nahata-20715
- **Pages:** 30

## Headnote

Statute Law;
Statute-Constitutionality of-Presumption of-Held, not an absolute
rule.
Delegated Legislation;
Delegation-Held, cannot be wide, uncanalised or unguided-Essential
legislative function can't be delegated
Doctrines:
Doctrine of Public policy-Not capable of being given a precise meaningOnly the judiciary has the power, a limited one, to interpret it.
A
B
c
D
The Respondent, a resident of town of Bikaner, was a Khatedar
tenant of some agricultural lands appointed one Sukhdeo Singh as his E
attorney authorizing him to look after his lands, cultivate the same and
to do all other acts, deeds and things including mortgage or sell the same,
get the requisite deeds and documents registered, by a deed of Power of
Attorney dated 16.7.1999. The said deed was presented before the SubRegistrar, Bikaner on 30.7.1999 for the purpose of registration which was F
refused by making an endorsement on the document that the same could
not be registered in terms of the Government Notification dated 26.3.1999
published in the Rajasthan Gazette dated 1.4.1999 as amended on
22.4.1999 whereby and whereunder registration otsuch documents have
been prohibited as being 'opposed to public policy'. The said notifications G
were said to have been issued by the State of Rajasthan in exercise of its
power conferred upon it under Section 22-A of the Act. The Respondent
questioned the constitutionality of Section 22-A of the Act as inserted by
the legislature of Rajasthan as also the aforementioned notifications by
filing a writ petition before the Rajasthan High Court. The Rajasthan High
I
H
2
SUPREME COURT REPORTS (2005) SUPP. 3 S.C.R.
A Court declared Section 22-A of the Act as inserted by the Rajasthan
Amendment Act, 1976 being Act No. 16 of 1976 as unconstitutional and
consequently the notifications were also quashed.
In appeal before this court, the appellant contended that a
presumption is attached in favour of a validity of a statute and it would
B be for the person to establish who alleges violation of fundamental or other
rights for impinging upon the constitutional validity. of Section 22-A of
the Act. A legislation directing compulsory registration of a document
and/or refusal to register the same being a matter of policy so as to enable
the State to regulate registration of document or class of documents could
C not be interfered by the High Court. The terminologies 'opposed the public
policy' or 'public interest' carry precise meaning having regard to the
provisions of Section 23 of the Indian Contract Act, Section 7(l)(b)(ii) of
Foreign Awards (Recognition and Enforcement) Act, 1961, and Section
3(1) of U.P. (Temporary Control of Rent and Evictions) Act, 1947 and
Section 34(2)(b)(ii) of Arbitration and Conciliation Act, 1996 and, thus,
D cannot be said to be wholly arbitrary. In exercise of its power of judicial
review the superior courts would not invalidate a statute only on the
ground that guidelines have not been laid down by the legislature for
making subordinate legislation or that the legislature has abdicated its
essential legislative function in favour of executive but in a given case may
E strike down only the notifications issued by the State if it be found to have
exceeded its jurisdiction in that behalf. In any event as such guidelines
can be found out either from the preamble or from other provisions of
the Act; the same need not be.stated in the offending provision itself, This
Court while hearing the matter having regard to the fact that similar
amendments have been carried out by the other States and would have
F wid~ repercussions directed issuance of notice to the State of Bihar,
Gujarat, Karnataka, Maharashtra and Meghalaya. Pursuant to the said
directions, the intervenor States including the States of Maharashtra,
Gujarat, Jharkhand, Meghalaya, etc., appeared and made their
submissions.
G
Dismissing the appeals, the court
HELD: 1.1. There exists a presumption as regard constitutionality
of a statute. Rule of presumpt

## Text

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ST ATE OF RAJASTHAN AND ORS.
V.
BASANT NAHATA
SEPTEMBER 7, 2005
[ASHOK BHAN AND S.B. SINHA. JJ.]
Statute Law;
Statute-Constitutionality of-Presumption of-Held, not an absolute
rule.
Delegated Legislation;
Delegation-Held, cannot be wide, uncanalised or unguided-Essential
legislative function can't be delegated
Doctrines:
Doctrine of Public policy-Not capable of being given a precise meaningOnly the judiciary has the power, a limited one, to interpret it.
A
B
c
D
The Respondent, a resident of town of Bikaner, was a Khatedar
tenant of some agricultural lands appointed one Sukhdeo Singh as his E
attorney authorizing him to look after his lands, cultivate the same and
to do all other acts, deeds and things including mortgage or sell the same,
get the requisite deeds and documents registered, by a deed of Power of
Attorney dated 16.7.1999. The said deed was presented before the SubRegistrar, Bikaner on 30.7.1999 for the purpose of registration which was F
refused by making an endorsement on the document that the same could
not be registered in terms of the Government Notification dated 26.3.1999
published in the Rajasthan Gazette dated 1.4.1999 as amended on
22.4.1999 whereby and whereunder registration otsuch documents have
been prohibited as being 'opposed to public policy'. The said notifications G
were said to have been issued by the State of Rajasthan in exercise of its
power conferred upon it under Section 22-A of the Act. The Respondent
questioned the constitutionality of Section 22-A of the Act as inserted by
the legislature of Rajasthan as also the aforementioned notifications by
filing a writ petition before the Rajasthan High Court. The Rajasthan High
I
H
2
SUPREME COURT REPORTS (2005) SUPP. 3 S.C.R.
A Court declared Section 22-A of the Act as inserted by the Rajasthan
Amendment Act, 1976 being Act No. 16 of 1976 as unconstitutional and
consequently the notifications were also quashed.
In appeal before this court, the appellant contended that a
presumption is attached in favour of a validity of a statute and it would
B be for the person to establish who alleges violation of fundamental or other
rights for impinging upon the constitutional validity. of Section 22-A of
the Act. A legislation directing compulsory registration of a document
and/or refusal to register the same being a matter of policy so as to enable
the State to regulate registration of document or class of documents could
C not be interfered by the High Court. The terminologies 'opposed the public
policy' or 'public interest' carry precise meaning having regard to the
provisions of Section 23 of the Indian Contract Act, Section 7(l)(b)(ii) of
Foreign Awards (Recognition and Enforcement) Act, 1961, and Section
3(1) of U.P. (Temporary Control of Rent and Evictions) Act, 1947 and
Section 34(2)(b)(ii) of Arbitration and Conciliation Act, 1996 and, thus,
D cannot be said to be wholly arbitrary. In exercise of its power of judicial
review the superior courts would not invalidate a statute only on the
ground that guidelines have not been laid down by the legislature for
making subordinate legislation or that the legislature has abdicated its
essential legislative function in favour of executive but in a given case may
E strike down only the notifications issued by the State if it be found to have
exceeded its jurisdiction in that behalf. In any event as such guidelines
can be found out either from the preamble or from other provisions of
the Act; the same need not be.stated in the offending provision itself, This
Court while hearing the matter having regard to the fact that similar
amendments have been carried out by the other States and would have
F wid~ repercussions directed issuance of notice to the State of Bihar,
Gujarat, Karnataka, Maharashtra and Meghalaya. Pursuant to the said
directions, the intervenor States including the States of Maharashtra,
Gujarat, Jharkhand, Meghalaya, etc., appeared and made their
submissions.
G
Dismissing the appeals, the court
HELD: 1.1. There exists a presumption as regard constitutionality
of a statute. Rule of presumption in favour of constitutionality, however,
only shifts the burden of proof and rests it on the shoulders of the person
H who attacks it. It is for that person to show that there has been a clear
•
STATE OF RAJASTHAN v. BASANTNAHATA
3
transgression of constitutional principles. But this rule is subject to the A
limitation that it is operative only till the time it becomes clear and beyond
reasonable doubt that the legislature has crossed its limits. This rule in
its application as principle of construction means that if two meanings are
possible then the courts will reject the one which renders it
unconstitutional and accept the other upholding the validity of the B
impugned legislation. [15-C-D-E)
~
Charanjit Lal Chowdhury v. the Union of India and Ors .. AIR (1951)
SC 41 : (1950) SCR 869, Union of India v. Elphinstone Spinning and Weaving
Co. Ltd. and Ors., AIR (2001) SC 72 : [2001) 4 SCC 139 and Seth Nand Lal
and Anr. v. State of Haryana and Ors., [1980) Supp SCC 574, referred to. c
Craies on Statute Law, Seventh Edition, referred to.
1.2. The court shall not invalidate a legislation on the ground of
delegation of essential legislative function or on the ground of conferring
unguided, uncontrolled and vague powers upon the delegate without taking D
into account the preamble of the Act as also other provisions of the statute
in the event they provide good means of finding out the meaning of the
offending statute. [20-C-D)
People Union for Civil Liberties and Anr. v. Union of India and Ors.,
[2004) 2 SCC 476 and Andhra Bank v. B. Satyanarayana and Ors., [2004) 2 E
sec 657' referred to.
1.3. The said principle of presumption is not an absolute rule but it
is also subject to limitations. Its application in interpretation can only be
.,,
>
applied to resolve a conflict when two interpretations are possible and not
when there is only one leading to the conclusion that the delegated F
legislation is unguided and excessive. If the provisions are unconstitutional
a mere presumption which decides the burden of proof cannot save them.
[16-A-B-CJ
Craies on Statute Law, seventh edition at page 95, referred to.
G
2.1. The necessity of the legislature's delegating its powers in favour
of the executive is a part of legislative function. It is a constituent element
of the legislative power as a whole under Article 245 of the Constitution.
Such delegation of power, however, cannot be wide, uncanalised or
}
unguided. The legislature while delegating such power is required to lay H
'"
4
SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.
A down the criteria or standard so as to enable the delegate to act within
the framework of the statute. The principle on which the power of the
legislature is to be exercised is required to be disclosed. It is also trite that
essential legislative functions cannot be delegated. The procedural powers
are, therefore, normally left to be exercised by the executive by reason of
B
a delegated legislation. [16-F-G-H; 17-A)
IN re: Delhi Laws Act, 1912 (1951) SCC 747, Rajnarain Singh v. The
Chairman, Patna Administration Committee, Patna and Anr., (1955) 1 SCR
I
,
290, Hamdard Dawakahana and Anr. v. The Union of India and Ors., AIR
(1960) SC 554, Krishna Mohan (P) Ltd v. Municipal Corporation of Delhi
c
and Ors., (2003) 7 SCC 151, Kishan Prakash Sharma and Ors. v. Union of
India and Ors., [2001) 5 SCC 212, Ajoy Kumar Banerjee and Ors. etc. v.
Union of India and Ors., [1984) 3 SCC 127 and Agricultural Market
Committee v. Shalimar Chemical Works Ltd., [1997) 5 SCC 516, referred
to.
D
Ramesh Birch and Ors. etc. v. Union of India and Ors., [1989) Supp.
•
sec 430, distinguished.
2.2. A subordinate legislation which is not backed up by any statutory
guideline under the substantive law and opposed to the enforcement of
legal right would not be valid. [29-C-D)
E
Renusagar Power Co. Ltd v. General Electric Co., [1994) Supp. I SCC
644 and Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd, [2003) 5
sec 705, referred to.
2.3. A party in suit against whom illegality is pleaded also gets an
opportunity to defend himself. Hence this essential function to decide on
'-
F what is public policy can not be delegated to executive through a
subordinate legislation. The legislature of a State, however, may lay down
as to which acts would be immoral being injurious to the society. Such a
legislation being substantive in nature must receive the legislative sanction
specifically and through a subordinate legislation or executive instructions.
G
[24-A-B-C)
2.4. Essential functions of the legislature cannot be delegated and it
must be judged with touchstone of Article 14 and Article 246 of the
Constitution of India. It is, thus, only the ancillary and procedural powers
which can be delegated and not the essential legislative point. The
contention raised on behalf of the Appellants herein that the State, being
..
H
STATE OF RAJASTHAN v. BASANTNAHATA
5
"'
higher authority, having been delegated with the power of making A
declaration in terms of Section 22-A of the Act, would not be abused is
stated to be rejected. Such a question does not arise herein as the provision
has been held to be ultra vires Articles 14 and 246 of the Constitution of
India. The contention raised to the effect that this Court would not
interfere with the policy decision is again devoid of any merit. A legislative B
policy must conform to the provisions of the constitutional mandates. Even
~
otherwise a policy decision can be subjected to judicial review.
(30-C-D-EJ
Cellular Operators Association of India and Ors. v. Union of India and
Ors., [2003) 3 SCC 186 and Clariant International Ltd and Anr. v. Securities c
and Exchange Board of India, (2004) 8 SCC 524, referred to.
3.1. Preamble and statement of object and reason can only be looked
into when there is vagueness or ambiguity present in the language of the
Act. So it is only when the language is itself capable of more than one
1 meaning, then the preamble or the statement of objects and reasons can D
be looked into and not when something is not capable of given a precise
meaning as in case of 'Public policy'. Even if the statement of Objects and
Reasons is looked into to ascertain its meaning then also there is nothing
therein which can be said to be related to morality or public policy.
(20-D-E; 21-A-B] E
People Union for Civil Liberties and Anr. v. Union of India and Ors.,
(2004] 2 SCC 476, Andhra Bank v. B. Satyanarayana and Ors., (2004] 2 SCC
657, Arnit Das v. State of Bihar, [2000] 5 SCC 488 and Godwat Pan Masala
"'
Products J.P. Ltd and Anr. v. Union of India and Ors., (2004] 7 SCC 68,
t
referred to.
F
3.2. It is always in the domain of judiciary to interpret what is
morality at a given point of time and this power can not be given to
executive. Finality cannot be attached to decisions of executive when such
things are in exclusive domain of judiciary. (21-D-E-F]
State· of Kera/a and Ors. v. Travancore Chemicals and Manufacturing G
Co. and Anr., (1998] 8 SCC 188, referred to.
3.3. It would not be correct to contend that public policy is capable
of being given a precise definition. What is 'opposed to public policy' would
..I
be a matter depending upon the nature of the transaction. The pleadings
of the parties and the materials brought on record would be relevant so H
6
SUPREME COURT REPORTS {2005] SUPP. 3 S.C.R.
A as to enable the court to judge the concept as to what is for public good.
or in the public interest or what would be injurious or harmful to the
public good or the public interest at the relevant point of time as contradistinguished from the policy of a particular government. A law dealing
with the rights of a citizen is required to be clear and unambiguous.
B Doctrine of public policy is contained in a branch of common law, it is
governed by precedents. This doctrine should not be taken recourse to in
'clear and incontestable cases of harm to the public though the heads are
not closed and though theoretically it may be permissible to evolve a new
head under exceptional circumstances of a changing world'.
c
D
(22-F-G-H; 23-A-B)
Gherulal Parakh v. Mahadeodas Maiya and Ors., AIR (1959) SC 781;
(1959) 2 SCR 406 and Zoroastrian Cooperative Housing Society Ltd. and
Anr. v. District Registrar, Cooperative Societies (Urban) and Ors., (2005} 5
sec 632, referred to.
3.4: The phraseology 'opposed to public policy' may embrace within
its fold such acts which are likely to deprave, corrupt or injurious to the
public morality and, thus, essentially should be a matter of legislative
policy. (24-C-D]
Central Inland Water Transport Corporation Limited and Anr. v. Brojo
E Nath Ganguly and Anr. etc., [1986} 3 SCC 156, referred to.
3.5. The question as to whether the statement as regard the validity
of a contract on the ground that it is opposed to public policy must
normally be viewed within the parameters fixed therefor by longstanding
authorities or precedents but in deciding a case it may not be covered by
F ~uch ai(thorities and lacking precedents, the preamble of the Constitution
or the principles underlying the fundamental rights and the Directive
Principles in our Constitution can be taken recourse to. (24-D-E-FJ
"'
Rattan Chand Hira Chand v. Askar Nawazjung (Dead) by lRs .. and Ors.,
G 1199113sec67, referred to.
Prof Winfield's Article "Public Policy in the English Common Law",
Chitty on Contracts, 28th edition at page 838, Cheshire, Fifoot and Furmst
on in their law of Contract, Fourteenth Edition, Prof Winfield in his article
"Public Policy in the English Common Law" reported in 42 Harvard law
H Review 76, referred to.
..
STATE OF RAJASTHAN v. BA SANT NAHA TA
7
Nagle v. Fei/den, (1966) 2 QB 633 and Newcastle Diocese Church A
Property Trustees v. Ebbeck, (1960) 34 ALJR 413, referred to.
3.6. A doctrine which is so vague or uncertain cannot and does not
provide any guideline Whatsoever. Furthermore, the executive while
making a subordinate legislation cannot be permitted to open new heads
of public policy in its whims. Towards opposed to public policy, therefore, B
do not lay down any guidelines to render it constitutional. Execution of
)'
power of attorney per se is not invalid. On the other hand, it is lawful. A
transaction between two persons capable of entering into a contract which
does not contravene any statute would be valid in law. The State of
Rajasthan does not make such transactions illegal. The Indian Contract C
Act or the Power of Attorney Act has not been amended. Execution of a
power of attorney per se, therefore, is not illegal. Registration of power
of attorney except in cases falling under Section 17(1)(g) or 17(l)(h) is not
compulsorily registrable. Sections 32 and 33 of the India Registration Act
also do not bar any such registration. The Act only strikes at the
documents and not at the transactions. The whole aim of the Act is to D
govern documents and not the transactions embodied therein. Thereby
only the notice of the public is drawn. (26-G-H; 27-A; 28-A-B-C-D)
'
M.E. Moo/la Sons, ltd. (in Liquidation) v. Official Assignee, Rangoon
and Ors., AIR (1936) PC 230, K. Panchapagesa Ayyar and Anr. v. K.
Kalyanasundaram Ayyar and Ors., AIR (1957) MADRAS 472 and Syed E
Abdullah Sahib v. Syed Rahmatul/a Sahib alias Baji Sahib and Ors., AIR
(1960) MADRAS 274, referred to.
3. 7. Hence, it becomes amply clear that it is not possible to define
Public policy with precision at any point of time. It is not for the executive F
to fill these grey areas as the said power rests with judiciary. Whenever
interpretation of the concept "public policy" is required to be considered
it is for the judiciary to do so and in. doing so even the power of the
judiciary is very limited. [29-G"H)
3.8. Having regard to the doctrine of separation of powers what is G
essentially within the exclusive domain of the judiciary can be delegated
to the executive unless policy behind the same is finally laid down becomes
redundant as a thing ·which itself is so uncertain cannot be a guideline for·
any thing or cannot be said to be providing sufficient framework for the
>
executive to work under it. (30-A-B-C)
H
8
SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.
A
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7800 of2001.
B
From the Judgment and Order dated 28.11.2000 of the Rajasthan High
Court in D.B.C.W.P. No. 3554 of 1999.
Aruneshwar Gupta and Naveen Kumar Singh for the Appellants.
Ms. Manjeet Chawla for the Respondent.
Yashank Adhyaru, Ms. Hemantika Wahi, Boby Augustine and Rutwik
Panda for State of Gujarat.
C
Sanjay R. Hegde, Anil K. Mishra and A. Rohen Singh for State of
D
E
F
G
H
Kamataka.
U.U. Lalit, Gautam Godara, *Ms. Pinky Anand, (*also for State of
Jharkhand), Ravindra Keshavrao Adsure for State of Maharashtra.
Manish Mohan, Aman Sinha and D.K. Sinha for Ugra Shankar Prasad
for State of Meghalaya.
Kumar Rajesh Singh and B.B. Singh for State of Bihar.
D.N. Goburdhun, Rajesh Pathak and Arup Banerjee for State of
Jharkhand.
The Judgment of the Court was delivered by
S.B. SINHA, J. Constitutionality of Section 22-A of the Registration
Act (The Act) as amended by the State of Rajasthan as also the notifications
issued by it in terms thereof are in question in this appeal which arises out
of a judgment and order dated 28. I I .2000 passed by a Division Bench of the
High Court of Judicature for Rajasthan at Jodhpur in D.B. Civil Writ Petition
No. 3554 of 1999.
FACTS:
The Respondent herein is a resident of town of Bikaner. He was a
Khatedar tenant of agricultural lands situated at Chak No. 13 KYD, Square
No. 110/24, Killa No. I to 25 Bighas, Tehsil Khajuwala, District Bikaner. He
appointed one Sukhdeo Singh as his attorney authorizing him to look after
his lands, cultivate the sam~ and to do all other acts, deeds and things including
w
t
•
STATE OF RAJ AST HAN v. BASA NT NAHAT A [S. B. SINHA, J.]
9
mortgage or sell the same, get the requisite deeds and documents registered, A
by a deed of Power of Attorney dated 16.7.1999. The said deed was presented
before the Sub-Registrar, Bikaner on 30.7.1999 for the purpose of registration
which was refused by making an endorsement on the document that the same
could not be registered in terms of the Government Notification dated
26.3.1999 published in the Rajasthan Gazette dated 1.4.1999 as amended on B
22.4.1999 whereby and whereunder registration of such documents have been
prohibited as being 'opposed to public policy'. The said notifications were
said to have been issued by the State of Rajasthan in exercise of its power
conferred upon it under Section 22-A of the Act.
The Respondent herein questioned the constitutionality of Section 22- C
A of the Act as inserted by the legislature of Rajasthan as also the
aforementioned notifications by filing a writ petition before the Rajasthan
High Court.
HIGH COURT:
By reason of the impugned judgment the Rajasthan High Court declared
Section 22-A of the Act as inserted by the Rajasthan Amendment Act, 1976
being Act No. 16 of 1976 as unconstitutional and consequently the notifications
as contained in annexures 3, 4, 6 and 7 of the writ petition were also quashed.
D
The Sub-Registrar was also directed to register the power of attorney dated E
16.7.1999 which was presented on 30.7.1999 within two weeks from the date
of presentation of the copy of the order.
The High Court in its impugned judgment, inter a/ia, held that Section
22-A of the Act confers arbitrary powers on the State Government to determine
as regard declaring a particular document being opposed to public policy. It F
was opined that the question as to whether a transaction is opposed to public
policy or not can be determined only by the courts and not by the SubRegistrar. The impugned legislation invades the right of a citizen to deal with
the property and, thus, is wholly arbitrary and unreasonable. The object of
registration of a document is not achieved by the impugned legislation. The G
Act deals with the deeds and documents and not transactions and in that view
of the matter non-registration of a document per se cannot be said to be
opposed to public policy.
SECTION 22-A OF THE ACT AND THE NOTIFICATIONS:
Section 22-A of the Act reads as under:
H
10
SUPREME COURT REPORTS (2005) SUPP. 3 S.C.R.
A
"Documents registration of which is opposed to public policy.-(1)
The State Government may, by notification in the Official Gazette,
declare that the registration of any document or class of document is
opposed to public policy.
(2) Notwithstanding anything contained in this Act, the registering
B
officer shall refuse to register any document to which a notification
issued under sub-section (I) is applicable."
The Notifications contained in annexures 3, 4, 6 and 7 of the Writ
petition are as under:
C
"Annexure/3
D
E
F
G
H
I April, 1999
"S.0.7. In exercise of the power conferred by section 22-A of the
Indian Registration Act, 1908 [Central Act No. XVI of 1908] P.S.
applicable in the State of Rajasthan, the State Govt. hereby declares
that the registration of the following classes of documents is opposed
to public policy.
Any power of attorney authorizing the attorney to transfer any
immovable property for a term in excess of six months or irrevocable
or where the term is not mentioned."
[No. F.2(2)FD/Tax-Div/99-I 89]
By order of the Governor,
Sd/-
Dy. Secretary to Govt."
"Annexure/4
April 22, 1999
"S.0. 62-In exercise of the powers conferred under Section 22-A of
the Indian Registration Act, 1908 [Central Act No. XVI of 1908] as
applicable in the State of Rajasthan, it is expedient to amend the
Notification No. F.2[3] FD-Tax-Div/99-189 dated 26.3.1999 as under;
In place of the phrase "six months" in the above notification, the
phrase "Three years" is substituted.
)
STATEOFRAJASTHANv. BASANTNAHATA [S. B. SINHA, J.)
11
[No. F.2(FDffAX-DIV/99-213]
A
By order of the Governor,
Sd/-
(Shikhar Agarwal) B
Dy. Secretary Govt."
"Annexure/6
26th March, 1999
S.O. 484:-In exercise of the powers conferred by Section 22-A of C
the Registration Act, 1908 (Central Act No. XVI of 1908), as
applicable in the State of Rajasthan, the State Govt. hereby declares
that the registration of any of the following documents is opposed to
public policy:-
Power of Attorney authorizing the execution of the sale deed, D
gift, mortgage or any other document of transfer of immovable·
property presentation for registration before any office other than the
Sub-Registrar or Registrar respectively in whose District or SubDistrict the whole or some part of the property to which such power
of attorney relates is situated.
E
[No. F.2[3] FDffAX-DIV./99-186].
By order of the Governor,
Sd/-
Dy. Secretary Govt." F
'.'Annexure/7
22nd April, 1999
S.O. 60.-ln exercise of the powers conferred under section 22-A of G
the Indian Registration Act, 1908 [Central Act No. XVI] as applicable
in the State of Rajasthan, it is expedient to amend the notification No.
F.2[16]FDffax Div./99-186 S.O. 484 dated 26.03.1999 in the public
interest as under:
H
12
A
SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.
AMENDMENT @@
· After the words 'authorising' following words are added:
"Other than the power of attorney executed in favour of brother or
sister or son or daughter or father or mother or husband or wife or
B
grandsons or granddaughter".
c
D
[No. F.2(3]FD/Tax Div./99-212]
PROCEEDING BEFORE THIS COURT:
By order of the Governor,
Sd/-
Dy. Secretary Govt."
This Court while hearing the matter having regard to the fact that
similar amendments have been carried out by the other States and would
have wide repercussions directed issuance of notice to the States of Bihar,
Gujarat, Karnataka, Maharashtra and Meghalaya. Pursuant to the said
directions, the intervenor States including the States of Maharashtra, Gujarat,
Jharkhand, Meghalaya, etc. appeared and made their submissions.
E SUBMISSIONS:
The learned counsel appearing on behalf of the Appellant and the
intervenor States raised inter a/ia the following contentions:
(i) That a presumption is attached in favour of a validity of a statute
F and it would be for the person to establish who alleges violation of fundamental
or other rights for impinging upon the constitutional validity of Section 22A of the Act.
(ii) A legislation directing compulsory registration of a document
and/or refusal to register the same being a matter of policy so as to enable
G the State to regulate registration of document or class of documents could not
be interfered by the High Court.
(iii) The terminologies 'opposed to public policy' or 'public interest'
carry precise meaning having regard to the provisions of Section 23 of the
Indian Contract Act, Section 7(1)(b)(ii) of Foreign Awards (Recognition and
H Enforcement) Act, 1961, Section 3(1) of U.P. (Temporary Control of Rent
(
{
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STATEOFRAJASTHAN v. BASANTNAl-IATA [S. B. SINHA, J.]
13
and Evictions) Act, 1947. and Section 34(2)(b)(ii) of Arbitration and A
Conciliation Act, 1996 and, thus, cannot be said to be wholly arbitrary.
(iv) In exercise of its power of )udicial review the superior courts
would not invalidate a statute only on the gr.pund that guidelines have not
been laid down by the legislature for making subordinate legislation or that
the legislature has abdicated its essential legislative function in favour of B
executive but in a given case may strike down only the notifications issued
by the State if it be found to have exceeded its jurisdiction in that behalf. In
any event as such guidelines can be found out either from the preamble or
from other provisions of the Act, the same need not be stated in the offending
provision itself.
c
THE ACT:
The Act was enacted to consolidate the enactments relating to the
Registration of Documents. Prior to enactment of the said Act, the provisions
relating to registration of documents were scattered in seven enactments. The D
Act was enacted in terms of Entry 18, List II and Entry 6, List III of the
Seventh Schedule of the Constitution oflndia. It mainly deals with the necessity
of getting a document registered in India so as to make them valid and even
if they are executed outside India to provide for registration thereof after
their first arrival in India.
E
Section 17 of the Act enumerates the instruments registration of which
is compulsory under the Act whereas Section 49 encompasses the effect of
a failure to register. Registration of documents, however, is not confined only
to documents relating to immovable property but also for the documents
dealing with other matters as for example adoption. Section 17 of the Act has
been !!_mended inter a/ia by the State of Rajasthan. The State of Rajasthan, F
however, inserted Section 17(l)(t) and 17(J)(g) with effect from 18.9.1989
and made the registration of agreement to sale and irrevocable power to
attorney relating to transfer of immovable property in any way a C()mpulsorily
registerable document. Section 18 provides for optional registration of
documents specified therein. Section 22 provides for description of houses G
and land by reference to Government maps or surveys. Several States, however,
as noticed hereinbefore, inserted Section 22-A. In terms of Sub-Section (1)
thereof, the State Governments have been authorized to issue a notification
declaring that the registration of any document or class of document would
be opposed to public policy. Sub-section (2) of Section 22-A starts with a
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14
SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.
A non-obstante clause stating that notwithstanding anything contained in the
Act, the registering officer shall refuse to register any document for which a
notification issued under Sub-section ( 1) is applicable.
Section 32 occurring in Part VI provides for presentation of documents
for registration. Section 33 deals with powet of attorney recognizable for the
B said purpose. Part XI of the Act deals with the duties and powers of registering
officers. Part XII deals with documents which a Sub-Registrar may refuse to
register which, inter alia, refers to a document relating to property, which
was not situated within the district of the Registrar or which ought to be
registered in the office of Sub-Registrar or on the ground of denial of execution.
C An appeal from such orders of the Sub-Registrar is provided for under Subsection (2) of Section 72. Even as against the order of Registrar a suit is
maintainable. However, if and when a document is refused to be registered
by the Sub-Registrar in terms of Sub-section (2) of Section 22-A of the Act,
evidently no appeal would lie.
D POWER OF AITORNEY:
A grant of power of attorney is essentially governed by Chapter X of
the Indian Contract Act. By reason of a deed of power of attorney, an agent
/
is formally appointed to act for the principal in one transaction or a series of
transactions or to manage the affairs of the principal generally conferring
E necessary authority upon another person. A deed of power of attorney is
executed by the princip~l in favour of the agent. The agent derives a right to
use his name and all acts, deeds and things done by him and subject to the
limitations contained in the said deed, the same shall be read as if done by
the donor. A power of attorney is, as is well-known, a document of
F convenience.
Besides the Indian Contract Act, the Power of Attorney Act, I 882 deals
with the subject. Section 1 A of the Power of Attorney Act defines power of
attorney to include any instruments empowering a specified person to act for
and in the name of the person executing it. Section 2 of the said Act reads,
G thus:
H
.. Execution under power-of attorney. -The donee of a power-ofattorney may, if he thinks fit, execute or do any instrument or thing
in and with his own name and signature, and his own seal, where
sealing is required, by the authority of the donor of the power; and
every instrument and thing so executed and done, shall be as effectual
(
>
)
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STATEOFRAJASTHANv. BASANTNAHATA[S. B. SINHA,J.]
15
in law as if it had been executed or done by the donee of the power A
in the name, and with the signature and seal, of the donor thereof.
This section applies to powers-of-attorney created by instruments
executed either before or after this Act comes into force."
Execution of a deed of power of attorney, therefore, is valid in law B
and subject to the provisions of the Act is not compulsorily registerable.
PRESUMPTION AS TO CONSTITUTIONALITY OF A STATUTE:
Indisputably, there exists a presumption as regard constitutionality of a
statute. Rule of presumption in favour of constitutionality, however, only C
shifts the burden of proof and rests it on the shoulders of the person who
attacks it. It is for that person to show that there has been a clear transgression
of constitutional principles [See Charanjit Lal Chowdhury v. The Union of
India and Ors., AIR [1951] SC 41: [1950] SCR 869]. But this rule is subject
to the limitation that it is operative only till the time it becomes clear and
beyond reasonable doubt that the legislature has crossed its limits. This rule D
in its application as principle of construction means that if two me~nings are
possible then the courts will reject the one which renders it unconstitutional
and accept the other upholding the validity of the impugned legislation.
In Union of India v. Elphinstone Spinning and Weaving Co. Ltd. and E
Ors., AIR (2001) SC 72 : [2001] 4 SCC 139, it was stated:
"9. A statute is construed so as to make it effective and operative.
There is always a presumption that the legislature does not exceed its
jurisdiction and the burden of establishing that the legislature has
transgressed constitutional mandates, such as those relating to F
fundamental rights, is always on the person who challenges its vires.
Unless it becomes clear beyond reasonable doubt that the legislation
in question transgresses the limits laid down by the organic law of the
Constitution it must be allowed to stand as the true expression of the
national will-Shell Co. of Australia v. Federal Commr. of Taxation.
The aforesaid principle, however, is subject to one exception that if G
a citizen is able to establish that the legislation has invaded its
fundamental rights then the State must justify that the law is saved.
It is also a cardinal rule of construction that if on one construction
being given the statute will become ultra vires the powers of the
legislature whereas on another construction which may be open, the H
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16
SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.
statute remains effective and operative, then the court will prefer the
latter, on the ground that the legislature is presumed not to have
intended an excess of jurisdiction."
Hence, the said principle of presumption is not an absolute rule but it
is also subject to limitations. Its application in interpretation can only be
B applied to resolve a conflict when two interpretations are possible and not
when there is only one leading to the conclusion that the delegated legislation
is unguided and excessive. If the provisions are unconstitutional a mere
presumption which decides the burden of proof cannot save them.
c
D
E
Jn Craies on Statute Law, seventh edition at page 95, it is stated:
"The first business of the courts is to make sense of the ambiguous
language, and not to treat it as unmeaning, it being a cardinal rule of
. construction that a statute is not to be treated as void, however,
oracular. This was thus laid down by Bowen L.J. in Curtis v. Stovin:
"The rules for the construction of statutes are very like those which
apply to the construction of other documents, especially as regards
one crucial rule-viz. that, if possible, the words of an Act of
Parliament must be construed so as to give a sensible meaning to
them. The words ought to be construed ut res magis valeat quam
pereat." And Fry L.J. added: "The only alternative construction offered
to us would lead to this result that the plain intention of the legislature
has entirely failed by reason of a slight inexactitude in the language
of the section. If we were to adopt this construction, we should be
construing the Act in order to defeat its object rather than with a view
to carry its object into effect."
F DELEGATED LEGISLATION:
The necessity of the legislature's delegating its powers in favour of the
executive is a part of legislative function. It is a constituent element of the
legislative power as a whole under Article 245 of the Constitution. Such
delegation of power, however, cannot be wide, uncanalised or unguided. The
G legislature while delegating such power is required to lay down the criteria
or standard so as to enable the delegatee to act within the framework of the
statute. The principle on which the power of the legislature is to be exercised
is required to be disclosed. It is also trite that essential legislative functions
cannot be delegated.
H
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STATEOFRAJASTHANv. BASANTNAHATA[S. B. SINHA,J.]
17
The procedural powers are, therefore, nonnally left to be exercised by A
the executive by reason of a delegated legislation.
LAW OPERATING IN THE FIELD:
We have been taken through a large number of decisions by the learned
counsel appearing on behalf of the parties beginning from Re: Delhi Laws B
Act, 1912 [1951] SCR 747 to Andhra Bank v. B. Satyanarayana and Ors.,
[2004] 2 SCC 657, but it may not be necessary to deal therewith separately
in great detail.
In Re: Delhi Laws Ai:t (supra) this Court in no unmistakable tenns
stated that the legislature may utilize any outside agency to the extent it finds C
necessary for doing things which it is unable to do itself or finds inconvenient
to do which would mean such things which are ancillary to the main enactment
and necessary for the full and effective exercise of its power of legislation.
Justice Mukherjea, in his opinion, stated:
"It cannot be said that an unlimited right of delegation is inherent in D
the legislative power itself. This is not warranted by the provisions of
the Constitution and the legitimacy of delegation depends entirely
upon its being used as an ancillary measure which the legislature
considers to be necessary for the purpose of exercising its legislative
powers effectively. and completely. The legislature must retain in its E
own hands the essential legislative functions which consist in declaring
the legislative policy and laying down the standard which is to be
enacted into a rule of law, and what can be delegated is the task of
subordinate legislation which by its very nature is ancillary to the
statute which delegates the power to make it. Provided the legislative
policy is enunciated with sufficient clearness or a standard laid down F
the Courts cannot and should not interfere with the discretion that
undoubtedly rests with the legislature itself in detennining the extent
of delegation necessary in a particular case."
As regard delegated power to "restrict and modify", it was held:
"delegation .... cannot extend to the altering in essential particulars of
laws which are already in force in the area in question."
G
"The power to restrict and modify does not import the power to make
essential changes. It is confined to alterations of a minor character
such as are necessary to make an Act intended for one area applicable H
18
SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.
~·
A
to another and to bring it into hannony with laws already in being in
the State, or to delete portions which are meant solely for another
area. To alter essential character of an Act or to change it in material
particulars is to legislate, and that, namely the power to legislature,
all authorities are agreed, cannot be delegated by a Legislature which
B
is not unfettered."
J
Vivian Bose, J., however, speaking for a Constitution Bench of this
Court in Rajnarain Singh v. The Chairman, Patna Administration Committee,
Patna and Anr., [1955] 1 SCR 290 analysed the opinions of different learned
Judges in Re: Delhi Laws Act (supra) and culled out the majority view thus:
c
" .. that an executive authority can be authorized to modify either
existing or future laws but not in any essential feature. Exactly what
constitutes an essential feature cannot be enunciated in general tenns,
and there was some divergence of view about this in the fonner case,
but this much is clear from the opinions set out above: it cannot
D
include a change of policy."
In Hamdard Dawakahan and Anr. v. The Union of India and Ors., AIR
(1960) SC 554 and Krishna Mohan (P) Ltd. v. Municipal Corporation of
Delhi and Ors., [2003] 7 SCC 151, this Court held that vague or uncanalised
or unguided power would render the delegation bad in law.
E
•
The legal position has been explained by a Constitution Bench of this
Court in Kishan Prakash Sharma and Ors. v. Union of India and Ors.,
[200 I] 5 sec 212 holding :
" ... The legislatures in India have been held to possess wide power of
F
legislation subject, however, to certain limitations such as the
legislatμre cannot delegate essential legislative functions which consist
in the detennination or choosing of the legislative policy and of
fonnally enacting that policy into a binding rule of conduct. The
legislature cannot delegate uncanalised and uncontrolled power. The
G
legislature must set the limits of the power delegated by declaring the
policy of the law and by laying down standards for guidance of those
on whom the power to execute the law is conferred. Thus the
delegation is valid only when the legislative policy and guidelines to
implement it are adequately laid down and the delegate is only
empowered to carry out the policy within the guidelines laid down by
..
H
the legislature. The legislature may, after laying down the legislative
STATE OF RAJASTHAN v. BASANTNAHATA [S. B. SINHA, J.]
19
policy, confer discretion on an administrative agency as to the A
execution of the policy and leave it to the agency to work out the
details within the framework of the policy.