# THE CONSUMER ACTION GROUP AND ANR v. STATE OF TAMIL NADU AND ORS

- **Citation:** [2000] Supp. 2 S.C.R. 523
- **Court:** Supreme Court of India
- **Decided:** 2000-08-18
- **Bench:** B.N. Kirpal, A.P. Misra, Ruma Pal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-consumer-action-group-and-anr-v-state-of-tamil-nadu-and-ors-17531
- **Pages:** 29

## Headnote

Tamil Nadu Town and Country Planning Act, 1971-Section 113Power to grant exemption-Whether ultra vires-Due to excessive delegation
A
B
of essential legislative functions-Held, no-Since the preamble, objects,
reasons and various provisions of the Act give clear-cut policy and guidelines
C
to the Government-Constitution of lndia-Articles 14 & 21.
Government orders-Passed under the Section-In violation of the provisions of the Act and Rules-Without recording any reasons-And setting aside
the orders, earlier passed by the Statutory Authorities in terms of the Act and
Rules-Legality of-Held, illc:gal.
D
Power to exempt-Exercise of-It is obligatory on the Government to
record the reasons, while passing order under the Section, even if Section is
silent about recording the reason.
Tamil Nadu Town & Planning (Amendment) Act, 1998:
Section I I 3-A-Regularisation of illegal construction-Plea that the Act
is ultra vires-Since it is against policy of the Statute and public interest and
is extension of the unbridled power of exemption granted under Section 113The Act cannot be challenged on the ground that the discretion of the delegatee
E
is unbridled-The Section r/w. statement of objects and reasons clearly indiF
cates legislatures intent and policy and no discretion is left to the Government-Section as a one time measure is a valid piece of legislation-In order
to stop s•Jch situations from recurring, State has to take effective measuresConstitution of India-Articles 14 & 21.
Administrative Law-Delegation of power-Exercise of-Whenever any
statute confers any power on any statutory authority including a delegatee
under a valid statute, howsoever wide the discretion may be, the same has to
be exercised reasonably within the sphere that statute confers and such exercise
G
of power must stand the test to judicial scrutiny which is one of the basic
features of our Constitution-The reason recorded truely discloses the
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523
524
SUPREME COURT REPORTS
[2000] SUPP. 2 S.C.R.
A
justifiability of the exercise of such power-While exercising such a power the
authority has to keep in mind the purpose and the policy of the Act and while
granting relief has to equate the resultant effect of such a grant on both viz., the
public and the individual.
Rights-Fundamental and individual-Scope of-Every individual right
B
including fundamental right is within reasonable limit-But if it inroads public
rights leading to public inconvenience, it has to be curtailed to that extent.
c
The petitioners filed the present writ petition under Article 32 of the
Constitution, challenging the constitutional validity of Section 113 of Tamil
Nadu Town and Country Planning Act, 1971 as ultra viresof Article 14 and
21 of the Constitution, and the validity of the orders passed under it by
respondent No. 1 granting exemptions. The petitioners contended that the
power under the section were being exercised indiscriminately in granting
exemption, in violation of public policy as laid down under the Act and the
Development Control Rules; and that section 113 is ultra vires, because
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there are no guidelines to control the power, and the same amounts to
delegation by the legislature of its essential legislative power. The State
contended that the power is controlled by the guidelines, which could be
gathered from the preamble, objects and reasons including various provisions of the Act and the Rules, and hence Section 113 cannot be held ultra
E
vires. The petitioner brought to the notice of the Court 62 orders passed
between 1.7.87 to ·29.1.88 under Section 113, and contended that these
orders are arbitrary and illegal as the same have been passed in disregard
of the provisions of the Act and Rules without assigning any reasons; and
that these orders override even the orders passed by the Development
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Authority rejecting their plans as not being in conformity with the development Rules.
During pendency of the writ petitions, the State passed Tamil Nadu
Town and Planning (Amendm

## Text

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THE CONSUMER ACTION GROUP AND ANR.
v.
STATE OF TAMIL NADU AND ORS.
AUGUST 18, 2000
[B.N. KIRPAL, A.P. MISRA AND RUMA PAL, JJ.]
Tamil Nadu Town and Country Planning Act, 1971-Section 113Power to grant exemption-Whether ultra vires-Due to excessive delegation
A
B
of essential legislative functions-Held, no-Since the preamble, objects,
reasons and various provisions of the Act give clear-cut policy and guidelines
C
to the Government-Constitution of lndia-Articles 14 & 21.
Government orders-Passed under the Section-In violation of the provisions of the Act and Rules-Without recording any reasons-And setting aside
the orders, earlier passed by the Statutory Authorities in terms of the Act and
Rules-Legality of-Held, illc:gal.
D
Power to exempt-Exercise of-It is obligatory on the Government to
record the reasons, while passing order under the Section, even if Section is
silent about recording the reason.
Tamil Nadu Town & Planning (Amendment) Act, 1998:
Section I I 3-A-Regularisation of illegal construction-Plea that the Act
is ultra vires-Since it is against policy of the Statute and public interest and
is extension of the unbridled power of exemption granted under Section 113The Act cannot be challenged on the ground that the discretion of the delegatee
E
is unbridled-The Section r/w. statement of objects and reasons clearly indiF
cates legislatures intent and policy and no discretion is left to the Government-Section as a one time measure is a valid piece of legislation-In order
to stop s•Jch situations from recurring, State has to take effective measuresConstitution of India-Articles 14 & 21.
Administrative Law-Delegation of power-Exercise of-Whenever any
statute confers any power on any statutory authority including a delegatee
under a valid statute, howsoever wide the discretion may be, the same has to
be exercised reasonably within the sphere that statute confers and such exercise
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of power must stand the test to judicial scrutiny which is one of the basic
features of our Constitution-The reason recorded truely discloses the
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523
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SUPREME COURT REPORTS
[2000] SUPP. 2 S.C.R.
A
justifiability of the exercise of such power-While exercising such a power the
authority has to keep in mind the purpose and the policy of the Act and while
granting relief has to equate the resultant effect of such a grant on both viz., the
public and the individual.
Rights-Fundamental and individual-Scope of-Every individual right
B
including fundamental right is within reasonable limit-But if it inroads public
rights leading to public inconvenience, it has to be curtailed to that extent.
c
The petitioners filed the present writ petition under Article 32 of the
Constitution, challenging the constitutional validity of Section 113 of Tamil
Nadu Town and Country Planning Act, 1971 as ultra viresof Article 14 and
21 of the Constitution, and the validity of the orders passed under it by
respondent No. 1 granting exemptions. The petitioners contended that the
power under the section were being exercised indiscriminately in granting
exemption, in violation of public policy as laid down under the Act and the
Development Control Rules; and that section 113 is ultra vires, because
D
there are no guidelines to control the power, and the same amounts to
delegation by the legislature of its essential legislative power. The State
contended that the power is controlled by the guidelines, which could be
gathered from the preamble, objects and reasons including various provisions of the Act and the Rules, and hence Section 113 cannot be held ultra
E
vires. The petitioner brought to the notice of the Court 62 orders passed
between 1.7.87 to ·29.1.88 under Section 113, and contended that these
orders are arbitrary and illegal as the same have been passed in disregard
of the provisions of the Act and Rules without assigning any reasons; and
that these orders override even the orders passed by the Development
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Authority rejecting their plans as not being in conformity with the development Rules.
During pendency of the writ petitions, the State passed Tamil Nadu
Town and Planning (Amendment) Act, 1998 through which Section 113-A
was introduced in 1971 Act. The petitioner also challenged the amending
Act, vide separate writ petition, and contended that Section 113-A is against
policy of the statute and against public interest, and the same suffers from
the same vice of it being unconstitutional as Section 113; and that the same
is only an extension to the unbridled exemption power conferred under
Section 113.
Partly allowing the Writ Petitions, the Court
•
CONSUMER ACTION GROUP v. STATE
525
HELD : 1.1. Section 113 of the Tamil Nadu Town and Country
A
Planning Act, 1971 is valid. It does not suffer from the vice of excessive
delegation of any essential legislative function. The Preamble, Objects and
Reasons and various provisions of the Act give clear-cut policy and guidelines to the Government for exercising its power. Hence it is neither unbridled nor without any guidelines. [550-F]
B
1.2. Inspite of very wide power being conferred on delegatee that such
a section would still not be ultra vires, if guidelines could be gathered from
the Preamble, Object and Reasons and other provisions of the Acts and Rules,
in testing validity of such provision, the courts have to discover, whether
there is any legislative policy purpose of the statute or indication of any
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clear will through its various provisions, if there be any, then this by itself
would be a guiding factor to be exercised by the delegatee. [537-E; F; G]
A.N. Parasuraman arul Ors. v. State of Tamil Nadu, [1989] 4 SCC 683
and Kunnathat Thathunni Moopil Nair v. The State of Kerala and Am:, [1961]
3 SCR 77, distinguished.
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Premium Granites and Am: v. State ofT.N. and Ors., [1994] 2 SCC 691;
Mahe Beach Trading Co. arul Ors. v. Union Territory of Pondicherry arul Ors.,
[1996] 3 SCC 741; State of Kera/a and Ors. v. Travancore Chemicals and
Manufacturing Company and Am:, [1998] 8 SCC 188; The State of Bombay
and Anr. v. State of Balsam, [1951] SCR 652; Harishankar Bag/a and Anr. v.
The State of Madhya Pradesh, [1995] SCR 380; Sardar lnder Singh v. State of
Rajasthan, [1957] SCR (Constitution Bench); P.J. Irani v. The State of Madras, [1962] 2 SCR 169 and Registrar of Co-operative Societies, Trivandrum
and Anr. v. K. Kunhambu and Ors., [1980] 2 SCR 260, referred to.
2.1. All the 62 GOs are not sustainable in law. The Government while
exercising its power of exemption has given a go-by to all the norms as laid
down under the Act and the Rules and has truly exercised its power
arbitrarily without following any principle which could be said to be in
furtherance of the objective of that. On scrutiny of each of the 62 GOs, it is
found that the grant of exemptions to the persons concerned has been in a
set manner, almost identical except for typing different plot numbers and
the rules which have been exempted all other words are identical. Except
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for this difference rest of the words in these orders are the same. Each of
these orders reveals non-application of mind by giving total go-by to the
rules relating to the restrictions and control in construction of a building,
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[2000] SUPP. 2 S.C.R.
to the floor space index, the front set back, side set back, parking requirements including provision of stand by generator, transformer room and
meter room and floor space requirements, construction abutting road
width, corridor width, permissible floor area, limits of nursing homes,
height of the rear construction even from the provisions of prohibition on
the construction of multi storeyed buildings etc. While granting the exemptions Government lias also not recorded any reason as to why such
power is being exercised and further such power was exercised not only to
regularise some irregularities but were passed to over reach the order of
refusal passed by the Member-Secretary, Madras Metropolitan Development Authority. [540-H; 541-C; D-E]
2.2. Whenever any statute confers any power on any statutory authority including a delegatee under a valid statute, howsoever wide the
discretion may be, the same has to be exercised reasonably within the
sphere the statute confers and such exercise of power must stand the test to
D
judicial scrutiny. This judicial scrutiny is oue of the basic features of our
Constitution. The reason recorded truely discloses the justifiability of the
exercise of such power. When such a wide power is given to any statutory
authority including a delegatee then it is obligatory on the part of such
authority to clearly record its reason in the order itself for exercising such
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a power. Application of mind of such authority at that point of time could
only be revealed when order records its reason. Even if the Section is silent
about recording of reason, it is obligatory on the Government while passing orders under Section 113 to record the reason. [542-A-D]
2.3. When such a wide power is vested in the Government it has to be
exercised with greater circumspection. Greater is the power, greater should
be the caution. No power is absolute, it is hedged by the checks in the
statute itself. While exercising such a power the authority has to keep in
mind the purpose and the policy of the Act and while granting relief has to
equate the resultant effect of such a grant on both viz., the public and the
individual. So long it does not materially affect the public cause, the grant
would be to eliminate individual hardship which would be within the
permissible limit of the exercise of power. But where it erodes the public
safety, public convenience, public health etc., the exercise of the power
could not be for the furtherance of the purpose of the Act. Minor abrasion
here and there to eliminate greater hardship, may be in a given case,
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be justified but in no case effecting the public at large. So every time
,
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CONSUMER ACTION GROUP v. STATE
527
Government exercises its power it has to examine and balance this before
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exercising such a power. Even otherwise every individual right including
fundamental rig\,lt is within reasonable limit but if it inroads public rights
leading to public incortveniences it has to be curtailed to that extent. So no
exemption should be granted effecting public at large. [543-A-D; 542-H]
2.4. Another significant fact which makes these impugned orders
illegal is that Section 113 empowers it to exempt but it obligates it to grant
subject to such condition as it deems fit. In other words, if any power is
exercised then Government must put such condition so as to keep in check
such person. In none of the sixty-two orders any condition is put by the
Government. [543-E-F]
B
c
3.1. Section 113-A as a one time measure brought in through the
Tamil Nadu Town and Planning (Amendment) Act, 1998 is valid piece of
legislation and not ultra vires. Section 113-A read with the Statement of
Objects and Reasons clearly indicates Legislature's intent and policy, instead of demolishing illegal constructions to regularise them by charging
D
regularisation fees. Thus no similar attributable vice could be attached to
Section 113-A. [547-A; B]
Section 113-A legislature, itself lays down what is to be done by the
Government, while in Section 113 Government is conferred with wide discretion though to act within the channel of the policy. In Section 113-A hardly
any discretion is left on the Government while in Section 113 very large
discretion is left. Challenge to section 113 is unguided wide power to a
delegatee, but no such challenge could be made against Legislature. Section
113-A is mandate of the Legislature itself to grant exemption and realise
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regularisation fees. There is no discretion on the delegatee. [547-B-C]
F
3.2. The facts recorded in the Statement of Objects and Reason of
the Amending Act indicates matter of serious concern which requires
earnest consideration to salvage in future such recurring situation affectG
ing public right with resultant hazard of traffic, public health, security etc.
Before such pattern becoming cancerous to spread to all parts of this
country, it is high time that remedial measure be taken by the State to
check this pattern. Unless the administration is toned up, the persons
entrusted to implement the scheme of the Act are made answerable to the
latches on their failure to perform their statutory obligations, it would
continue to result in wrongful gains to the violators of the law at the cost of
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[2000] SUPP. 2 S.C.R.
public, and instead of development bring back cities into the hazards of
pollution, disorderly traffic, security risks, etc. Such a pattern retards the
development, jeopardises all purposeful plans of any city, and liquidates
the expenditure incurred in such development process. This inflow has to
be c~ecked at the very root. State must act effectively not to permit such
situation to develop in the wider interest of public at large. When there is
any provisjon to make illegal construction valid on ground of limitation,
then it must mean Statutory Authority in spite of knowledge has not taken
any action. The functionary of this infrastructure has to report such
illegalities within shortest period; if not, there should be stricter rules for
their non-compliance. [548-D; E-F; 549-C-D-E]
CIVIL ORIGINAL JURISDICTION: Writ Petition (C) No. 926of1988.
Under Article 32 of the Constitution of India.
WITH
Writ Petition (C) No. 237 of 1999.
R. Mohan, Dayan Krishnan, Nikhil Nayyar, B. Sunita Rao, M.A.
Krishnamoorthy, V.G. Pragasam, A. Mariarputham, Ms. Aruna Mathur, Anurag
D. Mathur, A.V. Rangam, Krishnamurthi Swami, S.R. Setia, Mrs. Shiel Seth,
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P.N. Likhyani, Ambrish Kumar, S. Muralidhar, Kailash Vasdev, Janaki
Ramachandran, K.K. Mani, Sudarsh Menon, K.R. Choudhary, V. Krishna Murthy
and R. Ayam Perumal for the appearing parties.
The Judgment of the Court was delivered by
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MISRA, J. The petitioner challenges the constitutional validity of Section 113 of the Tamil Nadu Town and Country Planning Act, 1971 (hereinafter
referred to as 'the Act') as it being ultra vires of Articles 14 and 21 of the
Constitution of India and also the validity of the orders passed under it,
granting exemptions by respondent no.1, viz., the Government. We are drawn
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to consider an issue, more appropriately expressed in the words of Chinnappa
Reddy, J. " ... the perennial, nagging problem of delegated legislation and the socalled Henry VIII clause have again come up for decision ..... ". The petitioner
- the consumer action group which is a trust registered under the Indian Trust
Act, has raised similar issue before us.
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The petitioner through this petition under Article 32 of the Constitution
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CONSUMER ACTION GROUP v. STATE [MISRA, J.]
529
of India has brought to the notice of this Court, impunity with which the
executive power of State of Tamil Nadu is being exercised indiscriminately in
granting exemptions to the violators violating every conceivable control, check
including approved plan, in violation of the public policy as laid down under
the Act and the Development Control Rules (hereinafter referred to as 'the
Rules'). The submission is, granting of such exemptions is against the public
interest, safety, health and the environment. To bring home this indiscriminate
exercise of power, reference is made to about sixty two such orders passed by
the Government between the period 1.7.1987 to 29.1.1988 which have been
annexed compositely as Annexure II to the petition. Submission is, it is this
indiscriminate exercise of power which results in the shortage of water,
electricity, choked roads and ecological and environmental imbalances.
Mr. Dayan Krishnan, learned counsel for the petitioner submits, such exercise
of power is because there are no guidelines or control under the Act. This is
the main plank of attack, for declaring Section 113 as ultra vires as it can do
or undo anything under the Act to wipe out any development without any check
which amounts to the delegation by the Legislature of its essential legislative
power.
Mr. R. Mohan, learned senior counsel for the State has denounced with
vehemence these submissions. The power is neither uncanalised nor without
A
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any guideline. This power is controlled through the guidelines, which could be'
gathered from the Preamble, Objects and Reasons, including various provisions
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of the Act and the Rules. So far challenge to the orders passed under it by the
State Government, it is open for the Court to examine the same and in case they
are found to have been passed arbitrarily or illegally the court may quash the
same, but such exercise of power would not lend support to a declaration of
Section 113 as ultra vires.
F
In order to appreciate the submissions and to adjudicate the issues involved, it is proper to scan through the periphery, scope and object of the
aforesaid Act and th\! Rules. The Preamble of the Act picturises that the Act
is for the planning the development of use of rural and urban land in the State
of Tamil Nadu and for the purposes connected therewith. Section 2(13) defines
'development' to mean carrying out of all or any of the works contemplated
in a regional plan, master plan, detailed development plan or a n·ew town
development plan prepared under this Act, which includes the carrying out of
building, engineering, mining or other operations in, or over or under the land
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and also includes making of any material change in the use of any building or
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land. Sub-section 15 of Section 2 defines 'development plan' to mean for the
development or re- development or improvement of the area within the jurisdiction of a planning authority and includes a regional plan, master plan, detailed
development plan and a m;w town development plan prepared under this Act.
This Act consists of XIV Chapters containing 125 Sections. It provides for the
creation of the Metropolitan Development Authority for the Metropolitan area.
Under Chapter II-A, the Madras Metropolitan Development Authority (MMDA)
was formed. The control and development plan of the Madras Metropolitan
area is listed with MMDA. Chapter III deals with the planning authorities and
its plan, Chapter IV deals with acquisition and disposal of land, Chapter V
contains special provisions regarding new town development authority and
Chapter VI refers to the control of development and use of land. This Chapter
gives clear guidelines to the appropriate authorities under which it has to perform
its statutory functions. Sub-section (2) of Section 49 gives guidelines to enable
the appropriate planning authority to grant or refuse permission in respect of
an application made under Section 49(1) by any person intending to carry out
any development on any land or building. Thus, this Section empowers MMDA
to revoke or modify any permission already granted. This also provides as to
when such an application for modification could be made. This Act also provides for the constitution of a tribunal under Chapter IX and provisions under
Chapter X for an appeal, revision or review. It is under Chapter XII, the impugned Section 113 is placed. This confers delegation of power on the State
Government and delegation of power to the Director under Section 91 and to
the appropriate planning authority under Section 91-A. It is true both these later
Sections are hedged with restrictions contained therein. It is under this setting,
when there is no check, or restrictions in Section 113 its vires is challenged.
This
contrast
between
Section
91
and
91-A with Section 113 is submitted, is indicative that the power with the Government is unguided and uncontrolled. In Chapter XIII, Section 122 empowers
the Government to make rules to carry out the purposes of this Act. Section
123 obligates the Government to place its Rules before the Legislature. Section
124 empowers the planning authority with the previous approval of the Gov-·
ernment to make regulations prospectively or retrospectively not inconsistent
with this Act and the Rules. Significantly sub-section (3) of Section 124 gives
power to the Government to rescind any regulation made under this section
through notification. Similarly, Rule 3 guides and controls the authorities to
exercise its powers within the limitations of each such zone. The said Rules
further guide the authorities to exercise its power within the limitation as
tabulated specifying the requirements relating to floor space index, maximum
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CONSUMER ACTION GROUP v. STATE [MISRA, J.)
531
height, minimum set-back, front set back, side set back, rear set back etc. For
commercial zones further restrictions are in relation to the horsepower rating
of electric motors and steps to be taken to regulate storage of explosives, to
regulate effluents, smoke, gas or other items likely to cause danger or nuisance
to public health. These rules set out norms on which basis specific standards
are to be worked out, keeping in mind the public interest, public health and
their safety as well development of that area, to cater to the need of its citizens.
It is in this background we now proceed to consider the challenge to
Section 113. For ready reference, the same is quoted hereunder:-
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"ll3. Exemptions:- Notwithstanding anything contained in this Act,
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the Government may, subject to such conditions as they deem fit, by
notification, exempt any land or building or class of land or buildings
from all or any of the provisions of this Act or rules or regulations
made thereunder."
It cannot be doubted, mere reading literally its language, the first impression
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is that power conferred upon the Government displays one to be of the widest
amplitude with no in built check revealed from this Section. The petitioner's
case is, such wide powers have led to its exercise unscrupulously without
consideration of its effect on the public at large. On the other hand learned
counsel fer the State denying this submits, the power is bridled and controlled
through the Preamble, Objects and Reasons and various provisions of the Act
and the Rules.
Challenging the vires of this section, counsel for the petitioner referred
to Premium Granites andAnr. v. State of'f.N. and Ors .. [1994] 2 SCC 691. In
this case, Rule of granting exempti'on 'rro!n other provisions of the statute of
the Tamil Nadu Minerals Concession Rules, 1959 was challenged as being
arbitrary and without any guidelines. Same submission was made, as in the
present case that this gives wide discretionary power to the authority uncanalised.
This decision held:-
" .. In our view, in interpreting the validity of a provision containing
relaxation or exemption of another provision of a statute, the purpose
of such relaxation and the scope and the effect of the same in the
context of the purpose of the statute should be taken into consideration
and if it appears that such exemption or relaxation basically and
intrinsically does not violate the purpose of the statute, there will be
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no occasion to hold that such provision of relaxation or exemption is
illegal or the same ultra vires other provisions of the statute. The
question of exemption or relaxation ex hypothesi indicates the existence of some provisions in the statute in respect of which exemption
or relaxation is intended for some obvious purpose."
This holds such a provision of regularisation or exemption cannot be
held to be illegal, if it is consistent with the purpose of the statute. It further
held:-
"But we do not think that in the facts and circumstances of the case,
and the purpose sought to be achieved by Rule 39, such reading down
is necessary so as tc, limit the application of Rule 39 only for varying
some terms and conditions of a lease. If the State Government has an
authority to follow a particular policy in the matter of quarrying of
granite and it can change the provisions in the Mineral Concession
Rules from time to time either by incorporating a particular rule or
amending the same according to its perception of the exigencies, it will
not be correct to hold that on each and every occasion when such
perception requires a change in the matter of policy of quarrying a
minor mineral in the State, particular provision of the Mineral Concession Rules has got to be amended."
So, this Court upheld the validity of Rule 39 of the Tamil Nadu Mineral
Concession Rules, 1959.
Strong reliance is placed for the petitioner in the case of A.N. Parasuraman
and Ors. v. State of Tamil Nadu, [1989] 4 SCC 683, Section 22 of the Tamil
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Nadu Private Educational Institutions (Regulation) Act, 1966 was challenged.
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This conferred wide exemption power on the State Government to exempt any
private educational institution from all or any provisions of the Act. This Court
held:-
"The provisions of the Act indicate that the State Government has been
vested with unrestricted discretion in the matter of the choice of the
competent authority under Section 2(c) as also in picking and choosing
the institutions for exemption from the Act under Section 22. Such an
unguided power bestowed on the State Government was struck down
as offending. Article 14 in the case of the State qf West Bengal v.Anwar
Ali Sarkar. A similar situation arose in K. T. Moopil Nair v. State of
CONSUMER ACTION GROUP v. STATE [MISRA, J.]
533
Kera/a where, under Section 4 of the Travancore-Cochin Land Tax
Act, 1955, all lands were subjected to the burden of a tax and Section
7 gave power to the government to grant exemption from the operation
of the Act. The section was declared ultra vires on the ground that it
gave uncanalised, unlimited and arbitrary power, as the Act did not lay
down any principle or policy for the guidance of exercise of the
discretion in respect of the selection contemplated by Section 7."
Section 22 was held to be ultra vires as the Act did not lay down any principle
or policy for the guidance to the delegatee for exercising its discretion.
In Mahe Beach Trading Co. and Ors. v. Union Territory of Pondicherry
and Ors., [1996] 3 SCC 741, the Municipal Council decided to levy a municipal tax of 5 paise on each litre of petrol and diesel oil sold at the petrol pump.
This levy was challenged which was struck down by the learned Single Judge.
During the pendency of this appeal, the Administrator of Pondicherry, promulgated Pondicherry Municipal Decree (Levy and Validation of Taxes, Duties,
Cesses and Fees) Ordinance, 1973 and this was later replaced by an Act.
Sections 3 and 4 of the Validation Act were challenged on the ground of
excessive delegation of the essential legislative power. This Court held:
"The principle which emanates from the aforesaid decisions relied
upon by the appellants is very clear namely: that if there is abdication
of legislative power or there is excessive delegation or if there is a total
surrender or transfer by the legislature of its legislative functions to
another body then that is not permissible. There is, however, no
abdication, surrender of legislative functions or excessive delegation
so long as the legislature has expressed its will on a particular subjectmatter, indicated its policy and left the effectuation of the policy to
subordinate or subsidiary or ancillary legislation."
However, the Court holds, the question .of these Sections being ultra vires
would have been relevant if any delegatee was to take any decision, which was
not in that case.
In State of Kera/a and Ors. v. Travancore Chemicals and Manufacturing
Co. and Anr., [1998] 8 SCC 188, the validity of Section 59-A of the Kerala
General Sales Tax Act was challenged which was held to be violative of Article
14 and was thus struck down. Section 59-A of this Act is quoted hereunder:
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"59-A. Power of Government to de1ermine rate of tax-If any question
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arises to the rate of tax leviable under this Act on the sale or purchase
of any goods, such question shall be referred to the Government for
decision and the decision of the Government thereon shall, notwithstanding any other provision in this Act, be final."
Court held:
"Section 59-A enables the Government to pass an administrative order
which has the effect of negating the statutory provisions of appeal,
revision etc. contained in Chapter VII of the Act which would have
enabled the appellate or revisional authority to decide upon questions
in relation to which an order under Section 59-A is passed. Quasijudicial or judicial determination stands replaced by the power to take
an administrative decision. There is nothing in Section 59-A which
debars the Government from exercising the power even after a dealer
has succeeded on a question relating to the rate of tax before an
appellate authority. The power under Section 59-A is so wide and
unbridled that it can be exercised at any time and the decision so
rendered shall be final."
In Kunnathat Thathunni Moopil Nair v. The State of Kera/a and Anr.,
(1961] 3 SCR 77, the constitutional validity of the Travancore-Cochin Land
Tax Act (Amendment Act 10 of 1957) was challenged as it contravenes Articles 14, 19(l)(f) and 31(1) of the Constitution of India. The grounds of
challenge were (a) the Act did not have any regard to the quality of the land
or its productive capacity and the levy of tax at a flat rate is unreasonable
restriction on the right to hold property; (b) the Act did not lay down any
provision calling for a return from the assessee for an enquiry or investigation
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of facts before the assessment; (c) Section 7 gave arbitrary power to the
Government to pick and choose in the matter of grant of total or partial
exemption from the provisions of the Act; and (d) the tax proposed to be levied
had absolutely no relation to the production capacity of the land sought to be
taxed or to the income they could arrive. This Court with respect to Section
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7 of the said Act held:-
"Furthermore, Section 7 of the Act, quoted above, particularly the
latter part, which vests the Government with the power wholly or
partially to exempt any land from the provisions of the Act, is clearly
discriminatory in its effect and, therefore, infringes Art. 14 of the
Constitution. The Act does not lay down any principle or policy for
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the guidance of the exercise of discretion by the Government in respect
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of the selection contemplated by s.7."
Section 7 was held to be ultra vires as the Act did not lay down any
principle or policy for the guidance.
For the State reliance is placed in the State of Bombay and Anr. v. F.N.
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Balsara, (1951] SCR 682 (Constitution Bench). With reference to the validity
of Section 139(c) of the Bombay Prohibition Act (XXV of 1949) the submission was that power given to the Government to exempt any person or institution or any class of persons or institutions from observing whole or any of
the provisions of the Act, rule or regulation or order is too wide and unbridled.
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This section is similar in the width of discretion to the section we are considering. This Court while setting aside the High Court decision upheld the
provisions and held:-
"This Court had to consider quite recently the question as to how far
"delegated legislation" is permissible, and a reference to its final
conclusion will show that delegation of the character which these
sections involve cannot on any view be held to be invalid. (See Special
Reference No. 1 of 1951: In re The Delhi Laws Act, 1912, etc.). A
legislature while legislating cannot foresee and provide for all future
contingencies, and section 52 does no more than enable the duly
authorized officer to meet contingencies and deal with various situations as they arise. The same considerations will apply to section 53
and 139(c). The matter however need not be pursued further, as it has
already been dealt with elaborately in the case referred to."
In Harishankar Bag/a and Anr. v. The State of Madhya Pradesh, [ 1995]
SCR 380 (Constitution Bench) this Court held:-
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"The next contention of Mr. Umrigar that section 3 of the Essential
Supplies (Temporary Powers) Act, 1946, amounts to delegation of
Legislative power outside the permissible limits is again without any
merit. It was settled by the majority judgment in the Delhi Laws Act
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case that essential powers of legislature cannot be delegated. In other
words, the legislature cannot delegate its function of laying down
legislative policy in respect of a measure and its formulation as a rule
of conduct. The Legislature must declare the policy of the Jaw and the
legal principles which are to control any given cases and must provide
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a standard to guide the officials or the body in power to execute the
law. The essential legislative function consists in the determination or
choice of the legislative policy and of formally enacting that policy
into a binding rule of conduct. In. the present case the legislature
has laid down such a principle and that principle is the maintenance
or increase in supply of essential commodities and of securing
equitable distribution and availability at fair prices .... As already
pointed out, 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 subordinate authority within the framework of
that policy."
In Sardar Imler Singh v. The State of Rc!iasthan, [1957] SCR (Constitution Bench), this Court was considering Section 15 of the Rajasthan (Protection and Tenants) Ordinance, 1949 which, with similar provision authorised the
Government to exempt any person from the operation of the Act. This Court
held:
"A more substantial contention is the one based on s.15, which authorises the Government to exempt any person or class of persons from the
operation of the Act. It is argued that that section does not lay down
the principles on which exemption could be granted, and that the
decision of the matter is left to the unfettered and uncanalised discretion of the Government, and is therefore repugnant to Art. 14. It is true
that section does not itself indicate the grounds on which exemption
could be granted, but the preamble to the Ordinance sets out with
sufficient clearness the policy of the Legislature; and as that governs
s.15 of the Ordinance, the decision of the Government thereunder
cannot be said to be unguided. Vide Harishanker Bag/a v. The State
of Madhya Pradesh."
P.J. Irani v. The State of Madras, [1962] 2 SCR 169 (Constitution
Bench). In this case Section 13 of Madras Buildings (Lease and Rent Control)
Act, 1949 is similar to the provisions we are considering conferred power of
exemption. This Court held:
"It was not possible for the statute itself to contemplate every such
contingency and make specific provision therefor in the enactment. It
was for this reason that a power of exemption in general terms was
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CONSUMER ACTION GROUP v. STATE [MISRA, J.]
537
conferred on the State Government which, however, could be used not
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for the purpose of discriminating between tenant and tenant, but in
order to further the policy and purpose of the Act which was, in the
context of the present case, to prevent unreasonable eviction of tenants."
In Registrar of Co-operative Societies, Trivandrum and Am: v. K.
Kunhambu and Ors., [ 1980] 2 SCR 260, this Court was considering Section
60 of the Madras Cooperative Societies Act, 1932, which empowered the State
Government to exempt existing society from any of the provisions of the Act
or to direct that such provisions shall apply to such society with specified
modifications. This Court held:
"The Legislature may guide the delegate by speaking through the
express provision empowering delegation or the other provisions of
the statute, the preamble, the scheme or even the very subject matter
of the statute. If guidance there is, wherever it may be found, the
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delegation is valid ......... Section 60 empowers the State Government to
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exempt a registered society from any of the provisions of the Act or
to direct that such provision shall apply to such society with specified
modifications. The power given to the Government under s. 60 of the
Act is to be exercised so as to advance the policy and objects of the
Act, according to the guidelines as may be gleaned from the preamble
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and other provisions which we have already pointed out, are clear."
The catena of decisions referred to above concludes unwaveringly in
spite of very wide power being conferred on delegatee that such a section
would still not be ultra vires, if guideline could be gathered from the Preamble,
Object and Reasons and other provisions of the Acts and Rules. In testing
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validity of such provision, the courts have to discover, whether there is any
legislative policy purpose of the statute or indication of any clear will through
its various provisions, if there be any, then this by itself would be a guiding
factor to be exercised by the delegatee. In other words, then it cannot be held
that such a power is unbridled or uncanalised. The exercise of power of such
delegatee is controlled through such policy. In the fast changing scenario of
economic, social order with scientific development spawns innumerable situations which Legislature possibly could not foresee, so delegatee is entrusted
with power to meet such exigencies within the in built check or guidance and
in the present case to be within the declared policy. So delegatee has to exercise
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its powers within this controlled path to subserve the policy and to achieve the
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objectives of the Act. A situation may arise, in some cases where strict adherence to any provision of the statute or rules may result in great hardship, in a
given situation, where exercise of such power of exemption is to remove this
hardship without materially effecting the policy of the Act, viz., development
in the present case then such exercise of power would be covered under it. All
situation cannot be culled out which has to be judiciously judged and exercised,
to meet any such great hardship of any individual or institution or conversely
in the interest of society at large. Such power is meant rarely to be used. So
far decisions relied by the petitioner, where the provisions were held to be ultra
vi res, they are not cases in which court found that there was any policy laid
down under the Act. In A.N. Parasuraman & Ors. (supra) Court held Section
22 to be ultra vires as the Act did not lay down any principle or policy.
Similarly, in Kunnathat Thathunni Moopil Nair (supra) Section 7 was held to
be ultra vires as there was no principle or policy laid down.
In this background we find the Preamble of the Act laid down:-
"An Act to provide for planning the development and use of rural
and urban land in the State of Tamil Nadu and for purposes connected
therewith."
The Preamble clearly spells out policy which is for planning and development of the use of the rural and urban land in the State. The Statement of
Objects and Reasons also indicates towards the same. The relevant portion of
which is quoted hereunder:
"The Tamil Nadu Town Planning Act, 1920 (Tamil Nadu Act VII
of 1920) which is based on the British Town and Country Planning and
Housing Act, 1909, has been in force in the State for nearly five
decades. The said Act provides for matters relating to the development
of towns to secure to their present and future inhabitants, sanitary
conditions, amenity and convenience.