PRINCIPLES OF INTERPRETATION OF THREE LIST OF 7TH SCHEDULE I.E. SEPARATION OF LEGISLATIVE POWERS
LEGISLATIVE STRUCTURE OF CENTER STATE RELATIONSHIP IN INDIA................................................ 6
PRINCIPLES OF INTERPRETATION OF LISTS.................................................................. 8
PRINCIPLE OF COLOURABLE LEGISLATION.............................................................................................................. 8
PRINCIPLE OF PITH AND SUBSTANCE............................................................................................................................ 10
LIBERAL AND HARMONIOUS CONSTRUCTION....................................................................................................... 11
ANCILLARY OR INCIDENTAL POWERS...................................................................................................................... 12
The doctrine of Separation of Powers was originally started in the writings of Montesquieu in the spirit of the Laws where Montesquieu refers to the division of govt. responsibilities into three separate branches of government to make sure that none of the branch intrude into the domain of another. The true objective of introducing there principles was to prevent the concentration of power and provide for check and balances. American Constitution, Australian constitution is very rigid as compared to Indian constitution and it does not apply to India or even England. Separation of Powers is practiced in India but not that rigidly. The tree main areas of government in some or the other way perform the task of other. The present research paper assess the separation of powers as envisioned by the Indian Constitution and the difficulties faced in practice by the government’s three wings, while implementing the constitutional provisions in letter and spirit. The writer also draws a comparative analysis to the separation of Powers American Constitution scheme of Separation of Powers
Keywords: Executive, Indian Constitution, Judiciary, Legislature, Separation of Powers
Questions have often been raised regarding this unique federalism that India has adopted often referred as ‘Quasi Federal’ or “Asymmetric Federalism”. These terms find relevance with stronger Union established by the virtue of very basic document against the ubiquitous understanding across the global. This unique setup of federalism has often raises concerns as to the separation of power between the center and states. While the general understanding of concept of federalism has been "the method of dividing powers so that the general and regional governments are each within a sphere co- ordinate and independent."1With nations described as ‘federal’ or ‘unitary’, depending on the way in which governance is organized. In a unitary set-up, the Centre has plenary powers of administration and legislation, with its constituent units having little autonomy. In a federal arrangement, the constituent units are identified on the basis of region or ethnicity, and conferred varying forms of autonomy or some level of administrative and legislative powers2.
1 K.C. Wheare, Federal Government, 4th ed. (London: Oxford University Press, 1963) at 11
2 Supra note 1
The essential features of federalism are dual government, distribution of powers, and supremacy of the constitution, the authority of courts, written Constitution, decentralization, and a real division of power, though the aforementioned principles are not exhaustive, they do encompass major elements of federalism3. A federal constitution establishes a dual polity, comprising two levels of government—a central government having jurisdiction over the entire country in some areas, and state governments, each of which exercises jurisdiction within defined regional boundaries. The totality of governmental powers and functions are divided between the Centre and the states. Each level of government thus functions within its assigned field.
With this brief understanding of federalism the nexus could be drawn with regards to variation in India’s federal structure from general conception of federalism. This research paper makes the case for the how variation in Federal structure works in Indian scenario i.e. understanding the separation of powers between Center and State. This separation of powers has been made in the constitution in 7th schedule providing for three list i.e. Center, State and Concurrent which encapsulates the division of legislative power into center and state. But conflicts have often arisen as to interpretation of these list with conflicting legislations by center or state encroaching into the sphere of others. Such misplaced encroachments into the sphere of others have been brought before the court time and again. Courts have used various doctrines and principles of interpretation to resolve these conflicts in legislative powers of center and state. Courts applications of these principles and doctrines gives consideration to various factors like unique federal structure adopted by the constitution.
Further for such interpretation primary consideration would be required to be given to determination of nature of legislation i.e. where either the Union or the State legislature proposes to enact a law, it must, in the first place, decide whether it has legislative competence with reference to the subject matter of the law. For this purpose, the judges will necessarily have to examine whether the subject matter falls within the relevant list, that is to say: (a) the Union List or the Concurrent list (for the draftsman in the Union) or (b) the State List (for the draftsman in the State). If the pith and substance of law, i.e., the true object of the legislation or a statute, relates to a matter with the competence of Legislature which enacted it, it should be held to intra vires even though it might incidentally trench on matters not within the competence of Legislatur4e.
3 Daniel J. Elazar, Exploring Federalism, University of Alabama Press, January 30, 1987,
4 Prem Chand Jain V. R.K. Chabra, (1984) 2 SCC 302
Similarly, statues passes this test prime facie another principle could be applied in instance where although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears, on proper examination, to be a mere pretence or disguise. In other words, it is the substance of the Act that is material and not merely the form or outward appearance, and if the subject matter is substance which is beyond. This becomes application of colourable legislation5. Thus, court is placed with work to interpret the legislation in case of doubt doctrines like colorable legislation, pith and substance and harmonious construction, broader in interpretation of entry6 and finally supremacy of Union considering the nature of federal structures needs to be evaluated. This paper elaborates upon such interpretation of separation of legislative power in consonance with constitution. Thus, this paper will attempt to scrutinize via application of various doctrines using various cases laws to understand the relationship of center and state in the context of these three spheres.
Scope of the Study
This study deals with an important aspect of Indian federalism, namely, the concurrent powers of legislation under the Constitution. The subject of federalism in any country covers a vast area, embracing legislative, executive and judicial powers, as distributed between the federal union and its units. Distribution of legislative power is only one branch of the subject; and in that branch, the topic of concurrent legislative power is only a sub-branch (so to say).
5 K.C.G. Narayan Dev v. State of Orissa AIR 1953 SC 375
6 Calcutta Gas Ltd. V. state of Bengal AIR 1962 SC 1044
In this short paper, it is proposed, to deal, first, with the general scheme of distribution of legislative powers under the Indian Constitution; next, to state, in brief, the main principles for the interpretation of legislative entries; and thereafter, to focus on the various entries in the Concurrent list itself, concentrating on their rationale. It will then be possible to formulate the questions that can possibly arise on the present scheme.
Jolowicz, in his Lectures (1963 ed., p. 280) speaks of interpretation thus: Interpretation is usually said to be either ‘legal’ or ‘doctrinal’. It is ‘legal’ when there is an actual rule of law which binds the Judge to place a certain interpretation of the statute.
According to Fitzerald, interpretation is of two kinds – ‘literal’ and ‘functional’. The literal interpretation is that which regards conclusively the verbal expression of the law. It does not look beyond the ‘literaligis’. The duty of the Court is to ascertain the intention of the legislature and seek for that intent in every legitimate way, but first of all in the words and the language employed. ‘Functional’ interpretation, on the other hand, is that which departs from the letter of the law and seeks elsewhere for some other and more satisfactory evidence of the true intention of the legislature.
LEGISLATIVE STRUCTURE OF CENTER STATE RELATIONSHIP IN INDIA
As discuused in the very inception of this paper a federal system postulates a distribution of powers between the centre and the states. The nature of distribution varies according to the local and political background in each country7.
7K.C. Wheare, Federal Government, 4th ed. (London: Oxford University Press, 1963) at 11
Though the basic essence of federal structure lies in the equal distribution of powers between center and state India constitution makers where more inclined to resort to the idea of strong center. This strong center leads to the development of unique idea of Indian Federalism often called as “Quasi-Federal”8
In order to scrutinize Indian scheme of federalism it needs legislative relationship between center and state needs to be traced from various Govt. of India Act of 1919 and 1935 which established a highly centralised power structure to keep effective control of the whole of British India. In the circumstances when the Union Powers Committee discussed the future set up of the Republic, it found that the “soundest framework for our Constitution is a Federation, with a strong Centre”. A purely centralised unitary structure was decidedly abandoned.9 A strong Centre, however, was an imperative necessity to keep the country together and to coordinate policy and action between the Union and the States on basic issues of national concern10
The Indian idea of federalism relating unique center state relationship could also be call as designed to accommodate the plural and diverse regions of the country. They acknowledged the fact that even in classical federations the trend has been towards centralization making a strong centre inevitable in a federal setup. What is important is whether it is functional and interdependent in the pursuit of common goal — the Welfare of the People11. In this context, the framers of the Constitution came to assign the Union a pre-eminent role in all spheres of governance. This understanding of Indian federalism is well reflected in the case of In Rajasthan v. Union of India12J. Beg said: “In a sense, therefore, the Indian Union is federal. But, the extent of federalism in it is largely watered down by the needs of progress and development of a country which has to be nationally integrated, politically and economically coordinated, and socially, intellectually, and spiritually uplifted.”
Thereby, Legislative jurisdiction in India is organised in Arts. 24513 and 24614 under the principle of supremacy of the Union over States15. The powers of legislation are identified in Seventh Schedule
8DD Basu, B.M. Gandhi & B.P. Banerjee, Compartive Federalism pg 205-274, Lexis Nexis, Haryana, India, 2013.
9 Vol.1, Evolution of Centre-State Relations in India, Commission On Centre-State Relations, Report, part 1, pg. 23.
12Rajasthan v. Union of India, (1978) 1 S.C.R.1. 13Article 245, The Indian Constitution,1950 14Article 246, The Indian Constitution,1950
15 DD Basu, B.M. Gandhi & B.P. Banerjee, Compartive Federalism pg 205-274, Lexis Nexis, Haryana, India, 2013.
under the three Lists, namely, Union List (List I), State List (List II) and Concurrent List (List III)16.The Concurrent List containing subjects in which the Union and States can legislate reflect the key areas in which nation building, social welfare and good governance have to take place through the joint efforts of the Union and the States. Obviously, they could not be allocated to the exclusive jurisdiction of the States or the Union. The key element they felt, was to ensure healthy intergovernmental dependence and cooperation with shared responsibilities, transcending the formally demarcated frontiers.
For example, the subjects covered in Part IV of the Constitution which are addressed to the “State” for progressive implementation are meant to be the responsibility of all levels of Government. They directly relate to the welfare of people everywhere. A broad uniformity of approach in legislative policy is essential in the matter of education, health, employment, housing, nutrition, etc. to be able to fulfil the care obligations of the directives. At the same time the specific requirements of different States need to be separately addressed by the States themselves while relating them to national goals and standards. Hence the rationale of the Concurrent List17.
The further exercise of power has been discussed in part dealing with various sphere of legislative powers between Center and State.
THE POWER OF Centre and states are divided. They cannot make laws outside their allotted subjects. It is that a scientific division is not possible and questions constantly arise whether a particular subject fails in the sphere of one or the other government. This duty in a federal constitution is vested in the Supreme Court of India. The Supreme Court has evolved the following principles of interpretation in order to determine the respective power of the Union and the States under the three lists.
16Seveth Schedule,The Indian Constitution,1950
17Vol.1, Evolution of Centre-State Relations in India, Commission On Centre-State Relations, Report, part 1, pg. 23.
PRINCIPLE OF COLOURABLE LEGISLATION
The doctrine of colourability is the idea that when the legislature wants to do something that it cannot do within the constraints of the constitution, it colours the law with a substitute purpose which will still allow it to accomplish its original.
Maxim: “Quando aliquid prohibetur ex directo, prohibetur et per obliqum” which means what cannot be done directly cannot also be done indirectly.
The rule relates to the question of legislative competence to enact a law. Colourable Legislation does not involve the question of bonafides or malfides. A legislative transgression may be patent, manifest or direct or may be disguised, covert or indirect. It is also applied to the fraud of Constitution.
In India ‘the doctrine of colourable legislation’ signifies only a limitation of the law-making power of the legislature. It comes into picture while the legislature purporting to act within its power but in reality, it has transgressed those powers. So the doctrine becomes applicable whenever legislation seeks to do in an indirect manner what it cannot do directly. If the impugned legislation
falls within the competence of legislature, the question of doing something indirectly which cannot be done directly does not arise.
In our Constitution, this doctrine is usually applied to Article 246 which has demarcated the Legislative competence of the Parliament and the State Legislative Assemblies by outlining the different subjects under list I for the Union, List II for the States and List III for the both as mentioned in the seventh schedule.
This doctrine comes into play when a legislature does not possess the power to make law upon a particular subject but nonetheless indirectly makes one. By applying this principle the fate of the Impugned Legislation is decided.
In K.C.G. Narayan Dev v. State of Orissa18the Supreme Court explained the meaning and scope of the doctrine of colorable legislation in the following terms:-
18 AIR 1953 SC 375
“If the Constitution distributes the legislative power amongst different Legislative 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, question arises as to whether the Legislature in a particular case has or has not, in respect to 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 or indirect, or and it is to this latter class of cases that the expression colourable legislation has been applied in judicial pronouncements. The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears, on proper examination, to be a mere pretence or disguise. In other words, it is the substance of the Act that is material and not merely the form or outward appearance, and if the subject matter is substance which is beyond The whole doctrine of colourable legislation is based upon the maxim that you cannot do indirectly what you cannot do directly. In these cases the Court will look in the true nature and. character of the legislation and for that its object, purpose or design to make law on a subject is relevant and not its motive. If the legislature has power to make law, motive in making the law is irrelevant. State of Bihar v. Kameshwar Singh19 is the only case where a law has been declared invalid on the ground of colorable legislation. In this case Bihar Land Reforms Act,1950 was held void on the ground that though apparently it purported to lay down principle for determining compensation yet in reality it did not lay down any such principle and thus indirectly sought to deprive the petitioner of any compensation.
PRINCIPLE OF PITH AND SUBSTANCE
Pith means ‘true nature’ or essence of something’ and substance means ‘the most important or essential part of something’. The basic purpose of this doctrine is to determine under which head of power or field i.e. under which list (given in the seventh schedule) a given piece of legislation falls.
19 1952 1 SCR 889
The doctrine has been applied in India also to provide a degree of flexibility in the otherwise rigid scheme of distribution of powers. The reason for adoption of this doctrine is that if every legislation was to be declared invalid on the grounds that it encroached powers, the powers of the legislature would be drastically circumscribed. Union & State Legislatures are supreme within their respective fields. They should not encroach/ trespass into the field reserved to the other. If a law passed by one trespass upon the field assigned to the other—the Court by applying Pith & Substance, resolve the difficulty &declare whether the legislature concerned was competent to make the law.
If the pith & substance of the law (i.e. the true object of the legislation) relates to a matter within the competence of the legislature which enacted it, it should be held intra vires—though the legislature might incidentally trespass into matters, not within its competence. The true character of the legislation can be ascertained by having regard—to the enactment as a whole — to its object
– to the scope and effect of its provisions.
Within their respective spheres, the Union and the State legislature are made supreme and they should not encroach into the sphere reserved to other. If a law passed by one Encroaches upon the field assigned to the other the court will apply the doctrine of pith and substance to determine whether the legislature concerned was competent to make it. If the pith and substance of law, i.e., the true object of the legislation or a statute, relates to a matter with the competence of Legislature which enacted it, it should be held to intra vires even though it might incidentally trench on matters not within the competence of Legislature. In order to ascertain the true character of the legislation one must have regard to the enactment as a whole, to its object and to the scope and effect of its
provision. The Privy Council applied this doctrine in Profulla Kumar v. bank of Khulna20 in this case the validity of the Bengal Money Lenders’ Act, 1946 which limited the amount and the rate of interest recoverable by a money lender on any loan was challenged on the ground that it was ultra vires of the Bengal Legislature in so far as it related to ‘promissory notes’, a central subject. The Privy Council held that the Bengal Money-Lenders Act was in Pith and substance a law in respect of Money-Lending and Money-lenders a state subject, and was valid even though it trenched incidentally on “Promissory note”- a central subject. In prohibition Act, which prohibited sale and possession State of Bombay v. F.N. Balsara21 the Bombay, Prn of liquors in the state, was challenged on the ground that it incidentally encroached upon import and export of liquors across custom frontier- a central subject. It was contended that the prohibition, purchase, use, possession and sale of liquor will affect its import. The court held that Act valid because the pith and substance of the Act fell under the State List and not under the Union List even though the Act incidentally encroached upon the Union Powers of Legislation.
LIBERAL AND HARMONIOUS CONSTRUCTION
The position in the Indian Constitution is different from other federal Constitutions in respect of distribution of legislative powers. There is no clear-cut division of powers between the Union and States. Thus, in case of conflict, the judiciary has to make reconciliation attempts between the conflicting entries (In Re C.R & Berar Sales of Motor Spirits & Lubricants Taxation Act, 1938).
Subject to the predominance of the Union list, the Entries in the various lists should be interpreted broadly. It is an attribute of plenary power of legislature. The language of the Entries should be given the widest scope and amplitude. But it is the duty of the courts to ascertain whether the authority to deal with matters falling within the jurisdiction of each legislature exists, and to define in the particular case before them the limits of their respective powers. The Entries are mere legislative heads and are of an enabling character.
In Calcutta Gas Co. v. State of West Bengal22, the question was whether the gas works' fall under the word industry'. 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 (which includes gas works) would become redundant i.e. useless.
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. The Supreme Court said that widest amplitude' should be given to the language of entries, but some of entries in different lists may overlap and may appear to be in direct conflict with each other.
20 AIR 1946 PC 60
21 AIR 1962 SC 1044
22 AIR 1962 SC 1044
It is then court's duty to reconcile entries and to bring harmony between them. Entries of two lists must be read together and the language of one interpreted and when necessary modified by that of the other. And this might mean to construe one entry in a restricted' sense (i.e. meaning though less wide, but can properly be given to it), as a widest' meaning (i.e. a meaning it can theoretically possess) may result in the overlapping.
ANCILLARY OR INCIDENTAL POWERS
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. Thus, the power to legislate w.r.t. land includes the power w.r.t. mortgages of land as a subsidiary subject.
The power to make laws on a subject includes the power to pass a valid law retrospectively. The power to levy tax would include the power to enact provisions to check tax evasion/tax remission. The power to make laws for labour welfare will justify the State to take over and utilize for the benefit of workers as a class, the unpaid accumulation belonging to the employees, but which were not claimed by them.
In R.D. Joshi v. Ajit Mills 23, the Court held that the punitive measures for enforcing social legislation are part of the ancillary powers. The Entries in lists must be given wide meaning implying all ancillary and incidental powers.
The question was whether it was permissible for State legislature to enact that sums collected by dealers by way of sales tax which was prohibited by State law, would be forfeited to the State punitively under Entry 54 read with Entry 64 of List II. The Court held that it was a punitive measure to enforce the Act; penal sanction for enforcing fiscal legislation for protecting public interest is part of ancillary powers.
23 AIR 1977 SC 2279
Limits on Ancillary Power Expressions incidental' and ancillary' powers mean the powers which are required to be exercised for the proper and effective exercise of legislative powers expressly conferred.
However, the doctrine can be invoked only in aid of the main topic of legislation. While the heads of legislation in the various lists of the Seventh Schedule are to be interpreted widely so as to take in all matters which are of incidental character to the topic mentioned therein, but there must be a head or entry to cover legislation.
There is a limit to ancillary powers flowing from the legislative entries. Therefore, the provision of the Hyderabad General Sales Tax Act that even if the moneys were collected by the seller otherwise than as a tax they should be handed over to the Government, was void in as much as there was no warrant for collection as tax of that which was not a tax.
Its recovery by 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 entry24. Thus, the power w.r.t. betting and gambling in Entry 34 of List II can not include the power to impose taxes on betting and gambling specifically provided in Entry 62 of list II. Similarly, it is doubtful if power to levy tax would include power to confiscate goods as ancillary thereto.
PLENARY POWER OF LEGISLATURE
It is an absolute power to enact laws (even if it is contrary to any understanding or guarantee given by the State), subject only to its legislative competence and other constitutional limitations. The Parliamentary power of legislation to acquire property, for example, is unrestricted, as held in State of W. B. v. Union of India 25.
No limitation can be read on the ground of legislative practice or legitimate expectations26.
24 Abdul Qader v. S.T.O., Hyderabad AIR 1964 SC 922; Kanti Lai v. H.C. Patel AIR 1968 SC 445
25 AIR 1963 SC 1241
26 Sri Srinivasa Theatre v. Govt. Of T.N. AIR 1992 SC 999
The principle to interpret the entries (in Lists) so as to make the legislative power of Parliament and State legislatures plenary' is that the entries should not be read in narrow or restricted sense. Each general word in an entry should be construed to include all ancillary or subsidiary matters which can fairly and reasonably be said to comprehend in it (State of W. B. v. Union of India).
The following points are important to understand the nature of plenary power:
The power to make a law includes the power to give effect to it prospectively (i.e. for future acts - law to take effect from a future date) as well as retrospectively (i.e. for past acts - law to take effect from a back date)27.
The meaning of a Validation Act is to remove the causes for ineffectiveness or invalidity of actions or proceedings which are validated by a legislative measure. A validating law is uphold first by finding out whether legislature possesses competence over the subject matter/and, whether by validation the legislature has removed the defects which the courts have found in the previous law.28
In the aforesaid case, it was held: The Legislature may levy a tax either prospectively or retrospectively. Ordinarily, a court hold a tax to be invalidly imposed because the power to tax is wanting or the statute or rules are invalid or do not sufficiently create jurisdiction. Validation of a tax so declared illegal may be done only if grounds of invalidity are capable of being removed and in fact removed and tax thus made legal, but the legislature must have power and competence to do so.
Where an impugned Act (i.e. an Act whose validity is questioned) passed by a State legislature is invalid on the ground that State legislature did not have legislative competence to deal with the topic covered by it, then even Parliament cannot validate such Act, because such validation would give the State legislature power over subjects outside its jurisdiction.
When the legislature cure the said infirmity and pass a validating law, it can make the said provisions of earlier law effective from the date when it was passed. The retrospective application
27 Rai Ramkrishna v. State of Bihar AIR 1963 SC 1667
28 Shri Prithvi Cotton Mills v. Broach Borough Municipality AIR 1970 SC 192
of law thereby removing the basis of earlier judicial decision (i.e. a decision based on earlier law) is not an encroachment on the judicial power.
However, the legislature cannot by bare declaration, without anything more, reverse or override a judicial decision29. But, the legislature cannot enact a legislation which overrules the decision of court and not to change the existing law retrospectively. Thus, the legislature has no power to enact a provision, the effect of which is to overrule an individual decision and affect the rights and liabilities of the parties to that decision. Such legislative act amounts to an encroachment on the power of judiciary30.
The rationale for such distribution of legislative powers between Union and States is that a strong Centre is necessary to coordinate the activities of various States in the interest of uniformity and to check fissiparous or antinational tendencies. Besides, the Central control was considered necessary for the purpose of achieving rapid economic and industrial progress. According to T.K. Tope, these provisions are merits rather than demerits of Indian Constitution.
They enable the Centre to legislate in exceptional circumstances on the State subjects without amending the Constitution and thus introducing a certain amount of flexibility in the scheme of distribution of powers. Moreover, they are invoked only for a limited period. The research has highlighted how by applying different doctrines the Apex Court in India has tried to harmonized differences between center and state in this field. As distribution of subject-matters cannot be claimed to be scientifically perfect and there happens to be overlapping between the subjects enumerated in the three lists. Whether a particular subject falls in the sphere of one or other government (i.e. Union or State), duties lies on the highest court to apply these principles to arrive at juncture to satisfy the upmost welfare.
29 State of T.N. v. K. Shyam Sunder AIR 2011 SC 3470
30 J.V. Saxena v. State of MP. AIR 1976 SC 2250