Case: Vasantlal Maganbhai Sanjanwala Vs. State of Bombay &amp; Others

has not laid down any policy or any standard to enable the Provincial Government to reduce the maximum rent fixed under S. 6(1). What is the limit of the lower rate the Government is empowered to fix? What is the extent of the area with reference to which that rate can be fixed? What are the conditions prevailing in a particular area which require the reduction of the maximum rent? Even if there are conditions justifiable for reduction of the maximum rent, what is the basis for that reduction? The disjunctive "or between "particular area and "may fix and the word "other qualifying "suitable basis indicate that the situation of the land in a particular area may also be a basis for fixing a lower rent. The situation of a land in a particular area cannot in itself afford a basis for fixing a specified rate of maximum rent. The words "suitable basis in the alternative clause are so vague that in effect and substance they confer absolute and arbitrary discretion on the Provincial Government. What is the standard of suitability? The standard of suitability is only what the Government thinks suitable. In this section the legislature in clearest terms abdicated its essential functions in favouur of the executive authority without laying down any standard for its guidance. In effect it permitted the Government to amend S. 6(1) of the Act. To illustratey the legislature fixes the maximum rent payable by a tenant to his landlord at X; the Mamlatdar after enquiry fixes Y as reasonable rent which is less than X; the Government in exercise of the power conferred under S. 6(2) can arbitrarily fix Z which is far less than the reasonable rent; with the result that the entire scheme promulgated by the legislature breaks. The Government also may select any small area containing a few landlords and reduce the maximum rent to the lowest level with the result the Act can be worked out as an expropriatory measure which is contrary to the intention of the legislature. Learned counsel for the respondents realising that arbitrariness is writ large on the fact of S. 6(2) attempted to evolve the legislative formula from the preamble to S. 6(1) and S. 12(3) of the Act. I cannot find any indication of the legislative policy in the manner of fixation of the lower rate of maximum rent in the preamble. Nor can I discover any such in S. 6(1).Section 6(1) contains a clear legislative policy in fixing the maximum rent on certain identifiable basis. The legislature says in effect in S. 6(2), "I have fixed the maximum rent in respect of irrigated lands and other lands on the basis of a definite share of the crops of such lands, but you can reduce that maximum rent on any basis you like. While S. 6(1) overrides other provisions of the Act, S. 6(2) derogates from S. 6(1) itself. Section 6(2) is capable of being exercised in such a way that the object of S. 6(1) is itself frustrated. Section 6(1) in effect is made subject to S. (6)(2).28. Now coming to S. 12 (3), it is contended that the factors mentioned in S. 12(3) afford a standard for the Government for fixing the maximum rent. To put it differently the suitable basis is one or other of the factors in S. 12 (3). The Act does not say so, either expressly or by necessary implication. The criteria for fixing rent in S. 13 are to afford a guide to Mamlatdar for fixing reasonable rent. Indeed the sub-clause is subject to S. 6 indicating thereby that the maximum rent fixed by the Government is not the same as the reasonable rent. Indeed if the reasonable rent determined on the basis of all or some of the factors in S. 12(3) is more than the maximum rent fixed by the Government on a suitable basis, the latter prevails over the former. As the maximum rent supersedes reasonable rent, the factors governing reasonable rent need not necessarily govern the fixation of maximum rent. To attempt to read the factors in S. 12(3) into S. 6(2) Is, in my view, not permissible. On a fair reading of the provisions of the Act, I find it not possible to discover any standard laid down by the legislature to enable the Provincial Government to fix a lower rate of the maximum rent. The section conferring such arbitrary power on the Provincial Government without laying down any legislative standard is in excess of the permissible limits of delegation.29. The learned Additional Solicitor General broadly contended that the policy of the legislature is to prevent rack renting and to fix a reasonable rent and, therefore, any exercise of the power under S. 6(2) is guided by that policy. This is an extreme contention and, if accepted, will enable Parliament and legislatures to confer absolute and unguided powers on the executive. If a legislature can legally be permitted to lay down a broad policy in general terms and confer arbitrary powers on the executive for carrying it out, there will be an end of the doctrine of the rule of law. If the contention be correct, the legislature in the present case could have stated in the preamble that they were making the law for fixing the maximum rent and could have conferred an absolute power on the Government to fix suitable rents having regard to the circumstances of each case. Such a law cannot obviously be valid. When the decisions say that the legislature shall lay down the legislative policy and its formulation as a rule of conduct, they do not mean vague and general declaration of policy, but a definite policy controlling and regulating the powers conferred on the executive for carrying into effect that policy.30. I must, therefore, hold that S. 6(2) of the Act is void inasmuch as it exceeded the permissible limits of legislative delegation.31. In the result the appeals are allowed with costs.32. Order: I

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]4. It is now well established by the decision of this Court that the power of delegation is a constituent element of the legislative power as a whole, and that in modern times when the Legislatures enact laws to meet the challenge of the complex socio-economic problems, they often find it convenient and necessary to delegate subsidiary or ancillary powers to delegates of their choice for carrying out the policy laid down by their Acts. The extent to which such delegation is permissible is also now well settled. The Legislature cannot delegate its essential legislative function in any case. It must lay down the legislative policy and principle, and must afford guidance for carrying out the said policy before it delegates its subsidiary powers in thatdealing with the challenge to the vires of any statute on the ground of excessive delegation it is, therefore, necessary to enquire whether the impugned delegation involves the delegation of an essential legislative function or power and whether the Legislature has enunciated its policy and principle and given guidance to the delegate or not. As the decision in Baglas case, 1955-1 SCR 380  : (AIR 1954 SC 465 ), shows, in applying this test this Court has taken into account the statements in the preamble to the Act, and if the said statements afford a satisfactory basis for holding that the legislative policy and principle has been enunciated with sufficient accuracy and clarity the preamble itself has been held to satisfy the requirements of the relevant tests. In every case it would be necessary to consider the relevant provisions of the Act in relation to the delegation made and the question as to whether the delegation is intra vires or not will have to be decided by the application of the relevant tests.Broadly stated S. 6(2) seeks to provide for the fixation of a lower rate of maximum rent areawise. We have already seen that individual tenants are given the right to apply for the fixation of reasonable rent by S. 12, and specific factors have been specified which the Mamlatdar must consider in fixing a reasonable rent. The Legislature realised that a large number of tenants in the State were poor, ignorant and in many cases helpless, and it was thought that many of them may not be able to make individual applications for the fixation of a reasonable rent under S.That is why it was thought necessary to confer upon the Provincial Government the power to fix a lower rate of the maximum rent payable by tenants in respect of particular areas. In a sense what could be done by the Mamlatdar in individual cases can be achieved by the Provincial Government in respect of a large number of cases covered in a particular area. If that be so, the legislative policy having been clearly expressed in the relevant provisions and the factors for determining reasonable rent also having been specified in S. 12(3), it is difficult to accept the argument that the Provincial Government has been given uncanalised or unfettered powers by S. 6(2) to do what it likes without any guidance. The relevant factors having been specified by S. 12 (3) when the Provincial Government considers the question of fixing a lower rate of the maximum rent payable in any particular area it is expected to adopt a basis which is suitable to that particular area. The relevant conditions of agriculture would not be uniform in different areas and the problem of fixing a reduced maximum rent payable in the respective areas would have to be tackled in the light of the special features and conditions of that area; that is why a certain amount of latitude had to be left to the Government in fixing the lower rate of the maximum rent in the respective areas, and that is intended to be achieved by giving it liberty to adopt a basis which it thinks is suitable for the area in question. The word "suitable in the context must mean suitable to the area having regard to the other provisions of the Act such as S. 6(1) and S.It is true that the power to fix a reasonable rent conferred on the Mamlatdar under S. 12 is subject to the power of the Provincial Government under S. 6(2). Even so we think it would be difficult to hold that the factors prescribe for the guidance of the Mamlatdar would have no relevance at all when the Provincial Government acts under S.our opinion, therefore, having regard to the legislative policy laid down by the Act in its preamble and in the other relevant sections to which we have referred, and having regard to the guidance which has been provided for fixing a reasonable rent under S. 12(3), it would not be possible to hold that the power delegated to the Provincial Government by S. 6(2) suffers from the infirmity of excessive delegation. The fact that no minimum has been prescribed would not materially affect thisis no substance in this argument. If S. 6(2) is valid then the exercise of the power validly conferred on the Provincial Government cannot be treated as fresh legislation which offends against Art.If the Act is saved by Art. 31B, S. 6(2) is also saved, and the power must be held to be validly conferred on the Provincial Government, and a notification issued by virtue of the said powers cannot be challenged on the ground that it violates Art.argument proceeds on the assumption that the power conferred on the Government by S. 6(2) can be exercised only once, and it seeks to derive support from the fact that the words "from time to time which were used in the corresponding section of the earlier tenancy legislation in the State have not been used in S. 6(2). Reliance is also placed on the fact that the said words have been used in S. 8(1) of the Act. The omission of the said words from S. 6(2) as contrasted with their inclusion in S. 8(1), says Mr. Limaye, indicates that the power delegated under S. 6(2) was intended to be used only once. This argument is fallacious. Why the Legislature did not use the words "from time to time in S. 6(2) when it used them in S. 8(1) it is difficult to understand; but in construing S. 6(2) it is obviously necessary to apply the provisions of S. 14 of the Bombay General Clauses Act, 1904 (I of 1904).Section 14 provides that where by any Bombay Act made after the commencement of this Act any power is conferred on any Government then that power may be exercised from time to time as occasion requires. Quite clearly if S. 6(2) is read in the light of S. 14 of the Bombay General Clauses Act it must follow that the power to issue a notification can be exercised from time to time as occasion requires. It is true that S. 14 of the Central General Clauses Act, 1897 (X of 1897) provides that where any power is conferred by any Central Act or Regulation then, unless a different intention appears, that power may be exercised from time to time as occasion requires. Since there is a specific provision of the Bombay General Clauses Act relevant on the point it is unnecessary to take recourse to S. 14 of the Central General Clauses Act; but even if we were to assume that the power in question can be exercised from time to time unless a different intention appears we would feel no difficulty in holding that no such different intention can be attributed to the Legislature when it enacted S. 6(2). It is obvious that having prescribed for a maximum by S. 6(1) the Legislature has deliberately provided for a modification of the said maximum rent and that itself shows that the fixation of any maximum rent was not treated as immutable. If it was necessary to issue one notification under S. 6(2) it would follow by force of the same logic that circumstances may require the issue of a further notification. The fixation of agricultural rent depends upon so many uncertain factors which may vary from time to time and from place to place that it would be idle to contend that the Legislature wanted to fix the maximum only once, or, as Mr. Limaye concedes, twice. Therefore the argument that the power to issue a notification has been exhausted cannot be sustained.