Case: Dr. Indramani Pyarelal Gupta Vs. W. R. Nathu And Others

was not comprehended by the phrase "under the Act", it would be illogical to hold that it would take in a bye-law. If would mean that the Legislature specially provided for a rule, which has certainly a higher status than bye-law in legislative practice, while it treated a bye-law as a provision of Act, that cannot be. The other reason that may be suggested is that the word "prescribed" was used in superabundant caution or by mistake. If superabundant caption was required to mention separately the rules, greater caution would have been necessary to provide separately for a bye-law. A court ordinarily shall attempt to give meaning to every word used by the Legislature, unless it is impossible to do so. Here there is not only no such impossibility, but there is also a good reason for the Legislature in excluding the bye-law from the operation of cl. (f) of S. 4 of the Act.66.. Subordinate or delegated legislation takes different forms. Subordinate legislation is divided into two main classes, namely, (i) statutory rules, and (ii) bye-laws or regulations made (a) by authorities concerned with local government, and (b) by persons, societies, or corporations. The Act itself recognizes this distinction and provides both for making of the rules as well as bye-laws. A comparative study of Ss. 11 and 12 whereunder power is conferred on the Central Government and recognized associations to make bye-laws on the one hand, and S. 28, whereunder the Central Government is empowered to make rules on the other, indicate that the former are intended for conducting the business of the association and the latter for the purpose of carrying into effect the objects of the Act. In considering the question raised in this case this distinction will have to be borne in mind.67. It would be unreasonable to assume that a private association, though registered under the Act, could confer powers on a statutory authority under the Act. That is why under S. 4 (f), the Legislature did not think fit to provide for the assignment of a function to the Commission in exercise of a power under a bye-law. The non-mention of bye-laws in cl. (f) is not because of any accidental permission but a deliberate one, because of the incongruity of an assignment of a function to the Commission under a bye-law. I would, therefore, construe the words "by or under this Act or as may be prescribed" as follows : "by this Act" applies to powers assigned proprio vigore by the provisions of the Act; "under this Act" applies to an assignment made in exercise of an express power conferred under the provisions of the Act; and "may be prescribed" takes in an assignment made in exercise of a power conferred under a rule. This construction gives a natural meaning to the plain words used in the section and avoids stretching the language of a statutory provision to save an illegal bye-law. In this context two decisions are cited at the Bar. The first is that of the Judicial Committee in 76 Ind. App 57: (AIR 1949 PC 136 ). There, under S. 3(2)(f) of the Indian Electricity Act (No. IX of 1910) "the provisions contained in the Schedule shall be deemed to be incorporated with and to form part of, every licence granted under this Part." Under S. 4(1)(a) of the said Act, "The Provincial Government may, if in its opinion the pubic interest so requires, revoke a license." inter alia, if "the licensee in the opinion of the Provincial Government makes wilful and unreasonably prolonged default in doing anything required of him by or under this Act." Under sub-cl. (6) of the Schedule, a licensee had to comply with certain conditions. The Government revoked the licence on the ground that the licensee did not comply with the conditions laid down in Schedule VI, which were deemed to be incorporated in the licence by virtue of S. 3(2), and therefore he did not do the thing required of him within the meaning of S. 4 of that Act. The Privy Council held that the performance by the licensee of the conditions of the Schedule to the Act was clearly required to be made under the Act. This decision does not help us very much in the present case, as the question of bye-law did not arise therein. Nor the decision of the Madras High Court in ILR (1958) Mad 513: (AIR 1958 Mad 343 ) is of any assistance. There the question was whether the regulations framed by the Life Insurance Corporation by virtue of the powers vested in it by Act 31 of 1956 prohibiting the employees from standing for election fell within the meaning of the words "under any law" in Art 191 (1)(e) of the Constitution. The High Court held that the regulations were law made under the Act of Parliament. The conclusion was based on the principle that the rule made in pursuance of the delegated power has the same validity and has the same characteristic as a law made directly by the Parliament. Apart from the fact that the words to he construed there were different and in a sense wider than the words to be construed in the present case, the principle accepted in the decision is only of a general application and does not help to construe the specific words of cl. (f) of S. 4; their meaning can be gathered only by interpreting the said words, having regard to the setting and the context in which they are used.68. For the foregoing reasons, I would hold that the Government had no power under S. 12 of the Act to make a bye-law assigning any function to the Commission. It follows that the notification dated January 24, 1956, by the Forward Markets Commission was illegal and the appellants would be entitled to the issue of a writ of mandamus in the terms prayed for. In the result, the appeal is allowed with costs.ORDERSINHA, J.69.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]In our opinion, these decisions afford no assistance for resolving the controversy before us. There is no question here of deducing an implied power from the grant of an express one. What we are concerned with is the scope of the grant of an express power or rather whether the grant of the power conferred upon the Commission by the bye-law could be held to be a power which could be assigned to the Commission under cl (f). So far as the terms of cl.(f) are concerned there is no limitation upon the nature of the power that might be conferred except, of course, that which might flow from its having to be one in relation to true regulation of forward trading in goods which the Act is designed to effectuate. Any limitation therefore would have to be deduced from outside cl. (f) of S. 4. Taking each of the clauses,(a) to (e), it is not possible to put them positively under one genus in order that there might be scope for the application of the ejusdem generis rule of construction.. Negatively, no doubt it might be said that none of these five clauses confer on executive power such as has been vested in them by the amended Bye-law 52AA but this cannot be the foundation for attracting the rule of construction on which learned Counsel relies. On the other hand, if there is no common positive thread running through cls. (a) to (e) such as would bring them under one genus and negatively they do not unit expressly include any administrative or executive functions, that itself might be a reason why the expression "other" occurring in cl. (f) should receive the construction that it is intended to comprehend such awe are here concerned with is whether it is legally competent to vest a particular power in a statutory body, and in regard to this the proper rule of interpretation would be that unless the nature of the power is such as to be incompatible with the purpose for which the body is created, or unless the particular power is contra-indicated by any specific provision of the enactment bringing the body into existence, any power which would further the provisions of the Act could be legally conferred on it. Judged by this test, it would be obvious that the power conferred by the bye-law is one which could be validly vested in theCounsel is undoubtedly right in his submission that a power conferred by a law is not one conferred "by the Act", for in the context the expression "conferred by the Act" would mean "conferred expressly or necessary implication by the Act itself." It is also common ground that a bye law framed under Sections(11) or 12 could not fall within the phraseology "as may be prescribed", for the expression "prescribed" has been defined to mean "by rules under the Act", i.e, those framed under S.28 and a bye law is certainly not within that description. The question therefore is whether a power "conferred by a bye-law could be held to be a power conferred under the Act". The meaning of the words under the Act" is well known."By an Act would mean by a provision directly enacted in the statute in question and which is gatherable from its express languages or by necessary implication therefrom. The words "under the Act" would in that context signify what is not directly to be found in the statute itself but is conferred or imposed by virtue of powers enabling this to be done; in other words, bye-laws made by Subordinate law-making authority which is empowered to do so by the parent Act. The distinction is thus between what is directly done by the enactment and what is done indirectly by rule-making authorities which are vested with powers in that behalf by thefind ourselves wholly unable to accept this argument. If without the reference to the phrase "as may be prescribed" the words ":under the Act" would comprehend powers which might be conferred under "bye-laws" as well as those under "rules" we are unable to appreciate the line of reasoning by which powers conferred by bye-laws have to be excluded, because of the specific reference to powers conferred by "rules". Undoubtedly, there is some little tautology in the use of the expression "as may be prescribed" after the comprehensive reference to the powers conferred "under the Act", but in order merely to avoid redundancy you cannot adopt a rule of construction on which cuts down the amplitude of the words used except, of course, to avoid the redundancy. Thus the utmost that could be said would be that though normally and in their ordinary, signification the words "under the Act" would include both "rules" framed under S.28 as well as "bye-laws" under S. 11 or 12, the reference to "rules" might be eliminated as tautologous since they have been specifically provided by the words that follow. But beyond that to claim that for the reason that it is redundant as to a part, the whole content of the words "under the Act" should be discarded, and the words "by the Act" should be read in a very restricted and, if one may add, in an unnatural sense as excluding a power conferred by necessary implication, when such a power would squarely fall within the reach of these words would not, in our opinion, be any reasonable construction of the provision. We need only add that the construction we have reached of S.4 (f) is reinforced by the language of S.3(1) which is free from the ambiguity created by the occurrence of the expression "as may be prescribed" in the former. We have therefore no hesitation in holding that there was no incompetency in the Forward Markets Commission being the recipient of the power which was conferred upon them by Bye-law 52AA asin the amended bye-law occurring in the group of existing bye-law making provision for emergencies to which sub-clause (o) of S. 11(2) refers, there is no dispute that there was an emergency in the forward market and that the impugned bye-law was framed to meet such a contingency. It was not contended before us that the method by which the emergency was resolved by the impugned bye-law-viz., by closing out subsisting contract was not the usual method employed for the purpose. If therefore the bye-law was a provision for an emergency within S.l1(2)(o) then it would seen to follow that for the resolution of that emergency, every one of the matters which could be included in such bye-laws would be attracted to it, and so we find it impossible to accept Mr. Pathaks submission regarding the invalidity of the bye- law.An analysis of the impugned Bye-law 52 AA and a comparison of it with that which it replaced would show that the main point of difference is that whereas formerly action to stop forward trading and for closing out contracts and to fix the rate at which contracts were to be closed out was vested in the Textile Commissioner, acting with the concurrence of the Forward Markets Commission, under the amended bye-law the power is directly vested in the Forward Markets Commission itself. The arguments, addressed to us on this point are concerned not so much with the propriety as with the vires of a provision by which the power to close out contracts by- the issue of a notification is vested in the Commission. Apart from an argument immediately to be noticed we do not see how, if such a power could validly be conferred upon a Textile Commission or even exercised by the Board of the Association under a bye-law framed under S.11, the same would be beyond the power to make bye -laws under S. 11 by the mere fact that the authority vested with the power is the Forward Markets Commission. We are clearly of the opinion that Bye law 52AA is well within the bye-law making power under S. 11 of the Act and therefore within S.therefore a bye-law could be made by the Association it is manifest that there is no limitation upon its powers such as is to be found in Art. 64 which applies only to the Board. The validity of the bye-law therefore cannot be challenged by reference merely to the powers of the Board, because what is contemplated by S. 11 is the power of the recongnised Association" to frame the bye-law. We have therefore no hesitation in rejecting the contention that the bye-law as framed contravenes the rules of theis thus clear that the entire machinery for resolving emergencies such as is contemplated by bye-law 52A includes the suspension of forward business together with the closing out of forward contracts of hedge and on call types whose volume or nature had led to the emergency. It proceeds on the basis that the crisis could not be met unless subsisting contracts were closed out and, so to speak, a new chapter begun. That is the ratio underlying the combined effect of Bye laws 52AA and 52A and in view of this circumstances the argument that on a reasonable construction of the amended bye-law it would apply to contracts to be entered into in future and not to subsisting contracts must bedo not however consider it necessary to canvass the correctness of this decision or the broad propositions laid down in it. It is clear law that a Statute which could validly enact a law with retrospective effect could in express terms validly confer upon a rule- making authority a power to make a rule or frame a bye-law having retrospective operation and we would add that we did not understand Mr. Pathak to dispute this position. If this were so the same result would follow where the power to enact a rule or a bye-law with "retrospective effect" so as to affect pending transactions, is conferred not by express words but where the necessary intendment of the Act confers such a power. If in the present case the power to make a bye-law so as to operate on contacts subsisting on the day the same was framed, would follow as a necessary implication from the terms of S. 11, it would not be necessary to discuss the latter question as to whether and the circumstances in which Subordinate legislation with retrospective effect could be validlyindicate that in the context of a crisis in forward trading the closing out of contracts was a necessary method of exercising control and was the mechanism by which the enactment contemplated that normalcy could be restored and healthy trading resumed.If therefore we eliminate the provisions in Ss. 16, 17 and 19 as not containing any indication that a power to frame a bye-law with retrospective effect was withheld from the Association, the question whether such bye-law-making power was conferred has to be gathered from the terms of S. 11 itself. Thus considered we are clearly of the opinion that a power to frame a bye-law for emergencies such as those for which a bye-law like 51AA is intended includes a power to frame one so as to affect subsisting contracts for resolving crisis in Forward Markets Commission. We have already referred to the terms of bye-law 52A which shows that when an emergency of the type referred to in S.11(2) (o) arises it is not practicable to rescue a forward market from a crisis without (1) putting an end to forward trading, and (2) closing out subsisting contracts so as to start with a clean slate for theis manifest that the section contemplates the making of a bye-law regulating the performance of contracts, the rescission and termination of contracts and this could obviously refer only to the bye-law affecting rights under contracts which are subsisting on the day the action is taken. It is therefore manifest that S.11 authorises the framing of a bye-law which would operate retrospectively in the sense that it affects rights of parties under subsisting contracts. Finally it should be borne in mind that ultimately what we are concerned in S. 11 of the Act is the power of the Association to frame the bye-law, for if the Association could validly frame such a bye-law, the Central Government could under S. 12 have a similar power. We did not hear any argument to establish that the Association had no suchThere is one other aspect in which the same problem might be viewed and it is this :The contract entered into by the respondents (sic) purported to be one under the bye-laws for the time being in force and any change in the bye-laws therefore would seem to be contemplated and provided for by the contract itself, so that it might not be correct to speak of the new bye-law as affecting any accrued rights under a contract. For when those bye-laws were altered the changes would get incorporated into the contracts themselves, so as to afford no scope for the argument that there has been an infringement of a vested right. In the view however which we have taken about the validity of the bye-law on the ground that it was well within the terms of Ss. 11 and 12 we do not consider it necessary to pursue this aspect further or to rest our decision onground of mala fides alleged was that the impugned notification was issued in order to prevent the Board of Directors of the Association from applying their minds and exercising their judgment which they were directed to do by the terms of the Consent Memo filed on which the appeal from the judgment in C. S. 2 of 1956 was disposed of on January 24, 1956. To the allegation made in this form in the petition the first respondent, the Chairman of the Forward Markets Commission, filed an affidavit in the course of which he pointed out that the continuance of trading in futures was in the circumstances then prevailing in the market detrimental then prevailing in the market detrimental to the interests of the trade and that a conclusion on this matter had been reached by the Commission even before Bye-law 52AA was amended, that the question of closing out existing contracts was engaging the attention of even the Board of the Association from as early as the beginning of January 1956 and it was for the purpose of enables the Commission to take action to set right matters that Bye-law 52AA was amended and that immediately the amended bye-law came into force the Commission took action and issued the notification now impugned. He also pointed out that the liberty given to the Association to consider the matter under the terms of the Compromise Memo was a factor which had also been taken into account before the notification had been taken into account before the notification had been issued. The learned Judges of the High Court accepted this explanation of the circumstances in which the notification came to be issued and considered that on the allegation in the petition no mala fides could be inferred. We are in entire agreement with the learned Judges of the High Court on this point. No personal motive or mala fides in that sense has been attributed to the members of the Commissioner and in these circumstances we consider that there is no basis for impugning the notification on the ground that it was not issued bonadecision is, therefore, an authority for the position that unless a statute confers on the Government an express power to make an order with retrospective effect, it cannot exercise such a power. The Mysore High Court in a considered judgment in AIR 1960 Mys. 326, dealt with the question that now arises for consideration. There, the Government issued three notifications dated 9-4-1956, 15-10-1957 and 13-2-1958 purporting to act under S.14(1) of the Madras Sugar Factories Central Act, 1949, where by cess was imposed on sugarcane brought and crushed in petitioners factory for the crushing season 1955-56, 1956-57 and 1957-58 respectively. One of the questions raised was whether under the said section the Government and power to issue the notifications imposing a cess on sugarcane brought and crushed in petitioners factory for a period prior to the date of the said notifications. Das Gupta, C.J., delivering the judgment of the Division Bench held that it could not.