M J Antony: Discretion coupled with duty

OUT OF COURT

When a power is conferred on the government, it has an obligation to use it for the public good.

Several statutes prescribe the establishment of committees or authorities to regulate activities in their respective fields. Very often, such panels are not constituted. Some time ago, the Supreme Court had to set up empowered committees in environment laws to breathe life into the rules, provoking the mandarins to question the court's jurisdiction. Their argument is whether the laws grant discretion to the executive to constitute such committees or not. The draftsmen use the word 'may constitute' instead of 'shall'.

When the government does not exercise its discretion, not only individuals but also trade and business suffer. Corruption breeds. Aggrieved persons then try to approach the courts. Can the court direct the lethargic government to set up the concerned panel? The Supreme Court recently answered the question with an emphatic 'yes' in its recent judgement, Dhampur Sugar Mills Ltd vs State of UP.

The Supreme Court declared in the context of the Molasses Act that "it is not open to the government to ignore the salutary provision taking the specious plea that the provision relating to the constitution of a committee is enabling, directory or discretionary and the state is therefore not obliged to constitute such a committee."

Section 3 of the Act stated that the government "may" constitute an advisory committee to deal with matters relating to the control, storage, preservation, gradation, price, supply and disposal of molasses. The state government argued that this provision merely enabled it to constitute the committee if and when it wanted and it was not obliged to do so at the behest of sugar mills. This view was approved by the Allahabad high court.

On the other hand, the sugar mills' grievance was that in the absence of such a committee, no directive can be issued by the controller of molasses to supply molasses. His directives would be without the authority of law. The Supreme Court upheld this view and directed the state government to set up the committee without further loss of time.

With the vast increase in the activities of the government, there have been frequent conflicts over the discretionary powers of the executive. In leading Supreme Court cases, the power of the police to grant licences to restaurants and the power of the drug authorities to grant licences to manufacture medicines have been discussed, with loud dissent, within the benches. They only show the complexity of the problem. Discretionary powers cannot be avoided as specific questions might involve the weighing of several imponderable factors involving political judgement. This is an unpalatable fact in the field of taxation and import-export policy. These are also the reasons why the executive wants the courts to keep out of their discretionary field.

In a recent judgement, Air India Ltd vs Cochin International Airport Ltd, the Supreme Court ruled that in arriving at a commercial decision, the state can choose its own method and fix terms and conditions which are not subject to judicial scrutiny. But the state cannot arbitrarily depart from the standards and procedures laid down by its agencies. In such an event, the court can examine the decision-making process and interfere if the state action is vitiated by mala fides, unreasonableness and arbitrariness. The court can intervene if the discretion granted to the state is not exercised at all (as in the environment and molasses case), is not lawful, if the authority took a wrong view or the discretion was abused from corrupt motives.

The molasses judgement noted that several statutes confer discretionary powers on officers using "permissive language" such as 'it may be lawful', 'it may be permissible', and 'it may be open to do'. In such cases, the intention of the legislature must be ascertained, not merely the language used. The court must then examine the scheme of the law, the purpose and object of the provision, consequences likely to ensue or inconvenience likely to result if the provision is read one way or the other.

In an English case, Padfield vs Minister of Agriculture, the Act provided for the reference of a complaint to a committee of investigation 'if the minister so directs'. The minister refused to act in this case. The court held that the minister was required to act on a complaint in the absence of good and relevant reasons to the contrary. This and other precedents from England were approvingly quoted by the Supreme Court in the molasses judgement.

One landmark Supreme Court case of 1980, Ratlam Municipality vs Vardichan, dealt with Section 133 of the Code of Criminal Procedure which granted power to the authorities to remove public nuisance. The subordinate courts held that the municipality was not bound to act under the 'may' provision. The Supreme Court held that the discretion was coupled with a public duty.