Holding

Section 60 of the Madras Cooperative Societies Act, 1932 is not void on the ground of excessive delegation of legislative power.

Summary

The appeal concerned the validity of Section 60 of the Madras Cooperative Societies Act, 1932, which empowers the State Government to exempt a registered cooperative society from any provision of the Act or to modify its application. The Kerala High Court had struck down a notification issued under this provision on the ground of unconstitutional excessive delegation of legislative power. The Supreme Court examined the nature of the Act as welfare legislation, its preamble, scheme and objectives, and considered whether sufficient policy guidance existed to limit the delegated authority. Relying on precedents concerning delegated legislation, the Court held that the legislature may delegate detailed implementation provided the essential policy is laid down. Consequently, Section 60 was held to be a valid exercise of delegated power and not void for excessive delegation. The appeal was dismissed.

Issues considered

Whether Section 60 of the Madras Cooperative Societies Act, 1932 is void for excessive delegation of legislative power.
Whether the power conferred by Section 60 is sufficiently guided by the Act's policy and objectives to be constitutionally valid.

Legislation cited

Madras Cooperative Societies Act, 1932s. 60

Subjects

delegated legislationexcessive delegationHenry VIII clausecooperative societiesconstitutional lawwelfare legislationMadras Cooperative Societies Act

Judgment

260

REGISTRAR OF CO-OPERATIVE SOCIETIES,
TRIVANDRUM AND ANR.
v.
K. K~BU & ORS.
November 2 7, 1979
B \,
[R. S. S.ARKARIA AND 0. CHJNNAPPA REDDY, JJ.]
Administrative law-Delegation of legislative power-A ct confers power on •
Govern1nent to exempt co-operative society from operation of Act-Delegation
if excessive-Madras Cooperatire Societies Act 1932, S. 60-Whether void.
Section 60 of the Madras Cooperative Societies Act, 1932, empowers the
State Government to exempt a registered society from any of the provisions of
the Act or to direct· that such provision shall apply toi such society with specified
modifications. .d
In the appeal to this Court on the question whether Se~tion 60 of the Act
is void on the ground of unconstitutio_nal delegation of legislative power.
HELD : 1. Section 60 is not void on the ground of' excessive delegation of
legislative power. [267 CJ
2. The po\vcr given to 11le Government under section 60 of the Act is to be
exercised so as to advance the policy and objects of the Act, according to the
guidelines enunciated in the preamble and the other provisions of the Act.
[267 Bl {
E 3. The Act, a welfare legislation, to facilitate the formation and working of
cooperative societies consists of numerous provisions, dealing with registration
of societies, rights and liabilities of 1nembers, duties of registered societies, pri-
vileges of registered societies, property and funds of registered societies. inquiry
and inspection, supersession of committees of societies, dissolution of societies,
surcharge and attachment, arbitration etc. The too rigorous application of some
of the provisions of the Act may itself occasionally result in frustrating. the very
F objects of the Act instead of advancing them. To provide for such situations,
the Government was invested by section 60 with a power to relax the occasional
rigour of the provisions of the Act and to advance the objects of the Act.
[266 D, G; H 277 Al
4. (i) Parliament and the State Legislatures are endowed \Vith plenary power
to legislate upon any of the subjects entrusted to them by the Constitution, sub-
jectl to the limitations Unposed by the Constitution itself. The· power to legislate
G
carries with it the power to delegate. While excessive delegation may amount
to abdication, delegaotion unlimited may invitei despotism uninhibited. The theory •
has therefore been evolved that the legislature cannot delegate its essential
function. [262 H-263 Al
(ii) The Parliament and the State Legislatures are not bodies of experts or
specialists. They are 8killed in the art of discovering the aspirations, the ex-
B pectations and the needs, the limits to the patience and the aquiescence and the
articulation of the views of the people whom they represent. They function
best when they concern themselves witli general principles, broad objectives and
COOPERATIVE SOCIETIES v. K. KUNHAMBU (Chinnappa Reddy, l.) 261

fundamental issues in.stead &f technical and situational intricacies which are &.
better, left to better equipped full time expert executive bodies and specialist
public servants. Parliament and the State Legislatures have neither the time nor
the expertise to be involved in detail and circumstance. Nor can Parliament and
the State Legislatures visualise and provide for new, strange, unforeseen and
unpredictable situations arising from the complexity of modem life and the
ingenuity of modern' man. That is the raison d'etre for delegated legislation.
(262 E-G] 8:
(iii) The Legislatw·e may guide the delegate by speaking through the express
provision empowering delegation or the other provisions of the statute, the pre-
amble, the scheme or even the very subject matter of the statute. If guidance
there is, wherever it may be found the delegation is valid. A generous degree
of latitude must be held permissible in the case of welfare legislation, particu-
larly these statutes which are designed to further the Directive Principles of c:
~tata Policy. (263 BJ

Delhi I.Aws Act 1912, [1951J SCR 747 : M. K. Papiah & Sons v. Excise Com-
mwioner [1975) 3 SCR 607 : Harishankar Bagla and Anr. v. The State of
Madhya Pradesh [1955] 1 S.C.R., p. 380 @ 388 : The Edward Mills Co. Ltd.,
Beawar v. The State of A/mer [19551 1 S.C.R. 735 : Pandit Banarsi Das Bhanot
v. The State of Madhya Pradesh Cl.959] S.C.R. 427: Sardar Inder Singh v. The I>
Stale of Rajasthan, (1959) S.C.R. 605: Vasantlal Maganbhai Sanjanwala v.
The State of Bombay, [1961] 1 S.C.R. 341 : Jyoti Parslzad v. The Administrator
for the Union Territory of Del/Ji [1962] 2 S.C.R. 125 : Mohammad Hussain
Gul'lm Mohammad v. The State of Bombay, [1962) 2 S.C.R. 659, referred to.

CIVIL APPELLATE JURISDICTION: Civil·Appeal No. 1258 of 1969.
From the Judgment and Decree dated 17-2-1969 of the Kerala E·
High Court in Writ Appeal No. 45 of 1968.
V. A . Seyid Mohammed and K. M. K. Nair for the Appellant.
Ex-Parte for the Respondent.
The Judgment of the Court was delivered by
CHINNAPPA REDDY, J.-The perennial, nagging problem of dele-
gated legislation and the so-called Henry VIII clause have again come
up for decision in this appeal by the State of Kerala. Section 60 of
the Madras Cooperative Societies Act 1932 and a notification issued
under that provision were stru.ck down by the High Court of Kerala
on the ground of unconstitutional delegation of legislative power.
Certain.consequential directions were issued by the High Court. Those
c.
directions have long since worked themselves out and so the party who
invoked the jurisdicti~n of the High Court under Article 226 of the
Constitution has no longer any surviving interest. The State of Kerala
is, however, interested in sus~g the validity of Section 60 and bas
fikd. this appeal. ·
Lawyers and judges have never ceased to be interested in the qu~s
tion of delegated Iegislatioa and since the Delhi Laws Act case, we
262 SUPREME COURT REPORTS [1980) 2 S.C.R.

l\ have been blessed(?) by an abundance of authority, the blessing no~
necessarily unmixe~. We do not wish, in this case, to search fllr the
precise principles decided .in the Delhi Laws Act case, nor to consider
whether N. K. Papiah & Sons v. Excise· Commissioner( 1) beats t!:t.e
final retreat from the earlier position. For the purposes of this case
we are content to accept the "policy" and "guidelines". theory and seek
1l such assistance as we may derive from cases where near identical pro-
visions have been, considered.
It is trite to say that the function of the State has long since ceased
to be confined to the preservation of the public peace, the ex.action
of taxes and the defence of its frontiers. It is now the function of the
-C State to secure to its citizens 'Social, economic and political justice',
to preserve 'liberty of thought, expression, belief, faith and worship,' arid
to ensure 'equity of status and of opportunity' and 'the dignity of the
individual' and the 'unity of the nation'. That is what the Preamble
to our Constitution says and that is what is elaborated in the two vital .
.) chapters of the Constitution on Fundamental Rights and Directive
·D Principles of State Policy. The desire! to attain these objectives has
necessarily resulted in intense legislative activity touching every ~pect
of the life of the citizen and the nation. Executive activity in the field
of delegated or subordinate legislation has increased in direct, geo-
metric progression. It has to be and it is as it should be. The Par-
liament and the State Legislatures are not bodies of experts or special-
' rE ists. They are skilled in the art of discovering the aspirations, the
expectations and the needs, the limits to the patience and the acqui-
escence and tlie articulation of the views of the people whom they re-
present. They function best when they concern themselves with gene-
ral principles, broad objectives and fundamental issues instead of
technical and situational intricacies which are better left to bclter
··P equipped full time expert executive bodies and specialist public ser-
vants. Parliament and the State Legislatures have neither the time
nor the expertise to be involved in detail and circumstance. Nor can
Parliament and the State Legislatures visualise and provide for new,
strange, unforeseen and unpredictable situations arising from the com-
-G plexity of modem life and the ingenuity of modem m?n. That is the
raison d'etre for delegated legislation. That is what makes delegated
legislation inevitable and indispensable. The Indian Parliament and
the Stafu Legislatures are endowed with plenary power to legislate
upon any of the subjects entrusted to them by the Constitution, subject
to the limitations imposed by the Constitution itself. The power to
,R legislate cirries with it the power to delegate. But excessive delega-
tion may amount to abdication. Delegation unlimited may invite
(1) [1975} 3 S.C.R. 607.
. ?Jo~-13· Tl'i

<:OOPERATJVf SOCIETIES~- K. KUN°!iAMBU (Chinnappa Reddy,!.) 263

despotism uninhibited. So the theory has been evolved that the legis- A
lature cannot delegate its essential legislative function. Legislate it
must by laying down policy and- principle and delegate it may to fill
in detail and carry out policy. The legislature may guid~ the delegate
by speaking through the express provision empowering delegation or
the other provisions of the statute, the preamble, the scheme or ~ven
B
the very subject matter of the statute. If guidance there is, wherever
it may be found, the delegation is valid. A good deal of latitude has
been held to be permissible in the case of taxing statutes and on the
same principle a generous degree of latitude must be permissible in the
~~ of welfare legislation, particularly those statutes which are design-
ed to further the Directive Principles of State Policy. c
In Harishankar Bagla and Anr. v. The State of Madhya Pra-
desh, (1) the question arose whether Section 3 of the Essential Supplies
(Temporary Powers) Act, 1946, which empowered the Central Gov-
ernment to make orders providing for the regulation or prohibition of
the production, supply and distribution of essential commodities and
trade and commerce therein was void for excessive delegation. The D
Court said it was not and observed:
" .... the legislature cannot delegate its function of lay-
ing down legislative policy in respect of a measure and its
formuhi.tion as ·a rule of conduct. The Legislature must
declare the policy of the law and the legal principles which E
oce '° control any given cases and must provide a standard
~ guide the officials or the body in power to execute the law.
The essential legislative function consists in the determina-
tion or choice of the legislative policy and of formally enact-
ing that policy into a binding rule of conduct. In the pre- .
sent 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. The principle is clear and
offers sufficient guidance to the Central Government in exer-
cising its powers under section 3".
G
Iri The Edward Mills Co. Ltd., Beawar v. The State of Ajmer('),
•this Court considered the question whether s. 27 of the Minimum
' ·Wages Act under which power was given to ·the Government to add
to either part of the schedule any employment in respect of whicl1 it
was in its opinion that minimum wages should be fixed exceeded th~
e
· (J) [1955] 1 S.C.R. p. 380 at 388.
(2) [1959] 1 S.C.R. 735.
264 SUPREME COURT REPORTS [1980] 2 s.c.R.

A limits of permissible delegiition and was, therefore, unconstitutional•
The Court held that the legislative policy was apparent on the face of ~
·the enactment which aimed at the statutory fixation of minimum wages.
with a view to obviate the chance of exploitation of labour. The in-
tention of the Legislature was not to apply the Act to all industries- •
but only to those industries where by reason of unorganised labour or
B want of proper arrangements for effective regulation of wages or for ,
other causes the wages of labourers in a particular industry were ve.."'j ·
low. In enacting s. 27 there was, therefore, no delegation of essential •
legislative power. .

c In Pandit Banarsi Das Bhanot v. The State of Madhya Prades/z(')~
this Court held that it was not unconstitutional for the Legislature to
leave it to the Executive tc> determine details relating to the working of
taxation laws such as the selection of persons on whom the tax is to
be laid, the rates at which it is to be chruged in respect of different
classes of goods and the selection of goods in respect of which exemp-
D tion from taxation might be granted etc. etc.

In Sardar lnder Singh v. The State of Rajasthan( 2 ), the validity
of s.15 of the Rajasthan (Protection of Tenants) Ordinance which
authorised the Government to exempt any person or class of persons.
from the operation of the Act was upheld and the argument t.'iat there
E was impermissible delegation of legislative power was repelled on the
ground. that the Preamble to t!he Ordinance set out with sufficient
clarity the policy of the Legislature.

In Vasantal Maganbhai Sanjanwala v. The State of Bombay(•);-~
F s. 6 (2) of the Bombay Tenancy & Agricultural Lands Act was chal-
lenged as. permitting excessive delegiition of legislative power as it
enabled the Government to fix a lower rate of the maximum rent pay..
able by the tenants of lands situate in any particular area or to lb: such
rate on any snitable cases as it thought fit. This Court noticed that
the Act was undonbtedly a beneficent measure, as shown by the Pre- •'
G amble which stated that the object of the Act was to improve the eco-
nomic and social conditions of peasants and ensure the full and effi-
cient nse of land for agricultural. Bearing in mind the Preamble and.. ,
the material provisions of the Act, it was held that the power delegated ---
was within permissible limits.

(1) [1959! S.C.R. 427
(2) [1957] S.C.R. 605.
(3) [1961] 1 S.C.R. 341.
COOl'UATIVE SOCIETIES V· K. KUNHAMBU (Chinnappa Reddy, J.) 265

In Jyoti Pershad v. The Administrator for the Union Te"itories of A
Delhi,(') Rajagopala Ayyangar, J. made some useful observations
which may be extracted here :
"In regard to this matter we desire to make two obser-
'
• vations. In the context of modem tonditions and the variety
,, and complexity of the situations which present themselves for
wlution, it is not possible for the Legislature to envisage in
B

• detail every possibility and make provisions for them. The
Legislature therefore is forced to leave the authorities creat-
ed by it an ample discretion limited, however, by the guid-
ance afforded by the Act. This is the ratio of delegated
legislation, and is a process which has come to stay, and c
which one may be permitted to observe is not without its
advantages. So Jong therefore as the Legislature in~icates,
in the operative provisions of the st>atute with certainty, the
policy and purpose of the enactment, the mere fact that the
legislation is skeletal, or the fact that a discretion is left to
those entrusted with administering the law, a.IIords no basis D
either for the contention that there has been an excessive
delegation of legislative power 11s to amount to an abdication
of its functions, or that the discretion vested is uncanalised
,)
and unguided as to amonnt to a carte blanche to discrimi-
nate. The second is tl:rat if the power or discretion has been
conferred in a manner which is legal and constitutional, tho
fact that Parliament could possibly have made more detailed
provisions, could obviously not be a ground for invalidating
the law."

In Mohammad Hussain Gulam Mohammad v. The State of Bam- F
by,(') the question was about the vires of s. 29 of the Bombay Agri-
cultural Produce Markets Act. It gave power to the State Government
to add to, or amend, or cancel any of the items of agricultural pfocluce
specified in the schedule in accordance with prevailing local condi-
tions, The attack was on the gronnd that legislative power had been
'
delegated to an extent not permissible. The Court while noticing G
that s. 29 itself did not provide for any criterion for determining which
• 11 item of agricultural produce should be put into the schedule, never-
• ,Meless upheld its vires on the ground that guidance was writ large in
the various provisions and the scheme of the Act. It was observed
that in each case the State Government had to consider whether the
H
(I) [1962] 2 S.C.R. 125.
\( (2l [I 0~21 2 S.C.R. 659
18--'-868SCI/79

•~ !!!At.I.• . . ''
'.

266 SUPREME COURT REPORTS [1980] 2 s.c.R.

A volume of trade in the produce was of such a nature as to give rise
to wholesale trade so as to merit inclusion in the schedule.
Let us now turn to s. 60 of the Madras Cooperative Societies Act,
•'
1932 whose vires is in question and which is as follows:-
1
"S. 60: The State Government may, by general or special
B order, exenipt any registered society from any of the pro-
visions of this Act or may direct that such provisions shall
apply to such society with such' modifiC'ations as may be speci- •
fied in ·the order."

The provision is a near Henry VIII clause. But to give it a name is~
c not to hang it. We must examine the preamble, the scheme and other '
available material to see if there are any discernible guidelines. Sure
the Cooperative Societies Act is a welfare legislation. Its preamble
proclaims:
"Whereas it is expedient further to facilitate the forma-
D tion and working of co-operative societies for the promotion
of thrift, self-help and mutual aid among •agriculturists and
other persons with common economic needs so as to bring
about better living, better business and better methods of pro-
duction and for that purpose to consolidate and amend the
law relating to co-operative societies in the State of Madras.'"
E ' . t"i
The policy of the Act is there and so are the guidelines. Why the
legislation ? "To facilitate the formation and working of Cooperative
Societies". Cooperative Societies, for what purpose? "For the pro-
motion of thrift, self-help and mutual aid". Amongst whom? "Among . -~
agriculturists and other persons with common economic needs". To
F what end ? "To bring about better living, better business and better
methods of production". The objectives are clear; the guidelines are
there. There are numerous provisions of the Act dealing with regis-
tration of societies, rights and liabilities of members, duties of regis-
tered societies, privileges of registered societies, property and funds of •
registered societies, inquiry and inspection, supersession of committees
G
of societies, dissolution of societies, surcharge and attachment, arbitra-

cept to say that they are generally designed to further the objectives s• '•
tion etc. We refrain from referring to the details of the provisions ex- f -.

out in the oreamble. But, numerous as the provisions are, they are no~- · ·
capable of meeting the extensive demands of the complex situations
H which may arise in the course of the working of the Act and the forma- •
tion and the functioning of the societies. In fact, the too rigorous appli-
cation of some of the provisions of the Act may itself occasionaly result
L •

COOPERATIVE SOCIETIES v. K. KUNHAMBU (Chinnappa Reddy, J.) 267

in frustrating the very objects of the Act instead of advancing them.
It is to provide for such situations that the Government is invested by
s. 60 with a power to relaoc the oreasional rigour of the provisions of
the Act and to advance the objects of the Act. Section 60 empowers
the State Government to 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 B
• 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 gleoaned from the preamble and other provisions which we have
--. ~'already pointed out, are clear. , :.
·J We are therefore of the view that s. 60 is not void on the ground c
of excessive delegation of legislative power. We so declare and other-
wise dismiss the appeal,

N.V,K. Appeal dismissed.

•

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