i introductory · 2020-04-04 · substantive rules of taxation or as to what is an unfair labour...

C h a p t e r I

INTRODUCTORY

S E C T I O N 1 . N E E D F O R A D M I N I S T R A T I V E L A W

Administrative law may be taken for the present purpose to be the law governing the organization, procedures, powers and duties of the organs of public authorities other than the legislatures and courts. It examines the objectives, problems, methods and jurisprudence of those agencies and their relationship to the legislatures and courts. It studies the law made by, as well as the law which controls, administration. But, in this, it restricts itself to the law of powers and procedures and does not deal with the substantive law (e.g., the substantive rules of taxation or as to what is an unfair labour practice).

Administration and administrative law are the all-pervading features of government today, and at the same time they are the most ancient.^ From the panchayat or police man at the village

1. As administrative law deals with the administration, it is as old as any organized administration. In India, a well organized and centralized administration was created by the Mauryas and later by the Guptas, several centuries before Christ. Long before Manu (200 B.C.) and Yajnavalkya (300 A.D.) wrote their dharmashastras, a secular arthashastra, a code extensively dealing with government administration, had come into existence. Kautilaya’s Arthashastra is dated somewhere between 321 and 300 B.C. and it shows a highly developed system of administration dealing with- almost every aspect of public welfare. See Shamasastry, Kautilaya’s Arthasastra (1961); Jayaswal, Manu and Yajnavalkya 5-9 (1917). The modern administrative system may, however, be traced to the period of Warren Hastings (1772-1780) under the East India Company. See Palande, Introduction to Indian Administration {\95V)\ Jain, Outlines o f Indian Legal History (2d rev. ed. 1966); Misra, The Central Administration, o f the East India Company 1773-1834 (1959); Roy, The Civil Service in India (1960); Ram Gopal, British Rule in India (1963).

level, through the block or district directors, finally up to the many “ functional organizations” of the United Nations, a system of adminis-

, tration exists. And although the policies, tasks and procedures of an international agency may be quite different from those of the local health officers, there exists a body of legal rules for keeping their functions within bounds.

The rapid growth of administrative law during the twentieth century owes much to the change in the concepts of the role and function of a modern government. The doctrine of laissez faire has given place to the doctrine of a welfare state and this has led to the proliferation of administrative powers and functions. The growth in the range of state functions has ushered in an administrative age and an era of administrative law.

Administrative law is of more than growing importance in India. Besides the causes which led to the development of administrative law in the Western countries, in India, a developing country, the government is being looked up to by its people for all types of activities to raise their living standard. Before independence, India was a police state. The independence has made people' conscious of their poverty and generated demands on their part for planning. Indeed, the people’s hope in the government to ameliorate their material condition is reflected in some of the provisions of the Constitution. Thus, for example, article 38 in the chapter on directive principles of state policy states: “The State shall striveto promote the welfare o f the-people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life."® The subsequent constitutional amendments,^ under which the government has in effect acquired the power to fix any compensation for taking of private property and to undertake any trade or profession or service to the total or partial exclusion of private interests, are also moves in the direction of creating a welfare state for the people of India.

The Constitution itself envisages a few administrative bodies mainly from the point of view of interstate cooperation and coordina-

2. In December, 1959 A.I.R., out of 257 pages of Supreme Court opinions, 229 pages or 80% were administrative law decisions.

3. Other articles which could be noted here are 39, 41 and 42. See Jain, Indian Constitutional Law 505-11 (1962).

4. Tiie first, fourth and eighteenth amendments, See id- at 630-639.

2 INDIAN ADMINISTRATIVE LAW [ CHAPTER 1

tion and to solve interstate problems. Examples are the Interstate Council under article 263, the Finance Commission under article 280, the bodies under article 262 (to solve interstate water disputes) and article 307 (to regulate interstate trade and commerce). The other constitutional bodies to be noted are the Union Public Service Commission under article 315 and the Election Commission under article 324. Besides, over a period o f time, the government has come to establish large number of administrative bodies of various kinds for various purposes. It is around all these bodies that problems of administrative law necessarily develop.

The long distances, the low economic level of the country, the large population and the relatively few trained civil servants, among other factors, have made the problem of administrative process in India, one o f great significance as well as of difficulty.

SECTION J J INTRODUCTORY 3

FREEMAN AND PAULLIN, ROAD TO PEACE : A STUDY IN FUNCTIONAL INTERNATIONAL ORGANIZATION

1_4 (1947)

Laymen are likely to think that a constitution or statute, in fact any written instrument, is sacrosanct. They assume that the written plan of government constitutes “ government.'’ Law students and historians know that this is not true. It is the actual growth of co-operation and the solution o f problems through the constitution which gives Hfe to the written document and builds “ government."

But even lawyers are apt to share with laymen another erroneous view of the law— that “ rights” and “ interests ' of person are the chief concern of government and legal protection. The study of constitutional law is likely to lead to this conclusion. Constitutional protections arose during the 17th and 18th centuries when the dispossessed common man was striving to change government so that it would serve him and be responsible to him. Since government had not been stable in the past, the individual could best be protected by defining and guaranteeing “ rights” This therefore was the great period of constitutional adoption in England. America and on the/ continent-...

Gradually, the inability o f individual man ip so complex a society'I , I-' 1' '

to protect himself by sole reliance on private rights and ; recognition of the social or “ public” interest iii man’s welfare led tc the- emphasis of the citizen on services. He now asked of the government not what are mj" rights but are you a government able to render

'level, through the block or district directors, finally up to the many ''functional organisations” of the United Nations, a system of administration exists- And although the pohcies, tasks and procedures of an international agency may be quite different from those of the local health officers, there exists a body of legal rules for keeping their functions within bounds.

The rapid growth of administrative law during the twentieth century owes much to the change in the concepts of the role and function of a modern government. The doctrine of laissez fah'e has (given place to the doctrine of a welfare state and this has led to the iproliferation of administrative powers and functions. The growth in ;thc range of state functions has ushered in an administrative age and an era of administrative law.

Administrative law is of more than growing importance in India.' Besides the causes which led to the development of administrative law in the W estern countries, in India, a developing country, the government is being looked up to by its people for all types of activities to raise their living standard. Before independence, India was a police state. The independence has made people conscious of their poverty and generated demands on their part for planning. Indeed, the people’s hope in the government to ameliorate their material condition is reflected in some of the provisions of the Constitution. Thus, for example, article 38 in the chapter on directive principles of state policy states: “ The State shall striveto promote the welfare of the - people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life."® Tile subsequent constitutional amendments,^ under which the government has in effect acquired the power to fix any compensation for taking of private property and to undertake any trade or profession or service to the total or partial exclusion of private interests, are also moves in the direction of creating a welfare state for the people of India.

The Constitution itself envisages a few administrative bodies mainly from the point of view of interstate cooperation and. coordina-

2. In December, 1959 A.I.R., out of 257 pages of Supreme Court opinions, 229pages or 80% were administrative law decisions.

3. Other articles which could be noted here are 39, 41 and 42. See Jain, M ow Comtitutional Law 505-11 (1962).

4. The first, fourth and eighteenth amendments. See /4. at 630-639,


SECTION I : INTRODUCTORY 3

tion and to solve interstate problems. Examples are tlie Interstate Council under article 263, the Finance Commission under article 280, the bodies under article 262 (to solve interstate water disputes.) and article 307 (to regulate interstate trade and commerce). 1 he other constitutional bodies to be noted are the Union Public Service Commission under article 315 and the Election Commission under article 324. Resides, over a period of time, the government has come to establish large number of administrative bodies of various kinds for various purposes. It is around all these bodies that problems of administrative law necessarily develop.

The long distances, the low economic level of the country, the large population and the relatively few trained civil servants, among other factors, have made the problem of administrative process in India, one o f great significance as well as of difficulty.

FREEMAN AND PAULLIN, ROAD TO PEACE : A STUDY IN FUNCTIONAL INTERNATIONAL ORGANIZATION

(1947)

Laymen are likely to think that a constitution or statute, in fact any written instrument, is sacrosanct. They assume that the written plan of government constitutes “government.” Law students and historians know that this is not true. It is the actual growth of co-operation and the solution of problems through the constitution which gives Hfe to the written document and builds “ government.''

But even lawyers are apt to share with laymen another erroneous view of the law— that “ rights” and “ interests” of person are the chief concern of government and legal protection. The study of constitutional law is likely to lead to this conclusion. Constitutional protections arose during the 17th and 18th centuries when the dispossessed common man was striving to change government so that it would serve him and be responsible to him. Since government had not been stable in the past, the individual could best be protected by defining and guaranteeing “ rights-” This therefore was the great period of constitutional adoption in England, America and on the continent--.

Gradually, the inability of individual man in so complex a society to protect himself by sole reliance on private rights and the recognition of the social or “ public” interest in man’s welfare led to the emphasis of the citizen on services- He now asked of the government not what are my rights but are you a government able to render

the services which will permit me to live the "full life” I was seeking under the old concept of ‘“ rights.” The laborer has come to recognize that his right to “ free speech” is a sterile right, if for union actiinties he can be discharged; the Negro has come to recognize that "equality” is a sterile right, if he is the first to lose his job and the last to be employed; the small business man has com e to recognize that "free enterprise” is a sterile right if uncontrolled monopolies rob him of his business. All men have come to recognize that their “ rights” are worthless except as the day-to-day operation of government realistically secures to them the where-with-all to live full well-rounded lives.I Supreme Court Justice Frankfurter and others have emphasized

man*s demand upon law to solve problems rather than define rights and the inability of legislatures and courts to perform demanded "services" as the source o f administrative law— the functional approach to government, which has grown phenomenally in the later 19th, and 20th century. The essence of this approach is the creation of a commission or body of experts into whose keeping is entrusted one problem area. It may be public utilities, old age security, rent control, rationing of food, prevention of monopolies, protection of health or any of the other problems that a complex civilization poses. Name almost any aspect of your life and you will name a field of Administrative Law control.

It is difEcult to catch in a few words the reasons which have caused functional organizations to be the form of government meeting the needs of our day. Yet perhaps we can suggest some aspects to keep in mind.

First, Administrative Law is preventive (like preventive medicine). Inspection and grading of meat answers the consumer’s need more adequately than does a right to sue the seller after the consumer is injured. Secondly, the functional approach treats any area as a soluble problem rather than a political controversy- Thirdly, administration allows the complexity of our day to be broken down into specialized units which can be handled by experts in that speciality- Specialization is the rule in the human body - eyes are not expected to perform the function of ears - and specialization is the demand of the modern body politic. Fourthly, constitutional government by definition requires that the total system be official” ; functional organization permits a realistic combination o f public and private operation in the field....Fifthly, public administration allows continuing supervision and


mentation. No legislator can fix a proper permanent rate of fare for railroads. Only as railroads operate under a rate can its fairness be tested; only by continuous supervision can it be adjusted to change conditions.. . .Finally, at a time when delay may itself cause greater harm than no relief, administrative law has substituted cheap, speedy, non-technical procedures for the delays and costliness of courts and legislatures.

SECTION]] INTRODUCTORY 5

1 LAW COMMISSION OF INDIA, FOURTEENTH REPORT30 (19J8)

Can we in the present social structure think of a reversion to the earlier pattern of judicial administration ? The law that is administered today is no longer the customary law. In fact, thousands o f statutes and regulations control down to the minutest detail the lives and activities of every citizen in this country. The Legislatures both at the Centre and in the States have undertaken reforms of a far-reaching nature affecting the well-being of millions of citizens. Recently, It was authoritatively stated that between 1st January 1953 and 30th November 1957 Parliament had passed more than three hundred and fifty bills and in the four years 1953 to 1956,-the State Legislatures passed two thousand five hundred and fifty-seven Acts out of which as many as two hundred and seventy-five Acts dealt with land reform- In the post-Constitution period, Parliament has passed about six hundred Acts. In addition, about eighty-nine Ordinances, twenty-one Regulations and sixty-two President's Acts have been promulgated. A W elfare State has necessarily to undertake legislation on an ever widening front, if the ultimate aim o f a socialistic pattern of society operating within the domain of the Rule of Law is to be evolved by democratic process. The enormous legislative output of Parliament and the State Legislatures calls for trained personnel to implement them. N o one can assert that in the conditions which: govern us today the replacement of professional cdurts by coiarts of the kind that existed in the remote past can be thought of.

2 LAW COM MISSION OF INDIA, FOURTEENTH REPORT 674—75 (1958)

Society in the twentieth century has becom e exceedingly com plex and governmental functions have multiplied. The change in the scope and character o f Government from negative to positive, that is, from the laissez fa ire to the public service state, has resulted in the concentration o f considerable pow er in the hands o f the executive branch o f Governm ent. The direct result o f this has been the growth of administrative law.

The problem before us thus is to prevent the potential threat to justice and freedom from the greatly extended powers and functions of the modern State.

W elfare schemes are planned and introduced by the Government in. all progressive democratic States. T o devise and carry out any general welfare scheme, it is always necessary to affect adversely some private rights o f property and personal liberty. These facts have to be faced by all those w ho live in a W elfare State. The trend is the same in all countries whether it is in the United Kingdom, the United States o f Am erica, France or India. The real problem therefore is “ to reconcile freedom and justice for the private citizen w ith the necessities of a modern government charged with the prom otion of a far-reaching social or econom ic policies.”


1 BENJAMIN, ADMINISTRATIVE ADJUDICATION IN THE STATE OF NEW YORK '

13 (1942)

The reasons for administrative action may be various, and may operate in a variety o f combinations. A partial list will be illustrative. Administrative action has been called upon to fill in the substance o f legislation where it is impossible for the legislature to lay down detailed rules in advance (e.g., the Industrial Code, the Sanitary Code, rate-making),- or where detailed application o f a legislative standard by private litigation in a great number o f individual cases is found to be inadequate (e.g., rate-making). It has been used where no rules are possible, but where governmental action involves the exercisc of discretion, of a choice between alternatives (e.g., the required extension o f a public utility’s services). It has been called upon where adjudication involves the use o f technical knowledge, or familiarity with a particular field, in the evaluation of testimony or

the interpretation of a statute (e.g., tlie Public Scivice Commission, the State Labor Relations Board). It has been resorted to as providing simple, speedy and inexpensive procedure (e.g., the collection o f taxes, the payment o f unemployment insurance). It has been used where there is involved not simply the adjudication o f a particular controversy but continuing control over a course of action (e.g., the payment of workmen’s compensation). It has been used because it makes available preventive measures (e.g-, rate-making, licensing), and because it offers a variety o f means o f enforcement (e.g., the suspension, revocation and reissuance of licenses, the destruction of contaminated articles, the granting of variations) not readily available through the courts.

SEC TIO N !] INTRODUCTORY 7

GELLHORN AND BYSE, ADMINISTRATIVE LAW 2—7 (1960)

In the Federal realm, as is well known, the administrative process may be traced in an unbroken line from 1789, the first year o f government under the Constitution of the United States. Commencing in that year with the administration of customs laws, the regulation of ocean-going vessels and the coasting trade, and the payment of veterans’ pensions, Congress provided the statutory foundation for the considerable body of agencies which now administer the public laws. The circumstance that the national legislature has through so many generations, from the customs law o f 1789 to the Federal Aviation A ct of 1958, seen wisdom in the administrative process suggests that bureaucracy may after all have its admissible virtues.

The striking fact is that new agencies have been created or old ones expanded not to satisfy an abstract governmental theory, but to cope with problems of recognized public concern. It was the growth of steam navigation, rather than predisposition toward administrative agencies, which gave rise in 1838 to “A n A ct to provide for the better security o f the lives o f passengers on board o f vessels propelled in whole or in part by steam," and so commenced the process of steam-boat inspection which continues until the present day in the United States Coast Guard. N o different in essence were the considerations that exactly a century later led to the .‘creation o f the Civil Aeronautics Authority to cootdinate regulation of the air transportation industry. If human relationships within society had

remained unchanged, if the N ation ’s territorial limitations had been unexpanded, if the arts and sciences had not progressed with the years, the machinery of government might similarly have remained undeveloped. Instead, in the span of a century and a half, new rights and duties among men have emerged, and the Government has responded to demands for their adjustment, their execution, and their protection.

It is of course plain that precisely similar considerations did not lead to the utilisation o f the administrative device in all the various situations in which it is to be found today. True, in each instance prescriptions by the legislature or decisions in individual cases by the judiciary were deemed to be comparatively inadequate mechanisms for dealing with governmental problems. But the reasons for the inadequacy were not always the same, nor did they by any means reflect discredit on Congress or the courts. In some cases decision to create an agency outside the courts was influenced by desire to avoid referring to the judiciary myriad controversies which would interfere with exibting duties. In some instances, decision to transfer subordinate legislative authority to administrative agencies was influenced by the need of relieving Congress from details so that its essential policymaking work might go forward. In yet other cases, the choice o f the' administrative agency was essential to the effectuation of a preventive program, necessitating constant supervision and inspection for which* neither judicial nor legislative organization is adapted.

Illustration may be found in the possible choices o f methods for the granting of a privilege or license or the fixing o f prices or wages. The granting of licenses is an individual and private act and, at the same time, a step in the effectuation of a general policy. T o fix a price or wage is to prescribe future conduct. The legislature may formulate policy and, indeed, this is its traditional function; but its attention to the specific is necessarily spasmodic because it does not remain constantly in session, nor is its machinery most suitable! for the finding of facts which are necessary to the issuance o f licenses or the fixing of prices or wages. Hence, while these functions might, without disregard of constitutional divisions of power, be performed by the legislature itself, practical considerations argue that they be undertaken elsewhere. Nor are these functions readily susceptible o f initial judicial treatment; the judicial function is traditionally to weigh the merits of particular controversies, but n ot to engage in a consistent determination of policy or to maintain steady contact with a general and continuing problem. Accordingly, a body which could


SECTION I ] INTRODUCTORY 9

^combine both functions— ascertainment o f facts and the establishment |of a continuous and uniform policy the development o f which is not dependent upon the largely accidental emergence of litigated cases—would be logically chosen to perform functions o f this nature. So it is that administrative agencies have been devised to concentrate their attention upon phases o f work somewhat alien to the basic functions of courts and legislatures, and from their concentration have developed the special knowledge and special skills which characterize the administrative process at its best.

The Interstate Commerce Commission furnishes the classic, though not the most ancient, example of this development. A fter the Civil W ar the rapid extension of railroads and the growing public dependence on them gave rise to pressing national problems. The carriers, it is true, were under certain common law obligations enforcible through the courts. But relief against exorbitant charges or unfair practices was slow, uncertain, and, above all, limited only to those who were suing because of the carriers' past misdeeds. The courts, in brief, could build no barriers against injury to the public, but were able only to redress those few private grievances which occasioned litigation. Responsibility for eliminating abuses o f mounting gravity therefore fell to Congress. But Congress, despite efforts to lay down regulations which could then be enforced by court proceedings, soon perceived that it could not exercise adequate control over rates and practices. “ The utter inability of Congress to give the time and attention indispensable to the exercise of these [law-tnaking] powers in detail,” as Chief Justice Taft put it, forced their being conferred on a body competent to deal flexibly with the changing conditions of the transportation industry. A nd the same types of considerations have operated in many other areas of activity— power and natural resources, and trade in agricultural products, and banking, and communications, and securities transactions, to mention some of the more prominent. In each case the very factors of rapid development and complexity which gave rise to regulation made specific and com plete treatment by legislation impossible and, instead, made necessary the choice of a body of officers who could keep abreast o f the novelties and thd intricacies which the problems presented.

The need for continuous expert supervision, capable o f ad hoc development to parallel the development o f the subject matter involved, has not been experienced only in respect o f particular industries as in the example just stiggest€d. I®: 'Jjecofnized as

well when Congress has sought to deal with difficulties o f a less constricted character. Thus, at the end of the last century and the beginning of the present one, the issues of “ big business" came to the fore; monopolies and competitive adjustments and practices were declared by Congress to have entailed abuses calling for correctives. Later, labor’s place in the industrial scene received legislative attention. In both cases, the administrative process was invoked to serve as the instrument to effectuate a national policy— the Federal Trade Commission to halt unfair methods o f competition, the National Labor Relations Board to bring an end to unfair labor practices.

The factors underlying the choice of these agencies in some respects partake of those underlying the choice of the agencies which act as guardians over particular industries; in other respects, new factors may be discerned. Once again, Congress found it undesirable, if nor impossible, to prescribe specific legislation defining unfair competition and unfair labor practices. It could have declared that certain practices were criminal, and left enforcement to the orthodox channels of the district attorney and the courts. But the objectives were social and the subject matters dynamic; the static process of deciding law, traditionally the province of the judiciary, was unsuitable where the activities to be regulated were highly individualized and constantly undergoing change. Accordingly a governmental group whose responsibility was not only to decide, but also to develop was selected.

But in the case o f these two agencies the factor of technical expertness plays a somewhat less important part; rather, expertness gives way to specialization. Trade and labor practices had become vital problems o f national scope and significance; accordingly, Congress deemed them worthy o f continuous attention by special tribunals, which would make not only for concentration but also for national uniformity o f treatment.

The distinction here suggested between espertnees and specialization in the administrative process is especially well illustrated by the Public Contracts Division of the Department of Labor. T o this division has been assigned the task of enforcing the W alsh-Healey A ct, which, among other things, requires the payment of prescribed wages to those who labor to fulfil cretain government contracts. If a contractor with the Government fails to pay the wages required, the Division seeks, first by informal representations and then if necessary by formal proceedings, to secure for the employees the


SECTION I j INTRODUCTORY U

deficiencies found to have occurred. The proceedings arc conducted, before the officers o f the Division, and decision is made by its Administrator. It would be unreal to insist that the eases so conducted and decided require the attention of experts; in fact, they are not essentially unlike those which may appear in many state courts of inferior jurisdiction. Segregation of the W alsli-H ealey cases from the general mass is justifiable chiefly because thus they are assured attention which might otherwise not be accorded. The sums involved are rarely large; yet, in the aggregate, they bear an important relationship to the realisation of the declared Congressional purposes. The advantage of the administrative process here over its judicial counterpart is that the administrative officials are concentrating their whole activity upon the problems of which the single case is merely an element, and so they are likely to perceive the important implications of the superficially insignificant controversy— while the judges, on the other hand, necessarily see the case only as an isolated bit of litigation, one among the many of different types which are brought before them for disposition.

The choice of administrative machinery has been influenced by another factor that may be identified in some instances, of which the adjudication of workm en’s compensation disputes is a notable example. Suits growing out of industrial accidents were originally tried and determined in the courts; they presented problems of legal rights between individuals which were traditionally o f the stuff making up private litigation for the judiciary. W hen workmen s compensation laws were enacted, they constituted something of a revolt against the rules of law which the courts had created and applied in this field. The legislature, having chosen to adopt an entirely original approach to a problem that had not been successfully solved by the courts, rather naturally thought a new and sympathetic agency would be more likely than the courts to further the policies declared.

One may perceive a similar element, too, in the creation o f the Federal Trade Commission and, more particularly, the, National Labor Relations Board. The policy declared in the Federal Trade Commission A ct and the National Labor Relations A ct departed from what had previously ^ een the law on the subject. Indeed, judicial hostility to, or at least lack o f sympathy witfc the efforts of labor to organize and bargain collectively wa$ , in no small: ipart responsible for the Labor A ct. Over a substantial period priof to

1935, the courts had, through judicial legislation, emphasized labor’s wrongs at the expense of labor’s rights. Congressional skepticism concerning the cordial treatment of labor by the judiciary crystallized in the Norris-LaGuardia A ct, divesting the federal courts of jurisdiction over a considerable area of labor relations. The selection o f an independent agency to administer the W agner A c t was a logical development of the policy reflected in the Norris-LaGuardia A ct; it was felt that the courts might have difficulty in sloughing off their ■former attitudes, and that those attitudes were not consonant with present policies. Since the Labor A ct was intended to reverse an existing legal and judicial trend, the task of carrying out the Congressional mandate was assigned to an official instrumentality other than that which had developed, if not created, the rejected policy.

T o these several factors, which have made for the choice o f the administrative over the judicial or legislative— (1) the need for expertness, (2) the need for specialization and continuity, (3) the desirability of sympathetic administration—may be added a fourth consideration, the tremendous volume of cases to be decided.

This often imperatively calls for the substitution of the administrative for the judicial tribunal, lest the courts be so overborne by the mass of business that they find themselves unable to perform their important and traditional tasks. One agency alone— the Social Security Administration— must dispose annually o f claims more than twenty times greater in number than all the criminal and civil (other than bankruptcy) cases that are determined in the Federal district courts. Of course the cases committed to the Social Security Administration infrequently approach the complexity often encountered in the matters considered by the judiciary. But if Congress had chosen, as it might conceivably have done, to require claimants against the United States to proceed by a conventional form of court action, the judges would soon be frantically preoccupied by tasks that might better be assigned to others. Even if the burden on the judges would not have been intolerable, moreover, there would remain a cogent argument against placing matters o f this type in the courts: characteristics arising from the so-called rigidity and formaHty o f the judicial process are commonly stated to be factors leading to the rejection of the judicial for the administrative method.

The administrative agency is at least hypothetically capable of shaping itself in such a way as to avoid technicalities which are popularly associated with “ the law ’s delays.” A cheap and speedy


forum is intended to be made available through admmistvadve agencies to those whose circiimstanccs and immediate needs might be ill-served by extensive litigation of a traditional tj^pe. Alas, the expectation that the administrative process would provide quick and inexpensive justice has— to put the matter charitably—not always been fully realized.

N o effort has been made in these introductory pages to catalogue comprehensively the reasons supporting Congressional assignment to administrative officers in every instance it has occurred. W hat has been said, however, perhaps sufficiently suggests that the administrative process is a response to, rather than exclusively the creator of, felt governmental problems.

SECTION 2 ] INTRODUCTORY 13

SECTION 2. ORIGIN, HISTORY AND CURRENT DEVELOPMENT

England

W riting in 1885, D icey while expounding his famous thesis on rule of law stated that England knew no administrative law. In saying this, D icey ignored the existence o f administrative discretion and administrative justice which even in his own days had made an appearance. A long list o f statutes conferred at that time broad discretionary powers on the executive which could not be called into question in the courts except when abused or exceeded. A number o f administrative tribunals had also come into existence by that time which D icey failed to notice . On the other hand, a contemporary of his, Maitland, while delivering lectures in 1887-8, could discern the growth o f administrative law in England. H e had then said : “ If you take up a modern volume of the reports of the Queen’s Bench division, you will find that about half o f the cases reported have to do with rules of administrative law ....” H e attributed the beginning of the development to the time of the Reform Bill o f 1832 which itself was an expression o f the vast new social and technological forces loosely known as the Industrial Revolution,^ In the words o f Maitland; “ Year by year the subordinate government o f England is becoming more and more important. The new movement set in with the

Maitland, The Constitutional History o f England 505 (1908).2. See Frankfurter’s foreword to "The Final Report o f the Attorney Geoerai’s

Committee on Administrative Procedure,” 41 Colum, L, jR. 5^5 (1941).

Reform Bill of 1832: it has gone far already and assuredly it will go farther. W e are becoming a much governed nation, governed by all manner of councils and boards and officers, central and local, high and low, exercising the powers which have been committed to them by modern statutes,” ^

In 1914, Dicey slightly changed his position. In the last edition (of his Law o f Constitution^' he remarked that during the last thirty years, extension of the duties and authority of English officials had produced in the law governing bureaucrats some o f the characteristics of the hated droit. H e feared that the law o f England was being “ officialized” under the impact o f socialistic ideas, but even, then he concluded that there was no true administrative law in! England. W ithin a year, however, he was again forced to reconsider his position as a result of two House of Lords cases; Board o f Education v. Rice" and Local Government Board v. Arlidge.^ W riting , under the title “ The Development of Administrative Law in England,” ’’ D icey was constrained to observe that legislation had conferred a considerable amount of quasi-judicial authority on the administration which was a considerable step towards introduction of administrative law in England.

Dicey misunderstood and feared the idea o f special courts dealing with cases to which the administration was a party. A close study of the French system reveals that this fear has been groundless. As has been observed by one scholar: “ D icey ’s most • unfortunate error, however, was his interpretation of the rule o f law as necessarily excluding administrative law and a special system of administrative courts. D icey ’s view was based on a fundamental misunderstanding of the French and other continental systems of administrative law ( droit administratif); The essence o f the continental systems is the existence of a separate hierarchy of administrative courts which are competent to decide legal issues between public authorities and the citizen. They have the same independent status as other courts and apply a coherent body of legal principles based on the distinctive character o f pubHc law. These systems are now recognized to have given greater protection to the individual than the unordered growth of administrative tribunals

3. Maitland, op. cit. supm note 1, at 501; also see at 417.4. Dicey, Law o f Constitution at xxxvii—xlviii (8th ed. 1015).5. [19I1JA.C. 179.6. [1915}A.C. 120.7. 31 Law Q. Rev, 148 (1915),


wliicli, partly as a consequence of D icey ’s error, still doniinate the legal systems of the British Commonwealth.” ®

For a long time, study of administrative law in Eugland suffered from Dicey's denial of its existence.® In course of time, however, D icey's spell was broken and some consciousness o f the growth o f administrative law in England came to the scholars. Even then, in the beginning, study of administrative law placed an undue emphasis only on two aspects, viz., subordinate or delegated legislation and administrative adjudication. This was because, as explained by Griffith and Street,^'' Dicey, by confining his examination to that part o f the droit ad minis tr at i f which deals with remedies, gave to the meaning of “ administrative law” in England a similarly restricted interpretation. These two aspects, though important in themselves, do not comprise, the whole o f the law relating to the administration.

A number o f important and significant developments have taken place in England during the last thirty-five years. In 1929, the British Government appointed a Coaimittee known as the Committee on Minister s powers (also know'n as the Donoughmore Committee), to consider administrative powers exercised by way o f delegated legislation and judicial or quasi-judicial decisions and to report on the safeguards desirable or necessary to secure the constitutional principles of the sovereignty of Parliament and supremacy of the law. It is common knowledge that this committee was appointed as a result of b itter criticism levelled against the growth of administrative power by Lord Chief Justice Hewart in his book New Despotism published in 1929. The concrete results o f this committee’s report, which was made in 1932, were the establishment of the Select Committee on Statutory Instruments in the House of Commons, and the passage o f the Statutory Instruments Act, both in 1946. In 1947, Parliament passed the Crown Proceedings A ct which made the Government liable to pay damages in cases o f tortuous and contractual liability and this, to a great extent, diluted the common law doctrine ‘^The King can do no wrong.*' In 1955, th^ British Government took another step towards the improvement of administrative process in the country by appointing the Frank's Committee to consider and make recommendations regarding"'the constitution and working of tribunals and also the working of such administrative procedures as

8. Friedmann, American Administrative Law 21 (1962 .9. Griffith & Street, Principles o f Administrative 3 (1963)4

10. Id, at 4.


include the holding o f an enquiry or hearing by or on behalf of a minister, etc. One of the most important recommendations of this committee was the establishment of the Council on Tribunals to keep the constitution and working of the tribunals under continuous review. The Council was appointed in 1958 by the Tribunals and Enquiries A ct of 1958. The A ct made many other reforms in the procedure of administrative adjudication. In 1961, another sector of administrative powers has been investigated by a non-official body known as '^Justice” which is the U. K. Section of the International Commission of Jurists. Its report entitled as Citizen and the Administration^'^ deals with the important question concerning the machinery for dealing with citizen’s complaints of misuse o f administrative powers by the executive. A suggestion has been made that a Parliamentary Commissioner be appointed in England for this purpose on the lines o f the famous Ombudsman of the Scandinavian countries.

16 INDIAN ADMINISTRATIVE LA W [ CHAPTER 1

United States

1 DAVIS. ADMINISTRATIVE LAW TREATISE24—33 (1958)

About one-third o f federal peacetime agencies were created before 1900, and another third before 1930. The first was established by the A ct of July 31, 1789, to “ estimate the duties payable” on imports and to perform other related duties. The second agency to be given the power of adjudication was established by the President, pursuant to a statute o f September 29, 1789, providing for military pensions for “ invalids who were wounded and disabled during the late war,” to be paid “ under such regulations as the President o f the United States may direct.” From that day to this, Congress has been grinding out legislation creating new agencies and adding to their powers.

Administrative law existed long before the term “ administrative law” came into use. The firs t federal administrative k w was embodied • in the 1789 statutes. Further enactments, interpretations and practices gradually produced a whole body o f administrative law, until in 1893 Frank J. Goodnow published a book on Comparative Administrative Law, and in 1905 another book on Principles o f the Administrative Law of the United States....In 1911 Ernst Freund brought out a case- book on administrative law. But, as M r. Justice Frankfurter has

II. Also known as the Whyatt Committee Report.

pointed out, the work of Goodnow and Freund “ was for many years unheeded by bench and bar.”

In 1916 Elihu R oot in an address as President of the American Bar Association raade a statement that could hardly be improved upon with the hindsight o f nearly a half century later ; "There is one special field of law development which has manifestly become inevitable. W e are entering upon the creation of a body of administrative law quite different in its machinery, its remedies, and its necessary safeguards from the old methods of regulation by specific statutes enforced by the courts.... The necessities of our situation have already led to an extensive employment o f that method.,.. Before these agencies the old doctrine prohibiting the delegation o f legislative power has virtually retired from the field and given up the fight. There will be no withdrawal from these experiments. W e shall go on; we shall expand them, whether we approve theoretically or not, because such agencies furnish protection to rights and obstacles to wrong doing which under our new social and industrial conditions cannot be practically accomplished by the old and simple procedure o f legislatures and courts as in'the last generation.” In his clarity o f perception, Elihu Root may have been a generation or more ahead of other leaders of the bar. A t the same time he uttered, important words o f caution : “ If we are to continue a government o f limited powers, these agencies of regulation must themselves be regulated....The rights o f the citizen against them must be made plain. A system of administrative law must be developed, and that with us is still in its infancy, crude and imperfect.” Unfortunately, leaders of the bar for the most part rejected this wise counsel. Emotional resentment against the rise of administrative power gradually welled up. The desire was to kill the agencies, using whatever weapon would most effectively get the deed done— invoke the separation o f powers theory to forbid combination o f legislative, judicial, and executive functions, or use the non-delegation doctrine to prevent a grant of power to the agencies, or require by statute a de novo judicial review o f administrative action. The growing antagonism of the bar toward the administrative process was unmistakable. But Congress and the state legislatures went right on , increasing administrative pow ers..

Then came the N qw Deal. New agerlcies flew tJiick ancl fast. General Hugh Johnson's NRi^seemingly regiilat 'd all economic life. The new SEC, according to some of the legal ^dvisets of corporations, made impossible the issuance or sale of ■ coipotatie securi )e; ,'':ex(tept


at the risk of huge personal liabilities. The NLRB seemed to many lawyers to decide every issue against the employer, stepping in to assure that labor organizers would win victories over employers who were only trying to live peacefully and keep their employees satisfied without outside interference. A host of other agencies were thorns in the sides of businessmen. If before the N ew Deal the antagonism toward bureaucracy was fast reaching the breaking point, the reasons for alarm had now been multiplied many times.

Opponents of the administrative process usually paid little heed to the view that the agencies were administering constructive programs. Many o f them did not care whether the investor was now for the first time effectively protected against fraud in the sale of securities, or whether the workingman was enjoying something in the nature of an equality of bargaining power; indeed, animosity toward the NLRB was usually intertwined with a belief that the working man had been given a superiority of (bargaining position. The agencies— especially the SEC and the NLRB —were for most lawyers becoming the symbol of an obnoxious poUtical philosophy which was fast destroying freedom.

The American Bar Association went into action. In 1933 it appointed a special committee on administrative law, which in 1934 began a series of annual reports : “ The iudicial branch of the federal government is being rapidly and seriously undermined... The committee naturally concludes that, so far as possible, the decision of controversies of a judicial character must be brought back into the judicial system” ....In 1938 the committee, this time headed by Dean Roscoe Pound, reported “ ten tendencies’ ' o f administrative agencies— to decide without a hearing, to hear only one side, to decide on evidence not produced, to make decisions on the basis of preformed opinions and prejudices....

In 1937 came the report o f the Presidents’ Committee on A d ministrative Management: “Commissions...constitute a headless fourth branch' of the Government, a haphazard deposit of irresponsi

ble agencies and uncoordinated p o w e rs ...P re s id e n t Franklin D. Roosevelt praised this report in submitting it to Congress : “ I have examined this report carefully and thoughtfully, and am convinced that it is a great document of permanent importance....”

Acting on what may have been sounder advice than that of the Committee on AdiBinistrative Management, President Roosevelt on B’abfiiary 16, 1939, requested the Attorney General to appoint a

18 INDIAN ADMINISTRATIVE LAW [ CHAPTER I

SECTION 2 ] INTRODUCTOR Y 19

committee to investigate the “ need for procedural reform in the field of administrative law.” A committee of distinguished practitioners, judges, and professors was appointed, which set about its tasks in scholarly fashion. It went after the facts. Its staff interviewed administrative officers, subordinates in the agencies, and practitioners who had had cases before the agencies. A detailed monograph was written on each agency, submitted in tentative form to the agency, and the committee and the agency then discussed the problems raised. Thereafter the committee held public hearings to receive opinions concerning the descriptions o f procedures and the criticisms in the monographs. An elaborate report was finally prepared, which, with its appendices, fills 474 printed pages. This report together with the monographs on which it is based, is still a primary source of information about the federal administrative process ; even though it is out o f date, no new comprehensive study has penetrated so far....

On some points the Attorney General's Committee rendered majority and minority reports, both o f which proposed legislation. Several bills embodying these proposals were introduced in the congressional session of 1941, and hearings were held. The war cut off further efforts until 1944, when new bills were introduced and new hearings held. The Administration and the American Bar Association forces finally compromised, and the result was the enactment in 1946, by a unanimous vote in both Houses, of the Admini^tr.aiiyj?_Procedure_^t (A P A ).

The major effects o f the A ct were to satisfy the political will for reform, to improve and strengthen the administrative process, and to preserve the basic limits upon judicial review of administrative action. The American Bar Association had fought for the propositions that “ the decision of controversies must be brought back into the judicial system," that “ life tenure should be assured to all who are to exercise judicial functions,” that “ administrative absolutism” stems from Marxism, and that the administrative process should be crippled through the W alter-Logan measure; but the Association was apparently reasonably satisfied with the APA* even though it transferred no power back to'the courts, did not substantially increase judicial review, continued the system of adjudication by those enjoying no life tenure, improved the administrative process insteg^d o f weakening or crippling it, and in general gave assurance i& ft further efforts to cripple the power of the ageticies w;ouId be ukilto succeed. The battle over fundalnentals had cgasSfd. The administrative process seemed secute,

A fter the enactment of the A P A a period of relative tranquilHty set in. Judicial interpretations of the A P A were generally sympathetic to its purposes, and the A c t ’s middle positions seemed to satisfy the former partisans on both sides. The courts kept on grinding out refinements of administrative law, both under the A ct and apart from it. The pace of law development seemed to be decelerating. The

■ 1949 report of the Task Force on Regulatory Commissions, of the first I H oover Commission, was based upon careful investigation but led to no recommendations for drastic changes in adjudication, rule making, or related activities: “ The independent regulatorycommission is a useful and desirable agency..." In 1955 came the report o f the President’s Conference on Administrative Procedure, which had been appointed in 1953 to inquire into the narrow subject of “ unnecessary delay, expense' and volume of records in some adjudicatory and rule-making proceedings.” The report was mild and helpful and, except for the troublesome problem of status of hearing officers, mostly noncontroversial.

In the post-APA period, the calm waters were first stirred by the Task Force of the second H oover Commission, which reported in 1955. The point of view was one o f consistent distrust o f the agencies; many of the recommendations were extreme and some of them seemed ill-considered. The H oover Commission itself refused to adopt the sweeping recommendations of its Task Force; only three members of the twelve-men Commission gave unqualified support to the recommendations to amend the A PA , and six members said: “W e did not vote for these recommendations because oftheir possible consequences and possible increase in the expenditures of the Government.” The ICC Practitioners’ Association appointed a Committee of One Hundred, which brought in an elaborate report adversely criticizing nearly every recommendation of the Task Force.

Attorney General Herbert Brownell said o f the Task Force recommendations to amend the A P A : “ These changes would substantially ‘judicialize’ the administrative process, with disastrous results CO efficient and effective government... These proposals are unsound, unworkable, and so costly that they should be rejected..,. T o summarize, it seems plain to me from my study o f this group o f Commission and Task Force proposals that, far from achieving the Commission’s objectives of attaining economy, efficiency, and improved service in the transaction of public business, these proposals would do exactly the contrary.”


The position o f the chief legal officer of the conservative administration seemed to doom the Task Force proposals- But the American Bar Association's Special Committee on Legal Services and procedure .stepped in. During 1956 it proposed a new Code o f Administrative Procedure, adopting some of the Task Force recommendations and rejecting or toning down others. The proposed Code was much more carefully drafted than the Task Force recommendations, and at this writing the question of adoption, rejection, or modification is an open one. The proposals are numerous and complex; some of the major ones include; (1) a prohibition o f off-the-record consultation of deciding officers with technical advisers or assistants; (2 ) a provision that an agency member or hearing commissioner who presides at the taking of evidence shall be disqualified to participate in agency review of an initial decision ; (3 ) a requirement for most adjudication that rules o f evidence “ shall conform, to the extent practicable, with those in civil nonjury cases in the United States district courts” ; (4) a provision making a presiding officer’s findings of fact final unless the agency deems them clearly erroneous on the whole record ; (5 ) judicial review o f “ every final agency action for which there is no other adequate remedy in any court” ; and (6) with respect to judicial review o f findings o f fact, substitution o f the “ clearly erroneous” rule for the “substantial evidence” rule.

In general, developments in state and local governments have been somewhat slower than those in the federal government- As long ago as 1930 the Governor o f N ew York appointed Robert M . Benjamin as a commissioner “ to study, examine and investigate the exercise of quasi-judicial functions” by administrative agencies. The report, Administrative Adjudication in the State of New York, came in 1942. It was to N ew Y ork State what the report o f the Attorney General’s Committee was to the federal government— a thorough, painstaking, detailed examination o f the manner in which administrative power was being exercised, and an inquiry into possible alternative methods. Other states sponsored investigations, the American Bar Association through its committee studied state administrative law, and finally the National Conference of Commissioners on Uniform State Laws promulgated a M odel State Administrative Procedure A ct. By 1957 at least thirty-two states had enacted legislation dealing with one or more o f the three main subjects of adjudication, rule Qiakiiig, aft( judicial review. Y et only about ten states had conigreheiisi^elegislation covering all three subjects. M ost of the state le^sl# idn is limited to the state level and does not reach municipal .and other local


administrative action. Much constructive work remains to be done. Federal administrative law, whose development in general is much more refined than that of the states, furnishes a useful guide and much facihtates the solution of state and local problems. In addition, various studies of individual states should be useful for all states.


India

Virtually till the end of British Rule in India, the Governmenri was concerned only with the most primary duties and even though at a later stage it did take up some functions o f a welfare nature they were not discharged on a comprehensive and efficient basis.^ A general survey, of the Indian legislation from 1834 to 1939 would amply justify this statement. Till 1918, the British Government was primarily concerned with the collection of revenue and discharging most simple and elementary functions while neglecting those which were regarded even in the age of laissez faire as essential duties o f a government.^® Government regulation somewhat increased after 1919. There were several reasons responsible for this development, “ The political changes of 1919 inevitably resulted in a quickening of activity in such matters as Agriculture and Research: Labour legislation, the affairs of Indians overseas, and the enquiries' of the League of Nations and the International Labour Organisation...[became] prom inent; revisions o f tariffs in pursuance of the policy of discriminating protection to industries, intervention in specific industries (e. g., cea, lac, rubber and coffee) and the development of commercial intelligence ...received increased attention ; new subjects...[came] to the front in connection with publicity, broadcasting, civil aviation, the Indian Stotes Department and the Public Service Commission....

A detailed and comprehensive study of the growth o f governmental regulation and administrative agencies will need a separate work. Here, certain broad trends may be noted during the period 1834 to 1939,1939 co 1947, and. thereafter.

1«34-I939

Some of the areas in which governmental regulation manifested itself during this period are : (i) public safety, health and morality,

12. See Roy, Civil Service in India 10 (1960).13.14. Report o f the Government o f India Secretariat Committee 3 (1937).

(ii) transport, (iii) labour, and (iv) trade and business (economic regulation).

Public Safety, Health and Morality

In this area, the government regulation generally took the form of prohibiting the carrying of a particular activity v^ithout a licence or permission. The Sarais A ct, 1867, required registration of the sarais with the District Magistrate who could refuse to register a sarai if the owner failed to produce a prescribed character certificate. The Arms A ct, 1878, prohibited the manufacture trade, and keeping of arms, without a licence. Similarly, the Indian Explosives A ct, 1884, empowered the government to regulate or prohibit by licensing all aspects o f trade and traffic in explosives. The Indian Petroleum A ct, 1899, prohibited, without a licence, the keeping or transportation of dangerous petroleum beyond a certain quantity. The Indian Boilers A ct, 1923, regulated the use of boilers, and banned their use without registration. A hierarchy of officers with regular appeals from one to the other was created under the A ct. Thus, from an order o f the Inspector, appeal lay to the Chief Inspector, and a further appeal to an Appellate Authority. The courts were barred from reviewing the orders o f these bodies.

Public health was largely a neglected subject during the British administration in India. H owever, out o f the few A cts enacted in the area, the following may be noted from the administrative law point o f view. The Opium A ct, 1878, prohibited the tr.ade and traffic in opium without the permission of the local government. Similarly, the Dangerous Drugs A ct, 1930, regulated the cultivatioUj production, import and export o f certain dangerous drugs, like coca leaf, hemp and opium, etc. The Epidemic Diseases A ct, 1897, empowered the government to take such measures as may be necessary to prevent the outbreak or spread o f dangerous epidemic diseases. The Indian Medical Council A ct, 1933, created the M edical Council of India for recognizing medical qualifications granted by medical institutions with a view to establishing a uniform minimum standard of higheir qualifications in medicine.

In connection with public morality,, tw o A cts lEay be noted The Dramatic Public Perfotmance A ct, 1876, authorized the loc^l government to prohibit a dramatic; perforinance in a particular axem without its licence. The Cinematograph A ct, 1918, provided far the licensing of cinema and the exhibition o f only such films as had heen certified by the prescribed authority.


Transport

The government regulation of transport was mainly from the point o f view o£ public safety, though as regards railways and tramways, some further regulation was necessitated because o f their being public utility services.

The Stage Carriage A ct, 1861, prohibited the plying of stage carriages without a licence from a magistrate or the commissioner of police. The licensing authority could refuse to issue a licence if it was of opinion that the “ stage carriage is unserviceable or is unsafe or unfit for public accommodation or use.”

“The first motor vehicle was imported into India in 1898,” ® and the first-all India statute on motor transport was the Indian M otor V ehicles A ct, 1914, It was a short enactment o f 18 sections, and provided, alia, for the Hcensing of drivers and registration of vehicles and empowered the local government to make rules for regulating the construction and equipment of motor vehicles, etc. The M otor Vehicles A ct, 1939, introduced a comprehensive regulation o f motor transport, “ State Transport and Regional Transport Authorities were set up for the first time to issue permits. The District Superintendent o f PoHce, who bad till then been the licensing authority, found his place in the scheme o f things as the Secretary o f the Regional Transport Authority in many of the States. The A ct laid down an elaborate procedure and prescribed conditions which should be taken into consideration while considering the issue of permits. Passenger buses which had often been free hitherto to move from place to place were now confined to certain routes under provincial rules which were framed under the A ct. Bus stands were notified and time-tables specified. Thus, for the first time, passenger transport came to be provided with a certain amount of regularity....Ill regard to the carriage of goods the A ct for the first time imposed restrictions on the free transport of goods. Permits were valid for a region and countersignatures were required for plying beyond the region o f origin. Discretion was given to the licensing authorities to limit the number of permits, one o f the factors influencing their discretion being the need to protect the railways from what was regarded as ‘unhealthy’ competition.


15, Report o f the Road Transport Reorganisation Committee 11 (1959).16. Id, aXn-2.

SECTION 2 ] IN TRO D UCTOR Y 25

■ The first railway-line in India was built in 1853 from Bombay to Thana, a distance of twenty-one miles. The railways were developed under a system of guarantee under which the Central Government guaranteed to the railway companies, an interest of 4 to 5% on their capital outlay. The system led to extravagance in the construction o f railways. “ The railroads, in addition to serving the needs of the articulate and politically important English trading firms, both in India and in England, were planned and operated to facilitate the prompt movement of troops and military supplies to trouble spots, and food grains and other assistance to famine areas. These requirements led in some cases to commercially uneconomic trackage; and such were the costs of construction and operation that by 1900 losses to the government were over $ 250,000,000."^* The main purpose the government had in view in the construction of railways was not so much the economic development, but its own efficiency, and this is also reflected in the government regulation of the railways. The India Railways A ct, 1890, ® though providing for inspection o f railways and certain other matters, however, regulated the regulation of the railway rates, “ Though, even as early as 1854, the Railway and Canal Traffic A ct of England provided for protection against abuse of its monopolistic power by the railways and the subsequent Acts of 1873, 1884 and 1888 provided for the creation o f machinery to determine complaints of undue preference, and reasonableness o f rates per se; it was not before 1890, however, that Indian railways were brought under a statutory obligation to treat all consumers alike and to provide for some machinery to hear and dispose o f complaints. But the Indian Railways A ct, 1890 departed substantialJy from the British legislation. UnHke the British machinery, the machinery proposed for India was neither permanent nor mandatory: nor had its jurisdiction wide enough to include reasonableness of rates per se. The A ct of 1850 provided for the setting up of an ad hoc Railway Commission, consisting of one Law Commissioner and two lay Commissioners, to hear complaints only about traffic facilities and unreasonableness or otherwise o f rates. The Commission was to take cognizance of such cases as might be referred to them by the Governor-General- in-Councii. N o better comment can be made on the machinery proposed in the A ct than to mention the fact that the Cominiss|©» was never set up, even though provision for it continued to ,exis| oh

18. Myers. Industrial Relations in India 27 {19SB,),19. The earlier Acts were the Railways Act. 1SS4, the

Act, 1879.

the statute book up to 1937.” “*’ In 1926, the government established the Railway Rates Advisory Committee which could take cognisance only o f such complaints as were referred to it by the government. "Furthermore, the Committee was to deal with certain types of complaints of undue preference and unreasonableness of rates; the classification of goods as such was outside its purview/ Even this committee did not work satisfactorily.'^^

Shipping by its very nature is a highly competitive industry but excessive competition therein results in combination and monopoly. To avoid cut-throat competition the shipping companies have attempted to enter into agreements, pools or conferences. W hile legislative and other actions were taken by the governments in other countries to control monopoly shipping and unfair practices, nothing was done in India during the British rule^® to encourage Indian shipping.^^ The Indian Merchant Shipping A ct, 1923,^’ was essentially a safety measure and provided, inter alia, for the licensing of officers of a ship and prohibited a steamship from carrying more than twelve persons without a survey certificate. The A ct did not provide for registration o f the ships which had to be registered under the British Merchant Shipping A ct, 1894, which applied to India as

Labour

The first A ct to create an administrative machinery to adjudicate on labour disputes was the Employers and W orkm en


20. Amba Prasad, “ The Railway Rates Tribunal,” 4 Indian Pub. Adm. 79-80 (1958).

21. Id, at 81.22. See id. at 81-82. The long felt need for the creation of Railway Rates

Tribunal was fulfilled only in 1949 by an amendment of the Indian Railways Act, 1890, by the Indian Railways (Second Amendment) Act, LXV of 1948, section 3.

23. See Srivastava, Transport Development in India 368 (1960); Transport in Modern India 426-27 (Bhatnagar, Satish Bahadur, Agrawal, Gupta ed. 6th ed.l961),

24. Ibid.25. The Act consolidated certain earlier enactments on the subject.26. It is only the present Merchant Shipping Act of 1958 which makes provision

for a comprehensive regulation of shipping with a view to develop and ensure the efficient maintenance of Indian shipping. The Act provides for registration and survey of a ship and licensing of its officers. It creates a National Shipping Board to advise the Central Government on matters relating to Indian shipping including its development. The Act requires the licensing of Indian ships and reserves coastiog trade for them by providing that "no ship other than Indian ship.,..shall engage in coasting trade of India except under a licence granted by the Director-General.”

(Disputes) A ct, 1960, which was enacted not with a view to benefit the labour but to help the expeditious execution o f sanctioned public works and the construction o f railways. It empowered the government to invest any magistrate with power to decide wage disputes (up to Rs. 200/-) of workmen employed in constructing any railway, canal or other public work. The draconian character of the A ct is obvious from the fact that it provided that if a person, who was engaged in the construction of the above work, refused to work, he could either be fined or ordered to perform the work by a magistrate. In case the worker refused to obey this order, he could even be imprisoned. The A ct was repealed in 1932.

In 1929 was enacted the Indian Trade Disputes A ct. This was a half-hearted attempt to settle industrial disputes. It provided for reference o f disputes by the government to a court of inquiry or the board o f conciliation. The major defect of the A ct was that the parties to the dispute w^ere not obligated to accept the recommendations contained in the report of the court or the board. N ot much use was made of this machinery. “ [I]t is a sad commentary on the want o f public sense o f the Indian Government as constituted under the old administration that the Government... remained rather indifferent to this utilisation o f this machinery. M ore than 500 disputes occurred in India during the period 1929-1933,but only tw o Courts o f Enquiry and tw o Boards of Conciliation were appointed by the Government; and between 1928 and 1936 although there were altogether eleven instances in which settlement was reached by conciliation or arbitration, only three of them related to cases where action was taken by the Provincial Governments under the Trade Disputes A ct. A nd be it said to the credit o f the new Congress Provincial Governments that within less than a year o f their assumption of office they appointed in the case of at least fifteen disputes Committees o f Enquiry and Boards o f Conciliation, roost o f them under the Trade Disputes A ct; and rhe results of the appointment of these independent tribunals in the various Provinces have been literally remakable-” ^

There were other A cts which created an administrative machinerSr to adjudicate on certain disputes between the employer and employee. Under the W orkm en’s Compensation A ct , 1923 ; a

" ................................... - ......................... ' - ------- ------------- -------------------------^ ----------

27. Boo! Chand, “Industrial Disputes,” in Indrntrial (P.C. Jain ed. 3d ed. 195J). The jBdusirial D i s p u t e s : h a s provisions for the settlement and adjudicatiojj o f inditstriial


commissioner to be appointed by the government for a local area was empowered to adjudicate on disputes relating to workmen compensation. The jurisdiction of the civil courts was barred in such matters. The Payment o f W ages A ct, 1936, gave power to “ appoint any Commissioner of W orkm en ’s Compensation, or other officer with experience as a judge of a civil court or as a stipendary Magistrate to be the authority” to hear and decide disputes relating to payment of wages. An appeal lay to the court against the order o f the authority directing the employer to pay the wages or the deductions made from the wages.

The Factories A ct, 1934,“® and the Indian Mines A ct, 1923, were enacted with a view to regulate the conditions o f work including the safety o f labour inside the factories and mines. The primary administrative machinery created to enforce these A cts consisted of the inspectors, though the Mines A ct, in addition, made provisions for the construction of the Mining Boards and Committees for the purpose of deciding or reporting upon any matter referred to these bodies.

Economic Regulations

Since the British Government in India was not much interested in the economic development of India, except insofar as it benefited England or her industries, the regulations pertaining to the economic life of India were very few.

Before the Second W orld W ar, tariffs were the main device to afford protection to indigenous industries all over the world. But in India ‘‘ the fiscal policy of the government of India remained based upon free trade principles down to 1923. If higher levels in tariff rates were adopted, they were adopted for purely revenue purposes.’ ' ® After 1923, the government adopted the policy o f “ discriminating” protection of a halting character. The first Fiscal Commission of 1921 recommended the creation of a permanent Tariff Board to investigate the claims of different industries. Instead, the government appointed ad hoc boards, and the first such board was appointed

28. The first Indian Factories Act was enacted in 1881 followed by the Factories Acts of 1891 and 191L The current Act is the Factories Act, 1948.

29. Wadia & Merchant, Our Economic Problem 496 (1959). For a brief historical survey of the customs duties in India, see the Report of the Customs Reorganisation Committee 5-7 (1957-58). The customs duties are levied under the Indian Tariff Act, 1934' , The earlier all-India statutes were the Tariff Acts of 1875, 1882 and 1894.


in 1923 to inquire into the claims of the iron and steel industry for protection.®*^

The Indian Companies A ct was enacted first in 1850 which was followed by several Acts. Then the Companies A ct, 1913, was enacted. This A ct did not provide for much of government interference in the affairs o f a company. The underlying idea was to attain only a limited objective, namely, creation of a limited liability of the shareholders. Registrar was the pivot of the administrative machinery under the A ct. The idea o f controlling a company to fulfil its economic and social responsibility towards its shareholders (both majority and minority) and the country had not yet developed.®^

The Reserve Bank of India Act, 1934, created a Reserve Bank of India to regulate the issue o f bank notes and to keep the reserves of the scheduled banks with a view to securing monetary stability in the country and “ generally to operate the currency and credit systems of the country to its advantage.” A t that time the Bank did not exercise much control over the commercial banking in the country. The A ct required the scheduled banks to keep cash reserves (amounting to certain percentage of their liabilities) with the Reserve Bank, and to furnish a return pertaining to certain matters- The government was given power to exclude a bank from the schedule if it had gone into liquidation, ceased to carry on banking business, or its capital and reserves fell below five lakhs rupees

The government evinced some interest in regulating such commo-' dities as cotton, tea and rubber. The Cotton Transport A ct, 1923, was passed with a view to maintain the quality and reputation o f the long staple cotton grown in certain areas- For this purpose, the local government was empow'ered to prohibit the import o f cotton into that area without a licence.

“ The year 1932-33 was one o f the worst for the tea industry. In addition to the worldwide depression, there was considerable overproduction, with the result that producers o f tea all over the world were faced with declining prices and accumulation o f stocks"^®® Consequently, the Indian Tea Control A ct, 1933, was enacted with a

30. It was only in 1931 that the Tariff Commission Act was enacted wMcJi provided for the creation of a permanent Tariff Commission to investigate into various matters pertaining to protection of industries and to re^rt thereoin tO : tii©' Central Government.

31. See infra.32. See infra.33. Wadia & Merchant, op. cit.


view to control tea exports and the extension o f tea cultivation. It created the Indian Tea Licensing Committee to issue export licences for tea and to permit its cultivation on new land. The duration of the A ct was limited to March 31, 1938. Consequently, a new statute, the Tea Control Act, 1938, was enacted having STibstantially the same provisions®'*

Like tea, there was over-production of rubber also before the Second W orld War. Consequently, the Indian Rubber Control Act, 1934 was enacted on similar lines as the Tea Control A ct of 1933. A Rubber Licensing Committee was created to issue export licences and to permit cultivation of rubber plants on new land.^®

1939-1947

The executive assumed vast powers during the Second W orld W ar. Section 2 of the Defence of India A ct, 1939, empowered the Central Government “ to make such rules as appear to it to be necessary or expedient for securing the defence of British India, the public safety, the maintenance o f public order or the efficient prosecution of War, or for maintaining supplies and services essential to the hfe of the comm,umty." The scction thus conferred on the Central Government practically an uncontrolled and unfettered discretion to do anything it wanted. The Defence of India Rules, 1939, were promulgated under section 2 of the Act. Through the rules, the government took vast powers to interfere with life, liberty and property of an individual. Innumerable orders were issued under the Rules. In addition, the government promulgated a number of ordinances to cover several matters. It is not possible here to survey the vast administrative mechanism and process that grew as a result of the war. Taking only the area of control of essential commodities, the following extract will give an idea of the depth o f governmental regulation.

30 INDIAN ADMINISTRATIVE LA W [ CHAPTER 1

34. The control over tea is now governed by the Tea Act, 1953, which creates a Tea Board. The functions of the Board are to issue export licences, permit cultivation of tea on new land and to promote the development of the tea industry.

35. The Second World War, however, saw the shortage of tubber and a Rubber Production Board was set up with a view to encourage the production of rubber. The rubber industry is now governed by the Rubber Act of 1947. The Act creates a Rubb<;r Board to promote the development of rubber industry, to advise the govern- nient on imports and exports of rubber, to recommend fair prices, etc. Its other functions are to issue general or special licences for the sale and purchase of rubber, and special licences for planting or replanting of rubber. An appeal lies from the order of the Board to the Central Government refusing to issue or renew or revoking a special licen.ce.

THE INDIAN LAW INSTITUTE, ADMINISTRATIVE PROCESS UNDER THE ESSENTIAL COMMODITIES ACT

11-22 (1964)

Defence of India Rule 81 (2) left practically an unlimited discretion in the government to control commodities in all possible ways. The rule was in no sense more articulate than S. 2 (1) o f the Defence o f India A ct under which it was made. A spate o f orders were issued by the Central and Provincial Governments under the rule and an elaborate system of control of commodities was built up in the country during the war period- These orders placed restrictions on various facets o f trade and commerce in specified commodities. They conferred discretionary powers on administrative authorities and gave rise to administrative process on a large scale, salient features of which may be noted here..,..

The wartime commodity control policy led to a great proliferation o f administration; a huge administrative apparatus was developed to administer the various control measures. T o start with, the powers of regulation and control acquired by the Government o f India under the Defence o f India A ct were administered through the Commerce Department. A s the war progressed, the food position became more and more difficult necessitating Central control on food. So, the Food Department was set up in December, 1942, to take over from the Commerce Department the task o f controlling prices, supply and distribution o f foodstuffs. Thus was formed the necessary Central unit to coordinate the various measures to solve the food problem. In course o f time, prices o f other commodities also started soaring sky- high, resulting in untold hardships to the ordinary consumers. To hold and bring down the price line, a new Department of Civil Supplies and Industries was created by the Central Government early in 1943. The Department sought to grapple with the problem o f price control o f many essential commodities like cloth etc. The major responsibility for commodity control thus came to be shared amongst three ^ epartments o f Commerce, Food & Civil Supplies. Subject to the overall control o f the Government Departments, a number o f

administratiye officers were appointed to deal with problems o f coattpol o f specific commodities....

Powers varied from officer tc> ofScer depending on the exigencies o f the com m odity to be controlled. Fqr example, the W heat Commissioner was only a sort o f permit-issuing officer to control inter-provindal m owm ents o i 'wheat, while the Sugar Controller

SECTION! ] INTRODUCTORY 3i

had more extensive powers, like power to requisition stocks and fix ex-factory prices etc.

A large number of restrictions and inhibitions came to be imposed on carrying on of trade and commerce. Vast discretionary powers were conferred upon the administrative officers, without any standards or safeguards for the interests affected, to control various aspects of trade and commerce, inter alia, production, consumption, distribution, prices, and movement of commodities. Besides, a large number of restrictions and limitations were imposed upon traders in specified commodities stating what they must do, or what they must not do. In most of the orders, there were neither adequate standards nor tests to control administrative powers or exercise of discretion by the executive, nor provisions to protect and safeguard the interests of the producers, dealers, purchasers and sellers of controlled commodities against misuse, or an improper exercise, o f power by an administrative officer. In fact, no semblance of administrative procedure was laid down in a large number of orders and everything was left to the discretion of the administrative officer concerned.

Power was conferred through various orders upon various administrative authorities to grant licences or permits to the producers, dealers, purchasers and sellers. The system of licensing was made use of on a very large scale and for different purposes, such as, to control production, distribution, sale, purchase, or storage of commodities. Out of 36 control orders surveyed for this study, 31 orders imposed some kind of licence, permit or written permission from an administrative agency for something or the other....

W ith the exception of only one order, no order mentioned the criteria which were to be kept in view by the licensing authority in granting licences. To take an example, under the Sulphate of Aluminia Control Order, 1943, the licensing authority could grant a registration certificate to a seller of sulphate of aluminium if it “ saw fit.‘* Similarly, only two orders mentioned the circumstances when the licence or permit could be refused; in all other cases the power was unqualified, so much so that the licensing authority was specifically authorised to refuse to grant a licence without assigning any reason under some control orders....

In no order, except one, procedure by way o f hearing the party aggrieved in case of refusal to grant, or revocation of, a hcence was specifically laid down. The only safeguard given to the party concerned, and that too only in a few cases, was that in case of


rejection o f an application for a licence, or cancellation or suspension of his license, the executive authority was required to record the reasons in writing. This, by itself, however, was a weak safeguard as there was no higher authority prescribed or going into and scrutinising the validity of such reasons. It was only in very few cases that a provision existed for making an appeal from one administrative agency to the other....

A characteristic feature of a large number of control orders introducing a system of licensing was to authorise the respective licensing authority to issue general or special directions to the licensees. The power was usually worded very broadly and no restrictions were placed on it. The licensee was placed under an obligation to observe these directions without having any remedy in case a direction was unjust, improper or unwarranted.,..

In a number o f cases, action taken or decision made by an administrative officer had been accorded a “ finality...."

In many cases, power was conferred on administrative authorities to grant exemption to any one from the operation o f any of the provisions o f the order; the authority granting exemption had practically full discretion as to the cases and circumstances in which this power could be used or as to the persons it could be applied to. In no order there was any indication as to the grounds on which exemption could be granted.,..

A safeguard found in some orders was in the provision to associate with the administrative officers concerned the representatives o f affected interests through an advisory committee, which could give advice to the officers concerned, regarding exercising of their powers thereunder. Several such advisory bodies were instituted. ..

Another notable characteristic feature o f the administrative procedures utilised to control essential commodities was an extreme reliance on delegation and sub-delegation o f legislative powers on the administrative authorities.... In the area of sub-'delegation, several tiers o f it were resorted to. Thus, the Defence o f India A ct empowered the Central Government to make Defence o f India Rules. These rules again empowered the Central Government and the Provincial Government to m^ke orders. These orders in fact fo rm ^ the bases of com modity cohtrqt as it was through them that detwle;!^ provisions were made regarding various aspects o f contrbls of commodities. Usually, one order referred to one commodity there were at times more than one order covering variOMis o f


the control of one and the same commodity. These orders further conferred important rule-making powers on administrative authorities, viz., to issue directions to licensees, to attach conditions to licenses, to make orders of a general or special nature.


1947 and AfterAfter independence, the government assumed new responsibilities

of v^aried sorts with a view to create a social service state. The implementation of a vast programme of economic and social reconstruction, with a view to promote the welfare of the people, has resulted in a great proliferation of the administration and in a tremendous growth of the administrative process. Consequently, many new governmental agencies have heen created, new areas of activity have been brought under governmental regulation and control and a number of public corporations and tribunals have been established, in addition to what had already come into existence prior to 1947.

The tremendous expansion in the governmental activity will be obvious from the fact that whereas in 1937 the Government of India consisted of fourteen departments®® and a few attached offices,®’ in 1953 there were thirty-seven ministries/departments and many attached offices.®® The Ministry o f Commerce and Industry alone had twenty-five attached offices besides having seventeen state undertakings and government corporations. One attached office, namely, the Chief Controller of Import and Exports had eleven regional offices at various places in the country apart from the headquarters at New Delhi, and employed more than 200 persons excluding classIV servants.®® During the six month period, October, 1961, to March,1962, the department received more than two lakh import applications and disposed of almost the same number.^® The applications are disposed of in the Chief Controller’s office in accordance with the policy announced beforehand. There is a regular hierarchy of administrative appeals. Judicial review is expressly excluded by the relevant statute.

36. The Indian Institute of Public Administration. The Organisation o f the Government of India 31 (1958).

37. During the period 1919-1937, only nine attached offices were created. Report of the Government o f India Secretariat Committee 59 (1937).

38. See the Government of India (Allocation o f Business) Rules, 1961, as amended up to March 21,1963.

39 Annual Administration Report o f the Import and Export Trade Control Organisation for the Year, 1961-62, ^X(A~65,

40. M a t71.

Space will not permit even a peripheral general survey of the growth of the administrative process from 1947 onwards. A few examples may, however, be noted here.

Taking up the area of labour, the Industrial Disputes Act, enacted in 1947, has made provision for setting up labour courts, industrial tribunals and national tribunals and thus create a system of administrative adjudication o f industrial disputes. Several industrial tribunals in different local areas have been established under the A ct. The A ct makes the award of a tribunal binding on the parties after it has been published by the government, thus removing one major defect in its predecessor, the Trade Disputes A ct o f 1929. A n important social security measure enacted in 1948 is the.^Employees' State Insurance A ct which provides for certain benefits to employees in cases of sickness, maternity and employment injury. For adjudication o f disputes and claims, the A ct provides for the creation o f administrative tribunals known as the Employees Insurance Courts for different areas. The Minimum W ag €s-A ct, 1948, empowers the government to fix minimum rates o f wages in certain employments. The A ct provides for a procedure to be follow ed by the government in fixing wages.

Another major area of post-independence governmental operation has been the regulation o f the economic sector. This is a manifestation of the feeling that political democracy would not mean much in a poor country like India if econothic conditions o f the people were not to improve. Lately, the country has accepted the ideal o f a socialistic pattern o f society which envisages econom ic development with social justice. This involves that government should itself establish certain industrial units o f its own and that there should be extensive governmental regulation of private enterprise so that it may be made to serve the social objectives in view, e.g., there is no great disparities o f income or wealth; that there is planned and not haphazard indus- trialization; that concentration of economic power is avoided and monopolies are not created and that the anti-social activities o f the private econom ic sector are minimized.*^

A s a means to plan the economic development 6f the country on sound and balanced lines and to implement tbe industrial policy o f the central government, the Industries (iPevelopijnent agd Regulation) A c t was enagted in 1951. Under tlie A ct, the government now possesses vast powers to regulate and control private enterprise,

41. T ft industrial poUcy : o f the GovBriMimt of dpwii in ftresolution o f 1956.


Thus the A ct requires the licensing and registration of industrial undertakings engaged in the manufacture or production of articles mentioned in the schedule to the A ct. The issue of a licence is discretionary with the government as the A ct lays down no conditions for the purpose. The government has power to make investigations into and take up the management of an undertaking if in its opinion it is being managed in a manner highly detrimental to the public interest. Then the government possesses a wide power to control the supply, distribution, price, etc., of an article if it appears to be necessary or expedient for securing the equitable distribution and availability at fair prices of the article. The only safeguard that the A ct provides for is the constitution of a Central Advisory Council which may be consulted by the government on any matter connected with the administration of the A ct. Provision has also been made for setting development councils with a view to establish the necessary liasion between public and private sectors and for insuring that private industries conform more and more to the planned pattern o f development. The A ct is one single important piece of econom ic development in legislation and is of special interest to lawyers as it is a legal and administrative innovation designed to facilitate economic development through a planned economy under democratic process. But it has generated a good deal of administrative process because it is a brief statute and leaves the details to be filled in from time to time within the policies of the administration.

A fter the Second W orld W ar, the Defence of India A ct, 1939, lapsed. But the control over the production, sale, distribution, etc., of the essential commodities was continued by the ^^sential Supplies (Temporary Powers) Act, 1946, which was kept alive till 1955 when the Essential Commodities A ct was enacted. The government has assumed vast powers under the A ct to regulate practically all aspects of a number of essential commodities. A number o f orders have been issued under the statute and a vast administrative mechanism has grown up to control all phases of trade and commerce^^ in the essential commodities.

The Companies A ct, 1956, is an omnibus piece o f legislation. It confers wide powers on the central government to control and regulate various aspects of company management. The government controls the formation and management o f joint-stock companies.

42. See The Indian Law Institute, Administrative Process under the Essential Commodities Act (1964).


and may investigate and inspect their affairs in order to ensure the maintenance o f a minimum standard of good behaviour in their management. The powers which the government has thus secured to control the private corporate sector have placed a tremendous responsibility on the government. If properly exercised, these powers can result in a lot o f public good; but if improperly exercised, they may stifle individual initiative and enterprise. T o mention only a few o f the vast powers vested in the governm ent in this respect: The government may direct special audit o f a company and may take such action on the audit repoi;t as it considers necessary in accordance with the provisions of the law. The government may appoint inspectors to investigate the affairs of a company suo motu in certain circumstances, or on the application o f certain number o f shareholders, or the report of the registrar or the order of the court. The inspector is empowered to extend his investigation into the affairs o f related companies or of the managing agents or their associates. On the basis o f the report, the government can prosecute the guilty officers and, on behalf o f the company concerned, also recover damages, by initiating proceedings in a court of law, for their misdeeds. Further, the central government may move for the removal o f persons managing the company before a tribunal constituted under the A ct,

T o prevent oppression or mismanagement by the persons who are managing the company, the government has power to appoint one or more directors for a period not exceeding three years. Further, the government can prevent a change in the board of directors from taking place if, in its opinion, such change will affect the company prejudicially.

The evils o f the prevalence o f the managing agents in the company management need not be mentioned here. The central government has wide powers under the A ct to control the managing agents. The government can specify the , classes o f industry or business which will not have managing agents on the companies. Further, the appointment and te-appointment of a managing agent is subject to the approval o f the government which is to accord sanction only if it is satisfied that such appointment is in public interest, that the managing agent is a fit and proper person to appointed and that the terms o f appointment are fair aiid reaspi^^He.

The A ct provides for the appointment o f 4'Advisory Commission by the central governmen^i to help it iil tiie

SEC TIO N !] INTRODUCTORY 37

discharge of its functions.^® Such a commission has been set up since 1956 with a full time chairman and members representing different interests, le .. trade and industry, accountancy, shareholders and labour. The commission has adopted several principles and criteria for disposal of various applications referred to it by the government. The commission is advisory in clferacter, yet a convention has been established that in all important cases where the views of the department differ from those o f the commission, the relevant issues will be referred to the minister-in-charge before a final decision is taken.^* In practice, the government accepts its advice in almost all cases.^ ’

The Board of Company Law Administration^® in the Ministry of Finance, set up from February 1, 1964, in terms o f section 10-E of the Companies (Amendment) A ct, 1963, is responsible for the administration of the Companies A ct. There are four regional directors at Bombay, Calcutta, Madras and Kanpur, who exercise various functions delegated to them by the government. Then there are the registrars who, besides registering certain documents o f the companies, perform a few other functions like inspections o f books, seizure of documents, reporting a case to the government, giving consent for extending the time to hold the annual general meeting, etc. Under section 638 of the Companies A ct, an annual report on the working and administration of the A ct is required to be prepared and laid before ParHament containing a detailed report or account o f the Board of Company Law Administration. For adjudication o f various disputes the Companies (Amendment) A ct, 1963, now provides for the creation of a tribunal known as the Companies Tribunal. It exercises and discharges the following powers: (1) Enquiry into cases against managerial personnel involving fraud, misfeasance and other such malpracticcs and irregularities in the management of

43. The Advisory Commission first came into existence under the Indian Companies Amendment Act, 1951, which was passed mainly to prevent trafficking in managing agency rights, cornering of shares with a view to acquire control of companies, etc. A new Advisory Commission was set up in 1956 when the present Companies Act came into force. The Third Annual Report on the Working and Administration o f the Companies Act A1 (1959).

44. The First Annual Report on the Working and Administration of the Companies Act 29-30 (1957).

45. Supra m tQ l.^ trn . See d.ko The Seventh Annual Report on the Working and Administration o f the Companies Act 59 (1963).

46. The Board has now statutory status: The Companies (Amendment) Act,1963, Before this the responsibility of administration of the Act was with Company Law Administration in the Ministry of Commerce and Industry.


companies and whose findings would enable the central government to remove such managerial personnel from office. (2) Powers and functions conferred on the court under sections 152, 203, 240, 297 to 407, which the central government may notify from time to time. It is a big task to explain the various powers which the government exercises over the corporate sector and the vast amount o f administrative process that is being created as a result thereof, an idea of this can be had from the following statistics during the year 1960-61: 7 investigations ordered under sections 235 and 237 of the A ct; 6588 prosecutions launched in various courts against 1009 companies and their officers for defaults under the A ct; 23 appeals were filed with the department under section 111 against refusal o£ registration or transfer o f shares; 2393 applications were considered under different sections enumerated in section 411 of the A ct and most of them were disposed o f in consultation with the Advisory Commission.

The amendments made to the Reserve Bank of India A ct, 1934, after 1947 give broad power of supervision and control over the commercial banking o f the country. The scheduled banks are required to maintain cash reserves o f the amount of certain percentage o f their demand and time liabilities. The Reserve Bank can vary this requirement from 3 to 15 per cent. This is a tremendous power since it has a direct impact on the banking credit of the country which may ultimately affect the economy o f . the country. The Reserve Bank has power to inspect a bank under section 35 o f the Banking Companies A ct, 1949, and if it is o f the opinion that the bank concerned is conducting its affairs to the detriment o f the interests o f its depositors it can be excluded from the schedule, which is bound to have adverse effect on the working o f the bank. The government has power even to order closure of a bank on the recommendation o f the Reserve Bank. In Vellukumel y. Reserve Bankf’ the Supreme Court has held that sections 38(1) and 3(b) (iii) o f the Banking Companies A ct, 1949, make the Reserve Bank the sole judge to decide whether the affairs o f a banking company arc being conducted in a manner prejudicial to the depositors' interests and the court has no option but to pass an order winding up the banking company when application is made by the Reserve Bank.

Import and export of commodities from and to foreign countlies is regulated by the Import and Export Control A ct. It is a Ijrief A ct and is the most skeletal o f all the econom ic deveisopmen^

47. AJ.R. 1962 S.C. 1371


in India. It creates a lot of administrative process as it works through a scheme o f licensing o f imports and exports. There are a number of regional offices of the Chief Controller o f Imports and Exports and every year nearly four lakh import applications have to be processed.

India has not yet reached the optimum of governmental regulation of economic affairs. In course of time, new and new regulatory measures are going to be adopted. As for example, there is no law yet against government monopolies. A directive principle in the Constitution enjoins against concentration o f economic power and means of production. A commission has already been appointed to look into the matter and suggest a law for the purpose.

The Requisitioning and Acquisition of Immoveable Property A ct, 1952, authorizes the central goverment to requisition private immoveable property for “ purposes of the union” which term is not defined in the statute. A large amount of discretion has thus been vested in the government to take private property for a purpose deemed necessary by it. Under the Preventive Detention A ct, 1950, the executive possesses a wide power to deprive personal liberty by detaining persons on its subjective satisfaction o f certain matters.

In the post-independence era, many new and varied kinds of taxes have been imposed by the central government resulting in vast amount of administrative process. The conspicuous examples are the estate duty, wealth tax, gift tax, sales tax and excise duty. W ith the rise in incomes, the income tax now covers many more people than in the past. The Indian Income Tax A ct, 1961, establishes an elaborate machinery for the assessment of income tax payable by a person. The initial assessment is made by an Income Tax Officer. A n appeal lies to the Appellate Assistant Commissioner from his decision. There is provision for further appeal to the Appellate Tribunal which is the final body to determine questions of fact. The Appellate Tribunal is under the control of the Ministry o f Law which ensures its independence from the tax collecting department (the Central Board of Direct Taxes in the Mininstry of Finance). Provisions exist for reference of questions of law to the High Court and the Supreme Court. The estate duty, the wealth tax and the gift tax also follow the same common pattern.


SECTION 3. CLAIMS FOR THE CRITICISM OF THE ADMINISTRATIVE PROCESS

SECTION 3 J INTRODVCTOR Y 41

MARKOSE, JUDICIAL CONTROL OF ADMINISTRATIVE ACTION IN INDIA5-6 (1956)

Realisation dawned in many quarters that in the name of efficiency and quickness the rights of individuals could be arbitrarily taken away by conferring powers on the executive without any definite limits or clear rules of procedure. Learned Judges both in England and in America did express themselves on the objectionable aspects of this development from time to time. The Supreme Court o f the United States o f America stated that the grant o f large unspecified powers to the Government is incompatible with the rule of law. It was felt that the words of Dicey, that the rule of law meant in the first place the predominance of regular law as opposed to the influence of arbitrary powers and excluded the existence of arbitrariness, o f prerogative or even of the wide discretionary authority on the part o f the Government had not lost their value. The Committee on Ministers’ Powers declared that

“ no considerations o f administrative convenience or executive efficiency should be allowed to weaken the control of the Courts and no obstacle should be placed by Parliament in the way, of the subjects’ unimpeded access to them.”It was pointed out that uncontrolled power was apt to be abused.

The tendency o f the administration to adopt arbitrary ways became rather clear.

It is not surprising that under the circumstances these administrative organs should beget alarm in some and satisfaction in others. There arose scathing critics and doughty defenders o f the system.

HAYEK, THE ROAD TO SERFDOM70-83 (1944>

Dem ocracy is essentially a means, a utilitarian device for safeguarding internal peace and individual freedom. As such it is by no means infallible or certain.... The clash beitween planning and" democracy arises simply from the fact that thelatter i s o b s t a c l e to the suppression of freedom which the direction of: economic activity requires. But in so far as democracy ceases to; fee a iu^iaiitee

individual freedom, it may well persist in some form under a totalitarian regime. A true “ dictatorship of the proletariat,” even if democratic in form, if it undertook centrally to direct the econom ic system, would probably destroy personal freedom as com pletely as any autocracy has ever done.

The fashionable concentration on democracy as the main value threatened is not without danger. It is largely responsible for the misleading and unfounded belief that, so long as the ultimate source of power is the will of the majority, the power cannot be arbitrary. The false assurance which many people derive from this belief is an

'important cause of the general unawareness o f the dangers which we face. There is no justification for the belief that, so long as power is conferred by democratic procedure, it cannot be arbitrary; the contrast suggested by this statement is altogether false: it is not the source but the limitation of power which prevents it from being arbitrary. Democratic control prevent power from becoming arbitrary, but it does not do so by its mere existence. If democracy resolves on a task which necessarily involves the use o f power which cannot be guided by fixed rules, it must become arbitrary pow er.,..

There can be no doubt that planning necessarily involves deliberate discrimination between particular needs of different people, and allowing one man to do what another must be prevented from doing. It must lay down by a legal rule how well o ff particular people shall be and what different people are to be allowed to have and do. It means in effect a return to the rule of status, a reversal of the “ movement of progressive societies” which, in the famous phrase of Sir Henry Maine, “ has hitherto been a movement from status to contract.” Indeed, the Rule of Law, more than the rule of contract, should probably be regarded as the true opposite o f the rule o f status. It is the Rule of Law, in the sense o f the rule of formal law, the absence of legal privileges o f particular people designated by authority, which safeguards that equality before the law which is the opposite of arbitrary government....

To say that in a planned society the Rule o f Law cannot hold is, therefore, not to say that the actions of the government will not be legal or that such a society will necessarily be lawless. It means only that the use of the government’s coercive powers will no longer be limited and determined by pre-established rules. The law can, and to make a central direction o f economic activity possible must, legalize what to all intents and purposes remains arbitrary action.

INDIAN ADMINISTRATIVE LAW [ CHAPTER 1

If the law says that such a board or authority maj" do what it pleases, anything that board or authority does is legal— but its actions are certainly not subject to the Rule of Law. By giving the government unlimited powers, the most arbitrary rule can be made legal; and in this way a democracy may set up the most com plete despotism imaginable.

SECTIONS] INTRODUCTORY 43

RAMASWAMI, RULE OF LAW AND A PLANNED SOCIETY1 Journal of the Indian Law Institute 31—32 (1958*59)

The administrative authority interferes in all the domains o f social and econom ic life, in the fields of industry, commerce, education, transport, banking, insurance, and so on. From the constitutional standpoint, there is large-scale delegation of legislative and judicial power to administrative agencies. W ithout such delegation, the working o f the administration cannot be efficient or prompt. In administration, there is obvious need for individual action; there is call for speedy determination; there is necessity for direction, guidance and expert advice. A large measure o f discretion, a large measure o f freedom is, therefore, conferred upon Government officials for carrying out administrative schemes. H ow far is this state o f affairs compatible with the rule o f law ?

It is true tha t national planning involves public control and direction o f econom ic and social activities. National planning also involves control o f basic industries, land ceilings, increased taxation, priorities, mobilisation o f labour, control of imports and exports, slum clearance, and so on. But the rule o f law is one o f the basic values in a democratic.State- Unless there is the rule o f law, there is the danger that the administration would become totalitarian. It is true that planning tends to eclipse the rule o f law. There is concentration o f power in the executive. The legislature must increasingly delegate its power to administrative authorities. The legislature is also compelled to confer judicial power upon administrative authorities so that welfare projects may be implemented in an effective manner. The problem is how to reconcile national planning and administrative discretion with the greatest amoitint o f legal safeguards. The developmient of a planned society necessarily toeans a reorientation of the traditional legal approach, but it does not mean the abrogation o f the rule of law. For eS:ample, thfere is"'the

classic doctrine o f separation of powers, executive, judicial and legislative. You cannot apply the doctrine rigorously in a complex planned society. It is a matter of necessity that there should he delegation of legislative power to administrative agencies. Actually, the administrative process is a meeting point o f legislation and adjudication. In the first place, there must be delegation of legislative power because there is need for closer examination of complicated facts before the proper legal rule can be framed and applied. In the second place, there must be vesting of judicial power also in administrative agencies if welfare schemes are to be properly carried out. It is clear that the legislative, administrative and judicial functions must overlap and supplement each other at many points; otherwise there cannot be an effective machinery of social control. As I have already said, a planned society needs reorientation o f legal approach. Lawyers may not be hostile to the work of administrative agencies, but this does not mean that one should abrogate the rule of law in the functioning of these agencies. On the contrary, the maintenance o f the rule of law in administration is of paramount importance. In my opinion, rule o f law is necessary if fundamental democratic; values are to be preserved and if the democratic structure o f thJ State is to be maintained.


COMMITTEE ON MINISTERS’ POWERS7 (1932)

W e regard...the whole of the Lord Chief Justice’s book,^ as a warning against possible dangers o f great gravity towards which he discerns an existing tendency to drift. W e are very much alive both to the presence o f such dangers and to their gravity if not checked, and have considered them throughout our enquiry. But, as appears from our considered view ...we see nothing to justify any lowering o f the country’s high opinion o f its Civil Service or any reflection on its sense of justice, or any ground for a belief that our constitutional machinery is developing in directions which are fundamentally wrong. Our Report draws attention to certain parts o f that machinery which are capable of improvement, and certain aspects o f its working where specific safeguards are needed. A t the same time we say deliberately that there is no ground for public fear, if the right precautions are taken. N one the less the public

1. Hewarf, T/ie New Despotism (1929).

should be grateful for outspoken criticism, even if exaggerated; and we think that the critics whose warnings—and it may be attacks— led up to our investigations performed a useful service.


FRANKFURTER, FOREWORD TO THE FINAL REPORT OF THE ATTORNEY GENERAL’S COMMITTEE ON ADMINISTRATIVE PROCEDURE

41 Columbia Law Review 586-87 (1941)

The pressure o f social need must find expression within the framework of living history- In the moral life of the individual certain needs are authenticated by all the experience we cherish as civilization. These must he duly regarded while extending the horizon of the things that give worth and dignity to life in what Graham W allas hopefully called “ the great society,” and in what certainly is an industrialized society. H ow to fit ancient liberties, which have gained a new preciousness, into solution o f those exigent and intricate economic problems that have been too long avoided rather than faced, is the special task of Administrative Law. Obviously, neither empty abstractions nor blinding preoccupation with some dramatic but distorting instance will produce that wise accommodation which best satisfies the jostling interests o f society. T o achieve such accommodation involves candid recognition that the administrative process has had a different development and has a different operation from that of our courts because the two derive from different needs. But simply because their ways are not the same does not make them rivals, nor does it set one over against the other. Rather must they be conceived as collaborators for common ends.

These too are generalities, But upon their translation into daily, fruitful, imaginative action depends, as much as on anything, the vindication o f our legal system.

Thus far our Administrative Law has largely “jrow ed ” like Topsy. The time has come for silly hostilities to cease, for us to give full acceptance to Administrative Law as an honorable and indispensable member of our legal household, instead of continuing to it as though it were a subverter.

NOTES

The foregoing extracts reveal the modern dilemma. To meet the u?w social an-d ecQnomic problems many new po’wers have to be

conferred on the government. It has to have powers to make rules, to adjudicate upon matters between individual and the state, to enquire, supervise, inspect and take administrative action of a varied kind in its discretion. The administration has acquired immense powers and has come to discharge functions varied and multifarious in scope, nature and ambit. Hegemony o f the executive is now an accomplished fact. Increase in governmental powers is not, however, an unmixed blessing; it poses the problems of disturbing some of the established and cherished notions o f individual liberty. Between individual liberty and government, there is an age-old conflict. In a vitriolic attack on the growth of administrative powers. Lord Justice Hewart characterized the new development as the “ New Despotism” and emphasized that the acquisition o f more and more powers by the bureaucracy presented a great threat to the individual liberty.

Administrative process has, however, come to stay. It has come to be accepted as a necessary evil in all progressive democracies, more so because of the concept of a welfare state where great welfare schemes for the general body of people are planned, introduced and administered by governmental agencies. To execute such schemes, it becomes necessary to affect adversely private rights of property, enterprise, trading and personal liberties. T h ejeal prqWem therefore is now tpjreconcile , freedom and justice for ^the citizens with the necessities of a modern government charged with the promotion of far-reaching social and economic policies. The constant task before an administrative lawyer is to seek to draw a balance between private rights and public interests. A s has been observed by Lord Denning, “Properly exercised the new powers o f the executive lead to the W elfare State: but abused they lead to the totalitarian State.’ ’®

The key function of administrative law is thus to find the ways, in which the administration could be kept within limits, so that discretionary power may not become arbitrary power. The task of administrative law is to reconcile, in the field o f administrative action, democratic safeguards and standards of fair play with the effective conduct of government.® The same idea has been put forth by W ade by saying that the central question in the administrative law is: how can the legal ideals of fair procedure and just decision be infused into the administrative powers o f the state?”* If proper safeguards, through various ways, such as parliamentary and executive

2. Denningj Freedom under the Law 126 (1949).3. 1 Benjamin, Administrative Adjudication in the State o f New York 9 (1942).4. Wade, Administrative Law 6 (1961),


control, improving procedures, and extending the scope of judicial review, are imposed on the exercise of administrative power, danger of its becoming arbitrary is reduced. The various committees appointed in England and in the United States, such as the Committee on Ministers' Powers, 1929, the Committee on Administrative Tribunal and Inquiries, 1955, and the Attorney General’s Committee, 1939, to probe into various aspects o f the administrative process did not look at its growth with alarm but suggested a number of improvements in the prevailing procedures. The current thinking therefore is that it is in the area of procedures that safeguards can be incorporated with any success rather than seek to control the conferment of substantive powers on the administration by Parliament.


SECTION 4. DEFINITION OF ADMINISTRATIVE LAW

GRIFFITH AND STREET, PRINCIPLES OF ADMINISTRATIVE LAW3—5 (1963)

...Sir IVOT Jennings has written: “ Administrative law is the law relating to the Administration. It determines the organisation, powers and duties o f administrative authorities.” This is the most commonly accepted definition to-day but it does not attempt to distinguish constitutional law, which in its usual meaning has a great deal to say concerning the organisation of administrative authorities. In another sense, also, this is a very wide definition, for the law which determines the powers of these authorities must include, for example, the provisions of A cts relating to public health, housing, town and country planning, the National Coal Board, and the personal health services. Indeed, almost every statute affects to some extent the powers and duties of administrative authorities. The truth is, as all these writers^ (with the possible exception of Austin) would themselves point out, that any definitions o f constitutional or administrative law and any distinctions drawn between them are arbitrary and based on the convenience o f the particular writer.,..

It is with three particular questions that this book® is primarily concerned. First, what sort o f powers does the Administration exercise ? Secondly, what are the litnits o f those powers Thirdly, what are the ways in which the Administration is kept within those limits ? ____

■---------------------------------------------------1-------------------------- —------- , ------------------ ------------------ -............................................................... ....... . - ' V ,

1, For instance MapitJand and Hollaiid/

This formulation excludes tw o matters in particular. In the first place, it excludes an examination o f the content o f those exercised powers. Thus, for example, the ways in which the Administration can make regulations under the Tow n and Country Planning A ct, 1947, are relevant, but not the provisions o f those regulations. To this there are, however, two exceptions. The first is that those provisions are examples of the ways in which the powers are exercised. The second is that sometimes regulations lay down procedures which the Administration proposes to follow ....

The second matter excluded by this formulation is the structure of the Administration. Since, however, the structure must be known for the understanding of the subject and since the meaning attached to “ the Administration” must be made clear, a brief account is included in this chapter. M oreover, structure and function are so interwoven that in many cases the latter can only be explained by reference to the former. So, particularly when deaHng with administrative tribunals and public corporations, details o f the structure are also given.


WADE, ADMINISTRATIVE LAW1 -3 (I960

[T]he modern state also provides elaborate social services and undertakes the regulation of much of the daily business of mankind. The state has seized the initiative, and has put upon itself all kinds of new duties. Hand in hand with these new duties must go new powers. In order to carry out so many schemes o f social service and control, powerful engines o f authority have to be set in motion. To prevent them from running amok there must be constant control, both political and legal. Ultimately, the political control rests with Parliament, though in reality much power is in the hands of ministers and officials. The legal control is the task of the courts o f law. This legal control, together with a few special features o f the political control, provides the principal subject-matter of administrative law.

A ny attempt to define the subject scientifically leads to a number o f arguable questions. The easiest, though perhaps the least satisfactory, of the possible definitions is to be found by appropriating one o f the three sectors of the traditional separation o f powers. If the powers and authorities of the state are classified as legislative, administrative, and judicial, then administrative law might be said to

be the law whicli concerns administrative authorities as opposoJ to the others. But then our territory would iiiciiide the whole c i constitutional law, except the parts of it which concern the legislature and the judiciary. It would include all the law of local government, for example, and all the law about social ser%nces l ik e the Natiorial Health Service, National Insurance, and so forth. Nor, even then, would it give clear lines of division. The motive force in the constitution derives not from the separation o f legislature and executive but from their conjunction, through the system of ministerial responsibility to Parliament combined with ministerial control of Parhament. It is often difficult to tell where legislation stops and administration begins. In particular, one of the commonest administrative activities is legislation under powers delegated by Parliament, and this delegated legislation is certainly a subject of administrative law.

A more useful approximation is to say that administrative law is concerned with the operation and control of the powers of administrative authorities, with emphasis on function rather than on structure. This leads directly to the root o f the matter: the question is, what has the law to do with the way in which administrative powers are exercised ? But it is better to mark out the field by reference to administrative authorities than by reference to administrative powers as such. For the authorities can easily be recognized: the Crown, ministers, local authorities, police, and so forth. It is harder to define administrative powers, since there is the above- mentioned overlap with legislative powers. W hen the Minister of Transport makes regulations controlling traffic, there is no doubt that he is an administrative authority, but the nature o f his power is legislative as well as administrative.

The real unity of the subject is then to be found by emphasizing function. W hat general principles are there governing all the powers o f so many authorities ? In order to extract these principles we must discard a great deal of associated law about structure and status which does not serve the main purpose. For example, local authorities have to exercise their powers o f acquiring land in accordance with just the same rules of statutory interpretation as apply to mirtisters and to central government departments. M any cases discussed in this book, therefore, concern, local authorities. But we do not have to inquire how a town clerk is appointed, or what are the quaHBcations o f borough councillors. A great deal niust b e taken for granted in order to clear the fiey . In just the same way coAstitutional law


concentrates on the most important aspects of the organs of government, but leaves out much detail. The status of judges, for example, is of die greatest importance; but the precise structure of the courts is not. Nor, similarly, need we set out all the particular powers of administrative authorities. An account of them could easily fill a volume, but it would distract attention from the general rules for their control.

Since it deals with the exercise of governmental power, administrative law is itself part o f constitutional law. N or is there any other department of constitutional law which displays such an active conflict of forces. W e are here on the most lively sector of the front in the constant warfare between government and governed. W hole new empires of executive power have been created. For the citizen it is vital that all power should be used in away conformable to his ideas of liberty, fair dealing, and good administration. This is a matter of great consequence and of some difficulty, for social needs and ancient liberties are frequently hard to reconcile.® It is in order to concentrate on this great question, the manner o f the exercise of power, that our definition of administrative law is somewhat narrow. In many other countries the corresponding subject is treated more widely.


K. C. DAVIS, ADMINISTRATIVE LAW TEXT 1-2 (1959)

1. What is Administrative Law?

Administrative law is the law concerning the powers and procedures of administrative agencies, including especially the law governing judicial review of administrative action- An administrative agency is a governmental authority, other than a court and other than a legislative body, which affects the rights of private parties through either adjudication or rule making. An administrative agency may be called a commission, board, authority, bureau, office, ofEcer, administrator, department, corporation, administration, division or agency. Nothing of substance hinges on the choice of name, and usually the choices

3. At another place, Wade points out that the unifying thread running throughout the subject of administrative law is the following question: “How can the legal ideals of fair procedure and just decision be infused into the administrative powers of the state?...The quest for administrative justice is what gives direction to our whole study. ’ Wade, Administrative Law 6 (1961)

have been entirely haphazard. W hen the President, or a gorerfiOr, or a municipal governing body exercises powers o f adjudication or rale* making, he or it is to that extent an administrative agency.

The administrative process is the complex of methods by which agencics carry out their tasks of adjudication, rule making, and related functions. The administrative process is often compared or contrasted with the judicial process, the executive process, and the legislative process.

Administrative law, as the term is used m this hook, is limited to law concerning powers, procedures, and judicial review. It does not include the enormous mass of substantive law produced by the agencies, much o f which is beyond the understanding of lawyers as such,^ Administrative law is restricted to some activities of agencies having powers o f adjudication or rule making, but, somewhat illogi- cally. It includes judicial review of executive or administrative action not involving either adjudication or rule making. Apart from judicial review, the manner in which public officers handle business unrelated to adjudication or rule making is not a part o f administrative law; this means that much of what political scientists call “ public administration” is excluded. Administrative law is also confined to arrangements involving rights o f private parties; it does not extend to internal problems affecting only the agencies and their officers and staffs.

Administrative law consists o f constitutional law, statutory law, common law, and. agency-made law. Although administrative agencies are created only by statute, by executive order authorised by statute, or by state constitutional provisions, and although the principal powers and functions o f agencies are normally defined by the instruments which create them, still the great bulk o f administrative law is judge-made law. Some o f the judge-made law either is or purports to be constitutional or statutory interpretation. Some o f it is common law in the sense that it is produced by courts w ithout reliance on either constitutional or statutory provisions, and some o f it is judges

4. One may thumb through the Code of Federal Regulations at random to confirm this. For instance, a regulation of the FCC provides: “ Where a signal traverses a path over which different conductivities exist, the distance tp a p&cular groundwave field intensity contour shall l>e determined by the use of the equivalent distance method.. „ This method considers a wave to be propagated accross a gjven conductivity accordingly the Curve for a homogeneous earth of that conductivity.*’ The regulation proceeds to'^ye an elaboratei^xample of the computation. 47 C.F.R.S. 3183(e) (1956 Supl^i

S!:cnON’ 4] INTRODUCTORY 51

made law that may or may not be directly or remotely anchored to constitutional or statutory provisions.

The three large segments of administrative law relate to transfer of power from legislature to agencies, exercise of power by the agencies, and review o f administrative action by the courts. As recently as a quarter of a century ago, the subject was still largely limited to the first and third of these, with concentration upon the doctrines of separation of powers and non-delegation. But at the middle of the century, the theory of separation o f powers, while still guiding the drafters of constitutions, has hardly any influence upon administrative arrangements or activities. The problems of delegation are tending to disappear from federal law and are of sharply diminishing importance in state law.

The heavy emphasis is now upon the administrative process itself—rule making and adjudication, and such incidental powers as investigating, supervising, prosecuting, advising and declaring. Inquiry into rule making entails not only the various procedures, including the extent of the requirement o f opportunity to be heard, but also the many perplexities about interpretative, legislative, and retroactive rules. In addition to adjudication procedures in the narrow sense— what takes place in initiating and conducting a proceeding— administrative law is concerned with problems of collective or group decisions, commonly referred to as institutional decisions; bias of agencies and officers; separation of judging from other functions, such as investigating and prosecuting, which may contaminate the judging function; substitutes for the exclusionary rules of evidence; the extensive use of extra-record information and understanding, findings, reasons, and stare decisis; and the binding effect o f determinations.

Despite the emphasis upon administrative procedures, judicial review is still both vital and complex, including, as it does, not only problems of availability and scope of review but also problems about timing and parties and forms of proceedings, as well as tort liability.

52 INDIAN ^DMINISTRATIVE LA IV [ CHAPTER 1

NOTESIt is difficult to evolve a satisfactory definition of administrative

law so as to demarcate articulately its nature, scope and content. There are many formulations in the field but either they are too broad or too narrow; they either include much more than what properly should be included within the scope of the subject; or else, they leave out some essential aspect or element of administrative law.

The American approach to the subject is propounded by Davis. Prinia fade, this definition does nos: appear to include many non- adjudicative functions o f the administration which in India arc characterised as ‘administrative’ as distinguished from “ legislative" or quasi-judicial."’

The modern English approach to administrative law is depicted b y Jennings’ definition. This definition is fuller in one respect as compared to that of Davis. W hile Davis appears to exclude “ administrative powers,” Jenning includes them. On the other hand while Davis lays emphasis on procedures used by administrative agencies in exercising their powers, Jennings does not mention them directlj" or specifically. Griiiith and Street have also raised some criticism against Jenning’s definition.

To the three questions raised by Griffith and Street,*' if the following tw o are added, we may have a fuller picture of the present-day administrative law. v/r., (1) W hat are the procedures followed byAdministrative authorities? (2) W hat are the remedies available to a person affected by administration ? The students may comment on the following definition o f administrative law. “ Administrative law deals with the structure, powers and functions o f organs of administration, the method and procedures followed by them in exercising their powers and functions, the methods by which they are controlled and the remedies which are available to a person against them when his rights are infringed by their operation.”

The student may break the definition into its various components and see whether they are necessary. They may also try to rephrase the definition to make it more representative of the modern administrative law in the country.Study N otes:

It is suggested that you make your own list of reasons for our legal system utiHzing administrative law. Remember that the same reasons did not exist in all situations and usually a combination of considerations operated. The following may start your thinking.

1. The judicial system proved inadequate to the adjudication o f certain kinds of issues. It may be slow, costly, inexpert, and formalistic, It was already overburdened and to add jurisdiction where hundreds o f thousands o f cases could be expected would severely tax existing functions. ; ^

5. See Ch. IV.6. Supra, p, 47,,

SECTION 4 ] INTRODUCTOR Y 53

2. The legislative process was laso inadequate. It lacked both time and technique to concern itself with details. M ore and more it needed to concentrate on broad policy decisions.

3. The administrative process could com bine functions usually kept separate. It could establish law both legislatively (by prospective rules) and judicially (case by case), thus not being left to the blind chance or what issues litigation might turn up, yet able to fit the cases into actual policy formation. Resulting continuity w’-as much desired.

4. The administrative process possessed technique and expertness to handle complex problems. It could develop a specialization and an awareness of the social context of a problem.

5. It could experiment. It was not committed to continue a rule until the next session o f the legislature. It could try a rule this week and if it found in actual application that the rule did not operate well, it could change it next week, incorporating in the new rule the lessons learnt from experience. It was in a position to test its rules immediately. This flexibility was essential in social control of private affairs where the desirable rule is not always apparent.

6. It could take hold of a problem at the preventive stage. It did not have to wait for private parties to formulate cases or begin litigation. It could utilize continuous supervision and guidance.

7. It was able to carry out a policy rather than act as an impartial arbitrator. In many areas like workmen’s compensation, labour relations, the statute created rules at variance with those applied by the courts and sought a sympathetic body to apply these new rules.

8. It represented a functional rather than a theoretical or legalistic approach. If the legal system had over-emphasized litigation as a battle to be won, administrative law could treat the matter as a problem to be solved. If the lawyers had made the courts their gaming ground subject to elaborate ground rules, the new forum could free itself from the legal clique and their rules.


i introductory · 2020-04-04 · substantive rules of taxation or as to what is an unfair labour...

Documents