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CHALLENGING THE LAW/RULE – UNGUIDED DISCRETIONARY POWERS

https://www.litigationplatform.com/Judgment/Index/b509638e-bc1b-48f3-9e6d-56b868d1e079


Nature of grievance:

Where the law, so as to give effect to the objectives set out in the Act, or to carry out the mandate of provisions of the Act, confers unfettered and unguided discretionary powers upon the Govts. / Administrative authorities or even upon judicial authorities, thereby authorize these Govts / Authorities to “pick and choose”, in the application of law to different individuals. These are regarded as abdication of essential legislative function, or are regarded as excessive delegation of powers upon Govts. / Administrative or statutory bodies / judicial authorities, as the case may be. Writ jurisdiction of High Court may be invoked challenging such law being violative of Article 14 of the Constitution of India.


Reliefs Prayed for:

(a)  That the impugned law be declared as violative of Article 14 of the Constitution of India;

(b)  Pending the hearing and final disposal of this Petition, the operation of the impugned law be stayed;

(c)  Any other relief as this Hon’ble Court deems fit and expedient, having regard to the facts and circumstances of the present case.


Grounds for Reliefs

(a)  The operation of the impugned law would be deemed to be arbitrary; and thus violative of Article 14 of the Constitution of India.


Material facts of the case:

The Petitioners most respectfully submit as under –

1.      The extract of the portion of Impugned Law which confers unguided and unfettered discretionary powers upon the Govt. / Authority concerned:

2.      The natural consequences which will flow, in the ordinary course of operation of the said portion of impugned Law;

3.      Demonstrate that there are no guidance in the impugned law of whatsoever nature, so as to indicate, under which circumstances, the powers are to be exercised by the Govt. / authorities, or are not to be exercised by the Govt. / authorities; and thus renders the application of law to the complete discretion / whims of the Govt. / authority concerned, and which may operate as serious prejudice to a person:

4.      The factors which would weigh the minds of the Constitutional Courts whilst deciding the Constitutional validity of a law which is challenged on the premise of “excessive delegation of powers”  –

(a)  Presumption of fair exercise of powers: Where a law, conferring discretionary powers on Govts / Administrative or judicial authorities, is constitutionally valid or not, should not be determined on the assumption that such authority will act in an arbitrary manner in exercising the discretion conferred upon it. Abuse of power given by law does occur; but the validity of the law cannot be contested merely because of such an apprehension. Discretionary power is not necessarily a discriminatory power.

(b)  The nature of discretionary powers: Whether the impugned law gives unguided and unlimited power to the Government / authorities to pick and choose in the matter of, (a) grant of total or partial exemption from the provisions of the Act, or (b) grant of any benefit etc.; (c) imposing of any obligation;

(c)  Where the impugned law takes away right of hearing: Before the exercise of powers / discretion, the factors which may be looked into are, the nature of “subjective satisfaction” which the Govt. / Authority has to arrive at before the exercise of powers / discretion, vis a vis to nature of right which is infringed, the nature and the urgency of mischief which is sought to be suppressed by the said powers / discretion;

(d)  Delegation of powers to restrict something: Where the impugned law confers powers / discretion upon Govts / Authorities to restrict something, then, the Courts may look into the nature of restrictions, and would see that the restrictions should not be excessive or beyond what is required in the interest of the general public;

(e)  A reasonable predictability of the application of law: Whether it is possible for a person  to whom the impugned law is applied generally, to reasonably predict the application of the impugned law, in a given situation, and the nature of right which is vulnerable to be frustrated, in the event of misuse of the discretionary powers;

(f)   The natural consequences which may ensue due to absence of guidance in the exercise of powers / discretion: The nature of scope of arbitrariness / consequences in the application of law, which may result due to absence of any guidance for the exercise of power, and the remedy which is provided under the law, to redress the such misuse of powers.

(g)  Where the law confers powers / discretion which are in the nature which may impair the personal liberty of any person: Where a law empowers any Authority to take preventive action (detention) against any person, it is essential that the law must provide the “existence of objective conditions” under which the said powers of preventive detention may only be exercised. If the law fails to provide any such conditions, the law becomes suspect, and is vulnerable to be declared as unreasonable.

(h)  The backdrop of the conditions in which the discretion is to be exercised: The observations of the Apex Court in the Mardia Chemicals case [2004 SC] are very instructive. In this case, the Apex Court dealt with section 17 of the SARFESI Act, 2002. This case emphatically dealt with fairness of procedural law, and the “judicial access” concerns punctuated the court’s decision. The S.17 prohibited borrowers from appealing to DRT (Debt Recovery Tribunal) against the action of the Bank / financial institution, unless the borrower deposits 75% of the claimed amount, and where the discretion was given to DRT presiding officer to waive this requirement of 75% deposit. The Apex Court, whilst declaring the mandate of section 17(2) as unconstitutional, said, such an onerous and oppressive condition should not be left operative in expectation of reasonable exercise of discretion by the concerned authority. It is instructive to reproduce the relevant observations of the Apex Court.

Para 60: The amount of deposit of 75% of the demand at the initial proceeding itself sounds unreasonable and oppressive, more particularly when the secured assets/the management thereof alongwith the right to transfer such interest has been taken over by the secured creditor or in some cases property is also sold. Requirement of deposit of such a heavy amount on basis of one-sided claim alone cannot be said to be a reasonable condition at the first instance itself before start of adjudication of the dispute. Merely giving power to the Tribunal to waive or reduce the amount, does not cure the inherent infirmity leaning one-sidedly in favour of the party, who, so far has alone been the party to decide the amount and the fact of default and classifying the dues as NPAs without participation/association of the borrower in the process. Such an onerous and oppressive condition should not be left operative in expectation of reasonable exercise of discretion by the concerned authority. Placed in a situation as indicated above, where it may not be possible for the borrower to raise any amount to make the deposit, his secured assets having already been taken possession of or sold, such a rider to approach the Tribunal at the first instance of proceedings, captioned as appeal, renders the remedy illusory and nugatory.

The court further said –

Para 64: The condition of pre-deposit in the present case is bad rendering the remedy illusory on the grounds that (i) it is imposed while approaching the adjudicating authority of the first instance, not in appeal, (ii) there is no determination of the amount due as yet, (iii) the secured assets or its management with transferable interest is already taken over and under control of the secured creditor, (iv) no special reason for double security in respect of an amount yet to be determined and settled, (v) 75% of the amount claimed by no means would be a meager amount, (vi) it will leave the borrower in a position where it would not be possible for him to raise any funds to make deposit of 75% of the undetermined demand. Such conditions are not alone onerous and oppressive but also unreasonable and arbitrary. Therefore, in our view, sub-section (2) of Section 17 of the Act is unreasonable, arbitrary and violative of Article 14 of the Constitution.


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