doctrine of colourable legislation

CONSTITUTIONAL LAW III PROJECT On

“DOCTRINE OF COLOURABLE LEGISLATION”

TABLE OF CONTENTS

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OBJECTIVE............................................................................................................. 3 INTRODUCTION...................................................................................................... 4 THE DOCTRINE OF COLOURABLE LEGISLATION.....................................................6 ARTICLE 246 AND THE DOCTRINE..........................................................................7 JUDICIAL PROCEEDINGS......................................................................................... 9 LIMITATIONS......................................................................................................... 12 CONCLUSION....................................................................................................... 15 BIBLIOGRAPHY..................................................................................................... 17

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OBJECTIVE To examine the Doctrine of Colourable Legislation and its applicability with regard to the interpretation of the lists i.e., the interpretation of the legislative powers as given under Article 246 and the Seventh Schedule.

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INTRODUCTION The Constitution is the supreme and fundamental law of our country. Since it is written in the form of a statute, the general principles of statutory interpretation are applicable to interpretation of the Constitution as well. As is the case with any other statute, the court tries to find out the intention of the framers of the Constitution from the words used by them. For example, in the case of State of Bihar v. Kameshwar Singh1, the Supreme Court used one of the standard principles of interpretation that where more than one reasonable interpretation of a Constitutional provision are possible, that which would ensure a smooth and harmonious working of the Constitution shall be accepted rather than the one that would lead to absurdity or give rise to practical inconvenience, or make well existing provisions of existing law nugatory, while interpreting the Constitution. However, even if an argument based on the spirit of the Constitution is very attractive, it must be validated with the spirit of the Constitution as reflected by the words of the Constitution. In the same case mentioned above, the Supreme Court observed that spirit of the Constitution cannot prevail if the language of the Constitution does not support that view. It is important to note that the Constitution itself endorses the general principles of interpretation through Article 367(1), which states that unless the context otherwise requires, the General Clauses Act, 1897 shall apply for the interpretation of this Constitution as it applies for the interpretation of an act of the legislature. Courts have ruled in cases such as Jugmendar Das v. State2, that not only the general definitions given in General Clauses Act, but also the general rules of construction given therein are applicable to the Constitution. Having said the above, the fact remains that Constitution is a special act. It is a fact that every provision of the Constitution is Constitutional and no part of it can be held unconstitutional. This casts an important duty on the interpreters of the Constitution to interpret its provisions

1 AIR 1952 SC

2 1951

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such that the spirit of the Constitution is not maligned. In Keshvananda Bharati v. State of Kerala3, the Supreme Court identified the basic structure of the Constitution that reflects its true spirit and held that nothing that hurts the basic structure of the Constitution is Constitutional. In the same case, the Supreme Court held that one should give the freedom to the parliament to enact laws that ensure that the blessings of liberty be shared with all, but within the framework of the Constitution. It is necessary towards that end that the Constitution should not be construed in a narrow and pedantic sense. The letters of the Constitution are fairly static and not very easy to change but the laws enacted by the legislature reflect the current state of people and are very dynamic. To ensure that the new laws are consistent with the basic structure of the Constitution, the Constitution must be interpreted in broad and liberal manner giving effect to all its parts and the presumption must be that no conflict or repugnancy was intended by its framers. Applying the same logic, the provisions relating to fundamental rights have been interpreted broadly and liberally in favour of the subject. Similarly, various legislative entries mentioned in the Union, State, and Concurrent list have been construed liberally and widely. The following are some of the key principles applied specially in interpreting the provisions of the Constitution – 1. Principle of Harmonious construction 2. Doctrine of pith and substance 3. Doctrine of Colourable legislation 4. Principle of Ancillary powers 5. Principle of Occupied field 6. Residuary power 7. Doctrine of repugnancy 8. Principle of Territorial Nexus 9. Doctrine of Stare Decisis

3 AIR 1973 SC

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10. Doctrine of prospective overruling

THE DOCTRINE OF COLOURABLE LEGISLATION Doctrine of Colourable Legislation, like any other constitutional law doctrine, is a tool devised and applied by the Supreme Court of India to interpret various Constitutional Provisions. It is a guiding principle of immense utility while construing provisions relating to legislative competence. Doctrine of Colourable Legislation is built upon the founding stones of the Doctrine of Separation of Power. Separation of Power mandates that a balance of power is to be struck between the different components of the State i.e. between the Legislature, the Executive and the Judiciary. The Primary Function of the legislature is to make laws. Whenever, Legislature tries to shift this balance of power towards itself then the Doctrine of Colourable Legislation is attracted to take care of Legislative Accountability. Black’s Law Dictionary defines ‘Colourable’ as: 1. Appearing to be true, valid or right. 2. Intended to deceive; counterfeit. 3. ‘Colour’ has been defined to mean ‘Appearance, guise or semblance’. The literal meaning of Colourable Legislation is that under the ‘colour’ or ‘guise’ of power conferred for one particular purpose, the legislature cannot seek to achieve some other purpose which it is otherwise not competent to legislate on. This Doctrine also traces its origin to a Latin Maxim:

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“Quando aliquid prohibetur ex directo, prohibetur et per obliquum” This maxim implies that “when anything is prohibited directly, it is also prohibited indirectly”. In common parlance, it is meant to be understood as “Whatever legislature can’t do directly, it can’t do indirectly”.

ARTICLE 246 AND THE DOCTRINE In our Constitution, this doctrine is usually applied to Article 246 which has demarcated the Legislative Competence of the Parliament and the State Legislative Assemblies by outlining the different subjects under List I for the Union, List II for the States and List III for both, as mentioned in the Seventh Schedule. This doctrine comes into play when a Legislature does not possess the power to make law upon a particular subject but nonetheless indirectly makes one. By applying this principle the fate of the Impugned Legislation is decided. Article 246 of the Indian Constitution reads as follows: Subject-matter of laws made by Parliament and by the Legislatures of States 1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the "Union List"). 2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List"). 3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the "State List"). 4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List. 7

If the Constitution of a state distributes the legislative powers amongst different bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamental rights, questions do arise as to whether the legislature in a particular case has or has not, in respect of the subject-matter of the statute, or in the method of enacting it, transgressed the limits of its constitutional powers. Such transgressions may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of cases that the expression “colourable legislation” has been applied in certain judicial pronouncements. The idea conveyed by the expression is that although a legislature in passing a statute purports to act within the limits of its powers, yet in substance and in reality it transgresses those powers, the transgression being veiled by what appears on proper examination to be a mere pretence or disguise.4 In other words, it is the substance of the act that is material and not merely the form or outward appearance and if the subject-matter in substance is something which is beyond the powers of that legislature to legislate upon, the form in which the law is clothed would not save it from condemnation. The legislature cannot violate the constitutional prohibition by employing an indirect method.5 “You cannot do indirectly what you cannot do directly.” It may be honest motive or mala fides to the legislature making the law. The Court will scrutinise the law to ascertain whether the legislature by device purports to make a law, which though in form appears to be within its sphere, in effect and substance reaches beyond it. If, in fact, it has power to make the law, its motives in making the latter are irrelevant.6 The rule of colourable legislation has no application if the legislature making the law has the competence to make the law.7

4 Ashok Kumar v. Union of India, (1991) 3 SCC 498

5 K.C. Gajapati Narayan Deo v. State of Orissa, AIR 1953 SC 375 ; Anil Kumar v. Commr., AIR 1959 Ass 147

6 Gullapalli Nageswar Rao v. A.P. SRTC, AIR 1959 SC 308

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The Doctrine of Colourable Legislation is relevant only in connection with the question of legislative competence.8 Objections based on Colourable Legislation have relevance only in situations when the power is restricted to particular topics, and an attempt is made to escape legal fetters imposed on its powers by resorting to forms of legislation calculated to mask the real subject matter. Whether less than what was done might have been enough, whether a more drastic provision was made than the occasion demanded, whether the same purpose could have been achieved by provisions framed differently or by some other means, they are wholly irrelevant considerations for testing the validity of the law. They do not touch the ambit of the power but only the manner of its exercise.

JUDICIAL PROCEEDINGS In the case of K.C Gajapti v. State of Orissa,9 there was the question of the validity of the Orissa Agricultural Income-Tax (Amendment) Act, 1950 which greatly enhanced the rate of tax on agricultural income. It was argued that the Act is not a bona fide taxation statute at all, but is a colourable piece of legislation, the real object of which is to reduce by artificial means the net income of intermediaries, so that the compensation payable to them under the Orissa Estates Abolition Act, 1952 be kept as low a figure as possible, agricultural income tax being deducted from the gross income in order to arrive at the net income on the basis of which the amount of compensation is to be determined. The Supreme Court did not accept this contention and declared the Act as valid. It was observed that the Act is certainly a legislation on “taxing of agricultural income”, as described in Entry 46 of List II of the Seventh Schedule. The State Legislature has undoubted competency to legislate on

7 K.C. Gajapati Narayan Deo v. State of Orissa, AIR 1953 SC 375

8 B.R. Shankaranarayana v. State of Mysore, AIR 1966 SC 1571

9 AIR 1953 SC 375

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agricultural income tax, and the Act purports to increase the existing rates of income tax. The increase in rates may be unjust or inequitable, but that does not affect the competency of the legislature. Even if it is assumed that the act was made under the guise of a taxation statute with a view to accomplish an ulterior purpose, namely, to reduce the amount of compensation, still it cannot be regarded as a colourable piece of legislation. Under Entry 42 of List III, the legislature can adopt any principle of compensation in respect of the properties acquired. Whether the deductions are large or small, inflated or deflated, they do not affect the constitutionality of a legislation under this entry. It would be colourable legislation only if it is shown that the real object is to attain something which is beyond any constitutional limitation or that it lies within the exclusive field of another legislature. It could be noticed that the two Acts did not make any reference to each other and were in no way interconnected. Taking each Act on its merit, the court had no hesitation to declare them valid as being within the competence of the legislature. It has made very clear that the motives which impelled to enact the law are irrelevant. However, if there was some mention of one Act in the other or the two Acts were expressly interconnected, the court could have read the ulterior purpose and in such a case motive would have become purpose, namely to bypass the constitutional limitation of the payment of compensation as provided in Article 31(2), thereby characterising the taxation statute as colourable legislation, the purpose being to overcome the payment of compensation. The Court while explaining the doctrine held that “if the constitution of a state distributes the legislative spheres marked out by specific legislative entries or if there are limitations on the legislative authority in the shape of fundamental rights, questions do arise as to whether the legislature in a particular case in respect to the subject matter of the statute or in the method of enacting it, transgressed the limits of the constitutional power or not. Such transgression may be patent, manifest and direct, but may also be distinguished, covered and indirect and it is the latter class of cases that the expression ‘colourable legislation’ has been applied in certain judicial pronouncements.” Further in K.C. Gajapati Narayan Deo v. State of Orissa10 the Court approved:

10 AIR 1953 SC 375

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“………..The doctrine of colourable legislation does not involve any question of bona fides and mala fides on the part of the Legislature.” If the law is settled that no mala fides could be attributed to the Legislature, an argument that the amendment has been passed only with a view to punish the ,first respondent is not available to the first respondent. The legislature as a body cannot be accused of having passed a law for an extraneous purpose. Therefore, no mala fides could be attributed to the legislature. A legislature does not act on extraneous consideration. But for lack of legislative competence or for being arbitrary, a legislative action cannot be struck down on ground of mala fide. In Mohan Lal Tripathi v. District Magistrate, Rae Bareilly and Ors.11 The Court held that a Legislature does not act on extraneous consideration. An Ordinance issued in 1990 was replaced by Act 19 of 1990. The Act came into force on 24th July 1990 but it was made retrospective with effect from 15th February 1990, the date when the ordinance was issued. The Court further held that but for lack of legislative competence or for being arbitrary a legislative action cannot be struck down on ground of mala fides. State of Bihar v. Kameshwar Singh;12 is the only case where a law has been declared invalid on the ground of colourable legislation. In this case the Bihar Land Reforms Act, 1950, was held void on the ground that though apparently it purported to lay down the principle for determining compensation yet in reality it did not lay down any such principle and thus indirectly sought to deprive the petitioner of any compensation. In relation to constitutional prohibitions binding a legislature it is clear that the legislature cannot obey the prohibitions merely by employing indirect methods of achieving exactly the same result. Therefore, in all such cases the court has to look behind the names, forms and appearances to discover the true character and nature of the legislation.13

11 1993 AIR 2042; 1992 SCR (3) 338

12 1952 1 SCR 889

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The doctrine of colourable legislation applies to taxation laws as well as other laws. But a challenge on the basis of colourable legislation, which is not a legitimate exercise of power, can succeed not merely by showing that the tax levied is unreasonably high or excessive, which is a legitimate exercise of power, but by providing other relevant circumstances which justify the conclusion that the statute is colourable and as such amounts to fraud.14 As an illustration of such a statute though ostensibly passed in exercise of the legislative power conferred on the legislature but struck down as a colourable exercise of the said power, reference may be made to Kunnathat Thatehunni Moopil Nair v. State of Kerela 15, where the provisions of the Travancore-Cochin Land Tax Act, 1955 were declared to be unconstitutional in view of Articles 14 and 19(1)(f). The Supreme Court held that the provisions of this Act were confiscatory in character, and reached the conclusion that in passing the Act, the legislature had merely adopted a device and a cloak to confiscate the property of the citizen taxed.

LIMITATIONS Limitations on the Application of Doctrine of Colourable Legislation:

13 Dwarkadas Shrinivas v. Sholapur Spg. & Wvg. Co. Ltd., AIR1954 SC 119

14 Jagannath Baksh Singh v. State of U.P., AIR 1962 SC 1563

15 AIR 1961 SC 552

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1) The doctrine has no application where the powers of a Legislature are not fettered by any Constitutional limitation. 2) The doctrine is also not applicable to Subordinate Legislation. 3) The doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature. The whole doctrine resolves itself into the, question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand, if the legislature lacks competency, the question of motive does not arise at all. Whether a statute is constitutional or not is thus always a question of power16. 4) A logical corollary of the above-mentioned point is that the Legislature does not act on Extraneous Considerations17. There is always a Presumption of Constitutionality in favour of the Statute. The principle of Presumption of Constitutionality was succinctly enunciated by a Constitutional Bench in Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar and Ors.18: “That there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles.” There is a very famous rule of interpretation as well that explains why the courts strongly lean against a construction which reduces the statute to a futility. The Latin Maxim “construction ut res magis valeat quam pereat” implies that a statute or any enacting provision therein must be so construed as to make it effective and operative. The courts prefer construction which keeps the statute within the competence of the legislature19.

16 K.C. Gajapati Narayana Deo And Other v. The State Of Orissa, AIR 1953 SC 375

17 Mohan Lal Tripathi v. District Magistrate, Rae Bareilly & Others, AIR 1993 SC 2042

18 AIR 1958 SC 538

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5) When a Legislature has the Power to make Law with respect to a particular subject, it also has all the ancillary and incidental power to make that law an effective one.20 6) As already discussed above that the transgression of Constitutional Power by Legislature may be patent, manifest or direct, but may also be disguised, covert and indirect and it is only to this latter class of cases that the expression “Colourable Legislation” is being applied.21

19 CIT v. Teja Singh, AIR 1959 SC 352

20 I.N. Saksena v. The State of Madhya Pradesh, AIR 1976 SC 2650

21 The State Of Bihar v. Kameshwar Singh, 1952 1 SCR 889

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CONCLUSION The Doctrine of Colourable Legislation is also called “Fraud on the Constitution”. The failure to comply with a Constitutional condition for the exercise of legislative power may be overt or it may be covert. When it is overt, we say the law is obviously bad for noncompliance with the requirements of the Constitution, that is to say, the law is ultra vires. When, however, the non-compliance is covert, we say that it is a ‘fraud on the Constitution’, the fraud complained of being that the Legislature pretends to act within its power while in fact it is not so doing. Therefore, the charge of ‘fraud on the Constitution’ is, on ultimate analysis, nothing but a picturesque and epigrammatic way of expressing the idea of non-compliance with the terms of the Constitution22. The doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law the motives which impelled it to act, are really irrelevant. On the other hand, if the legislature lacks competency, the question of motive does not arise at all.

22 The State Of Bihar v. Kameshwar Singh, 1952 1 SCR 889

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Whether a statute is constitutional or not is thus always a question of power. If the constitution of a State distributes the legislative power amount different bodies which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamental right, questions do arise whether the legislative in a particular case has or has not, in respect to the subject matter of the statute or in the method of enacting it transgressed the limits of its constitutional powers. Such transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to the latter class of cases that the expression ‘colourable legislation’ has been applied. The idea conveyed by this expression is that although apparently a legislature in passing a statute purported to act within the limits of its power, yet in the substance and reality, it transgressed these powers. The legal position, therefore, is that the legislature can only make law within its legislative competency. Its legislatives field may be circumscribed by specific legislative entries or limited by fundamental rights by the constitution. The legislature cannot overstep the field of its competency, directly or indirectly. The court will scrutinize the law to ascertain whether the legislature by device purports to make a law which though in form appears to be within its sphere,, in effect and substance reaches beyond it. If, in fact, it has power to make the law, its motives in making the law are irrelevant. The doctrine of colourable legislation is relevant only in connection with the question of legislative competency.

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BIBLIOGRAPHY

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http://www.shareyouressays.com/111360/short-essay-on-the-doctrine-of-colourablelegislation

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http://en.wikipedia.org/wiki/Doctrine_of_colourability

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http://www.lawyersclubindia.com/experts/Colorable-legislation 23456.asp#.VFidBvmUegY

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http://en.wikisource.org/wiki/Constitution_of_India/Part_XI

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Shukla, V.N.; Constitution of India; 12th Edition; Eastern Book Company, Lucknow

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http://gaurlaw.wordpress.com/2013/12/12/doctrine-of-colourable-legislation-india/

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http://www.desikanoon.co.in/2014/05/doctrine-of-colorable-legislation-india.html

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