First part of article 14 is negative concept , which ensures that there is no special privilege for anyone. Its equivalent to second corollary of Dicean Rule of law . Whatever rank or condition , none is above the law. Second part of article 14 is a positive concept , it postulates the same laws for the persons similarly situated i.e. equality of treatment in equality of circumstances. It recognizes that among equals , law must equal.
As per Black’s Law Dictionary, ‘Class legislation’ is term applied to statutory enactments which divide the people or subjects of legislation into classes, with reference either to the grant of privileges or the imposition of burdens, upon an arbitrary, unjust, or invidious principle of division, or which, though the principle of division may be sound and justifiable, make arbitrary discrimination between those persons or things coming within the same class.
The fundamental principle is that Art. 14 forbids class legislation but permits reasonable classification for the purpose of legislation which classification must satisfy the twin tests of classification being founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question.
Supreme Court of India
Srinivasa Theatre And Ors. Etc. ... vs Government Of Tamil Nadu And Ors. ... on 12 March, 1992
Article 14 of the Constitution enjoin upon the State not to deny to any person 'Equality before law' or 'the equal protection of laws' within the territory of India. The two expressions do not mean the same thing even if there may be much in common. Section 1 of the XIV Amendment to U.S. Constitution uses only the latter expression whereas the Irish Constitution (1937) and the West German Constitution (1949) use the expression "equal before law" alone. Both these expressions are used together in the Universal Declaration of Human Rights, 1948, Article 7 whereof says "All are equal before the law and are entitled without any discrimination to equal protection of the law." While ascertaining the meaning and content of these expression, however, we need not be constrained by the interpretation placed upon them in those countries though their relevance is undoubtedly great. It has to be found and determined having regard to the context and scheme of our Constitution. It appears to us that the word "law" in the former expression is used in a generic sense-a philosophical sense-whereas the word "law" in the latter expression denotes specific laws in force.
Equality before law is a dynamic concept having many facets. One facet-the most commonly acknowledged-is that there shall be no previleged person or class and that none shall be above law. A facet which is of immediate relevance herein is the obligation upon the State to bring about, through the machinery of law, a more equal society envisaged by the preamble and part IV of our Constitution.For equality before law can be predicated meaningfully only in an equal society i.e., in a society contemplated by Article 38 of the Constitution.
Supreme Court of India
Kerala Hotel & Restaurant ... vs State Of Kerala And Ors on 21 February, 1990
Equivalent citations: 1990 AIR 913, 1990 SCR (1) 516
Broadly stated the points involved in the constitutional attack to the validity of this classification are, in sub- stance, only two:
(1) Is the classification of sales of cooked food made with reference to the eating houses wherein the sales are made, rounded on an intelligible differentia? and (2) If so, does the classification have a rational nexus with the object sought to be achieved?
(Fazl Ali J. has distilled in the form of seven principles most of the useful observations of this Court in the Sholapur Mills case, ChiranjitLal Chowdhury v. The Union of India and Others Willis says :--
"The guaranty of the equal protection of the laws means the protection of equal laws. It forbids
class legislation, but does not forbid classification which rests upon reasonable grounds of distinction. It does not prohibit legislation, which is limited either in the objects to which it is directed or by the territory within which it is to operate. "It merely requires that all persons subject to such legislation shall be treated alike under like cir- cumstances and conditions both in the privileges conferred and in the liabilities imposed." "The inhibition of the amendment was designed to prevent any person or class of persons from being singled out as a special subject for discriminating and hostile legislation." It does not take from the states the power to classify either in the adoption of police laws, or tax laws, or eminent domain laws, but permits to them the exercise of a wide scope of discretion, and nullifies what they do only when it is without any reasonable basis. Mathematical nicety and perfect equality are not required. Similarity, not identity of treatment, is enough. If any state of facts can reasonably be conceived to sustain a classification, the existence of that state of facts must be assumed. One who assails a classification must carry the burden of showing that it does not rest upon any reasonable basis."
The seven principles formulated by Fazl Ali J. are as follows :--
"1. The presumption is always in favour of the constitutionality of an enactment, since it must be assumed that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and its discriminations are based on adequate grounds.
2. The presumption may be rebutted in certain cases by showing that on the face of the statute, there is no classification at all and no difference peculiar to any individual or class and not applicable to any other individual or class, and yet the law hits only a particular individual or class.
3. The principle of equality does not mean that every law must have universal application for all persons who are not by nature, attainment or circumstances in the same position, and the varying needs of different classes of persons often require separate treatment.
4. The principle does not take away from the State the power of classifying persons for legitimate purposes.
5. Every classification is in some degree likely to produce some inequality, and mere production of inequality is not enough.
6. If a law deals equally with members of a welldefined class, it is not obnoxious and it is not open to the charge of denial of equal protection on the ground that it has no application to other persons.
7. While reasonable classification is permissible, such classification must be based upon some real and substantial distinction bearing a reasonable and just relation to the object sought to be attained, and the classification cannot be made arbitrarily and without any substantial basis.")
Supreme Court of India
Deepak Sibal & Ors vs Punjab University And Another on 14 February, 1989
In considering the reasonableness of classification from the point of view of Article 14 of the Constitution, the Court has also to consider the objective for such classification. If the objective be illogical, unfair and unjust, necessarily the classification will have to be held as unreasonable
It is true that a classification need not be made with mathematical precision but, if there be little or no difference between the persons or things which have been grouped together and those left out of the group, in that case, the classification cannot be said to be a reasonable one.
Supreme Court of India
Federation Of Railway Officers ... vs Union Of India on 13 March, 2003
In examining a question of the nature where a policy is evolved by the Government , judicial review thereof is limited. When policy according to which or the purpose for which discretion is to be exercised is clearly expressed in the statute, it cannot be said to be an unrestricted discretion. On matters affecting policy and requiring technical expertise Court would leave the matter for decision of those who are qualified to address the issues. Unless the policy or action is inconsistent with the Constitution and the laws or arbitrary or irrational or abuse of the power, the Court will not interfere with such matters.
Supreme Court of India
Chiranjit Lal Chowdhuri vs The Union Of India And Others on 4 December, 1950
Quite conceivably there may be a law relating to a single individual if it is made apparent that, on account of some special reasons applicable only to him and inapplicable to anyone else, that single individual is a class by himself.
Supreme Court of India
The State Of West Bengal vs Anwar All Sarkarhabib ... on 11 January, 1952
Equivalent citations: 1952 AIR 75, 1952 SCR 284
Author: M P Sastri
Bench: Sastri, M. Patanjali (Cj), Fazal Ali, Saiyid, Mahajan, Mehr Chand, Mukherjea, B.K., Das, S.R. & Aiyar, N.C. & Bose, Vivian
Article 14 of our Constitution, it is well known, corresponds to the last portion of section 1 of the Fourteenth Amendment to the American Constitution except that our article 14 has also adopted the English doctrine of rule of law by the addition of the words "equality before the law." It has not, however, been urged before us that the addition of these extra words has made any substantial difference in its practical application. The meaning, scope and effect of article 14 of our Constitution have been discussed and laid down by this Court in the case of Chiranjit Lal Chowdhury v. The Union of India and Others (1). Although Sastri J., as he then was, and myself differed from the actual deci- sion of the majority of the Court, there was no disagree- ment between us and the majority as to the principles underlying the provisions of article 14. The difference of opinion in that case was not so much on the principles to be applied as to the effect of the application of such principles. Those principles were again considered and summarised by this Court in The State of Bombay v.F.N. Balsara (2). It is now well established that while arti- cle 14 is designed to prevent a person or class of persons from being singled out from others similarly situated for the purpose of being specially subjected to discriminating and hostile legislation, it does not insist on an "abstract symmetry" in the sense that every piece of legislation must have universal application. All persons are not, by nature, attainment or circumstances, equal and the varying needs of different classes of persons often require separate treatment and, therefore, the protecting clause has been construed as a guarantee against discrimi- nation amongst equals only and not as taking away from the State the power to classify persons for the purpose of legislation. This classification may be on different bases. It may be geographical or according to objects or occupa- tions or the like. Mere classification, however, is not enough to get over the inhibition of the Article. 'The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some quali- ties or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others
and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act. The differ- entia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them. In short, while the Article forbids class legislation in the sense of making improper discrimination by conferring privileges or imposing liabilities upon persons arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liability proposed to be imposed, it does not forbid classification for the purpose of legislation, provided such classification is not arbitrary in the sense I have just explained. The doctrine, as expounded by this Court in the two cases I have mentioned, leaves a considerable latitude to the Court in the matter of the application of article 14 and consequently has the merit of flexibility.
Discrimination may not appear in the statute itself but may be evident in the administration of the law. If an uncontrolled or unguided power is conferred without any reasonable and proper standards or limits being laid down in the enactment, the statute itself may be challenged and not merely the particular administrative act. Citing the case of Sunday Lake Iron Co. v. Wakefield, Rogers v. Alabama and Concordia Fire Ins. Co. v. Illinois, Prof. Weaver says at page 404 of his compendious book on Constitutional Law under the heading of ' DISCRIMINATION IN THE ADMiNiSTRATION OF THE LAWS':--
"Discrimination may exist in the administration of the laws and it is the purpose of the equal protection clause to secure all the inhabitants of the state from intentional and arbitrary discrimination arising in their improper or preju- diced execution, as well as by the express terms of the law itself. The validity or invalidity of a statute often depends on how it is construed and applied. It may be valid when given a particular application and invalid when given another."
A difficulty was suggested and discussed in the course of the arguments in case article 14 was to receive a very wide interpretation. Under article 12 of the Constitution, even a local authority comes within the defi- nition of "the State" and section 13 provides in sub-clause (3) that "'law' includes any ordinance, order, bye-law, rule, regulation, notification............ " Therefore any ordinance or notification issued by a local authority acting under the powers conferred on it by a statute might be challenged as discriminatory and if this is permitted, the work of administration might be paralysed altogether. This, no doubt, is a possible result but the difficulty envisaged is by no means insurmountable. If the statute or the enact- ment makes a reasonable or rational classification and if the power conferred by the statute on a local authority is exercised to the prejudice of a person visa vis other per- sons similarly situated, two answers would be possible. One is that there was no discrimination at all in the exercise of the power. The second is that the power was exercised in good faith within the limitations imposed by the Act and for the achievement of the objects the enactment had in view and that the person who alleges that he has been discriminated against will have to establish mala fides in the sense that the step was taken intentionally for the purpose of injuring him; in other words, it was a hostile act directed against him. If the legislation itself is open to attack on the ground of discrimination, the question of any act done by a local or other authority under the power or powers vested in it will not arise. If the Act itself is invalid on the ground that it is ultra vires, the notification, ordinance, or rule falls to the ground with it, but if the Act remains, the validity of the notification or order etc., when im- pugned, may have to be considered independently. There may be cases where individual acts of state offi- cials are questioned and not the legislation itself. As regards such cases, Willoughby states at page 1932 of his Volume III on the Constitution of the United States :--
"It is, however, to be observed in this connection, that the prohibitions apply to the acts of State officials even when they are done in pursuance of some State legislative direction, for, while no constitutional objection may be made to any law of the State, it has been held that its officials may exercise their public authority in such a discriminatory or arbitrary manner as to bring them within the scope of the prohibitions of the Fourteenth Amendment. This, it will be remembered, was one of the grounds upon which, in Yick Wo v. Hopkins (118 U.S. 356) it was held that due process of law had been denied. In Tarrance v. Florida (188 U.S. 519) the administration of a State law and not the law itself was challenged and the court said: 'Such an actual discrimination is as potential in creating a denial of equality of rights as a discrimina- tion made by law.'"
There is only one other point that I would like to deal with. Trevor Harries C.J. has taken the view that section 5 of the Act would have been unexceptionable had it only provided for the trial by a Special Court of certain of- fences or classes of offences or certain classes of cases and that in his opinion the discrimination arose by the provision for the trial of cases, as distinguished from classes of cases. It is rather difficult, however, to appreciate this distinction. If the statute makes no classi- fication at all, or if the classification purported to be made is not reasonable or rational but is arbitrary and illusory, as in this case, Section 5 would be void as con- travening article. 14. It is no doubt true that totally different considerations might arise if specified offences or groups of offences in a particular area or arising out of a particular event or incident were to be,tried by a Special Court but this is not the case here. I am unable to see how if the Act merely provided that certain "classes of cases" as distinguished from "cases" should be tried by a Special Court, the attack against discrimination could be avoided, as even then the test of rationality or reasonableness would still remain to be satisfied. If the Act does not enunciate any principle on the basis of which the State Government could select offences or classes of offences or cases or classes of cases and the State Government is left free to make any arbitrary selection according to their will and pleasure then the Act is void. On this point, I would invite special attention to the view taken by Mr. Justice Das Gupta in the following passage of his Judgment:--
"The Act lays down no principle on which selection of "classes of offences" or "classes of cases" should be made by the State Government. The State Government may even arbitrarily determine the classes of cases to be tried by the Special Court and if it does so its action will be well within its powers conferred by the Act. The Act indicates no basis whatsoever on which such classification should be made. I am of opinion that the whole Act is ultra vires the Constitution and deletion of the word "cases" from section 5 would not save the rest of the Act from being invalid."
Bose J.--We are concerned here with article 14 of the Constitution and in particular with the words "equality before the law" and "equal protection of the law." Now I yield to none in my insistence that plain unambiguous words in a statute, or in the Constitution, must having regard to the context, be interpreted according to their ordinary meaning and be given full effect. But that predicates a position where the words are plain and unambiguous. I am clear that that is not the case here.
Take first the words "equality before the law". It is to be observed that equality in the abstract is not guaran- teed but only equality before the law. That at once leads to the question, what is the law, and whether "the law" does not draw distinctions between man and man and make for inequalities in the sense of differentiation? One has only to look to the differing personal laws which are applied daily to see that it does; to trusts and foundations from which only one particular race or community may benefit, to places of worship from which all but members of particular faith are excluded, to cemeteries and towers of silence which none but the faithful may use, to the laws of property, marriage and divorce. All that is part and parcel of the law of the land and equality before it in any literal sense is impossible unless these laws are swept away, but that is not what the Constitution says, for these very laws are preserved and along with equality before the law is also guaranteed the right to the practice of one's faith.
Then, again, what does "equality" mean? All men are not alike. Some are rich and some are poor. Some by the mere accident of birth inherit riches, others are born to pover- ty. There are differences in social standing and economic status. High sounding phrases cannot alter such fundamental facts. It is therefore impossible to apply rules of abstract equality to conditions which predicate in equality from the start; and yet the words have meaning though in my judgment their true content is not to be gathered by simply taking the words in one hand and a dictionary in the other, for the provisions of the Constitution are not mathematical formula which have their essence in mere form. They constitute a frame-work of government written for men of fundamentally differing opinions and written as much for the future as the present. They are not just pages from a text book but form the means of ordering the life of a progressive people. There is consequently grave danger in endeavouring to confine them in watertight compartments made up of ready- made generalisations like classification. I have no doubt those tests serve as a rough and ready guide in some cases but they are not the only tests, nor are they the true tests on a final analysis.
What, after all, is classification? It is merely a systematic arrangement of things into groups or classes, usually in accordance with some definite scheme. But the scheme can be anything and the laws which are laid down to govern the grouping must necessarily be arbitrarily select- ed; also granted the right to select, the classification can be as broadbased as one pleases, or it can be broken down and down until finally just one solitary unit is divided off from the rest. Even those who propound this theory are driven to making qualifications. Thus, it is not enough merely to classify but the classification must not be 'discriminatory', it must not amount to 'hostile action', there must be 'reasonable grounds for distinction', it must be 'rational' and there must be no 'substantial discrimination'. But what then becomes of the classification? and who are to be the judges of the reasonableness and the substantiality or otherwise of the discrimination? And, much more important, whose stand- ards of reasonableness are to be applied? --the judges'?--the government's?--or that of the mythical ordi- nary reasonable man of law which is no single man but a composite of many men whose reasonableness can be measured and gauged even though he can neither be seen nor heard nor felt? With the utmost respect I cannot see how these vague generalisations serve to clarify the position. To my mind they do not carry us one whit beyond the original words and are no more satisfactory than saying that all men are equal before the law and that all shall be equally treated and be given equal protection. The problem is not solved by sub- stituting one generalisation for another. To say that the law shall not be discriminatory carries us nowhere for unless the law is discriminatory the question cannot arise. The whole problem is to pick out from among the laws which make for differentiation the ones which do not offend article 14 and separate them from those which do. It is true the word can also be used in the sense of showing favouritism, but in so far as it means that, it suffers from the same defect as the 'hostile action' test. We are then compelled to import into the question the element of motive and delve into the minds of those who make the differentia- tion or pass the discriminatory law and thus at once substi- tute a subjective test for an objective analysis. I would always be slow to impute want of good faith in these cases. I have no doubt that the motive, except in rare cases, is beyond reproach and were it not for the fact that the Constitution demands equality of treatment these laws would, in my opinion, be valid. But that apart. What material have we for delving into the mind of a legislature? It is useless to say that a man shall be judged by his acts, for acts of this kind can spring from good motives as well as bad, and in the absence of other material the presumption must be overwhelmingly in favour of the former.
I can conceive of cases where there is the utmost good faith and where the classification is scientific and ration- al and yet which would offend this law. Let us take an imaginary case in which a State legislature considers that all accused persons whose skull measurements are below a certain standard, or who cannot pass a given series of intelligence tests, shall be tried summarily whatever the offence on the ground that the less complicated the trial the fairer it is to their sub-standard of intelli- gence. Here is classification. It is scientific and systematic. The intention and motive are good. There is no question of favouritism, and yet I can hardly believe that such a law would be allowed to stand. But what would be the true basis of the decision? Surely simply this that the judges would not consider that fair and proper. However much the real ground of decision may be hidden behind a screen of words like 'reasonable', 'substantial', 'rational' and 'arbitrary' the fact would remain that judges are sub- stituting their own judgment of what is right and proper and reasonable and just for that of the legislature; and up to a point that, I think, is inevitable when a judge is called upon to crystallise a vague generality like article 14 into a concrete concept. Even in England, where Parliament is supreme, that is inevitable, for, as Dicey tells us in his Law of the Constitution, "Parliament is the supreme legislator, but from the moment Parliament has uttered its will as lawgiver, that will becomes subject to the interpretation put upon it by the judges of the land, and the judges, who are influenced by the feelings of magistrates no less than by the general spirit of the common law, are disposed to construe statutory exceptions to common law principles in a mode which would not commend itself either to a body of officials, or to the Houses of Parliament, if the Houses were called upon to interpret their own enact- ments."
Supreme Court of India
In Re: The Special Courts Bill, ... vs Unknown on 1 December, 1978
The scope, content and meaning of Article 14 of the Constitution has been the subject-matter of intensive examination by this Court in a catena of decisions. It would, therefore, be merely adding to the length of this judgment to recapitulate all those decisions and it is better to avoid that exercise save and except referring to the latest decision on the subject in Maneka Gandhi v. Union of India from which the following observation may be extracted:
"...... what is the content and reach of the great equalising principle enunciated in this article ? There can be no doubt that it is a founding faith of the Constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or lexicographic approach. No attempt should be made to truncate its all-embracing scope and meaning for, to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits..... Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Article 14 like a brooding omnipresence."
The decisions clearly lay down that though Art. 14 forbids class legislation, it does not forbid reasonable classification for the purpose of legislation. In order, however, to pass the test of permissible classification, two conditions must be fulfilled, viz., (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group; and (ii) that differentia must have a rational relation to the objects sought to be achieved by the statute in question. (see Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar & Others.(1) The classification may be founded on differential basis according to objects sought to be achieved but what is implicit in it is that there ought to be a nexus i.e., causal connection between the basis of classification and object of the statute under consideration. It is equally well settled by the decisions of this Court that Art. 14 condemns discrimination not only by a substantive law but also by a law of procedure.
After an exhaustive review of almost all decisions bearing on the question of Art. 14, this Court speaking through Chandrachud, C.J. in Re. Special Courts Bill (2) restated the settled propositions which emerged from the judgments of this Court undoubtedly insofar as they were relevant to the decision on the points arising for consideration in that matter. Four of them are apt and relevant for the present purpose and may be extracted. They are:
"3. The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is justified if it is not palpably arbitrary.
4. The principle underlying the guarantee of Article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same remedies should be made available to them irrespective of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is substantially the same.
6. The law can make and set apart the classes according to the needs and exigencies of the society and as suggested by experience. It can recognise even degree of evil, but the classification should never be arbitrary, artificial or evasive.
7. The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that differentia must have a rational relation to the object sought to be achieved by the Act."
The other facet of Art. 14 which must be remembered is that it eschews arbitrariness in any form. Article 14 has, therefore, not to be held identical with the doctrine of classification. As was noticed in Maneka Gandhi's case in the earliest stages of evolution of the Constitutional law, Art. 14 came to be identified with the doctrine of classification because the view taken was that Art. 14 forbids discrimination and there will be no discrimination where the classification making the differentia fulfils the aforementioned two conditions. However, in EP. Royappa v. State of Tamil Nadu(1), it was held that the basic principle which informs both Arts. 14 and 16 is equality and inhibition against discrimination. This Court further observed as under:
"From a positivistic point of view, equality is antithetic to arbitrariness. In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Art. 14, and if it affects any matter relating to public employment, it is also violative of Art. 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment.
Justice Iyer has in his inimitable style dissected Art.
14 as under:
"The article has a pervasive processual potency and versatile quality, equalitarian in its soul and allergic to discriminatory diktats. Equality is the antithesis of arbitrariness and ex cathedra ipse dixit is the ally of demagogic authoritarianism. Only knight- errants of 'executive excesses'-if we may use current cliche-can fall in love with the Dame of despotism, legislative or administrative. If this Court gives in here it gives up the ghost. And so it that I insist on the dynamics of limitations on fundamental freedoms as implying the rule of law; be you ever so high, the law is above you."(2) Affirming and explaining this view, the Constitution Bench in Ajay Hasia etc. v. Khalid Mujib Sehravardi & others etc. (3) held that it must, therefore, now be taken to be well settled that what Art.14 strikes at is arbitrariness because any action that is arbitrary must necessarily involve negation of equality. The Court made it explicit that where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Art. 14. After a review of large number of decisions bearing on the subject, in Air India etc. etc. v. Nargesh Meerza & Ors. etc etc. (1) the Court formulated propositions emerging from analysis and examination of earlier decisions. One such proposition held well established is that Art. 14 is certainly attracted where equals are treated differently without any reasonable basis.
Thus the fundamental principle is that Art. 14 forbids class legislation but permits reasonable classification for the purpose of legislation which classification must satisfy the twin tests of classification being founded on an intelligible differntia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question.
As a corrolary to this well established proposition, the next question is, on whom the burden lies to affirmatively establish the rational principle on which the classification is founded correlated to the object sought to be achieved ? The thrust of Art. 14 is that the citizen is entitled to equality before law and equal protection of laws. In the very nature of things the society being composed of unequals a welfare state will have to strive by both executive and legislative action to help the less fortunate in the society to ameliorate their condition so that the social and economic inequality in the society may be bridged. This would necessitate a legislation applicable to a group of citizens otherwise unequal and amelioration of whose lot is the object of state affirmative action. In the absence of doctrine of classification such legislation is likely to flounder on the bed rock of equality enshrined in Art. 14. The court realistically appraising the social stratification and economic inequality and keeping in view the guidelines on which the State action must move as constitutionally laid down in part IV of the Constitution, evolved the doctrine of classification. The doctrine was evolved to sustain a legislation or State action designed to help weaker sections of the society or some such segments of the society in need of succor. Legislative and executive action may accordingly be sustained if it satisfies the twin tests of reasonable classification and the rational principle correlated to the object sought to be achieved. The State, therefore, would have to affirmatively satisfy the Court that the twin tests have been satisfied. It can only be satisfied if the State establishes not only the rational principle on which classification is founded but correlate it to the objects sought to be achieved. This approach is noticed in Ramana Dayaram Shetty v. The International Airport Authority of India & Ors.(1) when at page 1034, the Court observed that a discriminatory action of the Government is liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.
Supreme Court of India
Kathi Raning Rawat vs The State Of Saurashtra on 27 February, 1952
Equivalent citations: 1952 AIR 123, 1952 SCR 435
Author: M P Sastri
Bench: Sastri, M. Patanjali (Cj), Fazal Ali, Saiyid, Mahajan, Mehr Chand, Mukherjea, B.K., Aiyar, N.C. & Bose, Vivian & Das, S.R.
The Saurashtra State Public Safety Measures Ordinance,
1948, was passed "to provide for public safety, maintenance
of public order and preservation of peace and tranquillity
in the State of Saurashtra." As crimes involving violence
such as dacoity and murder were increasing, this Ordinance
was amended by the Saurashtra State Public Safety Measures
(Third Amendment) Ordinance, 1949, which, by secs. 9, 10 and
11, empowered the State Government by notification in the
official gazette to constitute Special Courts of criminal
Jurisdiction for such area as may be specified in the noti-
fication, to appoint Special Judges to preside over such
Courts and to invest them with jurisdiction to try such
offences or classes of offences or such eases or classes of
cases as the Government may, by general or special order in
writing, direct. The procedure laid down by
the Ordinance for trial before such Courts varied from the
normal procedure prescribed by the Criminal Procedure Code
in two material respects, viz., there was no provision for
trial by jury or with the aid of assessors, or for enquiry
before commitment to sessions. In exercise of the powers
conferred by this Ordinance the Government, by a notifica-
tion, constituted a Special Court for certain areas and
empowered that Court to try offences under sees. 183, 189,
302, 304, 307, 392 and certain other sections of the Indian
Penal Code which were specified in the notification.
It was contended on behalf of the appellant who had been
convicted by the Special Court under secs. 302, 307 and 392
of the Indian Penal Code read with sec. 34, that the Ordi-
nance of 1949 and the notification above-mentioned contra-
vened Art. 14 of the Constitution and were therefore ultra
vires and void:
Held, per PATANJALI SASTRI C.J, FAZL ALI, MUKHERJEA and
DAS JJ.--(MEHR CHAND MAHAJAN, CHANDRASEKHARA AIYAR and Bose
JJ. dissenting)--That the impugned Ordinance in so far as it
authorised the State Government to direct offences or class-
es of offences or classes of cases to be tried by the Spe-
cial Court did not contravene the provisions of Art. 14 and
was not ultra vires or void. The notification issued under
the Ordinance was also not void.
All legislative differentiation is not necessarily dis- criminatory. In fact, the word "discrimination" does not occur in article 14. The expression "discriminate against" is used in article 15 (1) and article. 16(2), and it means, according to the Oxford Dictionary, "to make an adverse distinction with regard to; to distinguish unfavourably from others". Discrimination thus involves an element of unfa- vourable bias and it is in that sense that the expression has to be understood in this context. If such bias is disclosed and is based on any of the grounds mentioned in articles 15 and 16, it may well be that the statute will, without more, incur condemnation as violating a specific constitutional prohibition unless it is saved by one or other of the provisos to those articles. But the position under article 14 is different. Equal protection claims under that article are examined with the presumption that the State action is reasonable and justified. This pre- sumption of constitutionality stems from the wide power of classification which the legislature must, of necessity, possess in making laws operating differently as regards different groups of persons in order to give effect to its policies. The power of the State to regulate criminal trials by constituting different courts with different procedures according to the needs of different parts of its territory is an essential part of its police power-Though the differing procedures might involve disparity in the treatment of the persons tried under them, such disparity is not by itself sufficient, in my opinion, to outweigh the presumption and establish discrimination unless the degree of disparity goes beyond what the reason for its existence demands as, for instance, when it amounts to a denial of a fair and impar- tial trial. It is, therefore, not correct to say that arti- cle 14 provides no further constitutional protection to personal liberty than what is afforded by article 21. Notwithstanding that its wide general language is greatly qualified in its practical application by a due recognition of the State's necessarily wide powers of legislative clas- sification, article 14 remains an important bulwark against discriminatory procedural laws.
a distinction should be drawn between"dis- crimination without reason" and' 'discrimination with rea- son". The whole doctrine of classification is based on this distinction and on the well-known fact that the circum- stances which govern one set of persons or objects may not necessarily be the same as those governing another set of persons or objects, so that the question of unequal treat- ment does not really arise as between persons governed by different conditions and different sets of circum- stances. The main objection to the West Bengal Act was that it permitted discrimination "without reason" or with- out any rational basis. Having laid down a procedure which was materially different from and less advantageous to the accused than the ordinary procedure, that Act gave uncon- trolled and unguided authority to the State Government to put that procedure into operation in the trial of any case or class of cases or any offence or class of offences. There was no principle to be found in that Act to control the application of the discriminatory provisions or to correlate those provisions to some tangible and rational objective, in such a way as to enable anyone reading the Act to say :--If that is the objective, the provisions as to special treatment of the offences seem to be quite suitable and there can be no objection to dealing with a particular type of offences on a special footing. The mere mention of speedier trial as the object of the Act did not cure the defect, because the expression "speedier trial" standing by itself provided no rational basis of classification. It was merely a description of the result sought to be achieved by the application of the special procedure laid down in the Act' and afforded no help in determining what cases required speedier trial.
As regards the present Ordinance, we can discover a guiding principle within its four corners, which cannot but have the effect of limiting the application of the special procedure to a particular category of offences only and establish such a nexus (which was missing in the West Bengal Act) between offences of a particular category and the object with which the Ordinance was promulgated, as should suffice to repel the charge of discrimination and furnish some justification for the special treatment of those of- fences. The Ordinance, as I have already stated, purported to amend another Ordinance, the object of which was to provide for public safety, maintenance of public order and preservation of peace and tranquillity in the State. It was not disputed before us that the preamble of the original Ordinance would govern the amending Ordinance also, and the object of promulgating the subsequent Ordinance was the same as the object of promulgating the original Ordinance. Once this is appreciated, It is easy to see that there is something in the Ordinance itself to guide the State Govern- ment to apply the special procedure not to any and every case but only to those cases or offences which have a ra- tional relation to, or connection with, the main object and purpose of the Ordinance and which for that reason become a class by themselves requiring to be dealt with on a special footing. The clear recital of a definite objective furnishes a tangible and rational basis of classification to the State Government for the purpose of applying the provi- sions of the Ordinance and for choosing only such offences or cases as affect public safety, maintenance of public order and preservation of peace and tranquillity. Thus, under section 11, the State Government is expected to select only such offences or class of offences or class of cases for being tried by the special court in accordance with the special procedure, as are calculated to affect public safety, maintenance of public order, etc., and under section 9, the use of the special procedure must necessarily be confined to only disturbed areas or those areas where adoption of public safety measures is necessary. That this is how the Ordinance was intended to be understood and was in fact understood, is confirmed by the Notification issued on the 9/11th February by the State Government in pursuance of the Ordinance. That Notification sets out 49 offences under the Indian Penal Code as adapted and applied to the State and certain other offences punishable under the Ordinance, and one can see at once that all these offences directly affect the maintenance of public order and peace and tran- quillity. The Notification also specifies certain areas in the State over which only the special court is to exercise jurisdiction. There can be no dispute that if the State Legislature finds that lawlessness and crime are rampant and there is a direct threat to peace and tranquil- lity in certain areas within the State, it is competent to deal with offences which affect the maintenance of public order and preservation of peace and tranquillity in those areas as a class by themselves and to provide that such offences shall be tried as expeditiously as possible in accordance with a special procedure devised for the purpose. This, in my opinion, is in plain language the rationale of the Ordinance, and it will be going too far to say that in no case and under no circumstances can a legislature lay down a special procedure for the trial of a particular class of offences, and that recourse to a simplified and less cumbrous procedure for the trial of those offences, even when abnormal conditions prevail, will amount to a violation of article 14 of the Constitution. I am satisfied that this case is distinguishable from the case relating to the West Bengal Act, but I also feel that the legislatures should have recourse to legislation such as the present only in very special circumstances. The question of referring individual cases to the special court does not arise in this appeal, and I do not wish to express any opinion on it. Certain other points were urged on behalf of the appel- lant, namely, that the Ordinance suffers from excessive delegation of legislative authority, and that the Rajpramukh had exceeded his powers in amending the provisions of the Criminal Procedure Code. These contentions were found to be devoid of all force and have to be reject- ed.
In the result, I would hold that the Saurashtra State Public Safety Measures (Third Amendment) Ordinance is not unconstitutional, and accordingly overrule the objection as to the jurisdiction of the special court to try the appellant.
Supreme Court of India
R.K. Garg And Ors. vs Union Of India (Uoi) And Ors. on 13 November, 1981 (Bearer Bonds case)
Now while considering the constitutional validity of a statute said to be violative of Article 14, it is necessary to bear in mind certain well established principles which have been evolved by the courts as rules of guidance in discharge of its constitutional function of judicial review. The first rule is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. This rule is based on the assumption, judicially recognised and accepted, that the legislature understands and correctly appreciates the needs of its own people, its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds. The presumption of constitutionality is indeed so strong that in order to sustain it, the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation.
10. Another rule of equal importance is that laws relating to economic activies should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrine or straight jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislature judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey v. Dond 354 US 457 where Frankfurter, J. said in his inimitable style:
In the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial difference to legislative judgment. The legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events-self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability.
The court must always remember that "legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry" that exact wisdom and nice adoption of remedy are not always possible and that "judgment is largely a prophecy based on meagre and un-interpreted experience". Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There, may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture v. Central Reig Refining Company 94 Lawyers Edition 381 be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues.
Supreme Court of India
Clarence Pais & Ors vs Union Of India on 22 February, 2001
Historical reasons may justify differential treatment of separate geographical regions provided it bears a reason and just relation to the matter in respect of which differential treatment is accorded. Uniformity in law has to be achieved, but that is a long drawn process. Undoubtedly, the States and Union should be alive to this problem. Only on the basis that some differences arise in one or other States in regard to testamentary succession, the law does not become discriminatory so as to be invalid. Such differences are bound to arise in a federal set up.
Supreme Court of India
Shree Meenakshi Mills Ltd. ... vs Sri A.V. Visvanatha Sastri & Ors on 21 October, 1954
the Constitution of India came into force on the 26th January, 1950, and the pre-Constitution laws had then to stand the test for their validity on the provisions of Part III of the Constitution. Article 14 of this Part guarantees to all persons the right of equality before the law and equal protection of the laws within the territory of India. This article not only guarantees equal protection as regards substantive laws but procedural laws also come within its ambit. The implication of the article is that all litigants similarly situated are entitled to avail themselves of the same procedural rights for relief, and for defence with like protection and without discrimination.
Supreme Court of India
Naraindas Indurkhya vs The State Of Madhya Pradesh & Ors on 18 March, 1974
That takes us to the challenge based on Art. 14 of the Constitution. This Article ensures equality before law and strikes at arbitrary and discriminatory State action, Where State Government exercises any power, statutory or otherwise, it must not discriminate unfairly between one person and another. Every State action must be guided by certain norms and standards which are in themselves not objectionable as being discriminatory in character. if power conferred by statute on any authority of the State is vagrant and unconfined and no standards or principles are laid down by the statute to guide and control the exercise of such power, the statute would be violative of the equality clause, because it would permit arbitrary and capricious exercise of power, which is the anti-thesis of equality before law. Such a case would fall within the second proposition laid down by this Court in Jyoti Pershad v. Administrator for the Union Territory of Delhi.
"The enactment of the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be accorded to persons or things similarly situated. This would happen when the legislature vests a discretion in an authority, be it the Government or an administrative official acting either as an executive officer or even in a quasijudicial capacity by a legislation which does not lay down any policy or disclose any tangible or intelligible purpose thus clothing the authority with unguided and arbitrary powers enabling it to discriminate.' It can, therefore hardly be disputed that if s. 4, sub-s.
(1) were found to confer a naked and arbitrary power on the State Government to select and prescribe such text books as it pleases in exercise of its absolute and uncontrolled discretion without any guiding principle or policy to control and regulate the exercise of such discretion, it would be in violation of the constitutional mandate of equality before law.
Supreme Court of India
Sudhir Chandra Sarkar vs Tata Iron & Steel Co. Ltd. And ... on 27 March, 1984
our Constitution envisages a society governed by rule of law. Absolute discretion uncontrolled by guidelines which may permit denial of equality before law is the anti-thesis of rule of law. Absolute discretion not judicially reviewable inheres the pernicious tendency to be arbitrary and is therefore violative of Art. 14. Equality before law and absolute discretion to grant or deny benefit of the law are diametrically opposed to each other and cannot co-exist. Therefore, also the conferment of absolute discretion by Rule 10 of the Gratuity Rules to give or deny the benefit of the rules cannot be upheld and must be rejected as unenforceable.
Supreme Court of India
Balco Employees Union (Regd.) vs Union Of India & Ors on 10 December, 2001
It is not for Courts to consider the relative merits of different economic policies. Court is not the Forum for resolving the conflicting clauses regarding the wisdom or advisability of policy. It will be appropriate to consider some relevant decisions of this Court in relation to judicial review of policy decisions.
While considering the validity of the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 1969, this Court in Rustom Cavasjee Cooper vs. Union of India, (1970) 1 SCC 248 at page 294 observed as under :-
"It is again not for this Court to consider the relative merits of the different political theories or economic policies. This Court has the power to strike down a law on the ground of want of authority, but the Court will not sit in appeal over the policy of the Parliament in enacting a law..."
Applying the analogy, just as the Court does not sit over the policy of the Parliament in enacting the law, similarly, it is not for this Court to examine whether the policy of this disinvestment is desirable or not. Dealing with the powers of the Court while considering the validity of the decision taken in the sale of certain plants and equipment of the Sindri Fertilizer Factory, which was owned by a Public Sector Undertaking, to the highest tenderer, this Court in Fertilizer Corporation Kamgar Union (Regd.), Sindri and Others vs. Union of India and Others, (1981) 1 SCC 568 at page 584, while upholding the decision to sell, observed as follows :-
".We certainly agree that judicial interference with the administration cannot be meticulous in our Montesquien system of separation of powers. The Court cannot usurp or abdicate, and the parameters of judicial review must be clearly defined and never exceeded. If the Directorate of a Government company has acted fairly, even if it has faltered in its wisdom, the court cannot, as a super-auditor, take the Board of Directors to task. This function is limited to testing whether the administrative action has been fair and free from the taint of unreasonableness and has substantially complied with the norms of procedure set for it by rules of public administration."
With regard to the question of the locus standi of the workmen, who feared large-scale retrenchment, to challenge the validity of action taken by the Company, it was observed at page 589 as follows :-
"If a citizen is no more than a wayfarer or officious intervener without any interest or concern beyond what belongs to any one of the 660 million people of this country, the door of the court will not be ajar for him. But, if he belongs to an organisation which has special interest in the subject matter, if he has some concern deeper than that of a busybody, he cannot be told off at the gates, although whether the issue raised by him is justiciable may still remain to be considered. I, therefore, take the view that the present petition would clearly have been permissible under Article 226".
In State of M.P. and Others vs. Nandlal Jaiswal and Others, (1986) 4 SCC 566 the change of the policy decision taken by the State of Madhya Pradesh to grant licence for construction of distilleries for manufacture and supply of country liquor to existing contractors was challenged. Dealing with the power of the Court in considering the validity of policy decision relating to economic matters, it was observed at page 605 as follows :-
"But, while considering the applicability of Article 14 in such a case, we must bear in mind that, having regard to the nature of the trade or business, the Court would be slow to interfere with the policy laid down by the State Government for grant of licences for manufacture and sale of liquor. The Court would, in view of the inherently pernicious nature of the commodity allow large measure of latitude to the State Government in determining its policy of regulating, manufacture and trade in liquor. Moreover, the grant of licences for manufacture and sale of liquor would essentially be a matter of economic policy where the Court would hesitate to intervene and strike down what the State Government has done, unless it appears to be plainly arbitrary, irrational or mala fide. We had occasion to consider the scope of interference by the Court under Article 14 while dealing with laws relating to economic activities in R.K. Garg v. Union of India. We pointed out in that case that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. We observed that the legislature should be allowed some play in the joints because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. We quoted with approval the following admonition given by Frankfurter, J. in Morey v. Dond.
In the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to legislative judgement. The legislature after all has the affirmative responsibility. The Courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability.
What we said in that case in regard to legislation relating to economic matters must apply equally in regard to executive action in the field of economic activities, though the executive decision may not be placed on as high a pedestal as legislative judgement insofar as judicial deference is concerned. We must not forget that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call 'trial' and error method' and, therefore, its validity cannot be tested on any rigid 'a priori' considerations or on the application of any strait-jacket formula. The Court must while adjudging the constitutional validity of an executive decision relating to economic matters grant a certain measure of freedom or 'play in the joints' to the executive. "The problem of government" as pointed out by the Supreme Court of the United States in Metropolis Theatre Co. v. State of Chicago.
are practical ones and may justify, if they do not require, rough accommodations, illogical, it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not discernible, the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void.
The Government, as was said in Permian Basin Area Rate cases, is entitled to make pragmatic adjustments which may be called for by particular circumstances. The Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The Court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. It is against the background of these observations and keeping them in mind that we must now proceed to deal with the contention of the petitioners based on Article 14 of the Constitution."
A policy decision of the Government whereby validity of contract entered into by Municipal Council with the private developer for construction of a commercial complex was impugned came up for consideration in G.B. Mahajan and Others vs. Jalgaon Municipal Council and Others, (1991) 3 SCC 91 and it was observed at page 104 as follows :-
"The criticism of the project being 'unconventional' does not add to or advance the legal contention any further. The question is not whether it is unconventional by the standard of the extant practices, but whether there was something in the law rendering it impermissible. There is, no doubt, a degree of public accountability in all governmental enterprises. But, the present question is one of the extent and scope of judicial review over such matters. With the expansion of the State's presence in the field of trade and commerce and of the range of economic and commercial enterprises of government and its instrumentalities there is an increasing dimension to governmental concern for stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost overruns in projects, balancing of costs against time scales, quality control, cost-benefit ratios etc. In search of these values it might become necessary to adopt appropriate techniques of management of projects with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable pejorative environmental implications or amount to clear abuse of power. This again is the judicial recognition of administrator's right to trial and error, as long as both trial and error are bona fide and within the limits of authority.."
To the same effect are the observations of this Court in Peerless General Finance and Investment Co. Limited and Another vs. Reserve Bank of India, (1992) 2 SCC 343 in which Kasliwal, J. observed at page 375 as follows :-
"31. The function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority. It is well settled that a public body invested with statutory powers must take care not to exceed or abuse its power. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. Courts are not to interfere with economic policy which is the function of experts. It is not the function of the courts to sit in judgement over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts".
In Premium Granites and Another vs. State of T.N. and Others, (1994) 2 SCC 691 while considering the Court's powers in interfering with the policy decision, it was observed at page 715 as under :-
"54. It is not the domain of the Court to embark upon unchartered ocean of public policy in an exercise to consider as to whether the particular public policy is wise or a better, public policy can be evolved. Such exercise must be left to the discretion of the executive and legislative authorities as the case may be.."
The validity of the decision of the Government to grant licence under the Telegraph Act 1885 to non-government companies for establishing, maintaining and working of telecommunication system of the country pursuant to Government policy of privatisation of Telecommunications was challenged in Delhi Science Forum and Others vs. Union of India and Another, (1996) 2 SCC 405. It had been contended that Telecommunications was a sensitive service which should always be within the exclusive domain and control of the Central Government and under no situation should be parted with by way of grant of licence to non-government companies and private bodies. While rejecting this contention, it observed at page 412 that : ".. The national policies in respect of economy, finance, communications, trade, telecommunications and others have to be decided by Parliament and the representatives of the people on the floor of the Parliament can challenge and question any such policy adopted by the ruling Government."
The Court then referred to an earlier decision in the case of R.K. Garg vs. Union of India and Others, (1981) 4 SCC 675 where there was an unsuccessful challenge to a law enacted by Parliament and held at page 413 as follows :-
"What has been said in respect of legislations is applicable even in respect of policies which have been adopted by Parliament. They cannot be tested in Court of Law. The courts cannot express their opinion as to whether at a particular juncture or under a particular situation prevailing in the country any such national policy should have been adopted or not. There may be views and views, opinions and opinions which may be shared and believed by citizens of the country including the representatives of the people in Parliament. But that has to be sorted out in Parliament which has to approve such policies. Privatisation is a fundamental concept underlying the questions about the power to make economic decisions. What should be the role of the State in the economic development of the nation? How the resources of the country shall be used? How the goals fixed shall be attained? What are to be the safeguards to prevent the abuse of the economic power? What is the mechanism of accountability to ensure that the decision regarding privatisation is in public interest? All these questions have to be answered by a vigilant Parliament. Courts have their limitations because these issues rest with the policy-makers for the nation. No direction can be given or is expected from the courts unless while implementing such policies, there is violation or infringement of any of the constitutional or statutory provision. The new Telecom policy was placed before Parliament and it shall be deemed that Parliament has approved the same. This Court cannot review and examine as to whether the said policy should have been adopted. Of course, whether there is any legal or constitutional bar in adopting such policy can certainly be examined by the Court".
While considering the validity of the industrial policy of the State of Madhya Pradesh relating to the agreements entered into for supply of sal seeds for extracting oil in M.P. Oil Extraction and Another vs. State of M.P. and Others, (1997) 7 SCC 592, the Court at page 610 held as follows :-
"41. After giving our careful consideration to the facts and circumstances of the case and to the submissions made by the learned counsel for the parties, it appears to us that the Industrial Policy of 1979 which was subsequently revised from time to time cannot be held to be arbitrary and based on no reason whatsoever but founded on mere ipse dixit of the State Government of M.P. The executive authority of the State must be held to be within its competence to frame a policy for the administration of the State. Unless the policy framed is absolutely capricious and, not being informed by any reason whatsoever, can be clearly held to be arbitrary and founded on mere ipse dixit of the executive functionaries thereby offending Article 14 of the Constitution or such policy offends other constitutional provisions or comes into conflict with any statutory provision, the Court cannot and should not outstep its limit and tinker with the policy decision of the executive functionary of the State. This Court, in no uncertain terms, has sounded a note of caution by indicating that policy decision is in the domain of the executive authority of the State and the Court should not embark on the unchartered ocean of public policy and should not question the efficacy or otherwise of such policy so long the same does not offend any provision of the stature or the Constitution of India. The supremacy of each of the three organs of the State i.e. legislature, executive and judiciary in their respective fields of operation needs to be emphasised. The power of judicial review of the executive and legislative action must be kept within the bounds of constitutional scheme so that there may not be any occasion to entertain misgivings about the role of judiciary in outstepping its limit by unwarranted judicial activism being very often talked of in these days. The democratic set-up to which the polity is so deeply committed cannot function properly unless each of the three organs appreciate the need for mutual respect and supremacy in their respective fields."
(emphasis added) The validity of the change of Government policy in regard to the reimbursement of medical expenses to its serving and retired employees came up for consideration before this Court in State of Punjab and Others vs. Ram Lubhaya Bagga and Others (1998) 4 SCC 117. The earlier policy upholding the reimbursement for treatment in a private hospital had been upheld by this Court but the State of Punjab changed this policy whereby reimbursement of medical expenses incurred in a private hospital was only possible if such treatment was not available in any government hospital. Dealing with the validity of the new policy, the Court observed at page 129 as follows :-
"25. Now we revert to the last submission, whether the new State policy is justified in not reimbursing an employee, his full medical expenses incurred on such treatment, if incurred in any hospital in India not being a government hospital in Punjab. Question is whether the new policy which is restricted by the financial constraints of the State to the rates in AIIMS would be in violation of Article 21 of the Constitution of India. So far as questioning the validity of governmental policy is concerned in our view it is not normally within the domain of any court, to weigh the pros and cons of the policy or to scrutinize it and test the degree of its beneficial or equitable disposition for the purpose of varying, modifying or annulling it, based on howsoever sound and good reasoning, except where it is arbitrary or violative of any constitutional, statutory or any other provision of law. When Government forms its policy, it is based on a number of circumstances on facts, law including constraints based on its resources. It is also based on expert opinion. It would be dangerous if court is asked to test the utility, beneficial effect of the policy or its appraisal based on facts set out on affidavits. The Court would dissuade itself from entering into this realm which belongs to the executive. It is within this matrix that it is to be seen whether the new policy violates Article 21 when it restricts reimbursement on account of its financial constraints."
The reluctance of the Court to judicially examine the matters of economic policy was again emphasised in Bhavesh D. Parish and Others vs. Union of India and Another, (2000) 5 SCC 471 and while examining the validity of Section 45-S of the Reserve Bank of India Act 1934, it was held as follows :-
"26. The services rendered by certain informal sectors of the Indian economy could not be belittled. However, in the path of economic progress, if the informal system was sought to be replaced by a more organised system, capable of better regulation and discipline, then this was an economic philosophy reflected by the legislation in question. Such a philosophy might have its merits and demerits. But these were matters of economic policy. They are best left to the wisdom of the legislature and in policy matters the accepted principle is that the courts should not interfere. Moreover in the context of the changed economic scenario the expertise of people dealing with the subject should not be lightly interfered with. The consequences of such interdiction can have large-scale ramifications and can put the clock back for a number of years. The process of rationalisation of the infirmities in the economy can be put in serious jeopardy and, therefore, it is necessary that while dealing with economic legislations, this Court, while not jettisoning its jurisdiction to curb arbitrary action or unconstitutional legislation, should interfere only in those few cases where the view reflected in the legislation is not possible to be taken at all".
In Narmada Bachao Andolan vs. Union of India and Others, (2000) 10 SSC 664, there was a challenge to the validity of the establishment of a large dam. It was held by the majority at page 762 as follows :-
"229. It is now well settled that the Courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision. Whether to have an infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policy-making process and the Courts are ill-equipped to adjudicate on a policy decision so undertaken. The Court, no doubt, has a duty to see that in the undertaking of a decision, no law is violated and people's fundamental rights are not transgressed upon except to the extent permissible under the Constitution."
It is evident from the above that it is neither within the domain of the Courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are our Courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical.
Process of disinvestment is a policy decision involving complex economic factors. The Courts have consistently refrained from interfering with economic decisions as it has been recognised that economic expediencies lack adjudicative disposition and unless the economic decision, based on economic expediencies, is demonstrated to be so violative of constitutional or legal limits on power or so abhorrent to reason, that the Courts would decline to interfere. In matters relating to economic issues, the Government has, while taking a decision, right to "trial and error" as long as both trial and error are bona fide and within limits of authority. There is no case made out by the petitioner that the decision to disinvest in BALCO is in any way capricious, arbitrary, illegal or uninformed. Even though the workers may have interest in the manner in which the Company is conducting its business, inasmuch as its policy decision may have an impact on the workers' rights, nevertheless it is an incidence of service for an employee to accept a decision of the employer which has been honestly taken and which is not contrary to law. Even a government servant, having the protection of not only Articles 14 and 16 of the Constitution but also of Article 311, has no absolute right to remain in service. For example, apart from cases of disciplinary action, the services of government servants can be terminated if posts are abolished. If such employee cannot make a grievance based on part III of the Constitution or Article 311 then it cannot stand to reason that like the petitioners, non-government employees working in a company which by reason of judicial pronouncement may be regarded as a State for the purpose of part III of the Constitution, can claim a superior or a better right than a government servant and impugn it's change of status. In taking of a policy decision in economic matters at length, the principles of natural justice have no role to play. While it is expected of a responsible employer to take all aspects into consideration including welfare of the labour before taking any policy decision that, by itself, will not entitle the employees to demand a right of hearing or consultation prior to the taking of the decision.
In a democracy, it is the prerogative of each elected Government to follow it's own policy. Often a change in Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested interests. Unless any illegality is committed in the execution of the policy or the same is contrary to law or mala fide, a decision bringing about change cannot per se be interfered with by the Court.
Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the Courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the appropriate forum is the Parliament and not the Courts. Here the policy was tested and the Motion defeated in the Lok Sabha on 1st March, 2001.
Thus, apart from the fact that the policy of disinvestment cannot be questioned as such, the facts herein show that fair, just and equitable procedure has been followed in carrying out this disinvestment. The allegations of lack of transparency or that the decision was taken in a hurry or there has been an arbitrary exercise of power are without any basis. It is a matter of regret that on behalf of State of Chattisgarh such allegations against the Union of India have been made without any basis. We strongly deprecate such unfounded averments which have been made by an officer of the said State.
The offer of the highest bidder has been accepted. This was more than the reserve price which was arrived at by a method which is well recognised and, therefore, we have not examined the details in the matter of arriving at the valuation figure. Moreover, valuation is a question of fact and the Court will not interfere in matters of valuation unless the methodology adopted is arbitrary [see Duncans Industries Ltd. vs. State of U.P. and Others, (2000) 1 SCC 633].
Judicial interference by way of PIL is available if there is injury to public because of dereliction of Constitutional or statutory obligations on the part of the government. Here it is not so and in the sphere of economic policy or reform the Court is not the appropriate forum. Every matter of public interest or curiosity cannot be the subject matter of PIL. Courts are not intended to and nor should they conduct the administration of the country. Courts will interfere only if there is a clear violation of Constitutional or statutory provisions or non-compliance by the State with it's Constitutional or statutory duties. None of these contingencies arise in this present case.
In the case of a policy decision on economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgement of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in the decision itself.
Lastly, no ex-parte relief by way of injunction or stay especially with respect to public projects and schemes or economic policies or schemes should be granted. It is only when the Court is satisfied for good and valid reasons, that there will be irreparable and irretrievable damage can an injunction be issued after hearing all the parties. Even then the Petitioner should be put on appropriate terms such as providing an indemnity or an adequate undertaking to make good the loss or damage in the event the PIL filed is dismissed.
It is in public interest that there should be early disposal of cases. Public Interest Litigation should, therefore, be disposed of at the earliest as any delay will be contrary to public interest and thus become counter-productive.
Academy of Nutrition Improvement and others v. Union of India [(2011) 8 SCC 274] wherein Supreme Court held that courts will be reluctant to interfere with policy decisions taken by the Government in matters of public health, after collecting and analysing inputs from service and research, nor will courts attempt to substitute their own views as to what is wise, safe, prudent or proper in relation to technical issues relating to public health in preference to those formulated by persons said to process technical expertise and rich experience.
TATA Iron and Steel company v. Union of India [1996(9) SCC 709]
the Court normally does not interfere on matters affecting policy unless the policy is inconsistent with the Constitution and the laws . Courts will interfere with matters of Government policy only when the action from Government is unconstitutional or contrary to statutory provision or arbitrary, irrational or in abuse of power.
In Narmada Bachao Andolan v. State of Madhya Pradesh (AIR 2011 SUPREME COURT 1989), a three Judge Bench of the Supreme Court while evaluating the case law with reference to interference of Court in policy matters held as under:
In State of Punjab and Ors. v. Ram Lubhaya Bagga etc. etc., AIR 1998 SC 1703 :
, this Court while examining the State policy fixing the rates for reimbursement of medical expenses to the government servants held : ".........When Government forms its policy, it is based on a number of circumstances on facts, law including constraints based on its resources. It is also based on expert opinion. It would be dangerous if court is asked to test the utility, beneficial effect of the policy or its appraisal based on facts set out on affidavits. The court would dissuade itself from entering into this realm which belongs to the executive. It is within this matrix that it is to be seen whether the new policy violates Article 21 when it restricts reimbursement on account of its financial constraints.......... For every return there has to be investment. Investment needs resources and finances. So even to protect this sacrosanct right finances are an inherent requirement. Harnessing such resources needs top priority........No State of any country can have unlimited resources to spend on any of its projects. W.A.Nos.1341 & 1375 of 2013 That is why it only approves its projects to the extent it is feasible."
The Court cannot strike down a policy decision taken by the Government merely because it feels that another decision would have been fairer or more scientific or logical or wiser. The wisdom and advisability of the policies are ordinarily not amenable to judicial review unless the policies are contrary to statutory or constitutional provisions or arbitrary or irrational or an abuse of power. (See: Ram Singh Vijay Pal Singh and Ors. v. State of U.P. and Ors., (2007) 6 SCC 44; Villianur Iyarkkai Padukappu Maiyam v. Union of India and Ors., (2009) 7 SCC 561
Bajaj Hindustan limited vs Sir Shadi Lal Enterprises Limited and another, wherein the Hon'ble Apex Court has held as follows:
39. We should not be understood to have meant that the judiciary should never interfere with administrative decisions. However, such interference should be only within narrow limits e.g., when there is clear violation of the statute or a constitutional provision, or there is arbitrariness in the Wednesbury sense. It is the administrators and legislators who are entitled to frame politics and take such administrative decisions as they think necessary in the public interest. The Court should not ordinarily interfere with policy decisions, unless clearly illegal.
45. In our opinion there should be judicial restraint in fiscal and economic regulatory measures. The State should not be hampered by the Court in such measures unless they are clearly illegal or unconstitutional. All administrative decisions in the economic and social spheres are essentially adhoc and experimental: Since economic matters are extremely complicated this inevitably entails special treatment for distinct social phenomena. The State must therefore be left with wide latitude in devising ways and means of imposing fiscal regulatory measures, and the Court should not, unless compelled by the statute or by the Constitution, encroach into this field.
46. In our opinion, it will make no difference whether the policy has been framed by the legislature or the executive and in either case there should be judicial restraint. The Court invalidate an executive policy only when it is clearly violative of some provisions of the statute or Constitution or is shockingly arbitrary but not otherwise."
(RULE OF LAW (DICEAN)
Dicey’s perception of the rule of law was introduced in his book Introduction to the Study of the Law of the Constitution.
Select Committee on Constitution Sixth Report (UK PARLIAMENT)
1. Dicey's first principle of the rule of law was that 'no man is punishable or can be lawfully made to suffer in body or goods except for a distinct breach of law established in the ordinary legal manner before the ordinary courts of the land. In this sense the rule of law is contrasted with every system of government based on the exercise by persons in authority of wide, arbitrary, or discretionary powers of constraint'.
2. Dicey's second principle of the rule of law concerns equality: 'every man, whatever be his rank or condition, is subject to the ordinary law of the realm and amenable to the jurisdiction of the ordinary tribunals'.
3.Dicey's third principle was that the unwritten constitution in the UK could be said to be pervaded by the rule of law because rights to personal liberty, or public meeting resulted from judicial decisions, whereas under many foreign constitutions such rights flowed from a written constitution.
Modern Conceptions of the Rule of Law:
(a) The Rule of Law and Lawful Authority
A core idea of the rule of law to which all would subscribe is that the government must be able to point to some basis for its action that is regarded as valid by the relevant legal system. Thus in the UK such action would commonly have its foundation in statute, the prerogative or in common law power. The relevant measure would then have to be made by the properly authorised person or institution, in the properly authorised manner
If the government cannot provide a legal foundation for its action then the UK courts would regard the action as unlawful, since there would be no lawful authority for it.
(b) The Rule of Law and Guiding Conduct
The meaning of the rule of law considered in the preceding section is important, but limited. Any law properly passed by Parliament would meet the rule of law defined in this manner. Thus the fact that laws should be passed in the correct legal manner is a necessary facet of the rule of law, but it is not sufficient. A further important aspect of the rule of law is that the laws thus promulgated should be capable of guiding ones conduct in order that one can plan ones life.
All are related to the idea of enabling individuals to be able to plan their lives. The 'list' includes the following: that laws should be prospective, not retrospective; that they should be relatively stable; that particular laws should be guided by open, general and clear rules; that there should be an independent judiciary; that there should be access to the courts; and that the discretion which law enforcement agencies possess should not be allowed to undermine the purposes of the relevant legal rules.
(c) The Rule of Law, Justice and Accountable Government:
It has also been argued that the rule of law provides the foundation for the controls exercised by the courts over governmental action through judicial review. In this sense the rule of law is expressive of how the state ought to behave towards individuals in society. The rule of law is said to demand that governmental action conforms to precepts of good administration developed through the courts, this being an essential facet of accountable government in a democratic society. The constraints imposed on government through judicial review are in part procedural and in part substantive. The range of these principles varies, but normally includes ideas such as: legality, procedural propriety, participation, fundamental rights, openness, rationality, relevancy, propriety of purpose, reasonableness, equality, legitimate expectations, legal certainty and proportionality. There has been a vibrant academic debate as to whether such principles must be legitimated by reference to legislative intent. There is nonetheless general agreement that it is the courts that have developed the principles of judicial review over the past 350 years.
Allan's interpretation of the rule of law also contains an admixture of formal and substantive elements. He argues that we should go beyond the formal conception of the rule of law, but that we should stop short of regarding the rule of law as the expression of any particular theory of substantive justice. The rule of law on this view does not entail commitment to any particular vision of the public good or any specific conception of social justice, but does require that all legal obligations be justified by appeal to some such vision. The rule of law should embrace, in addition to its formal attributes, ideals of equality and rationality, proportionality and fairness, and certain substantive rights. These are said to constitute central components of any recognisably liberal theory of justice, while leaving the scope and content of the rights and duties which citizens should possess largely as a matter for independent debate and analysis. Formal equality is to be supplemented by a more substantive equality, which requires that relevant distinctions must be capable of reasoned justification in terms of some conception of the common good. Allan's theory also embraces certain substantive rights, namely freedoms of speech, conscience, association, and access to information. It is recognised that there will be other rights within a liberal polity, which should be faithfully applied, but these are not regarded as a constituent part of the rule of law.
It should be recognised that any approach of the kind under examination will require some choice as to what are to count as fundamental rights, and the more particular meaning ascribed to such rights. This choice will reflect assumptions as to the importance of differing interests in society. This is unavoidable. It is of course true that any democracy to be worthy of the name will have some attachment to particular liberty and equality interests. If, however, we delve beneath the surface of phrases such as liberty and equality then significant differences of view become apparent even amongst those who subscribe to one version or another of liberal belief. This leaves entirely out of account the issue as to how far social and economic interests ought to be protected. It also fails to take account of other visions of democracy, of a communitarian rather than liberal nature, which might well interpret the civil/political rights and the social/economic rights differently. It is therefore neither fortuitous, nor surprising, that in other common law systems which possess constitutionally enshrined rights, such as the United States and Canada, there is considerable diversity of opinion even amongst those who support a rights-based approach, as to whether this should be taken to mean some version of liberalism, a pluralist model, or a modified notion of republicanism.
This point is equally true of ideas such as legality, rationality, participation, openness, proportionality, procedural fairness and the like, which can be given interpreted differently depending upon the more general scheme into which they are to fit.
The consequences of breach of the rule of law in the sense considered within this section should also be addressed. It is important, as when discussing other versions of the concept, to distinguish between the consequences of breach of the rule of law in relation to primary statute and in relation to other measures.
The short answer in relation to a primary statute that violates the rule of law is as follows. The fact that a statute does not conform to this conception of the rule of law does not in itself lead to its invalidation. The UK courts have not traditionally exercised the power of constitutional review to annul primary statutes for failure to conform to fundamental rights, or other precepts of the rule of law that constitute the principles of judicial review. This proposition must nonetheless be qualified in three ways.
First, there are statements by judges countenancing the possibility that the courts might refuse to apply an Act of Parliament in certain extreme circumstances. The examples tend to be of (hypothetical) legislation that is morally repugnant, or of legislation through which Parliament seeks to re-order the constitutional structure by abolishing judicial review, by making illegitimate use of the Parliament Acts or by extending very considerably the life of a current Parliament. It should moreover be recognised that the case law authority for the traditional proposition that courts will not invalidate or refuse to apply statute is actually rather thin. There are to be sure many judicial statements extolling the sovereignty of Parliament, but they are principally just that, judicial statements rather than formal decisions. Insofar as there are formal decisions that could be said to be based on the traditional proposition, the facts of such cases were generally relatively innocuous. They were a very long way from the types of case where courts might consider it to be justified to refuse to apply a statute, which also means that such cases could be readily distinguished should a court feel minded to do so.
Secondly, one who subscribes to the version of the rule of law discussed in this section might well argue that courts should generally exercise the ultimate power to invalidate statute for failure to comply with constitutionally enshrined rights, or with rights that are regarded as fundamental or foundational even where they are not formally enshrined in a written constitution. Dworkin is a prominent exponent of this view. The literature on this topic is vast, with the debate for and against such judicial power being replayed in successive academic generations.
Thirdly, courts or judges who subscribe to the conception of the rule of law discussed in this section have in any event powerful interpretive tools at their disposal through which to read legislation so that it does not violate fundamental rights or other facets of the rule of law. Thus even prior to the Human Rights Act 1998, the courts made it clear through the principle of legality that statutes would be read so as to conform to such rights. If Parliament intended to infringe or limit fundamental rights then this would have to be stated expressly in the legislation, or be the only plausible reading of the statutory language. Legislation was therefore read subject to a principle of legality, which meant that fundamental rights could not be overridden by general or ambiguous words. This was, said Lord Hoffmann, because there was too great a risk that the full implications of their unqualified meaning might have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts would therefore presume that even the most general words were intended to be subject to the basic rights of the individual. Parliament had, therefore, to squarely confront what it was doing and accept the political cost. An interpretive approach is clearly evident once again in the Human Rights Act 1998, section 3, which provides that 'so far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights'. Section 3 does not, however, affect the validity, continuing operation or enforcement of any incompatible primary legislation. Where a court is satisfied that primary legislation is incompatible with a Convention right then it can, pursuant to section 4 of the HRA, make a declaration of that incompatibility.
The consequence of breach of the rule of law in relation to measures other than primary statute is more straightforward. Insofar as the rule of law is regarded as the foundation of the principles of judicial review then it follows that breach of the rule of law, manifested through breach of one of the more particular principles of judicial review, can lead to annulment of the measure. This says nothing about whether the judicial decision will be controversial or not. The great many judicial review decisions generate no political controversy, but there will inevitably be instances where Parliament, or more usually the relevant minister, feels that the court's judgment was 'wrong' in some way. There will more generally be wide-ranging academic debate about the principles of judicial review and the way in which they are applied in particular cases.
It is fitting to conclude this paper by reverting to Lord Bingham's lecture, the catalyst for which was the statutory mention of the rule of law in the Constitutional Reform Act 2005, section 1.
The Modernized Rule of Law – The 8 Principles by Lord Bingham:
The lecture entitled ‘The Rule of Law’ was given by Lord Bingham in the House of Lords on 16 November 2006. Lord Bingham outlined 8 sub-rules which he believed comprised the rule of law and these 8 principles enunciated by Lord Bingham had been regarded as the modern version of the rule of law. Lord Bingham articulates eight principles that comprise the rule of law. Certain of these principles address the more formal dimensions of the rule of law. These include the idea that the law must be accessible, and so far as possible, intelligible, clear and predictable; that questions of legal right and liability should ordinarily be resolved by application of the law and not the exercise of discretion; and that means should be provided for resolving without prohibitive cost or inordinate delay bona fide civil disputes which the parties themselves are unable to resolve.
The view of Lord Bingham could be said as filling in lacunae of Dicey’s conception as it is more modern and concerning the present times. The eight principles are as below:
Sub-rule 1: The law must be accessible so far as possible, intelligible, clear and predictable.
Sub-rule 2: Questions of legal right and liability should generally be decided by application of the law and not the exercise of the discretion.
Sub-rule 3: The law must apply equally to everyone, unless differences can be justified.
Sub-rule 4: The law must provide appropriate protection of essential and basic human rights.
Sub-rule 5: The parties in civil disputes must be able to resolve disputes without facing a huge legal cost or excessive delays.
Sub-rule 6: The executive must use the powers given to them reasonably, in good faith, for the proper purpose and must not exceed the limit s of these powers.
Sub-rule 7: There must be adjudicative procedural fairness.
Sub-rule 8: The state must comply with the obligations of international law which whether deriving from treaty or international custom and practice governs the conduct of nations.)
Indian Supreme court on rule of law :
Supreme Court of India
Kumari Shrilekha Vidyarthi Etc. ... vs State Of U.P. And Ors on 20 September, 1990
Equivalent citations: 1991 AIR 537, 1990 SCR Supl. (1) 625
Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, can it be said that the State can thereafter cast off its personality and exercise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applica- ble to private individuals whose rights flow only from the terms of the contract without anything more? We have no hesitation in saying that the personality of the State, requiring regulation of its conduct in all spheres by requirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Article 14 and contractual obligations are alien concepts. which cannot co-exist. The Preamble of the Constitution of India resolves to secure to all its citizens Justice, social. economic and political; and Equality of status and opportunity. Every State action must be aimed at achieving this goal. Part IV of the Constitution contains `Directives Principles of State Policy which are fundamental in the governance of the country and are aimed at securing social and economic freedoms by appropriate State action which is complementary to individual fundamental rights guaranteed in Part III for protection against excesses of State action to realise the vision in the Preamble. This being the philoso- phy of the Constitution, can it be said that it contemplates exclusion of Article 14--non-arbitrariness which is basic to rule of law--from State actions in contractual field when all actions of the State are meant for public good and expected to be fair and just? We have no doubt that the Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the Preamble. In our opinion. it would be alien to the Constitutional Scheme to accept the argument of exclusion of Article 14 in contractual matters. The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals.
There is an obvious difference in the contracts between private parties and contracts to which the State is a party, Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal require- ments of public law obligations and impress with this char- acter the contracts made by the State or its instrumentali- ty. It is a different matter that the scope of judicial review in respect of disputes failing within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, chal- lenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also fails within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic require- ments of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition there- to. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non-arbitrariness at the hands of the State in any of its actions.
Thus, in a case like the present, if it is shown that the impugned State action is arbitrary and, therefore, violative of Article 14 of the Constitution, there can be no impediment in striking down the impugned act irrespective of the question whether an additional right, contractual or statutory, if any, is also available to the aggrieved per- sons.
The State cannot be attributed the sprit personality of Dr. Jekyll and Mr. Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfil the obligation of Article 14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the con- tract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it. It is really the nature of its personality as State which is significant and must characterize all its actions, in what- ever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The re- quirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. There is a basic difference between the acts of the State which must invariably be in public inter- est and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest. Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regu- lating the conduct of the State activity.
In Wade's Administrative Law, 6th Ed., after indicating that `the powers of public authorities are essentially different from those of private persons', it has been suc- cinctly stated at p. 400-401 as under:
.... The whole conception of unfettered discretion is inappropriate to a public authority, which possesses powers solely in order that it may use them for the public good.
There is nothing paradoxical in the imposition of such legal limits. It would indeed be paradoxical if they were not imposed. Not is this principle an oddity of British or American law: it is equally prominent in French law. Nor is it a special restriction which fetters only local authori- ties: it applies no less to ministers of the Crown. Nor is it confined to the sphere of administration: it operates wherever discretion is given for some public purpose, for example where a judge has a discretion to order jury trial. It is only where powers are given for the personal benefit of the person empowered that the discretion is absolute. Plainly this can have no application in public law. For the same reasons there should in principle be no such thing as unreviewable administrative discretion, which should be just as much a contradiction in terms as unfettered discretion. The question which has to be asked is what is the scope of judicial review, and in a few special cases the scope for the review of discretionary decisions may be minimal. It remains axiomatic that all discretion is capable of abuse, and that legal limits to every power are to be found somewhere.
(emphasis supplied) The view, we are taking is, therefore, in consonance with the current thought in this field. We have no doubt that the scope of judicial review may vary with reference to the type of matter involved, but the fact that the action is reviewa- ble, irrespective of the sphere in which it is exercised, cannot be doubted.
A useful treatment of the subject is to be found in (1990) 106 L.Q.R. at pages 277 to 292 in an article `Judi- cial Review and Contractual Powers of Public Authorities'. The conclusion drawn in the article on the basis of recent English decisions is that `public law principles designed to protect the citizens should apply because of the public nature of the body, and they may have some role in protect- ing the public interest'. The trend now is towards judicial re,dew of contractual powers and the other activities of the Government. Reference is made also to the recent decision of the Court of Appeal in Jones v. Swansea City Council,  1 W.L.R. 54, where the Court's clear inclination to the view that contractual powers should generally be reviewable is indicated, even though the Court of Appeal faltered at the last step and refrained from saying so. It is significant to note that emphasis now is on reviewability of every State action because it stems not from the nature of function, but from the public nature of the body exercising that function; and all powers possessed by a public authority, howsoever conferred, are possessed `solely in order that it may use them for the public good'. The only exception limiting the same is to be found in specific cases where such exclusion may be desirable for strong reasons of public policy. This, however, does not justify exclusion of reviewability in the contractual field involving the State since it is no longer a mele private activity to be excluded from public view or scrutiny.
Unlike a private party whose acts uninformed by reason and influenced by personal predilections in contractual matters may result in adverse consequences to it alone without affecting the public interest, any such act of the State or a public body even in this field would adversely affect the public interest. Every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. This is equally true of all actions even in the field of contract. Thus, every holder of a public office is a trustee whose highest duty is to the people of the country and, therefore, every act of the holder of a public office, irrespective of the label classifying that act, is in discharge of public duty meant ultimately for public good. With the diversification of State activity in a Wel- fare State requiring the State to discharge its wide-ranging functions even through its several instrumentalities, which requires entering into contracts also, it would be unreal and not pragmatic, apart from being unjustified to exclude contractual matters from the sphere of State actions re- quired to be non-arbitrary and justified on the touchstone of Article 14.
Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, we have no hesitation in saying that the ultimate impact of all actions of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters. We, therefore, find it difficult and unrealistic to exclude the State actions in contractual matters, after the contract has been made, from the purview of judicial review to test its validity on the anvil of Article 14.
It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasona- bleness, it would be unconstitutional. See Ramana Dayaram Shetty v. The International Airport Authority of India and Ors.,  3 SCR 1014 and Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir & Anr.,  3 SCR 1338. In Col. A.S. Sangwan v. Union of India and Ors.,  Supp. SCC 559, while the discretion to change the policy in exer- cise of the executive power, when not trammelled by the statute or rule, was held to be wide, it was emphasised as imperative and implicit in Article 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validi- ty on this touch-stone, irrespective of the field of activi- ty of the State, has long been settled. Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose.
In M/s Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay, 3 SCC 293, the matter was re- examined in relation to an instrumentality of the State for applicability of Article 14 to all its actions. Referring to the earlier decisions of this Court and examining the argu- ment for applicability of Article 14, even in contractual matters, Sabyasachi Mukharji, J. (as the learned Chief Justice then was), speaking for himself and Kania, J., reiterated that `every action of the State or an instrumen- tality of the State must be informed by reason ...... actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Con- stitution.' Ranganathan, J. did not express `any opinion on this point but agreed with the conclusion of the other learned Judges on the facts of the case. It is obvious that the conclusion on the facts of the case could not be reached by Ranganathan, J. without examining them and this could be done only on the basis that it was permissible to make the judicial review. Thus, Ranganathan, J. also applied that, principle without saying so. In view of the wide-ranging and, in essence, all pervading sphere of State activity in discharge of its, welfare functions, the question assumes considerable importance and cannot be shelved. The basic requirement of Article 14 is fairness in action by the State and we find it difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its function, when it has the uppermost duty to be governed by the rule. of law. Non- arbitrariness, in substance, is only fair play in action. We have no doubt that this obvious requirement must be satis- fied by every action of the State or its instrumentality in order to satisfy the test Of validity.
it is this aspect which has been considered at length by Sabyasachi Mukharji, j. (as the learned Chief justice then was) in M/s Dwarkadas Marfatia's case (supra) even though, that was a case of statutory exemption granted under the Rent Act to an instrumentality of the State and it was in that context that the exercise of power to terminate the contractual tenancy was examined. All the same, without going into the question whether the obligation of the in- strumentality to act in pursuance of public purpose, was a public law purpose or private law purpose, it was held that the obligation to act in pursuance of public purpose was alone sufficient to attract Article 14. It was held that there was an implied obligation in respect of the dealings with the tenants/occupants of the authority to act in public interest/purpose. It was emphasised that every state action has to be for a public purpose and must promote public benefit. Referring to some earlier decisions, it was reiter- ated that all State actions `whatever their mien' are amena- ble to constitutional limitations, the alternative being to permit them `to flourish as an imperium in imperio'. It was pointed out that `governmental policy would be invalid as lacking in public interest, unreasonable or contrary to the professed standards', if it suffers from this vice. It was stated that every State action must be reasonable and in public interest and an infraction of that duty is amenable to judicial review. The extent of permissible judicial review was indicated by saying that `actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose'. It is sufficient to quote from the judg- ment of Mukharji, 3. (as the learned Chief Justice then was) the following extract:
" ..... Where there is arbitrariness in State action, Article 14 springs in and judicial review strikes such an action down. Every action of the executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, it should meet the test of Article 14 ......
(emphasis supplied) This decision clearly shows that no doubt was entertained about the applicability of Article 14 of the Constitution to an action of the State or its instrumentality, even where the action was taken under the terms of a contract of tenan- cy which alone applied by virtue of the exemption granted under the Rent Act excluding the applicability of the provi- sions thereof.
In another recent decision in Mahabir Auto Stores & Ors. v. Indian Oil Corporation & Ors., J.T. 1990 1 S.C. 363, it was held that Article 14 was attracted even where the ag- grieved person did not have the benefit of either a contrac- tual or a statutory right. The grievance in that case was made by a person who was not a dealer of the Indian Oil Corporation but merely claimed to have been treated as one by a long course of conduct. it was held by the learned Chief justice that the impugned act of the Indian Oil Corpo- ration was an administrative decision and could be impeached on the ground that it was arbitrary or violative of Article 14 of the Constitution. It was emphasised that the Indian Oil Corporation being an instrumentality of the State was bound to act fairly; and that `fairness in such actions should be perceptible, if not transparent'. If Article 14 was applied even without the benefit of a contract of deal- ership, the position cannot be worse with the added benefit of a contract. With respect, we concur with the view about the impact of Article 14 of the Constitution on every State action as indicated by the learned Chief Justice in these two recent decisions.
No doubt, it is true, as indicated by us earlier, that there is a presumption of validity of the State action and the burden is on the person who alleges violation of Article 14 to prove the assertion. However, where no plausible reason or principle is indicated nor is it discernible and the impugned State action, therefore, appears to be ex facie arbitrary, the initial burden to prove the arbitrariness is discharged shifting onus on the State to justify its action as fair and reasonable. If the State is unable to produce material to justify its action as fair and reasonable, the burden on the person alleging arbitrariness must be held to be discharged. The scope of judicial review is limited as indicated in Dwarkadas Marfatia's case (supra) to oversee the State action for the purpose of satisfying that it is not vitiated by the vice of arbitrariness and no more. The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases. it is not for the courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is successfully repelled by showing that the act which was done, was fair and reasonable in the facts and circumstances of the case. As indicated by Di- plock, L.J., in Council of Civil Service Unions v. Minister for the Civil Service,  3 All ER 935, the power of judicial review is limited to the grounds of illegality, irrationality and procedural impropriety. In the case of arbitrariness, the defect of irrationality is obvious.
In our opinion, the wide sweep of Article 14 undoubtedly takes within its fold the impugned circular issued by the State of U.P. in exercise of its executive power, irrespec- tive of the precise nature of appointment of the Government Counsel in the districts and the other rights, contractual or statutory, which the appointees may have. It is for this reason that we base our decision on the ground that inde- pendent of any statutory right, available to the appointees, and assuming for the purpose of this case that the rights flow only from the contract of appointment, the impugned circular, issued in exercise of the executive power of the State, must satisfy Article 14 of the Constitution and if it is shown to be arbitrary, it must be struck down. However, we have referred to certain provisions relating to initial appointment, termination or renewal of tenure to indicate that the action is controlled at least by settled guide- lines, followed by the State of U.P., for a long time. This too is relevant for deciding the question of arbitrariness alleged in the present case.
It is now too well-settled that every State action, in order to survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 of the Consti- tution and basic to the rule of law, the system which gov- erns us. Arbitrariness is the very negation of the rule of law. Satisfaction of this basic test in every State action is sine qua lion tO its validity and in this respect, the State cannot claim comparison with a private individual even in the field of contract. This distinction between the State and a private individual in the field of contract has to be borne in the mind.
The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question, whether an impugned act is arbitrary or not, is ultimately to be answered on the facts and in the circum- stances of a given case. An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasona- bleness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, perform- ance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. Every State action must be informed by reason and it follows that an act unin- formed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being. It is trite that be you ever so high, the laws are above you'. This is what men in power must remember, always.
Almost a quarter century back, this Court in S.G. Jais- inghani v. Union of India and Ors.,  2 SCR 703, at p. 7 18-19, indicated the test of arbitrariness and the pit- falls to be avoided in all State actions to prevent that vice, in a passage as under:
"In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any princi- ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey--"Law of the Constitution"-Tenth Edn., Introduction cx). "Law has reached its finest moments", stated Douglas, J. in United States v. Wunderlick, (*), "when it has freed man from the unlimited discretion of some ruler ... Where discretion is absolute, man has always suffered". It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discre- tion, as Lord Mansfield stated it in classic terms in the case of John Wilker (*), "means sound discretion guided by law. It must be governed by rule, not humour: it must not be arbitrary, vague and fanciful."