https://www.litigationplatform.com/Judgment/Index/b509638e-bc1b-48f3-9e6d-56b868d1e079
Nature of
grievance:
Where
the law, so as to give effect to the objectives set out in the Act, or to carry
out the mandate of provisions of the Act, confers unfettered and unguided
discretionary powers upon the Govts. / Administrative authorities or even upon
judicial authorities, thereby authorize these Govts / Authorities to “pick and
choose”, in the application of law to different individuals. These are regarded
as abdication of essential legislative function, or are regarded as excessive
delegation of powers upon Govts. / Administrative or statutory bodies /
judicial authorities, as the case may be. Writ jurisdiction of High Court
may be invoked challenging such law being violative of Article 14 of the
Constitution of India.
Reliefs Prayed for:
(a)
That
the impugned law be declared as violative of Article 14 of the Constitution of
India;
(b)
Pending
the hearing and final disposal of this Petition, the operation of the impugned
law be stayed;
(c)
Any
other relief as this Hon’ble Court deems fit and expedient, having regard to
the facts and circumstances of the present case.
Grounds for Reliefs
(a)
The
operation of the impugned law would be deemed to be arbitrary; and thus
violative of Article 14 of the Constitution of India.
Material facts of the case:
The Petitioners most respectfully submit as under –
1.
The
extract of the portion of Impugned Law which confers unguided and unfettered
discretionary powers upon the Govt. / Authority concerned:
2.
The
natural consequences which will flow, in the ordinary course of operation of
the said portion of impugned Law;
3.
Demonstrate
that there are no guidance in the impugned law of whatsoever nature, so as to
indicate, under which circumstances, the powers are to be exercised by the
Govt. / authorities, or are not to be exercised by the Govt. / authorities; and
thus renders the application of law to the complete discretion / whims of the
Govt. / authority concerned, and which may operate as serious prejudice to a
person:
4.
The factors which would weigh the minds of the Constitutional Courts
whilst deciding the Constitutional validity of a law which is challenged on the
premise of “excessive delegation of powers”
–
(a) Presumption of fair
exercise of powers: Where a law, conferring discretionary powers on Govts /
Administrative or judicial authorities, is constitutionally valid or not,
should not be determined on the assumption that such authority will act in an
arbitrary manner in exercising the discretion conferred upon it. Abuse of power
given by law does occur; but the validity of the law cannot be contested merely
because of such an apprehension. Discretionary power is not necessarily a
discriminatory power.
(b) The nature of
discretionary powers: Whether the impugned law gives unguided and unlimited
power to the Government / authorities to pick and choose in the matter of, (a)
grant of total or partial exemption from the provisions of the Act, or (b)
grant of any benefit etc.; (c) imposing of any obligation;
(c) Where the impugned law
takes away right of hearing: Before the exercise of powers / discretion, the
factors which may be looked into are, the nature of “subjective satisfaction”
which the Govt. / Authority has to arrive at before the exercise of powers / discretion,
vis a vis to nature of right which is infringed, the nature and the urgency of
mischief which is sought to be suppressed by the said powers / discretion;
(d) Delegation of powers
to restrict something: Where the impugned law confers powers / discretion upon
Govts / Authorities to restrict something, then, the Courts may look into the
nature of restrictions, and would see that the restrictions should not be
excessive or beyond what is required in the interest of the general public;
(e) A reasonable predictability
of the application of law: Whether it is possible for a person to whom the impugned law is applied
generally, to reasonably predict the application of the impugned law, in a
given situation, and the nature of right which is vulnerable to be frustrated,
in the event of misuse of the discretionary powers;
(f) The natural
consequences which may ensue due to absence of guidance in the exercise of
powers / discretion: The nature of scope of arbitrariness / consequences in the
application of law, which may result due to absence of any guidance for the
exercise of power, and the remedy which is provided under the law, to redress
the such misuse of powers.
(g) Where the law confers
powers / discretion which are in the nature which may impair the personal liberty
of any person: Where a law empowers any Authority to take preventive action
(detention) against any person, it is essential that the law must provide the
“existence of objective conditions” under which the said powers of preventive
detention may only be exercised. If the law fails to provide any such
conditions, the law becomes suspect, and is vulnerable to be declared as
unreasonable.
(h) The backdrop of the
conditions in which the discretion is to be exercised: The observations of the
Apex Court in the Mardia Chemicals case [2004 SC] are very instructive. In this
case, the Apex Court dealt with section 17 of the SARFESI Act, 2002. This case
emphatically dealt with fairness of procedural law, and the “judicial access”
concerns punctuated the court’s decision. The S.17 prohibited borrowers from
appealing to DRT (Debt Recovery Tribunal) against the action of the Bank /
financial institution, unless the borrower deposits 75% of the claimed amount,
and where the discretion was given to DRT presiding officer to waive this
requirement of 75% deposit. The Apex Court, whilst declaring the mandate of
section 17(2) as unconstitutional, said, such an onerous and oppressive
condition should not be left operative in expectation of reasonable exercise of
discretion by the concerned authority. It is instructive to reproduce the
relevant observations of the Apex Court.
Para 60: The amount of
deposit of 75% of the demand at the initial proceeding itself sounds
unreasonable and oppressive, more particularly when the secured assets/the
management thereof alongwith the right to transfer such interest has been taken
over by the secured creditor or in some cases property is also sold.
Requirement of deposit of such a heavy amount on basis of one-sided claim alone
cannot be said to be a reasonable condition at the first instance itself before
start of adjudication of the dispute. Merely giving power to the Tribunal to
waive or reduce the amount, does not cure the inherent infirmity leaning
one-sidedly in favour of the party, who, so far has alone been the party to
decide the amount and the fact of default and classifying the dues as NPAs
without participation/association of the borrower in the process. Such an
onerous and oppressive condition should not be left operative in expectation of
reasonable exercise of discretion by the concerned authority. Placed in a
situation as indicated above, where it may not be possible for the borrower to
raise any amount to make the deposit, his secured assets having already been
taken possession of or sold, such a rider to approach the Tribunal at the first
instance of proceedings, captioned as appeal, renders the remedy illusory and
nugatory.
The court further said
–
Para 64: The condition
of pre-deposit in the present case is bad rendering the remedy illusory on the
grounds that (i) it is imposed while approaching the adjudicating authority of
the first instance, not in appeal, (ii) there is no determination of the amount
due as yet, (iii) the secured assets or its management with transferable interest
is already taken over and under control of the secured creditor, (iv) no
special reason for double security in respect of an amount yet to be determined
and settled, (v) 75% of the amount claimed by no means would be a meager
amount, (vi) it will leave the borrower in a position where it would not be
possible for him to raise any funds to make deposit of 75% of the undetermined
demand. Such conditions are not alone onerous and oppressive but also
unreasonable and arbitrary. Therefore, in our view, sub-section (2) of Section
17 of the Act is unreasonable, arbitrary and violative of Article 14 of the
Constitution.
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