ASMINISTRATIVE

DISCRETION
Meaning, Need, Exercise of Discretion, ABUSE OF
DISCRETION, JUDICIAL REVIEW OF
ADMINISTRATIVE DISCRETION
 Meaning
Discretion – for Layman in daily life ‘exercising a choice’ eg making of will,
marriage, gifting, choice of food etc without regard to any set pattern or
practice.
Discretion + Administration = Making a choice amongst available
alternatives as per reason and justice and not according to personal whims.
Hence negates choices which are – arbitrary, fanciful, vague
Edward Coke – science to discern between falsity and truth, right and
wrong, and negates will and private affection.

NEED FOR ADMINISTRATIVE DISCRETION

Modern complexities Hence discretions is necessary
Balance between administrative absolute action vs claim of subjects to have
reasonable exercise of power
Since power cannot be removed hence tightening of the procedure is
followed.
 Judicial Review – Role of the Judges

The task of judges is not to replace the government with judicial institution by going
into the merit of the discretion but to look at the procedure followed for making
discretionary choice. Thus, the judicial review in India is not at par with the activism
of the US Courts.
Usually along with discretion guidelines are also issued to exercise the discretion.
Grounds for judicial review
Irrelevant consideration
No consideration of relevant facts
Partly relevant and partly irrelevant court will look into the purpose if that is
improper the exercise becomes abuse of power.

Stages of Judicial Review

Control at the Stage of delegation of discretion
Control at the stage of exercise of discretion
 Control at the Stage of Delegation of
Discretion
Exercises the control by looking at the constitutionality of the law under
which such powers are delegated with reference to the fundamental rights
enunciated in Part III. Therefore, vague, arbitrary powers are discouraged
under Art 14, 19 and all other provisions of the Constitution.

Control at the Stage of exercise of discretion

Unlike US in India there is no Administrative Procedure Act to provide
judicial review thus the same is developed within constitutional
safeguards of abuse of power.
Courts uses safeguards under two broad generalisations –
Firstly, authority is deemed not have exercised the discretion or has
failed to exercise the discretion.
Secondly, authority has not exercised the discretion properly or there is
excess of discretion or abuse of discretion.
Category 1 - Authority is deemed not have exercised the
discretion or has failed to exercise the discretion
Abdication of discretion or unreasonable fetters on
discretion
Purtabpore Co. Ltd. v. Cane Commr. of Bihar
(1969)
Shri Rama Sagar Industries Ltd. State of A.P.
(1974)

Category 2 - Authority has not exercised the discretion

properly or there is excess of discretion or abuse of
discretion.
Indian Rly. Construction Co. Ltd. v. Ajay Kumar
Purtabpore Co. Ltd. v. Cane Commr. of Bihar (1969)
Power of the case commissioner to reserve sugar case areas
for the respective sugar factories, at the dictation of the Chief
Minister. Exclusion of 99 villages from the area reserved for
the appellant-company. Held authority had not exercised
discretion at all hence all the exclusions were quashed by the
Court.
Shri Rama Sagar Industries Ltd. State of A.P. (1974)
Sec 21 A.P. Sugarcane (Regulation of Supply and Purchase)
Act, 1961 allowed the administrative authority to exempt from
tax any new factory which had substantially expanded.
Framing of Policy by the Government granting exemption only
to factories in the cooperative sector. Held unreasonable
fetters on the power of the administrative authority and hence
not valid.
Indian Rly. Construction Co. Ltd. v. Ajay Kumar (2003)
Respondent employee assaulted a senior officer and along with others ransacked the
office – accordingly dismissed without inquiry under Indian Railway Construction
Company Limited (Conduct, Discipline and Appeal) Rules 1981 as per Rules 23
(Penalties) and 30 (special procedure allowing imposition of penalty without a formal
inquiry in specific circumstances).
Respondent challenged the dismissal on account of victimization on account of union
activity.
Single judge quashed dismissal order for want of inquiry
DB upheld the decision
Appeal to the SC –
Overturned the judgments given below held failure on the part of courts to examine
question as to practicability or otherwise holding inquiry.
In the absence of malafide claimed proceeding on the basis of malafide by the courts
was not proper.
Alleged act of misconduct not disbelieved by the HC and hence employer can
legitimately raise a plea of losing confidence in employee.
Order of dismissal upheld with order of payment of 15 lacs towards back wages in
order to seek balance.
 Administrative Discretion vis-à-vis Art 14, Art 19
Art 14
I. State of W.B. v. Anwar Ali Sarkar (1952)
II. State of Punjab v. Khan Chand (1974)
III. Manohar Lal v. State of Maharashtra (1971)

Art 19
IV. Himat Lal K Shah v. Commr. of Police (1973)
V. State of Madras v. VG Row (1952)
VI. State of MP v. Bharat Singh (1967)
VII.State of Maharashtra v. Kamal S. Durgule
State of WB v. Anwar Ali Sarkar (1952)
The case challenged the constitutional validity of section 5(1) of the West
Bengal Special Courts Act 1950 which allowed –
 Establishing special courts for the speedy trial of offences like murder, arson,
and dacoity committed during the communal disturbances of 1950.
 Empowering the state government to refer any case pending before an
ordinary criminal court to a special court.
 Allowing the state government to appoint judges and prosecutors to the
special courts.
Section 5(1) of the West Bengal Special Courts Act, 1950, states that a Special
Court shall try such offences or classes of offences, or cases or classes of cases,
as the State Government may, by general or special order in writing, direct.

The Act was controversial as it gave the government wide powers to control the
special courts. Critics argued that it violated Article 14 of the Constitution on
equality before the law by allowing differential treatment of riot cases compared
to ordinary criminal cases. They contended that the special courts took away
the accused’s right to a fair trial by standard criminal procedure.
Facts of the case - The respondent (Anwar Ali Sarkar) and 49 other
persons were charged with various offences alleged to have been
committed by them in the course of their raid as an armed gang on a
certain factory known as the Jessop Factory at Dum Dum, and they were
convicted and sentenced to varying terms of imprisonment by the Special
Court to which the case was sent for trial by the Governor of West Bengal
by a notification dated 26th January, 1950, in exercise of the powers
conferred by section 5 (1) of the Act.
The validity of the conviction was challenged on the ground of violating Art
14 before the Calcutta HC which quashed the conviction of the respondent
and others and directed trial as per common law.
Later in appeal the SC emphasized on the well-established principle of
‘reasonable classification’ to be based on intelligible differentia which bears
a rational nexus to the law’s objective. The Court distinguished between
referring ‘cases’ and ‘classes of cases’ to Special Courts, noting that the
arbitrary selection of individual ‘cases’ without a clear basis constituted an
abuse of power and granted excessive and unconstitutional discretionary
power to the executive. Held procedural fairness is integral to the right to
equality. Accordingly, the appeal was dismissed.
State of Punjab v. Khan Chand (1974)
The truck of Khan Chand was requisitioned by the District Magistrate,
Rohtak for famine relief work. He challenged the constitutionality of the
East Punjab Requisition of Movable Property Act, 1947. it was an Act to
provide for the requisitioning and acquisition movable property. Section 2
of the Act read as under -
"2. (1) The State Government, if it considers it necessary or expedient so
to do, may by order in writing requisition any movable property and may
make such further orders as may be necessary or expedient in connection
with the requisitioning :
Provided that no property used for the purpose of religious worship and no
aircraft or anything forming part of an aircraft or connected with the
operation, repair or maintenance of aircraft, shall be requisitioned.
(2)Where the State Government makes any order under sub-section (1), it
may use or deal with the property in such manner as may appear to it to
be expedient.
This was challenged on the ground of violation of Art 14.
 The HC (Full Bench) found section 2 of the Act violative of Act 14. later
dismissing the appeal of the state the Supreme Court, upheld the
contention, that the Act confers wide discretionary powers upon
authorities by not laying down the guidelines for requisitioning movable
property. Even the words ‘public purpose’ are not used. Therefore,
arbitrariness and power to discriminate are writ large on the face of the
Act and fall within the mischief which Art 14 seeks to prevent.

Manohar Lal v. State of Maharashtra (1971) Critique of Judicial

approach
This case is an example of judicial humility towards administrative
convenience. In the present case section 187-A of the Sea Customs Act,
1878 gave wide discretionary power to the authorities to either refer a
case of smuggled goods to a magistrate or to look into the matter
themselves. The Court upheld the constitutionality of the statute on the
ground that as this discretion is to be exercised by the senior officers,
that will stand as a guarantee against its misuse.
 Art 19
Himat Lal K. Shah v. Commr. of Police (1973)
Rule 7 under section 44 of the Bombay Police Act, 1951 gave unguided discretionary
power to the Police Commissioner to grant or refuse permission for any public
meeting to be held on a public street. SC held the power as unreasonable restriction
on the exercise of fundamental right.
State of Madras v. VG Row (1952)
Section 15(2)(b), criminal law amendment act, 1908 as amended by Madras Act 1950
gave wide discretionary powers to the state government to declare any association as
unlawful. The court struck down the same because it allowed discretion to be applied
on subjective satisfaction without permitting the grounds to be judicially tested.
Harakchand Ratanchand Banthia v. UOI (1969)
The Gold Control Act, 1968 invested administrative authority with blanket
discretionary power to grant or refuse licence to any dealer in gold ornaments.
Though the Act had provided that such power was to be exercised with reference to
the number of existing dealers, anticipated demand, suitability of the applicant and
public interest, the court struck down the law on the ground that such vague
expressions my result in the arbitrary exercise of power.

State of Maharashtra v. Kamal S. Durgule (1985)

 Some Notable cases -
Barium Chemicals Ltd. v. Company Law Board (1967)
M.A. Rasheed v. State of Kerala (1974)

S.R. Venkataraman v. UOI (1979)

The appellant, a Centra Government officer, was prematurely
retired from service in ‘public interest’ under Rule 56(j)(i) on
attaining the age of 50 years. Her contention was that the
government did not apply its mind to her service record, and
that in facts and circumstances of the case the discretion vested
was not exercised for furtherance of public interest, and that the
order was based on extraneous circumstances. The Government
admitted that there was nothing on record to justify the order.
The SC quashed the order considering it abuse of power.
Ramana Dayaram Shetty v. International Airport
Authority of India (1979)
Air India Ltd. v. Cochin International Airport Ltd. (2000)
Held that it is the decision making process and not the decision
which is amenable to judicial review.
Facts – the Cochin International Airport Authority wrote letters
to certain firms for quotations for ground handling services.
Combata Aviation quoted higher offer and thus was
recommended by the evaluation committee. However, Board of
Directors decided to negotiate with Air India, being a public
sector undertaking. After negotiation it increased its offer, and
hence contract was awarded to Air India. Declining to interfere
in the exercise of discretion of the authority, the court observed
that the state can choose its own methods or various factors of
commercial viability, therefore, court should not interfere with
the decision unless dire public interest so require.
 Doctrine of Implied Limitation
(Absolute discretion is constitutional blasphemy)
State of Punjab v. Salil Sabhlok (2013)
State of Punjab & Haryana – appointment of Harish Dhanda as chairman of state Public Service
Commission – challenged by R-1 (Salil Sablok) and others before DB of HC under PIL (Art 226),
DB order dated 13-07-11 held,
• Even though Art 316 does not prescribe any procedure it cannot be said that there needs no
procedure (implied limitation),
• Further held that the procedure adopted for appointment of Harish Dhanda in the present case is
whether valid, if not what would be the consequences – referred the matter to three judge bench
– Subsequently chief justice of HC constituted full bench –
Full Bench order dated 17-08-11
• Provided detailed procedure to be followed for appointment by constitution of Search Committee
• Referred matter to DB for checking the validity of appointment of Harish Dhanda which quashed
the appointment on the same day dated 17-08-2011
SC held (Justice Patnaik),
Issue
1. Whether PIL can be entertained or it is a just a service matter in which only aggrieved party has
the locus to initiate a legal action in the court of law?
2. Whether the DB after recording the finding that the irregularity and illegality contended against
Harish Dhanda is not substantiated was right in making academic reference of the matter to the
Full Bench?
3. Despite having no procedure under Art 316 can states proceed on random basis or there are
implied relevant factors which needs to be considered?
4. Whether appointment of Mr. Harish Dhanda was valid?
Issue 1-
Held that the R-1 relied on the provisions of Art 315, 316, 317,
318, 319 and 320 of the Constitution relating to Public Service
Commission to content that the functions of Public service
commission are sensitive and important, and it is very
essential that a person, who is appointed as the chairperson
must possess outstanding and high degree educational
qualifications and great amount of experience in the field of
selection, administration and recruitment and must also be a
person of integrity and impartiality. Accordingly, held that the
writ petition is a matter affecting interest of general public in
the state of Punjab and any member of the public could
espouse the case of the general public hence Mandamus would
lie.
Issue -
2. Whether the DB after recording the finding that the irregularity and illegality contended against
Harish Dhanda is not substantiated was right in making academic reference of the matter to the
Full Bench?
3. Despite having no procedure under Art 316 can states proceed on random basis or there are
implied relevant factors which needs to be considered?
Relied on -
 Ashok Kumar Yadav v. State of Haryana (1985)
 R/o Dr. Ram Ashray Yadav, Chairman Bihar Public Service Commission v. Unknown (2000)
 Inderpreet Singh Kahlon and others v. State of Punjab and others (2006) (appointment of Ravinderpal
Singh Sindhu)
Held, even though Art 316 does not specify the aforesaid qualities of the chairman of a public service
Commission, these qualities are amongst the implied relevant factors which have to be taken into
account by the government while determining the competency of the person to be selected and
appointed as chairman of the Public Service Commission under Art 316 of the Constitution. Accordingly,
if these relevant factors are not taken into consideration by the state government, while selecting and
appointing the Chairman of the PSC, the court can hold the selection and appointment as not in
accordance with the Constitution. Quoted De Smith’s Judicial Review (6 th ed.)
“if the exercise of discretionary power has been influenced by considerations that cannot lawfully be
taken into account, or by the disregard of relevant considerations required to be taken into account
(expressly or impliedly), a court will normally hold that power has not been validly exercised….if the
relevant factors are not specified (e.g. if the power is merely to grant or refuse a licence, or to attach
such conditions as the competent authority thinks fit), it is for the courts to determine whether the
permissible considerations are impliedly restricted, and, if so, to what extent.”
UK
In England as Parliament is supreme and can confer any amount of discretion the courts
have held that concept of unfettered discretion is a constitutional blasphemy.
Along with requiring that the discretion must be exercised in conformity with the general
policy of the Act and for proper purpose, courts insist on its ‘reasonable’ exercise.

Padfield v. Minister of Agriculture, Fisheries, and Food (1968)

The case lays down the parameter of exercise of administrative discretion in the UK. In
this case under the statutory milk marketing scheme, the prices paid to milk producers in
different areas are fixed by the Milk Marketing Board which consists of representatives of
the producers. The producers near the area of London complained that though they were
in proximity of the London market, yet the price paid did not reflect the higher value of
their milk, and requested the minister to refer the matter to the statutory committee for
complaints. To direct or not to direct a complaint to the committee was the sole discretion
of the Minister. The minister in exercise of his unfettered discretion refused to direct the
complaint. One of the reason given by the minister was that the minister would be in a
difficult political position if, despite the committee’s acceptance of the complaint, the
minister should take no action.
House of Lords held that the minister’s reasons were unsatisfactory and his decision was
unreasonable. The purpose of the Act was that every genuine complaint must be
forwarded to the committee and anything contrary to this would frustrate the purpose.
USA
In the US, besides the judicial review of administrative discretion which is
available in the ‘due process clause’ and the general grant of constitutional
judicial power, the Administrative Procedure Act, 1946, in section 10, provides that
the reviewing court shall ‘hold unlawful and set aside agency action, findings, and
conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.’ section 10 also provides exception to judicial review in
cases where agency action is by law committed to agency discretion.
However, courts have interpreted this exception in a manner not to cover arbitrary
or capricious exercise of discretion.

Citizens to Preserve Overton Park Inc. v. Volpe (1971)

In the present case the Secretary of Transportation had authorised the use of
federal funds for the construction of a highway through the public park. The
statute gave discretion to the Secretary to allow such a construction only if a
‘feasible and prudent’ alternative route did not exist. Contended that the
determination of ‘feasible and prudent’ alternative route is committed to his
absolute discretion and hence is not subject to judicial review. The court did not
allow the exception to Section 10, Administrative Procedure Act, 1946 to reign
Supreme Court.
Judicial Overreach of the US Supreme Court
Boreta Enterprises Inc. v. Deptt. Of Alcoholic Beverages Control (1970)
The agency revoked the liquor licence because the licencee employed topless
waitress on the ground of public morals and might leading to socially deleterious
conduct. The California Supreme Court held the exercise of discretion invalid on
the ground that it is not a legal exercise of discretion covered within the
requirement of ‘good cause’ clause for revocation of licence.

United States v. Professional Air Traffic Controllers’ Organisation (1970)

The Court ordered the Controllers of air traffic to end a strike and return to work.
The order of the court also laid down that the Federal Aviation Authority (FAA) will
impose no penalty of suspension or dismissal, no matter that he question of
discipline in case of strike was within the sole discretion of the FAA.

France
Controls discretion under ‘abuse of discretionary power’. ‘Abuse of discretionary
power’ carries the same meaning equivalent to the term ‘unreasonable exercise
of power’ in UK and ‘arbitrary and capricious exercise of power’ in the USA.