Constitutional Law I Unit 2
Distribution of Powers Between Center and States
Generally, three models are followed in the matter of distribution of powers in a federation. In the first model, the powers of the Centre are defined and the residuary powers are left to the States. This model is found in America. In the second module, the powers of the federating units or States are defined and the residuary powers are given to the centre.
Canada follows this model. And in the third model, the powers of both the governments are clearly laid down. Australia has this model of federation. In India, we follow the combination of both the Canadian and the Australian models.
The distribution of powers between the Union and the State governments is done by The Constitution of India. The Seventh Schedule of the Constitution includes three lists of subjects – the Union List, the State List and the Concurrent List. The Central or Union Government has exclusive power to make laws on the subjects which are mentioned in the Union List.
The States have the power to make law on the subjects which are included in the Concurrent List. With regard to the Concurrent List, both the Central and State governments can make laws on the subjects mentioned in the Concurrent List. Finally, the subjects which are not mentioned in the above three lists are called residuary powers and the Union government can make laws on them.
It may be noted here that in making laws on the subjects of the Concurrent list, the Central government has more authority than the State governments. And on the subjects of the State List also the Central government has indirect control. All this shows that though the Indian Constitution has clearly divided powers between the two governments, yet the Central government has been made stronger than the State governments.
We can discuss the distribution of powers between the two governments in India under three headings, such as, legislative relations, administrative relations and financial relations with reference to the three lists.
The President of India is a component part of the Union Parliament. In theory he possesses extensive legislative powers. He has power to summon and prorogue the Parliament and he can dissolve the Lok Shaba. Article 85 (1), however, imposes a restriction on his power. The President is bound to summon Parliament within six months from the last sitting of the former session. If there is a conflict between the two houses of Parliament over an ordinary Bill he can call a joint sitting of both Houses, to resolve the deadlock (Article 108).
At the commencement of each session the President addresses either House of Parliament of a joint session of a Parliament. In his address to joint session of Parliament he outlines the general policy and programme of the Government. His speech is like that of the King in England and is prepared by the Prime Minister. He may send message to either Houses of Parliament
Every Bill passed by both Houses of Parliament is to be sent to the President for his assent (Article 111). He may give his assent to the Bill, or withhold his assent or in the case of a bill other than a money-bill, may return it to the House for reconsideration on the line suggested by him. If the bill is again passed by both the houses of the Parliament with or without amendment, he must give his assent to it when it is sent to him for the second time. A bill for the recognition of a new State or alteration of State boundaries can only be introduced in either House of the Parliament after his recommendation (Article3).
The State Bills for imposing restrictions on freedom of trade and commerce require his recommendation (Article 304). He nominates 12 members of the Rajya Sabha from among persons having special knowledge or practical experience of Literature, Science, Art and Social Services [Article 80(3)]. He is authorized by the Constitution to nominate two anglo-Indians to the Lok Sabha, if he is of opinion that the anglo-Indians community is not adequately represented in that House (Article 331).
The President has to lay before the Parliament the Annual Finance Budget, the report of Auditor-General, the recommendations of the Finance Commission, Report of the Union Public Service Commission, and report of the Special Commission for Scheduled Castes and Scheduled Tribes, the report of the Commission of the Backward Classes and the report of the Special Officer for linguistic minorities
As in legislative maters, in administrative matters also, the Central government has been made more powerful than the States. The Constitution has made it clear that the State governments cannot go against the Central government in administrative matters. The State governments have to work under the supervision and control of the Central government.
The States should exercise its executive powers in accordance with the laws made by the Parliament. The Central government can make laws for maintaining good relations between the Centre and the States.
It can control the State governments by directing them to take necessary steps for proper running of administration. If the State fails to work properly or according to the Constitution, it can impose President’s rule there under Article 356 and take over its (the State’s) administration.
Again, there are some officials of the Central government, working in the States, through which it can have control over the State govern
1. Article 257 of the Constitution lays down that the executive authority of every State shall be exercised in such a way that it does not impede or prejudice the exercise of the executive power of the Union.
2. There are some functionaries of the Union government who serve the State governments. The Governor of a State is appointed by the President who acts as a central agent in the State. The Chief Justice and the Judges of a High Court are appointed by the President and he can also remove them if a resolution is passed by the Parliament in this regard. The offices of the All India Services are appointed by the Central government but they serve in different States.
Article 280 provides for the establishment of a Finance Commission. The President shall within two years from the commencement of the constitution and thereafter at the expiration of every fifth year or at such earlier time as he considers necessary constitute a Finance Commission.
The Finance Commission shall consist of a Chairman and four other members appointed by the President. Parliament may by law prescribe qualifications which shall be requisite for appointment as members of the Commission and the manner in which they shall be selected.
In exercise of the power under Article 80 (1), Parliament has passed the Finance (Miscellaneous Provision) Act, 1951. It provides that the Chairman of the Commission shall be selected from among persons who have had experience in public affairs. The other four members shall be selected from among persons who (1) are, or have been, or are qualified to be appointed as judges of a High Court; or (2) have special knowledge of the Finance and accounts of Government, or (3) have had wide experience in financial matters and in administration, or (4) have special knowledge of economics.
The members of the Commission shall hold office for such period as may be specified in the Presidential order and shall be eligible for appointment. The Commission is empowered to determine its procedure and shall have all the powers of a civil court in respect of summoning and enforcing the attendance of witnesses, production of any document and requisitioning any public record from any court or office.
Article 245(1) of the Constitution says that subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a
State may make laws for the whole or any part of the State, according to Article 245(2) no law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation.
Thus, the Constitution confers the power to enact laws having extra-territorial operation only to the Union Parliament and not to the State legislature, and consequently and extra-territorial law enacted by any State is changeable unless the same is protected on the ground of territorial nexus.
If a State law has sufficient nexus or connection with the Subject-matter of that law, the state law is valid even when it has extra-territorial operation. It could, therefore, be said that a State Legislature is also empowered to enact a law having extra-territorial operation subject to the condition that even though the subjectmatter of that law is not located within the territorial limits of the State, there exists as sufficient nexus of connection between the two.
The area in which the principle of territorial nexus has been applied most in India is taxation. In State of Bombay Vs R.M.D. Chamarbangwala, a newspaper printed and published at Bangalore had wide circulation in the State of Bombay.
Through this news paper the respondent conducted and ran prize competitions for which the entries were received from the State of Bombay through agents and depots established in the State to collect entry forms and fees for being forwarded to the head office at Bangalore. The Bombay Legislature imposed a tax on the business of prize competitions in the state by enacting the Act of 1952 and amending the Bombay Lotteries and prize Competitions and Tax Act, 1948. The respondent contended that he was not bound to pay the said tax on the ground of extra-territoriality.
The Supreme Court ruled that when the validity of an act is called in question the first thing for the court to do is to examine as to whether the Act is called in question the first thing for the court to do is to examine as to whether the Act is a law with respect to a topic assigned to the particular legislature which enacted it because under the provisions conferring legislative powers on it such legislature can only make a law for its territory or any part thereof and its laws cannot, in the absence of a territorial nexus, have any extra-territorial operation.
For sufficiency of territorial connection, two elements were considered by the court, namely, (1) the connection must be real and not illusory, and (2) the liability sought to be imposed must be pertinent to that connection. It was held that all the activities which the competitor was ordinarily expected to undertake took place in the State of Bombay and there existed a sufficient territorial nexus to enable the Bombay Legislature to tax the respondent who was residing outside the state.
Some other example of cases:-
1. Tata Iron and Steel Company Vs. State of Bihar, AIR 1958 SC 452
2. State of Bihar vs. Charusila Das, AIR1959 SC 1002.
When two or more provisions of the same statute are repugnant, the court will try to construe the provisions in such a manner, if possible, as to give effect to both by harmonizing them with each other. The court may do so by regarding two or more apparently conflicting provisions as dealing with separate situations or by holding that one provision merely provides for an exception of the general rule contained in the other.
The question as to whether separate provisions of the same statute are overlapping or are mutually exclusive may, however, be very difficult to determine.
The basis of the principle of harmonious construction probably is that the legislature must not have intended to contradict itself. This principle has been applied in a very large number of cases dealing with interpretation of the Constitution.
It can be assumed that when the legislature gives something by one hand it does not take away the same by the other. One provision of an Act does not make another provision of the same Act useless. The legislature cannot be presumed to contradict itself by enacting apparently two conflicting provisions in the same Act.
In State of Bombay v. F.N. Balasara, while deciding upon the constitutionality of the Bombay Prohibition Act, 1949, enacted by the Bombay Legislature, whereby restrictions on production and sale of liquor were put, the Supreme Court observed that the expression possession and sale occurring in entry 31 of List II are to be read without any qualification. Under that entry the State Legislature has the power to prohibit possession, use and sale of intoxicating liquor absolutely.
The word import in Entry 19 of List I standing by itself does not include with sale or possession of the article imported into country by a person residing in the territory into which it is imported. There is, therefore, no real conflict between entry 31 of List II and Entry 19 of List I. Consequently, the Act of 1949, in so far as it purports to restrict possession, used and sale of foreign liquor, is not an encroachment on the field assigned to the Federal Legislature.
Some other cases:
1. Raj Krishna Vs Binod, AIR 1954 SC 202
2. Bengal Immunity Company Vs State of Bihar, AIR 1955 SC 661.
Pith and Substance
The Doctrine “Pith and Substance” means, that if an enactment substantially falls within the powers conferred by the Constitution upon the legislature by which it was enacted, it does not become invalid merely because it incidentally touches upon subjects within the domain of another legislature as designated by the Constitution.
Within their respective spheres, the Union and the State Legislatures are made supreme and they should not encroach into the sphere reserved to the other. If a law passed by one encroaches upon the field assigned to the other the Court will apply the doctrine of ’pith and substance’ to determine whether the Legislature concerned was competent to make it.
If the ‘pith and substance’ of law, i.e., the true object of the legislation or a statute, relates to a matter with the competence of Legislature which enacted it, it should be held to be intra virus even though it might incidentally trench on matters not within the competence of Legislature. In order to ascertain the true character of the legislation one must have regard to the enactment as a whole, to its object and to the scope and effect of its provisions.
The Privy Council applied this doctrine in Profulla Kumar Mukerjee Vs Bank of Khulna, AIR 1947. In this case the validity of the Bengal Money Lenders’ Act, 1946, which limited the amount and the rate of interest recoverable by a money-lender on any loan was challenged on the ground that it was Ultra virus of the Bengal Legislature in so far as it related to ‘Promissory Notes’, a Central subject.
The Privy Council held that the Bengal Money-lenders’ Act was in pith and substance a law in respect of moneylending and money-lenders-a State subject, and was valid even though it trenched incidentally on “Promissory note”—a Central subject.
In 1980 in the case of Ishwari Khetal Sugar Mills Vs State of U.P., the validity of the U.P. Sugar Undertakings (Acquisition) Act,1971, was challenged on the ground that the State Legislature had no competence to enact the impugned law on the ground that it fell under Parliament’s legislative power under Entry 52 of List I.
It was contended that in view of the declaration the Parliament had made under Entry 52 List I to take the Sugar Industry under its control, that industry went out of Entry 24 of List II and hence the State Legislature was divested of all legislative power to legislate in respect of Sugar Industry and as the impugned legislation was in respect of industrial undertaking in Sugar (Entry 52 of List I) a central subject the impugned legislation was void.
The Court, however, rejected these contentions and held that there was no conflict between that State Act and the Central Act under Industries Act, 1951. The power of acquisition or requisition of property in Entry 42, List III is an independent power and the impugned Act being in pith and substance, an Act to acquire scheduled undertakings the power of the State Legislature to legislate is referable to entry 42 and its control was taken over by the Central Government.
Article 254 (1) says that if any provision of law made by the Legislature of the State is repugnant to any provision of a law made by Parliament which is competent to enact or to any provision of the existing law with respect to one of the matters enumerated in the Concurrent List, then the law made by Parliament, whether passed before or after the law made by the Legislature of such stage or, as the case may be, the existing law shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy be void.
Article 254 (1) only applies where there is inconsistency between a Central Law and a State Law relating to a subject mentioned in the Concurrent List. But the question is how the repugnancy is to be determined? In M.Karunanidhi vs Union of India, in 1979, Fazal Ali, J., reviewed all its earlier decisions and summarized the test of repugnancy.
According to him a repugnancy would arise between the two statutes in the following situations:
1. It must be shown that there is clear and direct inconsistency between the two enactments [Central Act and State Act] which is irreconcilable, so that they cannot stand together or operate in the same field.
2. There can be no repeal by implication unless the inconsistency appears on the face of the two statutes.
3. Where the two statutes occupy a particular field, but there is room or possibility of both the statutes operating in the same field without coming into collusion with each other, no repugnancy results.
4. Where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field.
The above rule of repugnancy is, however, subject to the exception provided in clause (2) of this Article. According to clause (2) if a State law with respect to any of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament, or an existing law with respect of that matter, then the state law if it is has been reserved for the assent of the President and has received his assent, shall prevail not withstanding such repugnancy.
But it would still be possible for the parliament under the provision to clause (2) to override such a law by subsequently making a law on the same matter. If it makes such a law the State Law would be void to the extent of repugnancy with the Union Law.
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