Administrative Law

Jalan Trading Co. v. Mill Mazdoor Union

AIR 1967 SC 691

Facts

The case involved the Payment of Bonus Act, 1965.
Section 37 allowed the Central Government to make provisions for removing “doubts or difficulties” in giving effect to the Act.
The order made by the Government under this section was also treated as final.
This was challenged as excessive delegation of legislative power.

Legislature can delegate details and implementation.
But it cannot delegate essential legislative function.
A “removal of difficulties” clause becomes unconstitutional if it allows the executive to practically amend the Act or decide the Act’s purpose for itself.

The Court treated Section 37 as more than a simple administrative power.
It did not merely allow the Government to solve small practical problems.
It allowed the Government to decide:
whether any doubt or difficulty existed;
whether it was necessary to remove it;
what the purpose of the Act was;
whether the Government’s order was consistent with that purpose.
This gave the executive too much control over the working and meaning of the Act.
The finality clause made the problem worse.
If the Government’s decision was final, courts would have very limited ability to check whether the Government had crossed the Act’s limits.
So, the executive was made almost the sole judge of its own power.
The PPT explains this as a Henry VIII clause, because it allowed the executive to alter or supplement the statute in the name of removing difficulties.
MP Jain also distinguishes this from Delhi Laws and Rajnarain. In those cases, modification was only to adapt an existing law to a new territory. But in Jalan, the power was much wider because it could affect the parent Act itself.

The Supreme Court held Section 37 invalid for excessive delegation.
The reason was that the Government was given power which, in substance, was legislative.
It could decide the purpose of the Act and remove doubts/difficulties by making provisions, while its decision was treated as final.
Use this case for: removal of difficulties clauses are not automatically valid; they become invalid when they allow the executive to exercise legislative power.
Contrast it with Gammon India, where the removal of difficulty clause was upheld because it did not contain finality and did not allow alteration of the Act.