A. Discretion Limited by Law
It used to be thought to be classical constitutional doctrine that wide discretionary power was incompatible with the rule of law. But this dogma cannot be taken seriously today, and indeed it never contained much truth. What the rule of law demands is not that wide discretionary power should be eliminated, but that the law should be able to control its exercise. Modern government demands discretionary powers which are as wide as they are numerous. Parliamentary draftsmen strive to find new forms of words which will make discretion even wider, and Parliament all too readily enacts them. It is the attitude of the courts to such seemingly unbounded power which is perhaps the most revealing feature of a system of administrative law.
The first requirement is the recognition that all power has legal limits. The next requirement, no less vital, is that the courts should draw those limits in a way which strikes the most suitable balance between executive efficiency and legal protection of the citizen. Parliament constantly confers upon public authorities powers which on their face might seem absolute and arbitrary. But arbitrary power and unfettered discretion are what the courts refuse to countenance. They have woven a network of restrictive principles which require statutory powers to be exercised reasonably and in good faith, for proper purposes only, and in accordance with the spirit as well as the letter of the empowering Act. They have also, as explained elsewhere, imposed stringent procedural requirements. Here we are concerned with the substance of administrative discretion.
B. Reasonable Exercise of Power
At times the statue may require the authority to act reasonably. The courts have also stated that the authority should consider the question fairly and reasonably before taking action. The term “unreasonable” means more than one thing. It may embody a host grounds mentioned already, as that the authority has acted on irrelevant or extraneous consideration or for an improper purpose, or mala fide, etc. Viewed thus, unreasonableness does not furnish an independent ground of judicial control of administrative powers apart from the grounds already mentioned.
“Unreasonableness” may also mean that even thought the authority has acted according to law in the sense that it has not acted on irrelevant grounds or exercised power for an improper purpose, yet it has given more weight to some factors than they deserved as compared with other factors. Interference on this ground requires going into the relative importance of different factors and their balancing which amounts to substituting the discretion of the judiciary for that of the executive. Courts do not normally exercise such wide power to interfere in the exercise of the administrative discretion.
Unreasonableness may furnish a ground for intervention by the courts when the Constitution of India or the statue so requires. Thus, article 14 of the Indian Constitution guarantees equality before the law but the courts have permitted reasonable classification to be made. Where the law is valid under the article, a discriminatory action would still be violative of the equality clause. Similarly, article 19 requires only reasonable restrictions to be imposed on the rights specified therein. In Maneka Gandhi v. India, it was held that an order made under section 10(3)(c) of the Passport Act, 1967 (power of impounding a passport) could be declared to be bad under clauses 1 (a) and (g) of the article if it was so drastic in nature, as to be imposing unreasonable restrictions on the individual’s freedom covered by the two clauses/ Thus if the order of impounding is for an indefinite period it would not be valid under the article.
At times, the law may require reasonable administrative behaviour, e.g., reasonable ground to believe by an authority to take action. In several cases the courts have considered this statutory formula. Firstly, “reasonable ground to believe” is a condition precedent to taking the administrative action in question. In Sheo Nath v. Appellate Assistant Commissioner, the Supreme Court with reference to the phrase used in the Income Tax Act for initiating reassessment proceedings by the I.T.O. said: “The Income Tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the Section”. If such a condition precedent is not satisfied so as to make out a prima facie case the order will be quashed.
Secondly, there should be some basis on which reasonable belief is to be based. The Supreme Court has held with reference to s. 147 (a) of the Income Tax Act, 1961 that “reason to believe” requires that the belief is to be reasonable or “based on reason which are relevant and material”. There should be rational and intelligible nexus between the reasons and the belief, though of course the court will not go into the adequacy or sufficiency of reasons. It will depend upon the facts of each case whether there was rational and intelligible nexus between reasons and belief. The reason to believe must related to the time when the impugned action was taken; any subsequent acquisition of belief in this regard would not be of any avail. The I.T.O. may act on direct or circumstantial evidence but not on mere suspicion. If there is some relevant evidence to support the “reasonable belief”, the courts would not go into its adequacy or the merits of the case.
C. Wednesbury Review
The principle of reasonableness has become one of the most active and conspicuous among the doctrines which have vitalized administrative law in recent years. Although the principle itself is ancient, the cases in which it was invoked were few and far between until 1968 the Padfield case opened a new era. Today, on the other hand, it appears in reported cases almost every week, and in a substantial number of them it is invoked successfully. Its contribution to administrative law on the substantive side is equal to that of the principles of natural justice on the procedural side.
This doctrine is now so often in the mouths of judges and counsel that it has acquired a nickname, taken from a case decided twenty years before Padfiel, the Wednesbury case. The reports now are freely sprinkled with the expression like ‘the Wednesbury principle’, ‘Wednesbury unreasonableness’, or ‘on Wednesbury grounds’. As Lord Scarman explained:
‘Wednesbury principles’ is a convenient legal ‘shorthand used by lawyers to refer to the classical review by Lord Greene MR in the Wednesbury case of the circumstances in which the courts will intervene to quash a being illegal the exercise of administrative discretion.
One of the grounds of review, he added, is ‘unreasonableness in the Wednesbury sense’. In the same case Lord Bridge referred to the exercise of power ‘unreasonably in what, in current legal jargon, is called the “Wednesbury sense’. ‘Wednesbury is now a common and convenient label indicating the special review of administrative disableness which has become the criterion for judicial review of administrative discretion. It is explained in that context below, where the key passage from the judgment of Lord Greene MR is set out in full.
In an important ex cathedra statement of the grounds for judicial review Lord Diplock preferred the term ‘irrationality’, explaining it as ‘what can by now be succinctly referred to as Wednesbury unreasonableness’. But it is questionable whether ‘irrationality’ is a better word. Virtually all administrative decision are rational in the sense that they are made for intelligible reasons, but the question then is whether they measure up to the legal standard of reasonableness. “Irrational” most naturally means ‘devoid of reasons’ whereas ‘unreasonable’ means ‘devoid of satisfactory reasons’.
The expression ‘arbitrary and capricious’ is sometimes used as a synonym for ‘unreasonable’, and in one case this has been transmuted into ‘frivolous or vexatious’ and ‘capricious and vexatious’. But the meaning of all such expression is necessarily the same, since the true question must always be whether the statutory power has been asbused.
D. Standard of Reasonableness
In Sheo Nath, the court stated that belief “must be that of an honest and reasonable person based upon reasonable grounds”. This formulation by itself does not seem to be of any help as this does not lay down any test of a “reasonable person”. As Lord Hailsham has said that two reasonable persons can come to the opposite conclusions on the same set of facts without being regarded as unreasonable. Wade also says that the duty to act reasonably, “has to be reconciled with the no less important doctrine that the court must no usurp the discretion of the public authority which Parliament appointed to take the decision. Within the bound of legal reasonableness is the area in which the deciding authority has genuinely free discretion”. It follows that the task of the courts is to see whether or not there exist some material for taking the action which is relevant and whether the authority has not left out relevant material. In other words, the term “reasonable” is to be interpreted narrowly as not giving any power to the court to go into the merits of the case and to substitute its own judgment for that of the authority. From the Sheo Nath and other cases, it is obvious that the courts have interpreted the term narrowly as just stated.
The scope of judicial review when the statue uses such phrases as “reasonable grounds” or “reasonable cause to believe” or “to act reasonably” was considered by the House of Lords in Secretary of State for Education v. Tameside Metropolitan Borough Council. The act authority as appeared to him to be expedient if he was satisfied that the authority was acting unreasonably. The Secretary of State issued directions to the local authority not to reverse a scheme adopted by its predecessor which was give rise to considerable difficulties and disruption. It was held that though the adoption of the original scheme would raise difficulties, yet it was not so impracticable that no reasonable authority could have adopted it. As regards the principle of judicial review, it may be appropriate to quote Lord Diplock:
It was for the Secretary of State to decide that. It has not for any court of law to substitute its own opinion for his; but it is for a court of law to determine whether it has been established that in reaching his decision unfavorable to the council he had directed himself properly in law and had in consequence of the Act he ought to have considered and excluded from his consideration matters that were irrelevant to what the had to consider.
Thus a narrow view of the scope of judicial review over “acting reasonably” was taken. No express statutory authority to act reasonably: The courts have been extremely reluctant to import the requirement of reasonableness (at least in the broad sense of going into the merits) into a statute by implication. The Supreme Court of India refused to accept the plea, in K.D. Co. v. K.N. Singh, that the court should judge whether the administrative action was reasonable or not where the statue was silent as to reasonableness. In S. Narayan v. India, the Supreme Court held that the court has no jurisdiction to go into the reasonableness of telephone rates fixed by the government. However, in one case, the statutory language, “If he is satisfied” has been held to mean “if he is reasonably satisfied” which, according to the court, meant that the satisfaction cannot be arbitrary or capricious and that it must be objective and based on the materials placed before the decision-maker by the parties concerned. But this approach appears to be an exception rather than the rule.
Sometimes, the courts have stated that they will quash administrative action if no reasonable body would have reached such a decision. Thus, while quashing an administrative action under section 237 of the Companies Act, 1956 the Supreme Court stated in Rohtas Industries v. S.D. Agarwal:
We do not think that any reasonable person much less any expert body like the Government on the material before it, could have jumped to the conclusion that there was any fraud involved in the sale of the shares in question.
Reference may also be made to the case-law in England. In Associated Provincial Picture Houses v. Wednesbury Corp., the principle has been asserted that unreasonableness may be a ground for attacking an administrative decision. Of course, the test for unreasonableness was very stringent. The decision could be attacked on this ground only if it was “so unreasonable that no reasonable authority could ever have come to it”, and to prove a case of that kind would require something “over-whelming”. There are not many cases in which administrative decisions may have been challenged on this ground. In Roberts v. Hapwood, it was held that a local authority having power to pay “such wages as it may think fit” was bound to exercise its discretion reasonably and that a “payment of £4 per week in 1921-22 to the lowest grade worker was so unreasonable as to be ultra vires in spite of the generality of the discretion. Lord Wrenbury interpreted the words “may think fit” as “may reasonably think fit”. In his view, it made no difference in the meaning, whether the word “reasonably” or “reasonable” was in or out because “a person in whom is vested a discretion must exercise his discretion upon reasonable grounds. Discretion does not empower a man to do what he likes merely because he is minded to do so – he must in the exercise of his discretion do not what he likes but what he ought … He must act reasonably”.
Though these statements are there in the English cases, yet there does not seem to be any English case where an administrative action may have been quashed by applying the test of reasonableness in the broad sense of going into merits of the case. Where an administrative action was quashed on the ground of unreasonableness it could as well have been done by applying the doctrine of irrelevant consideration.
In France, the procedure followed for annulling administrative action is known as the recours an annulation pour exces de pouvoir. The object of this procedure is to quash an administrative act or decision which is improper. The test of reasonableness is much broader in France than what it has been possible to achieve in the common law system. It is an overriding principle of the French administrative law that an administrative act is proper and, therefore, lawful only if it is reasonable, the opposite of capricious or arbitrary, and further, the administrator must produce the reason before the tribunal (Counseil d’Etat) whenever it thinks that there is sufficient ground for producing the reason. Thus, an administrative action can be brought to the test of reason. Whatever grounds of quashing an administrative action are available in England are available in France also but superadded to those is the test of reasonableness. In France, the ground of detournement de puvoir means that though the public authority has presented the external legal formalities, yet it has public authority has presented to it to secure recognition in India as well to some extent as discussed earlier, though in France it is used much more liberally by confining an unlimited discretion to a special and limited purpose and quashing as a detournement de pouvoir the use of the power or discretion not clearly directed to the attainment of that purpose so read into the statute by the Conseil d’Etat.
Further, in France, beyond this, there is the much developed ground of la violation de la loi which goes much further and is vastly multifarious. The implications are that the Conseil d’Etat can quash an administrative action which appears to it not to be in accord with the French legal system thought it does not infringe any positive enactment. Thus, the Conseil imposes on the administration conformity to a standard of conduct not enacted as obligatory by any statue.
In his book, Administrative Law, Wade categories the scope of unreasonableness, namely:
- Opposition to the policy of Parliament;
- Infringement of fundamental rights;
- Penalising the inncocent;
- Financial motives;
- Indiscriminate action;
- Misplaced philantrophy;
- Permissible philantrophy;
- Improper licensing decision;
- Unreasonable planning decision;
- Compulsory purchase of land;
- Tax concessions;
- Unreasonable regulation
E. Goodbye to Wednesbury?
The Wednesbury doctrine is now in terminal decline, but the coup de grace has not yet fallen, despite calls for it from very high authorities. Lord Shyn said in the Alconbury case, with reference to proportionality.
I consider that eve without reference to the Human Rights Act 1998 the time has come to recognize that this principle is part of English administrative law not only when judges are dealing with Community acts but also when they are dealing with acts subject to domestic law. Trying to keep the Wednesbury principle and proportionality in separate compartments seems to met to be unnecessary and confusing.
Although quoting and sympathizing with these weighty opinions, and acknowledging that ‘the Wednesbury test is moving closer to proportionality’, the Court of Appeal has held that ‘it is not for this court to perform the burial rites’. Thus task must be left to House of Lords, and meanwhile the law as laid down by the House in the Brind case, in which proportionality was rejected as part of English law, must linger on.
Lord Irvine LC has suggested, in a human rights context, that ‘these is a pro-found difference between the Convention margin of appreciation and the common law test of rationality’, and has raised the question, ‘how long the courts will restrict their review to a narrow Wednesbury approach in non-Convention cases, if used to unquiring more deeply in Convention cases? The difference that he observes is in substance the same as that detected by the House of Lords, and his question is whether it will be eliminated by ‘spill-over effect’ from human rights and EU law. This is exactly the kind of convergence which European influences are likely to bring about. It is evident already in the numerous references to proportionality which judges are making freely, and which are paving the way for its general acceptance.
- H.W.R. Wade and C.F. Forsyth, Administrative Law, 7th and 9th edition, Oxford University Press, 2005.
- M.P. Jain and S.N. Jain, Principles of Administrative Law, 4th edition, Wadhwa and Company Nagpur, Delhi, 2003.
- Durga Das Basu, Administrative Law, 5th edition, Kamal Law House, Calcutta, 1998.