The Validity of Status of Henry VIII Clauses in India



[This article is authored by Madhur Arora, JGLS, O.P. Jindal Global University, New Delhi]

Henry VIII clause is a provision that is generally added to parent legislations that delegate some power to the executive. They allow the said executive to amend or repeal one or more statutes by way of the enactment of delegated legislation. [1] Since the said clauses exist in the parent legislation that delegates such power in the form of “removal of doubt clauses” [2], there have been various contentions with regards to the existence of these clauses within the ambit of Indian Jurisprudence. Upon observation of the conflict that has ensued with regard to Henry the VII Clauses, it may be asserted that the Indian judiciary does indeed accept a narrow form of said clauses and does not disregard the validity of wide-ambit Henry the VIII Clauses completely.
In the case of Jalan Trading v. Mill Mazdoor Union [3], Section 37 of the Payment of Bonus Act, 1965 was challenged as it was alleged to be a Henry VIII clause and subsequently a case of excessive delegation of powers. The power was delegated to the Central Government under the said section wherein the Central Government was empowered to make portions in order to remove difficulties or doubts as long as the provision was not inconsistent with the purpose of the act. The power was wide enough to allow the amendment of the parent act itself. Additionally, such power was final and was not open to judicial review. Justice Shah considered this an example of a wide-ambit or broad Henry VIII clause and ruled against its validity. Although the case of Jalan Trading has been considered the first case in laying down the foundation of the jurisprudence regarding wide Henry VIII clauses, subsequent decisions have gone into different directions. 
In the case of Gammon India v. Union of India [4] wherein the validity of section 34 of the Indian Contract Labour (Regulation and Abolition) Act, 1970 was challenged, citing the same reasons as the Jalan Trading case. Again, there was a power that had been delegated to the Central Government to create provisions for the removal of doubts and difficulties. Being a constitutional bench, the bench in Gammon India could not overrule the verdict of the Five – Judge bench in Jalan Trading, however, a distinction was drawn upon the ambit of the clauses itself in both cases. Wherein in Jalan Trading, the Central Government had the power to amend the parent act as well as the subordinate legislation, no such power existed with the government under section 34 of the Indian Contract Labour (Regulation and Abolition) Act, 1970. Additionally, the finality of the actions of the government in the Jalan Trading case was considered to be the factor that caused the clause to be considered an instance of excessive delegation, which is what led to the declaration of its invalidity. This meant that a narrow scope Henry VIII clause was acceptable and valid in India. 
However, this decision, therefore, had an interpretative implication that caused the Jalan Trading verdict to mean that the mere existence of Henry VIII clauses is not invalid. The invalidity stems from additional factors such as the finality of the actions of the government. However, when the judgment by Justice Shah is read carefully, the use of the term “accentuates” leads us to the conclusion that it was indeed the mere existence of the clause that was problematic, and the finality was an additional factor rather than a deciding one. 
Power to remove the doubt or difficulty by altering the provisions of the Act would in substance amount to exercise of legislative authority and that cannot be delegated to executive authority. Sub-section (2) of s. 37 which purports to make the order of the Central Government in such cases finally accentuates the vice in sub. s. (1).
The ratio in Jalan Trading, therefore, was that any conferment of power to remove the doubt or difficulty by allowing the alteration of the provisions of the Act in itself is impermissible and that the presence of finality clause under Section 37, in that case, was only an accentuating matter instead of it being causation of the decision in the case.
The conflict that arises between the two interpretations of the Jalan Trading case is causative of the ambiguity on the status of Henry VIII clauses and their status in India. In the event that the first interpretation is taken into account, we would find that the existence of all Henry VII  clauses is invalid and that it may be struck down from any and all legislations by the ere virtue of its existence. However, the second interpretation is to be taken, we would find that any Henry VIII clause that would amount to excessive delegation would be invalid, however, any such clause that delegates with the permissible limits in Indian Jurisprudence is valid.
After the Gammon India case, another landmark case upon the issue of the legality of Henry VIII clause is identified as Bengal Iron Corporation v. Commercial Tax Officer. [5]  The challenge was to the validity of section 42 of the Andhra Pradesh Legislative Council Act, 2005 which stated that in the event there is a requirement for the executive to remove any doubts or difficulties in order to facilitate a smooth transition from the old act to the new act, they may do so by making rules that would have that effect. In making such rules, the executive may derogate from the provisions of the new act, which is also the parent act. However, in every other instance where removal of difficulty is required, the Executive can make rules not inconsistent with the provisions of the parent Act. This implies Section 42 is an example of both the broad and narrow Henry VIII clauses. 
The court upheld the validity of the said clause. They stated the following: 
However, in a subsequent decision in Gammon India Limited., it has been explained that the decision in Jalan Trading was influenced by the words occurring at the end of Section 37 of the Payment of Bonus Act to the effect that the direction of the Government issued thereunder was final. It is meant "for giving effect to the provisions of the Act", it was held. Sub-section (2) of Section 42 of the A.P. Act does no doubt not contain the aforesaid offending words, and cannot, therefore, be characterized as invalid
The Bengal Iron Corporation's decision also being a Two – Judge bench cannot overrule the Jalan Trading verdict, however, serves as a guiding light in deciding what interpretation should be considered as valid in this regard. The Court in the Bengal Iron Corporation Case read the Gammon India Case as if it sought to imply that it was the finality clause in the “Removal of Doubt or Difficulty clause“ that influenced the decision of the Court in the Jalan Trading case. 
An assumption that the interpretation of both subsequent cases is correct is not only supported by the virtue of them being subsequent interpretations, but also by the fact that it has been noted on Indian Jurisprudence that broadening the ambit of a previous position by a subsequent decision of the same court is acceptable until there is a subsequent development that happens. This additional factor too ratifies the understanding taken by the court in Gammon India and Bengal Iron Corporation.
It may be therefore ascertained that Henry VIII Clauses are valid in India. They may be divided into two types, broad and narrow. The jurisprudence is clear on narrowly worded Henry VIII clauses and allows for their existence. The ambiguity arises on questions of the existence of wide – ambit Henry VIII Clauses, however, their existence is not impermissible, rather, they may be considered invalid in the event they delegate power too excessively.

References
[1] “Delegating Legislative Power”, Australian Law Reforms Commission, available here, accessed on 10th May 2019.
[2] Henry VIII Clauses & The Rule of Law, RULE OF LAW, Institute of Australia, available here.
[3] Jalan Trading v. Mill Mazdoor Union, 1967 SCR (1) 15.
[4] Gammon India v. Union of India, (1974) 1 SCC 598.
[5] Bengal Iron Corporation v. Commercial Tax Officer 1993 SCR (3) 433.

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