Residuary powers of legislation

N ATIONAL ATIO NAL L AW INSTITUTE UNIVERSITY , BHOPAL

In partial fulfilment of the requirement of the project on the subject of Constitutional Law-III of B.A., L.L.B (Hons.), Fifth Trimester

A CADEMIC CADEMIC Y EAR EAR : 2015-16 Submitted on 5 th November 2015

Residuary Powers of Legislation in the Indian Constitution Constitution and a Comparative Study of other Federal Constitutions of the World

Submitted to:

Ms. Kuldeep Kaur Barrister-at-Law, Lincoln's Inn, London.

Submitted by:

Udyan Arya Shrivastava (2014 BALLB 98 )

N ATIONAL L AW I NSTITU TE U NIVER SITY , B HOPAL

A CKNOWLEDGEMENTS On completion of this Project it is my present privilege to acknowledge my profound gratitude and indebtedness towards my teachers for their valuable suggestions and constructive criticism. Their precious guidance and unrelenting support kept me on the right track throughout the project. I gratefully acknowledge my deepest sense of gratitude to: Prof. (Dr.) S.S. Singh, Director, National Law Institute University, Bhopal for providing us with the infrastructure and the means to make this project; Our Constitutional Law teacher, Ms. Kuldeep Kaur , who provided me this wonderful opportunity and guided me throughout the project work; I’m also thankful to the library and computer staffs of the University for helping me find and

select books from the University library. Finally, I’m thankful to my family members and friends for the affection and encouragement with which doing this project became a pleasure.

Udyan Arya Shrivastava (2014 BALLB 98 )

[2] CONSTITUTIONAL LAW-III R ESIDUARY POWERS OF LEGISLATION


T ABLE OF CONTENTS

1) TABLE OF CONTENTS ............................................................................................. 3 2) INTRODUCTION........................................................................................................ 4 a) THE NATURE OF ‘R ESIDUARY POWER ’ ....................................................................................... 4 3) RESIDUARY POWERS CLAUSE IN THE INDIAN CONSTITUTION ................ 5 a) GOVERNMENT OF INDIA ACT, 1935 AND THE DISTRIBUTION OF LEGISLATIVE POWERS . 5 b) V ESTING OF R ESIDUARY POWERS .............................................................................................. 7 c) SCOPE OF R ESIDUARY POWER ..................................................................................................... 7 4) PROVISIONS FOR RESIDUARY LEGISLATIVE POWERS IN OTHER FEDERAL CONSTITUTIONS OF THE WORLD .................................................... 9

a) b) c) d)

U.S.A. .............................................................................................................................................. 9 C ANADA ........................................................................................................................................ 11 AUSTRALIA.................................................................................................................................... 12 S WITZERLAND .............................................................................................................................. 13

5) CONCLUSION ............................................................................................................ 14 6) BIBLIOGRAPHY ......................................................................................................... 15 a) BOOKS ........................................................................................................................................... 15 b) W EBSITES ...................................................................................................................................... 15



INTRODUCTION The Constitution of India, enacted in 1950, is of relatively recent origin and artificial construction when compared with the constitutions of other leading federations of the world. Most of the provisions of the Constitution, especially those dealing with the federal structure and distribution of legislative powers, are based not on shared experiences in the working of a republic but were drafted by the Constituent Assembly after studying the constitutions of other leading federations of the world. The nature of ‘Residuary Power’

One of the hallmarks of the federal system is distribution of legislative powers between the centre and the states (or federating units). This distribution of legislative powers can lead to unforeseen circumstances as it is humanly not possible to foresee every possible activity and assign it to one List or the other. In such circumstances the question of ‘residuary powers’ arises.

Who will have the legislative competence to legislate on residual subjects, i.e., subjects not mentioned in any of the Lists? It is quite impossible for constitution makers to provide an exhaustive list of powers: something is bound to be forgotten or new fields of jurisdiction are likely to appear in the future. Thus, it becomes necessary to provide some blanket clause which will determine which of the two levels of government shall get those new powers. Most federal constitutions of the world envisage such a difficulty and make a special provision for either the centre or the states to legislate on residuary matters. This provision is known as the residuary powers clause and such power to legislate is known as ‘ residuary legislative power’ . In this project I’ll attempt to dissect the residuary powers clause in the Indian Constitution,

understand its scope and then undertake a comparative study with other leading federal constitutions of the world, namely U.S.A., Australia, Canada and Switzerland.



R ESIDUARY POWERS CLAUSE IN THE INDIAN CONSTITUTION Article 248 of the Indian Constitution, which vests residuary power in the Parliament, states, 248. Residuary powers of legislation .— (1) Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List. (2) Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists. To fully understand this provision it’s important to appreciate its context and evolution, which is

discussed as follows. Government of India Act, 1935 and the Distribution of Legislative Powers

The federal scheme in the Constitution of India is adopted from the Government of India Act, 1935. The said Act made an innovation upon several precedents to make a treble enumeration of powers, in order to make it as exhaustive as possible and also to minimize judicial intervention and litigation. The three legislative lists (I, II and III) respectively enumerated the powers vested in the Federal Legislature, the Provincial Legislature and to both of them concurrently (Section 100). If however, a matter was not covered by any of the three Lists that would be treated as a residuary power of the Federal Parliament (Section 104) and Section 107 provided for predominance of federal law in case of inconsistency with a Provincial Law, in the concurrent sphere.1 Thus, under the Government of India Act, 1935, the residuary power of legislation was given neither to the Federal Legislature nor to the provincial legislatures. It was left to the discretion of the Governor-General to assign these powers to either Legislature. It was only when all categories in the three Lists were absolutely exhausted that one could think of falling back upon the residuary powers. 2 But the Lists under the Act were so exhaustive that they left little or nothing in the residuary field. It is to be noted that the only reported occasion for the application

1 Re.

C.P. Motor Spirit Taxation, AIR 1939 FC 1(5); Prafulla v. Bank of Commerce, (1947) 51 CWN 599 (610) (PC). General v. Province of Madras, AIR 1945 PC 98: 1945 FCR 179.

2 Governor-



of the residuary power of the legislation under the Government of India Act, 1935 was as regards the power to provide for acquisition of a commercial or industrial undertaking. 3 Borrowing the pattern of treble enumeration from the Government of India Act, 1935, the Constitution of India makes a three-fold division of powers namely; a) List I or the Union List – It contains subjects over which the Union shall have exclusive powers of legislation, including 97 items. These include defence, foreign affairs, banking, currency and coinage; union duties and taxes and the like. b) List II or the State List – It comprises of 66 items or entries over which the State Legislature shall have exclusive power of legislation, such as public order and police, local Government, public health and sanitation, agriculture, forests and fisheries, education, State taxes and duties, and the like. c) List III or the Concurrent List – It gives concurrent powers to the Union and the State Legislatures over 47 items, such as Criminal Law and procedure, Civil Procedure, marriage, contracts, torts, trusts, welfare of labour, social insurance, economic and social planning. Thus the framers of the Indian Constitution attempted to exhaust the whole field of legislation as they could comprehend, into numerous items, narrowing down the scope for filling up the details by the judicial process of amplifying the given items. Besides, wherever any conflict could be anticipated, the Constitution has given predominance to the Union jurisdiction, so as to give the federal system a strong central bias. Similarly, in all the cases which have come up to the Supreme Court, the Court has upheld the jurisdiction of the Union Parliament. Thus, in case of overlapping, the power of the State Legislature to legislate with respect to matters enumerated in the State List has been made subject to the power of the Union Parliament to legislate in respect of matters enumerated in the Union and Concurrent Lists, and the entries in the State List have to be interpreted accordingly.4 Similarly, in the concurrent sphere, in case of repugnancy between a Union and a State law relating to the same subject, the former prevails. If, however, the State law was reserved for the assent of the President and has received such assent, the State law may

3 Rajahmundry 4 K.S.E.Bd.

Electric Supply Co. v. State of Andhra, (1954) S.C.A. 272. v. Indian Aluminium, AIR 1976 SC 1031 (1036-37); I.T.C. v. State of Karnataka, (1985) Supp SCC 476

(para. 19). [6] CONSTITUTIONAL LAW-III R ESIDUARY POWERS OF LEGISLATION


prevail notwithstanding such repugnancy, but it would still be competent for Parliament to override such State law by subsequent legislation {Article 254(2)}.5 Vesting of Residuary Powers

The Constitution of India vests the residuary power, i.e., the power to legislate with respect to any matter not enumerated in anyone of the three Lists, in the Union Legislature (Article 248). The vesting of residual power under the Constitution follows the precedent of Canada, for it is given to the Union instead of the States as in USA and Australia. Our Constitution has bodily adopted the concept of Residuary Powers of the Legislation from the scheme of Government of India Act, 1935.In India the residuary powers of the legislation have been vested in the Centre so as to incline towards the fabric of the Indian federal system which thus makes the Centre stronger. As was stated in the Constituent Assembly by Pt. Jawahar Lal Nehru, Chairman of the Union Powers Committee: “We think that Residuary Powers should remain with the Centre. In view of the exhaustive nature of the three lists drawn upon by us, the residuary subjects could only relate to matters which, while they may claim recognition in future are not identifiable and cannot be included now in the Lists”.6

Although under the present Constitution, the scheme of the Three Lists has been taken over with the difference that although the three lists has been greatly enlarged and is made exhaustive in nature, but the residue power has been conferred on the centre. In adopting the scheme of the Government of India Act, 1935 our Constitution had the benefit of the innovations which the Act had introduced in the distribution of legislative power as the lists contained very little overlapping of issues. However, the final determination as to whether a particular matter falls under the residuary power or not is that of the Courts. 7 Scope of Residuar y Power

It can be easily pointed out that the aim of the Indian Constitution, like that of the Government of India Act, 1935, is to make the Legislative Lists as exhaustive as possible. The three lists

5 U.P.E.S.

v. Shukla, AIR 1970 SC 237(239). Shiva Rao, The Framing of India’s Constitution , Vol. II, p. 777. 7 Union of India v. Dhillon, AIR 1972 SC 1061. 6 B.



which were exhaustive as to leave little or nothing for the residual field was said for the Government of India Act, 1935 is even more pertinent to the present Constitution as it contains 97 as against 59 entries in the List I, 66 entries as against 54 in list II and even List III is larger in the present Constitution. Hence, the resort to the residual power should be the last refuge was held for Government of India Act, 1935 still prevails with the present Constitution. In a case where two constructions are possible, one of which will avoid resort to the residuary power and the other which will necessitate such resort, the former must be preferred. This does not mean, however, that in order to avoid falling back upon the residual power, the Court would be justified in straining the language of any of the Entries or to render the residuary entry altogether meaningless. This article, i.e., Art. 248(1) applies to the Union vis a vis the States. So far as the Union Territories are concerned, Parliament has unlimited power under the article 246 (4). Nonetheless great care with which the various Entries in the three lists given under the seventh schedule of our Constitution have been framed, there may be some legislative or taxing power which does not come under any of these Entries. In such a case, it is the Union Parliament which shall have the power to legislate with regard to such matter of taxation, by virtue of Art. 248(2). Art 248(2) has reference to the distribution of legislative powers between the centre and the states as it provides that in respect of matters not enumerated in the Lists including taxation. It is the Parliament that has power to enact laws for which provision is given under Art. 248(2) read with Art. 246(4) of the Indian Constitution. This Residuary Power of legislation has also been explained in Entry 97 of the Union List (List I) as follows: Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists. “

”



PROVISIONS FOR R ESIDUARY LEGISLATIVE POWERS IN O THER FEDERAL CONSTITUTIONS OF THE WORLD U.S.A.

In USA, there is a single enumeration of powers, which signifies that the Constitution simply enumerates the powers specially assigned to the Federal Legislature and leaves the entire unremunerated residue to the State Legislatures. Woodrow Wilson stated that “the State

Governments are the ordinary governments of the country; the federal government is its instrument only for the particular purposes”.8 The Constitution of the USA makes the division of powers between the Federation and the States by the following four provisions: 1. Powers of the Union - The Federal Congress has no general power to make laws for the people; it has got only enumerated powers. These powers are enumerated in Article. I, Section 8 to declare war, raise armies, coin money, regulate foreign commerce etc. As to the powers of the national government, Marshall, C.J. said in the case of Gibbons v. Ogden 9 that “the genius and character of the whole government seem to be, that its action is to be applied to all the external concerns of the nation, and to those internal concerns which affect the States generally, but not to those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere for the purpose of executing some of the general powers of the national Government” 2. Powers of the States – The powers of the States are not enumerated by the Constitution. However, according to the Tenth Amendment, the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or the people. Thus, the residuary powers are given to the States. The reserved rights of the States inter alia includes the right to pass laws, to give effect to laws through executive action, to administer justice through the Courts, and to employ all necessary agencies for legitimate purposes of State Government. 3. Limitations on Union Powers – Congress is prohibited from taxing exports or giving preference to particular States in the exercise of its ‘Commerce’ powers, namely; “No Tax or

Duty shall be laid on Articles exported from any State and no preference shall be given by any 8 Woodrow 9 (1824)

Wilson, Constitutional Government , quoted in New York v. United States, (1946) 326 US 572 (592). 9 Wh (195). [9] CONSTITUTIONAL LAW-III R ESIDUARY POWERS OF LEGISLATION


Regulation of Commerce or Revenue to the Ports of one State over those of another, nor shall Vessels bound to or from, one State, be obliged to enter, clear or pay Duties in another” by Clauses. (5) and (6) of Article I, Section 9 respectively. 4. Limitation on States Powers – Though all powers not expressly given to the Union were reserved to the States (10th Amendment), the Constitution at the same time imposed certain limitations upon the exercise of those reserved powers so that their exercise might not interfere with the exercise of the powers conferred upon the National Government. These limitations are: a. Taxation – No State may, without the consent of Congress, lay any tax on tonnage or on imports and exports beyond what may be necessary for enforcing its inspection laws under Article I, Section 10(3) and Section 10(2) respectively. b. Monetary – Under Article 1 Section 10(1), no State shall coin money, emit bills of credit; make anything but gold and silver coin a tender in payment of debts. Thus, the power over “currency and coin” given to the Nat ional Government is exclusive. 10 Actually, it is

essential in the commercial and economic interests of the Union to have a uniform monetary system. c. Foreign and Inter-State Agreements – As per Article I, Section 10 “no State shall enter into any treaty or confederation…..No State shall, without the consent of Congress, enter

into any agreement or compact with another State or with a foreign power”. The prohibition against foreign agreements supplements the provisions regarding treaties {Article II, Section 2(2)} in favour of the National Government. The power is made exclusive by prohibiting the States to enter into that field 11 and the prohibition against the inter-State compacts without the consent of Congress is, obviously, meant to prevent the growth of political combinations which may encroach upon the supremacy of the United States.12 In practice, however, the Clause has made possible inter-state co-operation on common problems with the approval of the National Government. Subject to the above limitations, the States have full sovereign powers over all persons and things within their respective territorial limits with respect to all matters which are not delegated to Congress by the Constitution, expressly or by necessary implication.13

10 University

of Illinois v. U.S., (1933) 289 US 48.

11 Ibid. 12 Virginia 13 Carter

v. Tennessee, (1893) 148 US 503. v. Cater Coal Co., (1936) 298 US 238. [ 10 ] CONSTITUTIONAL LAW-III R ESIDUARY POWERS OF LEGISLATION


Thus, there is no Concurrent List in the American Constitution. However, a concurrent sphere has resulted from the judicial interpretation that there is a sphere, where a State can legislate so long as Congress does not ‘occupy the field’ or th e State legislation does not conflict with a

federal legislation.14 Nevertheless, it seems that each government, national and State, is supreme within their own sphere. In other words neither Government can exercise its powers in such manner as to obstruct the free exercise of power by another. The position on paper today is that Congress itself cannot under any device; exercise any power which is not granted to it expressly or by necessary implication. But the area of concern is “implied power” founded inter alia, upon the “necessary and proper clause” clause in Article I,

Section 8(18) which signifies that the Courts have helped in the expansion of the federal power to an extent undreamt of by the fathers of the Constitution and hence the Congress may legislate on matters under the pretext of necessary and proper which though not comes under their domain. Canada

In Canada, the residuary powers were allocated to the federal government. The Fathers of Confederation wanted to avoid the "weaknesses" of the American constitution which had left all residual powers in the hands of the constituting states. The conditions prevalent in British North America, at the time of Confederation seemed to dictate the creation of a strong federal government endowed with sufficiently large powers to withstand American pressures and create a strong national economy. Residuary powers would assure, in the future, the continued strength of the Dominion government. In a strict sense the whole of s.91 of the Constitution Act, 1867 is the residuary clause since the federal government was granted the power to legislate "for the Peace, Order and good Government of Canada, in relation to all Matters not coming within the classes of Subjects by this Act assigned exclusively to the Legislature of the Provinces." (my emphasis) In other words, the Provinces were given a list of specified fields of jurisdiction and the federal government was given the rest. The list of powers (ss. 1-29) given in s. 91 was only an "illustrative list" of the types of powers granted to the federal government and was included "for greater Certainty, but not so as to restrict the generality of the foregoing Terms of this Section."

14 Gibbons

v. Ogden, (1824) 9 Wh (195). [ 11 ] CONSTITUTIONAL LAW-III R ESIDUARY POWERS OF LEGISLATION


On the face of it, there were then only two types of powers granted in the Constitution Act, 1867: 1) the specified list of the provincial governments; 2) the rest that went to the federal government. However, matters are not as simple as they first appear: the provincial list contained two clauses which were not easily defined unless reference was made to the 29 categories of s. 91; these two clauses were 92-13 ("Property and Civil Rights") and 92-16 ("Generally all Matters of a merely local or private Nature in the Province"). Thus, instead of two, three compartments of powers eventually appeared in the Constitution Act: 1) s.92; 2) the illustrative list of s .91 and 3) the residuary clause which came into play only if powers could not be allocated through No. 1 or No.2. Thus, part of the residuary clause came to rest in s. 92-13 and in 92-16 since the definition of Property and Civil Rights could only be gathered by removing from it the 29 classes found under s.91; matters were to fall under the federal residuary clause if it was proven that the disputed powers were undoubtedly of a general rather than a local nature and could not be linked to one of the listed powers under s. 91 or s. 92. Australia

When the six Australian colonies joined together in Federation in 1901, they became the original States and ceded some of their powers to the new Commonwealth Parliament. Before Federation, each colony had its own set of powers. At Federation some of these powers were handed over to the Commonwealth (s 51). The remaining powers stayed with the states (s 108); they are called the residual powers and only the states can make laws based on these powers. Section 51 of the Constitution of Australia grants legislative powers to the Australian (Commonwealth) Parliament only when subject to the constitution. There are 39 subsections to section 51, each of which describes a "head of power" under which the Parliament has the power to make laws. The Commonwealth legislative power is limited to that granted in the Constitution. Powers not included in section 51 are considered "residual powers", and remain the domain of the states, unless there is another grant of constitutional power (e.g. Section 52 and Section 90 prescribe [ 12 ] CONSTITUTIONAL LAW-III R ESIDUARY POWERS OF LEGISLATION


additional powers). Matters covered in section 51 may be legislated on by the states, but the legislation will be ineffective if inconsistent with or in a field 'covered by' Commonwealth legislation (by virtue of s109 inconsistency provision). Switzerland

Switzerland’s federal constitution, adopted in 1848 after a civil war, was a compromise that

sought to accommodate both the liberals (mainly Protestants) promoting a unitary state and the conservatives (mainly Roman Catholics) defending the former Confederation. Based on a highly decentralized federalism, the Cantons (the constituent units of the federation) maintained their far-reaching original autonomy, now as self-rule within a federation, and continued to share their sovereignty with the federation. The constitutional concept of Switzerland’s distribution of powers reflects a “bottom-up”

construction of the federation and depends, finally, on the residual powers of the Cantons and, in some instances, even municipalities. As a logical consequence the Swiss Constitution does not distribute the powers between the Confederation and the Cantons in a final list, and it does not provide powers for the Cantons. In principle it determines exclusively the powers delegated to the Confederation. Where new powers are delegated to the federal government, they are formulated carefully so that, even within a delegated power, the Cantons still retain some part of their sovereignty.

[ 13 ] CONSTITUTIONAL LAW-III R ESIDUARY POWERS OF LEGISLATION


CONCLUSION Federalism leads to the setting up of a composite institution where there is a separate and distinct union government, and state governments. The pattern of relationship is never rigidly defined in the Indian Constitution. The fact that the relationship is based on an elastic set of norms has always gone to the advantage of successive powerful union governments. The concept of federalism in India is built upon the substructure of power sharing in a setup of parliamentary democracy. In speaking about the concept of federalism-in-practice, we should be sharply aware of the fact that from the moment the Constitution started to be drafted, the concept of unity rather than diversity had a marked influence on the process of federalism. The drive to create an ‘indestructible union’ was also accompanied by the urge to foster and foist on

the nation, a driving supremacy of the Union over the State, in matters that concerned the nation’s interests. Residuary Power of the Legislation is one such concept introduced in the

Indian Constitution by the framers of the Constitution who were able to perceive the future legislative needs which would arise in future through there far sightedness has proved to be a boon in keeping the federal character of our Constitution intact with a stronger Centre. Unlike India, in the U.S.A. and in Australia, residuary powers are vested in the competent States, while in Canada they belong to the Centre as the framers of the Canadian Constitution supposed that the American system of vesting residuary powers in the state resulted in weakness of the Federal Government and so they reversed the process, by leaving the residue to the Dominion Parliament and conferring only those powers on the Provincial Legislatures which are required for local purposes. The comparison with other federal constitutions should provide some context to the residuary powers clause in the Indian Constitution and help in better understanding it.



BIBLIOGRAPHY Books 





Basu, D.D. Shorter Constitution of India , 11th edition. LexisNexis Butterworth. Jain, M.P. Indian Constitutional Law . 7th ed. 2014. Mehdi, Ali. Residuary Legislative Powers in India – Retrospect & Prospects . Deep & Deep Publications. 1990.



Rao, B. Shiva. The Framing of India’s Constitution , Vol. II.



Shukla, V.N. Constitution of India. Revised by Mahendra P. Singh; 10th Edition, Eastern Book Company.

Websites 

www.legalservicesindia.com



www.indiankanoon.com


Residuary powers of legislation

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