AI Drafter 
TaxTMI 
TaxTMI 
2005 (9) TMI 620
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.... The said deed was presented before the Sub-Registrar, Bikaner on 30.7.1999 for the purpose of registration which was refused by making an endorsement on the document that the same could not be registered in terms of the Government Notification dated 26.3.1999 published in the Rajasthan Gazette dated 1.4.1999 as amended on 22.4.1999 whereby and whereunder registration of such documents have been prohibited as being 'opposed to public policy'. The said notifications were said to have been issued by the State of Rajasthan in exercise of its power conferred upon it under Section 22-A of the Act. The Respondent herein questioned the constitutionality of Section 22- A of the Act as inserted by the legislature of Rajasthan as also the aforementioned notifications by filing a writ petition before the Rajasthan High Court. HIGH COURT: By reason of the impugned judgment the Rajasthan High Court declared Section 22-A of the Act as inserted by the Rajasthan Amendment Act, 1976 being Act No. 16 of 1976 as unconstitutional and consequently the notifications as contained in annexures 3, 4, 6 and 7 of the writ petition were also quashed. The Sub-Registrar was also directed to reg....
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....89 dated 26.3.1999 as under; In place of the phrase "six months" in the above notification, the phrase "Three years" is substituted. [No. F.2(FD/TAX-DIV/99-213] By order of the Governor, Sd/- (Shikhar Agarwal) Dy. Secretary Govt." "Annexure/6 26th March, 1999 S.O. 484:- In exercise of the powers conferred by Section 22-A of the Registration Act, 1908 (Central Act No. XVI of 1908), as applicable in the State of Rajasthan, the State Govt. hereby declares that the registration of any of the following documents is opposed to public policy:- Power of Attorney authorizing the execution of the sale deed, gift, mortgage or any other document of transfer of immovable property presentation for registration before any office other than the Sub-Registrar or Registrar respectively in whose District or Sub-District the whole or some part of the property to which such power of attorney relates is situated. [No. F.2[3] FD/TAX-DIV./99-186]. By order of the Governor, Sd/- Dy. Secretary Govt." "Annexure/7 22nd April, 1999 S.O. 60. In exercise of the powers conferred under section 22-A of the Indian Registration Act, 1908 [Central Act No. XVI] as applicable in th....
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....may strike down only the notifications issued by the State if it be found to have exceeded its jurisdiction in that behalf. In any event as such guidelines can be found out either from the preamble or from other provisions of the Act, the same need not be stated in the offending provision itself. THE ACT: The Act was enacted to consolidate the enactments relating to the Registration of Documents. Prior to enactment of the said Act, the provisions relating to registration of documents were scattered in seven enactments. The Act was enacted in terms of Entry 18, List II and Entry 6, List III of the Seventh Schedule of the Constitution of India. It mainly deals with the necessity of getting a document registered in India so as to make them valid and even if they are executed outside India to provide for registration thereof after their first arrival in India. Section 17 of the Act enumerates the instruments registration of which is compulsory under the Act whereas Section 49 encompasses the effect of a failure to register. Registration of documents, however, is not confined only to documents relating to immovable property but also for the documents dealing with other matters ....
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....avour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well-known, a document of convenience. Besides the Indian Contract Act, the Power of Attorney Act, 1882 deals with the subject. Section 1A of the Power of Attorney Act defines power of attorney to include any instruments empowering a specified person to act for and in the name of the person executing it. Section 2 of the said Act reads, thus: "Execution under power-of-attorney The donee of a power-of-attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the power; and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof. This section applies to powers-of-attorney created by instruments executed either before or after this Act comes into force." ....
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.... Hence, the said principle of presumption is not an absolute rule but it is also subject to limitations. Its application in interpretation can only be applied to resolve a conflict when two interpretations are possible and not when there is only one leading to the conclusion that the delegated legislation is unguided and excessive. If the provisions are unconstitutional a mere presumption which decides the burden of proof cannot save them. In Craies on Statute Law, seventh edition at page 95, it is stated: "The first business of the courts is to make sense of the ambiguous language, and not to treat it as unmeaning, it being a cardinal rule of construction that a statute is not to be treated as void, however, oracular. This was thus laid down by Bowen L.J. in Curtis v. Stovin: "The rules for the construction of statutes are very like those which apply to the construction of other documents, especially as regards one crucial rule viz. that, if possible, the words of an Act of Parliament must be construed so as to give a sensible meaning to them. The words ought to be construed ut res magis valeat quam pereat." And Fry L.J. added: "The only alternative construction offer....
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....g the legislative policy and laying down the standard which is to be enacted into a rule of law, and what can be delegated is the task of subordinate legislation which by its very nature is ancillary to the statute which delegates the power to make it. Provided the legislative policy is enunciated with sufficient clearness or a standard laid down the Courts cannot and should not interfere with the discretion that undoubtedly rests with the legislature itself in determining the extent of delegation necessary in a particular case." As regard delegated power to "restrict and modify", it was held: "delegation cannot extend to the altering in essential particulars of laws which are already in force in the area in question." "The power to 'restrict and modify does not import the power to make essential changes. It is confined to alterations of a minor character such as are necessary to make an Act intended for one area applicable to another and to bring it into harmony with laws already in being in the State, or to delete portions which are meant solely for another area. To alter essential character of an Act or to change it in material particulars is to legislate, and that,....
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....atures of States, it impliedly prohibits them to throw away that responsibility on the shoulders of some other authority" [See also Ajoy Kumar Banerjee and Others etc. vs. Union of India & Others [(1984) 3 SCC 127], Agricultural Market Committee vs. Shalimar Chemical Works Ltd. [1997) 5 SCC 516], Krishna Mohan (supra). Our attention, however, has been drawn to a decision of this Court in Ramesh Birch and Others etc. vs. Union of India and Others [1989) Supp. (1) SCC 430] wherein Ranganathan, J. speaking for a 2-Judge Bench while construing the provisions of Section 87 of the Reorganisation Act empowering the Central Government to extend with such restrictions or modifications as it may think fit any enactment which is in force in a State at the date of notification to the Union Territory of Chandigarh observed: "23. But, these niceties apart, we think that Section 87 is quite valid even on the "policy and guideline" theory if one has proper regard to the context of the Act and the object and purpose sought to be achieved by Section 87 of the Act. The judicial decisions referred to above make it clear that it is not necessary that the legislature should "dot all the i's....
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....int of time by reference to which the age was to be determined to find a person to be a juvenile. The ambiguity can be resolved by taking into consideration the Preamble and the Statement of Objects and Reasons. The Preamble suggests what the Act was intended to deal with. If the language used by Parliament is ambiguous the court is permitted to look into the Preamble for construing the provisions of an Act (Burrakur Coal Co. Ltd. v. Union of India). A Preamble of a statute has been said to be a good means of finding out its meaning and, as it were, the key of understanding of it, said this Court in A. Thangal Kunju Musaliar v. M. Venkatachalam Potti. The Preamble is a key to unlock the legislative intent. If the words employed in an enactment may spell a doubt as to their meaning it would be useful to so interpret the enactment as to harmonise it with the object which the legislature had in its view" So it is only when the language is itself capable of more than one meaning, then the preamble or the statement of objects and reasons can be looked into and not when something is not capable of given a precise meaning as in case of 'Public policy'. Even if the Statement of ....
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.... appellate or the revisional power exercised by the High Court under Section 40 of the Act as the case may be. The section enables passing of an executive order which has the effect of subverting the scheme of a quasi-judicial and judicial resolution of the lis between the State and the dealer." We are not oblivious of the decisions of this Court laying down the proposition of law that the statute dealing with fiscal matters and / or laying down a provision or enforcing the doctrine of social justice adumbrated in the Directive Principles of State Policy as contained in Part IV of the Constitution of India ordinarily would not be interfered with by the superior courts in exercise of their power of judicial review. The Act is neither a fiscal statute nor deals with any matter falling under Part IV of the Constitution of India. PUBLIC POLICY: The words 'Public policy' or 'opposed to public policy', inter alia, find reference in Section 23 of the Indian Contract Act, Section 7(1)(b)(ii) of Foreign Awards (Recognition and Enforcement) Act, 1961, Section 3(1) of U.P. (Temporary Control of Rent and Evictions) Act, 1947 and Section 34(2)(b)(ii) of Arbitration and ....
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....ndeniable cases of harm to the public. Although, theoretically it was permissible to evolve a new head of public policy in exceptional circumstances, such a course would be inadvisable in the interest of stability of society." A contract being "opposed to public policy" is a defence under section 23 of the Indian contract Act and the courts while deciding the validity of a contract has to consider: a) Pleadings in terms of Order VI, Rule of the Code of Civil Procedure. b) Statute governing the case c) Provisions of Part III and IV of the Constitution of India d) Expert evidence, if any. e) The materials brought on record of the case. f) Other relevant factors, if any. A party in a suit against whom illegality is pleaded also gets an opportunity to defend himself. Hence this essential function to decide on what is public policy can not be delegated to executive through a subordinate legislation. The legislature of a State, however, may lay down as to which acts would be immoral being injurious to the society. Such a legislation being substantive in nature must receive the legislative sanction specifically and not through a subordinate legislation or execut....
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....on at page 838, it is stated: "Objects which on grounds of public policy invalidate contracts may, for convenience, be generally classified into five groups : first, objects which are illegal by common law or by legislation; secondly, objects injurious to good government either in the field of domestic or foreign affairs; thirdly, objects which interfere with the proper working of the machinery of justice; fourthly, objects injurious to marriage and morality; and fifthly, objects economically against the public interest. This classification is adopted primarily for case of exposition. Certain cases do not fit clearly into any of these five categories." The learned author observed that doctrine of public policy is somewhat open-textured and flexible which has been the cause of judicial censure of the doctrine and has been seen by the courts as being vague and unsatisfactory, a treacherous ground for legal decision, a very unstable and dangerous foundation on which to build until made safe by decision as also being not immutable, stating that the commercial practice which was once permissible may be found to be mischievous and vice-versa. In Cheshire, Fifoot & Furmston in th....
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....uideline whatsoever. Furthermore, the executive while making a subordinate legislation cannot be permitted to open new heads of public policy in its whims. Towards opposed to public policy, therefore, do not lay down any guidelines to render it constitutional. Execution of power of attorney per se is not invalid. On the other hand, it is lawful. The notifications issued by the State of Rajasthan themselves show that the uncertain position to which the parties to a transaction evidenced by a deed or a document can be put to. By the notification dated 1st April, 1999, any power of attorney authorizing the attorney to transfer any immovable property for a term in excess of six months or irrevocable or where the term is not mentioned was declared to be opposed to public policy; whereas by reason of a subsequent notification dated 22nd April, 1999 in place of six months, three years was substituted. Similarly, by a notification dated 26th March, 1999, power of attorney authorizing the execution of the sale deed, gift, mortgage or any other document of transfer of immovable property presentation for registration before any office other than the Sub-Registrar or Registrar respectively ....
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.... Indian Registration Act also do not bar any such registration. The Act only strikes at the documents and not at the transactions. The whole aim of the Act is to govern documents and not the transactions embodied therein. Thereby only the notice of the public is drawn. In M.E. Moolla Sons, Ltd. (in Liquidation) Vs. Official Assignee, Rangoon and others [AIR 1936 PC 230], while commenting on section 17 and section 49 of the Act, it was stated: "It is to be observed upon a comparison of these different sections that while the Registration Act only requires certain documents to be registered on pain of the consequences entailed by S. 49, T.P. Act, by S. 54 enacts that (with a limited exception) the sale of immovable property can be made only by registered instrument. The provisions of the Registration Act by themselves would not operate to render invalid a mere oral sale. On the other hand the somewhat wide phrase "any interest.to or in immovable property" which occurs in Cl. (b), S.17(1), Registration Act, does not occur in S. 54 of the other statute." [See also K. Panchapagesa Ayyar and another Vs. K. Kalyanasundaram Ayyar and Others, AIR 1957 MADRAS 472] Similar view ha....
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....ime. It is not for the executive to fill these grey areas as the said power rests with judiciary. Whenever interpretation of the concept "public policy" is required to be considered it is for the judiciary to do so and in doing so even the power of the judiciary is very limited. Even for the said purpose, the part dealing with public policy in Section 23 of the Indian Contract Act is required to be construed in conjunction with other parts thereof. A further question which arises is whether having regard to the doctrine of separation of powers what is essentially within the exclusive domain of the judiciary can be delegated to the executive unless policy behind the same is finally laid down. A thing which itself is so uncertain cannot be a guideline for any thing or cannot be said to be providing sufficient framework for the executive to work under it. Essential functions of the legislature cannot be delegated and it must be judged with touchstone of Article 14 and Article 246 of the Constitution of India. It is, thus, only the ancillary and procedural powers which can be delegated and not the essential legislative point. The contention raised on behalf of the Appellant....