The Supreme Court’s Ordinance Judgment – I: Key Conceptual Issues

Yesterday, a seven-judge bench of the Supreme Court handed down an important judgment on the scope of the President’s ordinance-making power under the Constitution. I will discuss the judgment in a two-part series. In this essay, I will lay out the background to the case, and discuss the Majority’s holding on the two central issues in the case: that is, judicial review of Ordinances, and the question of enduring effect. I believe that the Majority’s finding was correct on both issues. In the second essay, I will discuss and critique some of the ancillary findings in the judgment, such as the issue of re-promulgation, the consequences of an Ordinance lapsing upon its validity, and so on.

Ordinances and the Constitution

Article 123(1) of the Constitution states:

“If at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinance as the circumstances appear to him to require.”

Article 123(2) then provides:

“An Ordinance promulgated under this article shall have the same force and effect as an Act of Parliament.”

Article 123(2)(a) further stipulates that an Ordinance:

“… shall be laid before both House of Parliament and shall cease to operate at the expiration of six weeks from the reassemble of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions.”

Article 213 of the Constitution vests similar powers in state governors, with some further qualifications that are not relevant here.

Articles 123 and 213, therefore, create a species of what Professor Shubankar Dam calls “Presidential legislation”. Under our separation of powers model, the Parliament is responsible for passing laws, and the Executive is responsible for implementing them. However, the Constitution also recognises that there may be times when a law is required urgently, and the Parliament is not in a position to meet, debate, and pass an Act. In these circumstances, Articles 123 and 213 allow the central and state executive (acting through the President and the Governor respectively) to temporarily stand-in for the Parliament. Consequently, an Ordinance:

(a) Can be passed only when both houses of Parliament are not in session,

(b) When passed, has the same “force and effect” as a law (i.e., is equivalent to legislation in certain important respects)

(c) But shall be laid before Parliament within a reasonable time of it reassembling. If that is not done for a period of six weeks, the Ordinance “ceases to operate”. It may also cease to operate if Parliament disapproves of it.

As we can see, Ordinances occupy a hybrid space between legislation and pure executive action. They have the same “force and effect” as law, but are not enacted following the usual deliberative procedures (debate and discussion in Parliament), and are hedged in with conditions both precedent and subsequent.

The Ordinances Case: Background

Clearly, under the Constitutional scheme, Ordinances were meant to be a temporary fix, to be used only in emergent situations, when there was an urgent need, and Parliament was unavailable. It was widely held that the promulgation of Ordinances were not subject to judicial review (unless, of course, they violated fundamental rights, or there was a legislative competence issue): this had been the position in pre-Independence Indian law under the various Government of India Acts, and continued to be so after Independence. However, as the 60s and 70s wore on the legislative productivity of Parliament (as well as state legislative assemblies) declined steadily, and the number and frequency of ordinances began to increase. Ordinances virtually became a parallel method of legislation (a situation that still prevails today). Matters finally came to a head before the Supreme Court in D.C. Wadhwa vs State of Bihar. For a decade and a half, the state of Bihar was being run through Ordinances. The state executive would promulgate an ordinance, allow it to lapse when the assembly came into session, and then, when the session was over, re-promulgate the same Ordinance – again and again. In D.C. Wadhwa, the Court labeled this a fraud on the Constitution, and held that, barring exceptional circumstances, re-promulgated ordinances would be void. This marked the first significant intervention to regulate the Ordinance-making power through judicial review.

Despite D.C. Wadhwa, in 1989, the Governor of Bihar promulgated an Ordinance through which the government took over four hundred and twenty-nine Sanskrit schools in the state of Bihar. This was followed by successive, re-promulgated ordinances, none of which were placed before the legislative assembly. The last ordinance lapsed. When the last ordinance lapsed, the staff of the Sanskrit schools (which, recall, had been taken over by the government through the Ordinances) sued the government for payment of salaries. The matter eventually reached a two-judge bench of the Supreme Court. The two judges – Justices Sujata Manohar and D.P. Wadhwa – agreed that the re-promulgated Ordinances (i.e., Ordinance No. 2 and onwards) were illegal. However, while Justice Sujata Manohar held that the first Ordinance was also illegal (as part of the “chain” of successive Ordinances), Justice Wadhwa disagreed, and held that it was legal. This, in turn, led to the following question: what happened to the acts that were done under an Ordinance that subsequently lapsed? Here again, the two judges disagreed. Justice Sujata Manohar held that there were no “enduring effects” under Ordinances, as a matter of course. Justice Wadhwa, on the other hand, held since an Ordinance was akin to a “temporary statute”, following well-established principles of statutory interpretation, acts done under lapsed Ordinances would continue to have effect until reversed by legislation. In this case, for instance, the school staff, having now entered the employment of the government, would be entitled to their salaries even after the Ordinance effecting that had ceased to operate.

This disagreement between the two judges resulted in a reference being made to a higher bench. Eventually, the matter came to be heard and decided by the present seven-judge bench. Justice Chandrachud wrote the Majority opinion, for himself and four other judges. Justice Thakur concurred on the issue of enduring effects, but left the other legal questions open. Justice Lokur concurred on the issue of enduring effects as well, but dissented on one point, holding that the laying of an Ordinance before the state assembly was not a mandatory requirement of Article 213.

The Judgment: Judicial Review of Ordinances

Broadly, there were two issues before the Supreme Court. D.C. Wadhwa had only held that re-promulgated Ordinances were subject to judicial review. At least so far, the established wisdom – going back to pre-Independence times – was that the first Ordinance could not be challenged in Court. In the two-judge bench, Justice Sujata Manohar broke with that school of thought by striking down the first Ordinance as well. Justice Wadhwa disagreed. Consequently, the first question that the Court had to answer was about the scope of judicial review of Ordinances, as a matter of general principle. Or, to put the question more clearly: when Article 123 states that Ordinances may be issued when “the President is satisfied that circumstances exist which render it necessary for him to take immediate action” (and when Article 213 states that “when the Governor is satisfied…“), to what extent can a Court review the President’s satisfaction, and look into whether, objectively, there was a need for taking “immediate action”?

Justice Chandrachud pointed out that during the 1975 Emergency, the 38th Amendment to the Constitution had amended Articles 123 and 213 to provide that the satisfaction of the President/Governor could not be “questioned in any court on any ground.” The Forty-Fourth Amendment deleted these provisions. The implication, therefore, was that Presidential satisfaction had always been subject to some form of judicial review. If the 38th Amendment had only been a clarificatory Amendment – making express what was always the legal position (i.e., that Presidential satisfaction was immune from judicial review), then there would have been no need to effectively repeal it after the ending of the Emergency. Consequently, Presidential satisfaction could be called into question in Court.

To what extent, though? Here, the Court drew upon the legal standard laid down in S.R. Bommai vs Union of India, in the context of judicial review of President’s Rule proclamations to hold:

“The court will not enquire into the adequacy, or sufficiency of the material before the President or the Governor. The court will not interfere if there is some material which is relevant to his satisfaction. The interference of the court can arise in a case involving a fraud on power or an abuse of power. This essentially involves a situation where the power has been exercised to secure an oblique purpose. In exercising the power of judicial review, the court must be mindful both of its inherent limitations as well as of the entrustment of the power to the head of the executive who acts on the aid and advice of the Council of Ministers owing collective responsibility to the elected legislature. In other words, it is only where the court finds that the exercise of power is based on extraneous grounds and amounts to no satisfaction at all that the interference of the court may be warranted in a rare case.”

In other words, following Bommai (and the more recent Arunachal decision), the Court could intervene in the limited circumstances where Presidential action (on the aid and advice of the council of ministers) was either mala fide, or where no relevant material existed which could give rise to that satisfaction. In other words, the Executive would have to place some material on record, demonstrating the urgency that required the passing of an Ordinance.

Given that this is exactly the standard that the Supreme Court has adopted across the board while interpreting Constitution provisions that allow for Presidential discretion (note: not his personal discretion, but when he acts on the aid and advice of the Council of Ministers) subject to certain explicitly stated preconditions, this seems to be an entirely correct and natural view to take.

The Judgment: Temporary Statutes and Enduring Effects

The second core question before the Court, as Justice Chandrachud framed it, was:

“Does action initiated under an ordinance survive the end of an ordinance which has not been adopted into an act of the legislature?”

The key interpretive issue was what meaning to give to the term the Ordinance shall “cease to operate” (in case it lapsed or was disapproved). Two Constitution Benches – State of Orissa vs Bhupendra Kumar Bose  and T. Venkata Reddy vs State of Andhra Pradesh – had held that insofar as the Ordinance exhibited an intention to create enduring (or permanent) effects, acts done during the pendency of the Ordinance would survive. The conceptual basis of these judgments was the assumption that an Ordinance was equivalent to a temporary statute (and that, in turn, was based on the premise that under the Constitution, Ordinances had the same “force and effect” as law, but were temporally limited). The Constitution Benches then followed the common law rule, which stipulated that temporary statutes could – and often did – create enduring rights. However, as Justice Chandrachud correctly observed, this analogy was flawed:

“An ordinance is not in the nature of a temporary enactment. An ordinance is conditioned by specific requirements. The authority to promulgate an ordinance arises only when the legislature is not in session and when circumstances requiring emergent action exist.”

In other words, a temporary statute was a law that existed for a temporary period because the legislature, which had the plenary power to do so, had stipulated the time at which was to end. An Ordinance, however, was temporally limited because of conditions imposed upon it by the Constitution. In fact, Venkata Reddy, by holding that the only way to prevent enduring effects of lapsed Ordinances was for Parliament to make a specific law to that effect, effectively placed Ordinances at a higher level than legislation.

Furthermore, the Court stated in Venkata Reddy:

“When the Constitution says that the Ordinance-making power is legislative power and an Ordinance shall have the same force as an Act, an Ordinance should be clothed with all the attributes of an Act of Legislature carrying with it all its incidents, immunities and limitations under the Constitution.”

However, as Justice Chandrachud correctly observed, this is too quick. Admittedly, Ordinances have the “force and effect” of law; however, there are a number of crucial differences between Ordinances and laws:

“The pre-conditions for a valid exercise of the power to promulgate as well as the conditions subsequent to promulgation are both part of a composite scheme. Both sets of conditions have to be fulfilled for an ordinance to have the protection of the ‘same force and effect’ clause.”

Or, to use a term beloved of the Constitution Bench in the NJAC judgment, the force-and-effect phrase in Articles 123 and 213 was actually to be read as “force-and-effect-plus”, the “plus” being the fulfilment of both conditions precedent (existence of emergent circumstances) and conditions subsequent (laying before Parliament).

Having disposed off the defensive arguments equating Ordinances to temporary statutes because of the “force and effect” clause, Justice Chandrachud then analysed, on independent grounds, the issue of enduring effect. He found that at a number of places in the Constitution – e.g., Articles 352 and 359, 249 and 250 – there was a specific provision saving acts done, after the Executive or legislative action in question ceased to operate. Articles 123 and 213, however, had no similar provision. Furthermore, in S.R. Bommai, it had been held that Parliamentary disapproval of a Presidential proclamation (under Article 356) meant a revival of the status quo ante before the Proclamation; any other reading would effectively deprive Parliament of its constitutional position as supervising the Executive in such circumstances. While the Court could not go so far to hold a disapproved/lapsed Ordinance void ab initio, it was obliged to read the phrase “cease to operate” in a manner that preserved Parliament’s role as the ultimate supervisory authority. As he held:

“… the court must adopt an interpretation which furthers the basic constitutional premise of legislative control over ordinances. The preservation of this constitutional value is necessary for parliamentary democracy to survive on the sure foundation of the rule of law and collective responsibility of the executive to the legislature. The silences of the Constitution must be imbued with substantive content by infusing them with a meaning which enhances the rule of law. To attribute to the executive as an incident of the power to frame ordinances, an unrestricted ability to create binding effects for posterity would set a dangerous precedent in a parliamentary democracy.”

Consequently, the default position was that acts done under a lapsed or disapproved Ordinance would not survive. However, in some cases, of course, restoring status quo ante would be impossible (the example discussed during oral arguments was that of flood-control dykes built under an Ordinance; if the Ordinance lapsed, it would make no sense to tear them down). Under which circumstances, then, would enduring effects exist? Justice Chandrachud laid down the following test:

“… in deciding to mould the relief the effort of the court would be to determine whether undoing what has been done under the ordinance would manifestly be contrary to public interest. Impracticality and irreversibility in that sense are aspects which are subsumed in the considerations which weigh in the balance while deciding where public interest lies. Impracticality cannot by itself be raised to an independent status because it would then be simple enough for the executive to assert the supposed complexities in undoing the effects of an ordinance. Since the basic constitutional value which is at issue is of parliamentary supremacy and control, the moulding of relief can be justified in cases involving grave elements of public interest or constitutional necessity demonstrated by clear and cogent material.”

This seems to be laying down a two-pronged test: effects would endure if it was actually, materially, impossible to reverse them, or if it was manifestly in the public interest to let them endure. While the first prong seems clear enough, the second – presumably – will be worked out on a case to case basis. In the present case, with respect to the regularisation of the staff as Government employees under an Ordinance, the Court found that neither condition was satisfied (although it did “mould the relief” on salaries). The Court also upheld Justice Sujata Manohar’s decision striking down the first Ordinance.

Conclusion

A quick, twelve-point summary of the Court’s decision is found in paragraph 80. In my view, the Majority judgment is rigorous, well-reasoned, and legally unimpeachable. The Court’s overarching constitutional framework is that Presidential legislation is an exception, a departure from the normal structure of the separation of powers, and should be treated as such. This framework determines the Court’s approach to both the issue of judicial review, and to the issue of enduring effects. On the first, the Court adopts the standard of judicial review laid down in S.R. Bommai. On the second, it holds that subject to manifest public interest and constitutional necessity, acts undertaken under a lapsed ordinance shall not endure. Both holdings, in my view, are correct.

(Disclaimer: The author assisted in legal arguments on behalf of Interveners taking the position that there ought to exist judicial review of the circumstances in which Ordinances are passed, and also that Ordinances do not create enduring effects).

 

 

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4 Comments

Filed under Ordinances, The Executive

4 responses to “The Supreme Court’s Ordinance Judgment – I: Key Conceptual Issues

  1. So it has been held
    1. That the SC can judicially review if the conditions precedent for the promulgation of an ordinance existed.
    2. Ordinances are conditional law, i.e., they must comply both with conditions precedent and with conditions subsequent in order to achieve legal status.
    They are like temporary laws but subject to compliance with these conditions.
    3. Acts done under a disapproved or lapsed ordinance will not survive its temporal limits except where a Court finds that this is required on account of grave elements of public interest or constitutional necessity demonstrated by clear and cogent material, and with impracticality and irreversibility being important relevant factors.

  2. The Modi Government has positioned itself to plead irreversibility for its demonetization ordinance after-effects presuming that it lapses unapproved. By the time the Constitution Bench gets to the matter, people will have been forced to destroy any remaining old notes to avoid criminal sanction.

    So the GOI can argue that since no old notes survive outside of Banks, the matter is not only infructuous and moot, but that even if the SC were to strike down the ordinance and the Nov 8 notification, the status quo ante will not be revived due to impossibility. Thus the effects of the ordinance will be irreversible.

    The only way to defeat this strategy is to get the SC to constitute the Bench now and to issue a stay of the criminal provisions for holding onto old notes in the hope of SC intervention.

    Someone needs to move an appropriate application in the batch matters.

  3. ssiva shanmugam

    Dear Mr. Bhatia, can you please attach or forward the 7 judges judgement to me in this email. *ANITA KUSHWAHA & OTHERS V/S PUSHAP SUDAN & OTHERS*

    On 3 January 2017 at 16:47, Indian Constitutional Law and Philosophy wrote:

    > gautambhatia1988 posted: “Yesterday, a seven-judge bench of the Supreme > Court handed down an important judgment on the scope of the President’s > ordinance-making power under the Constitution. I will discuss the judgment > in a two-part series. In this essay, I will lay out the backgr” >

  4. On Demonetization, since the GOI was able to introduce a legislation on demonetization, but elected not to use the winter Parliament session for this and after avoiding debate in Parliament, it elected to issue the demonetization ordinance, it would appear as if the demonetization ordinance would under this SC ruling amount to a fraud on the Constitution, How will the GOI demonstrate urgency here, when it did nothing during the entire winter session?
    But sadly no one is pushing for hearing of the demonetization matters. The SC needs to be flooded with written applications for early hearing.

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