Administrative Discretion: Concept, Control & Review

Meaning and Definition

Administrative Discretion means the freedom of an administrative authority to choose from amongst various alternatives but with reference to rules of reason and justice and not according to personal whims and fancies. The exercise of discretion should not be arbitrary, vague and fanciful, but legal and regular.

Lord Halsbury observed :

When it is said that something is to be done within the discretion of the authorities, that something is to be done according to the rules of reason and justice, not according to private opinion: according to law, and not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man competent to the discharge of his office ought to confine himself.

Lord Edward Coke defines administrative discretion as "a science or undertaking to discern between falsity and truth, between right and wrong, between shadows and substance, between equity and colourable glosses and pretences, and not according to the will and private affections”.

Importance of Administrative Discretion

The government cannot function without the exercise of some discretion by the officials. It is necessary not only for the individualization of the administrative power but also because it is humanly impossible to lay down a rule for every conceivable eventuality in the complex art of modern government. Circumstances differ from case to case so that applying one rule mechanically to all cases may itself result in injustice. But it is equally true that absolute discretion is a ruthless master. It is more destructive of freedom than any of man's other inventions. Therefore, a reasonable exercise of discretion is the need of the hour.

In State of Punjab v. Khan Chand, the Supreme Court was of the view that considering the complex nature or problems which have to be faced by a modern state, it is inevitable that the matter of details should be left to the authorities acting under an enactment. Discretion has, therefore, to be given to the authorities concerned for the exercise of the powers vested in them under an enactment.

In Ram Jawaya Kapoor v State of Punjab (1955), Court held that administrative discretion may be denoted by words or phrases such as 'may' or ‘if he is satisfied’ or ‘if he is of the opinion’ or ‘if he has reason to believe’ etc to confer discretionary power to the executive.

Judicial Control over Administrative Discretion

The Judicial control of administrative power is required to prevent abuse or non exercise of power by administrative authorities. However while exercising judicial control the court cannot direct the competent authority to exercise its discretion in a particular way.

In Suresh Estates Pvt. Ltd. v Municipal Corpn., Greater Mumbai (2007), court held that when a statute confers a discretionary power to be exercised by competent authority, the court cannot direct the competent authority to exercise discretion in a particular manner. The court can always direct the competent authority to exercise the discretion vested in accordance with 'law’. Court may compel the authority in which discretion is vested to exercise that discretion, but not to exercise it in any particular manner.

In Mahboob Sheriff v Mysore S.T.A. (1960), when an authority issued a permit for one year, while statute required renewal of the permit for a period between 3-5 years, it was held that the court could only direct the authority to grant the renewal of permit for a period anywhere between 3-5 years without itself specifying the period.

The Judicial Review of Administrative discretion can be exercised at two stages:

I. At the stage of delegation of discretion
II. At the stage of exercise of discretion

Judicial Review at the stage of delegation of discretion

The court exercises control over delegation of discretionary powers to the administration by adjudicating upon the constitutionality of the law under which such powers are delegated with reference to the fundamental rights enunciated in Part III of the Indian Constitution. Therefore, if the law confers vague and wide discretionary powers on any administrative authority, it may be declared ultra vires Article 14, Article 19 and other provisions of the Constitution.

If a statute does not disclose a definite policy or the objective, subject to which the administrative power is to be exercised, then the statute may be held to be discriminatory and arbitrary and thus violative of Article 14 of the Indian Constitution.

In the State of W.B. v Anwar Ali Sarkar (1952), under W.B. Special Courts Act, discretion was conferred on the State government to refer any offence for trial by the Special Court. The procedure before the Special Court was stringent in comparison to that for normal trials. The court declared law invalid on ground that by giving discretion to the government to refer any offence for trial by the special court without prescribing any standard or criteria confers a wide discretion and can be a basis of unreasonable classification, thus violative of Article 14.

In Himat Lal v Police Commissioner. (1973), Rule 7 under Bombay Police Act gave unguided discretionary power to the police commissioner to grant /refuse permission for any public meeting. The court struck down it as being an unreasonable restriction on freedom to assemble guaranteed under Article 19(1)(b).

In H.R. Banthia v Union of India (1970), the Gold Control Act invested administrative authority with power to grant or refuse licence to any dealer in gold ornaments. The court struck down the law on the ground that such vague and uncertain expressions lacking objective standards or norms may result in arbitrary exercise of power.

Discretion is not said to be unregulated or arbitrary if the circumstances in or the grounds on which it can be exercised are stated, or if the law lays down the policy to achieve which discretion is to be exercised, or if there are enough procedural safeguards in the law (e.g. review by a higher authority) to provide security against the abuse of discretion.

Judicial Review at the stage of exercise of discretion

In India, the courts will interfere with the discretionary powers exercised by the administration in the following circumstances:
1. Failure to exercise discretion/Non Application of Mind
2. Abuse of discretion

Failure to exercise discretion/Non Application of Mind

The main object of conferring discretionary power on an administrative authority is that the authority itself must exercise the said power by applying its mind to the facts of the case in hand. If there is failure to exercise discretion on the part of that authority the action will be bad. Failure to exercise discretion may arise in the following circumstances :

a) Acting under dictation

Sometimes, an authority that is legally empowered to make a decision does not exercise its own judgment, but instead acts on the instructions or pressure of a superior authority. Even if it appears that the authority is acting independently, in reality, the decision is being made by someone else. This is known as acting under dictation. Since the concerned authority fails to apply its own mind as required by law, such an action is treated as a non-exercise of power and is considered invalid.

It is well-settled that if the authority permits its decision to be influenced by the dictation of others, it would amount to abdication and surrender of discretion.

In Commissioner of Police v. Gordhan Das Bhanji (1952), under the Bombay Police Act, 1902, the Commissioner of Police had the authority to grant cinema theatre licences. He initially granted a licence based on the recommendation of the Advisory Committee but later cancelled it on the direction of the State Government. The Supreme Court held this cancellation invalid, stating that the Commissioner acted under dictation and not by applying his own judgment, as required by law.

In Orient Paper Mills Ltd. v. Union of India (1969), the Deputy Superintendent, who had the legal authority to levy excise duty, did not exercise his independent judgment. Instead, he followed the instructions of the Collector while passing the order. The Supreme Court held this action invalid, as the Deputy Superintendent had acted under dictation rather than using his own discretion as required by the statute. The Court therefore set aside the order, reinforcing that delegated powers must be exercised personally and independently by the authority entrusted with them.

In Purtabpore Co. Ltd. v. Cane Commissioner of Bihar (1970), the Cane Commissioner had the authority to reserve areas for sugar factories. However, he excluded 99 villages from the area reserved for the appellant company on the direction of the Chief Minister. The Supreme Court held this action invalid, stating that the Commissioner had abandoned his independent authority and acted under dictation. Since he failed to exercise his own discretion, the Court quashed the order.

b) Imposing Fetters on Exercise of Discretion (Self Restriction)

Where a statute has conferred discretionary power on an authority, it is expected of it to apply it from case to case and not to fetter its discretion by declaration of rules or policy to be followed by it uniformly in all cases. The authority should consider each case on its own merits. If it lays down a general rule, to be applicable to each case, then it is preventing itself to exercise its mind according to the circumstances of each case and this amounts to going against what the statute had intended the authority to do. A general policy may, however, be adopted but each case should be decided on its own merits.

In Gell v. Teja Noora (1907), under the Bombay Police Act, 1863, the Commissioner of Police had the discretionary power to decide whether or not to grant a licence for a public carriage (like a victorial), based on its safety and suitability. However, instead of examining each carriage individually, the Commissioner issued a general order setting strict construction standards and declared that only carriages built exactly like a sample victorial he had approved would be licensed. The Court held this approach invalid, stating that the Commissioner had restricted his own discretion and failed to consider each case on its merits, as required by the law. This case is a classic example of improperly fettering discretion through a rigid policy.

In Kesavan v. State of Kerala (1961), a rule stated that a school-leaving certificate could only be given to a student who was at least 15 years old. However, the Director had the power to grant exemptions in deserving cases. Instead of considering each case individually, the Director made a fixed rule not to allow exemption if the student's age was short by more than two years. The Court held this policy invalid, as it restricted the Director’s discretion and went against the intent of the rule, which required case-by-case consideration.

c) Acting Mechanically and Without Due Care

When discretionary powers are given to an executive authority, they must be exercised with great care, responsibility, and proper judgment. The authority should not act mechanically but must apply their own mind based on the specific facts of each case. If decisions are made without due care or personal consideration, it amounts to a failure to exercise discretion, which is legally invalid.

In Nandlal Khodidas Barot v. Bar Council of Gujarat (1981), the Bar Council referred multiple complaints, including one against the appellant, to its Disciplinary Committee, which later suspended him from practice for one year. On appeal, the Supreme Court held that the Bar Council cannot refer complaints mechanically; it must apply its mind and form a reasonable belief that there is a prima facie case of misconduct before sending it to the Committee. Since, in this case, the referral was made routinely without proper examination, the Court declared it invalid and set aside the suspension.

d) Sub-delegation

A discretionary power must, in general, be exercised only by the authority to which it has been committed. It is a well-known principle of law that when a power has been confided to a person in circumstances indicating that trust is being placed in his individual judgment and discretion, he must exercise that power personally unless he has been expressly empowered to delegate it to another.

In Ganapati Singhji v State of Ajmer (1955), the power to issue certain rules was conferred on the Chief Commissioner, but he delegated the power to district magistrate. The court held that the Chief Commissioner's action in sub-delegating his power was ultra vires. No such difficulty will, however, arise when the statute in question expressly makes a provision authorising sub-delegation.

Abuse of Discretion

When discretionary power is conferred on an administrative authority, it must be exercised according to law. When the mode of exercising a valid power is improper or unreasonable, there is an abuse of the power.

Authority is said to have abused its discretion in following circumstances:

a)Malafide

Malafide (bad faith) may be taken to mean dishonest intention or corrupt motive. If the discretionary power is exercised by the authority with bad faith or dishonest intention, the action can be quashed by the court.

When an administrative action is taken out of personal animosity, ill-will, vengeance or dishonest intention, there exists malafide intention and the action necessarily requires to be struck down and quashed.

In Pratap Singh v. State of Punjab (1964), the petitioner was a civil surgeon and he had taken preparatory leave to retire. Initially the leave was granted, but subsequently it was revoked. He was placed under suspension, a departmental enquiry was instituted against him and, ultimately, he was removed from service. The petitioner alleged that the disciplinary proceedings had been instituted against him at the instance of the then Chief Minister to wreak personal vengeance on him as he had not yielded to the illegal demands of the former. The Supreme Court accepted the contention, held the exercise of power to be mala fide and quashed the order.

In C.S. Rowjee v. State of A.P.(1964), the State Road Transport Corporation had framed a scheme for nationalisation of certain transport routes. This was done as per the directions of the then Chief Minister. It was alleged by the petitioner that the particular routes were selected to take vengeance against the private transport operators of that area as they were his political opponents. The Supreme Court upheld the contention and quashed the order.

In G. Sadanandan v. State of Kerala (1966), the petitioner, a wholesale kerosene dealer, was detained under Rule 30(1)(b) of the Defence of India Rules, 1962, on allegations of acting against the maintenance of essential supplies. He challenged the detention under Article 32, claiming it was mala fide and based on false and malicious reports by the Deputy Superintendent of Police, who allegedly aimed to benefit his own relatives by removing the petitioner from the business. The Supreme Court found that the Deputy Superintendent failed to file an affidavit denying the allegations, and the government's response was weak. Concluding that the detention was clearly mala fide, the Court quashed the order and cautioned the authorities to exercise their powers responsibly.

In Express Newspapers (P) Ltd. v. Union of India (1986), the Supreme Court held that the notice of re-entry upon forfeiture of the lease granted by the Central Government, along with the threatened demolition of the Express Building, was mala fide and politically motivated. The action was seen as a response by the ruling party against the Express Group of Newspapers, which had published content critical of the government. Significantly, the government failed to respond to or refute the allegations of mala fides. The Court observed that when allegations of mala fide intent are made, it is incumbent upon the concerned authority or official to provide a clear and specific denial. If such allegations go unrebutted, the Court may presume mala fides on the part of the authorities.

b) Irrelevant Considerations

Statutes granting discretionary powers to administrative authorities usually specify the relevant factors to be considered in decision-making. Such powers must be exercised only for the intended purpose and based on relevant considerations. If an authority relies on irrelevant or extraneous factors, the action becomes ultra vires (beyond legal power) and is liable to be quashed. Discretion must not be influenced by legally unacceptable considerations.

In Barium Chemical Ltd. v. Company Law Board (1967), the Company Law Board ordered an investigation into the affairs of the company under Section 237 of the Companies Act, 1956. This section allows such an investigation if the company is suspected of being run to defraud its creditors or members, or if there is fraud, misconduct, or lack of transparency in its management.

However, the reason given by the Board was that the company had suffered a loss due to poor planning, which led to a drop in share value and the resignation of several prominent directors. The Supreme Court held that these reasons were not among the grounds listed in Section 237, and therefore, the Board had acted on irrelevant considerations. As a result, the Court quashed the order, reinforcing that discretionary powers must be used only for the purposes clearly stated in the law.

In Smt. S.R. Venkataraman v. Union of India (1979), the appellant, a Central Government officer, was prematurely retired at the age of 50 in the supposed 'public interest'. She challenged the order, arguing that her service record was not properly considered and that the decision was based on irrelevant factors. The government admitted that there was no material on record to justify her retirement. The Supreme Court held that when an administrative order is based on non-existent facts or irrelevant reasons, it amounts to a misuse of power and is legally invalid.

c)Leaving out relevant consideration

While considering the discretionary power the administration authority is expected to take all the relevant factors into consideration. If the authority fails to take into account relevant consideration, even then the exercise of power would be bad.

In Rampur Distillery Co. v. Company Law Board (1970), the Company Law Board, using its power under Section 326 of the Companies Act, refused to approve the renewal of the managing agents' term. The reason given was their past misconduct in the year 1946–47. The Supreme Court held that while it was acceptable to consider past conduct, the Board's failure to consider the managing agents’ present performance, which was highly relevant, made the decision legally flawed. Ignoring present, relevant facts in such matters can lead to unfair and unreasonable decisions.

In Ranjit Singh v. Union of India (1981), the petitioner, a long-time gun manufacturer, had his monthly production quota reduced from 30 to 10 guns based on the Industrial Policy Resolution of 1956, which favored government monopoly in arms manufacturing. He challenged the reduction under Article 32, citing severe financial hardship. The Supreme Court held the government's order arbitrary, as it failed to consider relevant factors like the factory’s production capacity, quality of output, economic viability, and policy related to law and order. The Court emphasized that quota reductions must be based on reason and relevant considerations, not on general policy alone.

d) Arbitrary action

An action can be said to be arbitrary where a person in authority acts on the basis of prejudice or preference rather than on reason or fact. To be termed as "arbitrary", the act must be illogical, whimsical or mala fide.

In S.G. Jaisinghani v. Union of India (1967), the Supreme Court observed that absence of arbitrary power is the first essential of rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred on executive authorities, must be confined within clearly defined limits.

e)Improper object : Collateral Purpose

A statutory power conferred on the authority must be exercised for that purpose alone and if it is exercised for a different purpose, there is abuse of power by the authority and the action may be quashed. Improper purpose must be distinguished from mala fide exercise of power. In the latter, personal ill-will, malice or oblique motive is present, while in the former it may not be so, and the action of the authority may be bona fide and honest and yet, if it is not contemplated by the relevant statute, it may be set aside.

In Nalini Mohan v. District Magistrate(1951), the relevant statute empowered the authority to rehabilitate the persons displaced from Pakistan as a result of communal violence. That power was exercised to accommodate a person who had come from Pakistan on medical leave. The order was set aside.

f) Colourable exercise of Power

Where a power is exercised by the authority ostensibly for the purpose for which it was conferred, but in reality for some other purpose, it is called colourable exercise of power. Here, though the statute does not empower the authority to exercise the power in a particular manner, the authority exercises the power under the "colour" or guise of legality.
In H.D. Vora v. State of Maharashtra(1984), State Government requisitioned the flat of the petitioner under a statute, but in spite of repeated requests of the petitioner, it was not derequisitioned. Declaring the action bad the court observed that though the act of requisition was of a transitory character, the government in substance wanted the flat for permanent use, which would be a "fraud upon the statute".

g) Non-observance of natural justice

It is well-settled law that even if the exercise of power is purely administrative in nature, if it adversely affects any person, the principles of natural justice must be observed and the person concerned must be heard. Violation of the principles of natural justice makes the exercise of power ultra vires and void.

h) Exceeding jurisdiction or acting without jurisdiction

An administrative authority must exercise the power within the limits of the statute and if it exceeds those limits, the action will be held ultra vires. If the power does not exist, the purported exercise of power would be non-existent and void.

In State of Gujarat v. Patil Raghav Natha (1969), the revisional authority exercising powers under the Land Revenue Code, went into the question of title. The Supreme Court observed that when the title of the occupant was in dispute, the appropriate course would be to direct the parties to approach the civil court and not to decide the question.

In Ahmedabad St. Xavier's College Society v. State of Gujarat(1974), the Supreme Court ruled that the University had no power to compel a minority institute to adopt a particular medium of instruction in education.

 

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