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CMA Foundation · Fundamentals of Business Laws and Business Communication · Legislative Process in India

A statute authorises a regulator to make regulations. The regulator publishes regulations, and a company challenges one of them, saying the Act itself laid down no policy and gave the regulator unlimited discretion to decide what the law should be. Which view best reflects the accepted Indian position on delegation?

The legislature may delegate subsidiary details but cannot abdicate its essential legislative function. If the Act lays down no policy and gives the regulator unguided discretion, the delegation is excessive and the regulation can be challenged and struck down by the courts.

  1. ADelegation is always valid, as the legislature may hand over its entire law-making function
  2. BThe legislature may delegate details but cannot abdicate its essential legislative function, so the challenge could succeed on excessive delegationCorrect
  3. CDelegation is invalid unless the President personally signs each regulation
  4. DOnly courts may frame regulations for regulators

Explanation

Indian courts hold that the legislature must lay down the policy and essential principles; it can delegate only ancillary or subsidiary matters. Handing over unguided, uncontrolled power amounts to excessive delegation, so the company's challenge may succeed. Total abdication is not allowed.

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