The judgement of Hon’ble Apex Court in the matter of Petroleum & Natural Gas … vs Indraprastha Gas Ltd.& Ors lays down a very important ratio that If on reading of the statute in entirety, such a power does not flow, a delegated authority cannot frame a regulation as that would not be in accord with the statutory provisions nor would it be for the purpose of carrying on the provisions of the Act.
The relevant extract of the Judgement wherein Hon’ble Apex Court quashed the Petroleum and Natural Gas Regulatory Board (Determination of Network Tariff for City or Local Natural Gas Distribution Networks and Compression Charge for CNG) Regulations, 2008 (hereinafter referred to as “the Regulations”) is as follows:
43. In the case at hand, the Board has not been conferred such a power as per Section 11 of the Act. That is the legislative intent. Section 61 enables the Board to frame Regulations to carry out the purposes of the Act and certain specific aspects have been mentioned therein. Section 61 has to be read in the context of the statutory scheme. The regulatory provisions, needless to say, are to be read and applied keeping in view the nature and textual context of the enactment as that is the source of power. On a scanning of the entire Act and applying various principles, we find that the Act does not confer any such power on the Board and the expression “subject to” used in Section 22 makes it a conditional one. It has to yield to other provisions of the Act. The power to fix the tariff has not been given to the Board. In view of that the Board cannot frame a Regulation which will cover the area pertaining to determination of network tariff for city or local gas distribution network and compression charge for CNG. As the entire Regulation centres around the said subject, the said Regulation deserves to be declared ultra vires, and we do so.
The judgement referred to by the Hon’ble Apex Court while reaching to the above conclusion are as follows-
St. Johns Teachers Training … vs Regional Director, National … on 7 February, 2003 (SC)
“A regulation is a rule or order prescribed by a superior for the management of some business and implies a rule for general course of action. Rules and regulations are all comprised in delegated legislations. The power to make subordinate legislation is derived from the enabling Act and it is fundamental that the delegate on whom such a power is conferred has to act within the limits of authority conferred by the Act. Rules cannot be made to supplant the provisions or the enabling Act but to supplement it. What is permitted is the delegation of ancillary or subordinate legislative functions, or, what is fictionally called, a power to fill up details.”
Kunj Behari Lal Butail And Ors vs State Of Himachal Pradesh And Ors on 18 February, 2000 (SC)
It is very common for the legislature to provide for a general rule making power to carry out the purpose of the Act. When such a power is given, it may be permissible to find out the object of the enactment and then see if the rules framed satisfy the test of having been so framed as to fall within the scope of such general power confirmed. If the rule making power is not expressed in such a usual general form then it shall have to be seen if the rules made are protected by the limits prescribed by the parent Act, (See : Sant Saran Lal & Anr. v. Parsuram Sahu & Ors., AIR (1966) SC 1852, para 19.
State Of Karnataka And Anr vs H. Ganesh Kamath Etc. Etc on 31 March, 1983 Equivalent citations: 1983 AIR 550, 1983 SCR (2) 665
It is a well settled principle of interpretation of statutes that the conferment of rule-making power by an Act does not enable the rule-making authority to make a rule which travels beyond the scope of the enabling Act or which is inconsistent there with or repugnant thereto.
Sukhdev Singh & Ors vs Bagatram Sardar Singh … on 21 February, 1975 Equivalent citations: 1975 AIR 1331, 1975 SCR (3) 619
“….statutory bodies cannot use the power to make rules and regulations to enlarge the powers beyond the scope intended by the legislature. Rules and regulations made by reason of the specific power conferred by the stature to make rules and regulations establish the pattern of conduct to be followed”.
General Officer … vs Subhash Chandra Yadav & Anr on 25 February, 1988 Equivalent citations: 1988 AIR 876, 1988 SCR (3) 62
“…..before a rule can have the effect of a statutory provision, two conditions must be fulfilled, namely, (1) it must conform to the provisions of the statute under which it is framed; and (2) it must also come within the scope and purview of the rule-making power of the authority framing the rule. If either of these two conditions is not fulfilled, the rule so framed would be void.”
Union Of India & Ors vs S. Srinivasan on 21 May, 2012
“…If a rule goes beyond the rule-making power conferred by the statue, the same has to be declared ultra vires. If a rule supplants any provision for which power has not been conferred, it becomes ultra vires. The basic test is to determine and consider the source of power which is relatable to the rule. Similarly, a rule must be in accord with the parent statute as it cannot travel beyond it.”
Dr. Indramani Pyarelal Gupta vs W. R. Nathu And Others on 11 April, 1962 Equivalent citations: 1963 AIR 274, 1963 SCR (1) 721
What we are here concerned with is whether it is legally competent to vest a particular power in a statutory body, and in regard to this the proper rule of interpretation would be that unless the nature of the power is such as to be incompatible with the purpose for which the body is created, or unless the particular power is contra-indicated by any specific provision of the enactment bringing the body into existence, any power which would further the provisions of the Act could be legally conferred on it. Judged by this test it would be obvious that the power conferred by the bye-law is one which could be validly vested in the Commission.
Academy Of Nutrition Improvement … vs Union Of India on 4 July, 2011
“Statutes delegating the power to make rules follow a standard pattern. The relevant section would first contain a provision granting the power to make rules to the delegate in general terms, by using the words “to carry out the provisions of this Act” or “to carry out the purposes of this Act”. This is usually followed by another sub-section enumerating the matters/areas in regard to which specific power is delegated by using the words “in particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters”.
It was further observed that
But even a general power to make rules or regulations for carrying out or giving effect to the Act, is strictly ancillary in nature and cannot enable the authority on whom the power is conferred to extend the scope of general operation of the Act. Therefore, such a power “will not support attempts to widen the purposes of the Act, to add new and different means to carrying them out, to depart from or vary its terms. (See: Principles of Statutory Interpretation by Justice G. P. Singh – 12th Edition page 1009) referring to Shanahan v . Scott – 1957 (96) CLR 245 and Utah Construction v. Pataky – [1965 (3) All ER 650]. Rule 44-I is not a rule made or required to be made to carry out the provisions of the Act, having regard to its object and scheme. It has nothing to do with curbing of food adulteration or to suppress any social or economic mischief.
It was further observed that
27. We have already noticed that as at present there is no material to show that universal salt iodisation will be injurious to public health (that is to the majority of populace who do not suffer from iodine deficiency). But we are constrained to hold that rule 44-I is ultra vires the Act and therefore, not valid.