‘Removal of Difficulties’ Clause: Tool for Improving the Effectiveness of Legislation
When drafting a new piece of legislation, it is not always feasible for the draftsmen to envisage all the possible contingencies that may arise. However, he must be prepared to deal with any situation that may affect its successful implementation. The ‘power to remove difficulties’ or Henry VIII clause is one such device in his repertoire that can help him address gaps or inconsistencies in the operation of a primary legislation by amending it through delegated legislation.
With the hope of facilitating effective legislation, it is included in many Indian legislation today as a matter of routine in order to serve as a safeguard to address difficulties which may arise in its implementation. While the clause is triggered in rare circumstances only when absolutely necessary, however such a powerful and controversial tool in the hands of the Government amounts to a delegation of legislative power, and there has been no real discussion by the Parliament of India on how to control its application.
This paper seeks to examine the scope, function and potential of this clause in Indian legislation. It aims to illustrate the relevance of such a tool in drafting complex legislation, and underlines the importance of greater parliamentary scrutiny of this device throughout the lawmaking process in order to ensure its legitimacy. The main objective of this paper is to bring to light an overlooked device by parliamentarians in the Indian lawmaking process which is routinely employed by draftsmen as a precautionary mechanism to improve the quality of legislative outcomes.
The paper is structured as follows. Section one discusses the origin, role and relevance of Henry VIII clauses in legislation. Section two outlines the nature, scope and function of the Henry VIII clause employed in India. Using a recent example, section three illustrates the benefits of such a tool in improving the effectiveness and quality of legislation. Section four highlights the main problem associated with this device, and identifies the measures needed to address it.
1. Origins, Role and Relevance of Henry VIII Clauses:
Henry VIII clause is a unique device in an Act of Parliament which empowers the Executive to amend the Act by way of delegated legislation. Its inspiration was derived from the Statute of Proclamations (1539) which gave Henry VIII wide power to legislate by proclamation. The need for such a flexible tool in the hands of the Executive to amend primary legislation using secondary legislation was felt as early as the Local Government Act, 1888, in order to bring an Act into full operation or give it full effect. The general consensus for employing this tool in legislative texts is linked to factors such as, on the one hand, the complexity and novelty of a legislative proposal that makes envisaging all aspects of an entirely new regulatory regime a very difficult task, and on the other, the urgency to make course corrections or adjustments to the legal landscape in the shadow of an overloaded legislative schedule and time-consuming parliamentary process.
A classic example of a Henry VIII clause is section 67(1) of the Rating and Valuation Act, 1925 15 & 16 Geo. 5. CH. 90. which stated that: “if any difficulty arises in connection with the application of this Act to an exceptional area … or otherwise in bringing into operation any of the provisions of this Act, the Minister may by order remove the difficulty … which appears to him necessary or expedient … for bringing the said provisions into operation, and any such order may modify the provisions of this Act so far as may appear to the Minister necessary or expedient for carrying the order into effect: provided that the Minister shall not exercise the powers conferred by this section after the thirty first day of march nineteen hundred and twenty nine.” The nature of this provision is narrow and restrictive as to the time period specified and its object. However, there are other kinds of broad-ranging Henry VIII clauses which can be unlimited as to time or Act(s), and even retrospective in nature.
It, therefore, comes as no surprise that Parliaments have been uncomfortable with the idea of surrendering their primary legislative function to the Executive especially since there is potential for abuse, particularly of overriding the intention of Parliament. The Donoughmore Committee of the UK Parliament, which had been appointed to examine the extent of the powers of Ministers relating to subordinate legislation, was extremely critical of this clause. Although, instead of abolishing it completely, they felt that it should be used only in exceptional cases, for the sole purpose of bringing an Act into operation, and that it should be subjected to a time limit of one year from the passing of the Act. They also recommended that they should not be permitted by Parliament without special grounds stated in the Ministerial Memorandum of the Bill. More recently, the Scrutiny of Legislation Committee which is the successor to the Subordinate Legislation Committee of the Queensland Legislative Assembly had conducted an in-depth study of the use of Henry VIII clauses in Queensland. Like the Donoughmore Committee, they conceded that circumstances do exist where using Henry VIII clauses, though undesirable, can still be justified, like for instance, in situations that warranted immediate Executive action, or to cure difficulties and facilitate effective application of an innovative piece of legislation, or to overcome anomalies as a result of a change in legislation or to facilitate transitional arrangements.
Henry VIII clauses are used frequently by the Executive, and they can be found in the UK as well as in those countries that were connected with the UK. Lord Rippon noted that Ministers take power to amend primary legislation almost as a matter of common form. Parliament, therefore, bears a crucial role in effectively monitoring and approving the need for Henry VIII clauses on a case-by-case basis. Parliamentary committees are also extremely important in scrutinising secondary legislation framed pursuant to this clause to ensure they are both justifiable and admissible.
2. Scope, Nature and Function of Henry VIII clause in India:
Given the major constitutional changes as well as socioeconomic legislative reforms pushed through during the early years of independent India, introducing a type of Henry VIII clause in the form of a ‘removal of difficulties’ provision in the miscellaneous chapter of legislations was considered essential to prevent implementation obstacles that were difficult to foresee during the drafting stage. In fact, even the Constitution of India contains an article which had temporarily vested wide powers in the President of India to remove difficulties, particularly relating to a smooth transition from the Government of India Act, 1935 to the Constitution. Furthermore, since this type of device is employed to facilitate smooth implementation of new legislation in the form of delegated legislation, the amendments framed pursuant to a ‘removal of difficulties’ clause cannot alter the policy underlying the parent Act, and must satisfy the criteria prescribed under the parent Act.
Yet, however, other than in cases relating to the transfer of territories or extension of laws, there appeared to be a rather laid back approach employed by draftsmen to include removal of difficulties provisions in Indian legislation without any discernible standard. For instance, emergency legislations that were rushed through during a period of external aggression, like the Defence of India Acts, 1962 and 1971 did not contain the clause. In the case of socio-economic legislation, while the Industrial Disputes Act, 1947 contained the clause, the Minimum Wages Act, 1947 did not. Even the Companies Act, 1956 which was a massive legislation that contained over 600 sections regulating commercial activity did not have the clause, but the duly deliberated Income Tax Act, 1961 did. Moreover, despite the fact that the device was originally intended to serve as a mechanism to give full effect to the Act during the initial stage of operation, as suggested by the Donoughmore Committee, there were many Acts that did not even prescribe restrictive criteria such as a time period of validity.
Notably, following the decision of the Supreme Court of India in M/s Jalan Trading Co. (P) Ltd. v Mill Mazdoor Sabha , which invalidated the device under section 37 of the Payment of Bonus Act, 1965 that had conferred finality to a Government order without even providing a laying provision before Parliament, Indian draftsmen have now completely moved towards the narrow and restrictive approach. An example of the standard provision used today is section 86 of the Information Technology Act, 2000 (21 of 2000) which states that: (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty: Provided that no order shall be made under this section after the expiry of a period of two years from the commencement of this Act. (2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament. This version of the provision explicitly restricts its application by specifying that the order should not be inconsistent with the Act, and prescribes a specified time period of validity as well as a laying provision. They are used routinely in modern Indian legislation, but are triggered only when absolutely necessary. If the clause happens to be triggered, then the order usually provides an explanation for the circumstances that led to the decision. Additionally, the draftsman performs an important role as he must first determine whether the changes proposed by the concerned administrative Department fall within the legislative policy of the Act, and therefore, whether a ‘removal of difficulties’ order or an amendment through the normal legislative process would be appropriate. He must be convinced that there actually is a difficulty or doubt that exists or has arisen, as a condition precedent, before exercising the power, and will then assist the concerned Department in framing the order so as to ensure that the ‘removal of difficulties’ order is within the legislative policy and above judicial challenge.
3. Potential for improving the quality and effectiveness of legislation:
Effectiveness as a feature of the quality of legislation is determined by the purpose behind introducing the law and its capacity for producing the intended result. For measuring the results of legislation when it is formulated and implemented, Mousmouti’s “effectiveness test” helps to prevent and address regulatory failures by identifying ineffectiveness in content, enforcement and accessibility at an early stage.
The power to remove difficulties may serve as a very useful mechanism to address ineffectiveness and simultaneously improve the quality of legislation when dealing with inadequacies in implementation of the law. This is especially important for technical and complex legislation, or brand new legislation. For instance, when a new law is enacted that overhauls a particular domain, and its interaction with other laws in the legal system creates obstacles to implementation, the power to remove difficulties can quickly and seamlessly address inconsistencies that prevent the legislation from achieving its desired objectives.
For example, the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the Code) which came into force on 28th May 2016, overhauled the complex framework of multiple overlapping laws that dealt with corporate insolvency and bankruptcy proceedings in India, and sought to reform the regime with an emphasis on facilitating a clear, unambiguous creditor-driven and time-bound insolvency resolution process. It also made certain modifications to existing laws through different Schedules. Section 252 of the Code amended the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (hereinafter referred to as SICA) in the Eight Schedule, to transfer pending proceedings from SICA to the Code. While the original SICA provision protected schemes sanctioned or under implementation by the Board of Industrial and Financial Reconstruction (BIFR) pursuant to the Sick Industrial Companies (Special Provisions) Act, 1985, they were recognised as schemes under implementation by virtue of section 424D of the Companies Act, 1956, which provides for the review or monitoring of schemes sanctioned or under implementation. However, the Companies Act, 1956 was repealed by a later enactment, the Companies Act, 2013, and the provisions relating to the revival, rehabilitation, sanction and implementation of schemes under the later act were subsequently omitted by the Eleventh Schedule to the Code.
Therefore, despite the statutory protection of schemes under SICA, there was a structural vacuum that existed as there was no authority to operate or implement the sanctioned schemes. The Central Government exercised its power to remove difficulties under section 242 of the Code to issue the Insolvency and Bankruptcy Code (Removal of Difficulties) Order, 2017 with effect from 24th May, 2017, which amended SICA to deem the schemes sanctioned or under implementation as an approved resolution plan under the Code, and to be dealt with in accordance with the provisions of the Code. Therefore the order addressed the obstacles to implementation in the interaction of the Code within the broader legislative context, and improved the effectiveness of the legislation. Furthermore, given how the reform involved multiple statutes, the use of this power to remove difficulties made a lot of practical sense for the Executive to deal with the details and complexities.
4. Main Problem and Measures Needed to Address It:
Despite the obvious advantage of employing this tool in an urgent situation, highlighted in the previous section, both the Donoughmore Committee (UK) and the Scrutiny of Legislation Committee (Queensland) argued, although a necessary evil, that it was an undesirable power. The primary concern for Parliaments based on the doctrine of separation of powers is that the clause can be misused by the Executive to override the intention of Parliament. Even though the Courts can serve as a check against excessive delegation, an essential safeguard to prevent the manipulation of delegated legislative powers is the crucial role that Parliamentary Committees have to play in scrutinising delegated legislation.
However, of the 4731 subordinate legislation tabled between 2009 and 2011 in India, only 40 rules (less than 1%) were reviewed by the Parliamentary Standing Committee on Subordinate Legislation. Therefore, even though a ‘removal of difficulty’ order provides an explanation for the need to amend the law, it is more likely that Parliament is left unaware of the changes that are made to primary legislation through this process. Furthermore, unlike the Donoughmore Committee or the Scrutiny of Legislation Committee, the Standing Committee on Subordinate Legislation has had no occasion to review and report on the use of this provision or the attitude of the Executive and drafters in India, and therefore, has not imposed any restrictions or criteria to limit the use of this tool. This provision has been inherited from the British model and generally accepted without question. Since this type of delegated legislation allows for the amending of primary legislation, the monitoring mechanism of Parliament needs to be strengthened and prioritised in order to ensure the admissibility of such amendments, so that they are used only in circumstances that are considered legitimate, justified and unavoidable. Parliament needs to clarify what circumstances are considered permissible.
While the device provides a flexible mechanism to improve the quality of legislation, it should not be seen as a tool that draftsmen can resort to in order to hide their own inefficiency. The Government of India must be required to make their case for the need to include such a provision, and the Parliament of India should provide the conditions that limit their application, like for instance, its scope and duration of applicability. Parliament must exercise caution and enable the introduction of this provision on a case-by-case basis only, and reserve this power for when absolutely necessary, like in circumstances of complex and technical legislation.
The ‘removal of difficulties’ clause can be a very powerful tool in the hands of the Government to deal with complex and time-sensitive problems in administering legislation. Although the prospect of amending primary legislation through delegated legislation is a controversial notion, it has proven to be a useful tool to improve the effectiveness and quality of legislation. It serves as a mechanism reserved to address anomalies, inconsistencies and gaps in the implementation of legislation which were not reasonably foreseen by the draftsmen. Securing the involvement and informed cooperation of Parliament before and after deploying such a device can help improve its legitimacy.
Today, the ‘power to remove difficulties’ is included in almost every Indian legislation as a matter of routine. Both, the UK and Queensland Parliamentary Committees had suggested such a device as appropriate only in exceptional circumstances. Yet however the Indian Parliament has not studied the frequency and effect of this provision, and has not set any adequate controls to limit its use. Given the immense potential of this device for improving legislation, but also the dangers of overriding the intention of the legislature, the Parliament of India needs to strengthen its oversight capacity in monitoring the justification for such a provision in each legislation and in scrutinising the notifications issued pursuant to it. Better control and coordination over the conditions and circumstances that warrant employing this tool would help reduce the draftsmen’s reliance on reserve powers in any situation, but will also serve in improving effectiveness and quality when absolutely necessary.