D.N. Ghosh v. Additional Sessions Judge (AIR 1959 Cal 208)

The petitioners ran Diguli Colliery. After a new Provident Fund Scheme under the 1948 Act, they were prosecuted for breaches. They argued that giving Government power to fix punishments in the Scheme was an excessive, unconstitutional delegation. The Calcutta High Court disagreed. The parent Act fixed the policy and the limits. The Government only filled in details. The delegation stood, and the challenge failed.

1. Is it unconstitutional for the Legislature to let the Executive frame scheme rules with penalties?
2. Were the prosecutions invalid because the penalty power was an excessive delegation?

• Delegation is valid if the Legislature states the policy, sets standards, and caps penalties.
• The delegate may fill in details, procedures, and recovery methods within the limits of the parent Act.

The High Court held that Section 9 of the Act is not ultra vires and Clause 70 of the Scheme is valid. The Legislature kept control by fixing the policy and capping penalties. The Government acted as a delegate only to work out details. Result: the challenge failed and the convictions were not disturbed.

Delegation is constitutional when the parent statute lays down policy, guidance, and limits. The delegate may prescribe details and penalties within those limits without crossing into law-making by itself.

• Clarifies the boundary between legislation and administration.
• Supports practical schemes (like PF) with enforceable rules.
• Sets a workable test for penalty clauses in delegated legislation.

1. Legislature must set policy and limits; delegate can fill details.
2. Penalty clauses in schemes can be valid within statutory caps.
3. Excessive delegation occurs only when policy and limits are absent.

Mnemonic: “P-L-C: Policy–Limits–Control.”

• Policy: Legislature states the “what & why.”
• Limits: Caps on penalties and scope.
• Control: Delegate fills details under guidance.

Delegated legislation

Rules made by the Executive under authority of a statute.

Ultra vires

Beyond legal power; invalid for want of authority.

Penalty cap

Maximum punishment set by the parent law for scheme breaches.