Today, the Counsel for the Tobacco Institute of India commenced his arguments. He mainly argued that there was lack of adherence to pre-consultative and procedural processes for bringing the impugned Rules into force.
The Counsel highlighted certain tests for the validity of subordinate legislation:
- The need for subordinate legislation to follow requisite procedures;
- If the delegated legislation made under Act A, infringes Act B, which is in pari materia with Act A, then it may be struck down on this ground.
- Subordinate Legislation may be struck down on grounds of illegality, impropriety or irrationality
- Subordinate Legislation is also subject to substantive controls – if it can be employed for an ‘improper purpose’, other than that prescribed by the parent act, then it would be void.
- The instrument should not be drafted in a manner such that it portrays that it is manifestly unjust.
He argued that the general rule that ‘legislative power must be exercised only by those upon whom it is conferred’ must be followed.
Justice Patil asked the Counsel if these conditions are prescribed in any Rules or elsewhere. In answer to this, the Counsel drew the attention of the Court to the Rules of Business made by the Parliament under Section 118. In this regard, the Counsel stated that the failure to comply with express procedural requirements would indicate the lack of procedural propriety and procedural due process in the passing of the 2014 Amendment Rules.
Justice Patil drew the Counsel’s attention to a paragraph on rationality in the context of proportionality (in the material from which he was putting forth his arguments). The Counsel agreed and stated that proportionality can also be cited as a ground for judicial review.
Justice Patil asked how far these principles would apply to administrative action.
The Counsel said that if one had to draw a distinction between administrative and quasi-judicial action, one could state that the principles of natural justice would not apply to the former. However, he submitted that the court has extended the jurisdictional reach of the principles of natural justice to the area of administrative action also and as per the Indian Express Case 1986 AIR SC 515 and the Cellular Operators Case [Civil Appeal No. 5017 of 2016 (Arising out of S.L.P. (Civil) No.6521 of 2016)] the court’s power of Judicial Review can be exercised at par for the review of executive/administrative action as well.
Justice Patil then said that accepting manifest arbitrariness for judicial review would then call for arguments as to irrationality, etc., as these concepts overlap.
To this, the Counsel responded saying that while the concepts cannot be contained in a watertight manner, such a view would only restrict the scope of judicial review. The Counsel cited Cellular Operators on manifest arbitrariness, the Court might as well say that the legislature never intended to give the authority to make certain rules.
Justice Patil states that Subordinate Legislation would call for a greater threshold of review in terms of degree; that is, it would be more than just unreasonableness, etc. The Counsel agreed and said it would be much broader. He brought the attention of the Court to Article 53 of the Constitution, dealing with the executive power of the Union. To analyse the manner in which this power vests, the Counsel then drew the Court’s attention to Article 74, which deals with the power of the Council of Ministers to aid and advise. Reading Article 75(3), he stated that the Council is collectively responsible to the House of the People. Then, referring specifically to Article 77(3), the Counsel submitted that Authentication is made mandatory, in the sense that, the President shall make rules for the convenient transaction of business.
The Counsel relied upon the Allocation of Business (AoB) and Transaction of Business (ToB) Rules and submitted that a civil servant does not work as a delegate of the Ministry, but takes decisions on behalf of the government. The Counsel referred to the Allocation of Business Rules to argue that the production, distribution for domestic consumption and export of tea, coffee, etc. as well as Tobacco Board is an Item (Item 8) that is under the purview of the Ministry of Commerce and Industry (C&I). The Counsel submitted that even regulation as to “packaged commodities” would come under the ambit of the Ministry of Consumer Affairs, and not the MHFW. He informed the Court that the Ministry of Health and Family Welfare (MHFW) had sought to bring COTPA and tobacco control under its ambit. However, he suggested amendments were still pending. Therefore, the argument made by the Counsel was that the Rules could not be framed by the Ministry of Health and Family Welfare as these subjects fell under the Commerce Ministry and it was only the Commerce Ministry that could frame the Rules. The Judges asked if any matter relating to the impugned legislation could be attributed to the MHFW, under the AOB Rules. The Counsel directed the Court’s attention to “WHO” and said that perhaps ‘international health regulation’ would be referable in this regard.
The Counsel then argued that the impugned Rules were still pending consideration before a Parliamentary Committee of Subordinate Legislation (PCSL) and before the Committee’s Report was out, the Rules were notified, which was procedurally incorrect. He referred to Questions that were put forth to the MHFW in the Rajya Sabha, and then in the Lok Sabha. In the Rajya Sabha, it was asked if the MHFW could provide details as to the activities to reduce tobacco consumption, the extent of its implementation and the reasons for deferral of the impugned Rules. The Ministry had responded saying that they cannot answer the questions as it isn’t within their purview. The Question in the Lok Sabha was as to the implementation of the pictorial warning. The MHFW had then responded that given the issuance of the Interim Report, the Final Report of the Committee was being considered.
To this, Mr. Dixit, the A.S.G. interjected and stated that as per section 31 of the COTPA, what was required was only the laying of the Rules before the Parliament for a period of 30 days and there was no legislative requirement for the Rules to be considered by a Parliamentary Committee.
The Counsel referred to various paragraphs of the interim and final reports of the Parliamentary Committee. He referred to how the Committee emphasized on the importance of tobacco cultivation in India, and its contribution to foreign exchange and domestic employment, which he submitted, has now reduced. The Counsel then highlighted the consideration given by the Committee that if the impugned Rules with 85% warnings are passed, it will give to the illegal importation of cigarettes. It was submitted that due to the increased size of health warnings, the consumption of illegal and smuggled tobacco products would go up and that it was also affecting the livelihood of tobacco workers. To this, Justice Nagarathna asked that therefore this would mean that the increased size of the health warnings would be working, as it would reduce the sales of cigarette packs and hence consequently have an affect on the farmers. The Counsel responded saying that the consumption of tobacco was not recued, because while consumption of legal tobacco has gone down, illicit tobacco consumption has gone up. Justice Patil at this pointed mentioned that the mere fact that there were illicit packs of tobacco being sold, may not be relevant to consider the constitutional validity of the Rules.
The Court asked the questions as to what would happen if the Report of the Parliamentary Committee is not considered.
The Counsel for TBI continued, by arguing that it was because of the Interim Report of the Committee that the 2014 Rules were kept in abeyance, and thereafter by not following any procedural requirements, only because of the Rajasthan High Court order, the said Rules were notified to be brought into force from 1st April 2016.
Justice Nagarathna asked by which Ministry the 2008 Rules were framed. To this, the Petitioners’ Counsel answered saying that it was the Health Ministry but the Rules were approved by the Group of Ministers. The Court also asked if the Committee manetioned anything about the 2008 Rules and it was answered that the 2008 Rules were not the subject matter before the Committee.
The Counsel for the Tobacco Institute of India continued and relied on the reports of the Parliamentary Committee which stated that only 72 of the 180 countries that have ratified the FCTC have implemented pictorial health warnings. He also intimated to the Court the findings of a study that the largest cigarette consuming countries such as China, Japan and the US also use only textual warnings. India is also a large consumer, but the average number of cigarettes consumed per day in India is the lowest. The Counsel replied that they were being cited to show that the health warnings extending up to 40% of the cover was enough and that 85% constituted excessive regulation.
The Counsel continued with his submissions on the divergence of opinion between the two ministries. He stated that the C&I Ministry in its submissions had stated that a national policy on tobacco should be based on the views of all the stakeholders involved. However, the MHFW had, in disregard of the findings of the Committee, notified the impugned 2014 Amendment Rules.
The arguing Counsel stressed on the importance of the findings of the PCSL, and stated that short of conducting a cross-examination, it had all the trappings of a judicial enquiry. The Counsel said that the Final Report of the PCSL states that the 40% pictorial warnings should continue, increased at most up to 50%.
The Counsel argued that the MHFW is an over-zealous department, which is looking to implement Article 3 of the FCTC. He then referred to Article 253 of the Constitution to argue that the Parliament must at first make law to implement an international agreement.
Justice Nagarathna asked whether the COTPA refers the intention to incorporate international practices in its provisions, and whether there is any mention of the object of ensuring a reduction in smoking. The Assistant Solicitor General (A.S.G.) spoke to say that while there is no express mention, there is sufficient intrinsic material. He stated the position of law, which was relied on in cases such as Keshavananda Bharti AIR 1973 SC 1461 and Vishakha v. State of Rajasthan 1997 (6) SCC 241, wherein international obligations become part of the domestic law unless they are repugnant to it. The Counsels for the Impleading Applicants on the side of the respondents also responded saying that the aim of reducing tobacco consumption is stated in the Preamble.
The Counsel for the ITC argued that Article 253 itself was expressly mentioned and then dropped from the Preamble of the COTPA. The Godawat case (2004) 7 SCC 68 was relied on yet again to stress that the COTPA is not a measure for public health and the prohibition of tobacco. It was also submitted that the FCTC was ratified only in 2005 and therefore COTPA could not have been enacted to implement the FCTC and that there were no amendments to the COTPA after the enactment of the FCTC in 2005.
The A.S.G. referring to Section 31 of the COTPA said that the Rules are laid before both houses of the legislatures for a period of 30 days, and that only if a modification is suggested and a draft of it is made to be implemented by the executive, is then any amendment to the Rules brought about in this deliberative stage.
Justice Nagarathna asked whether the Parliament had an opportunity to suggest any modifications. The A.S.G. submitted that the Court can only asked if Section 31 has been complied with, as there is no case wherein legislation has been struck down depending on whether the Parliament duly considered it or not.
Thus, the arguments for the day ended with Justice Patil emphasizing that certain factual aspects need to be clarified so it can be known whether the Subordinate Legislation was passed in adherence to the required procedure, after the publishing of the Interim Report by the PCSL and the order of the Rajasthan HC.