Can the Government Act Against Its Own Entities?

In the complex interplay between state power and legal accountability, a pressing question often arises: Can the government act against its own grantees, entities, or instrumentalities? This issue touches the heart of constitutional governance, where unchecked authority could undermine fairness and public trust. Generally, the law imposes strict limits to prevent arbitrary or unlawful actions by the government against those it has empowered or supported.

This blog post delves into the legal principles, key court findings, and practical implications, drawing from authoritative judgments. Note: This is general information, not specific legal advice. Consult a qualified lawyer for your situation.

The Core Legal Principle: No Arbitrary or Ultra Vires Actions

The foundational rule is clear: The government cannot act arbitrarily or beyond its legal authority against its own entities or those acting on its behalf. Any such action is liable to be invalidated. This stems from constitutional mandates like Article 14 (equality before law) and the doctrine of ultra vires (beyond powers).1980 0 Supreme(SC) 209

Key points include:- Government must operate within statutory and constitutional bounds. Exceeding authority triggers the ultra vires rule, rendering actions void.1980 0 Supreme(SC) 209- Arbitrary or unreasonable decisions violate Article 14 and are subject to being struck down.2013 0 Supreme(Bom) 2222- The state cannot arbitrarily target its own lawful entities without a solid legal basis.1961 0 Supreme(SC) 92

As stated in one ruling: It is only in public interest that it is recognised that an authority acting on behalf of the Government or by virtue of statutory powers cannot exceed his authority. Rule of ultra vires will become applicable when he exceeds his authority and the Government would not be bound by such action.1980 0 Supreme(SC) 209

Detailed Breakdown: Government's Scope of Authority

Bounded by Law and Reasonableness

Government actions are not absolute. They must align with public interest and rationality. Courts have consistently held: The Government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated.2013 0 Supreme(Bom) 2222

This principle ensures executive powers under Article 162 remain tethered to legality. Actions failing the 'reasonableness test' invite judicial review, protecting entities from capricious state moves.

The 'Act of State' Doctrine and Own Entities

When it comes to internal entities or past liabilities, the government faces further curbs. The 'act of State' concept limits judicial compulsion on accepting prior state obligations, but it doesn't greenlight arbitrary harm to current instrumentalities. One case clarifies: rejection of claims against a former state is an act of State, yet the current government cannot exceed constitutional powers in dealing with its own setups.1961 0 Supreme(SC) 92

Insights from Related Judgments: Reinforcing Limits

Courts across India have echoed these limits in diverse contexts, preventing the government from leveraging its position unfairly.

• No Advantage from Own Wrongdoing: In a COVID-19 license fee dispute, the court ruled the pandemic was force majeure; the government (via DTIDC) couldn't demand fees during lockdown or take coercive steps, as the Government cannot take advantage of its own wrong.2021 0 Supreme(Del) 2440 This extended to waivers and license renewals, highlighting public law duties even in contracts.2021 0 Supreme(Del) 2440

• Promissory Estoppel and Policy Flip-Flops: Governments can't renege on promises that induce reliance. In a land acquisition case, the doctrine placed the citizen and the State at the same footing, barring retreat from investment-inducing policies.2010 0 Supreme(All) 1710 Similarly, unfulfilled rewards to police can't be dodged: the State Government cannot take advantage of its own inaction.2010 0 Supreme(Kar) 1023

• Injunctions and Statutory Bars: Malaysian and Indian parallels show injunctions against government are restricted. Under laws like the Government Proceedings Act, courts can't restrain public duties lightly. One ruling affirmed: injunctions against government for performance bonds are impermissible, prioritizing public interest.

  KHARISMA WIRA SDN BHD vs KETUA SETIAUSAHA KEMENTERIAN PERTAHANAN MALAYSIA & ORS

• Control Over Corporations and Services: State control under statutes (e.g., Sections 417-421) doesn't permit overreach. Meetings directed by government are valid only within powers; illegal regularization of strikes was struck down.2014 Supreme(Online)(Chh) 79 2021 Supreme(Online)(Ker) 44645 Judicial independence further insulates: government can't unilaterally decide on judges' discipline.2015 0 Supreme(Ker) 1725

• Pensions and Natural Justice: Delaying pension decisions for decades violates fairness; Government cannot take advantage of its own inaction.2018 0 Supreme(J&K) 291 Courts quashed denials, mandating benefits under Civil Services Rules.

These cases illustrate a pattern: whether contracts, grants, or services, the government is held to higher accountability against its own.

Exceptions: When Government Actions Hold

Limits aren't absolute. Permissible actions include:- Those within statutory scope, reasonable, and serving public interest.1980 0 Supreme(SC) 209- Statutory powers exercised adversely, if not arbitrary.1980 0 Supreme(SC) 209- Superintendence under specific laws, like over registrars, without usurping roles.2010 Supreme(Online)(SC) 91

For instance, urgency in land acquisition for public needs (e.g., housing) withstands review if backed by materials, without invoking promissory estoppel absent direct promises.2010 0 Supreme(All) 1710

Practical Recommendations for Entities and Citizens

Facing potential government action? Consider:- Verify Authority: Challenge ultra vires moves early via writs under Article 226.- Seek Judicial Review: Highlight arbitrariness or Article 14 violations.2013 0 Supreme(Bom) 2222- Document Reliance: Invoke promissory estoppel for policy-induced actions.2010 0 Supreme(All) 1710- Public Interest Angle: Argue force majeure or own-wrong doctrines in contracts.2021 0 Supreme(Del) 2440

Governments should:- Stick to legal scopes to avoid invalidation.1980 0 Supreme(SC) 209- Ensure reasonableness in decisions.2013 0 Supreme(Bom) 2222- Honor assurances to maintain trust.2010 0 Supreme(Kar) 1023

Key Takeaways

• Government powers are checked by constitution and statutes—no room for arbitrariness against own entities.2013 0 Supreme(Bom) 2222
• Ultra vires and Article 14 are powerful shields for judicial invalidation.1980 0 Supreme(SC) 209
• Courts prevent self-serving wrongs, from lockdowns to rewards.2021 0 Supreme(Del) 2440 2010 0 Supreme(Kar) 1023
• Always within public interest—balance favors legality over unchecked might.

In conclusion, while governments wield broad authority, they cannot act against their own grantees or entities whimsically. Such moves risk nullification, upholding rule of law. Stay informed, act proactively, and remember: this overview isn't advice—seek professional counsel for tailored guidance.

References:1. 1980 0 Supreme(SC) 209: Ultra vires in government actions.2. 2013 0 Supreme(Bom) 2222: Arbitrariness and reasonableness.3. 1961 0 Supreme(SC) 92: Act of State limits.4. Additional cases as cited inline.