Report No. 24
23. Section 3(1)-Scope of functions of Commission.-
Section 3(1) states that the functions which can be entrusted to a Commission are two-fold, namely,-
(a) making an inquiry into any definite matter of public importance, and
(b) performing such functions as may be specified in the notification appointing the Commission.
24. (a) An argument was advanced in Ram Krishna Dalmia v. Mr. Justice Tendolkar, 1959 SCR 279: 1958 SCA 754: AIR 1958 SC 538 that while Parliament could make a law with respect to "inquiries" under the relevant legislative entries, it could not make a law conferring a power to perform any function other than the power to hold an inquiry. Further, it was contended that the law which the appropriate legislature is empowered to make under the relevant legislative entries relating to inquiries must be with reference to inquiries for the purpose of legislation and not for administrative purposes.
The Supreme Court rejected these arguments and pointed out that an inquiry under the Act was not limited in its scope or ambit to future legislative purposes. So far as the expression 'performing such functions' was concerned, it was assumed that such functions would be functions necessary for or ancillary to the purposes of the Commission. It is desirable to make the position clear in the Act and we recommend accordingly.1
(b) In the abovementioned case, the notification appointing the Commission, after directing an inquiry to be made into the affairs of certain companies and firms and after stating in detail the facts to be investigated, called upon the Commission to inquire into and make recommendations in respect of the following, among other matters, namely (item 10), "any irregularities, fraud or breach of trust or action in disregard of honest commercial practices in respect of the companies and firms whose affairs are investigated by the Commission which may come to the knowledge of the Commission and the action which, in the opinion of the Commission, should be taken as and by way of securing redress or punishment or to act as a preventive in future cases".
(c) It was held by the Supreme Court that, having regard to the fact that the Commission had no judicial powers and its report could only be recommendatory, there was no point in the Commission making recommendations for any action "as and by way of securing redress or punishment" regarding wrongs already done or committed because the redress or punishment, if any, for such wrongs has to be given or imposed by courts of law in their own discretion and without being in any way influenced by the view of any person or body, however august or high-powered that person or body might be.
Accordingly the Court held that any recommendation about action to be taken as and by way of securing redress or punishment could not be said to be necessary for or ancillary to the purpose of the Commission and such a direction to the Commission was outside the scope of the Act. This, however, relates to the actual specification of the functions of the Commission and does not require any amendment in the Act.
1. See App I, section 3(1) as proposed.