The Kerala HC's order on salary deferment - Examining implications for the 'rule of law'

In a significant order delivered on 28^th April, the Kerala High Court had stayed an executive order of the Kerala Government, which partially deferred the salary payment of all government employees who earned more than Rs. 20,000. This was done on the ground that there was no ‘legislative backing’ for such an executive order. Following the Kerala HC’s decision, the Kerala Government promulgated an ordinance to remedy the defect pointed out by the HC. The Kerala HC has also in a subsequent order upheld the validity of the ordinance.

In this post, our focus shall be on the reasoning adopted by the Kerala HC while staying the initial executive order. We shall also discuss its implications for a possible legal challenge to the Aarogya Setu app – which is being implemented by the Central Government on the basis of executive orders - without an anchoring legislation.

The reasoning employed by the Kerala HC

The executive order issued by the Kerala Government was applicable on all government employees who earned a gross salary of more than Rs. 20,000. Under this order, the government employees were subjected to a deferment of a small portion of their salary, for all months from April 2020 to August 2020. The salary that was deferred was equivalent to 6 days worth of salary for each month, from April to August. It is significant to note here that the executive order only deferred the payment of a small portion of the salary, and did not in any way alter or reduce the salary amount that was payable. This measure was a means to reduce expenditure, in light of the fiscal paucity faced by the Kerala Government.

The primary argument of the petitioners was that the executive order violated Article 300A of the Constitution. Under Article 300A – “No person shall be deprived of his property save by the authority of law”. Now, it has been consistently held by the Supreme Court that the term ‘law’ includes only statutory law, and not an independent executive order.  This implies that if an executive order has to be issued, it should derive its authority from an anchoring legislation. The petitioners contended that ‘salary’ fell within the ambit of the term ‘property’ under Article 300A, and that a person can be ‘deprived’ of the same only through a statutory law, and not solely through an executive order.

The Kerala Government on the other hand contended that the power to defer payment of salary can be read into Section 2 of the Epidemic Diseases Act, 1897, along with Section 38 and Section 39 of the Disaster Management Act, 2005. Under Section 2 of the Epidemic Diseases Act, the State Government has the power to frame temporary regulations in a manner that it deems fit, to prevent the spread of an epidemic disease, such as Covid-19.  Section 38 of the Disaster Management Act, 2005 confers the State Governments with the power to undertake a wide array of measures for disaster management. Section 39 on the other hand enlists the responsibilities of different departments of the State Government during a national disaster.

It is pertinent to recall here that the nationwide lockdown has been imposed by the Central Government by invoking the Disaster Management Act. The State Governments have simultaneously invoked the Epidemic Diseases Act to frame regulations for preventing the spread of Covid-19. One similarity between both these legislations is that they confer the Central and the State Governments with a wide array of discretionary powers, during a situation such as the Covid-19 pandemic.

The Court rejected the argument of the government, and accepted, at a prima facie level, the petitioners’ contention that ‘salary’ fell within the ambit of the term ‘property’ under Article 300A. The Court also held that the provisions of the Epidemic Diseases Act and the Disaster Management Act do not confer the Government with the power to defer the salary of government employees during any kind of disaster or emergency situation. Hence, the executive order did not derive its source from any statutory law, which was in violation of Article 300A. The Court accordingly stayed the operation of the executive order.

There are two significant takeaways from the Court’s order. First, it was reiterated that the term ‘law’ under Article 300A refers only to statutory law, and not to a mere executive order. If the State were to defer payment of salaries through an executive order, then such an executive order should derive its authority from a statutory law. Second, the Court held that if the power to defer salaries is not specifically mentioned in the Epidemic Diseases Act or the Disaster Management Act, this power cannot be simply read in through the omnibus provisions present in both these legislations. The key point here is that neither of these legislations confer the Central or the State Governments with unbridled power to undertake any and every measure through executive diktat.

After this order, the Kerala Government promulgated an ordinance that conferred it with the power to defer payment of salary during a public health emergency or a disaster. By invoking the power conferred by the ordinance, the Kerala Government issued executive notifications that achieved the same objective which the earlier executive order sought to achieve – by deferring salary payments of those government employees who had a gross salary exceeding Rs. 20,000.

The Kerala HC subsequently refused to grant any interim stay on the executive notification, and held that it was within the scope of the powers conferred by the newly promulgated ordinance. This way, the Court has further emphasized on the principle that such an executive order should derive its authority from a statutory law, or through an ordinance - which has the same force and effect as a law enacted by the Legislature, under Article 213 of the Constitution.

Implications for the ‘rule of law’ and Aarogya Setu

While staying the executive order, the Kerala HC noted that even in times of an emergency, there can be no deviation from the rule of law. If Article 300A mandated that property cannot be deprived through an executive order that is not backed by a statutory law, then this requirement cannot be dispensed with even in times of a pandemic. Furthermore, as discussed above, the Court noted that the Disaster Management Act and the Epidemic Diseases Act do not confer unbridled powers to undertake any and every action by means of an executive order.

This has significant implications for the legal issues surrounding the Aarogya Setu mobile app. This mobile app is being implemented by the Central Government without any specific anchoring legislation. Furthermore, for devising measures to tackle different aspects of the Covid-19 pandemic, the Central Government has constituted multiple Empowered Groups of Officers, by invoking the powers conferred by Section 10 of the Disaster Management Act. One such group of Officers is the Empowered Group on Technology and Data Management. This Empowered Group, has, through an executive order, notified Aarogya Setu’s Data Access and Knowledge Sharing Protocol. Now, the question that arises here is whether the Aarogya Setu app as a whole, along with its Data Access and Knowledge Sharing Protocol fall within the ambit of the Disaster Management Act.

While examining this issue, it is pertinent to recall that the fundamental rights conferred by Part III of the Indian Constitution are subject to reasonable restrictions enacted through ‘law’. Akin to Article 300A, the term ‘law’ here only refers to statutory law, and does not include an executive order which lacks a statutory basis. The Aarogya Setu app collects a significant amount of personal data, and is undoubtedly an infringement of the right to privacy. As held in the KS Puttuswamy  decision, such an infringement of privacy shall be constitutionally valid only if the proportionality test is satisfied.

The first requirement of the proportionality test is the requirement of legality – under which the measure should be backed by law. The Aarogya Setu app and the Protocol issued can hence be considered valid only if they fall within the ambit of the Disaster Management Act. It is at this juncture that the Kerala HC’s order finds significance, as the Court noted that if the power to undertake a specific measure (such as deferring salary payments) is not specifically mentioned in the Disaster Management Act, the same cannot be simply read into the omnibus provisions of the statute.

Similarly, as the statute does not confer any specific power to collect personal data through a contact tracing app, this power cannot be read into the ambit of the statute. Applying this interpretation, the Aarogya Setu app, along with the notified Protocol, cannot fall within the ambit of the Disaster Management Act, and must be backed by an independent parliamentary law.

This interpretation given by the Kerala HC prevents a rule by executive decree, even in times of an emergency such as the Covid-19 pandemic. It prevents a situation where measures that may infringe on constitutional rights are justified by simply referring to the omnibus provisions of the Disaster Management Act. When the implementation of the Aarogya Setu app is challenged in Court, the bench should adopt an approach similar to the Kerala HC – which ensures that even during a grave emergency, there is rule of law, and not rule by law.