The doctrine thus refers to the question of competence of the legislature concerned to enact a particular law. The Constitution has already distributed legislative powers between the Parliament and State Legislatures and each has power to enact within its legislative spheres, marked out for it by the specific legislative entries.
In respect of the subject-matter of a particular legislation, the question may arise whether the legislature transgresses the limits imposed on it by the Constitution. Such transgression may be patent, manifest or direct or may be disguised, covert or indirect.
In order to decide to which class of subjects of legislation a statute really belongs, and so whether or not the legislature has transgressed the sphere assigned to it, what material is the substance of the legislation in question, its true nature and character not its outward or formal appearance. To ascertain the true character and substance of the enactment, courts take into consideration its object, purpose or design.
Summing up the doctrine, Subha Rao, J. has stated in Gullapalli Nageshwar Rao vs. State Road Transport Corporation, AIR 1959 S.C. 308, “The legislature can only make laws within its legislative competency. The legislative field is circumscribed by the scheme of distribution of powers.
The legislature cannot overstep the field of competency, directly or indirectly. The court will scrutinise to ascertain whether the legislature by device purports to make a law which though in forms appears to be within its sphere in effect or substance, reaches beyond it.”
The doctrine of colourable legislation has reference to competency, and not to the motives, bona fides or malafides, of the legislature. The motives of a legislature in making a law are irrelevant. It is not for the courts to decide and scrutinise the policy which led to the enactment within the ambit of the legislature.
State of Bihar v. Kameshwer Singh, AIR 1952 S.C. 252, is the only case where a law has been declared invalid on the ground of colourable legislation. In this case, Bihar Land Reforms Act, 1950, was held void on the ground that though apparently it purported to lay down any such principle and thus indirectly sought to deprive the petitioner of any compensation.