Madhavan Nair J.
1. This second appeal raises a constitutional question as to the validity of certain provisions in the Travancore-Cochin Indebted Agriculturists'' Relief Act, III of 1956 (continued in force by Kerala Act XI of 1958), and in the Cochin Agriculturists'' Relief Act, XVIII of 1114, on account of their repugnancy to the provisions of Sections 32 and 79 of the Negotiable Instruments Act, 1881, imported into the State by the Central Act III of 1951. The appellants sued the respondent for the balance due under a promissory note dated April 18, 1953, calculating interest on the principal amount at 12 per cent per annum as specified in the note. The respondent contended that he being an agriculturist, which fact was not disputed by the appellants, interest above 6 per cent per annum cannot be claimed against him as has been directed in the aforesaid Agriculturists'' Relief Acts, and that therefore the amount due by him was only Rs. 674.7 nP. which he paid to the appellants through court on February 5, 1958. The appellants impugned the provisions in the aforesaid Acts scaling down interest payable under promissory notes to be repugnant to the provisions of Sections 32 and 79 of the Negotiable Instruments Act and therefore void under Article 254 of the Constitution, and asserted their right to be paid 12 per cent interest as provided in the note. The courts below held the impugned Acts valid and therefore found the amount due to the appellants as stated by the respondent only. Hence this Second appeal.
2. In response to the notice given under Order XXVII-A Rule 1, C.P.C. the learned Advocate-General appeared in the cause and supported the impugned Acts.
3. The only ground which the provisions of the two Agriculturists'' Relief Acts have been challenged here is repugnancy to the provisions of the Negotiable Instruments Act.
Repugnancy falls to be considered", observed the Supreme Court in
4. In order to bring out repugnancy counsel for the appellants confined his attention to the provisions in the impugned Acts scaling down interest on debts, without challenging the entire Acts, and urged those provisions that limited interest on any debt due by an agriculturist to 6 percent per annum to be repugnant to the provisions in the Negotiable Instruments Act (Section 32) that the maker of a promissory note is bound to pay the amount thereof according to the apparent tenor of the note and (Section 79) that where interest at a specified rate is expressly made payable on a promissory note, interest has to be calculated at that rate; and contended that both sets of provisions cannot stand together. Though the impugned Acts do not specifically mention promissory notes, the provisions therein limiting the interest on all the debts of agriculturists are wide enough to include debts on promissory notes within their compass. Therefore they spell out an apparent repugnancy which has to be solved in this case.
5. The legislative powers of the Parliament and the State Legislatures are defined in Articles 246 of the Constitution. The Parliament has exclusive power to make laws with respect to matters enumerated in List I; and subject thereto the Legislature of a State has exclusive power to make laws for such State with respect to any of the matters enumerated in List II of the Seventh Schedule to the Constitution. It is therefore argued that if a matter comes within the ambit of both the Lists I and II, and both the Parliament and the State Legislature have legislated on it, there would arise a repugnancy which, under Article 254 of the Constitution, would strike down the State Act as void. Item 46 of List I is: "Bills of Exchange, cheques, promissory notes and other like instruments"; and item 30 of List II is: "Money-lending and money-lenders; relief of agricultural indebtedness." In the nature of things, it is impossible to draw a line of demarcation between these two items so as to keep the field of legislation exclusive for either Legislature. Both ''money-lending'' and ''relief of agricultural indebtedness'' must necessarily cover debts under promissory notes, cheques, and bills of exchange; and therefore any enactment on those matters, if it is to carry out its purpose fully and effectively, must necessarily trench upon the item marked out'' for Central legislation. Constitution cannot therefore be deemed to have forbidden a casual or incidental encroachment, unless it amounts to colorable legislation, which would be a real trespass. In
...Even when the Constitution enumerates elaborately the topics on which the Centre and the States would legislate, some overlapping of the fields of legislation is inevitable...............If a statute is found in substance to relate to a topic within the competence of the Legislature, it should be held to be intra vires, even though it might incidentally trench on topics not within the legislative competence. The extent of the encroachment on matters beyond its competence may be an element in determining whether the legislation is colorable, that is, whether in the guise of making a law on a matter within its competence, the legislature is, in truth, making a law on a subject beyond its competence. But where that is not the position then the fact of encroachment does not affect the vires of the law even as regards the area of encroachment.
6. The Negotiable Instruments Act, though enacted in 1881, is contended to be a post-constitution legislation for the Travancore-Cochin State as it has been extended to the State only by the Central Act, III of 1951. That contention appears correct and has the support of Joseph v Municipal Council (1960 KLT 46 = 1960 K.L.J. 252) and
7. As regards the Cochin Act, it was an ''existing law'' when the Constitution came to be and its continuance in force was directed by Article 372 of the Constitution. No provision of the Constitution has been shown to offend that Act or any of its provisions. So, the Cochin Act has to be taken as being valid when the Constitution came into force and in the days that followed. Under Article 372 it "shall continue in force until altered or repealed by a competent Legislature or other competent authority." Counsel contends that by the post-constitution Central legislation in the Negotiable Instruments Act the Cochin Agriculturists'' Relief Act has become repugnant to the law made by the Parliament regarding interest on promissory notes and other negotiable instruments.
8. It may be that if ''interest on promissory note debts'' be viewed as a separate subject, legislation thereon must be found within the exclusive province of the Parliament as included in the item "Bills of exchange, cheques, promissory notes and other like instruments"; and the Central legislation alone can then be valid. But if ''interest on debts'', which would naturally cover interest on amounts due under promissory notes, be viewed as the subject for legislation, it would be within the province of the State Legislature as included in the item ''money-lending'', and the State legislation must prevail. But in the scheme of the Seventh Schedule to the Constitution, interest on debts, either generally or in particular, is not a distinct subject for legislation. Dissection and sub-dissection of subjects of legislation enumerated in the Constitution, in order to check the vires of legislations or the repugnancy of enactments do not seem to be warranted.
In
...One must have regard to the enactment as a whole, to its objects and to the scope and effect of its provisions. If on such examination it is found that the legislation is in substance one on a matter assigned to the Legislature, then it must be held to be valid in its entirety, even though it might incidentally trench on matters which are beyond its competence. It would be quite an erroneous approach to the question to view such a statute not as an organic whole, but as a mere collection of sections, then disintegrate it into parts, examine under what heads of legislation those parts would severally fall, and by that process determine what portions thereof arc intra vires, and what are not.
Applying the above principles to find if the Madras Prohibition Act was repugnant to the Indian Evidence Act or the Code of Criminal Procedure, their Lordships held:
Now, the Madras Prohibition Act is, as already stated, both in form and substance, a law relating to intoxicating liquors. The presumption in S. 4(2) are not presumptions which are to be raised in the trial of all criminal cases, as are those enacted in the Evidence Act. They are to be raised only in the trial of offences under S.4 (1) of the Act, They are therefore purely ancillary to the exercise of the legislative power in respect of Entry 31 in List II. So also, the provisions relating to search, seizure and arrest in Ss. 28 to 32 are only with reference to offences committed or suspected to have been committed under the Act. They have no operation generally or to offences which fall outside the Act. Neither the presumptions in S. 4(2) nor the provisions contained in Ss. 28 to 32 have any operation apart from offences created by the Act, and must, in our opinion, be held to be wholly ancillary to the legislation under Entry 31 in List II. The Madras Prohibition Act is thus in its entirety a law within the exclusive competence of the Provincial Legislature, and the question of repugnancy under S. 107(1) (Government of India Act) does not arise.
9. Almost the identical question as is raised in this second appeal arose before the Federal Court in
Subjects must still overlap, and where they do the question must be asked what in pith and substance is the effect of the enactment of which complaint is made and in what list is its true nature and character to be found. If these questions could not be asked, much beneficent legislation would be stifled at birth, and many of the subjects entrusted to Provincial Legislation could never effectively be dealt with.
In
...The Legislatures in our Country possess plenary powers of legislation. This is so even after the division of legislative powers, subject to this that the supremacy of the legislatures is confined to the topics mentioned as Entries in the List conferring respectively powers on them. These Entries, it has been ruled on many an occasion, though meant to be mutually exclusive are sometimes not really so. They occasionally overlap, and are to be regarded as enumeratio simplex of broad categories. Where in an organic instrument such enumerated powers of legislation exist and there is a conflict between rival Lists, it is necessary to examine the impugned legislation in its pith and substance, and only if that pith and substance falls substantially within an Entry or Entries conferring legislative power, is the legislation valid, a slight transgression upon a rival list, notwithstanding. This was laid down by Gwyer C.J.in
It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its ''pith and substance'', or its ''true nature and character'' for the purpose of determining whether it is legislation with respect to matters in this list or in that.
This dictum was expressly approved and applied by the Judicial Committee in
It becomes, therefore, necessary to examine closely how the Act is constructed and what it provides.
10. Hence the test in cases like the present one is to see with respect to what matter the Legislature has exercised its legislative power in the impugned enactments. In this, we have to look to the substance of the entire Act and not to any isolated provision therein severed from its context in the Act. Neither the Cochin Agriculturists'' Relief Act, nor the Travancore-Cochin Indebted Agriculturists'' Relief Act, can be said to be a legislation on promissory notes. Their preambles have expressed their intent to be relief of agricultural indebtedness. The various sections in the Acts are designed to give agriculturists relief from the onerous burden of their debts which the Legislature has thought fit to be relieved against. In carrying out that avowed intent, object or purpose, the Acts have to cover indebtedness under promissory notes executed by agriculturists debtors. The Acts nowhere deal with promissory notes as such. But in providing relief against general indebtedness the debts under promissory notes also come in for relief and have been relieved against by their beneficent provisions made in wide terms. It cannot therefore be said that the substance of the Agriculturists'' Relief Acts is legislation on promissory notes; they are in substance and in reality legislation on ''relief against agricultural indebtedness''. It cannot then be said that the legislation in the impugned Agriculturists'' Relief Acts are on the same subject-matter as in the Negotiable Instruments Act. They cannot therefore be described as repugnant to the Central legislation in the Negotiable Instruments Act or as void on that count.
11. On the identical reasoning must fall another argument advanced by counsel for the appellants based on the doctrine of ''Occupied filed''. The contention was that, since the Central Legislation in Negotiable Instruments Act has already provided for interest on promissory notes, the later legislation by the State regarding such interest in the Travancore-Cochin Indebted Agriculturists'' Relief Act, 1956, has to be held an encroachment on an occupied filed and therefore repugnant and void under Article 254 of the Constitution. If the two legislations are not on the same subject, neither the doctrine of occupied field, nor the principle of repugnancy can be of any application. Relief of indebtedness presupposes the existence of a debt. The Negotiable Instruments Act, in providing for payment of the amount, principal and interest as specified in the promissory note, has brought about the debt. When agriculturist debtors are found to suffer unfairly under their indebtedness, relief becomes necessary. The Constitution conferred power on State Legislatures to provide for such relief according to the conditions of agriculturists in the particular State. The spheres of legislation on calculation of normal interest on promissory note debts and on the scaling down of such interest for purposes of relieving a particular class of debtors seem to be quite distinct and cannot therefore be said to occupy the same filed. In the result, the opinion of the courts below that the impugned provisions in the Agriculturists'' Relief Acts are not affected by any constitutional infirmity is correct. The second appeal fails, and is dismissed with costs.
