M V BAHULEYAN Vs. STATE OF KERALA

JUDGEMENT

(1.) Petitioners have approached this Court challenging sub-s. 5 of S.3 of the Kerala Chitties Act, 1975 as ultravires, and unconstitutional and seeking a direction to grant permission to the petitioners to conduct chitties of more than Rs. 25,000/-. The said provision reads as follows: -

(2.) It is true that the said provision classifies the individuals and also the Government companies and Banking Companies f hat they are granted privileges to conduct chitties in different manner. As per clause (a), no Banking Company will be entitled to conduct at a time chitties, the aggregate amount of which exceeds 60% of the net assets. In the case of individuals, that is limited only to 50%. The petitioners contend that this is a discrimination. Chitties Act is a legislation intending to safeguard the interest of the public and to safeguard the amount invested by them. In such circumstances, there is nexus in classifying the Banking Companies defined in terms of the Banking Regulations Act or a new Bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 on one side and persons or bodies other than such Banking Companies on the other side. The Banking Companies are being controlled and regulated by the Reserve Bank and always their financial dealings will be watched by the banker of the banks. But, at the same time, there will be no close watch on the dealings of other companies, or individuals. Therefore, such classification contained in Clause (a) and (b) of S.3(5) of the Act cannot be said to be arbitrary or illegal.

(3.) The first proviso to the said provision contains a ceiling of Rs. 25,000/- for a chitty conducted by a foreman. Therefore, petitioners can conduct a chitty for a maximum amount of Rs. 25,000/-. The second provisio carves out an exemption to the first proviso, enabling the banking companies to conduct a chitty upto the limit of Rs. 2 lakhs. The third proviso still gives further exemption to a company owned by the Government of Kerala to conduct chitties without any such limit. Petitioners submit that these exemptions from the main proviso granted to the Banking Companies and also to the Companies owned by Government of Kerala are discriminatory, as the petitioners are unable to conduct chitties exceeding Rs. 25,000/-.