J D NICHANI Vs. STATE OF MADRAS

JUDGEMENT

(1.) THE petitioners in these two petitions are carrying on business as moneylenders in the city of Madras and Salem respectively and they have approached this Court by means of these two petitions under Article 228 of the Constitution for the issue of a writ of Mandamus or other appropriate writ to direct the State of madras to forbear from enforcing the provisions of the Madras Money Lenders Act (Madras Act XXVI of 1957) hereafter to be referred to as the Act. In the affidavits filed in support of the petitions the Constitutional validity of the Act and in particular of Sections 2 (6) to (8), 4 (3), 10 and 14 of the Act have been challenged, the contention being that they contravene either or both the fundamental rights guaranteed under Arts. 14 and 19 (1) (g) of the Constitution.

(2.) THE Act came into force on 16-10-1959 and it forms part of a series of legislative measures enacted by the State legislature to control and regulate the profession of money lending. The preamble to the Act states:

(3.) MR. R. Gopalaswami Iyengar appearing on behalf of the petitioners has contended that: the entire enactment offends the provisions of Article 14 of the constitution as the ` lenders have been singled out for discriminatory -treatment in the matter of running their business of money lending. We are, however, unable to accept his arguments, so broadly advanced. The subject of money-lending and money-lenders has been and is always regarded as a special branch for legislation not merely in our country but in other countries as well. A debtor who by reason of his economic dependence is liable to be exploited by the money-lender requires protection and the legislature has stepped in to protect and evolve a machinery to give relief to him against any contract that he might have made with his creditor, e. g. , the Usurious Loans Act empowers the Court to reopen harsh and unconscionable transactions. The Madras Agriculturists Relief Act (Act IV of 1938)regulates the interest payable by an agriculturist debtor. Even in England it was realised as early as the beginning of this century that the system of money lending by professional money-lenders at high rates of interest was productive of crime, bankruptcy, unfair advantage like extortion, etc. and serious injury to the community and money lending as a profession required regulation and control. The Money lenders Act, 1900 (63 and 64 Vict. Ch. 51) regulating the money lenders' profession by obliging money lender to register himself and carry on the business in the registered name was passed. Section 6 f that Act defines money lender as including every person whose business is that of money lending. But this definition exempted the pawn-broker, a registered society or a statutory money lending corporation and a bona fide banker. Under our Constitution also "money lending and money lenders" is an item in the State list in the VII Schedule. It does not therefore need much argument to convince that money lenders form a distinct class for which there can be special legislation. The State Legislature has undoubted power under the Constitution to bring in and enact legislation for the regulation and control of the business of money lending. Article 14 of the constitution, no doubt, ensures non-discrimination in the legislative and administrative spheres of Governmental activity. But that does not and has never been understood to mean that all laws should be of universal application. Legislation could be and is very often made for different classes of persons to achieve particular objects or to give effect to particular policies of the Government. It is inevitable that there should be classification in that regard, the only condition being that such classification should be bona fide and founded upon a reasonable basis having regard to the objects in view.