PUKHRAJ NAGRAJ RANKA AND SUBHASCHANDRA KANHAYALAL LONAVAT AND SHIVJIRAM RAGHUNATHDAS ATTAL AND RAGHUNATH GAMBIR WANI AND OTARMAL GULABC Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) Writ Petition No. 700 of 1977 has been filed by the petitioners for themselves, individually as well as on behalf of other money lenders. While admitting the petitions this Court granted leave under Order 1, Rule 8 of the Civil Procedure Code and, therefore, it could be said that the said writ petition was filed in a representative capacity. In this writ petition as well as other writ petitions which were heard with Writ Petition No. 700 of 1977, the petitioners have challenged the provisions of the Maharashtra Debt Reliefs Act, 1975 as enacted in the year 1975 as well as amended by Maharashtra Act XL of 1977 and Maharashtra Act XVIII of 1979. The various provisions of this Act are challenged mainly on the ground that they are violative of the petitioners fundamental rights guaranteed under Articles 14 and 19(1)(f) and (g) of the Constitution of India. According to the petitioners when the matter was heard by this Court on an earlier occasions in (Kailashchand Khusalchand Bakliwal v. State of Maharashtra) 79 Bom.L.R. 449 or by the Supreme Court in (M/s. Fatehchand Himmatlal and others v. State of Maharashtra) A.I.R. 1977 S.C. 1825, in view of the promulgation of the emergency and the consequential suspension of these fundamental rights, the petitioners had no right to challenge the various provisions of the Debt Reliefs Act on this Count. Therefore, in substance in these writ petitions we are concerned with the question whether the various provisions of the Act No. III of 1976 (hereinafter referred to as the Debt Reliefs Act) are violative of the petitioners fundamental rights guaranteed under Articles 14 and 19(1)(g) of the Constitution of India.

(2.) In Writ Petition No. 700 of 1977 it is contended by the petitioners that the various provisions of the Debt Reliefs Act are violative of the petitioners fundamental rights guaranteed under Articles 14 and 19(1)(f) and (g) of the Constitution of India because they impose unreasonable restrictions on the petitioners fundamental rights guaranteed under the Constitution of India to carry on trade, business or profession as a money lender and the said provisions are also violative of Article 14 of the Constitution of India being arbitrary without having a reasonable nexus with the object sought to be achieved. In para 10-A of the petition, the petitioners have contended that at the relevant time the petitioners had about 145 customers, whom they had advanced loan and out of them 125 were not from the neighbourhood in which the shop of the petitioners is situated. Out of these 145 customers 112 had come for the first time, 43 for the second time and 13 for more than twice. About 140 customers do not belong to the category of rural debtors. These 145 customers includes lawyers, Government servants and traders. According to them none of the petitioners were prosecuted for not complying with the provisions of the Bombay Money Lenders Act, nor any complaint was filed against them to any of the authorities. It is their case that as they advanced loan on the basis of the pledge articles or sureties and as all the customers are not residents of the neighbourhood they have no knowledge about their whereabouts and financial position. In the petition it is also alleged that the petitioners have never visited the place of their debtors at any time nor do they ever know their financial condition or extent of assets or their liabilities. The petitioners have never visited the place of their debtors at any time nor do they ever know their financial condition or extent of assets or their liabilities. The petitioners have never approached personally the customers and it is the customer who seek loan from the petitioners. It is the case of the petitioners that they cannot be termed as unscrupulous creditors but are bona fide money lenders carrying on their business of money lending. The petitioners further contended that the various provisions of the Act have no nexus with the object sought to be achieved and the various definitions including the definition of debtor and worker are wholly arbitrary. The petitioners further contended that the section 48 which bars representation through a legal practitioner is also wholly arbitrary, because it denies the petitioners a reasonable opportunity to put forward their case effectively before the authorities concerned. It is also contended by the petitioners that the provisions of sections 58 and 60 which grants exemption in favour of the various categories of institutions who also carry on business of money lending are also arbitrary because though the petitioners who are individual money lenders and the categories of money lenders referred to in sections 58 and 60 belong to the same class of money lenders a preferential treatment is meted out to the by granting exemption, which is violative of the petitioners fundamental right guaranteed under Article 14 of the Constitution of India. Shri Shah who led arguments on behalf of the petitioners has contended before us that the various provisions of the Debt Reliefs Act in substance destroy the petitioners fundamental right to carry on business. Further persons who have capacity to pay the debts are treated on par with the persons who are not in position to repay the debt. By following the uniform pattern these two classes have been treated equally though they do not belong to the same class. It is also contended by Mr. Shah that the definition of word "worker" is wholly unreasonable and the said definition travels beyond the object of the legislature. It is also contended by Shri Shah that the provisions of the newly added Chapter V-A of the Act are also violative of the petitioners fundamental rights guaranteed under Articles 14, 19(1)(f) and (g) of the Constitution of India. According to Shri Shah the period of one year chosen while defining the term debtor for ascertaining his income in wholly arbitrary and fanciful and does not reflect the real financial position of the person. In a given case because of the natural calamity or otherwise the annual income for a year immediately before the appointed date may be meagre though for the earlier several years as well as the for subsequent years he might be making good fortune. Therefore, in substance it is contended by Shri Shah that laying down a period of one year for ascertaining the income of the debtor is wholly unreasonable and arbitrary and has no nexus with the object sought to be achieved. Shri Shah then contended that so far as worker is concerned his only immovable property is taken into consideration for valuation of his property and the moveable property is wholly excluded from consideration. A persons financial position depends upon not only on the immovable assets but also moveable property in his possession and, therefore, the legislature has arbitrarily acted in excluded from consideration the moveable property of the worker while ascertaining his financial position. Therefore, Shri Shah contended that the said provision is wholly arbitrary, unreasonable and has no nexus with the object sought to be achieved. According to Shri shah the term worker as defined by the Act might include in its import doctors or lawyers, whose income might have been less than Rs. 6000/- in the year preceding the appointed date. Thus the date chosen or the year selected for ascertainment of the financial position or income being wholly arbitrary, the said provision is violative of the petitioners fundamental rights incorporated in Articles 14 and 19 of the Constitution of India. This is more so because the legislature wholly ignores the purpose for which the loan is taken. According to the learned Counsel if the legislature intended to confer a right upon the weak section of the society who are really unable to repay the debts, then the purpose for which the loan is taken as well as average income of the debtor spread over at least 3 years should have been taken into consideration. In a given case a possibility cannot be ruled out that the debtor might have borrowed money for purchasing equipment etc. so as to carry on his own business. Many times it so happens, particularly in rural areas and in the families of working classes that there are more than one earning members in a family. These family members live together and the income is also pooled together. In these circumstances the income of all the members of the family should have been taken into consideration for deciding paying capacity. Further there are in the field other enactments including the Bombay Money Lenders Act and the provisions of these enactments are sufficiently drastic and a person cannot a get a decree in a Court of law unless various provisions of these Acts are satisfied. In these circumstances the legislature should not have included the decree of the Court while defining the terms debtor. According to the learned Counsel the petitioners are not against this socio-economic measure but the way it has been done is wholly arbitrary and the said provision is wholly destructive of their fundamental right to carry on their business, and imposes unreasonable restrictions and is also discriminatory. Therefore, according to the learned Counsel this enactment as a whole should be declared ultra vires of Articles 14 and 19(1)(f) and (g) of the Constitution of India.

(3.) So far as the newly added Chapter V-A is concerned, it is contended by Shri Shah that by the earlier provisions the earlier debts are wholly wiped out and in the year 1979 again this chapter is added depriving the petitioners-money lenders of their legitimate right to recover the amount of loan in lump sum. This whole chapter imposes an unreasonable restriction upon the fundamental rights of the petitioners. The provisions made in this chapter are also arbitrary and according to the learned Counsel the whole enactment is enacted only to achieve a cheap popularity. Shri Shah has also contended that if a person has enough money or property from which he can repay the loan in lump sum, then the provisions made in sections 9 and 40 of the Act for scaling down the debt is wholly unreasonable. Further the percentage of scaling down is also arbitrary and it has no reasonable nexus with the object sought to be achieved. The rate of interest provided is also wholly illusory. On the top of it, though various provisions of the Act and the procedure laid down and prescribed involve determination of serious and complicated questions of law and facts, by section 48 of the Act, the legal practitioners are excluded from appearing before the authorities which in substance amount to denial of giving reasonable opportunity to the petitioners to put forward their case. Therefore, according to the learned Counsel, apart from laying down various arbitrary and fanciful restrictions, which has no nexus with the object sought to be achieved, the whole enactment is so drafted so as to completely destroy the petitioners right to carry on trade, business or profession of money lending and as these provisions are not severable, the whole enactment is liable to be declared as ultra vires of said fundamental rights of the petitioners.