KAILASCHAND KHUSALCHAND BAKLIWAL Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THIS group of petitions under Article 226 of the Constitution of India raises a common question relating to the constitutional validity of the Maharashtra Debt Relief Act, 1975 (Act III of 1976)(hereinafter referred to as 'the Act') which came into force on January 3, 1976. Some of these petitions have been filed on the Appellate Side of this Court at Bombay and some petitions which were originally filed before the Nagpur Bench were transferred to this Court for hearing and counsel appearing in these cases from Nagpur have also been heard. Similarly, Miscellaneous Petition No. 997 of 1975 which was originally filed on the Original Side of this Court challenging the Maharashtra Debt Relief Ordinance, 1975 (VII of 1975)(hereinafter referred to as 'the Ordinance') has been referred to the Division Bench to be heard along with the other petitions on the appellate side and Mr. P.A. Mehta along with Mr. H.K. Shah appeared for the petitioners in that petition. After the Ordinance stood repealed and was replaced by the Act, the said petition was duly amended raising a challenge to the constitutional validity of the Act. Another petition filed on the Original Side which has also been referred to the Division Bench was Miscellaneous Petition No. 4 of 1976 in which Mr. M. Soochak appeared for the petitioner.

(2.) THE main argument in this group of petitions on behalf of the petitioners were addressed by Mr. Soli Sorabjee appearing in Special Civil Applications Nos. 2065 of 1975 and 2060 of 1976, Mr. P.A. Mehta appearing in Miscellaneous Petition No. 997 of 1975, Mr. M.L. Pendse appearing in Special Civil Application No. 1046 of 1976 and Mr. Rana appearing in Special Civil Application No. 2071 of 1976 and Mr. V. Mohta appearing in the petitions transferred from the Nagpur Bench addressed arguments on some additional points. The case of the State of Maharashtra in support of the Act was argued by the learned Advocate -General Mr. R.W. Adik.

(3.) AT this stage we will not refer in detail to the provisions in the Act. Reference to them will be made later while considering the challenge made to almost each of the provisions of the Act. Reference must, however, be made at the outset to the substantive provisions in the Act contained in Sections 4, 14 and 15. Indeed the main provision which came in for a very vehement and concentrated attack from the petitioners was the one contained in Section 4 of the Act and it is, therefore, necessary to refer to that section in detail at the outset. But before that it is necessary to refer to Section 3 of the Act which was intended to revive debts which stood discharged as a result of the provisions of Clause 3 of the Ordinance. Section 3 of the Act provides as follows: Notwithstanding anything contained in the Maharashtra Debt Relief Ordinance, 1975, all debts of a debtor which stood discharged on the appointed day under the provisions of that Ordinance shall, on the commencement of this Act, stand revived; and accordingly, the provisions of the said Ordinance as amended by this Act as herein provided shall operate in relation to all such revived debts as if those provisions were always amended and in operation on the appointed day. The obvious object of Section 3 of the Act was, to a certain extent, to undo the effect of Clause 3 of the Ordinance under which fictionally every debt outstanding on the appointed day, that is, August 22, 1975 including the amount of interest, if any, payable by a debtor to a creditor was to be deemed to be fully discharged for, unless those debts were revived, no provision in respect of those debts could have been made in the Act especially when the Act introduced certain modifications in regard to the substantive provisions and in regard to the persons who would, under the Act, be entitled to the benefit thereof. Section 4 which is included in Chapter III which is headed as 'Liquidation of Certain Debts' then reads as follows: Notwithstanding anything contained in any other law for the time being in force or in any contract or other instrument haying force by virtue of any such law, and save as otherwise expressly provided in this Act, every debt of a worker whose immovable property if any, does not exceed twenty thousand rupees in market value and every debt of any other debtor, outstanding on the appointed day, including the amount of interest, if any, payable by a debtor shall be deemed to be wholly discharged; and the consequences as hereinafter set forth shall, with effect from the appointed day, ensue namely: (a) no such debt due from a debtor on the appointed day shall be recoverable from him or from against any moveable or immovable property belonging to him, nor shall any such property be liable to be attached and sold or proceeded against in any manner in the execution of any decree or order relating to such debt against him; (b) no civil court shall entertain any suit or proceeding against such debtor for the recovery of any amount of such debt, including interest, if any: Provided that, where a suit or proceeding is instituted jointly against such debtor or any other person, nothing in this clause shall apply to the maintainability of a suit or proceeding in so far as it relates to such other person; (c)all suits and proceedings (including appeals, revisions, attachment or execution proceedings) pending on the appointed day for the recovery of any such debt against such debtor shall abate: Provided that nothing in this clause shall apply to the sale of (i) any movable property, held and concluded before the appointed day; (ii) any immovable property, confirmed before such day; (d) every debtor undergoing detention in a civil prison in execution of any decree for money passed against him by a civil court in respect of any such debt shall be released; (e) every property pledged or mortgaged by such debtor shall stand released in favour of such debtor, and the creditor shall be bound to return the same to the debtor forthwith on the debtor making an application in writing in that behalf; and the creditor shall pass a receipt to the debtor of having received the application. If the creditor refuses to pass a receipt, then the debtor may get the application endorsed to that effect under the signature and date of any of the officers referred to in Section 6 or by any person authorised by them in this behalf. Explanation 1. -Nothing in this section shall be construed to entitle any such debtor to the refund of any part of a debt already repaid by him or recovery from him before the appointed day. Explanation 2. -For the purposes of this section, the expression 'debt of a worker' includes a debt arising out of loans taken from more than one creditor. At this stage it is necessary to refer to certain definitions in the Act. Section 2(e) defines 'debt' as meaning 'any liability, in cash or kind, outstanding on the appointed day, being a liability arising out of a loan (with interest if the loan is taken by a worker, and with or without interest, in any other case), whether secured or unsecured, due from a debtor whether payable under a decree or order of any court or otherwise.' A 'debtor' is defined in Section 2(f) as meaning 'a marginal farmer, rural artisan, or rural labourers whose total income from all sources did not exceed two thousand and four hundred rupees during the year immediately before the 1st day of August 1975 and a worker whose total income from all sources did not exceed, if living in an urban area six thousand rupees during the year immediately before the said date, and if living elsewhere four thousand and eight hundred rupees during that year.' The 'marginal farmer' was defined in Section 2(h) as 'an agriculturist who holds land measuring not more than one hectare of unirrigated land and includes an agriculturist who cultivates as a tenant or share cropper land measuring not more than one hectare of unirrigated land'. A 'rural artisan' was denned in Section 2(k) as 'a person who principally earns his livelihood in a rural area by practising any craft either by his own labour or with the help of labour of the members of his family but does not include an artisan who resides in an urban area.' A 'rural labourer' was defined in Section 2(k) as 'a person who (i) does not hold any land in rural area, (ii) may or may not have any homestead therein, and (iii) earns his livelihood principally by manual labour, but does not include any such labourers residing in an urban area and a rural artisan.' The Act defined a 'small farmer' in Section 2(m) as meaning 'an agriculturist who holds land measuring more than one hectare of unirrigated land but less than two hectares of such land and who cultivates personally such land and includes an agriculturist who cultivates as a tenant or a share cropper land measuring more than one hectare of unirrigated land but not more than two hectares of such land.' There are two Explanations to Clause (m) of Section 2 of the Act. Under Explanation I it is provided that a person belonging to a Scheduled Caste, Scheduled Tribe, Nomadic Tribe or Vimukta Jatis shall be deemed to be small farmer irrespective of the extent of unirrigated land held and cultivated by him as aforesaid. Explanation II provides: Nomadic Tribes' and 'Vimukta Jatis' means Nomadic Tribes and 'Vimukta Jatis determined as such by the State Government from time to time. The only other definition which needs to be referred to is the definition of 'worker' in Section 2(o) which provides that 'worker' means a person who earns his livelihood through any profession, calling or trade and also a person who is working in any factory (including a badli worker therein)'. By Explanation to Clause (o) the expression 'factory' was to have the same meaning assigned to it in the Factories Act, 1948, with the modification that the limitation on the number of workers working therein shall be dispensed with and the expression 'badli worker' meant a worker who is provided with a badli card and who is employed in a factory in place of another worker who is temporarily absent and whose name is borne on the muster -roll of the factory.