BALMUKUND JAINARAYAN MARWADI Vs. GADI NARAYAN PATIL KEDAR

JUDGEMENT

(1.) THIS appeal seeks to challenge the validity of Section 10(2), C.P. and Berar Relief of Indebtedness Act (14 of 1939), which enables the Debt Relief Courts to reduce the principal of a debt in the case of a loan originally advanced before 1st January 1932 in accordance with Schedule 2 to the Act. The contention is that neither the Federal nor the Provincial Legislature has power to reduce the principal of a debt, and secondly, that even if it be assumed that the matter falls within the concurrent list in Schedule 7, Government of India Act, 1935, then inasmuch as the Act in question was not reserved for the consideration of the Governor-General as contemplated by Section 107(2), Government of India Act, the provision is ultra vires. When any legislation empowers a Court or other body to reduce the principal of a debt, it interferes with the law of contract, that is to say, with the existing Indian.law. Contract is item 10 in the concurrent list, therefore under Section 107(2) a Provincial Legislature can interfere with contracts, provided the measure is reserved for the consideration of the Governor-General and receives his assent. If, however, the bill is not reserved for consideration, it can still be validated, by receiving the subsequent assent of the Governor. General. This saving clause is to be found in Section 109(2). That section runs as follows: No Act of... a Provincial Legislature and no provision in any such Act, shall be invalid by reason only that some previous sanction or recommendation was not given, if assent to that Act was given.... (b) where the previous sanction or recommendation required was that of the Governor General...by the Governor General....

(2.) THE Act in question received the assent of the Governor General sometime before 18th July 1939 when it was published in the Central Provinces and Berar Gazette Extraordinary. It therefore received this assent before it became law, and whether it had been reserved for his consideration or not becomes immaterial. The provision is intra vires, The other questions raised in the appeal are no longer open to review in this Court because the matters raised have been settled by the Federal Court in Subramanyan v. Muttuswami Goundan A.I.R. 1941 F.O. 47 The appeal fails and is dismissed with costs.