SADANAND JHA Vs. AMAN KHAN

JUDGEMENT

(1.) This appeal which has been referred to a Full Bench arises out of an action on a mortgage. The only point raised in the Courts below was with regard to the question of interest. The loan was for Rs. 400 and in the plaint a sum of Rupees 1980 was claimed credit having been given for Rupees 281. The trial Judge disallowed compound interest but allowed simple interest at the rate provided by the mortgage bond being Rupee 1-4-0 per mensem. The District Judge on appeal reversed the trial Court's judgment and allowed compound interest at the rate claimed. The appeal raises the question of the validity of Section 11, Bihar Money- lenders Act (Bihar Act 3 of 1938) which is expressly retrospective. It is contended by the appellant that the learned Judge in the Court below had jurisdiction to make a decree in favour of the plaintiff for a sum of interest no greater than the amount of the loan advanced by reason of the provisions of the Section to which I have referred. The Section provides: Notwithstanding anything to the contrary in any other law or in anything having the force of law or in any contract, no Court shall, in any suit brought by a money-lender (in this Act the money-lender is defined as a person who advances a loan) in respect of a loan advanced before or after the commencement of this Act, pass a decree for an amount of interest for the period preceding the institution of the suit which together with any amount already realised as interest through the Court or otherwise, is greater than the amount of the loan advanced or, if the loan is based on a document, the amount of loan mentioned in the document on which the suit is based. On behalf of the respondents, Mr. Jha contends that the Federal Legislature being paramount with regard to subjects of which Contract (No. 27) is one, enumerated in List III of Schedule 7, Government of India Act (25 & 26, Geo. V, Ch. 42), and money lending being a branch of the law of Contract the Section is void as being repugnant to the "existing Indian law." The arguments proceeded in the first place on the footing that the legislation was ultra vires the Provincial Legislature. Although, that in one aspect may be a correct designation of the problem before us, it would appear that the question is more limited, as there can be no doubt that Parliament having conferred on the Provincial Legislature the power to legislate with regard to "trade and commerce within the Province, markets and fairs, money-lending and money- lenders" (Item 27), the legislation in question is within the competence of the Legislature. The question is the narrower one, whether the provisions of the Act with which we are concerned is repugnant to "existing Indian law" as I have already stated. The case depends upon the proper construction to be placed upon Part 5 of the Government of India Act 1935 and the three lists given in Schedule 7 of the Act. More particularly are we concerned with Secs.100 and 107 and two items in two lists. Section 99 of Part 5, Government of India Act, distributes generally legislative powers to the Federal Legislature for the whole or any part of British India or for any Federated State," and to the Provincial Legislature for the Province. We are not concerned with the subject-matter of Sub-section 2 of Section 99. Section 100 deals with the distribution of the legislative powers in detail. Sub-section (1) of that Section provides that: Notwithstanding anything in the two last succeeding Sub-sections the Federal Legislature has, and a Provincial Legislature has not, power to make laws with respect to any of the matters enumerated in List I.

(2.) The next succeeding sub-section confers powers on the Federal Legislature and the Provincial Legislatures with regard to the Concurrent Legislative List, List III, and Sub-section 3 confers power on the Provincial Legislature to make laws for the Province, excluding the right of the Federal Legislature to legislate in respect of the matters enumerated in the Provincial Legislative List, List II. To be more specific, Sub-section 2 relating to the Concurrent Legislative List confers the power referred to "notwithstanding anything in the next succeeding Sub-section" (that is, Sub-section 3 giving the Province power with respect to the Provincial Legislative List) and confers power on the Provincial Legislature with respect to the same List which power is "subject to Sub-section 1" granting exclusive power in respect of the Federal Legislative List to the Federal Legislature. And again, the power conferred upon the Provincial Legislature in respect of the Provincial Legislative List by Sub-section 3 is subject to the power conferred in the two preceding Sub- sections, (Federal and Concurrent Legislative Lists).

(3.) It was contended by Mr. P.R. Das on behalf of the appellant in his able argument, that the Section properly construed plainly meant that the legislative powers were distributed to the Federal Legislature and the Provincial Legislature and those powers were mutually exclusive, but whilst admitting that the subjects of legislation, as contained in the Lists could not be put into water-tight compartments, he contended that the Provincial Legislature when legislating on a subject contained in the Provincial List or with regard to a subject the-dominant character of which or the "pith: and substance" of which [as to the application of these tests, see Attorney-General for Ontario V/s. Reciprocal Insurance (1934) A.C. 337, see-also Gallagher V/s. Lynn (1937) A.C. 863 ] properly brought the legislation in question withins a subject assigned to the Provincial Legislature, such legislation could not be considered beyond the powers of the Provincial Legislature and therefore could not be questioned. That may be true, but on a plain, reading of the Section, it seems to me to be abundantly clear that Parliament intended in this Section that the Federal Legislature-should be paramount with regard to all matters enumerated in the three Lists and it is that situation with which we have to deal. I am of the opinion that the argument does not correctly state the nature of the problem before us. It appears from this Section that the Federal Legislature was given exclusive power to legislate with regard to those subjects enumerated in. List I of Schedule 7, and those powers are untrammelled by the powers given to the Provincial Legislature in respect to the subjects enumerated in the Provincial List and the Concurrent List. Again, upon the Federal Legislature is conferred the power to legislate with regard to certain subjects, enumerated in the Concurrent List notwithstanding any power conferred upon the. Provincial Legislature to legislate with regard to that List or with regard to the-subjects enumerated in List II. But the same concurrent power given to the. Provincial Legislature is cut down by the exclusive power granted to the Federal Legislature, and finally the exclusive power given to the Provincial Legislature to legislate in its own field under List II, is conditioned by the exclusive power granted to the Federal Legislature with regard to List I and the concurrent power under List III.