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Banking Regulation Act, 1949 – s.21A – Constitutional validity of – Held: s.21A is valid as it is part of an enactment which, in pith and substance, is relatable to Entry 45, List I of the Seventh Schedule to the Constitution – However, insofar as s.21A incidentally encroaches upon the field of relief of agricultural indebtedness, set out in Entry 30, List II, it will not operate only in States where there is a State Debt Relief Act which deals with the subject matter of relief of agricultural indebtedness, where the State Debt Relief Act covers debts due to “banks”, as defined in those Acts – In States where the State Debt Relief Act does not apply to banks at all, or applies only to certain specified banks, s.21A will, in the former situation, apply in such States, and, in the latter situation, apply only in respect of loans made to agriculturists where such loans are given by banks other than the banks specified or covered by the concerned State Debt Relief Act, as the case may be – Constitution of India – Seventh Schedule List I Entry 45 – Judicial review – Usurious Loans Act, 1918 – State Debt Relief Legislations. Banking Regulation Act, 1949 – s.21A – Non-obstante clause – Interpretation of – Whether s.21A can be said to prevail over State Debt Relief Act in the event of a clash between the two – Held: So far as relief of agricultural indebtedness is concerned, where there is State legislation on the same subject matter which directly clashes with s.21A, s.21A will have to give way to the State Debt Relief Act insofar as relief from agricultural indebtedness due to banks is concerned – The non-obstante clause in s.21A cannot override a State Debt Relief Act in this situation, as Parliament cannot give itself supremacy over State legislation where none exists under the Constitution – If this were not the case, the exclusive power of the States to make laws within List II would become illusory, and “Parliamentary paramountcy” would trap many a beneficent State legislation made within its exclusive domain. Constitution of India – Seventh Schedule, List II, Entry 30 – Interpretation of Entry 30 – The expression “relief of agricultural indebtedness” does not take colour from the expression “money lending and money lenders” preceding it in Entry 30 List II – The two expressions are separated by a semicolon which shows that they are not inextricably connected – Thus, money lending is not restricted to the agricultural sector but includes within its scope money lent to all person including purely commercial transactions – Interpretation of Constitution. Constitution of India – Seventh Schedule, List I, Entry 45 – Banking – Whether s.21A of Banking Regulation Act trenches upon Entry 30, List II – Held: In pith and substance, the Banking Regulation Act fall within Entry 45, List I, but insofar as relief of agricultural indebtedness is concerned, s.21A certainly trenches upon Entry 30, List II – Banking Regulation Act, 1949 – s.21A – Doctrine of pith and substance. Constitution of India – Seventh Schedule, List I, Entry 45; List II Entry 18 and 30 – Agricultural indebtedness, relief of agricultural indebtedness and banking – How they all fall under different Entries – Held: Qua the general entry “banking” under Entry 45, List I, which deals with banks of all kinds and the lending by banks as well as recovery of debts by banks generally, Entry 30, List II, which deals with relief of agricultural indebtedness, is special, for the reason that indebtedness itself is only one species of banking and agricultural indebtedness is a sub-species thereof – The species of indebtedness is within Entry 45, List I, whereas the sub-species of agricultural indebtedness is within Entry 18, List II – It is only relief of agricultural indebtedness, which is a sub-sub-species of indebtedness, which is relatable to Entry 30, List II. Constitution of India – Art.246 – Federal supremacy – Doctrine of pith and substance – Doctrine of incidental trenching and unoccupied field – Once the spheres of both the entries i.e. State List Entry and Union List Entry have been delineated, the doctrine of pith and substance comes in to test whether a particular legislation is referable, as a whole, to an entry in List I or to the competing entry in List II – Once it is found that the legislation as a whole is referable to an entry in List I, but it incidentally encroaches upon an entry in List II, there is no reason for the doctrine of unoccupied field not to apply to federal legislation – The expression “with respect to” appears in all the sub-articles of Art.246, which expression, so far as sub-articles (1) to (3) are concerned, imports the twin doctrines of incidental trenching and unoccupied field, which applies, therefore, to legislation made under sub-articles (1) to (3) of Art.246, thus making it clear that incidental encroachment by Parliament cannot be tolerated when the exclusive field allotted to the State legislature is not unoccupied –The paramountcy principle contained in Art.246, is only taken as a last resort after harmonious construction fails, and, that too, qua entries in competing lists – Once legislation is referable to one list or the other, the doctrine of incidental trenching and unoccupied field would apply equally to both Parliamentary and State legislations. Interpretation of Constitution – Harmonious construction – How Entry 45 of List I and Entry 30 List II to be harmonized – Scope of Art.246 – Where two entries in Union List and State List are irreconcilable – Held: Art.246 only states that where two entries in the Union List and the State List, respectively, have a head-on collision and are irreconcilable, then, as a last resort, the entry in the State List is to give way to the entry in the Union List – But, this is only as a last resort – First, it is incumbent upon the Court to harmonize the entries, if possible, by giving effect to both and not rendering any one of them otiose – Constitution of India – Art.246 – Banking Regulation Act, 1949 – s.21A. Precedent – Binding effect – ratio decidendi – Where a matter is not argued at all by the respondent, and the judgment is one of reversal, it would be hazardous to state that the law can be declared on an ex parte appraisal of the facts and the law, as demonstrated before the Court by the appellant’s counsel alone – That apart, where there is a detailed judgment of the High Court dealing with several authorities, and it is reversed in a cryptic fashion without dealing with any of them, the per incuriam doctrine kicks in, and the judgment loses binding force, because of the manner in which it deals with the proposition of law in question – Also, the ratio decidendi of a judgment is the principle of law adopted having regard to the line of reasoning of the Judge which alone binds in future cases – Such principle can only be laid down after a discussion of the relevant provisions and the case law on the subject – If only one side is heard and a judgment is reversed, without any line of reasoning, and certain conclusions alone are arrived at, without any reference to any case law, such a judgment would not be binding upon apex court – Constitution of India – Art.141 – Doctrine of per incuriam. |
