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Ramkishan Agarwal and anr. Vs. the Collector, Jabalpur and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 722 of 1976
Judge
Reported inAIR1977MP21
ActsConstitution of India - Articles 31, 31(1), 46, 226 and 301 ;Madhya Pradesh Gramin Rin Vimukti Tatha Rin Sthagan Adhiniyam, 1975 - Sections, 5A; Madhya Pradesh Act, 1975
AppellantRamkishan Agarwal and anr.
RespondentThe Collector, Jabalpur and ors.
Appellant AdvocateR.K. Pandey, Adv.
Respondent AdvocateS.L. Saxena, Govt. Adv.
DispositionPetition dismissed
Cases Referred(Meghraj v. State of M. P.). Besides
Excerpt:
.....to agriculturists and also containing a threat that in case there was a slightest negligence, the authorities will be compelled to take hard and strong steps. the creditors in general have not well tested the provisions of the act. they avoid to return the property on one pretext or the other, at times the creditors ill-treat the debtors and many complaints of ill-treatment meted out to poor debtors are pouring in. there is no material before us to think that senior revenue officers like the collector or the sub-divisional officer, who should be quite experienced and aware of their jurisdiction, would arrogate to themselves powers which are not conferred on them by the act, or abuse their powers......provides for penalties, (1) no creditor shall refuse to return or re-deliver possession to the debtor of the property pledged or mortgaged by him, which stands released or redeemed in favour of such debtor under the act. (2) a creditor is prohibited from accepting any payment against any claim for such debt which has been discharged, or the recovery of which has been suspended under the act. (3) for contravention of either (1) or (2) above, punishment with imprisonment which may extend to one year or fine which may extend to rs. 1,000 has been provided.8. these special rights have been conferred on such debtors and the above-said liabilities have been imposed on their creditors. the abovesaid categories of debtors have been defined in the act as follows:--'3 (e) 'landless.....
Judgment:

Shiv Dayal, C.J.

1. By this petition under Articles 226 and 227 of the Constitution of India, the constitutional validity of the Madhya Pradesh Gramin Rin Vimukti Tatha Rin Sthagan Adhiniyam, 1975 (No. 37 of 1975) has been challenged. It is contended that the different provisions of the impugned Act are ultra vires the Constitution. It seeks a writ to restrain the respondents from enforcing their orders served on the petitioners through the Patwari to produce all the pledged ornaments before the Sub-divisional Officer, Jabalpur.

2. The petitioners carry on the business of money-lending. They advance money to the members of Scheduled Castes and Scheduled Tribes, to small and marginal farmers and also to others who are not covered by the Act. It is averred in the petition that on July 18, 1976, respondents Nos. 3 and 4, who are Patwaris, approached the petitioners and told them that they were required to produce all the pledged ornaments involved in their money-lending business end the account books before the Sub-divisional Officer, Jabalpur, at Camp Barela on July 25, 1976, with a view to return them. The Patwaris took their signatures on a piece of paper in token of the intimation given to them, of these orders of respondents Nos. 1 and 2 (the Collector and the S.D.O. respectively). The Patwaris refused to supply them with a copy of the order, but told them that notices were being issued to them for production of the ornaments as per the orders of the Collector and the Sub-divisional Officer, Jabalpur.

3. The petitioners contend that the State Government had no legislative competence to pass the impugned Act, the subject-matter of which is not covered by any of the Entries, either in List II or List III. The effect of the Act is to extinguish the debts due to the debtors enumerated in the Act and to enable such debtors to receive back their pledged movable and mortgaged immovable properties without repaying the debts, for which they pledged them as security. The impugned Act does not take into account the extent of property and the paying capacity of the debitors. It extinguishes their debts even though theirproperties may be worth more than the debts and they may have the capacity to discharge their debts. There is no limit on the amount of debt, which will be discharged. Thus, the petitioner's fundamental rights guaranteed under Article 19(1) (f) and (g) and also under Article 301 of the Constitution are violated. The Act robs or deprives the petitioners of their money without anything being paid to them in return, either fully or proportionately, either immediately or by instalments, and thus infringes the rights guaranteed by Article 19 of the Constitution.

4. The object of the Act is to provide relief from indebtedness to members of the Scheduled Castes and Scheduled Tribes, small and marginal formers, landless agricultural labourers and rural artisans in rural areas. The reliefs, which the Act affords to them, except to small farmers, are contained in Section 4 of the Act, which may be summed up thus:--

(a) Every debt advanced before the commencement of the Act (including interest) payable by the persons of the above classes shall be deemed to be wholly discharged.

(b) Jurisdiction of the Civil Court is barred for the recovery of such debts.

(c) Execution and other proceedings in respect of any decree, whether for money or sale, or foreclosure, shall stand withdrawn and the property of the debtor under attachment shall forthwith be released.

(d) Every such debtor in detention in civil prison shall be released.

(e) All suits and proceedings pending against such debtors shall abate.

(f) Every property pledged shall stand released in favour of such debtor and the creditor shall be bound to return the same to the debtor forthwith.

(g) Every mortgage executed by such debtor shall stand redeemed and the mortgaged property shall be released in favour of such debtor.

5. Section 5 provides for reliefs to small farmers, which may be summed up as follows:--

(i) Recovery of every debt advanced before the commencement of the Act shall stand suspended for a period of one year from the date of its commencement.

(ii) Any proceeding pending for recovery in any 'civil Court shall standpostponed till the expiry of the said period of suspension.

(iii) No Civil Court shall entertain any suit or proceeding for the recovery of such debt during the period of such suspension.

The State Government is empowered to extend the said period of suspension by a further period not exceeding one year at a time.

6. Section 6 provides for exceptions. The Act does not apply to (a) any rent in respect of property let out to such debtor; (b) any liability arising out of breach of trust or any tortious liability; (c) any liability in respect of wages or remuneration for service rendered; (d) any liability for maintenance under a decree or otherwise; (e) debt due to the Central Government or any State Government or any local authority or a banking company, or any co-operative society or any Government society; and (f) price of goods purchased by such debtor,

7. By Amendment Act No. 29 of 1976, Section 5-A has been introduced, which provides for penalties, (1) No creditor shall refuse to return or re-deliver possession to the debtor of the property pledged or mortgaged by him, which stands released or redeemed in favour of such debtor under the Act. (2) A creditor is prohibited from accepting any payment against any claim for such debt which has been discharged, or the recovery of which has been suspended under the Act. (3) For contravention of either (1) or (2) above, punishment with imprisonment which may extend to one year or fine which may extend to Rs. 1,000 has been provided.

8. These special rights have been conferred on such debtors and the above-said liabilities have been imposed on their creditors. The abovesaid categories of debtors have been defined in the Act as follows:--

'3 (e) 'Landless agricultural labourer' means a person who does not hold any agricultural land and whose principal means of livelihood is manual labour on agricultural land.

(k) 'Rural artisan' means a person who does not hold any agricultural land and-

(i) whose principal means of livelihood is production or repair of traditional tools, implements and other articles or things used for agriculture or purposes ancillary thereto; in rural area; or

(ii) who normally earns his livelihood by practising a craft either by hisown labour or by the labour of the member of his family in rural area.

(g) 'Marginal farmer' means an agriculturist, who,--

(i) in case of a member of Scheduled Caste or Scheduled Tribe holds not exceeding one hectare of irrigated or two hectares of unirrigatetd agricultural land and who cultivates personally such land;

(ii) in case of a person other than a member of Scheduled Caste or Scheduled Tribe, holds an agricultural land not exceeding half hectare of irrigated or one hectare of unirrigated land and who cultivates personally such land.

(I) 'Small farmer' means an agriculturist other than a member of Scheduled Caste or Scheduled Tribe who holds more than half hectare of irrigated or one hectare of unirrigated but not exceeding one hectare of irrigated or two hectares of unirrigated agricultural land and who cultivates personally such land.'

From these definitions, it can clearly be seen that the persons who have been afforded the statutory protection constitute a very weak section of the society. Their means are evidently negligible. Such persons are presumably unable to pay any debt and they go on paying interest. That too may perhaps be endless. They may never be in a position to repay the whole of the principal.

9. Article 46 of the Constitution contains one of the directive principles of State policy as follows:--

'The State shall promote with special care the educational and economic interests of the weaker sections of the people and in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation.'

This Article envisages exploitation of such debtors as are defined in the Act and aims at their protection from such exploitation.

10. We have no doubt that the State Legislature was competent to enact this law which falls within Entry 30, List II of the VIIth Schedule to the Constitution:--

'30. Money-lending and money-lenders; relief of agricultural indebtedness.'

It was an argument that the expression 'agricultural indebtedness' in this Entry refers to debts incurred in connection with agriculture only so that in every case it will be a matter for trial whether the debt was incurred in connection with agriculture exclusively. We do not acceptthis narrow interpretation. In our opinion, the Entry must be read as a whole so that the word 'agricultural' must be interpreted to harmonise it with 'money-lending and money-lenders'. The framers of the Constitution have, by this Entry, empowered the State Legislature to relieve agriculturists of their indebtedness Relief to agriculturists must be the true import of the expression. Irrespective of whether the indebtedness be agricultural or non-agricultural, all debts will fall within the scope of this Entry, if they are incurred by an agriculturist, whether in connection with agriculture or otherwise.

11. In Niemla Textile Finishing Mills Ltd. v. The 2nd Punjab Tribunal, 1957 SCR 335 = (AIR 1957 SC 329), their Lordships held that the entries in the legislative list should not be given a narrow construction. They include within their scope and ambit all ancillary matters which legitimately come within the topics mentioned therein.

12. In Chaturbhai v. Union of India, (1960) 2 SCR 362 = (AIR 1960 SC 424), it was held that in the interpretation of the scope of the entries, the widest possible amplitude must be given to the words used and each general word must be held to extend to ancillary or subsidiary matters which can fairly be said to be comprehended in it.

13. In Waverly Jute Mills v. Reymon & Co., (1963) 3 SCR 209 = (AIR 1963 SC 90), it was held that it is well established rule of construction of the Entries in the list that they should be interpreted broadly and not in a narrow sense. They must not be so construed as to render them futile or otiose.

14. Then, again, in Banarsi Dass v. Wealth Tax Officer, AIR 1965 SC 1387, the Supreme Court reiterated that the relevant words used in the Entries of the 7th Schedule must receive the widest interpretation and it has been further observed that it is not reasonable to import any limitation in interpreting a particular Entry in the list by comparing it or contrasting it with any other Entry in that very list. While the Court is deter-mining the scope of the area covered by a particular Entry, the Court must interpret the relevant words in the Entry in a natural way and give the said words the widest interpretation.

15. The Kerala Agriculturists Debt Relief Act was held to be within the purview of Entry 30 of the StateList in Chalapuram Bank v. Mammad Koya, 1961 Ker LT 470.

16. In Khajamian Wakf Estates etc. v. State of Madras, Civil Appeal No. 2480 and others of 1966 and some other appeals of 1967 and some others of 1968, decided on November 18, 1970 = (reported in AIR 1971 SC 161) their Lordships of the Supreme Court laid down thus:--

'It was next urged that the provisions in the impugned Acts reducing the liability of the tenants in the matter of payment of arrears of rent, whether decreed or not was beyond the legislative competence of the State Legislature. This contention is again untenable. These arrears are either arrears of rent or debts due from agriculturists. If they are treat-ed as arrears of rent then the State Legislature had legislative power to legislate in respect of the same under Entry 18 of List II of the VIIth Schedule. If they are considered as debts due from agriculturists then the State Legislature had competence to legislate in respect of the same under Entry 30 of the same list.'

(Underlining by us)

We think that this high authority of the Supreme Court directly supports us in the view we take.

17. Section 5-A is also valid. It is a provision of necessity because when such a law is made to give relief to the weaker sections of the society, there must be legislative sanction behind it and contravention of the provision must be made punishable, otherwise, creditor from whose exploitation protection is afforded, may not care to comply with the law.

18. We, therefore, hold that there was legislative competence in the Madhya Pradesh State Legislative Assembly when it enacted the Madhya Pradesh Gramin Rin Vimukti Tatha Rin Sthagan Adhiniyam, 1975 (Act No. 32 of 1975) and its Amendment Act No. 29 of 1976, whereby Section 5-A was enacted.

19. It was then contended by the learned counsel for the petitioner that there is no special machinery provided in the Act to enforce the rights and obligations under it. This is right, whereas special rights have been conferred on the weaker sections of the society that their properties, movable and immovable will be released and possession restored to them, the question is if the creditor does not comply with it voluntarily, where isthe forum to enforce it, except under the general law, i.e., by taking recourse to a civil suit? That procedure, as is well-known, is an intricate and lengthy one. It is a matter of common experience that it takes many years for a weaker party to get a decree, with practically no means and perhaps no time to indulge in litigation against a strong creditor who may be well to do and who can afford to protract litigation and thus frustrate and defeat the very object of the Act. Besides, even in the case of an honest and well meaning creditor, who may be willing to restore only that property which really belongs to such debtors but no other, there has to be, at any rate, a special forum, in the absence of which the only remedy is by a suit in the civil Court. Leaving them to resort to a civil suit would itself work hardship particularly to such weaker sections of the society.

The creditors are also to be protected against ill-advised or motivatively instigated debtors from claiming movables and immovables, when the same is not due. In this State, it is a matter of very common experience that there have been numerous cases in which deeds embodying out and out sale have been assailed as fictitious or nominal, which could have never been intended as sale deeds but as having been got executed merely as security for repayment of the debts. And there have also been cases where genuine sale deeds have been falsely alleged to be bogus or nominal, or to have been intended merely as security for repayment of debts. In the absence of a special forum, it is only the Civil Court which can determine such disputes.

20. There is nothing in the Act which empowers either the Collector or the Sub-divisional Officer to institute any proceeding before them to give relief under the Act; for instance, either to declare that any debt is wholly discharged or to enforce the release of any property, movable or immovable, and to put the debtor in possession thereof. No doubt, in case of such contravention as may fall within the mischief of Section 5-A, the authorities may prosecute the offender-creditor.

21. However, in the case before us, it has been stated by the respondents in the return that they did nothing except to apprise the debtors and creditors residing in villages, of their respective rights and obligations flowing from theAct and to warn the creditors that in case of contravention of the provisions of the Act, they are liable to be prosecuted. This, in our opinion, cannot be said to mean coercion, i.e. exercise of any force or compulsion. If the Revenue authorities, who are intimately connected with the rural population, have shown any zeal or enthusiasm in protecting the rights of the debtors conferred by, or the obligations of the creditors imposed by the Act, it is only commendable because, otherwise, these categories of debtors would not even know what rights the lawgivers have conferred on them. They are illiterate and hardly come in contact with lawyers or legislators. On the other hand, if any revenue officer has over-stepped his powers and tried to arrogate jurisdiction of the civil Court in initiating or taking cognizance of any suit or proceeding for judicial determination of such rights or obligations, such acts of theirs would be struck down as null and void being ultra vires the law.

22. In the present case, there is no evidence of any such high-handedness or outrage on the part of any of the respondents.

23. The next contention is that while the impugned Act deprives the petitioners of their property, it does not provide for compensation to be paid to them. Therefore, the Act invades the petitioner's fundamental right under Article 31 of the Constitution. There can be no doubt that where the Act applies, it deprives the creditors of their right to recover the debt or retain the pledged articles or mortgaged property for some time or for all time. All this is 'Property' within the meaning of Article 31. The term 'property' includes every possible interest which a party may have in property. It includes both movable and immovable property; for instance, the right of a mortgagee of a house partakes the nature of immovable property. (See State of Bombay v. F.N. Balsara, 1951 SCR 682 = (AIR 1951 SC 318 at p. 328). In State of M.P. v. Ranojirao, (1968) 3 SCR 489 = (AIR 1968 SC 1053), it has been held that a right to a sum of money is property. Therefore the Act deprives moneylenders of their property within the meaning of Article 31(1) of the Constitution, which runs thus:--

'No person shall be deprived of his property save by authority of law.'

However, the right to compensation is bestowed by Article 31(2), which provides that no property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning'. But it is enacted in Clause (2A) of the same Article:--

'Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property.'

Therefore, the petitioners are not entitled to any compensation inasmuch as they are deprived of their property (i) by authority of law; and (ii) the Act does not provide for transfer of ownership or right to possession of any property to the State or to a corporation owned or controlled by the State. This contention must also, therefore, be rejected,

24. It is also a contention of the petitioners that the Act infringes the right under Article 301 of the Constitution, which confers the right of free trade, commerce and intercourse throughout the territories of India. We do not see any substance in this contention. That Article confers freedom as of right to free movement of persons or things, tangible or intangible, commercial or non-commercial, unobstructed by barriers, inter-State or intra-State or any other impediments operating as such barriers. As held by their Lordships in Automobile Transport Ltd. v. State of Rajasthan, (1963) 1 SCR 491 = (AIR 1962 SC 1406):--

'All obstructions or impediments, whatever shape they may take, to the free flow or movement of trade or noncommercial intercourse offend Article 301 of the Constitution.'

Thus, this Article, when read in its proper context and subject to the limitations prescribed by other Articles in Part XIII, must be regarded as imposing a constitutional limitation on the legislative power of Parliament and the State Legislatures. This Article will be violated when restrictions are imposed at the frontiers of any State or at any stage, prior or subsequent. But, as is clearly seen from the provisions of the impugned Act, no such restriction or barrier has been imposed. The liquidation of any debt is no obstruction or barrier on the right of free trade, commerce and intercourse conferred by this Article, It relates to previous transactions. This contention must be rejected as untenable and misconceived.

25. We have also heard Shri Awasthy in Misc. Petition No. 730 of 1976 (Regd. Partnership Firm 'Dhannilal Labhchand' and 11 Ors. v. State of M. P.); and in Misc. Petition No. 824 of 1976 (Meghraj v. State of M. P.). Besides these questions which we have discussed above, Shri Awasthy's complaint is that notices were issued by the Patwari requiring the petitioners to appear before the Sub-divisional Officer on the specified date and at the specified time and place, with account books and ornaments for the purpose of returning them to agriculturists and also containing a threat that in case there was a slightest negligence, the authorities will be compelled to take hard and strong steps. In the return filed by the respondents, it has been stated that under the Law, the debtors have been discharged of the debts.

The creditors in general have not well tested the provisions of the Act. They avoid to return the property on one pretext or the other, At times the creditors ill-treat the debtors and many complaints of ill-treatment meted out to poor debtors are pouring in. To avoid the unpleasant situation, it has been thought out that meetings of debtors and creditors should be summoned and creditors should be advised to return back the pledged ornaments only to those debtors who come under the various categories as given in the Act and who stand discharged from debts. Nobody is forced to attend the meeting, and nobody is forced to return the ornaments. In case any creditor neglects the advice or avoids to return the pledged ornaments; the debtors are advised to make a complaint before the competent Magistrate. There is neither any force nor coercion behind the advice tendered.

The creditors, particularly the petitioners in the present case, are making a, mountain of a mole hill......' It may beseen, that the notices which were issued to the petitioners to appear before the Tahsildar or other Revenue Officers were for dates which have expired; for instance, June 8, 1976; August 20, 1976; and so on. Shri Awasthy vehemently told us at the hearing that the Revenue Officers harassed the petitioners and warnedthem of dire consequences if they would not appear on the dates to be fixed hereafter and that if they would not obey the Sub-Divisional Officer, they would be detained under MISA. The Revenue Officers are thus compelling and bringing undue pressure upon them to submit to an assumed jurisdiction which they have not.

The learned Advocate-General denies all these allegations. There is no material before us to think that senior Revenue Officers like the Collector or the Sub-Divisional Officer, who should be quite experienced and aware of their jurisdiction, would arrogate to themselves powers which are not conferred on them by the Act, or abuse their powers. Shri Pandey and Shri Awasthy both insisted that we should issue directions to the respondents not to fix another date in future, or to summon the petitioners. In our opinion, it is not necessary to issue any such anticipatory writ, when the petitioners have not produced before us any notice issued by the respondents for any future date, nor have they made any statement on affidavit about any threatened action to be taken hereafter.

26. This petition is, therefore, dismissed. Parties shall bear their own costs. The amount of security shall be refunded to the petitioners.


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