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Gonela Krishnamurthy and anr. Vs. Kalidindi Venkateswaran (Died) and ors. - Court Judgment

LegalCrystal Citation
CourtChennai High Court
Decided On
Case NumberAppeal against order No. 194 of 1948
Reported inAIR1952Mad11; (1951)2MLJ366
ActsDebt Law; Madras Agriculturists' Relief Act, 1938 - Sections 4; Constitution of India - Articles 14 and 19; Transfer of Property Act, 1882 - Sections 58
AppellantGonela Krishnamurthy and anr.
RespondentKalidindi Venkateswaran (Died) and ors.
Appellant AdvocateM.S. Ramachandra Rao and ;N. Sethumadhawa Rao, Advs.
Respondent AdvocateV. Subramanyam, Adv.
DispositionAppeal dismissed
Cases ReferredIn Chintaman Rao v. The State of Madhya Pradesh
madras agriculturists' relief act (iv of 1938)--india vires--not repugnant to articles 14 and 19 (1) (f) of the constitution of india, 1950; the provisions of act iv of 1938 are not repugnant to any of the provisions of the constitution of india and are certainly intra vires thereof. the right of equality before law is not offended by any of the provisions of the act in its sphere of enforecement. it is enforeceable against all persons coming within the ambit of the act without any distinction being made on any ground whatsoever. the exemptions are based upon reasonable classification. looked at from any point of view it cannot be stated that act iv of 1938 places arbitrary restriction on the acquistion, holding and disposal of property. - - 1. this is an appeal preferred against the order made by the learned district judge of krishna in o. p. no. 11 of 1915.2. the facts are: the respondent before us and his late undivided brother narasimha rao borrowed a sum of rs. 1600 from the deceased. anjaneyulu father of appellants 1 to 3 and executed a registered mortgage deed in his favour, subsequently on 9-5-1931 the mortgagors executed ex. b.1 styled as a deed of sale in respect of the immovable property for a bum of rs. 1682 8-0 of a portion of the hypotheca plus an additional extent making the total extent sold larger in extent and undoubtedly in value though we have no specific evidence on that point, than the original hypotheca. this deed of bale contained the usual covenants of sale and stipulated the following condition to.....
1. This is an appeal preferred against the order made by the learned District Judge of Krishna in O. P. no. 11 of 1915.

2. The facts are: The respondent before us and his late undivided brother Narasimha Rao borrowed a sum of Rs. 1600 from the deceased. Anjaneyulu father of appellants 1 to 3 and executed a registered mortgage deed in his favour, Subsequently on 9-5-1931 the mortgagors executed EX. B.1 styled as a deed of sale in respect of the immovable property for a Bum of Rs. 1682 8-0 of a portion of the hypotheca plus an additional extent making the total extent sold larger in extent and undoubtedly in value though we have no specific evidence on that point, than the original hypotheca. This deed of Bale contained the usual covenants of sale and stipulated the following condition to reconvey:

"You and we have agreed that in case, within three years from now onwards, that is, before 8-5 1934, we pay to you the amount remaining after deducting from out of the amount of principal and interest accruing due on the sale amount of Rs. 1683-8- 0 with compound interest from now onwards at the rate of Be. 1 per cent per mensem with annual rest), that net income realised from the lands under sale after deluding the cists, etc., from now onwards till then, you shall, at our cost, reconvey the property to us. Moreover, it is agreed that the said instalment shall be the essence of this agreement."

The property alleged to be sold seems to have been continued in the possession of the vendors because the vendors have neither filed patta in his name nor the kist receipt in his name for these lands. On the other hand, the petitioner in the lower Court has filed kist receipt book Ex. A 6 covering Aswaraopalam lands. It is in these circumstances that the petitioner has filed the O.P. for a declaration of the amount clue under this document of 9-5-1931 on the plea that he is an "agriculturist" and that this 1931 document is not an outright sale deed but only a mortgage by conditional sale.

3. The position taken by the respondents in the lower Court was that the transaction represented as a mortgage, namely, the 1931 document was a deed of sale with a condition of re-conveyance within the time fixed thereunder and that time was the essence of contract and that condition not having been fulfilled the contract had become null and void and that this document not being a mortgage by conditional sale the question of declaration does not arise and the petition has gat to be dismissed.

4. The learned District Judge of Krishna upheld the contention of the petitioner that the deed of 1931 is a mortgage by conditional sale and that he had jurisdiction under the Act IV of 1938 to give the declaration asked for, and allowed the petition, The defeated respondents in the lower Court appeal.

5. In appeal two points are taken before us, namely, that first of all on the facts the learned District Judge went wrong in holding that this 1931 document was a mortgage by conditional sale and that it is not really an outright sale and secondly that Act IV of 1938 is ultra vires of the Constitution of India by reason of its provisions being repugnant to and offending Articles 14 and 19(1)(f) of the Constitution of India.

6. We shall take up the contention on facts first and deal with the contention based upon Arts. 14 and 19(1)(f) of the Constitution of India.

7. The facts of this case clearly show that the deed in question has got all the indicia of a mortgage by conditional sale and cannot be construed as an outright sale. The following tests have been collected in Mulla's Transfer of Property Act, 3rd Edn., 1949, for deciding whether a given document should be construed as an outright sale or a mortgage by conditional sale, (i) Existence of a debt, (a) Period of payment, short period indicating of Bale and the long period of mortgage. (3) Continuance of the grantor in possession indicates mortgage. (4) The stipulation for interest on repayment indicates mortgage. (6) The price below the true value indicates mortgage; the contemporaneous deed stipulating for reconveyance indicates a mortgage but one executed after lapse of time points to Bale. These tests are not exhaustive and are only illustrative.

8. In this case the circumstances under which this 1981 deed came into existence show that it could not be an outright sale. It is common ground that there was a dispute between the mortgagor and the mortgagee that insumcient property has been hypothecated and that the mortgagee stood in danger of jeopardising his security. There was also a criminal case about it. This sale deed was the answer terminating that criminal litigation. Therefore, the probabilities are that the mortgagor executed this document not as a sale deed but merely hypothecating additional properties and giving more security and that the parties to the transaction meant nothing more. This receives corrohoration from the fact that the mortgage was for Rs. 1500 and the subsequent sale, deed which has come into existence within one year's time was for an additional sum of Rs. 183.8-0 including interest and conveying a larger extent. It is clear that this additional extent has been included in the 1931 document practically for nothing and, therefore, it is a strong indication of this document being a mortgage by conditional sale. The stamp papers for the 1931 sale, deed have been purchased by the vendor which again is an indication against this being an outright sale-deed. Then the last covenant in the 1931 document which has been reproduced about incorporates two things namely accounting and compound interest. These stipulations for accounting and compound interest are very strong circumstances showing that the document is not an outright sale. We have already mentioned that the respondent before us seems to have been continuing in possession of the property and paying kist. The records before us show that this point is not free from doubt. This has not been clearly ascertained in the evidence of P.W. 1 whose deposition baa been printed. Therefore, on the facts we are clearly of opinion that the learned District Judge of Krishna was right in construing the document as a mortgage by conditional sale and not as an outright sale. On this conclusion the other findings of the learned District Judge flow and, therefore, on the facts there are no grounds for interference.

9. Turning to the point of law, namely, that Act IV of 1938 is ultra vires of the Constitution of India by reason of its provisions being repugnant to Arts. 14 and 19(1)(f), the contentions of the learned advocate for the appellant before us are to the following effect : namely that Act IV of 1938 is a negation of the rights of "Equality before the law and equal protection of the laws assured by Article 14 of the Constitution" and secondly that arbitrary restrictions have been placed by this Act on the fundamental right to acquire, hold and dispose of property assured under Article 19. We shall proceed to examine these contentions in two parts. First Article 14 and secondly Article 19(i)(f).

10. So far as Article 14 of the Constitution is concerned the case for the appellant depends upon the definition of the terms of equality before law and equal protection of the laws. It is unnecessary for us to indulge in any parade of learning and go into an elaborate examination of the American decisions because these two phrases have been the subject matter of deep consideration by this High Court in a leading decision reported in V. G. Row v. State of Madras, A.I. R. (88) 1931 Mad. 147. The learned Chief Justice has analysed both these concepts in the following terms :

"The two phrases 'equality before the law' and 'the equal protection of the laws' must be taken to denote two different conceptions because of the disjunctive. Otherwise we would be attributing the sin of tautology to the Constitution makers. These two phrases appear to have been taken from the Constitutional doctrine of the two countries Britain and the United States. It was Dicey who enunciated the doctrine of equality before the law as a part of the rate of law which according to the learned Professor form a the fundamental principle of the British Constitution. It has three meanings or may be regarded from three different points of view. It means la the first place the supremacy of the regular law of the land as opposed to arbitrary power. A man may be punished for a breach of law but he can be punished for nothing else. It means against equality before the law or the equal subjection of all classes to the ordinary law of land administered by the ordinary law Courts; the rule of law in this sense excluded the idea of any exemption of officials or others from the duty of obedience to the law which governs other citizens or from the jurisdiction of the ordinary tribunals."

This aspect of the rule has been understood to imply that no man however well placed or powerful he be otherwise is above the law; that officials like private citizens are bound to obey the same law and for the same offence are tried by the same judicial tribunals and that for the vindication of their civil rights or to obtain redress for wrongs done to them, they have to pursue the same remedies (see Dicey p. 123) "Equality before the law" does not mean that the powers and privileges of a private citizen are the same as the powers of a public officer may be given special powers (sic). What the rule of law requires is that any abuse of such power or any other wrongful act by a public officer should be subject to control by the Courts in the same way as any wrongful act committed by an ordinary citizen. The principle of equality before the law is not violated by the existence of special laws providing for particular groups in the State, e.g., soldiers, doctors, or lawyers. Such laws may not affect the rest of the people, but apply only to the members of a particular calling. But in the enforcement of these laws as well as in the enforcement of the general law, no distinction is made between man and man. To give a concrete illustration of the principle, if the criminal law provides for the punishment of an offence any person who is guilty of the offence irrespective of his position in life or his wealth or influence will be liable to be punished in the same way as any other person guilty of the same offence. No doubt the punishment may vary according to the facts of each particular case, but the same set of facts, if they existed in another case, would also result in the same punishment. In my opinion, the principle of equality before the law does not come into play in any controversy as to the legality of a law enacted by the State. It comes into play really in the sphere of its enforcement. This is obvious from the fact that Professor Dicey who treats it as one of the fundamentals of the British Constitution was well aware of the supremacy of the British Parliament in the making of laws. No question can arise in Britain of an Act of Parliament being invalid because it contravenes the principles of equality before the law. So, when Professor Dicey speaks of the principle being an essential part of the Constitution, it only means that the laws of the land shall be enforced against all persona equally without any distinction being made on any ground whatsoever. In my opinion) it is in this sense that the phrase "Equality before the law" is used in Article 14. The impugned Act does not offend this principle. The other concept of "The equal protection of the laws" undoubtedly comes from the 14th Amendment to the United States Constitution. This guarantee was aimed at undue favour and individual or class privilege on the one hand and at hostile discrimination or the oppression of inequality, on the other. It sought an equality of treatment of all persons even though all enjoyed the protection of due process. Thus the guarantee was intended to secure equality of protection not only for all but against all similarly situated. In short the equal protection clause embodies a prohibition against discrimination, discrimination in favour of any person or class as much as discrimination against any person or class. Equal protection of the laws is a pledge of the protection of equal laws. Yick Wo v. Hopkins, (1686) 118 U.S. 356. It requires that persons subjected to a piece of legislation shall be treated alike under like circumstances and conditions both in the privileges conferred and in the liabilities imposed; Hayes v. State of Missouri, (1387) 120 U.S. 68. It prevents any person or class of persons from being singled out as a special subject for discriminating and hostile legislation. Penbina Consolidated Silver Mining & Milling Co. v. Commonwealth Pensylvania. (1888), 125 U.S. 181. It is well established that this clause does not forbid classification for purposes of the exercise by the State of police or taxation rights. It is in this sense I understand the phrase as incorporated in Article 14.

11. In other words, equal protection in short means: absence of any arbitrary discrimination by the laws themselves or in their administration. None should be favoured and none should be placed under any disadvantage, in circumstances that does not admit of any reasonable justification for a different treatment. Thus it does not mean that every person should be taxed equally but that persons under the same circumstances or property of the same character should be taxed by the same standard. But if there is any reasonable basis for classification, the legislature would be entitled to make a different treatment. Thus it may (i) exempt certain classes of property from taxation at all, such as libraries and the like; (ii) impose different specific taxes upon different trades and professions; (iii) tax real and personal property in different manners and so on. Similarly property specifically benefited may be subject to special taxation if the taxation is equal within the class benefited. Again, there may be different modes of assessment for different kinds of properties provided the rule of assessment is the same. "Equal protection" thus means, in short

"that no impediment should be interposed to the pursuits by any one except as applied to the same pursuit by others under like circumstances; that no greater burdens should be laid upon one than or laid upon others in the game calling and condition; that in the administration of criminal justice no different or higher punishment should be imposed upon one than such as is prescribed to all for line offences,"

Nor does equal protection prohibit the granting of special privileges to particular enterprises or employments in the interests of the general welfare, provided there is no discrimination within that class, e.g., in favour of national banks, insurance companies, railways and the like. Similarly, corporations may be treated separately from individuals and foreign corporations may ba classified separately from domestic corporations.

"Class legislation discriminsting against some and favouring others is prohibited, but legislation which, in carrying out a public purpose is limited in its-application, is not prohibited, if within the sphere of its operation it affects alike all persons similarly situated."

"A classification is reasonable when it is not an arbitrary selection but rests on differences pertinent to the subject in respect of which classification is made; thus a particular business may be subjected to a special burden if there is reasonable relation between the burden imposed and the peculiar character of the business. Thus, railways may be made a special class for taxation or safely to the public. Similarly, certain professions may be limited to persona having particular qualifications. Again a classification having some reasonable basis does not offend against 'equal protection' merely because it is not made with mathematical nicety or because in practice it results in some inequality. * * * *

"The burden of showing that a classification rests upon an arbitrary and not reasonable basis ia upon the parson who impeaches the law as a violation of the guarantee of equal protection. Further, if any state of facts can be reasonably conceived that would sustain the classification, the existence of that state of facts at the time the law was enacted must be assumed" (See Durgadas Babu Constitution of India, M. L. J. Publication).

12. Applying these principles, we find that first of all the right of equality before law is not offended by any of the provisions of Act IV [4] of 1938 in its sphere of enforcement. It is enforceable against all persons coming within the ambit of the Act without any distinction being made on any ground whatsoever. The learned advocate was not able to point out any single provision which shows discrimination in the enforcement of this Act. Therefore the impugned Act does not offend this principle.

13. Turning to the other concept of "equal protection" the learned Advocate contends that this principle is offended by reason of Act IV [4] of 1938 including non agriculturists in its preliminary definition of "agriculturists" and secondly by reason of its excluding agriculturists under various exceptions in Clauses A to I of Section 4 of Act IV of 1938.

14. In so far as the first contention is concerned it is based upon the fact that the term "agriculturist" has now been judicially interpreted as including simple mortgagees who most often happen to be in the case of money lending creditors who are all non-agriculturists. It is, no doubt, true that the definition is reduced into absurdity when a money-lender is made an agriculturist of the Madras State and a tiller of the soil by reason of his being a simple mortgagee but this inclusion, which by the way, was due to the judicial interpretation of the term "saleable interest in the land," is not a case of discrimination against moneylenders and would not amount to a case of a class of persons being singled out as subject for hostile legislation. On the other hand, it is conferring a benefit on these non-agriculturists and would also take them in for purposes of the benefits of Act IV [4] of 1938.

15. Then turning to the exempted categories set out in (a) to (i) of Section 4 of Act IV [4] of 1988 for this classification we must first of all bear in mind the objects and reasons for which this Act, Act IV [4] of 1938, was enacted which are set out in the objects and reasons published in the Gazette dated 1-13 1937:

"The object of the bill is to rehabilitate agriculture which is the basin industry of this province. Directly or indirectly the prosperity of ail sections of the people is dependent upon the economic well being of the agriculturist, His present deplorable plight is well known, While on the one hand his income had diminished, on the other, the interest upon his debt has been steadily accumulating, often at an unconscionable rate. The predominant feature of the distress is due to the burden of the debt. It is the duty of any modern Government which is alive to its responsibilities to the people to relieve the producers of the people's food from such an intolerable burden. It would not be right for the State to permit the hereditary skill of the agriculturist to pass Into unemployment allowing land to fall into the bands of people who are at rangers-to the calling of agriculture. Conciliation and other voluntary methods have failed and the adoption of the principle of compulsion has become necessary.

The bill provides that payment of the outstanding. principal should discharge the debt (in cases where high rates of interest are charged). Interest will run from 1-10-1937 at a rate not exceeding six per cent, per annum. In cases where high rates of interest are charged, payment of twice the principal is to have the effect of completely discharging the debtor from further liability, As far as possible persons following occupations other than agriculture have been excluded from the benefit of the bill. Dues to Government and local bodies and to co-operative and certain Joint stock banks have also been excluded from its scope. Every endeavour has been made in drafting the bill to simplify the issues and make them easy of decision, thus minimising litigation."

16. Bearing these objects and reasons if we examine the circumstances under which all these exemptions A to I Game to be incorporated the task of our finding out whether these exclusions offend equal protection of law will become easy.

17. Clauses (a) to (c): These clauses exempt debts due to the Provincial Government to the Central Government; and to Local authorities from the operation of the Act. The reason for this has been explained by the Prime Minister as follows :

"If revenues taxes and cesses were written off no object or advantage would be gained for the people by the passing of this Act. If the revenues, taxes and cesses were exempted it was because they were necessary for ordered administrations. The procedure adopted by the Government in granting loans and collecting them was different from that adopted by private individuals. Further, the writing off loans, or interest thereon was a mailer for executive action and that course was available and need not be dealt with by legislation. Government could not afford to nor did they leave interest on loans to get into arrears as private creditors did, thereby leaving a burden, may be an act of charity, too heavy for the debtor to bear (Proceedings of the Council)."

18. The statement of objects and reasons reproduced just above show that it was the endeavour of the Legislature that as far as possible persons following occupations other that) agriculture should be excluded from the benefit of the bill. This explains Clause (d). Under Clause (d) persona living in urban areas and following predominantly non-agricultural occupations either alone or in addition to agriculture have been excluded. It is quite likely that a few genuine agriculturists also come to be excluded under this category but then we have to remember that these persons have only to think themselves for it because they cannot have the bast of both worlds, namely, be an agriculturist and at the same time enjoy all the amenities of urban life also. No Legislature can frame definitions which in its practical working would not develop isolated flaws or reveal loop holes; for as the English proverb haa it, we cannot make an omelette without breaking some eggs. The exclusion, however, is based upon a sound classification and is certainly not arbitrary.

19. Clause (e). The reason for this exemption is that the credit system of co-operative societies is not less important than the functions of the Government in regard to agriculture and it would be impossible to treate co-operative societies as outside bodies and to place them in the same category as ordinary creditors.

20. Clauses (f) and (g). The reasons for enacting these exemptions were. Liability arising out of a breach of trust (express or implied) and in respect of maintenance are treated differently from ordinary debts. Even agriculturists cannot escape discharging their obligations to the fullest extent possible in respect of these special classes of liabilities. No Court of equity would extend its protection to persona guilty of breach of trust in any form to any extent, and the helpless condition of persons whose sole means of support is a paltry maintenance allowance calls for even a greater measure of protection, than even what an agriculturist is entitled to. Such maintenance may be payable to women, children, aged parents, junior members of a Halabar tarwad or the younger brothers of the holder of an impartible estate. Liability in respect of all classes of maintenance is left untouched by this Act.

21. Clause (h). With reference to this clause, the Select Committee has observed as follows:

''The committee has also exempted from the operation of this Act any debt or debts doe to a woman who is entirely dependent on such debt or debts for her maintenance, and has accordingly included the following additional items in Clause 4 of the bill. Any debt or debts due to a woman, who on October 1, 1937 did not own any other property, provided that the principal amount of the debt or debts on such, date did not exceed Rs. 3,000 (this amount has been raised to Rs. 6,000 by the amending Act of of 1948) It is provided that in calculating the value of the property owned by the woman on October 1, 1937 the house in which she lived or any furniture therein or her household utensils, wearing apparel, jewellery or such like personal belongings, should not be taken into account,"

22. Clause (I). Wages due to agricultural or other rural labourers are also exempted from the operation of this Act. Such debts rarely carry any interests. The words "other rural labourer" would include a village labourer employed for any purpose though not agricultural. Wages due to domestic servants and personal attendants in the rural parts of this province would be saved by this sub-clause. Such labourers in towns and in city factories would not come under the terms "rural labourer."

23. The case with, which these exemptions-were framed upon a sound and explicable classification baaed upon the objects and reasons for which this Act IV of 1938 came to be passed is illustrated by an amendment which was proposed to include within the scope of this exemption debts due to orphans, very aged and disabled persons. The Prime Minister in 'opposing this amendment said that women for whose benefit the protection was devised constituted a distinct class. As for the other categories of persons referred to numerous difficulties would arise in defining tbem or ascertaining their fitness for relief. He was unable to accept the amendment because it would lead to enquiries whether a person was infirm or not and whether he was capable or not of earning a livelihood and in the case of minors the time that minority should be calculated upto--whether the date of the loan or the date of the legislation. The complications that, might enure might he too many to be solved easily. In the case of woman, at least, the tradition was to make a distinction with respect to tenure, estate and other matters. If a similar distinction was to be made in the case of the other persons also it would lead to difficulties. As for orphans what was the criterion? Was it the mere fact of the death of parents? If so, a minor might be driving in a motor car, due perhaps to the absence of parental care and was he to be considered an orphan? The house would be ill advised in accepting this amendment. He would admit, at the same time there were many cases of an absolutely deserving character but he was afraid these could not be provided for. Let them therefore be content with providing for women, who he added, became a "nightmare" to him because of the amount of literature which appeared in the press in their behalf. It would be very difficult to define a "disabled person" so as to entitle him to be exempt from She provisions of the bill. Regarding minors, there was one great difficulty. In this country, if they proceeded to differentiate in regard to legal rights of minors, an amount of complication with regard to the rights of the individual members of Hindu families would arise. Such difficulties would not arise in the case of women. (Proceedings in Council).

24. This analysis shows that these exemptions, are based upon reasonable classification and come within the ambit of the principles mentioned above showing that they have not singled out a person or class of persons for discriminating and for hostile legislation. The burden, as already pointed out, of showing that this classification rests upon arbitrary and not reasonable basis is upon the person who impeaches. This burden has been singularly not discharged by the appellant before us.

25. Finally coming to Article 19(i) of the Constitution the ideology behind this right is that of individualism and private property. It means that a man is free to acquire any property (including means of production) either by inheritance, personal earning or other lawful means to hold it as his own, and to dispose of it, limited only by the exigencies of public welfare. "Dispose of" means (a) to determine the fate of, to exercise the power of control over, to fix the condition, employment etc., or to direct or assign for a use; (b) to exercise finally one's power of control over, to pass over into the control of, someone else by selling, to get rid of.

Clause (5) Restrictions upon the right of property. Clause (5) of Article 19 authorises the state to impose reasonable restrictions on the exercise of the rights of property, (i) in the interests of the general public; (ii) for the protection of the interests of any scheduled tribe.

Interests of the general public : The expression "interests of the general public" in Clauses 6 and 6 of Article 19 differs from the expression 'interests of public order" in Clauses (3) and (4). Bo, the State shall be competent to impose restrictions under Clauses (5) and (6) not only on grounds of public order but also on grounds of social and economic policy or on the ground of the "common good" e. g. for securing the objects referred to in Clauses (b) to (c) of Article 39.

26. The point for determination is whether Act IV of 1938 under the guise of protecting public interests places arbitrary restrictions or reasonable restrictions upon acquiring, holding and disposing of property. In Chintaman Rao v. The State of Madhya Pradesh, the phrase ''reasonable restrictions" has been

interpreted. The phrase "reasonable restrictions" connotes, according to the Supreme Court that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature beyond what is required in the interests of the public, The word "reasonable" implies intelligent care and deliberation that is the choice of a cause which reason, dictates. Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Article 19(1)(g) and the social control permitted by Clause 6 of Article 19 it must be held to be wanting in that quality.

27. In this case the Act IV of 1938 has done nothing more than to redress an admittedly serious state of affairs, namely, imminent ruination of the agriculturists, by prices falling down and interest mounting up. There was the great danger of cultivation passing out of the hands of the agriculturists who constituted the back-bone of the State into the hands of the money lending non-agriculturists classes. So the Legislature has stepped in and done nothing more than redressed this balance taking care, however, to see that the creditors were not also put to any hardship by preserving their capital in tact and ensuring reasonable rates of remuneration by way of interest and wiping out of the debts only when the lender has got back more than twice the principal advanced by him and which was in consonance with the ancient Hindu principle of Damdupat. The learned advocate for the appellant was unable to point out any circumstances showing that the reliefs provided for by the Act IV of 1938 were either unnecessary or arbitrary or of an excessive nature or not warranted by public interest. In fact the Constitution itself has conferred powers on the State Legislature in Schedule 7 list 11 -- State List item No. 30 lending and money lenders; relief of agricultural indebtedness to deal with money lending, money lenders and agricultural indebtedness. This regulation of money lending and money lenders and relief of agricultural indebtedness is considered to be legitimate exercise of the police powers of the State and in these days of the welfare State it is too late in the day to challenge it and in fact in this country such legislation has been enacted for a very long time even during the time of the British Administration. Therefore, looked at from any point of view it cannot be stated that this Act IV of 1936 places arbitrary restrictions on acquisition, holding and disposal of property.

28. The point of law taken, therefore, fails and the provisions of Act IV of 1938 are not repugnant to any of the provisions of the Constitution of India and are certainly infra vires thereof.

29. In the result this appeal fails and is dismissed with costs.

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