ATUL CHANDRA DAS (D) THROUGH LRS. versus RABINDRA NATH BHATTACHARYA (D) THR. LRS. & ORS. ETC. on 4 April 2019

[2019] 5 S.C.R. 1185

ATUL CHANDRA DAS (D) THROUGH LRS.

v.

RABINDRA NATH BHATTACHARYA (D) THR. LRS. & ORS.ETC.

(Civil Appeal Nos. 8793-8794 of 2013)

APRIL 04, 2019

[ASHOK BHUSHAN AND K. M. JOSEPH, JJ.]

Bengal Money Lenders Act, 1940:

s.37A – Suit by appellants for ejectment of respondents fromsuit property – Stating that the respondents (original owners) hadsold the suit property to ‘B’ and thereafter ‘B’ sold the property topredecessor-in-interest of the appellants – Respondents counteredthe case of appellants and also filed title suit stating that the prop-erty was mortgaged with conditional sale, by them in favour of ‘B’against a loan and that even before expiry of redemption period,‘B’ in collusion with the appellants entered into agreement to sellthe property to the appellants – Trial court dismissed the suit ofappellants and decreed the suit of respondents placing reliance ons.37A of Bengal Money Lenders Act and holding that the sale byrespondents to ‘B’ was a mortgage with conditional sale – HighCourt confirmed the order of trial court – On appeal inter aliacontended that s. 37A since is contained under State Act isrepugnant to central law i.e. s.58(c) of Transfer of Property Act –Held: The respondents cannot be non-suited for inapplicability ofs. 37A as the respondents had sought reliefs relating to redemption– Section 58(c) of Transfer of Property Act when read with s. 37Aof Money Lenders Act, it is clear that the legislature intended tooverride the effect of proviso to s. 58(c) by enacting s. 37A – s. 37Ais traceable to the Entry ‘Transfer of Property’ in the ConcurrentList and not to ‘money lending’ in State List of VII Schedule – Evenif there is inconsistency between s.58(c) of Transfer of Property Actand 37A of the State Act, in view of the assent given by thePresident, the matter falls u/Art. 254(2) of the Constitution andtherefore, s. 37A of the State Act will prevail – Transfer of PropertyAct, 1882 – s. 58(c) – Constitution of India – Art. 254(2), VIISchedule.

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ADismissing the appeals, the Court

HELD: 1.1 Under Section 58(c)of Transfer of Property Act,1982, the proviso makes it indispensable to constitute atransaction a mortgage that one of the conditions mentioned inSection 58(c) be incorporated in the document by which theBconditional sale is effected. However, keeping Section 58(c) sideby side with Section 37A of the Bengal Money Lenders Act, 1940(State Act) the conclusion is inevitable that the State legislaturehas intended to override the effect of proviso to Section 58(c) ofthe Transfer of Property Act by enacting Section 37A in the StateAct. Section 37A was incorporated by way of an amendment inCthe State Act. Reading of Section 37A brings out the legislativeintent with unambiguous clarity and therefore the High Courtwas right in relying upon Section 37A of the State Act to find thatthough it was by agreement dated 07.12.1959 which is a separatedocument that condition to make it a mortgage was incorporatedDit would not make any difference. Despite the sale deed dated27.11.1959, the respondents continued to be in possession ofthe plaint scheduled property and it has been found that theypaid the taxes. It is further found that the market value of theproperty would not have been less than Rs. 30 thousand as onthe date of the alleged sale namely 27.11.1959.E[Paras 9 and 10][1193-C-D; F-H; 1194-A-B]

2. A Suit for redemption is mentioned as suit to whichSection 36 of the State Act applies. Section 38 undoubtedlyenables the borrowers to seek a direction for taking accounts.The reliefs in the suit filed by the respondents include reliefsFrelating to redemption in the form it is asked for. In fact, no issuein this regard was taken before the Trial Court. There is no reasonto non-suit, the respondents on this ground. [Paras 15 and16][1197-C-E]

3.1 It was pleaded that Money lending falls as entry (30) inGthe State List of the Constitution. Transfer of Property other thanagricultural land falls in Entry 6 in the concurrent list. The Statelegislature in enacting Section 37A of the State Act, a law relatingto money lending has made a law which is inconsistent andtherefore, repugnant to the law made by the Parliament in SectionH

58(c) of the Transfer of Property Act. This contention is takenfor the first time in this Court. There is also no merit in the sameat any rate. Section 37A is traceable to the Entry ‘Transfer ofProperty’ which is found in the Concurrent List. [Para 17][1197-E-H]

3.2 Even if the Court proceeds on the basis that there isan inconsistency between Section 58(c) of the Transfer of PropertyAct and Section 37A of the State Act, in view of the assent givenby the President, the matter falls under Article 254(2) of theConstitution. Therefore, despite the inconsistency, Section 37Aof the State Act will prevail in the State. [Para 18][1198-E-F]

Swarnalata Tat v. Chandni Charan Dey and Ors.AIR 1984 Calcutta 130 – referred to.

Case Law Reference

AIR 1984 Calcutta 130 referred to Para 6

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 8793-8794 of 2013.

From the Judgment and Order dated 19.09.2006 of the HighCourt at Calcutta in F.A. Nos.7 and 8 of 1989

Ms. Neha Sharma, Ms. Daisy Hannah, Ms. Sreoshi Chatterjee,Shekhar Kumar, Advs. for the Appellants.

C. M. Angadi, Rameshwar Prasad Goyal, Shereef K. A., Advs.for the Respondents.

The Judgment of the Court was delivered by

K. M. JOSEPH, J. 1. The appellants are the legalrepresentatives of one Atul Chandra Das. These appeals are directedagainst the common judgment of the Calcutta High court dismissing theFirst Appeal No.7 of 1989 and First Appeal No.8 of 1989. The appealswere filed by Atul Chandra Das against the dismissal of E.S. No.782 of1979 filed by him for ejectment of the respondents from the plaint scheduleproperty and decreeing of Suit no.1271 of 1980 filed by the respondentswhich would be referred to as the title suit. Thus, the appeals before us

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Aare lodged against the concurrent finding of the courts below andmaintained by special leave granted by this Court.

2. The case set up by Atul Chandra Das is as follows:

By a registered deed of conveyance dated 28.11.1959 (the partiesshall be referred to as in the position in the trial Court), the defendantsBsold for consideration the plaint schedule property to one BholanathAuddy(hereinafter referred to as “Bholanath”). Simultaneously,Bholanathcreated tenancy in favourof the defendants at the monthly rent of Rs.50/-. It was agreed that the share of corporation tax shall be paid by thedefendants. It was also agreed between Bholanath and defendants thatCthe defendants were to vacate and deliver possession on the expiry oftwo years from 28.11.1959. Thereafter, an agreement for sale wasentered into on 15.8.1960 between Bholanath and Atul Chandra Das.He agreed to sell plaint schedule property for Rs.9000/-. Since Bholanathfailed to perform the obligation, O.S. No.171 of 1962 was filed by AtulChandra Das for specific performance. On 30.11.1977 a decree wasDpassed in favour of Atul Chandra Das. In terms of decree he depositedthe balance consideration and finally a sale deed was executed in hisfavour. He claimed to be the landlord of the building and alleging thatdefendants have no right to occupy the premises,he sought recovery ofpossession by evicting the defendants. The defendants filed writtenEstatement.That apart they also filed the other suit namely Suit No.1271of 1980.Therein the following averments were made inter alia:

Smt. Annapurna Devi (since deceased) was the owner for life ofthe property and on her death, herthree sons namely Late AshutoshBhattacharya, Late Dulal Krishna Bhattacharya and Rabindra NathFBhattacharya (hereinafter referred to as ‘Bhattacharyas and who arethe defendants in the suit filed by Atul Chandra Das and plaintiffs inO.S. No. 1271/1980) were given absolute rights, in terms of the willexecuted by Bijoy Kr. Ghosal, the owner of the property.They set up thecase that a sum of Rs.8000/- came to be borrowed from Bholanath on28.9.1959. To secure Rs.8000/- Bhattacharyas mortgaged by conditionalGsale,on 28.11.1959 the plaint schedule property in favour of Bholanath.In order to give effect to mortgage an agreement for sale was enteredinto on 07.12.1959 with Aboya Devi(since deceased wife of LateAshutosh Bhattacharya and deceased Late Karuna Bhattacharya, the H

wife of first plaintiff in a title suit and Late Smt. Rama Devi, daughter ofAnnapurna Devi) who were the nominees of the mortgagors for theagreement to sell of the house on payment of a sum of Rs. 10,000/-which was settled to be the mortgage money, no rate of interest havingbeen stipulated.Two years was agreed to be the period of redemption ofmortgage. The title deeds were to be kept with Bholanath by way offurther security. The agreement which is referred to by Atul ChandraDas as an agreement for sale in his favour dated 15.8.1960 is describedas a collusive and fraudulent agreement and it was entered into beforethe expiry of period of redemption. The plaint schedule property comprisedof a three storied building standing upon an area of 1 cottah and 8chittackas of land and the value at the relevant time would not havebeen less thanRs.30,000/-,the annual municipal value being Rs.1469/-declared at that point of time. Bholanath was a mere mortgagee in amortgage by conditional sale. The specific performance suit was describedas a collusive suit. Bhattacharyas claimed to be the owners being legateesunder the will. The relief sought by the plaintiffs in O.S. No.1271 of1980is relevant. The relevant portion reads as below:-

“20. For the purpose of jurisdiction the suit is valued for declarationwith consequential relief of perpetual injunction at Rs.51/- therebeing no objective standard of valuation and objectively forRs.8500/- and Court fee stamp of Rs.4.15 is paid on the sum ofRs.51/- being the value for declaration with injunction and courtfee stamp Rs.525.00 is paid on the sum of Rs.6500/- being balanceof the principal due the total court fee paid being Rs.529.15p.

The plaintiffs therefore pray-

(a) That the suit be decreed for:-

(i) Declaration that the sale dated 28.11.59 for the considerationof Rs.8000/- of the property described in the schedule “A” belowby Sm. Annapurna Devi since deceased, Ashutosh Bhattacharyya,since deceased and the plaintiff nos.1 and 2 to BholaNath Duddya,since deceased followed by the condition of re-transfer as peragreement for sale dt. 7.12.59 by BholanathAuddya since de-ceased in favour of Sm. Abhoya Devi, since deceased Sm. Karunaand Sm. Rama Devi since deceased, on payment of Rs.10,000/-within 2 years was on ostensible sale amounting to a mortgage by AB

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conditional sale and the sallers in the said deed of sale were mort-gagors and the buyer therein was the mortgagee and the periodof redemption was 2 years as provided in the said agreement forsale dt. 7.12.59.

(ii) declaration that either the defendant Nos. 2 to 7 are the presentmortgagee being the heirs and legal representatives of the saidBholanathAuddya, deceased or in alternative the defendant no. 1

is the present mortgages, by subrogation having stepped in theshoes of the said BholanathAuddya by purchase.

(iii) declaration that the right of redemption of the said mortgageby conditional sale is still subsisting and the plaintiffs are entitledto redeem the said mortgage on deposit of the mortgage moneyamounting to Rs.8500/- in court or such amount as may be deter-mined by the Court or payment of the same to who ever may bedeclared to be the mortgages or mortgagees.

(iv) Declaration that the agreement dated 15.08.60 between thesaid BholanathAuddya since deceased and the defendant No. 1for sale of the property described in the schedule “A” below is acollusive and fraudulent agreement and not enforceable in law.

(v) Declaration that the decree dated 30.11.77 of the Hon’bleHigh Court at Calcutta in Suit No. 171 of 62 for specific perfor-mance of contract for the sale of the property described on theschedule “A” below was obtained by practising fraud upon thecourt by the defendant No. 1 and the said Bhola Nath Auddyasince deceased collusively.

(vi) declaration that the said decree of the Hon’ble High Court atCalcutta and the conveyance executed thereunder on 26.3.79 bythe Registrar Original Side of the said Hon’ble High Court forsale of the property described in the schedule “A” below in favourof the defendant No. 1 are not enforceable in law and the defen-dant No. 1 cannot take any advantage under the said decree and/or the said conveyance in enforcement of the same.

(vii) declaration that the defendant No. 1 has no right title andinterest in the property described in the schedule “A” below ei-ther as owner or as landlord nor has any right to file the Ej. Suitno. 782 of 1979 in the city civil court, Calcutta now pending be- ATUL CHANDRA DAS (D) THR. LRS. v. RABINDRA NATHBHATTACHARYA (D) THR. LRS. [K. M. JOSEPH, J.]

fore the Ld. Registrars’ Bench and/ or proceeding with the same.That the suit be decreed for perpetual injunction restraining thedefendant No. 1.

i. From enforcing the said decree dt. 20.11.77 in suit no. 171 of 62of the Hon’ble High Court at Calcutta and/ or enforcing the con-veyance dt. 26.3.79 executed by the Registrar Original side, HighCourt at Calcutta in favour of the defendant No. 1 under the saiddecree and/ or taking any advantage under the said decree and/or taking any and/ or the said conveyance and interfering with thepossession of the plaintiffs in the property described in the sched-ule “A” below in any way including recording his name in CalcuttaCorporation and/ or in the Calcutta Collectorate.

ii.From preceding with the Ej. Suit No. 782 of 79 now pendingbefore the ld. Registrar’s Bench City Civil Court, Calcutta.

iii. For temporary Injunction to the effect as prayed for in prayerNos. b(i) and (ii) above till the disposal of this suit.

iv. That the suit be decreed for Rs.8500/- or such other sum asmay be determined by the court as the present balance of themortgage money payable by the plaintiffs for redemption of themortgage.

c. That the property described in schedule “A” below be freedfrom the mortgage on deposit in court or payment to whoever willbe declared to be the mortgagee or mortgagees by the plaintiffsof the mortgage money to be decreed by the court.

d. That the suit be decreed for Costs.

e. That the suit be decreed for any other relief or reliefs to whichthe plaintiffs may be entitled under law and equity. “

3. The trial Court proceeded to consider the evidence and on thebasis of same came to the conclusion that there is no merit in the caseset up by Atul Chandra Das. It was found to be a case of mortgage byconditional sale and suit filed by Atul Chandra Das was dismissed andthe suit filed by the Bhattacharyas came to be decreed. As alreadynoticed, the High Court has confirmed the said decree.

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A4. We heard the learned counsel for the appellant and learnedcounsel for the Bhattacharyas.

5. The learned counsel for the appellant would submit before usthat the courts below have proceeded to find that the sale dated 28.11.1959executed by the previous owners,namely the defendants in favour ofBBholanath was a mortgage without noticing that such a finding will be inthe teeth of the proviso to Section 58(c) of the Transfer of Property Act.In other words, in order to constitute a mortgage by way of conditionalsale, the proviso to Section 58(c) of the Transfer of Property Actmandates that the condition of agreement to sell which is what is reliedupon by the Bhattacharyas to make Bholanath a mortgagee must haveCbeen incorporatedin one document. In this case on the other hand, thereis no dispute that the Bhattacharyas relied upon a separate and distinctdocument namely an agreement to sell executed by Bholanath in favourof the Bhattacharyas dated 7.12.1959. There is no conditionforreconveying the property contained in the sale deed dated 28.11.1959.

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6. The second submission is that the courts have gone wrong inrelying on Section 37A of the Bengal Money-Lenders Act, 1940(hereinafter referred to as ‘the State Act’). It is her contention that thesuit filed by the Bhattacharhyas was not filed under the State Act. Therewas no account demanded within the meaningof the Act. Support wasEsought to be drawn from the judgment of the Single Bench reported inSwarnalataTat v. Chandni Charan Dey and Ors.AIR 1984 Calcuttapage 130.

7. The last submission is as follows:-

Section 37(A) contained under the State Act is repugnant to CentralFLaw namely Section 58(c)of the Transfer of Property Act.

8. Per contra, the learned counsel for the respondent supportedthe judgment. He submitted that Bholanath had not obtained any titleunder the purported sale deed dated 27.11.1959. He could not haveconveyed any title to the Atul Chandra Das. The suit for specificGperformance was a collusive suit.

9. Section 58(c) of the Transfer of Property Act reads as follows:- “58(c). Mortgage by conditional sale – Where, the mortgagorostensibly sells the mortgaged property- on condition that on default of payment of the mortgage-moneyon a certain date the sale shall become absolute, or on condition that on such payment being made the sale shallbecome void, or on condition that on such payment being made the buyer shalltransfer the property to the seller, the transaction is called mortgage by conditional sale and themortgagee a mortgagee by conditional sale, [Provided that no such transaction shall be deemed to be amortgage, unless the condition is embodied in the document whicheffects or purports to effect the sale]”

It is undoubtedly true that under Section 58(c), the proviso makesit indispensable to constitute a transaction a mortgage that one of theconditionsmentioned in Section 58(c) be incorporated in the documentby which the conditional sale is effected. However, it is now time torefer toSection 37(a) of the State Act. It reads as under:- “37(a)Saving as to mortgage by conditional sale. – In the casewhere any loan is secured by a mortgage and the mortgagorostensible sells the mortgaged property on any of the conditionsspecified in sub-section (c) of section 58 of the Transfer of PropertyAct, 1882 (4 of 1882) then, notwithstanding anything to the contrarycontained in the proviso to the said sub-section, the transactionshall always be deemed to be a mortgage by a conditional saleand the mortgagee a mortgagee by conditional sale for the purposeof the said sub-section.”

10. Keeping Section 58(c) side by side with Section 37(a) of theState Act, the conclusion is inevitable that the State legislature has intendedto override the effect of proviso to Section 58(c) of the Transfer ofProperty Act by enacting Section 37(a) in the State Act. Section 37(a)was incorporated by way of an amendment in the State Act. Reading ofSection 37(a) brings out the Legislative intent with unambiguous clarityand therefore the High court was right in relying upon Section 37(a) ofthe State Act to find that though it was by agreement dated 07.12.1959which is a separate document that condition to make it a mortgage wasincorporated it would not make any difference. We may also notice that A

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Adespite the sale deed dated 27.11.1959, the Bhattacharyas continued tobe in possession of the plaint scheduled property and it has been foundthat they paid the taxes. It is further found that the market value of theproperty would not have been less than Rs.30 thousand as on the date ofthe alleged sale namely 27.11.1959.

B11. The next contention is that suit filed by Bhattacharya was notunder the State Act.Support was sought to be drawn from the judgmentof the Single Judge reported inSwarnalataTatcase(Supra). Para 12 ofthe judgment relied upon by the appellants reads as follows:-

“12. The first question which calls for determination is whetherCthe present suit is a suit under the Bengal Money Lenders Act,1940 (hereinafter referred to as the said Act). Section 36(1) ofthe said Act empowers the Court to re-open a decree in any suitto which the Act applies or in any suit brought by a borrower forrelief under the Section, to re-open the transaction whether thesuit has been heard ex parte or otherwise. Nowhere in SectionD36, it is provided that a fixed court fee of Re. 1 is to be paid forinitiating proceeding under Section 36 of the said Act. Section 38provides that any borrower may make any application at any timeto a Court which would have jurisdiction to entertain suit by thelender for the recovery of the principal and interest of a loanEbefore or after the commencement of the said Act for takingaccounts and for declaring amount due to the lender. Suchapplication shall be in the prescribed form and shall be accompaniedby a fee of one rupee and on receipt of such application the Courtshall cause a notice thereon to be served on the lender. The Courtshall thereafter take an account of the transaction between theFparties and declare the amount, if any due and payable but notdue by the borrower to the lender, whether as principal or interestor both. A proceeding under Section 38 shall be deemed to be asuit for the purpose of Section 11 of the Civil P.C. 1908. Admittedly,the plaintiff has not filed any application under Section 38 of theGAct far less in the prescribed form. As such the question ofpayment of a fixed court fee of one rupee would not arise. Section38 does not contemplate any suit. It enables a borrower to makean application in the prescribed form asking the Court to take anaccount and to declare the amount due to the lender. Merely ATUL CHANDRA DAS (D) THR. LRS. v. RABINDRA NATHBHATTACHARYA (D) THR. LRS. [K. M. JOSEPH, J.]

because a fixed court fee of one rupee has been paid, the suitcannot be corrected into an application under Section 38 of thesaid Act. Assuming that the Court should have treated the suit asan application under Section 38 of the said Act, even then theplaintiff cannot succeed in her contention. The requirements ofSection 38 have not been complied with. There is no prayer fortaking account and for declaring the amount due to the lender. Noborrower can call in and the procedure prescribed under Section38 unless he asks for account and determination of the amountdue to the lender. Even if the loan is secured, the borrower neednot ask for redemption. He will be at liberty to file an applicationfor determination only of the amount due from him. This was notdone by the plaintiff, who claims to be the successor-in-interestof the borrower. On the contrary, the plaintiff has asked, interalia, for the following reliefs in the plaint:—

(a) For a decree declaring the aforesaid transaction is a loantransaction and declaring that the aforesaid deed of sale is anostensible deed of sale as a security to repayment of the said loanis repaid.

(b) For a decree of permanent injunction restraining the defendantNo. 1 from claiming any right of ownership in the property in suitby virtue of the aforesaid deed of sale.

Having regard to the provisions of Ss. 36 and 38 of the said Actand the averments made in the plaint and the reliefs claimed inthe suit, I am unable to accept the contention of Mr. Mullick thatthe present suit is suit under the Bengal Money Lenders Act,1940.”

12. It is at once necessary to notice Section 2(12) of the StateAct which defines the word “loan”.

“2(12). “loan” means an advance, whether or money or in kind,made on condition or repayment with interest and includes anytransaction which is in substance a loan but does not include- (a) ****

(b) ****

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A(c) A loan taken or advanced by, by the Central Government orany State Government or by any local authority in West Ben-gal; (d) A loan advanced before or after the commencement of thisAct –

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(i) by a bank; or

(ii) by a co-operative life insurance society, co-operative society,insurance company, life assurance company, Life InsuranceCorporation of India, mutual insurance company, providentinsurance society or from a provident fund;C

(e) an advance made on the basis of a negotiable instrument asdefined in the Negotiable Instruments Act, 1881, (26 of 1881)other than a promissory note; (f) Omitted by W.B. Money Lender Amendment Act, (Act IV ofD1931)

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(h) a loan made to or by the Administrator General and OfficialTrustee of West Bengal or the Commissioner of Wakfs or theOfficial Assignee or the Official Receiver of the High CourtEin Calcutta;

(i) a loan or debenture in respect of which dealings are listed onany Stock Exchange;”

13. Commercial loan is defined in Section 2(4) of the State Act.Section 2(22) defines suit to which this Act applies. It reads as follows:- F

“2(22) “suit to which this Act applies” means any suit or proceedinginstituted or filed on or after the 1[st] day of January, 1939 or pendingon that date and includes a proceeding in execution- (a) for the recovery of a loan advanced before or after the com-Gmencement of this Act; (b) for the enforcement of any agreement entered into before orafter the commencement of this Act, whether by way of settle-ment of account or otherwise, or of any security so taken, inrespect of any loan advanced whether before or after thecommencement of this Act; orH

(c) for the redemption of any security given before or after thecommencement of this Act in respect of any loan advancedwhether before or after the commencement of this Act.”

14. Section 36 comes under the heading ‘Reopening oftransactions’. It deals with the power of the Court to exercise all or anyof the various powers which are mentioned therein. Sub Section 4 ofSection 36 reads as follows:- “36(4). This Section shall apply to any Suit, whatever it formsmay be, if such suit is substantially one for the recovery of a loanor for the enforcement of any agreement of security in respect ofa loan or for the redemption of money such security.”

15. It will be noticed that a Suit for redemption is mentioned assuit to which Section 36 applies. Section 38 undoubtedly enables theborrowers to seek a direction for taking accounts.

16. We have noticed the relief which was sought in the suit whichwas considered by the learned Single Judge in SwarnalataTatAIR 1984Calcutta 130. In fact, Court in the said case could not find a mortgageproved also. The reliefs on the other hand in the suit filed by Bhattacharyainclude reliefs relating to redemption in the form it is asked for. In fact,no issue in this regard was taken before the Trial Court. We see noreason to non-suit, the Bhattacharyas on this ground which is taken forthe reasons which we have given.

17. The last contention taken is that Section 37(a) of the StateAct is repugnant to Section 58(c) of the Central Act namely, the Transferof Property Act. The contention runs as follows:- Money lending falls as entry (30) in the State List. Transfer ofProperty other than agricultural land falls in Entry 6 in the concurrentlist. TheState legislature in enacting Section 37(a) of the State Act, alaw relating to money lending has made a law which is inconsistent andtherefore, repugnant to the law made by the Parliament in Section 58(c)of the Transfer of Property Act.

This contention is taken for the first time in this Court. We alsosee no merit in the same at any rate. Section 37(A) is traceable to theEntry ‘Transfer of Property’which is found in the concurrent list. Article254 of the Constitution of India reads as follows:- A

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“254. Inconsistency between laws made by Parliament and lawsmade by the Legislatures of States

(1) If any provision of a law made by the Legislature of a State isrepugnant to any provision of a law made by Parliament whichParliament is competent to enact, or to any provision of an existinglaw with respect to one of the matters enumerated in theConcurrent List, then, subject to the provisions of clause ( 2 ), thelaw made by Parliament, whether passed before or after the lawmade by the Legislature of such State, or, as the case may be, theexisting law, shall prevail and the law made by the Legislature ofthe State shall, to the extent of the repugnancy, be void.

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(2) Where a law made by the Legislature of a State with respectto one of the matters enumerated in the concurrent List containsany provision repugnant to the provisions of an earlier law madeby Parliament or an existing law with respect to that matter, then,the law so made by the Legislature of such State shall, if it hasDbeen reserved for the consideration of the President and hasreceived his assent, prevail in that State: Provided that nothing inthis clause shall prevent Parliament from enacting at any timeany law with respect to the same matter including a law addingto, amending, varying or repealing the law so made by theELegislature of the State.”

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18. In this case proceeding on the basis that there is aninconsistency between Section 58(c) of the Transfer of Property Actand Section 37(A) of the State Act, in view of the assent given by thePresident, the matter falls under Article 254(2). Therefore, despite theFinconsistency, Section 37(A) of the State Act will prevail in the State.

19. The argument that being part of State Act which is the MoneyLending Act and Money lending is in the state list and therefore, it is acase of legislative, incompetence, does not appeal to us. We have foundthat the provisions of 37(A) is traceable to the Entry ‘Transfer of Property’Gin the Concurrent List and that Article 254(2) saves the provision.

20. We see no merit in the appeals and the appeals stand dismissed.

Kalpana K. Tripathy

Appeals dismissed.

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