TULOL, J. ( 1 ) THESE petitions under Art. 226 of the Constitution have been filed by the creditors against the State of Mysore, challenging the vires of the mysore Agricultural Debtors Relief Act, 1966 and some of the individual sections of the Act on various grounds. ( 2 ) BEFORE adverting to the grounds of attack, it is necessary to ascertain the 'pith and substance' of the Act. Prior to the enactment of this Act, different enactments providing for relief of indebtedness of Agriculturists were in vogue. As they differed both in the quantum and method of relief to be granted to agriculturists under each of the Acts, the impugned enactment came to be passed in order to 'consolidate and amend the law for the relief of agricultural debtors in the State of Mysore'. The Bill was first published in June 1962 and was referred to the Select Committee. It was finally passed in 1966, received the assent of the President on the eleventh day of November 1966 and was brought into' force on the 1st day of April 1969 by virtue of the Notification issued by the State Government under section 1 (3) of the Act. ( 3 ) THE pattern and the provisions of the Act are almost identical with those of the Bombay Agricultural Debtors Relief Act, 1947. Any debtor (as defined in Sec. 2 of the Act) or his creditor may make an application within three months from the commencement of the Act to the Court of the munsiff or the Civil Judge having ordinary jurisdiction in the area where the debtor ordinarily resides, according as the total amount of the debts due from the debtor on the date of the application as specified thereunder does not exceed the pecuniary jurisdiction of such Court. On receipt of the application, the Court has to issue notice to the debtor or the creditors, as the case may be, and also published a general notice requiring the debtor and the creditors to submit their statements in the prescribed form within one month from the date of service. All applications against a debtor have to be consolidated and heard together. Two issues-whether the debtor is a 'debtor' under the Act and whether his total debts exceed rupees Twenty thousand-are required to be decided as preliminary issues. All applications against a debtor have to be consolidated and heard together. Two issues-whether the debtor is a 'debtor' under the Act and whether his total debts exceed rupees Twenty thousand-are required to be decided as preliminary issues. All suits, appeals, applications and proceedings pending in any Court involving the aforesaid questions have to be transferred to the Court having jurisdiction under the Act. On the Court finding the two issues in the affirmative, it has to examine the debtor, the creditor or the creditors, and take accounts of all the transactions, calculating interest at the rates specified in Sec. 21. The Court has also to issue notices to the Deputy Commissioner, the local authority, the Co-operative Sdciety and the Schedule Bank etc. , to file statements showing their debts dyr from the particular debtor and indicating their willingness, if any as regards the extent of remission they are prepared to give to' the debtor. Thereafter, the value of the property and the other assets of the debtor has to be ascertained in the prescribed manner and the paying capacity of the debtor shall be deemed to be sixty per cent of the value of all his property. The unsecured debts have to be scaled down prorata to the paying capacity of the debtor while the secured debts have to be similarly scaled down if the total amount of such debts is more than sixty per cent of the value of the secured property belonging to the debtor. An award will then be drawn up in the prescribed form, fixing priority in respect of the debts due to Government, Local Authority and the loans taken by the debtor, if any, for seasonal finances under Sec. 61 of the act Where the amount of debts of the debtor scaled down under the Act exceed half the value of his immovable property, the Courts have to intimate the creditors the amount of debts due from the debtor as also the value of his immovable property and call upon them to intimate in writing whether they agree to the further scaling down of the said debts so as to reduce them to a sum not exceeding half the said-value of the immovable property of the debtor. If the maority of the creditors ot ?ths in value of all the creditors agree to the further scaling down of the debts, the Court shall' direct the debtor to pay the amotint of such debts so agreed upon within a period of one month from the date of the order. If the debtor fails to pay the amount of such debts within the period of one month from the date of the order or the extended period, the Court has to prepare a scheme embodying the terms of the award evidencing adjustment of the debts and forward the scheme to the Primary Land Development Bank or the Mysore Central co-operative Land Development Bank, as the case may be, for acceptance of the scheme. If the said Bank does not agree to accept the scheme, the court has to make an award directing the said Bank to pav the creditors in cash the debt as finally scaled down and charge all the debts on the immovable properties of the debtor, such charges shall be deemed to be a mortgage executed in favour of such Bank. The Bank shall then be entitled to recover the said amount from the debtor in such instalments as may be fixed by the Court. There are also provisions for re-opening of the awards and their execution. No alienation of his property can be made by the debtor before discharging all his debts unless it be with the previous sanction of the Court. Appeals are provided for against the different orders mentioned in Sec. 43 of the Act. The awards have to be registered under chapter III. Chapter IV contains provisions for insolvency proceedings against a debtor. The State Government is given power to authorise in any local area any person to advance loans for financing of crops or seasonal financing of debtors who' are parties to any proceeding under the Act or in respect of whose debts an adjustment has been made thereunder. The act repeals the Madras Agriculturists Relief Act 1938, the Bombay agricultural Debtors Relief Act 1947 and the Hyderabad Agricultural Debtors relief Act 1956, besides repealing the Debt Conciliation Acts in force in the Mysore area, the Madras area and the Coorg area. The act repeals the Madras Agriculturists Relief Act 1938, the Bombay agricultural Debtors Relief Act 1947 and the Hyderabad Agricultural Debtors relief Act 1956, besides repealing the Debt Conciliation Acts in force in the Mysore area, the Madras area and the Coorg area. ( 4 ) THE grounds on which the vires of the Act is impugned are- (1) The subject matter of the Act is beyo'nd the scope of the relevant legislative entry which empowers the State Legislature to enact such legislation; (2) The Act has no relevance to the present conditions off the agriculturists; and (3) The Act and some of its provisions are violative of Arts, 14 and 19 (1) of the Constitution. We shall deal with each of them in their serial Order. ( 5 ) THE legislative competence is challenged on the ground that instead of restricting the relief to be granted to agriculturists only to debts inquired for agricultural purposes, the Act provides for adjustment of debts incurred for agricultural and non-agricultural puposes. In paragraph 8 of the counter-affidavit, this contention is sought to' be repelled with reference to entries 14, 18 and 30 of List II to the Seventh Schedule of the Constitution. It is contended that the pith and substance of the Act are within the competence of the State Legislature and that the Act cannot, therefore, be assailed merely on the ground that there is incidental encroachment on some of the subjects in the concurrent list, particularly when the assent of the President has been received under Art. 254 (2) of the Constitution ( 6 ) WHENEVER the vires of an enactment is assailed on the ground of legislative competence, what the Court has to ascertain is, as laid down by the Supreme Court in K. C. Gajapathi Narayan Deo v. State of Orissa, AIR 1953 SC. 375 . whetherthe Legislature has acted within the sphere of the relevant specific legislative entry or whether in the method of enacting it the Legislature has transgressed the limits of its constitutional powers. The requisite principles to be followed in such cases have been succinctly laid down by the supreme Court in A. S. Krishna v. Madras State, AIR. 1957 SC. 297. whetherthe Legislature has acted within the sphere of the relevant specific legislative entry or whether in the method of enacting it the Legislature has transgressed the limits of its constitutional powers. The requisite principles to be followed in such cases have been succinctly laid down by the supreme Court in A. S. Krishna v. Madras State, AIR. 1957 SC. 297. "when a law is impugned on the ground that it is ultra vires the powers of the Legislature which enacted jt, what has to be ascertained is the true character of the legislation. To do that, one must have regard to the enactment as a whole, to its objects and to the scope and effect of its provisions. If on such examination it is found that the legislation is in substance one on a matter assigned to the Legislature, then it must be held to be valjd in its entirety, even though it might incidentally trench on matters which are beyond its competence. It would be quite an erroneous approach to the question to view such a statute not as an organic whole, but as mere collection of sections, then disintegrate it into parts, examine under what heads of legislation those parts would severally fall and by that process determine what portions thereof are intra vires and what are not. " ( 7 ) IN view of the contention raised in the counter-affidavit to defend the competence of the Legislature with reference to entries 14, 18 and 30 of List II of the Seventh Schedule to the Constitution, Mr. M. K. Nambiar, the learned counsel appearing for some of the petitioners, addressed arguments at some length regarding the interpretation of legislative entries when the subject matter oi an enactment is referable to two or more entries. The three entries referred to in the counter-affidavit Of the State read as follows:"entry 14: Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases. 18: Land, that is to' say, rights in or over land, land tenures including relation of landlord and tenant and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonisation. 30: Money lending and money lenders; relief of agricultural indebtedness. " ( 8 ) DISTRIBUTION of legislative powers has been dealt with in the Constitution in Part XI. 30: Money lending and money lenders; relief of agricultural indebtedness. " ( 8 ) DISTRIBUTION of legislative powers has been dealt with in the Constitution in Part XI. The legislative powers conferred on the Parliament and the State Legislature are expressly made subject to' the other provisions of the Constitution. Under Art. 245 (1) of the Constitution, parliament may make laws for the whole o'r any part of the territory of India and the Legislature-pf a State may make laws for the whole or any part of the State. Art. 246 makes it explict that the Parliament has exclusive power to make laws with respect to any of the matters enumerated in List i in the Seventh Schedule, while the Legislature of a State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule; the Parliament and the Legislature ol any State also have power to make laws with respect to any of the matters enumerated in List III in the Seventh schedule. Tt is not the contention of any of the petitioners that the subject- matter of the impugned enactment falls within the scope of any of the entries in List I in the Seventh Schedule. ( 9 ) IT is unnecessary to enter into a detailed discussion of the various decisions cited by Mr. Nambiar regarding the interpretation of different entries as, in our opinion the Pith and substance of the impugned enactment falls fully within the scope of Entry No. 30. In the State of Bombay v. Narottamdas, AIR. 1951 SC. 69, the Court had to consider the validity o'f the Bombay civil Courts Act which was attacked OP the ground that it was ultra vires the State Legislature as it conferred jurisdiction On the new Court not only in respect of matters which the Provincial Legislature was competent to legislate upon under List IT of the Seventh Schedule to the Government of India Act 1935 but also in regard to matters in respect of which only the Central or the Federal Legislature could legislate under List I. It is in the context of this argument that their Lordships examined the relevant legislative Entries in List I and List II and stated that-"the expression 'general' must always be understood as being opposed to' what is 'special' or exclusive". (p. 89 ). Our attention was also drawn to the decision in Calcutta Gas Coy. v. State of W. B. , AIR. 1862 SC. 1044 where the constitutional validity of the West Bengal Oriental gag Company Act 1950 came up for consideration. In this case also the argument centred round the construction of Entries 7 and 52 in List I and entries 24, 25, 26 and 27 in List II, Subba Rao, J. (as he then was) laid down- " It may therefore be taken as a well settled rule of construction that every attempt should be made to harmonise the apparently conflicting entries not only of the different lists also of the same list and to reject the construction which will rob one of the entries of its entire content and make it nugatory". The well settled rules of interpretation in the matter of construing legislative Entries have been noticed in the following passage at page 1049:"the power to legislate is given to the appropriate Legislatures by Art. 246 of the Constitution. The entries in the three Lists are only legislative heads or fields of legislation: they demarcate the area over which the appropriate Legislatures can operate. It is also well settled that widest amplitude should be given to the language of the entries. But some of the entries in the different lists or in the same list may overlap and sometime may also appear to be in direct conflict with each other. It is then the duty of this Court to reconcile the entries and bring about harmony between them. "another decision cited by the learned Counsel is to be found in Waverly jute Mills v. Raymon and Co. , AIR. 1963 SC. 90. wherein the argument addressed to the court required examination of certain entries in the three Legislative Lists to decide the vires of the Forward Contracts (Regulation) Act, 1952. In discussing this question, their Lordships referred to the well established rule of construction that different legislative entries should be construed in such a manner as to give effect to all of them so as to avoid a construction that will result in any of the Entries being rendered futile or otiose. They also stated that-"where there are two entries, one general in its character and the other specific, the former must be construed as excluding the latter. They also stated that-"where there are two entries, one general in its character and the other specific, the former must be construed as excluding the latter. This is only an application of the general maxim Generalis Specialibus non Derogant". ( 10 ) AS already observed, the question for determination in these cases does not revolve on the construction of Entries in the different legislative lists It centres round the construction of Entry 30 of the State Legislative list In the Seventh Schedule. There is therefore no need to refer to the principles bearing on the construction of different entries in different legislative Lists. ( 11 ) ENTRY 30 in List II is in our opinion comprehensive enough to cover the impugned enactment. The contents of this entry relate tot "money- lending and Money Lenders; relief of agricultural indebtedness". It was contended that the word 'agricultural' being an adjective, required that the relief of indebtedness must relate to' debts incurred in connection with agriculture. It was also contended that as the entry had no reference to agriculturists, the enactment would not fall within the scope of the entry. Another argument advanced was that even if the entry were to coyer the enactment promulgated for giving relief to agriculturists, the scope of the Act must be restricted only to the relief of agricultural debts of agriculturists. ( 12 ) IN our opinion the Entry must be read as a whole and construed harmoniously in as much as money-lending and indebtedness are inextricably connected in such a way that the latter is the result of the former. Construed that way, indebtedness need not be restricted only to agriculral debts. Reference may be made to the decision of the Federal Court in manikka Sundar Bhatta v. R. S. Nayudu, AIR. 1947 FC. 1. in which their Lordships had to consider Entry No. 34 of List II in the Seventh Schedule to the Government of India Act 1935 which read in these words-"34. Charities and charitable institutions; charitable and religious endowments. " it was contended before their Lordships that having regard to the introduction in the latter part of the entry distinction between Charitable and religious Endowments, only a narrow meaning, excluding religious charities and religious institutions could be given to the words 'charities and charitable' occurring in the earlier part of the entry. It was also contended, as Mr. " it was contended before their Lordships that having regard to the introduction in the latter part of the entry distinction between Charitable and religious Endowments, only a narrow meaning, excluding religious charities and religious institutions could be given to the words 'charities and charitable' occurring in the earlier part of the entry. It was also contended, as Mr. Nambiar contended before us, that when two words or expressions are coupled together, one of which generally__excludes the other, the more general term should be taken to have been used as excluding the specific one. In rejecting this argument, their Lordshipg stated that in their judgment- "the additional phrases 'charitable institutions' and 'charitable endowments' in Entry 34 are only illustrative of the directions, which the power, the really enabling power, to legislate in respect of charities may, amongst others, take. "they held that the power to legislate in respect of charities will include the power to legislate in respect of all matters connected with religious charities and institutions. The ratio of the principle adopted by their Lordships has been briefly summarised in the first head note thus-"it is a general principle of interpretation of statutes that when two words or expressions are coupled together, one of which generally includes the others, the more general term must be deemed td have been used in a meaning excluding the specific one. It is true that this principle may often be properly applied but all such general principles of construction must yield to definite indications in the context that the portions of an enactment to be construed have not been drafted on the basis of any such principle. "this rule of construction has, however, been clarified by the Supreme Court in Madras State v. Gannon Dunkerley and Co. , AIR. 1958 S. C. 560. when their Lordships had to refer to the interpretation of words 'sale of goods' occurring in Entry 48 in List II of the Seventh Schedule to the Government of India Act 1935 which read as "taxes on the sale of goods". After referring to the various decisions cited at the Bar, T. L. Venkatarama Aiyar J. who spoke for the court, stated:- "----The scheme of the drafting is that there is in the begirming of the Entry words of general import, and they are followed by words having reference to particular aspects thereof. After referring to the various decisions cited at the Bar, T. L. Venkatarama Aiyar J. who spoke for the court, stated:- "----The scheme of the drafting is that there is in the begirming of the Entry words of general import, and they are followed by words having reference to particular aspects thereof. The operation of the general words, however, is not cut down by reason of the fact that there are some heads dealing with specific aspects. In Manikkasundaram v. R. S. Nayudu occur the following observations pertinent to the present question: ______ 'the subsequent words and phrases are not intended to limit the ambit of the opening general term or phrase but rather to illustrate the scope and objects of the legislation envisaged as comprised in the opening term or phrase'. " there is, therefore, no justification for the contention that the general words with which Entry 30 opens cannot have a bearing in construing the latter part of the same entry. As already observed, the whole Entry has to be construed harmoniously where such construction appears to be justified by the context of the words employed therein. ( 13 ) IT has to be borne in mind that in construing a legislative entry it is not permissible to a Court to adopt a narrow or technical construction. Ingenious refinement or subtlety of reasoning is out of place. The words and expressions used in an Entry have to be construed according to their common and apparent usage of the language. ( 14 ) IN this context the learned Advocate General drew our attention to the decision of the Federal Court in Subramanyam v. Muthuswami, AIR. 1941 FC. 47. in which the validity of the Madras Agriculturists Relief Act 1938 was attacked on the ground that the Provincial Legislature had no competence to legislate on negotiable instruments. Amongst the entries referred to before their Lordships is Entry 27 in List II which reads-" Trade and Commerce within the Province; Markets and Fairs; money-lending and Money Lenders. "dealing with this question, Varadachariai J. who delivered the concurring judgment, stated-"that the subject-matter of the impugned legislation is to a certain extent at least within the jurisdiction of the Provincial Legislature cannot and has not been denied. It may be that it will fall partly under one item and partly under another item in List II or List III. "dealing with this question, Varadachariai J. who delivered the concurring judgment, stated-"that the subject-matter of the impugned legislation is to a certain extent at least within the jurisdiction of the Provincial Legislature cannot and has not been denied. It may be that it will fall partly under one item and partly under another item in List II or List III. For instance, some of the debts affected by the Act may fall under the heading of 'trade' and some under the heading of 'money-lending' in item 27. Support may in some instances also be derived from item 10 relating to contracts etc. . . . . . . . . . . . . . "though the objection to the validity of that Act was not taken in the present form, it can reasonably be inferred that their Lordships accepted the position that the Madras Agriculturists Relief Act 1938 was atleast in certain aspects covered by Entry 27. ( 15 ) SOME of the Advocates referred to the definition of 'agriculture' used in the Indian Income-tax Act, 1961 and the Mysore Agricultural income-tax Act 1957 for the interpretation of the word 'agriculture'. It must be remembered that the definition' of a word or expression contained in any enactment is strictly confined in its application to the interpretation of that Act, subject also to the context in which that word might occur in that Act, itself. It would be therefore incorrect to employ the definition of a word given in some Act for interpretation of another Act. " The cardinal rule of interpretation that the words should be read in their ordinary, natural and grammatical meaning" subject to this rider that in construing the words in a constitutional enactment conierring legislative power the most liberal construction should be put upon the words so that the same may have effect in their widest amplitude. " (See A. I. E. 1955 Supreme Court, btf at page 61 ). Reliance was also placed on the decision of the Supreme Court in the commissioner of Income-tax v. Binoy Kumar, AIR. 1957 SC. 768. in which their Lordships have tried to ascertain the meaning of the word 'agriculture' by reference to the Law Dictionaries and the other decisions. " (See A. I. E. 1955 Supreme Court, btf at page 61 ). Reliance was also placed on the decision of the Supreme Court in the commissioner of Income-tax v. Binoy Kumar, AIR. 1957 SC. 768. in which their Lordships have tried to ascertain the meaning of the word 'agriculture' by reference to the Law Dictionaries and the other decisions. They summarised the position thus: - "these are the various meanings ascribed to the term 'agriculture' in various dictionaries and it is significant to note that the term has been used both in the narrow sense of the cultivation of the field and the wider sense of comprising all activities in relation to the land including horticulture, forestry, bleeding and rearing of live-stock, dairying, butter and cheese-making, husbandry etc. "while the meaning of the word 'agriculture' may be helpful in determining the amplitude of the word 'agricultural', it cannot be confined in its application to the strict meaning so as to interpret the entry as restricting only to debts incurred for the purpose of agriculture. As observed by the supreme Court in sree Ram Narain v. State of Bombay, AIR. 1961 SC. 652.-". . . . . . None of the items in the Lists is to be read in narrow or restricted sense" and "each general word should be held to extend to all ancillary and subsidiary matters which can fairly and reasonably be said to be comprehended in it. " ( 16 ) ANOTHER principle relevant to the question of interpretation has been laid down by the Supreme Court in Diamond Suyar Mills v. State of u. P. , AIR 1959 SC. 459 . wherein their Lordships had to consider the meaning of the words 'local area' occurring in Entry 52 of List II and laid down that-"the salutary rule is that the word conferring right of legislation should be interpreted literally and the powers conferred should be given the widest amplitude, while guarding ourselves against extending the meaning of the words beyond their reasonable connotation, in an anxiety to preserve the power of the Legislature. "they further stated that"if there is any difficulty in ascertaining the limits, the difficulty must be resolved as far as possible in favour of the Legislative body. "they further stated that"if there is any difficulty in ascertaining the limits, the difficulty must be resolved as far as possible in favour of the Legislative body. " we are further fortified in our view by the Full Bench decision of the andhra Pradesh High Court in Court of Wards, Paigah v. The Commissioner of wealth Tax, AIR. 1959 AP. 345 FB. wherein the words 'agricultural land' occurring in the Wealth Tax Act came up for consideration. Their Lordships stated- "words like 'agriculture' or 'agricultural' are used in different senses and bear different meanings according to the context in which they occur and they cannot be construed as having been used only in the one sense of actual tilling or ploughing. "it is therefore necessary that the word 'agricultural' has to be interpreted not only in the context of the word indebtedness' that follows but also to harmonise it with the opening words of the entry 'money-lending and money lender'. ( 17 ) WE have already referred to the insistence of some Advocates that the proper rule Of interpretation is to construe the word 'agricultural' in its grammatical sense. In this concext we might refer usefully to the decision of the Supreme Court in Regional Provident Fund Commissioner v. Sri Krishna Metal Manufacturing Co. , AIR. 1962 SC. 1536. in which the question was regarding the construction of the word 'factory' occurring in S. 1 (3) (a) of the Employees Provident fund Act 1952. In rejecting the plea of grammatical construction, their Lordships observed-"we are not inclined to accept this construction. The ordinary rule of grammar on which this construction is based cannot be treated as an invariable rule which must always and in every case be accepted without regard to the context. If the context definitely suggests that the relevant rule of grammar is inapplicable, then the lequirement of the context must prevail over the rule of grammar". We are inclined to invoke this principle in the construction of Entry 30. The object of empowering the Legislature to legislate on relief of agriculral indebtedness necessarily implies that the Legislature has power to relieve the agriculturists from all their indebtedness, whether agricultural or non-agricultural. It is common knowledge that the burden of indebtedness on the part of the Agriculturists is mostly due to their spending on non-agricultural affairs like marriages, religious functions, festivals etc. It is common knowledge that the burden of indebtedness on the part of the Agriculturists is mostly due to their spending on non-agricultural affairs like marriages, religious functions, festivals etc. Giving the entry its natural and full meaning, we have no doubt in holding that the present enactment, the pith and substance of which provides for relief of agricultural indebtedness of every kind, is well within the scope of the legislative competence of the State Legislature. ( 18 ) ANOTHER aspect of attack on the vires of the enactment is that there is no justification in the present context of rising prices Of agricultural commodities to enact a legislation for the relief Of Agriculturrists from their debts. It was contended on behalf of some of the petitioners that the Agriculturists had become rich on account of the high prices" which their commodities fetched. It was contended that on account of the various measures undertaken by the State like supply of improved implements, seeds, fertilizers and creation of irrigation facilities, the Agriculturists had attained a high capacity for taking more than one crop in their lands so as to enrich their purses. ( 19 ) IN countering this argument the learned Advocate General has placed considerable material in the form of Reports and results of investigations. The enactment of a particular legislation which is within the competence of the Legislature is a matter of policy and it would not be open to the Courts to scrutinize whether the policy adopted was just and proper. Our attention was drawn to certain passages from the Report of the Royal Commission on Agriculture in India, prepared in 1928, wherein it has been observed that there is widespread financial confusion and indebtedness amongst the Agriculturists and that there were many reasons which incapacitated an agriculturist from repaying his debts in time. It has further been noticed that in spite of the numerous developments, "the cultivator has continued, in the main, illiterate; he keeps no accounts and makes no distinction between sums expended on the needs of his industry and those expended on the requirements of himself and his family for conerations he has been accustomed to a ceaseless struggle to extort a bare livelihood from an insufficient holding, and has been subject to disaster from drought, flood or epidemic " (See page 432 ). It is common knowledge that the vagaries of monsoon drive the agriculturists to incur loans for the necessities of his life. ( 20 ) REFERENCE was also made to the all India Rural Credit Survey. 1954, Volume II, in which the questionable practices of money-lenders and the ineffectiveness of the money-lending legislations have been surveyed. Our attention was also drawn to certain passages on ' rural indebtedness' discussed in the book entitled ' Indian Economies' by K K. Dewett, g. C. Singh and J D. Varma 1968 Edition Referring to the rural indebtedness relating to the vear 1961-62 it has been stated that "the average indebtedness of each of the 74 million of rural families in the country is rs. 406. In 1961-62 alone, the rural population had to incur debts amounting to Rs. 1,332 crores. which works out approximately at Rs 180 per family. This reveals not only the appalling povertv of the rural masses of India but it also disproves the contention that the villagers are now prosperous enough to make a saving and invest in agriculture and small industry ". ( 21 ) WE do not think it necessary to refer to all the material placed before us bv the learned Advocate General to establish that agricultural indebtedness has been on the increase in spite of the numerous beneficial measures that the State had undertaken The learned Advocates for the petitioners drew our attention to the provisions contained in the Mysore land Improvement Loans Act 1963 the Mysore Agriculturists Loans Act, 1963 and the Mysore Money-Lenders Act 1961 to demonstrate that the ameliorative measures undertaken by the State did not justify the present enactment The scone of the former two Acts is very limited and the advance of loans is strictly limited to purposes connected with agricltural improvement They do not answer the need of loans for non-agricultural purposes The provisions contained in the Myso're Money Lenders Act give no relief except that thev are intended to regulate money-lending so as to eliminate fraud and dishonesty on the part of the Monev Lenders in their dealings with their debtors On a careful consideration of all the material placed before us and the provisions contained in Arts. 3. 39 and 43 of the Constitution, we are satisfied that the impugned enactment has. to be upheld as being just and relevant to the present conditions of agriculturists. 3. 39 and 43 of the Constitution, we are satisfied that the impugned enactment has. to be upheld as being just and relevant to the present conditions of agriculturists. ( 22 ) THE argument that the enactment is violative of Arts 14 19 (1), and 31 can be more appropriately examined with reference to the contentions raised against the validity of the different provisions of the Act. It was further argued that some of the provisions impair the rights and obligations conferred bv the Indian Contract Act the Code of Civil procedure, the Evidence Act the Limitation Act and the Provincial Insolvency act respectively falling within the legislative Entries 7. 13. 12 13 and 9 of list III (Concurrent List) in the Seventh Schedule to the Constitution. The encroachments on these subiects are quite ancillary and incidental as we shall presentlv show Under Art 254 (2) df the Constitution where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then the lew so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State. It is not disputed that the Act received the assent of the President on the eleventh day off november 1966. It therefore follows that any impediment to the validity of the Act on account of its incidental transgression of certain subjects in the concurrent list must therefore disappear in view of the assent accorded to the Act by the President under the aforesaid article of the Constitution. ( 23 ) ANOTHER objection closely connected with this aspect of the attack is that the Mysore Agricultural Debtors Relief Bill had not received the assent of the Governor and that therefore the Act is not valid law. It was contended that as the subject-matter squarely fell within Entry 30 of list II of the Seventh Schedule the consent of the Governor was essential and that if the Governor had consented, there could be no reservation of any Bill for the assent of the President, as the Bill becomes transformed into an Act as soon as the Governor assents to it. We see not merit in this contention. Arts. 200 and 201 of the Constitution make it clear that when a Bill is passed bv both the Houses of Legislature of a State, it shall be presented to the Governor. When it is so presented, three courses are open to the Governor- (1) the Governor shall declare that he assents to the bill; (2) he might withhold his assent to the Bill and return it together with a message requesting the House or Houses to re-consider the Bill or any of its specific provisions; (3) he may reserve the Bill for consideration of the President. As the Bill incidentally entrenched upon some of the subjects in the Concurrent List of Legislation, as already indicated, the bill was reserved by the Governor for the consideration of the President and the President has assented to the Where the Bill is so' reserved, the constitution does not require separate assent of the Governor. ( 24 ) THIS position is clarified by the Supreme Court in State of Bihar v. Kameswar Singh, AIR 1952 SC 252 . wherein it is stated in para 17 that reservation for the assent of the President:" should be made without the Governor himself giving his assent to the Bill. It is significant that the Article do'es not contemplate the governor giving his assent and thereafter, when the Bill has become a full-fledged law, reserve it for the consideration of the President. Indeed, the Governor is prohibited from giving his assent where such reservation by him is made compulsory. The Constitution would thus seem to contemplate only the Bill passed by the House or Houses of legislature being reserved for the consideration of the President and not laws to which the Governor has already given his consent. "in view of the provisions of the Constitution referred to above and the decisions of the Supreme Court, we reject this contention as having no merit in it. ( 25 ) WE now proceed to consider the individual sections that have been challenged by the different petitioners S 1 (3) of the Act lavs down that the Act " shall come into force on such date as the State Government may, by notification, appoint ". It is contended for some of the petitioners that the Act was passed in 1966 and was brought into force on 1st April 1969. It is contended for some of the petitioners that the Act was passed in 1966 and was brought into force on 1st April 1969. According to their contention, the sub-section which delegated the power to bring the Act into force was unguided and the delay in bringing the Act into operation was vital to its validity. Such provision delegating the power td the State Government has been held to be valid in Sardar Inder singh v. State of Rajasthan, AIR. 1957 SC. 510. Basant Kumar v. Eagle Rolling Mills, AIR. 1964 SC. 1260. and Jalan Trading Co. v. Mill Mazdoor Sabha, AIR. 1967 SC. 691. While the legal position as laid down by these decisions which renders the impugned provisions valid was conceded by Mr. Vasudeva Reddy who pointedly attacked the validity of this provision, he sought to sustain his argument by reference to the decision of the Court of Appeal in W and J. B. Eastwood v. Herrod, (1968) 3 All. E. R. 389. wherein it has been laid down that- " too rigid adherence to precedent may lead to injustice in a particular case. " this argument needs no scrutiny in view of Art. 141 of the Constitution, according to which the Law declared by the Supreme Court shall be binding on all Courts within the territory of India. Besides, the delay in the issuance of the Notification might, as was pointed out at the Bar, have provided opportunity for certain people to acquire the status of Agriculturists by cultivation of lands personally so as to make them eligible fo'r the benefits of the Act. Such a situation does not go counter to the object of the Act, but merely subserves it. We have no doubt that Sec. 1 (3) of the Act is valid. ( 26 ) THE definition of 'debt' occurring in S. 2 (4) of the Act was attacked on the ground that it included any liability in cash or kind due from a debtor and was therefore too' wide. It was contended that the definition would include chit fund loans, loans taken by Agriculturists from different companies and from Sugar Factories by the cane-growers. The scope of the writ petitions does not permit scrutiny of the contention whether any particular kind of debt is included in the definition or not. It was contended that the definition would include chit fund loans, loans taken by Agriculturists from different companies and from Sugar Factories by the cane-growers. The scope of the writ petitions does not permit scrutiny of the contention whether any particular kind of debt is included in the definition or not. These are contentions which will have to be examined by the Court before which the applications by the creditors or debtors made under S. 4 come up for decision. We might indicate that the crucial test as to whether there is a debt or not appears to have been furnished by the definition read with s. 4. which implies the relationship of creditor and debtor between the parties. ( 27 ) A similar ground of attack was advanced against Section 2 (5) which defines the word 'debtor'. It was contended that Cl. (a) (ii) of the definition included a person who held land at any time not more than 30 years before the 30th January 1960. which land has been transferred under an instrument or not and which transfer was alleged to' be in the nature of mortgage. It is not clear to us why the Legislature has chosen the period of 30 years prior to 30th Jan. 1960. The repealed Debt Relief Acts in force in Mysore, Madras and Bombay were enacted in 1928, 1938 and 1947 respectively. These Acts contained provisions for adjudication of a claim relating to' a transaction being a mortgage though apparently a sale. The period of 30 years prior to January 1960 would necessarily take us to a date prior to the Madras Act and the Bombay Act. If such transactions were mortgages the debtors concerned would have applied for adjudication of the real nature of such transactions. However, as the date chosen appears to be a matter of legislative policy and as it has not been shown to be unreasonable, we do not see anything objectionable about it. Another contention in regard to this definition is as regards the aggregate annual income of such debtor from all sources being not in excess of Rs. 5,000. It was argued that the limit of Rs. 5,000 is sufficient to cover cases of even Gazetted Officers getting a monthly salary of Rs. 400 and there was therefore no justification for extending the benefit of relief to persons with that income. 5,000. It was argued that the limit of Rs. 5,000 is sufficient to cover cases of even Gazetted Officers getting a monthly salary of Rs. 400 and there was therefore no justification for extending the benefit of relief to persons with that income. We are unable to accept this argument since the Agriculturists are a class by themselves and the income that seems to have been contemplated by this definition is the gross income. The prices of agricultural commodities have gone up by three or four times within these ten or twelve years; therefore, the limit of Rs. 5,000 cannot be considered to be unreasonable. ( 28 ) THE next formidable ground of attack is against S. 3 of the Act on the ground that it introduces a hostil'e discrimination between the creditors enumerated therein and the other private creditors like the petitioners left out. This section reads as follows:" 3. Savings.-Save as otherwise expressly provided, nothing in this Act shall affect the debts and liabilities of a debtor falling under the following heads, namely: - (i) any revenue or tax payable to Government or any other sum due to it by way of loan or otherwise; (ii) any tax payable to a local autho'ritv or any other sum payable to such authority by way of loan or otherwise; (iii) any sum due to a co-operative society; (iv) any sum advanced solely for the purpose of financing of crops or for the purpo'se of seasonal financing as provided for in this Act; (v) any sum in respect of which proceedings have been taken under the Hyderabad Jahgirdars Debt Settlement Act, 1952; (vi) any sum due under a decree or order for maintenance passed by a competent Court; (vii) any sum due to a Scheduled Bank; (viii) any liability arising out of a breach of trust; and (ix) any debt due to a woman, where the value of the property owned by her including the principal amount of the debt so due does not exceed six thousand rupees. Explanation.-For the purposes of this clause, the house in which the creditor woman lives, or any furniture therein, or her household utensils, wearing apparel, jewellery, or such like personal belongings shall not be regarded as property. Explanation.-For the purposes of this clause, the house in which the creditor woman lives, or any furniture therein, or her household utensils, wearing apparel, jewellery, or such like personal belongings shall not be regarded as property. "it would be manifest from the scheme of this section that the debts enumerated therein are not liable to be adjusted and the benefit which an agriculturist is entitled to get under the provisions of the Act in respect of his other debts would not be available in regard to any of these debts. It is contended that in enacting this section, the Legislature had introduced a discrimination between the private creditors and these creditors, without any rational basis and without anv nexus between the basis of classification and the object of the enactment. We have already pointed out above that the Act consolidates and amends all the previous laws on the subject and provides for the relief of the agricultural debtors of the State of Mysore. If that were the object of the Act, unless the basis of classification adopted in S. 3 is defensible in the face of Art. 14 of the Constitution, the section or parts of it will have to be. struck down as offending the said article. ( 29 ) BEFORE discussing the various decisions cited by the Advocates for the petitioners including the Advocate for the debtor-petitioner and the Advocate General, it is necessary to ascertain the discernible basis of classification adopted for exempting these creditors from the operation of the Act. Clauses (i) and (ii) are severabie, while the first clause refers to revenue or tax payable to Government, the second clause refers to any tax payable to a local authority. Public policy requires that these revenues and taxes due to Government and the local authorities should not be liable to reduction under a temporary legislation like the one we are considering. On that ground alone we hold that an exemption of revenues and taxes due to the Government and the local authorities is just and free from the vice of discrimination, as none of the debts due to other creditors stands on the same footing. But this ground of discrimination would not be available in respect of sums due to the Government and local authorities by way of loans or otherwise. But this ground of discrimination would not be available in respect of sums due to the Government and local authorities by way of loans or otherwise. Similarly, debts due to a Co-operative Society cannot be distinguished from debts due to other creditors. ( 30 ) THE learned Advocate General contended that the aforesaid debts had been excluded from the purview of the enactment as the object of the act is to provide for adjustment and scaling down of debts incurred for non-productive purposes and due to persons who indulge in the exploitation of the helpless and ignorant agriculturists. It has to be conceded that debts advanced by the State Government under the Mysore Land improvement Loans Act, 1963 would fall in the category of loans advanced to agriculturists connected with agricultural objects. Such debts are advanced only for specific purposes mentioned in the two Acts. But this cannot be said of loans advanced by ordinary co-operative societies as the Mysore co-operative Societies Act, 1959 does not require a Society registered under it to advance loans only for agricultural purposes. What can be said about debts due to a Co-operative Society also holds good in respect of debts due to a Scheduled Bank mentioned in clause (vii) of the section. There is no rational point of distinction between a Scheduled Bank and an ordinary bank. The mere fact that a Scheduled Bank is subject to more rigorous control and supervision by the Reserve Bank cannot, for the purpose of this Act, distinguish such bank from other banks which are also subiect to numerous legal restrictions. Besides, there is no material to support the contention of the Advocate General that the debts advanced by local authorities, Co- operative Societies and Scheduled Banks are invariably debts advanced for agricultural purposes; nor is there any material to show that the private creditors exploit the ignorance and the helpless situation of the agriculturists residing in rural areas. In support of the latter contention, our attention was drawn to the report of the agricultural Finance Sub-Committee of 1945 and the views expressed by learned authors of 'indian Economies' by K. K. Dewett and others (1968 ed. ). In support of the latter contention, our attention was drawn to the report of the agricultural Finance Sub-Committee of 1945 and the views expressed by learned authors of 'indian Economies' by K. K. Dewett and others (1968 ed. ). There are, no doubt, observations in the report of the Royal Commission on Agriculture in India 1928 to the following effect:" We have no hesitation in recording our belief that the greatest hope for the salvation of the rural masses from their crushing burden of debt rests in the growth and spread of a healthy and well organised co-operative movement based upon the careful education and systematic training of the villagers themselves. . . . . . . . . . . . If the rural community is to be contented, happy and prosperous, local Governments must regard the co-operative movement as deserving all the encouragement which it lies within their powers to give. " (vide page 436 ). "it must be conceded that the co-operative movement has been spreading fast and wide within the State and has been trying to provide facilities for rural credit both amongst agriculturists and other businessmen. But the crucial point for our consideration is whether the basis of the classification viz. , " these are institutions which advance loans solely for agricultural purposes ", can be accepted as a ground of defence to uphold the classification. ( 31 ) SOME support for such a classification was sought for by the learned Advocate General from a portion of the preamble to the Act. The preamble states that the Act was enacted 'to consolidate and amend the law for the relief of agricultural debtors in the State of Mysore and for certain other purposes specified herein'. It is the contention of the learned advocate General that the words 'for certain other purposes specified herein' would furnish sound support for the classification adopted b'y the legislature. In our opinion, the words: 'certain other purposes specified herein' have no reference to the basis of classification, but to other matters for which provisions have been expressly made in the Act. After the adjustment and scaling down of debts, the award which is to be drawn up under Sec. 31 creates a charge against all the properties of the debtor. After the adjustment and scaling down of debts, the award which is to be drawn up under Sec. 31 creates a charge against all the properties of the debtor. Further, Sec. 40 declares that no alienation o'f any property belonging to a debtor, who is a party to any proceeding under this Act, or an Award registered under this Act, made by him before all his debts are discharged shall be valid, unless it is made with the previous sanction of the Court. In such a situation, it is difficult that a debtor who is a party to a proceeding under the Act or to an award registered under the Act would be able to get credit in the open market. Therefore, provision has been made under Sec. 61 of the Act for authorising persons to advance loans for financing of crops or seasonal finance to such debtors. Similarly, provision has also been made under Sec. 32 of the Act for preparation of a scheme for adjustment o'f debts through the Land Development Bank or through the Mysore Central Co-operative Land Development Bank, which are authorised under the aforesaid section, to take over the debts of the debtors and pay the creditors in cash or in bonds guaranteed by the State government. Incidently, provision has been made in Chapter IV for adjudicating a debtor insolvent if the Court finds that the income of the debtor and his immovable property are not sufficient to allow his debts to be liquidated by annual payments not exceeding twelve in number. The words ' for certain other purposes specified herein' occurring at the end of the first paragraph of the preamble cover the aforesaid purposes and have no reference to the basis of classification as argued by the learned advocate General. ( 32 ) IN support of the contention that the State has denied to the private creditors equal protection o'f the laws in violation of Article 14 of the Constitution, reliance has been placed on some decisions of the Supreme court. Both sides have relied upon the decision of the Supreme court in Ramakrishna Dalmia v. Justice Tendolkar, AIR. 1958 SC. 538. Both sides have relied upon the decision of the Supreme court in Ramakrishna Dalmia v. Justice Tendolkar, AIR. 1958 SC. 538. It has been laid down therein that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. It is further to be presumed that the legislature understands and correctly appreciates the need of its own people and that its discriminations are based on adequate grounds. While these presumptions are unexceptionable, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the Court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation. Their Lordships have further laid down:"it is now well settled that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases, namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of Supreme Court that article 14 condemns discrimination not only by a substantive law but also by a law of procedure". These principles have been reiterated in the subsequent decisions of the supreme Court and have been applied to test the numerous bases of classification adopted by the statutes under examination. The same principles have been laid down in Jia Lal v. Delhi Administration, AIR. 1962 SC. 1781. where the constitutional validity of S. 29 of the Arms Act 1878 was attacked as being void owing to its contravention of Art. 14 of the Constitution. The same principles have been laid down in Jia Lal v. Delhi Administration, AIR. 1962 SC. 1781. where the constitutional validity of S. 29 of the Arms Act 1878 was attacked as being void owing to its contravention of Art. 14 of the Constitution. That section required prio'r sanction to be obtained for prosecution in regard to an offence punishable under Section 19 (f) of the Act if the offence had been committed in certain areas. This distinction was sought to be defended on the ground that the areas had been distinguished on the basis of geographical situation and political conditions prevailing in the particular area prior to 1857. Their Lordships struck down the classification on the ground that such classification was not in conformity with Article 14 of the Constitution as more than a century had since elapsed and the conditions had so radically changed that it was impossible to sustain any distinction between the territories north of the Jumna and Ganga and other territories on any ground pertinent to the object of the law in question. ( 33 ) AS against these decisions, the learned Advocate General has relied upon certain other decisions, which we presently proceed to notice, to support the supposed basis of classification underlying the impugned provisions. Strong reliance was placed on the decisions in krishnamurthy v. Venkateswaran, AIR. 1952 Mad. 11. Chandmal Ratichand Jhabua v. State of M. P. , AIR. 1967 MP. 52. and Catholic Bank of India v. George Jacob, AIR. 1968 Ker. 3. The Madras Agriculturists' Relief Act 1938 considered by the Madras High Court in the aforesaid decision (A. I. R. 1952 Mad. 11) also contained a category of exempted debts in section 4 of the Act similar to those covered by S. 3 of the Act under consideration. After analysing the characteristics of the different Acts so enumerated, their Lordships came to the conclusion that the exemptions v, ere based upon reasonable classification and had not been singled out for hostre discrimination. With due respect, we would like to point out that though their Lordships held that the basis of classification adopted by that Act was reasonable, there is no indication in the judgment that the basis of the classification was tested as having a rational nexus with the object of the Act. With due respect, we would like to point out that though their Lordships held that the basis of classification adopted by that Act was reasonable, there is no indication in the judgment that the basis of the classification was tested as having a rational nexus with the object of the Act. The same observations apply with equal force to the decision of the Madhya Pradesh High Court in Chandmal's case (21 ). In that case, their Lordships were considering the Madhya Bharat Scheduled tribes Debt Relief Regulations, 1962. Regulation 4 exempted the claims ot Co-operative societies from the operation of the Act. It was held that the classification was reasonable and consistent with the object of the regulations, which was to protect the members of Scheduled tribes from being exploited by the superior intelligence and devices of certain classes of private money lenders. It was also observed that though a bank is a profit making institution, the manner of its management and the control exercised by the Reserve Bank in certain cases, and the applicability of the special banking laws assure that it will not indulge in illegitimate profit- making to which private money lenders are tempted. ( 34 ) THE learned Advocate General stressed upon these views to justify the classification in the present case. We are unable to know whether any material was placed before the Court that the private creditors were making illegitimate profits and exploiting the scheduled tribe debtors. Assuming that such a material was placed before their Lordships, there is no discussion in the body of the judgment, which shows that any effort was made to establish a rational relationship between the basis of that classification and the object of the Act. This is also the feature of the Full Bench Decision of the Kerala High Court in the Catholic Bank of India's case (22 ). The Kerala Agriculturists Debt Relief Act 1958 also contained a clause of exemption of certain classes of debts. The Act was passed in order to give relief to the indebted agriculturists and the classification was upheld, with due respect, on the basis of a number of assumptions. The Kerala Agriculturists Debt Relief Act 1958 also contained a clause of exemption of certain classes of debts. The Act was passed in order to give relief to the indebted agriculturists and the classification was upheld, with due respect, on the basis of a number of assumptions. We find at paragraph 36 of the judgment the following observations made by Raman nair J. , who delivered a concurrent judgment:"act 31 of 1958 was enacted to give relief to indebted agriculturists in the State of Kerala, and it is notorious that they stood in need of this relief because of their exploitation by money lenders". The decision of the Supreme Court in State of Rajasthan v. Mukanchand, AIR 1964 SC 1633 . to which we shall immediately advert, was distinguished on the ground that the jahgirdars of Rajasthan stood in need of relief by reason of the resumption of their Jagirs and their consequent impoverishment. His Lordship proceeded: "now, this exploitation of the agriculturist was effected not merely by taking advantage of his dire need for money to impose extortionate terms with regard to interest and the like, but lay also in such non-apparent abuses as the deduction of interest in advance at a higher rate than that specified in the contract, and not giving due credit to payments made. "even if these assumptions were correct, it is still necessary under Article 14 of the Constitution to find a reasonable relationship between such assumptions and the object of the Act Since none of these derisions considered the fulfilment of the second test of reasonable classification to satisfy the requirements of Art. 14 of the Constitution, we do not think that they are of any assistance in deciding the point at issue ( 35 ) THE decision of the Supreme Court direct to the point at issue is td be found in State of Rajasthan v. Mukan Chand (23) their Lordships were dealing with the validity of S 2 (e) of the Rajasthan Jagirdar's debt Reduction Act, 1957, which excluded certain debts due to the creditors mentioned in clauses (i) to (vi) The preamble to the Art stated that the Act was intended "to provide for the scaling down of debs of iagirdars whose jagir lands have been resumed under the provisiers of the rajasthan Land Reforms and Resumption of Jagirs Act, 1952" S. 2 (e) of that Act, which is identical with Section 2 (4) read with S. 2 of the Act read thus:"s. 2 (e)-"debt" means an advance in cash or in kind and includes any transaction which is in substance a debt but does not include an advance as aforesaid made on or after the first day of January, 1949 or a debt due to: - (i) the Central Government or Government of any State; (ii) a Local Authority; (iii) a Scheduled Bank; (iv) a Co-operative Society; (v) a waqf, trust or endowment for a charitable or religious purpose only; or (vi) a person, where the debty sadvanced en his Behalf by the Court of Wards". Their Lordships were dealing with an appeal by the State The concerned creditor had obtained a mortgage decree in February 1954 agaipst one Rao raja Inder Singh. The debtor applied to the District Judge fer reduction of his decretal debt in accordance with S 5 of the Ac. The on liton urged that the provisions relied upon were ultra vires the Constition being in contravention of Arts. The debtor applied to the District Judge fer reduction of his decretal debt in accordance with S 5 of the Ac. The on liton urged that the provisions relied upon were ultra vires the Constition being in contravention of Arts. 14, 19 and 31 The High Court upheld the contenion of the creditor, and the State Government appealed to the Suprem Court in upholding the decision of the High Court, their Lordishps of the supreme Court laid down as follows: " We think that the High Court was right in hliding that the impugned part of S 2 (e) infringes Art 14 of the Constitution. It is now well settled that in order to pass the test of permissble elassification, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentration whic guishes persons or things that are to be put together from others left out of the group, and (2) that the different a must have a rational relationship to the object sought to be achieved bv the statute in question. In our opinion, condition No 2 above has clearly not been satisfied in this case The obiect sought to be achieved bv the impugned Act was to reduce the debts secured on iagir lands which had heen resumed under the provisions of the Rajasthan Land Reforms and resumption of Jagirs Act. The jagirdar's capacity to pay debts had been reduced by the resumption of his lands and the object of the Act was to ameliorate his condition. The fact that the debts are owed to a Government or local authority or other bodies mentioned in the impugned part of S. 2 (e) has no rational relationship with the object sought to be achieved by the Act. Further, no intelligible principle underlies the exempted categories of debts. The reason why a debt advanced on behalf of a person by the Court of Wards is clubbed with a debt due to a State or scheduled bank and why a debt due to a non- scheduled bank is not excluded from the purview of the Act is not discernible. "since this decision fully supports the contentions of the petitioners, it is unnecessary to refer to the other decisions cited on their behalf. "since this decision fully supports the contentions of the petitioners, it is unnecessary to refer to the other decisions cited on their behalf. ( 36 ) THE learned Advocate General, however, sought to distinguish this decision on the ground that it was a case of jagirdars, whose lands had been resumed by the State on payment of half the market value as compensation and whose debts were sought to be reduced on equitable considerations, and cannot, therefore, be relied upon in a case where the relief is to be given to agriculturists, who are being exploited by unscrupulous creditors. We do not think that any point of distinction can really be made as advanced by the Advocate General. ( 37 ) THE decision of the Madras High Court in m. Kevalchand v. State of Madras, AIR. 1957 Mad. 514. is of no assistance. Their Lordships were dealing with the provisions of the Madras Pawn-Brokers Act, 1943. The definition of 'loan' in S. 2 (5) of that Act excluded from the operation of the Act, advances made by a co-operative society and a banking company. It also excluded deposits with an incorporated company or co-operative society. It was held that the exemption granted did not offend Art. 14 of the constitution. The object of the Act was to subject the Pawn-brokers to certain control and regulation. It was on that ground that the exemption was held to be sustainable. ( 38 ) ANOTHER decision cited by him is contained in manna Lal v. Collector of Jhalwar, AIR. 1961 SC. 828. The Rajasthan Public Demands Recovery Act, 1952 which came up for consideration contained provisions which accorded special facility to the State for recovery of the debt as 'public demand'. It was held that there was no violation of. Art. 14 of the Constitution, since the Government, even as a Banker, can be legitimately put in a separate class as distinguished from other Banks. We may point out that the provision that was attacked in that case was as regards the special facility for recovery of debts due to the State Bank. No question of exemption of any debts in a debt adjustment legislation arose in that case. ( 39 ) BEFORE closing the discussion, we would like to refer to the decision of the Allahabad High Court in brij Rajkumari v. Mustafa Ali Khan, AIR. 1968 ALL. 322, FB. No question of exemption of any debts in a debt adjustment legislation arose in that case. ( 39 ) BEFORE closing the discussion, we would like to refer to the decision of the Allahabad High Court in brij Rajkumari v. Mustafa Ali Khan, AIR. 1968 ALL. 322, FB. in which the U. P. Zamindars' Debt Reduction Act, 1953 came up for consideration. It would be found from para 7 of the judgment that the definition of the word 'debt' as contained in the Act excluded from its operation debts due to Central Government or the State Government, a local Authority, a scheduled bank, a co-operative society, a waqf etc. A Bench of five Judges considered the previous decisions of that Court and the decision of the Supreme Court in State of Rajasthan v. Mukan Chand (23) referred to above and struck down the provision on the ground that the question stood concluded by the aforesaid decision of the Supreme court. We are of the opinio'n that the exclusion of debts due to the State government, the local authority, a co-operative society Or a scheduled bank is unconstitutional. ( 40 ) CERTAIN other debts are mentioned in the section and are excluded from the operation of the Act. One of such debts is as contained in clause (iv) 'any sum advanced solely for the purpose of financing of crops or for the purpose of seasonal financing as provided for in this Act'. Such a provision is made in S. 61 of the Act and since those debts are loans to be advanced to debtors who are parties to the proceeding under the Act or to the award to be passed 'therein, the debts would not be due within the period specified in S. 4 of the Act and their exclusion is valid. Clause (v) exempts 'any sum in respect of which proceedings have been taken under the Hyderabad Jahgirdars Debt Settement Act, 1952'. The exclusion seems to be based on the pround that there cannot be a second settlement of debts, which have already been settled under an enactment in the Hyderabad area before it became part of this State. Clause (v) exempts 'any sum in respect of which proceedings have been taken under the Hyderabad Jahgirdars Debt Settement Act, 1952'. The exclusion seems to be based on the pround that there cannot be a second settlement of debts, which have already been settled under an enactment in the Hyderabad area before it became part of this State. Similarly, exclusion of 'any sum due under a decree or order for maintenance passed by a competent court' mentioned in clause (vi) may also be defended on grounds of public policy, since by making adjustments the persons entitled to maintenance would be either without means or would have to suffer reduction of the amounts payable to them for their maintenance. So also the exclusion of ' any liability arising out of a breach of trust ' under clause (viii) can be defended on the ground that such a person cannot be permitted to enrich himself by his own dishonest act The last clause, namely Cl. (ix) exempts 'any debt due to a woman, where the value of the property owned by her including the principal amount of the debt so due does not exceed six thousand rupees'. This provision was defended bv the learned Advocate general by reference to Art. 15 (3) of the Constitution on the ground that it was a special provision for women as contemplated under that article of the Constitution. In our opinion, special treatment for women like maternity leave, separate accommodation, entrances etc at places of public resort, is permissible when such treatment is relatable to some feature o'f disability which is peculiar to women so as to differentiate them from men as a class. The explanation added to this clause states: " the house in which the creditor woman lives, or any furniture therein, or her house-hold utensils, wearing apparel, jewellery, or such like personal belonging shall not be regarded as property ". Bead with the explanation the clause exempts debts due to a woman upto Rs. 6,000, even though the total value of items of her property as detailed in the explanation may be of any value. "we cannot, therefore, consider that the exemption of debts due to a woman can be considered eitlier reasonable generally or defensible under Art. 15 (3) of the Constitution. 6,000, even though the total value of items of her property as detailed in the explanation may be of any value. "we cannot, therefore, consider that the exemption of debts due to a woman can be considered eitlier reasonable generally or defensible under Art. 15 (3) of the Constitution. For the reasons, we are of the opinion that the exclusion of debts in Clauses (i), (ii), (iii), (vii) and (ix) cannot be defended as their exclusion is violative of Art. 14 of the Constitution and has no rational relationship with the object of the Act. The agriculturists are as much entitled to these debts being adjusted as any other debts owed by them. ( 41 ) AT this stage, we may mention that some of the petitioners, who claim to be companies and factories etc. advancing Joans to their agriculturist-members or-shareholders contended that they were in fact similarly placed as the Co-operative Societies and the Banks, and their exclusion from the categories of creditors included in S. 3 of the Act was discriminatory. We refrain from pronouncing on this contention since we haye struck down the relevant part of the section itself. ( 42 ) A uanimous attack advanced on behalf of the petitioners relates to the validity of S. 4 and its first proviso which read as follows:" 4. Application for adjustment of debts.- (1) Any debtor ordinarily residing within the State of Mysore, or his creditors, may make an application within three months from the commencement of this act, to the Court for adjustment of his debts: provided that ao application under this section shall lie- (a) from a debtor whose debts have been adjusted on an application under S. 4 of the Bombay Agricultural Debtors Relief Act, 194 or of the Hyderabad Agricultural Debtors Relief Act, 1956, or in respect of debts which have been scaled down under the Madras agriculturists Belief Act. 1938 ; ". The contention as regards the main section is that the period of three months prescribed for making of an application is so unreasonable that it deserved to be struck down as impairing the right to fie a suit within three years. It cannot be disputed that prescription of a period of limitation is a matter of legislative policy. The contention as regards the main section is that the period of three months prescribed for making of an application is so unreasonable that it deserved to be struck down as impairing the right to fie a suit within three years. It cannot be disputed that prescription of a period of limitation is a matter of legislative policy. The period prescribed proceeds on the assumption that the party will have full opportunity afforded to him to enforce his right in a Court of Law. As observed in Cooley's constitutional Limitations, Vol. 11, page 764,-". . . . . . . . It is essential that such statutes allow a reasonable time after they take effect for the commencement of suits upon existing causes of action though what shall be considered a reasonable time must be settled by the judgment of the legislature, and the Courts will not enquire into the wisdom of its decision in establishing the period of legal bar, unless the time allowed is manifestly so insufficient that the statute becomes a denial of justice. "we have therefore to consider whether the period of three months from the date of commencement of the Act is so unreasonable as to amount to denial of justice. It was contended that under sub-sec. (3) of S. 4 an application should contain particulars of all debts specified in S. 3 due from a debtor and that the period of three months would be most insufficient for a creditor to collect all the details. Form 2 which is prescribed under rule 5 is the form of application for creditors; column 5 reads " Names and addresses of other creditors so far as they are known to the applicant ". It is thus evident that what the creditor is required to mention relates to the details of debts known to him; the Act does not contain any provision which would visit him with penal consequences for failing to incorporate the details of debts due to other creditors. The period of three months is quite sufficient for filing an application by a creditor or debtor for the adjustment of his debt. In this context it is irrelevant that the limitation prescribed for a suit is three yeors. The Act is a special law enacted for giving relief to Agriculturists. The relief to be effective must be expeditious and as inexpensive as possible. In this context it is irrelevant that the limitation prescribed for a suit is three yeors. The Act is a special law enacted for giving relief to Agriculturists. The relief to be effective must be expeditious and as inexpensive as possible. It is to achieve these ends that the act provides for making an application, and the period of three months is sufficient. Incidentally we might mention that even under the Limitation Act, the maximum period prescribed for any application specified in arts. 118 to 133 is ninety days. ( 43 ) COMING to Cl. (a) of the proviso, we may indicate that the objection to the validity of this clause was pointed out by us and we requested the learned Advocate General to defend the validity of that clause. The apparent meaning of the clause is that no application shall lie from a debtor whose debts have been adjusted either under the Bombay Agricultural debtors Relief Act or the Hyderabad Agricultural Debtors Relief Act. There is no valid reason for excluding these debtors from the benefit of the act. Discrimination between these debtors and the debtors governed by the Madras Agricultural Debtors Relief Act, 1938 becomes apparent when we consider the last clause of the proviso, which imposes a similar bar only " in respect of the debts which have been scaled down under the madras Agriculturists Relief Act 1938 ". Besides, the use of the words ' his creditor' in the main section implies that if an application from the debtor lies, then his creditor can make an application. This means, if no appication from a debtor whose debts have been adjusted under the Bombay Act or the Hyderabad Act lies, then his creditor also cannot file an application. So the first para of the proviso will have to be struck down. We cannot allow the last portion of Cl. (a) to stand as it would discriminate between debtors from, one area and debtors from another area. The whole clause of this proviso has to be struck down as violating Art. 14 of the Constn. ( 44 ) S. 5 was attacked on the ground that it had no purpose behind it. We cannot allow the last portion of Cl. (a) to stand as it would discriminate between debtors from, one area and debtors from another area. The whole clause of this proviso has to be struck down as violating Art. 14 of the Constn. ( 44 ) S. 5 was attacked on the ground that it had no purpose behind it. In our opinion, this section requires every creditor and debtor to file a true and correct statement of debts and the other details essential for the purpose of deciding whether the application by the debtor is competent and whether he is eligible for adjustment of his debts under the Act. ( 45 ) S. 6 of the Act was attacked an the ground that it violates the principle of Law of Suretyship contained in the Contract Act. What this section lays down in effect is, that where the debtor is jointly and severally liable, the debt shall be liable to be adjusted only in so far as the debtor is concerned and he is free to take action by making an application for adjustment of such debt. It is laid down that where the debts are adjusted, the surety shall be discharged from liability in respect Of such debt or portion of such debt. This provision is consistent with the object of the Act. If a surety is a non-Agriculturist and if the Act were to provide that notwithstanding adjustment of the debts due from a debtor the liability of the surety shall remain unaffected, the very object of granting relief to a debtor will be frustrated for the simple reason that a surety who has discharged the debts of a debtor will have his normal remedy in a Court of law. The impairment of the law of Contract to the extent indicated in sub-sec. (2) is reasonable and has to be upheld. ( 46 ) S. 11 of the Act was attacked on two grounds. Firstly, that the section does not specify the date with reference to which the total debts have to be ascertained; and secondly, that the total debts due from a debtor adjustable under the Act should not exceed Rs. 20,000, is arbitrary. This section, in our opinion, has to be read with S. 17 which provides for determination of the debtor being a 'debtor' under the Act and iris 'total 'debts. 20,000, is arbitrary. This section, in our opinion, has to be read with S. 17 which provides for determination of the debtor being a 'debtor' under the Act and iris 'total 'debts. The explanation to S. 17 lays down that the expression 'the date of the application' shall mean the date of an application which has been made within the period prescribed under S. 4 and where there are two or more applications made for adjustment of the debts of the same debtor, the date of the last of such applications. The explanation clinches the matter beyond all doubt, and it is quite reasonable that the date of the last application shall be taken as the date with reference to which the total debts of the debtor should be determined. It is open to a creditor or debtor to make an application on any date within a period of three months. It was therefore impossible for the Legislature to specify any fixed date with reference to which the total debts should be ascertained. As regards the second contention that the total debts liable to be adjusted as due from a debtor should not exceed Rs. 20,000 relates to a matter of legislative policy. It appears that the Legislature seems to have considered that it is not possible to adjust the debts of creditors whose debts exceed Rs. 20,000; such debtors are either large estate-holders or might be having other sources of income. In our opinion Ss. 11 and 17 are unassailable. ( 47 ) S. 15 of the Act lays down that every debt due from a debtor in respect of which no application has been made under S. 4 within the specified period or in respect of which no application for recording a settlement is made under S. 8 within the period specified in that section, and every debt due from a debtor in respect of which a statement is submitted to the court by the creditor in compliance with the provisions of S. 14 shall be extinguished. The second sub-section is in the nature of a proviso. The second sub-section is in the nature of a proviso. It states-" (2) Nothing in this section shall apply to any debt due from any person who has by his declaration, act or omission intentionally caused or permitted his creditor to believe that he is not a debtor for the purpose of this act, or that no application under S. 4 can be entertained in respect of any debt owed by such person to such creditor by reason of the provisions of Section 11. "sub-sec. (2) is obviously for the benefit of creditors who are, for the reasons stated therein, prevented from making applications against their debtors within the period prescribed by S. 4. There cannot be any legal objection to the validity of this sub-section. What is, however, urged against the validity of sub-sec. (1) ox S. 15 is that the extinguishment of debt for failure to make an application within the time prescribed is in the nature of penalty and a creditor is made to suffer the penalty without affording him a reasonable opportunity of showing that his debt does not suffer the extinguishment under the Act. Reliance was placed on the decision of the Supreme Court in Kantilal Babulal and Bros. v. H. C. Patel, AIR. 1968 SC. 445. where S. 12a (4) of the Bombay Sales Tax Act, 1946, was struck down as violative of Art. 19 (1) (f) of the Constitution. That sub-section provided that any amount collected by a dealer by way of sales tax in excess of the amount payable by him under the Act would be forfeited to the State government. It was contended for the State that the amount could be forfeited as a measure of penalty for the contravention of sub-sees. (1) and (2) of S. 12a which provided for collection of tax. In dealing with this contention, their Lordships stated:". . . . . . Under our jurisprudence no one can be penalised without a proper enquiry. Penalising a person without an enquiry is abhorrent to our sense of justice. It is a violation of the principles of natural justice, which we value so much. . . . . . . . In dealing with this contention, their Lordships stated:". . . . . . Under our jurisprudence no one can be penalised without a proper enquiry. Penalising a person without an enquiry is abhorrent to our sense of justice. It is a violation of the principles of natural justice, which we value so much. . . . . . . . "the operation of S. 15, though automatic according to its apparent tenor, the question of extinguishment would normally arise when a creditor files either a belated application or a suit in the ordinary Civil Court for recovery of debt due from his debtor. In such cases, the debtor will put forward S. 15 as defence to support his contention that the debt has been extinguished and discharged. It would be then open to the creditor to show why he did not file the application and whether he had any of the grounds mentioned in sub-sec. (2) or other grounds for not making the application. If there was no such provision, it would not be possible to compel every creditor to make an application against his debtor, with the result that there cannot be an adjustment of all the debts due from a debtor to his different creditors. The restriction imposed by this section is reasonable and is in the interest of a public purpose and cannot be struck down as violative of Art. 19 (1) (g ). ( 48 ) IT was next contended that S. 18 was violative of Art. 14 of the constitution. That section provides for transfer of pending suits, appeals, applications and other proceedings in respect of any debt pending in any civil or Revenue Court to the Court having jurisdiction under the Act, when such proceeding involves questions whether the person from whom such amount is due is a 'debtor' and whether his total debts exceed rs. 20,000. The object of this provision is to enable the Court to consolidate all proceedings relating to the recovery of debts claimed to be due from a 'debtor'. Nd doubt the transfer of proceedings contemplated by the section is restricted only to those cases where the two preliminary issues mentioned in S. 17 are involved. The basis of classification is obvious. The object of this provision is to enable the Court to consolidate all proceedings relating to the recovery of debts claimed to be due from a 'debtor'. Nd doubt the transfer of proceedings contemplated by the section is restricted only to those cases where the two preliminary issues mentioned in S. 17 are involved. The basis of classification is obvious. Proceedings which do not involve the two issues cannot be transferred for the simple reason that the Court under the Act cannot give any relief to such a 'debtor', either because he does not satisfy the requirements of his eligibility mentioned in S. 17 of the Act or because no such issues arise in that suit or appeal etc. There may be cases where even if a person is an agriculturist, his claim for being a 'debtor' may be rejected. In the absence of such transfer, the suits or appeals would be heard and decided by the court in which they may be pending with the result that the decrees or orders enforceable would create confusion and conflict in the enforcement of the award to be passed under the Act. There is, therefore, nothing illegal or unconstitutional about the provisions contained in S. 18 of the Act. ( 49 ) THE provisions contained in Ss. 21, 29 and 30 relating to the scaling down of debts and determination of paying capacity were attacked as being violative of Art. 19 (1) (f) of the Constitution. It was contended that 'money' is property and that reduction of debts- would amount to expropriation of property without payment of adequate compensation. Reliance was placed on two decisions of the Supreme Court. The decision in State of bihar v. Kameshwar Singh (14) considered the validity of certain provisions of the Bihar Land Reforms Act, 1950 which provided for acquisition of land and distribution of the same amongst the tenants. It was held that the Bihar Legislature was competent to make law on the subject of transfer of estates and that the Act as regards such transfer was constitutional. It was also held that there was public purpose behind the Act while bringing about the reform in the land distribution system of Bihar for the general benefit of the community and that it was not possible for the Court to say that there was no public purpose behind the acquisition contemplated by the impugned statute. It was also held that there was public purpose behind the Act while bringing about the reform in the land distribution system of Bihar for the general benefit of the community and that it was not possible for the Court to say that there was no public purpose behind the acquisition contemplated by the impugned statute. It was held that S. 23 (f) of the Act providing for compensation was colourable and the provision was accordingly struck down. The other decision in the Bombay Dyeing and Manufacturing Co. v. State of Bombay, AIR. 1958 SC. 328. dealt with the validity of certain provisions of the bombay Labour Welfare Fund Act, 1953. S. 3 (1) and (2) of the Act provided for the employer making payment to the Welfare Fund Commissioner of all unpaid accumulations of wages. The provisions were held unconstitutional as they took away the property of the employer in violation of Art. 19 (1) (f) or Art. 31 (2) of the Constitution. In our opinion, none of these decisions applies to the facts of the present case. Sub-sees. (2) and (3) of S. 21 provide respectively for reduction of principal and interest by 40 per cent and 30 per cent and reduction of interest to 12 per cent and 9 per cent for the purpose of taking accounts according as transactions commenced before the 1st January 1941 and after that date but before the 1st January 1950. It should be remembered that on the date when applications for such debts are required to be made, the debts would be more than 19 years old. Such money debts would not be kept alive by the creditors unless certain amounts are paid from time to time towards principal or interest or towards both, and either documents of renewal or acknowledgements are taken. So if in such cases reductions are effected, we do not think that there would be, in the ultimate analysis, any reduction in the amount of principal. Under sub-sec. (4), debts for adjustment of transactions which commenced on or after 1st January 1950, there is no reduction of principal or interest. The sub-section provides for charging of interest at a rate not exceeding 6 per cent. Under sub-sec. (4), debts for adjustment of transactions which commenced on or after 1st January 1950, there is no reduction of principal or interest. The sub-section provides for charging of interest at a rate not exceeding 6 per cent. Remembering that the object of the Act is to provide relief to Agriculturists from their indebtedness, reduction of debts at the aforesaid rates in the case of old debts cannot be regarded as unreasonable. It is true that in the absence of such legislation, creditors would have recovered their debts according to the contract. The modifications of the contracts which would ordinarily be hit by Art. 19 (1) (f) of the Constitution cannot be regarded as unreasonable in view of the object of the Act and the public purpose it is intended to serve. S. 30 provides for pro rata reduction of unsecured and secured debts if they exceed 60 per cent value of the unsecured of secured property of the debtor. It may be noted that under S. 29 the paying capacity of the debtor is deemed to be 60 per cent of the value of his property. The obvious reason for fixation at that level is that if all the property of the debtor is charged with his debts, there would be no property left over td him for the maintenance of himself and his family. The object of fixing the paying capacity at 60 per cent of the value of the property of the debtor is obviously intended to leave some property for the sustenance of the debtor, while at the same time, security is afforded to the debts of the other creditors by creating a charge against the remaining immovable property of the debtor. It should be noted that the State does not deprive any creditor of his property in order to benefit itself. The reduction of debt to give relief to debtors is, in our opinion, reasonable restriction in the interest of general public on the freedom of carrying on money-lending transactions. It should be noted that the State does not deprive any creditor of his property in order to benefit itself. The reduction of debt to give relief to debtors is, in our opinion, reasonable restriction in the interest of general public on the freedom of carrying on money-lending transactions. ( 50 ) IN the context, we might refer to the decision of the Supreme court in State of Rajasthan v. Mukan Chand, in which reduction of debts (due from the Jagirdars whose Jagir properties had been taken over by the State for a public purpose at a low valuation) upto 50 percent at varying rates as mentioned in Schedules I and II to the Rajasthan Jagir- dars' Debt Reduction Act 1957 and S. 7 (2) which restricted the recovery of the debt to the compensation amount were held to be valid. The High court had he]d Ss. 3 and 4 which provided for reduction of debts at the scheduled rates to be valid but struck down S. 7 (2) as invalid. The supreme Court while confirming the decision of the High Court in part, held S. 7 (2) also to be valid and stated:" Now, coining to the question of the validity of S. 7 (2), we consider that this sub-section is valid as it imposes reasonable restrictions, in the interests of general public, on the rights of a secured creditor. A secured creditor, when he advanced money on the security of jagir property, primarily looked to that property for the realisation of his dues. Further, this sub-section has been designed with the object of rehabilitating a iagirdar who'se jagir properties have been taken over by the State for a public purpose at a low valuation. If this provision was not made the jagirdar would find it difficult to start life afresh and look to other avocations, for not only his existing non- jagir property but his future income and acquired properties would be liable to attachment and sale for the purpose of satisfying the demands of such secured creditors. Accordingly, we hold that S. 7 (2) imposes reasonable restrictions in the interest of general public. "for the reasons aforesaid and fortified by this decision of the Supreme court, we hold that Ss. 21, 29 and 30 are valid and constitutional. ( 51 ) OBJECTIONS were raised with regard to S. 23 and S. 43. Accordingly, we hold that S. 7 (2) imposes reasonable restrictions in the interest of general public. "for the reasons aforesaid and fortified by this decision of the Supreme court, we hold that Ss. 21, 29 and 30 are valid and constitutional. ( 51 ) OBJECTIONS were raised with regard to S. 23 and S. 43. as impairing the provisions of the Transfer of Property Act and the Evidence Act. S. 23 gives power to the Court to declare a transfer purporting to be a sale as being a mortgage after enquiring into the nautre of the transactiotion recording evidence, notwithstanding that the recitals of the document indicate a sale. An identical provision is to be found not only in the other debt Relief Acts but even in the Dekl on Agriculturists' Relief Art 1879 in vogue in the Bombav Area. S. 43 provides for appeal. It was contended that only one appeal had been provided for and the right of a second appeal available under the Code of Civil Procedure had been unjustly taken away. The right of appeal is a right conferred bv a statute and it is open to the Legislature while enactine a law on a special subject to provide for one or more appeals as deemed fit No doubt these sections are in conflict with the relevant provisions contained in the Transfer of Property Act, the Evidence A. ct and the Code of Civil Procedure We have, however, already indicated that such conflict has been legalised by obtaining the assent of the President to the enactment under Art. 254 (2) of the Constn. ( 52 ) S. 25 provides for notices to the Deputy Commissioner, the Registrar of Co-operative Societies, the Local Authorities and others, to file statements in respect of their debts. Since we have struck down portions of S. 3 in regard to debts due to these authorities and institutions, it is unnecessary to consider the grounds of attack against this section. ( 53 ) SEC. 28 which provides for determining the value of the property of the debtor was attacked on the ground that it gave no guidance as regards the method of ascertaining the value. The section leaves it to the court to determine the value of the property in the manner prescribed by the rules made by the State Government. 28 which provides for determining the value of the property of the debtor was attacked on the ground that it gave no guidance as regards the method of ascertaining the value. The section leaves it to the court to determine the value of the property in the manner prescribed by the rules made by the State Government. Different considerations will arise in regard to the determination of the value of different items of property and values must necessarily depend upon the nature and quality of such property. It is not possible for the Legislature to envisage all characteristics of different items of property and lay down yardsticks in the section itself. The delegation of power to the State Government to make rules in that behalf is positively constitutional. ( 54 ) THE provisions contained in Chapter IV of the Act providing for insolvency proceedings were attacked on the ground that they were discriminatory. No specific grounds have been set out or placed before us to support the plea of discrimination. The provisions in the Chapter are self contained and cover cases of all debtors coming under the Act and requiring further relief in case they have no capacity to pay their adjusted debts. ( 55 ) THE only other section that was attacked is Sec. 61, which lays down as follows: ' 61. Power of Government to authorise any person to advance loans to debtors: (1) The State Government or any officer empowered by it may, by notification, authorise in any local area any person to advance loans for financing of crops or seasonal finance to debtors who are parties to any proceedings under this Act or in respect of whose debts an adjustment has been made under this Act. (2) Such authority shall be granted on such conditions as may be prescribed. " it is contended on behalf of the petitioners that the section does not lay down any principles for the guidance of the State Government or the officer, in accordance with which he could authorise certain persons to advance loans under the Act. It must be conceded that the section vests very arbitrary power in the authority concerned. The learned Advocate General submitted that since the section used the words 'any person', every person who might make an application for authority to advance loans would be granted such authority. It must be conceded that the section vests very arbitrary power in the authority concerned. The learned Advocate General submitted that since the section used the words 'any person', every person who might make an application for authority to advance loans would be granted such authority. We are unable to accept such a contention for the obvious reason that such a position cannot be spelt out from the words used in the section. The power delegated to the State Government and to the Officer to be empowered thereunder is arbitrary and has, therefore, to be struck down. We accordingly strike down Sec. 61. ( 56 ) FROM the aforesaid discussion, it follows that parts of Sec. 3, proviso (a) to Sec. 4 and Src. 61 have to be struck down as unconstitutional. Since Sec. 61 which delegates power to the State Government or the authority notified by it to authorise advance of loans is independent of the other provisions of the Act, its invalidity does not affect the other sections of the Act. That is not, however the position as regards the effect of our striking down portions of Sec. 3 and proviso (a) to Sec. 4 of the Act. We shall proceed to consider the legal consequences of our decision on the valid portions of the Act. ( 57 ) IT was contended by the learned Advocates for the petitioners that the material portions of Sec. 3 which are violative of Art. 14 of the constitution are so much intertwined with the remaining vital sections of the Act that the entire Act was liable to be struck down. This argument was resisted by the Advocate General according to whom, there was no vital connection between the impugned clauses of Sec. 3 and the other important sections of the Act. The following passage from Volume I of Cooley's 'constitutional Limitations' VIII Edition was read as correctly stating the legal position when part of an enactment is held to be unconstitutional. It states-". . . . Where, therefore, a part of a statute is unconstitutional, that fact does not authorize the Courts to declare the remainder void also, unless all the provisions are connected in subject-matter, depending on each other, operating together for the same purpose, or otherwise so connected together in meaning, that it cannot be presumed the legislature would have passed the one without the other. The constitutional and unconstitutional provisions may even be contained in the same section, and yet be perfectly distinct and separable, so that the first may stand though the last fall. The point is not whether they are contained in the same section; for the distribution into sections is purely artificial; but whether they are essentially and inseparably connected in substance. If, when the unconstitutional portion is striken out, that which remains is complete in itself, and capable off being executed in accordance with the apparent legislative intent, wholly independent of that which was rejected it must be sustained. The difficulty is in determining whether the good and bad parts of the statute are capable of being separated within the meaning o'f this rule. If a statute attempts to accomplish two or more objects, and is void as to one, it may still be in every respect complete and valid as to the other. But if its purpose is to accomplish a single object only, and some of its provisions are void the whole must fail unless sufficient remains to effect the object without the aid of the invalid portion. And if they are so mutually connected with the dependent on each other, as conditions, considerations, or compensations for each other, as to warrant the belief that the legislature intended them as a whole, and if all could not be carried into effect the legislature would not pass the residue independently, then if some narts are unconstitutional, all the provisions which are thus dependent, conditional, or connected must fall with them. " (See pages 360-363 ). ( 58 ) THE pivotal legal position has been indicated bv the Supreme court in K. Kunhikoman v. State of Kerala, AIR. 1962 SC. 723. in which the Kerala agrarian Relations Act. 1961 was struck down on the ground that the provisions relating to the plantations in so far as they did not apply to pepper and areca plantations violated Art. 14 of the Constitution and those provisions could not be separated from the other provisions of the Act Two tests were indicated as decisive of the question:- (1) whether the legislature could not have passed the Act without thp provisions which have been struck down; and (2) whether the provisions which have been struck down cannot be severed from the Act. ( 59 ) THE learned Advocate General relied upon the Full Bench decision of the allahabad High Court in Brij Rajkumari v. Mustafa Ali Khan, AIR. 1968 All. 322, FB. where a provision akin to Sec. 3 was struck down from the U. P. Zamindars Debt Reduction Act, 1953 as violative of Art. 14, and their lordships held that the invalid provisions were separable from the Act. In arriving at this conclusion, their Lordships stated-"----It may be noted that the impugned portion constitutes a mere exemption. Its elimination leaves the definition of the debt, as contended in the opening part of the clause, which is the main or governing portion, untouched and unimpaired. The opening portion constitutes the general clause. It defines debt in terms of widest amplitude. After the elimination of the impugned portion, the portion left is not thin or truncated, but substantial and real. In fact, its elimination has the effect of further widening the scope of the mam portion by extending the area of its application, thereby making it firmer, stronger and more substantial. The scheme that emerges as a result of its elimination is, a scheme which is not substantially different from that intended by the Legislature but is, in fact, more in harmony with it. "in that case, clauses which were struck down formed part of Sec. 2 (f) of the Act which defined 'debt' and excluded debts due to Central Government local authority, Scheduled Bank, Co-operative Society etc. from that definition. It was in this context that the portion of the definition struck down was held to be separable from the rest of the Act as also incapable of affecting vitally the object of the Act and its material scheme of debt reduction, as their Lordships found the striking down of the impugned clause merely widened the scope of the Act. ( 60 ) THE doctrine of severability was discussed by the Supreme court and the following rules of construction have been laid down in r. M. D. C. v. Union of India, AIR. 1957 SC. 628. :"1. In determining whether the valid parts: of a statute are separable from the invalid parts thereof, it is the intention of the legislature that is the determining factor The test to be applied is whether the legislature would have enacted the valid part if it had known that the rest of the statute was invalid. 1957 SC. 628. :"1. In determining whether the valid parts: of a statute are separable from the invalid parts thereof, it is the intention of the legislature that is the determining factor The test to be applied is whether the legislature would have enacted the valid part if it had known that the rest of the statute was invalid. 2. If the valid and invalid provisions are so inextricably mixed up that they cannot be separated from one another, then the invalidity of a portion must result in the invalidity of the Act in its entirety. On the other hand, if they are so distinct and separate that after striking out what is invalid, what remains is in itself a complete code independent of the rest, then it will be upheld notwithstanding that the rest has become unenforceable. 3. Even when the provisions which are valid are distinct and separate from those which are invalid, if they all form part of a single scheme which is intended to be operative as a whole, then also the invalidity of a part will result in the failure of the whole. 4. Likewise, when the valid and invalid parts of a statute are independent and do not form part of a scheme but what is left after omiting the invalid portion is so thin and truncated as to be in substance different from what it was when it emerged out of the legislature, then also it will be rejected in its entirety. 5. The separability of the valid and invalid provisions of a statute does not depend on whether the law is enacted in the same section or different sections; it is not the form but the substance of the matter that is material, and that has to be ascertained on an examination of the Act as a whole and of the setting of the relevant provision therein. 6. If after the invalid portion is expunged from the statute what remains cannot be enforced without making alterations and modifications therein, then the whole of it must be struck down as void, as otherwise it will amount to judicial legislation. 7. In determining the legislative intent on the question of separability, it will be legitimate to take into account the history of the legislation, its object, the title and the preamble to it. " (Vide para 22 ). 7. In determining the legislative intent on the question of separability, it will be legitimate to take into account the history of the legislation, its object, the title and the preamble to it. " (Vide para 22 ). ( 61 ) IF the question of severability is considered with reference to the provisions of the impugned Act in the light of these principles, we have no doubt that the invalid provisions cannot be separated from the valid provisions and what remains after the invalid provisions are struck down cannot be worked without material amendments. ( 62 ) THE first test to be applied is whether the Legislature would have enacted the valid part, if it had known that part o'f the statute was invalid. The result of our striking down portions of clauses (i) and (ii) and clauses (iii), (Vii) and (ix) would not enlarge the scope of the Act as was held to be the position by the Allahabad High Court in regard to the U. P. Zamindars Debt Reduction Act, because from the various provisions of the act it is clear that the Legislature would not have enacted an Act providing for scaling down of the debts due to Government, Local Authority, co-operative Society, Scheduled Bank etc. and reducing the rate of interest in modification of the contract. ( 63 ) THE second test is whether the invalid provisions are so inextricably mixed up with valid provisions which form material parts of the scheme of adjustment of debts, that the invalid portion of S. 3 must result in the invalidity of the entire Act itself. The most significant result of striking down the clauses of S. 3 would be that the debts due to the authorities and institutions mentioned therein would now be extinguished as neither the debtor nor his creditor could have made an application under S. 4 and the date for making applications expired on the 30th of June 1969. S. 4 as it stands has not vested any power in the State Government to extend the time for making applications by the debtor or his creditor hereafter. ( 64 ) APART from this serious consequence, S. 21, which provides for taking of accounts with reduced rate of interest, does not refer to these debts. S. 4 as it stands has not vested any power in the State Government to extend the time for making applications by the debtor or his creditor hereafter. ( 64 ) APART from this serious consequence, S. 21, which provides for taking of accounts with reduced rate of interest, does not refer to these debts. As a consequence of such an exclusion the value of the property and other assets required to be calculated under S. 28 would now be materially affected as a result of the deletion of the clauses of S. 3. Reference may also be made to S. 25, which requires the Deputy Commissioner, the local authority, co-operative society, scheduled bank etc. to file a statement showing the total amount due from the debto'r and the amount which they are prepared to remit in respect of the debt due to them. This section would now become otiose. This would further affect the determination of the paying capacity of the debtor and the Court would have no power to scale down these debts under S. 30. S. 31 provides for making an award after determining the amount of debts scaled down in the manner provided in S. 30. Due to the inextricable connection of these clauses with the scheme of adjustment of debts, no award can be made by the Courtin terms of the section. S. 38 contains a proviso laying down that the execution of the award in the manner provided would not affect the right of government, a local authority or a co-operative society to have recourse to any mode of recovery allowable by any law in force. If Ss. 31 and 38 are read together, it will follow that the exempted categories of creditors would have priority in the recovery of their debts and the mode of recovery provided under any law or Act remains unaffected. In State of M. P. v. Panchu Lal, C. A. 685 of 1968, SC. (decided by the Supreme Court on 22-4-1969), their lordships considered the validity of Rule 3, which provided for State's precedence over other debts in the matter of recovery. They held that the rule imposed an unreasonable restriction and was therefore void. S. 3, as it stands, has a bearing on Sec. 56, which provides for distribution of assets of an insolvent. They held that the rule imposed an unreasonable restriction and was therefore void. S. 3, as it stands, has a bearing on Sec. 56, which provides for distribution of assets of an insolvent. It would thus be evident that S. 3 is intertwined with many sections which are vital to the scheme of debt adjustment envisaged by the Act. ( 65 ) AFTER the invalid portion is expunged from the statute book, the remaining portions of the Act cannot be enforced without making suitable amendments to the Act. We have already indicated the vital connection between S. 3 and the other provisions of the Act and how allowing the remaining Act to stand on the statute book would result in the extinguishment of these debts, without giving either the debtor or the agencies of the government, the scheduled banks and the societies to make applications for the adjustment of their debts. In our opinion, the provisions struck down by us materially affect the rest of the Act and what remains cannot be enforced without suitable amendments. The history of the Legislation also indicates that the categories of debts exempted in S. 3 were contained in the repealed enactments, but tho'se were enactments except the Hyderabad Act 1956 which had been passed prior to the Constitution. We are, therefore, unable to appreciate the plea of the Advocate General that the portions struck down are separable from the rest of the provisionsof the Act. ( 66 ) AS regards the effect of our striking down proviso (a) to S. 4 of the Act, we would like to point out that the debtors and creditors from the bombay Area and the Hyderabad Area would now have the right to make applications for adiustment of debts under the Act; such right having been denied to them under the proviso and the date for making applications having already lapsed, the whole Act would be hit by Art. 14 of the constitution, as it would in substance, erure only to the benefit of the debtors and creditors residing in areas other than the Bombay Area and the Hyderabad area. This could not have been the intention of the Legislature. For this reason also, the Act is liable to be struck down. This could not have been the intention of the Legislature. For this reason also, the Act is liable to be struck down. ( 67 ) IN the result, we allow these writ petitions and strike down the mysore Agricultural Debtors Relief Act, 1966 as unconstitutional, being violative of Art. 14 of the Constitution. In the circumstances, we direct the parties to bear their costs. --- *** --- .