Research › Browse › Judgment

Kerala High Court · body

1978 DIGILAW 223 (KER)

KRISHNAN NAIR v. SUB-REGISTRAR CHEMENCHERY

1978-08-21

S.K.KADER, V.P.GOPALAN NAMBIYAR

body1978
Judgment :- 1. The validity of the Kerala Chitties Act 1975 has been canvassed in these writ petitions. Shri P. K. Appa Nayar led the attack with arguments on O.P. No. 974 of 1976. No separate arguments were advanced in any of the other writ petitions which were posted along with it. In two of them, Counsel merely associated themselves with the argument of Sri Appa Nayar. In the others, not even that was done and their fate was left to rest on the decision in Sri Appa Nayar's case. Arguments advanced were, we should think, quite feeble and insufficient to hold the Act to be unconstitutional. 2. The Act has been passed with the assent of the President. By S.70 thereof the provisions of the Act, except certain specified sections shall "so far as may be" apply to chitties started before the commencement of the Act in the Malabar District known to the States Re-orginanction Act. Based on this provision making the Act applicable to pre-existing chitties, the argument advanced was that chitties are essentially contracts primarily intended to operate for advancing loans from a common fund to the subscribers, that they are regulated and governed by the provisions of the Indian Contract Act; and when the Chitties Act of 1975 seeks to apply its provisions even to chitties started before the commencement of the Act, there is, an usurpation of the field covered by an existing law made by the Parliament viz. the Indian Contract Act, and therefore to that extent the law is invalid. There is a further line of attack: that though entrenched the Act in the Ninth Schedule and protected by Art.31 B, is still open to attack for violation of fundamental right and basic structure of the Constitution. 3. That the Chitties Act by S.6, 7, 8,10, 13,14, 16 and 20 and various other Sections, tends to regulate the conduct of chitties is clear enough. This is said to amount to an usurpation by a State Legislature of a jurisdiction that does not belong to it. That the power of legislation in this sphere is to be traced into Entry 7 of List III of the Constitution was beyond dispute. Both the Counsel for the petitioners and the learned Advocate General were agreed on the point. Entry 7 of List III of the Seventh Schedule to the Constitution reads: 7. That the power of legislation in this sphere is to be traced into Entry 7 of List III of the Constitution was beyond dispute. Both the Counsel for the petitioners and the learned Advocate General were agreed on the point. Entry 7 of List III of the Seventh Schedule to the Constitution reads: 7. Contracts, including partnership agency, contracts of carriage, and other special forms of contracts, but not including contracts relating to agricultural land". That the relationship between the subscribers and the Foreman of the Chitty is one of contract is sufficiently recognised by the judicial decisions. (See for instance the recent pronouncement in P. K. Achuthan v. State Bank of Travancore, Calicut (1974 KLT. 806). See also the decision in Gokul Chit Funds & Trades (P) Ltd. v. Kochu Ouseph Vareed & Others (1975 KLT. 747) holding that the Chitties Act applies to existing chitties. The application of the Act to existing chitties under S.70 is "so far as may be" expressions of wide elasticity and import. (See C. A. Abraham v. Income-tax Officer, Kottayam (AIR. 1961 SC. 609). 4. The attack against the Act was on the ground that it violates the fundamental right of the petitioners and affects the basic structure of the Constitution. After inclusion in the Ninth Schedule, and the protection afforded by Art.31B of the Constitution, we have difficulty to hold that a statute can be attacked as violative of fundamental rights. The very object and purpose of inclusion in the Ninth Schedule is to place the Act outside the pale of attack on the ground of violation of Part III of the Constitution. A challenge on the ground of violation of fundamental rights is therefore not open, after inclusion of the Act in the Ninth Schedule. 5. But counsel for the appellant contended that despite inclusion in the Ninth Schedule the matter was still capable of review as violating the basic structure of the Constitution. Some, atleast of the fundamental rights, it is claimed, would be within the basic structure. This, it was claimed, was the result of the decision in Kesavanda Bharati's case (AIR. 1973 SC. 1461). Copious citations therefrom were made by Counsel for the petitioners and by the learned Advocate General in support of their respective stand points. Some, atleast of the fundamental rights, it is claimed, would be within the basic structure. This, it was claimed, was the result of the decision in Kesavanda Bharati's case (AIR. 1973 SC. 1461). Copious citations therefrom were made by Counsel for the petitioners and by the learned Advocate General in support of their respective stand points. (We are not satisfied from a perusal of the said judgment, that the constitutional validity of the Act on the ground of violation of fundamental right is open to review even after its inclusion in the Ninth Schedule. We will assume that despite inclusion in the Ninth Schedule it is open to the petitioners to show that the impugned Act alters the basic structure or the basic feature of the Constitution, wherever be the concept involved. But the question would be: What is the basic structure of the Constitution that is violated by the Act? To this, we did not get a satisfactory reply from Counsel for the petitioners, beyond the general statement that there has been a violation of fundamental right and that the violation of the said right is also a violation of the basic structure. The learned Advocate General on the other hand, maintained that Kesavananda Bharati's case is clear that a question of the violation of the basic structure of the Constitution is not involved in the inclusion of an Act in the Ninth Schedule; and that an Act so included, is not liable to challenge on the ground of the violation of fundamental rights. He invited our attention to the passages of the judgment of the Supreme Court in Kesavananda Bharati's case at pages 1566,1649,1610 and 1718 of AIR. 1973 SC. 1461). He further invited our attention to the pronouncement in Smt. Indira Nehru Gandhi v. Shri Raj Narain (AIR. 1975 SC. 2299) (para. 153) which raised the question not only of the Constitutional validity of the amendments effected to the Representation of People Act and and the Electoral Laws Amendment Act, but also regarding the validity of the Constitution 39th Amendment. The validity of the Acts and the Amendments was upheld except in regard to one Section. 6. We are unable to see from the arguments of the Counsel, how the Act subverts the basic structure of the Constitution, or for that matter, violates any fundamental right. The validity of the Acts and the Amendments was upheld except in regard to one Section. 6. We are unable to see from the arguments of the Counsel, how the Act subverts the basic structure of the Constitution, or for that matter, violates any fundamental right. In The Tuticorin Trading and Credit Corporation (P) Ltd. v. The State of Madras (1966 (1) MLJ. 313) the validity of a similar legislation in Madras was upheld (except that of one Section). And in Chockananthan Chit Fund and Finance (P) Ltd. v. Union Territory of Pondi-cherry AIR. 1972 Mad. 99) the validity of a legislation practically on the same dines, viz. the Pondicherry Chitty Funds Act was also upheld. There is no force in the contention that the Indian Contract Act has completely occupied the field in regard to chitties and that the impugned Act is a trespass into the occupied field. The impugned Act is meant to regulate the conduct of Chitties, to ensure protection and safety to the subscribers and to define and channelise the obligations of the Foreman. These are not to be found in the Indian Contract Act; and there is no force in the contention that the legislation invades Parliament's powers. 7. No question of repugnance to the provisions of the existing Indian Law under Art.254 can arise. We may reproduce Art.254(1): and (2) "254.(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament whether passed before or after the law made by the Legislature of such State, or as the case may be the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2) 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 law 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: Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State". Having regard to Art.254 (2) it is plain that even assuming there are inconsistencies with the provisions of the Chitties Act and those of the Indian Contract Act, the impugned Act is to prevail in the State in view of the assent of the President to it, which has been obtained. We see no substance in the attack against the validity of the Chitties Act. We dismiss these writ petitions with no order as to costs. Stay petitions dismissed. Dismissed.