PANKAJASHA MENON v. UNION BANK OF INDIA — 1988 DIGILAW 278 (KER)

Judgment :- 1. The first defendant in O.S.251/83 is the petitioner. 2. The suit is for recovery of Rs. 7,94,857/- with 15% interest, instituted by the respondent. The petitioner in his defence inter alia has contended that the interest charged on the transactions mentioned in the plaint, is excessive and as such attract the provisions of the Cochin Usurious Loans Act, for short the 'Loans Act'. 3. The respondent plaintiff took the stand that, assuming 'Loans Act' applies to the transactions, based on which the suit is instituted, the court was incompetent to reopen the transactions with a view to scale down the interest, in view of the provisions contained in S.21A of the Banking Regulations Act of 1949, for short the 'Regulation Act'. 4. The petitioner thereupon presented an application under S.113 C.P.C. for getting the following questions referred to this court, for our opinion:. "(a) Whether S.21-A of the Banking Regulation Act is ultravires and violative of Art.14 of the Constitution of India for the reasons stated in the accompanying affidavit? (b) Whether the notification issued under S.1(3) of the Usurious Loans Act 1918 and under S.1(4) of the Cochin Usurious Loans Act, 1111 M.,E. are legal and valid?". The second question need not be dealt with in these proceedings because even according to the petitioner, the notification which declares that the Loans Act shall not apply to loans given by all categories of banks, is only prospective in operation and as such has no application here. The transactions in question are of a period prior to 22nd day of May, 1979, the date on which the above notification came into force. 5. Regarding first question, the decision of the Andhra Pradesh High Court (A.I.R. 1986 A.P. 291) supports the argument of the petitioner that the section "is ultravires and violative of Art.14 of the Constitution". 6. The respondent opposed the application. According to it the section is is valid. That means, 'no circumstances have been made out for referring the the case to High Court'. 7. Accepting the above contention, the court below, by the order under challenge, dismissed the application. Hence the revision. The petitioner has also filed an application under Art.228 of the Constitution of India, for the withdrawal of the case to this court for the purpose of determining the question of law referred to above. 8. 7. Accepting the above contention, the court below, by the order under challenge, dismissed the application. Hence the revision. The petitioner has also filed an application under Art.228 of the Constitution of India, for the withdrawal of the case to this court for the purpose of determining the question of law referred to above. 8. In view of the ruling of the Andhra Pradesh High Court, in the matter of State Bank of India, Eluru, the question sought to be referred deserves consideration by the High Court. If that be so, the reference sought for should have been granted by the court below. In the light of the principles enunciated by the Supreme Court in Raja Ganga Pratap Singh v. Allahabad Bank Ltd. (A.I.R. 1958 S.C. 293), the question raised is a substantial question of law as to the interpretation of the Constitution of India and hence the case in any event, requires to be withdrawn to this court in exercise of the power under Art.228 of the Constitution for determining the question. 9. The above position notwithstanding the learned counsel for the respondent Mr. Balagangadhara Menon contended that neither the reference application nor the petition under Art.228 is maintainable. The points highlighted by Mr. Menon in this regard, are: (1) The object with which S.113 C.P.C. is enacted is to enable subordinate courts to obtain in any non appealable cases, the views of the High Court on a question of law well in advance, thereby avoiding Commision of any errors. To put it differently, he argues, under S.113 C.P.C. no reference shall be had unless it be, that the decree that will be passed in the suit is a non-appealable one, the reason being that in appealable cases, possible errors can be corrected by the appellate court. (2) A Single Judge of the High Court has no power to hear and dispose of a petition under Art.228 of tie Constitution of India. The said' power, going by the Provisions of the Kerala High Court Act, 1958. for short the 'High Court Act', is vested in the Division Bench. (3) The question sought to be,referred cannot be said to be a substantial question of law as to the interpretation of the Constitution, the determination of which is necessary for the disposal of the case. for short the 'High Court Act', is vested in the Division Bench. (3) The question sought to be,referred cannot be said to be a substantial question of law as to the interpretation of the Constitution, the determination of which is necessary for the disposal of the case. The statements in the petition at best, disclose that S.21A of the Regulation Act is, ultravires the Constitution; that means, the, petitioner has not sought for the interpretation of the Constitution or any provisions there of. 10. To understand the above contentions, necessarily we have to construe S.113 of the Code of Civil Procedure, the relevant provisions of the High Court Act and the relevant Articles of the Constitution of India. 11. Accordingly the scope of S.113 C.P,C. requires to be considered while dealing with the first point stated above. The main part of S.113 C.P.C. starts off with the words "Subject to such conditions and limitations as may be prescribed". The question therefore is: has the code prescribed any conditions and limitations? Here comes the relevance of 0.46 R.1. This order prescribes the conditions and limitations. They therefore must be kept in view while construing the main part of S.113.0.46 provides that the suit or the appeal at the hearing of which or in the course of which any question of law or usage having the force of law arises, on which the court trying the suit or appeal, or the executing court which executes decrees in such suits entertains any reasonable doubt, then the said court may draw a statement of the facts of the case and the point on which doubt is entertained and refer such statement with its own opinion on the point for the decision of the High Court. The order further provides that such a reference however, can be made only in a suit or an appeal in which the decree that will be passed is not subject to an appeal It is not the case of the petitioner that the decree that will be passed in the suit is not appealable. It therefore follows that if the question sought to be raised is one which falls under the main part of S.113, the same cannot be referred because the decree that will be passed in the suit is appealable; that means, the appellate court can correct the error, the trial court may commit. It therefore follows that if the question sought to be raised is one which falls under the main part of S.113, the same cannot be referred because the decree that will be passed in the suit is appealable; that means, the appellate court can correct the error, the trial court may commit. If the position had been what is stated above it could be said that the counsel is well founded in his submission that the petition seeking reference is not maintainable. 12. But on a scrutiny of the pleadings it is clear that the question sought to be raised is one that comes under the proviso to S.113 C.P.C. The proviso reads: "Provided that where the Court is satisfied that a case pending before it involves a question as to the validity of any Act, Ordinance or Regulation or of any provision contained in an Act, Ordinance or Regulation, the determination of which is necessary for the disposal of the case, and is of opinion that such Act, Ordinance, Regulation or provision is invalid or inoperative, but has not been so declared by the High Court to which that Court is subordinate or by the Supreme Court, the Court shall state a case setting out its opinion and the reasons therefor, and refer the same for the opinion of the High Court". This proviso engrafts an exception to the general principle envisaged in the main part of S.113. The question contemplated in the proviso to S.113 shall be one pertaining to the validity of any enactment. Ordinance or Regulation or of any provision contained in the Act, Ordinance or Regulation, the determination of which is, necessary for the disposal of the case, and if the court is of opinion that such Act, Ordinance, Regulation or provision is invalid or inoperative, but has not been so declared by the High Court to which the Court is subordinate or by the Supreme Court, then the court shall state a case setting out its opinion and the reasons therefor, and refer the same for the opinion of the High Court. The question sought to be referred here satisfies the above requirements and therefore the court below should have allowed the application and referred the question to this court for our opinion. 13. Dilating on point No. 2 Sri. The question sought to be referred here satisfies the above requirements and therefore the court below should have allowed the application and referred the question to this court for our opinion. 13. Dilating on point No. 2 Sri. Menon argues that since the proceedings contemplated, whether it be under Art.227 or 228 of the Constitution of India, belongs to the category of writs of the nature of habeas corpus (going by the provisions contained in clauses (iii) and (iv) of sub-S. 10 of S.3 of The High Court Act), the same cannot be heard and disposed of by Single Judge. To appreciate this argument, we have to analyse the content of the above clauses. It reads: "3. Powers of Single Judge. The powers of the High Court in relation to the following matters may be exercised by a Single Judge, .. . (10) Exercise of the powers under (i) .... (ii) .... (iii) Clause (1) of Art.226 of the Constitution of India except where such power relates to the issue of a writ of the nature of habeas corpus; and (iv) Art.227 and 228 of the Constitution of India". Clause (iii) provides that a Single Judge can exercise the power under clause (1) of Art.226 of the Constitution of India except where such power relates to the issue of a writ of the nature of habeas corpus. Mr. Menon however, submits that this exception clause, in view of the conjunction "and" at the end of clause (iii), takes in its fold the power vested in the High Court under Art.227 and 228, made mention of in clause (iv). The counsel for the petitioner on the other hand argues that the proceedings contemplated under Art.226, 227 and 228 lay to the High Court and whether it is to be heard by one, two or a larger number of judges is merely a matter of procedure and it is such procedure that is prescribed by the High Court Act. S.3 thus enumerates the powers of a Single Judge in regard to the matters that would come before the High Court. It should in this connection be remembered that no party has any vested right to have these proceedings heard by a specified number of Judges. (See Ittiavira Mathi v. Varkey Varkey, A.I.R. 1964 S. C.907). S.3 thus enumerates the powers of a Single Judge in regard to the matters that would come before the High Court. It should in this connection be remembered that no party has any vested right to have these proceedings heard by a specified number of Judges. (See Ittiavira Mathi v. Varkey Varkey, A.I.R. 1964 S. C.907). The preamble to The High Court Act makes it clear that the provisions of the Act are intended to regulate "the business and the exercise of the power of the High Court". But for this sub-section proceedings under Art.226, 227 and 228 require to be heard by the High Court as a whole. It is in this background we have to consider the scope of sub-S. 10 of S.3. The argument of the counsel for the petitioner, stated hereunder, may become relevant in this context. He argues that the powers of the Single judge enumerated in sub-s. 10 of S.3 are distinct and different. He, in this connection, made particular reference to the semicolon separating each clause from the other, followed by the conjunction "and" just before clause (iv). The punctuation, that is the semicolon, at the end of each sub-clause and the conjunction "and" at the end of clause (iii) immediately after the semicolon do indicate that these clauses cover different and distinct powers exercisable by a Single Judge. This line of thinking cannot be rejected because as stated by Caries, punctuations, when they occur, they can be looked upon as a sort of contemporanea expositic. Approving this principle stated by Caries, the Supreme Court in Aswini Kumar v. Arabinda Bose (A. I. R.1952 S. C. 369) has further observed: "When a statute is carefully punctuated and there is doubt about its meaning, a weight should undoubtedly be given to the punctuation, vide Crawford on Statutory Construction, p. 343. I need not deny that punctuation may have its uses in some cases, but it cannot certainly be regarded as a controlling element and cannot be allowed to control the plain meaning of a text....". I need not deny that punctuation may have its uses in some cases, but it cannot certainly be regarded as a controlling element and cannot be allowed to control the plain meaning of a text....". The words and expressions used in an enactment in my judgment, therefore, can be construed with reference to punctuation in case of any doubt about its meaning although as pointed out by a Division Bench of this court in M.G. Kollamkulam v. C.I.T. (1977 K. L.T. 990), it may not always be safe to rely on punctuation as a deciding factor in the interpretation of a statute. The Section, in my opinion, is carefully punctuated and therefore there is no reason why weight shall not be given to the punctuation while construing the same. It is all the more so because the language employed in the sub-section is precise and unambiguous. It is clear from this language that the legislature intended that a Single Judge can exercise the power in respect of proceedings falling under Art.226, 227 or 228 except where such power relates to the issue of a writ of the nature of habeas corpus. Since the punctuation is in agreement with the suggested meaning of the sub-section, it provides an important additional reason for the acceptance of that meaning. (See Crawford p. 344). Whatever that be as already noted no party has a vested right to have the proceedings contemplated under Art.226, 227 and 228 heard by a specified number of judges. The respondent therefore cannot be permitted to contend for the position that a petition under Art.228 cannot be heard by a Single Judge. The above argument of the learned counsel therefore is rejected. 14. Art.228 of the Constitution requires to be construed to answer the question covered by the third contention of the learned counsel. Art.228 reads: "228. Transfer of certain cases to High Court. The above argument of the learned counsel therefore is rejected. 14. Art.228 of the Constitution requires to be construed to answer the question covered by the third contention of the learned counsel. Art.228 reads: "228. Transfer of certain cases to High Court. If the High Court is satisfied that a case pending in a court subordinate to it involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the case, it shall withdraw the case and (a) either dispose of the case itself, or (b) determine the said question of law and return the case to the court from which the case has been so withdrawn together with a copy of its judgment on such question, and the said court shall on receipt thereof proceed to dispose of the Case in conformity with such judgment". Construing this article the Supreme Court in Raja Ganga Pratap Singh v. Allahabad Bank Ltd. (A. I. R.1958 S. C. 293) has observed thus: " It seems clear to us that the "question raised by the appellant in this case comes within the proviso to S.113 of the Code as also Art.228 of the Constitution. The question contemplated by the proviso to S.113 of the Code is as to the validity of an Act or of a provision in it while Art.228 of the Constitution has in view a question as to the interpretation of the Constitution. Now the question raised in the present case is as to the validity of a provision in the Zamindar's Debt Reduction Act. This question is, however, also a question as to the interpretation of the Constitution, for the validity of the provision is challenged on the ground that it contravenes an article of the Constitution". The case, in the light of the above ruling, requires to be withdrawn to this court, at least to determine the question as to the validity of S.21 A of the Regulation Act. 15. The learned counsel for the respondent Mr. Menon however, argues that interpretation of a statute or a provision thereof and consideration of the question whether such statute is ultravires the Constitution do not raise any substantial question of law as to the interpretation of the Constitution. 15. The learned counsel for the respondent Mr. Menon however, argues that interpretation of a statute or a provision thereof and consideration of the question whether such statute is ultravires the Constitution do not raise any substantial question of law as to the interpretation of the Constitution. He contends that the constitutional provisions, the violation of which makes S.21A ultra vires, have finally been interpreted by the Supreme Court and therefore no question of interpretation of the Constitution is involved in the case. Interpretation of the Section applying the principles enunciated by Supreme Court while construing the constitutional provisions, alone arises in the case, the counsel argues. In support of this argument he relied on the following decisions of the Supreme Court: State of J & K v. Ganga Singh (AIR 1960 SC 356), Bhagwan Swarup v. State of Maharashtra (AIR 1965 S. C. 682) and Paradise Printers & Others v. Union Territory of Chandigarh (1988 (1) S. C. C. 440). In the first two rulings, the Supreme Court considered the meaning of identical expressions in Art.228, namely, "substantial question of law as to the interpretation of the Constitution" contained in Art.132(2) and Art.145(1) of the Constitution. The meaning given to these expressions by the Supreme Court in the said rulings, unless the context otherwise indicates, shall be the meaning that should be given to the same expressions in the different Articles of the Constitution. But what we find here is that another decision of the Supreme Court, in Raja Ganga Pratap Singh's case, construing the same expressions contained in Art.228 which has not been referred to in these subsequent decisions, has observed that if the question raised is as to the validity of an Act or a provision thereof then it is also a question as to the interpretation of the Constitution. It may in this context be noted that one of the members of the bench which decided the issue in Ganga Pratap Singh's case was also a member of the bench which decided the issue in Ganga Singh's case. The question in Ganga Pratap Singh's case was about the validity of a provision in the Zamindar's Debt Reduction Act and whether that statute is ultravires the Constitution. The ratio of this case thus is that such a question is a substantial question of law as to the interpretation of the Constitution. The question in Ganga Pratap Singh's case was about the validity of a provision in the Zamindar's Debt Reduction Act and whether that statute is ultravires the Constitution. The ratio of this case thus is that such a question is a substantial question of law as to the interpretation of the Constitution. If that be so the question now before me undoubtedly is a substantial question of law as to the interpretation of the Constitution. 16. From a scrutiny of these decisions it is plain that there are apparently two lines of thoughts. In Bhagwan Swamp's case and Paradise Printers' case a distinction is sought to be made between what is called an interpretation of the Constitution and an interpretation of a statute. It is suggested there that these two questions need not necessarily be the same. But one thing is certain that, when the vires of a statute is under challenge it cannot be said that the said case raises only a question of interpretation of the statute. It should in this connection be borne in mind that in deciding the vires of a statute both the statute and the Constitution require to De interpreted. May be that the provision of the Constitution, the violation of which makes the statute ultravires, might have been interpreted in the past. But that does not mean that an interpretation once received is static in that the Constitutional provision once interpreted shall not again be interpreted while testing the Constitutionality of a statute. The Supreme Court consistently has been of the view that the appeal from a judgment of the High Court which dealt with and disposed of a question pertaining to the vires of an enactment or a provision thereof raises a substantial question of law as to the interpretation of the Constitution of India. To put it differently the Supreme Court never doubted the correctness of this view. (See Budhan Choudhry v. State of Bihar (A.I.R. 1955 S.C.191). Here the Constitutionality of S.30 Crl. P.C. was under challenge. The High Court of Patna found that the challenge is not sustainable. But the High Court granted a certificate under Art.132 (1) to file an appeal against the judgment before the Supreme Court. (See Budhan Choudhry v. State of Bihar (A.I.R. 1955 S.C.191). Here the Constitutionality of S.30 Crl. P.C. was under challenge. The High Court of Patna found that the challenge is not sustainable. But the High Court granted a certificate under Art.132 (1) to file an appeal against the judgment before the Supreme Court. Entertaining the appeal, the Supreme Court observed: "This is an appeal from a judgment of the High Court of judicature at Patna which raises a substantial question of law as to the interpretation of the constitution of India." It should in this connection be remembered that the cases considered by the Supreme Court in the decisions cited by the counsel at the bar namely State of J & K v. Ganga Singh (A.I.R. 1960 S.C. 356), Bhagwan Swarup v. State of Maharashtra (A.I.R. 1965 S.C. 682) and Paradise Printers & Others v. Union territory of Chandigarh (1988 (1) S.C.C. 440) ), did not involve any question of law as to the interpretation of the Constitution. Taking into account the principle enunciated in the decision in Ganga Singh's case, the Supreme Court in Bhagwan Swarup v. State of Maharashtra (A.I.R. 1965 S.C. 682) stated thus: 'As the question raised has already been decided by this Court, what remains is only the application of the principle laid down to the facts of the present case. We cannot, therefore, hold that the question raised involves a substantial question of law as to the interpretation of the Constitution within the meaning of Art.145 (3) of the Constitution." To the same effect is the decision in Paradise Printers' case. The supreme Court observed thus: "The question is only the application of the principles to a given case." The question mooted in this case was this: "whether the revised policy adopted by the Chandigarh administration to allot smaller sites to the appellants (in the case) was discriminatory and violative of Art.14 of the Constitution." Holding that "the true meaning and scope of Art.14 has been stated and restated in a string of decisions of this court" the Supreme court made the observation extracted above. In Ganga Singh's case, the question mooted had no manner of similarity with the question mooted in Ganga Pratap Singh's case. The question considered in this case, is this: "The other grounds are only a further clarification of the said grounds. In Ganga Singh's case, the question mooted had no manner of similarity with the question mooted in Ganga Pratap Singh's case. The question considered in this case, is this: "The other grounds are only a further clarification of the said grounds. In Part II of their statement of case the appellants stated as follows: "It is now well-established that while Art.14 forbids class legislation, it does not forbid reasonable classification for the purpose of legislation." "The respondents, in their statement of case, accepted the said legal position but contested the position that there was reasonable classification. It is therefore manifest that throughout there has never been a controversy between the parties in regard to the interpretation of Art.14 of the Constitution, but their dispute centered only on the question whether the impugned rule stood the test of reasonable classification What remained to be done by the High Court was to apply that interpretation to the facts before it" (emphasis supplied) These decisions of the Supreme Court therefore cannot be said to have pointedly considered the question which was specifically considered and decided by the Supreme Court in Ganga Pratap Singh's case. The argument of the counsel based on these decisions, therefore, is rejected. 17. Having understood the law thus, let us consider whether, for the disposal of the case it is necessary to decide this question. Before we go any further, it is necessary to highlight the conditions that must exist so that the High Court may exercise its powers and withdraw the case under Art.228 of the Constitution. The conditions that should be satisfied are: (i) The suit or the case must be actually pending in a court subordinate to the High Court. (ii) The High Court must be satisfied that the case involves a substantial question of law as to the interpretation of the constitution. That means a casual or frivolous allegation that such a question is involved is not sufficient and (iii) The High Court must be satisfied that the determination of the Constitutional question is indispensable for the disposal of the case. (See Ganga Pratap's case) 18. That the suit is actually pending in a court subordinate to this Court, is beyond dispute. In the suit the validity of S.21 A is under challenge. (See Ganga Pratap's case) 18. That the suit is actually pending in a court subordinate to this Court, is beyond dispute. In the suit the validity of S.21 A is under challenge. The case therefore involves a substantial question of law as to the interpretation of the Constitution, going by the ratio discernible from Ganga Pratap's case. A reference in this connection to the ruling of the Andhra Pradesh High Court In the matter of State Bank of India, Eluru is profitable. The Andhra Pradesh High Court has struck down S.21A on the ground that it is violative of the fundamental rights guaranteed under Art.14 of the Constitution. The petitioner therefore has a presentable case. Regarding the third condition a reference to the pleadings in Para.3 of the written statement is relevant. They are: "The plaintiff Bank functions within the territorial jurisdiction of the erstwhile Cochin State. The defendants arc permanently residing and carrying on their avocation within the limits of erstwhile Cochin State. Properties offered as security and enforcement sought for by the Bank are also situated in the erstwhile Cochin State. Hence this is a f it case in which the provisions of the Cochin Usurious Loans Act, are applicable. Under S.3 of the Cochin Usurious Loans Act, this court is competent to reopen the transactions which constitute the subject matter of the suit. There is every reason to believe that the interest charged on the transactions referred to in the plaint is excessive. The transaction Between the parties in the instant case is substantially unfair. Compound interest is being claimed at 21 percent per annum. Interest over 12 percent per annum should be deemed to be excessive. The defendants are entitled to get the benefits of the Cochin Usurious Loans Act. It is true that by virtue of the provision contained in S.1 sub-s. 4 of the Cochin Usurious Loans Act, 1111 the Government of Kerala as per notification published in Kerala Gazette dated 22nd day of May, 1979 have declared that the said Act shall not apply to the loans given by all categories of Banks. This notification is admittedly prospective as all other notifications are. It is not retrospective. Hence the said notification is applicable only in cases where transactions have taken place after 22-5-1979. The suit transaction arose in 1978. Therefore, the suit transaction is not hit by the said Notification. This notification is admittedly prospective as all other notifications are. It is not retrospective. Hence the said notification is applicable only in cases where transactions have taken place after 22-5-1979. The suit transaction arose in 1978. Therefore, the suit transaction is not hit by the said Notification. Defendants are entitled to get the interest scaled down." It is clear from the above pleadings as also Para.3 and 4 of the plaint that the claim in the suit cannot be decreed without determining the question as to whether the interest claimed is liable to be scaled down, taking into account the provisions of the Loans Act. Going through these pleadings it is also clear that without determining the constitutional question, the main issue in the case cannot be disposed of. In my judgment therefore, the determination of the question referred to above is necessary for the disposal of the case. 19. Point No. 3 raised by the counsel for the plaintiff-respondent, in the light of the principles enunciated above, is also liable to be rejected. 20. The petition C.M.P. No. 14342 of 1988 under Art.228 is allowed. O. S.251 of 1983 accordingly is directed to be withdrawn to this court to determine the question of the validity of S.21A of The Banking Regulations Act. The suit thereafter will be returned to the Subordinate Court for disposal in accordance with the opinion given by this court. 21. In the light of the above direction to. withdraw the suit to this court under Art.228, no separate order directing a reference of the question to this court under S.113 C.P.C. is called for. The C.R.P. is disposed of as above.