BHURSINGH POONAMCHAND MALWAI v. SHYAMSUNDER — 1989 DIGILAW 98 (MP)

S. K. DUBEY, J. ( 1 ) THIS order shall also govern the opinion in F. A. No. 19/79. On an order of reference by Hon'ble A. G. Qureshi, J. , this matter has come up for opinion on the questions referred to as under :-" (1) Whether the Rules framed under the Madhya Bharat Moneylenders' Act continue to be in force despite the repeal of that Act? (2) Whether the Rules framed under the Madhya Bharat Moneylenders' Act can be deemed to have been framed under the M. P. Moneylenders Act in view of second proviso to S. 6 of the M. P. Extension of Laws Act, 1958?" ( 2 ) THE material facts of the case have been referred in paras 1 to 3 of the Order, which are not reproduced to burden this opinion. ( 3 ) THE controversy, thus arose that after the repeal of the United State of Gwalior, Indore and Malwa (Madhya Bharat) Moneylenders Act, Samvat 2007 (Act No. 62 of 1950-Samvat 2007) (for short, "the M. B. Act") and on enforcement of the M. P. Moneylenders Act, 1934 (for short, "the M. P. Act of 1934") in Madhya Bharat region by the M. P. Extension of Laws Act, 1958, 1-1-59, the rules framed under the M. P. Act of 1934 were not extended to the Madhya Bharat area and the Rules framed under the M. B. Act continued to apply. In M/s. Rajaram Champalal Saraf v. M/s. Mahendra Kumar Moolchand Sanawad (First Appeal No. 59 of 1976 decided on 16-3-82 at Indore Bench), the learned single Judge of this Court held that there being nothing on record to indicate that no dates and areas have been prescribed by the Government, as contemplated in S. 3 (l) (b) of the Act of 1934 for the Madhya Bharat region, the provisions of S. 3 of the said Act are not attracted to a moneylender, who carries on his business in the district of West Nimar, Tehsil Sanawad, where the plaintiffs carry on their business and at Maheshwar, where the defendants are carrying on their business. This judgment was followed by another decision of the learned single Judge in Geetabai Goyal v. Surendra Kumar (First Appeal No. 9 of 1978, decided on 30-9-86 at Indore Bench, reported at page No. 115 as Note No. 87 in (1987) 1 MPWN ). This judgment was followed by another decision of the learned single Judge in Geetabai Goyal v. Surendra Kumar (First Appeal No. 9 of 1978, decided on 30-9-86 at Indore Bench, reported at page No. 115 as Note No. 87 in (1987) 1 MPWN ). ( 4 ) THOUGH the referring Judge was of the opinion that by virtue of the second proviso to S. 6 of the M. P. Extension of Laws Act, 1958, no new rules were framed nor the Rules framed under the M. B. Act were superseded by any specific order under the Act extended to the Madhya Bharat region, where the M. B. Act was in force. As such, there can be no hesitation in holding that the rules framed under the M. B. Act are still in force in Madhya Bharat area after the extension of the M. P. Act of 1934 and such rules shall be deemed to have been framed under the M. P. Act of 1934. But, because of the decision in Rajaram Champalal's case (supra), the learned single Judge referred the matter for the opinion of the Larger Bench. ( 5 ) SHRI S. D. Sanghi, learned Counsel for the appellant, contended that the M. B. Act was a corresponding law, which was repealed by the M. P. Act of 1934. But the rules framed under S. 12 of the M. P. Act of 1934, known as "moneylenders Accounts Rules" were not extended to the Madhya Bharat region. The said rules deal with the manner of maintaining of accounts by a moneylender and sending of the statements thereof to a debtor, within one month of the date or time specified according to the area, in which such debtor resides. By virtue of the second proviso to S. 6 and by deeming fiction, the rules framed under the M. B. Act shall continue to be in force under the extended Act, unless and until the rules are superseded by the new rules. Learned Counsel further contended that it is the golden rule of interpretation that an Act cannot remain in vacuum unless the rules are framed; in that case, the purpose and object of the M. P. Act of 1934 will not be achieved, and it cannot be endorsed till the Rules framed under the M. P. Act of 1934 are not extended or the new rules are not framed. Shri Sanghi also contended that after the extension of the M. P. Act of 1934 in the Madhya Bharat region since 1-1-1959, the rules framed under the M. B. Act are holding the field for more than three decades. Therefore, the contention that the plaintiff moneylender was not obliged to maintain the statement of accounts and to send a copy thereof, and in failure of the same, the accounts cannot be reopened, is not correct. Learned Counsel, in support of his contentions, placed reliance on Tirathsingh v. Bachittarsingh, AIR 1955 SC 830 ; The State of U. P. v. Baburam Upadhyaya, AIR 1961 SC 751 ; State of M. P. v. M/s. Azar Bharat Financial Company, AIR 1967 SC 276 ; Commissioner of Income-tax, Delhi v. S. Teja Singh, AIR 1959 SC 352 ; Jagirsingh v. Ranbirsingh, AIR 1979 SC 381 ; U. P. Bhudan Yagya Samiti v. Brijkishore, (1988) 4 SCC 274 ; Atmaram Mittal v. Ishwarsingh Puniya, (1988) 4 SCC 284 ; Rajaram Bhiwaniwala v. Nandkishore, 1975 Jab LJ 347 and State of M. P. v. A. K. Jain, AIR 1958 Madh Pra 162. ( 6 ) SHRI T. N. Singh, learned Counsel for the respondent contended that the M. B. Act was a beneficial legislation. Section 1 (5) of the M. B. Act was applicable to agriculturists only and not to all debts and debtors; and contended that after the extension of the M. P. Act of 1934, though the M. B. Act was repealed by it, it was not a corresponding law. The M. P. Extension of Laws Act, 1958 is a prospective legislation, hence the rules are to be framed for the Madhya Bharat region or the rules under the M. P. Act of 1934 are to be applied after specifying the dates and areas. The applicability of the M. P. Act of 1934 or compliance of the provisions, in particular, S. 3 of the Act is dependent on the rules. Until the rules are made, the law is incomplete and the compliance of the provisions of the M. P. Act of 1934 cannot be compelled. The applicability of the M. P. Act of 1934 or compliance of the provisions, in particular, S. 3 of the Act is dependent on the rules. Until the rules are made, the law is incomplete and the compliance of the provisions of the M. P. Act of 1934 cannot be compelled. Learned Counsel, in support of his contentions, placed reliance on a Full Bench decision of this Court in Gram Panchayat, Gorakhpur v. Khushilal, 1973 Jab LJ 21 and on a decision of the Apex Court in Straw Products Limited v. Income-tax Officer, 'a' Ward, Bhopal, AIR 1968 SC 579 . Learned Counsel further contended that after repeal of the M. B. Act, the rules framed under it will also be deemed to be repealed and, as such, it cannot be contended that by virtue of S. 6 of the M. P. Extension of Laws Act, 1958, unless the M. B. Rules are superseded, they continue to apply. Section 6 cannot be read in isolation but has to be read with S. 7 of the M. P. Extension of Laws Act, 1958. ( 7 ) BEFORE we deal with the contentions of the parties, it would be appropriate for us to look to the provisions of the M. P. Extension of Laws Act, 1958. Before the reorganisation and formation of the State of Madhya Pradesh in Madhya Bharat area, the M. B. Act and the rules framed thereunder were in force. By the M. P. Extension of Laws Act of 1958, certain laws were extended to the Madhya Bharat region vide notification No. 41772-XXI-A (Dr) dated 31-12-58 issued under the M. P. Extension of Laws Act, 1958, which was published in the M. P. Gazette Extraordinary dated 1-1-59. The M. P. Act of 1934 was one of the Acts, which was extended to the whole of the Madhya Pradesh State. After the extension of the M. P. Act of 1934, all corresponding laws were repealed. Section 6 of the M. P. Extension of Laws Act, 1958, reads as under:-"6. The M. P. Act of 1934 was one of the Acts, which was extended to the whole of the Madhya Pradesh State. After the extension of the M. P. Act of 1934, all corresponding laws were repealed. Section 6 of the M. P. Extension of Laws Act, 1958, reads as under:-"6. Repeal and Saving - (1) If immediately before the appointed day, there is in force in any region of the State any law corresponding to any of the Acts now extended to that region, that law shall, save as otherwise expressly provided in the Act, stand repealed provided that the repeal shall not affect- (a) the previous operation of any law so repealed or anything duly done or suffered thereunder; or (b) any right, privilege, obligation or liability acquired, accrued or incurred under any law so repealed; or (c) any penalty, forfeiture or punishment incurred in respect of any offence committed against any law so repealed; or (d) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding, or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if this Act had not been passed provided further that, subject to the preceding proviso, anything done or any action taken (including any appointment or delegation made, notification, order, instruction or direction issued, rule, regulation, form, bye-law or scheme framed, certificate obtained, patent, permit or licence granted or registration effected) under any such law shall be deemed to have been done or taken under the corresponding provision of the Act as now extended to that region, and shall continue to be in force accordingly, unless and until superseded by anything done or any action taken under the said Act. (2) For avoidance of doubt, it is hereby declared that nothing in sub-section (1) shall affect the continuance in force of the Madhya Bharat Towns Improvement Act, 1956 (2 of 1956) with respect to the towns of Gwalior, Indore, Ratlam, Ujjain and Neemuch. " ( 8 ) IT cannot be doubted that the M. B. Act was a corresponding law, which was repealed after the extension of the M. P. Act of 1934. " ( 8 ) IT cannot be doubted that the M. B. Act was a corresponding law, which was repealed after the extension of the M. P. Act of 1934. The contention of Shri T. N. Singh, learned counsel for the respondent, cannot be accepted, because of S. 1 (5) of the M. B. Act was applicable to those moneylenders only, who had advanced loans to agriculturists. In this respect, the preamble of the M. B. Act is clear, which reads as under:-"an Act to control and regulate the transactions of money-lending in the United State of Gwalior, Indore and Malwa (Madhya Bharat ). "after the enforcement of the M. B. Act, other Acts like the Indore Money-lenders Act of 1938, were repealed by S. 22 of the M. B. Act, S. 1 of the M. B. Act deals with the title, extent and commencement of the Act. Section 1 (5) of the M. B. Act states that, at first instance, it shall apply to those money-lenders only, who had advanced a loan to an agriculturist. But the Government may, from time to time, extend its operation to any other moneylenders also. The scheme of the M. B. Act is also such that it cannot be said that it was operative only on the money-lenders, who had advanced the loan to agriculturists only. Neither of the parties placed any material before us to show that it was applicable to those money-lenders, who advanced loan to agriculturists only. Section 9 of the M. B. Act deals with maintaining accounts by moneylenders and supply of the statement thereof to the debtors. Under Section 21, rules were framed under the M. B. Act, in relation to maintaining of accounts and furnishing the details of the statements under S. 9 (a) (b) of the M. B. Act and in relation to other provisions. The M. P. Act of 1934 contains the analogous provisions; hence, after its extension, the M. B. Act, which was applicable to all the money-lenders in the M. B. area was repealed. Therefore, there is no doubt, that the M. B. Act was a corresponding Act. The M. P. Act of 1934 contains the analogous provisions; hence, after its extension, the M. B. Act, which was applicable to all the money-lenders in the M. B. area was repealed. Therefore, there is no doubt, that the M. B. Act was a corresponding Act. ( 9 ) A bare reading of second proviso to S. 6 of the M. P. Extension of Laws Act, 1958, shows that after the extension of the M. P. Act of 1934 in the M. P. region, the corresponding law, i. e. the M. B. Act, stood repealed. The second proviso to S. 6 clearly says that any rule framed under such repealed law, shall be deemed to have been framed under the corresponding provisions of the Act as now extended to the region, where the repealed law was in force and such rules shall be in force unless and until superseded by anything done or any action taken under the extended Act. Nothing has been placed before us to demonstrate that after the extension of the M. P. Act of 1934, the rules framed thereunder were also extended to the Madhya Bharat region. This having not been done, it cannot be said that the rules under the M. P. Act, 1934 were also extended to the Madhya Bharat region. It was also not shown to us that after the extension of the M. P. Act of 1934, the rules in force under the M. B. Act in the M. B. region were superseded by any notification or order or by the new rules. This was also not disputed that the money-lenders, on whom the M. B. Act applied after the extension of the M. P. Act of 1934, were maintaining the accounts according to the provisions contained in the M. B. Rules and were sending copies thereof to the debtors. Under S. 3 of the M. P. Act of 1934, every money-lender has to regularly maintain the accounts and has to furnish every year a statement of accounts to the debtor. Section 7 of the M. P. Act of 1934 provides for consequences of non-compliance with the requirement of S. 3 of the M. P. Act of 1934. It has also not been disputed that the rules framed under the M. B. Act are, in any manner, inconsistent with the provisions of the M. P. Act of 1934. Section 7 of the M. P. Act of 1934 provides for consequences of non-compliance with the requirement of S. 3 of the M. P. Act of 1934. It has also not been disputed that the rules framed under the M. B. Act are, in any manner, inconsistent with the provisions of the M. P. Act of 1934. ( 10 ) BY deeming fiction in second proviso to S. 6 of the M. P. Extension of Laws Act, 1958, any rule, regulation, bye-laws, notification, order, etc. shall be deemed to have been done or taken under the corresponding provisions of the M. P. Act of 1934, as now extended to the region and it shall continue to apply to be in force until and unless superseded. If the M. B. rules are not applied, in that case, the M. P. Act so extended cannot be enforced and shall remain in vacuum till the rules are not framed. It is a rule of interpretation well settled that a construction, which defeats the object of legislation must, if that is possible, be avoided. The M. P. Act of 1934 is a beneficial and welfare legislation for the protection of the debtors. The Supreme Court in the case of Gajanan and others v. Brindaban, 1970 Jab LJ 912, while construing the provisions of the M. P. Act of 1934 in para 5, observed that the Act was enacted with the object of making better provision for the regulation and control of the transactions of money-lending so as to secure protection to ignorant debtors against evil of fraud and extortion on the part of unscrupulous money-lenders without unduly interfering with freedom of private contract. The Full Bench of this Court in Rajaram Bhiwaniwala v. Nandkishore, 1975 Jab LJ 347, after relying on the case of Gajanan (supra), considered the object of the Act of 1934 and observed in para 20 as under:-"in construing a welfare legislation, the Court should adopt a beneficent rule of construction. If a section is capable of two constructions, that construction should be preferred which furthers the policy of the Act, and is more beneficial to the debtors, in whose interest the Act has been passed. If a section is capable of two constructions, that construction should be preferred which furthers the policy of the Act, and is more beneficial to the debtors, in whose interest the Act has been passed. "therefore, if the contention of Shri T. N. Singh, learned counsel for the respondent, is accepted, then in that case, after the repeal of the M. B. Act and the extension of the M. P. Act of 1934, the M. P. Act of 1934 will not be in force and the money-lending transactions will not be governed by the M. P. Act of 1934, as no rules are in force, as a result of which, the purpose and object of the Act will be defeated, which was not the intention of the legislation while extending the M. P. Act of 1934. ( 11 ) WHEN we look to the intention of the legislature, the circumstances, the background and the purpose, for which the M. P. Act of 1934 was extended to the Madhya Bharat region from 1-1-59, the rules framed therein, which was applicable in the Mahakaushal region, were not extended to the M. B. region, nor the rules, which were in force in the M. B. region, were superseded by notification, order or by the rules. There can be no hesitation, in view of second proviso to S. 6 of the M. P. Extension of Laws Act, 1958, in holding that the rules framed under the M. B. Act are still in force after the extension of the M. P. Act of 1934 to the Madhya Bharat region and such rules shall be deemed to have been framed under the M. P. Act of 1934. This can also be held in view of the provisions of S. 25 of the M. P. General Clauses Act, 1957, which says that where any enactment is repealed and re-enacted by the M. P. Act, with or without notification then unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, regulation, form or bye-law made or issued under the repealed enactment shall, so far as it is not inconsistent with the provisions re-enacted, continue to be in force and be deemed to have been made or issued under the provisions so re-enacted unless and until it is superseded by any appointment, notification, order, scheme, rule, regulation, form or bye-law, made or issued under the provisions so reenacted. We have already observed above that the M. B. rules framed under the M. B. Act are not in any manner inconsistent or contrary to any of the provisions of the M. P. Act of 1934. Thus, these rules would be deemed to be applicable for the purposes of the extended Act, i. e. , the M. P. Act of 1934 in respect of repeal of the M. B. Act. The result, therefore, is that the rules made under the M. B. Act not only continue to be in force but by a legal fiction, they shall be deemed to have been made under the extended Act, i. e. the M. P. Act of 1934. The contention of Shri T. N. Singh that the rules framed under the M. B. Act were the part of the M. B. Act, hence would be deemed to be repealed, in view of the provisions of S. 6 of the M. P. Extension of Laws Act, 1958 and S. 25 of the M. P. General Clauses Act, 1957, can also not be accepted. ( 12 ) THERE is also another aspect, which may legitimately be kept in view, that after 1-1-1959, when the M. P. Act of 1934 was extended, in the absence of new Rules, the rules framed under the M. B. Act were holding the field and prevailed for considerable length of time, i. e. more than three decades and the people in the Madhya Bharat region, for compliance of the provisions of S. 3 and other provisions of the M. P. Act of 1934, were maintaining the accounts in accordance with the provisions of the Rules framed under the M. B. Act. Hence there is nothing to justify that rules framed under the M. B. Act are not applicable. Moreover, it will create serious consequences. If a different interpretation is put, as suggested by the learned Counsel Shri T. N. Singh, that the rules will also be deemed to be repealed when the Act is repealed, then the purpose, aims and objects of the M. P. Act of 1934 will not be achieved in such a situation. ( 13 ) WHILE deciding the First Appeal No. 59 of 1976 (M/s. Rajaram's case) (supra), second proviso to S. 6 of the M. P. Extension of Laws Act, 1958 was not brought to the notice of the learned Judge nor was it considered by the learned single Judge. In the case of Geetabai (1987) 1 MP WN, page 115, Note No. 87 (supra), the learned single Judge merely followed the judgment in Rajaram's case (supra ). In this case also, neither the provisions of S. 6 of the M. P. Extension of Laws Act, 1958 were considered nor were brought to the notice of the learned single Judge. ( 14 ) IN view of the discussion made by us on the questions referred for opinion and in view of the fact that the learned Judges in the two cases referred to above, have not considered the provisions of S. 6 of the M. P. Extension of Laws Act, 1958, and, in our humble opinion, the said two decisions do not lay down the correct law. ( 15 ) WE would, therefore, answer the reference as under :- (1) The rules framed under the Madhya Bharat Money-lenders Act continue to be in force despite the repeal of that Act; and (2) The rules framed under the Madhya Bharat Money-lenders Act can be deemed to have been framed under the M. P. Moneylenders Act, 1934, for the Madhya Bharat area in view of the second proviso to S. 6 of the M. P. Extension of Laws Act, 1958. ( 16 ) IN the result, the reference is answered accordingly. Now the case shall be placed before the learned referring Judge for disposal of the appeals in accordance with the opinion of the Division Bench on the questions referred to it. Reference answered in affirmative. .