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2013 (6) TMI 122 - SC - Companies LawConstitutional bench - whether the Kerala Chitties Act 23 of 1975 became repugnant to the Central Chit Funds Act 40 of 1982 under Article 254(1) upon making of the Central Chit Funds Act 40 of 1982 (i.e. on 19.08.1982 when the President gave his assent) or whether the Kerala Chitties Act 23 of 1975 would become repugnant to the Central Chit Funds Act 40 of 1982 as and when notification under Section 1(3) of the Central Chit Funds Act 40 of 1982 bringing the Central Act into force in the State of Kerala is issued? Repugnancy arises on the making and not commencement of the law, as correctly held in the judgment of this Court in Pt. Rishikesh (1995 (5) TMI 245 - SUPREME COURT OF INDIA). On the enactment of the Central Chit Funds Act, 1982, on 19.08.1982, which covered the entire field of chits under entry 7 of List III of the Constitution, the Kerala Chitties Act, 1975, on account of repugnancy as enshrined in Article 254(1), became void and stood impliedly repealed. That, on the occupation of the entire field of chits , the Kerala Legislature could not have enacted the State Finance Act No. 7 of 2002, inserting Section 4(1a) into the Kerala Chitties Act, 1975, particularly on the failure of the State in obtaining Presidential assent under Article 254(2). The Central Chit Funds Act, 1982 though not brought in force in the State of Kerala is still a law made, which is alive as an existing law. By reason of Article 367 of the Constitution, the General Clauses Act, 1897 applies to the repeal. Section 6 of the General Clauses Act, 1897 is, therefore, relevant, particularly Sections 6(b) and 6(c) and consequently, the previous operation of the Kerala Chitties Act, 1975 is not affected nor any right, privilege, obligation or liability acquired or incurred under that repealed State Act of 1975. Thus, after 19.08.1982, the Kerala Chitties Act, 1975 stands repealed except for the limited purposes of Section 6 of General Clauses Act, 1897 If and when the Central Government brings into force the Chit Funds Act, 1982 by a notification in State of Kerala, under Section 1(3), Section 90(2) will come into play and thereby the Kerala Chitties Act, 1975 shall continue to apply only to chits in operation on the date of commencement of the Central Chit Funds Act, 1982 in the same manner as the Kerala Chitties Act, 1975 applied to chits before such commencement.
Issues Involved:
1. Timing of Repugnancy: When does repugnancy arise under Article 254(1) of the Constitution? 2. Effect of Repeal: What is the effect in law of a repeal? Detailed Analysis: Timing of Repugnancy: The primary issue was whether the Kerala Chitties Act, 1975 became repugnant to the Central Chit Funds Act, 1982 upon the enactment of the Central Act or upon its commencement in Kerala. Arguments by the State of Kerala: - The term "made" in Article 254 refers to the identification of the law and not the timing for determining repugnancy. - Repugnancy can only be declared by a court when both laws are in operation. - The State Act remains valid until the Central Act is brought into force in the State. Arguments by Private Chitty Firms: - Repugnancy arises upon the enactment of the Central law, irrespective of its commencement. - The Kerala Chitties Act, 1975 became void when the Central Chit Funds Act, 1982 received Presidential assent and was published in the Official Gazette. Court's Analysis: - Articles 245 and 246 use the terms "make" and "made" to indicate legislative power and distribution, not commencement. - The legislative process is complete when a Bill receives Presidential or Governor's assent and is published in the official gazette. - The Central Chit Funds Act, 1982 was "made" on 19.08.1982 when it received Presidential assent, thus repugnancy arose on this date. - The Kerala Chitties Act, 1975 became void on the making of the Central Chit Funds Act, 1982. Conclusion: Repugnancy arises on the making of the law, not its commencement. The Kerala Chitties Act, 1975 became void on 19.08.1982 when the Central Chit Funds Act, 1982 was made. Effect of Repeal: The second issue was the effect in law of a repeal, particularly whether Section 6 of the General Clauses Act, 1897 applies to implied repeals. Court's Analysis: - Section 6 of the General Clauses Act applies to both express and implied repeals. - The legislative intent to supersede the earlier law is the basis for implied repeals. - The Kerala Chitties Act, 1975 was impliedly repealed by the Central Chit Funds Act, 1982, but transactions and rights under the State Act before the repeal are saved by Section 6 of the General Clauses Act. Conclusion: The Kerala Chitties Act, 1975 was impliedly repealed by the Central Chit Funds Act, 1982. However, the previous operation of the Kerala Act and rights acquired under it are saved by Section 6 of the General Clauses Act. Summary of Conclusions: 1. Repugnancy arises on the making of the law, as held in Pt. Rishikesh. 2. The Kerala Chitties Act, 1975 became void and stood impliedly repealed upon the making of the Central Chit Funds Act, 1982 on 19.08.1982. 3. The Central Chit Funds Act, 1982, though not in force in Kerala, is an existing law. The previous operation of the Kerala Chitties Act, 1975 is not affected by the repeal. 4. If and when the Central Government brings the Central Chit Funds Act, 1982 into force in Kerala, Section 90(2) will apply, allowing the Kerala Chitties Act, 1975 to continue for chits in operation before the commencement of the Central Act.
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