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Issues Involved:
1. Legislative competence of the Tamil Nadu Legislature to enact Section 52-A of the Tamil Nadu Revenue Recovery Act, 1864. 2. Whether Section 52-A is violative of Article 14 of the Constitution of India. Issue-Wise Detailed Analysis: 1. Legislative Competence: The primary issue was whether the Tamil Nadu Legislature had the legislative competence to enact Section 52-A of the Tamil Nadu Revenue Recovery Act, 1864. The Madras High Court had previously declared Section 52-A ultra vires, concluding that the Tamil Nadu Legislature lacked the necessary competence. Arguments and Analysis: - The Advocate-General for Tamil Nadu relied on various entries in List II and III of the Seventh Schedule of the Constitution of India, specifically Entry 3 (Administration of justice; Constitution and organisation of all Courts, except the Supreme Court and the High Court), Entry 43 (Public debt of the state), Entry 45 (Land revenue), and Entry 43 of List III (Recovery in State of Claims in respect of land-revenue and sums recoverable as such arrears, arising outside that State). - The High Court had distinguished the judgment in Mukherjee and Co. v. Union of India, which had upheld similar provisions in the Bengal Public Demands Recovery Act, 1913, on the ground that the provisions were different. - The Supreme Court disagreed with the High Court's summary rejection of the Advocate-General's contention, emphasizing that the language of Entry 11-A (Administration of justice; Constitution and organisation of all courts, except the Supreme Court and High Courts) gives wide powers to the State Legislature. - The Court referred to the Constitution Bench's interpretation in State of Bombay v. Narothamdas Jethabhai, which held that the legislative powers conferred on the Provincial Legislature by the entry on administration of justice included the power to regulate and provide for the whole machinery connected with the administration of justice, including jurisdiction and powers of courts. - The Supreme Court concluded that the Collector under the Act exercises judicial powers of the State, making the Collector a revenue court. Thus, the Tamil Nadu Legislature was competent to enact Section 52-A under Entry 11-A List III. 2. Violation of Article 14: The respondents had also challenged Section 52-A on the grounds that it was violative of Article 14 of the Constitution of India. However, the High Court did not address this issue, having struck down the section on the ground of legislative competence. Supreme Court's Conclusion: - The Supreme Court held that Section 52-A was enacted to provide a speedier remedy for the recovery of loans granted by State-owned corporations. The legislation was related to "money lending" and "money lenders" under Entry 30 of the State List. - The Court emphasized that the loans advanced by the corporations were public money and needed to be recovered expeditiously to facilitate further financial assistance. - The Court cited previous judgments, including U.P. Financial Corporation v. Gem Cap (India) Pvt. Ltd. and S.P. Chengalvaraya Naidu v. Jagannath, to highlight the necessity of expeditious recovery mechanisms to prevent abuse of the court process by unscrupulous individuals. - The Court ultimately held that Section 52-A was constitutionally valid and that the Tamil Nadu Legislature had the legislative competence to enact it. Judgment: The Supreme Court allowed the appeals, set aside the judgment of the Madras High Court, and dismissed the writ petitions filed by the respondents. The respondents were ordered to pay costs quantified at Rs. 5,000 each. Additional Judgments: - The Court also addressed separate but related cases involving the Bihar and Orissa Public Demands Recovery Act, 1914, and upheld the legislative competence of the Bihar Legislature to enact similar provisions for the recovery of bank dues as arrears of land revenue. - The judgments of the Calcutta High Court in Harish Tara Refractories (P) Ltd. v. The Certificate Officer and the Patna High Court in Sawar Mal Choudhary v. State Bank of India were upheld, and the transferred cases were dismissed with costs.
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