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TMI Blog2013 (6) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the Appearing Parties. JUDGMENT S.H. Kapadia, CJI.- Introduction 1. By order dated 18.02.2009 in Civil Appeal No. 6660 of 2005 in the case of State of Kerala v. Mar Appraem Kuri Co. Ltd., the referring Bench of 3-judges of this Court doubted the correctness of the view taken by a 3-judges Bench of this Court in Pt. Rishikesh v. Smt. Salma Begum [1995] 4 SCC 718. Accordingly, the matter has come to the Constitution Bench to decide with certitude the following core issues of constitutional importance under Article 254(1) of the Constitution. Scope of the Reference - when does repugnancy arise? 2. In the present case, the question to be answered is - 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? 3. The question arose before the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll has been passed by the House of the People, it shall be presented to the President and the President shall either give his assent to the Bill or withhold his assent therefrom. The proviso is not material for the purpose of this case. Once the President gives assent it becomes law and becomes effective when it is published in the Gazette. The making of the law is thus complete unless it is amended in accordance with the procedure prescribed in Articles 107 to 109 of the Constitution. Equally is the procedure of the State Legislature. Inconsistency or incompatibility in the law on concurrent subject, by operation of Article 254, clauses (1) and (2) does not depend upon the commencement of the respective Acts made by the Parliament and the State legislature. Therefore, the emphasis on commencement of the Act and inconsistency in the operation thereafter does not become relevant when its voidness is required to be decided on the anvil of Article 254(1). Moreover the legislative business of making law entailing with valuable public time and enormous expenditure would not be made to depend on the volition of the executive to notify the commencement of the Act. Incompatibility or repug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the impugned judgment are set out herein below: Kerala Chitties Act, 1975 (State Act) The Chit Funds Act, 1982 (Central Act) Section 1 - Short title, extent and commencement (1) This Act may be called the Kerala Chitties Act, 1975 (2) It extends to the whole of the State of Kerala. (3) It shall come into force on such date as the government may, by notification in the Gazette, appoint. Section 1 - Short title, extent and commencement (1) This Act may be called the Chit Funds Act, 1982. (2) It extends to the whole of India except the State of Jammu and Kashmir. (3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different States. Section 2 - Definitions In this Act, unless the context otherwise requires,- (4) "discount" means the amount of money or quantity of grain or other commodity, which a prize winner has, under the terms of the variola, to forego for the payment of veethapalisa, foreman's commission or such other expense; as may be prescribed; Section 2 - Definitions In this Act, unless the context otherwise requires,- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which may extend to six months, or with fine which may extend to three hundred rupees, or with both. Section 4 - Prohibition of chits not sanctioned or registered under the Act (1) No chit shall be commenced or conducted without obtaining the previous sanction of the State Government within whose jurisdiction the chit is to be commenced or conducted or of such officer as may be empowered by that Government in this behalf, and unless the chit is registered in that State in accordance with the provisions of this Act: Provided that a sanction obtained under this sub-section shall lapse if the chit is not registered within twelve months from the date of such sanction or within such further period or periods not exceeding six months in the aggregate as the State Government may, on application made to it in this behalf, allow. Section 15 - Security to be given by foreman (1) Every foreman shall, before the first drawing of the chitty,- (a) execute a bond in favour of or in trust for the other subscribers for the proper conduct of the chitty, charging immovable property sufficient to the satisfaction of the Registrar for the realization of twice the chitty amount; or (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less than one and a half times the chit amount in favour of the Registrar; or (c) transfer in favour of the Registrar such other securities, being securities in which a trustee may invest money under section 20 of the Indian Trusts Act, 1882 (2 of 1882), of such value, as may be prescribed by the State Government from time of time: Provided that the value of the securities referred to in clause (c) shall not, in any case, be less than one and a half times the value of the chit amount. (2) Where a foreman conducts more than one chit, he shall furnish security in accordance with the provisions of sub-section (1) in respect of each chit. (3) The Registrar may, at any time during the currency of the chit, permit the substitution of the security: Provided that the face value or market value (whichever is less) of the substituted security shall not be less than the value of the security given by the foreman under sub-section (1). (4) The security given by the foreman under sub-section (1), or any security substituted under sub-section (3), shall not be liable to be attached in execution of a decree or otherwise until the chit is terminated and the claims of all the subscribers are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arbitrary for the authorities in Kerala to insist for another security for the same chitty merely because 20% or more subscribers are residing in the State. Learned Single Judge further held that the Registrar in Kerala is absolutely free to call for details of registration and security furnished by the Foreman in any other State under Section 20 of the Central Act and after confirmation with the Registrar in that State he will record the same and shall not call for further security being furnished under Section 15 of the Kerala Act from the same Foreman for the same chitty. Learned Single Judge also found if a Foreman is registered under the Central Act in any State outside Kerala and has subscribers in Kerala, the Central Act applies to the Foreman even in regard to the business he has in Kerala, no matter the Central Act is not notified in the State and in such cases the learned Single Judge opined that the provisions of the State Act will yield to the extent the same is inconsistent with the Central Act. Learned Single Judge himself has therefore noticed inconsistencies between the various provisions of the State Act and the Central Act. 15. On a comparison of the various pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e "State List"). 249. Power of Parliament to legislate with respect to a matter in the State List in the national interest. - (1) Notwithstanding anything in the foregoing provisions of this Chapter, if the Council of States has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest that Parliament should make laws with respect to any matter enumerated in the State List specified in the resolution, it shall be lawful for Parliament to make laws for the whole or any part of the territory of India with respect to that matter while the resolution remains in force. (2)** ** ** (3) A law made by Parliament which Parliament would not but for the passing of a resolution under clause (1) have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of six months after the resolution has ceased to be in force, except as respects things done or omitted to be done before the expiration of the said period. 250. Power of Parliament to legislate with respect to any matter in the State List if a Proclamation of Emergency is in oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." [Emphasis supplied] Submissions 13. Shri K.K. Venugopal, learned senior counsel appearing for the State of Kerala and Shri V. Shekhar, learned senior counsel for Union of India submitted that the word "made" in Article 254 is relevant only to identify the law, i.e., the Parliamentary law or the State law and has nothing to do with the point of time for determination of repugnance. According to the learned counsel, a decision by a Court, on the question as to whether any State Act is repugnant to a Central Act, can be made only after both laws have been brought into force for the simple reason that the very object of determination of repugnance between two laws, by a Court, is to decide and declare as to which one of the two laws has to be obeyed or in the language of Article 254, which of the two laws "shall prevail". T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Act, the Central Government has been empowered to bring the said Act into force on such date as it may, by notification in the official gazette, appoint and different dates may be appointed for different States. Till date, the said 1982 Act has not been extended to the State of Kerala. According to the learned counsel, if one was to accept the contention advanced on behalf of the private chit firms that "when a Central law is made as envisaged in Article 254 of the Constitution then all repugnant State laws would immediately stand impliedly repealed, even without the Central Act being brought into force by a notification under Section 1(3) of the 1982 Act"; then, in that event, there would be a total legislative vacuum particularly when transactions have taken place in the State of Kerala on and from 19.08.1982 till date and even up to the date of notification which has not been issued under Section 1(3) till today. According to the learned counsel, keeping in view the provisions of Sections 1(3), 4, 89 and 90 of the 1982 Act and absent framing of the Rules by the State Government in terms of Section 89, making of the central law cannot be the test for determining repugnancy. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 367 of the Constitution. By reason of Article 367, the General Clauses Act, 1897 would apply to the said repeal. Thus, after 19.08.1982, the Kerala Chitties Act, 1975 stood repealed except for the limited purposes of Section 6 of the General Clauses Act, 1897. According to the learned counsel for the private chitties, to bring the Central Chit Funds Act, 1982 into operation in any State the Central Government has to issue a notification in the Official Gazette under Section 1(3). This has been done for several States but not for States like Kerala, Gujarat, etc. That, until such notification neither the Kerala Chitties Act, 1975 prevails in the State of Kerala as it has become void and stands repealed under Article 254(1) nor the Central Chit Funds Act, 1982 as it is not notified. Thus, according to the learned counsel, as and when the Central Government brings into force the Chit Funds Act, 1982 by a notification in the State of Kerala under Section 1(3), Section 90(2) of the 1982 Act will come into play and thereby the Kerala Chitties Act, 1975 shall continue to apply only to the chits in operation in Kerala on the date of commencement of the Central Act, 1982 in the same manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Central Act. Thus, the Parliament in enacting the Central law has manifested its intention not only to override the existing State laws, but also to occupy the entire field relating to chits, which are special contracts, under Entry 7 of List III. Thus, the actual bringing into force of the Central Act is not a relevant circumstance insofar as the legislative business of the State Legislature is concerned. That, when the State of Kerala intended to amend the State Act in 2002 by insertion of Section 4(1a), it was bound to keep in mind the fact that there is already a Central law governing chits since 19.08.1982, though not in force in Kerala, whereby there is a pro tanto repeal of the State Act. Therefore, the State Legislature ought to have followed the procedure in Article 254(2) by reserving the law for the consideration of the President and obtained Presidential assent. Therefore, according to the learned counsel, there is no merit in the contention of the State that there would be a legislative vacuum in the State of Kerala if the propositions advanced on behalf of the private chit firms are to be accepted. According to the learned counsel, Section 85(a) and Section 90( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This Article deals with distribution of legislative powers as between the Union and the State Legislatures, with reference to the different Lists in the Seventh Schedule. In short, the Parliament has full and exclusive powers to legislate with respect to matters in List I and has also power to legislate with respect to matters in List III, whereas the State Legislatures, on the other hand, have exclusive power to legislate with respect to matters in List II, minus matters falling in List I and List III and have concurrent power with respect to matters in List III. [A.L.S.P.P.L. Subrahmanyan Chettiar v. Muttuswami Goundan AIR 1941 F.C. 47]. Article 246, thus, provides for distribution, as between Union and the States, of the legislative powers which are conferred by Article 245. Article 245 begins with the expression "subject to the provisions of this Constitution". Therefore, Article 246 must be read as "subject to other provisions of the Constitution". For the purposes of this decision, the point which needs to be emphasized is that Article 245 deals with conferment of legislative powers whereas Article 246 provides for distribution of the legislative powers. Article 245 deals wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitations. [See: Para 22.6 of Vol.3 at Page 2305 of the Constitutional Law of India by H.M. Seervai, Fourth Edition]. This aspect is important as the word "void" finds place in Article 254(1) of the Constitution. Therefore, the Union and State Legislature have concurrent power with respect to subjects enumerated in List III. Hence, the State Legislature has full power to legislate regarding the subjects in List III, subject to the provision in Article 254(2), i.e., provided the provisions of the State Act do not conflict with those of the Central Act on the subject. Where the Parliament has made no law occupying the field in List III, the State Legislature is competent to legislate in that field. As stated, the expression "subject to" in clauses (2) and (3) of Article 246 denotes the supremacy of the Parliament. Thus, the Parliament and the State Legislature derive the power to legislate on a subject in List I and List II from Article 246(1) and (3) respectively. Both derive their power from Article 246(2) to legislate upon a matter in List III subject to Article 254 of the Constitution. The respective Lists merely demarcate the legislative fields or legislative heads. Further, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to the subject in List III. In the present case, Entry 7 of List III in the Seventh Schedule deals with the subject of "Contracts". It also covers special contracts. Chitties are special contracts. Thus, the Parliament and the State Legislatures are competent to enact a law with respect to such contracts. The question of repugnancy between the Parliamentary Legislation and State Legislation arises in two ways. First, where the Legislations, though enacted with respect to matters in their allotted spheres, overlap and conflict. Second, where the two Legislations are with respect to matters in the Concurrent List and there is a conflict. In both the situations, the Parliamentary Legislation will predominate, in the first, by virtue of non-obstante clause in Article 246(1); in the second, by reason of Article 254(1). Article 254(2) deals with a situation where the State Legislation having been reserved and having obtained President's assent, prevails in that State; this again is subject to the proviso that Parliament can again bring a legislation to override even such State Legislation. In clause (1) of Article 254 the significant words used are "provision of a law made by the Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arliament and received the assent of the President on 19.08.1982. It came on the Statute Book as the Chit Funds Act, 1982 (40 of 1982). Section 1(2) of the said Act states that the Act extends to the whole of India, except the State of Jammu and Kashmir whereas Section 1(3) states that it shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different States. The point to be noted is that the law-making process ended on 19.08.1982. Section 1(3) is a piece of conditional legislation. As stated, in legislations of such character, merely because the legislation has postponed the enforcement of the Act, it does not mean that the law has not been made. In the present case, after enactment of the Chit Funds Act, 1982 on 19.08.1982, the said Act has been applied to 17 States by notifications issued from time to time under Section 1(3). How could Section 1(3) operate and make the said Act applicable to 17 States between 2.04.1984 and 15.09.2008 and/or postpone the commencement of the Act for certain other States including State of Kerala, Gujarat, Haryana, etc. unless that Section itself i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sts the intention on the part of the Parliament to occupy the field hitherto occupied by State Legislation. Each and every aspect relating to the conduct of the chits as is covered by the State Act has been touched upon by the Central Act in a more comprehensive manner. Thus, on 19.08.1982, the Parliament in enacting the Central law has manifested its intention not only to override the existing State Laws, but to occupy the entire field relating to Chits, which is a special contract, coming under Entry 7 of List III. Consequently, the State Legislature was divested of its legislative power/authority to enact Section 4(1a) vide Finance Act No. 7 of 2002 on 29.07.2002, save and except under Article 254(2) of the Constitution. Thus, Section 4(1a) became void for want of assent of the President under Article 254(2). Let us assume for the sake of argument that the State of Kerala were to obtain the assent of the President under Article 254(2) of the Constitution in respect of the insertion of Section 4(1a) by Finance Act No. 7 of 2002. Now, Article 254(2) deals with the situation where State Legislation is reserved and having obtained the President's assent, prevails in the State over t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Clause (1), Clause (2) engrafts an exception viz. that if the President assents to a State law which has been reserved for his consideration, it will prevail notwithstanding its repugnancy to an earlier law of the Union, both laws dealing with a concurrent subject. In such a case, the Central Act will give way to the State Act only to the extent of inconsistency between the two, and no more. In short, the result of obtaining the assent of the President to a State Act which is inconsistent with a previous Union law relating to a concurrent subject would be that the State Act will prevail in that State and override the provisions of the Central Act in their applicability to that State only. The predominance of the State law may however be taken away if Parliament legislates under the proviso to Clause (2). The proviso to Article 254(2) empowers the Union Parliament to repeal or amend a repugnant State law even though it has become valid by virtue of the President's assent. Parliament may repeal or amend the repugnant State law, either directly, or by itself enacting a law repugnant to the State law with respect to the "same matter". Even though the subsequent law made by Parliament ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned, both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by Article 254(1) discussed above. Thirdly, so far as the matters in List II, i.e. the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain conditions Parliament can do so. It is, therefore, obvious that in such matters repugnancy may result from the following circumstances: 1. Where the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy. 2. Where however a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) of Article 254. 3. Where a law passed by the State Legislature while being substantially within the scope of the entries in the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities referred to above, the following propositions emerge: 1. That in order to decide the question of repugnancy it must be shown that the two enactments contain inconsistent and irreconcilable provisions, so that they cannot stand together or operate in the same field. 2. That there can be no repeal by implication unless the inconsistency appears on the face of the two statutes. 3. That where the two statutes occupy a particular field, but there is room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results. 4. That where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field." Applying the above tests to the facts of the present case, on the enactment of the Central Chit Funds Act 1982 on 19.08.1982, intending to occupy the entire field of Chits under Entry 7 of List III, the State Legislature was denuded of its power to enact the Finance Act No. 7 of 2002. However, as held in numerous decisions of this Court, a law enacted by the State legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clyde Engg. Co. Ltd. v. Cowburn [1926] 37 C.L.R. 466, in which Isaacs, J. laid down one test of inconsistency as conclusive: "If, a competent legislature expressly or implicitly evinces its intention to cover the whole field, that is a conclusive test of inconsistency where another Legislature assumes to enter to any extent upon the same field." Applying these tests, this Court held that there was no repugnancy as "sugarcane" was dealt with by the impugned State Act whereas the Central Act dealt with supply and distribution of manufactured articles at fair prices and, therefore, there was no question of any inconsistency in the actual terms of the Acts enacted by Parliament and the State. The only question that arose was whether Parliament and the State Legislature sought to exercise their powers over the same subject matter or whether the laws enacted by Parliament were intended to be a complete exhaustive code or whether such Acts evinced an intention to cover the whole field. This Court held that as "sugarcane" was not the subject- matter of the Central Act, there was no intention to cover the whole field and, consequently, both the Acts could co-exist without repugnancy. Having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. This was the controversy which came before this Court. One of the points which arose for determination was that of repugnancy. It was urged that the object and purpose of Orissa Mining Areas Development Fund Act, 1952 was distinct and different from the object and purpose of the Central Act of 1957, with the result that both the enactments could validly co-exist since they did not cover the same field. This argument was rejected by this Court. It was held that having regard to the terms of Section 18(1) the intention of Parliament was to cover the entire field. That, by reason of declaration by Parliament under the said Section the entire subject matter of conservation and development of minerals was taken over for being dealt with by Parliament thus depriving the State of the power hitherto possessed. Relying on the judgment of the Constitution Bench of this Court in the case of Hingir-Rampur Coal Co. Ltd. v. State of Orissa [1961] 2 SCR 537, it was held in Tulloch's case that for the declaration to be effective it is not necessary that the rules should be made or enforced; all that was required was a declaration by Parliament to the effect that in public interest regulation an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one legislature has superiority over the other then to the extent of the repugnancy the one supersedes the other. But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. In the present case, having regard to the terms of Section 18(1) it appears clear to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expression "existing law" finds place in Article 254. In Edward Mills Co. Ltd., v. State of Ajmer AIR 1955 SC 25, this Court has held that there is no difference between an "existing law" and a "law in force". Applying the tests enumerated hereinabove, we hold that the Kerala Chitties Act, 1975 became void on the making of the Chit Funds Act, 1982 on 19.08.1982, [when it received the assent of the President and got published in the Official Gazette] as the Central 1982 Act intended to cover the entire field with regard to the conduct of the Chits and further that the State Finance Act No. 7 of 2002, introducing Section 4(1a) into the State 1975 Act, was void as the State legislature was denuded of its authority to enact the said Finance Act No. 7 of 2002, except under Article 254(2), after the Central Chit Funds Act, 1982 occupied the entire field as envisaged in Article 254(1) of the Constitution. Thus, repugnancy arises on the making and not commencement of the Central Chit Funds Act, 1982. On 19.08.1982, the Kerala Chitties Act, 1975 ceased to operate except to the extent of Section 6 of the General Clauses Act, 1897. (ii) Our Answer to Question No. (ii) :- The Effect in Law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principles upon which the rule as to implied repeal rests to attribute to that legislature which effects a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would, in our opinion, attract the incident of the saving found in Section 6 for the rules of construction embodied in the General Clauses Act are, so to speak, the basic assumptions on which statutes are drafted." 21. In A. Thangal Kunju Musaliar (supra), the Travancore State Legislature enacted Act No. XIV of 1124 on 7.03.1949 to provide for investigation of tax evasion cases. The Act was to come into force by Section 1(3) on the date appointed by the State Government. The States of Travancore and Cochin merged on 1.07.1949. By Ordinance 1 of 1124, all existing laws were to continue in force in the United State of Travancore and Cochin. After action was taken u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he General Clauses Act, it will not take his argument an inch forward, for that notification, by reason of the last sentence of Section 22 quoted above, will not take effect till the commencement of the Act. It will bring about a stalemate. It is, therefore, clear that a notification bringing an Act into force is not contemplated by Section 22 of the General Clauses Act. Seeing, therefore, that it is Section 1(3) which operates to prevent the commencement of the Act until a notification is issued thereunder by the Government and that it is Section 1(3) which operates to authorise the Government to issue a notification thereunder, it must be conceded that that Section 1(3) came into force immediately on the passing of the Act. There is, therefore, no getting away from the fact that the Act was an "existing law" from the date of its passing right up to 1-7-1949 and was, consequently, continued by Ordinance 1 of 1124. This being the position, the validity of the notification issued on 26-7-1949 under Section 1(3), the reference of the case of the petitioner, the appointment of Respondent 1 as the authorised official and all proceedings under the Travancore Act 14 of 1124 cannot be que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe off the former enactment, wholly or in part, then, it would be a case of pro tanto repeal. 25. In the present case, repugnancy is established by both the tests. As can be seen from the impugned judgment (vide paras 13-15) on comparison of the provisions of the Kerala Chitties Act, 1975, being the State Act, and the Chit Funds Act, 1982, being the Central Act, inconsistencies actually exist directly. Further, as stated above, the intention of the Parliament in enacting the Central Act is to cover the entire field relating to or with respect to Chits. Hence, on both counts the two Acts cannot stand together. In consequence of this repugnancy the Kerala Chitties Act, 1975 became void under Article 254(1) on the enactment of the Central Chit Funds Act, 1982 on 19.08.1982 and the Kerala Chitties Act, 1975 thus stood impliedly repealed. By reason of Article 367 of the Constitution, the General Clauses Act, however, applies to the said repeal. Under Sections 6(b) and (c) of the General Clauses Act the previous operation of the Kerala Chitties Act, 1975 is not affected nor any right, privilege, obligation or liability acquired or incurred under the said Kerala repealed Act. This is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in cases where a chitty is registered outside the State, say in Jammu & Kashmir, but having 20% or more of the subscribers normally residing in State of Kerala, the Foreman (who has got registration outside the State of Kerala) has to open a branch in the State of Kerala and obtain registration under the Kerala Chitties Act, 1975. This sub-section was inserted to plug a loophole. In many cases, chitties were registered outside the State of Kerala even when large number of subscribers were residing in State of Kerala. It is true that on the making of the Central Chit Funds Act, 1982, the State legislature could not have enacted the Finance Act No. 7 of 2002 inserting Section 4(1a) into the State Act as the entire field stood occupied by the Central Chit Funds Act, 1982 without the assent of the President as envisaged under Article 254(2), however, we find that Section 4(1) of the Central Chit Funds Act, 1982 is much wider and more stringent than Section 4(1a) of the Kerala Chitties Act, 1975, as amended by Finance Act No. 7 of 2002, inasmuch as under Section 4(1) of the Central Chit Funds Act, 1982, no chit shall be commenced or conducted without obtaining sanction of the State Go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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