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TMI Blog1940 (12) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ents, praying that since they had paid more than twice the amount of the principal sum as well as the costs, the Court might be pleased to record under the Act full satisfaction of the decree. In February 1939 a Full Bench of the Madras High Court, in another case, Nagaratnam v. Seshayya ('39) 26 AIR 1939 Mad 36 held that the Act was within the competence of the Legislature, and accordingly the subordinate Judge allowed the two petitions and recorded full satisfaction of the decree. A revision application to the High Court was dismissed, but the High Court gave a certificate Under Section 205, Constitution Act. The appeal now comes before this Court, and the substantial question to be decided is whether the Act was within the powers of the Madras Legislature, though there are subsidiary questions also involved. 2. The Act is an attempt to deal in a very drastic manner with the problem of rural indebtedness, which has vexed legislators since the days of Solon. It contains, as other provincial Acts passed on the same subject during the last few years have also contained, many unusual and at first sight startling provisions. It applies to all debts payable by an agriculturist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the institution of a suit to recover the amount as the Court directs. These provisions are not easily to be reconciled with the provisions of the Madras Act, where debts based upon promissory notes are concerned. The Court was therefore invited by counsel for the appellant to say that the Act was beyond the competence of the Madras Legislature, because it dealt with debts which in a great number of cases would be debts based upon promissory notes; or that, if not wholly invalid, it was at any rate beyond the competence of the Legislature in so far as it might affect such debts, or alternatively ought to be construed as not applying to them. A Full Bench of the Madras High Court, in the case already cited, have decided that the Madras Act does not trench in any way upon the exclusive powers of the Federal Legislature. We do not regard the Madras Agriculturists Belief Act, said the learned Chief Justice, delivering the judgment of the Court, as really affecting the principles embodied in the Negotiable Instruments Act. Negotiation of a promissory note is not prohibited, nor is it said that a maker or an indorser shall not be liable. The only effect of the Act, so far as negot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted the later Act. By Section 91, Canadian Act, the Dominion Legislature is given a general power to legislate for the peace, order and good government of Canada in relation to all matters not coming within the classes of subjects by this Act assigned to the Legislatures of the Provinces , and without prejudice to the generality of the power so given the exclusive legistative authority of the Dominion is expressly declared to extend to all matters coming within the classes of subjects enumerated in the section. Section 91 further declares that any matter coming, within any of the classes so enumerated shall not be deemed to come within the class of matters of a local or private nature comprised in the enumeration of the classes of subjects by this Act assigned exclusively to the Provinces [this corresponds to Section 100(1), Government of India Act]. Then Section 92 gives the Provincial Legislatures exclusive authority to make laws in relation to matters coming within the list of (provincial) subjects enumerated in that section, the last class in. the list being described as generally all matters of a merely local or private nature in the province [these provisions correspo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or even most, of the debts with which it deals are in practice evidenced by or based upon such instruments. That is an accidental circumstance which cannot affect the question. Suppose that at some later date money-lenders were to adopt a different method of evidencing the debts of those to whom they lend money; how could the validity or invalidity of the Act vary with money-lenders' practice? I am of opinion therefore that the Act cannot be challenged as invading the forbidden field of List I, for, it was not suggested that it dealt with any item in that List other than No. 28. 8. It was then contended that, even if not wholly invalid, either the Act was invalid in part, in so far as it did or might affect promissory notes, or that it ought to be construed as not applying to promissory notes at all. But these questions do not in my opinion arise in the present case, because the liability on which the Act operated was a liability under a decree of the Court passed before the commencement of the Act. It had ceased to be a debt evidenced by or based on the promissory note, for, that had merged in the decree and had become a judgment-debt: nor could the appellant any longer h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for, that proposition seems to me much too broadly stated. I doubt whether any provincial Act could, in the form of a debtors' relief Act, fundamentally affect the principle of negotiability or the rights of a bona fide transferee for value. Perhaps the position is different where the promissory note has never changed hands and is sued upon by the original payee; and it may be (though I do not decide the question) that an Act such as the Court is now considering can operate upon the original debt in such cases, even though the creditor has taken a promissory note in respect of his debt. If it were otherwise, the power of Provincial Legislatures to enact remedial legislation in a field peculiarly their own would be very greatly hampered; so much so, indeed, that the Central Legislature might well find itself compelled to review the situation. But it would perhaps be inadvisable that I should say more on this occasion. 11. I think that the appeal should be dismissed. As the respondents did not enter an appearance there will be no order for costs. It is not the practice of this Court to give costs to an Advocate-General intervening. Sulaiman, J. 12. This is a plaintiff& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible to give any direction to a subordinate Court to select one opinion in preference to the other. Secondly, it is emphasised that a Judge who does not concur is not prevented from delivering a dissenting judgment. The sub-section does not say that reasons cannot be stated separately by the Judges who concur in one judgment. No doubt the practice of the Judicial Committee, unlike that in the House of Lords, is that one of their Lordships delivers the judgment, which is taken to be on behalf of all. But obviously there are three main reasons for it. In the first place, the decision of their Lordships of the Privy Council is in the form of a report submitted to His Majesty. It would accordingly be wholly inappropriate to submit conflicting opinions to His Majesty. In the second place, their Lordships hear appeals from the Dominions, India and the Colonies, and it is desirable that it should not appear that there has been any divergence of opinion, so that there may be no doubts as to the correctness of the law which the Courts have to follow. In the third place, the Privy Council is the ultimate Court of appeal and it is more appropriate that the law should be settled definitely and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der or otherwise, with two exceptions. Section 7 lays down: Notwithstanding any law, custom, contract or decree of Court to the contrary, all debts payable by an agriculturist at the commencement of this Act, shall be scaled down in accordance with the provisions of this chapter. No sum in excess of the amount as so scaled down shall be recoverable from him or from any land or interest in land belonging to him; nor shall his property be liable to be attached and sold or proceeded against in any manner in the execution of any decree against him in so far as such decree is for an amount in excess of the sum as scaled down under this chapter. 17. Section 8 relates to debts incurred before 1st October 1932 and provides: (1) All interest outstanding on 1st October 1937 in favour of any creditor of an agriculturist whether the same be payble under law, custom or contract or under a decree of Court and whether the debt or other obligation has ripened into a decree or not, shall be deemed to be discharged, and only the principal or such portion thereof as may be outstanding shall be deemed to be the amount repayable by the agriculturist on that date; and (2) Where an agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not connote the idea that it must be absolutely and exclusively within one list and not encroaching, not even in an indirect way, upon any other. 21. As pointed out by me in the U. P. Regularizations of Remissions Act case, United Provinces v. Mt. Atiqa Begum ('41) 28 AIR 1941 FC 16 their Lordships of the Privy Council in dealing with Canadian cases have repeatedly laid down the test that in order to see whether an Act is in respect of a particular subject, one must look to its true nature and character and to its pith and substance . It is quite wrong to assume that the doctrine of pith and substance laid down by their Lordships is some special doctrine exclusively applicable to the Canadian Constitution. Indeed, Lord Atkin in the House of Lords in Gallagher v. Lynn (1937) 1937 AC 863 at p. 870 applied this doctrine previously applied to the Constitution in a Federal system, to the Constitution of the Northern Ireland. His Lordship held that in pith and substance the Milk and Milk Products Act, 1934, was not a law in respect of trade, but was a law for peace, order and good government in respect of precautions taken to secure the health of inhabitants of Northern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in List I, or is void on account of any repugnancy. 23. The substance - The substance of the Act is to give relief to agriculturists in respect of interest accruing upon the debt due from them. In one aspect it relates to money-lending and money-lenders because the reduction of interest on loans made to them by money-lenders would affect money-lending transactions. It is certainly a measure relating to agriculturists in the main, though an agriculturist is defined in a somewhat wider sense and though the debt due from him is not confined to loans taken for agricultural purposes, but includes any liability due from him. But, there can at the same time be no doubt that the scheme of the Act is to benefit the agriculturists as a class and relieve them from onerous burden of high interest, from which the Provincial Legislature thought they had been unfairly suffering. It may be, literally speaking, difficult to say that benefit to agriculturists (defined in a somewhat wide way) is included in the term agriculture. On the other hand, it may well be that unless agriculturists are relieved from their financial troubles, agriculture itself may suffer. Again, agricultural lands may de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instruments to the Federal Legislature. A uniformity of practice as regards these for the whole of India is necessary. As they can be freely negotiated, they can circulate from province to province, and after successive endorsements can even be sued upon in provinces other than those in which they were executed. As they pass from hand to hand, holders in due course have to be protected. They are allowed to presume that the consideration evidenced by such instruments is due in full. Holders in due course cannot be expected to inquire and ascertain whether the original maker had been an agriculturist or not; and it would be grossly unfair to such holders, if after having paid almost full consideration for such instruments, they were confronted in a suit brought upon them with a provincial law that cuts down interest which accrued even prior to the passing of that Act. As the impugned Act deals with debts in general, it would be difficult to say that the Act, taken as a whole, is with respect to negotiable instruments mentioned in the aforesaid category. But at the same time it is impossible to deny that the Act encroaches upon the field covered by such instruments. It would have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p. 118, relying on the ruling In re Marriage Legislation in Canada.(1912) 1912 AC 880 at pp. 885 to 887 adhered to the principle of exception and observed: In other words, as I interpret the two entries, entry No. 45 (List I) may be said to contain a general power to levy excise duty at all stages. As an exception to this, a portion of the power is cut out and allocated to the provinces under entry No. 48 (List II). It operates as an exception to the general power conferred by entry No. 45. 29. On the other hand, at p. 94, I did not feel myself able to apply the principle that where a particular power comes within both the two mutually exclusive jurisdictions, as in Canada, it should be regarded as an exception to the general one. I pointed out that an exception falls within and not outside a general provision, the essence of the principle being that a particular exception restricts a general provision, although covered by it. In the Indian Constitution there being a definite provision for overlapping, where such an overlapping is inevitable, the general power of the Centre would override even a particular power of a province. I was of the opinion that the power of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the classes of subjects specified in Section 91 shall not be deemed to come within the class of matters of local or private nature comprised in the enumeration of the classes of subjects assigned to the Provincial Legislatures. The difficulty in Canada has been that the power of the Dominion Legislature extends to the very wide field peace, order and good government,'' and also includes the residuary power in respect of matters not allocated to the provinces. Another difficulty is that the last class in Section 92 is also expressed in general language generally all matters of a merely local or private nature in the province. Again, the provinces have power as regards property and civil rights in the province. There is a further complication arising from the categories direct and indirect taxation. In particular, while Section 91 specifically mentioned 26. Marriage and Divorce, Section 92 also specifically mentioned 12. The Solemnization of Marriage in the province. In view of such general categories, it is no wonder that overlapping was not impossible. And yet there was no statutory provision corresponding to Section 107 of the Indian Act. Their Lordships of the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed so as to ensure that, Federal laws must dominate in the fields of Lists I and III. While the Federal Legislature is given power, it is expressly provided that a Provincial Legislature has not power to make laws with respect to any of the matters enumerated in List I. And this exclusion of power is notwithstanding anything in the two next succeeding sub-sections. Again, in Sub-section (2), while both the Federal Legislature and a Provincial Legislature have power to make laws with respect to any of the matters enumerated in List III, this is notwithstanding anything in the next succeeding sub-section. The exclusive power of a Provincial Legislature with regard to matters in List II is provided for in Sub-section (3), but it is again emphasized that this last sub-section is subject to the two preceding sub-sections. On a very strict interpretation of Section 100, it would necessarily follow that from all matters in List II which are exclusively assigned to Provincial Legislatures, all portions which fall in List I or List III must be excluded. Similarly, from all matters falling in List III, all portions which fall in List I must be excluded. The section would then mean th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit to recover such amount as the Court directs. 35. Parties cannot even contract out of their statutory rights. Thus, in the case of a promissory note or bill of exchange, interest has to be calculated till at least the institution of the suit, at the rate specified therein. Any provincial law providing that the interest prior to the suit should be curtailed or cut down, is prima facie in conflict with it. It will be trenching upon a field already occupied by Section 79. 36. After the Negotiable Instruments Act, came the Usurious Loans Act (Act 10 of 1918), as amended by Act 28 of 1926, which also was a Central Act. Now usurious loans undoubtedly come within money-lending , which is specifically included in List II. As pointed out by me in the U. P. Regularization of Remissions Act case,('41) 28 AIR 1941 FC 16. an earlier Act can be modified, by necessary implication, by the provisions of a later Act. The Negotiable Instruments Act must therefore be read along with the Usurious Loans Act, as well as any provincial law on the subject that existed in March 1937, and they all taken together constitute the existing Indian law on the subject of negotiable instruments. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It draws no distinction between the original promisee and a holder in due course. The special hardship that would be inflicted on the latter is not at all taken into account in the Act and the special protection given to bona fide holders in due course by the Negotiable Instruments Act read with the Usurious Loans Act is destroyed. Had it been confined to the scaling down of the interest before a decree is passed, it might have come within the modification introduced by the Usurious Loans Act. But it affects decrees previously passed on promissory notes, which could not have been touched at all under the existing Indian laws in Madras. It is thus not a case where the power of a Provincial Legislature eo nomine in the absence of any Central legislation is to be considered, but a case where such legislation actually exists and already occupies the field. 38. Decree - The Advocate-General of Madras has strongly urged before us that this is a case where the debt due on a promissory note had merged in a decree long before the impugned Act came into force, and that we must accordingly confine our attention to the facts of this particular case. His contention is that before the Act c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 41.Their Lordships of the Privy Council have laid down in several cases that part of an Act can be held valid and another part invalid, if they are severable. If the offending provisions are so interwoven into the scheme that they are not severable, the whole is ultra vires: In re the Initiative and Referendum Act. ('19) 6 AIR 1919 PC 145. In Attorney-General for British Columbia v. Attorney-General for Canada ('37) 24 AIR 1937 PC 93 at page 388, their Lordships found the whole texture of the Act so inextricably interwoven that one part could not be contemplated as existing independently of the other. In Shyamakanta Lal v. Rambhajan Singh ('39) 26 AIR 1939 FC 74 at p. 213, I had relied on these cases and pointed out that: It is a well-established principle that if the invalid part of an Act is really separate in its operation from the other parts, and the rest are not inseverably connected with it, then only such part is invalid, unless of course the whole object of the Act would be frustrated by the partial exclusion. If the object which is beyond the legislative power is perfectly distinct from that which is within such power, the Act can be ultra vires i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh a Legislature may have no power to legislate directly on a particular subject embracing a pecuniary liability, it could indirectly legislate that when the dispute comes in a Court, the decree should be passed in a particular way, or a decree already passed should be amended in that way. This would introduce a serious anomaly and would enable Legislatures freely to encroach upon other fields indirectly, and at the same time effectively. 44. In Ramnandan Prasad v. Madhwanand Ramji ('40) 27 AIR 1940 FC 1 at p. 5 I have expressed the opinion that the provision in Section 11, Bihar Money-Lenders Act (3 of 1938) that no Court shall . . . pass a decree for an amount of interest, etc. affected the powers of Courts. In the Bihar case, Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri,('41) 28 AIR 1941 FC 5 decided today, also, I have expressed the opinion that the same provision in the corresponding Section 7, Bihar Money-Lenders (Regulation of Transactions) Act (7 of 1939) does affect the powers of a Court. Similarly, in the present case, I am of the opinion that the provision in Section 19 that a Court shall . . . . apply the provisions of this Act to such decree . . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion which the Federal Legislature is competent to enact merely means a subject in List I and that it applies to all previous laws of the Central Legislature and is not necessarily confined to laws of the Indian Legislature passed after the coming into force of the Government of India Act. This contention, if accepted, would raise several difficulties. According to strict grammar, the present tense is competent to enact would not necessarily mean 'had been or was competent to enact'. Furthermore, the existing Indian law with respect to matters enumerated in the Concurrent List, is expressly mentioned as an alternative to Federal law . There is therefore no point in saying that Federal law, which the Federal Legislature is competent to enact, means an existing law on a subject, in Lists I and in. The learned Advocate-General of India is therefore compelled to urge that it refers only to matters in List I; but such an argument would not be convincing as the words competent to enact undoubtedly cover matters both in Lists I and III. 48. Federal law - An examination of the language employed in Section 316 points to the conclusion that the Federal law must mean law pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the existing Indian law. I am accordingly unable to see that there is anything in the language of Section 316 which would make the expression Federal law in Section 107 (1) include a previously existing Indian law on a subject falling in List I. Of course, if there were a fresh enactment by the Indian Legislature after Part III has come into force and before the Federation comes into existence, then the provisions of Section 107(1) would certainly apply to it. For purposes of the transitional period, one may paraphrase the sub-section as meaning if any provision of a provincial law made by a Provincial Legislature established under this Act, is repugnant to any provision of any laws of the Indian Legislature made after Part III has come into force, which the Indian Legislature is competent to enact, etc . 49. It follows that so far as the old law is concerned, it is only the latter' portion of the sub-section which can, if at all, apply to it. But this portion is restricted to provisions of an existing Indian law with respect to one of the matters enumerated in the Concurrent List, and does not at all refer to any existing Indian law with respect to one of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s any gap which cannot otherwise be filled up. Apparently, it was thought that as the provinces had been given any authority to legislate with respect to matters falling in List I, all cases where there is an encroachment would be met by Section 100 itself. 51. Unoccupied field - The doctrine which has been evolved with regard to the Canadian cases is that if the encroachment is merely incidental, then there is no defect so long as the trespass is upon an unoccupied field. Engrafted upon the doctrine of incidental encroachment there is the further doctrine of unoccupied field. In Attorney-General of Ontario v. Attorney-General for the Dominion of Canada (1894) 1894 AC 189 at pp. 200-201 the Lord Chancellor observed: They would observe that a system of bankruptcy legislation may frequently require various ancillary provisions for the purpose of preventing the scheme of the Act from being defeated. It may be necessary for this purpose to deal with the effect of executions and other matters which would otherwise be within the legislative competence of the provincial Legislature. Their Lordships do not doubt that it would be open to the Dominion Parliament to deal with such matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otect the Provincial Act against the Interest Act of 1927, passed by the Dominion Parliament, the validity of which, in the view of their Lordships is unquestionable . . . . Dominion legislation properly enacted Under Section 91 and already in the field must prevail in territory common to the two Parliaments. 55. In Jai Gobind Singh v. Lachmi Narain Ram ('40) 27 AIR 1940 FC 20 at p. 51 where the amount due on an earlier promissory note had formed part of the mortgage money, I distinguished the case by pointing out that the suit being on a mortgage the field was apparently clear, and, therefore, the question of interfering with the interest due on the promissory note did not directly arise. No Canadian case has been cited before us in which although the subject of legislation was substantially within Section 92, it not only incidentally encroached upon a subject mentioned in Section 91, but at the same time actually clashed with an existing Dominion legislation. The principles laid down by their Lordships have gone only so far as to permit an incidental encroachment, provided the Dominion field is unoccupied. In no case so far decided have their Lordships tolerated a trespass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash between the centre and provinces can be avoided, which I think we must. This will also explain the apparent gap in Section 107(1) of the Act, that gap being filled in by the provisions of section 100. 57. The result is that the effect of Sections 8 and 19, Madras Act, is to compel Courts to reopen decrees passed on the basis of promissory notes before the Act came into force, and recalculate the amounts due on them disallowing all interest outstanding on 1st October 1937, and even the principal if double the amount has already been paid by way of interest; while the Negotiable Instruments Act, even read with the Usurious Loans Act, enjoins that interest should be calculated at the Contract rate, and no Court should cut down such interest if a decree has already been passed. In my opinion the Provincial Act being repugnant to the existing Indian law relating to promissory notes which is exclusively a Federal subject, is void to that extent. 58. I, however, agree with the High Court that there is nothing in the Madras Agriculturists Relief Act which really conflicts with any provision of the Hindu law. No doubt, a creditor can always fall back upon the original consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Indian Legislature. The inclusion of money-lending and money-lenders in List II of Schedule 7 to the Constitution Act justifies the inference that Provincial Legislatures must have been considered better fitted to deal with the subject with adequate knowledge of local conditions and requirements. Both before and after 1935, the local Legislatures in the several provinces have enacted more drastic measures for the purpose. The common feature of these measures was that they compelled the Court to reduce substantially the rate of interest recoverable from a debtor and limited the total amount of interest recoverable on any loan to a sum equal to the principal amount, on the analogy of the damdupat rule. The classes of cases in which relief was available under these enactments varied from province to province. Under the Madras Act in question, relief was afforded to all persons falling within the definition of agriculturist given in the Act, and if they were agriculturists, they were entitled to invoke the protection given by the Act, in respect of all liabilities falling within the definition of debt given in the Act. It is noteworthy that even decrees passed before the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions relating to similar questions raised under the British North America Act. In the Patna High Court, more than one learned Judge has strongly protested against importing these principles - particularly what is described as the pith and substance rule-into the construction of the Government of India Act; and in Sagarmal Marwari v. Bhuthu Ram ('41) 28 AIR 1941 Pat 99 Meredith J., observed: There are peculiar provisions in Section 100, Government of India Act, and in my view they bar the application of the pith and substance principle to that Act. 62. It must always be in the discretion of each Judge to decide for himself how far he can or will accept help and guidance from precedents; but the note of caution sounded by my Lord the Chief Justice in his judgment in In the matter of C.P. and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938.('39) 26 AIR 1939 FC 1 at p. 38 as to the application without qualification of precedents relating to federal and provincial powers under other systems cannot reasonably be interpreted as altogether banning their use. It seems to me necessary to point out that the assumption in the Sagarmal Marwari v. Bhuthu Ram (&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f subjects in any system of distribution of legislative powers. That they need not be limited to any special system of federal constitution is made clear by the fact that in Gallagher v. Lynn (1937) 1937 AC 863 at p. 869, Lord Atkin applied the pith and substance rule when dealing with a question arising under the Government of Ireland Act-which did not embody a federal system at all-and in Shannon v. Lower Mainland Dairy Products Board ('39) 26 AIR 1939 PC 36 at pp. 719, 720 when dealing with a Canadian case, he embodied in the judgment the principles enumerated in the Irish case. 64. That the subject-matter of the impugned legislation is to a certain extent at least within the jurisdiction of the Provincial Legislature cannot be and has not been denied. It may be that it will fall partly under one item and partly under another item in List II or List III. For instance, some of the debts affected by the Act may fall under the heading of trade and some under the heading of money-lending in item 27. Support may in some instances be also derived from item 10 (relating to contracts, etc.) and item 14 (relating to actionable wrongs) in List III. In the Madras Full Bench ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act may be obviated by so interpreting the general terms used in the Act as to limit them to cases with which alone the Legislature was competent to deal: see Macleod v. Attorney-General for New South Wales (1891) 1891 AC 455 at page 459. 66. The Full Bench decision of the Madras High Court held that the Act is not invalid or inoperative even in respect of debts due under negotiable instruments, because in the opinion of the learned Judges it did not really affect the principles embodied in the Negotiable Instruments Act. This statement seems to require qualification. It is of the essence of negotiation (as distinguished from a mere assignment) that a holder in due course must be able to recover the full amount due for principal and interest according to the apparent tenor of the document and he cannot be called upon to enquire whether the executant of the document or the person liable was an agriculturist or not. If this right is negatived, it cannot be said that the negotiability of the document has not been affected. The question will nevertheless remain, whether, notwithstanding this abridgement of the rights of the holder of a negotiable instrument, the legislation may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Instruments Act. The validity of this contention will depend upon the import of the expression federal law occurring in the opening part of Sub-section (1) of Section 107. It may be conceded that the words which the Federal Legislature is competent to enact may refer to the first list also and they need not be qualified by the words occurring later and referring to the Concurrent Legislative List; because, if these later words were intended to qualify the opening words of the sub-section also, it would not have been necessary to use the words which the Federal Legislature is competent to enact in the earlier portion. In Sagarmal Marwari v. Bhuthu Ram ('41) 28 AIR 1941 Pat 99, Meredith J., seems to take a different view. But as contended by the learned Advocate-General of Madras, the expression federal law would prima facie seem, on the wording of Section 316, only to comprehend legislation passed by the Indian Legislature after the Government of India Act of 1935 came into operation and not earlier enactments of the Central Legislature, like the Negotiable Instruments Act. The use of the word accordingly in Section 316 suggests that the second part of para. 1 is conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny doubt on this ground, it might be sufficient to read this head, with item 2 in the same list (jurisdiction and powers of Courts). Even if it should be found necessary to call in aid the powers under the Concurrent List, on the ground that there was an interference with the provisions of the Civil Procedure Code relating to decrees, the precaution of obtaining the assent of the Governor-General under section 107(2), Constitution Act, has been taken in this case. Sir B.L. Mitter was prepared to assume that the passing of the decree would not make any difference; but, on this basis, he contended that where the claim arose out of a promissory note, the matter must be regarded as falling under item 28 of List I (cheques, bills of exchange, promissory notes, etc.), even after a decree had been passed. I am unable to accede to this argument. A distinction may have to be drawn between decrees passed before the date of the Madras Act and decrees passed subsequent to that date. 70. Assuming, for the sake of argument, that liabilities under negotiable instruments cannot be affected by provinical legistation, it would be anomalous to recognise in the Provincial Legislature a power to red ..... X X X X Extracts X X X X X X X X Extracts X X X X
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