STATE OF KERALA & ORS. v. M/S. MAR APPRAEM KURI CO. LTD. & ANR.

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A is to be noted that no order was issued by the Central Government in exercise of the powers vested in it under that Section and no question of repugnancy could arise because repugnancy must exist in fact and not depend merely on a possibility. The possibility of an order under Section 18G being B issued by the Central Government would not be enough. The existence of such an order was an essential pre-requisite before repugnancy could arise." This sentence has been relied upon by learned counsel for the State of Kerala in the present case in support of his submission that repugnancy must exist c in fact and not depend on a mere possibility. According to the learned counsel, in the present case, applying the ratio of the judgment in the case of Tika Ramji (supra), it is clear that the repugnancy has not arisen in the present case before us for the simple reason that the Central Chit Funds Act, 1982 has D not come into force in the State of Kerala. That, a mere possibility of the Central Act coming into force in future in the State of Kerala would not give rise to repugnancy.

(v) In the case of State of Orissa v. M.A. Tulloch and Co. reported in (1964) 4 SCR 461, the facts were as follows:-On a E lease being granted by State of Orissa under Mines and Minerals (Development and Regulation) Act 1948 (Central Act), Tulloch and Company started working a manganese mine. The State of Orissa passed Orissa Mining Areas Development Fund Act, 1952 under which the State Government was F authorized to levy a fee for development of "mining areas" in the State. After bringing these provisions into operation, State of Orissa demanded from Tulloch and Company on August 1, 1960 fees for the period July, 1957 to March, 1958. Tulloch and Company challenged the legality of the demand before the High G Court under Article 226 of the Constitution. The writ petition was allowed on the ground that on the coming into force of the Mines and Minerals (Regulation and Development) Act of 1957, hereinafter called the "Central Act of 1957", which was brought into force from 1st June, 1953 the Orissa Mining Areas H Development Fund Act 1952 should be deemed to be non-

STATE OF KERALA & ORS. v. MAR APPRAEM KURI 501 CO. LTD. & ANR. [S.H.KAPADIA, CJI.] existent. This was the controversy which came before this A 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- B 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 c 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. 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 and development of the mines should come under the control of the Union. In such a case the test must be whether the legislative declaration covers the field or not. Applying the said test, in Tulloch's case, the Constitution Bench held that the Central Act of 1957 intended to cover the entire field dealing with regulation and development of mines being under the control of the Central Government. In Tulloch's case, reliance was placed on the above underlined portion in Tika Ramji's F case (supra) which, as stated above, was on the assumption that sugarcane was an article relatable to sugar industry within Section 18G of the Central Act No. LXV of 1951. It was urged on behalf of the State of Orissa in Tulloch's case that Section 18(1) of the Central Act of 1957 merely imposes a duty on the G Central Government to take steps for ensuring conservation and development of mineral resources. That, since the Central Government had not framed Rules under the Act for development of mining areas till such Rules were framed, the Central Act of 1957 did not cover the entire field, and, thus, the H

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A Orissa Mining Areas Development Fund Act, 1952 continued to operate in full force till the Central Government enacted Rules under Section 18 of the 1957 Act. The said contention of the State of Orissa was rejected by the Constitution Bench of this Court in Tulloch's case by placing reliance on the judgment of B this Court in Hingir-Rampur's case (suprq) in following words:

"We consider that this submission in relation to the Act before us is without force besides being based on a misapprehension of the true legal position. In the first place the point is concluded by the earlier decision of this court c in Hingir Rampur Coal Co. Ltd. v. State of Orissa where this court said:

"In order that the declaration should be effective it is not necessary that rules should be made or enforced. All D that this required is a declaration by Parliament that it was expedient in the public interest to take the regulation of development of mines under the control of the Union. In such a case the test must be whether the legislative declaration covers the field or not." E But even if the matter was res integra, the argument cannot be accepted. Repugnancy arises when two enactments both within the competence of the 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 H

STATE OF KERALA & ORS. v. MAR APPRAEM KURI 503 CO. LTD. & ANR. [S.H.KAPADIA, CJI.] overborne on the ground of repugnance. Where such is the A 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 B 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 supersession, of the State Act."

19Copy pinpoint19. To sum up, Articles 246(1), (2) and 254(1) provide that to the extent to which a State law is in conflict with or repugnant to the Central law, which Parliament is competent to make, the Central law shall prevail and the State law shall be void to the extent of its repugnancy. This general rule of repugnancy is subject to Article 254(2) which inter alia provides that if a law made by a State legislature in respect of matters in the Concurrent List is reserved for consideration by the President and receives his/ her assent, then the State law shall prevail in that State over an existing law or a law made by the Parliament, notwithstanding its repugnancy. The proviso to Article 254(2) provides that a law made by the State with the c President's assent shall not prevent Parliament from making 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 a State legislature. Thus, Par.liament need not wait for the law made by the State with the President's assent to be brought into force as it can repeal, amend, vary or add to the assented State law no sooner it is made or enacted. We see no justification for inhibiting Parliament from repealing, amending or varying any State Legislation, which has received the President's assent, overriding within the State's territory, an earlier Parliamentary enactment in the concurrent sphere, before it is brought into force. Parliament can repeal, amend, or vary such State law no sooner it is assented to by the President and that it need not wait till such assented to State law is brought into force. This view finds support in the judgment H

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A of this Court in Tulloch (supra). Lastly, the definition of the expressions "laws in force" in Article 13(3)(b) and Article 372(3), Explanation I and "existing law" in Article 366(10) show that the laws in force include laws passed or made by a legislature before the commencement of the Constitution and 8 not repealed, notwithstanding that any such law may not be in operation at all. Thus, the definition of the expression "laws in force" in Article 13(3)(b) and Article 372(3), Explanation I and the definition of the expression "existing law" in Article 366(10) demolish the argument of the State of Kerala that a law has C not been made for the purposes of Article 254, unless it is enforced. The expression "existing law" finds place in Article

254. In Edward Mills Co. Ltd., Beawar 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 D 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 E Act No. 7 of 2002, introducing Section 4(1 a) 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 F 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. G (ii) Our Answer to Question No. (ii) :-The Effect in Law of a Repeal

20Copy pinpoint20. In State of Orissa v. M.A. Tulloch & Co. (supra), this Court came to the conclusion that by reason of the declaration H

STATE OF KERALA & ORS. v. MAR APPRAEM KURI 505 CO. LTD. & ANR. [S.H.KAPADIA, · CJI.] by Parliament the entire subject matter of "conservation and A development of minerals" stood taken over, for being dealt with by Parliament, thus, denying the State of the power within it hitherto possessed and consequently the Central Act superseded the State law, thus effecting a repeal. After coming oto the conclusion that the State law stood repealed, this Court B was required to consider a submission advanced on behalf of Tulloch & Co. It was submitted that Section 6 of the General Clauses Act, 1897 applied only to express repeals and not to repeals consequent upon the supersession of the State Act by a law having the constitutional superior efficacy. It was c submitted that a mere disappearance or supersession of the State Act under Article 254(1) was at the highest a case of implied repeal and not an express repeal. That, Section 6 of the General Clauses Act applied only to express repeals and not to implied repeals. This contention was rejected in the 0 following terms :

"The entire theory underlying implied repeals is that there is no need for the later enactment to state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word 'repeal' in the later statute. Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which Section 6 presumes where the word 'repeal' is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction or difference between an express provision and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant H

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A legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and B 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 c 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." D

21Copy pinpoint21. In A. Thangal Kunju Mussaliar v. M. Venkitacha/am Potti and Anr. [1955] 2 SCR 1196, 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 under Act No. XIV of 1124, a F controversy was raised that as the said Act No. XIV of 1124 was not a law in force when the United State of Travancore and Cochin was formed, all proceedings under the Travancore Act No. XIV of 1124 had lapsed. This contention was dismissed by this Court in following terms: G ''The general rule of English law, as to the date of the commencement of a statute, since 1797, has been and is that when no other date is fixed by it for its coming into operation it is in force from the date when it receives the royal assent (33 Geo. 3, c. 13). The same rule has been H

STATE OF KERALA & ORS. v. MAR APPRAEM KURI 507 CO. LTD. & ANR. [S.H.KAPADIA, CJI.] adopted in Section 5 of our General Clauses Act, 1897. A We have not been referred to any Travancore law which provides otherwise. If, therefore, the same principle prevailed in that State, Travancore Act 14 of 1124 would have come into force on 7-3-1949 when it was passed by the Travancore Legislature. What prevented that result? B The answer obviously points to Section 1 (3) which authorises the Government to bring the Act into force on a later date by issuing a notification. How could Section 1(3) operate to postpone the commencement of the Act unless that section itself was in force? One must, therefore, c concede that Section 1 (3) came into operation immediately the Act was passed, for otherwise it could not postpone the coming into operation of the Act. To put the same argument in another way, if the entire Act including Section 1(3) was not in operation at the date of its passing, 0 how could the Government issue any notification under that very section? There must be some law authorising the Government to bring the Act into force. Where is that law to be found unless it were in Section 1(3)? In answer, Shri Nambiyar referred us to the principle embodied in Section E 37 of the English Interpretation Act which corresponds to Section 22 of our General Clauses Act. That section does not help the petitioner at all. All that it does is to authorise the making of rules or byelaws and the issuing of orders between the passing and the commencement of the enactment but the last sentence of the section clearly says that "rules, bye-laws or orders so made or issued shall not take effect till the commencement of the Act or Regulation". Suppose Shri Nambiyar is right in saying that the Government could issue a notification under Section 1(3) by virtue of the principle embodied in Section 22 of the G 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 H

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A 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 B 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 c 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 questioned on the D ground that the Act lapsed and was not continued by Ordinance 1 of 1124."

22Copy pinpoint22. In T.S. Ba/iah v. T.S. Rengachari [1969] 3 SCR 65, the underlying principle of Section 6 of the General Clauses E Act, 1897 is explained as under :

"The question is not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. Section 6 of the General Clauses Act therefore will be applicable whenever there is a repeal F of an enactment. In such cases consequences laid down in Section 6 will follow, unless, as the Section itself says, a different intention appears in the repealing statute."

23Copy pinpoint23. In State of Punjab vs. Mohar Singh [1955] 1 SCR 893 G prosecution was commenced against Mohar Singh under Section 7 of the East Punjab Refugees (Registration of Land Claims) Act, 1948. The offence was committed at a time when the said Act was not in force. The offence was committed when East Punjab Refugees (Registration of Land Claims) H Ordinance of 1948 was in force. That Ordinance was for a

STATE OF KERALA & ORS. v. MAR APPRAEM KURI 509 CO. LTD. & ANR. [S.H.KAPADIA, CJI.]

temporary period. It was substituted by the Act. It is important to note that the Ordinance was a temporary law and the same was repealed before it expired by efflux of time. In the above circumstances, Section 6 of General Clauses Act, 1897 came for interpretation before this Court. It was held : "We cannot subscribe to the broad proposition that Section 6 is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases unless the new legislation manifests a contrary intention or incompatibility. Such incompatibility has to be ascertained from a consideration of all relevant provisions of the new law and c mere absence of a saving clause by itself is not material."

24Copy pinpoint24. Applying the tests laid down in the above judgments of this Court, when a State law is repealed expressly or by implication by a Union law, Section 6 of the General Clauses Act 1897 applies as to things done under the State law which are so repealed, so that transactions under the State law before the repeal are saved as also any rights and liabilities arising under the State Act, prior to the enactment of the Central Act. Repeal of an enactment is a matter of substance. It depends on the intention of the Legislature. If by reason of the subsequent enactment, the Legislature intended to abrogate or wipe off the former enactment, wholly or in part, then, it would be a case of pro tanto repeal.

25Copy pinpoint25. 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 G 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 H 19.08.1982 and the Kerala Chitties Act, 1975 thus stood

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A 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 B or incurred under the said Kerala repealed Act. This is the Constitutional position which would prevail if Section 90(1) of the Central Chit Funds Act, 1982 would not have been there. In other words, Section 90(1) of the Central Chit Funds Act, 1982 is stated out of abundant caution. Thus, after 19.08.1982 c the Kerala Chitties Act, 1975 stood repealed except for the limited purposes of Section 6 of the General Clauses Act. Likewise, the other existing six State laws on Chits, referred to in Section 90 of the Chit Funds Act, 1982, existing on 19.08.1982 also stood repealed subject to the saving under Section 6 of the General Clauses Act. 0

26Copy pinpoint26. 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 some States but it has not been done for others like Kerala. It is for the Central Government to issue a notification bringing into force the Chit Funds Act, 1982 in Kerala when it deems appropriate as it has done in some States. Until such notification is issued neither the Kerala Chitties Act, 1975 prevails in the State of Kerala as it has become void and has been repealed under Article 254(1), nor the Central Chit Funds Act, 1982 as it is not notified till date. If 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) will come into play and thereby the G Kerala Chitties Act, 1975 shall continue to apply only to chits in operation in State of Kerala on the date of the commencement of the Central Chit Funds Act, 1982 in the same manner as the Kerala Chitties Act, 1975 applied to such chits before such commencement. Moreover, Sections 85(a) H and 90(2) of the Central Chit Funds Act, 1982 provide for

STATE OF KERALA & ORS. v. MAR APPRAEM KUR! 511 CO. LTD. & ANR. [S.H.KAPADIA, CJI.] continuance of the application of the provisions of the Kerala A Chitties Act, 1975 till the commencement of the Central Chit Funds Act, 1982. Such commencement is dependent upon notification under Section 1(3). Thus, on such commencement of the Central Chit Funds Act, 1982, the transactions (chits) between 19.08.1982 and the date of commencement of the B Central Act will stand protected under Section 90(2). Hence, there would be no legislative vacuum.

27Copy pinpoint27. Before concluding, one aspect needs to be highlighted. Section 4( 1a) was inserted into Section 4( 1) vi de State C Finance Act No. 7 of 2002. Under Section 4(1a), 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 D 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(1 a) 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(1 a) of the Kerala Chitties Act, 1975, as amended by Finance Act No. 7 of 2002, Dinasmuch 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 Government within whose jurisdiction the chit is to be commenced or conducted and unless such chit is registered in that State in accordance with the provisions of the Central Chit Funds Act 1982. Conclusions

28Copy pinpoint28. To sum up, our conclusions are as follows :i) On timing, we hold that, repugnancy arises on the making and not

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A commencement of the law, as correctly held in the judgment of this Court in Pt. Rishikesh and Another v. Sa/ma Begum (Smt) [(1995) 4 sec 718).

ii) Applying the above test, we hold that, on the enactment of the Central Chit Funds Act, 1982, on 19.08.1982, which 8 covered the entire field of "chits" under entry 7 of List Ill 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).

iii) That, 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 F 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 G of the Central Chit Funds Act, 1982 in the same manner as the Kerala Chitties Act, 1975 applied to chits before such commencement.

29Copy pinpoint29. The reference is answered accordingly.

H K.K.T. Reference answered.