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Prafulla Kumar Mukherjee vs the bank of commerce
448
Prafulla Kumar Mukherjee
v.
The Bank of Commerce
1947 (49) BOMLR 568
FACTS
FACTS OF CASE
#The Bengal Money Lenders Act, 1940 was passed to reduce the debts owed by the agriculturists.
#It was challenged on the ground that being a provincial (State) Law, it affected the promissory notes which was a subject matter of the Centre under Entry 46 of the List 1.
#The Act provided for limiting the amount and the rate of interest recoverable by a lender on any loan. The ground was that the Act was ultra vires the Bengal Legislature.
FACTS CONTINUED:-
CONTINUED........
#The High Court of Calcutta held the Act to be intra vires to the Provincial Legislature.
#Appeal was made to the Federal Court, where the decision of High Court of Calcutta was reversed. It was held that the Act was ultra vires to the law making powers of the Bengal Legislature.
#Appeal to the Privy Council.
Issues and constitutional questions involved
. Issues and constitutional questions involved
Q1.) Whether the Bengal Money Lenders Act, 1940 is valid or is ultra vires to the Bengal Legislature?
Q2.)Does the Act in question deal in pith and substance with moneylending ? If it does, is it valid though it incidentally trenches upon matters reserved for the Federal Legislature ? Once it is determined, whether the pith and substance is money-lending, is the extent to which the Federal field is invaded a material matter?
Doctrine of interpretation in question :-
Doctrine of interpretation in question.
The doctrine which was applied in the present case is “Doctrine of Pith & Substance”. The doctrine was applied for the first time in India by Judge Porter in the present case.
Pith means ‘true nature’ or ‘essence of something’ and Substance means ‘the most important or essential part of something’.
DOCTRINE OF PITH & SUBSTANCES......
Doctrine of Pith
Doctrine of Pith and Substance says that where the question arises of determining whether a particular law relates to a particular subject (mentioned in one List or another), the court looks to the substance of the matter. Thus, if the substance falls within Union List, then the incidental encroachment by the law on the State List does not make it invalid.
CONTINUES...
& Substance
- In The State of Bombay And Another vs F.N. Balsara supreme court held - This is the first important judgment of the Supreme Court that took recourse to the Doctrine of Pith and Substance. The court upheld the Doctrine of Pith and Substance and said that it is important to ascertain the true nature and character of a legislation for the purpose of determining the List under which it falls.
- This imply that incidental encroaches may happen because legislative matters in different lists are bound to overlap some or the other way creating a conflict.
- In the judgment, it was observed that the Money Lenders Act deals with one aspect of a Provincial matter and cannot be held void in whole due the its effect on promissory notes which is a part of Federal List.
Critical analysis of the case
. Critical analysis of the case
- The doctrine has been applied in India also to provide a degree of flexibility in the otherwise rigid scheme of distribution of powers. The reason for adoption of this doctrine is that if every legislation were to be declared invalid on the grounds that it encroached powers, the powers of the legislature would be drastically circumscribed.
- This is essentially a Canadian Doctrine now firmly entrenched in the Indian Constitutional Jurisprudence. Cushing v. Dupey.
- In this case the Privy Council evolved the doctrine, that for deciding whether an impugned legislation was intra vires, regard must be had to its pith and substance.
ANALYSIS:-
ANALYSIS CONTI...
- The Act dealt with moneylenders and money-lending, which was provided in Entry of the List II (Provincial List) and not specifically about the promissory notes which were covered under Federal List. Promissory notes can be a type of security for the loan from the moneylenders.
- Therefore, mere incidental encroachment should not lead to held the act as invalid. The doctrine of pith and substance helps to ascertain that an enactment that substantially falls within the powers expressly conferred by the Constitution upon the Legislature, which enacted it, cannot be held to be invalid because of the incidental encroachment on matters assigned to another Legislature.
- This doctrine is an established principle of law in India recognized not only by this Court, but also by various High Courts. Where a challenge is made to the constitutional validity of a particular State Act with reference to a subject mentioned in any entry in List I, the Court has to look to the substance of the State Act and on such analysis and examination, if it is found that in the pith and substance, it falls under an entry in the State List but there is only an incidental encroachment on any of the matters enumerated in the Union List, the State Act would not become invalid merely because there is incidental encroachment on any of the matters in the Union List
Conclusion
- It arises when there is a conflict between two or different subject matters of different list.
- There can be circumstances in which subject matter of list 1 clashes with the subject matter of list 2. Hence, this doctrine is applied in this kind of situation.
- The main reason behind the adoption of this doctrine of pith and substance is that the powers of the legislature would be severely limited if every law were to be declared invalid on the ground that it infringes power.
- According to this doctrine, it is examined to check its“true nature and character” in order to ascertain in what list it falls.
- It provides a degree of flexibility. It is widely used in determining whether the state is within its power to make statute which involves a subject mentioned in the union list of the constitution.
- It is applied in the case State of Bombay Vs F.N Balasar, by the supreme court. This was the first important judgment which upheld the pith and substance..
Your Thankfully
Aniket Rathore 17BAL073