1. Gwyer, C.J.:—[After stating the facts of the case as set out on pp. 189-190, supra, the learned Chief Justice continued:—]

2. The Madras Agriculturists Relief 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” at the commencement of the, and “agriculturist” is defined in very wide terms, so as to include not only persons cultivating agricultural land but certain others also who possess an interest in such land. “Debt” is defined as meaning any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue Court or otherwise, though land revenue or any tax or cess payable to the Central or Provincial Government or to any local authority, together with certain other liabilities not here Material, are excluded. The definition appears to be wide enough to cover damages for an actionable wrong. It is then provided by s. 7 that, not withstanding any law, custom or decree of the Court to the contrary, all debts payable by an agriculturist at the commencement of the are to be scaled down in accordance with the provisions of the; and by s. 8 (inter alia) that in the case of debts incurred before 1st October, 1932, where an agriculturist has paid to any creditor twice the amount of the principal, whether by way of principal or interest or both, the debt, including the principal, shall be deemed to be wholly discharged. By s. 19, the Court may apply the provisions of the to a decree for the repayment of a debt obtained against an agriculturist before the commencement of the and, notwithstanding anything contained in the Code of Civil Procedure, amend the decree or enter satisfaction, as the case may be. The Act contains no express reference to promissory notes or any other form of negotiable instrument, as debt relief legislation in other Provinces, to which our attention was drawn, has sometimes done. It should be added that it was reserved for, and received, the assent of the Governor-General.

3. The Federal Legislature has an exclusive power to legislate with respect to cheques, bills of exchange, promissory notes and other like instruments (List I, entry no. 28). The Negotiable Instruments Act, 1881, provides (s. 32) that in the absence of a contract to the contrary, the maker of a promissory note is bound to pay the amount thereof at maturity according to the apparent tenor of the note; and (s. 79) that where interest at a specified rate is expressly made payable on a note, interest is to be calculated at that rate until payment or until such date 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 was beyond the competence of the Madras Legislature, because itealt 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.

4. 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 Relief 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, so far as negotiable instruments are concerned, is to reduce liability where the maker or indorser is an agriculturist. In providing for this the Provincial Legislature was acting in the interests of agriculture and regulating money-lending to agriculturists. It could never have been the intention of Parliament in conferring a general power on the Federal Legislature to legislate with regard to negotiable instruments to reduce the power of a Provincial Legislature to deal with subjects within its exclusive control. When examined, the Madras Agriculturists Relief Act is in substance within the express powers of the Madras Legislature and the fact that in particular cases it may operate to reduce liability on contracts evidenced by negotiable instruments cannot affect its validity.” The Chief Justice concluded by observing that the authorities, mainly decisions of the Judicial Committee on appeals from Canada, which he had already cited were definite on the point. It is therefore necessary to examine a little more closely the provisions of the Constitution Act and to see what light can be thrown upon them by decisions of the Judicial Committee, and in particular by decisions upon the provisions of the British North America Act.

5. Section 100(3) of the Constitution Act provides that a Provincial Legislature has the exclusive power of legislating with respect to the matters enumerated in List II, the Provincial Legislative List. But this power is expressly stated to be subject to the provisions of s. 100 (1), which give an exclusive power to the Federal Legislature to legislate with respect to the matters enumerated in List I, the Federal Legislative List. Hence, though Parliament has no doubt done its best to enact two lists of mutually exclusive powers, it has also provided, exmajori cautela, that if the two sets of legislative powers should be found to overlap, then the federal legislation is to prevail. And the reason for this is clear. However carefully and precisely lists of legislative subjects are defined, it is practically impossible to ensure that they never overlap; and an absurd situation would result if two inconsistent laws, each of equal validity, could exist side by side within the same territory.

6. The British North America Act, 1867, contains analogous provisions and it can scarcely be doubted that Parliament had those provisions in mind when it enacted the later Act. By s. 91 of the 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 legislative 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 s. 100 (1) of the Government of India Act). Then s. 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 correspond to s. 100 (3) of the Government of India Act). As interpreted by the Judicial Committee, the British North America Act presents an exact analogy to the India Act, even to the over-riding provisions in s. 100 (1) of the latter: “The rule of construction is that general language in the heads of s. 92 yields to particular expressions in s. 91, where the latter are unambiguous”: per Lord Haldane in Great West Saddlery Co. v. The Kin. The principles laid down by the Judicial Committee in a long series of decisions for the interpretation of the two sections of the British North America Act may therefore be accepted as a guide for the interpretation of similar provisions in the Government of India Act.

7. It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation, would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its “pith and substance”, or its “true nature and character”, for the purpose of determining whether it is legislation with respect to matters in this list or in that: Citizens Insurance Company of Canada v. Parsons; Russell v. The Quee; Union Colliery Co. of British Columbia v. Bryde; Att.-Gen. for Canada v. Att.-Gen. for British Columbia; Board of Trustees of Lethbridge Irrigation District v. Independent Order of Forester. In my opinion this rule of interpretation is equally applicable to the Indian Constitution Act. On this point I find myself in agreement with the Madras High Court, and I dissent from the contrary view which appears to have been taken in a recent case by the High Court at Patna: Sagarmal Marwari v. Bhuthu Raj .

8. It is clear that the pith and substance of the Madras Act, whatever it may be, cannot at any rate be said to be legislation with respect to negotiable instruments or promissory notes; and it seems to me quite immaterial that many, 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 vary with moneylenders' practice I am of opinion therefore that the cannot be challenged as invading the forbidden field of List I, for it was not suggested that it dealt with any entry in that List other than no. 28.

9. It was then contended that, even if not wholly invalid, either the 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 operated was a liability under a decree of the Court passed before the commencement of the. 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 have sued upon the note. It was argued however that before the provisions, of the could be applied to the decree, in accordance with s. 19 of the, it was necessary to have recourse to the terms of the note, in order to ascertain to what extent the provisions of s. 8 required or enabled the decree to be scaled down. But this could not affect the nature of the liability, which still remained a judgment-debt; and it was upon that liability and upon no other that the operated, even though itmight be necessary to go into its earlier history for a particular and special purpose. In the present case the judgment-debt was already in existence when the was passed, and it is not necessary to consider whether any different principle would be applicable in the case of decrees made after its enactment. It is sufficient to say that here the has neither affected nor purported to affect any liability on a promissory note.

10. That the provisions of the in their application to the decree obtained by the appellant were within the competence of the Madras Legislature to enact does not seem to me open to doubt. They may be justified by reference to entry no. 4 and no. 15 of List III, perhaps also to entry no. 2 in List II; I do not say that there may not be others, but these will suffice.

11. A number of other matters were argued at the Bar on which, having regard to the view of the case which I have just expressed, it becomes unnecessary for me to express any opinion. There is the difficult question, assuming that the pith and substance of the impugned Act is with respect to matters covered by List II and not to any matters covered by List I, whether and to what extent any of its provisions which relate to matters covered by List I may still be held to be valid on the ground that they are merely incidental to its main purpose; and the further question whether their incidental character will save them if they come into conflict with Federal or Central legislation already occupying the field. These may involve yet another question, that of the true construction of s. 107 (1) of the Constitution Act. But though, as I have said, I reserve my opinion upon all of them, I do not wish it to be assumed that I accept in its entirety the view of the Madras High Court that the impugned Act does not really affect the principles embodied in the Negotiable Instruments Act, 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 used 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.

12. 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.

13. Sulaiman, J.:—This is a plaintiff's appeal arising out of a suit on a promissory note dated the 4th March, 1926, executed by the defendant No. 1 for Rs. 2,975 carrying interest at 36 per cent, per annum. The plaintiff claimed interest at 24 per cent, only, and the limitation was saved by payments made on the 3rd March, 1929, and the 24th February, 1932, Defendants Nos. 2 and 3 who contested the suit are the sons of defendant No. 1. The first court decreed the claim on the 21st November, 1934. On the 22nd March 1938, the Madras Agriculturists Relief Act (IV of 1938) came into force, after the assent of the Governor-General had been given. While the decree was in execution, the judgment-debtors applied to the court on the 24th July, 1938, alleging that, in view of the scaling down of the interest under the new Madras Act, the decree had been satisfied. Objection was of course taken to this by the decree-holder. The court on the 11th February, 1939, held that the Madras Act was intra vires of the Provincial Legislature and ordered satisfaction of the decree to be recorded. On the 27th April, 1939, the plaintiff filed a Revision in the High Court, but it was rejected by a single Judge on the 2nd May, 1939, in view of an earlier pronouncement of a Full Bench of that Court. The learned Judge granted the required certificate under s. 205(1) of the Government of India Act. The application for leave to appeal was heard by a Division Bench which held that, in view of clause 15 of the Letters Patent, the order of the single Judge was a final order. The High Court accordingly admitted the appeal.

14. An Explanation.— I feel that I owe an explanation for stating my reasons separately even on points on which there may be concurrence. I do not think that there is anything in the provisions of the Government of India Act, 1935, barring a separate statement of the reasons. Section 214 (4) merely lays down that “no judgment shall be delivered by the Federal Court save in open court and with the concurrence of a majority of the judges present at the hearing of the case, but nothing in this sub-section shall be deemed to prevent a judge who does not concur from delivering a dissenting judgment”. This sub-section has obviously a two-fold effect. First, there must be the concurrence of a majority of the judges in the final conclusion. If the judges were equally divided the decision would be wholly inconclusive and therefore utterly useless, as it would be impossible to give any direction to a subordinate court to select one opinion in preference to the other. Secondly, it is emphasized 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.

15. 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 made certain, without any expectation of its being changed if a majority in a later case comes to prefer a contrary opinion.

16. None of these reasons applies to the Federal Court. Here a dissenting judgment is expressly allowed by Statute. In particular, as the decision of this Court is subject to an appeal to their Lordships of the Privy Council, it is only fair that a judge who wishes to state his reasons separately should have an opportunity to do so, in order that his full reasons may be before their Lordships when the appeal comes to be heard. It often happens that there are reasons, which may not be accepted by the other members of the Bench as sound or which may not appeal to them as being important, but which are considered by the judge as being necessary to support the view taken by him. Frequently the way in which propositions of law may be stated are not absolutely identical. While concurring in the final result, judges sometimes differ in stating their reasons. Grounds of decision are no less important in constitutional cases, as they may have to be applied again in a different class of cases. In the early years of the working of a constitution, when ideas have not crystallized, and rules of law applicable to it have not been clearly formulated, differences of opinion are not uncommon.

17. Such a practice is in consonance with that prevailing in the High Court of Australia and the Supreme Court of South Africa. In Canada, even after over 70 years, during which the Privy Council has made numerous pronouncements on the Canadian Constitution, separate judgments are still delivered. Even in non-constitutional cases, if important, separate judgments are frequently delivered in the Court of Appeal in England.

18. The Impugned Act.— The impugned Act is the Madras Agriculturists Relief Act, 1938 (Madras Act IV of 1938), which received the assent of the Governor-General on the 11th March, 1938. The object of the, as mentioned in its Preamble, was to provide for the relief of indebted agriculturists. Its relevant provisions may be summarized as follows. Section 3 (ii) (a) defines “agriculturist” as a person who has a saleable interest in any agricultural or horticultural land, with certain exceptions. Section 3(iii) defines “debt” as meaning any liability in cash or kind, whether secured or unsecured, due from an agriculturist, payable under a decree or order 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.”

Section 8 relates to debts incurred before the 1st October, 1932, and provides:

(1) “All interest outstanding on the 1st October, 1937, in favour of any creditor of an agriculturist whether the same be payable 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 agriculturist has paid to any creditor twice the amount of the principal whether by way of principal or interest or both, such debt including the principal, shall be deemed to be wholly discharged.”

19. The main part of s. 19 is as follows:—

“Where before the commencement of this Act, a Court has passed a decree for the repayment of a debt, it shall, on the application of any judgment-debtor who is an agriculturist or in respect of a Hindu joint family debt, on the application of any member of the family whether or not he is the judgment-debtor or on the application of the decree-holder, apply the provisions of this Act to such decree and shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, amend the decree accordingly or enter satisfaction, as the case may be”.

20. The first question for consideration before us is whether the provisions of s. 8 read with s. 19 are “with respect to” a subject-matter in list II, as to which the Provincial Legislature has exclusive authority, or in List III, as to which it has concurrent authority, the repugnancy, if any, being cured by the assent of the Governor-General, or whether those provisions are “with respect to” a subject within List I, as to which it has no legislative power at all.

21. Pith and Substance.— No doubt, every effort appears to have been made to make the three Lists as comprehensive and exhaustive as well as exclusive as possible; and it may well be that barring personal or customary laws, it would only be extremely rare cases which would not come in any one of these three Lists so as to fall within the residual powers of legislation dealt with by s. 104 of the. Nevertheless, in view of the large number of items in the three Lists, it is almost impossible to prevent a certain amount of overlapping. Absolutely sharp and distinct lines of emarcation are not always possible. Rigid and inflexible watertight compartments cannot be ensured. A hard and fast rule of exclusion derived from the strict literal language of s. 100 may therefore be quite impracticable and unworkable. To avoid such difficulties the Imperial Parliament has thought fit to use the expression “with respect to”, which obviously means that looking at the legislation as a whole, it must substantially be with respect to matters in one List or the other. A remote connexion is not enough. Those words 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.

22.As pointed out by me in the United Provinces Regularizations of Remissions Act case 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 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 Ireland by protecting them from the danger of an unregulated supply of milk. In turn, the observation made in Gallagher's case was quoted again in Shannon v. Lower Mainland Dairy Products Board. There can therefore be no doubt that this doctrine of pith and substance is of a general application, and in no way restricted to the peculiar language employed in the British North America Act, 1867.

23. In view of the successive pronouncements of their Lordships of the Privy Council, though made mostly with regard to Canadian cases, it is unreasonable to assume that Parliament contemplated from the use of the words “with respect to” in the Indian Act that any overstepping beyond the limit, howsoever small or insignificant, and any encroachment upon the field of List I, howsoever unimportant, should make the wholly void. Incidental encroachment is not really forbidden. We have therefore first to see whether the impugned Provincial Act is “with respect to” any of the matters in List II. If this is not so, then the must fall to the ground. If it falls within any of the matters enumerated in that List, then we have to see next whether it also falls within any of the matters in List III. If it does and no assent of the Governor-General has been obtained, it must again fall to the ground if it conflicts with an existing Indian law. But if such assent has been obtained, then it will for the time being remain valid. Lastly we have to see whether it falls within any of the subjects mentioned in List I. If it does not, then there is no difficulty, but if it does, then we have to see further whether the is really “with respect to” any of the matters in List I. If it is so, then the must fall to the ground. If it is not, then obviously the indirectly, or as it has been said “incidently” but not in substance, trenches upon List I. But in order to establish that the provisions of ss. 7, 8 and 19 of the Madras Act are within the authority of the Provincial Legislature, it is not necessary for the respondents to show that the provisions come within any single category. So long as it can be shown that all the provisions contained therein fall within List II or List III, the Province would have prima facie an authority to legislate, unless it can be shown that it is with respect to any matter in List I, or is void on account of any repugnancy.

24. The Substance.— The substance of the 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 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 deteriorate in value if they are sold frequently at auction in lieu of debts, and pass from hand to hand, sometimes to persons who are unable to cultivate them themselves. Further, the provision for scaling down interests is certainly an interference with the contract between the lender and the borrower, and can well come within the category “contract”: List III, entry no. 10.

25. It may be that in view of the wide definition of “agriculturist”, all the provisions do not come within the category agriculture; and it may also be that in view of the circumstance that “debt” means any liability, whatsoever, all the provisions may not come within the category “money-lending”. And it may also possibly be that in some extreme cases the liability may go outside the category “contract”, and may fall within “trade and commerce”, (e.g., unpaid purchase-money). But taking all the provisions together and considering the as a whole, it cannot be doubted that it is with respect to matters in Lists II and III. It is most difficult to place it outside these two Lists. Indeed, the Advocate-General of India has conceded that he cannot lay his finger on any category in List I, within which this Act could fall. He therefore felt compelled to urge before us that the deals with matters outside all the Lists, and can therefore come only under the residual power mentioned in s. 104 of the Indian Act. But resort to that residual power should be the very last refuge. It is only when all the categories in the three Lists are absolutely exhausted that one can think of falling back upon a nondescript. It seems to me that this cannot be done in the present case. The legislative-practice in India prior to the commencement of the Government of India Act also shows that in the various Provinces there were existing legislations for relief from high rates of interest. It is therefore impossible to hold that the impugned Act is wholly outside Lists II and III of the Seventh Schedule.

26. Negotiable Instruments.— As the impugned Act deals with all debts of agriculturists, it necessarily includes their debts due on negotiable instruments as well. But List I, entry no. 28 specifically and expressly assigns “cheques, bills of exchange, promissory notes and other instruments” to the Federal Legislature. Being of all-India importance there was a special reason for assigning negotiable 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, 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 encroaches upon the field covered by such instruments. It would have been open to the Provincial Legislature expressly to exclude such instruments from the operation of this Act, (as had been done partially in s. 2 (vii) (e) of the Central Provinces Act XIII of 1934); but that has not been done. It is accordingly impossible to hold that there is no trespass on the Federal legislative field. There is an apparent overlapping, and no clear-cut demarcation is discernible. The question is how this obvious conflict can be avoided.

27. Restricted Interpretation.— The principle of interpretation which was applied by me in In re The Central Provinces and Berar Act No. XIV of 1938 was that it should certainly be our earnest endeavour to avoid a conflict between two apparently competing entries, as too liberal an interpretation given to both of them might create a clash. “As far as possible, an undefined term should not be given such a wide scope as to include a particular provision”. If a subject comes within a special and specific provision, and can only by defining and enlarging the meaning of the words be brought within the scope of the general, then the special provision should be considered to be exclusive of the other. But, of course, where such a restricted interpretation is not possible, overlapping may be inevitable.

28. Principle of Exception.— This principle, coupled with that of an exception to a general provision, was also applied in that case by my Lord the Chief Justice, who relying on the Bank of Toronto v. Lambe observed: “it would accord with sound principles of construction to take the more general power, that which extends to the whole of India, as subject to an exception created by the particular power, that which extends to the Province only. It is not perhaps strictly accurate to speak of the provincial power as being excepted out of the federal power, for the two are independent of one another and exist side by side. But the underlying principle in the two cases must be the same, that a general power ought not to be so construed as to make a nullity of a particular power conferred by the same Act and operating in the same field, when by reading the former in a more restricted sense effect can be given to the latter in its ordinary and natural meaning”. My brother Jayakar J, on p. 118, relying on the ruling in In re Marriage Legislation in Canada 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 Centre to tax consumption, if inclusive, would not admit of any exception in favour of the Provinces, but must prevail. The maxim generalibus specialia derogant cannot be appropriately applied to the three competing Lists. I see three difficulties in importing from the Canadian cases the doctrine of the exception to the general provision. In the first place, it may very often be difficult to decide which is general and which is particular or special. The mere fact that a Central Act may apply to the whole of India whereas a Provincial Act to a smaller area of the Province, would not make the latter an exception, for that would in most cases make a Provincial law override a Central law. In some cases two subjects may both be general, and only particular parts of them may be overlapping. For instance ‘a promissory note’ is a general category, but ‘a promissory note executed by an agriculturist’ is special. On the other hand, ‘debt’ is general, but ‘debt due on a promissory note’ is special. Either of the two categories ‘debt due on a promissory note’ and ‘debt due from an agriculturist’ can be regarded as particular and the other more general according to the point of view from which we look at them. A second serious difficulty is that by applying the rule of exception, we would have to cut out, as Jayakar J. has expressly said, a portion of the power given to the Centre and allocate it to the Provinces exclusively, so that even though the general provision would include such a power, the Centre would be prevented from legislating with respect to it at all. The third difficulty in the way of importing such a rule is that the provisions in the two Constitutions are not identical, and the categories are not in pari materia.

30. Canadian Sections.— Sections 91 and 92 of the British North America Act show the dominant position of the Dominion Legislature, but with restrictions. First of all, power is given to the Dominion to make laws for “the peace, order, and good government of Canada”; but from this are excepted the classes of subjects exclusively assigned to the Provincial Legislatures under s. 92. The exception itself is, however, subject to the exclusive power of the Dominion Legislature with respect to matters specifically enumerated in s. 91. It is then emphasized that any matter coming within any of the classes of subjects specified in s. 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 s. 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 s. 91 specifically mentioned “26. Marriage and divorce”, s. 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 s. 107 of the Indian Act.

31. Their Lordships of the Privy Council in the various Canadian cases which came up for consideration always laid down that the competing subjects in the two Lists should be read and interpreted together so that it may be possible “to arrive at a reasonable and practical construction of the language of the sections, so as to reconcile the respective powers they contain, and to give effect to all of them” [Citizens Insurance Company of Canada v. Parsons. But as overlapping was inevitable, their Lordships further evolved the principle: “Notwithstanding this endeavour to give pre-eminence to the Dominion Parliament in cases of a conflict of powers, it is obvious that in some cases where this apparent conflict exists, the legislature could not have intended that the powers exclusively assigned to the Provincial Legislature should be absorbed in those given to the Dominion Parliament”.

32. In In re Marriage Legislation in Canada, the question for consideration was whether in view of the category “Marriage” in s. 91, the category “The solemnization of marriage in the Province” could be completely excluded from the authority of the Provincial Legislature. There were only two alternatives open: first, that the solemnization of marriage which was specifically and expressly assigned to the Provinces should be considered as a particular exception to the general provision about marriage, or secondly, it should be held that Parliament had made a serious mistake in specifically allotting the solemnization of marriage to the Provinces, when in view of the more general category “Marriage” they could not legislate with respect to such solemnization at all. Their Lordships naturally preferred the former course. In the Great West Saddlery Co. v. The King Lord Haldane after stating ‘the rule of exception’ applicable to the heads of ss. 91 and 92, added: “Neither the Parliament of Canada nor the Provincial Legislature have authority under the to nullify, by implication any more than expressly, Statutes which they could not enact”.

33. Indian Section.— Now although the object of s. 100 of the Government of India Act is the same, the language is not identical. Taking s. 100 strictly literally, it would certainly follow from the double restriction imposed on a Provincial Legislature that its exclusive power is limited 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 s.s. (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 s.s. (3), but it is again emphasized that this last subsection is “subject to the two preceding sub-sections”. On a very strict interpretation of s. 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 that the Federal Legislature has full and exclusive power to legislate with respect to matters in List I, and has also power to legislate with respect to matters in List III. A Provincial Legislature has exclusive power to legislate with respect to List II, minus matters falling in List I or List III; has concurrent power to legislate with respect to matters in List III, minus matters falling in List I. In its fullest scope, s. 100 would then mean that if it happens that there is any subject in List II which also falls in List I or List III, it must be taken as cut out from List II. On this strict interpretation there would be no question of any real overlapping at all. If a subject falls exclusively in List II and no other List, then the power of the Provincial Legislatures is supreme. But if it does also fall within List I, then it must be deemed as if it is not included in List II at all. Similarly, if it also falls in List III, it must be deemed to have been excluded from List II. The dominant position of the Central Legislature with regard to matters in List I and List III is thus established. But the rigour of the literal interpretation is relaxed by the use of the words “with respect to” which as already pointed out only signify “pith and substance”, and do not forbid a mere incidental encroachment. But even if such an incidental encroachment may be ordinarily permissible, the field may not be clear. There may be competency and yet repugnancy also. The question is how to prevent a clash if the trespass is on a field already occupied by a Central Legislation.

34. The Negotiable Instruments Act.— There is in force a Central legislation, namely, The Negotiable Instruments Act, 1881, (Act XXVI of 1881) which deals with negotiable instruments, now specifically included in List I. Section 32 of this Act provides that in the absence of a contract to the contrary, the maker of a promissory note is bound to pay the amount thereof at maturity according to the apparent tenor of the note. Section 79 in more specific language lays down:

“When interest at a specified rate is expressly made payable on a promissory note or bill of exchange, interest shall be calculated at the rate specified, on the amount of the principal money due thereon, from the date of the instrument, until tender or realization of such amount, or until such date after the institution of a 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 s. 79.

36. After the Negotiable Instruments Act, came the Usurious Loans Act (Act X of 1918), as amended by Act XXVIII 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 United Provinces v. Atiqa Begum, 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 s. 3 of the later Act where (a) interest is excessive, or (b) the transaction is substantially unfair, a court is empowered to reopen the transaction and relieve the debtor of his liability for excessive interest, in spite of any contract or agreement. But there are two provisoes: The court cannot (i) reopen an agreement which is more than 12 years old, or (ii) do anything which affects any decree of a court. There was also protection given to a bona fide transferee for value. The combined effect of the two enactments was that where the interest was excessive or the transaction was substantially unfair, a court could go behind the rate of interest entered in a promissory note, reopen the transaction and disallow all excessive interest up to 12 years earlier, but could not go behind a decree passed on a promissory note. As pointed out by me in the case, referred to above, the effect of s. 292 of the Government of India Act, is not only to ensure that the existing Indian laws were not repealed, but actually to continue them in force until altered, repealed or amended by a competent Legislature. And a Provincial Legislature is not competent to alter, repeal or amend any law with respect to matters falling in List I. It follows that a Provincial legislation cannot nullify any such law.

37. The impugned Act permits the reopening of a final transaction evidenced by a promissory note even beyond a period of 12 years. It also enables a court to reopen a decree already passed and to modify it. It is not a mere case where the Provincial Legislature has fixed limits for testing the excessiveness of interest, enabling a court to reduce the interest according to a prescribed scale, whether or not the interest is in its own opinion excessive, and whether or not the transaction in its own opinion is substantially unfair. Nor is it a case where only pendente lite interest is scaled down, nor even a case where the provisions apply to a suit in which a decree is to be passed in future. Nor does it even protect bona fide holders in due course. Had the provision been confined to the interest after the suit was filed, there would have been no such conflict. Interest pendente lite is in the discretion of the court under s. 34 of the Civil Procedure Code, and the court's power to allow it is left untouched by s. 79 of the Negotiable Instruments Act. 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 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 came into force the matter had passed beyond the domain of promissory notes into that of a decree, or as he put it “contract by record”, and that so much of the impugned Act as relates to a decree of the court cannot be said to be in conflict with any provisions of the Negotiable Instruments Act, and must therefore be upheld. The judgment of the High Court is not based on any such ground.

39. Now s. 8, s.s. (1) provides for the discharge of interest “whether the same be payable 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”. Sub-section (2) provides for the discharge of the principal in a certain case. These sub-sections are substantive provisions which alter the terms of the contract and the decree, whether passed before or after the. Section 19 enjoins upon a court the duty of reopening a decree, although passed before the impugned Act, and provides that on application made, the court “shall apply the provisions of this Act to such decree and shall not withstanding anything contained in the Code of Civil Procedure, 1908. amend the decree accordingly or enter satisfaction, as the case may be”. Section 8 has the effect of extinguishing the interest on a debt whether it “has ripened into a decree or not”. It applies equally to decrees that were passed before the commencement of the Madras Act as well as to those to be passed thereafter. On the other hand, s. 19 prevents a court from seeking shelter behind the finality of a decree already passed, and makes it obligatory on the court to amend it, so as to make it accord with the provisions of s. 8. This is compelling it to pass almost a fresh decree.

40. Taking all the provisions together, particularly s. 8. it is very difficult to sever and split up the contract of the loan and the decree passed by a court on the basis of it. It seems to me that the two are inextricably mixed up together and indissolubly connected. Section 8 treats the liability as a debt wholly irrespective of the fact whether it is a decretal debt or not. I do not read these provisions as indicating that even if the contract could not be interfered with, the decree can be amended. It rather seems to me that both the contract and the decree obtained on it hang together and must stand or fall together so far as the Lists go.

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. In Att.-Gen. for British Columbia v. Att.-Gen. for Canada their Lordships-found “the whole texture of the so inextricably interwoven” that one part could not be contemplated as existing independently of the other. In Shyamakant Lal v. Rambhajan Singh 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 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 can be ultra vires in the former, while intra vires in the latter”. But I am not aware of any case in which the same section containing similar provisions for contract as for the decree based on it has been considered to be severable so as to make the latter valid, while the former is invalid.

42. Obviously, the main object of the Madras Legislature was to relieve the agriculturists of their liability to pay excessive interest. This was an interference with the contract between the parties. The method adopted for achieving this object was to declare that the interest shall be deemed to be discharged in certain cases, whether a decree has been passed or not, and then to compel courts to amend the decree if already passed. Now if the Provincial Legislature had no power to amend the contract evidenced by the promissory note, so as to deprive the promisee of his right to recover interest due under it, it seems to me that it could not exercise the same power in an indirect way by providing that the court should not pass a decree for such interest, or that if once a decree is passed, the decree should be amended so as to deprive him of that interest. If a legislature has no power to enact that interest should be cut down before a decree comes to be passed, it would be anomalous to assume that nevertheless it has power to cut down interest from a decree already passed. “It is a very familiar principle that you cannot do that indirectly which you are prohibited from doing directly”: Madden v. Nelson and Fort Sheppard Railw and Board of Trustees of Lethbridge Irrigation District v. Independent Order of Forester.

43. It seems to me that where a court is bound by a statute to amend a decree and alter the amount due under it which it would not otherwise have power to do, there is an interference with the powers of that court, if not of its jurisdiction. Legislatures in India have no authority to interfere with the jurisdiction and powers of courts, except with respect to matters coming within their Lists. Entries no. 53 of List I, no. 2 of List II and no. 15 of List III make that perfectly clear. If a legislature is not competent to deal with a subject matter, then it is equally incompetent to affect the jurisdiction and powers of the court with respect to that matter. If this were not so, the result would be that even though 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 Narain Singh v. Kulpati Shri Mahant Goshwami Madhwanand Ramji I have expressed the opinion that the provision in s. 11 of the Bihar Money-Lenders Act (III 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 decided today, also, I have expressed the opinion that the same provision in the corresponding s. 7 of the Bihar Money-Lenders (Regulation of Transactions) Act (VII of 1939) does affect the powers of a court. Similarly, in the present case I am of the opinion that the provision in s. 19 that a court “shall…..apply the provisions of this Act to such decree amend the decree accordingly or enter satisfaction”, does affect the powers of the court. Obviously, it is not a mere matter of simple procedure or method.

45. Section 8 contains a substantive provision directly depriving a creditor of a part of his debt. As in a case where twice the amount of the principal had already been paid by way of interest previously, even the outstanding amount of the principal is to be completely wiped out, the interference is not only with the claim for interest, but for the principal sum as well. It is not “a matter included in the Code of Civil Procedure”, as mentioned in List III, entry no. 4. Section 19 enjoins upon the court the duty of giving effect to those provisions where a decree has already been passed. It is really not an independent provision but a necessary consequence of s. 8, which applies both to a simple debt and debt due “under a decree” whether the debt “has ripened into a decree or not”. In my opinion if a legislation is ‘with respect to decrees passed on promissory notes’ then it is necessarily also ‘with respect to promissory notes’.

46. I am accordingly unable to split up and separate the provision of law with regard to decrees from the provision of law with regard to debts. In my opinion the former is inseparable from the latter and the power to deal with it is dependent on the existence of the power to deal with the latter, except for repugnancy. Further the latter provision is in direct conflict with the provisions of the Negotiable Instruments Act, read with the Usurious Loans Act, and therefore amounts to an undoubted trespass on a field already occupied by an existing Indian law with respect to negotiable instruments.

47. Repugnancy under Section 107.— While in Canada the solution where a repugnancy exists is mostly a judge-made law, in the Indian Act the principle is embodied in s. 107, which in the event of repugnancy in certain cases makes the law of the Central Legislature prevail over that of the Province, even though there would be competency if there had been no such Central legislation. It has been suggested by the Advocate-General of India that by virtue of the provisions contained in s. 316 of the “a Federal law” referred to in s. 107 (1) should include “an existing Indian law” on a subject which falls within List I. His point is that the expression “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 III. 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 s. 316 points to the conclusion that the “Federal law” must mean law passed by the Federal Legislature, or before Federation comes into being, passed by the Indian Legislature after the coming into force of the, and does not refer to the Indian laws which existed prior to the. In s. 311 “Provincial law” is defined as meaning an Act passed or law made by a Provincial Legislature established under this Act, and the expression “existing Indian law” means any law made before the commencement of Part III of the by any competent legislature, no matter whether the Central or a Provincial Legislature. The latter thus includes all the laws that were in existence at the time of the coming into force of the Government of India Act, no matter whether they had been made by the then Central or Provincial Legislatures. What s. 316 lays down is that the powers conferred by the on the Federal Legislature shall be “exercisable” by the Indian Legislature, and references to the Federal Legislature and the Federal laws shall be construed as references to the Indian Legislature and laws of the Indian Legislature. The expression “The powers ……… shall be exercisable, etc.” obviously implies the exercise of such powers in the future. That has no reference to Acts passed previously in the exercise of powers that existed before the came into force, for they come within the category ‘existing Indian law’. It is obvious that “the powers conferred by the provisions of this Act” cannot “be exercisable by the Indian Legislature” unless the occasion arises after the has come into force. It follows that the first portion of s. 316 necessarily and unmistakably refers to Acts which are to be passed thereafter. The second portion begins with the words “and accordingly”. The significance of these words is that the second portion of s. 316 is consequential, that is to say, is the result of the exercise of the powers conferred by the provisions of this Act. So that it again follows that this latter provision also must refer to the laws of the Indian Legislature which in future come to be enacted by the Indian Legislature, in the exercise of the powers conferred by this Act on such Legislature. Three different kinds of expressions have been used in the viz., “Federal law”, “existing Indian law” and “laws of the Indian Legislature”. There is absolutely no reason to suppose that Federal law was intended to include any part of the existing Indian law. I am accordingly unable to see that there is anything in the language of s. 316 which would make the expression “Federal law” in s. 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 s. 107 (1) would certainly apply to it.

49. 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.” 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 matters enumerated in the Federal List. If the matter were one falling within the Concurrent List, then the repugnancy is cured completely by the assent of the Governor-General obtained subsequently.

50. It seems at first sight strange that s. 107 should be incomplete as regards the existing Indian laws, and that provisions of repugnancy aiming at the removal of an inconsistency between Federal and Provincial laws should be unnecessarily restricted and should leave a gap. After Federation has come into force, or even after the Indian Legislature has re-enacted any old law, the difficulty may perhaps disappear. This would be so, if the words “with respect to one of the matters enumerated in the Concurrent List” were held to qualify only “an existing Indian law” and not “a Federal law” mentioned earlier. This would be putting a liberal interpretation so as to make the Provincial law, which is repugnant to a Federal law in respect of a matter in List I or List III, void to that extent. But s. 107 (1), as it stands, does not apply to the case where there is a repugnancy between a Provincial law enacted after the came into force, and an existing Indian law made prior to the, but falling within List I. If there were no other restriction on the power of the Provincial Legislature, the result would be that while the Provincial Legislature would not be competent to make a Provincial law repugnant to an existing Indian law relating to the Concurrent List, it would have almost a free hand to encroach upon the field of List I, regardless of the provisions of all the existing Indian laws. Such an untoward result could not have been contemplated. If it was necessary to impose drastic restrictions on the power to legislate with regard to the Concurrent List, where the whole field is open to a Provincial Legislature, it would be all the more necessary to impose even more drastic limitations on the powers of a Provincial Legislature to make legislation repugnant to the existing Indian law with respect to matters which have been expressly taken out of the authority of the Provincial Legislature. The principle of repugnancy embodied in s. 107 was presumably borrowed from the trend of decisions in Canadian cases, and might have been borrowed in full, so as not to leave a gap. But even if this sub-section is not comprehensive, it does not follow that there is any gap which cannot otherwise be filled up. Apparently, it was thought that as the Provinces had not 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 s. 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 Att.-Gen. of Ontario v. Att.-Gen. for the Dominion of Canad 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 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 matters as part of a bankruptcy law, and the provincial legislature would doubtless be then precluded from interfering with this legislation inasmuch as such interference would affect the bankruptcy law of the Dominion Parliament. But it does not follow that such subjects, as might properly be treated as ancillary to such a law and therefore within the powers of the Dominion Parliament, are excluded from the legislative authority of the provincial legislature when there is no bankruptcy or insolvency legislation of the Dominion Parliament in existence”.

52. In Grand Trunk Railway of Canada v. Att.-Gen. of Canada, Lord Dunedin observed that the earlier cases seemed to establish two propositions: “First, that there can be a domain in which provincial and Dominion legislation may overlap, in which case neither legislation will be ultra vires, if the field is clear; and, secondly, that if the field is not clear, and in such a domain the two legislations meet, then the Dominion legislation must prevail”.

53. In Att.-Gen. for Canada v. Att.-Gen. for British Columbia Lord Tomlin when dealing with the questions of conflict between the jurisdiction of the Parliament of the Dominion and the provincial jurisdiction, laid down four propositions as a result of the previous decisions of their Lordships, the last two being: “It is within the competence of the Dominion Parliament to provide for matters which, though otherwise within the legislative competence of the Provincial legislature, are necessarily incidental to effective legislation by the Parliament of the Dominion upon a subject of legislation expressly enumerated in s. 91”, and “There can be a domain in which provincial and Dominion legislation may overlap, in which case neither legislation will be ultra vires if the field is clear, but if the field is not clear and the two legislations meet the Dominion legislation must prevail.”

54. In Board of Trustees of Lethbridge Irrigation District v. Independent Order of Foresters , the Lord Chancellor declining to put a ‘restricted interpretation’ on the term “interest”, observed: “Even if it could be said that the relates to classes of subjects in s. 92 as well as to one of the classes in s. 91, this would not avail the appellants to protect 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 s. 91 and already in the field must prevail in territory common to the two Parliaments.”

55. In Jaigobind Singh v. Lachmi Narain Ram 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 mortage the field was apparently clear, and therefore the question of interfering with the interest due on the promissory note did not directly arise.

56. No Canadian case has been cited before us in which although the subject of legislation was substantially within s. 92, it not only incidentally encroached upon a subject mentioned in s. 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 as well as a clash. If a clash with the Dominion legislation were also allowed, then a Provincial Legislature would be in a position, though indirectly, to nullify the Dominion legislation, even inside the field exclusively open to the Dominion, which would make the position intolerable.

57. It seems to me that the principles of interpretation laid down by their Lordships in the Canadian cases cannot be brushed aside by simply saying that they relate to a different Constitution. Those principles are not only of the greatest weight but must be a guide to us even in interpreting the Indian Constitution. Of course, we cannot interpret the language of any section in the Indian Act in the light of the interpretation of the corresponding section in the Canadian Constitution. That has to be avoided; but the principles of interpretation that have been established cannot be ignored. At the same time it would be dangerous to import only a part of the doctrine and exclude another part. Partial application may frustrate the very object for which the rule of law was deduced. The two doctrines of incidental encroachment and unoccupied field are closely related. I would go further and say that they are indissolubly connected. We cannot import the doctrine of incidental encroachment in favour of the Provinces, and refuse to import the doctrine of unoccupied field which is in favour of the Centre. The two must go hand in hand. To allow Provincial legislatures to encroach upon the exclusive Federal field, even though in an indirect way, when there is a Central legislation already occupying the field, would be to give the former a free hand in nullifying Central Acts relating to matters in the Federal List. Such a carte blanche could hardly have been contemplated. The scheme of s. 100 of the is to exclude completely from the authority of the Provincial Legislature the power to legislate with respect to subjects in List I. If in consequence of certain difficulties that Provincial Legislatures would experience by a rigid enforcement of such an exclusion we must in interpreting the words “with respect to” import the Canadian doctrine of permissibility of incidental encroachment, we must then at the same time import the other allied doctrine also that such an encroachment is permissible only when the field is actually unoccupied. It is only in this way that actual clash between the Centre and the Provinces can be avoided, which I think we must. This will also explain the apparent gap in s. 107(1) of the, that gap being filled in by the provisions of s. 100.

58. The result is that the effect of ss. 8 and 19 of the Madras Act is to compel courts to re-open decrees passed on the basis of promissory notes before the 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.

59. 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 consideration, and sue upon the debt independently of the promissory note. It is equally true that the sons were impleaded in this case merely to deprive them of the chance of contending that it was not binding upon them on account of its having been tainted with immorality or illegality. A Hindu son is under a pious obligation to pay his father's debts out of the joint family property. But he is not bound to pay what his father cannot be made to pay. If the interest on the loan taken by the father can be cut down under some existing law so as to benefit the father, the son can equally take advantage of that relief.

60. I also agree that any repugnancy to the Contract Act is cured by the assent of the Governor-General; and further as usurious loans come within money-lending, any conflict with the Usurious Loans Act alone is not material. But for his erroneous conclusion as to the intra vires character of the Madras Act, re-affirmed by the Full Bench decision of the Madras High Court, the Subordinate Judge would have had no jurisdiction to interfere with the decree; and so his order for the satisfaction of the decree, when in fact it had not been satisfied, amounted to acting with an illegality in the exercise of his jurisdiction. The High Court could therefore appropriately exercise its discretion to interfere in Revision.

61. I would allow the appeal and remit the case to the High Court with the declaration that the order of the Subordinate Judge, dated the 11th February, 1939, be set aside, and the execution allowed to proceed.

62. Varadachariar, J.:—The constitutional question arising for decision in this appeal relates to the validity of the Agriculturists Relief Act, 1938 (IV of 1938), passed by the Madras Legislature. The learned counsel for the appellant, while contesting the validity of the impugned legislation, conceded that it was a genuine and bona fide, though drastic, attempt at a solution of the problem of agricultural indebtedness which has long been recognised as a pressing problem in this country. The Usurious Loans Act passed by the Indian Legislature in 1918 only conferred certain discretionary powers on the court, and its operation was not limited to agriculturists; it proved ineffective to check the growing burden of rural indebtedness. Recommendations for more drastic measures were made from responsible quarters, but no further action was taken by the Indian Legislature. The inclusion of “money-lending and money-lenders” in List II of Schedule VII 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 recoverabe 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 and if they were agriculturists, they were entitled to invoke the protection given by the, in respect of all liabilities falling within the definition of “debt” given in the. It is noteworthy that even decrees passed before the date of the and decrees for money not arising out of loan transactions were directed by the to be reopened, with a view to give the judgment-debtor the benefit of the. Certain classes of debts were excluded from the operation of the, but no exception was made in respect of debts due under promissory notes or other negotiable instruments.

63. On the question of the validity and effectiveness of the, several possible views have been suggested in the course of the arguments or have emerged therefrom. On the one side, there is the view that the is valid in its entirety and is operative in respect of all kinds of debts as defined in the. This was the view taken by a Full Bench of the Madras High Court; and the learned Advocate-General of Madras, who intervened in this appeal, naturally supported that view. On the other side, there is the extreme view that the is wholly invalid. The learned Advocate-General for India, who appeared for the appellant, put forward this view as a possible contention, but he did not seriously press it. Between these two extremes, two other views were suggested: (1) that the was ultra vires or void so far as its provisions were calculated to affect certain classes of debts, particularly those evidenced by promissory notes or other negotiable instruments, or (2) that the should, as a matter of interpretation, be so construed as not to affect these classes of debts. Dealing with a similar enactment in Bihar, a Division Bench of the Patna High Court recently held that a relieving provision in that Act couched in very wide and general terms could not affect the rights conferred by the Negotiable Instruments Act on the holder of a promissory note or other negotiable instrument, including the right to recover full interest as per terms of ss. 79 and 80 of that Act. [See Sagarmal Marwari v. Bhuthu Ram]. With reference to these intermediate views, a further question was raised and discussed before us, namely, whether the liability of the respondent in the present case was or was not such as could be validly reduced by an enactment of the Provincial Legislature.

64. In dealing with the questions above stated, the Madras Full Bench and the Advocate-General of Madras (in his arguments before us) relied on certain principles of interpretation laid down by the Judicial Committee in decisions 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's case, Meredith J. observed “there are peculiar provisions in s. 100 of the Government of India Act and in my view they bar the application of the pith and substance principle to that Act”. 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 re The Central Provinces and Berar Act No. XIV of 1938 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 Patna case that the scheme of s. 100 of the Constitution Act is radically different from that of ss. 91 and 92 of the British North America Act is not warranted. A long line of decisions beginning at least as early as Citizens Insurance Company of Canada v. Parsons, have interpreted these provisions of the Canadian Constitution in a manner that almost assimilates their scheme to that adopted in s. 100 of the Government of India Act. There is of course no elaborate Concurrent List in the British North America Act corresponding to List III of Schedule VII to the Government of India Act and the grant of general legislative power to the Dominion Parliament by the opening words of s. 91 has obviated the necessity for a provision like that made in s. 104 of the Government of India Act to meet unforeseen contingencies. But as regards the distribution of powers between the Centre and the Provinces, the relation between ss. 91 and 92 of the British North America Act is according to the decisions substantially the same as that indicated in s. 100 of the Constitution Act between Lists I and II of the Seventh Schedule. The position under the Canadian Constitution was described by Viscount Haldane in John Deere Plow Co. Ltd. v. Wharton in the following words: “The general power conferred on the Dominion by s. 91….. extends in terms only to matters not coming within the classes of subjects assigned by the exclusively to the Legislatures of the Provinces. But if the subject-matter falls within any of the heads of s. 92, it becomes necessary to see whether it also falls within any of the enumerated heads of s. 91, for, if so, by the concluding words of that section it is excluded from the powers conferred by s. 92”. The position of the Provincial Legislatures under the Indian Constitution Act in respect of the subjects enumerated in List II and in relation to the subjects specified in List I is in essence the same as that above stated in regard to the powers of the Provincial Legislature under s. 92 of the British North America Act. It will be clear from the decisions that the rules of interpretation adopted in the Canadian cases were evolved only as a matter of reasonableness and common sense and out of the necessity of satisfactorily solving conflicts arising from the inevitable overlapping of 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. 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, when dealing with a Canadian case, he embodied in the judgment the principles enumerated in the Irish case.

65. 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 entry and partly under another entry in List II or List III. For instance, some of the debts affected by the may fall under the heading of “trade” and some under the heading of “money-lending” in entry no. 27. Support may in some instances be also derived from entry no. 10 (relating to contracts, etc.) and entry no. 14 (relating to actionable wrongs) in List III. In the Madras Full Bench judgment, the learned Chief Justice expressed the opinion that the might also be regarded as one relating to agriculture. This is perhaps open to question, on the ground that “agriculture” in entry no. 20 of List II must be understood as signifying only the process of agriculture (though other allied matters are brought in by a kind of inclusive enumeration) and cannot comprehend a subject like agricultural indebtedness merely because the relief of such indebtedness may contribute to the prosperity and efficiency of agriculture. The decision of the Judicial Committee in Att.-Gen. for Canada v. Att.-Gen. for British Columbi putting a limited interpretation upon the reference to “fisheries” in s. 91 of the British North America Act may lend some support to this principle of strict interpretation of the term “agriculture”. But it is unnecessary at this stage to consider whether all conceivable kinds of debts falling within the definition in the Madras Act can or cannot be brought under one or other of the entries in Lists II and III, because that has not been the line of attack adopted by the learned counsel for the appellant. The objection to the impugned Act, in whatever form urged, was based on the fact that List I of the Seventh Schedule to the Constitution Act reserves cheques, bills of exchange, promissory notes and other like instruments for the exclusive competence of the Federal Legislature (entry no. 28). Though the Madras Act does not in terms purport to deal with negotiable instruments, debts due under such instruments will undoubtedly fall within the definition of “debts” in the. The question for consideration therefore is whether this inclusion of debts due under negotiable instruments has rendered the wholly or in part invalid or inoperative.

66. The argument of total invalidity need not be dealt with at any length, not only because it was not seriously pressed, but also because there is little force in it. If an enactment deals in part with matters beyond the competence of the Legislature which enacted it, it must be held to be wholly invalid only in cases where the valid and invalid provisions are inseparably intermixed or the innocent provisions are merely ancillary to the offending provisions. This cannot be said to be the position in the present case. Further, as there is no provision in the dealing in terms with negotiable instruments, any objection based on the wide scope of the may be obviated by so interpreting the general terms used in the as to limit them to cases with which alone the Legislature was competent to deal. [See Macleod v. Att.-Gen. for New South Wales [1891] A.C. 455, at p. 459..

67. The Full Bench decision of the Madras High Court held that the 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 instalment, the legislation may not be valid and operative in its entirety according to the principles adopted in the decisions of the Judicial Committee in some of the Canadian cases. These cases recognize that even where provincial legislation contains provisions relating to subjects exclusively reserved for the Dominion Legislature, the whole enactment may be effective if the offending provisions are only incidental or if it is possible to regard a subject as falling under the dominion jurisdiction in one aspect and under provincial jurisdiction in another aspect and the impugned provincial legislation has been enacted in respect of the latter aspect. When it becomes necessary to decide this question, the effect of the decision in Ladore v. Bennett , and its explanation in Board of Trustees of Lethbridge Irrigation District v. Independent Order of For ester, will fall to be considered. On the other hand, a different result might follow if, with reference to the observation of Viscount Haldane in Great West Saddlery Co. v. The King, it should be held that the entries “trade and commerce”, “money-lending and money-lenders” in List II and the entry “contract” in List III are expressed in “general language” while “cheques, bills of exchange, promissory notes” in entry no. 28 of List I are “particular” entries and “general language” in Lists II and III must yield to “particular expressions” in List I, where the latter are unambiguous. In the next succeeding sentence on the same page, their Lordships recognize that this rule may sometimes also apply in favour of the Provinces, for otherwise the purpose of assigning the particular item to the Province will be frustrated. It does not seem to me necessary for the purpose of this case to decide these questions, because the liability here sought to be reduced with the aid of the provisions of the Madras Act, had long before the date of the enactment of that Act passed into a decretal liability and was no longer one under a promissory note or other negotiable instrument.

68. For the same reason, it seems to me unnecessary to express a definite opinion on another contention of Sir B.L. Mitter, namely, that the provisions of the impugned Act may also be void under s. 107 (1) of the Constitution Act, in so far as they are repugnant to the provisions of the Negotiable 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 s 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 Sagarma's case, 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 s. 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 s. 316 suggests that the second part of the first paragraph is consequential upon the first and as the first part clearly refers to the transition period—between the introduction of provincial autonomy and the establishment of the Federation, —it would seem to follow that the expression “laws of the Indian Legislature” in the second part refers to the laws passed by the Indian Legislature, while functioning as the “Federal Legislature” during the transition period. This construction would no doubt lead to an apparent anomaly in the operation of s. 107, viz., that while provincial legislation in respect of subjects in the Concurrent List cannot override “existing Indian law” except when assented to by the Governor General, such legislation in respect of subjects enumerated in List II may without any such safeguard override pre-existing enactments even of the Central Legislature if they relate to subjects specified in List I. It is however conceivable that the position might well have been left like this, because the danger of such interference by the Provincial Legislatures was small. A Provincial Legislature can, if at all, trespass on List I subjects only when it legislates (in fact and not merely colourably) on List II subjects; whereas in the case of List III subjects, the whole field is open to interference by the Provincial Legislature. But I refrain from expressing any final opinion on this question, as it is unnecessary for the purposes of this case to decide it.

69. It only remains to consider whether or not the claim of the appellant belonged to a category that could be affected by provincial legislation. The recitals in the promissory note on which the suit was instituted and the admissions made in paragraph 6 of the affidavit filed by the appellant's agent on 3rd October 1938 in the Coimbatore Sub-Court in the present proceedings show that the appellant is a money-lender and the promissory note related to the balance due on account of previous money dealings between the parties. Apart from the existence of the promissory note, the case would clearly fall under the head “money-lending and money-lenders” in item 27 of List II. Under this head, it would probably make no difference in respect of the Provincial Legislature's power to deal with such a case that a decree had been passed in respect of the debt, because, the creditor would not be any the less a “money-lender” on that account. If there should be any doubt on this ground, it might be sufficient to read this head with entry no. 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 s. 107 (2) of the 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 mater must be regarded as falling under entry no. 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. Assuming, for the sake of argument, that liabilities under negotiable instruments cannot be affected by provincial legislation, it would be anomalous to recognize in the Provincial Legislature a power to reduce the liability under such an instrument as soon as it merges in a decree. This will be permitting that Legislature to do indirectly what it cannot do directly and inviting every promisor to insist on a suit being filed on his note and then allowing him to avail himself of the benefit of the. The Madras Act under consideration does not present any such problem, because s. 19 is limited to decrees passed before the commencement of the. Where, as in the present case, that is the position, the provisions affecting the operation or effect of that decree cannot be said to relate to a negotiable instrument. The Act does not attempt to operate on the instrument and the right of the creditor at the moment of the commencement of the did not possess the incidents of a negotiable instrument, either as regards negotiability or as to the benefit of s. 79 of the Negotiable Instruments Act. Relying on the provision in s. 8 to the effect that the liability should be scaled down with reference to the “principal” amount, the learned counsel for the appellant contended that the itself treated the promissory note as still the basis of the claim. That does not seem to me to be the correct way of reading a provision which only lays down a method of calculation of the amount to which the decree is to be scaled down.

The parties are not relegated to the position of “promisor” and “promisee”. Nor does the provision in s. 19 as to the “amending” of the decree imply such restoration of the parties to their status before suit. The decree is reopened only to the extent necessary to alter the amount payable. This is shown by the fact that in the same paragraph in s. 19, provision has also been made for “entering up satisfaction” if the amount payable as per the terms of the has been paid even before the date of the application under s. 19. There is accordingly no reason for holding that the impugned Act is invalid or inoperative so far as the subject-matter of the present proceedings is concerned. This appeal must therefore be dismissed. As the respondent has not appeared, there will be no order as to costs in the appeal.

70. Gwyer, C.J.:—In accordance with the decision of the majority of the Court, the appeal is dismissed. There will be no order as to costs.