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Bank Of Commerce, Ltd., Khulna v. Nripendra Nath Datta And Others

Bank Of Commerce, Ltd., Khulna
v.
Nripendra Nath Datta And Others

(Federal Court)

Appeal Nos. 1 to 4 of 1944 | 12-12-1944


1. Spens, C.J.:— In the is batch of appeals also, the question for decision relates to the validity and operation of Sections 30 and 36 of the Bengal Money-Lender's Act, 1940. In these cases however, the lender's rights, though based on promissory notes, had passed into claims under decrees before the enactment of the Act. They are thus ad idem with (1944) F.C.R. 126.In the ordinary course, we should have contented ourselves with merely following that decision. But, as in the connected batch (civil Appeals Nos. 5 to 11 of 1944) we have held that the Act is in some measure invalid a further contention which was left open in (1944) F.C.R. 126 must be considered, viz., that if the Act is in some respects at least ultra vires the provincial legislature, it must be held to be wholly invalid. We are of the opinion that in the present case, the part of the Act which we have held to be invalid is severable from the rest of the Act and that the Act cannot be held to be wholly void.

 2. It was next contended that certain provisions in the Act which affect banks were also ultra vires the provincial legislature as interfering with the matter of entry 38 of List I, “banking, that is to say, the conduct of banking business by corporations.” Attention was in this connexion drawn particularly to the provisions of S. 2, cls. (1) and (12)(d) and Ss. 3, 8 and 13. Relying upon the decision of the Judicial Committee in (1894) A.C. 31, counsel for the appellant argued that these sections constituted a serious interference with the conduct of banking business in the province.

 3. These provisions however do not directly affect the present case as the decrees to which they relate had been obtained before the passing of the Act. The question of their invalidity is raised here only to support the argument, that if some portions of the Act are invalid the legislation as a whole must be held to be invalid. In the view that we have already expressed on the question of severability, which we should have no difficulty in applying to the provisions in question here, we are not prepared to accept this contention. We accordingly express no opinion on the question whether these particular sections are valid or not.

 4. The validity of Ss. 30 and 36 of the Act was also impugned on the ground that even these provisions affect the subject of “banking.” As the liabilities of the debtors in these cases have been fixed with reference to the provisions of these sections it is necessary to deal with this contention separately. Our attention was drawn in this connexion to certain observations of Duff, C.J. in (1942) S.C.R. (can) 31 A number of objections to the validity of the legislation then in question were considered by the Supreme Court in that case, but when the matter went on appeal to the Judicial Committee in (1943) A.C. 356  their Lordships dealt with only one objection (not relevant to the present case) and expressed no opinion on the other points. It has been argued before us that as the application of Ss. 30 and 36 of the Act will greatly reduce the amount which a bank can recover in execution of decrees obtained by it, these provisions must be held to constitute a serious interference with the conduct of banking business. This contention seems to us to rest on an unduly wide interpretation of the expression “conduct of banking business.” A law of limitation or a law relating to the compulsory acquisition of land may affect the rights of a bank just as they may affect the rights of other suitors or property owners. It would be too much to say that every law which in its operation might affect the property or interests of a bank just as it affects the property or interests of other persons, would constitute an encroachment on entry 38 of List I. On a reasonable construction, the entry must be limited to laws which affect the conduct of the business of banks qua banks. In this view, we must overrule this last objection to the validity of these sections. The appeals fail and are dismissed. As the respondents have not appeared, there will be no order as to costs. Leave to appeal to His Majesty in Council granted.

Advocates List

None

Petitioner/Plaintiff/Appellant (s) Advocates

Respondent/Defendant (s)Advocates

For Petitioner
  • Shekhar Naphade
  • Mahesh Agrawal
  • Tarun Dua
For Respondent
  • S. Vani
  • B. Sunita Rao
  • Sushil Kumar Pathak

Bench List

SPENS

C.J.

VARADACHARIAR

ZAFRULLA KHAN

Eq Citation

AIR 1945 FC 7

(1945) 1 Mad LJ 30 (FC)

1945 MWN 135

(1945) 1 MLJ 30

1945 MWN 135

AIR 1945 FC 7

HeadNote

- Validity of the Bengal Money-Lenders Act, 1940 (BMLA) challenged. - Issue: Whether BMLA is wholly invalid due to the partial invalidity of Sections 30 and 36. - Held: BMLA is severable, and the invalidity of Sections 30 and 36 does not render the entire Act void. - Banking provisions in BMLA, including Sections 2(1) and (12)(d), 3, 8, and 13, challenged as ultra vires provincial legislature. - Held: These provisions do not directly affect the present case and are not severable. No opinion expressed on their validity. - Ss. 30 and 36 of BMLA challenged as affecting the subject of "banking." - Held: These sections do not constitute a serious interference with the conduct of banking business. - Entry 38 of List I (banking) construed to be limited to laws affecting the conduct of banking business qua banks. - Appeals dismissed; no order as to costs since respondents did not appear. - Leave to appeal to His Majesty in Council granted.