TMI Blog2013 (6) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... of "chits", the Kerala Legislature could not have enacted the State Finance Act No. 7 of 2002, inserting Section 4(1a) into the Kerala Chitties Act, 1975, particularly on the failure of the State in obtaining Presidential assent under Article 254(2). The Central Chit Funds Act, 1982 though not brought in force in the State of Kerala is still a law made, which is alive as an existing law. By reason of Article 367 of the Constitution, the General Clauses Act, 1897 applies to the repeal. Section 6 of the General Clauses Act, 1897 is, therefore, relevant, particularly Sections 6(b) and 6(c) and consequently, the previous operation of the Kerala Chitties Act, 1975 is not affected nor any right, privilege, obligation or liability acquired or incurred under that repealed State Act of 1975. Thus, after 19.08.1982, the Kerala Chitties Act, 1975 stands repealed except for the limited purposes of Section 6 of General Clauses Act, 1897 If and when the Central Government brings into force the Chit Funds Act, 1982 by a notification in State of Kerala, under Section 1(3), Section 90(2) will come into play and thereby the Kerala Chitties Act, 1975 shall continue to apply only to chits in ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad High Court in the case of Smt. Chandra Rani v. Vikram Singh 1979 All. L.J. 401 in the following circumstances:- The U.P. Civil Laws (Reforms and Amendment) Act 57 of 1976 being the State Act stood enacted on 13.12.1976; it received the assent of the President on 30.12.1976; it was published in the Gazette on 31.12.1976 and brought into force w.e.f. 1.01.1977 whereas the Civil Procedure Code (Amendment) Act 104 of 1976, being the Central Act, was enacted on 9.09.1976; it received the assent of the President on the same day; it got published in the Central Gazette on 10.09.1976; and brought into force w.e.f. 1.02.1977 (i.e. after the State Act came into force). The Full Bench of the Allahabad High Court in Smt. Chandra Rani ( supra) held that the U.P. Act No. 57 of 1976 was a later Act than the Central Act No. 104 of 1976. The crucial date in the case of the said two enactments would be the dates when they received the assent of the President, which in the case of the Central Act was 9.09.1976 while in the case of the U.P. Act was 30.12.1976. This decision of the Full Bench of the Allahabad High Court in the case of Smt. Chandra Rani (supra) came for consideration before this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt when the effect of the operation is visualised by comparative study." 5. The above statement of law in Pt. Rishikesh ( supra) created a doubt in the minds of the referring judges and, accordingly, the said statement of law has come before the Constitution Bench of this Court for its authoritative decision. Facts in the present case 6. The lis in the present case arose under the following circumstances. Many of the private chitty firms remained out of the regulatory mechanism prescribed in the Kerala Chitties Act, 1975 by registering themselves outside the State but continued to operate in Kerala. Because of this, investor protection became difficult. Consequently, Section 4 of the said 1975 Act was amended vide Finance Act 7 of 2002. By the said amendment, sub-section (1a) was inserted in Section 4. This amendment intended to bring in chitties registered outside the State having 20% or more of its subscribers normally residing in the State within the ambit of the said 1975 Act. Being aggrieved by the said Amendment, the private chitty firms challenged the vires of Section 4(1a) of the 1975 Act as repugnant under Article 254(1) to the Central Chit Funds Act, 1982. Questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of money or the quantity of grain which a prized subscriber is, under the terms of the chit agreement required to forego and which is set apart under the said agreement to meet the expenses of running the chit or for distribution among the subscribers or for both; Section 3 - Prohibition of chitty not sanctioned or registered under this Act (1) No chitty shall, after the commencement of this Act, be started and conducted unless the previous sanction of the Government or of such officer as may be empowered by the Government in this behalf is obtained therefor and unless the chitty is registered in accordance with the provisions of this Act: Provided that the previous sanction under this sub-section shall lapse unless the chitty is registered before the expiry of six months from the date of such sanction: Provided further that such previous sanction shall not be necessary for starting and conducting any chitty by- (i) a company owned by the Government of Kerala; or (ii) a co-operative society registered or deemed to be registered under the Co-operative Societies Act for the time being in force; or (iii) a scheduled bank as defined in the Reserve Bank of India Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oved bank an amount equal to the chitty amount or invest in Government securities of the face value of note less than one and a half times the chitty amount and transfer the amount so deposited or the Government securities in favour of the Registrar to be held in trust by him as security for the due conduct of the chitty. (2) If any foreman makes default in complying with the requirements of sub-section (1), he shall be punishable with fine which may extend to five hundred rupees. (3) The security given by the foreman under sub-section (1) or any security substituted under sub-section (6) shall not be liable to be attached in execution of a decree or otherwise until the chitty is terminated and the claims of all are fully satisfied. (4) The Registrar shall, after the termination of a chitty and after satisfying himself that the claims of all the subscribers have been fully satisfied, order the release of the security furnished by the foreman under sub-section (1) or the security substituted under sub-section (6), as the case may be, and in so doing he shall follow such procedure as may be, prescribed in that behalf. (5) The security furnished under sub-section (1) shall, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully satisfied. (5) Where the chit is terminated and the Registrar has satisfied himself that the claims of all the subscribers have been fully satisfied, he shall order the release of the security furnished by the foreman under sub-section (1), or the security substituted under sub-section (3), as the case may be, and in doing so, he shall follow such procedure as may be prescribed. (6) Notwithstanding anything to the contrary contained in any other law for the time being in force, the security furnished under this section shall not be dealt with by the foreman during the currency of the chit to which it relates and any dealing by the foreman with respect thereto by way of transfer or other encumbrances shall be null and void." 10. Apart from the conflicting provisions mentioned hereinabove, the impugned judgment has brought out various inconsistencies between the various provisions of the State Act and the Central Act in the following terms: "13. When we scan through the various provisions of both the legislations it is clear that there is repugnancy between some of the provisions of those legislations. The expression "discount" in Section 2(g) of the Chit Funds Act gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions in the Chit Funds Act and the Kerala Chitties Act we have come across several such inconsistent and hostile provisions which are (sic) repugnant to each other. Suffice to say that if Sub-section (1a) (sic) of Section 4 is given effect to, a Foreman who has already got the registration under the Central Act and governed by the provisions of that Act would also be subjected to various provisions of the Kerala Act which are inconsistent and repugnant to the Central Act. If Section 4(1a) (sic) is therefore given effect to it would have extra territorial operation." (i) Point Of Time For Determination Of Repugnance 11. The key question that arises for determination is as to from when the repugnancy of the State Act will come into effect? Did repugnancy arise on the making of the Central 1982 Act or will it arise as and when the Central Act is brought into force in the State of Kerala? 12. Before dealing with the respective submissions made by counsel before us, we need to quote Articles 245(1), 246(1), (2) and (3), 249(1) and (3), 250(1) and (2), 251 and 254 of the Constitution, which read as follows: "Part XI Relations Between The Union And The States Chapter I.-L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in operation - (1) Notwithstanding anything in this Chapter, Parliament shall, while a Proclamation of Emergency is in operation, have power to make laws for the whole or any part of the territory of India with respect to any of the matters enumerated in the State List. (2) A law made by Parliament which Parliament would not but for the issue of a Proclamation of Emergency have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of six months after the Proclamation has ceased to operate, except as respects things done or omitted to be done before the expiration of the said period. 251. Inconsistency between laws made by Parliament under Articles 249 and 250 and laws made by the Legislatures of States. - Nothing in articles 249 and 250 shall restrict the power of the Legislature of a State to make any law which under this Constitution it has power to make, but if any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament has under either of the said articles power to make, the law made by Parliament, whether passed before or after the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s "shall prevail". Therefore, according to the learned counsel, the very text of Article 254 makes it clear that a declaration of repugnance by a Court presupposes both laws actually being in operation. That, though the term employed in Article 254(2) is "a law made by the Legislature of a State", it actually refers to a stage when the law is still a Bill passed by the State legislature which under Article 200 is given to the Governor for his assent. According to the learned counsel, the phrase "law made" would also include a law which is brought in force. In this connection, it was submitted that if a petition is filed before a Court to declare a State law void, as being repugnant to Parliamentary law which has not been brought in force, the court would reject the petition as premature as repugnancy cannot arise when the Parliamentary law has not even been brought in force. In this connection, learned counsel relied upon the judgment of this Court in Ch. Tika Ramji v. State of U.P. 1956 SCR 393 in which there is an observation to the effect that repugnance must exist in fact and not depend on a mere possibility. According to the learned counsel there is no merit in the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining repugnancy. 14. On behalf of the private chitty firms, it was submitted by Shri T.R. Andhyarujina, Shri Shyam Divan, Shri Mathai M. Paikeday and Shri C.U. Singh, that the bringing into force or commencement of the Central Act was irrelevant in considering repugnancy under Article 254(1), and that the repugnancy arose when the State law came into conflict with the enactment of the Central law, even when the Central law is not brought into force in the State of Kerala. That, under Article 254(1), the repugnancy of the State law to the law made by the Parliament is to be considered with reference to the law made. The words "law made" have reference to the enactment of the law. In this connection, it was pointed out that the words "law made" have been used at seven places but there is no mention to the commencement of a law in Article 254. Thus, according to the learned counsel, repugnancy arose when the Central Chit Funds Act, 1982 received the assent of the President and on its publication in the Official Gazette and not on its commencement, which till date is not there in the State of Kerala. In consequence, the Kerala Chitties Act, 1975 became void on 19.08.1982 when the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82 in the same manner as the Kerala Chitties Act, 1975 applied to such chits before such commencement. However, as the Kerala Act, 1975 stood repealed on 19.08.1982, on the enactment of the Central Chit Funds Act, 1982, there could be no Amendment of the Kerala Act, 1975 by Finance Act No. 7 of 2002. In the circumstances, it was submitted that Section 4(1a) inserted in Section 4 by the Kerala Finance Act No. 7 of 2002 was void and inoperative in law as the President's assent under Article 254(2) has not been obtained. 15. According to Shri V. Giri, learned counsel for one of the private chitty firms, the judgment of this Court in Pt. Rishikesh (supra) has been correctly decided. In this connection, it was submitted that the aspect of repugnancy primarily arises in the mind of the Legislature. That, in the case of Deep Chand v. State of U.P. [1959] Suppl. 2 SCR 8, three principles were laid down as indicative of repugnancy between a State law and a Central law, which have to be borne in mind by the State Legislature whenever it seeks to enact a law under any entry in the Concurrent List. Thus, where there is a Central law which intends to override a State law or where there is a C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85(a) and Section 90(2) of the Central Chit Funds Act, 1982 inter alia provide for continuance of the application of the provisions of the Kerala Chitties Act, 1975 till the commencement of the Central Act by issuance of notification under Section 1(3) of the Central Chit Funds Act, 1982. On commencement of that Act there is a pro tanto repeal of the State Act by Section 90 of the Central Act. However, according to the learned counsel, repugnancy arose between two competing legislations, the moment the Legislature took up the Kerala Chitties Act, 1975 for amendment by Finance Act No. 7 of 2002. Such repugnancy had to arise in the mind of the legislature and the State Legislature was bound to take note of the 1982 Central Act. In this view of the matter, there is no legislative vacuum at any point of time as urged on behalf of the State of Kerala. To hold otherwise would mean bypassing the legislative will of the Parliament expressed by passing the 1982 Act. Our Answer to Question No. (i):- Point of time for determination of repugnance: 16. Article 254 deals with inconsistency between laws made by Parliament and laws made by the Legislatures of States. It finds place in Part XI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Article 245 deals with extent of laws whereas Article 246 deals with distribution of legislative powers. In these Articles, the Constitution framers have used the word "make" and not "commencement" which has a specific legal connotation. [See: Section 2(13) of the General Clauses Act, 1897]. One more aspect needs to be highlighted. Article 246(1) begins with a non-obstante clause "Notwithstanding anything in clauses (2) and (3)". These words indicate the principle of federal supremacy, namely, in case of inevitable conflict between the Union and State powers, the Union powers, as enumerated in List I, shall prevail over the State powers, as enumerated in Lists II and III, and in case of overlapping between Lists III and II, the former shall prevail. Indu Bhusan Bose v. Rama Sundari Devi [1970] 1 SCR 443. However, the principle of federal supremacy in Article 246(1) cannot be resorted to unless there is an "irreconcilable" conflict between the entries in Union and State Lists. The said conflict has to be a "real" conflict. The non-obstante clause in Article 246(1) operates only if reconciliation is impossible. As stated, Parliamentary Legislation has supremacy as provided in Arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lative heads. Further, Article 250 and Article 251 also use the word "make" and not "commencement". If one reads the Head Note to Article 250 it refers to power of the Parliament to legislate with respect to any matter in the State List if a Proclamation of Emergency is in operation. The word "made" also finds place in Article 250(2). In other words, the verb "make" or the verb "made" is equivalent to the expression "to legislate". Thus, making of the law is to legislate with respect to any matter in the State List if Proclamation of Emergency is in operation. The importance of this discussion is to show that the Constitution framers have deliberately used the word "made" or "make" in the above Articles. Our Constitution gives supremacy to the Parliament in the matter of making of the laws or legislating with respect to matters delineated in the three Lists. The principle of supremacy of the Parliament, the distribution of legislative powers, the principle of exhaustive enumeration of matters in the three Lists are all to be seen in the context of making of laws and not in the context of commencement of the laws. 17. Under clause (1) of Article 254, a general rule is laid down to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of a law made by the Legislature of a State", "any provision of a law made by Parliament which Parliament is competent to enact", "the law made by Parliament, whether passed before or after the law made by the Legislature of such State", and "the law made by the Legislature of the State shall, to the extent of repugnancy, be void". Again, clause (2) of Article 254 speaks of "a law made by the Legislature of a State", "an earlier law made by Parliament", and "the law so made by the Legislature of such State". Thus, it is noticeable that throughout Article 254 the emphasis is on law-making by the respective Legislatures. Broadly speaking, law-making is exclusively the function of the Legislatures (see Articles 79 and 168). The President and the Governor are a part of the Union or the Legislatures of the States. As far as the Parliament is concerned, the legislative process is complete as soon as the procedure prescribed by Article 107 of the Constitution and connected provisions are followed and the Bill passed by both the Houses of Parliament has received the assent of the President under Article 111. Similarly, a State legislation becomes an Act as soon as a Bill has been passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess that Section itself is in force? To put the matter in another way, if the entire Act including Section 1(3) was not in operation on 19.08.1982, how could the Central Government issue any notification under that very Section in respect of 17 States? There must be a law authorizing the Government to bring the Act into force. Thus, Section 1(3) came into force immediately on passing of the Act (see A. Thangal Kunju Musaliar v. M. Venkatachalam Potti AIR 1956 SC 246). Thus, the material dates, in our opinion, are the dates when the two enactments received the assent of the President which in the case of Central Act is 19.08.1982 while in the case of the Kerala Chitties Act, 1975, it is 18.07.1975. There is one more way in which this problem can be approached. Both the courts below have proceeded on the basis that there are conflicting provisions in the Central Act, 1982 vis- -vis the State Act, 1975 (see paragraphs 13, 14 15 of the impugned judgment). In our view, the intention of the Parliament was clearly to occupy the entire field falling in Entry 7 of List III. The 1982 Act was enacted as a Central Legislation to "ensure uniformity in the provisions applicable to chit fund in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the State over the Central Law. However, in view of the proviso to Article 254(2), the Parliament could have brought a legislation even to override such assented to State Finance Act No. 7 of 2002 without waiting for the Finance Act No. 7 of 2002 to be brought into force as the said proviso states that nothing in Article 254(2) shall prevent Parliament from enacting at any time, any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the State Legislature) [emphasis supplied]. Thus, Parliament in the matter of enacting such an overriding law need not wait for the earlier State Finance Act No. 7 of 2002 to be brought into force. In other words, Parliament has the power under the said proviso to override the Finance Act No. 7 of 2002 even before it is brought into force. Therefore, we see no justification for construing Article 254(2) read with the proviso in a manner which inhibits the Parliament from repealing, amending, or varying a State Legislation which has received the President's assent under Article 254(2), till that State Legislation is brought into force. We have to read the word "made" in the proviso to Articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw made by Parliament does not expressly repeal a State law, even then, the State law will become void as soon as the subsequent law of Parliament creating repugnancy is made. A State law would be repugnant to the Union law when there is direct conflict between the two laws. Such repugnancy may also arise where both laws operate in the same field and the two cannot possibly stand together, e.g., where both prescribe punishment for the same offence but the punishment differs in degree or kind or in the procedure prescribed. In all such cases, the law made by Parliament shall prevail over the State law under Article 254(1)." (ii) In I.T.C. Ltd. v. State of Karnataka [1985] Supp. SCC 476, this Court vide para 18 stated as under. "18. Thus, in my opinion, the five principles have to be read and construed together and not in isolation - where however, the Central and the State legislation cover the same field then the Central legislation would prevail. It is also well settled that where two Acts, one passed by the Parliament and the other by a State Legislature, collide and there is no question of harmonising them, then the Central legislation must prevail." (iii) In the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential. 4. Where, however, a law made by the State Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in their applicability to the State only. Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to Article 254. So far as the present State Act is concerned we are called upon to consider the various shades of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, a law enacted by the State legislature on a topic in the Concurrent List which is inconsistent with and repugnant to the law made by the Parliament can be protected by obtaining the assent of the President under Article 254(2) and that the said assent would enable the State law to prevail in the State and override the provisions of the Central Act in its applicability to that State only. Thus, when the State of Kerala intended to amend the State Act in 2002, it was bound to keep in mind the fact that there is already a Central law on the same subject, made by Parliament in 1982, though not in force in Kerala, whereunder there is a pro tanto repeal of the State Act. Therefore, the State legislature ought to have followed the procedure in Article 254(2) and ought to have obtained the assent of the President. (iv) In Ch. Tika Ramji (supra), the facts were as follows:- The State Legislature enacted the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 which empowered the State Government to issue notifications, which were in fact issued on 27.09.1954 and 9.11.1955 regulating supply and purchase of sugarcane. It was inter alia contended that the U.P. Sugarcane (Regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co-exist without repugnancy. Having come to the conclusion that there was no repugnancy, the Court observed that, "Even assuming that sugarcane was an article relatable to the sugar industry as a final product within the meaning of Section 18G of Central Act No. LXV of 1951, it is to be noted that no order was issued by the Central Government in exercise of the powers vested in it under that Section and no question of repugnancy could arise because repugnancy must exist in fact and not depend merely on a possibility. The possibility of an order under Section 18G being issued by the Central Government would not be enough. The existence of such an order was an essential pre-requisite before repugnancy could arise." This sentence has been relied upon by learned counsel for the State of Kerala in the present case in support of his submission that repugnancy must exist in fact and not depend on a mere possibility. According to the learned counsel, in the present case, applying the ratio of the judgment in the case of Ch. Tika Ramji (supra ), it is clear that the repugnancy has not arisen in the present case before us for the simple reason that the Central Chit Funds Act, 1982 has not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in public interest regulation and development of the mines should come under the control of the Union. In such a case the test must be whether the legislative declaration covers the field or not. Applying the said test, in M.A. Tulloch Co.'s case (supra), the Constitution Bench held that the Central Act of 1957 intended to cover the entire field dealing with regulation and development of mines being under the control of the Central Government. In M.A. Tulloch Co.'s case, (supra) reliance was placed on the above underlined portion in Ch. Tika Ramji's case (supra ) which, as stated above, was on the assumption that sugarcane was an article relatable to sugar industry within Section 18G of the Central Act No. LXV of 1951. It was urged on behalf of the State of Orissa in M.A. Tulloch Co.'s case (supra) that Section 18(1) of the Central Act of 1957 merely imposes a duty on the Central Government to take steps for ensuring conservation and development of mineral resources. That, since the Central Government had not framed Rules under the Act for development of mining areas till such Rules were framed, the Central Act of 1957 did not cover the entire field, and, thus, the Orissa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no inconsistency and no supersession, of the State Act." 19. To sum up, Articles 246(1), (2) and 254(1) provide that to the extent to which a State law is in conflict with or repugnant to the Central law, which Parliament is competent to make, the Central law shall prevail and the State law shall be void to the extent of its repugnancy. This general rule of repugnancy is subject to Article 254(2) which inter alia provides that if a law made by a State legislature in respect of matters in the Concurrent List is reserved for consideration by the President and receives his/her assent, then the State law shall prevail in that State over an existing law or a law made by the Parliament, notwithstanding its repugnancy. The proviso to Article 254(2) provides that a law made by the State with the President's assent shall not prevent Parliament from making at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by a State legislature. Thus, Parliament need not wait for the law made by the State with the President's assent to be brought into force as it can repeal, amend, vary or add to the assented State law no soone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Question No. (ii) :- The Effect in Law of a Repeal 20. In M.A. Tulloch Co. (supra), this Court came to the conclusion that by reason of the declaration by Parliament the entire subject matter of "conservation and development of minerals" stood taken over, for being dealt with by Parliament, thus, denying the State of the power within it hitherto possessed and consequently the Central Act superseded the State law, thus effecting a repeal. After coming to the conclusion that the State law stood repealed, this Court was required to consider a submission advanced on behalf of M.A. Tulloch Co. (supra). It was submitted that Section 6 of the General Clauses Act, 1897 applied only to express repeals and not to repeals consequent upon the supersession of the State Act by a law having the constitutional superior efficacy. It was submitted that a mere disappearance or supersession of the State Act under Article 254(1) was at the highest a case of implied repeal and not an express repeal. That, Section 6 of the General Clauses Act applied only to express repeals and not to implied repeals. This contention was rejected in the following terms : "The entire theory underlying implied r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vancore and Cochin. After action was taken under Act No. XIV of 1124, a controversy was raised that as the said Act No. XIV of 1124 was not a law in force when the United State of Travancore and Cochin was formed, all proceedings under the Travancore Act No. XIV of 1124 had lapsed. This contention was dismissed by this Court in following terms: "The general rule of English law, as to the date of the commencement of a statute, since 1797, has been and is that when no other date is fixed by it for its coming into operation it is in force from the date when it receives the royal assent (33 Geo. 3, c. 13). The same rule has been adopted in Section 5 of our General Clauses Act, 1897. We have not been referred to any Travancore law which provides otherwise. If, therefore, the same principle prevailed in that State, Travancore Act 14 of 1124 would have come into force on 7-3-1949 when it was passed by the Travancore Legislature. What prevented that result? The answer obviously points to Section 1(3) which authorises the Government to bring the Act into force on a later date by issuing a notification. How could Section 1(3) operate to postpone the commencement of the Act unless that sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Travancore Act 14 of 1124 cannot be questioned on the ground that the Act lapsed and was not continued by Ordinance 1 of 1124." 22. In T.S. Baliah v. T.S. Rengachari [1969] 3 SCR 65, the underlying principle of Section 6 of the General Clauses Act, 1897 is explained as under :- "The question is not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. Section 6 of the General Clauses Act therefore will be applicable whenever there is a repeal of an enactment. In such cases consequences laid down in Section 6 will follow, unless, as the Section itself says, a different intention appears in the repealing statute." 23. In State of Punjab v. Mohar Singh [1955] 1 SCR 893 prosecution was commenced against Mohar Singh under Section 7 of the East Punjab Refugees (Registration of Land Claims) Act, 1948. The offence was committed at a time when the said Act was not in force. The offence was committed when East Punjab Refugees (Registration of Land Claims) Ordinance of 1948 was in force. That Ordinance was for a temporary period. It was substituted by the Act. It is important to note that the Ordinance was a tem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red under the said Kerala repealed Act. This is the Constitutional position which would prevail if Section 90(1) of the Central Chit Funds Act, 1982 would not have been there. In other words, Section 90(1) of the Central Chit Funds Act, 1982 is stated out of abundant caution. Thus, after 19.08.1982 the Kerala Chitties Act, 1975 stood repealed except for the limited purposes of Section 6 of the General Clauses Act. Likewise, the other existing six State laws on Chits, referred to in Section 90 of the Chit Funds Act, 1982, existing on 19.08.1982 also stood repealed subject to the saving under Section 6 of the General Clauses Act. 26. To bring the Central Chit Funds Act, 1982 into operation in any State the Central Government has to issue a notification in the Official Gazette under Section 1(3). This has been done for some States but it has not been done for others like Kerala. It is for the Central Government to issue a notification bringing into force the Chit Funds Act, 1982 in Kerala when it deems appropriate as it has done in some States. Until such notification is issued neither the Kerala Chitties Act, 1975 prevails in the State of Kerala as it has become void and has been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted without obtaining sanction of the State Government within whose jurisdiction the chit is to be commenced or conducted and unless such chit is registered in that State in accordance with the provisions of the Central Chit Funds Act 1982. Conclusions 28. To sum up, our conclusions are as follows :- (i) On timing, we hold that, repugnancy arises on the making and not commencement of the law, as correctly held in the judgment of this Court in Pt. Rishikesh (supra). (ii) Applying the above test, we hold that, on the enactment of the Central Chit Funds Act, 1982, on 19.08.1982, which covered the entire field of "chits" under entry 7 of List III of the Constitution, the Kerala Chitties Act, 1975, on account of repugnancy as enshrined in Article 254(1), became void and stood impliedly repealed. That, on the occupation of the entire field of "chits", the Kerala Legislature could not have enacted the State Finance Act No. 7 of 2002, inserting Section 4(1a) into the Kerala Chitties Act, 1975, particularly on the failure of the State in obtaining Presidential assent under Article 254(2). (iii) That, the Central Chit Funds Act, 1982 though not brought in force in the State ..... X X X X Extracts X X X X X X X X Extracts X X X X
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