TMI Blog2017 (1) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... tate and also to provide measures of agrarian reforms. The field of encroachment made by the State legislature is in the area of banking. So long there did not exist any parallel Central Act dealing with sale of secured assets and referable to Entry 45 of List I, the State Act, including Section 187, operated validly. However, the moment Parliament stepped in by enacting such a law traceable to Entry 45 and dealing exclusively with activities relating to sale of secured assets, the State law, to the extent that it is inconsistent with the Act of 2002, must give way. The dominant legislation being the Parliamentary legislation, the provisions of the Tripura Act of 1960, pro tanto, (Section 187) would be invalid. It is the provisions of the Act of 2002, which do not contain any embargo on the category of persons to whom mortgaged property can be sold by the bank for realisation of its dues that will prevail over the provisions contained in Section 187 of the Tripura Act of 1960. The decision of this Court in Central Bank of India vs. State of Kerala and Ors. (2009 (2) TMI 451 - SUPREME COURT OF INDIA) holding that the provisions of the Bombay Sales Tax Act, 1959 and the Kerala Gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Revenue and Land Reforms Act, 1960 (hereinafter referred to as the Tripura Act of 1960 ) as under the Tripura Act there is a legislative embargo on the sale of mortgaged properties by the bank to any person who is not a member of a scheduled tribe. The auction purchasers in the present case happened to be the persons who are not members of any scheduled tribe. 3. The High Court by the impugned order answered the writ petition in favour of the respondents/writ petitioners on the ground that the Tripura Act of 1960 being included in the Ninth Schedule to the Constitution and, therefore, enjoying the protection of Section 31-B of the Constitution, would prevail over the Act of 2002 so as to invalidate the sale Notification dated 26.06.2012, the same being contrary to the provisions of Section 187 of the Tripura Act of 1960. 4. It will not require much appreciation or scrutiny to come to the conclusion that the High Court was wholly incorrect in answering the writ petition and striking down the sale Notification dated 26.06.2012 on the above basis. Article 31-B of the Constitution, on the very face of the language contained therein, is self explanatory and provides protec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, in the present case, is the Act of 2002 enacted by the Union Parliament and not the State Act. On the said basis, it is contended that by virtue of Article 246(1) of the Constitution, the Act of 2002, so far as sale of mortgaged properties by the bank is concerned, would prevail over Section 187 of the Tripura Act of 1960. The said provisions of the State Act must give way to the provisions of the Central Act, it is urged. 6. Learned counsels for the respondents/writ petitioners, in reply, have contended that the provisions of both the statutes can co-exist and run parallelly without any conflict. It is urged that, in fact, there is no conflict between the two. Section 187 of the Tripura Act of 1960 does not prohibit or impose a complete embargo on the sale of mortgaged properties. Only when the borrower is a tribal the sale by the Bank has also to be to a tribal. 7. Repugnancy or inconsistency between the provisions of Central and State enactments can occur in two situations. The first, in case of a Central and a State Act on any field of entry mentioned in List III of the Seventh Schedule (Concurrent List). To such a situation of repugnancy or inconsistency, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: See Zaverbhai Amaidas v. State of Bombay, (1955) 1 SCR 799 ; M. Karunanidhi v. Union of India, (1979) 3 SCR 254 and T. Barai v. Henry Ah Hoe, (1983) 1 SCC 177. 8. The above view has been reiterated in State of W.B. vs. Kesoram Industries Ltd. and Ors. (2004) 10 SCC 201 There are several other pronouncements of this Court on the aforesaid issue. The same, however, would not require any mention as any such reference would be only a multiplication of discussions on what appears to be a settled issue. In the present case, however, the question before this Court is not one of repugnancy between a Central and a State law relatable to an Entry in List III (Concurrent List). No further attention to the above aspect of the matter would, therefore, be required. 9. The second situation of repugnancy or inconsistency as in the present case i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hstanding the fact that the State legislation is within the demarcated field (List II). This is the principle of federal supremacy which Article 246 of the Constitution embodies. The said principle will, however, prevail provided the pre-condition exists, namely, the Parliamentary legislation is the dominant legislation and the State legislation, though within its own field, has the effect of encroaching on a vital sphere of the subject or entry to which the dominant legislation is referable. This is the principle that is discernible from the Constitution Bench judgment of this Court in State of West Bengal and Ors. vs. Committee for Protection of Democratic Rights, West Bengal and Ors. (2010) 3 SCC 571 Paragraphs 25, 26 and 27 which illuminates the issue may be conveniently extracted below. 25. The non obstante clause in Article 246(1) contemplates the predominance or supremacy of the Union Legislature. This power is not encumbered by anything contained in clauses (2) and (3) for these clauses themselves are expressly limited and made subject to the non obstante clause in Article 246(1). The State Legislature has exclusive power to make laws for such State or any part th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nth Schedule. The rules relating to distribution of powers are to be gathered from the various provisions contained in Part XI and the legislative heads mentioned in the three lists of the Schedule. The legislative powers of both the Union and State Legislatures are given in precise terms. Entries in the lists are themselves not powers of legislation, but fields of legislation. However, an entry in one list cannot be so interpreted as to make it cancel or obliterate another entry or make another entry meaningless. In case of apparent conflict, it is the duty of the court to iron out the crease and avoid conflict by reconciling the conflict. If any entry overlaps or is in apparent conflict with another entry, every attempt shall be made to harmonise the same. 14. When the question arose about reconciling Entry 45 of List I, duties of excise, and Entry 18 of List II, taxes on the sale of goods, of the Government of India Act, 1935, Sir Maurice Gwyer, C.J. in Central Provinces and Berar Act No. XIV of 1938, In re , (1939) FCR 18, at pp. 42-44 observed: A grant of the power in general terms, standing by itself, would no doubt be construed in the wider sense, but it may be qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to them, States are supreme. The Centre cannot tamper with their powers. More particularly, the courts should not adopt an approach, an interpretation, which has the effect of or tends to have the effect of whittling down the powers reserved to the States. 94. Although Parliament cannot legislate on any of the entries in the State List, it may do so incidentally while essentially legislating within the entries under the Union List. Conversely, the State Legislatures may encroach on the Union List, when such an encroachment is merely ancillary to an exercise of power intrinsically under the State List. The fact of encroachment does not affect the vires of the law even as regards the area of encroachment. [A.S. Krishna vs. State of Madras, AIR 1957 SC 297; Chaturbhai M. Patel vs. Union of India, (1960) 2 SCR 362; State of Rajasthan vs. G. Chawla, AIR 1959 SC 544; Ishwari Khetan Sugar Mills (P) Ltd. vs. State of U.P., (1980) 4 SCC 136]. This principle commonly known as the doctrine of pith and substance, does not amount to an extension of the legislative fields. Therefore, such incidental encroachment in either event does not deprive the State Legislature in the first case or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding Section 187, operated validly. However, the moment Parliament stepped in by enacting such a law traceable to Entry 45 and dealing exclusively with activities relating to sale of secured assets, the State law, to the extent that it is inconsistent with the Act of 2002, must give way. The dominant legislation being the Parliamentary legislation, the provisions of the Tripura Act of 1960, pro tanto, (Section 187) would be invalid. It is the provisions of the Act of 2002, which do not contain any embargo on the category of persons to whom mortgaged property can be sold by the bank for realisation of its dues that will prevail over the provisions contained in Section 187 of the Tripura Act of 1960. 19. The decision of this Court in Central Bank of India vs. State of Kerala and Ors. (2009) 4 SCC 94 , holding that the provisions of the Bombay Sales Tax Act, 1959 and the Kerala General Sales Tax Act, 1963 providing for a first charge on the property of the person liable to pay sales tax, in favour of the State, is not inconsistent with the provisions contained in the Recovery of Debts Due to Banks and Financial Institutions, Act 1993 (for short the DRT Act ) and also the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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