Wort, J.:— This appeal which has been referred to a Full Bench arises out of an action on a mortgage. The only point raised in the Courts below was with regard to the question of interest. The loan was for Rs. 400 and in the plaint a sum of Rupees 1980 was claimed credit having been given for Rupees 281. The trial Judge disallowed compound interest but allowed simple interest at the rate provided by the mortgage bond being Rupee 1-4-0 per mensem. The District Judge on appeal reversed the trial Court's judgment and allowed compound interest at the rate claimed. The appeal raises the question of the validity of Section 11 of the Bihar Money-lenders Act (Bihar Act 3 of 1938) which is expressly retrospective. It is contended by the appellant that the learned Judge in the Court below had jurisdiction to make a decree in favour of the plaintiff for a sum of interest no greater than the amount of the loan advanced by reason of the provisions of the Section to which I have referred. The Section provides:
Notwithstanding anything to the contrary in any other law or in anything having the force of law or in any contract, no Court shall, in any suit brought by a money-lender (in this Act the money-lender is defined as a person who advances a loan) in respect of a loan advanced before or after the commencement of this Act, pass a decree for an amount of interest for the period preceding the institution of the suit which together with any amount already realised as interest through the Court or otherwise, is greater than the amount of the loan advanced or, if the loan is based on a document, the amount of loan mentioned in the document on which the suit is based.
2. On behalf of the respondents, Mr. Jha contends that the Federal Legislature being paramount with regard to subjects of which Contract (No. 27) is one, enumerated in List III of Sch. 7, Government of India Act (25 & 26, Geo. Y, Ch. 42), and money lending being a branch of the law of Contract the Section is void as being repugnant to the “existing Indian law.” The arguments proceeded in the first place on the footing that the legislation was ultra vires the Provincial Legislature. Although, that in one aspect may be a correct designation of the problem before us, it would appear that the question is more limited, as there can be no doubt that Parliament having conferred on the Provincial Legislature the power to legislate with regard to “trade and commerce within the Province, markets and fairs, money-lending and money-lenders” (Item 27), the legislation in question is within the competence of the Legislature. The question is the narrower one, whether the provisions of the Act with which we are concerned is repugnant to “existing Indian law” as I have already stated. The case depends upon the proper construction to be placed upon Part 5 of the Government of India Act 1935 and the three lists given in Sch. 7 of the Act. More particularly are we concerned with Ss. 100 and 107 and two items in two lists. Section 99 of Part 5 of the Government of India Act, distributes generally legislative powers to the Federal Legislature “for the whole or any part of British India or for any Federated State,” and to the Provincial Legislature for the Province. We are not concerned with the subject-matter of sub-section 2 of S. 99. Sec. 100 deals with the distribution of the legislative powers in detail. Sub-s. (1) of that Section provides that:
Notwithstanding anything in the two last succeeding sub-sections the Federal Legislature has, and a Provincial Legislature has not, power to make laws with respect to any of the matters enumerated in List I.
3. The next succeeding sub-section confers powers on the Federal Legislature and the Provincial Legislatures with regard to the Concurrent Legislative List, List III, and sub-sec. 3 confers power on the Provincial Legislature to make laws for the Province, excluding the right of the Federal Legislature to legislate in respect of the matters enumerated in the Provincial Legislative List, List II. To be more specific, sub-s. 2 relating to the Concurrent Legislative List confers the power referred to “notwithstanding anything in the next succeeding sub-section” (that is, sub-s. 3 giving the Province power with respect to the Provincial Legislative List) and confers power on the Provincial Legislature with respect to the same List which power is “subject to sub-s. 1” granting exclusive power in respect of the Federal Legislative List to the Federal Legislature and again, the power conferred upon the Provincial Legislature in respect of the Provincial Legislative List by sub-sec. 3 is subject to the power conferred in the two preceding sub-sections, (Federal and Concurrent Legislative Lists).
4. It was contended by Mr. P.R Das on behalf of the appellant in his able argument, that the Section properly construed plainly meant that the legislative powers were distributed to the Federal Legislature and the Provincial Legislature and those powers were mutually exclusive, but whilst admitting that the subjects of legislation, as contained in the Lists could not be put into water-tight compartments, he contended that the Provincial Legislature when legislating on a subject contained in the Provincial List or with regard to a subject the dominant character of which or the “pith and substance” of which as to the application of these tests, see (1934) AC 337,1 see also, (1937) AC 8632 at page 870] property brought the legislation in question within a subject assigned to the Provincial Legislature, such legislation could not be considered beyond the powers of the Provincial Legislature and therefore could not be questioned. That may be true, but on a plain reading of the Section, it seems to me to be abundantly clear that Parliament intended in this Section that the Federal Legislature should be paramount with regard to all matters enumerated in the three Lists and it is that situation with which we have to deal. I am of the opinion that the argument does not correctly state the nature of the problem before us. It appears from this. Section that the Federal Legislature was given exclusive power to legislate with? regard to those subjects enumerated in. List I of Schedule 7, and those powers are untrammelled by the powers given to the Provincial Legislature in respect to the subjects enumerated in the Provincial List and the Concurrent List. Again, upon the Federal Legislature is conferred the power to legislate with regard to certain subjects, enumerated in the Concurrent List notwithstanding any power conferred upon the Provincial Legislature to legislate with, regard to that List or with regard to the subjects enumerated in List II. But the same concurrent power given to the Provincial Legislature is cut down by the exclusive power granted to the Federal Legislature, and finally the exclusive power given to the Provincial Legislature to legislate in its own field under List II, is conditioned by the exclusive power granted to the Federal Legislature with regard to—List I and the concurrent power under List III. In arriving at a conclusion with regard to the matter in hand I would bear in mind the principle, which has been so often reiterated by the Judicial Committee of the Privy Council in constitutional cases that we are not entitled to stray beyond the limits of the matter under discussion, nor to lay down any general rules of construction of the Act. Expressed in the language of their Lordships of the Privy Council in (1883) 9 AC 1173 at page 128:
In all these questions of ultra vires it is the wisest course not to widen the discussion by consideration not necessarily involved in the decision of the point in controversy:
See also, (1882) 7 AC 964 at p. 107 and (1902) AC 735 at page 77. In this connexion I should like to add that, although a large number of their Lordships' decisions on constitutional problems arising under the British North America Act of 1867 have been freely quoted, they offer little or no assistance to us in the question before us and indeed it would be dangerous to apply those decisions to this case having regard to the fact that the Act under consideration in this case and the British North America Act differ so materially in structure, although the interpretation of the two Acts may give rise to similar constitutional problems. There have been however principles enunciated which may be of general application and to the extent to which those principles may be described as principles or canons of construction may be useful in determining the matter before us. If the matter under consideration fell to be determined under S. 100 and the respective Legislative Lists only, the problem which we have to solve would bear a striking resemblance to those arising in many of the Canadian cases. But, it will be seen that the case depends not only on that Section but upon the proper construction to be placed upon Section 107 of the Government of India Act, in conjunction with the Legislative Lists in Sch. 7, a Section the prototype of which is not found in the British North America Act, unless it be the Proviso to S. 91 which was dealt with by the Judicial Committee in (1896) AC 3486 at p. 359. But it will be seen that the scheme of the two Acts is different: whereas under the Proviso referred to, subjects enumerated in Section 91 of the British North America Act, 1867 shall not be deemed to come within the class of matters of a local and private nature comprised in the enumeration of the classes of subjects by the Act assigned to the Provincial Legislatures, under the Section of the Act now under consideration Federal Legislation shall prevail in all subjects which the Legislation of the Federal Legislature is competent to enact. Had we been considering the power of the Federal Legislature on the one hand to legislate with regard to a particular subject in the presence of actual legislation by the Province on a subject which was alleged to be within the power of the Federal Legislature, whether as regards a subject specifically enumerated in the Federal or Concurrent Lists or as incidental thereto, questions such as arose in (1883) 9 AC 117 and (1894) AC 1897 would have arisen in this case. We are not concerned with Ss. 101 to 106. Shortly stated, they give powers with regard to legislation in exceptional circumstances, not present in this case. We come therefore to S. 107. It is unnecessary to consider sub-s. 2 or sub-s. 3 of that Section as they relate to matters which are clearly not relevant to this case. Sub-section 1 provides:
If any provision of a Provincial law is repugnant to any provision of a Federal law which the Federal Legislature is competent to enact or to any provision of an existing Indian law with respect to one of the matters enumerated in the Concurrent Legislative List, then subject to the provisions of this Section, the Federal law, whether passed before or after the provincial law, or as the case may be, the existing Indian law shall prevail and the Provincial law, shall to the extent of the repugnancy, be void.
5. It will be seen that the last part of the sub-section makes the Federal legislation or the “existing Indian law” paramount, but the words “subject to the provisions of this Section” occur. These last words gave rise to some difficulty in the argument. But it seems to be quite clear that the expression necessarily refers to those provisions in sub-s. (2) under which on certain conditions a provincial law, although repugnant to an “existing Indian law” may yet have effect in the Province in which it was enacted, but the words can have no reference to the validity or otherwise of the Federal or Provincial legislation, as apart from references to that question, which are not relevant to the point before us; in the first part of the sub-section and the last sub-section, no mention is made in the Section to that matter. Broadly stated it would appear that, whilst S. 100 distributes legislative powers to the respective Legislatures, sub-s. (1) of S. 107 provides a test with respect to the validity of legislation when conflict between the Federal and the Provincial Legislation arises—a possibility which is contemplated and is not unlikely having regard to the fact that concurrent legislative powers are conferred on the two Legislatures. It is said in this case that there is this conflict as the Provincial Legislature, in enacting Section 11 of the Bihar Money Lenders Act (although that legislation is intra vires coming as it does expressly under head 27 Money-lending and Moneylenders), has trenched upon the Concurrent List, in that Sec. 11, prohibiting a moneylender from recovering more than a certain amount of interest and in that sense having made a contract for the parties, has legislated in respect of a subject enumerated in the Concurrent Legislative List, Item 10, and therefore has brought itself within the mischief of sub-s. (1) of Section 107 of the Government of India Act. The appellant has sought to avoid this position by relying upon a number of Canadian decisions for the application of the maxim generalia specialibus non derogant: see the case in (1920) AC 1029,8 contending that the general term in the Concurrent List “Contract” is to be cut down by the specific words in the Provincial List “Money-lending and Moneylenders”, or, as expressed by their Lordships of the Judicial Committee in the case referred to,
that the generality of the wording of…. has to be interpreted as restricted by the specific language of…. in accordance with the well-established principle that subjects in one aspect may come under one list and in another aspect, that is made dominant, be brought under the other:
See also (1912) AC 880.9 The argument amounts to this also that, when considering the validity of the legislation under consideration, in its relation to “existing Indian law” with regard to a subject enumerated in the Concurrent List, it must be held that the general subject “contract” having been cut down by the special subject “Money-lending”, the “existing Indian law” although dealing with interest does not deal with a subject in the Concurrent Legislative List. But, this principle cannot be held to apply, and it seems to me for several reasons, the main one of which is stated in the earlier part of my observations. Had we been considering on the one hand the power of the Federal Legislature eo nomine to legislate in the absence of actual legislation by that Legislature, and on the other hand legislation by the Provincial Legislature on a subject specifically enumerated in the Provincial List and in another aspect coming within a subject enumerated in the Federal List or the Concurrent List of which the subject-matter of the Provincial Legislature was said to be a branch or part, then it might have been held that the power conferred on the Provincial Legislature to legislate with regard to money-lending and money-lenders was an exception to the power of the Federal Legislature to legislate under the Concurrent Legislative List with regard to the wider and more general subject “Contract”. Undoubtedly money-lending, as I have said, is a branch of “Contract”; the subject money-lending and money-lenders may be considered the species and contract the genus. The principle relied upon by the appellant is a principle of construction; it cannot affect matters of definition. It will be noticed that the first part of sub-s. (1), S. 107, refers to two different cases first,
if any provision of a Provincial law is repugnant to any provision of a Federal law which the Federal Legislature is competent to enact,
secondly,
or to any provision of an existing Indian law with respect to one of matters enumerated in the Concurrent Legislative List.
6. The principle generalia specialibus non derogant may be applied in testing the question under the first part whether the Federal Legislature is competent to enact legislation with regard to a subject e.g the power to legislate in the field of contract, may be limited by the application of the principle by excluding from that subject the special subject money-lending. But, it cannot be applied for the purpose of deciding whether the “existing Indian law” relates to a subject in the Concurrent List. Either the subject-matter of the “existing Indian law” comes within a subject enumerated in the Concurrent Legislative List or it does not, e.g money-lending or interest recoverable in a money-lending contract is a part of the subject ‘contract’. At this stage we were invited to consider a detailed comparison of the various subjects of legislation enumerated in the Lists with a view to support and to test the arguments advanced. As an instance, Item No. 28, List 1, was compared with one of the Items under consideration in this case, Contract: No. 10, List 3. The comparison was also used by Mr. Jha for contending that where Parliament intended a limit to be placed upon the Legislature as regards any particular subject it is so provided, for instance, Item No. 45, List 1: No. 7, List 3. This does not altogether support Mr. Jha's case but I purposely refrain from any discussion of this argument as it clearly tends to widen the matter under discussion—a course condemned by the Judicial Committee of the Privy Council, and not being the point to be determined in this case, must necessarily be barren of results. If and when the many problems suggested by these comparisons arise, I have no doubt they will be solved by the competent authority. But here the position is clear. We are considering, it is argued, Provincial legislation in its relation to an “occupied field”, occupied by the “existing Indian law” in respect to ‘contract’ in its wider and general aspects, it might be said that the Provincial legislation in respect to ‘contract’ in the particular aspect ‘money-lending’ was valid, as the power to legislate with regard to that particular matter had been specifically conferred upon that Legislature. What has been described as the “doctrine of the occupied field” has been expressed by Lord Tomlin in (1930) AC 11110 in the fourth rule there laid down and may be applied to the case before us mutatis mutandis:
There can be a domain in which Provincial and Dominion Legislations 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:
See (1907) AC 65,11 also (1894) AC 189 at p. 200. This doctrine may be applied to the case before us as I have stated, as the dominant power of the Central Legislature is a feature common to the Canadian and Indian constitutions, expressly so in the case of the Indian, by Section 107 of the Government of India Act. Here it is necessary to pause to examine what is meant by existing Indian law under the Government of India Act. Under S. 311(2)
“existing Indian law” means any law, ordinance, order, bye-law, rule or regulation passed or made before the commencement of Part 3 of this Act by any Legislature, authority or person in any territories for the time being comprised in British India, being a Legislature, authority or person having power to make such a law, ordinance, order, bye-law, rule or regulation.
7. So we are met with this position that the laws (in this particular case, it is argued, provisions of the Code of Civil Procedure, Contract Act, Usury Laws Repeal Act, 1855 and Usurious Loans Act, 1918) to which S. 11 is alleged to be repugnant have the same status as a law passed by the Federal Legislature under S. 11, List 3 of S. 100 and List 3 of the Concurrent Legislative List of Sch. 7. The validity of the “existing Indian law” cannot be called in question, and the problem therefore with which we are met is to consider whether the Provincial Legislature had power to legislate with regard to this particular matter (that is admitted) and whether the “existing Indian law” properly defined comes within the subject ‘contract’ in the Concurrent Legislative List; in other words, whether this particular field of legislation is already occupied: and, if that is answered in the affirmative, whether Section 11 of the Bihar Money Lenders Act, is repugnant thereto. It will be seen that the field of investigation is narrowed. We are therefore not met with the problems which existed in so many of the cases before the Privy Council under the British North America Act: the question does not arise whether for instance legislation of the Provincial Legislature was on a subject incidental to or ancillary to a specific subject with regard to which powers have been conferred, nor does the question strictly arise whether the legislation complained of comes within the powers of the Provincial Legislature. Section 11 of the Bihar Money Lenders Act, prohibits the making a decree for interest, whatever the contract between the parties may be, for a sum beyond a certain amount. The Court complying with the provision of this Section therefore would impose upon the parties a new contract and I do not think there can be any doubt therefore that the Provincial Legislature in passing this legislation is dealing with the subject “contract under the special head money-lending and money-lenders;” that is not disputed. It is argued that the Legislature by a law passed by an authority indicated in the definition to which reference has been made, has also legislated with regard to the subject “contract” coming within the Concurrent Legislative List. In the first place it is said that the Legislature has legislated under O. 34, Rr. 2 and 11 of the CPC. R. 2 provides:
In a suit for foreclosure if the plaintiff succeeds the Court shall pass a preliminary decree ordering that an account be taken of what was due to the plaintiff at the date of such a decree.
8. Rule 11 provides:
In any decree passed in a suit for foreclosure, sale or redemption where interest is legally recoverable the Court may order payment of interest to the mortgagee.
9. Sub-clause (a)(iii) of that Rule provides:
On the amount adjudged due to the mortgagee for costs, charges and expenses properly incurred by the mortgagee…. at the rate agreed between the parties or, failing such rate, at the same rate as is payable on the principal….
10. It is contended here that the Legislature provides that the Court is bound to make a decree at the contract rate. Section 37 of the Contract Act, is also relied upon. That Section provides:
The parties to a contract must either perform, or offer to perform their respective promises, unless such performance is dispensed with or excused under the provisions of this Act or of any other law.
11. Dealing first with Section 37 of the Contract Act, I am clearly of the opinion that there is no obligation laid down by the Legislature in that Section to make a decree according to the terms of the contract and on no other terms. Sec. 37 itself provides for a possible dispensation to the parties to the contract:
Unless such performance is dispensed with or excused under the provisions of this Act or of any other law.
12. In those cases in which the facts come within the provisions of the Usurious Loans Act, 1918, the strict performance is excused. As regards O. 34 the respondents, also rely upon the case in 54 Cal 16112 in which Lord Phillimore in delivering the judgment of the Privy Council said:
Till the period of redemption has expired, the matter remains in contract and interest has to be paid at the rate and with the rests specified in the contract of mortgage.
13. Reliance was also placed upon the case in 63 IA 11413 for the contention that as the law stood before the passing of Section 11 of the Bihar Money-lenders Act, the contract made by the parties bound them as provided by O. 34. The short answer to that argument is that in the cases quoted one question alone which was being considered was interest recoverable for the period before and after the decree and again from an examination of the latter case it will be seen to be an authority directly opposed to the argument advanced. It is contended by Mr. P.R Das that this order creates no rights, lays down no principle of substantive law but is merely a branch of the adjective law, and for that reason no assistance-can be gained from it by the respondent. Again it may be remembered that O. 34 found place at one time in the Transfer of Property Act—an additional reason for the correctness of the view advanced by the appellant: In other words, it was transferred from an Act dealing with substantive-law and made a rule under an Act dealing with adjective law or law of procedure. But a much more serious question arises with regard to the other Act mentioned: the Usurious Loans Act, 1918. In this connexion it was first argued that the Section under consideration was repugnant to the Usury Laws Repeal Act, 1855, repealed the Usury laws then in existence and provided that:
In any suit in which interest is recoverable the amount shall be adjudged or decreed by the Court at the rate (if any) agreed upon by the parties, and if no rate is agreed upon, at such a rate as the Court shall deem reasonable.
14. There are other provisions with which we have in this case no concern. Then came the Usurious Loans Act of 1918 by which to some extent the Usury laws existing before the passing of the Act of 1855 were reinstated. The Usurious Loans Act 1918 provides that in circumstances mentioned in S. 3 the Court has a discretion to make a decree other than at the rate of interest agreed upon between the parties: in other words, to reopen the transaction, the subjects of the litigation, and to that extent to make a new contract between the parties. The position is this, therefore, in a case in which the conditions mentioned in Section 3 of the Usurious Loans Act, 1918, do not exist, the Court is bound to make a decree at the rate “agreed upon between the parties” (Act 28 of 1855). If the case before us had been limited to a consideration of the repugnancy of Section 11 of the Bihar Money Lenders Act, to the Act of 1855, much could have been said for the appellant's argument that Parliament could not have intended that a conflict should exist, that it could not be assumed on any construction of the relevant provisions that, what Parliament gave a Provincial Legislature by conferring powers to legislate in respect to money lending was expressly taken away by conferring power on the Rederal Legislature to legislate as to contract, or by inference made invalid by placing a general subject contract in the Concurrent List. But the “existing Indian law” does include legislation on this specific subject in the sense that a law exists with regard to the recovery of interest in the Usurious Loans Act, 1918.
15. Now, by Section 11 of the Bihar Money Lenders Act, the Court is deprived of the discretion placed in its hands by the Usurious Loans Act, 1918, and at the same time, as regards those cases to which by their circumstances the Act of 1918 does not apply in terms, the Court is prohibited from obeying the mandatory provisions of the Act of, 1855— “adjudge or decree an amount of interest according to that agreed upon by the parties.” The answer to that put forward in the argument of Mr. P.R Das is a principle laid down by a number of Indian authorities to which I shall now refer. It is contended on the analogy of these authorities that S. 11 of the Act, under consideration amounts to nothing more than a rule of limitation of suits and is therefore in conflict neither with the Usury Laws Repeal Act of 1855 nor with the Usurious Loans Act of 1918. It will be observed that if this argument is to be accepted it must be held that the two Acts referred to—the Acts of 1855 and 1918—are Acts giving substantive rights. The first case relied on is 1 Cal 9214 deciding that the Damdupat rule was not applicable to the mufussal and the Judges deciding that case said during the course of the judgment that:
In the Presidency town here no doubt it has been held that the rule of Hindu law in question has not been abrogated by Act 28 of 1855.
16. In 5 Cal 86715 Wilson J., sitting alone, observed on the authority of certain Bombay decisions, but without considering the authorities in detail, that he doubted whether the rule of Hindu law in question (i.e Damdupat rule) has properly anything to do with the legality or illegality of any contract, “I think it is rather a rule of limitation.” Chaudhuri J. sitting on the Original Side of the Court in 42 Cal 82616 held (referring however to a Madras decision to which detailed reference will be made later) that the Damdupat rule applied in cases of mortgage, observing that the Madras Court had overlooked Section 4 of the Transfer of Property Act. On the other hands in 5 Beng LR 50017 the Court held that Act 28 of 1855 repealed the Mahomedan laws against interest as between co-religionists but remarking that so far as Courts of justice were concerned the rule had been treated as obsolete. In Madras in 26 Mad 66218 it was held that under. sections 86 and 88 of the Transfer of Property Act, the mortgagee was entitled to interest at the contract rate, and whether the rule of Damdupat be treated as a special rule (being applicable to Hindus only) and the Transfer of Property Act as a general statutory provision or vice versa—the rule of Damdupat general, and sections 86 and 88 of the Transfer of Property Act, as special—the same, result obtained viz. the latter was to be taken as having abrogated the former. This latter case is against Mr. Das's contention. However he relies upon the earlier quoted cases by way of analogy. He contends that Section 11 of the Bihar Money-lenders Act, lays down nothing more than a rule of limitation and in no way affects or is repugnant to the statutory provisions to which reference has been made. However, whatever Section 11 of the Bihar Money-lenders Act, may be described as, whether as a mere rule of limitation, or as a provision of substantive law, it most certainly deprives the Court, as I have already stated, of the discretion given to the Court under Section 3 of the Usurious Loans Act of 1918 in cases in which the circumstances proved allow of the exercise of a discretion, and is most certainly opposed to the express provision of the law laid down in the Usury Loans Repeal Act in those cases to which Usurious Loans Act does not apply.
17. Nor can the validity of the Section be upheld because in the particular circumstances of some cases the discretion given to the Courts by the Usurious Loans Act may be exercised and yet the Court obey the express provisions of Sec. 11, i.e in those cases in which the amount of the interest awarded does not exceed the limits provided by that Section. Those cases would be rare, as it is notorious especially in cases of the kind with which we are dealing, that owing to the fact that no interest is paid to the creditor for the whole or part of the period of limitation the amount of interest far exceeds the principal, even in those cases in which the Court exercises its discretion under the Usurious Loans Act. An Act cannot at the same time be valid and invalid, valid in those cases in which by the circumstances of the case, and not, by reason of the provisions of the Act itself, the Court keeps within the confines laid down, invalid in those cases, even allowing for the Court's discretionary powers, in which the limitations of S. 11, are exceeded. In my judgment the Section under consideration is repugnant to the earlier existing Indian law and, to the ex tent of the repugnancy, which is indicated above, is void. The result then is that the appeal fails and must be dismissed with costs. A certificate is granted under Section 205 of the Government of India Act.
Dhavle, J.:— This is an appeal by defendant 3 in a suit brought to enforce a mortgage bond executed years ago by his father and elder brother, defendants 1 and 2. The rate of interest provided in the bond was Re. 1-4-0 per cent, per mensem with yearly rests. The trial Court held that the rate was excessive and decreed the claim with only simple interest at Re. 1-4-0 per cent, per mensem. On an appeal by the plaintiff the District Judge held that the compound interest stipulated in the bond was not excessive, and therefore decreed the Suit in full. Defendant 3 filed the second appeal to this Court in October 1936. In July 1938, the Bihar Money-Lenders Act, 3 of 1938, became law. S. 11 of this Act provides:
Notwithstanding anything to the contrary contained in any other law or in anything having the force of law or in any contract, no Court shall, in any suit brought by a money-lender in respect of a loan advanced before or after the commencement of this Act pass a decree for an amount of interest for the period preceding the institution of the suit which, together with any amount already realised as interest through Court or otherwise, is greater than the amount of the loan advanced, or if the loan is based on a document, the amount of loan mentioned in the document on which the suit is based.
18. Bihar Act 5 of 1938 which became law in September 1938, provided inter alia that S. 11 of Act 3 shall apply, and shall be deemed always to have applied, to suits brought by money-lenders in respect of loans advanced before the commencement of the said Act (Act 3 of 1938) and to appeals arising out of such suits, whether such suits or appeals were instituted before or after Section 11 came into force. The Division Bench before which this appeal came in the first instance, has referred to a Full Bench the question whether Section 11 of the Bihar Act 3 of 1938, is ultra vires of the Provincial Legislature. It was the appellant that sought to take advantage of what may be called the rule of Damdupat embodied in S. 11 and the respondent that sought to meet this by urging that the Section was ultra vires. This contention is based on Section 107(1) of the Government of India Act 1935, read with Item 10 “contracts,” in List 3, the Concurrent Legislative List in Sch. 7 of the Act, and Section 2 of the Usury Laws Repeal Act 1855, which provides that in any suit in which interest is recoverable, the amount shall be adjudged or decreed by the Court at the rate (if any) agreed upon by the parties.
19. This last is part of the “existing Indian law” as defined in Section 811, sub-section (2) of the Government of India Act, and relates to the law of contracts. It is urged for the respondent that Section 11 of the Bihar Act 3 of 1938, is repugnant to it, and that therefore under Section 107, sub-section (1) of the Government of India Act, Section 2 of the Usury Laws Repeal Act ought to prevail over Section 11 of the Bihar Money-lenders Act which must to the extent of the repugnancy be treated as void. On the other hand, it has been urged for the appellant that as the Bihar Act relates to “money-lending and money-lenders,” a matter specifically included in Item 27 of the Provincial Legislative List, List 2 in Sch. 7, Government of India Act, the Provincial Legislature has, under sub-s. 3 of Section 100 of the latter Act, exclusive power to legislate with respect to the matter, and that these powers of legislation are plenary, as large and of the same nature, as those of Parliament itself”: 5 IA 178.19 The relief of the debtor is not, it is pointed out, an unusual feature of Money-Lenders Acts, and it is contended that as the Bihar Legislature is empowered to legislate “with respect to” this matter, the Act “is not invalidated if incidentally it affects matters which are outside the authorised field”: (1937) AC 863. S. 107(1) places existing Indian law with respect to the matters enumerated in the Concurrent Legislative List on the same footing as Federal law in respect of repugnancies with Provincial Legislation, but it is contended that the Section is confined to repugnancies with the former occurring in Provincial laws enacted with respect only to the matters enumerated in the Concurrent Legislative List. The Bihar Money-Lenders Act comes under the Provincial Legislative List, and it is therefore urged that S. 107(1) has no application, and further that there is in fact no repugnancy between Section 11 of the Money-lenders Act and Section 2 of the Usury Laws Repeal Act 1855, “which deals exclusively with the rate of interest which may be allowed”: 14 Cal 781.20
20. I have already quoted the terms of the two Sections. In so far as Section 11 of the Bihar Act, forbids the passing of a decree for “an amount of interest” in excess of the amount of the loan advanced, there is plainly an apparent conflict with the requirement of S. 2 of the Act of 1855 that “the amount (of interest) shall be decreed by the Court at the rate agreed upon by the parties.” In legislating on the subject of money lending and money lenders the Bihar Legislature is no doubt dealing with a matter within the competence of the Provincial Legislature, and of the Provincial Legislature alone. Indeed, sub-s. (3) of Section 100 of the Government of India Act, provides not only that the Provincial Legislature has power to make laws for a Province with respect to any of the matters enumerated in the Provincial Legislative List, but also that the Federal Legislature has no power to do so—an express exclusion of the latter on which much stress has been laid by the appellant. But there is a distinction between exclusive powers and unrestricted powers; and the power conferred upon the Provincial Legislature with respect to List II is by the very terms of the sub-section “subject to the two preceding sub-sections.” Now, sub-s. 1 of S. 100 gives the Federal Legislature exclusive power to make laws with respect to any of the matters enumerated in List I, the Federal Legislative List, and this power is expressed to be “notwithstanding anything in the two next succeeding sub-sections.” Sub-s. 2 gives power to the Federal Legislature, again” notwithstanding anything in the next succeeding sub-section,” to make laws with respect to any of the matters enumerated in List III, the Concurrent Legislative List. The same sub-section also provides that “subject to the preceding sub-section” the Provincial Legislature has power to make laws with respect to the same matters. The distribution of legislative powers with respect to the three Lists between the two kinds of Legislature, the Federal Legislature and the Provincial Legislatures, thus proceeds on lines not to-be found in the North British America Act, 1867, on which a number of decisions ranging from (1882) 7 AC 96 to 1937 AC 260,21 have been cited before us. The powers conferred on the Federal and the Provincial Legislatures can up to a certain point be expressed in the same terms “concurrent” as regards List III, and “exclusive” as regards Lists I and II respectively and yet there is a vital difference between, them, for the Federal Legislature is given exclusive and concurrent powers over Lists I and III respectively “notwithstanding” the powers of the Provincial Legislatures-over Lists III and II, while these latter powers are “subject to” the former. The distinction may perhaps be more clearly brought out in another way as follows: the Federal Legislature has (1) exclusive power over List I, notwithstanding the concurrent-power of Provincial Legislatures over List. III and their exclusive power over List II; (2) concurrent power over List III, notwithstanding the exclusive power of Provincial Legislatures over List II; and (3) no power over List II which is confided to Provincial Legislatures, subject, however to the powers of the Federal Legislatures over Lists I and III; while the Provincial Legislatures have (1) no power at all over List I; (2) concurrent power over List III, subject, however to the exclusive power of the Federal Legislature over List I; and (3) exclusive power over List II, subject to the powers of the Federal Legislature, over Lists I and III.
21. If we turn to the items included in these three Lists, it becomes plain that Parliament intended to make an exhaustive enumeration of the powers confided to the two kinds of Legislature. This appears even more clearly from S. 104 which deals with “residual powers of legislation” and enacts that the Governor-General, acting in his, discretion, may empower either the Federal Legislature or Provincial Legislature to enact a law with respect to any matter not enumerated in any of the three Lists. Apart from this (and from such special provisions as we find, for instance, in S. 102 which will be referred to later) either Legislature has power to legislate with respect to the Concurrent Legislative List with its 36 items, including (be it noted) such general subjects as (1) Criminal law, (2) Criminal Procedure, (4) Civil Procedure including the law of limitation (5) Evidence, (8) Transfer of Property other than agricultural land, (10) Contracts, including special forms of Contracts but not including Contracts relating to agricultural land, and (14) Actionable wrongs (save in so far as included in List I or List II), while the Federal Legislature has for its own exclusive field List I with its 59 items of all-India or Federal concern, and the Provincial Legislatures their List II with its 54 items. In a very detailed scheme of this kind it was only to be expected that an absolutely sharp and definite distinction could not be attained and that some of the subjects assigned, say, to the Federal Legislature may unavoidably run into the Concurrent Legislative List (with its very general subjects) or the Provincial Legislative List. It could not have been the intention that conflicts should exist; and it seems therefore to have been provided on one hand that the Federal Legislature is to exercise its powers over List 1, notwithstanding the concurrent powers given to the Provincial Legislatures over List 3 and the exclusive powers given to them over List 2, and on the other, that these concurrent powers of the Provincial Legislatures over List 3 and their exclusive powers over List 2 are to be subject to the powers of the Federal Legislature over Lists 1 and 3.
22. The usual practice of the Courts in constitutional matters is to refrain from expressing an opinion on points which do not arise: see, (1937) AC 326.22 But it is desirable, as in Parsons' case (already referred to), to take one or two illustrations in order to understand the inter-relations of the Federal and the Provincial Legislatures with reference to the three Lists and apply them to the particular question before us, namely, whether Section 107(1) renders Section 11 of the Bihar Money-lenders Act, void on the ground of its repugnancy to Section 2 of the Usury Laws Repeal Act. Thus, Item 54 in List 1, “Taxes on income other than agricultural income”, might on the face of it easily run into or clash in part with Item 16 in List 3, “legal, medical and other professions” and Item 46 in List 2, “Taxes on professions, trades, callings, and employments;” and vice versa. There are also Items 26 (carriage of passengers and goods by sea or by air) and 28 (Cheques, bills of exchange, promissory notes, and other like instruments) in List 1 which might easily run into Item 10 (Contracts) or 31 (Electricity) in List 3 and Items 27 (Trade and commerce within the Province) and 29 (… distribution of goods) in List 2. Conflicts might thus arise not only when the two kinds of Legislature operate in the concurrent field, but also when one Legislature operates in its exclusive field and another in its exclusive or in the concurrent field; and these would all seem to have been provided against by the double method of imposing a limitation on the powers of Provincial Legislatures by making them “subject to” the powers of the Federal Legislature, while conferring powers on the latter “notwithstanding” the powers of the former in the Provincial no less than in the concurrent field. Which legislation is to prevail in case of actual conflict in any fields seems to be laid down in sub-s. (1) of Sec. 107 of the Act, while sub-s. (2) of this Section provides a special method by which a Provincial Legislature may effectively legislate on a matter in the concurrent field notwithstanding provisions to the contrary in a Federal or the existing Indian law in that field. If this be the right view, it would follow that so far as Section 11 of the Money-lenders Act, is really repugnant to Section 2 of the Usury Laws Repeal Act, the latter must prevail.
23. Against this view Mr. P.R Das has argued that the Government of India Act does not contemplate any conflict between Federal and Provincial legislation except in the concurrent field, for which alone (he has argued) specific provision is made in Sec. 107. In this connexion learned counsel has in the first place referred to S. 102 of the Act, which in sub-s. (1) empowers the Federal Legislature, on a “Proclamation of Emergency,” to make laws for a Province with respect to any of the matters enumerated in the Provincial Legislative List, and in sub-s. (2) provides that such Federal laws (which by the succeeding sub-sections are to have effect for a limited time) shall prevail over any provisions of the Provincial laws that may be repugnant to it. The conflict dealt with in this Section is however a conflict arising only when two Legislatures—the Federal and the Provincial— operate in one and the same, viz the Provincial field, the former being empowered to do so in times of grave emergency. This does not, in my opinion, furnish any indication that Parliament did not think of, and therefore made no provision regarding conflicts that may arise in ordinary times when the Federal and the Provincial Legislatures exercise exclusive powers over Lists 1 and 2, respectively, and also exercise concurrent powers over List 3. All such conflicts prima facie come within sub-s. (1) of S. 107 which runs:
107(1). If any provision of a Provincial law is repugnant to any provision of a Federal law which the Federal Legislature is competent to enact or to any provision of an existing Indian law with respect to one of the matters enumerated in the concurrent legislative list, then subject to the provisions of this Section, the Federal law whether passed before or after the Provincial law or as the case may be the existing Indian law shall prevail and the Provincial law shall to the extent of the repugnancy be void.
24. The expression “subject to the provisions of this Section” takes us to the next sub-section which is as follows:
107(2). Where a Provincial law with respect to one of the matters enumerated in the concurrent legislative list contains any provision repugnant to the provisions of an earlier Federal law or an existing Indian law with respect to that matter then if the Provincial law, having been reserved for the consideration of the Governor-General or for the signification of His Majesty's pleasure, has received the assent of the Governor-General or of His Majesty, the Provincial law shall in that Province prevail, but nevertheless the Federal Legislature may at any time enact further legislation with respect to the same matter:
Provided that no bill or amendment for making any provision repugnant to any Provincial law, which having been so reserved, has received the assent of the Governor-General or of His Majesty shall be introduced or moved in either chamber of the Federal Legislature without the previous sanction of the Governor-General in his discretion.
25. It has been urged for the appellant that the words following “an existing Indian law” in sub-s. (1), namely “with respect to one of the matters enumerated in the Concurrent Legislative List”, should also be read with the expressions “any provision of a Provincial law” and “any provision of a Federal law” occurring earlier in this subjection; and the reason given is that the expression “subject to the provisions of this Section” in the same sub-section, has, so it is argued, the effect of making the repugnancies dealt with in sub-s. (1) identical with those dealt with in sub-sec. (2). The construction contended for is opposed to the plain grammar of the sub-section, and there is nothing in the scheme of legislation laid down in the Act to indicate that Parliament intended it. As we have already seen, the enumeration of items in the three lists itself makes it far from improbable that conflicts of legislative provisions would arise in other fields no less than in the concurrent field; and there is no reason to suppose that Parliament intended to leave the former to the operation of S. 100 alone “with its qualifications of “notwithstanding” and “subject to”. Further, if Parliament had intended to provide in sub-sec. (1) of S. 107 for conflicts in the concurrent field alone, it could easily have done so by adopting the language of sub-s. (2) which is unmistakably confined to action in the concurrent field. Nor can I agree that the expression “subject to the provisions of this Section” in sub-s. (1) has the effect of confining the conflicts dealt with in this sub-section to conflicts in the concurrent field. That expression no doubt refers to sub-s. (2) which is confined to legislation in the concurrent field. But is the provision of this exceptional procedure for the concurrent field any reason for supposing that Parliament either was not aware of or decided to ignore possible conflicts between Provincial legislation in the exclusive field and Federal or the existing Indian law in the concurrent field? As we have seen already from Sec. 100, the powers of the Provincial Legislatures are subject to the powers of the Federal Legislature. S. 107 may be regarded as a supplement to that provision. In sub-sec. (1) it deals with the effect of repugnancies between Provincial and Federal legislation (whenever passed) without any reference to the fields to which the conflicting enactments may relate; and it also deals with repugnancies between Provincial legislation and the existing Indian law which has not been referred to in S. 100 and is here in the concurrent field only put on the same footing as Federal law irrespective of whether this relates to its exclusive or the concurrent field.
26. The sub-section provides in effect that in either case the Provincial law shall, to the extent of the repugnancy (and no more), be void. To this general rule the second sub-section provides an exception limited to Provincial, Federal, and existing Indian legislation, all in the concurrent field. That the exception is limited, in my opinion, affords no reason for restricting the scope of the general rule.
27. We have in the present case to consider a conflict of a provision in a Provincial law on a matter enumerated in the Provincial Legislative List with a provision of the existing Indian law with respect to a matter enumerated in the Concurrent Legislative List; and as I have already remarked, the existing Indian law is placed on the same footing in this respect as Federal Legislation in sub-s. (1) of S. 107. The limitation placed in S. 100 on the powers of a Provincial Legislature over the Provincial Legislative List by making them “subject to” the powers of the Federal Legislature over the Concurrent Legislative List makes it impossible to accept the appellant's contention that the exclusive power of the Provincial Legislature with respect to moneylenders and money-lending is plenary; indeed in the very passage in 5 IA 178 which was cited for the appellant, Lord Selborne clearly spoke of the powers of the Indian Legislature being “as large, and of the same nature, as those of Parliament itself”, (only) when the former is acting within the limits which circumscribe these powers. The same limitation (with the corresponding power of Federal Legislature in the concurrent field notwithstanding’ the exclusive power of the Provincial Legislature “with respect to” List II) goes far to show that it is not open to this latter Legislature, when operating in its exclusive field, to affect matters governed by Federal Legislation, even incidentally. The additional facts that the Provincial Legislature is itself empowered to operate in the concurrent field, but that this power (no less than the exclusive power over List II) is qualified by the provisions of S. 107, seem to me to leave no doubt that Provincial Legislation in the exclusive provincial field is not permitted to trench upon Federal Legislation, even if such invasion could be regarded as necessarily incidental to the effective exercise of its powers by the Provincial Legislature. The proper test to apply to the case before us is, in my opinion, not so much whether the Provincial Act is “with respect to” a matter in List II or in List III, as whether any provision in it is repugnant to the provision of an existing Indian law with respect to a matter enumerated in List III; for S. 107 in sub stance imposes a limitation upon what Provincial Legislation may validly effect even in the two fields open to it. To powers so limited the principle in 1937 AC 863, a case under such a very different Act as the Government of Ireland Act, 1920, cannot apply. For, as Lord Selborne L.C said about the application of the doctrine of ultra vires in (1880) 5 AC 473,23 whatever may fairly be regarded as incidental to, or consequential upon, those things which the Legislature has authorized ought not (unless expressly prohibited) to be held by judicial construction to be ultra vires, an observation which need not be confined to the interpretation of Railway Acts; and the express limitation of the powers of the Provincial Legislature by making them subject inter alia to Federal law in its appropriate fields (read with Sec. 107 as regards existing Indian law in the concurrent field) amounts to an equally clear prohibition of even an incidental invasion of the superior law in that field by the Provincial Legislature. Mr. Das has also urged that in giving relief to the debtor under S. 11 Provincial Legislature cannot be said to have travelled beyond the field of money lenders and money lending, especially as the rule of Damdupat is not unknown in this country and that the generality of the term contracts in Item 10, Concurrent List, should be interpreted as restricted by the specific language of Item 27 in the Provincial List, in accordance with what Lord Haldane in (1920) AC 1029 called the well established principle that subjects which in one aspect may come under a section describing the powers of a Provincial Legislature may, in another aspect that is made dominant, be brought within another section which gives the powers of the Federal Legislature (and vice versa). But the principle so set out refers to Sections 92 and 91 of the British North America, Act, 1867, and its scope appears more clearly from Lord Haldane's observations in (1921) 2 AC 9124:
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. The rule may also apply in favour of the Province in construing merely general words in, the enumerated heads in S. 91…. Whether an exception is to be read in either case depends on the application of the principle that language which, is merely general is, as a rale, to be harmonized with expressions that are at once precise and particular by treating the latter as operating by way of exception. The two sections must be read together and the whole of the scheme for distribution of legislative powers set forth in their language must be taken into account in determining what is merely general and what is particular in applying the rule of construction. For, neither the Parliament of Canada nor the Provincial Legislature have authority under the Act to nullify, by implication any more than expressly, statutes which they could not enact….
It is obvious that the question of construction may sometimes prove difficult. The only principle that can be laid down for such cases is that legislation, the validity of which has to be tested, must be scrutinized in its entirety in order to determine its true character.
28. The scheme of the British North America Act is however materially different from that of the Government of India Act. Section 92 of the former Act enumerates 16 classes of subjects assigned exclusively to the Legislatures of the Provinces, and S. 91 empowers the Parliament of Canada to make laws for the peace, order and good government of Canada in relation to all matters not coming within those classes, and further, for greater certainty etc., specifically enumerates 29 classes of subjects as within the exclusive authority of the Parliament of Canada “notwithstanding anything in this Act”. There is another Section (S. 95) giving concurrent powers of legislation respecting two subjects only, agriculture and immigration, and providing that a Provincial law relative to these subjects shall have effect as long and as far only as it is not repugnant to any Act of the Parliament of Canada. But, among the subjects specified in S. 92 is a very comprehensive subject “property and civil rights in the Provinces”, as against particular subjects enumerated in S. 91 like the regulation of trade and commerce, the raising of money by any mode or system of taxation, navigation and shipping, sea coast and inland fisheries, banking and incorporation of banks, bankruptcy and insolvency, marriage and divorce, and the criminal law. Particular subjects are also specified in S. 92, such as direct taxation, shop, saloon and other licenses, the incorporation of companies, and the solemnization of marriage. The Act exhausts the whole range of legislative power, and it was found that whatever was not given to the Provincial Legislatures rested with the Parliament, (1887) 12 AC 575,25 but this certainly cannot be said of the Government of India Act in view of the provisions of S. 104. It would have been practically impossible for the Dominion Parliament to legislate upon several of the classes of subjects enumerated in S. 91 without affecting the property and civil rights of individuals in the Provinces, a subject specified in S. 92, and the general language of this last subject was interpreted as restricted by that of the former. The rules were therefore established that
the legislation of the parliament of the dominion, so long as it strictly relates to subjects of legislation expressly enumerated in S. 91, is of paramount authority, even though it trenches upon matters assigned to the Provincial Legislatures by S. 92,
and that
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: (1930) AC 111.
29. Exceptions were similarly read in favour of the Provinces as regards particular subjects like the solemnization of marriage and direct taxation as against the subjects of marriage and divorce and the raising of money by any mode or system of taxation enumerated in Sec. 91, the reason being that the Legislature could not have intended that powers exclusively assigned to the Provincial Legislature should be absorbed in those given to the Dominion Parliament; the principle was applied that the generality of the wording of S. 91 in such matters must be interpreted as restricted by the specific language of items found in S. 92. But can this principle be applied to the subject of money-lending and money-lenders in our List II as against contracts in List III? The Government of India Act places a large number of general subjects in the Concurrent List and provides a means by which Provincial Legislation may prevail in this field, but otherwise leaves Federal Legislation dominant in this as in field I and makes Provincial Legislation ‘subject to’ that legislation (together with the existing Indian law in the concurrent field); and as to conflicts or repugnancies, it makes special provision by Sec. 107, which may be compared and contrasted with the Canadian principle of the “occupied field.” Mr. Das's contention that the item of contracts in the Concurrent List should be read as restricted by the item of money-lending and money-lenders in the Provincial List is further rendered unacceptable by the fact that the former is defined with manifest deliberation as:
Contracts, including partnership, agency, contracts of carriage, and other special forms of contract, but not including contracts relating to agricultural land,
30. While contracts relating to agricultural land, thus excepted, apparently come within “transfer, alienation and devolution of agricultural land” in Item 21 in the Provincial List. Provincial Legislation, which under S. 100 is confined to Lists II and III, will, in case of conflicts with competent Federal law or the existing Indian law relating to matters within List III, have the validity of its provisions judged under the Government of India Act by reference to the terms of Sec. 107, to which no real parallel can be found in the British North America Act; and our Act makes it clear that any provision of a Provincial law which is repugnant to any provision of the other law must, to the extent of the repugnancy, be treated as void, except so far as the Provincial Legislature may have put itself in a position to apply sub-s. (2) of the Section and obtained the necessary assent. From this point of view, it is not for the Courts to consider whether or not the Bihar Legislature could pass any really effective legislation on the subject of money-lending and moneylenders without trenching upon the existing Indian law with respect to contracts. The former subject is by no means wholly included in the latter, and unlike the Provincial Legislatures in the Dominion of Canada, the Bihar Legislature has power to get over the existing Indian law with respect to contracts by a resort to Sec. 107(2). The exclusive power given to the Provincial Legislature over moneylenders and money-lending cannot therefore be enlarged in the way contended for on behalf of the appellant so as to include an incidental invasion of the dominant law in the concurrent field. I would hold accordingly that it cannot be validly exercised so as to override any provision of any existing Indian law, and that in case of repugnancy S. 107(1) must take effect.
31. I now come to the contention of the appellant that there is in fact no repugnancy between Section 11 of the Bihar Act and Section 2 of the Usury Laws Repeal Act. This contention is rested, as I have already indicated, on the ruling in 14 Cal 781. The relation of the Hindu law rule of Damdupat and the Usury Laws Repeal Act has been the subject of a certain difference of opinion even in Calcutta, to say nothing of the contrary view that has prevailed in Madras: see, 26 Mad 662. The questions that arose on the point were whether the Usury Laws Repeal Act only repealed previous legislation or also superseded the Hindu rule of Damdupat, and whether this rule was a rule regulating the rate of interest or only a rule of limitation. The learned Judges in 14 Cal 78 answered both these questions in favour of the rule (referred to as the law) of Damdupat, which was in force on the Original Side of that High Court in accordance with 21 George III, c. 70, s. 17. Those questions do not arise before us, for we have now to deal with the specific provision of the Bihar Act which on the face of it, precludes the passing of a decree required by Section 2 of the Usury Laws Repeal Act. Learned counsel for the appellant has not suggested how it is possible for a Court in this Province to comply with Section 11 of the Bihar Act, without infringing Sec. 2 of the other Act. I am not therefore prepared, on the authority of the ruling in 14 Cal 78 to hold that the apparent conflict between the two provisions is not an actual repugnancy.
32. It has been contended for the respondent that Section 11 of the Bihar Act, also offends against the existing Indian law relating to other items in the Concurrent List— No. 4, Civil Procedure, and No. 8, Transfer of Property. But the conflict, such as it is, is a conflict not as regards procedure but as regards the right to recover interest accrued at the agreed rate. The transaction was a mortgage, and if repugnancy is established in the domain of Contract (the main contention on behalf of the respondent), it seems unnecessary to consider whether there is a repugnancy in the domain of Civil Procedure as well, or in the other item which was referred to by the learned advocate for the respondent and on which the case in 26 Mad 662, is relevant along with the criticism, of Chaudhuri J. in 42 Cal 826. The result is that in my opinion Section 11 of the Bihar Money-lenders Act, has not been competently enacted so as to supersede Section 2 of the Usury Laws Repeal Act, and must be treated as void. This conclusion is not affected by the facts that in circumstances which do not exist in this case, Section 3 of the Usurious Loans Act, Act 10 of 1918, gives certain powers to the Court notwithstanding Section 2 of the Usury Laws Repeal Act, 1855, and that Section 22 of the Bihar Money-lenders Act, saves those powers except as otherwise provided in S. 12. The case was (therefore) in fact argued before us on Section 2 of the Usury Laws Repeal Act. I would accordingly uphold the decree of the lower Appellate Court and dismiss this appeal with costs.
Manohar Lall, J.:— The question before the Full Bench is whether Section 11 of the Bihar Money Lenders Act, 1938 (hereinafter to be referred to as the Act) is intra vires of the Provincial Legislature as constituted under the Government of India Act, 1935, and if so, whether it can be applied in deciding the rights of the respondent, a mortgagee, to recover interest in full as stipulated in his mortgage bond. The question is of very far reaching importance to the litigants of this province. It is a matter of satisfaction that we have had able assistance from Mr. P.R Das who appeared for the appellant and from Mr. L.K Jha, who appeared for the respondent. The facts which are necessary to be stated are these. The appellant executed a mortgage bond for Rs. 400 on 24th Chait 1328, in favour of the respondent, the due date of payment whereof was in 1329. The interest stipulated on the principal sum was Re. 1-4-0 per cent, per mensem with yearly rest. The trial Court decreed the suit for the principal sum but disallowed the compound rate of interest and awarded only simple rate of interest at the stipulated rate. In appeal the learned District Judge held that the stipulated rate was not excessive, that the transaction between the parties was fair and that there was necessity for the loan. He therefore set aside the decree of the learned Munsif and granted to the plaintiff a decree at the compound rate of interest as claimed in the plaint. The defendant has appealed to this Court.
33. The appellant contends that by operation of S. 11 of the Act, (which admittedly has retrospective effect by reason of the Amending Act of 1938) no decree can be passed for any amount of interest which is greater than the amount of loan advanced as stated in the mortgage bond; in other words, that the plaintiff is entitled to a decree for Rs. 800 only. The respondent on the other hand contends that the Provincial Legislature has no power to make this provision in the Act as it conflicts with the existing Indian laws on the subject, namely Interest Act 32 of 1839, the Usury Laws Repeal Act of 1855, Usurious Loans Act of 1918, Contract Act of 1872 (Section 37) of the CPC, 1908, Order 34 (the provision relating to mortgage decrees). It is necessary in the first instance to consider what is the pith and substance of the Act. The Act is stated to be an Act “to regulate moneylending transactions and to grant relief to debtors in the province of Bihar.” The Act received the assent of His Excellency the Governor of this province on 6th July 1938. It is admitted that the Act has not received the assent of His Excellency the Governor-General or of His Majesty. The Act contains a detailed scheme as to the registration of moneylenders and the manner in which they are required to keep accounts (Secs. 4 to 7). Chapter 3 provides that in certain cases a moneylender shall not be entitled to institute a suit at all and limits the powers of the Courts to pass a decree for interest except at certain rates or up to a fixed amount and also provides that an agreement by a debtor to pay compound interest to the creditor shall, in respect of a loan advanced after the commencement of this Act be void. There are other provisions under this Chapter which give the Courts power to re-open certain transactions. In other Sections of the same Chapter provisions are made with the ostensible object of helping the debtors even in the execution stage. Chapter 4 deals with penalties and procedure. The provision of S. 22 is important. It specifically refers to the Usurious Loans Act of 1918 and provides that:
Save as otherwise provided in Sec. 12 nothing in this Act shall affect the powers of a Court under the Usurious Loans Act.
34. A consideration of the various provisions makes it clear that the Act attempts to deal completely and exhaustively with interest, the rate recoverable and the amount which can be decreed by the Courts in certain instances (irrespective of the contracts between the parties) and the registration of moneylenders. The Act also contains stringent provisions that if a moneylender fails to obey the mandatory provisions of the Act his suit is liable to be dismissed. Such in substance being the dominant character of the Act, it will be useful at this stage to examine the scheme of the Government of India Act which confers powers on the different Legislatures. A perusal of the various clauses of Section 100 and Section 107 leads to the conclusion that the scheme of the Government of India Act, 1935, appears to give exclusive jurisdiction to the Federal Legislature over the subjects enumerated in List 1. There is a concurrent field called List 3 wherein both the Federal and the Provincial Legislature can legislate but subject nevertheless to the exclusive powers of the Federal Legislature regarding the subjects of List 1.
35. The Provincial Legislature again has been given exclusive powers to legislate over the matters of List 2 but nevertheless subject to the exclusive powers of the Federal Legislature as just pointed out. Any conflict between the Provincial law and the Federal law or the existing Indian law is avoided by the clear provisions of Sec. 107. From this I conclude that the framers of the Government of India Act must have foreseen that the sharp and definite distinction which they intended to carefully make between the powers of the two Legislatures might not have been attained or possibly could not be attained and that some of the classes of the subjects assigned exclusively to the Provincial Legislatures may have run into and were embraced by some of the enumerated classes of subjects in Lists 1 and 3. Therefore an endeavour was made to provide for cases of apparent conflict and it is with this object that Sec. 100 and Sec. 107 have been so carefully worded. This can be illustrated by taking a few examples from the lists: Item 13 in List 1 relates to Benares Hindu University and Aligarh Muslim University. Item 17 in List 2 is education and would appear to cover Item 13 of List 1. But, by virtue of S. 100, the powers of the Provincial Legislature under Item 17 of List 2 are subject to the exclusive powers of the Federal Legislature under Item 13, that is, the Provincial Legislature has no jurisdiction to legislate with regard to these two Universities. The same remarks apply to Item 52 of List 1 and Item 14 of list 2 as well as to Item 51 of list 1 and Item 30 of list 2. It is unnecessary to multiply further instances. A more apposite illustration is provided by Item 28 of list 1, Item 27 of list 2 and Item 10 of List 3 (the very matter under consideration). It cannot be denied that Item 28 or list 1 is a part of money-lending (Item 27 of list 2) if the words are taken in the general sense and also a part of Item 10, List 3. But by the operation of S. 100 the Provincial Legislature whether acting under List 2 or List 3, have no power to touch cheques and bills of exchange. For example, this may be graphically illustrated by a diagram:
36. Circle A covers the whole field of contracts and, therefore, necessarily covers cheques which is the lower sector of that circle. Circle B deals with money-lending and must cover necessarily, if the words are to be taken in the largest and literal sense, both contracts and cheques; in other words this circle must cut the Circle A including the sector of cheques. The scheme of the Indian Act now comes to our aid to solve this difficulty of overlapping or repugnancy. If the words of S. 100 are kept in view the powers under the heading of money-lending will cover only that portion of Circle B which is not covered by cheques' sector. The Provincial Legislature having concurrent powers with Federal Legislature can legislate with regard to that portion of Circle B which falls within Circle A (outside the sector) provided always that if there is any existing Indian law on this matter, the latter will prevail by virtue of the express provision in S. 107. It should be stated here that any remarks that are being made by me in the course of this judgment with respect to the other provisions of the Act and of the Government of India Act must be clearly understood to be only incidental and must not be taken as deciding finally the questions that may arise hereafter.
37. A large number of Canadian cases which have come up for decision before their Lordships of the Judicial Committee beginning from (1880) 5 Appeal Cases right up to 1937 Appeal Cases, were freely cited before us on behalf of both the parties. These cases concerned the decision of the questions which were raised before their Lordships of the Privy Council from time to time as to whether a certain provision of an Act passed by the Provincial Legislature of Canada or by the Dominion Parliament was or was not intra vires of the powers given to them under the Act — the question in each case being generally whether the provisions of Section 91 of the Canadian Act, in a particular matter controlled or dominated the provision under S. 92 on the same matter or on a cognate matter or vice versa. As instances, see the case of solemnisation of marriage (1912) AC 880, the Railway case (1907) AC 65, the Timber case (1930) AC 357.26 But in my opinion the cases which were referred to in argument are of no material assistance in deciding the matter in controversy before us. They are no doubt very useful and valuable guides to the application of the doctrine of the ‘general and special’ or the ‘overlapping and the occupied field’ rules (if applicable in the present case) but the scheme of the Indian Act to my mind is entirely different from the Canadian Act. The latter gives only exclusive powers to the Provincial Legislature with respect to the subjects enumerated specifically in Sec. 32 but, while bestowing full power on the Dominion Parliament with respect to the matters enumerated in S. 91 also leaves the residual power in the Dominion Parliament under the heading “peace, order and good government of Canada.” In the Indian Act the scheme is wholly different.
38. The doctrine of the occupied field which is found stated in many cases of the Privy Council and which is Item 4 in the synopsis by Lord Tomlin in (1930) AC 111 at p. 118 has been inserted for us in Section 107 of the Indian Act. It may also be useful to note that where it was found impossible to legislate on any of the matters enumerated in Section 91 or Section 92 of the Canadian Act, without incidentally trenching upon the jurisdiction of the other Legislature, the legislation under consideration was held by the Judicial Committee to be good. But that reasoning has no application to the consideration of the Act passed by the Indian Legislature created under the Indian Act because here the powers are given to both exclusively as well as concurrently. I can find no such parallel in the Canadian law of 1867 except to a limited extent under S. 95. The scheme of the Indian Act is entirely different. The residual power is given to the Governor-General under Sec. 104; the Federal Legislature and the Provincial Legislature have been given exclusive powers in certain fields, concurrent powers in another field (the exercise of jurisdiction by the Provincial Legislature being wholly excluded from list 1). In my opinion, the key to the solution of the problem before us is very clearly indicated in S. 100 and S. 107. It will therefore be worse than useless, if not dangerous, to apply the principles which have been enunciated by the Privy Council to govern the construction of the Canadian Act, as governing the construction of the present Act under consideration which is framed entirely on different lines and based upon wholly different scheme of policy. The two Acts are not in pari materia. The Judicial Committee have condemned in strong language this method of construction which the appellant wished us to follow from the anology of another Act. In dealing with the construction of certain Sections in the Income-tax Act (11 of 1922), the High Court in India had relied upon a large number of English cases which depended upon the construction of the English Income-tax Statute. Sir George Lowndes in delivering the judgment of their Lordships of the Judicial Committee in 6 ITC 17827 made the following observations at page 180:
Again, their Lordships would discard altogether the case law which has been so painfully evolved in the construction of the English Income-tax Statutes—both the cases upon which High Court relied and the flood of other decisions which has been let loose in this Board. The Indian Act is not in pari materia; it is less elaborate in many ways, subject to fewer refinements and in arrangement and language it differs greatly from the provisions with which the Courts in this country have had to deal. Under such conditions their Lordships think that little can be gained by attempting to reason from one to the other….
39. See also the observation in 57 IA 11028 at p. 114. I therefore decline to be led away by the argument from analogy based upon the reasonings adopted by their Lordships in deciding cases on the Canadian law. The real question to decide then, as I indicated in the course of the argument several times, is whether the provision under consideration in the Act is on a matter coming under List 2 and whether it conflicts with the provision of any existing Indian law with respect to a matter enumerated in List 3; in other words, whether the provision; that the Courts are precluded from passing a decree for interest beyond the amount of principal, is within the law making powers given to the Provincial Legislature and if so whether it conflicts with any existing Indian law with respect to any matter in List 3. It is obvious and this was not seriously contested before us, that on a plain reading the subject of S. 11 does not fall within the general words of Item 27 in List 2 “money-lending and money-lenders” as well as in Item 10 of List 3 “contracts”. It therefore follows that the Provincial Legislature have complete powers to pass this enactment. But admittedly they have not followed the procedure laid down by S. 107, sub-cl. (2). No sanction of His Excellency the Governor-General has been obtained nor the assent of His Majesty has been signified to this Section. The provisions of S. 107(1) now come into play and Sec. 11 will be of no validity in this Province if it conflicts with any existing Indian law on the subject.
40. Is there then any existing Indian law on this matter? The term “existing Indian law” has been defined by Section 311 of the Government of India Act. It was admitted and indeed it is manifest that there does exist an Indian law with respect to the matter in question. If the present Section had not been enacted we would have been able to dispose of the appeal by deciding the extent to which the respondent would have been entitled to obtain a decree for the amount of interest. But, the provisions of S. 11 leave us no discretion. Apparently therefore there is a serious conflict between the provisions of S. 11 and the provisions of one or more existing Indian laws with respect to this matter which I have already held is enumerated in the concurrent legislative list. The Usury Laws Repeal Act of 1855 by S. 2 definitely directs that in any suit in which interest is recoverable the amount shall be decreed by the Court at the rate agreed upon by the parties.
41. Section 11 of the Act comes into direct conflict with this provision. The Usurious Loans Act of 1918, which is specially mentioned in S. 22 of the Act, was enacted to give additional powers to Courts in certain cases of usurious loans. The powers given by the Act of 1918 are mentioned in S. 3 of that Act, namely it gives powers to the Court “notwithstanding anything in the Usury Laws Repeal Act of 1855” to reopen the transactions between the debtor and creditor where the Court thinks that the interest is excessive and the transaction between the parties is substantially unfair. It is to be noticed that this Section gives the Court wide powers within which it may exercise its discretion but does not cut down the discretion. S. 11 of the Act leaves the Court no discretion whatsoever and therefore it comes into conflict with the Usurious Loans Act of 1918. Similarly, the Indian Contract Act of 1872 by S. 37 provides that the parties to a contract must perform or offer to perform their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law. Before the passing of the Act under consideration, there was no other law beyond that contained in Section 16 of the Contract Act, or the provisions contained in the two Acts of 1855 and 1918, which I have just referred to, which would excuse the performance of a contract if valid to pay the amount of interest calculated at the rate agreed upon by the parties. Therefore S. 11 of the Act comes into conflict with this provision of Section 37 of the Contract Act also. When Sec. 107, sub-cl. (1), is applied to this state of affairs it is clear to my mind that these existing Indian laws, just referred to, shall prevail and the enactment of the Provincial Legislature shall, to the extent of repugnancy, be void; in other words S. 11 cannot operate at all to override the provisions to be found in these Acts of 1855, 1872 and 1918. But, it was argued by learned counsel for the appellants that it is impossible to conceive of any Act which can be framed regarding money-lending and moneylenders which would not contain a provision like Sec. 11, if the Legislature wanted to make such a provision. He referred as an-illustration to the two English Acts 63 and 64 Victoria, Chs. 51, 17 and 18, Geo. 5 Ch. 21. The answer to this argument is that the Provincial Legislature have not been deprived of the power to make this provision. They can always do so by following the procedure laid down by Sec. 107, sub-cl. 2, namely by obtaining the assent of His Excellenoy, the Governor-General or of His Majesty. Mr. Das argued that if Lists 3 and 2 are read together and the doctrine of the general and special as laid down in the Canadian cases is applied, the subject of S. 11 must be deemed to be excluded from Item 10 of List 3 and must be interpreted to fall wholly within the ambit of Item 27 of List 2. As I have already stated it is not permissible to apply the principles which the Privy Council laid down in considering the Canadian Act to the consideration of the Indian Act. The two lists must be read as they stand and if the subject of S. 11 falls within Item 10 on a plain reading thereof, effect must be given to that reading. The Provincial Legislature is not debarred from passing this enactment but if it is to prevail against any existing Indian law they have only to follow the procedure indicated by S. 107, sub-cl. 2. I therefore overrule this contention.
42. Learned counsel for the appellant finally contended that the provision in Sec. 11 to restrict the amount of interest recoverable is not a provision which conflicts with any existing Indian law on the subject because, so he argued, this provision is merely a provision regarding the limitation of suits. He relied upon the observations of the learned Judges of the Calcutta High Court in a number of cases beginning with 12 WR OC 929 and 5 Beng LR 500. In these cases, it was held that the rule of Damdupat was a rule of limitation of suits and therefore was applicable when the parties to a litigation were Hindus residing within the presidency in the town of Calcutta. In my opinion this argument has no weight because apart from the fact that Sir Barnes Peacock did not approve of this argument in 3 Beng LR OC 11330 and the observations of Phear J. in 14 WR 308 are expressly obiter, it seems to me that the Calcutta decisions could be justified by the very words of Section 37 of the Contract Act. The rule of Damdupat prevails as a rule of law within the presidency town if the parties are Hindus. In other words the performance of the contract to pay interest when the principal is reached is excused under the provision of the rule of Damdupat which is “any other law” — the rule of Damdupat does not prevail in this province.
43. The learned advocate for the respondent also contended that the provision under consideration comes into conflict with the provision to be found in O. 34, R. 11 of the CPC. Civil Procedure, he argued, is expressly mentioned in Item 4 in List 3. But I do not agree with this argument. R. 11, O. 34, is part of an adjective law and points out only the mode in which interest is to be calculated after the Court has decided the rate of interest that should be decreed in the particular case before it. The Court decides the rate of interest recoverable not by virtue of its powers under the Code of Civil Procedure but by virtue of the provisions of those existing Indian laws which have been referred to by me above. With the wisdom of this Act this Court is in no sense concerned. A Court of law has nothing to do with a Provincial or a Federal Act lawfully passed except to give it effect according to its tenor. With the wisdom or expediency or policy of an Act lawfully passed no Court has a word to say. All therefore that I can consider and have considered in the arguments under review is whether it is proved that this provision in the Act is within the authority of the Provincial Legislature and if so whether it conflicts with any existing Indian law. Having given this case my most anxious consideration, I come clearly to the conclusion that the provisions of S. 11 of the Act though intra vires of the Bihar Legislature cannot be applied in favour of the appellant in this appeal. I would therefore dismiss this appeal with costs.
D.S/R.K
44. Appeal dismissed.
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