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Shah, C.J.—This reference has been made by the Civil Judge, Senior Division, Bhavnagar, and the questions referred to us are these:
(1) Whether the Khedur Sanrakshan Dhara of the Bhavnagar State is inconsistent with the provisions of Article 14 of the Constitution and is void under Article 13(1) after the coming into force of the Constitution on 26th January 1950.
(2) If it is not so void, whether in respect of the new transactions commenced after the formation of the Saurashtra State on 1st March 1948, an agriculturist can get the benefit of the Act simply for the reason that the village in which he resides was a part of the area constituting the former Bhavnagar state.
In the Bhavnagar State there was what is called the Sansthan Bhavnagar Khedut Sanrakshan Dhara modelled on the lines of the Bombay Deccan Agriculturists Relief Act. On the integration of the Bhavnagar State and. the other States of Kathiawar and the formation of the State of Saurashtra on 1st March 1948, the Raj Pramukh promulgated Ordinance No. 1 of 1948 by Section 4 whereof it was enacted that when the administration of any Covenanting state has been taken over by the Raj Pramukh, or when any State, Estate or Taluka has been merged in the State of Saurashtra, all laws, ordinances, Acts etc., having the force of law in the Covenanting States shall continue to remain in force until repealed or amended. By Section 5 of Ordinance No. II of 1948, it was provided that the High Court shall apply the laws and the usages prevailing in the States till such time as a duly constituted authority modifies such laws prevailing in them. The Sansthan Bhavnagar Khedut Sanrakshan Dhara, hereinafter called the Act, was one of the laws which continued to remain in force and the said law is being administered and enforced in the area constituting the former Bhavnagar State till now. In one of the suits falling under the Act, it was contended on behalf of the Plaintiff moneylender that inasmuch as the Act applies to the Kheduts of part of the Saurashtra. State, viz., those who resided in and carried on agriculture within the area of the former Bhavnagar State and did not apply to the Kheduts of the remaining parts of the Saurashtra State, it denies to these latter equality before the law and that it also discriminates against the moneylenders dealing with agriculturists of the former Bhavnagar State inasmuch as it subjects them to disabilities arising under the Act, while moneylenders'' in other parts of the Saurashtra State are not so subjected. It was therefore urged that the Act was inconsistent with Article 14 of the Constitution.
Now dealing with the question of equality before the law and the equal protection of the laws guaranteed by Article 14, Fazl Ali J. observed as follows in -- Chiranjit Lal Chowdhuri Vs. The Union of India (UOI) and Others, :
This Article corresponds to the equal protection clause of the Fourteenth Amendment of the Constitution of the United States of America, which declares that "no State shall deny to any person within its jurisdiction the equal protection of the laws.
Professor Willis dealing with this clause sums up the law as prevailing in the United. States in regard to it in these words:
Meaning and effect of the guaranty -- The guaranty of the equal protection of the laws means the protection of equal laws. It forbids class legislation, but does not forbid classification which rests upon reasonable grounds of distinction. It does not prohibit legislation, which is limited either in the objects to which it is directed or by the territory within which it is to operate. ''It merely requires that all persons subjected to such legislation shall be treated alike under like circumstances and conditions both in the privileges conferred and in the liabilities imposed. The inhibition of the amendment ... was designed to prevent any person or class of persons from being singled out as a special subject for discriminating and hostile legislation.'' It does not take from the States the power to classify either in the adoption of police laws, or tax laws, or eminent domain laws, but permits to them the exercise of a wide scope of discretion, and nullifies what they do only when it is without any reasonable basis. Mathematical nicety and perfect equality are not required. Similarity, not identity of treatment, is enough, If any state of facts can reasonably be conceived to sustain a classification, the existence of that state of facts must be assumed. One who assails a classification must carry the burden of showing that it does not rest upon any reasonable basis.
(Page 579, 1st Edition of "Constitutional Law" by Prof. Willis).
Having summed up the law in this way, the same learned author adds:
Many different classifications of persons have been upheld as constitutional. A law applying to one person or one class of persons is constitutional if there is sufficient basis or reason for it.
There can be no doubt that Article 14 provides one of the most valuable and important guarantees in the Constitution which should not be allowed to be whittled down, and, while accepting the statement of Professor Willis as a correct exposition of the principles underlying this guarantee, I wish to lay particular emphasis on the principle enunciated by him that any classification which is arbitrary and which is made without any basis is no classification and a proper classification must always rest upon some difference and must bear a reasonable and just relation to the things in respect of which it is proposed.
Dealing with the same question, Mukherjea J. held in the same case, at p. 57 of the judgment, that the guarantee against the denial of equal protection of laws does not mean that identically the same rules of law should be made applicable to all persons within the territory of India in spite of differences of circumstances and conditions. The learned Judge observed:
As has been said by the Supreme Court of America, "equal protection of laws" is a pledge of the protection of "equal laws," See -- Yick W.C. v. Hopkins 118 US 356 at 369, and this means "subjection to equal laws applying alike to all in the same situation." Vide -- Southern Railway Co. v. Greene 216 US 400 at p. 412. In other words, there should be no discrimination between the person and Anr. if as regards the subject-matter of the legislation their position is the same. I am unable to accept the argument of Mr. Chari that a legislation relating to one individual or one family or one body corporate would per se violate the guarantee of the equal protection rule. There can certainly be a law applying to one person or to one group of persons and it cannot be held to be unconstitutional if it is not discriminatory in its character. (See Willis, Constitutional Law, p. 580). It would be bad law "if it arbitrarily selects one individual or a class of individuals, one corporation or a class of corporations and visits a penalty upon them, which is not imposed upon Ors. guilty of like delinquency". (See -- Gulf C. and S.F.R. Co. v. Ellis (1897) 165 US 150 at 159)
On the same point Das J. observed as follows:
"Equal protection of the Laws", as observed by Day J. in -- Southern Railway Company v. Greane (1909) 216 U.S. 400, "means subjection to equal laws, applying alike to all in the same situation". The inhibition of the Article that the State shall not deny to any person equality before the law or the equal protection of the laws was designed to protect all persons against legislative discrimination amongst equals and to prevent any person or class of persons from being singled out as a special subject for discriminating and hostile legislation. It does not, however mean, that every law must have universal application, for all persons are not, by nature, attainment or circumstances, in the same position. The varying needs of different classes of persons often require separate treatment and it is, therefore, established by judicial decisions that the equal protection clause of the Fourteenth Amendment of the American Constitution does not take away from the State the power to classify persons for legislative purposes. This classification may be on different basis. It may be geographical or according to objects or occupations or the like. If law deals equally with all of a certain well-defined class it is not obnoxious and it is not open to the charge of a denial of equal protection on the ground that it has no application to other persons, for the class for whom the law has been made is different from other persons and, therefore, there is no discrimination amongst equals. It is plain that every classification is in some degree likely to produce some inequality, but mere production of inequality is not by itself enough. The inequality produced, in order to encounter the challenge of the Constitution, must be "actually and palpably unreasonable and arbitrary". Said Day J. in -- Southern Railway Co. v. Greene 1909 216 U.S. 400 supra:
While reasonable classification is permitted, without doing violence to the equal protection of the laws, such classification must be based upon some real and substantial distinction, bearing a reasonable and just relation to the things in respect to which such classification is imposed; and the classification cannot be arbitrarily made without any substantial basis. Arbitrary selection, it has beep said cannot be justified by calling it classification.
Therefore if there is a substantial basis for a classification based on a reasonable differentiation, it is permissible for a State to have different laws in different parts of it. The State may also undertake legislation by stages and may enact it territory-wise or even classwise, but the basic fact to justify such legislation is that there must be some reasonable basis and that the law will not discriminate arbitrarily. It is open to a State to legislate territorywise, that is, to have a classification based on. geographical distinction and this position has been fairly conceded by Mr. Shah who argued amicus curiae for the Plaintiff moneylender. However the distinction must rest upon real and substantial distinction bearing a reasonable and just relation to the. facts as they exist and in respect of which the classification is made.
Now the Act having been continued in force by the Saurashtra State, for all practical purposes it must be deemed to be a law of the Saurashtra State. The application of such a law to only a part of the Saurashtra State can well be justified provided special reasons exist which induced the Saurashtra State to apply the said law to this particular area; as for instance that the Kheduts of the said area require special protection on account of their backward state as compared to the Kheduts of the remaining areas of the Saurashtra State. If it is not possible to justify the legislation on any such ground then it cannot be denied that the Act is discriminatory and denies the protection thereof to the Kheduts of the remaining areas of the Saurashtra State, and that it also discriminates against the moneylenders of the area of the former Bhavnagar State inasmuch as it subjects them to certain disabilities as against moneylenders in the remaining part of the Saurashtra State. It is not urged by the learned Advocate General, and indeed it is not possible to urge that any special need or considerations existed which justified the application of the Act to the area of the former Bhavnagar State as against the rest of Saurashtra State. The needs of the agriculturists for protection against the moneylenders are common all over the Saurashtra State and though it is true that the Act is a beneficial measure so far as the agriculturists are concerned that is not the determinative factor and it will not prevent the Act from being discriminatory. The test is whether any special needs or circumstances exist which justify a classification territory-wise or that the agriculturists of the former Bhavnagar State by reason of their backwardness vis-a-vis the agriculturists of the rest of the Saurashtra State require the protection of the Act, whereas the latter do not stand in need of such protection.
This does not appear to have been the consideration weighing with the Saurashtra State when it decided to continue the application of the Act after the formation of the new State; nor as I said, has the State any valid reasons even now to justify the application of the Act to that particular area, and to keep the agriculturists of the remaining part of the State deprived of the benefits of the Act, or not to subject the moneylenders of the rest of the State to the disabilities under the Act. The preamble to the Ordinance, No. 1 of 1948, says, inter alia, "and whereas the Raj Pramukh considers it expedient to provide for the peace and good Government of the State established by the covenant and for the taking over the administration of the Covenanting States and certain other States, Estates and Talukas etc.," he was pleased to make and promulgate the ordinance. Therefore the idea in continuing the application of the Act was to provide for the peace and good Government of the State, and it does not at all appear that the State considered the application of the Act necessary having regard to the special needs and conditions of the agriculturists of the Bhavnagar State as compared to the needs and conditions of the agriculturists of the remaining part of the Saurashtra State.
However, the learned Advocate General contended that the onus lies on the Plaintiff moneylender to prove that the needs and conditions of the agriculturists in the rest of the State are equally the same as those of the agriculturists of the former Bhavnagar State and that in the absence of such proof the application of the Act to the latter should be taken as not constituting a discrimination against the Ors. ; and, in support of this proposition, he relied on the observations of Fazl Ali J. in Chiranjit Lal Chowdhuri Vs. The Union of India (UOI) and Others, . The learned Judge observed that the presumption is always in favour of the constitutionality of an enactment, and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. The learned Judge referred to -- Middleton v. Texas Power and L. Co. 248 US 152 and 157, and quoted the following observations:
It must be presumed that a legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based upon adequate grounds.
In this view the learned Judge held that the onus was on the Petitioner to show that the impugned legislation was arbitrary and unreasonable, and that there were other Companies in the territory which should have been subjected to the same disabilities. On this question of onus, a similar view was taken by Mukherjee J. in the same case. Das J. however, observed as follows:
If there is a classification, the Court will not hold it invalid merely because the law might have been extended to other persons who in some respects might resemble the class for which the law was made, for the Legislature is the best judge of the needs of the particular classes and to estimate the degree of evil so as to adjust its legislation according to the exigency found to exist. If, however, there is, on the face of the statute, no classification at all or none on the basis of any apparent difference specially peculiar to any particular individual or class and not applicable to any other person or class of persons and yet the law hits only the particular individual or class it is nothing but an attempt to arbitrarily single out an individual or class for discriminating and hostile legislation. The presumption in favour of the Legislature cannot in such a case be legitimately stretched so as to throw the impossible onus on the complainant to prove affirmatively that there are other individuals or class of individuals who also possess the precise amount of the identical qualities which are attributed to him so as to form. a class with him. As pointed out by Brewer J. in the -- Gulf C and S Fe'' Rly Co. v. W.H. Ellis (1897) 165 US 150, while good faith and a knowledge of existing conditions on the part of a Legislature was to be presumed, yet to carry that presumption to the extent of always holding that there must be some undisclosed and unknown reason for subjecting certain individuals or corporations to hostile and discriminating legislation was to make the protecting clause a mere rope of sand, in no manner restraining State action.
These observations are pertinent to the facts of the present case and I respectfully agree with them. If therefore there is no apparent difference specially peculiar to the agriculturists of the former Bhavnagar State, and still if the law benefits them alone or hits the moneylenders of that area only then the Act must be taken as arbitrarily singling them out for discrimination, and it will not be proper to throw the onus on the Plaintiff in this case to prove affirmatively that the agriculturists of the remaining part of the Saurashtra State possess identical qualities so as to form a class with the agriculturists of the former Bhavnagar State; or that the moneylenders of the remaining part of the Saurashtra State do also require to be subjected to the same disabilities. the position is so obvious that it does not require any affirmative proof on either of these points; and in truth it has not been suggested by the State that the Bhavnagar agriculturist needs a special protection. The indebted state of the agriculturists and the qualities of the moneylenders are the same all over Saurashtra. we do not think therefore that the answer to this question which has been referred to us should rest on the mere point of onus. Therefore, unless the Act is based on the special needs and circumstances of the agriculturists of the former Bhavnagar State and, therefore, on real and substantial distinctions, it cannot be justified and must be taken as denying the equal protection of laws and thereby contravening Article 14 of the Constitution.
The learned Advocate General also urged that Section 4 of Ordinance No. 1 of 1948 itself did not create any discrimination, that it merely continued the application of the law as it stood before and he relied on -- Ramjilal Vs. Income Tax Officer, Mohindargarh, . It is true that in the present case the discrimination was not in the Sansthan Bhavnagar Khedut Sanrakshan Dhara itself, but it arose on the integration of the Bhavnagar State and other States into the State of Saurashtra in March 1948 because most of the other States did not have a similar law. As pointed out in a judgment of the Division Bench of the Rajasthan High Court in - ''Civil Miscellaneous Case No. 1 of 1951'' the similarity between -- ''Ramjilal''s case'' and this case ends there. In Ramjilal''s case only the pending proceedings were allowed to be concluded according to the law which existed when the proceedings arose and thereafter the Patiala Law was to apply equally throughout the State. There is no question of pending proceedings in the present case and the inequality arose on the formation of the Saurashtra State in March 1948. So long as the Constitution was not there, the inequality did not matter, but on the coming into force of the Constitution on 26th January 1950, if the inequality made the law inconsistent with the provisions of Chapter III, then the law became bad to the extent of such inconsistency. As held by Wanchoo C.J. in that case if the impugned Act can never be hit by Article 14 on the ground that when it was passed there was no inequality in it, the provisions of Article 13 would become a dead letter and all laws would continue to be followed in spite of Article 13(1) even though they may be hit by the provisions of Chapter III of the Constitution. There is therefore no substance in this contention of the Advocate General.
It was next urged that the persons whose rights are hit by the Act can alone complain and not the Ors. , and that inasmuch as the agriculturists of the Saurashtra State, outside the old Bhavnagar State, never received the benefit of the Act no question of the infringement of their rights can arise. It is urged that these other agriculturists did not have any such benefits before and the fact that the benefits are denied to them now will not therefore constitute discrimination. The contention is good as far as it goes. However it ignores the fact that it is the moneylenders of the former Bhavnagar State who are hit and the Act discriminates against them vis-a-vis the moneylenders of the rest of the State; and as their interests are vitally affected, the present Plaintiff who is one of them, has the right to raise this question of discrimination even though there may not be any discrimination between one moneylender and Anr. moneylender of the former Bhavnagar State.
For the abovesaid reasons we hold that the impugned Act contravenes Article 14 and is therefore void and unconstitutional under Article 13(1) of the Constitution as from 26th January 1950, and we answer the question accordingly.
The second question has been referred to us suo motu by the learned Judge and is not raised by any of the parties. It is no doubt of academic interest in the present case, and though ordinarily we would be disinclined to answer points of academic interest, since the question has been raised and argued and since it is likely to arise in other cases, we propose to deal with it. The question as framed is if the Act is not so void, meaning if it is not void from the coming into force of the Constitution on 26th January 1950, whether in respect of the transactions commenced after the formation of the Saurashtra State on 1st March 1948, the benefit of the Act can be given to the agriculturist simply on the ground that he resides within the territory of the former Bhavnagar State. The question is not framed properly. If the impugned Act is void from 26th January 1950, as we hold it is, still the transactions entered into before that date cannot be affected. As held in -- Keshavan Madhava Menon Vs. The State of Bombay, , before the Constitution came into force, there was no such thing as fundamental rights. As the fundamental rights became operative only from the date of the Constitution the question of the inconsistency of the existing laws with those rights must necessarily arise on and from the date those rights come into being. Therefore, Article 13(1) can have no retrospective operation but is wholly prospective. If an act was done before the commencement of the Constitution in contravention of the provisions of any law which, after the Constitution, becomes void, with respect to the exercise of any of the fundamental rights, the inconsistent law is not wiped out so far as the past act is concerned. Again the fact of the Act being valid till 26th January 1950 has in the manner in which the question is put by the learned Judge, little relevance, because the ground on which the learned Judge feels a doubt as to the applicability of the Act after the formation of the Saurashtra State in March 1948 is that the agriculturist of the area comprising the former Bhavnagar State is no longer an agriculturist of the Bhavnagar State within the meaning of the Act and has become an agriculturist of the Saurashtra State.
However that may be, we will deal with the question in the spirit in which it is put. Now it is true as stated by the learned Judge, that on the formation of the Saurashtra State all the agriculturists residing in the State, became the agriculturists of the Saurashtra State and thereafter there did not remain any class of agriculturists which might be called the agriculturists of the Bhavnagar State. It is also true that the Act was intended to benefit the agriculturists of the Bhavnagar State, and at first sight it might appear improper to treat those agriculturists as if they still remained agriculturists of the Bhavnagar State though that State exists no longer. The application of the Act to these agriculturists may also create anomalous situations and may present difficulties in its operation, but these are not considerations of vital importance. The Act having been continued in force by the Saurashtra State, and as the Act was valid till the coming into force of the Constitution, as we have held on the first point, it has to be applied in the case of those to whom it is applicable regardless of the difficulties in the operation of the Act. The impugned Act is valid and applicable from the date of the formation of the Saurashtra State till 26th January 1950. Therefore to the transactions entered into between 1st March 1948 and 26th January 1950 the Act will apply and claims in respect of the same must be determined in accordance with the provisions of the Act. We answer Question No. 2 referred to us accordingly. As a matter of precaution we might as well state that to the transactions prior to 1st March 1948 the Act will necessarily apply. Before concluding we desire to express our thanks to the learned Advocates who appeared amicus curiae for their valuable assistance.
Baxi, J.
I agree.