Megh Raj and Another vs Allah Rakhia and Others

Srinivasa Varadachariar, J.—These two appeals have been preferred by certain mortgagees, challenging the correctness of the judgment of

a Special Bench of the Lahore High Court which held that the Punjab Restitution of Mortgaged Lands Act (Punjab Act No. IV of 1938) was intra

vires the Provincial Legislature. The suits out of which the appeals arise were instituted in a subordinate Court in the Province; but, before they

came"" on for trial in the ordinary course, they were, on the application of the mortgagees-Plaintiffs, transferred to the High Court by a special order

of the Court, on the ground that they involved an important and difficult point of law, namely, ""whether the Restitution of Mortgages Act is ultra

vires or intra vires of the Punjab Legislature"". In the High Court, the Punjab Government applied to be impleaded as a party to the suits, on the

ground that it was interested in the decision of the question involved. It was accordingly impleaded as a Defendant ""subject to just exceptions"", and

is thus a party Respondent in the appeals before this Court, though in the Memorandum of Appeal it is the Advocate-General of the Punjab who is

stated to be the Respondent. As soon as the High Court pronounced its opinion on the point of law, the suits were remitted to the subordinate

Court for decision on the merits, but on a certificate granted by the High Court under Section 205 of the Constitution Act, the appeals to this Court

have been preferred and the proceedings in the subordinate Court have in the meanwhile been staved.

The impugned Act of the Punjab Legislature purports to make certain special provisions in respect of mortgages with possession effected before

June 8, 1901. Dealing with such of them as ""subsist"", the Act sets aside the normal procedure for redemption, and authorizes the mortgagor to

apply to the Collector for restitution of possession of the mortgaged land. If the Collector finds that the value of the benefits enjoyed by the

mortgagee while in possession have equalled or exceeded twice the amount of the principal sum originally advanced under the mortgage, he is

authorized to extinguish the mortgage and direct the mortgagee to put the mortgagor in possession. If the value of the benefits enjoyed is less than

twice the amount of the principal sum originally advanced, the Collector is authorized to restore possession of the land to the mortgagor on

payment of compensation to the mortgagee according to a scale fixed in the Act; and on the compensation amount being deposited in court, the

Collector is authorized to declare the rights of the mortgagee extinguished. The Collector is further authorized in all cases to carry out the order for

possession by ejecting the mortgagee; and the civil court is debarred from entertaining"" any claim to enforce any right under a mortgage declared

extinguished under this Act or to question the validity of any proceedings under this Act"".

It was when the mortgagors presented petitions to the Collector under the Act, praying for restitution of possession, that the present suits were

instituted by the mortgagees. The plaints prayed for a declaration of the Plaintiffs'' right to continue in possession until their mortgage claims were

satis-fied in the ordinary course, and for a perpetual injunction restraining the Defendants from prosecuting their petitions before the Collector. The

main ground urged in the plaint was that Punjab Act IV of 1938 was ultra, vires the Provincial Legislature. It may be convenient to point out at this

stage that though the arguments before the High Court and before this Court were mainly based on Section 107 of the Constitution Act, the

Plaintiffs'' plea and even the decision of the High Court arc expressed in terms of ultra vires and intra rires and are not limited in the manner in

which a question of ""repugnancy"" of certain provisions within the meaning of Section 107 of the Constitution Act may be expected to be limited.

This is probably due to the fact that the Plaintiffs also contended that the impugned Act was void as contravening the provisions of Section 298 of

the Constitution Act.

From the judgment of the High Court, it would appear that some argument was urged before that Court based on Section 299 of the

Constitution Act, but as no such argument has been advanced before us, it is unnecessary to say anything about it. The argument based on Section

298 was repeated before us, but it may be briefly disposed of. It has not been suggested that there is anything in the provisions of the impugned

Act which is discriminatory in its nature. All that was relied on was that the date (June 8, 1901) fixed in Section 2 of the Act was the date on which

the Punjab Alienation Act, 1900, came into force and it was said that that Act was discriminatory, and that this Act was part of the same policy,

discriminating between agriculturist communities and non-agriculturist communities in the Punjab. It was also said that in fact and in effect the

working of Act IV of 1938 would benefit members of the agriculturist communities at the expense of the non-agriculturists because the mortgagors

in the province generally belonged to the agriculturist class and the mortgagees to the non-agrigulturist class. No question arises in this case with

reference to the Punjab Alienation Act and we do not propose to say anything with reference to the objections urged against it. When a particular

piece of legislation is impeached as contravening Section 298 of the Constitution Act, the Court has to consider the provisions of the impugned Act

and to determine whether directly or in effect it prohibits any person from acquiring, holding or disposing of property or carrying on any

occupation, trade, business or profession, on grounds only of religion, place of birth, descent, etc. Descent was the only basis of discrimination

suggested in the case, and it was said that the impugned Act in effect prohibited persons of a particular descent (communities classed as non-

agricultural) from folding property. It is impossible to uphold this objection, when once it is admitted, as it was before us, that under the provisions

of the Act agriculturist mortgagees, though they may be fewer in number, were as much liable to be dispossessed by order of the Collector as non-

agriculturist mortgagees.

Proceeding now to the main arguments urged in the case, namely, those based on Section 107 of the Constitution Act, the points for

determination are-

(1) whether the subject-matter of the impugned Act is wholly within the Provincial Legislative List or the Act covers to any extent matters

enumerated in the Concurrent Legislative List, and

(2) whether any and, if so, which of the provisions of the impugned Act are repugnant to any provision of an ""existing Indian law"" with respect to

one of the matters enumerated in List III, the Concurrent Legislative List.

In the judgment of the High Court there is some discussion of the question of the ""pith and substance"" of the Act-but that question does not arise

when objection is taken not under Section 100 of the Constitution Act, but under Section 107(1). Counsel for the Appellant made it clear that it

was not his contention that any of the provisions in the impugned Act were beyond the competence of the Provincial Legislature, because he

recognised that it made no difference on the question of competence, whether the subject-matter fell under List II or under List III of the Seventh

Schedule. But he contended that the High Court erred in holding that the subject-matter of the Act was wholly covered by List II. He admitted that

the opening words of entry No. 21 in List II, namely, ""land, that is to say, rights in or over land"", were very wide and quite general. But he urged

that in respect of certain topics, namely, ""transfer, alienation and devolution"" the scope of that entry must be restricted to ""agricultural land"" as

indicated lower down in the entry itself ; and he maintained that the propriety of such a restriction was confirmed by the fact that by entries Nos. 7,

8 and 10 in List III, wills, intestacy and succession, and transfers and contracts were placed within the concurrent jurisdiction of the Central and

Provincial Legislatures, except as regards agricultural land. If entry No. 21, in List II were thus limited, it would follow, according to him, that the

provisions of the impugned Act, in so far as they applied to property other than agricultural land, would be inoperative to the extent to which they

were repugnant to any existing Indian law: see Section 107(1) of the Constitution Act. On this footing, he attempted to show that the impugned Act

is not limited in its operation to agricultural land, and that some of its provisions are repugnant to certain provisions of the Contract Act and of the

Code of Civil Procedure Code. It will be convenient to take up the latter question first, as it seems easier to reach a definite conclusion thereon.

In Australia, where the Constitution Act contains a provision (s. 109) similar to s, 107 (1) of the Indian Constitution Act, difficulty has

sometimes been felt in precisely defining the test of repugnancy or inconsistency. In the American Constitution there is no corresponding provision.

In the British North America Act, there is no express declaration of the supremacy of Dominion over Provincial laws; but it has been laid down in a

number of cases that where there is- a conflict between Dominion and Provincial legislation, the former is paramout: see Wynes, ""Legislative and

Executive Powers in Australia"", pp. 91 and 92. The same author accordingly observes at p. 94 that ""American cases are to be applied with

caution, while Canadian cases may lay down a principle too narrow for application"" to cases where there is express statutory provision of the kind

now under consideration. There however appears to be no serious difficulty in the class of cases (referred to by Wynes on p. 102) of which Stock

Motor Ploughs v. Forsyth (1932) 48 Com. L.R. 128, is an illustration. The principle of that decision is that where the paramount legislation does

not purport to be exhaustive or unqualified, but itself permits or recognises other laws restricting or qualifying the general provision made in it, it

cannot be said that any qualification or restriction introduced by another law is repugnant to the provision in the main or paramount law. Hume v.

Palmer (1926) 38 Com. L.R. 441, furnishes another illustration of this principle. By Section 2 of the Colonial Laws Validity Act, 1865, ""any

colonial law which is or shall be in any respect repugnant to the provisions of any Act of parliament extending to the Colony to which any such law

may relate"" was declared to be void and inoperative to the extent of such repugnancy. The Commonwealth Legislature had passed a Navigation

Act and it was contended that some of its provisions were repugnant to the United Kingdom Merchant Shipping Act, 1894. This objection was

answered by a reference to Section 735 of that Act; which provided for the Legislature of any British Possession repealing any provisions of that

Act relating to ships registered in that Possession.

Section 37 of the Indian Contract Act, which lays down that parties to a contract must either perform or offer to perform their respective

promises, qualifies this statement by the words ""unless such performance is dispensed with or excused under the provisions of ... any other law"".

When the statement of the general rule itself is so qualified, it is difficult to see how a law which excuses performance of any particular kind of

contract can be said to be in consistent with the section, which must be taken as a whole. The impugned law will only be one of the special cases

contemplated or saved by the main or paramount Act. Likewise, Section 9 of the Code of Civil Procedure Code, which postulates the jurisdiction

of the ordinary civil courts to try all suits of a civil nature, excepts ""suits of which their cognizance is either expressly or impliedly barred""; and

Section 4 lays down that in the absence of any specific provision to the contrary, nothing in the Code shall be deemed to limit or otherwise affect

any special form of procedure prescribed by or under any other law for the time being in force. As held by this Court in The United Provinces v.

Atiqa Begum (1940) F.C.R. 110, at pp. 137, 145, these qualifying or saving words preclude the contention that an Act which bars a civil remedy

in certain cases is repugnant to the provisions of the Code of Civil Procedure.

The position will be even more obvious, if another test of repugnancy which has been suggested in some cases is applied, namely, whether there

is such an inconsistency between the two provisions that one must be taken to repeal the other by necessary implication. For the application of this

test, it will be immaterial whether the Central law is earlier or later in date than the Provincial law. If, for the sake of argument, we assume that the

Contract Act or the Code of Civil Procedure was passed after the impugned Punjab Act, it will be impossible to contend that the provisions

already referred to in these subsequent enactments will have the effect of repealing by necessary implication the earlier Punjab law, when they

expressly save the operation and effect of other laws dealing with matters, which in the absence of such special law will undoubtedly be governed

by the general Central enactment. In this view, the objection based on Section 107(1) of the Constitution Act will not avail the Appellants, so far as

either the Code of Civil Procedure or Section 37 of the Contract Act is concerned. If however it should be found that the substantive provisions of

an impugned Act are to any extent void or inoperative, any attempt to exclude attack on them by barring the jurisdiction of civil courts will be open

to criticism as ""an attempt to do by indirect means something which the Provincial Legislature was not entitled to do directly (see Board of Trustees

of Lethbridge v. Independent Order of Foresters [1940] A.C. 513, at pp. 533, 534.).

It was pointed out by counsel for the Appellants that under Sections 69 and 70 of the Contract Act, a mortgagee will be entitled to be

reimbursed in respect certain payments made by him for the benefit of the mortgagor and it was suggested that, on a strict interpretation of ss. 7, 8

and 12 of the impugned Act. the mortgagee might be deprived of his right to such reimbursement. To this it was said by way of answer that on a

proper interpretation of the relevant sections of the Punjab Act no such consequence would follow, and that rights of this kind belonging to the

mortgagee would be saved either by holding that the extinction under the Act and the exclusion of the civil court''s jurisdiction related only to his

rights qua mortgagee or by taking such disbursements into account when calculating the ""value of the benefits enjoyed by the mortgagee while in

possession"" as directed in Section 7. We do not feel called upon at this stage to express any opinion on these questions relating to the

interpretation of the Act. It is sufficient to say that the Act does not clearly or in terms take away any rights which a mortgagee may have under

Sections 69 and 70 of the Contract Act, and that no particular provision in the Act can accordingly be said to be repugnant to those provisions of

the Contract Act.

In the argument before the High Court, a passing reference seems to have been made in this connection to the Limitation laws and to the

Transfer of Property Act (Central Act No. IV of 1882). There is no provision in the impugned Act which conflicts with the Indian Limitation Act

(Central Act No. IX of 1908), and even if there were any, the saving of special or local laws in Section 29(2) of the Limitation Act would preclude

the argument of repugnancy, for the reasons above indicated. No argument was urged before us with reference to the Transfer of Property Act for

the obvious reason that a plea of repugnancy under Section 107(1) of the Constitution Act could be raised only on the strength of statute law or

statutory rules and the Transfer of Property Act is not as such in force in most of the Punjab.

This conclusion is sufficient to dispose of the appeal ; but as the other question was discussed at some length in the arguments before us and

we do not wish to be understood as wholly accepting the view expressed in the judgment of the High Court as to the scope of entry No. 21 in the

Provincial List, we think it right to make a few observations on that aspect of the case.

The expression ""agricultural land"" has not been defined in the Constitution Act. It must accordingly be understood in the sense which it

ordinarily bears in the English language. In the judgment of the High Court, the definition of ""land"" in the English Interpretation Act, 1889, has been

quoted. It is unnecessary to refer to it here, because it was conceded before us on both sides that in the Constitution Act ""land"" comprises both

corporeal and incorporeal rights and interests. This is indeed clear from the words ""rights in or over land"" in the opening portion of entry No. 21.

The discussion before this Court related to the significance of the term ""agricultural"". In the impugned Act Section 3(1) provides as follows:

The expression ''land'' means land which is not occupied as the site of any building in a town or village and is occupied or let for agricultural

purposes or for purposes subservient to agriculture or for pasture, and includes-

(a) the sites of buildings and other structures on such land;

(b) a share in the profits of an estate or holding ;

(c) any dues or any fixed percentage of the land revenue payable by an inferior land owner to a superior landowner;

(d) a right to receive rent;

(e) any right to water enjoyed by the owner or occupier of land as such ; (f) any right of occupancy; and (g) all trees standing on such land."" It was

contended on behalf of the Appellant--

(1) that lands occupied or let for pasture could not always be regarded as agricultural land, and likewise the sites of buildings and other structures

on agricultural or pasture land ;

(2) that ""holding"" in paragraph (6) was not always limited to agricultural land ; and

(3) that in paragraph (d) the right to receive rent was not limited even by reference to ""such land"" as in some of the other paragraphs, and might

well include rent from non-agricultural property.

Objection was lastly taken to the inclusion in paragraph (g) of ""trees standing on such land"" in the definition of land. It was pointed out that in

Bkagwana v. Gopi A.I.R. 1935 Lah. 202, it had been held by the Lahore High Court that trees would not fall within the corresponding definition

of ""land"" in the Punjab Alienation Act and that paragraph (g) in the definition was added to meet this decision. We do not propose to express any

definite opinion on the several steps involved in this part of the argument. It may however be observed that there is force in the contention that

entry No. 21 in List II should be read and interpreted as a whole and in the light of entries Nos. 7, 8 and 10 of List III.

As regards the connotation of the word ""agricultural"", it may be pointed out that ""agriculture"" has been variously defined in several English and

Indian statutes for the purposes of these statutes and it is neither useful nor legitimate to attempt to draw any inference from these statutory

definitions for the purpose of determining the ordinary connotation of the word in the English language. In some decisions, the Court has thought it

right to place- a restricted interpretation on the expression ""agricultural purpose"" in view of indications afforded by the particular Act which had to

be considered by the Court: see Chandrasekhara Bharati Swamigal v. Duraisami Naidu I.L.R. (1931) Mad. 900, where all the prior decisions are

reviewed. In Murugesa v. Chinnathambi I.L.R. (1901) Mad. 421, a Division Bench of the Madras High Court had to discuss the meaning of the

expression ""agricultural purposes"" in Section 117 of the Transfer of Property Act. It was pointed out in that case that ""agriculture"" was used in a

narrow sense as well as in a more general sense, and that the latter comprehended not merely the raising of grain or food crops but also the

cultivation of the ground for the purposes of procuring vegetables and fruits for the use of man and beast, including gardening or horticulture and

the raising or feeding of cattle and other stock. One of the learned Judges who had held in an earlier case that land used for a coffee garden was

not used for an agricultural purpose"" stated in this later judgment that on further consideration he was of the opinion that his earlier view was

wrong. The view thus expressed by the learned Judge in his later judgment is in accord with the decision of the Judicial Committee in Kaju Mal v.

Saligram I.L.R. (1923) Lah. 50, where dealing with a definition in the Punjab Alienation Act practically identical in its terms with the definition in

the impugned Act. Their Lordships confirmed a decision of the Punjab Chief Court to the effect that land used as a tea garden was used for

agricul turai purposes"". In the judgment of the Chief Court (which was generally approved by Their Lordships) it was observed that"" the term

''agricultural land'' is used in the Act of 1905 in its widest sense to denote all land which is tilled""; see Kaju Mal v. Saligrami Punjab Record 1919,

case No. 91. The Chief Court had held that land covered by a natural forest was not agricultural land, and this view also would seem to have been

confirmed by the Judicial Committee: see also Province of Bihar v. Pratap U.N.S. Deo (1941) 22 PLT 483, and for further discussion of the

question reference may be made to Deen Muhammad Mian v. Hulas Narain Singh (1942) 25 PLT 143.

No reason has been suggested by counsel for the Appellant why ""agricultural land"" mentioned in entry No. 21 of List II of the Seventh

Schedule should be limited to what has been described in the cases as the narrower meaning of the expression. But the view indicated in Murugesa

v. Chinnathambi I.L.R. (1901) Mad. 421, by its approval of Yenkayya v. Ramasami I.L.R. (1898) Mad. 39, viz., that land used for a cocoanut

garden must be deemed to be used for an ""agricultural purpose"" has not gone unchallenged, and even more so the view taken in Panadi Pathan v.

Ramaswami Chetti I.L.R. (1922) Mad. 710, that a lease of land for growing casuarina trees to be used for fuel was a lease for agricultural

purposes ; see Chandrasekhara Bharati Swamigal v. Duraisami Naidu I.L.R. (1931) Mad. 900. In the last cited case, Reilly J. observed that

agriculture cannot be defined by the nature of the products cultivated but should be defined rather by the circumstances in which the cultivation is

carried on"". The learned Judge then proceeded: ""When the land is covered, with trees which have to stand on it for a number of years sometimes

as long as a century, during most of which period the land itself is untouched, to describe that as agriculture appears to me inappropriate"". The

decision of the Judicial Committee in Kesho Prasad Singh v. Sheo Prakash Ojha I.L.R. (1921) All., would at first sight seem to lend some support

to this view, as Their Lordships (without any discussion) confirmed the view of the High Court that Section 79 of the Agra Tenancy Act which

related to ""land held for agricultural purposes"" had no application to the ""grove"" in question in that case. It is stated in the judgment of the High

Court in Kesho Prasad Singh v. Sheo Prakash Ojha I.L.R. (1921) All. 19, at p. 33. that the grove had been planted on land granted by the

zamindar for the purpose of planting a grove, on condition in the grantee agreeing to deliver One-half of the fruit to the zamindar. Following a line

of authority in the Allahabad High Court, the learned Judges held that ""land held for the purpose of a grove is not land held for agricultural

purposes"". From the judgment of Sir Sundar Lal in Habibullah v. Kalyandas (1914) 12 A.L.J. 1080., it would however appear that the decisions

on the point in that Province had not been uniform, and the cases which took the view above stated proceeded mainly on the supposed intention of

the Agra Tenancy Act and the prevailing custom according to which a grove-holder only owns the trees and has no right as a rule in the land after

the trees have been cut"". It does not therefore seem right to treat Kesho Prasad Singh''s Case as laying down any principle or test of general

application. In this state of the authorities, it seems to us best to refrain from deciding the precise scope of the expression ""agricultural land"" or the

propriety of excluding ""land on which a grove has been planted"" from the category of agricultural land. It may on a proper occasion"" be necessary

to consider whether for the purposes of the relevant entries in Lists II and III of the Constitution Act it will not be right to take into account the

general character of the land (as agricultural land) and not the use to which it may be put at a particular point of time. It is difficult to impute to

Parliament the intention that a piece of land should, so long as it is used to produce certain things, be governed by and descend according to laws

framed under List II, but that when the same parcel of land is used to produce something else (as often happens in this country), it should be

governed by and descend according to laws framed under List III.

The decision in Bhagwana v. Gopi A.I.R. 1935 Lah. 202, was, as stated in the judgment, concerned only with the trees and not with the land

occupied by those trees; and there was no occasion therefore to discuss the meaning of the word ""agriculture"". According to the ''principle

recognised in Section 8 of the Transfer of Property Act, trees on land are ordinarily regarded as an incident there of, though it is permissible to deal

with the trees independently of the land. Whether paragraph (g) of the definition in the impugned Act is intended to refer only to cases where the

land and the trees thereon have been dealt with together, or also to cases where the trees have been dealt with independently of the land they stand

on, and whether even in the latter case paragraph (g) can be said to deal with ""agricultural land"" within the meaning of entry No. 21 in List II of the

Constitution Act, are questions which we prefer to leave alone as unnecessary to be considered for the purposes of this case.

If the general meaning of ""agriculture"" is to be adopted, even land used for pasture may in many cases fall within the definition of ""agricultural

land"" (sec King Emperor v. Alexander Allen I.L.R. (1901) Mad. 627, and it is unnecessary to decide whether there may not be at least some

instances in which pasture land cannot in any sense be described as ""agricultural land"". We shall only add that if paragraphs (b) and (d) of the

definition in the impugned Act are to be regarded as not limited to ""such land"" as is referred to in the previous paragraphs though these words are

not reproduced in paragraphs (b) and (d), they may possibly cover cases not relating to ""agricultural land"" and to that extent fall under List III and

not under List II.

Our attention was drawn to some of the provisions in the Act with reference to which it was stated that their language was not by any means

very clear or definite ; and that as the working of the Act was left in the hands of the Collector, the Commissioner and the Financial Commissioner

and the jurisdiction of the civil courts had been excluded, parties might run the serious risk of some of these provisions being misinterpreted or

misapplied. It was, for instance, said that already the expression ""subsisting mortgages"" in Section 2 and the expression ""sum originally advanced

in s.s. (2) of Section 7 had given rise to difficulty. It was also pointed out that paragraph (a) of s.s. (1) of Section 7 provides for the ""mortgage

being extinguished, while Section 8 speaks of the ""rights of the mortgagee"" being extinguished, and that Section 12 prohibits ""any right under a

mortgage"" being enforced; and it was argued that it was not clear whether the scope of these three provisions was identical or whether they

differed in their scope and effect. It does not seem to us right to express any opinion on these hypothetical questions ; and though the discussion

revealed the possibility of some of the provisions in the Act being so interpreted (or misinterpreted) as to cause unnecessary or unmerited loss to

mortgagees, it will not be reasonable to assume that the tribunals to which the Legislature has entrusted the working of the Act will not properly

interpret these provisions. Under Section 13 of the Act, power is conferred on the Provincial Government to make rules for the purpose of giving

effect to the provisions of the Act, and paragraph (c) of s.s. (2) of that section refers in particular to the principles by which the Collector shall

assess the amount due under the mortgage and the value of the benefits accruing to the mortgagee while in possession. Any obscurity or difficulty

arising out of the wording of any provisions in the Act can be met by the insertion of definite and appropriate provisions in the rules to be thus

framed.

In the view we have taken on the question of ""repugnancy"" within the meaning of Section 107(1) of the Constitution Act, the appeals must fail,

even if it can be said that the provisions of the impugned Act affect ""property other than agricultural land"". The appeals are accordingly dismissed,

except to the extent indicated below.

In both the cases, the Plaintiffs-mortgagees have been directed by the High Court to pay costs to the Punjab Government in that Court. As

already stated, the Government intervened in this litigation by its own choice and no reasons have been suggested in the High Court''s judgment nor

was any shown before us to justify a departure from the usual rule that the intervener is not entitled to costs. The orders as to costs in both the

cases are accordingly set aside. In this Court, the Appellants will pay the costs of the Punjab Government in the first of these two appeals.