Patna High Court
Ishwar Das Murlidhar And Ors. vs State Of Bihar And Anr. on 15 April, 1983
Equivalent citations: AIR1983PAT281, AIR 1983 PATNA 281, (1983) PAT LJR 455, 1983 BBCJ 542, (1983) BLJ 410
JUDGMENT P.S. Sahay, J.
1. This writ application relates to a case under the Bihar Debt Relief Act, 1976 (hereinafter referred to as the Relief Act). The petitioners have prayed for quashing the letter of the Collector sent to the Anchal Adhikari, as contained in Annexure-4, and the order of the Anchal Adhikari, as contained in Annexures 5 and 5A, giving certain directions under the Relief Act.
2. In order to appreciate the points raised it will be necessary to state some facts. The petitioners are Firm and they carry on trade in cloth, silver etc, and they are also registered under the Money Lenders Act. The petitioners' Firm used to advance money to various persons who pledge their silver ornaments and a loan to the value of 80% of the pledged goods was advanced to them. The Firm granted them receipts in printed forms and maintained counterfoil and the person receiving such loan had to put signature or thumb impression on the forms. According to the terms of the agreement mentioned therein if the person taking loan fails to pay the entire amount within the period prescribed, which was usually for one year, the petitioners were entitled to forfeit the pledged goods; a copy of such receipt has been filed and marked as Annexure-1. The petitioners' Firm received a notice from the Anchal Adhikari asking them to return the goods pledged to the debtors even without repayment of the debt, a copy of the letter has been filed and marked as Annexure-2, A list of ninety one persons, who had taken loan from these petitioners, was also sent along with Annexure-2: a copy of the list is An-nexure-2A. The petitioners had earlier filed a writ application against similar notice to return the pledged ornaments and this gave rise to C. W. J. C. Nos. 423 and 424 of 1976. The impugned notices issued under the Relief Act, which was under challenge, were subsequently withdrawn by the authorities and those applications were disposed of by this Court and a copy of the order passed on 22-4-1976 has been filed and marked Annexure-3. Thereafter, the Collector of Madhubani suddenly again issued a Circular on the 8th July, 1976 to all the Anchal Adhikaris to take necessary actions for the implementation of the twenty point programme of the Prime Minister; a copy of the aforesaid Circular has been filed and marked Annexure-4. In pursuance of the aforesaid Circular, notice was issued to these petitioners; copy of the same has been filed and marked Annexure-5. It has also been averred in the petition that the petitioners' Firm neither advanced money on landed property nor received any mortgage of landed property. Being aggrieved by the aforesaid order the petitioners have moved this Court under Articles 226 and 227 of the Constitution of India, which was admitted on 9-9-1976 and the operation of the order as contained in Annexures-4 and 5 was stayed so far as the petitioners were concerned. Amendment petition was also filed on behalf of the petitioners, in which it is stated that in spite of the fact that the case was pending in this Court and there was an order Of stay, notices were issued to the petitioners as to why they had not returned the pawned ornaments and, therefore, the petitioners should appear before the Anchal Adhikari failing which legal action will be taken against them; a copy of the notices have been filed and marked Annexures-6 and 6A. It may be mentioned that no counter affidavit has been filed on behalf of the State in this case.
3. I shall briefly refer to the provision of law in question. Bihar Debt Relief Ordinance was promulgated on 25-11-1976 and it was followed by another Ordinance (Ordinance No. 211 of 1976) and finally the Relief Act (Bihar Act 10 of 1977) was enacted and published in the Gazette on 22-1-1977 after it had received the assent of the President on 10-1-1977. According to the preamble of the Act it is to provide relief from indebtedness to the small and marginal farmers, rural artisans and agricultural labourers. The reason for the enactment is to implement the liquidation of rural indebtedness in stages from certain classes of persons mentioned above. Section 2 (a) defines debt and is as follows :
"2 (a) 'Debt' means all liabilities to a money-lender in cash or kind, secured or unsecured, payable under a decree or order of a Civil Court or otherwise including any transaction which is in substance a debt, and subsisting on the date of the commencement of this Act whether due or not due."
Sections 2 (b) and 2 (c) define "Scheduled Debtor" and "Small farmer" and Section 2 (d) defines 'Marginal farmer' who owns land not more than one acre of irrigated or two acres of unirrigated and in case of Scheduled Tribes the area is just the double, "Rural Artisan" is denned under Section 2 (e) who normally earns his livelihood by practising a craft either by his own labour or by the labour of the members of his family and whose annual income does not exceed Rs 2,400/-. Similarly. "Agricultural labourer" has been defined under Section 2 (f) who also does not possess more than one acre of irrigated and two acres of unirrigated land and whose annual income does not exceed Rs. 2,400/-. Section 3, which is relevant, may be usefully quoted :
"3. Discharge of debts or Scheduled debtors and consequences of such discharge -- (11 Notwithstanding anything contained in any other law for the time being in force or in any contract or other instrument having force of law by virtue of any such law. and save as otherwise expressly provided by Section 5 of this Act, every debt incurred by a Scheduled debtor before the commencement of this Act including the amount of interest, if any, payable on such debt shall be deemed to have been wholly discharged."
Other provisions of this section are not necessary to be mentioned for the purpose of this case. According to Section 4, any agreement for working as labourer in lieu of debt shall be void after the commencement of this Act and Section 6 provides for penalty for persons contravening the provisions of the Act which is punishable with imprisonment and fine or with both.
4. It may be mentioned that similar Acts have been enacted in different States. The Maharashtra Debt Relief Act was challenged in the Supreme Court on various grounds, that it was held that it was neither violative of Article 301 of the Constitution nor had put restrictions on the freedom of trade and business, and all other arguments were repelled and the case is reported in Fateh Chand v. State of Maharashtra (AIR 1977 SC 1825). It has been held that the Act was valid piece of legislation, within the legislative competence of the State and it neither infringed Article 301 nor Article 304 (b) of the Constitution. The restriction put on the persons carrying on such business was held to be valid and reasonable and the measures were regulatory in nature. Krishna Iyer, J. speaking for the Bench held as follows (Para 38):
"The bulk of the beneficiaries are rural indigents and the rest urban workers. These are weaker sections for whom constitutional concern is shown because institutional credit instrumentalities have ignored them. Money lending may be ancillary to commercial activity and benignant in its effects, but money-lending may also be ghastly when it facilitates no flow of trade, no movement of commerce, no promotion of intercourse, no servicing of business, but merely stagnates rural economy, strangulates the borrowing community and turns malignant in its repercussions. The former may surely be trade, but the latter -- the law may well say -- is not trade. In this view we are more inclined to the view that this narrow, deleterious pattern of money-lending cannot be classed as 'trade'. "
5. Madhya Pradesh Gramin Rin Vimukti Tatha Rin Sthagan Adhiniyam (32 of 1975) enacted by the State of Madhya Pradesh was challenged on various grounds and the case is reported in the case of Ramkishan Agarwal v. Collector of Jabalpur. (AIR 1977 Madh Pra 21) and it was held that it did not invade the fundamental rights of the money-lenders under Article 31 of the Constitution and was also not violative of Article 301 of the Constitution. It has been further held that the term 'property' includes every possible interest which a party may have in property. It includes both movable and immovable; for instance, the right of mortgage of a house partakes the nature to immovable property. A right to a sum of money is property. Therefore, the Act though it may deprive money-lenders of their property within the meaning of Art: 31 (1) of the Constitution, it was not void it was further held that the money lenders who used to advance money on pawned articles are not entitled to any compensation inasmuch as they are deprived of their property (1) by authority of law: (2) the Act does not provide for transfer of ownership or right to possession of any property in the State or to a Corporation owned or controlled by the State.
6. A similar Act, enacted by the State of Tamil Nadu. Tamil Nadu Debt Relief Act (Act 31 of 1976), was similarly challenged and in the case of N A. Chidambaram Chettiar Firm v. State of Tamil Nadu (AIR 1977 Mad 153) it has been held that though the provisions of the Act are harsh but that will not invalidate the entire Act and it was further held that the restrictions imposed were all reasonable and could not be challenged. Their Lordships have further held that (Para 10) :
"The legislation cannot therefore, be attacked on the ground that it is unreasonable, mala fide or for ulterior purpose. It is certainly in public interest and, therefore, even if it is conceded for the purposes of argument, which we do not, that it is open to the petitioners to challenge the legislation as being not in conformity with Articles 301 and 304, we would hold that the impugned legislation is in accordance with the provisions of Article 304."
7. Now, I propose to take up the points raided by Sri B. C. Ghose, learned counsel appearing on behalf of the petitioners. He has vehemently argued that the Acts put unreasonable restrictions on trade and business and no property can be acquired without paying compensation and, thus, it encroaches upon the fundamental right of the petitioners in carrying on trade and business and, further, it has been urged that it does not satisfy the test of reasonableness. All these arguments which have been advanced before us, were also advanced before the Supreme Court while considering the Maharashtra law and have been repelled. From the discussions, mentioned above, and the law laid down by the Supreme Court and also the observations of the learned Judges of the Madras and Madhya Pra-desh High. Courts, it is difficult to accept the submission of Mr. Ghose. It is needless to repeat them and I. in full agreement with the decisions of the Madras and Madhya Pradesh High Courts, hold that there is no merit in the contention raised on behalf of the petitioners. Here it may be useful to refer to a Full Bench decision of our own High Court in the case of Madho Singh v. State of Bihar, (1978 BBCJ (HC) 86) : (AIR 1978 Pat 172) where Section 12, Bihar Money Lenders Act. was also challenged with special reference to Section 12 of the aforesaid Ac*. According to Section 12 the loan, which was advanced on land, the principal amount and all dues in respect of a usufructuary mortgage relating to an agricultural land, whether executed before or after the commencement of the Act were to be fully satisfied and the mortgage shall be deemed to be wholly redeemed on expiry of the period of seven years from the date of the execution of the bond. Their Lordships, after considering a number of decisions of the Supreme Court and other High Courts, have held that the Act did not put any restriction on any right relating to trade or business and the restrictions put in the interest of one class, namely, the agricultural debtors to hold property under usufructuary mortgage beyond seven years were reasonable restrictions. It was further, held that the restrictions imposed were reasonable and they were not violative of any Article of the Constitution. Their Lordships further observed that agricultural debtors in this State of Bihar are gene-rally weak and oppressed section of the Society and money-lenders, while lending money, make an unconscionable bargain, a notorious fact of which Court can take judicial notice of. The Relief Act is on similar terms as the Money Lenders Act and in view of the pronouncement of the Full Bench it is difficult to accept any of the contentions raised by Mr. Ghose in this case.
8. Lastly, it has been submitted that the Act contemplates advance of money on land and not on ornaments and, therefore, the direction bv the authorities to return back the ornaments is wholly without jurisdiction. Mr. Ghose has further submitted that the law should be read down so as to include only lands and not the ornaments and in this connection, reliance has been placed on a decision of the Supreme Court in the case of Jagdish Pandey v. Chancellor, University of Bihar, (AIR 1968 SC 353). In view of the definition of debt as given in Section 2 (a) which includes cash or kind etc. etc., it is difficult to accept the contention of Mr. Ghose. The word kind, in my opinion, will include ornaments as well. Reading the other provisions if ornaments are excluded, as urged by the learned counsel appearing on behalf of the petitioners, the very purpose and the object of the Act will be frustrated. Therefore, the interpretation given by Mr. Ghose is against the section itself which cannot be accepted. Mr. Ghose has also submitted that there is no provision for giving compensation to the petitioners and after return of the ornaments they will not get any money which cannot be permitted in law. Learned Advocate General, appearing on behalf of the State, has on the other hand, contended that there is neither the question of acquisition nor of requisition and in that view of the matter, there is no question of payment of compensation in such cases. In this connection, he has also relied on some of the provisions of the Act and case laws which have been referred to above. He has, further, submitted that under Section 7 of the Act the. State Government has the power to make rules in order to carry out, the provisions of the Act but neither the rules have been framed nor there has been any executive instructions with regard to this matter and he has, therefore, relied on the provisions of the Act, in my opinion, the contention of the learned Advocate General has to toe accepted and even if no compensation is paid the law cannot be struck down as illegal and void, as urged on behalf of the petitioners.
9. Thus, on a careful consideration of the points raised and after hearing the submissions of the parties, I find that there is no merit in this application and it is. accordingly, dismissed. But in the circumstances of this case, there shall be no order as to costs.
M. J. C. No. 615 of 1982 : The petitioners have moved this Court for drawing a proceeding for contempt of Court against the Anchal Adhikari, Jainagar, and the State of Bihar for violating the stay order passed by this Court on 9-9-1976. It is stated in the petition that in spite of the stay order notices have been issued to the petitioners, a copy of the same has been filed and marked 3 and 3A. Learned counsel, appearing on behalf of the petitioners, has submitted that the petitioners had brought the matter to the notice of the Court that there has been an order of stay but in spite of that illegal action has been taken by the authorities. Show cause has been filed on behalf of the respondents and it has been stated in para 7, that on receipt of the order of this Court on 23-12-1982, further proceedings have been stayed by the authorities. In Paragraph 8 it is stated that the respondent Anchal Adhikari had joined on 4-10-1980 and was never informed of the stay order passed by this Court and when he was informed about the same he had stayed the proceedings. After going through the show cause, I am satisfied that there is no deliberate attempt on behalf of the respondents to flout the order of the Court, rather when the respondent Anchal Adhikari learnt about the stay order he stayed the proceedings, In my opinion therefore no case has been made out by the petitioners for proceeding in contempt against the 'respondent. The application is accordingly dismissed.