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In this connection, it was submitted that if a petition is filed before a Court to declare a State law void, as being repugnant to Parliamentary law which has not been brought in force, the court would reject the petition as premature as repugnancy cannot arise when the Parliamentary law has not even been brought in force. In this connection, learned counsel relied upon the judgment of this Court in Tika Ramji v. State of U.P. [1956 SCR 393] in which there is an observation to the effect that repugnance must exist in fact and not depend on a mere possibility. According to the learned counsel there is no merit in the contention advanced on behalf of private chit firms that upon mere enactment by the Parliament of a law relating to a subject in List III, all State enactments on that subject become immediately void, as repugnant. Further, learned counsel emphasized on the words “to the extent of the repugnancy” in Article 254(1). He submitted that the said words have to be given a meaning. Learned counsel submitted that the said words indicate that the entire State Act is not rendered void under Article 254(1) merely by enactment of a Central law. In this connection, it was submitted that the words “if any provision of a law” and the words “to the extent of repugnancy” used in Article 254(1) militate against an interpretation that the entire State Act is rendered void as repugnant merely upon enactment by Parliament of a law on the same subject. Lastly, learned counsel submitted that a purposive interpretation of Article 254 must be adopted which does not lead to a legislative vacuum. In this connection learned counsel submitted that the State law came into force w.e.f. 25.08.1975 as per notification published in Kerala Gazette No. 480 whereas the Chit Funds Act, 1982 came into force w.e.f. 19.08.1982. Under Section 1(3) of that Act, the Central Government has been empowered to bring the said Act into force on such date as it may, by notification in the official gazette, appoint and different dates may be appointed for different States. Till date, the said 1982 Act has not been extended to the State of Kerala. According to the learned counsel, if one was to accept the contention advanced on behalf of the private chit firms that “when a Central law is made as envisaged in Article 254 of the Constitution then all repugnant State laws would immediately stand impliedly repealed, even without the Central Act being brought into force by a notification under Section 1(3) of the 1982 Act”; then, in that event, there would be a total legislative vacuum particularly when transactions have taken place in the State of Kerala on and from 19.08.1982 till date and even up to the date of notification which has not been issued under Section 1(3) till today. According to the learned counsel, keeping in view the provisions of Sections 1(3), 4, 89 and 90 of the 1982 Act and absent framing of the Rules by the State Government in terms of Section 89, making of the central law cannot be the test for determining repugnancy.

14. On behalf of the private chitty firms, it was submitted by Shri T.R. Andhyarujina, Shri Shyam Divan, Shri Mathai M. Paikeday and Shri C.U. Singh, that the bringing into force or commencement of the Central Act was irrelevant in considering repugnancy under Article 254(1), and that the repugnancy arose when the State law came into conflict with the enactment of the Central law, even when the Central law is not brought into force in the State of Kerala. That, under Article 254(1), the repugnancy of the State law to the law made by the Parliament is to be considered with reference to the law made. The words “law made” have reference to the enactment of the law. In this connection, it was pointed out that the words “law made” have been used at seven places but there is no mention to the commencement of a law in Article 254. Thus, according to the learned counsel, repugnancy arose when the Central Chit Funds Act, 1982 received the assent of the President and on its publication in the Official Gazette and not on its commencement, which till date is not there in the State of Kerala. In consequence, the Kerala Chitties Act, 1975 became void on 19.08.1982 when the Central Chit Funds Act, 1982 was made after receiving the assent of the President. On the question as to whether the Kerala Chitties Act, 1975 is repugnant to the Central Chit Funds Act, 1982 and whether Section 4(1a) inserted by Finance Act No. 7 of 2002 was void, the learned counsel submitted that the Central Act, 1982 intended to occupy the entire field of contracts in Entry 7 of the Concurrent List; that, both the legislations are made under Entry 7 of the Concurrent List and, therefore, in such a situation there would be repugnancy between the State legislation existing at the time of the enactment of the Central Act, 1982. Applying these tests, it was submitted that the Kerala Chitties Act, 1975 became void under Article 254(1) on the enactment of the Central Chit Funds Act, 1982. That, in consequence of the said repugnancy, the Kerala Chitties Act, 1975 became void under Article 254(1) on 19.08.1982 and the Kerala Chitties Act, 1975 stood impliedly repealed. However, according to the learned counsel, the previous operation of the Kerala Chitties Act, 1975 is not affected nor any right, privilege, obligation or liability acquired under the Kerala Chitties Act shall stand affected in view of Article 367 of the Constitution. By reason of Article 367, the General Clauses Act, 1897 would apply to the said repeal. Thus, after 19.08.1982, the Kerala Chitties Act, 1975 stood repealed except for the limited purposes of Section 6 of the General Clauses Act, 1897. According to the learned counsel for the private chitties, to bring the Central Chit Funds Act, 1982 into operation in any State the Central Government has to issue a notification in the Official Gazette under Section 1(3). This has been done for several States but not for States like Kerala, Gujarat, etc. That, until such notification neither the Kerala Chitties Act, 1975 prevails in the State of Kerala as it has become void and stands repealed under Article 254(1) nor the Central Chit Funds Act, 1982 as it is not notified. Thus, according to the learned counsel, as and when the Central Government brings into force the Chit Funds Act, 1982 by a notification in the State of Kerala under Section 1(3), Section 90(2) of the 1982 Act will come into play and thereby the Kerala Chitties Act, 1975 shall continue to apply only to the chits in operation in Kerala on the date of commencement of the Central Act, 1982 in the same manner as the Kerala Chitties Act, 1975 applied to such chits before such commencement. However, as the Kerala Act, 1975 stood repealed on 19.08.1982, on the enactment of the Central Chit Funds Act, 1982, there could be no Amendment of the Kerala Act, 1975 by Finance Act No. 7 of 2002. In the circumstances, it was submitted that Section 4(1a) inserted in Section 4 by the Kerala Finance Act No. 7 of 2002 was void and inoperative in law as the President’s assent under Article 254(2) has not been obtained.

ii) Our Answer to Question No. (ii) :- The Effect in Law of a Repeal

20. In State of Orissa v. M.A. Tulloch & Co. (supra), this Court came to the conclusion that by reason of the declaration by Parliament the entire subject matter of “conservation and development of minerals” stood taken over, for being dealt with by Parliament, thus, denying the State of the power within it hitherto possessed and consequently the Central Act superseded the State law, thus effecting a repeal. After coming to the conclusion that the State law stood repealed, this Court was required to consider a submission advanced on behalf of Tulloch & Co. It was submitted that Section 6 of the General Clauses Act, 1897 applied only to express repeals and not to repeals consequent upon the supersession of the State Act by a law having the constitutional superior efficacy. It was submitted that a mere disappearance or supersession of the State Act under Article 254(1) was at the highest a case of implied repeal and not an express repeal. That, Section 6 of the General Clauses Act applied only to express repeals and not to implied repeals. This contention was rejected in the following terms :

“The entire theory underlying implied repeals is that there is no need for the later enactment to state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word ‘repeal' in the later statute. Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which Section 6 presumes where the word ‘repeal' is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction or difference between an express provision and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principles upon which the rule as to implied repeal rests to attribute to that legislature which effects a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would, in our opinion, attract the incident of the saving found in Section 6 for the rules of construction embodied in the General Clauses Act are, so to speak, the basic assumptions on which statutes are drafted.”