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5. Now, in order to determine whether the impugned legislation falls within List I and therefore ultra vires of the Provincial Legislature, we have to consider what the nature of the legislation is. It is entirely fallacious to argue, as was sought to be argued at one stage, that the well-known argument of pith and substance does not apply to the case before us. The pith and substance argument really amounts to this. The Court must look at the true nature and effect of the legislation which it is considering. It must consider its scope and ambit, it must consider its true aspect from the point of view of the Legislature and must come to the conclusion what is the legislation about. It must not be misled by mere technicalities or by legal phraseology which may conceal the true intent of the Legislature, but must fairly arrive at 8 conclusion as to what is the true nature and character of the legislation which it is considering. The Privy Council in a very recent case has very clearly enunciated this principle. The decision is to be found in Prafulla Kumar Mukherjee v. Bank of Commerce Lid., Khulna (1947) L.R. 74. I.A. 23, s.c. 49 Bom. L.R. 568. The judgment was delivered by Lord Porter, and it would indeed be audacity of the highest order for me to try and improve upon what has been so lucidly and succinctly stated by Lord Porter as the true principles which should govern the consideration of whether a particular piece of legislation is ultra vires or not. Reading the Privy Council case I find certain principles that emerge which I will briefly state. The first is that although it is not always wise to construe the Indian Constitution Act by analogy with the Canadian or the Australian Constitution Acts, even so both in the interpretation of the Canadian and the Australian Acts and in the Indian Act the pith and substance argument fully applies. The second principle that emerges is that when you have different subjects mentioned in different lists, subjects are bound to overlap, and when they do overlap, what the Court must do is to find out what is the nature of the enactment in pith and substance and in which List does it fall according to its true nature and character. The Privy Council also clearly asserts that a Provincial Act may encroach upon the Federal field, but what the Court must do is to determine the extent of that invasion and the Court must do so in order to find out whether in pith and substance the legislation really falls in the Provincial field. The mere fact that there is a trespass by the Provincial Legislature upon the Federal field does not necessarily make the Provincial legislation ultra vires. The extent and nature and character of the trespass must be considered, and if the Court finds that the trespass is such as to make the legislation really a legislation which falls in one of the items in List I, then alone the Court would say that the legislation is ultra vires. Finally, the main principle laid down in this case of the Privy Council is that the Provincial Legislature may deal with a Federal subject if it is only an ancillary or incidental effect of the legislation, provided that in substance it is dealing with a Provincial subject.

6. It is interesting to note what the facts were in the case which came before the Privy Council and in which these principles were enunciated by their Lordships, The Act that was challenged was the Bengal Money Lenders Act of 1940, and one of the sections of that Act provided that notwithstanding anything contained in any law for the time being in force, or in any agreement, no borrower shall be liable to pay after the commencement of this Act more than a limited sum in respect of principal and interest or more than a certain percentage of the sum advanced by way of interest, and the respondent before their Lordships filed the suit, from which the appeal arose, to recover loans and interest alleged to be due on promissory notes executed by the borrowers who were the appellants, and the contention before the Privy Council was that the Bengal Legislature in passing the Money Lenders Act, 1940, had encroached upon the Federal field inasmuch as they had passed legislation which affected promissory notes which fell in List I of the Seventh Schedule. Their Lordships felt that three questions arose in order to determine whether the contention of the party challenging the legislation was sound, and these three questions were : (1) Does the Act in question deal in pith and substance with money lending ? (2) If it does, is it valid though it incidentally trenches on matters reserved for the Federal Legislature ? (3) Once it is determined whether the pith and substance is money lending, is the extent to which the Federal field is invaded a material matter"? And their Lordships' answer was that the Act dealt in pith and substance with money lending and therefore it was valid although it incidentally trenched on matters reserved for the Federal Legislature, and finally that once it was determined that the pith and substance was money lending, the extent to which the Federal field was invaded was not a material consideration. In connection with the second question their Lordships cited with approval an observation of Sir Maurice Gwyer, Chief Justice, in Subrahmanyan Chettiar v. Muttuswami Goundan [1940] F.C.R. 188 (p. 201):

The same observations are to be found in the recent judgment pronounced by their Lordships of the Privy Council in Prafulla Kumar Mukherjee v. Bank of Commerce, Ltd., Khulna (1947) L.R. 74 I.A. 23, s.c. 49 Bom. L.R. 568. The legislation which came for consideration before their Lordships of the Privy Council there was the Bengal Money Lenders Act, 1940, and it was impugned on the ground that certain provisions therein contained trenched upon matter's reserved for the Federal Legislature in items 28 and 38 of List I. Their Lordships in connection with this matter framed three particular questions which the Court should address itself to before arriving at a conclusion whether the provisions of the impugned Act are ultra vires, and adopting the very same phraseology I also would ask myself the same three questions in connection with the impugned Act before us, viz. (1) Does the Act in question deal in pith and substance with the jurisdiction and powers of the City Civil Court ? (2) If it does, is it valid though it incidentally trenches on matters reserved for the Dominion Legislature in item 28 of List I ? (3) Once it is determined whether the pith and substance is the enactment of jurisdiction and powers of the City Civil Court, is the extent to which the Dominion field is invaded a material matter? As regards the first question there is no doubt, on a consideration of items 1 and 2 of List II, that the impugned Act deals in pith and substance with the jurisdiction and powers of the City Civil Court. The main purpose of the enactment of Bombay Act XL of 1948 is the establishment of an additional civil Court for Greater Bombay. You cannot have the establishment of a Court in mere form or name, but you must have a Court which is newly established, as the one before us, clothed with jurisdiction and powers to receive, try and dispose of suits and proceedings. In enacting the jurisdiction and powers within the meaning of item 2 of List II the Bombay Legislature had full and exclusive authority to do so and it had not got to rely upon any other power except the one which is given to it in item 2 of List II. The other provisions of the impugned Act make it clear that the only object, purpose and scope of this piece of legislation which was enacted by the Bombay Legislature was the establishment of the City Civil Court and the investing it with the jurisdiction and powers to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding Rs. 10,000 in value and arising within the Greater Bombay. In my opinion, therefore, the pith and substance of this impugned Act was the jurisdiction and powers of the City Civil Court which was established by the Bombay Legislature acting within the scope of the powers which were vested in it by item 1 of List II. As regards the second question, I need not say anything more than what I have stated before that in the enactment of Sections 3 and 12 of the impugned Act the Bombay Legislature incidentally trenched on matters reserved for the Dominion Lgislature, in so far as the suits and other proceedings of a civil nature not exceeding Rs. 10,000 in value and arising within Greater Bombay would also comprise within that category suits within that pecuniary limit in respect of or based on cheques, bills of exchange, promissory notes and other instruments of like nature.

...the extent of the invasion by the provinces into subjects enumerated in the Federal List has to be considered. No doubt it is an important matter, not, as their Lordships think, because the validity of an Act can be determined by discriminating between degrees of invasion, but for the purpose of determining what is the pith and substance of the impugned Act.

The pith and substance of the impugned Act is not-again to state the proposition in terms of the question before us-the jurisdiction and powers of the Courts in relation to item 28 of List I but the jurisdiction and powers of the City Civil Court; "once that question is determined the Act falls on one or the other side of the line and can be seen as valid or invalid according to its true content." The further observations of their Lordships of the Privy Council comprise the point of view which has got to be adopted in considering this aspect of the case : They observed (p. 44):