- (1.) We have pronounced judgment today in CA Nos. 2620-64 of 198v. For the reasons recorded therein these transferred cases have to be dismissed. We may, however, briefly deal with the controversy involved in these cases.
(2.) Bihar and orissa Public Demands Recovery Act, 1914 (the Bihar Act) was amended by Act 4 of 1974 thereby incorporating "any money payable to the State Bank of India" within the list of Public Demands set out' in Schedule I to the Bihar Act. In these transferred cases the only point argued before us was that the Bihar Legislature had no legislative competence to enact law providing for recovery of bank dues as arrears of land revenue.
(3.) We may refer to the facts relating to Transferred Case No. 40 of 1989. Harish Tara Refractories (P) Ltd. , had entered into several agreements with the State Bank of India, Main Branch, Ranchi. The case of the bank is thatthere were various dealings and transactions between the parties and large sums of money became due and payable by the company. According to the bank the admitted liability of the company as on 1/10/1979 was Rs. 31,18,993.55. Since the repayment of the loan was not made despite repeated demands the Manager of the bank sent a requisition for a certificate under the Bihar Act for recovery of the outstanding loan amount together with interest. The Certificate Officer issued a certificate under S. 4 and 6 of the Bihar Act. The certificate was challenged by the company by way of writ petition before the Calcutta High court, inter alia, on the ground that the Bihar Legislature had no legislative competence to enact the law permitting recovery of the bank dues as arrears of land revenue. It was argued that the Bihar Act was a legislation relating to 'banking' in respect of which only Parliament can make law under Entry 45, List I, Seventh Schedule, Constitution of India. Suhas Chandra Sen, J. dealt with the points raised before him in a lucid manner with utmost clarity. The learned Judge referred to the judgment of a division bench of the Calcutta High court in N. C. Mukherjee and Co. v. Union of India and came to the conclusion that the provisions of the Bihar Act and of the Bengal Public Demands Recovery Act, 1913 were almost identical and as such the Certificate Officer under the Bihar Act was exercising the judicial powers of the State. The learned Judge followed the judgment of this court in State of Bombay v. Narothamdas Jethabai and held as under: " 'Administration of justice; constitution and organisation of all courts, except the Supreme court and the High court' has now been brought under Entry 11-A of the Concurrent List. It is no more the exclusive power of the State Legislature to legislate on these matters. But 'administration of justice' is certainly a subject on which the State Legislature can legislate. In view of the interpretation given to this phrase by the Supreme court, this power must necessarily include the power of enlarging or diminishing the jurisdiction of the courts. The Bihar Legislature by the Amending Act 4 of 1974 has merely enlarged the jurisdiction of the Certificate Officer so as to enable the State Bank of India and other banks specified in the Schedule to take recourse to the speedier remedy provided under the Bihar and orissa Public Demands Recovery Act. Possibly, this was done to enable the banks to avoid the proverbial law's delay and to realise their claims speedily by the expeditious remedy provided by that Act. Whatever may be the reason for passing this legislation, there cannot be any doubt that the amendment clearly comes under Entry 11-A of the Concurrent List. The Amending Act 4 of 1974 has merely brought a dispute relating to money payable to the State Bank of India within the jurisdiction of the Certificate Officer. In effect, what has been done is to enlarge the jurisdiction of the revenue court. " 326 The learned Judge dealt with the argument that the impugned provision of the Bihar Act was in relation to banking and, therefore, the Bihar Legislature has encroached upon the field reserved for Parliament and rejected the same on the following reasoning: " 'banking' has been kept in the Union List in the Seventh Schedule under Entry 45. The banking laws have not set up any special court or laid down any procedure for resolving disputes arising between a bank and its customers. These disputes have to be resolved by taking recourse to the established civil courts and also by following the procedure that have been laid down. As has been noted earlier in the judgment that establishment of courts and laying down of the procedure to be followed in those courts come within the ambit of the legislative competence of the State Legislatures. In pith and substance, the State Legislature has merely enlarged the jurisdiction of an existing court to entertain and try certain types of cases relating to banks. Before this amendment was made, a bank had to file a suit in a civil court in the ordinary way for realisation of money due to it. The amendment enables the bank to approach the Certificate Officer and avail of the speedier remedy of that court. The purpose of the amendment is quite clear. The law has been passed only to make the speedy remedy of the certificate proceedings available to the banks. As I have held earlier that it is competent for the State Legislature to enlarge the jurisdiction of a court and also to legislate on matters of procedure. It is true that 'banking' comes under the Union List; but that does not mean any legislation which affects the banks in any way must be passed by Parliament. I have held earlier in the judgment that the impugned legislation comes squarely within Entries 11-A and 13 of the Concurrent List. Even if the legislation incidentally trenches upon the field reserved for the central Legislature, it will not be bad on that account. This principle of law has been emphasised by the Supreme court in a number of cases. * * * It is well settled that entries in the three lists should be construed liberally. It is possible, and it is very often the case, that in passing a legislation which is within its competence, a Legislature may incidentally encroach upon the field which has been earmarked in another list exclusively for Parliament. But that by itself will not make the legislation void, the test is to find out whether the legislation comes within any specific entry of the State List or the Concurrent List. If in pith and substance, it is a legislation in respect of a matter which comes within the ambit of the power of the State Legislature, then even though, it incidentally trenches upon a field reserved for Parliament, the legislation will not be bad. In the instant case, there is an additional fact that the Act was reserved and has received the assent of the President. 327 In my opinion, the legislation comes squarely within Entries 11-A and 13 of the Concurrent List. In pith and substance, the Amending Act 4 of 1974 passed by the Bihar Legislature had the effect of merely enlarging the jurisdiction of the Certificate Officer. By this amendment, the Bihar Legislature made an already existing speedy procedure of a court established by it available to the State Bank of India and some other banks. This legislation was within the competence of the Bihar Legislature and will not be bad even if it incidentally trenches upon the field reserved for Parliament under List I of the Seventh Schedule. "we agree with the above-quoted reasoning and the conclusions reached by the learned Judge of the Calcutta High court and approve the same.;