AMARENDRA NATH VERMA, J. - (1.) A difference of opinion between two Division Benches of this Court as to the effect of sec.32-G inserted by the State Financial Corporations (Amendment) Act, 1985 (No. 43 of 1985) in the State Financial Corporations Act, 1951, on the continued validity of the U.P. Public Moneys (Recovery of Dues) Act (hereinafter referred to as the'State Act') in its application to the dues of the U.P. State Financial Corporation, has led to the reference of this case to us.
(2.) In a bunch of (Writ Petns. Nos. 9476 of 1986, 14797 of 1987 and 15437 of 1987) disposed of by a Division Bench of this Court by its judgment dated November 3, 1987, it was held that Section 3 of the State Act was repugnant to Act No. 43 of 1985 (hereinafter referred to as the Central Act') and was, therefore, void and inoperative in its application to the recovery of dues of the U.P. State Financial Corporation. In Messrs. Krishna Utensils v. U.P. State Financial Corporation and others (Writ Petn. No. 20818 of 1988), however, a Division Bench of this Court in its judgment dated September 1, 1988, differed with the earlier Bench decision of this Court and held that there was no repugnancy between the Central Act and the State Act. It ruled that there was really no conflict between the two enactments and that section 32-G was merely complementary to the various modes of recovery already possessed under the State Financial Corporations Act and was not in derogation of the same. It consequently referred the case to a larger Bench for resolving the conflict of views. That is how the matter is before us.
(3.) It may be observed at the outset that both the Division Benches proceeded on the premise that the question had to be judged in the light of Article 254 of the Constitution of India. The learned Judges constituting the two Benches, therefore, concentrated mainly on the issue whether the State Law was repugnant to the Central Law and applied the various tests which have been laid down by their Lordships of the Supreme Court as well as the Federal Court for determining the question of repugnancy between the Central Law and the State Law within the meaning of Article 254 of the Constitution of India. Both the Division Benches have, with great respect, gone wrong in applying Art.254 of the Constitution of India. The appropriate provision to be applied in the present case, in our opinion, is Article 246 of the Constitution of India. There is a long line of decisions of the Supreme Court as well as the Federal Court ruling that the concept of repugnancy is relevant only where the laws enacted by Parliament and the State Legislature supposed to be in conflict with each other deal with the subjects falling in the Concurrent List, viz., List III of the Seventh Schedule of the Constitution. There is a complete unanimity of opinion in the pronouncements of the Supreme Court that there is no question of any repugnancy in respect of State Laws falling in List II and in respect of Central Law covered by List I. In support of this proposition we would content ourselves by referring only to the latest pronouncement on the subject in the case of I.T.C. Ltd. v. State of Karnataka, reported in 1985 (Supp) SCC 476. His Lordship Fazal Ali, J., speaking for the majority, referred to the decisions of the Supreme Court with approval in the cases reported in AIR 1964 SC 1284 (State of Orissa v. M.A. Tulloch and Co.), AIR 1969 SC 59 (Sudhir Chandra Nawn v. Wealth Tax Officer) and (1969) 3 SCC 838 (Baij Nath Kedia v. State of Bihar) in support of his conclusion that Art. 254(2) applies only to matters contained in the concurrent List and has nothing to do with matters enumerated in List I or List II. The same view was expressed by his Lordship Mukerji, J. in paragraph 230 of the judgment of page 575. His Lordship summed up the law thus : "The concept of repugnancy arises only with regard to laws dealing with subjects covered by the entries falling in List III, in respect of which both Parliament and State Legislature are competent to legislate. Under Article 254 of the Constitution, a State law passed in respect of a subject-matter comprised in List III would be invalid if its provisions were repugnant to a law passed on the same subject by Parliament. The repugnancy arose only if both the laws could not exist together. Repugnancy does not arise simply because Parliament and the States pass law on the same subject. There cannot be any repugnancy in respect of State laws passed in respect of matters falling in pith and substance in List II or in respect of Central laws passed on subjects falling in List I.";