Kerala Small Financier’s Association & Ors. Vs. Union of India & Ors.
EmailAppeal: Civil Appeal No. 5005 of 2001
With Civil Appeal Nos. 5006, 5007, 5008, 5009-5019 and 5020 of 2001
(Arising out of S.L.P. (C) Nos. 17147/2000, 18400/2000, 17283/2000, 891-901/2001 and 7424/2001 respectively)
With Civil Appeal Nos. 5006, 5007, 5008, 5009-5019 and 5020 of 2001
(Arising out of S.L.P. (C) Nos. 17147/2000, 18400/2000, 17283/2000, 891-901/2001 and 7424/2001 respectively)
Petitioner: Kerala Small Financier’s Association & Ors.
Respondent: Union of India & Ors.
Apeal: Civil Appeal No. 5005 of 2001
With Civil Appeal Nos. 5006, 5007, 5008, 5009-5019 and 5020 of 2001
(Arising out of S.L.P. (C) Nos. 17147/2000, 18400/2000, 17283/2000, 891-901/2001 and 7424/2001 respectively)
With Civil Appeal Nos. 5006, 5007, 5008, 5009-5019 and 5020 of 2001
(Arising out of S.L.P. (C) Nos. 17147/2000, 18400/2000, 17283/2000, 891-901/2001 and 7424/2001 respectively)
Judges: B.N. KIRPAL & N. SANTOSH HEGDE, JJ.
Date of Judgment: Feb 08, 2001
Head Note:
BANKING LAW/CONSTITUTION
Reserve Bank of India Act, 1934
Section 45-S with Constitution – Schedule VII, list I, entry 45 and list II, entry 30 – Legislative competence – Validity. Held that in view of decisions in Kanta Mehta approved in T. Velayudhan Achari (JT 1993 (1) SC 580), Legislature had competence to enact section 45-S and is valid piece of legislation. (Para 3)
Cases Reffered:
1. T. Velayudhan Achari and Another v. Union of India and Others, (JT 1993 (1) SC 580) (Para 3)
2. Kanta Mehta v. Union of India and Others (1987 (62) Company Cases 769) (Para 3)
2. Kanta Mehta v. Union of India and Others (1987 (62) Company Cases 769) (Para 3)
JUDGEMENT:
Order
1. Special leave granted.
2. The only contention raised in these cases is with regard to the legislative competence of the Parliament to enact section 45-S of the Reserve Bank of India Act. The main ground in this regard which is urged by the learned counsel for the appellants is that in respect of persons who are registered under the Money Lenders Acts passed by the various states, their business cannot be brought to an end by virtue of section 45-S. It is contended that the Acts have been passed in exercise of the powers conferred on the state Legislatures under entry 30 of list II and inherent in the right of carrying on the business of money lending is the option to take money on deposit. The enactment of section 45-S now prevents an unincorporated body or person from accepting a deposit even though the person may be a registered money lender.
3. In our opinion, this question is no longer res integra. In Kanta Mehta v. Union of India and Others (1987 (62) Company Cases 769) the High Court of Delhi considered such a contention which had been raised with regard to the validity of section 45-S which had been incorporated at that point of time on the ground of legislative competence. The High Court came to the conclusion that under entry 45, list I of the seventh schedule the said provision had been validly enacted. This case came up for consideration before a bench of three judges of this Court in T. Velayudhan Achari and Another v. Union of India and Others, (JT 1993 (1) SC 580). After setting out the conclusions of the High Court, this Court had upheld the legislative competence of the Parliament to enact the said provision. This Court in no uncertain terms observed that the decision of the Delhi High Court was correct. In paragraph 32, this Court stated that “We approve the reasoning of the Delhi High Court in Kanta Mehta’s case”. Again in paragraph 43, this Court stated that “Therefore, we are in entire agreement with the Delhi High Court”. The aforesaid decision of this Court in T. Velayudhan Achari’s case (supra) is binding on us and following the ratio of the said decision the conclusion which we can arrive at is that even the new section 45-S has been validly enacted. The provisions of the state laws relating to money lending cannot have the effect of overriding the provisions of section 45-S of the Reserve Bank of India Act. Section 45-S is a valid piece of legislation and it binds all persons referred to therein.
4. These appeals are, accordingly, dismissed with no order as to costs.
1. Special leave granted.
2. The only contention raised in these cases is with regard to the legislative competence of the Parliament to enact section 45-S of the Reserve Bank of India Act. The main ground in this regard which is urged by the learned counsel for the appellants is that in respect of persons who are registered under the Money Lenders Acts passed by the various states, their business cannot be brought to an end by virtue of section 45-S. It is contended that the Acts have been passed in exercise of the powers conferred on the state Legislatures under entry 30 of list II and inherent in the right of carrying on the business of money lending is the option to take money on deposit. The enactment of section 45-S now prevents an unincorporated body or person from accepting a deposit even though the person may be a registered money lender.
3. In our opinion, this question is no longer res integra. In Kanta Mehta v. Union of India and Others (1987 (62) Company Cases 769) the High Court of Delhi considered such a contention which had been raised with regard to the validity of section 45-S which had been incorporated at that point of time on the ground of legislative competence. The High Court came to the conclusion that under entry 45, list I of the seventh schedule the said provision had been validly enacted. This case came up for consideration before a bench of three judges of this Court in T. Velayudhan Achari and Another v. Union of India and Others, (JT 1993 (1) SC 580). After setting out the conclusions of the High Court, this Court had upheld the legislative competence of the Parliament to enact the said provision. This Court in no uncertain terms observed that the decision of the Delhi High Court was correct. In paragraph 32, this Court stated that “We approve the reasoning of the Delhi High Court in Kanta Mehta’s case”. Again in paragraph 43, this Court stated that “Therefore, we are in entire agreement with the Delhi High Court”. The aforesaid decision of this Court in T. Velayudhan Achari’s case (supra) is binding on us and following the ratio of the said decision the conclusion which we can arrive at is that even the new section 45-S has been validly enacted. The provisions of the state laws relating to money lending cannot have the effect of overriding the provisions of section 45-S of the Reserve Bank of India Act. Section 45-S is a valid piece of legislation and it binds all persons referred to therein.
4. These appeals are, accordingly, dismissed with no order as to costs.
