Holding

Section 52‑A of the Tamil Nadu Revenue Recovery Act is constitutionally valid and within the legislative competence of the State Legislature.

Summary

The Supreme Court examined the constitutional validity of Section 52‑A inserted by the Tamil Nadu Revenue Recovery (Amendment) Act, 1972, which allowed recovery of loans advanced by state‑owned corporations as arrears of land revenue. The petitioners challenged the provision on two grounds: lack of legislative competence of the Tamil Nadu Legislature and violation of Article 14. The Court held that the Collector, empowered under the Act, functions as a revenue court and that the State Legislature may confer additional jurisdiction on such courts under Entry 11‑A of List III, as well as under Entry 45 and Entry 30 of List II. Consequently, Section 52‑A falls within the legislative competence of the State and does not offend the equality clause. The appeal was allowed, the High Court judgment striking down the provision was set aside, and the writ petitions were dismissed with costs.

Issues considered

Whether the Tamil Nadu Legislature had competence to enact Section 52‑A of the Revenue Recovery Act under the constitutional entries.
Whether Section 52‑A violates Article 14 of the Constitution.
Whether the Collector can be deemed a revenue court for purposes of legislative competence.

Legislation cited

Constitution of Indias. Schedule VII List II Entry 30, s. Schedule VII List II Entry 45, s. Schedule VII List III Entry 11‑A
Tamil Nadu Revenue Recovery Act, 1864 (as amended 1972)s. 52-A

Subjects

legislative competencestate legislatureEntry 11‑Arevenue courtSection 52‑ATamil Nadu Revenue Recovery ActArticle 14public dues recovery

Judgment

'

A STATE OF TAMIL NADU
v.
G.N. VENKATASWAMY & ORS. ETC. ETC.

JULY 11, 1994

B [KULDIP SINGH AND DR. A.S. ANAND, JJ.J

Tamilnadu Revenue Recovery Act. 186~Section 52-A (as inserted by
Tamil Nadu Revenue Recovery (Amendment) Act 1972).

c 52-A isConstitution of India 1951}-Schedule VIII list II Entry ]{}-Section
constitutionally valid inasn1uch as State Legislature can confer addi-
tional jurisdiction on existing revenue coutts to recover any public dues as
arrears of land revenue.

Collector constitutes revenue court \\-ithin the meaning of Entry 1lA
D of Schedule VII List III. The Tamil Nadu Revenue Recovery Act, 1864 was
amended and a new section namely 52-A was inserted in it in 1972. The
validity of Section 52-A was challenged before the High Court on two
grounds.

1. State Legislature had no legislative competence to enact Section
E 52-A.
2. It was violative of Article 14 of the Constitution.

The Act provides for distress sale of distraint property, attachment
of land, sale of land and the arrest of defaulter for non-payment of the
F arrears of land revenue. Collector is the authority competent to take such
actions. Detailed procedure in that behalf has been provided under the
Act. The act provides a salutary procedure which is drastic and has l)een
enacted for speedy recovery of the land revenue. Entry III (Administration
of Justice) etc. and Entry 43 (Public Debt of the State), Entry 45 (land
G revenue) etc. of List II and Entry 43 recovery of State claims of List III
were relied upon by the State Counsel, and decision of Collector, High
Court in Mukherjee and Co. v. Union of India, AIR (1964) Calcutta 165,
were relied upon by the State Government.

But a Division Bench of the High Court declared S. 52-A of the Act
H ultra vires the powers of the State Legislature. It did not deal with the
322
STATE OFT.N. '" VENKATASWAMYJ 323

ground under Article 14. A

On appeal to the Supreme Court, this Court after considering the
relevant decisions and allowing the appeal, this Court

HELi>: I.I. Under Entry 11-A of List III of the 7th Schedule of the
Constitution, the State Legislature has the powers to make laws thereby B
enlarging or reducing the powers of the courts. The State Legislature can
create new courts, reorganise the existing courts, provide jurisdiction to
the said courts and also take away the existing jurisdiction if it so desires.
There is no reason why a State Legislature cannot confer additional
jurisdiction on existing revenue courts to recover any public dues as C
arrears or land revenue. (330-G-H, 331-A]

State of Bombay v. Narothamdas Jetlwbai, (1951] SCR 51 =AIR
(1951) SC 69, followed.

C. Mukherjee and Co. v. Union of India, AIR (1964) Cal 1165 = (1962) D
Cal W 210 = (1964) 51 ITR 366, referred to.

1.2. The collector exercises powers under the Revenue Recovery Act
which is an Act of the State Legislature. He is invested with the power to
decide the controversy between the State and the defaulter. There is in
E
existence a tis between the State and the defaulter. There is assertion and
denial. The dispute involves the rights and obligations or the parties which
are decided by the Collector. The Collector has the power to sell movable
and immovable property or the defaulter. He can even arrest and detain
the person up to a period of two years. All these powers of the Collector
are the judicial powers of the State. The only conclusion which can be F
drawn is that the Collector under the Act is a revenue court. [332-F-G]

1.3. Once it is held that the Collector is a revenue court then there
is no difficulty in holding that Section 52-A of the Act was enacted by the
Tamil Nadu Legislature under Entry 11-A List III Schedule 7 Constitution G
of India. (332-H)

Associated Cement Companies Ltd. v. P.N. Shamia, (1965) 2 SCR
366 =AIR (1965) SC 1595 = (1965) 1 LW 433 and Dev Singh v. Registrar,
Punjab and Haryana High Court, [1987) 3 SCC 169 = (1987) SCC (L&S)
190= (1987) 3 ATAC 794= (1987) 2 SCR 1005, relied on. H
324 SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.

A 1.4. Section 52-A of the Act is passed \lith the object of providing a
speedier remedy to the State-0"11ed corporations to realize the loan ad-
vanced by them. While advancing loans the Corporations do not act as
ordinary bankers with a view to earn interest. [333-C]

U.P. Financial Cmpn. v. Gem Cap !India) Pvt., ltd., [1993) 2 SCC
B 299 = JT (1993) 2 SC 226 and S.P. Chengalvaraya Naidu v. Jagamiath,
[1994] 1 SCC 1 =JT (1993) 6 SC 331, relied upon.

1.5. There is no doubt that Section 52-A of the Act has been brought
on the Statute Book with a view to expedite recovery of the loans advanced
by the Corporations. The Legislation is directly related to Entry 30 List II.
c Thus Section 52-A of the Act is constitutionally valid and the Tamil Nadu
Legislature and legislative competence to enact the same. [334-C]

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2620 to
2664 of 1981 etc. etc.
D
From the Judgment and Order dated 7.10.80 of the Madras High
Court in W.P. No. 3427 of 1977 & etc. etc.

P.R. Seetharaman, for the Appellant S.K. Dholakia, M.N. Shroff and
Ms. Rcmma Bhandari for the Appellant in T.C. Nos. 40-41/89.
E
Ms. Seita Vaidyalingam, R. Mohan and V. Balachandran, for the
Respondent.

S. Balakrishnan and S. Prasad for the Respondent No. 5.

F H.N. Salve, R.P. Kapur and Sanjay Kapur for the Respondent No. 2
in T.C. No. 40-51/89.

H.L. Agarwal and Anil K. Jha for the Respondent in T.C. Nos.47 &
48/89.

G Judgment/Order

The Judgment of the Court was delivered by

KULDIP SINGH, J. The Tamil Nadu Revenue Recovery Act, 1864,
(the Act) was amended by the Tamil Nadu Revenue Recovery (Amend-
H ment) Act, 1972 and Section 52-A was inserted in the Act. The validity of
STATEOFT.N. v. VENKATASWAMY[KULDIPSINGH,J.] 325

Section 52-A of the Act was challenged before the Madras High Court by A
way of a batch of writ petitions on the ground the the Tamil Nadu
legislature has no legislative competence to enact the said section. A
Division Bench of the High Court by its judgment dated October, 7, 1980
alllowed the writ petitions and declared Section 52-A of the Act ultra vires
the powers of the State Legislature. These appeals by the State of Tamil B
Nadu are against the judgment of the Madras High Court.

Section 52-A of the Act reads as under : -

"52-A. Recovery of sums due to the Tamil Nadu Agro- Industries
Corporation and other Corporations, etc. - Without prejudice to C
any other mode of recovery which is being taken or may be taken,
all loans granted and all advances made to any person-

(i) by the Tamil Nadu Agro-Industries Corporation Limited,
Madras, or
D
(ii) by such other Corporation (the shares of which have been
contributed, underwritten or guaranteed by the State Government)
as may be notified in this behalf by the Stat~ Government in the
Tamil Nadu Government Gazette, or

(iii) from out of the Amalgamated Tamil Nadu Shares of the E
Post War Services Reconstruction Fund and the Special Fund for
Reconstruction and Rehabilitation of Ex- servicemen,

together with interest on such loans and advances, and all sums
due to the Corporations mentioned in clauses (i) and (ii) may be . F
recovered in the same manner as arrears of land revenue under
the provisions of this Act."

In exercise of the powers under Section 52-A(ii) the Tamil Nadu
Government have from time to time notified various Corporations such as
the State Industries Promotion Corporation Ltd., the Tamil Nadu Small G
Industries Development Corporation Ltd., !ht Tamil Nadu Industrial In-
vestment Corporation Ltd., the Tamil Nadu Small Industries Corporation
Ltd., etc. etc.

The respondents-writ petitioners before the High Court- borrowed
various sums of money from one or the other corporation notified under H
326 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.

A Section 52-A of the Act. With a view to recover the sums due, from the
respondents, to the said corporations, proceedings were initiated under the
Act. The Tehsildars concerned issued notices calling upon the respondents
to pay the. amounts mentioned in the respective notices to the concerned
corporations. In some of the cases distrained orders had also been issued.

B Apart from the challenge on the ground of legislaiive competence
the validity of Section 52-A of the Act was also questioned on the ground
that it was violative of Article 14 of the Constitution of India. Since the
High Court struck down the section on the ground of legislative com-
petence it did not deal with the challenge on the ground of Article 14 of
c the Constitution of India. Before us the parties confined their arguments
only to the question cif legislative competence.

The Act provides for distress, sale of distrained property, attachment
of land, sale of land and the arrest of the defaulter for non payment of the
D arrears of land revenue. The Collector is the authority competent to take
any of the actions under the Act. Detailed procedure has been provided
under the Act for distress, sale and arrest. Section 48 provides that when
the arrears of revenue with penalty and other charges cannot be liquidated
by the sale of the property of the defaulter, or of his surety, and the
Collector has reason to believe that the defaulter or his surety is wilfully
E withholding payment of the arrears or has been guilty of fraudulent conduct
in order to evade payment, it shall be lawful for him to cause the arrest
and imprisonment of the defaulter or his surety, not being a female. No
person can be imprisoned for a period longer than two years depending
upon the amount of arrears. It cannot be disputed that the Act provides a
F summary procedure which is drastic and has been enacted for speedy
recovery of the land revenue payable to the Government.

The Advocate-General appearing for the State of Tamil Nadu before
the High Court relied upon the following Entries in List II and III, Seventh
G Schedule, Constitution of India in support of his contention that the Tamil
Nadu Legislature was competent to enact Section 52-A of the Act :-

"Ent'ry 3 List II (As it was before Constitution (Forty-second
Amendment) Act, 1976).

H Administration of justice; constitution and organisation of all
STATE OF T.N. v. VENKATASWAMY [KULDIP SINGH, J.] 327

Courts, except the Supreme Court and the High Court; Officers A
and servants of the High Court; procedure in rent and revenue
Courts; fees taken in all Courts except the Supreme Court.

Entry 43 List II : Public debt of the state.

Entry 45 List II: B
Land revenue, including the assessment and collection of
revenue, the maintenance of land records survey for revenue
purposes and records of rights, and alienation of revenues.

Entry 43 List Ill : c
Recovery in State of Claims in respect of land-revenue and
11
sums recoverable as such arrears, arising outside that State.

So far as Entry 3 List II is concerned the Advocate-General relied
upon the judgment of the Calcutta High Court in Mukherjee and Co. v. D
Union of India, AIR (1964) Calcutta 165. The question of competence of
the State Legislature to enact the Bengal Public Demands Recovery Act,
1913 was raised before the Calcutta High Court .. Bachawat, J. who spoke
for the court examined various provisions and the scheme of the Bengal
Act and came to the conclusion that the exercise of the power under the E
said Act truly represented the judicial power of the State. On the finding
the learned Judge held as under :-

"In my opinion the Bengal Public Demands Recovery Act, 1913
may fairly be said to be a law with respect to administration of
justice, constitution and organisation of revenue Courts and pro- F
cedure of revenue Courts and with respect to land revenue includ-
ing the collection of land revenue and is well covered by the Entries
3 and 45 of the State List. The State Legislature is competent to
make such a law. It follows that the West Bengal Act XI of 1961
is also a law with respect to the matters enumerated in Entries 3 G
and 45 of the State List and consequently the State Legislature has
power to make this law. 11

The High Court distinguished the judgment in Mukherjee and Co.'s
case on the short ground that the provisions in the Bengal Act were
different from the provisions under the Act. H
328 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.

A We are of the view that the High Court was not justified in summarily ·
rejecting the contention of the learned Advocate- General based on Entry
3 of List II. Part of Entry 3 List II has been omitted by the Constitution
(Forty-second Amendment) Act, 1976 and new Entry 11-A was inserted in
List III. The said Entry reads as under :
B "11-A. Administration of justice; constitution and organisation of
all courts, except the Supreme Court anil High Courts."

The -plain language of Entry 11-A gives very wide powers to the State
Legislature to enact laws relating to "administration of justice 11 and "con~
c stitution and organisation of all courts". A Constitution Bench of this Court
in State of Bombay v. Narothamdas Jethabhai and another, (1951] SCR 51
authoritatively interpreted Entries 1 and 2 List II of the Government of
India Act, 1935. The said Entries were in the following terms :-
11
1..... the administration of justice; constitution and organisation of
D all courts except the Federal Court...."

"2. Jurisdiction and powers of all courts except the Federal Court,
with respect to any of the matters in this List... .. "

The question before this Court in Narothamdas's case (supra) was whether
E the Legislature of the State of Bombay had jurisdiction to create an
additional civil court for Greater Bombay having jurisdiction to try, receive
and dispose of all suits and .other proceedings of a civil nature not exceed-
ing a certain value. The precise contention raised was that the Act was ultra
vires the Legislature of the State of Bombay because it conferred jurisdic-
F tion on the new court not only in respect of the matters which the
Provincial Legislature was competent to legislate upon, but also in regard
to matters in respect of which only the Central or the Federal Legislature
could legislate. Mehr Chand Mahajan, J. interpreted the expression "ad-
ministration of justice and constitution and organisation of all courts" in
the foll0wing words:-
G
"It seems to me that the legislative powers ·conferred on the
Provincial Legislature by Item of List II has been conferred by use
of language which is. of the widest amplitude (administration of
justice and constitution and organisation of all courts). It was not
H denied that the phrase employed would include within its ambit
STATEOFT.N.I'. VENKATASWAMY!KULDIPSINGH.J.] 329

legislative power in respect to jurisdiction and power of courts A
established for the purpose of administration of justice. Moreover,
the words appear to be sufficient to confer upon the Provincial
Legislature the right to regulate and provide for the whole
ma~hinery connected \vith the administration of justice in the
Provincial. Legislation on the subject of administration of justice B
and constitution of courts of justice would be ineffective and
incomplete unless and until the courts establish under it were
clothed with the jurisdiction and power to hear and decide causes.
It is difficult to visualise a statute dealing with administration of
justice and the subject of constitution and organisation of courts C
without a definition of the jurisdiction and powers of those courts,
as without such definition such a statute would be like a body
without a soul. ..................... .A court without powers and jurisdic-
tion would be an anomaly as it would not be able to discharge the
function of administration of justice and the statute establishing D
such a court could not be said to be a law on the subject of
administration of justice. It is a fundamental principle of the
construction of a constitution that everything necessary for the
exercise of powers is included in the grant of power. Everything
necessary for the effective execution of power of legislation must
therefore be taken to be conferred by the constitution with that E
power. ........... .The three lists of subjects contained in Schedule 7
have not been drawn up with any scientific precision and the
various items in them overlap. The point kept in view .in drawing
up the lists was to see that all possible power of legislation was
included within their ambit. By making administration of justice a F
provincial subject and by conferring on the Provincial Legislature
power to legislate on this subject and also on the subject of
constitution and organisation of courts, Parliament conferred on
that Legislature an effective power which included within its ambit
the law making power on the subject of jurisdiction of courts." G

flazl Ali, J. in a separate concurring judgment observed as under: -

"For the purpose of correctly deciding the question raised, we must
first try to understand the meaning of the following items in Entry H
330 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.

A 1 of List II, "administration of justice, constitution and organisation
of all courts except the Federal Court." A reference to the three
Legislative Lists sho\VS that "administration of justice" is entirely a
provincial subject on which only the Provincial Legislature can
legislate. The same rerriark applies to "constitution and organisa·
tion of all courts except the Federal Court." The expression "ad-
B ministration of justice" has a wide meaning, and includes
administration of civil as well as criminal justice, and in my opinion
entry 1 in List II, which I have quoted, is a complete and self
contained entry. In this entry, no reference is made to the juris-
diction and powers of courts, because the expressions "administra·
tion of justice 11 and "constitution and organisation of courts", which
c have been used therein without any qualification or limitatiOn, are
wide enough to include the power and jurisdiction of courts, for
how can justice be administered if courts have no power and
jurisdiction to administer it, and how can courts function without
any power or jurisdiction. Once this fact is clearly grasped, it
D follows that, by virtue of the words used in entry 1 of List II, the
Provincial Legislature can invest the courts constituted by it with
power and jurisdiction to try every cause or matter that can be
dealt with by a court of civil or criminal jurisdiction, and that the
expression "administration of justice" must necessarily include the
power to try suits and proceedings of a civil as well as criminal
E nature, irrespective of who the parties to the suit or proceedings
or what its subject-matter may be. This power must necessarily
include the power of defining, enlarging, altering, amending and
diminishing the jurisdiction of the courts and defining their juris-
diction territorially and pecuniarily."
F
It is no doubt correct that with the coming into force of Entry 11-A
List III it is no more the exclusive power of the State Legislature to legislate
under the said Entry but "administration of justice" and "constitution and
organisation of all courts" are the subjects on which the State Legislature
cati legislate. These expressions have been authoritatively interpreted by
G this Court in Narothamdas's case (supra). It is, therefore, settled that under
Entry 11-A the State Legislature has the power to make laws thereby
enlarging or reducing the powers of the courts. The State Legislature can
create new courts, reorganise the existing courts, provide jurisdiction to th~
said courts and also take away the existing jurisdiction if it so desires. We,
H therefore, see no reason why a State Legislature cannot confer additional
STATEOFT.N. v. VENKATASWAMY [KULD!PSINGH.J.[ 331

jurisdiction on existing revenue courts to recover any public dues as arrears A
of land revenue.

The High Court did not go into the question whether the Collector
under the Act is a revenue court. As mentioned above, the provisions of
the Act are rather drastic. The Collector has very wide powers under the
Act to order distress, sale of distrained property, attachment and sale of
B
land and even arrest and detention of the defaulter. The Collector exercises
what we call the judicial powers of the State. This Court in Associated
Cement Companies Ltd. v. P.N. Shamta & Anr., [1965] 2 SCR 366 dealt
with the question whether the authority exercising powers under the Punjab
Welfare Officers Recruitment and Conditions of Service Rules, 1952 was c
a court or tribunal under Article 136(1) of the Constitution of India.
Gajendragadkar, C.J., who spoke for the court observed as under :-

"The expression "court1' in the context denotes a tribunal con-
stituted by the State as a part of the ordinary hierarchy of courts D
which are invested with the State's inherent judicial powers. A
sovereign State discharges legislative, executive and judicial func-
tions and can legitimately claim corresponding powers which are
described as legislative, executive and judicial powers. Under our
Constitution, the judicial functions and powers of the State are
primarily conferred on the ordinary courts which have been con- E
stituted under its relevant provisions. The constitution recognised
a hierarchy of courts and to their adjudication are normally
entrusted all disputes between citizens and citizens as well as
between the citizens and the State. These courts can be described
as ordinary courts of civil judicature. They are governed by their F
prescribed rules of procedure and they deal with questions of fact
and law raised before them by adopting a process which is
described as judicial process. The powers which these courts
exercise, are judicial powers, the functions they discharge are
judicial functions and the decisions they reach and pronounce are
judicial decisions .............. The main and the basic test however, is G
whether the adjudicating power which a particular authority is
empowered to exercise, has been conferred on it by a statute and
can be described as a part of the State's inherent power exercised
in discharging· its judicial function. Applying this test, there can be
no doubt that the power which the State Government exercises H
332 --SUPREME COURT REPORTS [1994) SUPP. 1 S.C.R.

A under R.6(5) and R.6(6) is a part of the State's judicial power. It
has been conferred on the State Government by a statutory Rule
and it can be exercised in respect of disputes between the manage-
ment and its Welfare Officers. There is, in that sense, a lis; there
is affirmation by one party and denial by another, and the dispute
necessarily involves the rights and obligations of the parties to it.
B The order which the State Government ultimately passes 1s
~escribed as its decision and it is made. final and binding. 11

Khalid, J. speaking for this Court in Dev Singh & Ors. v. Registrar,
Punjab and Haryana High Court & Ors. [1987] 2 SCR 1005 reiterated the
C law laid down in Associated Cement case (supra) in the following words:-

"What follows from this case and the authorities referred therein
is this: The State is invested in some cases with a power to decide
controversies between parties. This power is undoubtedly one of .
the attributes of the State and that is called the judicial power of
D
the State. What has to be remembered is that this power is
exercised to resolve controversies between parties. In Associated
Cement's case also this Court took notice of the fact that a dispute
existed between the management and its welfare officer. It was
held that there existed a lis the decision of which lis was rendered
E by the State in exercise of its judicial power. This was the test that
has to be applied to find out whether an order is a judicial order
or not. 11

The Collector exercises powers under the Act which is an Act of the
F State Legislature. He is invested with the power to decide the controversy
between the State and the defaulter. There is in existence a lis between the
State and the defaulter. There is assertion and denial. The dispute involves
the rights and obligations of the parties which are decided by the Collector.
The Collector has the power to sell movable and immovable property of
the defaulter. He can even arrest and detain the person up to a period of
G two years. All these powers of the Collector are the judicial powers of the
State. The only conclusion which can be dra'wn is that the Collector under
the Act is a revenue court. Once it is held, as we have, that the Collector
is a revenue court then there is no difficulty in holding that Section 52-A
of the Act was enacted by the Tamil Nadu Legislature under Entry 11-A
H List Ill Schedule 7 Constitution of India.
STATEOFT.N. v. VENKATASWAMY[KULDIPS[NGH,J.] 333

We may examine the question from another angle. Section 52-A of A
the Act specifically provides for the recovery of "all loans granted and all
advances made to any person" by the corporations covered under the Act.
The proceedings initiated under the Act ar.e only for recovery of loans
granted to the respondents by various corporations. Section 52-A of the
Act, therefore, is a legislation on the subject "money lending" and "money
B
lenders" under Entry 30 of the State List which is in the following terms:-

"Money-lending and money-lenders; relief of agricultural indeb-
tendness."

Section 52-A of the Act is passed with the object of providing a C
speedier remedy to the State-owned corporations to realise the loan ad-
vanced by them. While advancing loans the corporations do not act as
ordinary bankers with a view to earn interest. The loans are advanced as
a financial assistance to establish an industry, develop agriculture or any
other purpose which would advance the well being of the people. Ordinari- D
ly the amounts so advanced are repayable in easy instalments and carry
comparatively lesser rate of interest as compared to the loans advanced by
the banks. The loans are advanced out of the funds of the State which is a
public money. Money has to be recovered expeditiously so that fresh
advances be made to others who have not yet received financial assistance
from the State agencies. If the corporations are left to a remedy of a suit E
the recovery is bound to be delayed considerably. It is with the object of
avoiding the unusual delay which normally takes place in the civil courts
the expeditious remedy by enacting Section 52-A has been provided. It is
often seen that a person who has taken loan from a corporation tries to
delay the payment by taking shelter behind cumbersome procedure of the F
civil courts. This Court in U.P. Financial Corporation v. Mis. Gem Cap
(India) Pvt. Ltd. and Ors., JT (1993) 2 S.C. 226 observed as under:-

"The above narration of facts shows that the respondents have no
intention of repaying any part of the debt. They are merely putting G
forward one or other ploy to keep the Corporation at bay. Ap-
proaching the Courts through successive writ petitions is but a part
of this game. Another circumstance. These Corporations are not
sitting on King Solomon's mines. They too borrow monier, from
Government or other financial corporations. They too have to pay
interest thereon. The fairness required of it must be tempered - H
334 SUPREME COURT REPORTS (1994] SUPP. 1 S.C.R.

A nay, determined, in the light of all these circumstances."

In S.P. Chenga/varaya Naidu (dead) by L.Rs. v. Jagannath (dead) by
L.Rs. and Qrs., JT (1993) 6 S.C. 331, this Court observed as under:-

"We are constrained to say that more often than not, process of
B the court is being abused. Property-grabbers, tax- evaders, bank-
loan-dodgers and other unscrupulous persons from all walks of life
fmd the court - process a convenient lever to retain the illegal-gains
indefinitely."

There is no doubt that Section 52-A of the Act has beeu brought on
C the Statute Book with a view to expedite recovery of the loans advanced
by the corporations. The legislation is directly related to Entry 30 List II.
We, therefore, hold that Section 52-A of the Act is constitutionally valid
and the Tamil Nadu Legislature had legislative competence. to enact the
same. We, therefore, allow the appeals, set aside the impugned judgment
D of the High Court and dismiss the writ petitions filed by the respondents
before the High Court. The appellant shall be entitled to costs which we
quantify as Rs. 5,000 to be paid by each of the respondents- petitioners in
the writ petitions before the High Court.

ORDER
E
Special leave granted.

We have, today, pronounced judgment in C.A. Nos. 2620-64 of 1981.
Since we have allowed those appeals this appeal has to be allowed. For the
reasons recorded and the conclusions reached in C.A. Nos. 2620-64 of 1981
F we allow this appeal, set aside the impugned judgment of the learned single
Judge and of the Division Bench of the High Court and dismiss the writ
petition filed by the respondent-petitioner before the High Court with
costs. We quantify the costs as Rs.5,000.

G We have pronounced judgment today in C.A. Nos. 2620-64 of 1981.
For the reasons recorded therein these transferred cases have to be dis- •
missed. We may, however, briefly deal with the controversy involved in
these cases.

Bihar and Orissa Public Demands Recovery Act, 1914 (the Bihar
H Act) was imended by Act IV of 1974 thereby incorporating "any money
STATE OF T.N. v. VENKATASWAMY [KULDIP SINGH, J.] 335

payable to the State Bank of India" within the list of Public Demands set A
out in Schedule 1 to the Bihar Act. In these transferred cases the only point
argued before us was that the Bihar Legislature had no legislative com-
petence to enact law providing for recovery of bank dues as arrears of land
revenue.
B
We may refer to the facts relating to Transferred Case No. 40 of
1989. Barish Tara Refractories (P) Ltd., had entered into several agree-
ments with the State Bank of India, Main Branch, Ranchi. The case of the
bank is that there 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 October C
1, 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 Sections 4 and 6 of the Bihar Act. The Certificate was challenged D
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 the Parliament can make law
under Entry 45 List I Seventh Schedule Constitution of India. Suhas E
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 Mukherjee and Co. v. Union
of India, AIR (1964) Calcutta 165 and came to the conclusion that the
provisions of the Bihar Act and of the Bengal Public Demands Recovery F
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. Narotltam-
das Jethabai and 1nr., [1951] SCR 51 and held as under:- -

"Administration of justice; constitution and organisation of all G
Courts, except the Supreme Court and the High Court" has now
been brought under Entry llA 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 inter- H
336 SUPREME COURT REPORTS [1994J SUPP. 1 S.C.R.

A pretation 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 IV of 1974 has merely enlarged the jurisdiction of the Certifi-
cate Officer so as to enable the State Bank of India and other
Banks specified in the Schedule to take recourse to the speedier
B 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
c that the amendment clearly comes under the 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 juri.sdiction of the Revenue Court.
D
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 the Parlia-
ment and rejected the same on the following reasoning: -

E "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 to the established Civil
Court and also by following the procedure that ' have been laid
F down. As has been noted earlier in the judgmeqt 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 Staie Legislature has
merely enlarged the jurisdiction of an existing Courts to entertain
and try certain types of cases relating to banks. Before this amend-
G ment 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
enable the Bank to approach the Certificate Officbr 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
H remedy of the Certificate proceedings available to th<;' Banks. As
STATEOFT.N.v. VENKATASWAMYIKULDIPSINGH,J.] 337

I have held earlier that it is competent for the State Legislature lo A
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 affect the Banks in
any way must be passed by the Parliament. 1 have held earlier in
the judgment that the impugned legislation comes squarely within
B
entries 11-A and 13 of the Concurrent List. Even if the legislation
incidentally trenches upon the field reserved for the Central Legis-
lature, 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 c
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 the Parliament. But that by itself will
not make the legislation void, the test is to find out whether the D
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 the Parliament, the legislation will not be
bad. In the instant case, there is an additional fact that the Act
E
was reserved and has received the assent of the President 11
"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 F
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 the Parliament G
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. H
338 SUPREME COURT REPORTS 11994] SUPP. 1 S.C.R.

A In Sawar Mal Choudhary and Ors. v. State Bank of India and Ors.,
AIR (1988) Patna 185 the Patna High Court had an occasion to deal with
the same point. S.S. Sandhawalia, CJ. who spoke for the Bench posed the
question before the Bench in the following _terms: -

"Whether Article 15 (inserted by Bihar Act of 1974) of Schedule
B
1 of the Bihar and Orissa Public Demands Recovery Act, is beyond
the competence of the State Legislature, is the significant common
question in this set of 6 writ petitions, placed for an authoritative
decision by a Division Bench.!!

c Primarily relying on Entry 43 List III Schedule 7 Constitution of India the
Bench answered the question in the negative. The Bench, however, noticed
the judgment of the Calcutta High Court in Harish Tara Refractories's case
and observed as under: -

D "In repelling the aforesaid contention of Mr. Bharuka, the firm
stahd of Mr. K.P. Verma, learned counsel appearing for the
respondent State Bank of India was that the recoveries of monies
due to the State owned Banks was primarily and purely a matter
of procedure and inevitably these matters could, therefore, be left
to the State Governments and their civil and revenue Courts. It
E was highlighted that it remains undisputed that the Certificate
Officer, who authorises the recoveries of public demands is a
Court, and, in any case, would undoubtedly come within the ambit
of revenue Court. Consequently, the State Government would have
undoubtedly the legislative power to govern the procedure and
F matters before the Certificate Officer. Both Entry 11-A and Entry
13 of List III may, therefore, also come in play because they govern
civil procedure as well. Further, ·because Court of the Certificate
Officer is a Court created by the State Government under its
statute, the State Legislature under Entry 11-A or Entry 13 would
not be barred from either legislating about the same or adding to
G the list of recoveries through such a Certificate Officer. Mr. Verma,
in the alternative, therefore, canvassed for the acceptance of the
view in Harish Tara Refractories (P) Ltd. v. Certificate Officer, AIR
(1985) Cal 56 (supra), holding that Entry 11-A and Entry 13 of
List II also sanctified the enactment of Art.15 of Schedule 1 to the
H Act.
STATEOFT.N.v. VENKATASWAMY[KULDIPSINGH,J.] 339

As is manifest from the gravamen of the discussions in this judg- A
ment, the primary contest herein was between Entry 45 of the
Union List I as against Entry 43 of the Concurrent List III. I have
already held that monies due to the State owned banks would come
well within the ambit of public demands and equally their recovery
both within and outside the State, by virtue of Entry 43 of the
B
Concurrent List III. However, no serious challenge would be laid
before us to the detailed reasoning in Hansh Tara Refractories (P)
Ltd. v. Certificate Officer, (supra) deriving the sanction for Article
15 of Schedule 1 from Entries 11-A and 13 of the Concurrent List
III. In the alternative, therefore, I find no reason to differ from the
said judgment either, and, the stand of the respondents based C
thereon may also be well accepted as an additional ground for
sustaining the competency of the State legislature to enact Art. 15
of Schedule 1 to the Act. The contention of Mr. Bharuka, there-
fore, must be rejected.

We do not express any opinion of the interpretation given by the Division D
Bench of the Patna High Court to Entry 43 of List III. We, however, uphold
the judgment of the Division Bench on the reasoning quoted above based
. ! ;: .. on Entries 11-A and 13 of List III .
/
For the reasons given above we uphold the judgment of the Calcutta E
High Court in Harish Tara Refractories (P) Ltd. v. The Certificate Officer
and Ors., (supra) and of the Patna High Court in Sawar Mal Choudhary
and Ors. v. State Bank of India and Ors., (supra) and as such dismiss the
transferred cases. The writ petitions/appeals filed by the petitioners in the
transferred cases in the High Court shall stand dismissed with costs. We
quantify the costs as Rs.5,000 to be paid by each of the petitioners in these F
transferred cases.

A.G. Appeals allowed.
T.P. dismissed.