FATEHCHAND HIMMATLAL & OTHERS versus STATE OF MAHARASHTRA ETC.

Citation: [1977] 2 S.C.R. 828 · Decided: 28-01-1977 · Supreme Court of India · Bench: A.N. RAY

Cited by 10 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

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828 
FATEHCHAND HIMMATLAL & OTHERS 
v. 
STATE OF MAHARASHTRA ETC. 
January 28, 1977 
[A. N. RAY, C.J., M. H. BEG, P. N. BHAGWATI, v. R. KRISHNA IYER 
AND S. M. FAZAL ALI, JJ.] 
Constitution of India-Article 301-304(b)-Frudom of tradt 
and 
com-
merce-Reasonable re3trlctions. 
A.rticie 252, 254(2), Seventll Schedule, List !, Entry 52, 97, List ll Entry 
30. 
Doctrine of occupied field-State maki111! a law on a 
differelll 
topic 
but 
covering i11 part the same area-Whether irreconcilable confUcts nectnaT)'-
Whether incidental provisions can be struck down-Gold Colllrol Act 1968-
Conf/ict between a Central law and a State /aw-Effect of the assent of the 
President. 
Interpretation of legislative entries in the Sevellllz Schedule, whether broad 
and liberal construction to be adopted.-Sevellflz Schedule List II Entry 30, 
meaning of money lending and money 
lenders and 
relief 
of agricultural 
indebtedness-Whether impugned Act is covered by this Entry. 
Maharashtra Debt Relief Act 1976-Constitutional validity of-Whether the 
State legislature has legislative 
competence-Whether 
violati>"e 
of 
Article 
304(b )-Whether the freedom of trade is absolute-Whether money-lendinJJ to 
the little pedsants, landless tiller, bonded labour, the pavement tenant and the 
slum dweller a trade-Whether every systematic profit oriented activity, 
how-
ever, sinister suppressive or socially diabolic can be said to be trade-Whether 
the test of reasonableness is to be applied in vacuum or in the context of life's 
realities. 
Perspective of poverty jurisprudence-Whether different from the canolls of 
traditional Anglo-Indian jurisprudence-Whether while testing 
constitutionality 
the principles of developmental jurispmdence must come into play-Procedural 
unreasonableness-Whether the burden of proving debtors' financial position 
011 the lender-Issuance of certificate in favour of debtor having presumptive 
i·aiue without hearinf! the creditor-Absence of appeal-Obligation of the cre-
ditor to move the machinery-Deposit of the ornaments before the proceedings 
can commence-Whether reasonable-Adoption 
of 
summary 
proceedings, 
whether valid. 
The Maharashtra Legislature passed the Maharashtra Debt Relief Act. 1976. 
By the said Act the existing debts of some classes of some indigents have been 
liquidated. The Act is a temporary measure. The validity of the said Act was 
challenged in the present writ petition and appeals on the following grounds : 
( 1 ) Money lending was a trade covered by Article 304 of the Constitu-
J.; 
tion. 
The restriction both substantive and procedural imposed by 
the impugned Act are not reasonable within the meaning of Article 
304(b). 
(2) The State Legislature has no legislative competence to enact the 
statute. 
(3) So far as the Gold ornaments are concerned the field ·is occupied 
by the Gold Control Act 1968 passed by the Parliament. 
There· 
fore, inasmuch as the said Act deals with Goid Ornaments it is Le-
yond the legislative competence. 
-~ 
FATEHCHAND HIMMATLAL v. MAHARASHTRA (Krishan ly~r, !.) 829 
The respondents contended that : 
( l) The money lending in the present case was not a trade. 
(2) Even if it was trade the restrictions imposed by the statute are 
reasonable. 
(3) 
(4) 
(S) 
The State Legislature is competent to enact the impugned Act. 
The doctrine of occupied field has no application. 
The Gold Control Act and the impugned Act deal with two com-
pletely different situations. 
(6) ln any case, there is no inconsistency between the two Acts. 
Upholding the validity of the Act, 
HELD : (1) It is cruel legal jike to legitimate as trn;le this age and 
bleeding business whereby the little peasant, the landless tiller, the bonded 
labour, the pavement tenant and the slum dweller born and buried during the 
Raj and the Republic in chill penury. [836 B-C] 
Atiabari Tea Co. (1961) 1 SCR 809, 843, referred to. 
(2) The topics of legislation listed in the 7th Schedule must receive a large 
and liberal and realistic interrelation. [836 E] 
(3) The freedom while it is wide is not absolute. 
Every systematic, profit 
oriented activity, however sinster, suppressive or socially diabolc, cannot ipso 
facto exalt itself into a trade. 
Dealings of Banks and similar institutions having 
some nexus with trade, actual or potential, may itself be trade or intercourse. 
All modern commercial credit and financial dealings amount to trade. Howevet\ 
the village oasea age old, feudal p

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