Bengal Money Lenders Act, 1940:
s.37A – Suit by appellants for ejectment of respondents from suit property – Stating that the respondents (original owners) had sold the suit property to ‘B’ and thereafter ‘B’ sold the property to predecessor-in-interest of the appellants – Respondents countered the case of appellants and also filed title suit stating that the property was mortgaged with conditional sale, by them in favour of ‘B’ against a loan and that even before expiry of redemption period, ‘B’ in collusion with the appellants entered into agreement to sell the property to the appellants – Trial court dismissed the suit of appellants and decreed the suit of respondents placing reliance on s.37A of Bengal Money Lenders Act and holding that the sale by respondents to ‘B’ was a mortgage with conditional sale – High Court confirmed the order of trial court – On appeal inter alia contended that s. 37A since is contained under State Act is repugnant to central law i.e. s.58(c) of Transfer of Property Act – Held: The respondents cannot be non-suited for inapplicability of s. 37A as the respondents had sought reliefs relating to redemption – Section 58(c) of Transfer of Property Act when read with s. 37A of Money Lenders Act, it is clear that the legislature intended to override the effect of proviso to s. 58(c) by enacting s. 37A – s. 37A is traceable to the Entry ‘Transfer of Property’ in the Concurrent List and not to ‘money lending’ in State List of VII Schedule – Even if there is inconsistency between s.58(c) of Transfer of Property Act and 37A of the State Act, in view of the assent given by the President, the matter falls u/Art. 254(2) of the Constitution and therefore, s. 37A of the State Act will prevail – Transfer of Property Act, 1882 – s. 58(c) – Constitution of India – Art. 254(2), VII Schedule.
Dismissing the appeals, the Court
HELD: 1.1 Under Section 58(c)of Transfer of Property Act, 1982, the proviso makes it indispensable to constitute a transaction a mortgage that one of the conditions mentioned in Section 58(c) be incorporated in the document by which the conditional sale is effected. However, keeping Section 58(c) side by side with Section 37A of the Bengal Money Lenders Act, 1940 (State Act) the conclusion is inevitable that the State legislature has intended to override the effect of proviso to Section 58(c) of the Transfer of Property Act by enacting Section 37A in the State Act. Section 37A was incorporated by way of an amendment in the State Act. Reading of Section 37A brings out the legislative intent with unambiguous clarity and therefore the High Court was right in relying upon Section 37A of the State Act to find that though it was by agreement dated 07.12.1959 which is a separate document that condition to make it a mortgage was incorporated it would not make any difference. Despite the sale deed dated 27.11.1959, the respondents continued to be in possession of the plaint scheduled property and it has been found that they paid the taxes. It is further found that the market value of the property would not have been less than Rs. 30 thousand as on the date of the alleged sale namely 27.11.1959. [Paras 9 and 10][1193-C-D; F-H; 1194-A-B]
2. A Suit for redemption is mentioned as suit to which Section 36 of the State Act applies. Section 38 undoubtedly enables the borrowers to seek a direction for taking accounts. The reliefs in the suit filed by the respondents include reliefs relating to redemption in the form it is asked for. In fact, no issue in this regard was taken before the Trial Court. There is no reason to non-suit, the respondents on this ground. [Paras 15 and 16][1197-C-E]
3.1 It was pleaded that Money lending falls as entry (30) in the State List of the Constitution. Transfer of Property other than agricultural land falls in Entry 6 in the concurrent list. The State legislature in enacting Section 37A of the State Act, a law relating to money lending has made a law which is inconsistent and therefore, repugnant to the law made by the Parliament in Section 58(c) of the Transfer of Property Act. This contention is taken for the first time in this Court. There is also no merit in the same at any rate. Section 37A is traceable to the Entry ‘Transfer of Property’ which is found in the Concurrent List. [Para 17] [1197-E-H]
3.2 Even if the Court proceeds on the basis that there is an inconsistency between Section 58(c) of the Transfer of Property Act and Section 37A of the State Act, in view of the assent given by the President, the matter falls under Article 254(2) of the Constitution. Therefore, despite the inconsistency, Section 37A of the State Act will prevail in the State. [Para 18][1198-E-F]
Swarnalata Tat v. Chandni Charan Dey and Ors.
AIR 1984 Calcutta 130 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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