® THE HIGH COURT OF SIKKIM : GANGTOK WRIT PETITION (C) NO. 7 0F 2005 Nima Ongdi Lepcha, S/o Passang Lepcha, R/o. Marchak Bust:y, P.O. & P.S. Ranipool, East District, Sikkim Vensus Stat:e of Sikkim , (Through the Chief Secretary, Governngent of Sikkim) Gangtok,`East Sikkim. The State JBank of,.Sikkim, :ta¥![n_gA;tR::,%!::tthH:jdg.!h°:f:Cye, P.O. & P.S. Gangtok, East District, Sikkim. The Certificate Officer, East District of Sikkim, Gangtok. ..." Petitioner .„„ Respondents Forthepetitioner : Mr. M.Z. Ahmed, learned Senior Counsel assisted by Ms. a. Dutta, learned counsel. FortheRespondent: Mr. S.P. Wangdi, learned Advocate General assisted by ` Mr. Karma Thinlay, learned Govt. Advocate and Mr. A.J. Sharma, learned counsel. ty, PRESENT : THE HON'BLE MR. JuSTICE N. S. SINGH, ACTING CHIEF JuSTICE THE HON'BLE MR. JuSTICE A. P. SuBBA, JUDGE. DA:TE OF JUDGMENT : 12T'] May 2006. i+ I ± E2 g M E H I A. P. Subba, J. By filing this Writ Petition, the Petitioner Shri Nima Ongdi Lepcha, a loanee of the State Bank of Sikkim (Respondent No. 2), has prayed for quashing the impugned Certificate of Public Demand dated 13.09.2004 issued by the Certificate Officer, East District for recovery of O.D. loan of Rs. 5,62,365.17 from him. 2. Before proceeding with the narration of the respective cases of the parties, it is convenient to bear in mind, that the law relating to recovery of public demands in erstwhile Sikkim was not comprehensive. The relevant law as contained in Notification No. 405 of 1950 was sketchy and inadequate. It mainly lacked provision for giving due opportunity to the debtor for making representations against the realisations of public demands. Hence, wit:h a view to make a comprehensive law with detailed provisions on the subject, the State Legislature enacted a law called the Sikkim Public Demands Recovery Act, 1988 (hereinafter referred to as Act 1 of 1988). This Act received the assent of the Governor on 27.02.1988 and came into force in the State. In the meant:ime, a Central Act called the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Recovery Act 1993), also came into force in the State in the year 1993. After t:his Act came into force, the State Government obtained the assent of the President to the above Act No. 1 of 1988 in the year 2003 and published it in the extraordinary Sikkim Government Gazette dated 22.4.2003, as Act No. 4 of 2003. This Act is hereinafter referred to as Act No. 4 of 2003. A.,\.- The Petitioner, who is a registered Class Ill contractor, had availed of over-draft loan facilities from the St:ate Bank of Sikkim. In t:he year 2004, a Certificat:e of Public Demand, which is impugned herein, was issued under the provisions of the above Act No. 4 of 2003 by the Ld. Certificate Officer, East Dist:rict against the Pet:it:ioner, for recovery of the O.D. Loan. It is this Certificate of P.ublic Demand t:hat has been impugned by the Petitioner in the present proceedings. 3. It is the case of the Pet:itioner, that t:he Act No. 1 of 1988 stood impliedly repealed by the application of the decision of t:his court reported in AIR 1999 Sikkim page-16 relied on and reiterated by a later decision dat:ed 8th July 2002 rendered in Writ Petition No. 10 of 2002. Over and above, this Act also stood impliedly repealed by the application of Art:icle 254 of the Constitution of India, as it has suffered for want of Presidential assent. The subsequent assent obt:ained in the year 2003, aft:er a lapse of 14 years, wit:hout the above t:wo decisions of this court being taken into consideration, cannot be sustained on the touchstone` of Art:icle 255 of the Const:itution of India, and as such, the subsequent assent cannot revive and revalidate the Act in question, which stood impliedly repealed as aforesaid. As regards Act No. 4 of 2003, the case of the Petit:ioner, is that, even though the said `Act' was published in the Government Gazette after obtaining t:he Presidential assent, subsequently on the 5th day of March, 2003 as Act No. 4 of 2003, no Notification in terms of Sect:ion 1(3) thereof had been issued t:o bring the said Act into force. Therefore, this Act has not yet come into force in the State. u.I- Consequently, the `Act No. 1 of 1988' having been impliedly repealed, and the Act No. 4 of 2003 having not been enforced in the State of Sikkim, the issuance of the impugned certificate of public demand dated 13.09.2004, in application case No. 209 of 2004, was completely illegal, wholly without jurisdiction and was t:hus liable to be quashed. 4. The state Bank of sikkim, (respondent No. 2) alone filed the counter affidavit. In the said counter affidavit, it has been denied that the Act No. 1 of 1988 stood impliedly repealed by t:he two decisions of this court referred t:o by the Petitioner. It has also been denied that the said Act No. 1 of 1988 failed for want of Presidential Assent. As regards Act No. 4 of 2003, it was conceded that no Not:ification in terms of Section 1 (3) of the Act has been issued and published bringing t:he said Act into operation in the State, but it was contended t:hat non- issuance of the required Notification after the Act received the assent of President on 05.03.2003, has no relevance, in so far as Act No. 1 of 1988 would continue to remain in force till such time the `Act No. 4 of 2003' is not brought into force, by issuing the required notification. By way of an alt:ernative plea, it was contended that even assuming that the corresponding law as mentioned in P.K. Saraswat's case is Act No. 1 of 1988, the Central Act and the Stat:e Act occupy and operate in different fields, and as such, question of any conflict or repugnancy between the two Acts would not arise. Accordingly, it was contended that the impugned certificate of public demand issued by the Certificate Officer under the provisions of the Act No. 4 of 2003 would not be invalid and unenforceable. 5. Mr. M.Z. Ahmed, Ld. Senior counsel assisted by Miss 8. Dutt:a, Ld. counsel for the petitioner and Mr. S.P. Wangdi, Ld. Advocate General assist:ed by Mr. Karma Thinley, Government Advocate and Mr. A.J. Sharma, Ld. counsel for the respondents were heard. 6. The three main points urged by Shri M.Z. Ahmed in his submissions are that; (1) the Act No. 1 of 1988 st:ood impliedly repealed by t:he application of the two Single Bench decisions of this court, (2) t:he Act No. 1 of 1988 also failed for want of Presidential assent as t:he subsequent assent does not revive and revalidate the same, and {3) the Act No. 4 of 2003 has not been brought in force in absence of the required Notification under Section 1(3) of the Act, and as such, t:he impugned Certificat:e of demand dated 13.09.2004, issued under the provisions of this Act:, is void ab initio, and is liable to be struck down and quashed. 7. In support of the first point that the Act No. 1 of 1988 st:ood impliedly repealed by the application of the two Single Bench decisions of t:his Court, Mr. Ahmed cited t:he following Single Bench decisions :- (1) P.K. Saraswat and etc, -Vs- Union of India & ors. (Writ Petition No. 142 with 208, 424 and 452 of 1998) reported in AIR 1999 Sikkim 16. (2) Ani] Lacliungpa -Vs- State of Sikkim and ors. (Writ Petition No. 10 of 2002). In order t:o ascertain whether the Act No. 1 of 1988 stands repealed by the application of the above decisions, as contended by the Ld. Counsel, it would be necessary to glance through the facts of the case, the issues involved, the points raised in the two cases and the decisions of the court thereon. 8. We may, therefore, take up P.K. Sarawat's case first. A perusal of the relevant facts of t:he case shows that the case of the petitioner therein, was that, the Recovery Act 1993, a Central Act, was inconsistent with the provisions of Sikkim Debts Law 1910 and other laws relating to recovery of money which are protected under 371 F (k) of the Constitution, and thus encroaches upon the field covered by t:he duly protected pre merger laws of the State. In the premises, it was contended that the Recovery Act 1993 could not have been enforced in the State of Sikkim. Repelling this submission, the Ld. Single Judge held that the Recovery Act, 1993 stands enforced in the State, and on such enforcement of the Act, the Sikkim Debts Law 1910 and. any other law on Recovery of Debts stand automatically repealed `if such laws are corresponding to the Recoverv Act'. The above observation of the court, which has been strongly relied on by Ld. Counsel for the Petitioner, speaks of the repeal of the `Sikkim Debts Law' and `any other law on Recovery of Debts' without making any specific reference to the Act No. 1 of 1988. The observation undoubtedly makes it clear that, even in the case of the Sikkim Debt Laws, 1910 and other similar laws, they would stand repealed only if they correspond t:o t:he Recovery Act, RE= 1993. The implication is obvious t:hat such Acts would be void only to the extent of repugnancy within t:he meaning of Article 254 of the Constitution of India. The provisions contained in Article 254 make it clear that, repugnancy occurs only when there is direct conflict between two provisions. However, t:he judgment in quest:ion does not spell out the area of the Acts which come in conflict with each other, with the result that, the provisions of t:he Acts which st:and repealed and which survive are not clearly discernible. The provisions contained in Art:icle 254 of the Constitut:ion of India, as already stated above, make it amply clear that, if any provisions of law made by legislature of St:ate, is repugnant t:o any provisions of the law made by the parliament or to any provisions of any exist:ing law with respect to one of the matters enumerat:ed in the Concurrent List, the law made by parliament will prevail and t:he law made by t:he legislature of the State shall to the extent be void. In Prem Nat:h -Vs- State of J&K AIR 1959 SC 749 cited by t:he Ld. Advocate General t:he Apex Court has held that, "The essential condition for the application of Article 254 (1) is that the existing law must be with respect to one of the matters enumerated in the Concurrent List; in other words, unless it is shown that the repugnancy is between the provisions of a subsequent law and those of an existing law in respect of the specified matters, the article would be inapplicable." In M. Karunanidhi -Vs- Union of India & anr. (1979 3 SCC 431) also a decision relied on by the Ld. Advocate General, the Apex Court in paragraph 24 of the ].udgment observed as follows: - ``Before any repugnancy can arise, the following conditions mLlst be satisfied: 1. That there is a clear and direct inconsistency between the Central Act and the State Act. That such an inconsistency is absolutely irreconciliable. That inconsistency between the provisions of the two Acts is of such a natL]re as to bring the two Acts into direct co[]ision with each other and a situation is reached where it is impossible to` obey the one without disobeying the other." 10. It is thus sett:led position of law that, t:here can be no repeal by implication unless the repugnancy between t:he Acts appears on the face of the t:wo statutes and where there is room or possibility of both the statutes operating in the same field, no repugnancy results. Therefore, when the provisions of an Act are held to be repugnant, cert:ain conditions as highlighted in above Karunanidhi's case have to be fulfilled. Thus, the question is, whether the required conditions are satisfied in the case at hand. As already noted above, t:he I.udgment in question hardly highlights and spells out the area, if any, where the provisions of the two Acts come in conflict. No doubt, the phrase ``any other law on Recovery of Debt:s" employed by the Ld. Singie Bench is broad enough to include the Act No. 1 of 1988 since it is a law on Recovery of Debt, and it may be t:aken as repealed if it corresponds to the Recovery Act 1993. However, as already noted above, a State Law does not become void in toto, as soon as the Union Parliament legislates wit:h respect to the same subject, and only such provisions of the State Act as are in direct conflict with the Central Act would cease t:o be in force by giving way to the provisions of the Central Legislation. In view of the above, the only legitimate conclusion would be, t:hat t:he Act No. 1 of 1988 cannot be taken to have been repealed in toto on the basis of the observat:ion made in P.K. Saraswat:'s case. `.}.`\,.-. 11. Having t:hus considered the implications of P.K. Saraswat:'s case, we may similarly proceed to consider the implication of Anil Lachungpa's case. Question is, whether the I.udgment rendered in Anil Lachungpa's case relied on by the Ld. Counsel for the Petit:ioner, in support of his case, can be taken as an authority, for the proposition, that t:he Act No. 1 of 1988 also st:ands repealed in the same way as the Debt Law of 1910, by virtue of the decision in P.K. Saraswat's case which was followed. For the sake of convenience of reference, we extract below the relevant portion of t:he judgment in Anil Lachungpa's case. ``Vide Judgment dated 30th March, 2001, the Certificate Officer issL]ed the impugned Certificate dated 30th March, 2001 in Sil(I{im PL]blic Demand Recovery Case No. 180 of 2000. The petitioner has challenged the judgment and the certificate issued by the Certificate Officer on the ground that on the enactment of the Recovery of Debts DLie to Banks and Financial Institutions Act, 1993, which is a Central Act, the Sikkim Public Demands Recovery Act, 1988 has stood repealed. The submission finds sLlpport from the judgment of 1:his CoL]rt in P.K. Saraswat versus Union of India-AIR 1999 Sikltim 16. Relying upon the decision, I allow the Writ Petition and quasli the judgment and certificate dated 30th March, 2001 issued by the Certificate Officer, East District in Sikkim Public Demand Recovery Case No. 180 of 2000". It is evident from the above, t:hat the Ld. Single Bench placed reliance on P.K. Saraswat's case without any discussion as to whether the factual sit:uat:ion of t:he case fits in with the fact situation of the decision on which reliance was being placed. As can be gathered from t:he judgment, t:he Ld. Single Bench proceeded on the assumption that Act No. 1 of 1988 stood repealed by virtue of , t:he decision rendered in P.K. Saraswat's case (supra). This approach, if we may say so with respect, is not in line with our foregoing conclusion that Act No. 1 of 1988 cannot be taken to have 10 been repealed in toto by virtLJe of the judgment passed in P.K. Saraswat's case. 12. We have already held above, that the Act No.1 of 1988 is not the Act which can be taken to have been repealed by the application of the decision rendered in P.K. Saraswat's case and even if I:he Act No. 1 of 1988 was taken as an Act covered by the expression ``any other law of Recovery Act' the two Acts` would operat:e in different areas, even though they cover the same field and as such, it would be incongruous to hold that the Act No. 1 of 1988 stands repealed on and after the enactment of Recovery Act, 1993 on the basis of what has been held in P.K. Saraswat's case (supra). 13. It thus becomes clear from the foregoing discussion, that it cannot be assumed that, by virtue of the Single Bench decisions in P.K. Saraswat's case and Anil Lachungpa's case, the Act No. 1 of 1988 stands repealed in toto and no part of it survives. 14. In addition to the above, the Ld. Advocate General had also submitt:ed t:hat the provision relating t:o lower limit of the amount of loan that can be recovered under the Recovery Act 1993, the meaning assigned to t:he words `Bank' and `Debt:' in the said Act and the meaning assigned t:o t:he words `Public Demand' under the Act No. 1 of 1988 also go to show that t:he ambit and scope of t:he two Acts are dist:inct and do not come in conflict with each ot:her in regard to recovery of loan below ten lakhs. However, we do not consider it necessary t:o go into this aspect:, in view of our above conclusion that, merely on t:he basis of the two Single Bench decisions of this court, it cannot be said that the Act No. 1 of 1988 e •,.A...- 11 stands repealed in toto. Accordingly, we propose to proceed further and take up the next point 15. Coming to the second point, it may be seen that the point raised by Mr. Ahmed, is that, the Act No. 1 of 1988 has failed for want of Presidential assent and does not stand revived by t:he subsequent assent of t:he President. The contention of the Ld. Advocate General in this regard, is that, the Act being a State Act, no Presidential Assent would be required for validity of the Act. It was, according to him, only by way of abundant caution, that the Presidential Assent to the Act was obt:ained in 2003, and the fact of obtaining the assent has nothing to do with the validity of the Act, as it was already in force. 16. It is stated t:hat the Act No.1 of 1988 falls within the State list i.e. List 11 of the 7th Schedule, and, as such, the State / Legislat:ure has the competence to pass such law. Article 246 of the Constitution which deals with dist:ribution of legislative powers bet:ween the Union and the State Legislatures, clearly provides that t:he Legislature of a St:ate shall have exclusive powers to make laws for such State or any part thereof, with respect to any of the matters enumerated in t:he List 11 in the Seventh Schedule to the Constitution. Thus, if the sub].ect matt:er falls in t:he State List, t:he question of obtaining Presidential Assent would not arise, for making the Act a valid piece of legislation, unless it is intended t:o prevail over an earlier law of the Union in the State, within the exception engrafted under Clause 2 of Article 254. It is obvious that no such purpose was sought to be achieved by obtaining the Presidential assent. The only purpose as the Ld. Advocate General highlighted \jL- 12 was, by way of `abundant caution' to avoid controversies that the Presidential assent was obtained. Whether t:he said object was achieved by obtaining the Presidential Assent is beside the point. On the issue at hand, we find it pertinent to note that, what is contended, is that, Act No. 1 of 1988 had failed for want of presidential assent, and such Act cannot be revived by obtaining Presidential assent at a later dat:e. We however find it difficult to see how the Act No. 1 of 1988 enacted by the State Legislature, in exercise of the legislative power vested in it under Article 246, is hit by Article 255 and how the question of Presidential assent t:o validate the Act arises. 17. Article 246 as already noted above, clearly defines the respective I.urisdictions of the Union Parliament and t:he State Legislatures as regards subject of legislation. It is not disputed that the subject matter of the Act No. 1 of 1988 falls within the State List. Article 255, to our mind, only enacts that in cases where the Constitution requires that a Bill relating t:o cert:ain matters shall not be introduced without the; recommendation, or prior sanction of the Governor, or the President, and if such recommendations or sanction has not been given, the irregularity shall be cured by subsequent assent of the concerned authority. It is only in a situation where the legislature, in order to cure the invalidity reenacts the provisions of the invalid statute t:hat the President cannot, by giving his assent t:o the subsequent bill, validate the earlier Act with retrospective effect. No such issue seems to have been involved in the present case. All that has been done by the St:at:e is to obtain assent of the President to the State Act, for which RI= 13 Governor's assent was already obtained, and as noted above, it has been done only by way of abundant caution. 18. Therefore, in our. considered view, the Act No.1 of 1988 does not fall within the ambit and purview of Article 255. As the Act No. 1 of 1988 is a State Legislation, on a subject falling within the State List, t:he question of obtaining Presidential assent to the Act would not arise. Therefore, in our considered view, the Act No. 1 of 1988 neither failed for want of President:ial assent nor does it need t:o be revalidated by a president:ial assent t:o be obtained subsequently. The Act No. 1 of 1988 being a Stat:e legislation, the required assent of the Governor has been duly taken. Such assent of the Governor already obtained, in our view, cannot be nullified by the Presidential assent subsequently obtained, and so long as the Act is not brought into force by issue of required Notification. 19. Therefore it follows that the Act No. 1 of 1988 being a State Legislation on a sub].ect falling within the Stat:e List, Presidential Assent would be unnecessary for validity of the Act. As such, t:he question of the said Act failing for want of Presidential Assent, in our opinion, does not and should not arise at this stage. The issue st:ands accordingly answered. 20. Now, passing on to the third and last point, it may be noted that, it is the admitted position that no Notification in terms of Sect:ion 1(3) of the Act No. 4 of 2003 has been issued. But it is the contention of Ld. Advocate General that non issuance of the Notification required under the Act No. 4 of 2003 has no relevance, as t:he Act No. 1 of 1988 is a valid piece of legislation and it 14 continues t:o be in force, even when the Act No. 4 of 2003 fails for any reason whatsoever. In order to appreciate the above contention. a reference to the relevant provision of the related Act would be called for. Section 1 (3) of t:he Act No. 4 of 2003 provides as follows: - ``1. (3) It shall come into force on such date as the State Government may, by notification, appoint"- The above provision is too clear to admit of any doubt that issuance of a Notification is a condition precedent for the Act to come into force. Admittedly no Notificat:ion as required under the above provision has been issued and as already noted above, the Ld. Advocat:e General fairly concedes that the Act No. 4 of 2003 has not come into force. Therefore, the crucial question is, whether the ` impugned Cert:ificate of Public Demand dated 30.09.2004, issued under t:he provisions of an Act:, which has not come into force, is valid and can be acted upon. ® ly\.....,, 21. It is the submission of Mr. Ahmed that, the impugned Certificat:e of Public Demand, which was issued in application No. 209 of 2004, was under the provisions of Act No. 4 of 2003. It is his further submission t:hat there being no such Act in force in the St:ate at the time of the issue of the impugned Certificate