Case: Pathumma &amp; Others Vs. State of Kerala &amp; Others

that the guarantee against the denial of equal protection of the laws does not mean that identically the same rules of law should be made applicable to all persons within the territory of India in spite of differences of circumstances and conditions. As has been said by the Supreme Court of America, equal protection of laws is a pledge of the protecting of equal laws". Yick Co. V. Hopkins (23) 118 U.S. a t 369 and this means "subjection to equal laws applying like to all in the same situation". Southern Railway Co. v. Greene (24) 216 U.S. 400, 412. fit other words, there should be no discrimination between one person and another it as regards the subject-matter of the legislation their position is the same".A similar view was taken in the case of Southern Railway Co. v. Greene (supra) where the Supreme Court observed as follows:-"The legislature undoubtedly has a wide field of choice in determining and classifying the subject of its laws, and if the law deals alike with all of a certain class, it is normally not obnoxious to the charge of denial of equal protection; but the classification should never be arbitrary. It must always rest upon some real and substantial distinction bearing a reasonable and just relation to the things in respect of which the classification is made, and classification made without any substantial basis should be regarded as invalid". 36. To the same effect is another decision of this Court in the case of The State of West Bengal v. Anwar Ali Sarkar (supra) where this Court observed as follows:"It can be taken to be well settled that the principle underlying the guarantee in Article 14 is not that the same rules of law should be, applicable to all persons within the Indian territory or that the same remedies should be made avail able to them irrespective, of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities impose d. Equal laws would have to be applied to all in the same situation, and there, should be no discrimination between one person and another if as regards the subject matter of t he legislation their position is substantially the same." 37. Having regard to the nature of the rights acquired by the stranger auction purchaser and the bonafide alienee it cannot be said that they are similarly situate or happen to be in exactly the same position. So far as the stranger auction purchaser like the appellant is concerned three facts stare in the face. First, the stranger auction purchaser participates in the proceedings in execution of the decree passed against the debtor and which culminate in the auction sale which is knocked down in favour of the purchaser. Thus, such a purchaser has a clear notice of the circumstances under which the decree was passed as also the fact that the property sold was the property of the debtor. If, therefore, the legislature at a later stage for the amelioration of the lot of the debtors passes a law to restore the property to the debtor the stranger auction purchaser cannot b e heard to complain. In fact, his position is more or less the same as that of the decree- holder. Second, the stranger auction purchaser knows that be has purchased the property at a distress sale and the element of innocence is completely eliminated. Third, under the provisions of the Act even if the property is restored to the stranger auction purchaser unlike the decree-holder the purchaser is entitled to get the entire purchase money in lump-sum including the cost before parting with the possession of the property. This clearly distinguishes the case from that of the decree-holder purchaser and shows that he is not seriously prejudiced. On the other hand, a bonafide alienee does not purchase the property under a distress sale but under sale which is negotiated with the vendor on the terms acceptable to the purchaser. Secondly a bonafide alienee has absolutely no notice of the debt or the debtor or the circumstance under which the decree was passed and the property was purchased by the vendor.A bonafide alience acquires a new title under a negotiated and completed sale and in case the sale is allowed to be re- opened by the Act it will lead to complicated questions which may cloud the real issues, and frustrate the object of the Act. That apart even our common law as a matter of public policy protects the interests of a bonafide transferee for value without notice against voidable transactions. For instance, transfers which could be set aside under section 53 of the Transfer of Property Act or under section 27(b) of the Specific Relief Act, cannot be set aside or enforced as against such transferees. The Act follows more or less the same policy and protects the bonafide alienee because his purchase is absolutely innocent. While it is true that the provisions of the Act operate rather harshly on the stranger auction purchaser but the rigours of the law have been softened by the fact that under the provisions of the Act the auction purchaser gets his full purchase money with costs for any improvement that he may have made, At any rate, any discomfort that he might have suffered as an individual has to be sublimated to the public good of the community at large, in the instant case, the poor agriculturist debtors. Indeed if the bonafide alienee was also brought within the fold of the Act then the classification might have been arbitrary end unreasonable so as to smack of a draconian measure and might have exceeded the permissible limits of discrimination contemplated by Article 14. 38. For the reasons given above we are unable to accept the argument of Mr. Krishnamoorty Iyer that the appellant has been selected for hostile discrimination under the provisions of section 20 of the Act. The argument is over- ruled.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It was contended that the main object of the Act appears to give relief only to those debtors who had filed suits for recovery of debts after 14th July, 1958. But the Act travels beyond the domain of the statement of objects and reasons by giving a blanket power to the Court to set aside the sales which have been completed even before the passing of the ActBefore however taking up the other two points raised by counsel for the appellants which were pressed before us in this Court it may be necessary to set out the approach which a Court has to make and the principles by which it has to be guided in such matters. Courts Interpret the constitutional provisions against the social setting of the country so as to show a complete consciousness and deep awareness of the growing requirements of the society, the increasing needs of the nation the burning problems of the, day and the complex issues facing the people which the legislature in its wisdom, through beneficial legislation, seeks to solve. The judicial approach should be dynamic rather than static, pragmatic and not pedantic and elastic rather than rigid. It must take into consideration the changing trends of economic thought, the temper of the times and the living aspirations and feelings of the people. This Court while acting as a sentinel on the quivive to protect fundamental rights guaranteed to the citizens of the country must try to strike a just balance between the fundamental rights and the larger and broader interests of society, so that when such right clashes with the larger interest of the country it must yield to the latter.It is obvious that the legislature is in the best position to understand and appreciate the needs of the people as enjoined by the Constitution to bring about social reforms for the upliftment of the backward and the weak-or sections of the society and for the improvement of the lot of poor people. The Court will therefore, interfere in this process only when t he statute is clearly violative of the right conferred on the citizen under Part III of the Constitution or when the Act is beyond the legislative competence of the legislature or such other grounds. It is for this reason that the Courts have recognised that there is always a presumption in favour of the constitutionality of a statute and the onus to prove its invalidity lies on the party which assails the same.In the instant case, therefore, we are not able to see any conflict between the directive principles contained in Article 38 and 39(b) and the restrictions placed by the ActWhat is required is that the legislature takes intelligent care and deliberation in choosing a course which is dictated by reason and good conscience so as to strike a just balance between the freedom contained in Article 19 (1) and the social control permitted by clauses (5) and (6) of Article 19. This view, was reiterated in the case of Messrs. Dwarka Prasad Laxmi Narain v. The State of Uttar Pradesh &Ors. ([1954] S.C.R. 803 at 811- 12.) It has also been pointed out by this Court that in order to judge the quality of the reasonableness no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will have to vary from case to case and with regard to changing conditions, the value of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances all of which must enter into the judicial verdict. In other words, the position is that the Court has to make not a rigid or dogmatic but an elastic and pregmatic approach to the facts of the case and to take an over-all view of all the circumstances, factors and issues facing the situation.This Court has considered this question on several occasions during the last 21 decades, and has laid down several tests guidelines to indicate what in a particular circumstance can be regarded as a reasonable restriction. One of the tests laid down by this Court is that, in judging the reasonableness of the restrictions imposed by clause (5) of Article 19, the Court has to bear in mind the Directive Principles of State Policy. It will be seen that Article 38 contains a clear directive to the State to promote the welfare of the people by securing and protecting as effectively as possible a social order in which justice, social, economic and political , hall inform all the institutions of national life. Article 39(b) contains a direction to secure that the ownership and control of the material resources of the community are so distributed as best to subserve the common good. Indisputably, the object of the Act is to eradicate rural indebtedness and thereby to secure the common good of people living in abject poverty. The object, therefore, clearly fulfils the directive laid down in Articles 38 and 39(b) of the Constitution as referred to aboveAnother test which has been laid down by this Court is that restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general publicThe fourth test which has been laid down by this Court to judge the reasonableness of a restriction is to examine the nature and extent, the purport and content of the right, nature of the evil sought to be remedied by the, statute, the ratio of harm caused to the citizen and the benefit to be conferred on the person or the community for whose benefit the legislation is passed, urgency of the evil and necessity to rectify the same. In short, a just balance has to be struck between the restriction imposed and the social control envisaged by clause (6) of Article 1919. The fifth test formulated by this Court is that there must be a , direct and proximate nexus or a reasonable connection between the other words, the Court has to see whether by virtue of the restriction imposed on the right of the citizen the object of the statute is really fulfilled or frustrated. If there is a direct nexus between the restriction and the object of the Act then a strong presumption in favour of t he constitutionality of the Act will naturally ariseAnother test of reasonableness of restrictions is the prevailing social values whose needs are satisfied by restrictions meant to protect social welfareAnother important test which has been enunciated by this Court is that so, far as the nature of reasonableness is concerned it has to be viewed not only from the point of view of the citizen but the problem before the legislature and the object which is sought to be achieved by the statute. In other word s the Courts must see whether the social control envisaged in clause (6) of Article 19 is being effectuated by the restrictions imposed on the fundamental right. It is obvious that if the Courts look at the restrictions only from the point of view of the citizen who is affected it will not be a correct or safe approach in as much as the restriction is bound to be irksome and painful to the citizen even though it may be for the public good. Therefore a just Wince must be struck in r elation to the restriction and the public good that is done to the people at large. It is obvious that, however important the right of it citizen or an individual may be, it has to yield to the larger interests of the country or the communityWe do not mean to suggest that the tests laid down above are completely exhaustive but they undoubtedly provide sufficient guidelines to the Court to determine, the question of reasonableness of a restriction whenever it arises.We would now like to examine the facts and circumstances of the present case in the light of the principles enunciated above in order to find whether or not restrictions imposed by the Act on the rights of the appellants are unreasonableAn analysis of this section shows that the statute seeks to create three different categories of creditors who were liable to restore property to the debtors under circumstances mentioned in the section. In the first place, where the decree-holder has purchased the property at an auction sale but has not been able to get possession of the same, the court has been given power to set aside the sale (1) if the applicant is an agriculturist and is prepared to deposit half of the decretal amount immediately and pay the balance in 10 equal half yearly installments; (2) where the purchaser who purchases the property at the auction sale is a stranger and not a decree-holder the sale can be set aside only on the judgment-debtor depositing the entire purchase money within six months from the date of the commencement of the Act. Sub-section (5) further provides that if any improvements have been made by the purchaser, the debtor will have to reimburse the purchaser for the same, (3) A bonafide alienee who has purchased the property from the auction-purchaser before the date of the publication of the Act is completely exempted from the operation of the provisions of the Act. The Act lays down a self-contain ed procedure for the mode in which the sale is to be set aside and the conditions on which this is to be done. Section 21 of the Act provides for an appeal to the Appellate Court against any order passed under section. 20 and where an order is passed by the Revenue Court an appeal lies to the District Court. Thus the important features of the Act may be summarised as follows:"1. That even if the auction-purchaser was a stranger and may have purchased the property from a debtor at an auction sale, he is liable to restore property on payment of the decretal amount;2. That if the purchaser has made any improvement in the property the debtor has to deposit the cost of the improvements in court before the sale is set aside3. That the debtor has to exercise his option of setting aside the sale within s ix months from the date of the Act."The avowed object of the Act seems to give substantial relief to the agriculturist debtors in order to get back their property and earn their livelihood. This is undoubtedly a laudable object and the Act is a piece of social legislation. As the decree-holder who had purchased the property is fully compensated by being paid the amount for which he had purchased the property, it cannot be said that his right to hold the property has been completely destroyed. The purchaser gets the property at a distress sale and is fully aware of the pitiable conditions under which the debtor was unable to pay the debt. In a Constitution which is wedded to a social patter n of society the purchaser must be presumed to have the knowledge that any social legislation for the good of a particular community or the people in general can be brought forward by Parliament at any time. The Act, however, does not take away the property of the purchaser without paying him due compensation. It is true that section 20(2) (b) provides for payment of the purchase money by installments, but no exception can be taken to this fact as in view of the poverty of the debtor it is not possible for him to pay the debt in a lump-sum and as the legislation is, for a particular community the provision for payment by installments cannot be said to work serious injustice to the decree-holder purchaser, A stranger auction purchaser has been treated differently because he bad nothing to do with the decree and is enjoined to return the property to the agriculturist debtor on payment of entire amount in lumpsum without insisting on installments. Thus, in short, the position is that the object of the Act is to protect the poor distressed agriculturist debtors from the clutches of greedy creditors who have grabbed the properties of debtors and deprived the debtors of their main source of sustenance. Another object which is said to be fulfilled by the statute is to eradicate and remove agricultural indebtedness in the State by amelioration and improvement of the lot of debtors by bringing them to the subsistence level and reducing their borrowings. The Act does not provide for any drastic or arbitrary procedure as the property is restored to the debtor only on payment of the purchase money. The Maharashtra Debt Relief Act of 1976 contained such more drastic provision s and in spite of that it was upheld by this Court as the restrictions were hold byus to be reasonable restrictions in the interest of the general public. To remove poverty by eradicating rural indebtedness is one of the very important social purposes sought to be achieved by our Constitution and it cannot be said that the invasion of the right of the appellants is so excessive as to be branded by the quality of unreasonableness. Having regard to the economic conditions prevailing in Kerala before the passing of the Act, it cannot be said that the restrictions are in any way arbitrary or excessive or beyond the requirements of the situation. Thus, all the tests laid down by this, Court for determining reasonableness of a restriction have been amply fulfilled in this case and we are unable to find any constitutional infirmity in this case on the ground that the Act is violative of Article 19(1) (f). We are clearly of the opinion that the provisions of the Act are reasonable restrictions within the meaning of clause (6) of Article 19. It is true that Article 31 confers a guarantee on a citizen against deprivation of his property except by authority of law. In other words, under Article 31 the property of the citizen cannot be taken away without. there being a valid law for that purpose. The law must not only be valid but it also must not contravene any of the provisions of Article 19 (1) (f). In the instant case, in view of our findings that the Ac t is a valid piece of legislation and amounts to a reasonable restriction within the meaning of sub-clauses (5) and (6) of Article 19 the law passes the test of constitutionality. In these circumstances, therefore, Article 31 is not infringed or violated by the ActWe are, however, unable to agree with this argument because in view of the clear and unambiguous provisions of the Act, it is not necessary for u s, to delve into the statement of objects and reasons of- the Act. Moreover, though the main purpose may have been to give relief to the agriculturist debtors after 14-7-1958 the object was to bring forward a comprehensive legislation on various aspects of the matter in order to give relief to the indebted agriculturists. This object is mentioned in the very first part of the statement of objects and reasons. The words clearly show that the Act was comprehensive in nature and was not confined to any particular situation. In these circumstances, therefore, the contention of learned counsel for the appellants on this score is over-ruledIt is now well settled that what Article 14 forbids is hostile discrimination and not reasonable classification. Equality before law does not me an that the same set of law should apply to all persons under every circumstance ignoring differences and disparties between men and things. A reasonable classification is inherent in the very concept of equality, because all persons living on this earth are not alike and have different problems. Some may be wealthy; some may be poor; some may be educated; some I may be uneducated some may be highly advanced and others may be economically backward. It is for the State to make a reasonable classification which must fulfil two conditions: (1) The classification must he founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group. (2) The differentia must have a reasonable nexus to the object sought to be achieved by the statuteWhile dealing with the first argument we have already pointed out the economic conditions prevailing in the State and the abject poverty in which the agriculturist debtors were living. We have also referred to the Directive Principles of State Policy as contained in the Constitution and have held that it is the duty of the legislature to implement these directives. Having regard, therefore, to the poverty and economic backwardness of the agriculturist debtors and their miserable conditions in which they live, it cannot be said that if they are treated as a separate category or class for preferential treatment in public interest then the said classification is unreasonable. It is also clear that in making the classification the legislature cannot be expected to provide an abstract symmetry but the classes have to be set apart according to the necessities and exigencies of the society as dictated by experience and surrounding circumstances. All that is necessary is that the classification should not be arbitrary, artificial or illusory. Having regard to the circumstances mentioned above, we are unable to hold that the classification does not rest upon any real and substantial distinction bearing a reason-able and just relation to the thing in respect of which the same is made. This view was taken in the case of State of West Bengal v. Anwar Ali Sarkar.([1952] S.C.R. 2 84 at 321.) In our opinion, both the conditions of reasonable classification indicated above are fully satisfied in this case. For these reasons, we hold that section 20 of the Act is not violative of Article 14 of the Constitution and reject the first branch of the argument on this pointWe have given our anxious consideration to this argument and we find that it is not tenable. It is well settled that before a person can claim to be discriminated against another he must show that al l the other persons are similarly situate or equally circumstanced. The pleading of the appellant does not at all contain any facts to show how the two are similarly situate. Unless the appellant is able to establish that he is equated with the bonafide alienee in all and every respect, Article 14 will have no application. In other words, discrimination violative of Article 14 can only take effect if there is discrimination between equals and not where unequals are being differently treated vide State of J &K v. T. N. Khosa &Anr. ([1974] 1 S.C.R. 771 at 783.)Having regard to the nature of the rights acquired by the stranger auction purchaser and the bonafide alienee it cannot be said that they are similarly situate or happen to be in exactly the same position. So far as the stranger auction purchaser like the appellant is concerned three facts stare in the face. First, the stranger auction purchaser participates in the proceedings in execution of the decree passed against the debtor and which culminate in the auction sale which is knocked down in favour of the purchaser. Thus, such a purchaser has a clear notice of the circumstances under which the decree was passed as also the fact that the property sold was the property of the debtor. If, therefore, the legislature at a later stage for the amelioration of the lot of the debtors passes a law to restore the property to the debtor the stranger auction purchaser cannot b e heard to complain. In fact, his position is more or less the same as that of the decree- holder. Second, the stranger auction purchaser knows that be has purchased the property at a distress sale and the element of innocence is completely eliminated. Third, under the provisions of the Act even if the property is restored to the stranger auction purchaser unlike the decree-holder the purchaser is entitled to get the entire purchase money in lump-sum including the cost before parting with the possession of the property. This clearly distinguishes the case from that of the decree-holder purchaser and shows that he is not seriously prejudiced. On the other hand, a bonafide alienee does not purchase the property under a distress sale but under sale which is negotiated with the vendor on the terms acceptable to the purchaser. Secondly a bonafide alienee has absolutely no notice of the debt or the debtor or the circumstance under which the decree was passed and the property was purchased by the vendor.A bonafide alience acquires a new title under a negotiated and completed sale and in case the sale is allowed to be re- opened by the Act it will lead to complicated questions which may cloud the real issues, and frustrate the object of the Act. That apart even our common law as a matter of public policy protects the interests of a bonafide transferee for value without notice against voidable transactions. For instance, transfers which could be set aside under section 53 of the Transfer of Property Act or under section 27(b) of the Specific Relief Act, cannot be set aside or enforced as against such transferees. The Act follows more or less the same policy and protects the bonafide alienee because his purchase is absolutely innocent. While it is true that the provisions of the Act operate rather harshly on the stranger auction purchaser but the rigours of the law have been softened by the fact that under the provisions of the Act the auction purchaser gets his full purchase money with costs for any improvement that he may have made, At any rate, any discomfort that he might have suffered as an individual has to be sublimated to the public good of the community at large, in the instant case, the poor agriculturist debtors. Indeed if the bonafide alienee was also brought within the fold of the Act then the classification might have been arbitrary end unreasonable so as to smack of a draconian measure and might have exceeded the permissible limits of discrimination contemplated by Article 1438. For the reasons given above we are unable to accept the argument of Mr. Krishnamoorty Iyer that the appellant has been selected for hostile discrimination under the provisions of section 20 of the Act. The argument is over- ruled.