SUPREME COURT OF INDIA
N. VENKATACHALA AND S.C. SEN, JJ.
State of Gujarat, Appellant
Versus
Vora Saiyedbhai Kadharbhai and others, Respondents.
Civil Appeal Nos. 8439 with 10112 of 1983
Decided on 2-3-1995.
WITH
State of Gujarat, Appellant
Versus
Somsinh Takhatsinh Rana and another, Respondent.
Constitution Of India,1950 - Article(1)(g) - Gujarat Rural Debtors Relief Act, 1976 - Section 14 - Suspended - Payment of reduced debt - Court enables a creditor to retain property pledged or mortgaged with him by debtor as security for his debt where such debt is merely scaled down and not fully wiped off under provision of Act- But said expression if had not been struck down by High Court a properly pledged or mortgaged with creditor as security by debtor for his debt would have stood released from security and returned by creditor to debtor forthwith notwithstanding fact that debt payable by debtor to creditor stood merely scaled down or reduced and did not stand fully discharged or wiped off as becomes obvious from a reading –Held, Legislature of Gujarat which had a human problem of saving poverty stricken debtors from clutches of non-institutional creditors relieving them of their debts extent found necessary and getting return of their properties from creditors given as security for their debts to eke out their livelihood it was very much justified in introducing provision of Section which enabled debtors to get back their properties given as security from creditors for making use them in their own way to takeout their livelihood in as much as such provision cannot be considered as that not made in social interest by Legislature for promoting social and moral progress of community as a whole- Therefore High Court was wholly wrong in its view that provision in sub-Section Act to extent it made creditors who were entitled get scaled down debts from certain debtors would have effect of depriving creditors of security for debt was an unreasonable restriction Articles Constitution and that view called to be interfered with- As observed by this Court in judgments to which court have adverted even if social legislations such as Debt Relief Legislation enacted by a Legislature are to make a few creditors victims of such legislation in way or other same cannot be regarded as an unreasonable restriction which cannot be imposed in respect of rights exercisable by citizens Constitution and that view called to be interfered with- As is observed by this Court in judgments to which court have adverted even if social legislations such as Debt Relief Legislation enacted by a Legislature foregoing reasons court are constrained to uphold constitutionality as whole and set aside judgment under appeals insofar as it has held words "or an order reducing his debt is made" therein as unconstitutional and struck them down on that account - Appeals allowed
JUDGMENT
VENKATACHALA,J.:—Was the High Court of Gujarat justified in striking down the expression "or an order reducing his debt is made" used in sub-section (2) of Section 14 of the Gujarat Rural Debtors Relief Act, 1976 - "the Act" on the ground that it is ultra vires Article 19(1)(f) and Article(1)(g) of the Constitution by its judgment in Vora Saiyedbhai Kadarbhai v. Saiyed Intajam Hussen Sedumiya, AIR 1981 Guj 154 is the only question which arises for our consideration and decision in these Civil Appeals, by special leave since the special leave in them is granted by this Court confined to that question.
2. The striking down of the said expression in sub-section (2) of Section 14 of the Act as unconstitutional by the High Court, enables a creditor to retain the property pledged or mortgaged with him by the debtor as security for his debt where such debt is merely scaled down and not fully wiped off under the provision of the Act. But, the said expression, if had not been struck down by the High Court, a properly pledged or mortgaged with the creditor as security by the debtor for his debt would have stood released from the security and returned by the creditor to the debtor forthwith, notwithstanding the fact that the debt payable by the debtor to the creditor stood merely scaled down or reduced and did not stand fully discharged or wiped off, as becomes obvious from a reading of sub-section (2) of Section 14 of the Act, which runs thus:
"S. 14. (1) .............
(2) Where a certificate of discharge of any debt is granted to a debtor or an order reducing his debt is made under Section 8, every property pledged or mortgaged by such debtor as a security of such debt shall stand released in favour of such debtor and the creditor shall forthwith return such property to the debtor."
(underlining is ours)
3. No doubt, the Act where the above sub-section finds its place was, as a whole, challenged before the High Court, as that which was ultra vires the Constitution . However, the High Court, as seen from its judgment adverted to at the outset, relying upon the judgments of the Constitution Benches of this Court. In Fatehchand Himmatlal v. State of Maharashtra (1977) 2 SCC 670 and Pathumma v. State of Kerala, (1978) 2 SCC 1 where Debtors Relief Acts similar to the Act had been found to be constitutional, upheld the constitutionality of the Act, as such, but for its view that the aforesaid expression in sub-section (2) of Section 14 of the Act, was ultra vires Articles 19(1)(f) and 19(1)(g) of the Constitution and of striking down the same as stated earlier.
4. None of the creditors who had impugned the provisions of the Act as unconstitutional before the High Court, have come to this Court questioning the correctness of the judgment of the High Court, upholding the provisions as a whole as constitutional. The debtors who will not get back their properties pledged or mortgaged as security for the debts, because of the striking down of the expression "or an order reducing his debt is made" in sub-section (2) of Section 14 of the Act by the High Court, though could have questioned the correctness of such striking down in this Court, it is obvious that their financial inability has prevented them from doing so. Be that as it may, the State has questioned the correctness of the said striking down by the High Court by filing the present appeals against the judgment of the High Court and, very rightly.
5. We heard Shri Anip Sachthey, learned counsel appearing for the appellants and Shri G. Vishwanatha Iyer, learned senior counsel, who was requested by us to appear on behalf of the respondents herein who were unrepresented.
6. Sub-section (2) of Section 14 which we have already reproduced, as is seen, was intended to release the debtors properties with the creditors as security for their debts and make the creditors return those properties to the debtors whether they are debtors whose debts had stood fully discharged or they are debtors whose
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