This group of cases and those which immediately follow necessitate a consideration of the principle upon which the respective jurisdictions of the Federal and Provincial Legislatures in India are to be delimited and of the method to be adopted in determining the subjects which are to be dealt with by the one or the other under the provisions of sections 99 and 100 of the Government’ of India Act, 1935, and the three lists set out in the Seventh Schedule thereto.

The question immediately in dispute is as to the validity of the Bengal Money-Lenders Act, 1940. By way of introduction it is enough to say that that Act limits the amount recoverable by a money-lender on his loans for principal and interest and prohibits the payment of sums larger than those permitted by the Act.

The Respondents are an incorporated body to which by an order of the 12th May, 1941, passed by the High Court of Calcutta under section 153-A of the Indian Companies Act, the assets of the Khulna Loan Bank, Ltd. (earlier known as the Khulna Loan Coy., Ltd.) were transferred.

Some of the cases now under appeal to their Lordships’ Board were brought by the Respondents who claimed to recover loans and interest alleged to be due upon promissory notes executed by appellant borrowers and in other instances by appellant debtors claiming a declaration that their indebtedness was at least diminished by the provisions of the Act and even in some instances that they were entitled to repayment of sums overpaid.

The proceedings began in 1941, 1942 and 1943, but are concerned with loans made at a much earlier date not by the Respondents but by the Khulna Loan Company or the Khulna Loan Bank. In every case the loans were secured by promissory notes executed contemporaneously with the transaction.

The Act, the validity of which their Lordships have to determine, by section 30 provides that

" Notwithstanding anything contained in any law for the time being in force, or in any agreement (1) No borrower shall be liable to pay after the commencement of this Act-"

more than a limited sum in respect of principal and interest or more than a certain percentage of a sum advanced by way of interest. Moreover it is retrospective in its effect, and its limitations can be relied upon by a borrower by way of defence to an action by the money-lender or the borrower can himself institute a suit in respect of a loan to which the provisions of the Act apply.

Section 100 of the Government of India Act, 1935, is in the following terms:-

"100. (1) Notwithstanding anything in the two next succeeding sub-sections, the Federal Legislature has, and a Provincial Legislature has not, power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to this Act (hereinafter called the ‘ Federal Legislative List.‘)

(2) Notwithstanding anything in the next succeeding sub-section, the Federal Legislature, and, subject to the preceding sub-section, a Provincial Legislature also, have power to make laws with respect to any of the matters enumerated in List III in the said Schedule (hereinafter called the Concurrent Legislative List’).

(3) Subject to the two preceding sub-sections, the Provincial Legislature has, and the Federal Legislature has not, power to make laws for a Province or any part thereof with respect to any of the matters enumerated in List II in the said Schedule (hereinafter called the ‘ Provincial Legislative List).

(4) The Federal Legislature has power to make laws with respect to matters enumerated in the Provincial Legislative List except for a Province or any part thereof."

The Federal Legislative List referred to in this section assigns to the Federal Legislature jurisdiction to make laws with respect to

" (28) Cheques, bills of exchange, promissory notes and other like instruments."

" (33) Corporations, that is to say, the incorporation, regulation and winding up of trading corporations including banking......"

"(38) Banking that is to say the conduct of