[Act 23 of ]. Preamble. An Act to define, amend and consolidate the law relating to chitties in the State of Kerala;. WHEREAS it is expedient to define, amend. RBI prepared a Draft Bill. The Kerala Chitties Act. The Chit Funds Act. The laws relating to chitties in force of Kerala State. appellant was that the plaintiff has violated the Kerala Chitties Act, and contended that there was no previous sanction Government as required under .

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As far as the Parliament is concerned, the legislative process is complete as soon as the procedure prescribed by Article of the Constitution and connected provisions are followed and the Bill passed chtities both the Houses of Parliament has received the assent of the President under Article What prevented that result?

To the general rule laid down in Clause 1Clause 2 engrafts an exception viz. Article 1 enunciates the normal rule that in the event of a conflict between a Union and a State law in the concurrent field, the former prevails over the latter. Where is that law to be found unless it were in Section 1 3?

Part XI consists of two Chapters. Penalty if the foreman is a company. Section 4 — Prohibition of invitation for subscription except under certain conditions 1 Where previous sanction is required by section 3 for starting and conducting a chitty, no person shall issue or publish any notice, circular, prospectus, proposal or other document inviting the public to subscribe for tickets in any such chitty or containing the terms and conditions of any such chitty unless such notice, circular, prospectus, proposal or other document contains a statement that the previous sanction required by section 3 has been obtained, together with the particulars of such sanction.

Article of the Constitution makes provision firstly, as to what would happen in the case of conflict between a Central and State law with regard to the subjects enumerated in the Concurrent List, and secondly, for resolving such conflict. To sum at, our conclusions are kerlaa follows: No explanation, much less a satisfactory explanation, has been rendered by the accused persons in their statements under Section Cr.

Such legislations are conditional legislations as in such cases no part of the legislative function is left unexercised. It extends to the whole of the State of Kerala.


Provided that the chitty amount in the case of anyone chitty conducted by a foreman shall not exceed twenty-five thousand rupees: Hence, the State Legislature has full power to legislate regarding the subjects in List III, subject to the provision in Article 2i.


First, regarding the matters contained in List I, i. Chitites of compensation to foreman. According to Shri V.

An Act to define, amend and consolidate the law relating to chitties in the State of Kerala. This is the Constitutional position which would prevail if Section 90 1 of the Central Chit Funds Act, would not have been there. However, according to the learned counsel, repugnancy arose between two competing legislations, the moment kfrala Legislature took up the Kerala Chitties Act, for amendment by Finance Act No.

Supreme Court nullifies Kerala Chit Fund Act

Rishikesh supra created a doubt in the minds of the referring judges and, accordingly, the said statement of law has come before the Constitution Bench of this Court for its authoritative decision.

An Act to define, amend and consolidate the law relating to chitties in the State of Kerala. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance.

That where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field. Accordingly, the matter has come to the Constitution Bench to decide with certitude the following core issues of constitutional importance under Article 1 of the Constitution. Copy of minutes to be filed with Registrar. Thus, Parliament in the matter of enacting such an overriding law need not wait for the earlier State Finance Act No.

Therefore, the State legislature ought to have followed the procedure in Article 2 and ought to have obtained the assent of the President. Power to make rules. Inspection of documents in Registrar’s Office. This was the controversy which came before this Court. Learned Single Judge himself has therefore noticed inconsistencies between the various provisions of the State Act and the Central Act.

In the present case, repugnancy is established by both the tests. Copies of variola to be given to subscribers and acknowledgements to be filed. Inconsistency or incompatibility in the law on concurrent subject, by operation of Articleclauses 1 and 2 does not depend upon the commencement of the respective Acts made by the Parliament and the State legislature.


Article deals with extent of laws whereas Article deals with distribution of legislative powers.

Supreme Court nullifies Kerala Chit Fund Act – News18

By reason of Article of the Constitution, the General Clauses Act, however, applies to the said repeal. The key question that arises for determination is as to from when the repugnancy of the State Act will come into effect?

Provision shall also be made in the variola that veethapalisa shall be istributed. The existence of such an order was an essential pre-requisite before repugnancy could arise.

Further, as stated above, the intention of the Parliament in enacting the Central Act is to cover the entire field relating to or with respect to Citties. Vesting of chitty assets in receiver. In the present case, having regard to the terms of Section 18 1 it appears clear to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersession, of the State Act.

While the Parliament has power to make laws for the whole or any part of the territory of India, the Legislature of a State can make laws only for the State or part thereof. Repugnancy arises when two enactments both within the competence of the keala Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one legislature keraal superiority over the other then to the extent of the repugnancy the one supersedes the other.

After action was taken under Act No. Provided that where a balance sheet is audited by a chartered accountant, a chitty auditor appointed under section 57 shall have the right to audit that balance sheet at any time. That, until such notification neither the Kerala Chitties Act, prevails in the State of Kerala as hcitties has become void and stands kerala chitties act under Article 1 nor the Central Chit Funds Kera,a, as it is not kerala chitties act Cowburn [] 37 C.

Our Answer to Question No.