JUDGMENT Amarendra Nath Verma, J.
1. A difference of opinion between two Division Benches of this Court as to the effect of Sec. 32-G inserted by the State Financial Corporation (Amendment) Act, 1985 (No. 43 of 1985) in the State Financial Corporations Act, 1951, on the continued validity of the U.P. Public Moneys (Recovery of Dues) Act (hereinafter referred to as the 'State Act') in its application to the dues of the U.P. State Financial Corporation, has led to the reference of this case to us.
2. In a bunch of (Writ Petns. Nos. 9476 of 1986, 14797 of 1987 and 15437 of 1987) disposed of by a Division Bench of this Court by its judgment dated November 3, 1987, it was held that Section 3 of the State Act was repugnant to Act No. 43 of 1985 (hereinafter referred to as the 'Central Act') and was, therefore, void and inoperative in its application to the recovery of dues of the U.P. State Financial Corporation. In Messrs. Krishna Utensils v. U.P. State Financial Corporation and others (Writ Petn. No. 20818 of 1988), however, a Division Bench of this Court in its judgment dated September 1, 1988, differed with the earlier Bench decision of this Court and held that there was no repugnancy between the Central Act and the State Act. It ruled that there was really no conflict between the two enactments and that Section 32-G was merely complementary to the various modes of recovery already possessed by the State Financial Corporation Act and was not in derogation of the same. It consequently referred the case to a larger Bench for resolving the conflict of views. That is how the matter is before us.
3. It may be observed at the outset that both the Division Benches proceeded on the premise that the question had to be judged in the light of Article 254 of the Constitution of India. The learned Judges constituting the two Benches, therefore, concentrated mainly on the issue whether the State Law was repugnant to the Central Law and applied the various tests which have been laid down by their Lordships of the Supreme Court as well as the Federal Court for determining the question of repugnancy between the Central Law and the State Law within the meaning of Article 254 of the Constitution of India. Both the Division Benches have, with great respect, gone wrong in applying Article 254 of the Constitution of India. The appropriate provision to be applied in the present case, in our opinion, is Article 246 of the Constitution of India. There is a long line of decisions of the Supreme Court as well as the Federal Court ruling that the concept of repugnancy is relevant only where the laws enacted by Parliament and the State Legislature supposed to be in conflict with each other deal with the subjects falling in the Concurrent List, viz., List III of the Seventh Schedule of the Constitution. There is a complete unanimity of opinion in the pronouncements of the Supreme Court that there is no question or any repugnancy in respect of State Laws falling in List II and in respect of Central Law covered by List I. In support of this proposition we would content ourselves by referring only to the latest pronouncement on the subject in the case of I T C Ltd. v. State of Karnataka, reported in 1985 (Supp) SCC 476. His Lordship Fazal All, J., speaking for the majority, referred to the decisions of the Supreme Court with approval in the cases reported in AIR 1964 SC 1284 (State of Orissa v. M. A. Tulloch and Co.), AIR 1969 SC 59 (Sudhir Chandra Nawn v. Wealth Tax Officer) and (1969) 3 SCC 838 : (AIR 1970 SC 1436) (Baij Nath Kedia v. State of Bihar) in support of his conclusion that Article 254(2) applies only to matters contained in the concurrent List and has nothing to do with matters enumerated in List I or List II. The same view was expressed by his Lordship Mukerji, J, in paragraph 230 of the judgment of page 575. His Lordship summed up the law thus :
"The concept of repugnancy arises only with regard to laws dealing with subjects covered by the entries falling in List III, in respect of which both Parliament and State Legislature are competent to legislate. Under Article 254 of the Constitution, a State law passed in respect of a subject-matter comprised in List III would be invalid if its provisions were repugnant to a law passed on the same subject by Parliament. The repugnancy arose only if both the laws could not exist together. Repugnancy does not arise simply because Parliament and the States pass law on the same subject. There cannot be any repugnancy in respect of State laws passed in respect of matters falling in pith and substance in List II or in respect of Central laws passed on subjects falling in List I."
4. Now it was not disputed before us by the learned counsel for the parties that both the Central laws as well as the State laws are laws which were enacted respectively by Parliament and the State Legislature within their exclusive and respective fields of legislation. The State Financial Corporation Act and its amendment are both indisputably covered by Entry 43 of List I of the Seventh Schedule of the Constitution which mentions the topic as 'Incorporation, regulation and winding up of trading corporations, including banking, insurance and financial corporations but not including co-operative societies. It is equally undeniable that the power to legislate with respect to financial corporations would also embrace within itself the power to enact a law with respect to the mode of recovery of the dues of the financial corporations. Section 32-G of the Central Act is thus clearly a piece of legislation specifically covered by the field of legislation allocated to Parliament under Clause (1) of Article 246 of the Constitution. Likewise, U.P. Public Moneys (Recovery of Dues) Act (the State Law) is also covered by Entry 43 of List II of the Seventh Schedule which provides 'Public debt of the State'.
5. That being so, reference to Article 254 of the Constitution, would on the strength of the decision of the Supreme Court in the case of ITC Ltd., (1985 (Supp) SCC 476) (supra), be out of place. Realizing this obvious constitutional position, Sri Prakash Krishna, learned counsel for the petitioner, who, we must say, argued the case with great ability and fairness, relied mainly on Article 246 of the Constitution of India and the doctrine of occupied field. The contention was that after the enactment of Section 32-G, the Central Act occupied the field of recovery of the dues of the State Financial Corporation as arrears of land revenue wholly and exclusively. With the result, Section 3 of the State Act which provides for recovery of certain dues, inter alia, of the U.P. Financial Corporation as arrears of land revenue, was rendered void and inoperative, inasmuch as the State law clearly encroached upon a field wholly occupied by the Central Act (Section 32-G). In support of this contention, learned counsel placed strong reliance on the decision of the Supreme Court in the case of I T C Ltd. (supra) as well as AIR 1972 SC 1738 (paragraph 37).
6. In order to appreciate the argument, we will briefly survey the provisions of the two enactments bearing on the controversy. The State Financial Corporations Act, 1951 was enacted to provide for the establishment of State Financial Corporations Act, with the object of providing immediate and long term credit to industrial concerns. Section 25 of this Act lays down the business which financial corporations may transact. It provides, inter alia, for guaranteeing on such terms and conditions, as may be agreed upon, loans raised by industrial concerns which are repayable within a specified period. Section 29 arms the Financial Corporation with power to take over the management or business or both of an industrial concern in case the letter makes any default in repayment of any loan or advance or any instalment thereof. The Financial Corporation has the further right to transfer by way of lease or sale and realise the property pledged or mortgaged to the Financial Corporation as a security for repayment of the loan or advance. There is then Section 31 of the Act which enacts a special provision for enforcement of claims by Financial Corporation by applying to the District Judge within the limits of whose jurisdiction the industrial concern carries on its business for an order for the sale of property pledged or mortgaged etc. to the Financial Corporation in case the industrial concern commits a breach of any agreement of loan or advance or makes any default of repayment of any loan or advance. The next material provision is Section 46-B which has been the subject of some debate at the Bar. It states :
"46-B. Effect of Act on other laws -
The provisions of this Act and of any rules or orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the memorandum or articles of association of an industrial concern or in any other instrument having effect by virtue of any law other than this Act, but save as aforesaid, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being applicable to an industrial concern."
7. The effect and scope of this provision came up for consideration before a Division Bench of this Court in the case of Ratan Sons Industries v. U. P. Financial Corporation, Kanpur reported in 1984 All LJ 44. The question raised there was whether the remedy conferred upon the State Financial Corporation for recovery of its dues as arrears of land revenue under Section 3 of U.P. Public Moneys (Recovery of Dues) Act was available to the corporation or whether the Financial Corporation was confined to the specific remedies provided under Sections 29 and 31 of the State Financial Corporations Act. This Court on an analysis of the relevant provisions held as follows (at Pp. 46-47 of All LJ) :
"We are clearly of the opinion that neither of these two provisions lends any support to the petitioners' submission. Section 31 of the State Financial Corporations Act lays down a special provision for enforcement of the claims by Financial Corporations. It enables the Corporation to enforce its claim through a special mode of recovery prescribed thereunder. It, however, does not, directly or by necessary implication, imply that the Financial Corporation is debarred from taking recourse to any other process which may be conferred upon it or be available to it elsewhere by force of other laws of the land. In our considered view the remedy provided under Section 31 is not in derogation of any other mode of recovery which is available to the Financial Corporation under any other law for enforcement of its claims. The remedy, under Section 31 is not, in our opinion, the sole or exclusive remedy available to the Financial Corporations. It is only an additional remedy which has been conferred upon the Financial Corporations. This has been made explicit by the latter part of Section 46-B which says that the State Financial Corporations Act shall be in addition to, and not in derogation of any other law for the time being applicable to an industrial concern.
Learned counsel, however, laid particular stress on the first part of Section 46-B which provides that the provisions of the State Financial Corporations Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Counsel submitted that the process of recovery provided under the U.P. Public Moneys (Recovery of Dues) Act, 1972 is much harsher than that provided under Section 31 and, therefore, it must be held that the former is inconsistent with the latter.
We find no merit in the contention. As already observed, the remedy provided under the U.P. Act is an additional remedy. As noticed above, from the latter part of Sec. 46B the legislative intent seems obvious, namely, that the Corporation shall not be denied recourse to any other mode of recovery which may be conferred upon it or be available to it under any other enactment. Section 46-B expressly says that the Act is not in derogation of any other law for the time being applicable to an industrial concern. The Corporation was hence fully empowered to enforce its claim through the process enacted in the U.P. Public Moneys (Recovery of Dues) Act."
8. The above decision of this Court also drew support from a decision of the Supreme Court in the case of Director of Industries v. Deep Chand reported in AIR 1980 SC 801. We will refer to this decision a little later.
9. We fully endorse the opinion expressed by this Court in Ratan Sons case, (1984 All LJ 44) and hold that for the recovery of its dues U.P. Financial Corporation was not confined to the remedies provided under Sections 29 and 31 of the State Financial Corporations Act. As observed in Ratan Sons case, there is nothing in the language or scheme of the State Financial Corporations Act to justify the contrary conclusion. In our opinion, if there was any doubt about it the same stands completely dispelled by the latter part of Section 46-B which expressly states that the provisions of that Act shall be in addition to and not in derogation of any other law for the time being applicable to an industrial concern. Indeed if the view that the State Financial Corporations were confined in the matter of recovery of their dues only to Sections 29 and 31 of the Act is accepted it would mean that a State Financial Corporation would not even have the remedy of a suit for the recovery of its dues. Such a result could obviously not have been intended by the Legislature.
10. The position that, therefore, emerges from the foregoing discussion and as indeed fairly conceded by the petitioner is that prior to the introduction of Section 32-G the U.P. Financial Corporation could lawfully take recourse to the machinery provided under the State law for recovery of its dues as arrears of land revenue.
11. The question is : Has the position altered after the insertion of Section 32G?. The question must, in our considered view, the answered in the negative. As observed above, the governing constitutional provision is Article 246 which states :
"246. Subject matter of laws made by Parliament and by the Legislatures of States -
(1) Notwithstanding anything in Clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the 'Union List') (2) Notwithstanding anything in Clause (3), Parliament, and, subject to Clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the Concurrent List') (3) Subject to Clauses (1) and (2) the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the 'State List') (4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List."
12. This provision has been the subject of consideration in a large number of decisions rendered both by the Supreme Court as well as the Federal Court. It is, however, unnecessary to burden our decision with all the various pronouncements of the Supreme Court as we find that there is a complete unanimity among the learned Judges on the subject. We will, therefore, content ourselves by referring to the decision of the Supreme, Court in the case of I T C Ltd., (1985 (Supp) SCC 476) (supra). His Lordship Fazal Ali, J., speaking for the majority, spelled out five cardinal principles emerging from an interpretation of Article 246 of the Constitution with regard to demarcation and delimitation of fields of legislation between Parliament and State Legislatures. The fifth principle spelled out in paragraph 17 of the judgment is relevant for our purposes and it; reads thus:
"The doctrine of occupied field has a great place in the interpretation as to whether or! not a particular Legislature is competent to legislate on a particular entry. This means that when the field is completely occupied by List I, as in this case, then the State Legislature is wholly incompetent to legislate and no entrenchment or encroachment, minimal or otherwise, by a State Legislature is permitted. In other words, where the field is not wholly occupied, then a mere minimal encroachment or entrenchment would not affect the validity of the State Legislation."
13. His Lordship also referred with approval to the decision in Sudhir Chandra Nawn (AIR 1969 SC 59) (supra) and Baij Nath Kedia (AIR 1970 SC 1436) (supra) both of which emphasized the same aspect. His Lordship Mukharji, J. also in the same case (I T C Ltd.) (1985 (Supp) SCC 476) observed that it is only if the Central Law completely occupies the field that the State law even if enacted with respect to the matter falling in List II shall have to give way to the Central law. The view expressed by their Lordships was founded on the scheme of the distribution of Legislative functions between the Central and State Legislatures under our Constitution. They placed particular reliance on Clause (3) of Article 246 which expressly states that the power of the legislature of any State to make laws shall be subject to Clauses (1) and (2) of Article 246 of the Constitution. The view was also in recognition of the dominant position of Parliament in the matter of distribution and delimination of legislative functions as recognized in our Constitution.
14. The question then is whether Section 32-G has the effect of occupying the entire field with respect to recovery of the dues of Financial Corporations as arrears of land revenue. The language of Section 32-G is explicit and unambiguous. It provides that the remedy being conferred under Section 32-G is "without prejudice to any other mode of recovery", such a language is wholly inconsistent with the legislative intent to occupy the entire field. The words 'without prejudice to any other mode of recovery' indicate in the clearest terms the intention of the Legislature which was to preserve all other remedies which the Financial Corporations already possessed for recovery of its dues. Prior to the insertion of Section 32-G there was no specific provision in the Central Act arming the Financial Corporations with the power to recover its dues as arrears of land revenue. The State Corporations, however, acquired that power under State laws, such as, the U.P. Public Moneys (Recovery of Dues) Act as a result of the saving clause enacted in the latter part of Section 46-B. It is possible that in some States there was no law corresponding to the U.P. Public Moneys (Recovery of Dues) Act. It appears, therefore, that in order to fill this gap arising from a possible absence of a provision in any State law for recovery of the dues the Central Legislature thought it necessary to insert Section 32-G. But while doing so, the Central Legislature expressly declared that the remedy provided under Section 32-G was without prejudice to any other mode of recovery already possessed by the Financial Corporation. This was made explicit by the use of the words 'without prejudice to any other mode of recovery'.
15. Upon the plain terms of the Statute (Section 32-G) therefore, we have not the slightest hesitation in holding that far from attempting to occupy the entire field, the Central Legislature expressly manifested an intention to leave the other modes already possessed by the Financial Corporations under other enactments untouched. In short, the Central Legislature did not purport to occupy the entire field. We have already found above that prior to the insertion of Section 32-G, the U.P. Financial Corporation did have available to it the mode of recovery enacted under Section 3 of U.P. Public Moneys (Recovery of Dues) Act. That remedy is not lost to the Financial Corporations by the insertion of Sec. 32-G.
16. Learned counsel for the petitioners, lowever, urged that the words occurring in Sec. 32-G 'without prejudice to any other mode of recovery' must be read down so as to be restricted only to the remedies specifically provided under Sections 29 and 31 of the State Financial Corporations Act and not to any other mode of recovery possessed by the Financial Corporations under any other law. We regret we cannot agree. The argument ignores Section 46-B which is an integral part of the statute. The reasoning which led this ourt to hold in Ratan Sons case, (1984 All LJ 44) that the remedy provided under U.P. Public Money's (Recovery of Dues) Act was available to the U.P. Financial Corporation and that the corporation was not confined to the remedies under Sections 29 and 31 is applicable with equal validity to the import of the words 'without prejudice to any other mode of recovery'. Further the words 'any other mode of recovery' are words of the widest possible amplitude and we find no valid ground for whittling them down to mean only the modes of recovery provided under Sections 29 and 31 of the Act. As already observed acceptance of the learned counsel's submission would mean that the Financial Corporation would stand deprived even of the remedy of a civil suit. Such a result could not have been in the contemplation of the Legislature.
17. Further, in construing Section 32-G, the object and purpose of the State Financial Corporations Act as well as the need for providing a speedy remedy to the Corporation for recovery of its dues should not be forgotten. While considering a challenge to the constitutionality of the U.P. Public Moneys (Recovery of Dues) Act, 1965, their Lordships of the Supreme Court in the case of Director of Industries, U.P. v. Deep Chand Agarwal, (AIR 1980 SC 801) (supra) observed in paragraph 6 of the judgment that the U.P. Act was designed to provide a speedier remedy to the State Government to realize the loans advanced by it or by the Uttar Pradesh Financial Corporation, Loans were advanced to assist the people financially in establishing an industry in the State or for the development of agriculture, etc. The loans are advanced from out of the funds of the State in which all people of the State are vitally interested. Consequently moneys advanced by the State Government or Financial Corporation have got to be recovered expeditiously so that fresh advance may be made to others who have not yet received financial assistance from the State Government. It is for this purpose that the State Government and the Financial Corporations were armed with a machinery for speedy recovery of their loans as arrears of land revenue through the modality of issue of a certificate to the Collector for realization of the loan as arrears of land revenue.
18. It will thus be seen that the State law merely advances, promotes and supplements the remedy conferred on the State Financial Corporation under Section 32-G. There is no conflict or collision between the two except that the remedy provided under Section 32-G is slightly more circuitous and perhaps time consuming. In the case of Messrs. Ram Chandra Mewalal Varanasi v. State of U.P., reported in 1984 All LJ 235 (paragraph 51) : 1984 (Supp) SCC 28 : (AIR 1987 SC 1837), the Supreme Court considering a somewhat identical problem, held that where the State Law merely promotes the real object of the Central law and is supplementary or complementary to the Central law, it cannot be invalidated on the ground of lack of legislative competence. In any case, the legislative intent behind Section 32-G being explicit and unambiguous, we cannot accept the contention that the State law has been rendered void and inoperative qua the dues of the Financial Corporation after the insertion of Section 32-G.
19. Learned Counsel next submitted that insofar as the recovery of the dues of the Financial Corporations as arrears of land revenue is concerned, the field must be deemed to have been wholly occupied by Section 32-G and consequently where the Financial Corporation seeks to recover its dues as arrears of land revenue, it must be held to be confined to the mode prescribed under Section 32-G. This argument is more or less a repetition of the submission already dealt with elaborately hereinabove. The argument proceeds on the erroneous assumption that Section 32-G is exhaustive in its operation. Section 32-G, in our opinion, merely prescribes (sic) of the several modes in which dues can be recovered as arrears of land revenue. There is nothing in the provision to suggest that all other modes of recovery of dues as arrears of land revenue stand excluded. The fact that under Section 32-G it is the State Government which upon being satisfied, issues the certificate of recovery to the Collector, unlike the mode prescribed under Section 3 of the State law under which the certificate is issued by a designated officer of the Financial Corporation would also make no difference to the result. As observed above, a mere difference in procedure prescribed under the two enactments would not by itself have the effect of invalidating the State law. So long as the Central law does not manifest a clear and unmistakable intention to occupy the field in its entirety, the State law enacted within the exclusive field of legislation allocated to it cannot be struck down merely on the ground that the procedure prescribed by the State law differs in some respects from that prescribed by the Central law.
20. Finally, learned Counsel for the petitioner made a feeble attempt to challenge the vires of U. P. Public Moneys (Recovery of Dues) Act on the ground of supposed lack of legislative competence. In support learned Counsel also placed reliance on the decision of the Madras High Court reported in AIR 1981 Mad 318. The argument cannot be accepted in view of the pronouncement of the Supreme Court in the case of the State of U. P. v. Deep Chand Agarwal (AIR 1980 SC 801) (supra), which expressly upheld the constitutionality of the enactment. Learned Counsel tried to distinguish that decision on the ground that in that case there was no challenge to the legislative competence of the State Legislature to enact U. P. Public Moneys (Recovery of Dues) Act. We think that the constitutionality of the enactment having been upheld by the Supreme Court, it is not open to this Court to reexamine the vires of the enactment on the ground suggested by the learned Counsel. The Division Bench in the case reported in 1984 All LJ 768 rightly held that after the decision of the Supreme Court it is not open to this Court to reexamine the validity of the Act.
21. In Writ Petition No. 9476 of 1986 and connected petitions (supra) the Bench, while striking down the State law, held that the State law was repugnant to the Central law (Section 32-G). Points of difference were indicated by the Bench. With profound respect to the learned Judges, they ignored the indisputable position that the Central law as well as the State law were not dealing with the topics falling in the Concurrent List Each law was a piece of legislation enacted within the sphere of legislation allocated respectively to Parliament and the State Legislature. Article 254 which was made the basis of the decision by the learned Judges was hence wholly inapplicable to the controversy. The real issue was whether the Central law occupied the field wholly not leaving any scope for the operation of the State law. We have already answered this question in the negative. We, therefore, hold that the decision in Writ No. 9476 of 1986 and connected writ petitions dated November 3, 1987 is not good law. We, however, approve the ultimate conclusion as to the validity of U. P. Public Moneys (Recovery of Dues) Act reached by the Division Bench referring this case to us, though, for the reasons given by us.
22. This Court, therefore, holds that Section 3 of U. P. Public Moneys (Recovery of Dues) Act continues to be valid, notwithstanding the insertion of Section 32-G in the State Financial Corporations Act.
23. That disposes of the main ground of challenge to the impugned recovery proceedings. Since the entire case has been referred to us, we may briefly refer to the relevant facts of the case. The petitioner was advanced a loan of Rs. 1,12,660/-(out of the total sanctioned loan of Rs. 2,17,000/-) by the U. P. Financial Corporation. The allegation is that the petitioner committed serious defaults in the repayment of the loan as a consequence of which after all efforts made by the Financial Corporation to extend maximum facility to the petitioner for the repayment of the loan having failed, a recovery certificate was issued to the Collector for recovery of Rs. 1,38,700.99 which has been challenged by the petitioner on the ground mentioned above. The allegation further is that contrary to the term in the mortgage deed the petitioner let out the factory premises to Messrs. U. P. Agro Development Corporation and started realizing rent from it. Thereupon the Financial Corporation asked the petitioner to deposit the rent being realized from the U. P. Agro Development Corporation so that the question of rehabilitation of the petitioner's unit be considered by the Corporation, the petitioner declined to do so. It is also pointed out in the counter-affidavit that the petitioner also filed a civil suit No. 52 of 1985 for permanent injunction restraining the Financial Corporation from realising its dues from him. An ad interim injunction was also issued on September 7, 1988 under which the petitioner was directed to deposit rent. The institution of the suit and the correspondence exchanged between the petitioner and the Financial Corporation on the subject had a material hearing. The petitioner, however, did not consider it necessary to mention these material facts. In our opinion, the omission to mention these facts in the petition amounts to suppression of material facts which disentitles the petitioner to the grant of any discretionary relief by this Court. The petition is hence liable to be dismissed on this ground also quite apart from the fact that the main challenge to the validity of the impugned recovery proceedings has failed on merits.
24. In the premise, the petition fails and is dismissed, with costs to the respondent No. 1.