# FATEHCHAND HIMMATLAL & OTHERS v. STATE OF MAHARASHTRA ETC - **Citation:** [1977] 2 S.C.R. 828 - **Court:** Supreme Court of India - **Decided:** 1977-01-28 - **Case number:** Civil Appeals No. 632 to 646 B of 1976 - **Bench:** A. N. Ray, M. H. Beg, P. N. Bhagwati, v. R. KRISHNA IYER, S. M. Fazal Ali - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/fatehchand-himmatlal-others-v-state-of-maharashtra-etc-7112 - **Pages:** 34 ## Headnote Constitution of India-Article 301-304(b)-Frudom of tradt and commerce-Reasonable re3trlctions. A.rticie 252, 254(2), Seventll Schedule, List !, Entry 52, 97, List ll Entry 30. Doctrine of occupied field-State maki111! a law on a differelll topic but covering i11 part the same area-Whether irreconcilable confUcts nectnaT)'- Whether incidental provisions can be struck down-Gold Colllrol Act 1968Conf/ict between a Central law and a State /aw-Effect of the assent of the President. Interpretation of legislative entries in the Sevellllz Schedule, whether broad and liberal construction to be adopted.-Sevellflz Schedule List II Entry 30, meaning of money lending and money lenders and relief of agricultural indebtedness-Whether impugned Act is covered by this Entry. Maharashtra Debt Relief Act 1976-Constitutional validity of-Whether the State legislature has legislative competence-Whether violati>"e of Article 304(b )-Whether the freedom of trade is absolute-Whether money-lendinJJ to the little pedsants, landless tiller, bonded labour, the pavement tenant and the slum dweller a trade-Whether every systematic profit oriented activity, however, sinister suppressive or socially diabolic can be said to be trade-Whether the test of reasonableness is to be applied in vacuum or in the context of life's realities. Perspective of poverty jurisprudence-Whether different from the canolls of traditional Anglo-Indian jurisprudence-Whether while testing constitutionality the principles of developmental jurispmdence must come into play-Procedural unreasonableness-Whether the burden of proving debtors' financial position 011 the lender-Issuance of certificate in favour of debtor having presumptive i·aiue without hearinf! the creditor-Absence of appeal-Obligation of the creditor to move the machinery-Deposit of the ornaments before the proceedings can commence-Whether reasonable-Adoption of summary proceedings, whether valid. The Maharashtra Legislature passed the Maharashtra Debt Relief Act. 1976. By the said Act the existing debts of some classes of some indigents have been liquidated. The Act is a temporary measure. The validity of the said Act was challenged in the present writ petition and appeals on the following grounds : ( 1 ) Money lending was a trade covered by Article 304 of the ConstituJ.; tion. The restriction both substantive and procedural imposed by the impugned Act are not reasonable within the meaning of Article 304(b). (2) The State Legislature has no legislative competence to enact the statute. (3) So far as the Gold ornaments are concerned the field ·is occupied by the Gold Control Act 1968 passed by the Parliament. There· fore, inasmuch as the said Act deals with Goid Ornaments it is Leyond the legislative competence. -~ FATEHCHAND HIMMATLAL v. MAHARASHTRA (Krishan ly~r, !.) 829 The respondents contended that : ( l) The money lending in the present case was not a trade. (2) Even if it was trade the restrictions imposed by the statute are reasonable. (3) (4) (S) The State Legislature is competent to enact the impugned Act. The doctrine of occupied field has no application. The Gold Control Act and the impugned Act deal with two completely different situations. (6) ln any case, there is no inconsistency between the two Acts. Upholding the validity of the Act, HELD : (1) It is cruel legal jike to legitimate as trn;le this age and bleeding business whereby the little peasant, the landless tiller, the bonded labour, the pavement tenant and the slum dweller born and buried during the Raj and the Republic in chill penury. [836 B-C] Atiabari Tea Co. (1961) 1 SCR 809, 843, referred to. (2) The topics of legislation listed in the 7th Schedule must receive a large and liberal and realistic interrelation. [836 E] (3) The freedom while it is wide is not absolute. Every systematic, profit oriented activity, however sinster, suppressive or socially diabolc, cannot ipso facto exalt itself into a trade. Dealings of Banks and similar institutions ## Text _Characters 0–39,354 of 102,667. This is a partial read: ask again with offset=39354 for what follows._ A B c D E F G ff 828 FATEHCHAND HIMMATLAL & OTHERS v. STATE OF MAHARASHTRA ETC. January 28, 1977 [A. N. RAY, C.J., M. H. BEG, P. N. BHAGWATI, v. R. KRISHNA IYER AND S. M. FAZAL ALI, JJ.] Constitution of India-Article 301-304(b)-Frudom of tradt and commerce-Reasonable re3trlctions. A.rticie 252, 254(2), Seventll Schedule, List !, Entry 52, 97, List ll Entry 30. Doctrine of occupied field-State maki111! a law on a differelll topic but covering i11 part the same area-Whether irreconcilable confUcts nectnaT)'- Whether incidental provisions can be struck down-Gold Colllrol Act 1968Conf/ict between a Central law and a State /aw-Effect of the assent of the President. Interpretation of legislative entries in the Sevellllz Schedule, whether broad and liberal construction to be adopted.-Sevellflz Schedule List II Entry 30, meaning of money lending and money lenders and relief of agricultural indebtedness-Whether impugned Act is covered by this Entry. Maharashtra Debt Relief Act 1976-Constitutional validity of-Whether the State legislature has legislative competence-Whether violati>"e of Article 304(b )-Whether the freedom of trade is absolute-Whether money-lendinJJ to the little pedsants, landless tiller, bonded labour, the pavement tenant and the slum dweller a trade-Whether every systematic profit oriented activity, however, sinister suppressive or socially diabolic can be said to be trade-Whether the test of reasonableness is to be applied in vacuum or in the context of life's realities. Perspective of poverty jurisprudence-Whether different from the canolls of traditional Anglo-Indian jurisprudence-Whether while testing constitutionality the principles of developmental jurispmdence must come into play-Procedural unreasonableness-Whether the burden of proving debtors' financial position 011 the lender-Issuance of certificate in favour of debtor having presumptive i·aiue without hearinf! the creditor-Absence of appeal-Obligation of the creditor to move the machinery-Deposit of the ornaments before the proceedings can commence-Whether reasonable-Adoption of summary proceedings, whether valid. The Maharashtra Legislature passed the Maharashtra Debt Relief Act. 1976. By the said Act the existing debts of some classes of some indigents have been liquidated. The Act is a temporary measure. The validity of the said Act was challenged in the present writ petition and appeals on the following grounds : ( 1 ) Money lending was a trade covered by Article 304 of the ConstituJ.; tion. The restriction both substantive and procedural imposed by the impugned Act are not reasonable within the meaning of Article 304(b). (2) The State Legislature has no legislative competence to enact the statute. (3) So far as the Gold ornaments are concerned the field ·is occupied by the Gold Control Act 1968 passed by the Parliament. There· fore, inasmuch as the said Act deals with Goid Ornaments it is Leyond the legislative competence. -~ FATEHCHAND HIMMATLAL v. MAHARASHTRA (Krishan ly~r, !.) 829 The respondents contended that : ( l) The money lending in the present case was not a trade. (2) Even if it was trade the restrictions imposed by the statute are reasonable. (3) (4) (S) The State Legislature is competent to enact the impugned Act. The doctrine of occupied field has no application. The Gold Control Act and the impugned Act deal with two completely different situations. (6) ln any case, there is no inconsistency between the two Acts. Upholding the validity of the Act, HELD : (1) It is cruel legal jike to legitimate as trn;le this age and bleeding business whereby the little peasant, the landless tiller, the bonded labour, the pavement tenant and the slum dweller born and buried during the Raj and the Republic in chill penury. [836 B-C] Atiabari Tea Co. (1961) 1 SCR 809, 843, referred to. (2) The topics of legislation listed in the 7th Schedule must receive a large and liberal and realistic interrelation. [836 E] (3) The freedom while it is wide is not absolute. Every systematic, profit oriented activity, however sinster, suppressive or socially diabolc, cannot ipso facto exalt itself into a trade. Dealings of Banks and similar institutions having some nexus with trade, actual or potential, may itself be trade or intercourse. All modern commercial credit and financial dealings amount to trade. Howevet\ the village oasea age old, feudal pattern of money lending to those below the subsistenc" level to the village artisan, the bonded labourer, the marginal ttller and the broken farmer, who borrows and repays in perpetual labour, hereditary service, periodical delivery of grain and unvouchered usurious interest is a countryside incubus. Such debts ever swell, never shrink, such captive debtors never become quits. Such countryside creditors never get off the backs of tnc victims. [840 D. 841 F-HJ Ibrahim (1970) 3 SCR 498, referred to. Automobile Transport (1963) 1 SCR 491, followed. ( 4 ). The economic literature, offici_al and other, on agricultural a-nd working class indebtedness is escalating and disturbing. Indeed the money lender is an oppressive component of the scheme. [844 GJ (5) The test of reasonableness is not to be applied in vacuum but in the contest of life's realities. The Legislature was confronted with the cruel species of money-lenders. The life of the Jaw is not noisis but actual experience. The perspective of poverty jurisprudence is radically different from the canons :>nd values of traditional Anglo-Indian Jurisprudence. The subject matter of the impugned legislation is indebtedness, the benr.ficiaries are petty farmers, manual workers and allied categories steeped in. debt and bonded to the money lending tribe. So, in passing on its constitutionality, the principles of Developmental Jurisprudence must come into play. [846 B, 848 G-H] (6) The exemption granted by the statute to credit instituti??S and banks is reasonable because liabilities due to Government, local a~1thonbes an~ ot!J.er credit institutions are not tainted with exploitation of. the debtor. L1ke\".1se, debts due to banking companies do not ordinary Sl!fl'er from ove.r-reachmg, unscrupulous or harsh treatment. Financi:;l institul10ns have until recently treated the village and urban worker and petty farmer as untonchables. [849 E-HJ A B c D E F G \ 7) Maybe some stray money-lenders may be good souls but the Legislature H cannot easily make meticulous exceptions and has to l?roceed on broad categorisations, not singul<>~ individualisaHons. The cr~d1tors . have not placed material before the Court to contradict the presumptton wh1c;h must be made 830 SUPREME c:;;ouRT REPORTS [1977] 2 s.c.R. A in favour of the legislative judgment. Since nice distinctions to suit every kindly creditor is beyond the law-making process, the court has to uphold the grouping as reasonable and the restrictions as justified in the circumstances of the case. [850 C·E] B D E H Australian Bank Natio11a/1isation Case : Co111111onwealt/1 of Australia v. Bank of New South Wales: 1950 A.C. 235, 311, approved. (8) The Court negatived the contention of the petitione,. that there was procedural unreasonableness in the Act. The section which imposes the obligation on the money lender to prove the debtor's financial position, the issuance of a certificate in favour of the debtor having a presumptive value without hearing the creditor, the absence of appeal, obligation of the creditor to move the machinery and the period of 7 days and the deposit of the ornaments beforethe proceedings can commence are all reasonable in the circumstances of the case. Viewed in the abstract, those grievances look genuine but when we get down to the reality, nothiilg so exists in the so-called provision. The provision requiring the creditor to move and not the debtor is reasonable because between the two. the money-lender is sure to be far shrewder and otherwise more capable of initiating proceedings. To cast that obligation on the debtor when in bulk of cases he is the village artisan, landless labourer or industrial worker is to deny relief in effect while bestowing it in the book. There is nothing objectionable in the debtor seeking a certificate of qualification from the sm111! officer of the area. The officer or the Government servant possesses familiarity with the where~'iihal and the whereabouts of the persons. Hearing the creditor before the certificate is issued would merely prolong and puzzle the proceedings. The creditor does not suffer because the certificate that the applicant is a debto1· raises only a rebuttable presumption and it is idle to argue that the creditor has no means of disproving the income or assets of his debtor. Ordinarily, the money-lender and the petty borrower live in and around the same neighbourhood. As proforma of the certificate to be issued needs mentioning several particulars these have to be filled by the certifying officer who has, therefore. to make the necessary enquiries from and about the debtor. Authorised Officer is one who exercises quasi-judicial powers even otherwise on the Revenue side. The adoption of the procedure under the Maharashtra Land Revenue Code is a fair safeguard although it is a summary procedure. To equate swnmary with arbitrary is contrary to common experience. The obligation for the production of the pli:odged article by the creditor as a preliminary to the institution of the proceedings is also a just measure so that when a decision is reached the article may be returned to the debtor in the event of the verdict going ill his favour. Where the subject matter is substantial and fraught with serious consequences and complicated questions are litigatively terminated summarily, without a second look at the findings by an appellate body it may be that unfairness is inscribed on the face of the law but where little men with petty debts, legally illiterate and otherwise handicapped are pitted against the money-lenders. absence about appeal cannot invalidate the statute. Where the enquiry is a travesty of justi.ce or violation of provisions, where the finding is a perversity of adjudication or fraud on power the High Court is not powerless to grant remedy even after the recent package of constitutional amendments. [852 A-H, 853 A-H, 854 A-BJ (9) Entry 30 in List II in the 7th Schedule is money lending and money lenders; relief of agricultural indebtedness. If common sense and common English are components of Constitutional construction relief against loans by scaling down, discharging, reducing interest and principal, and staying the realisation of debts will among other things fall squarely within the topic. [854 F-HJ {10) The argument that the subject matter of the present legislation would foll under the residuary power under Entry 97 of List I is negatived. f855 Bl ( 11) Where Parliament has made a law under E~try 52 of List I !lnd in the course of it framed incidental provisions affecting gold loans and money lending business involving gold ornaments. The State making a law on 2 different topic but covering in part the same area of gold loans must not go into irreconcilable conflicts. The doctrine of occupied field does uot totally - JIATEHCHAND HIMMATLAL v. MAHARASHTRA (Krishan Iyer, J.) 8 31 deprive the State Legislature from making any Jaw incidentally referable to A gold. In· the event of a plain conflict the State Law must step down unliliiS Aricle 252(2) can be invoked. In that case the State Jaw would still .prevail if the assent of the President has been obtained. There is no conflict between the Gold Control Act and the impugned Act. Secondly, the subjects of both the legislations can be traced to the Concurrent List and Article 254(2) vali- .. dates within the State the operation of the impugned Act since the assent of the President has been obtafoed. [858 B-D] CIVIL APPELLATE JURISDICTION : Civil Appeals No. 632 to 646 B of 1976. · (From the Judgment and Order dated the 22/23/26 /27th of April, 1976 of the Bombay High Court in S.C.A. Nos. 997, 2128, 2773, 2077, 2065, 2045, 1172, 1193, 1195, 1196, 1199, 1200, 1210/ 75 and 2050 & 2071 of 1976) and CIVIL APPEALS NOS. 655 & 1286 of 1976 (From.the Judgment and Order dated the 14-5-1976, 23rd, 24th, 27th April, 1976 of the Bombay High Court in S.C.A. No. 2985 of 1976 and Misc. Petition 4 of 1976) and WRIT PETITIONS NOS. 98, 102-107, 110-113 & 115-120 of 1976 Under article 32 of the Constitution of India) B. Sen, (in CA. 632) Y. S. Chitale, (in CA. 633) Sachin Chowdhary, (in CA. 634) F. S. Nariman and R. N. Bennerjee, Adv. (in CA. 637) H. P. Shah, (in CAs. 632-638) A. J. Rana, (in CA. 635) P. H. Parekh &: Miss Manju Jelly, with them, for the appellants in CAs. 632-637 Vallabhadas Mohta, Sardar Bahadur- Saharya & Vishnu Bahadur Saharya, for the appellants in CAs. 638-644 & 644. J. L. Nain, A. J. Rann, Janendra Lal, B. R. Agarwala and Gagra.: & Co., with him for the appellants in CAs 645 & 646 except for appellant No. 52 in CA. 646 F. S. Nariman, R. N. Banerjee, 1. B. Dadachanji & K. J. John with him for the appellant No. 62 in 646170 Madhukar Soochak, K. Rajendra Chowdhary, K. A. Shah and (Mrs.) Veena Devi Khanna, Advocates for the Appellant in CA. 1286176 S. K. Dholakia, V. J. Kankaria & R. C. Bhatia, for the petitioners in all the Writ Petitions. Niren De, Attorney G~nl. (only in CAs. 632, 638 and W.P. No. 98/76 l. W. Adik, Adv. Genl. of Maharashtra, M. N. Shroff, for the RespGndents in the appeals and Writ Petitions M. P. Chandrakantraj Urs and N. Nettar, for the intervener in CA. 632176 (State of Karnataka) c D E F H 832 SUPREME COURT REPORTS [1977] 2 s.C.R. A K. Parasaran, Adv. Genl. Tamil Nadu. A. V. Rangam, V. B c 0 E F G H Sathiade.v and (Miss) A. Subhashini, in the for the intervener in CA. 632 (State of Tamil Nadu; K. Rajendra Chowdhary, for the interveners/ Applicants A Ratnasabhapat!i and Jayalakshimi & Co. M/s. Jeshtmal, K. R. Chowdhary, Mrs. V~ena Devi Khanna, for the intervener/applicant N. Dhanraj. B. A. Desai, S. C. Agarwala and V. J. Francis, for Respondents 4 & 5 in CA. 1286/76. The Judgment of the Court was delivered by KRISHNA IYER, J. The distance between societal realities and constitutional dilettantism often makes for the dillemma of statutory validity and the arguments addressed in the present batch of certificated appeals and writ petitions evidence this forensic quandary. Likewise, the proximity between rural-cum-clum economics and social relief legislation makes for veering away from verbal obsessions in legal construction. A constitution is the documentation of the founding faiths of a nation and the fundamental directions for their fulfilment. So much so, an organic, not pedantic, approach to interpretation, must guide the judicial process. The healing art of harmonious construction, not the tempting game of hair-splitting, promotes the rhythm of the rule of law. These prologuic observations made, we proceed to deal with the common subject matter of the appeals and the writ petitions. A bunch of counsel, led by Shri Nariman and seconded by Shri B. Sen, have lashed out against the vires of the Maharashtra Debt Relief Act, 1976 (for short, the Debt Act). The former has focused on the fatal flaw in the Act based on Art. 301 of the Constitution and the latter has concentrated his fire on the incompetency of the State Legislature to enact the Debt Act. A plurality of submissions by a procession of lawyers has followed, although the principal points have been comprehensively covered by Shri Nariman and Shri B. Sen. To encore is not to augment, and yet, some counsel, who had not much to supplement, claimed the right to be heard and exercised it ad Ubiem, essaying what had already been forcefully urged and forgetting that a fine, fresh presentation of a case is apt to be staled by a second version of it and pejorated by a third repetition. While in constitutional issues of great moment this Court is reluctant to ratio oral submission it is important, by comity of the Bench and the Bar, to conserve judicial time in the name of public justice so that. internal allocations avoiding over-lapping may be organised among many counsel who may appear in :;everal appeals, substantially dealing with the same points. A happy husbandry of advocacy is helpful for judge and lawyer alike and to streamline forensic businf)ss is the joint responsibility of both the limbs of the institution of justice. Back to the beginning. Art. 301 of the Constitution mandates . -t .. FATEHCIIAND HIMMATLAL v. MAHARASHTRA (Krishan Iyer, J.) 833. "301. Freedom of trade, commerce and intercourse.-·~ -· --- Subject to the other provisions of this Part, trade, com- · ·-. merce and intercourse throughout the territory of India shall be free." · We may also read the cognate provision viz., Art. 304 (b) : "304 (b). RestrictioM on trade, commerce and among States.- Notwithstanding anything in Article 301 or Article 303, the Legfslature of a State may by lawX X X X A B (b) impose such reasonable restrictions on the freedom of c trade, commerce or intercourse with or within that State as may be required in the public interest : Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President." The unmincing submission of Shri Nariman is that money-ending is very much a trade, that the Debt Act deals drastically with moneylenders in defiance of Art. 301 and, since the manacles on moneylenders and money-lending are unreasonably harsh and callously indiscriminate, the 'freedom" which belongs constitutionally to professional money-lenders is breached by the ·statutory liquidation of their loans. Nor can the invalidatory consequence of this violation be obviated by Art. 304(b). This latter provision salvages statutes which contra- ,·ene freedom of trade, commerce and inter-course only if they possess the vinue.; of . reasonableness and public interest. The injustice of wiping out the debts of marginal farmers, rural artisans, rural labourers and workers as provided in the scheme of the Act was anathematised by Shri Nariman as an unwarrantedly unreasonable annihilation, of the trade and its capital. We will deal with this contention presently but we may merely mention for later discussion another short, lethal objection to a part ·of the law, put forward by counsel. He stated that there was legislative incompetency for the State Legislature because it had forfeited the power to legislate on money-lending where gold loans were involved, since Parliament had occupied the field under Entry 52 of List I by enacting the Gold Control Act, 1968, and had thereby elbowed out the State Legislature from that field. · Considerable eclectic study of English,· Aiistralian and American cases was displayed in the course of arguments, reverberating in Indian . precedents dealing with Part XIII of the Constitution. Of course, we will refer to them with pertinent brevity, although we · must administer to ourselves the caveat that the same words used in constitutional enactments of various nations may bear different connotations D E G H 834 SUPREME COURT REPORTS [1977] 2 .s.c.R. A and when Courts are called upon to interpret them they must :u:climatize the expressions to the particular conditions prevailing . in the country concerned. Different lands and life-styles, di1Ierent value systems and economic solutions, di1Ierent social milieus and thought- ~ ways, different subject matters and human categories-these vital Variables influence statutory. projects and interpretations, although lexicographic aids and understandings in alien jurisdictions may also be B looked into for light, but not beyond that. ·· The constitutional guarantee of the commercial mobility and unity of the country in Art. 301 is sought to be made the major sanctuary of 'money-lenders' whose 'freedom' to lend and thereby end the lendce is, by legislative judgment, hand-cuffed. Before unravelling the provisions of. the Debt Act, we must first found ourselves on the quintesC sentials of Art. 301 and the juristic and economic basics implied in . that provision. We are not construing a petrified legal parchment but reading the Iuscent lines of a human text with a national mission. We must never forget that the life of the suprema lex is nourished by the social setting, that juridical abstractions and theoretical conceptions may be fascinating forensics but jejune jurisprudence, if the raw Indian realities are slurred over. We are expounding the ConstituD tion of a nation whose people hunger for a full life for each, and therefore, a perception of the signature of social justice writ on it is imperative. · 'Nothing is more certain in modern society', declared the American Supreme Court at mid-century, 'than the principle that there are not absolutes'. Legal Einsteinism guides the Court, · not doctrinal absolutes, as we will presently discuss. E Since Art. 301 has loomed laige in the debate at the bar, it is JI G H pertinent to ask what is its object and design. . For, if the impugn~d legislation does violate Art. 301, it must perish unless rescued by Art. 304(b). This Court, in Atiabari Tea Co. ('),tracing the roots of Art. 301, observed : "Let us first recall the political and co~stitutional background of Part XIII. It is a matter of common I>nowledge that, before the Constitution was adopted, neatly two-thirds of the territory of India was subject to British Rule and was then . . known as British India, while the remaining part of the territory of India was governed by Indian Princes and it consisted of several Indian States. A large number of these States claimed sovereign rights within the limitations imposed by the paramount power in that behalf, as they purported t<> exercise their legislative power of imposing taxes in respect of trade and co=erce which inevitably led to the erection of customs barriers between themselves and the rest of India. In the matter of such barriers British India was governed by the provisions of s. 297 of the Constitution Act, 1935. Te>· the provisions of this section we will have occasion later. to. (!) (1961) 1 S.C.R. 809, 843 •.. '} VATEHCHAND HIMMATLAL v. MAHARASHTRA (Krishan Iyer, J.) 835 refer during the course of this judgment. Thus, prior to 1950 the flow of trade and commerce was impeded at several . points which constituted the boundaries of Indian States. After India .attained political freedom in 194 7 and before the Constitution was adopted the historical process of th~ merger and the integration of the several Indian States with the rest of the country was speedily accomplished with the result that when the Constitution was first passed the territories of India consisted of Part A States which broadly stated represented the Provinces in British India, and Part B States which were made up of Indian States. This merger or integration of Indian States with the Union of India was preceded by the merger and consolidation of some of the States inter se between themselves. It is with the knowledge of the trade barriers which had been raised by the Indian States in exercise of their legislative powers that the Constitution-makers framed the Articles in Part XIII. "The main object of Art. 301 obviously was to allow the free flow of the stream of trade, commerce and intercourse throughout the territory of India." It is fair to realise that Art. 301 springs from Indian history and · hope. We may recall the political and constitutional background of Part XIII-the divided days of British rule, the united aspirations of Independent India, the parochial pressures and regional pulls leading inevitably to the erection of fiscal barriers and hampering of economic oneness. The integration of India was not merely a historical process but a political, social and economic necessity. Gajendragadkar J., in Atiabari Tea Co. (supra) pointed out : "In drafting the relevant Articles of Part XIII the makers of the Constitution were fully conscious that economic unity was absolutely essential for the stablity and progress of the federal polity which had been adopted by the Constitution for the governance of the country. Political freedom which had been won, and political unity which had been accomplished by the Constitution, had to be sustained and strengthened by the bond of economic unity." (p. 843) · "Free movement and exchange of goods throughout the territory of India is essential for the economy of the nation and for sustaining and improving living standards of the country. The provision contained in Art. 301 guaranteeing the freedom of trade, commerce and intercourse is not a declaration of a mere platitude, or the expression of a pious hope of a declaratory character; it is not also a mere statement of a directive principle of State policy; it embodies and enshrines a principle of paramount importance that the economic unity of the country will provide the main sustaining force for the 'stability and progress of the political and cultural unity of the country." ( p. 844) ' A B c F G H A B c D E F G H 836 SUPREME COURT REPORTS (1977] 2 s.c.R. . Such ~eing t~e perspective, the judicial sights must be set high while read1~g ~1cle. 301. Social solidarity is a human reality, not ~ere ?Onst1tutional. piety, and a non-exploitative economic order outlm~ m. Art. 3~, 1s the bed~ock of a contented and united society. Social disorder 1s the bete noire of commerce and trade. All this is non-controve~sial ground but the learned Attorney General contests the very applicability of Art. 301 to money-lenders and moneylending vis a vis the humble beneficiaries of the statute viz., the marginal farmers, rural artisans, rural labourers, workers 'and small farmers. It is a cruel legal joke to legitimate as trade this age-old bleeding business of agrestic India whereby the little peasant. the landless tiller, the bonded labourer, the pavement tenant and the slum dweller have been born and buried during the Raj and the Republic in chill penury. Is trade in human bondage to be dignified legaUy, betraying the proletarian generation? For whom do the constitutional bells of the socialist Republic toll? Therefore, argues the Attorney General, it is juristic blasphemy to call 'unscrupulous moneylending' -a rural spectre which stalks Maharashtra-a trade at all. These chronic operations, socially obnoxious and economically inhuman, cannot be recognised as licit and wear the armour of Art. 301, for this preliminary reason. Not all systematic economic activity is trade. Sinister, socially shocking ones, are not. Shri Nariman has counter-asserted, backed by a profusion of prece-· dents, that money-lending in the modem complexities of business life is a lubricant for the wheels of commerce and has been treated .as trade. It is the life-blood of business. It needs no argument to say that the topics of legislation, listeq in the Seventh Schedule, must receive a large and liberal, yet realistic, interpretation. So understood, the expression 'trade' in its wide import, covers not merely 'buying and selling of goods' but trading facilities like advances, overdrafts, mercantile documents, trading intelligence, telegraphic and telephonic communications, banking and insurance and many oilier sophisticated operations connected with and essential for commerce and intercourse. Even travel facilities in certain circumstances have a nexus with trade and commerce and are part of them. Learned counsel referred to Ibrahim(') wherein this Court has referred to the corresponding provisions in the Australian Constitution and imparted a comprehensive meaning to 'trade'. American and Australian caselaw, Halsbury and the Judicial Committee, were read with special emphasis on the amplitude of the expression 'trade'. An inventory of Indian statutes wherein 'money-lending' as a business was mentioned and licensed, was also brought to our notice. Indeed, this wealth of legal literature may well be held ~o make 01;1t that mone}'.-lendin~, banking, insurance and other financial transactions, commerc1~l credit and mercantile advances may, conceptually, be charactensed as 'business'. Mercantile credit, money-lending, pawn-broking and advances on pledges are business. Othe~e, the co~erce of O';!r country will grind to a halt. ~an we conceive .of trad.e w1thou! credit, or commerce without mercantile documents, d1scountmg, lendmg and (1) [1970] 3 S.C.R. 498. ., .. r, FATEHCHAND HIMMATLAL v. MAHARASHTRA (Krishan Iyer, J.) 837 negotiable paper? To deny to monetary dealings the status of trade is to push India into the medieval age : Broadly viewed, money-lending amongst the commercial community is integral to trade and is trade. So far we go with Shri Nariman and others who have urged the same point with allomorphic modifications. A The learned Attorney General's stance is radical and rooted in B the rural bondage to break which is the mission of this legislation. If accepted, it will mean that money-lending, in the limited statutory se~ and projected on the Indian rural-urban screen vis a vlv the cxplmted people below-the-poverty-line, cannot be regarded as 'trade'. It is apt to be reminded of the then famous epigram of Frederick W. Maitland : "A woman can never be outlawed, for a woman is C never in law." Money-lending-is it in law at all? No trade, no Art. 301, and so the baptismal certificate that Art. 301 insists upon from the economic activity that seeks its 'free' blessings is that it is 'trade, commerce or intercourse'. Thus the critical question is as to whether money-lending and the class of money-lenders who have been preying upon the proletarian and D near-proletarian segments of Indian society for generations may be legally legitimated as 'traders' or 'businessmen'. This is not an abstract legal question turning) on semantic exercises but a living economic question of incurable indebtedness. Blood, sweat and tears animate amelioratory law which exiles literal interpretation. The heartbeats of the Debt Act, according to the State counsel, cannot be felt without humanistic insight by first ostracising, in the name of social E order, the die-hard, death-grip practices which have defied legislative policing in the past and have kept, in chronic servitude, vast numbers of the Indian agrarian community and working class. But if, as urged by the opposition, the law flatly flouts Art. 301, it fails. The rule of law, for functional success, must run close to the rule of life. Therefore, constitutional assays must be on the touchstone of F societal factors. So we cannot embark upon a study of the working of stock-exchanges, the dependence of industry and business on credit and key-loans, the role of pledges in financing commercial activity, when the chalfenge is to an economic legislation dealing with the lowliest and the lost, the destitude and the desperate, far from big business and industry, trade and commerce and high finance and sophisticated credit. We must zero-in on the social group the Debt Act seeks to G save, the pattern of lending the statute strikes at, the heaviness of the blow and on whom it falls, and the raison d'etre of the measure. Does this specific species of deleterious economic activity, masked as moneylending 'trade', qualify for the freedom that Art. 301 confers on trade? The specific social malady and the legislative therapeutics suggested guide the court. Here again, relativity, not absolutes, rules jurisprudence. H Of course, while interpreting the relevant Articles_ in Part XIII and pronouncing upon the concept of 'trade', we must i'lave regard to the general scheme of the Constitution and should not truncate the A B E F G H 838 SUPREME COURT REPORTS (1977] 2 s.c.R. scope a.nd .an_ipli~ude of economic unity, free movement, protection from d1scnmmat10n, unhampered financial arrangements and the like. Undoubtedly, the freedom, while it is wide, is not absolute. Our Constitution, framed by those who were sensitive to the massive pove:ty of the country and determined to extirpate the social and ccononuc backwardness of the masses, could not have envisioned a development where some will be 'free' to keep many 'unfree' [See Articles 38 and 39 (c)l. That is why, to make assurance doubly sure, a further provision is made in Art. 304(b) by adding a rider to the freedom of commerce subjecting it to the requirement of reasonableness and imposition of restrictions in public interest. Das, J., in Automobile Transport (') struck the truy note, if we may say so with great respect, that while the text of the Articles is a vital consideration in interpreting them, 'we must' at the same time, remember that we arc dealing with the Constitution of a country and the interconnection of the different part's of the Constitution forming part of an integrated whole'. The learned Judge asks : 'Even textually, we must ascertain the true meaning of the word 'free' occurring in Art. 301 From what burdens or restrictions is the freedom assured? This is a question of vital importance even in the matter of construction'. Later, in the judgment, Das J., drives home the point that 'the conception of freedom of trade in a community regulated by law pre-supposes some degree of restriction, that freedom must necessarily be delimited by considerations of social orderliness' (underscoring sμpplied). Even the Australian Case (1916 22 CLR 556, 573) conceptulizes freedom as nothing extra legem, lest freedom should be confounded with anarchy. 'We are the slaves of the law", said Cicero, 'that we may be free'. Sir Samuel Griffith, C. J. in Duncan v. State of Queensland (22 CLR 556, 573), said : "But the word 'free' does not mean extra legem any more than freedom means anarchy. We boast of being an absolutely free people, but that does not mean that we are not subject to law." The conscience of the commerce clause in India, as elsewhere, is the promotion of an orderly society. social justice is the core of the constitutional order. Two inter-connected, but different facets of freedom of trade and commerce fall for serious consideration i'n the light of the above discussion. Is anti-social, usurious, unscrupulous money-lending to economically weaker sections, eligible for legal recognition as 'trade' within the meaning of Art. 301 ? Secondly, a&-suming that eveE such activi•ties have title to be termed 'trade' are the provisions of the Debt Act reasonable, regulatory and in the public interest ? The learned Attorney General argued for the proposition that the narrow, noxious category of money-lending with which we are concerned is so oppressive and back-bre!lking so far as the poorest sections of the community are concerned that a sense of social justice forbids the court to legitimate it as 'trade'. Not all systematic economic activity, even if not formally banned by the law, can be christened 'trade', he submits, and relies on Chamorbaughwala to reinforce this reason- (!) [1963] (I) S.C.R. 491. (2) [1957] S.C.R. 930. • ' . 1'ATEHCHAND HIMMATLAL v. MAHARASHTRA (Krishan /yer, J.) 839 mg. In that case the impugned Act was said to offend against Art. 301. The Court, therefore, considere_d whether gambling was not 'trade, commerce or intercourse' and took ~sky-view of the numerous decisions in various countr;'es bearing on this branch of sociological jurisprudence. One of the Australian cases dealing with lotteries (Mansell v. Beck) elicited the observation that lotteries, not con~ ducted under the authority of government, were validly suppressed as pernicious. Taylor, J. made the trenchant observation " .... whilst asserti•ng the width of the field in which ·s. 92 may operate it is nec~s3ary to observe that not every transaction which employs the forms of trade and commerce will, as trade and commerce, invoke its protection. The sale of stolen goods, when the transaction is juristically analysed, is no different from the sale of any other goods but can it be doubted that the Parliament of any State may prohibit the 3ale of stolen goods w;•thout infringing s. 92 of the Constitution ? The only feature which distinguishes such a transaction from trade and commerce as generally understood is to be found in the subject of the transaction; there is no difference in the means adopted for carrying it out. Yet it may be said that i•n .essence such a transaction constitutes no part of tr.ade and commerc·e ·as that expression is gener;illy understood. Nnmerous examples of other transactions may be given, such as th_e sale of a forged passport, or, the sale of counterfeit money, which provoke the same comment and, although legislation prohibiting such transactions may, possibly, be thought to be legally justifiable pur~uant to what has, on occasion, been referred to all a 'police power', I prefer to think that the subjects of such transactions are not, on any view, the subjects of trade and commerce as that expression is used in s. 92 and that the protection dfforded by that section has nothing to do with such transactions even though they may require for their consummation, the employment of instruments, whereby inter-State trade and commerce is commonly carried on." ( (RMDC Case, pp. 915-916) In the United States of Amerita, operators of gambling sought the protection of the commerce clause. But the Court upheld the power of the Congress to regulate and control the same. Likewise, the Pure Food Act which prohibited the importation of adulterated food was upheld. The prohibition of transportation of women for immoral purposes from one State to another or to a foreign land was held valid. Gambling itself was held in great di