KLE College of Law.

Kalamboli

Name : Sheetal Saylekar

TYLLB Roll No 35

Subject: Interpretation of statute

Assignment : Doctrine of occupied field and doctrine of repugnancy

Submitted to : Professor Mohammad Salim Khan Sir

Until 7 May, 2012, it was taken for granted that the doctrines of occupied field and
repugnance are as different as chalk and cheese. The easiest way of explaining the difference
is to say that occupied field is concerned with the existence of legislative power, while
repugnance is concerned with the exercise of legislative power that is shown or assumed to
exist. In more precise terms, the doctrine of repugnance, found in article 254 of the
Constitution, is that a State legislation which is repugnant to a law enacted by Parliament is
void to the extent of repugnance. Some doubts about the scope of art 254 arose on account of
the words “with respect to one of the matters enumerated in the Concurrent List”. A close
analysis of these words demonstrates that the “comma” is placed after the words “competent
to enact” rather than “an existing law”, suggesting that article 254 is confined to Central
legislation in the Concurrent List only in respect of pre-1950 legislation. But the Supreme
Court rejected this interpretation in many cases, notably VK Sharma v State of Karnataka
AIR 1990 SC 2072, and held that article 254 is applicable only to a conflict between a State
and a Central legislation enacted under the same entry in the Concurrent List.

While there are, of course, two views about whether this is correct or not, two basic
propositions about repugnance were never questioned even in this line of case law:
(i) repugnance arises only if there is an actual conflict between two legislations, one enacted
by the State Legislature and the other by Parliament, both of which were competent
to do so; and (ii) the State law is void only to the extent of repugnance, subject to art 254(2).

Occupied field, on the other hand, has nothing at all to do with a conflict between two
laws. It is perhaps an unfortunate expression because it is used in precisely this sense in the
jurisprudence of other countries. But in India it simply a compendious way of referring to a
few legislative entries in List II of Schedule VII, which are expressly made “subject” to a
corresponding Entry in List I or List III. The two most important instances of such entries are
Entry 24, List II (“Industries”, made subject to Entry 52, List I, which provides that
Parliament may declare, by law, that the control of a certain industry by the Union is in the
public interest) and Entry 23, List II (Mines and mineral development, made subject to Entry
54 ListI, which provides that Parliament may by law declare that the control of mines and
mineral development by the Union is in the public interest). By making such a declaration in
a legislation (for example the Essential Commodities Act or the MMRDA), Parliament
acquires legislative competence over what would otherwise be a field of State legislation, and
the State is entirely denuded of legislative competence. It is apparent that no question of
repugnance arises:
if a field is validly occupied, that field ceases to form part of the State List. As one judge put
it, that field is “subtracted” from the State List and “added” to the Union List.

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One controversy that arose in occupied field litigation was whether Parliament
could occupy a field by simply making a declaration. For example, suppose
Parliament declares in the MMRDA that mines and mineral development under the control
of the Union is expedient in the public interest, but merely provides in the operative part that
“the mining sector shall comply with such rules as may be notified by the Competent
Authority”, and the competent authority notifies no such rules. A concern was expressed that
if occupied field is invoked in this way, neither the State (because it cannot), nor the Union
(because it does not) legislates for that sector, leading to a “legislative vacuum”. In the
leading Entry 54 cases (Hingir Rampur Coal Co, MA Tulloch and Baijnath Kedia), the
Supreme Court held that this is irrelevant, because Entry 54 denudes the States of
competence the moment the declaration is made by Parliament. But some leading Entry 52
cases, particularly Belsund Sugar and Ishwari Khetan, suggested otherwise. This apparent
conflict was not really a conflict – without going into more detail than is necessary, the
difference is explained by the fact that the Supreme Court had previously construed the
substance of Entry 52 more narrowly (and correctly) than it did Entry 54 (see Tika Ramji
affirmed in a judgment rich in scholarship by Ruma Pal, J., in ITC v AMPC,
over Pattnaik, J’s dissent).

It is crucial to note that none of this had anything to do with repugnance. The controversy
over “mere declaration” versus “actual legislation” was at all times confined to the few
entries in the Constitution that expressly permit Parliament to occupy a State field. Indeed,
when the point was argued in relation to repugnance, the Supreme Court authoritatively held
in Tika Ramji (para 18) that “repugnancy must exist in fact, and not depend merely on a
possibility”. Conceptually, it is submitted that this is correct –
the Constitution has two mechanisms to deal with legislative conflicts: one deals
with who has the power to enact a law in a certain field of legislation in List II (ordinarily the
State, unless the Centre occupies the field in the manner specified in the corresponding entry
in List I) and the other with what happens when two legislatures, both of which have the
power to enact laws, enact conflicting laws (repugnance). Indeed, repugnance presupposes
that both laws have been enacted by competent legislatures – thus, if the State of Tamil
Nadu imposes income tax, and this is in conflict with the Income Tax Act, 1961, it is
unnecessary to resort to art 254, because the Tamil Nadu Act is void ab initio for the
legislature lacks competence. On the other hand, if the State of Tamil Nadu enacts the Sales
Tax Act, and Parliament enacts the Central Excise Act, and it is argued that the two
legislations somehow conflict, the solution is article 254 (conceptually – in practice, article
254 would be unavailable because of VK Sharma and one would have to resort to the
non-obstante clause in article 246). But if the Centre has not enacted the Central Excise Act,
and it is sought to be shown that the Tamil Nadu legislature still lacks the power
to enact it, there can be no question of repugnance. That contention can succeed only
if it is shown that: (i) “tax on sale of goods” is not in the State List or (ii)the Centre has
validly occupied the field of “tax on sale of goods” (which it can never do, it is not expressly
subject to a List I entry) or (iii) the Tamil Nadu Act is, in pith and substance, not within “tax

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on sale of goods”. Repugnance, it is submitted, can never arise when there is only one law in
operation.

Having said that, there is no doubt that this apparent conflict in the occupied
field cases on the need for actual legislation as opposed to a mere
declaration is an important one, and ought to have been decided by the Supreme
Court. Unfortunately, the Supreme Court, with respect, picked the wrong case,
when it decided State of Kerala v Mar Appraem Kuri on 7 May, 2012. Simplifying the facts,
the Centre enacted the Chit Funds Act, 1982 [“the Central Act”] which would become
operative in the State of Kerala upon the issue of a notification under s 1(3) of the Central
Act, and the State of Kerala enacted the Kerala Chitties Act, 1975. The Centre did not
notify the Central Act in the State of Kerala. The result was that there was only one law in
force in the State of Kerala – the Kerala Act. Chit funds filed a writ petition in the Kerala
High Court and managed to persuade a Division Bench that the Kerala Act was repugnant to
the un-notified Central Act. The State of Kerala appealed. The Supreme Court referred the
matter to a Constitution Bench.

Surprisingly, the Constitution Bench accepted the contention of the chit funds that even an
un-notified Central law attracts art 254. The Chief Justice gives two reasons
for this conclusion: (i) article 254 uses the verb “made” and the form “making” – the
“making” of a law is complete on enactment, even before the law is notified and (ii)
Parliament, by enacting the Central Act, intended “to occupy the entire field falling in Entry 7
of List III” and therefore the State Legislature is denuded of legislative competence unless
article 254(2) is applicable.

With great respect, it is submitted that this decision is incorrect and unfortunately
conflates occupied field and repugnance. First, the verb “made” is used, as senior counsel
rightly submitted in oral argument, not to indicate when a law becomes repugnant, but to
identify the law which must independently be shown to be repugnant. Secondly, the
conceptual distinction between repugnance and occupied field – or betweenthe existence of
legislative power and its exercise – is at the heart of the Constitution’s distribution of
legislative powers. To hold that a mechanism intended to solve conflicts arising out of the
latter is in fact applicable because the field is occupied is, it is respectfully submitted,
unfortunate.

The second reason the Court gives is an illustration of why it may be dangerous to use the
expression “occupied field” – in the law of other countries, notably America, it is possible for
the Federal legislature to oust the Provincial Legislature’s legislative competence by
“evincing an intention” to enact a complete code. This is sometimes called “occupied field”.
That conception of occupied field has no place at all in Indian constitutional law. This is clear
not only as a matter of concept, but also from a number of Supreme Court authorities,
particularly Tika Ramji.

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The final point is that the Chief Justice rejected the State of Kerala’s reliance
on paragraph 18 of Tika Ramji by relying on MA Tulloch, which had held
that a mere declaration can denude the State Legislature of legislative competence. Once
again, it is submitted with respect that the error is to confuse occupied field with repugnance
– MA Tulloch held that occupied field under Entry 54 only requires a declaration. It did not
hold, and could not have held, that a mere declaration suffices for repugnance
under art 254.

Since it is unlikely that the Supreme Court will revisit this issue, this judgment will
fundamentally alter Indian constitutional law on the distribution of
legislative power, with significant consequences for virtually every area of
law in which Parliament or the States have legislated.