Prafulla Kumar Mukherjee v. Bank of Commerce (1947)

CASE_TITLE: Prafulla Kumar Mukherjee v. Bank of Commerce (1947) 49 BOMLR 568

The case checks if the Bengal Moneylenders Act, 1940 is valid. Using the Pith and Substance test, the Court looked at the true nature of the Act. It found the core to be moneylending (a State subject). Any touch on promissory notes (a Union field) was incidental. So, the law stands.

1. Does the Bengal Moneylenders Act, 1940 have constitutional validity?
2. Does the Act improperly enter a Union field (promissory notes), or is any overlap only incidental under the pith and substance test?

Pith and Substance: Find the law’s real subject. If its core lies in one list, the law is valid though it touches another list incidentally.

Application to Lists: Moneylending is a State subject; promissory notes lie with the Union. Dominant purpose controls.

• Doctrine applied: Pith and Substance.
• Core finding: The Act’s substance is moneylending, squarely in the State field.
• Overlap: Any effect on promissory notes is incidental, not dominant.
• Result: The Act is valid and continues to operate for public welfare.

When a law’s dominant purpose is within the State List, it is valid even if it incidentally touches a Union List matter. Here, moneylending is the core; promissory notes are a side effect.

• Federal balance: Protects State power over local economic regulation.
• Welfare focus: Lets States guard borrowers without losing competence to incidental overlaps.
• Exam anchor: A staple citation for the pith and substance principle.

1. Dominant nature decides competence.
2. Incidental overlap does not void the law.
3. Moneylending = State; promissory notes = Union.
4. Public welfare aims support validity.

Mnemonic: “DOM-IN-VAL” — DOMinant subject, INcidental overlap, Act VALid.

1. Spot the law’s core subject (State/Union).
2. Separate core from incidental effects.
3. State the validity if core is in State List.

Issue: Is the Bengal Moneylenders Act constitutionally valid despite touching promissory notes?

Rule: Pith and Substance — dominant purpose controls; incidental overlap allowed.

Application: The Act targets moneylending (caps, recoveries). Any effect on promissory notes is side-effect, not the core.

Conclusion: Act is valid; State competence sustained.

Pith and Substance

Test to find a law’s real nature and list placement.

Incidental overlap

Secondary effect on another list that does not control the law’s character.

Moneylending

State subject; regulation of private lending and recovery.

Promissory notes

Union subject; negotiable instruments used in credit transactions.

Reviewed by The Law Easy.