State of Kerala v. Mar Appraem Kuri Co. Ltd. (2012)
AIR 2012 SC 2375 — Article 254(1) Repugnancy: making vs commencement, and what happens to the State law.
state-of-kerala-v-mar-appraem-kuri-co-ltd-2012
Quick Summary
The Supreme Court clarified a simple but important point: conflict between a State law and a Central law (on a Concurrent List subject) happens when the law is made, not when it starts. If there is conflict, the Central law wins under Article 254(1). Because of this, most of the Kerala Chitties Act, 1975 gave way to the Central Chit Funds Act, 1982, with only limited savings under Section 6 of the General Clauses Act, 1897.
Issues
- Does repugnancy under Article 254(1) arise on the making of the law or on its commencement?
- What is the legal effect when a State law is repugnant to a Central law?
Rules
- Article 254(1): If a Central law and a State law clash on a Concurrent subject, the Central law prevails; the State law is void to the extent of inconsistency.
- General Clauses Act, 1897 — Section 6: Repeal does not affect prior operations, rights, liabilities, or proceedings already begun, unless a different intention appears.
Facts (Timeline)
Many private chitty firms avoided the Kerala Chitties Act, 1975 by registering outside Kerala but kept operating inside the State.
Investor protection was hard. The State amended Section 4 by Finance Act 7 of 2002, adding Section 4(1a).
New Section 4(1a): if 20% or more subscribers normally live in Kerala, the chitty falls under the Kerala Act, even if registered outside.
Private chitty firms challenged Section 4(1a) as repugnant to the Central Chit Funds Act, 1982.
Arguments
Appellants (Chitty firms)
- Kerala’s Section 4(1a) clashes with the Central Act’s field on chit funds.
- Central law must control; State amendment is void to that extent.
Respondent (State of Kerala)
- Amendment is to protect investors and close regulatory gaps.
- No real conflict; it complements regulation inside Kerala.
Judgment (Held)
- Repugnancy arises on making, not commencement.
- Because of repugnancy under Article 254(1), the Kerala Chitties Act, 1975 stood impliedly repealed to the extent of conflict with the Chit Funds Act, 1982.
- Kerala Act survives only for limited matters saved by Section 6, General Clauses Act, 1897.
Ratio
Article 254(1) prefers the Central law when a State law covers the same field in the Concurrent List and there is a conflict. The conflict is judged at the point of enactment. The State law becomes inoperative to that extent, except for saved effects under Section 6 of the General Clauses Act.
Why It Matters
- Clarifies the time when repugnancy is tested.
- Gives a clear rule for resolving Central–State overlap on Concurrent subjects.
- Shows how implied repeal works with statutory savings.
Key Takeaways
- Repugnancy = on making, not on start date.
- Central law prevails on Concurrent conflict (Art. 254(1)).
- State law becomes void to the extent of conflict.
- Savings under Section 6 GCA may protect past acts and rights.
Mnemonic + 3-Step Hook
Mnemonic: “Make, Match, Melt”
- Make — Test repugnancy when the law is made.
- Match — If it clashes with Central law, match goes to Centre.
- Melt — State law melts away (void) except saved parts.
IRAC Outline
Issue: When does repugnancy arise and what is its effect under Article 254(1)?
Rule: Central law prevails over conflicting State law on Concurrent subjects; repugnancy is assessed at making; Section 6 GCA saves limited effects.
Application: Kerala’s Section 4(1a) covered the same field as the Central Chit Funds Act and conflicted with it.
Conclusion: Kerala provision is void to that extent; Kerala Act stands impliedly repealed subject to Section 6 savings.
Glossary
- Repugnancy
- Direct conflict between a State and a Central law on a Concurrent List subject.
- Implied Repeal
- Later law overrides earlier law without express words because both cannot stand together.
- Section 6 GCA
- Saves past operations, rights, and liabilities despite repeal.
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