The Doctrine of Pith and Substance essentially deals with the conflict between the laws of Centre and State. India adopts a federal structure of governance, therefore the extent of legislative powers is distributed between the Centre and the States. As per Article 245, Parliament may make laws for whole or any part of India and the legislature of a State may make laws for whole or any part of the State and Article 246 clearly mentions the extent of legislative powers of the Parliament and State governments. Schedule VII of the Constitution has three lists viz: List I (Union List), List II (State List) and List III (concurrent list). The Centre has the exclusive power to legislate over the topics mentioned in List I and the State governments have the exclusive authority to legislate on the subject-matters included in List II. The Concurrent list included those items which can be legislated upon by both the Centre and the States. It is not possible to make a clear-cut distinction between the powers of the Union and the State legislatures. There is bound to be overlapping and in all such cases, it is but reasonable to ask what in whole is the true nature and character of the law. A strictly verbal interpretation would result in a large number of statues is to have the full scope to exercise the powers granted to it, it is necessary to assume that the Constitution does not prevent a legislature from dealing with a matter which may incidentally affect any matter in the other list
The doctrine of ‘pith and substance’ is applied when the legislative competence of a legislature with regard to a particular enactment is challenged with reference to the entries in the various lists i.e., a law dealing with a subject in one list is also touching on a subject in another list. In such a case, what has to be ascertained is the pith and substance of the enactment- the true character and nature of the legislation. If on examination of the statute, it is found that the legislation is in substance one on a matter assigned to the legislature enacting that statute, then it must be held valid in its entirety even though it may trench upon matters beyond its competence i.e., on a matter included in the list belonging to the other legislature. Incidental encroachment is not prohibited. The doctrine is firmly supported by Article 246 of the Constitution. In ascertaining the substance of the impugned legislation one must have regard to the enactment as a whole, to its object, and to the scope and effect of its provision.
In Subramanyam Chettiar v. Muthuswami Goudan case, Gwyer, C.J, AIR 1941 FC 47 (51) in explaining the validity of the doctrine of pith and substance said: “It must inevitably happen from time to time that legislation though purporting to deal with a subject in one List touches also upon a subject in another List, and the different provisions of the enactment may be so closely interwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule has been evolved whereby the impugned statute is examined to ascertain its ‘pith and substance’ or its ‘true nature and character’ for the purpose of determining whether it is legislation with respect to matters in this list or that”
In Prafulla Kumar v. Bank of Commerce, AIR 1947 PC 60 case, the constitutional validity of the Bengal Money Lenders Act, 1940, which has provided for limiting the amount and the rate of interest recoverable by a lender on any loan, was challenged on the ground that it was ultra vires the Bengal Legislature. The High Court of Calcutta held that the Act was intra vires the Provincial Legislature, but on appeal to the Federal Court the decision of the High Court was reversed and the Act was held to be ultra vires the law-making powers of the Bengal Legislature….On appeal to the Privy Council, it was contended on behalf of the appellant that the Act was valid as it dealt with ‘moneylending’ and ‘money lenders’ in the province- a matter within the exclusive competence of the Provincial Legislature under List II, Entry 27. On behalf of the respondent – creditor, it was contended that the Act as affected the right of provincial Legislature, or at least that much of the Act as affected the right of promissory noteholders to recover the full amount due on their promissory notes. The respondent relied upon Entry 28 of List I, which assigned to the Federal Legislature exclusive authority to make laws with respect to “cheques, bills of exchange, promissory notes, and other like instruments”. During the judgment, Lord Porter said “What in pith and substance is the effect of the enactments of which complaint is made. After having ascertained the true character of law, the court must point out in which of the three Lists an Act of that nature truly falls.”
In the State of Bombay v. Balsara (1951) 2 SCR 682, case the Court observed: “The doctrine of ‘pith and substance’ means that if an enactment substantially falls within the legislative powers of a legislature expressly conferred by the constitution, the enactment cannot be held to be invalid, merely because it incidentally encroaches on matters assigned to another legislature.”
In the State of Gujarat v. Shantilal Mangaldas, AIR 1969 SC 634 case, the Court held that the doctrine of pith and substance is wholly irrelevant in determining whether the statute infringes any fundamental right.
In A. S. Krishna v. State of Madras AIR 1957 SC 297 case, the Court held that the extent of encroachment of legislation on matters beyond its competence may be an element in determining whether the legislation is colourable but whether that is not the position, that is the statute is found in substance to relate to a topic within the competence of the legislature, then the fact of (incidental) encroachment does not affect the vires of the law even as regards the area of encroachment.
In Vijay Kumar Sharma v. State of Karnataka, AIR 1990 SC 2072 case, the Supreme Court has held that the doctrine of pith and substance applies even when Parliament and State legislatures legislate in the same List, i.e., the Concurrent List but with respect to different Entries. The Court has said that the doctrine is relevant for the purpose of determining whether a law of Parliament or an existing law and a law of the State legislature are on the same matter in the Concurrent List of they pertain to different matters. If the pith and substance of the two laws is the same then Article 254(1) applies otherwise it does not.
Conclusion:
The Constitution provides segregation of powers among the Centre and the states, but it is inevitable that ancillary (incidental) encroachments are bound to take place during the enactment of laws. When such incidental encroachment of legislative powers takes place, courts with the aid of the doctrine of pith and substance decide the validity and legitimacy of an enactment. It also helps the court to find the true nature of the subject matter of the Act and gives the power to allocate it to a suitable list. It is very necessary for the court to examine its scope and effects, whether the allocation is genuine or not.