Repugnancy under Article 254 arises on making of the Central law, and inconsistent State law is displaced.

Repugnancy under Article 254(1) arises when a competent Central law is made and assented to, not only when it later commences in a State. Where Parliament occupies the entire concurrent field, an inconsistent State law is displaced on the making of the Central enactment. The Central Chit Funds Act, 1982 was treated as occupying the field of chits, so the Kerala Chitties Act, 1975 stood impliedly repealed to the extent of inconsistency, while Section 6 of the General Clauses Act preserved prior operation, accrued rights and completed transactions. A later State amendment could not validly operate without Presidential assent under Article 254(2).

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Issues: (i) Whether repugnancy under Article 254(1) arises on the making of the Central law or only on its commencement; (ii) Whether the Kerala Chitties Act, 1975 stood repealed on the making of the Central Chit Funds Act, 1982 and the effect of such repeal on subsequent State amendment and past transactions.

Issue (i): Whether repugnancy under Article 254(1) arises on the making of the Central law or only on its commencement.

Analysis: The constitutional scheme in Articles 245, 246 and 254 focuses on the making of law by the competent legislature. A Parliamentary enactment becomes law on assent and publication, even if its commencement is postponed by conditional legislation. Where Parliament has manifested an intention to occupy the entire field in the Concurrent List, the existence of the later Central enactment itself is sufficient to create repugnancy with an inconsistent State law. Commencement in a particular State is not the test for determining repugnancy.

Conclusion: Repugnancy arises on the making of the Central law and not on its commencement.

Issue (ii): Whether the Kerala Chitties Act, 1975 stood repealed on the making of the Central Chit Funds Act, 1982 and the effect of such repeal on subsequent State amendment and past transactions.

Analysis: The Central Chit Funds Act, 1982 occupied the entire field of chits under the Concurrent List and therefore displaced the inconsistent State Act to the extent of repugnancy under Article 254(1). The State enactment consequently stood impliedly repealed, while Section 6 of the General Clauses Act preserved prior operation, accrued rights, liabilities and completed transactions. A subsequent State amendment in 2002 could not validly operate in the absence of Presidential assent under Article 254(2). Until the Central Act is brought into force in Kerala by notification under Section 1(3), the saving provisions of Section 90(2) protect existing chits on the date of commencement.

Conclusion: The Kerala Chitties Act, 1975 stood void and impliedly repealed on 19.08.1982, and the State amendment inserting Section 4(1a) was invalid for want of Presidential assent.

Final Conclusion: The appeal failed, the State amendment could not survive, and the earlier State law survives only for the limited saving effect of the General Clauses Act until the Central Act is brought into force in Kerala.

Ratio Decidendi: For Article 254, repugnancy is determined by the making of a law by the competent legislature, not by its commencement, and a later Central enactment occupying the entire Concurrent field voids the inconsistent State law to that extent, subject to the saving rules governing repeal.

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