2004 (4) TMI 528 - SC - Indian Laws

Application of Clause (2) of Article 254 of the Constitution of India questioned - Held that - Appeal dismissed. If the Central Act and the State Act had been enacted in terms of different entries of List I and List II of the Seventh Schedule of the Constitution of India. In this case, admittedly both the Central Act and the State Act had been enacted in terms of Entry 22 of List III of the Seventh Schedule of Constitution of India. In case of any conflict therefor the constitutional scheme contained in Article 254 will have to be applied. Even if Section 25S of the State Act is read to have an overriding effect, undoubtedly the provisions of the supreme lax shall prevail over a statute. A non-obstante clause contained in a statute cannot override the provisions of the Constitution of India.

Issues Involved:
1. Application of Clause (2) of Article 254 of the Constitution of India.
2. Validity of the closure notice issued by the respondent-company.
3. Applicability of the Central Act vs. the State Act.
4. Repugnancy between the Central Act and the State Act.
5. Presidential Assent and its implications.
6. Effect of the non-obstante clause in Section 25J of the Central Act.

Issue-wise Analysis:

1. Application of Clause (2) of Article 254 of the Constitution of India:
The appeal revolves around the application of Clause (2) of Article 254 of the Constitution of India. The High Court held that the State Act, having received Presidential Assent and being enacted later, would prevail over the Central Act. The Supreme Court affirmed this interpretation, stating that the conflict should be assessed based on the date of enactment rather than the date of coming into force.

2. Validity of the Closure Notice Issued by the Respondent-Company:
The respondent-company issued a closure notice for its factory at Ghaziabad, which was contested by the appellant trade union. The High Court dismissed the writ petition filed by the appellant, upholding the closure notice, while allowing the writ petitions filed by the respondent-company against the recovery certificates issued under the State Act.

3. Applicability of the Central Act vs. the State Act:
The appellant argued that the Central Act, specifically Chapter V-B, should apply to the industrial establishment as it employed more than 100 workmen. The respondent contended that the State Act, which requires compliance for establishments with more than 300 workmen, should apply. The Supreme Court analyzed the provisions of both Acts and concluded that there is no irreconcilable conflict, allowing both laws to operate concurrently.

4. Repugnancy between the Central Act and the State Act:
The Supreme Court examined whether there is repugnancy between the Central Act and the State Act. It was noted that both Acts cover the same field under Entry 22 of List III of the Seventh Schedule. The Court held that repugnancy exists when there is a direct conflict, and in this case, the State Act, having received Presidential Assent, would prevail over the Central Act where such conflict exists.

5. Presidential Assent and its Implications:
The appellant argued that the Presidential Assent obtained for the State Act did not consider the conflict with the Central Act. The Supreme Court dismissed this argument, stating that the appellant did not raise this issue in the writ petition or the Special Leave Petition. The Court presumed that the State Act was amended with full awareness of the Central Act, and the Presidential Assent was sought and granted accordingly.

6. Effect of the Non-Obstante Clause in Section 25J of the Central Act:
The appellant contended that Section 25J of the Central Act, incorporated by reference in Section 25S, should have an overriding effect. The Supreme Court rejected this argument, clarifying that Section 25S does not introduce a non-obstante clause for Chapter V-A. The Court held that the non-obstante clause in Section 25J is confined to Chapter V-A and does not extend to Chapter V-B, thus not affecting the State Act.

Conclusion:
The Supreme Court dismissed the appeals, affirming the High Court's judgment. The Court concluded that the State Act, having received Presidential Assent and being enacted later, prevails over the Central Act in cases of conflict. The non-obstante clause in Section 25J of the Central Act does not extend to Chapter V-B, and the State Act's provisions apply to the industrial establishment in question. No costs were awarded.

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