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TMI Blog1974 (3) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... as the First Amendment Act) and rules 3 and 4 of the Bombay Labour Welfare Fund Rules, 1953 (hereinafter referred to as tie Rules) as unconstitutional and prayed for the issue of a writ in the nature of mandamus or other appropriate writ or direction against the respondents in the writ petition to desist from enforcing the direction in the I notice dated August 2, 1962 of respondent No. 3 to the writ petition requiring the petitioner-1st respondent to pay the unpaid accumulations specified therein. The High Court held that s. 3 (1) of the Act in so far as it relates to unpaid accumulations specified in s. 3 (2) (b), s. 3 (4) and s. 6A of the Act and rules 3 and 4 of the Rules was unconstitutional and void. In order to appreciate the controversy, it is necessary to state the background of the amendment made by the Legislature of Gujarat in the Act. The Act was passed by the legislature of the then State of Bombay in 1953 with a view to provide for the constitution of a fund for financing the activities for promoting the welfare of labour in the State of Bombay. Section 2(10) of the Act defined unpaid accumlation as meaning all payments due to the employees but not made to .t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o safeguard the property for the benefit of the true owners and the State taking it over only in the absence of such claims, the law which vests the property absolutely in the State without regard to the claims of the true owners cannot be considered as one relating to abandoned property. On May 1, 1960, the State of Bombay was bifurcated into the States of Maharashtra and Gujarat. The legislature of Gujarat thereafter enacted to First Amendment Act making various amendments in the Act, some of them with retrospective effect. The First Amendment Act was intended to remedy the defects pointed out in the decision of this Court in the Bombay Dyeing Case([1958] S.C.R. 1122.). The preamble to the First Amendment Act recites that it is expedient to constitute a Fund for the financing of activities to promote welfare of labour in the State of Gujarat, for conducting such activities and for certain other purposes . Section 2(2) defines 'employee'. Section 2(3) defines 'employer' as any person who employs either directly or through another person either on behalf of himself or any other person, one or more employees in an establishment and includes certain other persons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee in respect thereof, but to the extent only of the amount paid to the Board and 'that the liability to make payment to the employee to the extent aforesaid shall, subject to the other provisions of the section, be, deemed to be transferred to the Board. Sub-section (3) provides that as soon as possible after any unpaid accumulation is paid to the Board, the Board shall, by a, public notice, call upon interested employees to submit to the Board their claims for any pay- ment due to them. Sub-section (4) provides that such public notice shall contain such particulars as may be prescribed and that it shall be affixed on the notice board or in its absence on a conspicuous part of the premises, of each establishment in which the unpaid accumulations were earned and shall be published in the Official Gazette and also in any two newspapers in the language commonly understood in the area in which such establishment is situated, or in such other manner as may be- prescribed, regard being had to the amount of the claim. Sub-section (5)states that after the notice is first affixed and published under sub-section (4) it shall be again affixed and published from time to time for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Trustees subject to the provisions and for the purposes of the Act and the moneys in the Fund shall be utilized by the Board to defray the cost of carrying out measures which may be specified by the State Government from time to time to promote the welfare of labour and of their dependents. Sub-section (2) of s.7 specifies various measures for the benefit of employees in general on which the moneys in the Fund may be expended by the Board. Section 11 provides for the appointment of an officer called the Welfare Commissioner and defines his powers and duties. Section 19 confers rule-making power on the State Government. Section 22 empowers the State Government by notification in the official gazette to exempt any class of establishment from all or any of the provisions of the Act subject to such conditions as may be specified in the notification. During the pendency of the writ petition before the High Court, the Gujarat Legislature passed the Bombay Labour Welfare Fund (Gujarat Amendment) Act, 1962 on February 5, 1963 (hereinafter referred to as the Second Amendment Act) introducing subsection (13) in s.6A with retrospective effect from the date of commencement of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided in s. 6A will have to be published and claims invited. Sub-sections (3) to (6) of s. 6A provide for a public notice calling upon interested employees to submit to the Board their claims for any payment due to them and subsections (7) to (I 1) of s. 6A lay down the machinery for adjudication of claims which might be received in pursuance to the public notice. It is only if no claim is made for a period of 4 years from the date of the publication of the first notice, or, if a claim is made but rejected wholly or in part, that the State appropriates the unpaid accumulations as bona vacantia. It is not as if unpaid accumulations become bona vacantia on the expiration of three years. They are, no doubt, deemed to be abandoned property under s. 6A(1), but they are not appropriated as bona vacantia until after claims are invited in pursuance to public notice and disposed of. At common law, abandoned personal property could not be the subject of ascheat. It could only be appropriated by the sovereign as bona vacantia (see Holdsworth's History of English Law, 2nd ed., vol. 7, pp. 495-6). The Sovereign has a prerogative right to appropriate bona vacantia. And abandoned property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal argument against the taking over of the unpaid accumulations by the State. Since the employers are the debtors of the employees, they can interpose no objection if the State is lawfully entitled to demand the payment, for, in that case, payment of the debt to the State under the statute releases the employers of their liability to the employees. As regards notice, we are of the view that all persons having property located within a state and subject to its dominion must take note of its statutes affecting control and disposition of such property and the procedure prescribed for these, purposes. The various modes of notice prescribed in s. 6A are sufficient to give reasonable information to the employees to come forward and claim the amount if they really want to do so. Be that as it may, we do not, however, think it necessary to consider whether the High Court was right in its view that the impugned provisions violated the fundamental rights of the citizen- employers or employees, for, it is a wise tradition with courts that they will not adjudge on the constitutionality of a statute except when they are called upon to do so when legal rights of the litigants are in actual con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and employees the law was void and non-est, and therefore, the first respondent was entitled to challenge the notice issued by the Welfare Commissioner demanding the unpaid accumulation as unauthorized by any law. The first respondent, no doubt, has the ordinary right of every person in the country to hold and dispose of property and that right, if taken away or even affected by the act of an Authority without the authority of law, would be illegal. That would give rise to a justiciable issue which can be agitated in a proceeding under article 226. The real question, therefore, is, even if a law takes away or abridges the fundamental right of citizens under article 19 (1) (f) I whether it would be void and therefore non-est as respects non-citizens ? In Keshava Madhava Menon v. State of Bombay([1951] S.C.R. 228.) the question was whether a prosecution commenced before the coming into force of the Constitution could be continued after the Constitution came into force as the Act in question there became void as violating article 19 (1) (a) and. 19 (2). Das, J. who delivered the majority judgment was of the view that the prosecution could be continued on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of constitutional limitations on legislative power. According to him, if the law is made without legislative competence, it was a nullity; a law violating a constitutional prohibition enacted for the benefit of the public generally was also a nullity; but a law violating a constitutional prohibition enacted for individuals was not a nullity but was merely unenforceable. At the second hearing of the case, Mahajan, J. after referring to Madhava Menon's Case([1951] S.C.R. 228), said that for determining the rights and obligations of citizens, the part declared void should be notionally taken to be obliterated from the section for all intents and purposes though it may remain written on the statute book and be a good law when a question arises for determination of rights and obligations incurred prior to January 26, 1950, and also for the determination of rights of persons who have not been given fundamental rights by the Constitution. Das, J. in his dissenting judgment held that to hold that the invalid part was obliterated would be tantamount to saying covertly that the judicial declaration had to that extent amended the section. At p. 659, the learned Judge observed : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning given to the word 'void' in Keshava Madhva Menon's Case([1951] S.C.R 228), Das, Acting C.J. said for the Court : All laws, existing or future, which are inconsistent with the, provisions of Part III of our Constitution are, by the express provision of article 13, rendered void 'to the extent of such inconsistency'. Such laws were not dead for all purposes. They existed for the purposes of pre-Constitution rights and liabilities and they remained operative, even after the Constitution, as against non- citizens. It is only as against the citizens that they remained in a dormant or moribund condition (at pp. 599-600). In M. P. V. Sundararamaier v. State of A.P. ([1958] S.C.R. 1422.), Venkatarama Aiyar, J. said that a law made without legislative competence and a law violative of constitutional limitations on legislative power were both unconstitutional and both had the same reckoning in a court of law; and they were both unenforceable but it did not follow from this that both laws were of the same quality and character and stood on the same footing for all purposes. The proposition laid down by the learned Judge was that if a law is enacted by a leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly to a case covered by article 13(1), for the learned Judges say that the laws exist for the purposes of pre- constitution rights and liabilities and they remain operative even after the Constitution as against non-citizens. The said observation could not obviously apply to post Constitu- tution laws. Even so, it is said that by a parity of reasoning the post-Constitution laws are also void to the, extent of their repugnancy and therefore the law in respect of noncitizens will be on the statute-book and by the application of the doctrine of eclipse, the same result should flow in its case also. There is some plausibility in this argument, but it ignores one vital principle, viz., the existence or the non-existence of legislative power or competency at the time the law is made governs the situation (p. 38). Das, C.J. dissented. He was of the view that a post- Constitution law may infringe either a fundamental right conferred on citizens only or a fundamental right conferred on any person, citizen or noncitizen and that in the first case the law will not stand in the way of the exercise by the citizens of that fundamental right and therefore, will not have any operation on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e injunction is that the law would be void to the extent of the contravention. The expression 'to the extent of the contravention' in the sub-article can only mean, to the extent of the contravention of the rights conferred under that part. Rights do not exist in vacuum. They must always inhere in some person whether natural or juridical and, under Part It, they inhere even in fluctuating bodies like a linguistic or religious minorities or denominations. And, when the sub-article says that the law would be void to the extent of the contravention , it can only mean to the extent of the contravention of the rights conferred on persons, minorities or denominations, as the case may be. Just as a pre-Constitution law taking away or abridging the fundamental rights under article 19 remains operative after the Constitution came into force as respects non-citizens as it is not inconsistent with their fundamental rights, so also a post-Constitution law offending article 19, remains operative as against non- citizens as it is not in contravention of any of their fundamental rights. The same scheme permeates both,, the sub-articles, namely, to make the law void in article 13(1) to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, and any such categorical statement would have been wrong, as the other sections might be void if they are inseparably knitted to the void one. When we see that the latter part of the sub-article is concerned with the effect of the voilation of the injunction contained in the former part, the words to the extent of the contravention can only refer to the rights conferred under Part III and denote only the compass of voidness with respect to persons or entities resulting from the contravention of the rights conferred upon them. Why is it that a law is void under article 13 (2) ? It is only because the law takes away or abridges a fundamental right. There are many fundamental rights and they inhere in diverse types of persons, minorities or denominations. There is no ,conceivable reason why a law which takes away the fundamental right of one class of persons, or minorities or denominations should be void as against others who have no such fundamental rights as, ex hypothesi the law cannot contravene their rights. It was submitted that this Court has rejected the distinction drawn by Venkatarama Aiyar, J. in Sundararamaier's case([1958] S.C.R. 1422.) between legislative inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is : void as against whom? And he cites the decision of the Privy Council in Durayappah v. Fernando((1967) 3 W.L.R. 289) in his support. In Jagannath v. Authorised Officer, Land Reforms([1971] 2 S.C.C. 893) this Court has said that a post-Constitution Act-which has been struck down for violating the fundamental rights conferred under Part III and was, therefore still-born, has still an existence without re-enactment, for being put in the Ninth Schedule. That only illustrates that any statement that a law which takes away or abridges fundamental rights conferred under Part III is still-born or null and void requires qualifications in certain situations. Although the general rule is that a statute declared unconstitutional is void at all times and that its invalidity must be recognized and acknowledged for all purposes and is no law and a nullity, this is neither universally nor absolutely true, and there are many exceptions to it. A realistic approach has been eroding the doctrine of absolute nullity in all cases and for all purposes(See Warring v. Colpoys, 122 F. 2d 642) and it has been held that such broad statements must be taken with some qualifications(1), that even an uncon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons void. The High Court held that there was no intelligible differentia to distinguish establishments grouped together under the definition of establishment' in S. 2(4) and establishments left out of the group and that in any event, the differentia had no rational relation or nexus with the object sought to be achieved by the Act and that the impugned provisions as they affected the rights and liabilities of employers and employees in respect of the establishments defined in s. 2(4) were, therefore, violative of article 14. (1) See Chicot Country Drainage District v. Baxter State Bank, Ark., 308 U.S. 371. (2) See warring v. colpoys, 122 F. 2d 642. (3)See General Theory of Law and State , p. 161. The reasoning of the High Court was that all factories falling within the meaning of s. 2(m) of the Factories Act, 1 948, were brought within the purview of the definition of 'establishment' while establishments carrying business or trade and employing less than fifty persons were left out and that out of this latter class of establishments an exception was made and all establishments carrying on the business of tramways or motor omnibus services were :included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work in connection with or ancillary thereto and, therefore, the legislature did not think it fit to extend the provisions of the Act to such establishments. No affidavit in rejoinder was filed on behalf of respondents to contradict this statement. It would be an idle parade of familiar learning to review the multitudinous cases in which the constitutional assurance of equality before the law has been applied. The equal protection of the laws is a pledge of the protection of equal laws. But laws may classify. 1 And the very idea of1 classification is that of inequality. In tackling this paradox the Court ha,,; neither abandoned the demand for equality nor denied the legislative right to classify. It has taken a middle course. It has resolved the contradictory demands of legislative specialization and constitutional generality by a doctrine of reasonable classification.(1) A reasonable classification is one which includes all who are similarly situated and none who are not. The question then is what does the phrase 'similarly situated' mean ? The answer to the question is that we must look beyond the classification to the purpose of the law. A reasonable classifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason for the law which would not require with equal force its extension to those whom it leaves untouched (See Missouri, R T Rly., v. May (1904) 194 US 267, 269.). What, then, are the fair reasons for non-extension ? What should a court do when it is faced with a law making an under-inclusive classification in areas relating to economic and tax matters ? Should it, by its judgment, force the legislature to choose between inaction or perfection ? The legislature cannot be required to impose upon administrative agencies tasks which cannot be carried out or which must be carried out on a large scale at a single stroke. if the law presumably hits the evil where it is most felt. it is not to be overthrown because there are other instances to which it might have been applied. There is no doctrinaire requirement that the legislation should be couched in all embracing terms. (see West Coast Hotel Company v. Parrish( 300 U.S. 379, 400). The piecemeal approach to a general problem permitted by under inclusive classifications, appears justified when it is considered that legislative dealing with such problems is usually an experimental matter. It is impossible to tell how success ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity would be viewed differently from laws which touch and concern freedom of speech and religion, voting, procreation, rights with respect to criminal procedure, etc. The prominence given to the equal protection clause in many modern opinions and decisions in America all show that the Court feels less constrained to give judicial deference to legislative judgment in the field of human and civil rights than in that of economic regulation and that it is making a vigorous use of the equal protection clause to strike down legislative action in the area of fundamental human rights(See Developments-Equal Protection . 82 Harv. Law Rev., 1065, at 1127). Equal Protection clause rests upon two largely subjective judgments : one as to the relative invidiousness of particular differentiation and the other as to the relative importance of the subject with respect to which equality is sought () See Cox, The Supreme Court Foreward , 1966 Term, 80 Harv. Law Rev. 91-95) . The question whether, under article 14, a classification is reasonable or unreasonable must, in the ultimate analysis depend upon the judicial approach to the problem. The great divide in this area lies in the difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... get unpaid accumulations for utilizing them for the welfare of labour in general. The aim of any legislature would then be, to get the unpaid accumulation from all concerns. So an ideal classification should include all concerns which have 'unpaid accumulations'. But then there are practical problems. Administrative convenience as well as the apprehension whether the experiment., if undertaken as an all-embracing one will be successful, are legitimate considerations in confining the realization of the objective in the first instance to large concerns such as factories employing large amount of labour and', with statutory duty to keep register of wages, paid and unpaid, and the legislature has, in fact,, brought all factories, whether owned by Government of otherwise, within the purview of the definition of 'establishment'. In other words, it is from the factories that the greatest amount of unpaid accumulations could be collected and since, the factories are bound to maintain records from which. the amount of unpaid accumulations could be easily ascertained, the legislature brought all the factories within the definition of 'establishment'. It then addre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... munity. The needs and difficulties of the community are constituted out of facts and 'opinions beyond the easy ken of the court (supra). It depends to a great extent upon an assessment of the local condition of these concerns which the legislature alone was competent to make. Judicial deference to legislature in instances of economic regulation is sometimes explained by the argument that rationality of a classification may depend upon 'local conditions' about which local legislative or administrative body would be better informed than a court. Consequently, lacking the capacity to inform it-,elf fully about the peculiarities of a particular local situation, a court should hesitate to dub the legislative classification irrational (see, Carmichnel v. Southern Coal and Coke Co.( 301 U.S. 495.). Tax laws, for example, may respond closely to local needs and court's familiarity with these needs is likely to be limited. Mr. S. T. Desai for the appellants argued that, if it is held that the inclusion of tramways and motor omnibuses in the category of 'establishment' is bad, the legislative intention to include factories and establishments employing more than 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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