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TMI Blog1962 (11) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... business as a partnership firm, registered under the Indian Partnership Act. The firm employs 43 persons, including cooks, waiters, tea-makers, bill clerks and two store-clerks. Besides paying salary to their employees, the petitioners give them free food and other personal allowances, which it is not necessary to set out in detail. In exercise of the powers conferred by s. 1(3)(b) of the Act, the General Government issued the notification No. G.S.R. 704, dated May 16, 1961, in the following terms: G.S.R. 704--In exercise of the ,powers con- ferred by Clause (b) of sub-section 3 of Section 1 of the Employees' Provident Fund Act, 1952 (19 of 1952), the Central Government hereby directs that. with effect from June 30, 1961, the said Act shall apply. to the following classes of establishments, in each of which twenty or more persons are employed, namely i. Hotels. ii. Restaurants. As a result of the notification aforesaid, the operation of the Act has been extended to hotels and restaurants, including the one run by the petitioners. Subsequently, the Central Government issued a notification 'under s. 5, read with s. 7(1), of the Act, the relevant portions of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme, for the establishment of provident funds under the Act for employees or any class of employees and establishments or class of establishments to which the scheme may be applied, by notification in the Official Gazette. The contribution of the employer to the fund shall be 61% of the basic wages and dearness allowance and retaining allowance, if any, and the employees contribution shall be equal to the employer's contribution, subject to his contribution being raised to the maximum of 6 1/3 %, if the employee so desires and the scheme so provides. Dearness allowance for the purposes of contribution shall be deemed to include also the cash value of any food concession allowed to the employee. Section 7 authorises the Central Government to add to, amend or vary any scheme framed under the Act. By s. 16 it is provided that the Act shall not apply to any establishment registered under the Co-operative Societies Act of 1912, or to any other establishment employing 50 or more persons or 20 or more but less than 50 persons until the expiry of 3 years in the case of the former and 5 years in the case of the latter, from the date on which the establishment is set up. Section 17 emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein. To all establishments which are factories engaged in. the industries enumerated in Schedule 1, the Act has been made) applicable of its own force, subject to the provisions of s. 16, which has indicated the establishments to which the Act shall not apply. The Schedule is liable to be added to or modified so as to include other categories of industries not already included in schedule 1. So far as establishments which do not come with in the description of factories engaged in industries the Central Government has been vested with the power of specifying such establishment and class of establishments, as it might determine to be brought within the purview. of the Act. The Act has given sufficient indication of the policy underlying its provisions namely, that it shall apply to all factories engaged in any kind, of industry and to all other establishments employing 20 or more persons.This court has repeatedly laid it down that where the discretion to apply the provisions of a particular statute is left with Government, it will be presumed that the discretion so vested in such a high authority will not be abused. The Government is in a position to have all the relevant and ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establishment of provident fund under the Act for employees or any class of employees, in pursuance of the provisions of the Act. And the scheme in question in this case, as already indicated, has actually- been framed and is under challenge in this case. The relevant provisions of s. 17 are in these words : 17. Power to exempt.-(1) The appropriate Government may, by notification in the Official Gazette, and subject to such conditions as may be specified in the notification, exempt from the operation of all or any of the provisions of any Scheme- (a) any establishment to which this Act applies if, in the opinion of the appropriate Government, the rules of its provident fund with respect to the rates of contribution are not less favorable than those specified in section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favorable to the employees than the benefits-provided under this Act or any Scheme in relation to the employees in any other establishment of a similar characters; or (c) any establishment if the employees of such establishment are in enjoyment of benefits in the nature of provident fund, pension or grat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule. The contention in that case that no principles had been prescribed and no standards laid down which could furnish an intelligent guide to the executive authority in making the selection of employments was repelled by this Court. A similar question was raised in this Court in the case of Vasantal Maganbhai Sanjanuwala v. The State of Bombay ([1961] 1 S.C.R. 341) challenging the vires of s. 6 (2) of the Bombay Tenancy and Agricultural Lands Act (Bom. 67 of 1948), which read as follows : The Provincial Government may, by notifica- tion in the Official Gazette, fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as it thinks fit. This Court, on a consideration of the preamble of the statute and its relevant provisions came to the conclusion that the power delegated to the Provincial Government by s. 6 (2) was not vitiated by excessive delegation. It will be noticed that the terms of the section quoted above had given much wider powers to the executive. But the Court pointed out that the legislature enunciated its policy and laid down the principle for the guidance of the dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of powers by the legislature. On the other hand, if a review of all those facts and circumstances and the provisions of the statute, including the preamble, leaves the Court guessing as to the principles and standards, then the delegate has been entrusted not with the mere function of applying the law to individual cases, but with a substantial portion of legislative power itself. Applying those principles which are now well-established by quite a number of decisions of this Court, can it be said in the instant case that the. legislature had not indicated clearly the principles underlying the legislation and the standards to be applied ? In our opinion, the answer must be an emphatic No . It was next contended that the Act was intended by Parliament to apply to employees who were mere wage-earners and not to salaried servants, and that in the instant case, the employees of the petitioners were not mere wage-earners. It is a little difficult to appreciate the distinction sought to be made. Both 'Salary' and 'Wages are emoluments paid to an employee by way of recompense for his labour. Neither of the two terms is a 'term of art'. The Act has not defined wag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive Societies employing less than fifty persons and working without the aid of power; or (b) to any other establishment employing fifty or more persons or twenty or more but less than fifty persons until the expiry of three years in the case of the former and five years in the case of the latter, from the date on which the establishment is or has been set up Explanation.-For the removal of doubt it is hereby declared that an establishment shall not be deemed to be newly set up merely by reason of a change in its location. Clause (a) of s. 16, as it now stands, has exempted establishments registered under the Co-operative Societies Act, because it is well-known that it is the settled policy of the Government to foster co-operative societies with a view to their development and growth in the interest of the community. It is not necessary to cite instances where this Court has held that cooperative societies stand on a special footing which distinguishes them from other establishments or corporations. Clause (b) has reference to establishments which have been in existence for less than 3 years or 5 years, as the case may be. That is an understandable classification with a view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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