PETITIONER:
BOMBAY DYEING &MANUFACTURING CO., LTD.
Vs.
RESPONDENT:
THE STATE OF BOMBAY AND OTHERS
DATE OF JUDGMENT:
20/12/1957
BENCH:
AIYYAR, T.L. VENKATARAMA
BENCH:
AIYYAR, T.L. VENKATARAMA
BOSE, VIVIAN
BHAGWATI, NATWARLAL H.
DAS, S.K.
SARKAR, A.K.
CITATION:
1958 AIR 328 1958 SCR 1122
ACT:
Labour Welfare-Law creating a fund for welfare activities
Companies called upon to pay fines realised from employees
and unpaid accumulation of wages-Constitutional validity
-Bombay Labour Welfare Fund Act (Bom.XL of 1953), ss. 3(1),
3(2)(a)(b)-Constitution of India, Arts. 31(2),19(1)(f).
HEADNOTE:
The Bombay Labour Welfare Fund Act (Bom. XL of 1953) was
enacted by the State Legislature with the object of
constituting a fund for the financing of activities for the
welfare of labour and S. 3(1) of the Act provided as
follows:-
“There shall be constituted a fund called the Bombay
Labour Welfare Fund and, notwithstanding anything contained
in any other law for the time being in force, the sums
specified in subsection (2) shall be paid into the Fund.”
Section 3(2) provided, inter alia, as follows
“The Fund shall consist of :-
(a) all fines realised from the employees;
(b) all unpaid accumulation;”
Notices were served on the appellant’s company as also
on other companies similarly situated, by the Welfare
Commissioner, appointed under the Act, calling upon them to
remit to him the fines and unpaid accumulations in their
custody. The appellant in reply questioned the validity of
the Act on the ground that it contravened Art. 31(2) Of the
Constitution and, thereafter, filed a Writ petition, out of
which the present appeal arises, which was treated by
consent of parties as a test case. The Judges of the
Division Bench who heard the matter field that the impugned
Act was intra vires, though on different grounds, and
dismissed the petition. The sole point for determination in
the appeal was whether s. 3(I) and sub-cls. (a) and (b) Of
S. 3(2) Of the Act were void as being violative of Art.
31(2) Of the Constitution:
Held, that the unpaid accumulation of wages remaining
with the appellant company was its own property and S. 3(1)
of the impugned Act in so far as it directs the payment of
it tinder 3(2)(b) of the Act contravenes Art. 31(2) Of the
Constitution and must be invalid. Article 31(2A) of the
Constitution has no retrospective effect and cannot apply
and the matter must be decided on the law as it stood at the
date of the Writ petition.
1123
The State of West Bengal v. Subodh Gopal Bose, [1954]
S.C.R. 587 and Dwarkadas Shrinivas of, Bombay v. Sholapur
Spinning and Weaving Co. Ltd., [1954] S.C.R. 674, applied.
Assuming that money was not property within the meaning
of Art. 31(2) and Art. 19(1)(f) applied that Article also
would be of no help to the respondent as the Act could not
be supported under Art. 19(5) Of the Constitution.
Commonwealth of Australia v. Bank of New South Wales,
[1950] A.C. 235, held inapplicable.
The State of Bihar v. Mahayajadhiraja Sir Kameshwar
Singh of Darbhanga, [1952] S.C.R. 889, considered.
The impugned Act had not the effect of substituting the
Board as the creditor in place of the employee nor could it
be said to be a legislation in respect of abandoned
property.
Although by defining ‘unpaid accumulation’ in the way it
did the Legislature obviously intended that only such wages
of the employees as were time-barred should be taken by the
State, it being well settled that the law of limitation only
bars the remedy but does not extinguish the debt, ss. 3(I),
5(2) and 17 of the Act must be held to have the effect of
transferring to the Board the debts due by the appellant to
its employees free from the bar of limitation.
Such a transfer can be valid only if it gives a complete
discharge to the employer from the debts. If it does not,
the Act must be held to infringe Art. 19(1)(f) of the
Constitution. The Act contains no provision granting a
discharge to the debtor. The bar of limitation prescribed
either by s. 15 Of the Payment of Wages Act (Act IV Of 1936)
or Art. 102 of the Limitation Act or the provisions of S. 56
of the Contract Act, assuming they applied, could not give
such a discharge.
Where the Statute deals with rights arising out of a
contract and interferes with the rights of one of the
parties to it, it must affect those of the other parties to
it as well. Consequently, the impugned Act which takes over
the rights of the employees in respect of wages due to them
without compensation and is, therefore unconstitutional, as
contravening Art. 19(1)(f) or Art- 31(2) of the
Constitution, would be unconstitutional as regards the
appellant as well.
The purpose of a legislation relating to abandoned
property must be, in the first instance, to safeguard the
property in the interest of the true owner and thereafter,
in absence of any claim, the taking over of it by the State.
The impugned Act which vests the property absolutely in the
State without any regard for the claims of the true owner
cannot be said to be a law relating to abandoned property.
I43
1124
Connecticut Mutul Life Insurance Company v. Moore, 333
U.S 541, Anderson National Bank v. Luckett, 321 U.S. 233 and
Standard oil Company v. New Jersey, 341 U.S. 428, referred
to.
As regards the fines mentioned in s. 3(2)(a) of the Act
the appellant must be held to be a bare trustee under s. 8
of the Wages Act having no beneficial interest in fund
created by that Act, and, consequently, ss. 3(I) and 3(2)(a)
of the Act cannot contravene Art. 31(2) Or Art. 19(1)(f) of
the Constitution.
Nor could it be said that the Act by extending the
circle of beneficiaries had encroached on the rights of the
employees of the appellant. These sections must, therefore,
be held to be constitutionally valid.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 167 of
1954.
Appeal from the Judgment and decree dated September 14,
1953, of the Bombay High Court in Misc. Application No. 267
of 1953.
R. J. Kolah, B. Narayanaswamy and J. B. Dadachanji,
for the appellants.
H. M. Seervai, Advocate General for the State of
Bombay and R. H. Dhebar, for the respondents.
1957. December 20. The following Judgment of the Court
was delivered by
VENKATARAMA AIYAR J.-The appellant is a limited Company
incorporated under the Indian Companies Act, 1879. It is
carrying on business in the manufacture of textiles, and
owns three factories called Spring Mills,, Textile Mills and
Bombay Dye Works, all of, which are situate in Bombay. In
its balance sheet for the year 1951, it has shown as one of
its liabilities a sum of Rs. 1,65,731-1-0 under the heading
“Unclaimed wages “. This amount is made up of wages earned
by the workmen in the factories but remaining undrawn by
them, and represents accumulations from year to year ever
since the formation of the Company which, it is stated, was
about the year 1880. ‘ The dispute in this appeal mainly
relates to this amount.
In 1953, the Legislature of the State of Bombay enacted
the Bombay Labour Welfare Fund Act (Bum. XL of 1953)
(hereinafter referred to as the Act), and it came into force
on June 4, 1953. We may, at this
1125
stage, refer to the relevant provisions of the Act, as it is
their validity that is the main point for our determination
in this appeal. The preamble to the Act recites that “ It
is expedient to constitute a Fund for the financing of
activities to promote welfare of labour in the State of
Bombay and for conducting such activities “. Section 2 is
the definition section; sub-s. (2) defines an ” employee ”
as meaning ” any person who, is employed for hire or reward
to do any work, skilled or unskilled, manual or clerical, in
an establishment”.
Employer ” is defined in sub-s. (3) as meaning ” 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-in a factory any
person named under s. 7(i)(f) of the Factories Act, 1948, as
the manager ”. Sub-section (10) defines “ Unpaid
accumulations “ as meaning ” all payments due to the
employees but not made to them within a period of three
years from the date on which they became due whether before
or after the commencement of this Act including the wages
and gratuity legally payable”. ”Wages “is defined in sub-s.
(11) as meaning “ all remuneration capable of being
expressed in terms of money which would) if the terms of the
contract of employment, express or implied were fulfilled,
be payable to a person employed in respect of his employment
or of work done in such employment…………
Then, there is s. 3, which runs as follows:
(1). “There shall be constituted a fund called the
Bombay Labour Welfare fund and, notwithstanding anything
contained in any other law for the time being in force, the
sums specified in sub-section (2) ,shall be paid into the
Fund.
(2). The Fund shall consist of–
(a) all fines realised from the employees;
(b) all unpaid accumulations;
(c) any voluntary donations;
(d) any fund transferred under sub-section (5) of
section 7; and
(e) any sum borrowed under section
1126
(3). The sums specified in sub-section (2) shall be
collected by such agencies and in such manner and the
accounts of the Fund shall be maintained and audited in such
manner as may be prescribed.”
Section 7(1) provides that “the Fund shall vest in and ,be
held and applied by the Board as Trustees subject ‘to the
provisions and for the purposes of this Act.” Sub-section
(2) of s. 7 is very material, and is as follows:
“Without prejudice to the generality of sub-section (1)
the moneys in the Fund may be utilized by the Board to
defray expenditure on the following:
(a) community and social education centres including
reading rooms and libraries;
(b) community necessities;
(c) games and sports;
(d) excursions, tours and holiday homes;
(e) entertainment and other forms of recreations;
(f) home industries and subsidiary occupations for
women and unemployed persons;
(g) corporate activities of a social nature;
(h) cost of administering the Act including the
salaries and allowances of the staff appointed for the
purposes of the Act; and
(i) such other objects as would in the opinion of the
State Government improve the standard of living and
ameliorate the social conditions of labour:
Provided that the Fund shall not be utilized in financing
any measure which the employer is required under any law
for the time being in force to carry out;
Provided further that unpaid accumulations and ,fines
shall be paid to the Board and be expended by it under this
Act notwithstanding anything contained in the Payment of
Wages Act, 1936 (IV of 1936), or any other law for the time
being in force “.
Section 11 provides for the appointment of an officer called
the Welfare Commissioner, and defines his ,powers and
duties. Section.17 enacts that,
“ Any sum payable into the Fund under this Act shall
without prejudice to any other mode of recovery,
1127
be recoverable on behalf of the Board as an arrear of land
revenue.”
Section 19 authorises the State Government to make rules to
carry out the purposes of this Act. Section 23 provides
that,
“In section 8 of the Payment of Wages Act, 1936 (IV of
1936), to sub-section (8) the following shall be added,
before the Explanation namely:
“ but in the case of any factory or establishment to
which the Bombay Labour Welfare Fund Act, 1953 (Bom. XL of
1953), applies all such realisations shall be paid into the
Fund constituted under the said Act.”
Rules were framed by the State of Bombay in exercise of
the powers conferred by s. 19, and they were published on
June 30, 1953. The material rules are Nos. 3 and 4, which
are as follows:
3.” Payment of fines and of unpaid accumulations by
employer-(I) Within fifteen days from the date on which the
Act shall come into force in any area, every employer in
such area shall pay by cheque, money order or cash to the
Welfare Commissioner-
(a)all fines realised from the employees before the said
date and remaining unutilized on that date; ,and
(b)all unpaid accumulations held by the employer on the
aforesaid date.
(2)The employer shall along with such payment submit a
statement to the Welfare Commissioner giving full
particulars of the amounts so paid.
(3) Thereafter, all fines realised from the employees
and all unpaid accumulations during the quarters ending 31st
March, 30th June, 30th September and 31st December shall be
paid by the employer in the manner aforesaid to the Welfare
Commissioner on or before the 15th of April, 15th of July ,
15th of October and 15th of January succeeding such quarter
and a statement giving particulars of the amounts so paid
shall be submitted by him along with such payment to the
Welfare Commissioner,
1128
4. Notice for payment of fines and unpaid accumu-
lations by Welfare Commissioner:-The Welfare Commissioner
may, after making such enquiries as he may deem fit, and
after calling for a report from the Inspector, if necessary,
serve a notice on any employer to pay any portion of fines
realised from the employees or unpaid accumulations held by
him which the employer has not paid in accordance with rule
3. The employer shall comply with the notice within 14 days
of the receipt thereof.”
On July 7, 1953, the Welfare Commissioner, Bombay
appointed under s. 1 1 of the impugned Act, sent a notice to
the appellant and other companies similarly situate,
inviting their attention to the relevant provisions of the
Act and of the rules and calling upon them to remit the
fines and unpaid accumulations remaining with, them, in
accordance with the directions contained therein. To this,
the appellant sent a reply on the same date impugning the
validity of the Act as being in violation of the provisions
of Art. 31 (2), and followed it up by filing the writ
petition out of which the present appeal arises, it being
treated by consent of parties as a test case.
The application was heard by Chagla C. J. and Tendolkar
J. who held that the impugned Act was intra vires but on
different grounds. The learned -Chief Justice- was of the
opinion that, on its true construction, the Act merely
substituted the Board as a creditor in the place of the
employees, that there -was no taking of property, and that,
in consequence, there was no contravention of Art. 31 (2).
Tendolkar J. hold that ” unpaid wages ” were unquestionably
moneys which belonged to the employer and that he was being
deprived of them, but there was no taking of possession or
acquisition of property within .Art. 31 (2) of the
Constitution but a deprivation of moneys, and as it was done
under the authority of -law, it fell within the protection
of Art. 31 (1). In the result, the petition was dismissed.
The learned Judges,however, granted a certificate under Art.
132, and that is how the appeal comes before us,
1129
The sole point for determination in this appeal is
whether s. 3 (1) and sub-cls. (a) and (b) of s. 3(2) of the
Act are void as contravening the provisions of the
Constitution; but to decide it, we have to consider quite a
number of questions which have been raised and discussed in
the arguments before us. It will be convenient to deal with
the two items, fines realised’ from the employees, s. 3 (2)
(a) and unpaid accumulations, s. 3 (2) (b) separately, as
the issues involved in the determination of their validity
are different.
Taking first unpaid accumulations, s. 3 (2) (b), the
contention of Mr. Kolah for the appellant is that s 3 (1) is
repugnant to Art. 31 (2) inasmuch as it deprives the
employers of moneys belonging to them without payment of any
compensation merely on the ground that they represent wages
due to the employees. Now, money is undoubtedly property,
and it cannot be disputed that a person who has money does
not cease to be its owner merely by reason of the fact that
he owes debts in satisfaction of which it may have to be
applied. Until the creditor takes appropriate proceedings
under the law for the realisation of his debt and the title
of the debtor is extinguished in those proceedings, the
title to the property continues in the debtor. Mr. Kolah is
therefore clearly right in his contention that the liability
of the appellant to pay wages to the employees does not ipso
facto extinguish its title to the moneys belonging to it
even pro tanto, and that the effect, therefore, of s. 3 (1)
is to take away money belonging to it. Then, the question
is whether such a provision is hit by Art. 31 (2) on the
ground that it is acquisition or taking possession of
property for a public purpose without payment of
compensation. It is common ground that the taking is for a
public purpose. The point in- dispute is whether what is
sought to be done under s. 3 is acquisition or taking
possession of property within Art. 31 (2). Tendolkar, J.,
answered this question against the appellant, because, in
his view, Art. 31 (2) would apply only if there was a
transfer of title to or beneficial interest in the amounts
to the State, that s. 3 (1) effected neither, that it did
deprive the employers of
1130
oheir moneys, but that fell under Art. 31 (1) and not Art.
31 (2), and that as that was done under the authority of
law, it could not be questioned.
Subsequent to this decision, this Court had occasion to
consider the true scope of Art. 31 (2) in relation to Art.
31 (1) in The State of West Bengal v. Subodh Gopal Bose (1)
and in Dwarkadas Shrinivas of Bombay v. The Sholapur
Spinning and Weaving Co. Ltd (2). In The State Of West
Bengal v. Subodh Gopal Bose(1), the majority of the learned
Judges took the view that. Arts. 31 (1) and 31 (2) were not
mutually exclusive, that it was not an essential requisite
of acquisition under Art. 31 (2) that there should be a
transfer of title to the State, that deprivation of property
and substantial abridgement of the rights of the owner were
also within Art. 31 (2), and that a law which produced those
results must, in order to be valid, satisfy the conditions
laid down in that Article. Das, J., (as he then was)
differed from this view, and held that the contents of the
two provisions were distinct, that while Art. 31 (1) had
reference to the ” police power” of the State, Art. 31 (2)
dealt with the power of ” eminent domain “. In Dwarkadas
Shrinivas of Bombay v. The Sholapur Spinning and Weaving
Co.(2) the majority of the Judges again reiterated the view
expressed in The State of West Bengal v. Subodh Gopal
Bose(1) that Arts. 31 (1) and 31 (2) covered the same
ground, and that substantial interference with rights to
property would be within the operation of Art’ 31 (2).
On these decisions, it should follow that s. 3 of the
impugned Act is bad as infringing Art. 31 (2), in that it
deprives the appellant of its moneys without giving any
compensation. Mr. Seervai, however, resists this contention
on the strength of Art. 31 (2A), which was introduced by the
Constitution (Fourth Amendment) Act, 1955. It is as
follows:
“ Where a law does not provide for the transfer of the
ownership or right to possession of any property to the
State or to a corporation owned or controlled by the State,
it shall not be deemed to provide for the
(1) [1954] S.C.R. 587.
(2) [1954] S.C.R. 674.
1131
compulsory acquisition or requisitioning of property,:
notwithstanding that it deprives any person of his
property.”
The argument is that the theory that acquisition in Art. 31
(2) is not confined to cases of transfer of ownership to the
State, and that even deprivation of property would fall
within it, which is the basis of’ the decisions in The State
of West Bengal v. Subodh Gopal Bose (1) and in Dwarkadas
Shrinivas of Bombay v. The Sholapur Spinning and Weaving Co.
Ltd. (2) can, in view of the above amendment, no longer be
accepted as correct, and that those decisions therefore
require to be reconsidered in the light of the new Art. 31
(2A). But it is not disputed that this provision has no
retrospective operation, and that the rights of the parties
must be decided in accordance with the law as on the date of
the writ application, and that on the provisions of the
Constitution as they stood on that date and as interpreted
in The State of West Bengal v. Subodh Gopal Bose (1) and
Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and
Weaving Co. Ltd. (2), s. 3 (1) of the impugned Act would be
obnoxious to Art. 31 (2). This should be sufficient to
conclude this, question in favour of the appellant, but the
respondents contend that s. 3 (1) is not within the prohibi-
tion of Art. 31 (2), because it operates only on money, and
money is not property for purposes of that Article.
There is considerable authority in America that the
power of eminent domain does not extend to the taking of
money, the reason being that compensation which is to be
paid in respect of money can only be money, and that,
therefore, in substance it is a forced loan. In The State
of Bihar v. Maharajadhiraja Sir Kameshwar Singh of
Darbhanga(3 ), this view was adopted by Mahajan J. at pages
943-944, by Mukherjea J. at page 961 and by Chandrasekhara
Aiyar J. at pages 1015 to 1018. It is argued for the
respondents that the position under Art. 31(2) is the same
as in America, as the provision therein that either the
(1) [1954] S.C.R. 587. (2) [1954] S.C.R. 674.
(3) [1952] S.C.R. 889.
144
1132
amount of the compensation should be fixed or the principles
on which and the manner in which compensation is to be
determined should be specified, involves that what is taken
is not money. It is argued, on the other hand, for the
appellant that the latest trends in American law show, as
was observed by Das J. (as he then was), at pages 984-985 in
The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of
Darbhanga (1), a departure from the view held in earlier
authorities that moneys and choses inaction could not be the
subject of ” eminent domain “; and that, in any case, the
principles of American law should not be applied in the
interpretation of the provisions of our Constitution. If
the contention of the respondents is to be accepted, the
question naturally arises what protection a person has in
respect of moneys belonging to him if he can be deprived of
them by process of legislation. The answer of Mr. Seervai
is that that protection is to be sought in Art. 19(1)(f),
that the word “ property” therein has a wider connotation
than what it bears in Art. 31(2) and includes money, and
that the citizens have the right to hold money subject only
to law such as is saved by Art. 19(5). In support of this
position, he relied on the decision in Bijay Cotton Mills
Ltd. v.The State of Ajmer (2) in which this Court applied
Art. 19(6) in pronouncing on the validity of the Minimum
Wages Act (XI of 1948) requiring the employers to pay wages
at a rate not less than that to be fixed by the Government.
Assuming that the correct position is what the res-
pondents contend it is, the question that has still to be
determined is whether the impugned Act could be supported
under Art. 19(5). There was some discussion before us as to
the scope of this provision, the point of the debate being
whether the words “imposing reasonable restriction” would
cover a legislation, which not merely regulated the exercise
of the rights guaranteed by Art. 19(1)(f) but totally
extinguished them, and whether a law like the present one
which deprived the owner of his properties could be held to
fall within that provision. It was argued that a law
authorising
(1) [1952] S.C.R. 889.
(2) [1955] 1 S.C.R. 752.
1133
the State to seize and destroy diseased cattle, noxious
drugs and the like, could not be brought within Art. 19(5)
if the word ‘restriction’ was to be narrowly construed, and
that accordingly the power to restrict must be held to
include, in appropriate cases, the power to prohibit the
exercise of the right. That view does find support in the
observations of Lord Porter in Commonwealth of Australia v.
Bank of New South Wales (1); but the present legislation
cannot be sustained even on the above interpretation of the
word ‘restriction’, as s. 3(1) of the Act deals with moneys
and money cannot be likened to diseased cattle or noxious
drugs so as to attract the exercise of police power under
Art. 19(5). It appears to us that whether we apply Art.
31(2) or Art. 19(5), the impugned Act cannot be upheld, and
it must be struck down, unless we accept the other
contentions which have been urged for the respondents in
support of its validity. Those contentions are firstly,
that the Act merely substitutes the Board as the creditor in
the place of the employees, and that ss. 3 and 17 merely
prescribe the mode in which the obligation is to be enforced
and-that was the ground on which Chagla C. J. based his
judgment; and secondly, that the impugned legislation is one
in respect of abandoned property, and it is not open to
attack as contravening either Art. 19 (1)(f) or Art. 31(2).
It is those contentions that now fall to be considered.
As regards the first contention, the question is whether
on a fair construction of the provisions of the impugned
Act, it is possible to spell out a substitution of
creditors. When an employee has done his work, the amount
of wages earned by him becomes a debt due to him from the
employer, and it is property which could be assigned under
the law. If the employee had assigned the debt to the Board
constituted under the Act, the latter would be entitled to
recover it from the employer. And what could be done by act
of parties can also be done by legislation. What we have to
see, therefore, is whether on the provisions of the statute
it could be held that there is a statutory
(1) [1950] A-C. 235, 311.
1134
transfer of the wages earned by the workman to the Board.
Section 5 of the Act vests the amounts mentioned in s. 3(2)
in the Board, and s. 3(1) directs that those amounts should
be paid by the employer to the Board. Counsel for the
appellant contends that there are in the Act no words of
transfer of the debts to the ;Board, and that there is only
a provision for payment of the amounts. But this is taking
too narrow a view of the true scope of those provisions.
Looking at the substance of the matter, we are of opinion
that s. 3(1) and s. 5(1) do operate to transfer the debts
due to the employees, to the Board.
It will be observed that the definition of “unpaid
accumulations ” takes in only payments due to the employees
remaining unpaid within a period of three years after they
become due. The intention of the Legislature obviously was
that claims of the employees which are within time should be
left to be enforced by them in the ordinary course of law,
and that it is only when they become time-barred and useless
to them that the State should step in and take them over.
On this, the question arises for consideration whether a
debt which is time-barred can be the subject of transfer,
and if it can be, how it can benefit the Board to take it
over if it cannot be realised by process of law. Now, it is
the settled law of this country that the statute of
Limitation only bars the remedy but does not extinguish the
debt. Section 28 of the Limitation Act provides that when
the period limited to a person for instituting a suit for
possession of any property has expired, his right to such
property is extinguished. And the authorities have held-and
rightly, that when the property is incapable of possession,
as for example, a debt, the section has no application, and
lapse of time does not extinguish the right of a person
thereto. Under s. 25(3) of the Contract Act, a barred debt
is good consideration for a fresh promise to pay the amount.
When a debtor makes a payment without any direction as to
how it is to be appropriated, the creditor has the right to
appropriate it towards a barred debt. (Vide s. 60 of the
Contract Act). It has also been held that a creditor is
entitled
1135
to recover the debt from the surety, even though a suit on
it is barred against the principal debtor. Vide Mahant
Singh v. U Ba Yi (1), Subramania Aiyar v. Gopala Aiyar (2),
and Dil Muhammad v. Sain Das (3). And when a creditor has a
lien over goods by way of security for a loan, he can
enforce the lien for obtaining satisfaction of the debt,
even though an action’ thereon would be time-barred. Vide
Narendra Lal Khan v. Tarubala Dasi (4). That is also the
law in England. Vide Halsbury’s Laws of England (Hailsham’s
Edition), Vol. 20, page 602, para. 756 and the observations
of Lindley L. J. in Carter v. White (5) and of Cotton L. J.
in Curwen v. Milburn (6). In American Jurisprudence, Vol.
34, page 314, the law is thus stated :
“ A majority of the courts adhere to the view that a
statute of limitations, as distinguished from a statute
which prescribes conditions precedent to a right of action,
does not go to the substance of a right, but only to the
remedy. It does not extinguish the debt or preclude its
enforcement, unless the debtor chooses to avail himself of
the defence and specially pleads it. An indebtedness does
not lose its character as such merely because it is barred;
it still affords sufficient consideration to support a
promise to pay, and gives a creditor an insurable interest.”
In Corpus Juris Secundum, Vol. 53, page 922, we have the
following statement of the law :
“ The general rule, at least with respect to debts or
money demands, is that a statute of limitation bars, or runs
“against, the remedy and does not discharge the debt or
extinguish or impair the right, obligation, or cause of
action.”
The position then is that under the law a debt subsists
notwithstanding that its recovery is barred by limitation,
and no argument has been addressed to us by the appellant
that the transfer of such a debt is invalid; and indeed it
could not be, in view of the provisions in the impugned Act,
which release the debts
(1) (1939) L. R. 66 1. A. 198.
(2) (1910) I.L.R. 33 Mad. 308.
(3) A.I.R. 1927 Lah. 396.
(4) (1921) I.L.R. 48 Cal. 817, 823.
(5) (1883) 25 Ch. D. 666, 672.
(6) (1889) 42 Ch. D. 4 24, 434.
1136
due to the employees from the bar of limitation. Section
3(1) provides that payment shall be made of the amounts
specified in sub-cl. (2) “notwithstanding anything contained
in any other law for the time being in force.” A similar
provision is again enacted in the second proviso to sub-s.
(2) of s. 5 that “unpaid accumulations ” and fines shall be
paid to the Board “notwithstanding anything contained in the
Payment of Wages Act, 1936, or any other law for the time
being in force.” One of those laws is the law of limitation,
and the effect of these provisions is to suspend limitation
in respect of the claims to which s. 3(2) relates. To
dispel any doubt as to whether it was competent to the
Legislature of the Bombay State to modify the provisions of
the Limitation Act, it should be stated that limitation is a
topic enumerated in the Concurrent List, being Entry 13 in
List III in Seventh Schedule to the Constitution, and under
Art. 254(2), the State Legislature can enact a law modifying
the Central Act, provided it is reserved for consideration
by the President and assented to by him, and that has been
done in the present case. Coming to the impugned Act, there
is one other provision therein to which reference must be
made. Section 17 provides that without prejudice to other
modes of recovery, the sums payable to the fund under s. 3
may be recovered as arrears of land revenue. This is a
provision which is generally made when amounts are due and
payable to the State, and Mr. Kolah concedes, that if the
impugned law is otherwise valid, it cannot be said to be bad
by reason of this section. On the above analysis, there
cannot be any doubt that the effect of the relevant
provisions of the Act is to transfer to the Board the debts
due by the appellant to its employees free from the bar of
limitation.
The question still remains whether there has been a
substitution of creditors, and that can only be, if the debt
due to the employee is discharged and in its place there is
substituted the debt in favour of the Board. If, however,
the employer is not released from his liability to the
employee, then the effect of s. 3(1) is only to create in
the Board a statutory creditor in
1137
addition to the creditor under the contract of employment,
and there can be no question of substitution. Mr. Seervai
agrees that if the Act does not operate to’ discharge the
employer from his obligations to the employees in respect of
the wages due to them, then it must be held to be
unconstitutional as infringing Art. 19(1)(f), because his
contention that the effect of’ the Act was only to take the
property of the employer in discharge of its obligations
could not then be maintained.
The real point for determination, therefore, is whether
on payment of the amounts in accordance with s. 3(1) of the
Act, the appellant gets a discharge of his obligations to
the employees in respect of wages due to them. The Act does
not contain any provision to that effect, and the absence
thereof has been strongly relied on by the appellant as
showing that no substitution of creditors was intended. In
answer to this contention, Mr. Seervai urges firstly that
though the Act does not, in terms, provide for the discharge
of the appellant on payment of the amount under s. 3(1),
that is the result of the provisions of the Payment of Wages
Act (Act IV of 1936), hereinafter referred to as the Wages
Act, and secondly, that the effect of s. 3(1) of the Act is
to render the contract of employment void under s. 56 of the
Contract Act, and the appellant is thereby discharged from
his obligations thereunder. We shall now examine both these
contentions.
To appreciate the first contention, it is necessary to
refer to the relevant provisions of -the Wages Act. Section
2(vi) defines ”wages” in terms which comprehend whatever
falls within the definition of that word in s. 2(11) of the
impugned Act. Section 3 casts on the employer the
responsibility for payment of wages to persons employed by
him. Section 4 provides for the fixing of wage periods,
which, however, are not to exceed one month. Under s. 5,
the wages have to be paid before the expiry of ten days
after the last day of the wage period in case of employees
who continue in service and in the case of those whose
employment has been terminated, within the second
1138
working day of such termination. Section 15 provides that
where an unauthorised deduction has been made from the wages
of an employed person or payment of wages has been delayed,
such person may apply to the authority appointed under the
Act for a direction for payment of the amount deducted or
the delayed ;wages, as the case may be, together with
payment of compensation. Such application has to be made
within six months from the date on which the deductions were
made or the date on which the payment of wages became due,
and by Act No. 62 of 1953 of the Bombay Legislature, the
period of six months has been enlarged to one year. There
is a proviso to this section that an application thereunder
can be made after the period prescribed therein “when the
applicant satisfies the authority that he had sufficient
cause for not making the application within such period.”
Section 22(d) of the Act provides that,
“No Court shall entertain any suit for the recovery of
wage or of any deduction from wages in so far as the sum so
claimed could have been recovered by an application under
section 15……..
Now, the argument of the respondents is that under the
provisions aforesaid, an employee has to prosecute his claim
for unpaid wages before the authority within the time
limited by s. 15 of the Wages Act, which is one year in the
State of Bombay, that if he fails to do so it becomes
unenforceable, and a suit with respect thereto under the
general law is also barred. The result is, it is contended,
that having regard to the definition of “unpaid
accumulations” as meaning all payments due to the employees
but not made to them within a period of three years, the
employer runs no risk of being called upon to pay to the
employee what has been paid by him to the Board under s.
3(1), and that therefore a payment under the impugned Act
gives him what is, for all practical purposes, a good
discharge. This argument rests on the supposition that so
far as unpaid wages are concerned, the operation of the
Wages Act is co-extensive with that of the impugned Act.
But that clearly is erroneous. It is true that wages as
defined in the Wages Act
1139
would include whatever are wages under the impugned Act.
But s. 1(6) limits the application of the Wages Act to wages
which are below Rs. 200 for a wage period. In respect of
wages of Rs. 200 or more, it is the general law that would
apply, and the period of limitation is not one year under s.
15 of the Wages Act but three years under Art. 102 of the
Limitation’ Act, which period is capable of extension under
the provisions of the Limitation Act beyond the three years
mentioned in s. 2(10) of the impugned Act. Then, it is to
be noted that under the proviso to s. 15(1), the authority
has the power to admit a petition even beyond the period
mentioned there, if sufficient cause is shown therefor. To
this, the reply of the respondents is that as on the terms
of s. 3(1) and the second proviso to s. 5(2) they are to
take effect notwithstanding anything contained in the Wages
Act or any other law, they override the power conferred by
the proviso to s. 15(1) of the Wages Act or the provisions
of the Limitation Act.
Even as regards s. 22 of the Wages Act, there is
divergence of judicial opinion as to its true scope. In
Simpalax Manufacturing Co. Ltd. v. Alla-Ud-Din (1), it was
held that if there was any bona fide dispute as to the
amount payable, the jurisdiction of the Civil Court was not
barred by s. 22. On the other hand, it was held in Bhagwat
Rai v. Union of India (2) that the jurisdiction of the Civil
Court would be barred, even if there was a bona fide
dispute, and that the bar under s. 22(d) was absolute, and
certain observations in Modern Mills Ltd. v. Mangalvedhekar
(3) and A. B. Sarin v. B. C. Patil (4) were relied on, as
supporting this contention. Even if Mr. Seervai is right in
his contention that the law is correctly laid down in
Bhagwat Rai v. Union of India (2) and that the decision in
Simpalax Manufacturing Co. Ltd. v. Alla-Ud-Din(1) is wrong,
the fact remains that claims in respect of unpaid wages to
which the impugned Act applies must, in view of s. 1(6) of
the Wages Act, fall at least
(1) A.I.R. 1945 Lah. 195.
(2) I.L.R. 1953 Nag. 433.
(4) A.I.R. 1951 BOM. 423.
(3) A.I.R. 1950 Bom. 342.
145
1140
in part outside the purview of that Act, and the protection
afforded by s. 15 of that Act will not be available with
reference thereto.
It is next contended that even if the impugned Act does
not protect the employer in respect of unpaid wages which
fall outside the Wages Act, it should be upheld in so far as
it relates to those claims which fall within the purview of
that Act, as the bar of limitation under s. 15 of that Act
is sufficient safeguard to the employer against being made
liable at the instance of the employees for wages which had
been paid to the Board. And it is also contended that even
with reference to claims for unpaid wages which fall outside
the Wages Act, the impugned Act should be held to be valid
if such claims are barred under the provisions of the
Limitation Act. In other words, the contention is that the
impugned Act should be upheld in respect of that portion of
the unpaid wages the recovery of which by the employees is
barred by limitation whether under s. 15 of the Wages Act or
the Limitation Act.
The impugned Act, it should be noted, merely enacts that
all unpaid accumulations should be paid to the Board. It
makes no distinction between claims for unpaid wages which
are barred by limitation and those which are not so barred.
It is contended for the respondents that when the subject-
matter of a law comprehends distinct matters as to some of
which it is unconstitutional and bad, it should nevertheless
be upheld as regards the others, if those others form a
distinct category, and that this principle applies not only
when a classification into distinct categories appears on
the face of the law but also when it exists in fact. Now,
the doctrine of severability in application is well-
established in our law (vide The State of Bombay v. F. N.
Balsara (1), The State of Bombay v.The United Motors (India)
Ltd.and R. M. D. Chamarbaugwalla v. Union of Indiaand
the principles applicable have been stated fullyin
Chamarbaugwalla’s Case (3). But assuming on the basis of
the above autho-
(1) [1951] S.C.R. 682. (2) [1953] S.C.R.1069.
(3)[1957] S.C.R. 930.
1141
rities that we can confine the operation of the impugned Act
to those claims of unpaid wages which are barred by
limitation, the question still is whether the impugned Act
gives a discharge to the employer even in respect of those
claims; for, as already stated, the operation of Art.
19(1)(f) can be avoided only if it is established that there
has been a substitution of creditors, which can only be if
and when the employer gets a discharge from those
obligations to the employees. The point to be decided
therefore is whether the effect of the bar of limitation is
to discharge the employer from liability to the employees.
It has been already mentioned that when a debt becomes
time-barred, it does not become extinguished but only
unenforceable in a court of law. Indeed, it is on that
footing that there can be a statutory transfer of the debts
due to the employees, and that is how the Board gets title
to them. If then a debt subsists even after it is barred by
limitation, the employer does not get, in law, a discharge
therefrom. The modes in which an obligation under a
contract becomes discharged are well-defined, and the bar of
limitation is not one of them. The following passages in
Anson’s Law of Contract, 19th Edition, page 383, are
directly in point:
“ At Common Law lapse of time does not affect
contractual rights. Such a right is of a permanent and
indestructible character, unless either from the nature of
the contract, or from its terms, it be limited in point of
duration.
“But though the right possesses this permanent
character, the remedies arising from its violation are
withdrawn after a certain lapse of time; interest reipub-
licae ut sit finis litium. The remedies are barred, though
the right is not extinguished.”
And if the law requires that a debtor should get a dis-
charge before he can be compelled to pay, that requirement
is not satisfied if he is merely told that in the normal
course he is not likely to be exposed to action by the
creditor.
That this distinction is not purely academical but.
1142
is of practical importance will be seen, when regard is had
to the provisions of the Industrial Disputes Act. Under
that Act, there is no period of limitation prescribed for
referring a dispute for adjudication by a tribunal. Even
when a claim for wages falls within the purview of the Wages
Act and an application under s. 15 of that Act would be
barred, it can nevertheless give rise to an industrial
dispute in respect of which action can be taken under the
provisions of the Industrial Disputes Act. It was held by
the Federal Court in Shamnagore Jute Factory Co. Ld. v. S.
M. Modak (1) that s. 22(d) of the Wages Act did not take
away the power of the authorities to refer to a tribunal set
up under the Industrial Disputes Act a claim which could be
made under the Wages Act, as that section had application
only to suits and did not exclude other proceedings
permitted by law for the enforcement of payment. If a
tribunal appointed under that Act can direct an employer to
make payment of wages, it follows that the bar under s. 15
of the Wages Act does not give an absolute protection to the
employer, and the same consequence must follow when the bar
of limitation arises under the Limitation Act. The result
therefore is that when an employer makes a payment under s.
3(1) of the Act he gets no discharge from his obligation to
the employees, even when the enforcement thereof is barred
by limitation.
The contention based on the provisions of the Wages Act
failing, Mr. Seervai falls back on s. 56 of the Contract
Act as furnishing a ground for holding that the employer is
discharged. Para. (2) of s. 56 provides that,
“ a contract to do an act which, after the contract is
made, becomes impossible, or by reason of some event which
the promisor could not prevent, unlawful, becomes void when
the act becomes impossible or
unlawful.”
It is argued that by operation of s. 3 of the impugned
Act, the performance of the contract by the employer has
become impossible, and the contract has thereby
(1) [1949] F.C.R. 365.
1143
become void. Section 56 of the Contract Act embodies the
law relating to frustration of contracts, and the true scope
of that section was considered by this Court in Satyabrata
Ghose v. Mugneeram Bangur and Co.
The position was thus stated by Mukherjea J.:
” In the large majority of cases however the doctrine of
frustration is applied not on the ground that the parties
themselves agreed to an implied term which operated to
release them from the performance of the contract. The
relief is given by the court on the ground of subsequent
impossibility when it finds that the whole purpose or basis
of a contract was frustrated by the intrusion or occurrence
of an unexpected event or change of circumstances which was
beyond what was contemplated by the parties at the time when
they entered into the agreement. Here there is no question
of finding out an implied term agreed to by the parties
embodying a provision for discharge, because the parties did
not think about the matter at all nor could possibly have
any intention regarding it. When such an event or change of
circumstances occurs which is so fundamental as to be
regarded by law as striking at the root of the contract as a
whole, it is the court which can pronounce the contract to
be frustrated and at an end. The court undoubtedly has to
examine the contract and the circumstances under which it
was made. The belief, knowledge and intention of the
parties are evidence, but evidence only on which the court
has to form its own conclusion whether the changed
circumstances destroyed altogether the basis of the
adventure and its underlying object. This may be called a
rule of construction by English Judges but it is certainly
not a principle of giving effect to the intention of the
parties which underlies all rules of construction. This is
really a rule of positive law and as such comes within the
purview of section 56 of the Indian Contract Act.”
Counsel for the respondents relies on these obser-
vations, and contends that when the contract of service was
entered into between the employer and the employees, they
could not have contemplated
(I) [1954] S.C.R. 310,323.
1144
that the Legislature would have intervened and required the
employer to pay the arrears of wages to the Board, and that
that is a supervening impossibility which brings s. 56 into
play and renders the contract void. We are not satisfied
that the performance of the contract of service has been
rendered impossible by reason of s. 3(1) of the impugned
Act. But assuming that that is the position, what follows ?
The matter would then be governed by s. 65 of the Contract
Act, which provides that when a contract becomes void, any
person who has received any advantage under such agreement
or contract is bound to restore it or to make compensation
for it to the person from whom he received it. Under this
section, the employer is liable to make compensation to the
employee for the work done by him, and that liability can be
enforced against him in spite of the fact that he has paid
the unclaimed wages to the Board under s. 3 (1) of the Act.
We are therefore of opinion that even if the matter is
governed by s. 56 of the Contract Act, the employer is no
more discharged than by the operation of the bar of
limitation under s. 15 of the Wages Act, or the provisions
of the Limitation Act. In this view, it must be held that
the provisions of the impugned Act are unconstitutional, in
that they take away the property of the appellant in
violation of either Art. 19 (1) (f) or Art. 31 (2) of the
Constitution.
A contention was also raised on behalf of the appellant
that even if the impugned Act did not encroach on any of the
Constitutional rights of the appellant, it clearly violated
the rights of the employees in that it deprives them of
their right to wages earned by them , that it was therefore
void as against them as being in contravention of Art. 31
(2), -and being void against them, it was void against the
appellant as well. For the respondents, it is contended
that the Act cannot be held to infringe Art. 31 (2) even as
regards the employees, as choses in action equally with
money are outside the operation of that Article, and
reliance is placed on the observations already referred to
in The State of Bihar v. Maharajadhiraja
1145
Sir Kameshwar Singh of Darbhanga (supra) at pages 942, 960-
961 and 1015 to 1018. Now, as the Act takes over the rights
of the employees in respect of wages due to them even when
they are not barred without making any provision for
compensation of the same to them, it must at least to that
extent be held to be unconstitutional, whether as
contravening Art. 19 (1) (f) or Art. 31 (2) it is
unnecessary to decide.
It is then argued that this is an objection open only to
the employees, and that the appellant can make no grievance
of it. It is no doubt true that a question as to the
constitutionality of a statute can be raised only by a
person who is aggrieved by it; but here, the statute deals
with rights arising out of contract, and that presupposes
the existence of at least two parties with mutual rights and
obligations, and it is difficult to see how when the rights
of one party to it are interfered with, those of the other
can remain unaffected by it. Let us assume that the
appellant makes a payment to the Board under s. 3 (1) of the
impugned Act on the footing that the law is not
unconstitutional as against him. What is there to prevent
the employee from suing to recover the same amount from the
appellant on the ground that the Act is unconstitutional ?
It will be no answer to that claim to plead that the
appellant has already paid the amount to the Board. The
fact is that a statute which operates on a contract must
affect the rights of all the parties to the contract, and if
it is bad as regards one of them, it should be held to be
bad as regards the others as well. It is unnecessary to
pursue this question further, as we have held that the Act
is unconstitutional even as regards the appellant.
It remains to deal with the contention of the res-
pondents that the impugned legislation is, in substance, one
in respect of abandoned property, and that, by its very
nature, it cannot be held to violate the rights of any
person either under Art. 19 (1) (f) or Art. 31 (2). That
would be the correct position if the character of the
legislation is what the respondents claim it to be, for it
is only a person who has some interest in property that can
complain that the
1146
impugned legislation invades that right whether it be under
Art. 19 (1) (f) or Art. 31 (2), and if it is abandoned
property, ex hypothesi there is no one who has any interest
in it. But can the impugned Act be held to be legislation
with respect to abandoned property ? To answer this
question, it is necessary to examine the basic principles
underlying such a legislation, and ascertain whether those
are the principles oil which the Act is framed. The
expression “ abandoned property ” or to use the more
familiar term “bona vacantia ” comprises properties of two
different kinds, those which come in by escheat and those
over which no one has a claim. In Halsbury’s Laws of
England, Third Edition, Vol. 7, page 536, para. 1152, it is
stated that ” the term bona vacantia is applied to things in
which no one can claim a property and includes the residuary
estate of persons dying intestate “. There is, however, this
distinction between the two classes of property that while
the State becomes the owner of the properties of a person
who dies intestate as his ultimate heir, it merely takes
possession of property which is abandoned. At -common law,
abandoned personal property could not be the subject of
escheat. It could only be appropriated by the Sovereign as
bona vacantia. Vide Holdsworth’s History of English Law,
Second Edition, Vol. 7, pages 495-496. In Connecticut
Mutual Life Insurance Company v. Moore(1), the principle
behind the law was stated to be that ” the State may, more
properly, be custodian and beneficiary of abandoned property
than any other person.” Consistently with the principle
stated above, a law relating to abandoned property enacts
firstly provisions for the State conserving and safeguarding
for the benefit of the true owners property in respect of
which no claim is made for a specified and reasonable
period, and secondly, for those properties vesting in the
State absolutely when no claim is made with reference
thereto by the true owners within a time limited.
There has been quite a number of laws on abandoned
property in the American States, and their validity
(I) 333 U.S. 541, 546; (1947) 92 L.Ed. 863, 869.
1147
has been the subject of numerous decisions in the Supreme
Court of United States. In Anderson National Bank v.
Luckett (1), the law related to Bank deposits. It provided
that if moneys in deposit had not been demanded or operated
on, for a period of 10 years in the case of demand deposits
and 25 years in the case of non-demand deposits, they might
be presumed to have been abandoned and the Banks -were to
transfer them to the State. Claims to the deposits might be
made to the Commissioner of Revenue, who was to determine on
their validity, his decision being open to review by the
Courts. The validity of this law was questioned on the
ground that sufficient opportunity had not been given to the
depositors to claim the deposits, and that as they could
attack the law as unconstitutional, the Bank got no
protection by payment to the State. In repelling this
contention, the Supreme Court observed that the Act did not
deprive the depositors of any of their rights, they being
given ample opportunity to establish their rights, and that
it merely substituted the State in the place of the Bank as
their debtor. The Court also held that it was ” within the
Constitutional power of the State to protect the interests
of depositors from the risks which attend long neglected
accounts, by taking them into custody when they have been
inactive so long as to be presumptively abandoned “. In
Connecticut Mutual Life Insurance Co. v. Moore (supra), the
law was with reference to moneys payable on life insurance
policies, which had matured. It provided that if those
amounts had remained unclaimed for a period of seven years,
then it had to be advertised by the companies in the manner
provided therein, and if no claims were preferred
thereafter, the amounts were to be paid to the State
Comptroller for care and custody. In holding that the law
was valid, the Court observed :
“ There is ample provision for notice to beneficiaries
and for administrative and judicial hearing of their claims
and payment of same. There is no possible injury to any
beneficiary.”
(1) 321 U.S. 233, 241; (1943) 88 L Ed. 692, 701 146
1148
In Standard Oil Company v. New Jersey (1), the law related
to shares and unpaid dividends, and provided for the State
taking them over, if they remained unclaimed for a period of
14 years. There was a provision for notice to the unknown
owners by advertisement. It was held following Connecticut
Mutual Life Insurance Company v. Moore (supra) that the law
was valid.
In the light of the above discussion, there cannot be
any reasonable doubt that the impugned Act cannot be
regarded as one relating to abandoned property. The period
of three years mentioned in s. 2 (10) of the Act is merely
the period of limitation mentioned in Art. 102 of the
Limitation Act, and even taking into account the class of
persons whose claims are dealt with in the Act, as counsel
for respondents would have us do, the period cannot be
regarded as adequate for raising a presumption as to
abandoment. A more serious objection to viewing the
legislation as one relating to abandoned claims is that
there is no provision made in the Act for investigating the
claims of the employees or for payment of the amounts due to
them, if they established their claims. The purpose of a
legislation with respect to abandoned property being, in the
first instance, to safeguard the property for the benefit of
the true owner and the State taking it over only in the
absence of such claims, a 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. This contention of the respondents must
also be rejected.
In the result, we are of opinion that s. 3(1) in so far
as it relates to unpaid accumulations in s. 3(2)(b) is
unconstitutional and void.
We have now to deal with the question as to the validity
of s. 3(1) and s. 3(2)(a) of the Act, which require the
employers to hand over to the Board the fines realised from
the employees. So far as this item is concerned, the
position of the employers is wholly
(1) 341 U.S. 428 ; (1950) 95 L.Ed. 1078,
1149
different from what it is as regards unpaid accumulations.
Section 8 of the Wages Act deals with the question of fines
which could be imposed by the employer, and it provides that
they should be entered in a separate register, and applied
for the benefit of his employees. It is not denied by the
appellant that under this provision the fines are
constituted a trust’ fund, and that the employers are bare
trustees in respect of such fund. Now, the grievance of the
appellant is that the Act deprives it of its rights as
trustees, and vests them in the Board, and that, further,
while the beneficiaries under s. 8 of the Wages Act are its
own employees, under s. 5(2) of the impugned Act they
include otherpersons as well. There might have been
substance in the complaint that the appellant had been
deprived of its rights as trustee if it bad any beneficial
interest in the fund. But admittedly, it has none, and it
is therefore difficult to hold that there has been such
substantial deprivation of property, as will offend Art.
31(2) according to the decisions in The State of West Bengal
v. Subodh Gopal Bose and Dwarkadas Shrinivas of Bombay v.
The Sholapur Spinning and Weaving Co. Ltd. (supra) or such
unreasonable interference with rights to property, as will
infringe Art. 19(1)(f). It is argued with some emphasis
that in enlarging the circle of beneficiaries, the Act has
encroached on the rights of the employees of the appellant.
But then, the trust is the creation not of the appellant but
of the Legislature, which gave the employees certain rights
which they did not have before, and what it can give, it can
also take away or modify, and we do not see how the
employers are aggrieved by it. We are of opinion that no
valid grounds exist on which s. 3(1) and s. 3(2)(a) of the
impugned Act could be attacked as unconstitutional, and they
must accordingly be held to be valid.
In the result, we hold, in modification of the order of
the Court below, that the provisions of the impugned Act are
unconstitutional and void in so far as they relate to ”
unpaid accumulations”, but that they are valid as regards ”
fines “; and an appropriate writ will
1150
issue against the respondents in the terms stated above.
The appeal succeeds in part, but as it is stated that ”
unpaid accumulations ” form by far the most substantial
portion of the claim, we direct the respondents to pay half
the costs of the appellant here and in the Court below.
Appeal allowed in part.