MUTHU ROWTHER v. STATE OF KERALA — 1982 DIGILAW 229 (KER)

Judgment :- 1. These are petitions filed by landowners, under Art.226 of the Constitution, challenging the validity of the Kerala Agricultural Workers Provident Fund Scheme, 1975 framed by the State Government in exercise of power under S.8(1) of the Kerala Agricultural Workers Act, 1974 (18/74). 2. The object of the Act is to provide for the welfare of the agricultural workers in the State of Kerala and to regulate the conditions of their work. S.1(3) provides that the Act shall come into force on a date to be notified by Government and that different dates may be appointed for different areas and for different provisions of the Act. Chapter II provides for the appointment/ constitution of Conciliation Officers, Agricultural Tribunals and inspectors. Chapter III contains provisions for security of employment and welfare. Chapter IV deals with hours of work, intervals of rest, over-time payment and wages. The provisions of Chapter V mainly relate to settlement of 'agricultural disputes', through conciliation and adjudication. Chapter VI deals with penalties, offences and prosecutions. Chapter VII contains 'mis¬cellanous' provisions; in particular, S.42 lays down that many of the provisions of the Act shall not apply "in relation to a landowner who does not hold more than one hectare in extent of land". 3. The Act received the assent of the President on-31-7-74; it was also included in the Ninth Schedule of the Constitution. All the provisions of the Act, except S.8 to 15, were brought into force on 2-10-75, in the whole State. S.8 to 15 were brought into force in the Palghat District alone, as per notification dated 6-8-79. The Provident Fund Scheme was framed and published in the Kerala Gazette on 15-8-1975, but was brought into force only from 9-8-79, as per S. R. 0.805/79 dated 19-7-79. 4. The provisions of the Act relating to Provident Fund are to be found in S.8 to 15 of the Act. S.8 authorises Government to frame a scheme called "the Agricultural Workers' Provident Fund Scheme", for the establishment of a fund providing for all or any of the matters specified in the Schedule. The Fund is to vest in the Board to be constituted under S.11, and is to be administered by the Board. S.9 fixes the rates of contribution payable by landowners and agricultural workers, and S.10 provides for modification of the Scheme. The Fund is to vest in the Board to be constituted under S.11, and is to be administered by the Board. S.9 fixes the rates of contribution payable by landowners and agricultural workers, and S.10 provides for modification of the Scheme. Under S.11 the Board is to consist of equal number of representatives of the Government, the landowners and the workers, and is to be constituted by notification in the Gazette, as a body corporate with perpetual succession and a common seal. S.12 provides for appointment of officers of the Fund. S.13 to 15 deal with matters which are not relevant for the present purposes. ' 5. Chapter II of the Scheme deals with the terms of office of members of the Board, their removal, resignation, filling up of vacancies disqualifications and the like. Chapter III provides for the appointment of a Commissioner to function as the Chief Executive Officer of the Board. Para.26 in Chapter IV deals with the eligibility of agricultural workers to become members of the Fund. Para.27 is designed to settle disputes regarding eligibility. Para.28 requires the landowner to deduct the workers' contributions from their wages. Under Para.29 he is required to pay to the Fund his own contributions, along with the contributions of the workers, every month. The other provisions, relevant for the present, are those contained in Para.36 and 37, the former requiring a worker eligible to become a member of the Fund to furnish a declaration in Form I, and the latter requiring the landowner to furnish returns in Forms II and III. With regard to the other paragraphs of the Scheme, it is enough to state that they broadly follow the pattern of other well-known Provident Fund Schemes. But it is useful to notice that Para.1 (2) of the Scheme provides that the Scheme shall come into force on such date as the Government by notification in the Gazette appoint, and that different dates may be appointed for different areas. 6. The Act itself is not challenged in most of the petitions, though in one or two, the validity of S.8 to 15 is incidentally impugned; even in those cases, the attack is mainly against the Provident Fund Scheme. 6. The Act itself is not challenged in most of the petitions, though in one or two, the validity of S.8 to 15 is incidentally impugned; even in those cases, the attack is mainly against the Provident Fund Scheme. And the grounds urged at the hearing are: (1) in so far as the Scheme compels a landowner to remit not only the contributions payable by him, but also to collect and remit the contributions payable by his workers also, it violates his fundamental rights under Art.19(1)(g) of the Constitution; (ii) the enforcement of the Scheme in the Palghat District alone is discriminatory; (iii) the Scheme is repugnant to the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (Central Act 19/52); (iv) arbitrary and uncanalised powers are conferred on the Commissioner under Para.27 of the Scheme; the power so conferred also conflicts with the powers conferred on other authorities under the Act, in Chapter V; (v) Para.1(3) makes the Scheme applicable to all agricultural workers and landowners, while Ss. (8) to (15) apply only in relation to landowners holding more than one hectare of land; (vi) the scheme was framed and notified on 15-8-75, while Ss. (8) to (15) were themselves brought into force only from 6-8-79; and (vii) the Scheme was not laid before the Legislative Assembly as required by S.8(4). 7. An attempt is also made to suggest that the notification dated 25-7-79 constituting the Board under S.11 of the Act is defective, in as much as some of the persons nominated as representatives of landowners are well-known leaders of agricultural workers and their unions, and not really landowners. It was argued that this was made possible because of the failure of the legislature to give guidelines as to how representatives of landowners and workers were to be chosen. But as noticed earlier, there is no challenge to S.11 of the Act, in most of the cases; the complaint in such cases can only be against the manner in which power under the Section has been exercised. If the power has been misused, what could be struck down is only the notification constituting the Board, and not the Scheme as such. If the power has been misused, what could be struck down is only the notification constituting the Board, and not the Scheme as such. Even in regard to those rare cases where a general challenge to S.8 to 15 of the Act is involved, it is possible to think that a legislative prescription for nominating equal number of persons to the Board, as representing landowners and agricultural workers, is clear and cogent, and does not suffer from the vice of excessive delegation. The legislature need lay down only the broad policy, and that function has been duly exercised by enacting sub-s. (3) of S.11; the delegate has been told in the clearest terms that the Board should consist of three well-defined classes of representatives. 8. There is then a complaint that the working of the Scheme creates practical difficulties and that a few of its provisions are not capable of being complied with; but the point was not elaborated at the hearing, with reference to any specific provision. I have therefore to take it that the point is not pressed, even if it is to be assumed that apprehend practical difficulties will be a ground for invalidating the Scheme. 9. Turning to the first ground of attack noticed in Para.6 above, the grievance of the petitioners seems to be against the provisions of the Act itself and not against the Scheme. S.9 (1) of the Act requires the landowner to pay contributions to the Fund at the rate of 5 percent of the wages, and S.5 (2) imposes a similar liability on the agricultural worker. Under S.8, the Scheme can provide for all or any of the matters specified in the Schedule to the Act. Entry No.(2) in the Schedule reads: "The manner in which the employees"' contributions may be collected by the employers and remitted to the Fund". Thus the Act itself provides that the responsibility of collecting 5 per cent from the wages of the workers and remitting it to the Fund is that of the landowners. If the imposition of the liability complained of is an unreasonable restriction on the fundamental rights of the landowners to practise any profession or to carry on any occupation, trade or business, within the meaning of Art.19(1)(g) of the Constitution, the attack must be against S.8 and 9 of the Act and the Schedule. If the imposition of the liability complained of is an unreasonable restriction on the fundamental rights of the landowners to practise any profession or to carry on any occupation, trade or business, within the meaning of Art.19(1)(g) of the Constitution, the attack must be against S.8 and 9 of the Act and the Schedule. But there is no challenge to them in the large majority of cases. It is also too late in the day to complain that such restrictions are unreasonable. Provisions relating to provident fund, gratuity, retrenchment compensation, holidays with wages and the like have all been uniformly upheld by courts as reasonable restrictions made in the interests of the general public. A satisfied class of agricultural workers, with a right to enjoy some kind of retrial benefit, is in the interests of agricultural production, agricultural peace and even in the interests of the landowners. Welfare measures calculated to assist weaker sections of the society cannot be per se unreasonable, unless it is established in a given case, with facts and figures, that they go beyond the limit of reasonableness. No such attempt is made by the petitioners. The inclusion of the Act in the Ninth Schedule also forecloses an attack against it on the basis of Art.19 This objection to the constitutional validity of the Act and the Scheme has therefore to be over-ruled. 10. The plea of discrimination, which is the second ground of attack, cannot also be sustained in view of the circumstance that there is no challenge in any of the petitions to S.1(3) of the Act, which empowers the State Government to appoint different dates for different areas and for different provisions of the Act to come into force. Even otherwise, it is well-known that the Palghat District, the granary of the State, is an area where conflicts between landowners and agricultural workers has been most pronounced. The counter affidavit affirms that the District is a "predominantly agricultural area". The provisions of the Employees' State Insurance Act, 1948 and the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 which empower the appropriate Governments and authorities to make a similar selective approach, have all stood the test of constitutional validity. A classification geared to the special features of an area and which takes note of the administrative difficulty for the State to coverall areas or establishments in a single stroke, is permissible under Art.14. A classification geared to the special features of an area and which takes note of the administrative difficulty for the State to coverall areas or establishments in a single stroke, is permissible under Art.14. Such a classification cannot be struck down as discriminatory, in the context of a welfare measure like the one on hand, unless it is shown that the area has been selected with "an evil eye and an uneven hand"; and such is not the case here. No doubt it is alleged in some of the petitions that Palghat has been chosen for "political reasons"; but if agricultural unrest has been most acute in this part of the State, and if a provision for Provident Fund is likely to give some quietus to the situation, the choice made by the State Government cannot be condemned as political. Even going by the averments in Para.4 of O.P. No. 4255/80, Palghat District has only about 8 percent of the cultivated area and less than 9 percent of the total number of cultivators in the State, but it has about 16 percent of the total number of agricultural workers in the State. The concentration of agricultural labour is thus comparatively high, and it cannot be said that the State's attempt to first enforce the Scheme in the Palghat District is arbitrary or discriminatory. 11. Repugnancy, which is the third ground of attack, ordinarily arises when there is a direct conflict between two enactments, or when the directions of the one cannot be obeyed without disobeying the directions of the other, or even when the Union legislation is a complete and exhaustive code, leaving no-room for encroachment by the State into such a field. So far as I could see, however, there is no conflict between Central Act 19/52 and the Scheme framed thereunder, and the Act and the Scheme impugned herein. The two do not operate in the same field, so as to raise the question of obedience and disobedience. The Central Act is also not an exhaustive Code; Provident Fund Schemes can be introduced by industrial adjudication also, as can be seen from entry No. 5 of the Third Schedule to the Industrial Disputes Act, 1947. The two do not operate in the same field, so as to raise the question of obedience and disobedience. The Central Act is also not an exhaustive Code; Provident Fund Schemes can be introduced by industrial adjudication also, as can be seen from entry No. 5 of the Third Schedule to the Industrial Disputes Act, 1947. Central Act 19/52 applies only to establishments which are factories engaged in the industries specified in Schedule I thereto, and to other notified establishments; and the petitioners have no case that the E. P. F. Scheme has been extended to the 'establishments' consisting of landowners and agricultural workers, if that term could be applied at all There is thus no repugnancy to complain of. That apart, the Scheme framed under the Agricultural Workers' Act stems from Ss. (8) to (15) of the Act itself, read with the Schedule, which is also part of the Act. The question of repugnancy can arise, if at all, only between the provisions of the Kerala Act and Central Act 19/52; but since the Kerala Act has received the assent of the President, its provisions can prevail in the State, by reason of Art.254(2) of the Constitution. The Kerala legislation is traceable to entries 23 and 24 of List III of the Seventh Schedule to the Constitution, while Central Act 19/52 is also traceable to entry 24. Both the legislations are under the concurrent list, and Art.254(2) is therefore squarely attracted. 12. It is also not possible to accept the contention that Para.27 of the Scheme confers an arbitrary and uncanalised power on the Commissioner. Para.26 and 27 read:- "26. Membership and contribution: Every agricultural worker in an area shall be entitled and required to be a member of the Fund from the date on which S.9 of the Act is brought into force in that area. 27. Para.26 and 27 read:- "26. Membership and contribution: Every agricultural worker in an area shall be entitled and required to be a member of the Fund from the date on which S.9 of the Act is brought into force in that area. 27. Decision of disputes: If any question arises as to whether an agricultural worker is entitled or required to become or continue as a member of the Fund or as regards the date from which he is so entitled or required, the question shall be referred to the Commissioner whose decision thereon shall be final: Provided that no such decision shall be made unless both the landowner and the agricultural worker have been given an opportunity of being heard." When the eligibility of an agricultural worker to become a member of the fund or to continue as a member of the fund is disputed, all that Para.27 says is that such question should be decided by the Commissioner after hearing the interested parties. The power is conferred for a limited purpose, and its scope also is limited. Conferment of power on an administrative authority to decide questions as to the applicability of a statute to persons, things, or events purported to be covered thereby, is a well-known legislative device designed to eschew arbitrariness in the administration of its provisions. A provision for a quasi judicial determination of disputes arising in that connection is in the interests of the parties themselves, and I am surprised that the paragraph is attacked, despite the safe-guards in its proviso, on the ground that arbitrary powers are involved in such determination. 13. Nor am 1 persuaded to think that there is any conflict between the provisions of Para.27 of the Scheme, and the provisions of Chapter V of the Act. The argument is that Para.27 of the Scheme sets up the Commissioner as a parallel authority for resolving the same kind of disputes as may be resolved by the Agricultural Tribunal and the Government under S.22 and 25 of Chapter V of the Act, thus opening up possibilities of conflicting decisions on the same point. The disputes to be resolved by the Tribunal and the Government under S.22 and 25 are agricultural disputes. The disputes to be resolved by the Tribunal and the Government under S.22 and 25 are agricultural disputes. 'Agricultural dispute' is defined in S.2(c) of the Act in the following terms: "(c) "agricultural dispute" means any dispute or difference between landowners and landowners or between landowners and agricultural workers or between agricultural workers and agricultural workers which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person. Explanation: Where any landowner discharges, dismisses, retrenches or otherwise terminates the services of, or denies employment to an individual agricultural worker, any dispute or difference between that agricultural worker and his employer connected with, or arising out of, such discharge, dismissal, retrenchment, termination or denial of employment shall be deemed to be an agricultural dispute notwithstanding that no other agricultural worker nor any union of agricultural workers is a party to the dispute;" Clearly, the main provision in S.2(c) covers only 'class disputes', and not 'individual disputes', and that is why the Explanation attempts to bring in individual disputes also by resort to a deeming provision. Now, class disputes i.e. disputes between a landowner and his employees connected with the employment, non-employment and the terms and conditions of service of such employees are outside the fold of Para.27 of the Scheme; the paragraph concerns itself only with the question whether an individual employee is entitled to be a member of the Fund. The Explanation to S.2(c) takes in only disputes regarding termination of a worker (discharge, dismissal, retrenchment and other forms of termination) or denial of employment to him; and here again, Para.27 does not empower the Commissioner to adjudicate disputes of that character. The Commissioner is powerless to grant any relief to the workers which a Tribunal or the Government could grant under S.22 and 25. The scope of the adjudication under Chapter V, and the determination under Para.27, are thus entirely different, and there is therefore no conflict or possibility of conflict, as apprehended by the petitioners. Para.27 only conceives of a case where the Provident Fund Officer proposes to register an agricultural worker as a member of the Fund, and the worker or his employer objects to it. Para.27 only conceives of a case where the Provident Fund Officer proposes to register an agricultural worker as a member of the Fund, and the worker or his employer objects to it. The lis is really between the officer on the one side, and the landowner and/or the worker on the other; and that is not the same thing as a dispute or difference between the landowner and the worker, as defined in S.2(c). The landowner is no doubt bound to countersign the declaration in Form I, and to submit returns in Forms IT and III; but these obligations depend on the outcome of the determination under Para.27. 14. Again, a statute or a statutory scheme can be declared as invalid only when it is shown that it is either beyond the competence of the legislature or that its provisions are in conflict with other constitutional prescriptions. No authority has been cited to show that by merely providing for the appointment of a plurality of authorities for deciding different questions for different purposes, and without anything more, an enactment can be struck down as invalid on the basis of apprehensions about conflicting decisions. S.20 of Act 18/74 empowers the Conciliation Officer to decide disputes relating to claims for arrears of wages. A landowner may contend that the agricultural worker claiming arrears is not his employee, and the question will then have to be decided by the Conciliation Officer. It is not suggested that this power of the Conciliation Officer is in conflict with that of the Tribunal under S.22. Again, when an industrial employee claims arrears of wages under S.15 of the Payment of Wages Act, the Authority appointed under that Section will have to decide the question of employer-employee relationship also, if that question is raised. No one has so far suggested that this power of the Authority conflicts with that of the Industrial Tribunal under S.10 of the Industrial Disputes Act, or of the Central Government under S.19A of E. P. F. and Miscellaneous Provisions Act, 1952 or of the Controlling Authority under S.7 of the Payment of Gratuity Act, 1972, for the reason that those authorities have also power to decide the same question, but for purposes entirely different. 15. 15. As to the contention that the Scheme is made applicable to all landowners and employees contrary to the provisions of S.42 of the Act, the counter-affidavit clarifies that it is intended to be applied only in relation to landowners having more than one hectare of land. Such a clarification could have been made by suitably amending Para.1(3) of the Scheme; but considering the scope of S.8 to 15 and S.42, it is enough to record the assurance given by the State and declare that that is the true legal position. 16. The counter-affidavit also explains that though the Scheme was framed in 1975, it was brought into force only from 6-8-1979 by notification under Para.1(2) thereof. This answers ground (vii) raised by the petitioners. 17. What survives for consideration is only ground (viii), where the grievance is that the Scheme has not been laid before the Legislative Assembly as required by S.8(4) of the Act. That sub-section reads: "(4) The Scheme framed under sub-section (1) shall be laid, as soon as may be after it is framed, before the Legislative Assembly while it is in session for a total period of fourteen days which may be comprised in one session or in two successive sessions, and if before the expiry of the session in which it is so laid or the session immediately following, the Legislative Assembly makes any modification in the Scheme, the Scheme shall thereafter have effect only in such modified form; so however that any such modification shall be without prejudice to the validity of anything previously done under the Scheme." The complaint is answered in Para.7 of the counter-affidavit by asserting that before bringing the Scheme into force, "all the conditions and formalities stipulated in S.4 of the Act", had been complied with. It is explained that what was meant was sub-sec. (4) of S.8; and if that is so, no infirmity can be attached to the Scheme on this ground also. 18. The question can be examined from another angle also. It is a feature of modern enactments to lay down only broad legislative policies, 'caving it to the executive to fill up the details, by what is called subordinate or delegated legislation. A variety of reasons are supposed to justify this practice. 18. The question can be examined from another angle also. It is a feature of modern enactments to lay down only broad legislative policies, 'caving it to the executive to fill up the details, by what is called subordinate or delegated legislation. A variety of reasons are supposed to justify this practice. The first is that it is unnecessary to incorporate a mass of complex details in the statute itself, when those details amount to no important change in the law itself. The second is that the legislature has no time to go into all such details. A third reason is that cumbersome legislations incorporating all such details, disfigure the statute book. Another reason is that time is required to reorganise the administrative machinery before bringing the Act into force, and it may not be possible for the legislature itself to anticipate all contingencies. But in many cases where the legislature so delegates its powers to the executive, some safeguard is incorporated to ensure that the delegate does not transgress its limits. Parliamentary control of subordinate legislation by making a provision for laying the rules or schemes before the house itself, to be approved, disapproved or modified by the house, has thus been found necessary and useful. The safeguard may take different forms. One method is to merely provide that the subordinate legislation shall be laid before the legislature. Another is to provide that it shall not take effect until it is laid before the house for a specific period. It may sometimes be provided that the subordinate legislation will take effect only on affirmation by the legislature; and in other cases, it may be provided that it will cease to have effect if disapproved by the legislature. Laying without further provision for control, laying with deferred operations, laying with immediate effect but subject to annulment, laying with operation deferred till affirmative resolution, are some of the well-known devices adopted for parliamentary control; and the extent of effective control will depend on the method chosen. The question often arises as to what happens when the delegate overlooks the prescriptions regarding laying. Authorities are more or less uniform in their opinion that the answer depends on the language of the statutory prescriptions themselves. If the provisions of the Act indicate that laying is mandatory, failure to "lay" may invalidate the subordinate legislation. The question often arises as to what happens when the delegate overlooks the prescriptions regarding laying. Authorities are more or less uniform in their opinion that the answer depends on the language of the statutory prescriptions themselves. If the provisions of the Act indicate that laying is mandatory, failure to "lay" may invalidate the subordinate legislation. On the other hand, if the provisions are only directory, the failure will not be fatal, the legislative prescription being understood as mere instructions for guidance. The general rule of interpretation is that prescriptions of a statute relating to performance of a public duty have to be construed as directory, when invalidation of the acts done in neglect of them would work serious injustice and inconvenience, without promoting the aim of the legislation. C. K, Alien suggests "Law and Orders". 3rd edition, p. 145. that the same rule should apply to the, construction of laying provisions also. H.W.R. Wade tackles the question in the following manner "Administrative Law", 2nd edition, p. 303.: "Under the multitude of statutes which empower delegated legislation by various procedures-some after laying drafts before Parliament, others requiring later laying before Parliament, others requiring consultation with advisory bodies-there is plenty of scope for false steps in procedure. It came to light in 1944 that numerous regulations made under the Fire Services (Emergency Provisions) Act 1941 had never been laid before Parliament as the Act required an Indemnity Act was passed to prevent this lapse from having any legal" consequences, and to validate the regulation. In fact it was by no means clear that they were invalid, for it is possible that statutory requirements of this kind are mere directions, and not mandatory conditions, and do not affect the validity of the regulations themselves." S A. de Smith also observes "Judicial Review of Administrative Action", 3rd edition p. 128. that laying requirements have generally been regarded as directory "both by the Courts and by learned commentators". 19. that laying requirements have generally been regarded as directory "both by the Courts and by learned commentators". 19. Examining S.8(4) of the Act in the above background, the legislative prescriptions appear to be the following: (i) the Scheme has to be placed before the Assembly for fourteen days, "as soon as may be after it is framed"; (ii) the Assembly can make modifications in the Scheme; (iii) when modifications are so made, the Scheme can operate thereafter only as modified; and (iv) but the modifications will not invalidate anything previously done under the Scheme. There is no stipulation that the Scheme shall not take effect unless it is placed before the Assembly for fourteen days. On the other hand, the provision that modifications made by the Assembly shall not affect 'anything previously done', is a clear indication that the Scheme comes into force even before the Assembly applies its mind to its provisions. Provisions for affirmative vote or for deferred operation are singularly absent, and the language used is not negative. It is therefore safe to hold that S.8 (4) is only directory in character, though as Alien says "Law and Orders". 3rd edition, p. 145. "it is a little startling to say that a command to lay Ministerial regulations before the legislature is a mere instruction for the guidance and government of those on whom the duty is imposed". 20. I am therefore unable to uphold the petitioners' case that the Agricultural Workers Provident Fund Scheme, 1975 is invalid. I reject the attack against S.8 to 15 of the Act also, wherever it is made. But it is seen that in many cases, the authorities functioning under the Scheme have been demanding payment without considering the objections filed by the petitioners. In some of the cases, the petitioners appear to have approached this Court even without filing objections. Having due regard to the facts and circumstances of the case, it is necessary to direct the authorities that they shall not proceed to make demands or attempt recovery before the objections are disposed of by the Commissioner under Para.27 of the Scheme, if any question relevant thereto has been raised. Where objections have not been filed so far, the petitioners will be given a month's time to file them. And subject as above, the Original Petitions are dismissed. No costs.