Research › Search › Judgment

Kerala High Court · body

2009 DIGILAW 344 (KER)

Federal Bank Ltd v. Govt Of India

2009-04-03

V.GIRI

body2009
JUDGMENT V. Giri, J. 1. Two notifications issued by the Central Government under the Employees Provident Fund and Miscellaneous Provisions Act (hereinafter referred to as the Act) have been challenged by certain Scheduled Banks and some of its employees in this Writ Petition. The issue involves considerable ramifications for the establishments and hundreds of it's employees. 2. Petitioners 1 to 6 are Banking companies in the private sector that are governed by the Banking Regulation Act. It is not permissible for the banks to carry on any business activity other than those permitted under the Banking Regulation Act. It is asserted that there is identity in the activity carried on by the private sector banks and Nationalised Banks. Petitioners 7 to 10 are employees in the workmen category employed in petitioners 3 and 5 banks. 3. Terms and conditions of service of employees in the category of workmen in both Private Sector and Nationalised Banks are not only uniform, but governed by common awards and settlements under the Industrial Disputes Act {for short ID Act}. Reference is made in this regard to the Sastri Award and Desai Award. The latest long term industry-vide settlement with regard employees and the workmen category of the banks in the Private Sector and the Nationalised Banks was signed on 27.3.2000 and continues to remain valid till it is terminated in accordance with the provisions of the ID Act. 4. Terminal benefits in the banking companies form part of the service conditions. Provident Fund and pension are payable in the petitioners banks in accordance with the settlements prevailing. Since Provident Fund and pension are contributory, a change in the rate of contribution payable by the management and by the workmen causes disturbance to the functioning of the trusts and schemes which have been formulated and implemented for the benefit of the employees in the Private Sector banks. It is the case of the petitioners herein that there is no dispute between the managements and the workmen in the Private Sector banks as regards the terminal benefits which are being paid to the employees in accordance with the schemes that are prevailing and which has a seal of approval in the long term settlement arrived at under the ID Act. 5. Of immediate relevance in the writ petition are two notifications issued by the Central Government under the Act and the Scheme framed thereunder. 5. Of immediate relevance in the writ petition are two notifications issued by the Central Government under the Act and the Scheme framed thereunder. By Ext.P2 notification the Government directed an amendment to be brought about to a statutory notification issued earlier on 18.12.1968 which regulated applicability of the Act to establishments and banks. By Ext.P2 all banks, other than the Nationlised Banks, established under the Central Act or State Act are brought within the purview of the Act. By Ext.P1 notification dated 25.2.2000, a contemporaneous amendment is made to the Employees Provident Fund (Amendment) Scheme 2000 by providing for the schemes to comprehend all banks other than Nationalised Banks established under a Central or State Act. Certain consequential amendments have also been made Exts.P1 and P2 notifications have been challenged in this wit petition. 6. The notifications are under challenge on several grounds. It is contended that the service conditions of employees of Scheduled Banks are regulated by long term settlements, arrived at under the Industrial Disputes Act. There has been parity in this regard with the employees of Nationalised Banks. The notification in question Exhibit P2 would show that Nationalised Banks have still not been brought under the purview of the EPF Act. The notification has indulged in a classification among the Banks, Nationalised and scheduled, which have all along been treated as similar. There is no reasonable object to be achieved by separate treatment being meted out to the Scheduled Banks. The notifications are, therefore, violative of Article 14 of the Constitution of India, it is contended. 7. It is further contended that as per the Schemes which have been implemented in all the Banks, including Nationalised Banks, pension and other retirement benefits are being given to the employees of the Banks. These have been taken note of in the long term settlement that has been arrived at from time to time. Coverage of the Scheduled Banks by the EPF Act, as per the impugned notifications, would result in larger and better benefits drawn by the employees of the Scheduled Banks being taken away. Pension and associated retirement benefits constitute the source of livelihood for most of these persons, after retirement. A sudden depletion of the same would directly affect their source of livelihood and consequently, the right to life under Article 21 of the Constitution. Pension and associated retirement benefits constitute the source of livelihood for most of these persons, after retirement. A sudden depletion of the same would directly affect their source of livelihood and consequently, the right to life under Article 21 of the Constitution. The impugned notifications are, therefore, violative of Article 21 of the Constitution, it is submitted. 8. The Writ Petition and the additional affidavit filed by the petitioners makes reference to the pension schemes which are prevailing in the Scheduled Banks. All the employees, right from a part-time sweeper to a General Manager, are covered by such Scheme. Coverage of the Banks under the EPF Act, if at all, would bring out benefits only to a small section of the employees, who could be called workmen in as much as only those persons whose salary does not exceed Rs.6,500/- would be covered by the EPF Act and the Scheme framed thereunder. The coverage of Banks, by the impugned notifications, would therefore cause serious detriment to the employees of the Banks as aforesaid. 9. It is also contended that the Pension Schemes currently implemented in the Banks are operated by a Trust constituted by the employees and employer together. The corpus of the fund administered by the Trust is constituted by the contributions made by the employees and the employer. The system has been in place in place and has been functional and operative for the last several years. A sudden disruption of the same, by making it applicable only to certain sections of employees, though pension and retirement benefits are drawn by the retired employees of the establishments as such would dislocate the entire system under which retrial benefits are drawn by the employees. These aspects have not been kept in mind by the Central Government, while issuing the notifications, it is contended, at the instance of the Central Government. 10. The Central Government has not filed any counter affidavit in this case. In other words, no materials have been placed before this Court by the Central Government, in rebuttal of the contentions taken up by the petitioners and in support of the notifications. The averments made by the petitioners, both in the Writ petition as also in the additional affidavit filed on 25.3.2009, remain uncontroverted. 11. The Provident Fund Commissionerate has filed a counter affidavit. The averments made by the petitioners, both in the Writ petition as also in the additional affidavit filed on 25.3.2009, remain uncontroverted. 11. The Provident Fund Commissionerate has filed a counter affidavit. They have also filed a statement in rebuttal of the additional affidavit filed by the petitioners. It is contended that it is up to the Central Government to decide which establishments have to be brought within the purview of the Act and which are liable to be excluded. The Scheduled Banks form a different class from the Nationalised Banks. Therefore, the notification which brings the scheduled Banks within the purview of the EPF Act and the Scheme framed thereunder does not suffer from the vice of Article 14 of the Constitution of India, it is contended. 12. It is further contended that when the EPF Act and the Scheme framed thereunder are made applicable to the employees of the Banks, benefits they would derive and obtain would be better and more comprehensive than the benefits which they are currently drawing from the respective establishments. 13. I heard Sri.M. Pathros Matthai, learned senior counsel for the petitioners, learned Assistant Solicitor General and Sri.N.N. Sugunapalan, learned senior counsel appearing on behalf of the Provident Fund Establishment. 14. Sri. Pathros Matthai contends that the service conditions of the employees of the Scheduled Banks have been regulated for a long time hitherto by long term settlements made applicable to the Nationalised Banks and Scheduled Banks treating them on a par. He contends that the extension of the EPF Act to the Scheduled Banks, is resultant upon a classification of the Scheduled Banks, and treating them differently from the Nationalised Banks. This, in the context of dealing with the service conditions of the employees of the Scheduled Banks, would result in an unreasonable classification, resulting in hostile discrimination in so far as Scheduled Banks are concerned. Reference is made in this regard to the judgment of a Division Bench of the Madras High Court in Bharat Oversees Bank Ltd. v. Government of India (2008-II-LLJ-569) and a learned Single Judge of the Karnataka High Court in Karnataka Bank Ltd. v. Union of India (2007-I-LLJ-116). 15. The notifications impugned in the present case were impugned before the Madras and Karnataka High Courts. 15. The notifications impugned in the present case were impugned before the Madras and Karnataka High Courts. The Madras High Court went on to hold that the notification in question appeared to be arbitrary and not based on any justifiable considerations and that nothing has been indicated why non Nationalised Banks were alone included in the notification. The Karnataka High Court went on to hold that the impugned notifications were issued in exercise of the power of conditional legislation and it was not immune from challenge. The Karnataka High Court also went on to hold that there are no material and characteristic differences between the petitioners and Nationalised Banks in the context of implementation of the Provident Fund and Pension Schemes under the Act. There is, therefore, no basis for exclusion of the Nationalised Banks from the impugned notifications. 16. The Madras High Court and the Karnataka High Court in the aforementioned decisions have essentially upheld the challenge against the notifications on the ground of violation of Article 14 of the Constitution of India, finding that there is no basis for the exclusion of Nationalised Banks from the purview of the notifications. It is also found that there are no essential differences in the service conditions applicable to the employees of the Scheduled Banks and the Nationalised Banks. 17. The Employees Provident Funds and Miscellaneous Provisions Act is one to provide for the institution of provident funds, pension fund and deposit-linked insurance fund for employees in factories and other establishments. It applies to every establishment, which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed. It also applies to any other establishment employing twenty or more persons or class of such establishments which the Central Government may be notification in the Official Gazette specify. Banking company regulated by the provisions of the Banking Regulation Act is not included in Schedule-I to the EPF Act. But, Banking company could be brought within the purview of the EPF Act, if it is an establishment employing 20 or more persons. This will require a notification of the Central Government, in terms of Section 1(3) of the Act. Banking company regulated by the provisions of the Banking Regulation Act is not included in Schedule-I to the EPF Act. But, Banking company could be brought within the purview of the EPF Act, if it is an establishment employing 20 or more persons. This will require a notification of the Central Government, in terms of Section 1(3) of the Act. Exhibit P2 notification brings out an amendment to a parent notification already issued by the Central Government in 1965 and by virtue of the notification, all Banks other than Nationalised Banks are brought within the purview of the EPF Act. With great respect, I am unable to agree with the Madras High Court and the Karnataka High Court and the inference drawn by the Courts to the effect that the notifications in question would violate Article 14 of the Constitution of India, since Nationalised Banks are not brought within the purview of the Act. Can it then be said that since the scheduled Banks and Nationalised Banks are to be treated on a par in so far as the service conditions of the employees are concerned, if Nationalised Banks are also brought within the purview of the EPF Act, then the notification may not have suffered from the vice of Article 14 of the Constitution of India. Can it therefore be inferred that the notification would have been valid and proper, had Nationalised Banks been brought within the purview of the EPF Act? 18. In my view, the question of infraction of Article 14 of the Constitution of India, in the context of considering the validity of a notification issued under Section 1(3) of the EPF Act will have to be decided within the framework of the statute and against the background of the purpose behind the legislation. It is up to the Central Government to bring any establishment employing 20 or more persons within the purview of the Act by means of a notification issued under Section 1(3) of the Act. The exercise of power by the Central Government under Section 1(3) of the Act in the instant case cannot be treated as illegal. It cannot also be gainsaid that Nationalised Banks could be treated differently from Scheduled Banks and are being treated differently, for several purposes. The exercise of power by the Central Government under Section 1(3) of the Act in the instant case cannot be treated as illegal. It cannot also be gainsaid that Nationalised Banks could be treated differently from Scheduled Banks and are being treated differently, for several purposes. Nationalised Banks are at present not covered by the EPF Act and therefore, a notification which seeks to bring in Scheduled Banks which could form a class by themselves, within the purview of the Act, cannot be considered as indulging in an unreasonable classification, violative of Article 14 of the Constitution, merely because by the same notification, Nationalised Banks were also not brought within the purview of the EPF Act. 19. A logical extension of the reasoning , which seems to suggest that the notification is violative of Article 14 of the Constitution because Nationalised Banks have been excluded from the Scheme would lead to the conclusion that the notification would have been valid, if Nationalised Banks are also brought within the purview of the Act by the same notification. 20. The statutory notifications would be vulnerable to an attack on the ground that the same contravenes Article 14 of the Constitution, not merely because the Nationalised Banks are excluded from the purview of the notification, but if otherwise the notifications are either illegal or they bring about an unfair treatment to the petitioners. A contention on the ground of violation of Article 14 will not lie on the ground of exclusion of Nationalised Banks from the purview of the notification, if the notifications are not otherwise vulnerable to an attack under any other provision of the Constitution or a statutory provision for that matter. If the notifications are otherwise liable to be treated as falling foul of any constitutional provision or a statutory provision, then they would suffer from the same vice and subject to the same result, on judicial review even if Nationalised Banks are included in the notification. Thus, exclusion of Nationalised Banks from the purview of the impugned notification by itself would not afford a ground for declaring the notifications as unconstitutional or unenforceable. 21. Sri. Pathrose Matthai then contends that the pension schemes and other retrial benefits available in the petitioners banks provide for a much more comprehensive facility and benefit to the employees of the banks. 21. Sri. Pathrose Matthai then contends that the pension schemes and other retrial benefits available in the petitioners banks provide for a much more comprehensive facility and benefit to the employees of the banks. He submits that extension of the pension scheme under the EPF Act to the Scheduled Banks by way of the impugned notification would straight away result in deprivation of the benefits and such facilities. He submits that there is a crucial facto which sets apart the scheme implemented in the petitioners banks from the statutory pension schemes. Under the pension schemes prevalent in the petitioners banks, all employees, even those having a monthly salary in excess of Rs.6,500/- are comprehended by the pension scheme. Details of the amounts that different categories of employees in the banks are entitled to draw as pension are given in the form of a statement supported by an affidavit filed by the Additional General Manager of the Federal Bank. As a matter of illustration, reference could be made to the case of employees having a monthly salary of Rs.10,000/-. The pensionable pay of an employee whose date of retirement is 31.3.2009 and who has rendered a service of 35 years is taken as Rs.10,000/-. The pensionable pay of such an employee as per the pension scheme under the EPF Act is Rs.6,500/-. Since the pensionable pay under the EPF Act is copped at Rs.6,500/-, the basic pension of such an employee is Rs.5,000/- as per the bank's pension scheme and Rs.3,250/- in the case of the pension scheme under the EPF Act. Consequently, the amount available for commutation under the existing pension scheme, is much more than the amount otherwise available for commutation under the statutory pension scheme. Thus, whereas under the banks pension scheme the amount of basic pension available for commutation is Rs.3,334/-, the amount available as basic pension under the Act is Rs. 2,167/-. The bank's pension scheme provides for a dearness relief in addition to the basic pension, which in the case under illustration would be Rs.2,430/- inasmuch as dearness relief is calculated on the entire pension which the employee is eligible before commutation. There is no provision in the statutory pension scheme for such a dearness relief. 22. Similar illustrations are given in respect of employees drawing different salaries. There is no provision in the statutory pension scheme for such a dearness relief. 22. Similar illustrations are given in respect of employees drawing different salaries. The correctness of the details given in the statements produced and marked as Exts.P3 to P5 along with the additional affidavit by the petitioners on 23.5.2009 have not been controverted by the respondents. I find no reason why I should not accept the said statement produced along with the additional affidavit filed by the Additional General Manager of the Bank. 23. I take note of the fact that the Central Government has neither filed a counter affidavit in the writ petition, nor even made an attempt to place on record any materials, contra to the factual details placed on record vide Exts.P3 to P5 statements. 24. I also take note of the statement filed by the counsel for the respondent namely the Provident Fund Organisation, in reply to Exts.P3 to P5 statements in the additional affidavit filed on 24.3.2009. Emphasis is made in the said statements to the effect that though there is a cap of Rs.6,500/- on the pensionable pay under the EPF pension scheme, contribution in relation to the pay exceeding Rs.6,500/- can be made if the employer and the employee so agree. This may be so. But a significant difference which I find in the schemes is the provisions for dearness relief to be calculated on the basic pay of a retired employee available before commutation even if the facility for commutation is availed by the employee. Further more, the facility for removing the capping on the pensionable pay under the statutory scheme is dependent on a consensus by the employer and the employee. This signifies a difference between the statutory scheme and the scheme prevailing in the petitioners banks. I also take note of the fact that the respondents have not controverted any other significant facet of the schemes prevailing in the petitioners banks, as affirmed by the petitioners, nor have they controverted the correctness of the details given in Exts.P3 to P5 statements produced along with the additional affidavit. 25. I also take note of the fact that the respondents have not controverted any other significant facet of the schemes prevailing in the petitioners banks, as affirmed by the petitioners, nor have they controverted the correctness of the details given in Exts.P3 to P5 statements produced along with the additional affidavit. 25. In the result, with the materials placed on record, I consider it appropriate to arrive at a finding that the retirement benefits by way of pension, family pension and associated reliefs that are being drawn by the employees of the petitioners Scheduled Banks, are more attractive and beneficial than the basic pension that an employee would be entitled to get, if he is brought within the purview of the EPF Act and the Scheme. I have given this finding in the context of the application of Employees Pension Scheme, because that alone would apply as a safe indicator and guideline in the matter of comparing the benefits that are being drawn by the employees. 26. If this be the position, can it be said that a notification like Exhibits P1 and P2 which seems to rope in Scheduled Banks under the provisions of the Act, would also result in the deprivation of a higher benefit that an employee is otherwise entitled to; and in such circumstances can it be said that the notification would violate Article 21 of the Constitution of India. The contention taken up by the learned senior counsel appearing for the petitioner is as follows: Pension, in most of the cases would constitute source of livelihood for retired persons and therefore, directly affects the right to life of such persons. Diminution in the quantum of the pension that an employee is currently drawing or would be entitled to draw, under the schemes which are prevailing in the Bank, would, therefore, be a direct infringement of his right to life which is protected under Article 21 of the Constitution of India. He refers to the judgment of the Supreme Court in Deokinandan Prasad v. State of Bihar ( AIR 1971 SC 1409 ), wherein the Supreme Court held in paragraph 32 of the judgment as follows: 32. The matter again came up before a Full Bench of the Punjab and Haryana High court in K.R.Erry v. The State of Punjab, ILR (1967) 1 punj & Har 278 (FB). The matter again came up before a Full Bench of the Punjab and Haryana High court in K.R.Erry v. The State of Punjab, ILR (1967) 1 punj & Har 278 (FB). The High Court had to consider the nature of the right of an officer to get pension. The majority quoted with approval the principles laid down in the two earlier decisions of the same High Court, referred to above, and held that the pension is not to be treated as a bounty payable on the sweet-will and pleasure of the Government and that the right to superannuation pension including its amount is a valuable right vesting in a Government servant. It was further held by the majority that even though an opportunity had already been afforded to the officer on an earlier occasion for showing cause against the imposition of penalty for lapse or misconduct on his part and he has been found guilty, nevertheless, when a cut is sought to be imposed in the quantum of pension payable to an officer on the basis of misconduct already proved against him, a further opportunity to show cause in that regard must be given to the officer. This view regarding the giving of further opportunity was expressed by the learned Judges on the basis of the relevant Punjab Civil Service Rules. But the learned Chief Justice in his dissenting judgment was not prepared to agree with the majority that under such circumstances a further opportunity should be given to an officer when a reduction in the amount of pension payable is made by the State. It is not necessary for us in the case on hand to consider the question whether before taking action by way of reducing or denying the pension on the basis of disciplinary action already taken, a further notice to show cause should be given to an officer. That question does not arise for consideration before us. Nor are we concerned with the further question regarding the procedure, if any, to be adopted by the authorities before reducing or withholding the pension for the first time after the retirement of an officer. Hence we express no opinion regarding the views expressed by the majority and the minority Judges in the above Punjab High Court decision on this aspect. Hence we express no opinion regarding the views expressed by the majority and the minority Judges in the above Punjab High Court decision on this aspect. But we agree with the view of the majority when it has approved its earlier decision that pension is not a bounty payable on the sweet-will and pleasure of the Government and that, on the other hand, the right to pension is a valuable right vesting in a Government servant.� 27. Thus, pension is a valuable right that is vested in Government servants. It was also construed as property within the meaning of Article 19(1) of the Constitution of India. It is contended that though the right to property is no longer fundamental, nevertheless it is a constitutional right as could be seen from Article 300-A of the Constitution of India. At any rate, where deprivation of pension has a direct impact on source of livelihood that the employee has or enjoys, then such deprivation would also violate Article 21 of the Constitution of India. 28. Sri.N.N. Sugunapalan referred to a judgment of the Supreme Court in A.K. Bindal and another v. Union of India (2003) 5 SCC 163 ) and contended that diminution in the quantum of pension as alleged by the petitioners would not result in violation of Article 21 of the Constitution of India. The Supreme Court in A.K. Bindal's case (supra) rejected the argument on the basis of Article 21 of the Constitution, when it was invoked in the case of revision of pay scale. It was held by the Supreme Court that mere non revision of the basic pay would not amount to violation of the fundamental right guaranteed under Article 21 of the Constitution of India as it would be stretching the argument too far and cannot be countenanced. Even under the Industrial Law, the view is that the workmen should get a minimum wage or a fair wage but not that his wages must be revised and enhanced periodically. Though on account of inflation, there has been a general price rise, that does not mean that it should lead to an inference that salary currently being paid to them is wholly inadequate to lead a life with human dignity. Sri.N.N. Sugunapalan also made reference to a judgment of the Supreme Court in Otis Elevator Employees Union S. Reg. Though on account of inflation, there has been a general price rise, that does not mean that it should lead to an inference that salary currently being paid to them is wholly inadequate to lead a life with human dignity. Sri.N.N. Sugunapalan also made reference to a judgment of the Supreme Court in Otis Elevator Employees Union S. Reg. v. Union of India ( (2003) 12 SCC 68 ) for the same purpose. 29. Absence of pay revision by itself may not enable the claimant to invoke Article 21 of the Constitution and then seek an enforcement of pay revision; as the Supreme Court held in A.K. Bindal's case (supra), that might be stretching the argument too far. But the contention herein is that the employees of the petitioner Banks are currently entitled to pension and other retirement benefits in accordance with the schemes that are prevailing and that the same constitutes a vested right. The employee, therefore, becomes entitled to an amount, the quantum of which is determined on the basis of corpus that is available in the Trust. All the employees in the Banks are entitled to draw pension. The materials on record, it is contended would show that the quantum of pension would undergo serious diminution, if they are compulsorily brought within the purview of the Employees Pension Scheme and the EPF Act. In such circumstances, their right to livelihood and consequently their right to life would be affected by the impugned notification. 30. I am in agreement with the submission made in this behalf by Sri. M. Pathros Matthai, on a broad basis. If an action taken by the State has the effect of reducing pension that a retired employee would otherwise be certainly entitled to draw, it will have a direct impact on his right to livelihood and consequently his right to dignified life guaranteed under Article 21 of the Constitution of India. The contention that he would nevertheless be in a position to draw a minimum pension, may not be a complete answer to the contention in that regard. The irrefutable contention is that if a person is entitled to get an amount as pension, an enforceable right is available with him in that regard. The contention that he would nevertheless be in a position to draw a minimum pension, may not be a complete answer to the contention in that regard. The irrefutable contention is that if a person is entitled to get an amount as pension, an enforceable right is available with him in that regard. It is not the case of the respondent that the reduction of the pension or other benefits that the employees of the petitioners Banks would be entitled to draw and derive, if they are brought within the purview of the EPF Act and the Scheme framed thereunder, accompanied by them being taken out of the purview of the individual scheme that are prevailing in the Bank, would be offset by any corresponding benefit that would come their way by reason of the establishments getting covered by the provisions of the EPF Act. After all, the prime motif and raison detre for a legislation like the EPF Act, a social welfare legislation, is to provide succour to the employees in the form of provident fund or pension. Therefore, if deprivation of the same is not accompanied or offset by any corresponding right, then it could be certainly open to an employee and consequently to the management of the establishment of such employee to resist a state action and say that they need not be subjected to such deprivation and there is no corresponding benefit that they derive by reason of such deprivation. I am inclined to accept the submission made by the learned senior counsel appearing for the petitioners, by reason of the materials on record which clearly suggest that employees of the Scheduled Banks would suffer a serious deprivation in the quantum of the pension that they would be entitled to draw as per the Pension Scheme that are currently prevailing, if they are taken out of the purview of the Pension Schemes and brought within the purview of the EPF Act and the pension Scheme framed thereunder and that such deprivation can be resisted by them on the ground that the said action is violative of Article 21 of the Constitution of India. The action of the Central Government, by issuing the notifications in question, may be a piece of conditional legislation or an exercise of statutory power. The action of the Central Government, by issuing the notifications in question, may be a piece of conditional legislation or an exercise of statutory power. It really makes no difference qualitatively, in the context of an attack on the ground of Article 21 of the Constitution. 31. I am also in agreement with the submission made by Sri.Pathros Matthai in this regard that though the right to life under Article 21 of the Constitution is made subject to a procedure established by law, the law for the purpose of Article 21 of the Constitution could either be a plenary statute or subordinate notification like Exhibits P1 and P2. But the law should also subscribe to the test of reasonableness. Merely because the Central Government is entitled to exercise such powers under Section 1(3) of the Act does not mean that the notifications are immune from an attack on the ground of Article 21 of the Constitution of India. The question is whether deprivation of the right to life or right to livelihood is established by the petitioners. In my view, the petitioners have so established the case and in such a situation, Exhibits P1 and P2 are vulnerable to a finding by a competent court that they would be violative of Article 21 of the Constitution of India. 32. There is yet another factor which impels me to come to the same conclusion. It has to be noted that all the employees in the petitioners Banks irrespective of the wages that they draw are entitled to be members of the Pension Schemes which are prevailing therein. On the other hand, in so far as the EPF Act and the Pension Scheme provided thereunder are concerned, only such employees who draw wages upto Rs.6,500/- are compulsorily brought within the purview of the Act. Enforcement of Exhibits P1 and P2 notifications would result in an incongruous situation in the petitioner Banks. It will mean that those among the employees who have a salary upto Rs.6,500/- would alone be compulsorily comprehended by the provisions of the Act and Scheme. At the same time, the employees who are drawing salary in excess of Rs.6,500/- would not necessarily be comprehended by the provisions of the Act and Scheme. At the same time, the employees who are drawing salary in excess of Rs.6,500/- would not necessarily be comprehended by the Act and the Scheme. At the same time, the employees who are drawing salary in excess of Rs.6,500/- would not necessarily be comprehended by the provisions of the Act and Scheme. At the same time, the employees who are drawing salary in excess of Rs.6,500/- would not necessarily be comprehended by the Act and the Scheme. In other words, they can continue to be the beneficiaries of the Pension Schemes prevailing in the Banks. There is nothing on record to indicate that the Government has kept in mind any of these aspects, when it decided to extend the provision of the EPF Act and the Scheme framed thereunder to the Scheduled Banks. Though issuance of a notification under Section 1(3) of the Act to bring an establishment within the purview of the Act does not contemplate a hearing of the establishment, it is only appropriate to note that when an extension of the provisions of the Act or the Scheme framed thereunder is sought to be made to an establishment where there is already a pension scheme applicable to the employees of the establishment, then it is appropriate that the Central Government takes into account and considers whether extension of the Act and the Scheme framed thereunder would bring in any continued benefit to the employees of the establishment so sought to be covered. That the ultimate purpose and object behind the enactment is the welfare of the employees, is an irrefutable proposition. 33. It is also relevant to take note of Section 17(1)(a) and (b) of the EPF Act in this regard. Section 17 provides for the power of the Government to exempt an establishment otherwise, brought within the purview of the Act. That the ultimate purpose and object behind the enactment is the welfare of the employees, is an irrefutable proposition. 33. It is also relevant to take note of Section 17(1)(a) and (b) of the EPF Act in this regard. Section 17 provides for the power of the Government to exempt an establishment otherwise, brought within the purview of the Act. Section 17(1) (a) and (b) of the Act reads as follows: (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 favourable 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 favourable 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 character; or (b) any establishment if the employees of such establishment are in enjoyment of benefits in the nature of provident fund, pension or gratuity and the appropriate Government is of opinion that such benefits, separately or jointly, are on the whole not less favourable to such employees than the benefits provided under this Act or any Scheme in relation to employees in any other establishment of a similar character: Provided that no such exemption shall be made except after consultation with the Central Board which on such consultation shall forward its views on exemption to the appropriate Government within such time limit as may be specified in the Scheme. 34. It is appropriate to refer to sub-clause (b) of Section 17(1) because it provides for a more comprehensive exemption. An establishment, where the employees are in enjoyment of benefits in the nature of provident fund, pension or gratuity, which are not less favourable than the benefits provided under the Act or any Scheme in relation to employees in any other establishment of a similar character, could be legitimately exempted by the Government under Section 17(1) (b) of the Act. The satisfaction which the Government will have to arrive at for the purpose of Section 17(1)(b) of the Act would obviously be related to the nature of the benefits that are actually drawn by the employees. The satisfaction which the Government will have to arrive at for the purpose of Section 17(1)(b) of the Act would obviously be related to the nature of the benefits that are actually drawn by the employees. In other words, the Government would therefore consider the contents of the Scheme that is prevailing in an establishment, when it seeks to exercise its power of exemption under Section 17(1)(b) of the Act. In my view, it would be neither incomprehensible or illogical to adopt a similar approach drawing inspiration as it were from Section 17(1) of the Act, even when the Central Government seeks to extend the provision of the Act to an establishment where such retirement schemes are already in existence. In the present case, there is no material on record to show that the Government had taken into account the contents of the Pension Scheme which are admittedly prevailing in the establishments of the petitioners or the views of the employees or the employers. It would have been appropriate had it been done so. I make it clear that I have not taken this view on the premise that principles of natural justice are applicable whenever the Government seeks to exercise its powers under Section 1(3) of the Act. I have taken this view only in the context of pointing out that consideration of such relevant materials would have been appropriate, before the Government decided to extend the Act to establishments where the Schemes providing for retirement benefits are already prevailing. That has not been done. 35. For all these reasons I am of the view that Exhibits P1 and P2 notifications are unsustainable for the reason that the implementation of the provisions of the Act and the scheme framed thereunder to the petitioners establishments would result in the reduction of the benefits that are being currently drawn by the employees of the petitioners Scheduled Banks to a considerable extent. At the same time, there is no corresponding benefit to offset such deprivation. Consequently, the notifications have a direct impact on the right to livelihood of the employees of such establishments or would have an impact as and when they retire from service. In the result, the notifications would be violative of Article 21 of the Constitution. They are accordingly unsustainable and liable to be quashed. 36. The Wit Petition is, therefore, allowed. Consequently, the notifications have a direct impact on the right to livelihood of the employees of such establishments or would have an impact as and when they retire from service. In the result, the notifications would be violative of Article 21 of the Constitution. They are accordingly unsustainable and liable to be quashed. 36. The Wit Petition is, therefore, allowed. Exhibits P1 and P2 are quashed in so far as they relate to employees of petitioners 1,2,3,4,5 and 6.