1958 Supreme(Cal) 97

HIGH COURT OF CALCUTTA
Sinha
D. N. GHOSH - Appellant
Versus
ADDITIONAL SESSIONS JUDGE - Respondent
Civil Revn.  2734  Of  1955
Decided On : APRIL 01, 1958

The legislature may confer upon a non-legislative body or person the power to prescribe rules and regulations as ancillary to a statute, provided that the policy has been declared and a primary standard has been fixed.

Headnote:

COAL MINES PROVIDENT FUND AND BONUS SCHEMES ACT, 1948 - DELEGATION OF POWER - PENALTY - EMPLOYER - DEFINITION - CONSTRUCTION OF AGREEMENT.

Fact of the Case:

Petitioners, owners of a coal field, entered into an agreement with Goswami, whereby Goswami was to work and develop the colliery, raise and sell its coal, employ staff and labour, accept all payments for any coal despatched out of the mines, open and operate accounts with any bank in the name of the Company. Goswami was entitled to purchase machinery and structures, but if it was outside the sphere of legal necessity involving a cost exceeding one thousand rupees, or falling outside the normal day to day necessity, then it would be subject to intimation to, and discussion with, the petitioners, if they so desire. Clause 7 laid down that accounts of the colliery shall be made up every six months, and 66-2/3 per cent of the share of the net profits would be paid by Goswami to the petitioners. In case the profits per month for any half year exceeds one thousand rupees, Goswami will be entitled to a further 10 per cent of the profit. Clause 12 lays down how consultation was to be made and how the accounts were to be checked. Clause 16 lays down that in the matter of disbursement of costs for works of a permanent nature, the parties would be charged in the ratio of ten per cent to the Second and ninety per cent to the First Party, in respect of the total cost. Pursuant to the powers granted under the Act, a scheme has been framed by the Government of India on or about the 11th December 1948. The preamble of this scheme states that it has been framed "in exercise of the powers conferred by Section 3 of the Coal Mines Provident Fund and Bonus Schemes Act 1948 (XLVI of 1948)". In the definition portion, the word "employer" is not to be found. Clause 33 of the Scheme deals with the mode of payment of contribution by the employer. Clause 38 deals with the submission of returns of qualified employees. Clause 42 deals with the submission of contribution cards to the Commissioner. Clause 70 prescribes under six headings the circumstances under which a person may become punishable with imprisonment which may extend to six months or with fine which may extend to one thousand rupees, or with both. A punishment is prescribed for failure to pay contribution which a person liable to pay under the Scheme and also for failing or refusing to submit any return, statement or other document required by the Scheme-The penultimate Sub-clause (f) prescribes a punishment for a person who is "guilty of any contravention of Or non-compliance with any of the requirements of the Act or of the Scheme, in respect of which no special penalty is provided."

Finding of the Court:

1. The power to impose penalty for violation of the provisions of a Scheme as given in Section 9 of the Act, and the provisions as to penalty as made by Government in Clause 70 of the Scheme, constitute proper delegation, and the exercise of powers properly delegated, and are therefore not void under the Constitution. 2. The Scheme having been framed under Section 3 of the Act, it was competent for the makers of the Scheme to include in Clause 70 provisions for penalties for transgressions against the provisions of the Act and or the Scheme. 3. The petitioners who have been convicted are employers as defined by the Act and therefore the conviction and the sentence are not bad.

Issues: 1. Whether the power to impose penalty for violation of the provisions of a Scheme as given in Section 9 of the Act, and the provisions as to penalty as made by Government in Clause 70 of the Scheme, constitute improper delegation, and the exercise of powers improperly delegated, and are therefore void under the Constitution? 2. Whether the Scheme having been framed under Section 3 of the Act, it was competent for the makers of the Scheme to include in Clause 70 provisions for penalties for transgressions against the provisions of the Act and or the Scheme? 3. Whether the petitioners who have been convicted are employers as defined by the Act and therefore the conviction and the sentence are bad?

Ratio Decidendi: 1. The legislature may confer upon a non-legislative body or person the power to prescribe rules and regulations as ancillary to a statute. 2. Provided that the policy has been declared and a primary standard has been fixed, such delegation of power is valid. 3. The legislature can prescribe that when such rules and regulations have been promulgated, the violation of any such rule or regulation shall constitute an offence and attract a penalty. 4. In such a case, it is the legislature which must prescribe the penalty or prescribe the standard of penalty to be imposed. 5. The petitioners come within the definition of an "employer" as given in the Act and consequently why they should not be dubbed as "employer" within the mischief of Section 2 (e) of the Act.

Final Decision: The application is dismissed. The Rule is discharged. Interim order, if any, is vacated. There will be no order as to costs.