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High Court Of Calcutta
SANKAR PRASAD MITRA, S. C. GHOSH, SABYASACHI MUKHERJI, S. K. DATTA, A. K. JANAH
PUSHRAJ PURANMULL - Appellant
Versus
N.ROY AND ORS. - Respondent
Matter 472 Of 1977
Decided On : 01/19/1978
WEST BENGAL RELIEF UNDERTAKINGS (SPECIAL PROVISIONS) ACT, 1972 - INDUSTRIAL RELATIONS, FINANCIAL OBLIGATIONS, UNEMPLOYMENT RELIEF - ACT SECTIONS 3, 4, 8 - PITH AND SUBSTANCE DOCTRINE - LEGISLATIVE COMPETENCE - STATE VS. UNION - LIST III, ENTRY 23 - CONSTITUTIONALITY - VALIDITY OF ACT AND NOTIFICATIONS - KEY LEGAL PRINCIPLE: STATE LEGISLATURE HAS COMPETENCE TO ENACT LEGISLATION FOR PREVENTION OF UNEMPLOYMENT OR PROVIDING RELIEF AGAINST UNEMPLOYMENT, EVEN IF IT INCIDENTALLY TOUCHES UPON AN ENTRY IN THE UNION LIST.
Fact of the Case:
CHALLENGE TO THE VALIDITY OF THE WEST BENGAL RELIEF UNDERTAKINGS (SPECIAL PROVISIONS) ACT, 1972, AND NOTIFICATIONS ISSUED THEREUNDER, ON GROUNDS OF LEGISLATIVE INCOMPETENCE OF THE STATE LEGISLATURE AND VIOLATION OF FUNDAMENTAL RIGHTS.
Finding of the Court:
THE COURT HELD THAT THE ACT WAS WITHIN THE LEGISLATIVE COMPETENCE OF THE STATE LEGISLATURE AS IT FELL WITHIN THE SCOPE OF ITEM 23 OF LIST III OF THE SEVENTH SCHEDULE TO THE CONSTITUTION, WHICH DEALS WITH 'SOCIAL SECURITY AND SOCIAL INSURANCE: EMPLOYMENT AND UNEMPLOYMENT'. THE COURT ALSO HELD THAT THE ACT WAS NOT IN CONFLICT WITH THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951, AS THE STATE ACT MERELY PROVIDED TEMPORARY RELIEF TO SICK INDUSTRIES TO ENABLE THEM TO REHABILITATE THEMSELVES AND START FUNCTIONING EFFICIENTLY, THEREBY PREVENTING UNEMPLOYMENT.
Issues: 1. WHETHER THE WEST BENGAL RELIEF UNDERTAKINGS (SPECIAL PROVISIONS) ACT, 1972, WAS BEYOND THE LEGISLATIVE COMPETENCE OF THE STATE LEGISLATURE. 2. WHETHER THE ACT WAS IN CONFLICT WITH THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951.
Ratio Decidendi: 1. THE COURT APPLIED THE DOCTRINE OF PITH AND SUBSTANCE TO DETERMINE THE TRUE NATURE AND CHARACTER OF THE ACT. IT HELD THAT THE PITH AND SUBSTANCE OF THE ACT WAS PREVENTION OF UNEMPLOYMENT OR PROVIDING RELIEF AGAINST UNEMPLOYMENT, WHICH FELL WITHIN THE SCOPE OF ITEM 23 OF LIST III OF THE SEVENTH SCHEDULE TO THE CONSTITUTION. 2. THE COURT HELD THAT THE ACT WAS NOT IN CONFLICT WITH THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951, AS THE STATE ACT MERELY PROVIDED TEMPORARY RELIEF TO SICK INDUSTRIES TO ENABLE THEM TO REHABILITATE THEMSELVES AND START FUNCTIONING EFFICIENTLY, THEREBY PREVENTING UNEMPLOYMENT. THE COURT DISTINGUISHED THE PRESENT CASE FROM CASES WHERE THE STATE LEGISLATURE HAD ATTEMPTED TO TAKE OVER OR CONTROL THE MANAGEMENT OF INDUSTRIES, WHICH WOULD HAVE BEEN BEYOND ITS COMPETENCE.
Final Decision: THE COURT DISMISSED THE PETITION AND UPHELD THE VALIDITY OF THE WEST BENGAL RELIEF UNDERTAKINGS (SPECIAL PROVISIONS) ACT, 1972, AND THE NOTIFICATIONS ISSUED THEREUNDER.
( 1 ) IN this application under Article 226 of the Constitution the validity of the West Bengal Relief Undertakings (Special Provisions) Act, 1972 has been challenged. The petitioner asks for a declaration that the Act is beyond the legislative competence of the State of West Bengal and is void. The petitioner has also prayed for issue of a writ in the nature of mandamus or appropriate direction for recall, cancellation and withdrawal of Notifications Nos. 1272--CSI and 1277-CSI both dated the 24th March, 1977 issued by the Deputy Secretary to the Government of West Bengal, Department of Closed and Sick Industries. By the first Notification the State Government in the exercise of power conferred by Section 3 of the Act declared Messrs. Nafar Chandra Jute Mills Ltd. to be a relief undertaking. By the second Notification the State Government directed in the exercise of power conferred by Section 4 of the Act that the operation of all contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force relating to the relief undertaking shall remain suspended.
( 2 ) THE petitioner claims to be a creditor of the said Jute Mills. It has been affected by the notifications like many other creditors inasmuch as it is unable to take steps for realisation of its dues.
( 3 ) TO appreciate the petitioner's contentions it may be convenient to refer to some of the entries in the three lists in the seventh schedule to the Constitution. Entry 52 of List I is "industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest". Entry 24 in list II is "industries subject to the provisions of entries 7 and 52 of list I".
( 4 ) THERE are a few other entries in List III which should be noted in this connection. Item No. 23 in List III is "social security and social insurance: employment and unemployment". Item No. 33 is "trade and commerce in, and the production, supply and distribution of :-- (a) the products of any industry where the control of such industry by the Union is declared by Parliament to be expedient in the public interest, and imported goods of the same kind as such products:. . . . . . . . . . . . . . . . . . "
( 5 ) ON behalf of the petitioner our attention was drawn to the Industries (Development and Regulation) Act, 1951. This Act was passed by Parliament and it came into force by a notification in the Gazette of India Extraordinary on the 8th May, 1952. By Section 2 of this Act the Parliament declared that it was expedient in the public interest that the Union should take under its control the industries specified in the first schedule. Item No. 23 in the first schedule to this Act includes jute and jute textiles. According to the petitioner the said declaration was made by Parliament by law under Entry 52 in list I.
( 6 ) THE petitioner then contends that Entry 24 in list II enables the State Legislature to legislate in regard to industries but subject to the provisions of, inter alia, Entry 52 in list I. The State Legislature, therefore, does not have competence to legislate in respect of industries the control of which has been taken over by the Union.
( 7 ) THE petitioner submits that the. West Bengal Act referred to above relates to control and regulating of industries in the State by the Government of West Bengal. The applicability of the State Act must be confined to those industries the control of which by the Union of India has not been declared by Parliament by Law to be expedient in public interest.
( 8 ) THE petitioner's contention is that since the control of jute industry is a subject-matter of the Industries (Development and Regulation) Act, 1951, the West Bengal Act has no application to jute industry. The impugned notifications relate to jute industry and are, therefore, ultra vires and void. There are no entries either in List II or List III, according to the petitioner, under which
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