1970 Supreme(Del) 29

Delhi High Court
V. S. DESHPANDE
Wire Netting Stores - Appellant
Versus
Regional Provident Funds Commissioner - Respondent
Civil Writ No.1236 of 1967
Decided On : 02/19/1970

Headnote:

EMPLOYEES PROVIDENT FUNDS ACT, 1952 - SECTION 1(3)(A), 4, 7-A, 19-A, SCHEDULE I - EMPLOYEES PROVIDENT FUNDS SCHEME, 1952 - SECTION 1(3)(A), 4, 7-A, 19-A, SCHEDULE I - CONSTITUTION OF INDIA - ARTICLES 19(1)(F), 19(1)(G), 14, 226, 227, 136 - FACTORIES - COVERAGE - INDUSTRY ENGAGED IN MANUFACTURE OF WIRE-NETTING ROLLS, WIRE NETTING, WIRE GAUGE, WIRE CLOTH AND JAALI MADE FROM G. I. WIRES - WHETHER COVERED BY ENTRY IN SCHEDULE I RELATING TO "ELECTRICAL, MECHANICAL OR GENERAL ENGINEERING PRODUCTS" - WHETHER PROVISIONS OF SECTIONS 7-A AND 19-A ARE ULTRA VIRES - WHETHER ORDER DATED 16TH JANUARY 1968 PASSED BY CENTRAL GOVERNMENT IS INVALID FOR WANT OF PERSONAL HEARING AND REASONS.

Fact of the Case:

The petitioners were running a factory from 1947 onwards for the manufacture of wire-netting rolls, wire netting, wire gauge, wire cloth and jaali made from G. I. wires of different sizes largely imported from abroad. Respondent No. 1 is the Regional Provident Funds Commissioner who is to implement the provisions of the Employees' Provident Funds Act, 1952 (hereinafter called the Act) and of the Employees' Provident Funds Scheme, 1952 framed by the Government under the Act (hereinafter called the Scheme). Section 1 (3) (a) of the Act makes it applicable to every establishment which is a factory engaged in any industry specified in Schedule I to the Act in which twenty or more persons are employed. Section 4 of the Act empowered the Central Government to add other industries to Schedule I. The importance of Schedule I lies in the fact that the application of the Act depends entirely on the particular industry being covered by an entry in the Schedule. The petitioners' case is that the industry carried on by them is in the nature of a metal textile industry which is not covered by any entry in Schedule I. The only relevant entries are "industry engaged in the manufacture of electrical, mechanical or general engineering products" and "industry engaged in the manufacture of textiles (made wholly or in part of cotton or wool or jute or silk, whether natural or artificial)." The petitioners' industry is not covered by the former entry because the industrial activity carried on by the petitioners is not in the nature of an engineering industry. It is also not covered by the second entry inasmuch as it is confined only to certain kinds of textiles which do not include the metal textiles woven by the petitioners.

Finding of the Court:

1. The petitioners' industry is not covered by the entry in Schedule I relating to "electrical, mechanical or general engineering products". 2. The provisions of Section 7-A of the Act empowering the Commissioner to determine the amount of provident fund contributions due from any employer are ultra vires inasmuch as no opportunity is given thereunder to the employers to show to the Commissioner that the particular industry is not covered by any entry in Schedule I. The invalidity of Section 7-A is not affected by the fact that the Commissioner in a particular case may give such opportunity to a particular employer. 3. The provisions of Section 19-A of the Act are also void on the ground of excessive and uncanalized delegation of powers by the legislature to the Central Government. 3-A. The order dated 16th January 1968 passed by the Central Government is also vitiated inasmuch as no personal hearing was given to the petitioners and no reasons for the order are given therein before it was passed.

Issues: 1. Whether the petitioners' industry is covered by the Act. 2. Whether the provisions of Section 7-A of the Act are ultra vires. 3. Whether the provisions of Section 19-A of the Act are also void. 3-A. Whether the order dated 16th January 1968 passed by the Central Government is also vitiated.

Ratio Decidendi: 1. The entry "textiles" in Schedule I of the Act is restricted to textiles made wholly or in part of cotton or wool or jute or silk, whether natural or artificial. The metal textiles manufactured by the petitioners are not included in the particular entry "textiles". It follows, therefore, that they are not excluded from the general entry "general engineering products." 2. Section 7-A of the Act imposes an unreasonable restriction on the fundamental right of the petitioners to hold property and to carry on business guaranteed by Article 19(1) (f) and (g), of the Constitution. 3. Section 19-A of the Act is unconstitutional on the ground of excessive and uncanalized delegation of power by the legislature to the Central Government. 3-A. The order dated 16th January 1968 passed by the Central Government is also vitiated inasmuch as no personal hearing was given to the petitioners and no reasons for the order are given therein before it was passed.

Final Decision: Both the writ petitions fail and are dismissed but without any order as to costs.