The power to issue exemptions under Section 5 of the Act is legislative in character and not subject to the rules of natural justice.

Sreedharan, J

1. Writ Petitioner in O.P. No. 2581 of 1988 is the appellant. He was an employee under the third respondent, Dhanalakshmi Bank Ltd. He questioned the order of dismissal invoking the provisions of Section18 of the Kerala Shops and Commercial Establishments Act, 1960, hereinafter referred to as the Act. before the second respondent. Second respondent refused to entertain his appeal under Section18 of the said Act on the ground that Scheduled Commercial Banks are exempted from purview of Act by virtue of S.R.O. 501/82. The said stand taken by the second respondent was challenged before learned single Judge without success. Hence the appeal.

2. S.R.O. No. 501/82 issued by the Kerala Government reads :-

"In exercise of the powers conferred by Section5 of the Kerala Shops and Commercial Establishments Act, 1960 (34 of 1960) the Government of Kerala, being satisfied that public interest so requires, hereby exempt the Scheduled Commercial Banks from all the provisions of the said Act. (emphasis added)".

3. The power to issue exemption under Section 5 is, it is settled, legislative in character. The power that was exercised by the Government in issuing the above mentioned S.R.O. was in exercise of the power of conditional legislation. Reference may be made to the decision of Supreme Court in Basant Kumar v. Eagle Rolling Mills. In this case the validity of Section 1(3) of the State Insurance Act, 1948 came up for consideration. The provision is :-

"The Act shall come into force on such date or dates as the Central Government may, by notification in the official Gazette, appoint, and different dates may be appointed for different provisions of this Act and for different States of for different parts thereof".

The argument was that the power given to the Central Government to apply the provisions of the Act by notification confers on the Central Government absolute discretion, the exercise of which is not guided by any legislative provision and is, therefore, invalid. Court took the view that Section1(3) of the Act is not an illustration of delegated legislation, but it is one properly described as conditional legislation. It was observed :-

"In the very nature of things, it would have been impossible for the legislature to decide in what areas and in respect of which factories the Employees' State Insurance Corporation should be established. It is obvious that a scheme of this kind, though very beneficent, could not be introduced in the whole of the country all at once. Such beneficial measures which need careful experimentation have some times to be adopted by stages and in different phrases, and so, inevitably, the question of extending the statutory benefits contemplated by the Act has to be left to the discretion of the appropriate Government".

Similarly in the instant case Section5 of the Act allows the State Government in public interest to exempt any establishment from the provision of the Act. This power is so conferred with Government because it would have been impossible for the legislature to decide what all types of establishments are to be exempted. The power thus conferred on the State Government is nothing but conditional legislation. The Government in the exercise of its power under Section5 of the Act is not subject to the rules of natural justice any more than is the legislature itself. Nor is the procedural requirement of hearing is implied in the exercise of the legislative power since no such hearing is expressly prescribed. In public interest State Government have decided to exempt Scheduled Commercial Banks from the ambit of the Act.4. Section5 of the Act gives power to State Government to issue notification exempting certain establishments from the purview of the Act not only for public interest but also on circumstances which would be just and proper having regard to the nature and capacity of the establishment. When the State Government, in exercise of this power, issues a notification, it is