COMMONWEALTH TRUST LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner is challenging the constitutional validity of Sections 4(1) and (3) of the Kerala Handloom Workers' Welfare Fund Act, whereby the rate of contribution payable by the worker is enhanced from Re. 1 to Rs. 3, whereby the employer has to effect double the amount remitted by the worker. The case of the petitioner is that, there is no rationale on the part of the respondents in enhancing the same as per the Ordinance bearing No. 19 of 2001, which was subsequently replaced by the Kerala Handloom Workers' Welfare Fund (Amendment) Act 2001. The petitioner is a company, constituted under the relevant provisions of the Indian Companies Act 1956 and it is having two factories, one situated near the head office of the company at Calicut and the other one at the beach, known as 'beach unit'. It is stated that the beach unit has been subsequently closed down due to various adverse circumstances. It is admitted that the petitioner is an 'employer' as defined under Section 2 (f) of the Kerala Handloom Workers' Welfare Fund Act. By virtue of the mandate under Section 4 (1) of the Act, every worker is suppose to contribute a sum of Re. 1 as the contribution to the fund and a equal contribution is to be made by the employer as well, as stipulated under Section 4 (3). It is stated that, the petitioner has been effecting the payment in compliance with the statutory requirement.

(2.) Over and above the payment as aforesaid, the petitioner contends that, the petitioner has been effecting other statutory payments, particularly under the Employees Provident Fund Act, ESI Act and various other labour enactments. By virtue of the nature of the operations being pursued by the petitioner and the adverse market conditions coupled with other relevant factors, the very existence of the unit came to be in doldrums. But without any regard to the actual facts and figures as above, the contribution payable under the Act was arbitrarily enhanced to a tune of Rs. 3 from Re.1, in the case of contribution payable by the worker under Section 4 (1) and the contribution payable by the employer under Section 4 (3) was stipulated as 'double the payment' of the contribution to be effected by the workers. By virtue of the amendment brought into force as per the Ordinance in question, the petitioner who was to effect a contribution of only Re. 1 per month, per worker, has to part with Rs. 6 per worker, which was enough to uproot the petitioner. This made the petitioner to challenge the constitutional validity of the said amendment by filing this Writ Petition. During the pendency of the above proceedings, the Ordinance was replaced by the Kerala Handloom Workers' Welfare Fund (Amendment) Act 2001, and the Writ Petition was got amended accordingly.

(3.) The respondents have filed separate counter affidavits, pointing out that, the amendment is very much within the power and prerogative of the State and it is traceable to the relevant entries in the List III under the 7th schedule of the Constitution of India.