RAM NARAIN AND CO Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner No. 1 is a partnership firm and its partners petitioner 2 to 5 challenge in this petition the order of the Central Government dated November 7 1967 under sec. 19A of the Employees Provident Funds Act 1952 hereinafter referred to as the Act and the notices issued in pursuance to that decision requiring the petitioners to implement the provisions of the Act and the scheme in regard to their factory for manufacturing ophthalmic lenses. From April 1 1962 the petitioners factory began to employ the requisite number of 20 or more employees. Therefore the authorities imitated petitioner that they were bound to implement the Act and the scheme with effect from April 1 1962 This intimation was given to the petitioners on December 31 1965 There was some correspondence and ultimately the petitioners made an application to the Central Government under sec. 19A of the Act to determine this doubt as to whether the Act and the scheme applied to the petitioners factory. The Central Government considered the representations made by the petitioners and even further views expressed by the petitioners and finally gave the impugned decision on November 7 1967 holding that the petitioners had by means of the process of grinding surfacing and glazing of glass manufactured ophthalmic lenses in their factory. The petitioners industry was therefore covered by the Act. As the authorities began to enforce the Act and for that purpose served the impugned notice the petitioners have filed this petition challenging the impugned decision and the action of the authority against the petitioners factory.

(2.) Mr. Abichandani at the hearing raised two points in the petition:- (1) That sec. 19A of the Act was ultra vires Articles 14 and 19(1)(g) of the Constitution as it amounted to giving arbitrary power to the Central Government by making excessive delegation without any guide lines and by imposing unreasonable restriction on the petitioners fundamental rights carry on their business; (2) That the scheduled industry was manufacture of glass as the basic product glass and manufactured ophthalmic lenses which was commercially a different substance from ordinary glass could never be covered within the scope of the scheduled entry glass.

(3.) Sec. 19A runs as under:- If any difficulty arises in giving effect to the provisions of this Act and in particular if any doubt arises as to (i) Whether any establishment which is a factory is engaged in any industry specified in Schedule I; xx xx xx xx xx xx The Central Government may be order make such provision or give such direction not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for the removal of the doubt or difficulty; and the order of the Central Government in such cases shall be-final. Sec. 19A therefore enables the Central Government to make a quasi-judicial adjudication on the relevant statutory issues mentioned in sec. 19A one of which is whether the establishment which is a factory is engaged in any industry in Schedule J. Even though sec. 19a does not lay down the procedure for such a quasi-judicial adjudication this statutory power must be exercised in accordance with the principle of natural justice. The section provides for doubts being resolved because of which there might be difficulties in the expeditious implementation of the Act. The particular doubt which can be resolved by the Central Government is on certain important questions as to whether the factory establishment is a scheduled industry; or whether the particular establishment is an establishment falling within those establishments to which the Act applies because of the notification under sec. 1(3)(b); or as to the number of persons employed or the number of years which have elapsed from the date of the set up of establishment or whether the quantum of benefits have been reduced by the employer. After the decision in P. L. Lakhanpal v. Union of India A.I.R. 1967 S.C. 1507 it is well settled that the duty to act judicially arises not only where a third party is to decide lis between the two contesting parties but even if there is on lis inter-partes and the contest is between the party proposing to do the act and the subject opposing it the final determination of the authority will yet be a quasi-judicial act provided the authority is required by the statute to act judicially. Even though statute may be silent in such latter type of cases as to whether the authority is to act judicially or not inference for this purpose has to be drawn by applying five factors; (1) express provision of the statute read along with the nature of the rights affected (2) manner of disposal of property (3) objective criterion if any to be adopted (4) effect of the decision on the person affected (5) other indicia afforded by the statute. Applying these tests it is obvious from the very nature of this power vested in the Central Government to make such a quasi-judicial determination which would have such a wide impact on the rights of the concerned subject and which is to be exercised according to the objective norms which have to be applied for arriving at this decision that the manner of the disposal of such an adjudication having such wide impact on the rights of the affected parties must be in accordance with the principles of natural justice. Therefore the duty to act judicially can be inferred in this case from the very nature of the power vested in the Central Government. It is equally well settled after the decision in Travancore Rayon's case in 1969 (3) S.C.C. 869 that such quasi-judicial bodies must always give reasons for their orders and they must pars speaking orders. Writ jurisdiction or the power of superintendence under Articles 226 or 227 respectively or even of the appeal under Article 136 of the Constitution could be effectively exercised only if the authorities pass speaking orders when they are invested with the power of making such quasi-judicial decisions which are made final under the Act. The Section also lays down the guide-lines because the power of the Central Government to issue directions under sec. 19A is restricted by providing that such a direction shall not be inconsistent with the provisions of this Act. Therefore the statute lays down its own perspective and the authority which has to decide this question so that the difficulty can be surmounted by resolving the doubt has to set within the scope of this perspective and the direction which the authority gives must be also consistent with the provisions of the Act. The Central Government is not invested with any arbitrary or uncanalised power without any guidelines but with a quasi-judicial power of making adjudication on the various statutory issues on which there is doubt or in regard to which difficulties are experienced and it has to act within the four corners of the Act. It has also the duty to act judicially in the exercise of this quasi-judicial function in accordance with the principles of natural justice and it must pass speaking orders with reasons. Therefore such a power could never be said to violate the guarantee of just and equal treatment under Art. 14. It is true that the orders of the Central Government are given a finality. But such finality would be to those directions or orders which are passed as per the perspective laid down in sec. 19A and which are within the four corners of the Act. There would be no finality in case of ultra vires orders which could not only be challenged in the writ jurisdiction under Article 226 or under Art. 227 by way of superintendence or even by an appeal under Art. 136 but also before a Civil Court if the order plainly contravenes the Act. In such a case the order is no order at all but only a purported determination which would not have any finality under the Act. Therefore both as regards the manner of disposal and the objective criterions which have to be followed the order would be completely reviewable by the Court. It is the Central Government to whom it is left by the Legislature to determine how this Act shall be implemented from time to time in the various scheduled industries in the country. The power is delegated to the Central Government to extend the act by amending the schedule of industries and by notifying from time to time the class of establishments under sec. 1(3) of the Act. That is why when there is difficulty arising in giving effect to the provisions of the Act or a doubt arises as specified in all the five statutory issues the same Central Government is invested with the powers to give its quasi-judicial decision on these matters so that the Act may be implemented without the least delay. The Central Government should have the best materials in its possession and would have because of its accumulated experience the special fitness for decision in these matters. In any event the Central Government is made judge in these matters as it would help speedy implementation of the Act because recourse to Courts would have for a number of years made this statute a dead letter because of the pending litigation. Such a measure of special justice requires immediate implementation. Therefore if the Central Government is made the sole judge in the matter rather then the ordinary Courts the enactment could never be said to violate the principle of rationality. In Vellukunnel v. Reserve Bank of India A.I.R. 1962 S.C. 1371 at page 1388 Their Lordships pointed out that the exclusion of Courts is not lightly to be inferred nor lightly to be conceded. The reasonableness of such a law under which the Legislature leaves the determination of an issue to an expert executive like the Reserve Bank rather than to the ordinary Courts has to be judged by regard to the total circumstances. The legislature has to ask itself a question as to who would be the appropriate authority and to determine as to whether the decision of the issue should be left with the highest executive the Central Government or with the ordinary Courts. The Courts might be wholly unsuitable looking to the total circumstances of the case or because of the urgency of the circumstances demanding expeditious disposal and because of the consequent delay in the ordinary Courts. Therefore in such a measure of social justice where the disputes have to be immediately resolved so that the statute does not remain a dead letter and the benefits of this benevolent measure reach the employees concerned as expeditiously as possible the Legislature could well leave this function to the Central Government to decide such point of doubt or difficulty so that the Act could be speedily implemented. As we have already pointed out the power is to be exercised as per the various restrictions like any other quasi-judicial power and within the four corners of the Act and therefore it could never be said that such a quasi-judicial power is arbitrary or unreasonable power without any guidelines. Therefore the attack under Articles 14 and 19(1)(g) must fail.