RAJIV RAMANLAL Vs. ASHOK MILLS LIMITED

JUDGEMENT

(1.) . This group of 52 appeals arises out of as many suits filed in the City Civil Court Ahmedabad. They were filed by shareholders of corporate employers in which they challenged the vires of secs. 3 and 6 of the Bombay Labour Welfare Fund Act 1953 and Rules 3 and 4 of the Labour Welfare Fund (Gujarat) Rules 1962 They contended that the aforesaid provisions were ultra vires Art. 19 (1) (f) and Art. 31 (2) of the Constitution of India. Some of the suits were instituted in 1975 and others were instituted in 1976. No evidence was led in the suits. They were decided on the basis of legal arguments advanced before the learned trial Judge. On 2nd September 1978 they were decided by the learned trial Judge by a common judgment. He turned down the conten- tions raised by the plaintiffs and dismissed the suits. Decrees passed by him in all the suits are challenged by the plaintiffs in these appeals.

(2.) Before we enter upon the examination of the contentions raised by the plaintiffs before us it is necessary to set out the history of the litigation relating to the impugned provisions. The Bombay Labour Welfare Fund Act 1953 (hereinafter referred to as the Labour Wefare Act for the sake of brevity was enacted by Bombay Legislature in 1953. Sec. 3 as it was then was challenged in a grouP of writ petitions before the High Court of Bombay on the ground that it was ultra vires Art. 31 (2). Sec. 3 as it was then read as follows:

(3.) The writ petitions were heard by Chagla C. J. and Tendolkar J who dismissed them by their order dated 14th September 1953. The reasons which weighed with the learned Judges were as follows. When the State acquires the property of a private citizen for a public purpose it does so in the exercise of the right which it has by reason of the principle of eminent domain. Therefore in the context of Art. 31 (2) under which challenge was raised to sec. 3 the learned Judges observed that they must be first satisfied that the legislation which they were considering acquired or took possession of the property belonging to the petitioner They further observed that on analysis of the impugned legislation the substance thereof was that the State directed the petitioner who was the debtor of his employees to pay to the State the debt due instead of paying it to his creditors. Therefore in the opinion of the learned Judges no property of the petitioner was involved in the impugned legislation and all that the law did was to substitute one creditor in place of another. They were of the opinion that the impugned legislation did not fall under Art. 31 (2). However in the alternative they observed that if the case fell under Art. 31 (2) there could be no doubt that the petitioner must succeed because obviousy no compensation was provided for acquisition or taking possession of the property of the petitioner. Howerver since the case did not fall under Art. 31 (2) the question of considering the challenge under that provision did not arise. The learned Judges also felt inclined to consider whether apart from Art. 31 (2) the State Legislature was competent to enact the impugned legislation and whether it contravened any fundamental right other than one specified in Art. 31(2).