Decided on July 03,2003



J.B.KOSHY, J. - (1.) In all these Original Petitions constitutional validity of some of the provisions in the Kerala Coir Workers' Welfare Fund Act, 1987, hereinafter referred to as the Act, are challenged by the petitioners. The above Act was amended by the Kerala Coir Workers' Welfare Fund (Amendment) Act, 1998, hereinafter referred to as the Amendment Act, which came into force with effect from 30/09/1997. When the above amendment came, Original Petitions were amended and the provisions under the Amended Act are also under challenge. The Preamble of the Kerala Coir Workers' Welfare Fund Act, 1987 states that it was enacted "to provide for constitution of a fund to grant relief to, to promote the welfare of, and to pay pension to coir workers and self employed persons in coir industry in the State of Kerala and for certain other matters incidental thereto". One of the contentions raised by the petitioners is that the petitioners are paying contributions under the Employees' Provident Funds Act, ESI Act and other welfare legislations and the State have no legislative competence to enact a similar Act and it is beyond legislative competence of the State.
(2.) Various similar Acts regarding the welfare of the workers were challenged and the Apex Court held that the State Government has got power to enact such Act for the welfare of the workers as it comes under List III. In Mangalore Ganesh Beedi Works v. Union of India, AIR 1974 SC 1832 : 1974 (4) SCC 43 : 1975-1- LLJ-367 a Constitution Bench of the Apex Court held that having regard to the true nature and character of the legislation meant for enforcing better conditions of labour amongst those who are engaged in the manufacture of beedis and cigars, the said Act, in pith and substance was for welfare of the labour falling within Entries 22,23 and 24 of List III. It was pointed out that the said Act had fastened liability on the person who himself engaged labour or the person for whom or on whose behalf labour was engaged or the person who had ultimate control over the affairs of the establishment by reason of advancement of money or of substantial interest in the control of the affairs of the establishment. Therefore, the impugned legislation is valid as it creates a welfare scheme for the workers by levying impost by way of contributions on the employer or a person in the position of an employer. Apex Court was considering the validity of the Beedi and Cigar Workers' (Condition of Employment) Act, 1966. The Supreme Court categorically stated that the employers who employed persons or managed persons directly or indirectly for the manufacture of the same are liable to contribute. Therefore, the Welfare Fund Act enacted cannot be struck down in its entirety on the ground that there is no legislative competence as these are coming within Entries 22, 23 and 24 of List III. The Act and the Rules with Schemes made thereunder are welfare legislation under Articles 39 and 41 of the Constitution. A legislation under Entry 23 of List III of the VII Schedule can be enacted by the State also. In the view of the above decision, the producers and the persons who engaged coir workers in the industry are liable to pay contribution.
(3.) The main point argued before us is that 'dealers' and 'exporters' are not liable to pay contribution on the basis of the turnover of the establishment, when there is no relationship of employer and employee. Now we will consider the definition in the Act so far as needed for deciding the issues. In the Section 2(h) of the Amended Act, 'employer' is defined as follows: " 'employer' means any person who directly employs whether on behalf of himself or for any other person one or more coir workers to do any work in connection with the processes in coir industry". As per Section 2(ha) of the Amended Act, the "exporter" is defined as follows: "'exporter' means any dealer or producer of coir products who exports coir products to any country outside India from ports within the State of Kerala and any such person who produces in or procures from Kerala such coir products and exports them to any country outside India from ports outside the State of Kerala". "Producer of coir products" is defined in Section 2(q) of the Amended Act as follows: " 'producer of coir products' means a person who manufactures coir products or carries on the business of processing coir products for export or for internal marketing". Section 2(f) of the Act, before its amendment defines the term "dealer" as follows: " 'dealer' means any person who is engaged in the business of purchase, sale or storage for sale, of husks or fibre or coir, yarn or any coir products or a person who rets husks and includes an agent of a dealer but does not include a cultivator who sells, or stores for sale, raw husks owned by him".;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.