D.S. Tewatia, J. - (1.) THE firm Messrs Khushi Ram -Raghunath Rai, Kiryana Merchants, Fenton Ganj, Jullundur City (hereinafter referred to as the Petitioner) is a partnership concern. It is alleged that its partners own three different and distinct establishments dealing in different and separate trades - -one at Naya Ganj, Kanpur, the other at Raman Market, Jullundur Cantonment, and the third at Mandi Fenton Ganj, Jullundur City. Jullundur City establishment deals in Kiryana goods, Jullundur Cantonment carries on the agency of the Lever Brothers; and the establishment at Kanpur is a commission agent's shop. It is further alleged that accounts of all the three establishments have separate sales tax registrations and their accounts are maintained and prepared separately and that the establishment at Jullundur does not exercise any control over the establishment at Kanpur; that in the year 1962 -63 the Petitioner's two establishments at Jullundur City and Cantonment employed 11 persons, while that in Kanpur only 7 and that had been the regular and general requirement of each establishment right from 1960 till the filing of the present petition; that it was, however, during July -August, 1962 that the combined strength rose to 20 employees, as a result of employment of 2 casual workers, namely, Das Mal and Yash Pal to cope with the rush of work. (Annexure 'A' to this petition is a copy of the ledger showing the payments made to the employees); that the Central Government by virtue of powers invested in it by Clause (b) of Sub -section (3) of Section 1 of the Employees Provident Fund and Family Pension Act, 1952 issued notification No. GSR -346, which came into force on 30th April, 1962, making applicable the provisions of the Employees Provident Fund Act, 1952, which was later on amended and named as the Employees Provident Fund and Family Pension Act, 1952 (hereinafter referred to as the Act) to every trading and commercial establishment engaged in the purchase, sale or storage of any goods including establishments of exporters, importers, advertisers, commission agents, brokers commodity or stock exchange; that the Petitioner's establishment was sought to be brought within the provisions of the Act and the scheme envisaged therein by Respondent No. 1, the Regional Provident Fund Commissioner, Punjab, Haryana, Union Territory of Chandigarh, and Himachal Pradesh, Chandigarh, vide its order dated 22nd February, 1968. This order was challenged -by the Petitioner through Civil Writ Petition No. 1558 of 1968, inter -alia, on the ground that the Petitioner establishment had not been given any hearing or opportunity to prove that the establishment was not liable to be covered under the Act; that the said petition was withdrawn on an understandings being given on behalf of the Respondent that the Petitioner would be afforded due opportunity to -contest its liability for coverage under the Act and that the matter would be decided afresh after due enquiry and that the Petitioner made representation in writing to Respondent No. 1, copy whereof is annexure 'B' to the petition, in which a definite stand was taken that even though the strength of the employees of the various establishments rose to 20 in August, 1962 that would not bring the establishment within the coverage of the Act, as that was not the regular and the general requirement of the establishment. It was categorically averred that the employment of two persons was as a result of rush of work and they were not the regular employees; that the aforesaid position and assertion of the Petitioner remained unrebutted; that Respondent No. 1 rejected the representation and the claim of the Petitioner, vide order dated 14th August, 1973, copy annexure 'C' to the petition, without considering the effect of the Supreme Court judgment reported in the Provident Fund Inspector, Guntur v. T.S. Hariharan : A.I.R. 1971 S.C. 1519, and without giving a specific; finding that employment Off 20 -persons during the short period of July and August was not on account of abnormal rush of work and that in" fact they were employed in its normal course of business; that Respondent No. 2, vide his letter. dated 20th October, 1973, copy annexure 'D' to the petition, directed the Petitioner to deposit all the contributions towards the Employees Provident Fund within seven days; that the Petitioner's representative, who was sent for by Respondent No. 2 on 5th November, 1973, was detained and deposit of an amount of Rs. 5,000 was insisted upon on the pain of criminal prosecution, without having earlier determined the amount as per provisions of Section 7 -A of the Act; and that per force the Petitioner had to deposit Rs. 5,000 through a bank draft.
(2.) THIS finally is said to have led to the filling of, the present petition challenging therein the vires of the notification, as also some of the provisions of the Act, and the orders, annexures 'C' and 'D' passed by the Respondents, inter alia, on the ground that the issuing of a single notification bringing under the cover of the provisions of the Act numerous trades and establishments was not envisaged by the provisions of Section 1(3)(b) of the Act, as that provided for the issuance of a separate notification for every establishment sought to be covered, and thus the Central Government exceeded its power in issuing the aforesaid notification; that, Clause (b) of Sub -section (3) of Section 1 of the Act confers blanket powers on the Central Government and thus suffers from vice of excessive delegation of legislative power; that the provisions of section 1(3)(b) of the Act are discriminatory and thus violative of the provisions of Article 14 of the Constitution inasmuch as while a notification under Section 4 of the Act covering an industry has to be laid before the two Houses of Parliament, notification issued under Section 1(3) (b) of the Act is not being envisaged to be so laid; that no criterion or guiding principle has been laid down as to on what basis and consideration the establishment will be brought under the Act by issuing a notification under Section 1(3) (b) of the Act; that the provisions of Section 14(1A) and 14AA of the Act are liable to be struck down being hard, stringent and unconscionable and for the same reason, provisions of Section 14(c) of the Act are liable to be struck down; that the provisions of Section 16(2) of the Act are discriminatory, as it only gives exemption to a class of establishment; and does not envisage exemption of an individual establishment; that Respondent No. 1 being himself a party has become Judge of his own cause and thus the provisions of Section 7A of the Act involve violation of the principles of natural justice; that the order annexure 'D' passed by Respondent No. 2 was passed without holding any enquiry as envisaged under Section 7 -A of the Act and was thus clearly illegal and void; that the orders annexures 'C and 'D' are void illegal as they are based on no evidence; that the impugned orders are illegal and without jurisdiction even when it is held that the three establishments were one and the combined strength of workers employed therein could be taken into consideration for judging the liability of the Petitioner under the Act, for out of the list of the workers contained in annexure 'A', four persons, namely, Roshan Lal, Faqir Chand, Radhe Sham and Bal Krishan were the partners of the Petitioner -concern and thus they could not be treated as workers, nor Basanta Mal could be treated as a worker, as he was employed merely to do the Court work for which he was paid Rs. 180 per annum; and that the impugned orders were illegal and without jurisdiction further for the reason that the same were passed on the report of the Inspector, Provident Fund, who made it simply on the assumption that the Act would become applicable if the number of employees reached 20 in a month including casual employees for any reason. In the written statement filed by Shri B. R. Anand, Regional Provident Fund Commissioner, Punjab, Haryana, Himachal Pradesh and Union Territory of Chandigarh, it is admitted that the Petitioner is a partnership firm of which Khushi Ram, Babu Ram, Raghu Nath and Banarsi Dass - -all brothers - -are partners in equal shares. However, it is denied that the partners of the Petitioner -firm own three different and distinct establishments. It is averred that it is one establishment having different branches - -one at Jullundur Cantonment and the other at Kanpur; that the business carried on in the establishment at Jullundur City and the two branches is identical i.e. Kiryana and Commission agents; that Kanpur branch sends its profit and loss account to the head office which maintains profit and loss accounts centrally; that income -tax assessment of Kanpur establishment and Raman Mandi Branch and head ?office at Jullundur City is done at Jullundur and the income -tax is paid by the head office and is shown in the books of the head office at Jullundur City; that it was one establishment having two branches, is established from the letter -head of the Petitioner, annexure R -l, and the aforesaid fact also stands admitted in the document, annexure R -2; that no evidence Was led before him to prove that the three establishments had different sales -tax registrations; that annexure R -2, which is a copy of the statement concerning the year 1962 -63, shows that besides seven employees on the pay -roll of its branch at Kanpur, it had in its other branches 13 employees in the month of July and as many as in the month of August and 14 in the month of September, 1962; that to the extent the contents of annexure 'A' differ from those of annexure R -2, the same are denied: and that annexures R -3 and R -4 clearly establish the strength of the employees in the Petitioner's establishment - -these documents came into being in February, 1968 and were signed by Khushi Ram, one of the partners of the Petitioner; that according to these documents, the strength of the employees as on 31st August, 1962 was 21. This was when the name of Basanta Mal is excluded as his name is not borne on annexure R -3. Annexure R -3 represents the admission of the Petitioner itself in regard to the strength of its employees, and it was not claimed that any of the employees mentioned therein was a casual worker, nor was it claimed in the representation dated 14th August, 1972, annexure 'B', that Das Mal was a casual worker as he left the employment in the month of September, 1962; that Roshan Lal, Faqir Chand, Radhe Sham and Bal Krishan were not partners of the Petitioner at the relevant time, for they became partners for the first time with effect from 1st April, 1966, as made clear by letter dated 12th February, 1968, annexure R -5; and that at no stage it had been claimed that Ram Dayal Kahar, whose name appears in annexure 'A -l' at Serial No. 6 was a house servant - -in fact his name has been shown in the account books of the Petitioner. The allegations in para 8 of the petition -were denied and it was pleaded that for more than one month the strength of the employees in the establishment of the Petitioner was more than 20 and they were engaged in connection with the regular course of business of the establishment that, the impugned order was passed in accordance with the material placed before Respondent No. 1 and the findings were given on the points actually urged before him that the Petitioner despite being called upon vide annexure R -6 dated 21st November, 1973, to submit all the returns in accordance with law, did not submit, the same and thus made it impossible for the Respondent to determine the actual amount of the contribution; that in any case since the record was with the Petitioner, it could calculate the amount and deposit the same; and that the notification issued by the Central Government and the impugned orders passed in pursuance thereof were legal and constitutional and so are the provisions of the statute whose vires and the legality have been assailed in the petition.
(3.) BEFORE dealing with the contention advanced by the learned Counsel for the Petitioner regarding the application of the provisions of the Act and the scheme framed thereunder to the Petitioner's concern, it would be desirable to first advert to the contentions advanced regarding the vires of the various' provisions of the aforesaid Act... .;