The Management of Sterling Spinners Limited,P.Pudupatti Padiyur P.O.,Vedasandur Taluk,Dindigul District. v. The Union of India

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 24.7.2009CORAM:THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR.JUSTICE RAJA ELANGOWrit Appeal No.1702 of 2000& C.M.P.No.14706 of 2000 The Management of Sterling Spinners Limited,P.Pudupatti Padiyur P.O.,Vedasandur Taluk,Dindigul District. .. Appellant vs.1. The Union of India, Secretary, Ministry of Law and Justice, Legislative Department, New Delhi.2. Regional Provident Fund Commissioner, Madurai Region, Madurai. .. Respondents Writ Appeal against the order dated 18.8.2000 passed by thelearned single Judge in Writ Petition No.3304 of 1998 on the file ofthis Court.Writ Petition No.3304 of 1998:- Petition filed under Article 226 ofthe constitution of India praying this Hon'ble Court to call for therecords in MO C6/TN/MD/41217/ENF/MDU dated 12.2.1998 on the file ofthe 2nd respondent Regional Provident Fund Commissioner, Madurai andquash the same.For appellant : Mr.DwarakanathanFor respondents: Mr.D.Srinivasan, SCCG for R-1 Mr.V.Vibishan for R-2 JUDGMENT(Judgment of the Court was delivered by S.J.MUKHOPADHAYA,J)Section 16 of the Employees' Provident Funds and MiscellaneousProvisions Act, 1952, (for short, 'the Act') was amended and Clause https://hcservices.ecourts.gov.in/hcservices/ (d) of Section 16(1) was omitted with effect from 22.9.1997. In viewof such omission of Clause(d) of Section 16(1), the secondrespondent-Regional Provident Fund Commissioner, Madurai Region,Madurai, by intimation/letter dated 12.2.1998, informed theappellant-Management of Sterling Spinners Limited, that the benefitof infancy protection, which was given to it, cannot be given inview of the aforesaid omission made by the amendment.2. The appellant-Company (Writ Petitioner) having unsuccessfullychallenged the said order/intimation, dated 12.2.1998, has preferredthis Writ Appeal against the order dated 18.8.2000 passed by thelearned single Judge in Writ Petition No.3304 of 1998.3. The appellant-Company was incorporated as a Public LimitedCompany on 20.9.1994 and it was established in an industrially mostbackward area for manufacture of hosiery cotton. 4. According to the appellant-Company, it started the businessof manufacturing activity with effect from 5.7.1996. On the otherhand, according to the respondents, the appellant-Company started tocommence its business on 10.10.1994. The benefit of exemption(infancy protection) is used to be granted under Section 16(1)(d) ofthe Act. 5. The appellant-Company applied for exemption (infancyprotection) in terms of Section 16(1)(d) of the Act, which wasgranted in its favour for a period of three years. By theNotification in the Gazette of India, Extraordinary, dated 22.9.1997,the Clause to grant exemption (infancy protection) under Section 16(1)(d) of the Act was omitted by omitting Clause (d) of Section 16(1)of the Act. The second respondent thereafter issued the impugnedletter dated 12.2.1998, allotting Code Number to the appellant-Company and asked it to pay its contribution in respect of theemployees from 22.9.1997.6. Before the Writ Court, the appellant-Company took a specificplea that the Ordinance can have no application to the rights alreadycreated and granted under Section 16(1)(d) of the Act and accrued tonew Units till the period of infancy expires. Therefore, the secondrespondent is not right in requiring the appellant-Company to coverits employees under the Act on the basis of the Ordinance. It wasalso pleaded that the Ordinance cannot be given retrospective effectto require the establishment like the appellant-Company and it isstill entitled for the benefit of infancy protection (exemption) aswas granted under Section 16(1)(d) of the Act.7. The respondents accepted that the appellant-Company is acovered exempted establishment, but their plea is that in view of theamendment by which, Clause (d) of Section 16(1) of the Act was https://hcservices.ecourts.gov.in/hcservices/ omitted, it is liable to pay its contribution of the employees witheffect from 22.9.1997, though it would have enjoyed the infancyprotection (exemption) of three years right from the date ofcommencement of the manufacturing activity, i.e. 5.7.1996.8. The learned single Judge, while considering the question asto whether the respondents are justified in passing the impugnedletter dated 12.2.1998 during the subsistence of the infancy periodof three years, which was granted on 5.7.1996 when the appellant-Company commenced its manufacturing activities, answered the questionin favour of the respondents.9. We have heard the learned counsel appearing for the partiesand perused the records.10. Similar matter fell for consideration before the SupremeCourt in the case of "S.L.Srinivasa Jute Twine Mills (P) Ltd. vs.Union of India" reported in 2006 SCC (L & S) 440. The Supreme Courtconsidered the effect of omission of Section 16(1)(d) of the Act, ifany, on the rights of infancy protection as existing on that date andaccrued prior to that date. In that case, the commencement ofcommercial production started from 17.11.1995, which was shown to bethe date of commencement of infancy protection and it was to continuefor a period of three years as per Section 16(1)(d), i.e. upto16.11.1998, but in view of the Ordinance No.17 of 1997, the benefitwas not given with effect from 22.9.1997. Having noticed Section 16of the Act and the amendment made therein, the Supreme Court noticedthe following facts and observed as follows:"10. Thereafter, Section 16 was again amendedby the Employees’ Provident Funds and MiscellaneousProvisions (Amendment) Act, 1998, omitting clause(d) with explanation in sub-section (1) of Section16 with effect from 22-9-1997. (The said omissionwas initially carried out by Ordinance No.17 of 1997promulgated on 22-9-1997 followed by Ordinance No.25of 1997 dated 25-12-1997 and Ordinance No.8 of 1998dated 23-4-1998 followed by Act 10 of 1998.)11. According to the appellants, the unamendedprovisions as they stood after the amendment in 1988under clause (d), apply to their cases and they wereentitled to the protection regarding non-applicationof the Act for a period of 3 years from the date onwhich such establishment was set up.According tothe High Court, as clause (d) was deleted witheffect from 22-9-1997, the Act had application toevery establishment and no exemption or "infancyperiod" whatsoever was available from 22-9-1997. https://hcservices.ecourts.gov.in/hcservices/

12. The crucial question, therefore, is theeffect of the amendment on the existing rights.""16. The matter can be looked at from anotherangle. Section 6 of the General Clauses Act, 1897(in short "the General Clauses Act") deals witheffect of repeal. The said provision so far relevantreads as follows:"6.Effect of repeal.—Where this Act, orany Central Act or Regulation made after thecommencement of this Act, repeals anyenactment hitherto made or hereafter to bemade, then, unless a different intentionappears, the repeal shall not—(a) revive anything not in force orexisting at the time at which the repeal takeseffect; or(b) affect the previous operation of anyenactment so repealed or anything duly done orsuffered thereunder; or(c) affect any right, privilege,obligation or liability acquired, accrued orincurred under any enactment so repealed; or(d) affect any penalty, forfeiture orpunishment incurred in respect of any offencecommitted against any enactment so repealed;or(e) affect any investigation, legalproceeding or remedy in respect of any suchright, privilege, obligation, liability,penalty, forfeiture or punishment asaforesaid;and any such investigation, legal proceedingor remedy may be instituted, continued orenforced, and any such penalty, forfeiture orpunishment may be imposed as if the repealingAct or Regulation had not been passed."17. In terms of clause (c) of Section 6 asquoted above, unless a different intention appearsthe repeal shall not affect any right, privilege orliability acquired, accrued or incurred under theenactment repealed. The effect of the amendment inthe instant case is the same. https://hcservices.ecourts.gov.in/hcservices/

18. It is a cardinal principle of constructionthat every statute is prima facie prospective unlessit is expressly or by necessary implication made tohave retrospective operation. (See Keshavan MadhavaMenon v. State of Bombay-1951 SCR 228 : AIR 1951 SC128 : 1951 Cri LJ 860) But the rule in general isapplicable where the object of the statute is toaffect vested rights or to impose new burdens or toimpair existing obligations. Unless there are wordsin the statute sufficient to show the intention ofthe legislature to affect existing rights, it isdeemed to be prospective only nova constitutiofuturis formam imponere debet, non praeteritis. Inthe words of Lord Blanesburgh,"provisions which touch a right in existence atthe passing of the statute are not to beapplied retrospectively in the absence ofexpress enactment or necessary intendment” (seeDelhi Cloth & General Mills Co. Ltd. v. CIT,AIR p.244—AIR 1927 PC 242 : 51 IA 421)."Every statute, it has been said", observed Lopes,L.J.,"which takes away or impairs vested rightsacquired under existing laws, or creates a newobligation or imposes a new duty, or attaches anew disability in respect of transactionsalready past, must be presumed to be intendednot to have a retrospective effect."(SeeAmireddi Rajagopala Rao v. AmireddiSitharamamma- ( (1965) 3 SCR 122 : AIR 1965 SC1970).As a logical corollary of the general rule, thatretrospective operation is not taken to be intendedunless that intention is manifested by express wordsor necessary implication, there is a subordinaterule to the effect that a statute or a section in itis not to be construed so as to have largerretrospective operation than its language rendersnecessary. (See Reid v. Reid ( (1886) 31 Ch D 402 :54 LT 100 (CA)). In other words, close attentionmust be paid to the language of the statutoryprovision for determining the scope of theretrospectivity intended by Parliament. (See Unionof India v. Raghubir Singh (1989 (2) SCC 754 : AIR https://hcservices.ecourts.gov.in/hcservices/ 1989 SC 1933). The above position has beenhighlighted in "Principles of StatutoryInterpretation" by Justice G.P. Singh. (10th Edn.,2006 at pp.474 and 475.)"11. In the light of the aforesaid observations and findings, theSupreme Court held that the appellants of the said case was entitledto the protection as had accrued to them prior to the amendment in1997 for the period of three years starting from the date theestablishment was set up irrespective of repeal of the provision forsuch infancy protection.12. The case of the present appellant-Company being squarelycovered by the decision of the Supreme Court in the said case, wealso hold that the appellant-Company is entitled to the protection ashad been accrued to it prior to the amendment of the Act and thus, itis entitled for such benefit of infancy protection (exemption) for aperiod of three years from 5.7.1996.13. The impugned letter dated 12.2.1998 issued by the secondrespondent-Regional Provident Fund Commissioner, Madurai Region,Madurai, and the impugned order dated 18.8.2000 passed by the learnedsingle Judge in Writ Petition No.3304 of 1998, are set aside. 14. The Writ Appeal stands allowed with the aforesaidobservations. No costs. C.M.P. is closed.csSd/Asst.Registrar/true copy/Sub Asst.RegistrarTo1. The Secretary, The Union of India, Ministry of Law and Justice, Legislative Department, New Delhi.2. The Regional Provident Fund Commissioner, Madurai Region, Madurai.+ 1 cc to M/s. Meenakshi Sundaram, Advocate, SR No.34534+ 1 cc to Mr. V. Vibhishanan, Advocate, SR No.34818+ 1 cc to Mr. K. Mohanamurali, SCCG, SR No.34398KS(CO)SR/5.8.2009Writ Appeal No.1702 of 2000