K.V. HYMAVATHI v. SPECIAL DEPUTY TAHSILDAR

H.L. DATTU, C.J. & A.K. BASHEER, J.-------------------------------------W.A. No. 683 of 2006 ------------------------------------ Dated this, the 5th day of August, 2008 JUDGMENTH.L. DATTU, C.J.This Writ Appeal is directed against the order passed by thelearned Single Judge in W.P.(C) No.17043/2005 dated 7.3.2006. By theimpugned order, the learned Single Judge has rejected the writ petition andthereby has confirmed the demand notices issued by the respondent, inter aliademanding the petitioner to make contributions towards the Kerala MotorTransport Workers Welfare Fund Act, 1985.2. The only issue which falls for our consideration and decisionis, whether the establishment which is covered under the provisions of theEmployees Provident Fund Act is exigible for levy and payment ofcontributions under the provisions of the Kerala Motor Transport WorkersWelfare Fund Act, 1985?3. The factual matrix of the case is simple. The petitioner'sestablishment is covered under the provisions of the Employees ProvidentFunds and Miscellaneous Provisions Act, 1952. This factual position is not indispute, since petitioner has produced the relevant certificates and thenotification issued by the Central Government under the provisions ofEmployees Provident Fund Act. The respondents have now quantified the W.A.No.683/06 - 2 -contribution payable by the petitioner under the provisions of the Kerala MotorTransport Workers Welfare Fund Act and have issued the demand notices.This was questioned by the petitioner unsuccessfully before the learned SingleJudge. That is how the present appeal.4. The learned counsel for the respondent while justifying theiraction in demanding welfare contribution from the petitioner under the Act,has relied on the observations made by a Division Bench of this Court in thecase of Unni Mammu Haji vs. State of Kerala, 1989 (1) KLT 729.5. The citation on which reliance is placed, was a case, whereinthe petitioners had called in question the validity of Section 4 of the KeralaMotor Transport Workers Welfare Fund Act, 1985, and the Welfare FundScheme issued by the State Government under Section 3 of the Act, on theground that the Act and the Scheme is void under Article 254(1) of theConstitution of India as being repugnant with the provisions of the EmployeesProvident Funds and Miscellaneous Provisions Act, 1952. This court whilerepelling the aforesaid contention at Para 5 of the judgment, has stated that, “There is no repugnancy between the State Actand the Central Act. The Employees Provident Funds andMiscellaneous Provisions Act, 1952 applies only toestablishments where 20 or more persons are employed. W.A.No.683/06 - 3 -The Welfare Fund Act passed by the Kerala Legislatureapplies only to such establishments to which the Central Actdoes not apply. So also the Payment of Gratuity Act appliesto shops and establishments in which 10 or more persons areemployed. The State Act with respect to gratuity appliesonly to such establishments excluded by the Central Act.Both the Central Act as well as the State Act, can, therefore,simultaneously apply to their respective areas of operation.There is, therefore, no repugnancy as envisaged byArticle 254(1) of the Constitution. That apart, the State Acthad received the assent of the President and the same wouldprevail over the Central Act even if the same is deemed tohave occupied the field. The Welfare Fund Act is not voidunder Article 254(1) of the Constitution for repugnancy withthe Central Act”.6. The title of the Act is, The Kerala Motor Transport WorkersWelfare Fund Act, 1985. The purpose of the Act is, to provide for theconstitution of a Fund to promote the welfare of Motor Transport Workers inthe State of Kerala. The Act is extended to the whole of the State of Keralaand it has come into force on 27th day of June, 1985. The Act defines themeaning of the expressions - employer, employee, contribution, motortransport undertaking etc. Section 3 of the Act provides for framing of the W.A.No.683/06 - 4 -Scheme for the purpose of the Act. Section 4 of the Act, provides forcontribution towards the fund, both by the employer and the employee.Proviso appended to the Section is the one which falls for interpretation in thiscase and therefore it is noticed. It reads as under:“Provided that nothing in this section shall apply to amotor transport to which the provisions of the EmployeesProvident Funds and Miscellaneous Provisions Act, 1952(Central Act 19 of 1952), apply”.7. The proper function of a proviso was considered by theSupreme Court in Commissioner of Income Tax vs. Indo Mercantile BankLtd. AIR 1959 SC 713. It was observed therein, that, a proviso qualifies thegenerality of the main enactment by providing an exception and taking out asit were, from the main enactment, a portion which, but for the proviso, wouldfall within the main enactment; ordinarily, it is foreign to the proper functionof a proviso to read it as providing something by way of addendum or dealingwith a subject which is foreign to the main enactment. “It is a fundamentalrule of construction that a proviso must be considered with relation to theprincipal matter to which it stands as a proviso”; therefore, it is to beconstrued harmoniously with the main enactment; it has to operate in the samefield and if the language of the main enactment is clear, it cannot be used for W.A.No.683/06 - 5 -the purpose of interpreting the main enactment or to exclude by implicationwhat the enactment clearly says unless the words of the proviso are such that,that is its necessary effect.8. Justice G.P.Singh in his book, “Principles of StatutoryInterpretation”, Tenth Edition, has explained the real nature and purpose of aproviso appended to a section. The learned author has stated as follows:“The normal function of a proviso is to except something outof the enactment or to qualify something enacted therein which butfor the proviso would be within the purview of the enactment. Asstated by LUSH., J. “when one finds a proviso to a section thenatural presumption is that, but for the proviso, the enacting partof the section would have included the subject matter of theproviso.” In the words of LORD MACMILLAN: “The properfunction of a proviso is to except and to deal with a case whichwould otherwise fall within the general language of the mainenactment, and its effect is confined to that case.” The provisomay, as LORD MACNAGHTEN laid down, be “a qualification ofthe preceding enactment which is expressed in terms too general tobe quite accurate”. The general rule has been stated byHIDAYATULLAH, J., in the following words: “As a general rule,a proviso is added to an enactment to qualify or create anexception to what is in the enactment, and ordinarily, a proviso isnot interpreted as stating a general rule”. And in the words ofKAPUR, J: “The proper function of a proviso is that it qualifies the W.A.No.683/06 - 6 -generality of the main enactment by providing an exception andtaking out as it were, from the main enactment, a portion which,but for the proviso would fall within the main enactment.Ordinarily it is foreign to the proper function of proviso to read itas providing something by way of an addendum or dealing with asubject which is foreign to the main enactment.” Further, a provisois not normally construed as nullifying the enactment or as takingaway completely a right conferred by the enactment.”.9. While this is the true rule of construction, the legislature byemploying clear and unambiguous language may assign to a proviso a fieldlarger than that occupied by the main section. After all, what is the essence inthe ultimate analysis is the intention of the legislature. If that intention ismade clear, no rule of construction arises for consideration. Therefore, thequestion would be, did the legislature intend to collect the contribution underprovisions of Motor Transport Workers Welfare Fund Act from an employerwhose motor transport undertaking is covered by the provisions of theEmployees Provident Funds and Miscellaneous Provisions Act? We mustremember that we are construing a welfare legislation meant for employees.But that does not mean an employer who is specifically excluded from thepurview of the Act would still come within the net of the provision, thoughhis motor transport undertaking as argued by learned counsel for the W.A.No.683/06 - 7 -respondent that, both the Central Act as well as the State Act, can be madeapplicable to their respective areas of operation. If the effect of the proviso,as contended by the learned counsel for the respondent, is accepted, it wouldbe reading into the provision the employer/motor transport undertaking whichis covered under the Provident Fund Act to come under the net of WelfareFund Act and in our considered view, this is not the intention of the legislatureand this Court certainly while considering the validity of Section 4 of the Act,in the case of Unni Mammu Haji vs. State of Kerala, did not subscribe to theview as contended by the learned counsel for the respondent. What thelegislature specifically prohibits is the inclusion of an establishment coveredby the Central Act for the purposes of the Motor Transport Workers WelfareAct and therefore, by interpretation, we cannot subject the motor transportundertaking cover under the Provident Fund Act to come under the purviewof Motor Transport Workers Welfare Fund Act. Hence, when the proviso saysthat Section 4(1) of the Act shall not apply to motor transport undertakingwhich is covered under Provident Fund Act, the one and the onlyinterpretation that is possible is, that a motor transport undertaking which iscovered by Provident Fund Act is kept out of Motor Transport WorkersWelfare Fund Act. W.A.No.683/06 - 8 -10. In the instant case, the petitioner and his employees hadvoluntarily opted to come under the provisions of Employees Provident FundAct by filing an application before the Central Provident Fund Commissioner.Sub-section (4) of the Provident Fund Act deals with the voluntary coverageunder the Act. This sub-section opens with a non-obstante clause by giving itan overriding effect to sub-section (3) which provides for compulsorycoverage of establishment for the purpose of the Act. Two conditions requireto be satisfied for attracting this sub-section. The first one is, it should bemade to appear to the Central Government that the provisions of the Actshould be made applicable to an establishment, which conclusion it can reacheither upon an application made to it or otherwise that the employer and themajority of the employees in relation to an establishment have agreed that theprovisions of the Act may be made applicable to the said establishment, andsecondly, the issue of a notification applying the provisions of the Act to theestablishment by publishing the same in the official gazette. It is only whenthis process is completed, that, the Act can be said to have become applicableto the establishment concerned. In the present case, such a notification isissued by the Central Government. Therefore, it can be safely said that thepetitioner's establishment is covered under the Employees Provident Funds W.A.No.683/06 - 9 -and Miscellaneous Provisions Act, 1952. 11. Our view, to the question posed by the petitioner is, in viewof the proviso appended to Section 4 of the Act, once an establishment viz.Motor Transport Undertaking, is covered by the provisions of the ProvidentFund Act, 1952, either under sub-section (3) or under sub-section (4) of theAct, those motor transport undertakings are kept out of Section 4 of the KeralaMotor Transport Workers Welfare Fund Act, 1985. 12. The next question that requires to be answered is, where didthe learned Single Judge go wrong, when he rejected the writ petition.13. The learned Single Judge, in our considered view, hasproceeded on the wrong assumption that it was never the intention of the StateLegislature by enacting the proviso to Section 4(1) of the Welfare Fund Act, topermit employers and majority of the employees to voluntarily go under thenet of Provident Fund Act and thereby depriving the employees of morebeneficial provisions available under the Welfare Fund Act. This, in ourview, is an assumption, and this wrong assumption has led the learned Judgeto reject the writ petition. It is no doubt true that, there are two legislations,one framed by the Central Government and the other by the State Government.Both legislations are made with the avowed object of assisting the employees W.A.No.683/06 - 10 -working in an establishment. If not for the proviso introduced by the StateLegislature under the Welfare Fund Act, we think that, the learned Judgewould have been justified in coming to the conclusion, that, both theselegislations would operate simultaneously in their respective areas ofoperation, since both these provisions are meant for the welfare of theemployees working in an establishment. In our view, even this propositionmay be difficult to accept, but we refrain to comment on this and this can bekept as a weapon in the armory for a better case. However, we hasten to add,that, the conclusion reached by the learned Judge is contrary to the statutoryprovisions and also the observations made by the Division Bench of this Courtin Unni Mammu Haji's case, where this court has specifically observed, that,the Welfare Fund Act passed by the State Legislature applies only to suchestablishments to which the Central Act does not apply. In the present case, asthe provisions of the Central Act is made applicable, may be at the instance ofthe employer and majority of employees of the establishment, the employer isexempted from paying contribution under the Motor Transport WorkersWelfare Fund Act, 1985. 14. In view of the aforesaid discussion, we cannot accept thereasoning and the conclusions reached by the learned Single Judge. W.A.No.683/06 - 11 -Therefore, we set aside the order passed by the learned Single Judge and alsothe demand notice issued by the respondent under the provisions of the KeralaMotor Transport Workers Welfare Fund Act. In the facts and circumstancesof the case, we deem it proper to direct the parties to bear their own costs. Theresult is, the writ appeal is allowed.Ordered accordingly. Sd/- H.L.DATTU, CHIEF JUSTICE. Sd/- A.K. BASHEER, JUDGEDK.