ORDER
1. All these petitions have been filed invoking the jurisdiction of this Court under Article 226 of the Constitution of India challenging the constitutionality of the proviso to Section 1(4) of the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as 'the Act') on the ground that it offends the fundamental rights of the petitioners guaranteed under Articles 14, 19(1)(d) and 19(1)(g) of the Constitution of India. The constitutional objection adverted is common to all the writ petitions. All the petitioners have challenged the notification dated 1st of July, 1992 issued by the 2nd respondent-State of Karnataka vide Annexure-A making the provisions of the Act applicable to every establishment and every contractor, who employs less than 20 workmen on the ground that there is a transgression by the State of the limits laid down and it is the case whether the power exercised is excessive and unreasonable.
2. To appreciate the grounds on which the contentions are sought to be sustained, it is necessary to set out briefly a few facts and I feel that it is sufficient to refer to the facts of the case in Writ Petition Nos. 2402 to 2419 of 1993, which is typical of other connected cases. Petitioner No. 18 is an Association of various Security and Allied Services operating in the State of Karnataka of which petitioners at Sl.Nos. 1 to 17 are members, who are engaged in the activity of taking on contract work of Security and other allied services. The petitioners, under contract, provide security services and other allied services to various companies, institutions, business organisations, residential houses, hotels, nursing homes, multistoried buildings, clubs, banks, insurance companies, factories etc. The petitioners engage security guards, and security supervisors to carry out the work under the Contract.
3. The Contract Labour (Regulation and Abolition) Act, 1970, is a central enactment promulgated to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith. Section 1(4) of the Act, makes the Act applicable to every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour, and to every contractor, who employs or who employed on any day of the preceding 12 months, 20 or more workmen. This sub-section has a proviso which empowers the appropriate Government to apply the provisions of the Act to any establishment or contractor employing such number of workmen less than 20 as maybe specified in the notification. Establishment in which work only of an intermittent or casual nature is performed, has been excluded from the applicability of the Act.
4. The Act lays down certain procedures for registration of establishments, and also provides for licensing of contractors. It also provides for certain welfare and health measures for contract labour and fixes liability on the parties involved in engaging contract labour. The second respondent, in purported exercise of power conferred on it under proviso to Section 1(4), issued a notification dated 1-7-1992 vide Annexure-A.
5. The petitioners challenged the impugned notification issued by the 2nd respondent contending that it is illegal, unreasonable and unjust and is an abuse of discretion and authority conferred on the 2nd respondent and is therefore liable to be quashed and set aside on various grounds urged by them which will be referred to in course of discussion. The petitioners also challenged the constitutional validity of the proviso to Section 1(4) of the Act on the ground that it confers unguided and arbitrary power on the appropriate Government and make the Act applicable in total violation of the applicability of the clause itself and such unguided power is bound to lead to abuse of power, in the absence of guidelines as to under what circumstance the power could be exercised. It is also alleged that since the applicability of the Act is extended by the impugned notification to any establishment or contractor employing less than 20 workmen every contractor will have to take a licence and every small shop or establishment has to be registered in accordance with the elaborate procedure prescribed under the Act it would be unreasonable restriction on the right of the petitioners to carry on their trade and business and thus hit by Article 19(1)(d) and 19(1)(g) of the Constitution. In the case of the petitioners, the Department of Labour has been insisting time and again that they should take licence under the Act for providing security and allied services to various institutions. It is also contended that the Security Guards and other employees engaged by the petitioners do not answer the definition of 'contract labour' and the petitioners do not come under the definition of 'contract' as defined under the Act.
6. The petitioners in Writ Petition No. 8991 of 1998 - M/s. Larsen and Toubro Limited Company challenged only the impugned notification dated 1st July, 1992 issued by the 2nd respondent on the ground that it is illegal, unreasonable, unjust and that it is an abuse of discretion and authority conferred on the 2nd respondent by virtue of the proviso to Section 1(4) of the Act and prayed for quashing the said notification. They allege that they have entrusted certain assignment relating to house keeping, security, canteen, gardening to a contractor who in turn have engaged about 60 contract labour for executing the respective assignments. This is besides the canteen contract where about 12 contract labour are deployed. The total number of contract labour deployed in the petitioner-factory is about 72. The contract labour engaged in the petitioner's factory are paid wages by the respective contractors which are not less than the prescribed minimum rates of wages under the provisionsof the Minimum Wages Act, 1948. The contract labour are extended the benefit of ESI, P.F., Earned Leave, Weekly offs and holidays and other benefits as provided under various legislations. The petitioners challenged the impugned notification on the same grounds, which are urged by the other petitioners in their writ petitions.
7. I have heard the arguments of the learned Counsel appearing for the petitioners, learned Advocate General appearing for the State and the learned Senior Counsel appearing for the impleaded respondentsrepresenting workmen Sri M.C. Narasimhan.
8. The learned Counsel for the petitioners has vehemently contended that the Parliament made the Act applicable to establishments employing 20 or more workmen and to contractors employing 20 or more workmen and at the same time the Parliament conferred certain powers on an appropriate Government to make the Act applicable to any establishment or contractor employing less than 20 workmen with the intention of conferring the said power on the appropriate Government to any specific case of establishment or contractor who should be regulated under the terms of the Act. It is further contended by him that the said power was not intended to be exercised to virtually effect amendment to the main Central enactment itself. It is pointed out by him that in the impugned notification of the 2nd respondent-State of Karnataka what is done is to virtually amend the main Section 1(4) of the said Act, by making it applicable to all establishments and to all contractors, irrespective of the number of contract labour engaged and the logic behind making the Act applicable to establishments and contractors employing 20 or more workmen is given a go-by for no reason. It is further argued by him that a power conferred under the proviso to make exceptions to the main provision does not extend to the extent of empowering such an authority to amend the Act itself and the impugned notification virtually means exercising the powers of Parliament which the appropriate Government cannot do. According to him, the intention of the enactment is that the delegated authority should take note of occasions where the Government may have to pick-and-choose an establishment or contractor or a class of establishment and make the Act applicable even if there are less than 20 workmen employed in the establishment. It is, therefore, contended by him that the impugned notification indicates non-application of mind on its part and it has removed the exemption clause and made it mandatory for every establishment and for every contractor to abide by the provisions of the Act to obtain registration and licence and since the said delegated power conferred on the 2nd respondent has been exercised highly arbitrarily it constitutes violation of fundamental rights guaranteed to the petitioners under Article 19 of the Constitution. It is therefore contended that the notification issued by the 2nd respondent as per Annexure-A is illegal, unreasonable and unjustified and is an abuse of discretion and authority conferred on the second respondent by virtue of proviso to Section 1(4) of the Act and it is therefore liable to be quashed. To appreciate this contention, I find it necessary to refer to the provisions of Section 1(4)(a) and (b) of the Act which reads as under:--
'Section 1(4) -- It applies-
(a) to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour;
(b) to every contractor who employs or who employed on any day of the preceding twelve months twenty or more workmen:
Provided that the appropriate Government may, after giving not less than two months' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment or contractor employing such number of workmen less than twenty as may be specified in the notification'.
It is contended by the learned Counsel for the petitioners that the Parliament made the Act applicable to establishment and contractors employing 20 or more workmen and at the same time the Parliament conferred certain powers on an appropriate Government to make the Act applicable to any establishment or contractor employing less than 20 workmen in exceptional cases and the said power was not intended to be exercised to virtually effect the amendment to the main central enactment itself. Since by the impugned notification issued by the 2nd respondent the Act is made applicable to all establishments and to all contractors irrespective of number of contract labour engaged, it is contended by the learned Counsel for the petitioners that what the 2nd respondent has done is virtually to amend the main Section 1(4) of the said Act. According to him the power conferred under the proviso to make exceptions to the main provision does not extend to the extent of empowering such an authority to amend the Act itself. He also relied upon a decision of the Supreme Court rendered by Three Judges in the case of Commissioner of Income-tax, Mysore, Trauancore-Cochin and Coorg v Indo-Mercantile Bank Limited, wherein it was held that:--
'The proper function of a proviso is that it qualifies the generality of the main enactment by providing an exception and taking 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 a proviso to read it as provided something by way of an addendum or dealing with a subject which is foreign to the main enactment.
The territory of a proviso therefore is to carve out from an enactment and exclude something which otherwise would have been within the section. It has to operate in the same field and if the language of the main enactment is clear it cannot be used for the purpose of interpreting the main enactment or to exclude by implication what the enactment clearly says unless the words of the proviso are such that that is its necessary effect'.
He also relied upon another decision of the Supreme Court reported in Madhu Gopal v VI Additional District Judge and Others, wherein itwas held that:
''. . .it is well settled principle of construction that unless clearly indicated, a proviso would not take away substantive rights given by the section or the sub-section. ..'.
In another decision reported in Privy Council in Madras and Southern Muhratta Railway Company Limited v Bezwada Municipality, wherein it was held that:--
'The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment and its effect is confined to that case. Where the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it by implication what clearly falls within its express terms'.
In another decision reported in Supreme Court in the case of S. Sundaram Pillai and Others v V.R. Pattabiraman and Others, wherein it was held that:--
'. . .Interpretation of a proviso is that a proviso may have three separate functions. Normally, a proviso is meant to be an exception to something within the main enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment. In other words, a proviso cannot be torn apart from the main enactment nor can it be used to nullify or set at naught the real object of the main enactment'.
Placing reliance on the above decisions, it is contended by the learned Counsel for the petitioners that the proviso to Section c of the Act confers only a limited power on the appropriate Government to make the Act applicable to exceptional cases to some establishments or contractors where the workmen employed are less than 20 by specifying those establishments or contractors and by specifying the number of workmen employed in those establishments or by those contractors by issuing a notification in the Official Gazette in this regard after giving not less than 2 months notice of its intention to do so and an omnibus notification like the impugned notification issued by the 2nd respondent vide Annexure-A making the Act applicable to every establishment and contractor irrespective of the number of the workmen employed is not contemplated under the said proviso and the said notification suffers from vice of excessive and arbitrary use of power under the said proviso. It is also their contention that the impugned notification issued is wholly unreasonable as it applies even to the establishments or contractors even if one person is employed and it clearly indicates that there is noapplication of mind by the 2nd respondent in issuing the said notification. According to them, the real object of the enactment is set at naught by issuing the impugned notification which is contrary to the main provisions of Section 1(4)(a) and (b). But the learned Advocate General and the learned Counsel appearing for the workmen Sri M.C. Narasimhan, repelled the above said argument and contended that by a plain reading of the Section 1(4) of the Act it is clear that the intention of the Parliament was ultimately to cover all contract employees irrespective of the number of contract labourers and the intention of the Parliament was not peremptorily limit the application of the Act to only establishments or contractors employing 20 workmen. If this were not so, there was no necessity for the proviso. The intention of the Parliament was in the first instance to apply the provisions of the Act for establishments and contractors employing 20 or more workmen. They contended that it is in view of this intention of the Parliament, the impugned notification has been issued by the State Government. It is further contended by the learned Advocate General that in the instant case the proviso does not carve out an exception to the main provision, but it is in the nature of addendum to extend the applicability of the Act to any establishment or contractor who employs less than 20 workmen. In support of this contention, they relied upon a decision of Supreme Court reported in S. Sundaram Pillai's case, supra, wherein it was held that:
'A proviso may be embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself.'
They also relied upon another decision of the Supreme Court in Commissioner of Commercial Taxes, Board of Revenue, Madras v Ramkishan Shrikishan Jhaver, wherein it was held that:--
'Proviso is exception to main part of section. In exceptional cases proviso may be substantive provision itself.'
They also relied upon another decision of the Supreme Court in Commissioner of Income-tax, Uttar Pradesh v Jagannath Mahadeo Prasad, wherein it was held that:--
'Where the language is quite clear and no other view is possible it is futile to go into the question whether the proviso to main section operates as a substantive provision or only by way of an exception to the main section'.
They also relied upon another decision of the Supreme Court in Shah Bhojraj Kuverji Oil Mills and Ginning Factory v Subhash Chandra Yograj Sinha, wherein it was held that:--
'As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment, and ordinarily a proviso is not interpreted as stating a general rule. But provisosare often added not as exceptions or qualifications to the main enactment but as saving clauses in which cases they will not be construed as controlled by the section'.
They also relied upon another decision of the Supreme Court in State of Orissa v Debaki Debi, wherein it was held that:--
'The Second Proviso to Section 12(1) and 12(6) of Orissa Sales Tax Act applies to every order of assessment as an independent provision'.
Placing reliance on the above decisions, it is argued by them that in the instant case, the proviso is to be interpreted in an addendum not to serve the purpose to act as an exception but to serve the purpose of extension of the Act and it is in the nature of an addendum.
9. Thus, it is clear from the above decisions that the interpretation to be given to a proviso to section would depend upon the theme of the section and the context in which the said proviso is used. It is clear from the language of the main section that the operation of the Act is restricted to those establishments or contractors whose workmen are 20 or more. It is also clear from the language used in the proviso that in exceptional cases the area of the operation of the Act can be extended by lifting the embargo and making the Act applicable to any establishment or contractor, where the workmen employed are less than 20 by-following the procedure prescribed by the appropriate Government. So, in my view, the proviso is meant to serve the purpose as an exception and not as an addendum or independent provision or as supplement to the main section. If it was the intention of the Parliament to make the Act applicable to all establishments and contractors employing even less than 20 workmen, the main Section 1(4) of the Act itself could have been enacted in such a manner as to make the provisions of the Act applicable to all establishments and contractors irrespective of the number of workmen employed. So, in my view, the proviso is intended to be given effect only as an exception applying to special and exceptional cases. By way of exception Parliament has left it to the discretion of the appropriate Government to extend the applicability of the Act to establishments or contractors where workmen employed are even less than 20 by specifying the number and the categories of establishments or contractors in the notification to be published in Gazette. If it was the intention of the Parliament to apply the powers given under the said proviso to all establishments or contractors irrespective of the number of workmen employed, the words 'as may be specified' would not have been employed in the said proviso. The words 'as may be specified in the notification' used in the proviso qualifying the rest of the sentence, clearly indicate the intention of the Parliament that exception can be made by the appropriate Government by issuing a notification after giving not less than 2 months' notice applying the Act only to some of the establishments or contractors whose names or categories are specified in the notification and by specifying the number of the workmen employed which could beless than 20. It appears to be the intention of the Parliament that while exercising the said power given under the proviso, the appropriate Government shall also give reasons as to why they proposed to make the Act applicable to the categories of establishments or contractors specified even if the workmen employed by them are less than 20. In my view to accede to the contention of the learned Advocate General and learned Senior Counsel Sri M.C. Narasimhan that the said proviso empowers to make the provisions of the Act applicable to all establishments and contractors irrespective of the number of workmen employed is to render the words 'as may be specified' used in the proviso devoid of ordinary meaning and to make them superfluous and meaningless which could not be the intention of the Parliament in enacting the law. Since it is found that the impugned notification issued by the 2nd respondent is a general and omnibus notification making the Act applicable to every establishment and contractors employing less than 20 workmen without making any exception and it had the effect of wiping out the provisions of the main Section 1(4)(a) and (b) of the Act which is the law enacted by the Parliament. The said notification was issued in such a manner as to take away the main section itself. I have, therefore, no hesitation to hold that the impugned notification suffers from the vice of excessive and arbitrary use of powers conferred under the proviso by the 2nd respondent without application of mind. Though the proviso empowers the State Government to make the provisions of the Act applicable to any specified establishment or contractor notified in the Gazette Notification, the impugned notification is issued making the Act applicable in the case of every establishment and every contractor where the workmen employed are less than 20. It is further found that though the powers given to the State under the said proviso is to make the Act applicable to specified establishments or contractors only after specifying the figure of the number of workmen employed which could be less than 20, the impugned notification is issued without specifying the figure of the number of workmen employed in every establishment or contractor making the Act applicable to all establishments and contractors. I have, therefore no hesitation to hold that the 2nd respondent exceeded its jurisdiction in issuing the impugned notification and the impugned notification suffers from the vice of excessive use of powers conferred under the proviso by the Parliament. As rightly pointed out by the learned Counsel for the petitioner the effect of the impugned notification is to make the Act applicable to every establishment or contractor even if the workman is one, whereas under the main provision of Section 1(4)(a) and (b) Parliament intended to make the Act applicable to the establishments or contractors employing 20 or more workmen and permit the appropriate Government to make the Act applicable even in cases where the workmen employed are less than 20 in exceptional cases by specifying the figure and the category of establishments or contractors in the Gazette Notification after issuing 2 months notice to them and after considering the objections filed by them. It is obvious that the Act is not intended to be made applicable to small establishments or contractors and only for extraordinary reasons and under exceptionalcircumstances the appropriate Government is empowered to make the Act applicable to specific categories of establishments and contractors by way of an exception and the applicability of the Act is mainly restricted to a well denned class of establishment and contractors who employ 20 or more workmen. But, as the impugned notification made the provisions of the Act applicable to all the establishments and contractors irrespective of the number of workmen employed by them, it must be held that there has been a total non-application of mind in the issuance of notification. According to the proviso, the appropriate Government may apply the provisions of the Act to every establishment or contractor employing such number of workmen less than 20 as may be specified in the notification by following the procedure, on giving not less than 2 months notice of its intention to do so by publishing the notification in the Official Gazette. But what has been done by the second respondent by the impugned notification issued is they made the Act applicable to every establishment or contractor employing less than 20 workmen without specifying the actual number and simply copying the language of the proviso. Thus, from this circumstance itself, it is clear that there is total non-application of mind by the 2nd respondent in issuing the impugned notification. In effect the impugned notification has totally removed the exemption clause and made it mandatory for every establishment and for every contractor to abide by the provisions of the Act which clearly indicates the excessive use of the powers given by the Parliament under the proviso to the appropriate Government. The proviso confers power to the appropriate Government to make the provisions of the Act applicable to specified establishments and contractors, who are employing less than 20 workmen in specified cases where such regulation is required in view of the nature and circumstances of the particular establishment or contractor. The 2nd respondent is required under the Act to apply its mind to particular situations where such regulations are required in view of the nature of the work and the peculiar circumstances in which such workmen are employed though the number of workmen employed is less than 20. In my view, the power conferred under the Act cannot empower the 2nd respondent to virtually amend the provisions of Section 1(4)(a) and (b) of the Act to make it generally applicable to all establishments and contractors employing less than 20 workmen without any qualification thereon. A power to extend the operation of the Act to particular instances cannot be equated to the power of subordinate legislation. The impugned notification, is in effect an amendment to the main provisions of Section 1(4)(a) and (b) of the Act which cannot be allowed to be sustained. The Government has to make an intelligible differentia among the establishments and may extend the applicability of the Act only to particular establishment which has not been done in the present case by the impugned notification issued. Since the Act provides for cumbersome procedure like registration of the principal employer, licence to be taken by the contractor, deposit per employee, Employees State Insurance, Provident Fund, registration under the Shops and Commercial Establishments Act and renewal of all these registrations every year, the Parliament made theprovisions of the Act applicable only to bigger contractors or establishments employing 20 or more workmen under the provisions of Section 1(4)(a) and (b) of the Act. But by the impugned notification even the small businessman, small shop-keepers and even the individuals requiring one or two security persons have to complete the above formalities before taking such services and for employing even one or two workmen in small establishments which is not the intention of the Parliament in enacting the said law. The impugned notification has virtually wiped out the main operation of Section 1(4) and has made the proviso as the main section. Further, the impugned notification issued is also not in accordance with the scope of the discretion given under the said proviso since it does not specify any number of workmen. Thus, it is found that the impugned notification has been issued contrary to proviso to Section 1(4) of the Act. Further, there is clear contradistinction between the words used in the main section i.e., 'every establishment' or 'every contractor' and in the proviso that 'any establishment' or 'any contractor'. Thus, the words 'every' and 'any' are used in contradistinction. The intention of the Legislature for introducing the proviso is to apply the provisions of the Act to particular establishment or contractor for any proper reasons. However, by the impugned notification, the State Government has applied the provisions of the Act to every establishment and contractor employing less than 20 persons which is contrary to the scope of the proviso. The impugned notification virtually means exercising the powers of the Parliament which the appropriate Government cannot do. The Parliament has carefully chosen the words when it has stated in the proviso that the appropriate Government may apply the provisions of the Act to any establishment or contractor which means that it expected that there may be occasions where the Government may have to pick and choose an establishment or contractor or a class of establishment and make the Act applicable even if there are less than 20 workmen employed in the establishment. Thus, it is found that the impugned notification issued by the 2nd respondent making the Act applicable to all establishments irrespective of the number of the workmen employed is an abuse of authority conferred on the 2nd respondent and clearly shows the total non-application of mind. I, therefore, find that the impugned notification Annexure-A issued by the 2nd respondent is liable to be quashed on the ground that it is in excess of the powers conferred under the proviso to Section 1(4) of the Act and is, therefore, ultra vires, illegal and without authority of law.
10. The learned Counsel for the petitioners have also challenged the constitutional validity of the proviso to Section 1(4) of the Act on the ground that it is unconstitutional and violative of the fundamental rights guaranteed under Articles 14(1)(d) and 19(1)(g) of the Constitution. Elaborating this argument, it is contended by the learned Counsel for the petitioners that the main Section 1(4)(a) and (b) of the Act and the proviso are irreconcilable and unbridled power is given under the proviso to the appropriate Government to apply to the provisions of the Act to any establishment or contractor employing less than 20 workmen without providing any guidelines for the use of the said power and thatit is an instance of an excessive delegation of power, contrary to the main Section. They also contended that the said proviso suffers from vice of unreasonableness since it wipes out the main Section and the real object of the enactment is set at naught. They relied upon a decision of the Supreme Court in the case of Delhi Science Forum and Others v Union of India and Another , wherein it was held that:--
'. .Exercise of discretion implies a fiduciary duty to act with due restraint. Wednesbury principle applicable. Discretion must be exercised reasonably, rationally, in public interest and in conformity with the conditions or guidelines announced to safeguard interest of the public and the nation'.
Placing reliance on the above decision, it is argued that the proviso to Section 1(4)(a) and (b) of the Act is hit by Article 14 of the Constitution since no guidelines are prescribed for exercise of discretion in a reasonable or rational manner by the appropriate Government for extending the applicability of the Act to establishments or contractors employing less than 20 workmen. They also relied upon another decision of the Supreme Court reported in G.B. Mahajan v Jalgaon Municipal Council, wherein it was held that:--
'Reasonableness of action in administrative law test of reasonableness distinguishes between use and improper abuse of power'.
Placing reliance on the above decision, it is contended that since reasons are not spelt out for conferring powers on appropriate Government under the proviso to make the Act applicable to every establishment or every contractor employing less than 20 workmen and as no guidelines are prescribed under the said proviso for exercise of the said power, the said proviso does not stand the test of reasonableness. They also relied upon another decision of the Supreme Court in State of Madras v V.G. Row, wherein it was held that:--
'The test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern, of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. In evaluating such elusive factors and forming their own conception of what is reasonable, in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision should play an important part, and the limit to their interference with legislative judgment in such cases can only be dictated by their sense of responsibility andself-restraint and the sobering reflection that the Constitution is meant not only for people of their way of thinking but for all, and that the majority of the elected representatives of the people have, in authorising the imposition of the restrictions, considered them to be reasonable'.
It is contended that since no guidelines are prescribed under the proviso specifying under what circumstances the applicability of the Act can be extended in respect of any establishment or contractor even if the workmen employed are less than 20, the restrictions sought to be introduced by way of exercise of power given under the said proviso by the appropriate Government cannot be considered as reasonable restrictions. It is further contended by the learned Counsel for the petitioner that unless it is shown by the State that the restrictions sought to be imposed while exercising the powers under the proviso to Section 1(4)(a) and (b) of the Act are in public interest, the proviso must be considered as imposing unreasonable restrictions on the fundamental rights guaranteed under Article 19(1)(g) of the Constitution. In support of this contention, he relied upon a decision of the Supreme Court reported in Municipal Corporation of the City of Ahmedabad v Jan Mohammed Usmanbhai, wherein it was held that:--
'Normally the legislature is the Judge of what is good for the community, but the Court should not shirk its duty of determining the validity of the law. In determining the reasonableness of the restriction imposed by the law under Article 19(6) the Court cannot proceed on a general notion of what is reasonable in the abstract or even on a consideration of what is reasonable from the point of view of the person or persons on whom the restrictions are imposed. The Court has to consider whether the restrictions are imposed. The Court has to consider whether the restrictions imposed are reasonable in the interest of general public. The expression 'in the interests of general public' in Article 19(6) is of wide import comprehending public order, public health, public security, morals, economic welfare of the community and the objects mentioned in Part IV of the Constitution. Nobody can dispute a law providing for basic amenities; for the dignity of human labour as a social welfare measure.
The tests of reasonableness have to be viewed in the context of the issues which faced the legislature. In the construction of such laws and in judging their validity, Courts must approach the problem from the point of view of furthering the social interest which it is the purpose of the legislation to promote. They are not in these matters functioning in vacuum but as part of society which is trying by the enacted law, to solve its problems and furthering the moral and material progress of the community as a whole'.
Placing reliance on the above decision, it is contended by the learned Counsel for the petitioners that it is not shown how the proviso to Section 1(4)(a) and (b) of the Act which gives unguided and uncanalised power to the appropriate Government to apply the provisions of the Act to any establishment or contractor employing less than 20 workmen, would serve the public interest and it is discriminatory in nature and hit by the provisions of Articles 14(1)(d) and 19(1)(g) of the Constitution.
11. The learned Counsel for the petitioners also relied upon another decision of the Supreme Court in Bishambhar Dayal Chandra Mohnn v State of Uttar Pradesh, wherein it was held:
'Executive action under Article 162 must be based on rule of law and restrictions imposed thereby must be reasonable'.
At page 47 in the above decision it was held:--
'The expression 'reasonable restriction' signifies that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern or reasonableness can be laid down as applicable in all cases. The restriction which arbitrarily or excessively invades the right cannot be said to contain tbe quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Article 19(1)(g) and the social control permitted by Article 19(6), it must be held to be wanting in that quality'.
Placing reliance on the above decision, it is argued that the impugned notification issued by the 2nd respondent by way of executive action while exercising the powers conferred under the proviso to Section 1(4)(a) and (b) making the provisions of the Act applicable to all establishments and contractors even if the workmen employed are less than 20, is not based on rule of law and the restrictions imposed must be considered as unreasonable. It is further argued that the said powers given by the Parliament under the said proviso to the appropriate Government are unreasonable and not based on rule of law. They also relied upon another decision of the Supreme Court in the case of State of Punjab v Khan Chand, wherein it was held that:--
'The Act confers uncontrolled power on the State Government or the Officers authorised by it to requisition any movable property. No guidelines have been laid down regarding the object or the purpose for which it becomes necessary or expedient to requisition a movable property. Even the authority requisitioning movable property is not required to specify the purpose for which it has become necessary or expedient to requisition that property. There is no provision in the Act that the power of requisitioningmovable property can be exercised under the Act only for a public purpose nor is there any provision that powers under the Act can be exercised only in an emergency. Hence the provisions of the Act violate Articles 14 and 19 of Constitution.
There is no element of judicial arrogance in the act of the Courts in striking down an enactment. The Constitution has assigned to the Courts the function of determining as to whether the laws made by the legislature are in conformity with the provisions of the Constitution. The Courts would be shirking their responsibility if they hesitate to declare the provisions of a statute to be unconstitutional, even though those provisions are found to be violative of the Articles of the Constitution, Hesitation or refusal on the part of the Courts to declare the provisions of an enactment to be unconstitutional, even though they are found to infringe the Constitution because of any notion of judicial humility would in a large number of cases have the effect of taking away or in any case eroding the remedy provided to the aggrieved parties by the Constitution. It is as much the duty of the Courts to declare a provision of an enactment to be unconstitutional if it contravenes any Article of the Constitution as it is theirs to uphold its validity in case it is found to suffer from no such infirmity'.
Placing reliance on the above decision, it is argued that the impugned proviso under Section 1(4)(a) and (b) of the Act violates Articles 14 and 19 of the Constitution since it confers uncontrolled powers on the State Government to apply the provisions of the Act to any establishment or contractor employing less than 20 workmen without laying any guidelines regarding the object or the purpose for which it becomes necessary or expedient to apply the provisions of the Act in the above said manner to any establishment or any contractor. It is further argued that the impugned notification issued by the 2nd respondent is also hit by the Articles 14 and 19 of the Constitution since it does not specify the purpose for which it becomes necessary or expedient to extend the provisions of the applicability of the Act to any establishment or contractor irrespective of the number of the workmen employed. According to the learned Counsel for the petitioners the proviso to Section 1(4)(a) and (b) of the Act conferring powers on the appropriate Government to extend the applicability of the Act to any establishment or contractor employing less than 20 workmen by issuing Gazette notification is a piece of legislative delegation and it does not lay down any criteria or proper guidelines and surrenders unguided and uncanalised power to the executive, it must be held to be going beyond permissible boundaries of valid delegation and the proviso must be held to be ultra vires and it must be struck down. It is further submitted that if the proviso is taken out of the main Section 1(4)(a) and (b) it does not affect the constitutionality of the rest of the provisions of the section, as they are severable. It is also contended by them that the powers given to the appropriate Government under the said proviso amount to excessive delegation of unguided and arbitrary powers which would enable unequal and discriminatorytreatment to be accorded to persons similarly situated by issuing a notification by the State Government. In support of this contention, they relied upon a decision of the Supreme Court in M/s. Devi Das Gopal Krishnan v State of Punjab, at page 1897 wherein it was held:
'The Constitution confers a power and imposes a duty on the legislature to make laws. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct. Obviously it cannot abdicate its functions in favour of another. But in view of the multifarious activities of a Welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency. But there is a danger inherent in such a process of delegation. An overburdened legislature or one controlled by a powerful executive may unduly overstep the limits of delegation. It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation. It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal construction should not be carried by the Courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities. It is the duty of the Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature'.
Placing reliance on the above decision, it is contended by the learned Counsel for the petitioners that the Parliament has not set down any standard for the guidance of the executive in enacting the said proviso and conferred an arbitrary power on the executive to make the provisions of the Act applicable to any establishment or contractor employing less than 20. workmen which virtually amounts to effacement of the main provisions of Section 1(4)(a) and (b) of the Act and modifying the policy laid down by it without reserving for itself any control over the subordinate legislature and on this ground the proviso is liable to be struck down as an instance of excessive delegation of legislative powers to the executive. It is also contended by the learned Counsel for the petitioners that the Parliament by enacting the main provisions of Section 1(4)(a) and (b) intended to make an exemption in favour of small establishments and contractors employing less than 20 workmen and the said intention and the object of the main provision to Section 1(4)(a) and (b) of the Act has been defeated on account of introducing the proviso giving arbitrary powers to the executive of the appropriate Governmentto make the Act applicable to any establishment or contractor employing even less than 20 workmen. They also relied upon the decision of the Supreme Court in the case of British India Corporation Limited v Collector of Central Excise, Allahabad, wherein it was held that:--
'It is a fallacy to assume that there can be no classification of manufacturers on the basis of the number of workers or the employment of power above a particular horse power. Manufacturers who employ 50 or more workers can be said to form a well defined class. Manufacturers whose manufacturing process is being carried on with the aid of power exceeding 2 H.P. are also a well defined class. Legislation of this type depending upon the number of workers or the extent of power employed, is frequently to be found. The contention that size makes no difference is not valid. It is well-known that the bigger manufacturers are able to effect economies in their manufacturing process and their out-turn being both large and rapid they are able to undersell small manufacturers. If this were not so mass production would lose all its advantages. Therefore, in imposing the excise duty under Item 17 in Schedule I to the Central Excises and Salt Act there is a definite desire to make an exemption in favour of the small manufacturer who is unable to pay the duty as easily, if at all, as the big manufacturer. Such a classification in the interests of co-operative societies, cottage industries and small manufacturers has often to be made to give an impetus to them and save them from annihilation in competition with large industry. It cannot be successfully assailed on the ground of discrimination. A similar consideration applies in the case where the exemption operates in respect of very small manufacturers employing not more than 50 workers and carrying on their manufacturing process with power not in excess of 2 H.P. This affords a protection to small concerns who if they are made to pay the duty, would have to go out of business. The Schedule which is characterised as discriminative is thus based upon a reasonable classification and is validly enacted. As the law is valid the attack under Articles 19 and 31 must fail'.
Placing reliance on the above decision, it is argued that by enacting the main provision under Section 1(4)(a) and (b), the Parliament intended to apply the provisions of the Act only to bigger establishments and contractors employing 20 or more workmen. But the proviso introduced giving powers to the appropriate Government to make the Act applicable even to small establishments and contractors employing less than 20 workmen cannot be considered as based on reasonable classification and therefore the petitioners are entitled to assail the validity of the said proviso on the ground of discrimination.
12. Repelling the above said contentions of the learned Counsel for the petitioners, learned Advocate General contended that the proviso to Section 1(4)(a) and (b) is a piece of conditional legislation but not the exercise of delegated legislative power and even if it is held to be an instance of delegated legislation it is within the limits recognised by the judicial decisions. Elaborating this argument, he contended that the legislation is complete in itself and the Legislature had itself made the law and the only function left to the delegatee (State Government) is to apply the law to any establishment or contractor employing less than 20 workmen by issuing a notification. According to him, the Legislature having laid down the broad principles of its policy has only left the details to be supplied by the administrative authority and so the proviso to Section 1(4)(a) and (b) is in the nature of a conditional legislation. In support of this contention he relied upon a decision of the Supreme Court in Hamdard Dawakhana v Union of India, wherein it was observed:
'The distinction between conditional legislation and delegated legislation is this, that in the former the delegate's power is that of determining when a legislative declared rule of conduct shall become effective, and the latter involves delegation of rule making power which constitutionally may be exercised by the administrative agent. This means that the legislature having laid down the broad principles of its policy in the legislation can then leave the details to be supplied by the administrative authority. In other words by delegated legislation the delegate completes the legislation by supplying details within the limits prescribed by the statute and in the case of conditional legislation the power of legislation is exercised by the legislature conditionally leaving to the discretion of an external authority the time and manner of carrying its legislation into effect as also the determination of the area to which it is to extend.
Thus when the delegate is given the power of making rules and regulations in order to fill in the details to carry out and subserve the purposes of the legislation the manner in which requirements of the statute are to be met and the rights therein created to be enjoyed, it is an exercise of delegated legislation. But when the legislation is complete in itself and the legislature has itself made the law and the only function left to the delegate is to apply the law to an area or to determine the time and manner of carrying it into effect, it is conditional legislation'.
It is contended by the learned Advocate General that as the only power given to the appropriate Government under the proviso is to issue a notification by giving 2 months notice published in the Gazette making the provisions of the Act applicable to any establishment or contractor employing less than 20 workmen as may be specified in the notification, the said proviso falls under the category of conditional legislation andthe Parliament has itself laid down its policy under the said proviso. It is, therefore, contended by him that the said proviso is not open to challenge on the ground that it is an instance of an excessive delegation of powers to the appropriate Government and there is no self-effacement of the legislative power in favour of another agency as sought to be contended by the learned Counsel for the petitioners. It is further contended by him that under the said proviso what all the appropriate Government has been empowered to do is to make the provisions of the Act applicable to any selected establishments or contractors even if the workmen employed by them are less than 20 and the Parliament had laid down its policy that the provisions of the Act are to be made applicable to any establishment or contractor even if the workmen employed are less than 20. He, therefore, contended that no arbitrary or uncanalised powers are given under the proviso to the State Government and the validity of the said proviso cannot be attacked on the ground that it is contrary to the main section itself and that it nullifies the main provision of Section 1(4)(a) and (b) of the Act. It is further contended by him that though the said proviso does not lay down in terms any guidelines for the State Government in use of the discretion given there is enough guidance in the provisions of the Act and the Rules which can be gathered from the policy and purpose of the Act as set out in the preamble and in the operative provisions of the Act. To appreciate the said contention of the learned Advocate General, I find it is necessary to refer to the preamble of the Act and other relevant provisions of the Act and the Rules. In the preamble of the Act, it is clearly stated that it is an Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected thereon. Section 1(5)(a) of the Act makes it clear that the Act shall not apply to establishments in which work only of an intermittent or casual nature is performed. Under Section 2(e) 'establishment' is defined as any office or department of the Government or a local authority. Thus the Act applies to even Government Departments or Local Authority who employs contract labour. The next important provision is Section 10 of the Act which enables the appropriate Government to prohibit employment of contract labour in any establishment. This power can be exercised only if the conditions mentioned therein such as perennial nature of work entrusted to contract labour etc. are satisfied. The next relevant provisions are contained in Chapter V of the Act. Section 16 enables the Government to issue notification requiring contractors to maintain a canteen, if such a contractor employs 100 or more workmen. In other words, there is no obligation to maintain a canteen, if the workmen in any establishment are less than 100. So, it is clear that this section will not affect those establishments sought to be covered by the notification to be issued under the proviso. Sections 17 and 19 are some of the welfare provisions which apply to all contractors and establishments. Section 17 requires the contractor to maintain a rest room for those workmen who stay over in the night shift. Section 18 requires the contractor to provide facilities for drinking water for contract labour as also latrine and urinals and washing facilities. As per Section 19, first-aid facilities are to be provided by the contractor. In terms of Section 21, the contractor is responsible for payment of wages correctly. If the above welfare facilities are not followed by the contractor then the principal employer will provide the said facilities. Thus, it is seen from the above provisions that the object with which the Act is enacted by the Parliament is to prohibit employment of contract labour in certain establishments, where the work that is being carried on is perennial or permanent in nature and to regulate the contract labour and in other cases to provide certain benefits and facilities mentioned in Chapter V for the welfare and health of contract labour. Section 31 provides that the appropriate Government can issue an order of exemption suspending the operation of the Act in particular situations. Section 35 provides for removal of difficulties in implementation of the Act. Chapter III provides for compulsory registration of the establishments by every principal employer to which the Act applies and a licence is to be taken by the contractors. Thus, it is seen from the above provisions of the Act that the facilities to be provided by the establishments or contractors to whom the Act applies if the workmen are less than 20, are only minimum facilities such as to provide for drinking water, latrine, urinals and washing facilities to the contract labour. The question of providing a canteen by the employer to any establishment arises only if the workmen employed are less than 100 or more. It cannot, therefore, be said that the proviso under Section 1(4)(a) and (b) which empowers the appropriate Government to extend the applicability of the Act even to establishments or contractors employing less than 20 workmen by specifying the number, puts any unreasonable restriction on the employers of the establishments and contractors. Compulsory registration of the establishment and compulsory licence to be taken by the contractor and the above said minimum facilities to be provided by them to the contract labour, cannot by any stretch of imagination be considered as unreasonable restrictions imposed on them. Further, it is also found that the provisions of Section 10 relating to abolition of contract labour do not automatically apply to the establishments and contractors employing less than 20 workmen by virtue of extending the applicability of the Act to them unless another notification is issued by the appropriate Government after consultation with the Central Board or a State Board after following the procedure prescribed under Section 10(ii) of the Act. Even to exercise the powers given under the proviso to Section 1(4)(a) and (b), to the appropriate Government guidelines are given in the form of the procedure to be followed under the said proviso itself. The said procedure to be followed is as follows:
(1) The appropriate Government has to issue a notification disclosing its intention to extend the applicability of the Act and to publish in the Official Gazette;
(2) A notice of not less than 2 months is to be given in the said notification;
(3) The establishments or contractors to which the appropriate Government intends to apply the Act must be specified andthe number of workmen employed in such establishments and contractors must be specified;
(3) Only after hearing the objections filed by the employer of these establishments and by the contractors, a decision is to be taken. Since two months notice is to be given, the appropriate Government will have to disclose the reasons as to why they intend to apply the Act to the selected and specified establishments or contractors referred in the notification. Thus, it is found that enough guidelines are indicated in the proviso itself to extend the applicability of the Act by the appropriate Government to any establishment or contractor employing less than 20 workmen. Thus, I find no merits in the contention of the learned Counsel for the petitioners in all these petitions that arbitrary, unguided and uncanalised powers are given to the appropriate Government under the said proviso and that the said proviso is hit by the vice of unreasonableness. On the other hand, I agree with the contention of the learned Advocate General that the said proviso is in the nature of a conditional legislation and the Parliament has itself formulated the policy in enacting Section 1(4)(a) and (b) of the Act and the proviso to abolish employment of contract labour in certain establishments and to regulate employment of contract labour in certain cases clearly indicating the manner in which the Act is to be made applicable by the appropriate Government to establishments and contractors employing less than 20 workmen. He also relied upon a decision of the Supreme Court in D. C. Bhatia v Union of India, wherein it was held that:--
'Court cannot interfere with the legislative policy'.
In the instant case, since the above said proviso is incorporated in Section 1(4)(a) and (b) of the Act by the law enacted by the Parliament after taking a policy decision regarding the regulation of contract labour, the powers of judicial review cannot be invoked to examine the correctness of the said policy decision in enacting the said proviso. Parliament declared its policy that the Act should apply to any establishment or contractor, employing less than 20 workmen, 'by following the procedure prescribed under the said proviso before doing so by the Gazette Notification to be issued by the appropriate Government. It cannot, therefore, be said that the power given under the proviso to the appropriate Government is beyond the permissible boundaries of valid delegation of powers.
13. Further, it is pointed out by the learned Advocate General that the constitutional validity of the various provisions of the Act has been examined in detail by the Supreme Court in M./S. Gammon India Limited v Union of India and the constitutional validity of the entire Actand Rules has been upheld and so it is entitled that it is not open to the petitioners to challenge the validity of the proviso to Section 1(4)(a) and (b) of the Act. In the above decision, the contention raised on behalf of the petitioner in that case that the provisions of the Act and the Rules made therein are unconstitutional, unreasonable and impracticable of implementation, has been rejected and it was held that the various provisions of the Act and the Rules made thereunder were found reasonable and not violative of Article 14 of the Constitution of India and were held valid. At page 95 of the above decision, it is observed as follows:--
'The conditions of contract labour has been engaging the attention of various committees for a long time. The benefits conferred by the Act and the Rules are social welfare legislative measures. The various measures which are challenged as unreasonable namely, the provisions for canteens, rest rooms, facilities for supply of drinking water, latrines, urinals, first-aid facilities are amenities for the dignity of human labour. The measure is in the interests of the public. It is for the legislature to determine what is needed as the appropriate conditions for employment of contract labour. It is difficult for the Court to impose its own standards of reasonableness. The legislature will be guided by the needs of the general public in determining the reasonableness of such requirements. There is a rational relation between the impugned Act and the object to be achieved and the provision is not in excess of that object. There is no violation of Article 14. The classification is not arbitrary. The legislature has made uniform laws for all contractors'.
Thus the constitutional validity of the Act has been upheld by the Supreme Court in the above decision.
14. It is contended by the learned Counsel for the petitioners that since the constitutional validity of the powers delegated to the appropriate Government under the proviso to Section 1(4)(a) and (b) of the Act is not specifically considered in the above decision, there is no bar for this Court to pronounce its decision on the said question. In reply to this contention, the learned Advocate General submitted that when the validity of the Act has been upheld with reference to its provisions and rules by a decision of the Supreme Court the binding effect of the said decision is not taken away even if certain aspects of the matter have not been considered in the decision. In support of this contention he relied upon a decision of the Supreme Court in T. Govindaraj Mudaliar v State of Tamil Nadu at page 978, wherein it was held that:--
'Validity of Chapter IV-A of Motor Vehicles Act, upheld in all previous decisions. Their binding effect is not taken away merely because, aspect based on guarantee under Article 19(1)(f) of Constitution was not expressly considered. The question regarding validity of Chapter IV-A on grounds of infringement of Article19(1)(f) which though open was not raised in earlier writ petitions, cannot be raised in subsequent writ petitions'.
He also relied upon another decision of the Supreme Court in Smt. Somawanti v State of Punjab, wherein it was held that:--
'. . . .It is contended that none of the decisions has considered the argument advanced before us that a law may be protected from an attack under Article 31(2) but it will still be invalid under Article 13(2) if the restriction placed by it on the right of a person to hold property is unreasonable. In other words, for the law before us to be regarded as valid it must also satisfy the requirements of Article 19(5) and that only thereafter can the property of a person be taken away. It is sufficient to say that though this Court may not have pronounced on this aspect of the matter we are bound by the actual directions which categorically negative an attack based on the right guaranteed by Article 19(1)(f). The binding effect of a decision docs not depend upon whether a particular argument was considered therein or not, provided that the point with reference to which an argument was subsequently advanced was actually decided. . .'.
In view of the above rulings of the Supreme Court, it is not open to the petitioners to contend that merely because the validity of the proviso to Section 1(4)(a) and (b) of the Act has not been specifically considered in the above decision of M/s. Gammon Indian Limited's case, supra, while upholding the validity of the various provisions and Rules of the Act, the said question can be raised in the present proceedings before this Court and that the constitutional validity of the said proviso can be independently examined by this Court. Further when the main Act itself is held to be valid, its extension to other establishments and contractors employing less than 20 workmen by the appropriate Government in the manner provided under the proviso to Section 1(4)(a) and (b) cannot be held to be invalid or arbitrary. As it is also found that sufficient guidelines are there in the proviso itself about the manner in which the said power is to be exercised by the appropriate Government, I am unable to accept the contention of the learned Counsel for the petitioners that the said proviso suffers from vice of unreasonableness or arbitrariness. Since it is also found that there is a rational relation between the said provisions of the Act and the object to be achieved viz., regulation of contract labour and providing certain amenities and facilities to them the said provision cannot be considered as inconsistent with the main object or in excess of that object. In a decision reported in Jyoti Pershad v Administrator for the Union Territory of Delhi, it is held that:--
'So long as the Legislature indicates, in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation is skeletal, or the fact that a discretion is left to those entrusted with administeringthe law, affords no basis either for the contention that there has been an excessive delegation of legislative power as to amount to an abdication of its functions, or that the discretion vested is uncanalised and unguided as to amount to a carte blanche to discriminate. If the power or discretion has been conferred in a manner which is legal and constitutional, the fact that Parliament could possibly have made more detailed provisions, could obviously not be a ground for invalidating the law'.
Since there is enough guidance in the Act which can be gathered from the policy and purpose of the Act as set out in the Preamble and in the operative provisions of the Act, the constitutionality of the proviso to Section 1(4)(a) and (b) cannot be questioned on the ground that there has been excessive delegation of legislative power as to amount to an abdication of its functions or that the discretion vested is uncanalised and unguided. There is enough guidance in the Act for exercise of discretion by the appropriate Government under the proviso to Section 1(4)(a) and (b) of the Act. So I find that the proviso to Section 1(4)(a) and (b) does not violate equal protection of laws guaranteed under Section 14 of the Constitution. In a latest decision of the Supreme Court in State of Tamil Nadu v K. Sabanayagam, it is held that:--
'In the case of conditional legislation, the legislation is complete in itself but its operation is made to depend on fulfilment of certain conditions and what is delegated to an outside authority is the power to determine according to its own judgment whether or not those conditions are fulfilled. In case of delegated legislation proper, some portion of the legislative power of the legislature is delegated to the outside authority in that the legislature though competent to perform both the essential and ancillary legislative functions, performs only the former and parts with the latter, i.e., the ancillary function of laying down details in favour of another for executing the policy of the statute enacted. The distinction between the two exists in this that whereas conditional legislation contains no element of delegation of legislative power and is, therefore, not open to attack on the ground of excessive delegation, delegated legislation does confer some legislative power on some outside authority and is therefore open to attack on the ground of excessive delegation.
Conditional legislation can be broadly classified into three categories:
In the first category when the legislature has completed its task of enacting a statute, the entire superstructure of the legislation is ready but its future applicability to a given area is left to the subjective satisfaction of the delegate who being satisfied about the conditions indicating the ripe time for applying the machinery of the said Act to a given area exercises that power as a delegate of the parent legislative body. This would be an actof pure and simple conditional legislation depending upon the subjective satisfaction of the delegate as to when the Act enacted and completed by the parent legislature is to be made effective.
However, there may be second category of conditional legislations wherein the delegate has to decide whether and under what circumstances a completed Act of the parent legislation which has already come into force is to be partially withdrawn from operation in a given area or in given cases so as not to be applicable to a given class of persons who are otherwise admittedly governed by the Act. In such an eventuality if the satisfaction regarding the existence of condition precedent to the exercise of such power depends upon pure subjective satisfaction of the delegate and if such an exercise is not required to be based on the prima facie proof of factual data for and against such an exercise and if such an exercise is to uniformly apply in future to a given common class of subjects to be governed thereby and when such an exercise is not to be confined to individual cases only, then even in such category of cases while exercising conditional legislative powers the delegate may not be required to have an objective assessment after considering rival versions on the data placed before it for being taken into consideration by it in exercise of such power of conditional legislation.
But there may be a third category of cases wherein the exercise of conditional legislation would depend upon satisfaction of the delegate on objective facts placed by one class of persons seeking benefit of such an exercise with a view to deprive the rival class of persons who otherwise might have already got statutory benefits under the Act and who are likely to lose the existing benefit because of exercise of such a power by the delegate. In such type of cases the satisfaction of the delegate has necessarily to be based on objective consideration of the relevant data for and against the exercise of such power. This exercise is not left to his subjective satisfaction nor is it a mere ministerial exercise. Section 36 of the Payment of Bonus Act falls in this third category of conditional legislative functions'.
In the present case, the Parliament has decided to extend the provisions of the Act even to establishments or contractors employing less than 20 workmen and enacted the proviso to Section 1(4)(a) and (b) by way of conditional legislation, but has left it to the discretion of the appropriate Government to make the Act applicable to any category of establishments or contractors employing less than 20 workmen by following the procedure prescribed under the said proviso. I am, therefore, unable to accept the contention of the learned Counsel for the petitioners that the said proviso is in the nature of delegated legislation and that some portion of the legislative power of the Legislature is delegated to the appropriate Government and that it is, therefore, open to attack on the ground of excessive delegation.
15. It is contended by the learned Advocate General that the impugned notification issued by the 2nd respondent-State Government applying the provisions of the Act to all establishments and contractors employing less than 20 workmen is a valid notification issued in exercise of the powers given to the appropriate Government in terms of proviso to Section 1(4)(a) and (b) and this Court has to examine only the limited question as to whether the procedural formalities prescribed under the said proviso have been complied or not and when once it is found that there is compliance of the procedural formalities prescribed, the said notification is not open to any challenge. In support of this contention, he relied upon a decision of the Division Bench of this Court rendered in Larsen and Toubro Limited v State of Karnataka, wherein the validity of a notification issued under Section 10 of the Act has been examined and held as follows:--
'There is nothing in the Act or the scheme underlying the same which precludes the appropriate Government from issuing a notification to all establishments as long as the same has been issued after due consideration of all the relevant criteria laid down under Section 10 of the Act, Section 10 empowers the Government to issue a single notification in respect of different establishments provided the operation and nature of work are similar or identical in all aspects which are sought to be covered by the notification.
Sub-section (2) of Section 10 of the Act lays down detailed guidelines for taking a decision in the matter. Once the Court is satisfied that the Government has taken into consideration the broad guidelines laid down by the legislation while taking a decision to abolish the contract labour from an establishment/establishments, the scope of judicial review would be restricted to the procedural fairness of the action taken by the State Government.
Therefore, the notification dated April 11, 1997, prohibiting the employment of contract labour in the canteen (industrial canteens) in factories employing 250 workers and above in the State of Karnataka under Section 10 of the Contract Labour (Abolition and Regulation) 1970, was valid'.
The learned Advocate General also relied upon a decision of the Madras High Court in Bharat Heavy Electricals Limited v Government of Tamil Nadu, where the same principle has been laid down while examining the notification issued under Section 10 of the Act. He also relied upon another decision of the Supreme Court in Air India Statutory Corporation v United Labour Union, wherein a notification issued under Section 10(2) of the Act by the Central Government has been upheld holding that the appropriate Government which can issue a notification is the Central Government in respect of Air India Statutory Corporation.But, in the instant case, it is found that the relevant criteria laid down under the proviso to Section 1(4)(a) and (b), have not been followed, in as much as, the impugned notification does not specify in respect of which establishments or contractors, where the workmen employed are less than 20, the Act is made applicable and it does not also specify the actual number of workmen employed in the establishments or by the contractors to which the Act is made applicable even if the said number of workmen employed is less than 20. Further no Affidavit of the 2nd respondent has been filed explaining for what reasons the Act has been made applicable to every establishment and contractor employing less than 20 workmen while departing from the provisions of the main Section 1(4)(a) and (b) and making an exception to make the Act applicable to all contractors and establishments irrespective of the number of workmen employed. It is also not disclosed by the 2nd respondent as to whether any objections have been received to the public notice issued, nature of objections raised and whether the said objections were taken into consideration before issuing the impugned notification. Since the 2nd respondent has not placed any such material on record, it is not possible to presume that the impugned notification has been issued after due consideration of all the relevant criteria laid down under the proviso. Further as it is also found that the mandatory requirement of specifying the particular establishments or contractors employing less than 20 workmen to which the provisions of the Act are made applicable and the number of workmen fixed for making the provisions of the Act applicable to every establishment or contractor in the impugned notification, have not been complied with, I am unable to hold that the impugned notification issued by the 2nd respondent is in accordance with the guidelines laid down in the said proviso and is within the scope of powers given under the said proviso to the appropriate Government. The contention of the learned Advocate General that the proviso gives power to the appropriate Government to make the Act applicable to every establishment or contractor employing less than 20 workmen, according to the plain language employed in the said proviso is without merit as the proviso makes it clear that in the notification to be issued, the appropriate Government has to specify the establishments or contractors to whom the provisions of the Act are made applicable even if the number of workmen employed by them is less than 20 and specify the number of workmen employed by those establishments or contractors which could be less than 20. By issuing the impugned notification making the provisions of the Act applicable to every establishment and contractor irrespective of the number of workmen employed, the 2nd respondent has not exercised the discretion conferred under the proviso to Section 1(4)(a) and (b) either reasonably or rationally, in public interest or in conformity with the conditions imposed in the proviso. The 2nd respondent while exercising the discretion given under the proviso has taken a decision which is devoid of any plausible justification and any authority having reasonable purpose could not have taken the said decision.
16. For all the above reasons, I hold that the impugned notification -Annexure-A issued by the 2nd respondent suffers from vice of unreasonableness and arbitrariness and is liable to be quashed. But, so far as the constitutional validity of the proviso to Section 1(4)(a) and (b) of the Act is concerned, I hold that it is not violative or ultra vires of Articles 14 and 19(1)(g) of the Constitution and I uphold the validity of the same.
17. In the result, all these petitions are partly allowed and it is declared that the impugned notification dated 1st of July, 1992 - Annexure-A issued by the 2nd respondent is illegal and bad in law and the said notification is quashed by issue of a writ of certiorari. No costs.