STATE OF GUJARAT V. SHRI AMBICA MILLS LTD. (1974) 4 SCC 656

STATE OF GUJARAT V. SHRI AMBICA MILLS LTD. (1974) 4 SCC 656

 

FACTS

The first respondent (a company under the Companies Act) filed a writ petition in the High Court and impugned that the provisions of Sections 3, 6A and 7 of the Bombay Labour Welfare Fund Act, 1953 (the Act) and Section 13 of the Bombay Labour Welfare Fund (Gujarat Extension and Amendment) Act, 1961 (the First Amendment Act) and Rules 3 and 4 of the Bombay Labour Welfare Fund Rules, 1953 (the Rules) as unconstitutional and prayed for the issue of a writ in the nature of mandamus or other appropriate writ.

 

ISSUE

There were two issues pertaining to the current case that reflected-

1. Whether a law would be void and non-est as respect to non citizens if it takes away or abridges the fundamental right of citizens under Article 19(1)(f)
2. whether the definition of ‘establishment’ in Section 2(4) violated the fundamental right of the respondent under Article 14 and the impugned provisions were therefore void.

 

JUDGEMENT AND ANALYSIS

1. In Bombay Dyeing & Manufacturing Co. Ltd. v. State of Bombay, the court held that the provisions of Sections 3(1) and 3(2) were invalid on the ground that they violated the fundamental right of the employer under Article 19 (1)(f). In Keshava Madhava Menon v. State of Bombay the court held that according to Article 13(1), after the inception of the Constitution, no existing law would be able to stand in the way of Fundamental Rights and such inconsistent laws would be wiped off from the statute books, however would remain operative as it is for the non-citizens.
2. The court observed that Article 19 remained operative after the Constitution came into force as regards non-citizens, because it was not inconsistent with their fundamental rights, A pre-Constitution law, which takes away or abridges the rights under Article 19, should remain operative even after the Constitution came into force, not because it was valid when enacted, but because it was void only to the extent of inconsistency with the fundamental rights conferred under Article 19 and that its voidness was, therefore, confined to citizens and therefore would become inconsistent only to the extent of the citizens. It was further explained that the meaning of “void” under Article 13(1) and 13(2) with respect to Article 19 is in contravention only to the citizens as Article 19 is operative only towards the citizens. This shows that the voidness under Article 13 is not in rem but to the extent of contravention of the rights conferred by part III of the Constitution.
3. Hence, it was held that if a law is otherwise good and doesn’t contravene any of the fundamental rights, it shall be valid and wouldn’t attract Article 13. As Article 19(1)(f)  isn’t applicable to non citizens, the law shall remain valid as it wouldn’t attract Article 13.
4. While dealing with the second issue, this Hon'ble court discussed the question whether under Article 14, a classification is reasonable or unreasonable must, in the ultimate analysis, depend upon the judicial approach to the problem. The great divide in this area lies in the difference between emphasising the actualities or the abstractions of legislation. The more complicated society becomes, the greater the diversity of its problems and the more legislation directs itself to the diversities.
5. A reasonable classification was considered one which included all who are similarly situated and none who are not, i.e. all persons who are similarly situated with respect to the purpose of the law. The purpose of a law may be either the elimination of a public mischief or the achievement of some positive public good. Under classification included a State that benefits or burdens persons in a manner that furthers a legitimate purpose but does not confer the same benefit or place the same burden on others who are similarly situated. Overclassification included those not only those who are similarly situated with respect to the purpose but others who are not so situated as well.
6. It was observed that whether a court can remove the unreasonableness of a classification when it is under- inclusive by extending the ambit of the legislation to cover the class omitted to be included, or, by applying the doctrine of severability delete a clause which makes a classification over- inclusive are matters on which it is not necessary to express any final opinion as we have held that the inclusion of tramway and motor omnibus service in the definition of ‘establishment’ did not make the classification unreasonable having regard to the purpose of the legislation. Hence it held the impugned Sections as valid.