Kerala High Court
Indian Trawlers Association, ... vs The State Of Kerala And Ors. on 13 February, 1992
Equivalent citations: AIR1992KER360, AIR 1992 KERALA 360, (1992) ILR(KER) 2 KER 706, (1992) 81 FJR 42, (1992) 2 LAB LN 281
ORDER K.A. Nayar, J.
1. It is agreed that the question arises for consideration in all these writ petitions are the same and that relates to the constitutional validity of Section 4 of the Kerala Fishermen's Welfare Fund Act, 1984 (for short 'the Act'). If Section 4 of the Act is declared unconstitutional, the other provisions of the Act, being integrally connected with Section 4, will not survive. Therefore, the sole question is whether the challenge against Section 4 of the Act can be upheld. Even though there are minor variations in facts in these petitions, it is agreed that for the purpose of disposal of these cases, the facts in O.P. 7787/88 alone need be referred to. That means, the disposal of O.P. 7787/88 will have the effect of disposal of all the cases in this batch of cases.
2. The petitioner is engaged in fishing operations using mechanised boats of different tonnage. Petitioner is owner of mechanised fishing boats and in that capacity they are owner of nets of the boats as well. He is also a dealer in fish. Hence, it is submitted that even though petitioner is a boat owner, he has to pay contribution in different capacities as an owner of fishing boats, owner of fishing nets, as a dealer in fish and as a fisherman catching fish etc. The fund so collected from the petitioner at varying rates will not be used for the benefit of the petitioner or for the benefit of the employees of the petitioner. Hence, the short question posed in all these petitions is Section 4 of the Act cannot be justified under any of the provisions of the Constitution, for, if it is to be justified as a tax, then there should be a specific taxing entry giving power to levy and collect tax. Without a specific power for taxation, the State cannot impose any tax on the petitioner. If it is to be justified as a fee, then it has to come under legislative entry relating to fee. But, then, there must be quid pro quo for collection of fee and, there being no quid pro quo, it is submitted that the collection cannot be justified as a fee also. If the Government do not purport to justify the Act as a fee, Section 4 of the Act will have to be struck down. On the other hand, if it is to be considered as a social welfare measure introduced for Ihe welfare of the employees, then as the employees of the petitioners are not benefited at all, the Act cannot be justified under any of the entries in the Concurrent List also. Hence, the Act cannot be justified under any of the entries in List II or List III of the VIIth. Schedule of the Constitution and, therefore, the Act has to be struck down as unconstitutional is the contention of the petitioners.
3. Before examining the contentions in detail, I will refer to the scheme of the Act itself. The Kerala Fishermen's Welfare Fund Act, 1985 was enacted for promoting the Welfare of Fishermen in the State of Kerata. Section 3 of the Act provides that the Government may, by notification in the official Gazette frame a scheme to be called as Kerala Fishermen Welfare Fund Scheme for the welfare of fishermen and the Fund shall be established after framing of the scheme in accordance with the provisions of the Act. Section 3 provides that the Fund shall be credited with the contribution prescribed in Section 4, fee levied under the scheme, damages realised under Section 21, grants or loans or advances made by the Government of India or the State Government, voluntary donations, penalty levied under the provisions of the Kerala Marine Fishing Regulation Act, 1980, and any amount raised by the Board from other sources to augment the resources of the Board. Sub-section (3) of Section 3 says that the fund shall vest in and be administered by the Board. Sub-section (4) of Section 3 is most important and it enumerates the purposes for which the fund may be utilised. The fund is to be utilised for providing distress relief to fishermen in times of natural calamities, for payment of financial assistances to fishermen who suffer permanent or temporary disablement; for payment of loan/grant to fishermen to meet the expenses for the marriage of children or expenses in connection with disease or death of dependants or any unexpected expenditure or the day to day expenditure during lean months; to provide for the fishermen and the members of their families education, vocational training and part-time employment, social education centres including reading rooms and libraries, sports and games and medical facilities, nutritious food for children and employment of opportunities to the handicapped; for payment of financial assis-- tance to fishermen who suffer loss of houses or fishing implements or any other damage due to natural calamities or other unexpected causes; to provide old age assistance to fishermen and for the implementation of any other purpose specified in the scheme. Other purposes are also specified in the scheme. Under Sub-section (5) of Section 3, every fisherman who is a member of a Fishermen's Welfare Society constituted under Section 4 of the Kerala Fishermen Welfare Societies Act shall be a member of the fund. Section 4 of the Kerala Fishermen's Welfare Societies Act provides for constitution of Fishermen's welfare societies having perpetual succession and common seal and every fisherman who permanently resides in the fisheries village or carries on fishing operations from or within the fisheries village and who has attained 18 years of age shall be deemed to be a member of the society. Pursuant to Section 5(2) of the Kerala Fishermen's Welfare Societies Act, 1980 rules have been framed and the Kerala Government has notified 225 villages ,as fisheries villages and formed welfare societies. The entire coastal area of the State has been formed into 225 villages and all the marine fishermen in the area are included in the welfare societies. The fishermen employed in the mechanised boats owned by the petitioner are also residents of the marine villages listed in 225 villages. The main contribution for the fund is provided for in Section 4 of the Act against which the main attack of the petitioner is directed to. The fishermen have to contribute 3% of the value of the fish caught by him during a year or three per cent of the wages earned by him in a year. A dealer has to contribute every year to the fund one per cent of his sale proceeds in the year. The owner of a fishing vessel has to contribute every year an amount calculated at varying rates as prescribed in the Act. For tradditional crafts like catamaran (non-motorised), catamaran (motorised), country craft up to 9 metre size (non-motorised), country craft up to 9 metre size (motorised) country craft above 9, metre size (non-motorised), country craft of above 9 metre size (motorised), mechanised boats below 15 CRT, mechanised boats of 15 CRT and above but below 25 CRT, mechanised boats of 25 GRT and above up to 35 GRT and mechanised boats above 35 GRT, different rates have been prescribed in the Act. The owner of a fishing net shall contribute to the fund one rupee per net per month for nine months every year. The owner of a prawn filtration area or a fish farm has to contribute . every year to the fund two per cent of the value of the prawn and other fish caught from the prawn filtration area or the fish farm during the year. A person ,who employs a fisherman in a fishing vessel shall be liable to pay under Sub-section (7) the contribution payable by, that fisherman after deducting that amount from the wages or pther remuneration due to such fisherman.
4. One of the main attack of the petitioner is, the same person has been directed to pay contribution in different capacities at varying rates. For instance, it is contended, the owner of a boat will have to pay contribution as owner of the boat, as a dealer in fish and then as the owner of the fishing net, etc. But this is only an apprehension of the petitioner as will be seen from the counter affidavit of the 1st respondent. The first respondent in his counter affidavit has stated that the petitioners are not being levied contribution in a dual capacity as boat owners or as net owners. The contribution from net owners is the contribution from owners of China net, stake net or free net. Therefore, the argument that aperson has been made to pay contribution in different capacities and, therefore, the Act pffends Article 14 of the Constitution being arbitrary is based on pure imagination and baseless.
5. It is also contended that the petitioners' employees cannot be considered as fishermen. But fisherman has been defined in Section 2(e) of the Kerala Fishermen Welfare Societies Act, 1980 to mean any person engaged, mainly in fishing operations for his livelihood, and fishing operations include fishing by any means, mechanical or otherwise, sale of marine products by members of families of fishermen, by transporting them to different places by head-load or cycle-load. Similarly, the word 'Dealer' has been defined to mean any person who carried on within the State of Kerala the business of buying and selling fish or processing fish for export or domestic marketing and includes a commission agent, a broker, or any other mercantile agent by whatever name called; and a non-resident dealer or an agent of a non-resident dealer or a local branch of a firm or company or association situated outside the State of Kerala. The Act covers all fishermen and the fishermen employed by the petitioners also are covered for the purpose of the benefits of the fund. The benefits conferred on the fishermen under the Act, in due course, will benefit the petitioners also. The fishermen being the backbone of the industry, their welfare and progress are always in the larger interest of the industry itself. The benefits conferred under the Act subserve the common good of the fishing industry. It is stated, that the petitioners are benefited by the hard labour of the fishermen and the liability to pay contribution as the principal employer of the fishermen directly or indirectly, will benefit the employer as well. Fisherman employed in the industry is not always identifiable. There can be persons directly employed by the principal employer viz., the boat owner and persons employed by or through an inter-mediate employer or persons whose services are temporarily lent or let on hire to the principal employer. Hence, it was found safe for the Legislature to fix the liability for contribution on the principal employer, viz. the boat owner. Since the rate has been fixed on the basis of their capacity to earn, the charging section cannot be considered as arbitrary. The norm fixed for contribution has been made taking into consideration the earning capacity of each category. It is found that the per capita production in mechanised and non-mechanised sectors show that the output for fishermen in mechanised sector is 7.19 tons whereas in non-mechanised sector it is only 1.29 tons. It is so averred in the counter affidavit of the first respondent. Therefore, it is stated that the fixation of a higher rate of contribution on the mechanised boats cannot be considered arbitrary. Further, it is seen that the returns for mechanised boats are higher with reference to the motorised country crafts since costly varieties of fish like prawns, lobsters, etc. are landed by mechanised boats whereas only cheaper varieties of fish are landed by motorised country crafts. According to the petitioner, the minimum investment, operational expenses and cost of maintenance being higher in the case of mechanised fishing boats, the prescription of higher rate of contribution is unreasonable. But it is stated by the respondent that the minimum investment of new motorised country crafts will be less than Rs. 35,000/- whereas that of a mechanised boat will be about Rs. 2 lakhs. The fuel and other maintenance cost put forward by the petitioner, it is stated, are not based on any reliable facts or figures, and the maintenance cost and the fuel charges are proportionate to the cost of investment. It is stated that it is after considering all the relevant aspects of the matter the rate has been fixed at varying levels, and, therefore, the same cannot be considered arbitrary or violative of Article 14 of the Constitution of India. The classification of the boats in different categories is stated to be for the purpose of making them contribute on a reasonable basis. The country crafts are usually operated by sixteen fishermen and the country crafts are mostly in the joint ownership. The mechanised boats are grouped according to the tonnage of the vessel. Unlike in the case of country crafts, the crew of the fishing boats have no ownership in the boat and profit of the fishing is not distributed equally among the fishermen. They are paid only the coolie charges. This fact also has been taken into account in fixing the rate of contribution. The norm thus prescribes for collecting contribution based on income derived by each category of contributors and their per capita income.
6. It is common knowledge that mechanised boats including trawlers employ vastly superior technology in comparison to the country traditional boats, whether motorised or not. Mechanised boat operations are on the increase in the State as more and more fishermen, who can afford to do so, are leaving the traditional methods of fishing to the financially more viable mechanised boat operations. The investment on a fishing boat is between Rs. 5 to 9 lakhs, as stated in the counter affidavit of the 2nd respondent. The mechanised boats employ less number of persons in comparison to country crafts and they are operating on diesel and hence they are more economical in the longer run than the traditional motorised country crafts which are run on a mixture of petrol and kerosene. The country boats, which costs about Rs. 2.5 lakhs, have very short life of about three years, their rate of depreciation being very high. Mechanised fishing boats employ highly advanced technology and are either trawlers or gill netters. In the case of trawlers, trawling net of large size is dragged along the bottom of the sea or along predetermined levels of depth controlled by the judicious use of floats and sinkers. They sweep the entire area and harvest huge quantities of fish in a single catch. The gill netters, it is stated, employ gill nets where a wall of net is set afloat on the sub surface and the fish get entangled in the net. Unlike the country crafts, not only is the range of operation is larger, but most of the fishing is of high price varieties such as prawn, lobsters, squids, scuttle fish, etc. It is stated that the mechanised fishing boats operate in a distance of about 20-25 kms. from the shore as against the maximum distance of about 8 kms. in the case of country boats. The fishing time of mechanised boats is also stated to be higher as they have storage facilities unlike the traditional crafts. The country boats have to return to the shore immediately after every catch as otherwise the catch will get deteriorated. The catch of mechanised fishing boats will be four to five times higher than the country crafts as will be seen from the counter affidavit of the 2nd respondent and the value they get is also substantially higher for they catch rare and exotic varieties. The size of the net also is comparatively bigger in mechanised boats. It is also stated that a mechanised fishing boat can operate during all periods except during the 1 1/2 months ban on trawling during the monsoon.
7. The above facts gathered from the affidavit of the 2nd respondent also justify the classification of the petitioners and imposing contribution at varying rates.
8. The petitioner challenges the legislative competency of the Act with respect to the Constitutional entry. Petitioner contends that the legislation will have to fall under one or other of the entries in the VII Schedule of the Constitution of India. Of list I of the VII Schedule I am not concerned as the Act in question is only a State enactment. Entry No. 21 in List II of the VII Schedule relates to fisheries and the taxing power cannot be exercised under the general entry aforementioned is the contention. It is stated that the power of legislation must be traced to a specific taxing entry if the levy is to be justified as a tax. Reference was made to the decision reported in Synthetics & Chemicals v. State of U.P. AIR 1990 SC 1927. It is also held in that decision that the Constitution must not be construed in a narrow or pedantic sense and that the construction which is most beneficial, giving widest possible amplitude of its power, must be adopted. No entry in the Constitution should be so read as to rob it off its entire content. A broad and liberal spirit should, therefore, inspire those whose duty it is to interpret the Constitution, and the courts are not free to stretch or to pervert the language of the enactment in the interest of any legal or constitutional theory. In deciding whether any particular enactment is within the purview of one legislature or the other, it is the pith and substance of the legislation in question that has to be looked into. It is well settled that the various entries in the three lists of the Indian Constitution are not powers but fields of legislation. The power to legislate is given by Article 246 and other articles of the Constitution. The three lists of the 7th Schedule to the Constitution are legislative heads or fields of legislation, which demarcate the area over which the appropriate legislatures can operate. Of course, widest amplitude should be given to the language of the three entries. But some of these entries in different lists or in the same list may override and sometimes may appear to be in direct conflict with each other. The duty of the Court is to find out the true intent and purpose and examine the particular legislation in question. Each general word should be held to extent to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. I n interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other in the same list. It has to be interpreted as an organic document in the light of the experience gathered. There are separate entries pertaining to taxation and other laws. Therefore, counsel for the petitioner is well founded in his submission that if the levy in question is to be justified as a tax, the same has to be traced to a taxing entry. Without a specific entry for texation, the legislation cannot be justified as a tax. The State did not try to justify the levy as a tax under a specific entry. Counsel also referred to the decision in M.T. Joseph v. Gift Tax Officer, AIR 1962 Ker 97 to show that separate power is necessary for taxation. In that decision it is held that the power to legislate on a particular topic is distinct and different from the power to levy tax and, power to legislate on a particular topic will not carry along with the power to impose tax in respect of those matters unless it has been specially conferred on the legislature. Therefore, entry 21 in the State List will not carry with it the power to levy tax.
9. The next contention is that if it is not a tax, then it has to be justified as a fee. If it a fee, quid pro quo is required. Counsel referred to the decisions reported in Sreenivasa General Traders v. State of A.P. AIR 1983 SC 1246,1.T.C. Ltd. v. State of Karnataka 1985 (Supp.) SCC 476, Om Prakash Agarwal v. Giri.Raj Kishori AIR 1986 SC 726, K. P. Oil Mills v. Commissioner, Ponnani Municipality 1987(1) KLT 123 and Mangalore Ganesh Beedi v. Union of India AIR 1974 SC 1832 : (1974 Lab 1C 1237). In this connection he also referred to the decision in Sri Jagannath Ramanuj Das v. State of Orissa, AIR 1954 SC 400 and Commissioner, H.R.E. Madras v. Sri Lakshmindra Thirtha Swamiar, AIR 1954 SC 282 at p. 295, para 43 to show that there is no quid pro quo for the contribution and, therefore, the levy cannot be justified as a fee. While the power to levy tax is conferred on the State legislature by various entries in List II of the VII Schedule, entry 66 therein relates to fee empowering the State Government to levy fee in respect of any matter in the list, but not including fee taken in any court. So is entry 47 in List III. That means, if the State legislature has power to levy tax, it is coexisting with the power to legislate with respect to substantive matters and it may levy fee with reference to the service that would be rendered by the State under such law. When the levy is questioned, the Court has to enquire into its real nature. The question to be determined is whether the power to levy tax or fee is conferred on that authority. Tax is payable for the common benefit of all tax payers. But a fee is payment made for some special benefit enjoyed by the payer and the payment is proportionate to such benefits. It is not necessary that a particular payer himself should be benefited, but it is sufficient if the payer also is benefited by the performance of service. In other words, quid pro quo need not be understood in mathematical equivalent to the fee, but a broad correlation would be sufficient. If there is correlation between the service and the levy, the levy can be justified as a fee. But in this case, we need not go into all these aspects as the levy is sought to be justified only as a social welfare measure under entries 20,23 and 24 of List III of the VII Schedule. It has to be added that in the counter affidavit it is clearly stated that the Act covers all fishermen and the fishermen employed by the petitioner also are Covered for the purpose of the benefits of the fund and the benefits conferred on the fishermen under the Act will, in due course, benefit' the fishermen employed by the petitioner also.
10. Then it is submitted that even though the Act has not specifically referred to levy a tax, the effect of the impugned Act if considered it will be' seen that the levy is masquerading as a tax. It is the impact of the legislation' on the fundamental rights of the citizen that is determinative of the real character of the Act. Counsel referred to the decisions reported in Maneka Gandhi v. Union of India, AIR 1978 SC 597 arid Bennet Coleman and Co. Ltd. v. Union of India, AIR 1973 SC 106. In the first of these decisions, the Supreme Court held that in deciding the validity of the State action with reference to fundamental rights, what the Court must consider is a direct and inevitable consequence of the State action, as otherwise, protection of the fundamental rights will be eroded. Counsel pointedly drew my attention to the observations contained in paragraphs 39 and 41 in the decision in Bennet Coleman Company's case (supra) and emphasised that it is not the object of the authority making the law impairing the rights of the citizen nor the form of action that determines the invasion of the rights. It is the effect of the law which attracts the jurisdiction of the court to grant relief. The principle underlying the above decisions is well settled. But its application in the present case is only the matter in dispute. Whether the pith and substance of the Act is taken, or the direct impact of the law is examined, it cannot be considered that it imposes a tax or a fee. It cannot be a tax as there is no levy under the impugned Act for a general purpose. No characteristic of a tax is present. The benefit conferred under the Act is only to subserve the common good of the fishing industry. Since the petitioners are also benefited by the hard labour of the fishermen, they also have a liability to pay contribution.
11. Then it is submitted with reference to the counter affidavit filed, that the levy is being justified by the State under entries 23 and 24 of List III of the VII Schedule of the Constitution, viz. social security and social insurance; employment and unemployment; welfare of labour including conditions of work, provident funds, employer liability, workmen's compensation, invalidity and old age pensions and maternity benefits. It is also submitted that the State may seek support of article 31-C of the Constitution for the legislation. Counsel referred to the decision reported in M/s. Gasket Radiators Pvt. Ltd. v. E.S.I. Corporation, AIR 1985 SC 790 : (1985 Lab 1C 682) (para 5), K. K. Bhaskaran v, State of Kerala 1972 KLJ 331 : (1973 Lab 1C 976), Chellappan v. State of Kerala, 1990 (1) KLT 254 and contended that the legislation under these entries can be justified only if it is for the benefit of the employees. The decision in Gasket Radiators' case was challenging the validity of the Employees' State Insurance Act and in that case the beneficiaries where the employees of the concerned employer. Those cases were sought to be distinguished on the ground that the fishermen, who are the beneficiaries, are not the employees of the petitioner and none of the employees of the petitioner will be benefited. Counsel for the petitioner referred to several welfare legislations such as Payment of Bonus Act, Kerala Labour Welfare Fund Act, etc., under which the beneficiaries are the employees of the particular employer. It is submitted that the claim of protection under Article 31-C of the Constitution also cannot be had in this case as Section 4 of the Constitution of the Constitution (Forty-Second Amendment) Act, 1976 has been held unconstitutional by the Supreme Court. Section 4 of the Constitution (Forty-second) Act reads as under :
"4. Amendment of Article 31 -C. In Article 31-C of the Constitution, for the words, brackets, letters and figures "the principles specified in Clause (b) or Clause (c) of Article 39", the words and figures "all or any of the principles laid down in Part IV" shall be substituted."
He referred to the decision reported in Minerva Mills Ltd. v. Union of India (AIR 1980 SC 1789) for this proposition, where it is held that Section 4 of the Forty-second Amendment Act is unconstitutional and, therefore, inoperative. Hence, only the legislation giving effect to the Directive Principles set out in Clauses (b) and (c) of Article 39 of the Constitution will get the protective umbrella against an attack on the ground of violation of Articles 14 and 19 of the Constitution. Article 39(b) and (c) reads as follows :
39, Certain principles of policy to be followed by the State:-- The State shall, in particular, direct its policy towards securing-
(a) xxx xxx xxx xxx. Xxx
(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good;
(c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;
XXX XXX XXX XXX XXX XXX In this connection counsel also referred to the decisions reported in Sanjeev Coke Manufacturing Company v.' Bharat Coking Coal Ltd. AIR 1983 SC239, State of Tamil Naduv. Bharat Coking Coal Ltd. AIR 1984 SC 326, Unni Mammu Haji v. State of Keraia 1989(1) KLT 729 (1989 Lab 1C 2093), Elizabeth v. State of Keraia 1991 (I) KLT475 (FB), Excel Glasses Ltd. v. State of Keraia 1992 (1) KLT 121, Tinsukhia Electric Supply Co. Ltd. v. State of Assam AIR 1990 SC 123 and Sankaranarayanan Nambiar v. Union of India 1989 (2) KLT 635 (AIR 1990 Ker 5). In Sanjeev Coke Manufacturing Company v. M/s. Bharat Coking Coal Ltd. AIR 1983 SC 239, after observing that the question of constitutional validity of Article 31-C appears to be concluded by the decision of the Supreme Court in Kesavananda Bharati v. State of Keraia, AIR 1973 SC 1461 the Supreme Court held as follows :
"13. In Kesavananda Bharati's case, the Court expressly ruled that Article 31-C as it stood at that time was constitutionally valid. No doubt, the protection of Article 31-C was at that time confined to laws giving effect to the policy of the Clauses (b) and (c) of Article 39. By the Constitution Forty-Second Amendment Act, the protection was extended to all laws giving effect to all or any of the principles laid down in part IV. The dialectics, the logic and the rationale involved in upholding the validity of Article 31-C When it confined its protection to laws enacted to further Article 39(b) or Article 39(c) should, uncompromisingly lead to the same resolute conclusion that Article 31-C with its extended protection is also constitutionally valid. No one suggests that the nature of the Directive Principles enunciated in the other Articles of Part IV of the Constitution is so drastic of different from the Directive principles in Clauses (b) and (c), of Article 39, that the extension of constitutional immunity to laws made to further those principles would offend the basic structure of the Constitution. In fact, no such argument appears to have been advanced in the Minerva Mills case, AIR 1980 SC 1789 and we find no discussion and no reference whatsoever, separately to any of the distinct principles enunciated in the individual Articles of Part IV of the Constitution in decision in Minerva Mills. The argument advanced and the conclusion arrived at both appears to be general, applicable to every clause of Article 39, and every Article of Part IV of the Constitution, no less to Clauses (b) and (c) than to other clauses. We wish to say no more about the Minerva Mills case as we are told that there is pending a petition to review the judgment."
On the basis of the above decision, the Supreme Court took the view that the protection of Article 31-C from the challenge of violation of Articles Hand 19 of the Constitution can be extended to every enactment giving effect to all or any of the principle laid down in Part IV of the Constitution.
12. The learned Additional Advocate General Sri V. K. Beeran, appearing on behalf of the respondents submitted that the law laid down by the Supreme Court in Sanjeev Coke Manufacturing Company's case (supra) is that the protective umbrella of Article 31-C is available to each and every principle contained in Chapter IV of the Constitution of India. Any legislation giving effect to the Directive Principles of State Policy, whether it be Article 39(b) or (c) or any other article, should get the protection of Article 31C is the contention. For this proposition he referred to the decision reported in Sanjeev Coke Manufacturing Company's case (supra), para 11. He also referred to the Full Bench decision of this Court in Elizabeth v. State of Kerala, 1991 (1) KLT 475 (FB), in which this Court observed as follows :
"Article 31-C gives protection in respect of a law giving effect to the policy of the State relating to all or any of the principles laid down in Part IV of the Constitution."
Admittedly, Article 31-C as originally stood gave protection only to enactments giving effect to the principles specified in Clauses (b) and (c) of Article 39 of the Constitution. That was amended by Section 4 of the Constitution (Forty-second Amendment) Act by which, "all or any of the principles laid down in Part IV" was substituted in the place of "the principles specified in Clause (b) or Clause (c) of Article 39". Thus, originally only the enactments giving effect to the principles laid down in Clauses (b) and (c) of Article 39 were protected from the challenge of violation of Articles 14 and 1$ of the Constitution. Only by Section 4 of the Constitution (Forty-Second Amendment) Act, the protective umbrella is extended to the legislation giving effect to all the Directive Principles. Section 4 of the 42nd amendment Act was struck down by the Supreme Court by the decision in Minerva Mill's Ltd. v. Union of India, AIR 1980 SC 1789 by the following observations:
"Section 4 of the Constitution 42nd amendment Act is beyond the amending power of the Parliament and is void since it damages the basic or essential features of the Constitution and detroys its basic structure by a total exclusion of challenge to any law on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14or Article 19 of the Constitution, if the law is for giving effect to the policy of the State towards securing all or any of the principles laid down in pan IV of the Constitution."
Then it is submitted on behalf of the petitioner that the observations made in Sanjeev Coke Manufacturing Company's case is only an obiter dicta. The learned Additional Advocate General submitted that the obiter dicta of the Supreme Court is also binding on this Court. He also referred to the decisions reported in Municipal Committee Amritsar v. Hazara Singh, AIR 1975 SC 1087: (1975 Cri LJ 928) para 4, and A. R. Antulay v. R. S. Nayak AIR 1988 SC 1531 : (1988 Cri LJ 1661). It is observed in the first of these decisions that:
"Judicial propriety, dignity and decorum demand that being the highest judicial tribunal in the country even obiter dictum of the Supreme. Court should be accepted as binding Declaration of law by that Court even if it be only by the way has to be respected."
Apart from the fact that the obiter dicta of the Supreme Court is binding on this Court, he also stated that the Full Bench decision of this Court is certainly binding on this Court, and that whatever the single Judge or the Division Bench of this Court or any other High Court has held, this Court is bound by the decision of the Full Bench. If I am to base my decision on this aspect alone, 1 would have referred the matter for consideration by a fuller Bench. But'in this case, I do not think it necessary to refer the matter to a larger bench,
13. Sri M. 1. Joseph, Counsel appearing for the petitioners also submitted that the protection under Article 31-C cannot be claimed in this case as Presidential assent has not been obtained as required by Article 31-C, and he referred to the decision reported in Gram Panchayat of Village Jamalpur v. Malvinder Singh, AIR 1985 SC 1394. The Supreme Court held in para 12 of the said decision as follows:
"........The assent of the President under Article 254(2) of Constitution is not a matter of idle formality. The President has, at least, to be apprised of the special reason why his assent is sought if there is any reason for doing so. If the assent is sought and given in general terms so as to be effective for all purposes, different considerations may legitimately arise. But if, as in the instant case, the assent of the President is sought to the law for a specific purpose, the efficacy of the assent would be limited to that purpose and cannot be extended beyond it."
Counsel explained that in so far as the President's assent to the legislation will deprive the citizen of their fundamental right under Arts. 14 and 19, specific assent of the President ought to have been obtained and in so far as the same has not been secured in this case, the legislation must be held to be void. As stated already, this question needs consideration only if the Act cannot be sustained without the protection of Article 31-C of the' Constitution. I am of the view that in this case the validity of the Act can be upheld even without recourse to the provisions of Article 31-C of the Constitution.
14. Learned Additional Advocate General further submitted that it is not necessary in this case to rely on the protection under Article 31-C of the Constitution of India as the Act is a legislation under entries 20,23 and 24 in list III of the VII Schedule of the Constitution. For this he referred to the decision in New Woodlands Hotel v. Varkey 1974 KLT 867, Mangalore Ganesh Beedi Works v. Union of India AIR 1974 SC1832: (1974 Lab 1C 1237) paras 25 & 28, Gasket Radiators v. E.S.I. Corporation MR 1985 SC 790, Chel-lappan v. State of Kcrala 1990 (1) KLT 254 para 4. In the decision in New Woodlands Hotel's case (supra) the provisions of the Beedi and Cigar Workers (Condition of Employment) Act, 1966 were impeached as unconstitutional. While upholding the validity of the Act, the Supreme Court held as follows:
".........Entry 24 in List III speaks of Labour including conditions of work, provident funds, employers' liability, workmen's compensation, invalidity and old age pensions and maternity benefits. The Act is for the welfare of labour. It is not an Act for industries. The true nature and character of the legislation shows that it is for enforcing better conditions of labour amongst those who are engaged in the manufacture of beedis and cigars."
The Supreme Court further held :
".......Entries 22 to 24 in list III are wide enough to cover this piece of labour welfare measure. Entry 22 deals with labour welfare. Entry 23 deals with social security, employment and unemployment. Entry 24 deals with welfare of labour including conditions of work, provident funds, employer's liability, workmen's compensation, invalidity and old age pensions and maternity benefits. The Act is valid and falls within Entries 22, 23 and 24 of List TIL1' In Gasket Radiators' case (supra) the Employees' State Insurance Act was justified under entries 23 and 24 of list III of the VII Schedule as under:
"..............The payment of contribution by an employer towards premium (what else is it?) of an employee's compulsory insurance under the Employees' State Insurance Act falls directly within entries 23 and 24 of List III and it is wholly unnecessary to seek justification for it by recourse to entry 97 of List I or entry 47 of List 111 in any circumlocutouSf fashion. We see no reason to brand or stamp the contribution as a tax or fee in order to seek to legitimise it. Legitimation need not be sought fictionally from entry 97 of List I or entry 47 of List III when legitimation is directly derived for the charge from entries 23 and 24 of List III."
The Supreme Court further held in that case that the contribution can be justified as a fee as well, as services and benefits are indeed meant to be and are bound to be conferred on the employees and through them to the employer in due course. Since I have already held Welfare fund is for the benefit of the fishermen community who are all employees including that of the petitioner, the levy can be justified as a social welfare measure. In Chellappan v. State of Kerala 1990 (1) KLT 254 a Division Bench of this Court held that Toddy Workers Welfare Fund Act, 1969 is a legislation coming under entry 24 of list III which deals with welfare of labour including conditions 'of work. Provident Fund, employer's liability, workmen's compensation etc. This Court held :
"This Act is intended "to provide for the constitution of a fund to promote the welfare of toddy workers in the State of Kerala". The Act provides a scheme be framed and directs contribution to be made by the employer to the Fund at certain rates to each of the employees and also, in addition to the contribution, to contribute as gratuity an amount equal to five per cent of the wages for the time being payable to each of the employees. The scheme has been framed and is in force. The Act, therefore, follows the general pattern of welfare legislations and according to us, falls 'directly under entry 24 of List III which deals with "welfare of labour including conditions of work, provident funds, employer's liability, workmen's compensation, invalidity and old age pensions and maternity benefits."
Kerala Fishermen's Welfare Fund Act, 1985 is also an Act which provide for constitution of welfare fund for promoting the welfare of the fishermen in the State of Kerala and for matters incidental thereto. Its benefits, in effect, extend to all fishermen employed by the petitioners. The fund is utilised to provide distress relief to fishermen in times of natural calamities, for extending financial assistance to fishermen suffering from permanent or temporary disablement, for extending welfare amenities to fishermen, to grant loans and grants to meet the social needs of the fishermen community, etc. and, therefore, the Act neatly come under entries 23 and 24 of List III of the VII Schedule.
14A. There is no discrimination involved in this case and the petitioners have not been taxed in a dual capacity. The contribution payable is fixed on the basis of the income earned and hence the basis for levy is also reasonable. The legislation comes as a welfare measure and it is not a tax or a fee. Hence, there is no need to justify the same with quid pro quo qr under any taxing entry. The Act can be justified under entries 20, 23 and 24 of List HI of the VII Schedule of the, Constitution. Even though the Additional Advocate General elaborated the law laid down by the Supreme Court and this Court under Article 31C of the Constitution with reference to Sanjeev Coke Manufacturing Company's case (supra), Minerva Mills v. Union of India, AIR 1980 SC 1789, Kcsavananda v. State of Kerala AIR 1973 SC 1461, Waman Rao v. Union of India, 1980(3) SCC 587 : (AIR 1981 SC 271), Unni Mammu Haji v. State of Kerala, 1989 (1) KIT 729 : (1989 Lab 1C 2093), Excel Glasses Ltd. v. State of Kerala, 1992(1) KLT 121, Elizabeth v. State of Kerala, 1991 (l| KLT 475, I am not elaborating on this aspect as it has already been explained by me. He also referred to the decision reported in State of Tamil Nadu v. L. Abu Kayur Bai (AIR 1984 SC 326 para 23) to emphasise the point that there is a reasonable connection between the Act and the objects mentioned in Article 39(b) and (c) for applying the protection under Article31-C of the Constitution. But as already explained, the Act can be saved even without the protective unbrella of Article 3,1- C of the Constitution. Additional Advocate General also referred to the principle to be adopted in the interpretation of the Constitu tional entry with special reference to the decisions reported in Manohar Lal v. The State AIR 1951 SC315 : (1951 All LJ 605) and M.T. Joseph v. Gift Tax Officer AIR 1962 Ker 97. Further it is emphasised that the burden of proof that Article 14 of the Consti tution is violated is heavily on the petitioner.
He referred to the decision in Bank of Baroda 'v. R. Nagachaya Devi (AIR 1989 SC 2105 para 7). These.are well'settled principles and, therefore, a further judicial elucidation is not called for,
15. Counsel for the 2nd respondent also referred to the per capita production of fish by the boat owners and by owners of other crafts and staled that there is no arbitrariness involved in this case. It is submitted, that the benefit of the fishermen is the prime motive behind the enactment and the fact that all the fishermen in the area scattered in 225 fisheries villages are covered by the fund will show that the petitioner is also benefitted. He further submitted that there is no demand from the petitioners in dual capacity as boat owners and owners of fishing net and that the demand from net owners is meant, only to cover the stake net and China nets and the boat owners, even though they own fishing nets for the boats, they are not made to pay contribution on that basis or as owner of the nets withal.
16. In the circumstances, in view of the fact that the contribution is demanded for the welfare of the fishermen community which includes the petitioners' employees as well, I find that the Act is a legislation coming under entries 20, 23 and 24 of List III of the VII Schedule of the Constitution of India, and as a legislation under those entries, the Act.is also not violative any of the rights under Arts. 14and 19 of the Constitution of India. I make it clear that 1 have not held that the Act is entitled to protection under Article 31C of the Constitution as 1 hold that the Act .is valid even without the aid of Article 31-C of the Constitution.
In the circumstances, I find no merit in the Original Petitions. The Original Petitions are, therefore, dismissed.