ORDER [ENTITY], J.
1. The first and second petitioners are banking companies in the Private Sector governed by the provisions of the [ACT]. Petitioners Nos. 3 and 4 and petitioners Nos. 5 and 6 are employees of petitioners Nos. 1 and 2 respectively.
2. The banking activity carried on by petitioners 1 and 2 is the same as carried on by nationalised banks. There is no difference in this regard.
3. It is the case of the petitioners that the [ACT] (hereinafter referred to as 'the Act' for brevity) was made applicable to banks carrying on its business in any State or territory and having no operation or branch outside that State. By a notification dated 9.3.2000, the provisions of the Act have been made applicable to all non-nationalised banks in India. In view of this, petitioners Nos. 1 and 2 are now required to cover their eligible employees under the provisions of the Act. And by this, there would be three categories of employees in the petitioner banks, namely:
a) Employees whose basic wage and dearness allowance put together is Rs. 5,000/- or less.
These employees would have to be covered under the Act and contribution at the rate of 12% of the basic wage and 12% of the dearness allowance is to be deducted from their salary and an equal contribution by the employer of which 8.33% would go to the Employees Pension Scheme, 1995.
b) Employers not falling within category (a) above, who have not opted for the pension scheme of the banks.
These employees are covered only under the P.F. Scheme of the bank, under which 10% of their basic wage, without limitation, and a matching contribution of the Management is remitted into their account in the P.F. Trust.
c) Employees who have opted for the Pension Scheme of the bank, in whose cases they will have contributory P.F. only and in addition a pension scheme for which the bank would exclusively contribute. In this case, there is no contribution from the Management towards Provident Fund.
It is in this background that the present writ petition is filed.
4. Shri. [ENTITY], Senior Advocate, appearing for M/s. [ENTITY] Associates for the petitioners, contends that the notifications in question have brought in different sets of service conditions amongst the employees in so far as Provident Fund and Pension Scheme is concerned. The well-established practice of maintaining a uniform set of service conditions is breached. The Shastry Award and the Desai Award, which has laid down elaborate service conditions of the employees in the banking sector have not made any differentiation between employees of nationalised banks and those of the Private Sector banks. There is thus no basis for differentiating between the nationalised and non-nationalised banks in the matter of coverage under the [ACT] and the Scheme. He would submit that petitioners Nos. 3 to 6, for instance, would be subject to discrimination in the matter of terminal benefits, by virtue of the impugned notification. While employees drawing more than Rs. 5,000/- per month enjoy the benefit of provident fund contributions on their basic salary as also enjoy a far superior pension Scheme under which pension amount is related to the cost of living index, the covered in so far as they are concerned, is limited to Rs. 5,000/- and even if their salary crosses Rs. 5,000/- in future and their pension is limited to a maximum of Rs. 2,500/-. While others who are performing identical work get better benefits.
5. The counsel seeks to refer to the following authorities:
[PRECEDENT]. While dealing with this case which questioned the university excluding private employees from admission to evening classes and restricting admission only to Government employees, the Supreme Court held that there was no basic difference between the two classes of employees. To exclude employees of private establishments would not satisfy the test of intelligible differentia that distinguishes the two groups of employees. And though it is true that a classification need not be made with mathematical precision - but if there be little or no difference between the persons or things which have been grouped together and those left out of the group, the classification cannot be said to be a reasonable one.
D.S. Nakara and Ors. v. Union of India A [ACT] Bench, upon a review of decisions dealing with the scope of [SECTION], has held that the fundamental principle is that [SECTION] forbids class legislation but permits reasonable classification for the purpose of legislation, which classification must satisfy the twin tests of classification being founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question.
6. Per contra, Shri. [ENTITY], appearing for the respondent contends that under the impugned notification the provisions of the Employees Provident Fund Scheme are made applicable to Banks other than Nationalised Banks.
The Act was passed in the year 1952 to provide the institution of Provident Fund Scheme for employees to different kinds of establishments and all industries covered under [SECTION] of the Act. The object of the Act and the three Schemes thereunder is to ensure the security of the workers at the time of retirement. In case the establishments are giving better benefits under the Act, they can always seek exemption under [SECTION] of the Act.
7. He would submit that the present case is clearly covered by the judgment of the case in [PRECEDENT] and [PRECEDENT] : wherein the amendment of the EPF Scheme for applicability of provisions to the employees of Newspaper Industry was upheld. The contention of discrimination was negatived.
He would submit that the petitioners cannot question the validity of the Notification merely because the Nationalised banks have been left out of the applicability of the Act. The exclusion does not violate or infringe [SECTION] of the [ACT].
The Notification in question is not in the nature of delegated legislation but in the nature of conditional legislation.
The primary objection that the Notification would create three classes of employees as regards payment of Provident Fund benefits are concerned, is not tenable for the reason that the maximum rate of contribution payable under [SECTION] of the Act is 12% limited to Rs. 6500/-. As per para 26(6) an employee who is not otherwise eligible, can be enrolled as a member or allow him to contribute on wages exceeding Rs. 6500/- if the employee and employer give consent thereof.
8. He would also rely on the following authorities.
[PRECEDENT] Wherein it was held that the Scheme could not be termed arbitrary or discriminatory on the ground that it warrants exorbitant contribution with negligible return.
[PRECEDENT]. The question was whether [SECTION] of the [ACT] was invalid on the footing that it contravened [SECTION] of the [ACT]. Since under the sub-section the Central Government was conferred power to apply the provisions of the Act by Notification and was afforded absolute discretion in this regard and was not guided by any legislative provision and therefore was invalid. Negativing the argument the Supreme Court held that the sub-section was not an illustration of delegated legislation, it is, what can be properly called, conditional legislation. The course adopted by modern legislatures in dealing with Welfare schemes has uniformly conformed to a pattern. The legislature evolves a Scheme of Socio-economic welfare, makes elaborate provisions in respect of it and leaves it to the Government concerned to decide when and how and in what manner the Scheme should be introduced. The counsel for the respondent would hence submit that the writ petition be dismissed.
9. By way of reply, Shri. [ENTITY] would submit, that conditional legislation is not immune from challenge, when there is no intelligible differentia in placing the petitioners in a different class from nationalised banks. The petitioner banks are bound by the provisions of the [ACT] and also by the Reserve Bank of India guidelines.
10. It is further submitted that the petition having been filed in the year 2000, important changes have occurred during the pendency of the petition and has placed the same on record. He submits that the petitioners are members of the Indian Banks Association (hereinafter referred to as 'the IBA' for brevity). The IBA is an apex body that negotiates on behalf of all Association of Officers and union of workers of all banks, both nationalised and private. That settlements have been entered into in the year 2005 and there is no difference in the matter of coverage of employees under the Provident fund Scheme between nationalised banks and private banks. And, with effect from 29.9.2005, employees who join after the said date, are all compulsorily covered under the Pension Scheme. By virtue of the impugned notifications, the petitioners are liable to extend yet another pension Scheme to the already existing Pension Scheme. And this casts a serious financial burden on the petitioners.
11. The amounts deducted towards Provident Fund or Pension Scheme are fully secured. The funds are being invested as per the pattern of investments notified by the Ministry of Finance, Government of India, from time to time.
12. On these rival contentions, it is to be noted that the impugned notifications are issued in exercise of power of, what may be properly termed, as conditional legislation. There is no authority brought to my attention for the proposition that conditional legislation is immune from challenge.
13. There is no serious dispute as to the service conditions of the employees of the petitioners and that of nationalised banks being alike in all respects. Nor is there any dispute of the petitioners being governed by the provisions of the [ACT] and their business, management and administration being controlled by the Reserve Bank of India under the provisions of the [ACT], and the [ACT].
14. There are no material and characteristic difference between the petitioners and nationalised banks for purposes of implementation of the Provident Fund and Pension Schemes under the [ACT] and Schemes. There is therefore, no basis for exclusion of the nationalised banks under the impugned notifications.
15. It is besides the point that the petitioners are in a position to have recourse to [SECTION] of the Act.
16. Accordingly the writ petition is allowed and the impugned notifications at Annexures "A" and "B" are quashed.