IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K. BASHEER TUESDAY, THE 5TH AUGUST, 2008/14TH SRAVANA, 1930 WA.No. 683 of 2006 ---------------------- (AGAINST JUDT. DT. 7.3.2006 IN WPC No.17043 OF 2005) APPELLANT/PETITIONER ------------------------------------ K.V. HYMAVATHI, HYMA TRAVELS, KRISHNA KRIPA, P.O. MAMBA, KANNUR DISTRICT, REPRESENTED BY POWER OF ATTORNEY HOLDER, M. BALAKRISHNAN, KRISHNA KRIPA, P.O. MAMBA, KANNUR DISTRICT. BY ADV. SRI. P.M. PAREETH & SMT. C.C. JANCY. RESPONDENTS/RESPONDENTS: -------------------------------------------- 1. SPECIAL DEPUTY TAHSILDAR, REVENUE RECOVERY NO.1, KANNUR. 2. DISTRICT EXECUTIVE OFFICER, KERALA MOTOR TRANSPORT WORKERS' WELFARE BOARD, KANNUR. 3. ASST. PROVIDENT FUND COMMISSIONER, SUB REGIONAL OFFICE, P.B. NO.117, FORT BUILDING, V.K. COMPLEX, FORT ROAD, KANNUR - 670 001. 4. STATE OF KERALA, REPRESENTED BY THE PRICNIPAL SECRETARY TO GOVERNMENT, LABOUR DEPARTMENT, THIRUVANANTHAPURAM. R2 BY STANDING COUNSEL SRI. PAULSON C. VARGHESE R3 BY STANDING COUNSEL SRI. R. SUDHEER. THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 14/7/2008, THE COURT ON 05/08/2008 DELIVERED THE FOLLOWING: H.L. DATTU, C.J. & A.K. BASHEER, J. ------------------------------------- W.A. No. 683 of 2006 ------------------------------------ Dated this, the 5th day of August, 2008 JUDGMENT H.L. DATTU, C.J. This Writ Appeal is directed against the order passed by the learned Single Judge in W.P.(C) No.17043/2005 dated 7.3.2006. By the impugned order, the learned Single Judge has rejected the writ petition and thereby has confirmed the demand notices issued by the respondent, inter alia demanding the petitioner to make contributions towards the Kerala Motor Transport Workers Welfare Fund Act, 1985. 2. The only issue which falls for our consideration and decision is, whether the establishment which is covered under the provisions of the Employees Provident Fund Act is exigible for levy and payment of contributions under the provisions of the Kerala Motor Transport Workers Welfare Fund Act, 1985? 3. The factual matrix of the case is simple. The petitioner's establishment is covered under the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952. This factual position is not in dispute, since petitioner has produced the relevant certificates and the notification issued by the Central Government under the provisions of Employees Provident Fund Act. The respondents have now quantified the W.A.No.683/06 - 2 - contribution payable by the petitioner under the provisions of the Kerala Motor Transport Workers Welfare Fund Act and have issued the demand notices. This was questioned by the petitioner unsuccessfully before the learned Single Judge. That is how the present appeal. 4. The learned counsel for the respondent while justifying their action in demanding welfare contribution from the petitioner under the Act, has relied on the observations made by a Division Bench of this Court in the case of Unni Mammu Haji vs. State of Kerala, 1989 (1) KLT 729. 5. The citation on which reliance is placed, was a case, wherein the petitioners had called in question the validity of Section 4 of the Kerala Motor Transport Workers Welfare Fund Act, 1985, and the Welfare Fund Scheme issued by the State Government under Section 3 of the Act, on the ground that the Act and the Scheme is void under Article 254(1) of the Constitution of India as being repugnant with the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952. This court while repelling the aforesaid contention at Para 5 of the judgment, has stated that, “There is no repugnancy between the State Act and the Central Act. The Employees Provident Funds and Miscellaneous Provisions Act, 1952 applies only to establishments where 20 or more persons are employed. W.A.No.683/06 - 3 - The Welfare Fund Act passed by the Kerala Legislature applies only to such establishments to which the Central Act does not apply. So also the Payment of Gratuity Act applies to shops and establishments in which 10 or more persons are employed. The State Act with respect to gratuity applies only to such establishments excluded by the Central Act. Both the Central Act as well as the State Act, can, therefore, simultaneously apply to their respective areas of operation. There is, therefore, no repugnancy as envisaged by Article 254(1) of the Constitution. That apart, the State Act had received the assent of the President and the same would prevail over the Central Act even if the same is deemed to have occupied the field. The Welfare Fund Act is not void under Article 254(1) of the Constitution for repugnancy with the Central Act”. 6. The title of the Act is, The Kerala Motor Transport Workers Welfare Fund Act, 1985. The purpose of the Act is, to provide for the constitution of a Fund to promote the welfare of Motor Transport Workers in the State of Kerala. The Act is extended to the whole of the State of Kerala and it has come into force on 27th day of June, 1985. The Act defines the meaning of the expressions - employer, employee, contribution, motor transport undertaking etc. Section 3 of the Act provides for framing of the W.A.No.683/06 - 4 - Scheme for the purpose of the Act. Section 4 of the Act, provides for contribution towards the fund, both by the employer and the employee. Proviso appended to the Section is the one which falls for interpretation in this case and therefore it is noticed. It reads as under: “Provided that nothing in this section shall apply to a motor transport to which the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (Central Act 19 of 1952), apply”. 7. The proper function of a proviso was considered by the Supreme Court in Commissioner of Income Tax vs. Indo Mercantile Bank Ltd. AIR 1959 SC 713. It was observed therein, that, a proviso 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 providing something by way of addendum or dealing with a subject which is foreign to the main enactment. “It is a fundamental rule of construction that a proviso must be considered with relation to the principal matter to which it stands as a proviso”; therefore, it is to be construed harmoniously with the main enactment; it has to operate in the same field and if the language of the main enactment is clear, it cannot be used for W.A.No.683/06 - 5 - the purpose of interpreting the main enactment or to exclude by implication what the enactment clearly says unless the words of the proviso are such that, that is its necessary effect. 8. Justice G.P.Singh in his book, “Principles of Statutory Interpretation”, Tenth Edition, has explained the real nature and purpose of a proviso appended to a section. The learned author has stated as follows: “The normal function of a proviso is to except something out of the enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment. As stated by LUSH., J. “when one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso.” In the words of LORD MACMILLAN: “The proper function of a proviso is to except and to deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case.” The proviso may, as LORD MACNAGHTEN laid down, be “a qualification of the preceding enactment which is expressed in terms too general to be quite accurate”. The general rule has been stated by HIDAYATULLAH, J., in the following words: “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”. And in the words of KAPUR, J: “The proper function of a proviso is that it qualifies the W.A.No.683/06 - 6 - generality of the main enactment by providing an exception 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 proviso to read it as providing something by way of an addendum or dealing with a subject which is foreign to the main enactment.” Further, a proviso is not normally construed as nullifying the enactment or as taking away completely a right conferred by the enactment.”. 9. While this is the true rule of construction, the legislature by employing clear and unambiguous language may assign to a proviso a field larger than that occupied by the main section. After all, what is the essence in the ultimate analysis is the intention of the legislature. If that intention is made clear, no rule of construction arises for consideration. Therefore, the question would be, did the legislature intend to collect the contribution under provisions of Motor Transport Workers Welfare Fund Act from an employer whose motor transport undertaking is covered by the provisions of the Employees Provident Funds and Miscellaneous Provisions Act? We must remember that we are construing a welfare legislation meant for employees. But that does not mean an employer who is specifically excluded from the purview of the Act would still come within the net of the provision, though his motor transport undertaking as argued by learned counsel for the W.A.No.683/06 - 7 - respondent that, both the Central Act as well as the State Act, can be made applicable to their respective areas of operation. If the effect of the proviso, as contended by the learned counsel for the respondent, is accepted, it would be reading into the provision the employer/motor transport undertaking which is covered under the Provident Fund Act to come under the net of Welfare Fund Act and in our considered view, this is not the intention of the legislature and this Court certainly while considering the validity of Section 4 of the Act, in the case of Unni Mammu Haji vs. State of Kerala, did not subscribe to the view as contended by the learned counsel for the respondent. What the legislature specifically prohibits is the inclusion of an establishment covered by the Central Act for the purposes of the Motor Transport Workers Welfare Act and therefore, by interpretation, we cannot subject the motor transport undertaking cover under the Provident Fund Act to come under the purview of Motor Transport Workers Welfare Fund Act. Hence, when the proviso says that Section 4(1) of the Act shall not apply to motor transport undertaking which is covered under Provident Fund Act, the one and the only interpretation that is possible is, that a motor transport undertaking which is covered by Provident Fund Act is kept out of Motor Transport Workers Welfare Fund Act. W.A.No.683/06 - 8 - 10. In the instant case, the petitioner and his employees had voluntarily opted to come under the provisions of Employees Provident Fund Act by filing an application before the Central Provident Fund Commissioner. Sub-section (4) of the Provident Fund Act deals with the voluntary coverage under the Act. This sub-section opens with a non-obstante clause by giving it an overriding effect to sub-section (3) which provides for compulsory coverage of establishment for the purpose of the Act. Two conditions require to be satisfied for attracting this sub-section. The first one is, it should be made to appear to the Central Government that the provisions of the Act should be made applicable to an establishment, which conclusion it can reach either upon an application made to it or otherwise that the employer and the majority of the employees in relation to an establishment have agreed that the provisions of the Act may be made applicable to the said establishment, and secondly, the issue of a notification applying the provisions of the Act to the establishment by publishing the same in the official gazette. It is only when this process is completed, that, the Act can be said to have become applicable to the establishment concerned. In the present case, such a notification is issued by the Central Government. Therefore, it can be safely said that the petitioner's establishment is covered under the Employees Provident Funds W.A.No.683/06 - 9 - and Miscellaneous Provisions Act, 1952. 11. Our view, to the question posed by the petitioner is, in view of the proviso appended to Section 4 of the Act, once an establishment viz. Motor Transport Undertaking, is covered by the provisions of the Provident Fund Act, 1952, either under sub-section (3) or under sub-section (4) of the Act, those motor transport undertakings are kept out of Section 4 of the Kerala Motor Transport Workers Welfare Fund Act, 1985. 12. The next question that requires to be answered is, where did the learned Single Judge go wrong, when he rejected the writ petition. 13. The learned Single Judge, in our considered view, has proceeded on the wrong assumption that it was never the intention of the State Legislature by enacting the proviso to Section 4(1) of the Welfare Fund Act, to permit employers and majority of the employees to voluntarily go under the net of Provident Fund Act and thereby depriving the employees of more beneficial provisions available under the Welfare Fund Act. This, in our view, is an assumption, and this wrong assumption has led the learned Judge to reject the writ petition. It is no doubt true that, there are two legislations, one framed by the Central Government and the other by the State Government. Both legislations are made with the avowed object of assisting the employees W.A.No.683/06 - 10 - working in an establishment. If not for the proviso introduced by the State Legislature under the Welfare Fund Act, we think that, the learned Judge would have been justified in coming to the conclusion, that, both these legislations would operate simultaneously in their respective areas of operation, since both these provisions are meant for the welfare of the employees working in an establishment. In our view, even this proposition may be difficult to accept, but we refrain to comment on this and this can be kept as a weapon in the armory for a better case. However, we hasten to add, that, the conclusion reached by the learned Judge is contrary to the statutory provisions and also the observations made by the Division Bench of this Court in Unni Mammu Haji's case, where this court has specifically observed, that, the Welfare Fund Act passed by the State Legislature applies only to such establishments to which the Central Act does not apply. In the present case, as the provisions of the Central Act is made applicable, may be at the instance of the employer and majority of employees of the establishment, the employer is exempted from paying contribution under the Motor Transport Workers Welfare Fund Act, 1985. 14. In view of the aforesaid discussion, we cannot accept the reasoning and the conclusions reached by the learned Single Judge. W.A.No.683/06 - 11 - Therefore, we set aside the order passed by the learned Single Judge and also the demand notice issued by the respondent under the provisions of the Kerala Motor Transport Workers Welfare Fund Act. In the facts and circumstances of the case, we deem it proper to direct the parties to bear their own costs. The result is, the writ appeal is allowed. Ordered accordingly. Sd/- H.L.DATTU, CHIEF JUSTICE. Sd/- A.K. BASHEER, JUDGE DK.