Ranipet Lorry Owners' Welfare Association vs The State of Tamil Nadu and Others

P.K. Misra, J.—In this batch of writ petitions, which have been filed by various owners of Transport Vehicles and also by Associations

representing the lorry owners or the private bus owners of the State as well as of other States, the main relief claimed is for a declaration that

Section 8-B(1)(b) and Section 8-B(2) of the Tamil Nadu Manual Workers (Regulation and Employment of Conditions of Work) Act, 1982,

hereinafter referred to as ""the Act"", as illegal, unconstitutional and void.

The basic allegations in all these writ petitions are as follows:

The owners of transport vehicles, including buses and lorries are liable to pay road tax which is required to be paid within the stipulated period. On

the basis of Circular No. 118/99, dated 28.12.1999, the Regional Transport Officers of various places are insisting upon payment of 1% of such

quarterly tax payable as Labour Welfare Fund.

The petitioners have raised two contentions objecting to such action. It is first contended that the provisions contained in Section 8-B(1)(b) and

8-B(2) of the Act are ultra vires, null and void and at any rate, the provisions are not applicable as the various transport operators are not

employers"" coming within the provisions of the Act.

In the course of hearing of the batch, learned Counsel appearing for the various petitioners have not seriously raised contentions in support of

the alleged invalidity of the provisions contained in Section 8-B(1)((b), but had submitted that the various transport owners are not coming within

the purview of the Act.

In the common counter affidavit filed on behalf of the respondent, it has been pointed out that the Act comes within the ambit of legislative

power of the State and the provisions contained in the Act intend to protect the manual employees employed in the State of Tamil Nadu.

The preamble of the Act is to the following effect.

An Act for regulating the employment of manual workers employed in certain employments in the State of Tamil Nadu and the conditions of their

work and security of their employments and certain other matters connected therewith.

Section 2 is the Definition section. The relevant definition clauses, namely Section 2(5), 2(6), 2(10), 2(11), 2(12) and 2(13) are extracted here

under.

(5) ""employer"" in relation to any manual worker engaged by or through contractor means the principal employer and in relation to any other manual

worker, the person who has ultimate control over the affairs of the establishment and includes any other person to whom the affairs of such

establishment are entrusted, whether such person is called an agent, manager or is called by any other name prevailing in the scheduled

employment;

(6) ""establishment"" means any place or premises including the precincts thereof, in which or in any part of which any scheduled employment is

being or is ordinarily carried on;

(10) ""manual worker"" means a person who is engaged or to be engaged directly or through any agency, in any scheduled employment whether for

wages or not, to do manual work in any scheduled employment, and includes any person not employed by any employer or a contractor, but

working with the permission of, or under agreement with the employer or contractor and a person who is given raw materials by an employer or a

contractor for making or altering or for any work, and a person who directly engages himself in any scheduled employment but does not include

any member of the family of an employer or any employee who is in the enjoyment of benefits by or under the Employees'' State Insurance Act,

1948 (Central Act XXXIV of 1948) or the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 (Central Act XIX of 1952).

(11) ""principal employer"" means an employer who engages manual workers by or through a contractor in any scheduled employment;

(12) ""scheduled employment"" means any employment specified in the schedule wherein any manual work is undertaken by the manual worker or

any processor branch of manual work forming part of such employment;

(13) ""scheme"" means a scheme made under this Act;

Section 8-B is extracted here under.

8-B.(1) Notwithstanding anything contained in any law for the time being in force or any agreement, but save as otherwise provided in Section

8A,--

(a) every employer other than an employer operating a motor transport for carrying passengers or goods by roads, employing manual worker in

any scheduled employment,,shall be liable to pay, within such time as may be prescribed, to the Board established u/s 6, for the scheduled

employments, other than the scheduled employment in construction or maintenance of dams, bridges, roads or in any building operations, every

month a sum at such rate not exceeding three per cent of the wages payable by him to such manual worker, as may be fixed by the Government by

notification;

(b) every employer operating any motor transport for carrying passengers of goods by roads, shall be liable to pay, in addition to the tax payable

by him under the Tamil Nadu Motor Vehicles Taxation Act, 1974 (Tamil Nadu Act 13 of 1974) (hereinafter in this section referred to as the said

Act), a sum at such rte not exceeding one per cent of the tax payable by him under the said Act, as may be fixed by the Government by

notification;

(c) every manual worker in any scheduled employment other than the scheduled employment in construction or maintenance of dams, bridges,

roads or in any building operations, shall pay a sum of rupees twenty per month in such manner and within such time as may be specified in the

scheme;

(d) the Government may, from time to time, make grants to the Board on such terms and conditions as the Government may, in each case,

determine,

as contribution to the Fund constituted for the benefit of manual workers in the scheduled employments under a scheme framed under this Act,

other than those employed in construction or maintenance of dams, bridges, roads or in any building operations.

(2) Notwithstanding anything contained in any law for the time being in force, every Officer appointed under the said Act shall while collecting tax

under the said Act, also collect the sum specified under Sub-section (1) and remit such sum within ninety days from the date of collection of such

sum to the Board referred to in Sub-section (1), in such manner as may be specified in the scheme.

(3) Any sum paid under Sub-section (1) or remitted under Sub-section (2) shall be credited to the Fund constituted for the benefit of the manual

workers, under a scheme framed under this Act, other than those employed in construction or maintenance of dams, bridges, roads or in any

building operation.

A perusal of the aforesaid provisions indicate that Section 8-B(1)(a) is applicable to employers other than the employers operating motor

transport for carrying passengers or goods by roads, whereas Section 8-B(1)(b) relates to every employer operating any motor transport for

carrying passengers or goods by roads. The expression ""employer"" has been defined in Section 2(5). As per the said provision, employer is the

person who has ultimate control over the affairs of the establishment. The expression ''establishment'' has been defined to mean any place or

premises in which or in part of which any scheduled employment is being or is ordinarily carried on. As per Section 2(12), scheduled employment

means employment specified in the schedule, wherein any manual work is undertaken by the manual worker.The schedule as per Section 2(12)

contains several entries. As per Entry No. 2 in such Schedule, employment in connection with loading of goods into public transport vehicles or

unloading of goods there from comes within the expression ""employment"". By virtue of G.O.Ms. No. 47, Labour & Employment, dated 2nd

March, 2001, Entry 24 has been amended and at present it stands as employment in driving auto-rickshaws, taxi, van, tempo, lorries and buses

other than owned by Government Departments.

Even though in all the writ petitions the validity of Section 8-B(1)(b) and Section 8-B(2) has been challenged, the basis of such challenge has

not been highlighted in any of the writ petitions nor even during the hearing. As a matter of fact, during the hearing, the counsels appearing for the

petitioners have practically given up the challenge to the validity of the provision and on the other hand, they have concentrated upon the question

as to whether such provision u/s 8-B(1)(b) is at all attracted to the owners of the transport vehicles by concentrating upon the definition of the

expressions, ''employment'', ''establishment'' and ''manual worker''.

Be that as it may, as is well known, the validity of the statute can be questioned if the legislature, which enacted the statute, does not have

legislative competence or if the provisions of the statute are violative of the provisions contained in the Constitution of India, including the provisions

relating to fundamental right.

So far as the legislative competence is concerned, as has been submitted by the learned Advocate General, the source of legislation can be

traced to Entry 23 of the Concurrent List. The impost which is sought to be imposed is relatable to such Entry 23 of the Concurrent List.

Even though it has not been specifically pointed out as to which provision of the Constitution is being violated, in many of the writ petitions it

has been stated that the provisions are arbitrary. It cannot be stated that the provisions are ipso facto arbitrary. There is a presumption of validity

of a statute and it is for the person challenging the validity of the statute to indicate as to how such provision is ultra vires, more particularly when

the challenge is on the ground of arbitrariness. The main intention of the statute is to make welfare provision for the manual workers in the

unorganized sector. The definition of manual worker, contained in Section 2(10) makes it clear the expression ''manual worker'' does not include

any employee who is in the enjoyment of the benefits by or under the Employees State Insurance Act, 1948 or the Employees'' Provident Funds

and Miscellaneous Provisions Act, 1952. In other words, by reading Section 2(10) along with the definition of employment as contained in Section

2(5), it is apparent that those of the manual workers, who are covered under the two Central Acts referred to above, are not intended to be

covered under the umbrella of the Tamil Nadu Manual Workers (Regulation and Employment of Conditions of Work) Act, 1982. The provisions

contained in the statute reflect the welfare measures to be taken and therefore the challenge on the ground of arbitrariness is not sustainable at all.

In course of hearing, it was also submitted by some of the learned Counsels appearing for the petitioners that no mechanism has been indicated

in the statute regarding resolution of any dispute regarding liability if any and its extent. Section 5 of the Act contains a provision regarding

resolution of dispute and lays down that if any question arises whether any scheme applies to any class of manual workers or employers, the matter

shall be referred to the prescribed authority and the decision of the prescribed authority made after consultation with the Advisory Committee on

questions shall be final.

It was submitted that in fact no such authority has been prescribed and therefore the provisions of the Act, which do not contain any

mechanism for resolution of the dispute, must beheld to be ultra vires. The validity of a provision cannot be dependant upon the question as to

whether subsequently any mechanism has been put in place for resolution of the dispute. Moreover, the amount to be paid by a person liable to

pay is to be specified either in the scheme or by the order of the Government. Therefore, no dispute regarding the quantum of the amount payable

can arise. The only other possible dispute would be as to whether the person is liable to pay or not. Such dispute can be resolved u/s 5 as the

question would be whether the scheme applies to any employer. Even otherwise, if a person claims that he is not liable to pay any amount, he can

always get a declaration from the competent court.

Even though the validity of the Act is beyond question, the principal question which remains to be decided is regarding the applicability of the

provisions of the Act to the owners of the transport vehicles. The counsels have submitted that as per the definition of ''employer'', such owners of

transport vehicles may not come within the meaning of such provisions. As per the definition contained in Section 2(5), the expression ''employer'',

means the person who has ultimate control over the affairs of the establishment. The expression ''establishment'' means, as per Section 2(6), any

place or premises, including the precinct thereof in which or in any part of which any scheduled employment is being or is ordinarily carried on.

The learned Counsels, by inviting our attention to the Schedule, contend that so far as the owners of the transport vehicles engaged in carrying

passengers are concerned, they are neither directly nor even indirectly engaging any person to load goods in such vehicles and therefore it cannot

be said that they will come within the definition clause, as such persons are in employment in connection with loading or any other manual work in

any establishment. As per Entry 2 of the Schedule, employment in connection with loading of goods into public transport vehicles or unloading of

goods there from and any other operation incidental or connected thereto shall be coming within the Schedule. So far as goods vehicles are

concerned, it is obvious, such goods vehicle would come within the definition as persons engaged in connection with loading of goods into public

transport or for unloading of goods. However, in this connection, it is contended that even though such persons are employed, they are not the

employees under the truck owners but they are engaged by the persons who hire the trucks for the purpose of carrying the goods. It is also

submitted by them, in any case, definition of the establishment is not applicable to their business of carrying goods.

As per the definition Clause 2(6) ""establishment"" means any place or premises including the precincts thereof, in which or in any part of which

any scheduled employment is being or is ordinarily carried on. When the definition clause defines the word ""to mean such and such"", the definition

is prima facie restrictive and exhaustive. However, keeping in view the context in which such expression has been used and the fact that the Act is

a beneficial legislation, meaning of the word ""establishment"" should not be restricted to what has been included in the definition, but a mere generic

meaning can be ascribed to such expression ""establishment"". Understood in such a wider perspective, ""business organisation"" which the dictionary

meaning of the word ""establishment"" ''a thing established, as a business'' can also be adopted. Similarly the word ""Place"" understood in the context

in which it has been used in the definition Clause 2(6) can take within its sweep the ""vehicle"". Understood in such generic sense, it can be said that

if a person running a business in transport either in transportation of persons or in transportation of goods can be said to be the employer in relation

to any manual worker engaged for loading or unloading in such vehicle or even driving such vehicle. As per entry 2 in the schedule employment in

connection with loading of goods into public transport vehicles or unloading of goods therefrom comes within the definition of scheduled

employment as per Section 2(12) of the Act. Similarly, entry No. 24 in the schedule, which is relating to employment in driving, inter alia, lorries

and buses, comes within the ambit of scheduled employment. Therefore, a person, who is engaged in driving any lorry or bus, can be considered

as a manual worker engaged to do manual work in any scheduled employment as envisaged in Section 2(10) of the Act. The owner of such lorry

or bus can be considered as employer so far as such manual worker is concerned, who is coming within the meaning of the expression ""employer

as per Section 2(5) of the Act. The only exception as envisaged in Section 2(10) indicates that the expression ""manual worker"" does not include

any employee who is in the enjoyment of benefits by or under the Employees'' State Insurance Act, 1948 or the Employees'' Provident Funds and

Miscellaneous Provisions Act, 1952. The obvious rational behind such exclusionary clause in Section 2(10) is that such employee coming within

the Employees'' State Insurance Act, 1948 or the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 is entitled to similar or

may be more benefits under those Acts for which the employer is also required to contribute and, therefore, the employer need not be made to pay

the amount.

A submission was made in course of hearing, even though there is no specific pleading in any of the writ petitions to that effect, that there is no

mechanism for ascertaining the liability or assessing the extent of liability. So far as ascertaining the liability of an employer is concerned, only if the

employer is able to establish that manual worker is covered under the Employees'' State Insurance Act, 1948 or the Employees'' Provident Funds

and Miscellaneous Provisions Act, 1952, he would not be liable to pay at such amount as would be notified by the Government in accordance with

Section 8-B and 8-B(1)(b). The requirement is to pay such rate not exceeding one per cent of the tax payable under the Tamil Nadu Motor

Vehicles Taxation Act, 1974. It is not disputed that as per the Notification the Government has fixed payment at the rate of one per cent of such

tax. Therefore, nothing remains to be assessed for making such payment as the person coming within the meaning of employer of a manual worker

in an establishment wherein the scheduled employment is carried on, is required to pay one per cent of the tax payable under the Tamil Nadu

Motor Vehicles Taxation Act, 1974,. Since the quantum of tax payable under the Tamil Nadu Motor Vehicles Taxation Act is already fixed by the

Statute, obviously there is no requirement for any other assessment. The question, however, remains that in some cases where some persons may

not be liable as they may not be the employer in view of the exclusionary clause in Section 2(10), the employee does not come within the definition

of the manual worker. In other words, if the employee is beneficiary under the Employees'' State Insurance Act, 1948 or the Employees''

Provident Funds and Miscellaneous Provisions Act, 1952, the employer of such employee does not come within the fold. This aspect also does

not require extensive enquiry because the concerned owner can always produce documentary evidence regarding the coverage of the

establishment under the the Employees'' State Insurance Act, 1948 or the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952,

as the case may be. These material documents can always be produced before the authority entitled to collect the imposed, namely, the person

authorised to collect the Motor Vehicles Tax under the Tamil Nadu Motor Vehicles Taxation Act, 1974. If, however, such authority does not

accept the documents/proof produced by the concerned owner of the vehicle, necessary declaration can always be obtained from the competent

court or even otherwise necessary information / materials can be produced before the Inspectors as envisaged u/s 16 of the Act.

Where the question arises regarding applicability of any scheme, the matter shall be referred to the decision of the prescribed authority. It was

contended across the Bar that no such authority has been prescribed. If that be so, steps can always be taken by the Government, but merely

because an authority as envisaged u/s 5 to resolve disputes regarding application of the scheme has not been prescribed or appointed, it cannot be

said that the provisions of the Act become inappicable.

Learned Counsel appearing for some of the bus operators belonging to other States submitted that the provisions of the Act should not be

made applicable to the outside owners of the bus as the driver or other workers engaged by him have no nexus with the object of the Act as they

belong to outside State and, therefore, such bus owner may not be liable.

Even though such a contention may prima facie appear to be impressive, we do not think such a contention can be accepted on a deeper

scrutiny. Even if the employees may be residents of outside States, the imposed is being collected as a social measure for the benefit of a class of

employees. Moreover, there is no embargo for such person to become member of the Scheme.

In course of hearing it was also contended that so far as the bus owners are concerned, there is no occasion for any one of them to avail

services of any person for loading goods as such process is meant only for carrying goods and not the passengers. This contention though prima

facie attractive, is untenable in view of entry 24, which relates to employment of any person in driving buses.

It was also contended that entry 24 cannot be pressed into service as the Scheme concerned had specifically excluded such persons.

However, in course of hearing, learned Advocate General produced before us the Scheme, which is meant for the drivers coming within the scope

of entry 24. The liability to pay imposed arises on account of different provisions contained in the statute. Merely because a scheme was not in

place immediately is not a ground for claiming that the Act is not applicable.

A ground was taken in various writ petitions that the requirement for making such payment of one per cent tax is through a demand draft which

causes unnecessary burden as the expense commission incurred for obtaining a draft is unnecessary. It has been stated in the counter affidavit that

steps are being taken for enabling the person to pay the amount in cash i.e., through challan. Therefore, such a contention has also lost its currency.

For the aforesaid reasons, all the writ petitions are dismissed, subject to the clarification indicated about the exclusionary clause relating to

employees coming within the umbrella of the Employees'' State Insurance Act, 1948 or the Employees'' Provident Funds and Miscellaneous

Provisions Act, 1952. There would be no order as to costs.