BOMBAY DYEING & MANUFACTURING CO. LTD. versus THE STATE OF BOMBAY AND OTHERS

Citation: [1958] 1 S.C.R. 1122 · Decided: 20-12-1957 · Supreme Court of India · Bench: VIVIAN BOSE · Disposal: Case Partly allowed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

1122 
SUPREME COURT REPORTS 
[1958} 
1957 
BOMBAY DYEING & MANUFACTURING CO., LTD. 
D ... mb<riO. 
v. 
THE STATE OF BOMBAY AND OTHERS 
(BHAGWATI, VEN1'ATARAMA AIYAR, s. K. DAS, A K. SARKAR 
and VIVIAN BOSE JJ.) 
Labou-r Welfare-Law creating a fund for welfare activities 
..,ompanies called upon to pay fines realised from employees 
and unpaid accumulation of wages-Constitutional 
validity-
9ombay Labour Welfare Fund Act (Bom. XL of 1953), ss. 3(1) 
3(2)(a)(b)-Constitution of India. Arts, 31(2) 19(1)(f). 
The Bombay Labour Welfare Fund Act (Born. XL of 1953) 
was enacted by the State Legislature with the object of consti-
tuting a fund for the financing of activities for the welfare of 
labour ands. 3(1) of the Act provided as follov.;s :-
"There shall be constituted a 
fund 
called the Bombay 
Labour Welfare Fund and, notwithstanding anything contained 
in any other law for the time being in force, the sums specified. 
in sub-section (2) shall be paid into the Fund.
11 
Section 3(2) provided, inter alia, as follows:-
"The Fund shall consist of: -
(a) all fines realised from the employees; 
(b) all unpaid accumulation;" 
Notices were served on the appellant's company as also on 
other companies similarly situated, ty the Welfare Commis-
sioner, appointed under the Act, calling upon them to remit to 
him the fines and unpaid accumulations in their custody. The 
appellant in reply questioned the validity of the Act on the 
ground that it contravened Art. 31(2) of the Constitution ar.d, 
thereafter, filed a Writ petition, out of which the present appeal 
arises, which was treated by consent of parties as a test case. 
The Judges of the Divi8ion Bench who heard the matter held 
that the impugned Act was intra vires, though on different 
grounds, and dismissed the petition. The sole point for deter-
mination in the appeal v.·•as whether s. 3(1) and sub-els. (a), and 
(b) of s. 3(2) of the Act were void as being violative of Art. 
~I (2) of the Constitution: 
Held, that the unpaid accumulation of wages remaining 
with the appellant company was its own property and s. 3(1) of 
the impugned Act in so far as it directs the payment of it under 
3(2)(b) of the Act contravenes Art. 31(2) of the Constitution and 
must be invalid. Article 31(2A) of the Constitution has no 
retrospective effect and cannot apply and the matter must be 
decided on the law as it 'toad at the date of the Writ petition. 
t •
• 
S.C.R. 
SUPREME COURT REPORTS 
1123 
The State of West Bengal v. Subodh Gopal Bose, [1954] 
S.C.R. 587 and Dwarkadas Shrinivas of Bombay v. Sholapur 
Spinning anrL Weaving Co. Ltd., [1954] S.C.R. 674, applied. 
19ii7 
Bombay Dyeing 4J 
Maniifactnring 
Assuming that money w1as not property within the ~eaning 
Oo., ;td. 
of Art. 31(2) and Art. 19(1)(~) applied that Article also would 
The sU.te of 
be of no help to the respondent as the Act could not be sup- Bombay a"'l Ollle't-' 
ported under Art. 19(5) of the Constitution. 
Commonwealth of Australia v. Bank of New South Wales, 
[1950] A.C. 235, held inapplicable. 
The State of Bihar v. Maharajadhiraja Sir Kameshwar 
Singh of Darbhanga, [1952] S C.R. 889, considered. 
The impugned Act had not the effect of substituting the 
Board as the creditor in place of the employee nor could it be 
said to be a legislation in respect of abandoned property. 
Altho4gh by defining 'unpaid accumulation' in the way it 
did the Legislature ol:viously intended that only such wages 
of . the employees as were time-barred should be taken by the 
State, it being well settled that the law of limitation only bars 
the remedy but does not extinguish the debt, SS. 3q}, 5(2} and 
17 of the Act must be held to have the effect of transferring to 
the Board the debts due by the appellant to its employees free 
from the bar of limitation. 
Such a transfer can be valid only if it gives a complete dis-
charge to the employer from the debts. If it does not, the Act 
must be held to infringe Art. 19(l)(f) of the Constitution. The· 
Act contains no provision granting a discharge to the debtor. 
The bar of limitation prescribed either by s. 15 of the Payment 
of Wages Act (Act IV of 1936) or Art. 102 of the Limitation Act 
or the provisions of s. 56 of the Contract Act, assuming they 
applied, could not give such a discharge. 
Where the· Statute deals w'ith rights arising out of a· con-
tract and interferes with the rights of one of the parties to it, 
it must affect those of the other parties to it as well. Conse-
qu

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