MOHMEDALLI AND OTHERS versus UNION OF INDIA AND ANOTHER

Citation: [1963] SUPP. 1 S.C.R. 993 · Decided: 09-11-1962 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Dismissed

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Judgment (excerpt)

I S.C.R. 
SUPREME COURT REPORTS 
MOHMEDALLI AND OTHERS 
v. 
UNION OF INDIA AND ANOTHER 
\B. P. SINHA, c. J., P. B. GAJENDRAGADKAR, 
K. N. WANCHOO, K. C. DAB GUPTA and 
J.C. SHAH, JJ.) 
993 
Provident Fund-Constitutional validity of enactment and 
scheme framed thereunder-Employees' Provident Funds Act, 
1952 (19 of 1952) as amended by Act 46 of 1960, ss. 1(3) 
(b), 16, 17-Gonstitution of India, Art. 14. 
By a notification issued by the Central Government under 
s. I (3) (b) of the Employees' Provident Funds Act, 1952 the 
petitioners' restaurant was brought under the Act. By a fur-
ther notification under s. 5 read with s. 7 (I) of the Act, 
the Employees' Provident Fund (Second Amendment) Scheme, 
1961, was introduced. The petitioners challenged the con-
stitutional validity of the said scheme and the sections under 
which it was made and applied to their restaurant. It was 
urged that s. I (3) (b) of the Act conferred uncontrolled and 
uncanalised power on the Government, that the Act had appli-
cation only to wage-earners and not to salaried employees as 
those employed in the petitioners' restaurant and that the 
scheme was discriminatory and therefore hit by Art. I 4 of the 
""' 
Constitution. 
l 
Held, 
that 
whether or not a particular 
piece of 
legislation suffers from excessive 
delegation 
jias to 
be 
judged on a consideration of 
the 
facts 
and circumstances 
that led to 
the 
enactment of 
the impugned 
statute. 
If the Act and its preamble do not clearly indicate the under-
lying principles or the criteria for its application, the inevitable 
conclusion must be that the delegate is entrusted not merely 
with the function of applying the law, but substantially with 
the legislative power itself. So judged, it could not be said 
that the power entrusted to Central Government to bring by 
notification such establishments as it thought fit within the 
purview of the impugned Act was uncontrolled or uncanalised. 
The Edward Mills Go. Ltd. 
Beawar v. The State of 
Ajmer, [1955] I S. C.R. 735, Vasantlal Maganbhai Sanjan-
wala, [1951] 1 S. C.R. 341 and Hamdard Dawakhana (Wakf) 
Lal Kuan, Delhi v. Union of India, [1960] 2 S. C. R. 671, 
referred to. 
1962 
Novtmber, 9. 
1962 
Mohmedal/i 
v. 
Un;on of India 
Sinha, C. J. 
994 SUPREME COURT REPORTS [1963] SUPP. 
I 
.T~e Act ma~es no distinction between wages and salary. 
In prmc1ple there is no difference between the two and it was 
not c?rrect to say that. the Att was not intended to apply to 
salaried employees, if by salary was meant fortnightly or 
monthly wages running into hundreds per month. 
The Act wa~ not discriminatory and did not infringe 
Art. 14. It apphed to all establishments since s. 16 was 
amended by Act 46 of 1960 except those registered under 
the Co-operative Societies Act, 1912; and those newly set up 
till the expiry of three or five years. As was held by this 
Court co-operative societies stood on a different footing from 
other establishments. Exemption under s. 17 also could not 
be said to be discrimimtory. The petitioners' establishment, 
which came within the notification, was not therefore, dis-
criminated against. 
0RIGINALjURISDICTION: Petition No. 56 of 
1962. 
(Under Article 32 of the Constitution of India 
for the enforcement of Fundamental Rights). 
N. 0. Ohatterji, S. K. Kapur and K. K. Jain, 
for the Petitioners. 
H. N. Sanyal, Additional Solicitor General of 
India, M. S. K. Saatri and R. H. Dhebar, for the 
Respondents. 
1962. November 9. The Judgment of the Court 
was delivered by 
SINHA, C. J.-This petition, under Art. 32 of 
the Constitution, challenges the vires of certain provi-
sions of the Employees' Provident Funds Act (19 
of 1952) which hereinafter. will be referred to as the 
Act, and the scheme framed thereunder. The respon-
dents to this petition I are the Union of India and the 
Regional Provident Fund Commissioner. 
The petition is founded on the following allega-
tions. The petitioner;;, 5 in n~ber, are citiz~ of 
India and are carrymg on busmess of runnmg a 
restaurant and general stores under the name and 
style of "Messrs George Restaurant and Stores" at 
• 
i 
1 s.c.R. 
SUPREME COURT REPORTS 
995 
20, 
Appollo 
Street, 
Fort, 
Bombay-1, 
since 
September, 1958. They are running this business as 
a partnership firm, registered under the Indian 
Partnership Act. The firm employs 43 persons, 
including cooks, waiters, tea;makers, bill clerks and 
two store-clerks. Besides paying salary to their 
employees

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