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

Citation: [1958] 1 S.C.R. 1122; 1957 INSC 116

Court: Supreme Court of India

Bench: VIVIAN BOSE , NATWARLAL HARILAL BHAGWATI, T.L. VENKATARAMA AIYYAR, S.K. DAS, A.K. SARKAR

Judgment date: 1957-12-20

Case summary

1957 INSC 116. Supreme Court of India judgment dated 1957-12-20. BOMBAY DYEING & MANUFACTURING CO. LTD. v. THE STATE OF BOMBAY AND OTHERS. Read the judgment...

Judgment text

1122 SUPREME COURT REPORTS [1958} 1957 BOMBAY DYEING & MANUFACTURING CO. , LTD. D ... mb ry that acquisition in Art. 31(2) 2'Aa Blah ~ is not confined to cases of transfer of ownership to the State, 8 °""'° 11 ~ IAer, and that even deprivation of property would fall within it, Ve",! '; 14 ';. "~ which is the baisis of the deoisions in The State of West Ben- 1JG gai v. Subodh Gopal Bose(') and in Dwarkadas Slirinivas of Bombay v. The Sholapur Spinning and Weaving Co. Ltd. (') can, in view of the above amendment, no longer be accepted as correct, and that those decisions therefore require to be reconsidered in the light of the new Art. 31(2A). But-it is not disputed that this provision has no retrospective operation and that the rights of the parties must. be decided in accord· ance with the law as on the date of the writ application, and that on the provisions of the Constitution as they stood on that date and as interpreted in The Staie of West Bengal v ..

Subodh Gopal Bose(') and Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and Weaving Co. Ltd. ( 1 ), s. 3 (l) of the impugned Act would be obnoxious to Art. 31(2). This should be sufficient to conclude this question in favour of the appellant, but the respondents contend that s. 3(1) is not within the prohibition of Art. 31(2), because it operates only on money, and money is not property for purposes of that Article. There is considerable authority in America that the power . of eminent domain does nt>t extend to the taking of money, the reason being that compensation which is to be · paid in respect of money can only be money, and that, there- fore, in substance it is a forced loan. In The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbl! angu('), this view was adopted by Mahajan J. at pages 943-944, by Mu- kherjea J. at page 961 and by Chandrasekhara Aiyar J. at pages 1015 to 1018. It is airgued for the respondents that the position under Art.

31 (2) is the same as in America, as the (') [1954] S. C. R. 587. (') (1954] S. C. R. 674. (') [1952] S. C. R. 889. . ll32 SUPRE:\IE COURT HEPOHTS [1958] 195? proV1S10n therein that either the amount of the compensa- 11ombt>y Dyeing . r. tion should be fixed or the principles on which and the man- Man•Jaduri"11 ner in which compensation is tt> be determined should be co. , Lid. , specified, involves that what is taken is not money. It is ar- r1,. s;;. of gued, on the other hand, for the appellant that the latest . B""'""Y allci Otlltr•trends in American law show, as was observed by Das J. (as Ve... tala••ma he then was), at pages 984-985 in The State of Bihar v. Maha- . Aiyur J.

ra;adhirai Sir Kameshwar Singh of Darbhanga('), a depar- ture from the view held in earlier authorities that moneys and choses in action could not be the subject of "eminent domain"; and that, in any case, the principles of American law should not be applied in the interpretation of the provi- sions of our Constitution. If the contention of the respbndents is to be accepted, the question naturally arises what protec- tion a person has in respect of moneys belonging to him if he can be deprived bf them by process of legislation. The answer of Mr. Seervai is that that protection is to be sought in Art. 19(1)(f), that the word "property" therein has a wider connotation that what it bears in Art. 31(2) and includes money, and that the citizens have the right to hold tr. oney subject only to law such as is saved J? y Art. 19(5). In sup- port bf this position, he relied on the decision in Bijay Cot- ton Mills Ltd. v. The State of Aimer(') in which this Court applied Art.

19(6) in pronouncing on the validity of the Minimum Wages Act (XI of 1948) requiring the employers to pay wages at a rate not less than that to be fixed by the Government Assuming that the correct position is what the respbn- dents contend it is, the question that has still to be determin- ed is whether the impugned Act could be supported under Art. 1905. There was some discussion before us as to the scope of this provision, the point of the debate being whe- ther the words "imposing reasonable restriction" would cover a legislation, which not merely regulated the exercise of the rights guaranteecl by Art. 19(l)(f) but totally extinguished them, and whether a law like the present one which deprived the owner bf his properties could be held to fall within that provision. It was argued that a law authorising the State to (') [1952] S. C. R. 889. (') [1955) 1 S. C. R. 752. S. C. R. SUP. REY.

IE COURT REPORTS 1133 seize and destroy diseased cattle, noxious -Orugs and the like, I96T could not be brought within Art. 19(5) if the word 'restric- Bombay Du•ing "' tion' was to be narrowly construed, and that accordingly the ~an•'facJZ:J"fl power to restrict must be held to include, in appropriate o. , v. · cases, the power to prohibit the exercise of the right. That BO:/:,,. ~ ::::f" 01 °/. ,,. view does find support in the observations of Lord Porter - - . Venkatasa1111J lll Commonwealth of Austraira v. Bank of New South Aiyar J. Wales('); but the present legislation cannot be sustained even on the above interpretation of the word 'restriction', as s. 3( l) of the Act deals with moneys and money cannot be likened to diseased cattle or noxious drugs so as to attract the exercise of police power under Art. 19(5). It appears to us that whether we apply Art. 31(2) or Art. 19(5), the im- pugned Act cannot be upheld, and it must be struck down.

unless we accept the other contentions which have been urged for the respondents in support of its validity. Those contentions are firstly. that the Act merely substitutes the Board as the creditor in the place of the employees, and that ss. 3 and 17 merely prescribe the mode in which the obliga- tion is to be enforced and-that was the ground on which Chagla C. J. based his judgment; and secondly, that the im- pugn~d legislat! on is one in respect of abandoned property, and it is not open to attack as contravening either Art. 19(l)(f) or Art. 31(2). It is those oontentions that now fall to be considered. As regards the first contention, the question is whether on a fair construction of the provisions of the impugned Act, it is possible to spell out a substitution of creditors. When an employee has done h! s work, the amount of wages earned by him becomes a debt due to him from the employer, and it is property which could be assigned 'under the law.

If the em- ployee had assigned the debt to the Board constitUted under the Act, the latter would be entitled to recover it from the em- ployer. And what could be done by act of parties can also be done by legislation. What we have to see, therefore, is whether on the provisions of the statute it could be held that ( 1 ) (1950] A. C. 235, 311. 1134 SUPRKME COURT REPORTS [1958) 1957 there is a statutory transfer of the wages earned by the work- Bomba D ei"fl "' man to the Board. Section 5 of the Act vests the amounts men- M•~uJdituring tioned in s. 3(2) in, the Bo11rd, and s. 3(1) directs that those Oo. , £14, amounts should be paid by the employer to the Board. Coun- Th• slate of sel for the appellant contends that there are in the Act no Bombay and OtMra words of transfer of the debts to the Board, and that there is only a provision for pavment of the amounts. But this is Vtnbitarama J . Aiyar J. taking tbo narrow a view of the true scope of those provi- sions.

Looking at the substance of the matter, we are of opi- nion that s. 3(1) and s. 5(1) do operate to transfer the debts due to the employees, to the Board. It will be observed that the definition of "unpaid ac- cumulations" takes in only payments due to the employees remaining unpaid within a period of three years after they become due. The intention of the Legislature obviously was that claims of the employees which are within time should be left to be enforced by them in the ordinary course of law, and that it is only when they become time-barred and useless to them that the State should step in and take them over. On this, the question arises for consideration whether a debt which is time-barred can be the subject of transfer, end if it can be, how it can benefit the Board to take it over if it can- not be realised by process of law. Now. it is the settled law of this country that the statute of Lim;tation only bars the remedy but does not extinguish the debt.

Section 28 of the Limitation Act provides that when the period limited to a person for instituting a suit for possession of any property has expired, his right to such property is extinguished. And the authorities have held-and rightly, that when the pro- perty is incapable of possession, as for example, a debt, the section has no application, and lapse of time does not ex- tingu'sh the right of a person thereto. Under s. 25(3) cf the Contract Act, a barred debt is good consideration for a fresh promise to pay the amount. When a debtor makes a pay- ment without any direction as to now it is to be appropiat- ed, the creditor has the right to appropriate it towards a barred debt. (Vi de s. 60 of the O>ntract Act). It has also been held that a ~reditor is entitled to recover the debt from 8. C. R. SUPRE~IE COURT Rl~PORTS 1135 the surety, even though a suit on it is barred against the 1967 principal debtor. Vide Mahant Singlt v. U. Ba Yi('), Subra· Bombay Dyeing " m~ia Aiyar v.

Gopala Aiyar('), and Dil Muhammad v. Saiti ~:~~~J,~;. ng Das('). And when a creditor has a lien over goods by way of v. · 1 h f h J' e... b · • 'l'lie State of ·security for a oan, e can en orce t e 1en tvr o taming Bolllbay and Ol! it. r• satisfaction of the debt, even though an action thereon would be time-barred. Vide Narendra Lal Khan v. Tarubala Dasi('). That is also the law in England. Vide Halsbury's . Laws of England (Hailsham's Edition), Vol. 20, page 602,. para. 756 and the observa~ions of Lindley L. J. in Carter v. White(') and of Cotton L. J. in Curwen v. Milburn('). In American Jurisprudence, Vol. 34, page 314, the Jaw is thus stated. · "A majority of the courts adhere to the view that a statute of limitations, as distinguished from a statute which prescribes conditions precedent to a right of lM::tion, does not go to the substance of a right, but only to the remedy.

It does not extinguish the debt or preclude its enforcement, unless the debtor chooses to avail himself of the defence and specially pleads it. An indebtedness does not lose its charac- ter as such merely because it is barred; it still affords suffi- ·cient consideration to suppbrt a promise to pay, and gives a creditor an insurable interest. " , In Corpus Juris Secundum. Vol. 53, page 922, we have the following statement of the law: "The general rule, at least with respect to debts or money . demands, is that a statute of limitation bars, or runs against, . the remedy and does not discharge the debt or extinguish or . impair the right, obligation, or cause of action. " The position then is that under the law a debt subsists notwithstanding that its recovery. is barred by limitation, and no argument has been addressed to us by the appellant that the transfer of such a debt is invalid; and indeed it could' not be, in view bf the provisions in the impugned Act, which re- ( ') (1939) L.

R. 66 I. A. 198. (') (1910) I. L. R. 33 Mad. 308. (: 1 ) A. LR. 1927 Lah. 396. (') 192~\ I. LR 48 Cal, 817, 823 {') (1883,) . 25 Ch. D. 666. 672. (') (1889) 42 Ch. D. 424, 434. 1136 SUPHK\IE COl;RT Rl sub-s. (2) of s. 5 that "unpaid accumulations" and fines shall V nl:nla. rama . Aiyar J, be paid to the Board .. notwithstanding anything contained in the Payment of Wag~s Act, 1936, or any other law for the time being in force. " One of those laws is the law of limita- tion, and the effect of these provisions is to suspend limita- tion in respect of the claims to which s. 3(2) relates. To dis- pel any doubt as to whether it wa·s competent to the Legisla- ture of the Bombay State to modify the provisions of the Limitation Act. it should be stated that limitation is •I topic enumerated in the Concurrent List, being Entry 13 in List III in Seventh Schedule to the Constitution, and under Art. 254(2).

the State Legislature can enact a law modifying the Central Act, provided it is reserved for consideration by the President and assented to by him, and that has been done in the present case. Coming to the impugned Aot, there is one other provision therein to which reference must be made. Section 17 provides that without prejudice to other modes of recovery, the sums payable to the fund under s. 3 may be re- covered as arrears of land revenue. This is a provision which is generally made when amounts are due and payable to the· State, and Mr. Kolah concedes, that if the impugned law is otherwise vMid, it cannot be said to be bad by reason of this section. On the above analysis, there oannot be any doubt that the effect of the relevalllt provisions of the Act is to trans- fer to the Board the debts due by the appellant to its em- ployees free from the bar of limitation. The question still remains whether there has been a sub- stitution of creditors,.

and that can only be, if the debt due to the employee is discharged and in its place there is substi- tuted the debts in favour of the Board. If, however, the em- ployer is not relea! sed from his liability to the employee, then the effect of s. 3(1) is omy to create in the Board a statutory S. C. H. ·SUPREME COURT REPORTS 1137 creditor in addition to the creditor under the contract of em- 11JJ1 ployment, and there can be no question of substitution. Mr. Bombay Dyei 1 'il Seervai ·agrees that if the Act does not operate to discharge Manufacturing . . Go. , Ltd. the employer . from his obligations to the employees in respect ,v. f h d h h · b h Id b The ! :! late of o t e wages ue to t em, t en tt must e e to e uncon~ BoinJJav a7id Otloera stitutional as infringing Art. 19(1 )(0, because his contention · · l 'enkataram. o. that the effect of the Act was only to take the property of the Aiyar j. employer in discharge of its obligations could not then be maintained.

The real point for determination, therefore, is whether on payment of the amounts in accorda! nce with s. 3(1) of the Act, the appellant gets a discharge of his obligation to the employees in respect of wages due to them. The Act does not contain any provision to that effect, and the abs6nce thereof has been strongly relied on by the appellant as showing that no substitu•ion of creditors was intended. In answer to this contention, Mr. Seervai urges firstly that though the Act does not, in terms, provide for the discharge of the appellant on payment of the amount under s. 3(1), that is the result of the provisions of the Payment of Wages Act (Act IV of 1936). hereinafter referred to as the Wages Act, and secondly, that the effect of s. 3(1) of the Act is to render the contract of em- pl<>yment void under s. 56 of the Contract Act, and the appel· lant is thereby discharged from his obligations thereunder. We shall now examine both these conten,ions.

To appreciate the first contention, it is necessary to refer to the relevant provisions of the Wages Act. Section 2(vi) de- fines "wages" in terms which comprehend whatever falls within the definition of that word in s. 2(11) of the impugned Act. Section 3 casts on the employer the responsibility for payment of wages to persons employed by him. Section 4 provides for the fixing of wage per;ods, which, however, are not lo exceed one month. Under s. 5, the wages have to be paid before the expiry of ten days after the last day of the wage period in case of employees who continue in service and in the case of those whose employment has been termi- nated, within· the second working day of such termination. 11as SUPIU . , Ltd. • J y, 1ea · : 'l'Ae S/,a1e of • • .

Bombay ond 01/itra "In the large ma1onty of cases however the doctrme of frustration is applied not on the ground that the parties them· selves agreed to an implied term which operated to release them from the performance of the contract. The relief is given by the court on the ground of subsequent impossibility when it finds that the whole purpcse or basis of a contract was frustrated by the intrusion or occurrence of an unexpect· ed event or change of circumstances which was beyond what was contemplated by the parties at the time when they' entered into the agreement. Here there is no question of finding out an implied term agreed to by the parties embodying a provi- sion for discharge, because the parties did not think about the matter at all nor could possibly have any intention re· garding it.

When such an event oi' change of circumstances occurs which is so fundamental as to be regarded by law as striking at the root of the contract as a whole, it is the court which can pronounce the contract to be frustrated and at an end. The court undoubtedly has to examine the contract and the circumstances under which it was made. The belief, knowledge and intention of the parties are evidence, but evidence only on which the court has to form its own conclu- sion whether the changed circumstances destr. ayed altogether the basis of the adventure and its underlying. object. This may be called a rule of construction by English Judges but it is certainly not a principle of giving effect to the intention of the parties which underlies all rules of construction. This is really a rule of positive law and as such comes within the purview of section 56 of the Indian Contract Act.

" Counsel for the respondents relies on these observations, and contends that when the contract of service was entered into between the employer and the employees, they could {') [1~54] S. C. R. 310, 323. Vn. l:alarania . Aiyar J. 1:J51 . Bomb('! I J1111·ing d: _\f 1J·1<'11f'1,. J. uring Co .. Lid. ,. Tiu: Stafo G/ Bombay and (. llic,rs V ~nka. ~1ram4i Aiyar J. Il44 SUPRE. i\IE COURT REPORTS [1958] not have contemplated that the Legislature would have in- tervened and required the employer to pay the arrears of wages to the Board, and that that is a supervening impossi- bility which brings s. 56 into play and renders the contract void. We are not satisfied that the performance of the con- tract of service has been rendered impossible by reason of s. 3(1) of t·he impugned Act. But assuming that that is the posi- tion. what follows? The matter would then be governed by s. 65 of the Contract Act.

which provides that when a con- tract becomes void, any person who has received any ad- vantage under such agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it. Under this section, the employer is liable to make compensation to the employee for the work done by him, and that liability can be enforced against him in spite of the fact that he has paid the unclaimed wages to the Board under s. 3(1) of the Act. We are therefore of ()pinion that even if the matter is governed by s. 56 of the Contract Act, the employer is no more discharged than by the operation of the bar of limitation under s. 15 of the Wages Act, or the provisions of the Limitation Act. In this view, it must be held that the provisions of the impugned Act are unconstitutional, in that they take away the property of the appellant in viola- tion of either Art. 19 (I) (f) or Art. 31(2) of the Constitution.

A contention was also raised on behalf of the appellant that even if the impugned Act did not encroach on any of the Constitutional rights of the appellant, it clearly violated the rights of the employees in that it deprives them of their right to wages earned by them, that it was therefore void as against them as being in contravention of Art. 31 (2), and being void against them, it was void against the appellant as well. For the respondents. it is contended that the Act cannot be held to infringe Art. 31 (2) even as regards the employees, as cho- ses in action equally with money are outside the operation of that Article, and reliance is placed on the observations already referred to in The State of Bihar v. Maharajadhi- S. C. R. SUPREME COURT REPORTS 1145 I n1;a Sir, Kameshwar Singh of Darbhanga (supra) at pages 1967 942, 960-961 and 1015 to 1018. Now, as the Act takes over BombayDyeing <11 the rights of the employees in respect of wages due to them Manu/actnri"il Co. ,W.

even when they are net barred without making any provision v 8 . f . . The tale" for compensation of the same to them, it must at least to Bombay and OtJ. er4 that extent be held to ·be unconstitutional, whether as con· travening Art. 19(1) (f) or Art. 31(2) it is unnecessary to de- . cide. lt is then argued that this is an objection open only to the employees, and that the appellant can make no grievance of it. It is no doubt true that a question as to the constitu- tionality of a statute can be raised only by a person who is aggrieved by it; but here, the statute deals with rights arising out of contract, and that presupposes the existence of at least two parties with mutual rights and obligations, and it is difficult to see how when the rights of one party to it are interfered with, those of the other can remain unaffect- ed by it. Let us assume that the appellant makes a payment to the Board under s.

3 (1) of the impugned Act on the foot- ing that the law is not unconstitutional as against him. What is there to prevent the employee from suing to recover the same amount from the appellant on the ground that the Act is unconstitutional? It will be no answer to that claim to plead that the appellant has already paid the amount to the Board. The fact is that a statute which operates on a con- tract must affect the rights of all the parties to the contract, and if it is bad as regards bne of them, it should be held to be bad as regards the others as well. It is unnecessary to pur- sue this question further, as we have held that the Act is unconstitutional even as regarqs the appellant. It remains to deal with the contention of the respondents that the impugned legislation is, in substance, one in respect of abandoned property, and that, by its very nature, it can- not be held to violate the rights of any person either under Art. I 9(1) <0 or Art. 31(2).

That would be the correct posi- tion if the character crf the legislation is what the respon- dents claim it to be, for it is only a person who has some in- terest in property that can complain that the impugned legis- L/P(DJ a SCl--8 Venkatarama Aiyru·J. 1146 SUPREllIE OOuR'l' REPORTS (1958} 1967 lation invades that right whether it be under Art. 19\IJ (fl or Bombay Dyeing"' Art. 31(2), and if it is abandoned property ex llvpo1/1es1 Jlanufacluring there is no one who has am· interest in it But can . the 1·m- Uo. Lill. ·· · ~. pugned Act be held to be legislation with respect to aban- Tbc Stal< of I d . , T h. . . . JJ,,m;,, 11 and Otlwn < one property' o answer t IS question, 1t JS necessary to examine the basic principles underlying such a legislation. Venkalara. :ma Aiyar J. and ascertain whether those are the principles on which the Act is frsmed.

The expression "abandoned property" or to use the more familiar term '"bona vacamia" comprises proper- ties of two different kinds, those which come in by escheat and those over which no one has a claim. In Halsbury's Laws of England, Thlrd Edition, Vol. 7 page 536, para. 1152. it is stated that "the term bona vacalllia is applied to thlngs in· which no one can claim a property and includes the residuary estate of persons dying intestate". There is, however, this dis- tinction between the two classes of property that while the State becomes the owner of the properties of a person who dies intestate as his ultimate heir, it merely takes possession of property which is abandoned. At common law, abandoned personal property could not be the subject of escheat. It could only be appropriated by the Sovereign as bona vacan- tia. Vide Holdsworth's History of English Law. Second Edi- tion, Vol. 7, pages 495-496. In Co1111ectic111 Mutual Life Insurance Company v. Moore\'.!.

the principle behind the law was stated to be that "the State may. more properly, be custodian and beneficiary of abandoned property than any other person. " Consistently with the principle stated above. a law relating to abondoncd property enacts firstly provisions for the State conserving and safeguarding for the benefit of the true owners property in respect of which no claim is made for a specified and reasonable period, and secondly. for those properties vesting in the State absolutely when no claim is made with reference thereto by the true owners within a time limited. There has been quite a number of laws on abandoned property in the American States, and their validity has been (') 333 U. S. 541, 546; (1947)) 92 L. Ed. 863. 869. S. C. R. SUPREME COURT REPORTS 1147 the subject of numerous decisions in the Supreme Court of 195~ United States. In Anderson National Bank v. Luckett('), the BombavD11dng--. 1J law related to Bank ·deposits. It provided that if moneys in .

M~1,~ 11 u deposit had not been demanded or operated on, for a period The 8iats of of 10 years in the case of demand deposits and 25 years in Btntt6at1 and Othera the case of non-demand deposits, they might be presumed Vellialaramn to have been abandoned and the Banks were to transfer . Aiynr J. them to the State. Claims to the deposits might be made to the Commissioner of Revenue, who was to determine on their validity, his decision being open to review by the Courts. The validity of this law was questioned on the ground that sufficient opportunity had not been given to the depositors to claim the deposits, and that as they could attack the law as unconstitutional, the Bank got no protection by payment to the State. In repelling this contention, the Supreme Court observed that the Act did not deprive the depositors of any of their rights, they being given ample opportunity to estab- lish their rights, and that it metely substituted the State in the place of the Bank as their debtor.

The Court also held that it was "within the Coostitutional power of the State to protect the interests of depositors from the risks which attend long neglected accounts, by taking them intO custody when they have been inactive so long as to be presumptively aban- doned". In Connecticut Mutual Life Insurance Co. v. Moore (supra), the law was with reference to moneys payable on life insurance policies, which had matured. It provided that if those amounts had remained unclaimed for a period of seven years, then it had to be advertised by the companies in the manner provided therein, and if no claims were pre· ferred thereafter, the amounts were to be paid to the State Comptroller for care and custody. In holding that the law was valid. the Court observed. "There is ample provision for notice to beneficiaries and for administrative and judicial hearing of their claims and payment of same. There is no possible injury to any bene- ficiary. " (') 321 U. S. 233, 241; (1943) 88 L. Ed.

692, '101. 1148 SUPREME COURT REPORTS [1958) 1961 In Standard Oil Company v. New Jersey('), the Jaw related R·n•wy Dye; 49 "' to shares and unpaid dividends, and provided for the State . 1t. nufa<turing taking them over, if they remained unclaimed for a period r. •n. , Lid. of 14 years. There was a provision for notice to the un- 7'1"' . ~;. ,. of known owners by advertisement. It was held following Con- Botnb"Y and Olhers necticut Mutual Life Insurance Company v. Moore (supra) V••""""'ma that the law was valid. A. Jyt1r J. In the light of the above discussion, there cannot be any reasonable doubt that the impugned Act cannot be regarded as one relating to abandoned property. The period of three years mentioned in s. 2(10) of the Act is merely the period of limitation mentioned in Art.

102 of the Limitation Act, and even taking into account the class of persons whose claims are dealt with in the Act, as counsel for respondents would have us do, the period cannot be regarded as adequate for raising a presumption as to abandonment. A more serious objection to viewing the legislation as one relating to aban- doned claims is that there is no provision made in the Act for investigating the claims of the employees or for payment of the amounts due to them, if they established their claims. The purpose of a legislation with respect to abandoned property being, in the first instance, to safeguard the property for the benefit of the true owner and the State taking it over only in the absence of such cla~ms, a law which vests the property absolutely in the State without regard to the claims of the true owners cannot be considered as one relating to abandoned property. This contention of the respondents must also be rejected. In the result, we are of opinion that s.

3(1) in so far as it relates to unpaid accumulations in s. 3(2)(b) is unconstitu- tional and void. We have now to deal with the question as to the validity of s. 3(1) and s. 3(2) (a) of the Act, which require the emplo- yers to hand over to the Board the fines realised from the em- ployees. So far as this item is concerned, the position of the (') 341 U. S. 428; (1950) 95 L. Ed. 1078. S. C. R. SUPREME COURT REPORTS 1149 employers is wholly different from what it is as regards un- paid accumulations. Section 8 of the Wages Act deals with the question of fines which could be imposed by the em- ployer, and it provides that they should be entered in a sepa- rate register, and applied for the benefit of his employees. It is not denied by the appellant that under this provision the fines are constituted a trust fund, and that the employers are bare trustees in respect of such fund.

Now, the grievance of the appellant is that the Act deprives it of its rights as trus- tees, and vests them in the Board, and that, further, while the beneficiaries under s. 8 of the Wages Act are its own em- ployees, under s. 5(2) of the impugned Act they include other persons as well. There might have been substance in the com- plaint that the appellant had been deprived of its rights as trustee if it had any beneficial interest in the fund. But admit- tedly, it has none. and it is therefore difficult to hold that there has been such substantial deprivation of property, as will offend Art. 31(2) according to the decisions in The State of West Bengal v. Subodh Gopal Bose and Dwarkadas Shri- nivas of Bombay v. The Sholapur Spinning and Weaving Co. Ltd. (supra) or such unrea~onable interference with rights to property, as will infringe Art. 19(1)(f). It is argued with some emphasis that in en.

larging the circle of beneficiaries, the Act has encroached o-n the rights of the employees of the appel- lant. But then, the trust is the creation not 9f the appellant but of the Legislature, which gave the. employees certain rights which they did not have before, and what it can give, it can also take away or modify, and we do not see how the employers are aggrieved by it. We are of opinion that no valid grounds exist on which s. 3(1) ands. 3(2)(a) of the impug· ned Act could be attacked as unconstitutional, and they-must accordingly be held to pe valid. In the result. we hold, in modification of-the order of the Court below, that the provisions of the impugned Act are un· constitutional and void in so far as they relate to _"unpaid ac- cumulations", but that they are valid as regards "fines"; and an appropriate writ will issue against the respondents in the terms Bo-mbay J. lyei11! 1 ,r, M ®u/adwring Oo. , Ltd. v. 'J'lie tJlale o/ Bomba!! or,d Of! tuw Venkataramo Aiyar J.

1967 Bombay Dyri! SQ <b MtJ/nujar. Mdinq . co. 1W. \". The State o/ Bum. bay umd Ol/u:r8 V~nkaWama Aiytn' J. 1968 JanVGry 22. 1150 SUPREME COURT REPORTS [1958] stated above. The appeal succeeds in part, but as it is stated that "unpaid accumulations" form by far the most substantial portion of the claim, we direct the respondents to pay half the costs of the appellant here and in the Court below. Appeal allowed in part. RAJA GANGA PRATAP SINGH v. THE ALLAHABAD BANK LTD. , LUCKNOW \S. R. DAS C. J. , VENKATARAMA AIYAll, B. P. SINHA, J. L. KAPUR and A. K. SARXAll JI. ) Statute, Constitutional validity of-Whether a question of inteTPretation of the Conltitution-Severabilitl/, if 1hottld be considered before deciding question of validitv-Dutii of Court -Code of Civil Procedure (V of 1908), s. 113 proviso-Con1Utu- tion of India, An. 228. The respondent, a scheduled bank, sued the appellant for recovery of money under a mortgage.

The appellant claimed reduction of the debt under the Uttar Pradesh Zamlndari Debt Reduction Act, 1953. An advance or debt due to a scheduled bank was excluded from the definition of "debt" lliven In the Act. The appellant contended that the definition In so far as It excluded certain debts offended Art. 14 of the Constitution as it made an arbitrary distinction between several cluses of debton. The appellant applied to the court under the proviso to 1. 113 of the Code of Civil Procedure prayinc that a case be stated for the opinion of the High Court as to the validity of the im- pugned portion of the definition. The Court rejected the applica- tion. The appellant made an application in revision to the High Court and also an application under Art. 22. 8 of the Constitu- tion for withdrawing the case for a decision of the question of the validity of the definition. The Higb Court dismiased the aP- plications.

The Courts below held that in eitber view of the question as to the validity of the impu&ned portion of the defini- tion, the appellant would be left without the remedy which he sought, because that portion of the definition was not severable from the rest and the whole definition would have to be exclud- ed and therefore it was not necessary to decide that question to dispose of the case :

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