Mehrotra, C.J:— The petitioner is the proprietor of a printing press known as the Janambhumi Press, situate at Jorhat and carries on the business of printing and publishing since 1949 by employing a number of workmen to run the concern and at the time of filing the petition the petitioner had fifty employees on its pay-roll.

2. The Employees' State Insurance Act (No. XXXIX of 1948) (hereinafter called ‘the Act’) came in force on the 19th April, 1948. As stated in the preamble the purpose of the Act is to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto. For the purpose of administration of the scheme of Employees' State Insurance, the Act established a body corporate known as the Employees' State Insurance Corporation on which are to be representatives inter alia of the Central Government and the States, of employers and employees and also two members of the medical profession.

3. A standing Committee and a Medical Benefit Council were also established, the former to administer the affairs of the Corporation subject to its general supervision and the latter to advise the Corporation on matters relating to the administration of medical benefits. The Act also established a Fund known as the Employees' State Insurance Fund which is to be administered by the Corporation for the purposes of the Act, and into which will be paid all contribution recoverable under the Act and such other monies as are received on behalf of the Corporation. The scheme is to be financed by contributions from employers and employees for which provision is made in Chapter IV and the scale of the contribution is dependent on the rate of wages paid to the employees, the employers' contribution, being approximately double that of the employees. Chapter V, lays down the benefits to which insured persons that is to say, all employees in factories or establishments to which the Act applies and their dependants will be entitled. Briefly there are five benefits referred to therein as sickness benefit, maternity benefit, disablement benefit, dependants' benefit and medical benefit. Provisions have also, been made for the adjudication of disputes and claims and for the constitution of an Employees' Insurance Corporation. In the year 1951 the Act was amended by Act 53, of that year. The amending Act introduced a new chapter in the principal Act — Chapter VA — which enacted that so long as the provisions of that Chapter remain in force every employer shall, notwithstanding anything contained in the Act, pay to the Corporation a special contribution at such rate as the Central Government may fix not exceeding five percent of his total wages bill. This chapter further provided that this special contribution in the case of factories or establishments situated in an area in which the provisions of both Chapters IV and V are in force Shall be fixed at a rate higher than that in the case of factories or establishments situated in an area in which the provisions of these Chapters are not in force. The Special contribution is, by Section 73-D of the Act, made recoverable as if it were an arrear of land revenue. The Central Government issued various notifications and the Regional Office of the Employees' State Insurance Corporation at Calcutta sent a few sets of forms, to the petitioner for furnishing particulars and requiring, him to submit quarterly returns, for the purpose of payment of the Employees' Special Contribution to the Corporation by its letter dated the 9th July, 1954. The petitioner on the receipt of the aforesaid letter duly filled up the requisite forms giving the particulars asked for and remitted, the Employees' Special Contribution for the quarter ending 30-6-54 amounting to Rs. 51/- only and asked for clarification as to the benefits to be derived by the employees under the said Act. In reply to the aforesaid letter the Regional Director of Employees State insurance Corporation, Calcutta wrote to the petitioner regarding the benefits available under the Act on the 1st September 1954. In this letter it is stated that from the 27th September, 1953 the Employees' State Insurance Act, 1948 applied to the petitioner and the petitioner was required to pay the employee's special contribution and submit the quarterly returns in form SC-2 with effect from this date. As some difficulties in depositing the contribution with the Imperial Bank of India, Dibrugarh branch are being felt, the amount may be remitted to him by the petitioner by money order. As to the benefits available under the Act a copy of the “Employees' Guide” for the information of the petitioner was enclosed therewith. On the 7th December, 1960 one of the employees of the petitioner's press Sri B.C Barua met with an accident and broke his knee. Another employee. Shri Chandra, Nath Sarma was lying ill since 23-12-60 and Page: 122was in need of treatment and hospitalization. The petitioner wrote to the Regional Director, Employees' State Insurance Corporation at Gauhati on the 26th December, 1960, requesting him to take immediate steps to arrange for proper treatment of the employees. In reply to the aforesaid letter the Regional Director, Employees State Insurance Corporation, Gauhati by his letter dated 29-12-60 expressed his inability to do anything in the matter on the ground that the benefit provisions of the Act had not yet been extended to Jorhat. On 19th April, 1961 the petitioner received a show cause notice from the opposite parties to this petition, that is, the Regional Director, Employees' State Insurance Corporation (Ministry of Labour and Employment) apposite party No. 1 and the Bakijai Officer, Jorhat opposite party No. 2, requiring him to show cause why he should not be prosecuted for failure to comply with the provisions of the said Act and for failure to make payment on account of the Employees' State Insurance Special Contribution for the period 30-6-59 to 31-12-60. A case for realisation of the said amount as arrears of land revenue amounting to Rs. 1,075/- was also commenced under she provisions of the Act. After notices were served on the petitioner, he has filed the present petition under Article 226 of the Constitution on the 12th May, 1961 and has challenged the validity of the provisions of Section 73-A of the Act. The validity of section 1(3) of the Act has also been challenged. The petitioner contends that as the provisions referred to above are ultra vires, the demand of special contribution from the petitioner is illegal.

4. It is not disputed that the provisions of Chapter V, have been brought into force on the 24th November, 1951 in the whole of India except the State of Jammu and Kashmir. Section 73-A provides that for so long as the provisions of this Chapter are in force, every principal employer shall, notwithstanding anything contained in this Act, pay to the Corporation a special contribution (hereinafter referred to as the employer's special contribution) at the rate specified under sub-section (3). Sub-section (2) of the Section provides that the employer's special contribution shall, in the case of a factory or establishment situate in any area in which the provisions of both Chapters IV and V are in force, be in lieu of the employer's contribution payable under Chapter IV. The proviso to sub-section (3) of the section lays down that the employer's special contribution in the case of factories or establishments situate in any area in which the provisions of both Chapters IV and V are in force shall be fixed at a rate higher than that in the case of factories or establishments situate in any area in which the provisions of the said Chapters are not in force. Chapter IV deals with the payment of the employer's contribution, its method and recovery. Chapter V deals with the benefits which the employees of the factory to which this Act is attracted are entitled to get. The proviso to section 73-A(3) makes it abundantly clear that a lesser special contribution is to be paid by the employers in the area in which the benefit provisions are not in force. In the present case it is not disputed that the benefit provisions have not so far been brought into force in the Jorhat area where the petitioner's factory is situate. It is also not disputed that the benefit provisions have been brought into force in several parts of India. The employer has been asked to contribute under Section 73-A of the Act. section 1(3) which is another relevant section, provides as follows.—

“It shall come into force on such date or dates as the Central Government may, by notification in the official Gazette appoint, and different dates may be appointed for different provisions of this Act and for different States or for different parts thereof.”

5. The main contention raised by the petitioner is that the provisions of section 1(3) of the Act are ultra vires of the Constitution. It gives unfettered discretion to the executive by a notification to apply any provision to any area, and as the Act lays down no policy for the guidance of the Government in issuing such a notification, the section itself contains the germs of discrimination and is hit by Article 14 of the Constitution. It is also contended that the power to make laws in respect of the matters enumerated in the Act is given to a legislature and the legislature in empowering the State Government by a notification to enforce the provisions of the Act in distinct areas has delegated the essential legislative power to the Executive. The power to apply provisions of the Act to various parts of the country has been given to the executive Government without laying down any rule of conduct for the guidance of the Government or laying down any principles or policy having relation to the object of the Act and as such this provision is hit by the principle of excessive delegation. If the contention of the petitioner is accepted to be true, the result will be that the Central Government had no power to apply in part the Act to the area in question and the whole Act including the benefit provisions should be made applicable to this area. It was contended in this connection that the provisions of Chapters VA and V formed part of an integral whole and it is not open to the Government to apply one portion and postpone the application of the other for some future date. Some argument was also advanced that on the language of section 1(3) it was not open to the Central Government to apply only the provisions of Chapter VA and not to apply the provisions of Chapter V to any specific area.

6. The second line of argument of the petitioner is that the provisions of Section 73A under which the petitioner has been required to pay special contribution are violative of Articles 19, 14 and 31 of the Constitution. The contention is that the petitioner has been deprived of his right to property without paying any compensation or the restriction placed on the petitioner's right to carry on business is unreasonable. It was also contended lastly that in any case even if the provisions of the Act were not discriminatory and were valid, the executive action of the Central Government in not applying the benefit provisions to this area is discriminatory and the opposite parties should be directed by a mandamus not to enforce the provisions of Chapter VA alone without enforcing the benefit provision. A good deal of argument was advanced to show that the special contribution provided for under Chapter VA is not a tax but a fee. I shall deal with this question however, when dealing with the constitutionality of Chapter VA.

7. In order to appreciate the contention of the petitioner that section 1(3) by conferring upon the Government an uncontrolled power to apply such sections of the Act as if thinks fit in such parts of the State as it selects, contravenes Article 14 of the Constitution, it is desirable to keep in view the scheme of the provisions of the Act. section 1(3) which I have already quoted, is in very wide terms. It gives power to the Central Government to bring the Act into force in different parts and further to bring different sections into force in different parts of a State on different dates. The contention of the petitioner is Page: 123that the Act discloses no legislative policy which would serve as a guide to the Central Government which has been vested with the power under section 1(3) and thus the power so vested is uncontrolled. Before Article 14 can be attracted it is necessary to show that the power of creating differentiation between two parts of the State by applying the provisions of the Act to one part and not applying them to the other, does not rest on any reasonable basis, having regard to the object which the legislature had in view. The purpose of the Act as given in the preamble is to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto. The Act itself extends to the whole of India except the State of Jammu and Kashmir. It will thus be clear that there is an underlying intention of the legislature that the Act should be brought into force in the whole of India to which it extends. What has been left to the discretion of the Government is to apply the Act in any part of India when the circumstances justify such an application. Nonetheless in course of time the whole of India to which the Act applies, will be subjected to the provisions of the Act. That the benefit provisions as circumstances rendered it practicable, should become available to the employees in all factories throughout India excluding the State of Jammu and Kashmir, is clearly intended by the framers of the Act. It cannot be doubted that the object of the Act is to benefit the employees. It also cannot be doubted that the benefit provisions are to be enforced when practicable throughout India. If that is the intention of the legislature, the discretion has been conferred on the Central Government only with regard to the manner in which it should come into force in different areas.

8. The import, content and the scope of Article 14 of the Constitution have been elaborately considered and explained in a number of decisions of the Supreme Court. In the case of ‘Ramakrishna Dalmia v. S.R Tendolkar’ reported in AIR 1958 SC 538 at pp. 548-49 Das, C.J has summarised in the form of five propositions the principles deducible from the various decisions of the Supreme Court. In the case of Jyoti Pershad v. Union Territory of Delhi reported in AIR 1961 SC 1602 at p. 1608 Ayyangar, J. has summarised the decisions as follows:—

“(1) If the statute itself or the rule made under it applies unequally to persons or things similarly situated, it would be an instance of a direct violation of the constitutional guarantee and the provision of the statute or the rule in question would have to be struck down.

(2) The enactment or the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be accorded to persons or things similarly situated. This would happen when the legislature vests a discretion in an authority, be it the Government or an administrative official acting either as an executive officer or even in a quasi-judicial capacity by a legislation which does not lay down any policy or disclose any tangible or intelligible purpose, thus clothing the authority with unguided and arbitrary powers enabling it to discriminate.”

“The legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct.” (Harishankar Bagla v. State of Madhya Pradesh, AIR 1954 SC 465 at p. 468.)……

(3) If is manifest that where the legislature lays, down the policy that indicates the rule or the line of action which should serve as a guidance to the authority. Where such guidance is expressed in the statutory provision conferring the power, no question of violation of Article 14 could arise, unless it be that the rules themselves or the policy indicated lay down different rules to be applied to persons or things similarly situated. Even where such is not the case, there might be a transgress on by the authority of the limits laid down or an abuse of power, but the actual order would be set aside in appropriate proceedings not so much on the ground of a violation of Article 14, but as really being beyond its power.

(4) It is not, however, essential for the legislation to comply with the rule as to equal protection, that the rules, for the guidance of the designated authority, which is to exercise the power or which is vested with the discretion, should be laid down in express terms in the statutory provision itself.*****

Such guidance may thus be obtained from or afforded by (a) the preamble read in the light of the surroundings circumstances which necessitated the legislation, taken in conjunction with well known facts of which the Court might take judicial notice or of which it is appraised by evidence before it in the form of affidavits, Kathi Raning Rawat v. State of Saurashtra, 1952 SCR 435 : AIR 1952 SC 123, being an instance where the guidance was gathered in the manner above indicated, (b) or even from the policy and purpose of the enactment which may be gathered from other operative provisions applicable to analogous or comparable situations or generally from the object sought to be achieved by the enactment.”

9. The examination of the provisions which I have already referred to above in the earlier part of my judgment in the background of these principles will show that the policy of the legislature is to ultimately apply the whole of the Act in the areas other than Jammu and Kashmir. The discretion given to the Central Government under section 1(3) of the Act cannot thus be regarded as being without any guidance.

10. This also answers the question of the petitioner that the provisions are hit by the principle of excessive delegation. In the case referred to above (AIR 1961 SC 1602 (-ibid-) it was observed as follows at p. 1612:—

“In regard to this matter we desire to make two observations. In the context of modern conditions and the variety and complexity of the situations which present themselves for solution, it is not possible for the legislature to envisage in detail every possibility and make provision for them. The Legislature, therefore, is forced to leave the authorities created by it an ample discretion limited, however, by the guidance afforded by the Act. This is the ratio of delegated legislation, and is a process which has come to stay, and which one may be permitted to observe is not without its advantages. So long, therefore, as the Legislature indicates, in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation is skeletal, or the fact that a discretion is left to those entrusted with administering the law, affords no basis either for the contention that there has been an excessive delegation of legislative power as to amount to an abdication of its functions, Page: 124or that the discretion vested is uncanalised and unguided as to amount to a carte blanche to discriminate.”

11. Dealing with the Orissa Estates Abolition Act, 1892 their Lordships of the Supreme Court in the case of Biswambhar Singh v. State of Orissa, reported in AIR 1954 SC 139 held that the provision that the State Government, may, from time to time by notification, declare that the estate specified in the notification has passed to and become vested in the State free from all encumbrances was not discriminatory as the object and purpose of the Act was clear, namely to abolish the right, title and interest in land of all intermediaries and the discretion vested in the State Government must be exercised in the light of this policy and was not absolute or unfettered. The Court pointed out that from the very nature of things a certain amount of discretionary latitude had to be given to the State Government. ‘It would’, the Court said,

‘have been a colossal task if the State Government had to take over all the estates at one and the same time. It would have broken down the entire administrative machinery. It could not be possible to collect sufficient staff to take over and discharge the responsibilities. It Should be difficult to arrange for the requisite finance all at once. It was, therefore, imperative to confer some discretion on the State Government.’

12. For similar reasons Section 21(1) of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952, which provided that

‘As soon as may be after the commencement of this Act, the Government may by notification in the Rajasthan Gazette, appoint a date for the resumption of any class of Jagir lands and different dates may be appointed for different classes of jagir lands’

was held to be valid: Amar Singhji v. State of Rajasthan, (S) AIR 1955 SC 504.

13. In my judgment therefore, the provisions of section 1(3) of the Act neither violate Article 14 of the Constitution nor do they constitute excessive delegation. There is no force in the contention that in terms section 1(3) does not give power to the Central Government by notification to apply parts of the Act in different parts of the State. The terms are wide enough and give power to the Central Government to appoint different dates for different provisions of the Act and for different parts of the State. It was contended that the provisions of Chapters VA and V are an integrated whole and it is not open to the Central Government to apply the provisions of Chapter VA without applying the provisions of Chapter V. There is no substance in this contention also. The proviso to sub-section (3) of section 73A occurring in Chapter VA also makes it clear that the legislature never intended to make Chapters VA and V an integrated whole. The proviso lays down that in the areas in which both the provisions of Chapters IV and V are applicable, the return of special contribution will be higher than the areas in which any of these Chapters are not in force. This proviso clearly indicates that the legislature contemplated the case where Chapter VA will apply irrespective of the fact whether Chapter V is or is not applicable.

14. It was then contended that the special contribution required to be paid by the employers under Section 73-A of the Act is in the nature of a fee. A fee is generally defined to be a charge for a special service rendered to Individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay. It was however, observed in the case of Commr. Hindu Religious Endowments, Madras v. Lakshmindra Thirtha Swamiar reported in AIR 1954 SC 282 at p. 295 that these are undoubtedly some of the general characteristics, but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. The argument in substance of Mr. Goswami for the petitioner was that as the imposition is in the nature of a fee, it cannot be realised without rendering the corresponding service. In my opinion this question is not material for the purpose of the present case at all. It is the constitutionality of section 73A which has been challenged by means of the present petition. If the provisions of Chapter VA have been validly enacted inasmuch as the legislature had competence to enact the said law and if the provisions are not hit by any of the fundamental rights guaranteed under the constitution, whether the imposition is in the nature of a fee or tax, it could be realised from the employers, and unless the argument is accepted that the provisions of section 73A are hit by Article 14 or article 19 of the Constitution, there is no bar to the realisation of the amount from the employers, whatever may be the nature of the imposition. It was not seriously contended on behalf of the petitioner that the provisions of section 73A are hit by article 19 of the Constitution and that they place unreasonable restriction on the rights of the employers to hold property and to carry on their business. When the Act is taken as a whole, the restriction placed on the right of the petitioners if any, cannot be regarded as unreasonable. The whole object of the Act is to provide for benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto. In order to work out the scheme it is essential to have a fund and in a welfare State the employers who get profits as a result of the labour of the employees, have to contribute towards the maintenance of the health of their employees. It cannot therefore, be said that the imposition constitutes unreasonable restriction on the right of the employers.

15. It was contended by Mr. Goswami for the petitioner that the decision of the Allahabad High Court in the case of Anand Kumar Bindal v. Employees' State Insurance Corporation, reported in (S) AIR 1957 All 136 does not lay down the correct law in so far as it holds that the imposition is a tax. The argument advanced in that case was that the provisions are violative of Article 31(2) of the Constitution which provides for the compulsory acquisition of property for a public purpose on payment of compensation. The State counsel had argued that the Act was saved by section 31(5)(b) that provided that nothing in clause 2 shall affect the provisions of any law which the State may hereafter make for the purposes of imposing or levying any tax or penalty. As the law provided for imposition of a tax, such a law was not affected by clause 2 of Article 31 by virtue of Article 31(5)(b)(i). This argument was accepted. No such argument has been pressed before us.

16. Apart from it the provisions of Article 31(2) of the Constitution have since been amended and under the amended clause mere deprivation of property will not attract Article 31(2), unless the property is also acquired by the, Government. In the present case there has been no Page: 125acquisition by the Government and thus the provisions are beyond the scope of Article 31(2) of the Constitution. Apart from it when the word ‘tax’ under Article 31(5) is considered along with the definition of the word ‘taxation’ under Article 366(28) which “includes the imposition of any tax or impost whether general or local or special and ‘tax’ shall he construed accordingly” the word has been used in its wider context. Article 265 of the Constitution also provides that no tax shall be levied or collected except by authority of law, and the word ‘tax’ under this Article has been given a very wide connotation. In the case of Ramjilal v. Income Tax Officer, Mohindargarh reported in AIR 1951 SC 97 it was pointed out by the Supreme Court that clause (1) of Article 31 of the Constitution must be regarded as concerned with deprivation of property otherwise than by the Imposition or collection of tax. It was not pleaded that the Central Government in applying the provisions of Chapter VA to Jorhat without applying Chapter V has discriminated and the order of the Central Government should not be enforced, if the point had been taken in the petition, the opposite party would have been in a position to place facts before us which would go to show that the circumstances justified the application of Chapter VA to Jorhat without applying Chapter V for the time being. In any view of the matter the petition has no force and it must be dismissed with costs.

17. For the reasons given above I agree with the order proposed by my brother Dutta, J.

18. Dutta, J.:— This is a petition under Article 226 of the Constitution of India. The facts are as follows:

19. The Employees' State insurance Act (hereinafter called the Act) was enacted on the 19th April, 1948 for the purpose of providing certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto. The scheme envisaged in the Act was one of compulsory state Insurance. The scheme was to be administered by a Corporation which would work through a Board consisting of representatives of the Central and the State Governments and of employees, workers and the medical profession and also some members elected by the Central Legislative Assembly. A Standing Committee of the Board would act as the Executive of the Board and a Medical Benefit Council would be set up to advise on matters relating to medical benefits. The Act established a fund called the State Insurance Fund which would be derived from contributions from employers and workmen. The provisions for such contributions were made in Chapter IV of the Act. Chapter V specified the benefits which all employees of factories to which the provisions of this Chapter applied, were entitled to. The Act was amended by Act 53 of 1951 and this amending Act Introduced a new Chapter viz. Chapter VI. Section 73A at this Chapter provided that so long as the provisions of this Chapter VA remained in force the owners or occupiers of all factories employing 20 or more persons carrying on a manufacturing process with the aid of power would, notwithstanding anything contained in the Act, pay to the Corporation a special contribution at such rate as the Central Government might fix not exceeding five percent, of his total wage bill. It was further provided that this special contribution in the case of factories or establishments ??? in an area in which the provisions of both Chapters IV and V were in force would be fixed at a rate higher than that in the case of factories or establishments situated ??? an area in which the provisions of this Chapter were not in force. The Central Government by a notification dated 24th November, 1951 fixed the percentage of the rates of employers' contribution as follows:

(i) In case of factories and areas where the provisions of Chapters IV and V were put in force, ¼ percent, of the total wage bill.

(ii) Where the scheme was not yet implemented, ¼ percent of the total wage bill.

20. By the end of 1952 the provisions of Chapters I, II, III and sections 44 and 45 of Chapter IV and Chapter VA, Sections 76(1), 77, 78, 79 and 61 of Chapter VI and Chapters VII and VIII were enforced in the whole of India except Jammu and Kashmir. The remaining provisions of Chapter IV and Chapters V and VI were enforced in different places with effect from various dates under section 1(3) of the Act which runs as follows:

“It shall come into force on such date or dates as the Central Government may, by notification in the official Gazette, appoint, and different dates may be appointed for different provisions of this Act and (for different States or for different parts thereof.)”

21. The petitioner's case is that he is the proprietor of a printing press known as the Janmabhumi Press, situated at Jorhat in the district of Sibsagar and has been carrying on the business of printing and publishing since the year 1949. There are at present fifty employees on its pay roll. In pursuance of a letter dated the 9th July, 1954 from the Insurance Commissioner the petitioner submitted returns giving the necessary particulars as required under the Act and remitted the employees' special contribution for the quarter ending 30-8-1954 amounting to Rs. 51/- only. The petitioner by his letter dated 28th July, 1954 informed the Regional Director about the remittance and enquired as to what benefits could be demanded by the employees under the Act. In reply the Regional Director by his letter dated 1st of September, 1954 (Annexure “C”) sent to the petitioner a copy of “Employees Guide” for information regarding the benefits. On 7-12-1960 one of the employees of the petitioner's press met with an accident and broke his knee. Another employee Shri Chandra Nath Sarma was lying ill since 23-12-1960 and was in need of treatment and hospitalization. As such the petitioner wrote to the Regional Director, Employees' State Insurance Corporation at Gauhati requesting him ta take immediate steps to arrange for proper treatment of the abovenamed two employees. In reply the Regional Director by his letter of 29-12-1960 expressed his inability to do anything in the matter on the ground that the benefit provisions of the Act had not been extended to Jorhat as yet. Thereafter the petitioner received a notice dated 19-4-1961 from the opposite party No. 1 calling upon him to show cause within ten days of the receipt of the notice as to why he should not be prosecuted for his failure to submit returns and make payments on account of the Employees' State Insurance “special contribution” for the period ending 30-6-1959 to 31-12-1960. A Bakijai case was also started by opposite party No. 2. It is against this notice and consequent proceedings that the writ petition is filed.

22. Mr. Goswami makes the following submissions:

(1) That section 1(3) of the Act not only empowers the Central Government to bring the Act into force in different parts of India on different dates, but it also enables it to bring different sections of the Act into fores Page: 126in different parts of a State on different dates. Thus this sub-section enables the Central Government to apply different provisions of the Act arbitrarily in different areas, and as such, it is inconsistent with Article 14 of the Constitution of India which ensures equality before the eye of law.

(2) That the employees' contribution under the Act is a mere fee and not a tax and it cannot be charged unless the benefits for which these contributions are made are also available. A fee is inseparably linked up with the special benefit for which it is levied.

(3) The sections of the Act conferring benefits have been brought into force in some parts of Assam whereas they have not been enforced in the Jorhat area for all these years. As a result an employer in the Jorhat area has to make contribution but he does not get any benefit in return as his employees are not entitled to any benefit under the Act. As a result, in these days of competition, an employer in the Jorhat area has to bear a special burden which is not there for employers in some other parts of Assam. Thus there is unreasonable restriction on the freedom of trade or business of an employer in the Jorhat area and consequent violation of Article 19(1)(g) of the Constitution.

23. First I may take the question whether the employers' contribution under the Act is a fee or a tax. The distinction between these two kinds of levies was considered by the Supreme Court in AIR 1954 SC 282. In that case certain provisions of the Madras Hindu Religious Endowments Act came into consideration. Section 76 of that Act provided that in respect of the services rendered by the Government and their officers, every religious institution should, from the income derived by it, pay to the Government, such contribution not exceeding five percent of his income as might be prescribed. The question arose whether this contribution was really a tax or a fee. Their Lordships of the Supreme Court held that the material fact which negatived the theory of fee in that case was that the money raised by levy of the contribution was not ear marked or specified for defraying the expenses that Government had to incur in performing the services. All the said expenses had to be made not out of these collections but out of the general revenue by a proper method of appropriation. Their Lordships laid down certain characteristics which distinguished a fee from a tax. It was pointed out that an element of compulsion was present in taxes as well as in fees. But whereas a tax was levied as a part of a common burden a fee was a payment for a special benefit or privilege.

24. If we apply the above test in the case before us, it appears that the employers' special contribution is not a tax but a fee. This contribution goes to a fund known as the Employees' State Insurance Fund which is to be utilised for the benefits to be given to the employees under the Act. The cost of these benefits will not be met from the general revenues of the State but will be borne entirely from the aforesaid fund only. In this view of the matter I have no hesitation to hold that the employers' contribution under the Act constitutes only a fee and not a tax.

25. The Allahabad High Court, however, held in (S) AIR 1957 All 136, that such a contribution was a tax and not a fee. With due respect I find it difficult to agree with this view. In that case Chief Justice Mootham observed that he ventured to think that the Supreme Court did not intend to lay down that a levy could not be a tax unless when collected it formed part of the revenue of the State. But the Supreme Court quoted Saligman to make it explicit that it was the special benefit accruing to the individual which was the reason for payment in the case of fee. In the case of tax, the particular advantage if it existed at all was an incidental result of State action. In my view, the employer's contribution is in the nature of a premium which is paid in a contract of insurance to cover some risk. In this view of the matter the Government cannot go on levying employers' contribution under section 73-A of the Act without giving a service in return. But from this it does not follow that the service must be given as soon as the contribution is made. The object of the Act is that the benefits which it provides should become available to the employees in all factories throughout India (except Jammu and Kashmir) as soon as circumstances make it practicable. There are various steps that the Government have to take before such benefits can be given to the employees. Statutory bodies have to be set up, various officers have to be appointed and arrangements have to be made for providing medical help. All these require time and money and in some areas the time required may be more than in other areas. Chapter VA is for meeting the needs of the transitory period. When the whole Act is brought into force in the whole of India (excluding Jammu and Kashmir) it would not be necessary to retain this Chapter. Then all contributions will be made under Chapter IV. It may be noted that Chap ter VA was inserted, as pointed out above, by an amending Act only in 1951. The object of the amendment was to make an equitable distribution of contributions by all employers. It was not considered fair that only employers of those regions to which the benefit provisions were extended should alone make contributions and thereby help to set up a corporation. The benefit provisions will sooner or later be extended to all areas. Therefore, the amendment provides that employers of regions to which the benefit clauses are not extended must also make their contributions though at a lesser rate.

26. In view of what I have said above, it cannot be said that section 1(3) of the Act is ultra vires Article 14 of the Constitution. Although the Government may bring the different sections of the Act into force in different areas on different dates, it does not mean that Government may bring into force section 73A and omit to bring into force Chapter V which provides the benefits for all time to come. Government has a legal duty to bring into force the sections providing benefits and it Government arbitrarily makes delay, there is no reason why the petitioner should not be able to apply for a writ to enforce that duty. In the present petition, however, there is no such prayer. No allegation is made in the present; petition that there has been a discrimination in fact in not bringing chapter V into force in the Jorhat area. It in fact this chapter was brought into force in a particular area of the State and the Jorhat area was arbitrarily left put, there was no reason again why such an action could not be challenged under a writ petition. As to have said above there is no such challenge in the present petition. I have held that the delay in Bringing into force chapter V is due to practical difficulties and that there are good grounds for levying contributions, before the benefit sections are brought into force. As such, I fine Page: 127that there has been no infringement of Article 19(1)(g), of the Constitution either. It cannot be said that the levy is unreasonable restriction which puts a competition handicap on the employers of the regions where the benefit provisions have not yet been brought into force. As already pointed out by me, the employers of these regions pay their contributions at a lesser rate and in all fairness they should snake their contributions as preliminary steps must be taken and some costs incurred before the benefit sections can be extended to their areas.

27. In the result, therefore, we do not find that section 1(3) of the Act is ultra vires, nor there is any infringement of the Article 19(1)(g) of the Constitution. Consequently, this petition has no force and it must be dismissed with costs which we assess at Rs. 100/-.

FF/V.B.B

28. Petition dismissed.