The Hindu : SC sets aside order on Fishermen's Act

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Wednesday, Feb 20, 2002

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SC sets aside order on Fishermen's Act

By T. Padmanabha Rao

NEW DELHI FEB. 19 . "The State (legislature) cannot place the burden of an `impost' by way of contribution for giving effect to legislation and the scheme made thereunder for the social security and social welfare of a section of society (under Entry 23 of the `Concurrent list' of the Constitution) upon a person who is not a member of such section of society nor an employer of a person who is a member of such section of society,'' a Constitution Bench of the Supreme Court has ruled.

"The burden of the impost may be placed only when there exists the relationship of employer and employee between the contributor and the beneficiary of the provisions of the Act and the scheme made thereunder,'' the Bench said.

(Entry 23 of the `Concurrent list' deals with the topic of "social security and social insurance and unemployment'').

Delivering the judgment, Justice Syed Shah Mohammad Quadri struck down as unconstitutional Section 4 (2) of the Kerala Fishermen's Welfare Fund Act, 1985, read with Section 2 (d) of the Act as amended which imposed a specified `levy' on persons, including an appellant-concern who carry on the business of buying selling, processing or exporting fish, as stated in the Act.

The Bench which included the Chief Justice, S.P. Bharucha and Justices U. C. Banerjee, S. N. Variava and Shivraj V. Patil allowed an appeal from the appellant and in effect set aside the verdict of the Kerala High Court which upheld the validity of Section 4 (2) of the Act.

"The only nexus between the categories of persons covered by the sweep of sub-section (d) of Section 2 of the Act, including the appellant, who carry on the business of buying or selling or processing fish or exporting fish (in raw or processed form) or fish products including a commission agent, a broker etc. and the beneficiaries under the Act and the scheme — the fishermen — is that the former are the purchasers and the latter are the catchers and sellers of fish'', the Bench noted.

"Such a nexus is not sufficient to burden a purchaser/exporter with the impost or levy of the contribution under Section 4(2) of the Act — which will clearly be outside the ambit of Entry 23 of List III of the Constitution, and, therefore, lacking legislative competence,'' the Bench said.

The Bench directed "that pursuant to the declaration of invalidity of Section 4(2) of the Act, the amount of contributions, already paid by persons, falling under Section 4(2), will not be liable to be refunded to the dealers-contributors by the Board''

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