JUDGMENT
S.M. Daud, J.
1. The short question arising for decision in this petition under Article 226 of the Constitution is as to the applicability of the Employees’ Provident Funds and Miscellaneous Provisions 5 Act, 1952 (Act) to the petitioners.
2. Petitioners are the Board and its Officers the Board having been constituted under the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981, hereinafter referred to as the “1981 Act”. The respondent – to be referred to as the “Commissioner” – is an authority under the Act – the power vested in him being that of overlooking the enforcement of the provisions thereof. On 21.3.1986 and 9.7.1986 the Board was served with the notices at Exs. A and C to show-cause as to why penal action should 2 not be taken against them for the failure to deposit contributions payable under the Act. Ex.B is a reply given by the petitioners to one of the notices aforementioned. Briefly, the stand taken in the reply was 2 that the Act did not apply to them, consequent to Clause 38 of the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Scheme, 1981 (Scheme). The reply did not carry conviction 2 with the respondent and that is why the petitioners have come to this Court invoking its jurisdiction under Article 226 of the Constitution.
3. The stand taken by the petitioners is that the enactment whereunder they have come into existence i.e. the Act of 1981, was reserved for and has received the assent of the President. The Concurrent List forming part of Schedule VII of the Constitution of India contains Entry No. 24 which reads thus:-
“Welfare of Labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits”.
Article 246 of the Constitution specifies the subjects on which laws can be made by the Parliament and the Legislature of the States. In relation to subjects listed in the Concurrent List the Parliament as also the State Legislatures have the power ol law making. In the case of an inconsistency between the laws made by the Parliament and the State Legislature a solution is provided by Article 254. The general rule is that in the case of an inconsistency the law made by the State Legislature has to give way to the law made by the Parliament. But Sub-Article (2) of Article 254 gives primacy to the law made by the State Legislature over that made by the Parliament, if the former has been reserved for the consideration of the President and has received his assent. The Act and the 1981 Act both provide for legislation on the subject of provident fund – the Act being of wider application to all establishments while the 1981 Act is limited in its application to the provisions of constituting and operating a provident fund for Security Guards. The Scheme has legal force under Section 4(1) of the 1981 Act. In exercise of the power conferred by Clause 38(1) of the Scheme, the Board has framed rules to provide for provident fund in relation to Security Guards. The formulated rules have been sent to the State Government for approval as required by Section 4(1) of the 1981 Act. This step having been taken the Proviso to clause 38(1) enables the Board “to fix the rate of contribution and the manner and method of payment thereof. Such a rate has been fixed and in accordance therewith contributions are being collected by the Board. The respondent has no business to interfere with the doings or omissions of the Board in the matter of provident fund for the Security Guards. The show-cause notices given to the petitioners and proceedings intended to be taken pursuant thereto, were an encroachment upon the power conferred upon the petitioners under the 1981 Act and deserved to be quashed.
4. The return filed on behalf of the respondent denies the entitlement claimed by the petitioners, so with, exclusion from the operation of the Act. The contention taken is that the Board cannot provide for: a rate of contribution less than that prescribed by the Act.
5. The sole question for consideration is whether the show-cause notices ‘given to: the petitioners and the contemplated action pursuant thereto are illegal? I find in the affirmative for the reasons given below:-
6. The 1981 Act under which Petitioner No. 1 has come into existence authorises the formulation of a Scheme by the State Government for various purposes. The content of the Scheme or Scheme is set out in Section 3 of the 1981 Act. Clause G) of Sub-section (2) of Section 3 of the 1981 Act provides for the formulation of a Scheme to cover “the Constitution of any fund…including provident fund for the benefits of registered Security Guards, the vesting of; such funds, the payment and contributions to be made to such funds, provisions for provident fund and rates of contribution being made after taking into consideration the provisions of the Act and the Scheme framed thereunder, with suitable modifications where necessary, to suit the condition of work of such registered Security Guards and all matters relating thereto”. The Scheme enables the framing and operation of rules to provide for a provident fund for registered Security Guards. The petition avers and there is no reason to doubt the averment about the Boards, having submitted a draft set of rules to the State Government which rules will govern the provident fund for registered Security Guard. Pending completion of the scrutiny of the proposal submitted by the Board and its approval by the State Government, liberty is given to the Board to make a provisional arrangement which is to regulate the rate of contribution and the manner and method of payment thereof. The petitioners aver that they are proceeding according to the provisional arrangement made by them until the State Government conveys its approval to the draft set of rules sent by them. The respondent denies that the Board is entitled to exemption from the operation of the Act. The Act is to provide for institution of provident funds for employees in factories and other establishments. This is so stated in the Preamble to the Act. In the constitutional arrangement, the Act would fall in Entry 24 of the Concurrent List. The 1981 Act is similarly covered being legislation enacted by the State Government upon a subject figuring in the Concurrent List. The Act and the 1981 Act are vitally different. The supervising authorities and many other features indicate a radical difference between the two enactments. The 1981 Act was reserved for the assent of the President and received the same on 24th September 1981. The assent was first published in the Maharashtra Government Gazette, Part XV, Extraordinary, on 25th September 1981. Having regard to Article 254(2), the 1981 Act together with the Scheme framed thereunder, will have primacy over the Act. That being the case, the respondent had no jurisdiction to issue the show-cause notices at Exs. A. and C. Learned Counsel Mr. Mehta contends that the rate of contribution to be prescribed – whether under the set of rules or the provisional arrangement for registered Security Guards – cannot be less than the rate prescribed from time to time under the Act. It is not open to the respondent to take this contention seeing that his intrusion is totally prohibited by the constitutional primacy conferred upon the 1981 Act pursuant to Article 254(2). But that apart, Clause 38(1) of the Scheme itself provides that the rate of contribution is not to be less than the rate specified under the Act, Mr. Mehta contends that show-clause notices had been given to the respondent and they could have very well attended the inquiry initiated by the respondent. If the respondent was clothing himself with a jurisdiction that did not vest in him. The petitioners were entirely within their rights to refuse to appear before him and go ahead with the enquiry commenced. Section 7A of the Act to which the learned Counsel referred has no application to determination of whether or not an establishment comes within the purview of the Act. Let it be remembered that the petitioners are not seeking exercise of the power to exempt establishments conferred by Section 17 of the Act. What they are seeking to stave is an encroachment upon the autonomy and immunity conferred upon them by the 1981 Act read together with Scheme framed thereunder. Consequently, the contention of the petitioners has to be allowed. Exs. A and C are hereby quashed with the respondent being prohibited from going ahead with the proceedings proposed to be taken pursuant to the said show-cause notices. Rule in these terms made absolute, with parties being left to bear their own costs.