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PETITIONER: BOMBAY DYEING &MANUFACTURING CO., LTD.

       Vs.

RESPONDENT: THE STATE OF BOMBAY AND OTHERS

DATE OF JUDGMENT: 20/12/1957

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

CITATION:  1958 AIR  328            1958 SCR 1122

ACT:    Labour Welfare-Law creating a fund for welfare activities Companies  called upon to pay fines realised from  employees and  unpaid  accumulation of  wages-Constitutional  validity -Bombay Labour Welfare Fund Act (Bom.XL of 1953), ss.  3(1), 3(2)(a)(b)-Constitution of India, Arts. 31(2),19(1)(f).

HEADNOTE:    The Bombay Labour Welfare Fund Act (Bom.  XL of 1953) was enacted  by  the  State  Legislature  with  the  object   of constituting a fund for the financing of activities for  the welfare  of  labour  and  S. 3(1) of  the  Act  provided  as follows:-     "There  shall  be constituted a fund called  the  Bombay Labour Welfare Fund and, notwithstanding anything  contained in  any  other  law for the time being in  force,  the  sums specified in subsection (2) shall be paid into the Fund."    Section 3(2) provided, inter alia, as follows    "The Fund shall consist of :-    (a)    all fines realised from the employees;    (b)    all unpaid accumulation;"     Notices  were served on the appellant’s company as  also on  other  companies  similarly  situated,  by  the  Welfare Commissioner, appointed under the Act, calling upon them  to remit  to  him the fines and unpaid accumulations  in  their custody.  The appellant in reply questioned the validity  of the Act on the ground that it contravened Art. 31(2) Of  the Constitution and, thereafter, filed a Writ petition, out  of which  the  present  appeal arises,  which  was  treated  by consent  of  parties  as a test case.   The  Judges  of  the Division Bench who heard the matter field that the  impugned Act  was  intra  vires, though  on  different  grounds,  and dismissed the petition.  The sole point for determination in the  appeal was whether s. 3(I) and sub-cls. (a) and (b)  Of S.  3(2)  Of the Act were void as being  violative  of  Art. 31(2) Of the Constitution:    Held,  that  the unpaid accumulation of  wages  remaining with the appellant company was its own property and S.  3(1) of  the impugned Act in so far as it directs the payment  of

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it  tinder 3(2)(b) of the Act contravenes Art. 31(2) Of  the Constitution  and  must be invalid.  Article 31(2A)  of  the Constitution  has no retrospective effect and  cannot  apply and the matter must be decided on the law as it stood at the date of the Writ petition.                             1123     The  State of West Bengal v. Subodh Gopal  Bose,  [1954] S.C.R.  587 and Dwarkadas Shrinivas of, Bombay  v.  Sholapur Spinning and Weaving Co. Ltd., [1954] S.C.R. 674, applied.     Assuming that money was not property within the  meaning of  Art. 31(2) and Art. 19(1)(f) applied that  Article  also would  be of no help to the respondent as the Act could  not be supported under Art.  19(5) Of the Constitution.     Commonwealth  of Australia v. Bank of New  South  Wales, [1950] A.C. 235, held inapplicable.     The  State  of Bihar v.  Mahayajadhiraja  Sir  Kameshwar Singh of Darbhanga, [1952] S.C.R. 889, considered.     The impugned Act had not the effect of substituting  the Board as the creditor in place of the employee nor could  it be  said  to  be  a  legislation  in  respect  of  abandoned property.     Although by defining ’unpaid accumulation’ in the way it did the Legislature obviously intended that only such  wages of the employees as were time-barred should be taken by  the State, it being well settled that the law of limitation only bars the remedy but does not extinguish the debt, ss.  3(I), 5(2)  and 17 of the Act must be held to have the  effect  of transferring to the Board the debts due by the appellant  to its employees free from the bar of limitation.     Such a transfer can be valid only if it gives a complete discharge  to the employer from the debts.  If it does  not, the  Act  must  be held to infringe  Art.  19(1)(f)  of  the Constitution.   The  Act contains no  provision  granting  a discharge  to the debtor.  The bar of limitation  prescribed either by s. 15 Of the Payment of Wages Act (Act IV Of 1936) or Art. 102 of the Limitation Act or the provisions of S. 56 of  the Contract Act, assuming they applied, could not  give such a discharge.      Where  the Statute deals with rights arising out  of  a contract  and  interferes  with the rights  of  one  of  the parties to it, it must affect those of the other parties  to it as well.  Consequently, the impugned Act which takes over the rights of the employees in respect of wages due to  them without compensation and is, therefore unconstitutional,  as contravening   Art.   19(1)(f)   or  Art-   31(2)   of   the Constitution,  would  be  unconstitutional  as  regards  the appellant as well.      The  purpose  of a legislation  relating  to  abandoned property  must be, in the first instance, to  safeguard  the property  in the interest of the true owner and  thereafter, in absence of any claim, the taking over of it by the State. The impugned Act which vests the property absolutely in  the State  without any regard for the claims of the  true  owner cannot be said to be a law relating to abandoned property. I43 1124     Connecticut  Mutul Life Insurance Company v. Moore,  333 U.S 541, Anderson National Bank v. Luckett, 321 U.S. 233 and Standard  oil Company v. New Jersey, 341 U.S. 428,  referred to.      As regards the fines mentioned in s. 3(2)(a) of the Act the  appellant must be held to be a bare trustee under s.  8 of  the  Wages  Act having no beneficial  interest  in  fund created by that Act, and, consequently, ss. 3(I) and 3(2)(a) of the Act cannot contravene Art. 31(2) Or Art. 19(1)(f)  of

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the Constitution.     Nor  could  it  be said that the Act  by  extending  the circle of beneficiaries had encroached on the rights of  the employees of the appellant.  These sections must, therefore, be held to be constitutionally valid.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No.  167  of 1954.     Appeal from the Judgment and decree dated September  14, 1953, of the Bombay High Court in Misc.  Application No. 267 of 1953.     R.    J.  Kolah, B. Narayanaswamy and J. B.  Dadachanji, for the appellants.     H.    M.  Seervai,  Advocate General for  the  State  of Bombay and R. H. Dhebar, for the respondents.     1957.  December 20.  The following Judgment of the Court was delivered by      VENKATARAMA AIYAR J.-The appellant is a limited Company incorporated  under the Indian Companies Act, 1879.   It  is carrying  on  business in the manufacture of  textiles,  and owns three factories called Spring Mills,, Textile Mills and Bombay  Dye Works, all of, which are situate in Bombay.   In its balance sheet for the year 1951, it has shown as one  of its liabilities a sum of Rs. 1,65,731-1-0 under the heading "Unclaimed  wages ". This amount is made up of wages  earned by  the  workmen in the factories but remaining  undrawn  by them,  and represents accumulations from year to  year  ever since the formation of the Company which, it is stated,  was about  the year 1880.  ’ The dispute in this  appeal  mainly relates to this amount.     In 1953, the Legislature of the State of Bombay  enacted the  Bombay  Labour  Welfare Fund Act  (Bum.   XL  of  1953) (hereinafter referred to as the Act), and it came into force on June 4, 1953.  We may, at this                             1125 stage, refer to the relevant provisions of the Act, as it is their validity that is the main point for our  determination in  this appeal.  The preamble to the Act recites that "  It is  expedient  to  constitute a Fund for  the  financing  of activities  to  promote welfare of labour in  the  State  of Bombay  and for conducting such activities ". Section  2  is the  definition section; sub-s. (2) defines an " employee  " as meaning " any person who, is employed for hire or  reward to do any work, skilled or unskilled, manual or clerical, in an establishment". Employer " is defined in sub-s. (3) as meaning " any  person who employs either directly or through another person either on  behalf  of  himself or any other  person,  one  or  more employees in an establishment and includes-in a factory  any person named under s. 7(i)(f) of the Factories Act, 1948, as the   manager   ".  Sub-section  (10)   defines   "   Unpaid accumulations  "  as  meaning  " all  payments  due  to  the employees  but  not made to them within a  period  of  three years from the date on which they became due whether  before or  after the commencement of this Act including  the  wages and gratuity legally payable".  "Wages "is defined in sub-s. (11)  as  meaning  "  all  remuneration  capable  of   being expressed in terms of money which would) if the terms of the contract  of employment, express or implied were  fulfilled, be payable to a person employed in respect of his employment or of work done in such employment............     Then, there is s. 3, which runs as follows:

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   (1).  "There  shall  be constituted a  fund  called  the Bombay  Labour  Welfare fund and,  notwithstanding  anything contained in any other law for the time being in force,  the sums  specified in sub-section (2) ,shall be paid  into  the Fund.     (2).  The Fund shall consist of--        (a)     all fines realised from the employees;        (b)     all unpaid accumulations;        (c)     any voluntary donations;        (d)     any fund transferred under sub-section (5) of section 7; and        (e)     any sum borrowed under section 1126     (3).  The  sums  specified in sub-section (2)  shall  be collected  by  such  agencies and in  such  manner  and  the accounts of the Fund shall be maintained and audited in such manner as may be prescribed." Section  7(1) provides that "the Fund shall vest in and  ,be held  and applied by the Board as Trustees subject  ’to  the provisions  and for the purposes of this  Act."  Sub-section (2) of s. 7 is very material, and is as follows:    "Without  prejudice to the generality of sub-section  (1) the  moneys  in  the Fund may be utilized by  the  Board  to defray expenditure on the following:   (a)     community  and social education centres  including reading rooms and libraries;   (b)     community necessities;   (c)     games and sports;   (d)     excursions, tours and holiday homes;   (e)     entertainment and other forms of recreations;   (f)     home industries and subsidiary occupations for women and unemployed persons;   (g)     corporate activities of a social nature;   (h)     cost of administering the Act including the salaries  and  allowances  of the staff  appointed  for  the purposes of the Act; and   (i)     such other objects as would in the opinion of  the State   Government  improve  the  standard  of  living   and ameliorate the social conditions of labour:    Provided that the Fund shall not be utilized in financing any  measure which the employer is required  under  any  law for the time being in force to carry out;    Provided  further  that unpaid accumulations  and  ,fines shall be paid to the Board and be expended by it under  this Act  notwithstanding  anything contained in the  Payment  of Wages Act, 1936 (IV of 1936), or any other law for the  time being in force ". Section 11 provides for the appointment of an officer called the  Welfare  Commissioner,  and  defines  his  ,powers  and duties.  Section.17 enacts that,     "  Any  sum payable into the Fund under this  Act  shall without prejudice to any other mode of recovery,                             1127 be  recoverable on behalf of the Board as an arrear of  land revenue." Section 19 authorises the State Government to make rules  to carry  out  the purposes of this Act.  Section  23  provides that,    "In  section 8 of the Payment of Wages Act, 1936  (IV  of 1936),  to  sub-section (8) the following  shall  be  added, before the Explanation namely:     "  but  in the case of any factory or  establishment  to which the Bombay Labour Welfare Fund Act, 1953 (Bom.  XL  of 1953), applies all such realisations shall be paid into  the Fund constituted under the said Act."

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   Rules were framed by the State of Bombay in exercise  of the  powers conferred by s. 19, and they were  published  on June  30, 1953.  The material rules are Nos. 3 and 4,  which are as follows:     3."  Payment  of fines and of  unpaid  accumulations  by employer-(I) Within fifteen days from the date on which  the Act  shall  come into force in any area, every  employer  in such  area shall pay by cheque, money order or cash  to  the Welfare Commissioner-     (a)all fines realised from the employees before the said date and remaining unutilized on that date; ,and     (b)all unpaid accumulations held by the employer on  the aforesaid date.   (2)The  employer  shall along with such payment  submit  a statement   to   the  Welfare   Commissioner   giving   full particulars of the amounts so paid.   (3)     Thereafter, all fines realised from the  employees and all unpaid accumulations during the quarters ending 31st March, 30th June, 30th September and 31st December shall  be paid by the employer in the manner aforesaid to the  Welfare Commissioner on or before the 15th of April, 15th of July  , 15th of October and 15th of January succeeding such  quarter and  a statement giving particulars of the amounts  so  paid shall  be  submitted by him along with such payment  to  the Welfare Commissioner, 1128    4.     Notice  for  payment of fines and  unpaid  accumu- lations  by Welfare Commissioner:-The  Welfare  Commissioner may,  after  making such enquiries as he may deem  fit,  and after calling for a report from the Inspector, if necessary, serve  a notice on any employer to pay any portion of  fines realised from the employees  or unpaid accumulations held by him which the employer has not paid in accordance with  rule 3. The employer shall comply with the notice within 14  days of the receipt thereof."    On  July  7,  1953,  the  Welfare  Commissioner,   Bombay appointed under s. 1 1 of the impugned Act, sent a notice to the   appellant  and  other  companies  similarly   situate, inviting  their attention to the relevant provisions of  the Act  and  of the rules and calling upon them  to  remit  the fines  and  unpaid accumulations remaining  with,  them,  in accordance with the directions contained therein.  To  this, the  appellant sent a reply on the same date  impugning  the validity of the Act as being in violation of the  provisions of  Art.  31  (2), and followed it up  by  filing  the  writ petition  out of which the present appeal arises,  it  being treated by consent of parties as a test case.     The application was heard by Chagla C. J. and  Tendolkar J.  who  held that the impugned Act was intra vires  but  on different  grounds.  The learned -Chief Justice- was of  the opinion  that,  on  its true construction,  the  Act  merely substituted  the  Board as a creditor in the  place  of  the employees, that there -was no taking of property, and  that, in  consequence, there was no contravention of Art. 31  (2). Tendolkar J. hold that " unpaid wages " were  unquestionably moneys which belonged to the employer and that he was  being deprived  of them, but there was no taking of possession  or acquisition   of  property  within  .Art.  31  (2)  of   the Constitution but a deprivation of moneys, and as it was done under  the authority of -law, it fell within the  protection of Art. 31 (1).  In the result, the petition was  dismissed. The learned Judges,however, granted a certificate under Art. 132, and that is how the appeal comes before us,                             1129     The  sole  point  for determination in  this  appeal  is

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whether s. 3 (1) and sub-cls. (a) and (b) of s. 3(2) of  the Act   are  void  as  contravening  the  provisions  of   the Constitution; but to decide it, we have to consider quite  a number of questions which have been raised and discussed  in the arguments before us.  It will be convenient to deal with the two items, fines realised’ from the employees, s. 3  (2) (a)  and unpaid accumulations, s. 3 (2) (b)  separately,  as the  issues involved in the determination of their  validity are different.    Taking  first  unpaid accumulations, s. 3  (2)  (b),  the contention of Mr. Kolah for the appellant is that s 3 (1) is repugnant  to  Art.  31  (2) inasmuch  as  it  deprives  the employers of moneys belonging to them without payment of any compensation merely on the ground that they represent  wages due  to the employees.  Now, money is undoubtedly  property, and  it cannot be disputed that a person who has money  does not cease to be its owner merely by reason of the fact  that he  owes  debts in satisfaction of which it may have  to  be applied.   Until the creditor takes appropriate  proceedings under the law for the realisation of his debt and the  title of  the  debtor is extinguished in  those  proceedings,  the title to the property continues in the debtor.  Mr. Kolah is therefore clearly right in his contention that the liability of the appellant to pay wages to the employees does not ipso facto  extinguish  its title to the moneys belonging  to  it even pro tanto, and that the effect, therefore, of s. 3  (1) is  to take away money belonging to it.  Then, the  question is  whether  such a provision is hit by Art. 31 (2)  on  the ground  that  it  is acquisition  or  taking  possession  of property   for   a  public  purpose   without   payment   of compensation.  It is common ground that the taking is for  a public  purpose.  The point in- dispute is whether  what  is sought  to  be  done under s. 3  is  acquisition  or  taking possession  of property within Art. 31 (2).  Tendolkar,  J., answered  this question against the appellant,  because,  in his  view,  Art.  31 (2) would apply only  if  there  was  a transfer  of title to or beneficial interest in the  amounts to  the State, that s. 3 (1) effected neither, that  it  did deprive the employers of 1130 oheir  moneys, but that fell under Art. 31 (1) and not  Art. 31  (2),  and that as that was done under the  authority  of law, it could not be questioned.     Subsequent to this decision, this Court had occasion  to consider  the true scope of Art. 31 (2) in relation to  Art. 31 (1) in The State of West Bengal v. Subodh Gopal Bose  (1) and  in  Dwarkadas  Shrinivas  of  Bombay  v.  The  Sholapur Spinning  and  Weaving Co. Ltd (2).  In The  State  Of  West Bengal v. Subodh Gopal Bose(1), the majority of the  learned Judges took the view that.  Arts. 31 (1) and 31 (2) were not mutually  exclusive, that it was not an essential  requisite of  acquisition  under Art. 31 (2) that there  should  be  a transfer of title to the State, that deprivation of property and substantial abridgement of the rights of the owner  were also within Art. 31 (2), and that a law which produced those results  must, in order to be valid, satisfy the  conditions laid  down  in  that Article.  Das, J.,  (as  he  then  was) differed  from this view, and held that the contents of  the two  provisions  were distinct, that while Art. 31  (1)  had reference  to the " police power" of the State, Art. 31  (2) dealt  with  the power of " eminent domain ".  In  Dwarkadas Shrinivas  of  Bombay v. The Sholapur Spinning  and  Weaving Co.(2) the majority of the Judges again reiterated the  view expressed  in  The  State of West  Bengal  v.  Subodh  Gopal Bose(1)  that  Arts.  31 (1) and 31  (2)  covered  the  same

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ground,  and  that substantial interference with  rights  to property would be within the operation of Art’ 31 (2).    On  these  decisions, it should follow that s. 3  of  the impugned  Act is bad as infringing Art. 31 (2), in  that  it deprives  the  appellant of its moneys  without  giving  any compensation.  Mr. Seervai, however, resists this contention on the strength of Art. 31 (2A), which was introduced by the Constitution  (Fourth  Amendment)  Act,  1955.   It  is   as follows:    "  Where a law does not provide for the transfer  of  the ownership  or  right to possession of any  property  to  the State or to a corporation owned or controlled by the  State, it shall not be deemed to provide for the (1) [1954] S.C.R. 587. (2) [1954] S.C.R. 674. 1131 compulsory  acquisition  or  requisitioning  of   property,: notwithstanding   that  it  deprives  any  person   of   his property."  The argument is that the theory that acquisition in Art. 31 (2) is not confined to cases of transfer of ownership to the State,  and  that even deprivation of  property  would  fall within it, which is the basis of’ the decisions in The State of  West  Bengal v. Subodh Gopal Bose (1) and  in  Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning and Weaving Co. Ltd.  (2) 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 accordance 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  State of West Bengal v. Subodh Gopal Bose  (1)  and Dwarkadas  Shrinivas of Bombay v. The Sholapur Spinning  and Weaving Co. Ltd. (2), s. 3 (1) 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 prohibi- tion 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 not 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, therefore,  in substance it is a forced loan.  In The  State of   Bihar  v.  Maharajadhiraja  Sir  Kameshwar   Singh   of Darbhanga(3 ), this view was adopted by Mahajan J. at  pages 943-944, by  Mukherjea J. at page 961 and by  Chandrasekhara Aiyar  J.  at  pages 1015 to 1018.  It  is  argued  for  the respondents  that the position under Art. 31(2) is the  same as in America, as the provision therein that either the   (1) [1954] S.C.R. 587.        (2) [1954] S.C.R. 674.   (3) [1952] S.C.R. 889. 144 1132 amount of the compensation should be fixed or the principles on  which  and  the manner in which compensation  is  to  be determined should be specified, involves that what is  taken is  not  money.  It is argued, on the other  hand,  for  the appellant  that the latest trends in American law  show,  as was observed by Das J. (as he then was), at pages 984-985 in The State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga  (1),  a departure from the view held  in  earlier authorities that moneys and choses inaction could not be the

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subject  of " eminent domain "; and that, in any  case,  the principles  of  American law should not be  applied  in  the interpretation  of the provisions of our  Constitution.   If the  contention  of the respondents is to be  accepted,  the question  naturally arises what protection a person  has  in respect of moneys belonging to him if he can be deprived  of 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 than  what  it bears in Art. 31(2) and includes  money,  and that the citizens have the right to hold money subject  only to  law such as is saved by Art. 19(5).  In support of  this position,  he relied on the decision in Bijay  Cotton  Mills Ltd.  v.The State of Ajmer (2) 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  res- pondents  contend it is, the question that has still  to  be determined  is whether the impugned Act could  be  supported under Art. 19(5).  There was some discussion before us as to the  scope of this provision, the point of the debate  being whether  the words "imposing reasonable  restriction"  would cover a legislation, which not merely regulated the exercise of  the  rights  guaranteed by  Art.  19(1)(f)  but  totally extinguished  them, and whether a law like the  present  one which deprived the owner of his properties could be held  to fall  within  that  provision.  It was  argued  that  a  law authorising   (1)     [1952] S.C.R. 889.   (2)     [1955] 1 S.C.R. 752.                             1133 the  State  to seize and destroy  diseased  cattle,  noxious drugs  and the like, could not be brought within Art.  19(5) if the word ’restriction’ was to be narrowly construed,  and that  accordingly  the  power to restrict must  be  held  to include,  in  appropriate cases, the power to  prohibit  the exercise  of the right.  That view does find support in  the observations of Lord Porter in Commonwealth of Australia  v. Bank  of  New South Wales (1); but the  present  legislation cannot be sustained even on the above interpretation of  the word ’restriction’, as s. 3(1) 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 impugned 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 obligation is to be enforced and-that  was  the ground on which Chagla C.  J.  based  his judgment; and secondly, that the impugned legislation is one in  respect  of abandoned property, and it is  not  open  to attack as contravening either Art. 19 (1)(f) or Art.  31(2). It is those contentions 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 his 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 employee had assigned the debt to the Board constituted  under the Act, the latter would be entitled  to

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recover it from the employer.  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 there is a statutory    (1)    [1950] A-C. 235, 311. 1134 transfer  of the wages earned by the workman to  the  Board. Section 5 of the Act vests the amounts mentioned in s.  3(2) in the Board, and s. 3(1) directs that those amounts  should be  paid  by  the employer to the Board.   Counsel  for  the appellant  contends  that there are in the Act no  words  of transfer of the debts to the ;Board, and that there is  only a provision for payment of the amounts.  But this is  taking too  narrow  a view of the true scope of  those  provisions. Looking  at the substance of the matter, we are  of  opinion 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 accumulations " 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, and  if it can be, how it can benefit the Board to  take  it over if it cannot be realised by process of law.  Now, it is the  settled  law  of  this  country  that  the  statute  of Limitation 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 property is incapable of  possession, as for example, a debt, the section has no application,  and lapse  of  time does not extinguish the right  of  a  person thereto.  Under s. 25(3) of the Contract Act, a barred  debt is good consideration for a fresh promise to pay the amount. When  a debtor makes a payment without any direction  as  to how it is to be appropriated, the creditor has the right  to appropriate  it  towards a barred debt. (Vide s. 60  of  the Contract  Act).   It has also been held that a  creditor  is entitled                             1135 to  recover the debt from the surety, even though a suit  on it  is  barred against the principal  debtor.   Vide  Mahant Singh v. U Ba Yi (1), Subramania Aiyar v. Gopala Aiyar  (2), and Dil Muhammad v. Sain Das (3).  And when a creditor has a lien  over  goods  by way of security for  a  loan,  he  can enforce  the  lien for obtaining satisfaction of  the  debt, even  though an action’ thereon would be time-barred.   Vide Narendra  Lal Khan v. Tarubala Dasi (4).  That is  also  the law in England.  Vide Halsbury’s Laws of England (Hailsham’s Edition), Vol. 20, page 602, para. 756 and the  observations of Lindley L. J. in Carter v. White (5) and of Cotton L.  J. in  Curwen v. Milburn (6).  In American Jurisprudence,  Vol. 34, page 314, the law 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  action, 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

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the  defence and specially pleads it.  An indebtedness  does not lose its character as such merely because it is  barred; it  still  affords  sufficient consideration  to  support  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 of the provisions in the impugned Act, which release the debts   (1)     (1939) L. R. 66 1. A. 198.   (2)     (1910) I.L.R. 33 Mad. 308.   (3)     A.I.R. 1927 Lah. 396.   (4)     (1921) I.L.R. 48 Cal. 817, 823.   (5)     (1883) 25 Ch.  D. 666, 672.   (6)     (1889) 42 Ch.  D. 4 24, 434. 1136 due  to the employees from the bar of  limitation.   Section 3(1)  provides  that payment shall be made  of  the  amounts specified in sub-cl. (2) "notwithstanding anything contained in  any  other law for the time being in force."  A  similar provision  is again enacted in the second proviso to  sub-s. (2) of s. 5 that "unpaid  accumulations " and fines shall be paid to the Board "notwithstanding anything contained in the Payment  of Wages Act, 1936, or any other law for  the  time being in force." One of those laws is the law of limitation, and the effect of these provisions is to suspend  limitation in  respect  of  the claims to which s.  3(2)  relates.   To dispel  any  doubt  as to whether it was  competent  to  the Legislature of the Bombay State to modify the provisions  of the Limitation Act, it should be stated that limitation is a 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 Act, 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  recovered 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 valid, it cannot be said to be bad by  reason  of this section.  On the above  analysis,  there cannot  be  any  doubt  that  the  effect  of  the  relevant provisions of the Act is to transfer to the Board the  debts due  by the appellant to its employees free from the bar  of limitation.    The  question  still  remains whether there  has  been  a substitution of creditors, and that can only be, if the debt due to the employee is discharged and in its place there  is substituted  the debt in favour of the Board.  If,  however, the  employer  is  not released from his  liability  to  the employee,  then the effect of s. 3(1) is only to  create  in the Board a statutory creditor in                             1137 addition  to the creditor under the contract of  employment,

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and  there can be no question of substitution.  Mr.  Seervai agrees  that if the Act does not operate to’  discharge  the employer from his obligations to the employees in respect of the  wages  due  to  them,  then  it  must  be  held  to  be unconstitutional  as infringing Art. 19(1)(f),  because  his contention that the effect of’ the Act was only to take  the property  of  the 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 accordance with s. 3(1) of  the Act,  the appellant gets a discharge of his  obligations  to the employees in respect of wages due to them.  The Act does not  contain any provision to that effect, and  the  absence thereof  has  been strongly relied on by  the  appellant  as showing that no substitution 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 employment void under s. 56 of the Contract  Act, and the appellant is thereby discharged  from his obligations thereunder.  We shall now examine both these contentions.     To  appreciate the first contention, it is necessary  to refer to the relevant provisions of -the Wages Act.  Section 2(vi)  defines  "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  periods, which,  however, are not to 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 terminated, within the second 1138 working  day of such termination.  Section 15 provides  that where an unauthorised deduction has been made from the wages of an employed person or payment of wages has been  delayed, such  person may apply to the authority appointed under  the Act  for a direction for payment of the amount  deducted  or the  delayed  ;wages,  as the case  may  be,  together  with payment  of compensation.  Such application has to  be  made within six months from the date on which the deductions were made  or the date on which the payment of wages became  due, and  by  Act No. 62 of 1953 of the Bombay  Legislature,  the period  of six months has been enlarged to one year.   There is a proviso to this section that an application  thereunder can  be made after the period prescribed therein  "when  the applicant  satisfies  the authority that he  had  sufficient cause  for not making the application within  such  period." Section 22(d) of the Act provides that,    "No  Court shall entertain any suit for the  recovery  of wage or of any deduction from wages in so far as the sum  so claimed  could have been recovered by an  application  under section 15........     Now,  the argument of the respondents is that under  the provisions aforesaid, an employee has to prosecute his claim for  unpaid  wages  before the  authority  within  the  time limited by s. 15 of the Wages Act, which is one year in  the State  of  Bombay,  that if he fails to  do  so  it  becomes unenforceable,  and  a suit with respect thereto  under  the general law is also barred.  The result is, it is contended,

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that   having   regard   to  the   definition   of   "unpaid accumulations" as meaning all payments due to the  employees but  not  made to them within a period of three  years,  the employer  runs  no risk of being called upon to pay  to  the employee  what  has been paid by him to the Board  under  s. 3(1),  and that therefore a payment under the  impugned  Act gives  him  what  is, for all  practical  purposes,  a  good discharge.   This argument rests on the supposition that  so far  as  unpaid wages are concerned, the  operation  of  the Wages  Act  is co-extensive with that of the  impugned  Act. But  that  clearly is erroneous.  It is true that  wages  as defined in the Wages Act                             1139 would  include  whatever are wages under the  impugned  Act. But s. 1(6) limits the application of the Wages Act to wages which  are below Rs. 200 for a wage period.  In  respect  of wages  of Rs. 200 or more, it is the general law that  would apply, and the period of limitation is not one year under s. 15  of the Wages Act but three years under Art. 102  of  the Limitation’ Act, which period is capable of extension  under the provisions of the Limitation Act beyond the three  years mentioned  in s. 2(10) of the impugned Act.  Then, it is  to be  noted that under the proviso to s. 15(1), the  authority has  the  power to admit a petition even beyond  the  period mentioned there, if sufficient cause is shown therefor.   To this,  the reply of the respondents is that as on the  terms of  s.  3(1) and the second proviso to s. 5(2) they  are  to take effect notwithstanding anything contained in the  Wages Act  or any other law, they override the power conferred  by the  proviso to s. 15(1) of the Wages Act or the  provisions of the Limitation Act.    Even  as  regards  s.  22 of  the  Wages  Act,  there  is divergence  of  judicial opinion as to its true  scope.   In Simpalax  Manufacturing Co. Ltd. v. Alla-Ud-Din (1), it  was held  that  if  there was any bona fide dispute  as  to  the amount payable, the jurisdiction of the Civil Court was  not barred by s. 22.  On the other hand, it was held in  Bhagwat Rai v. Union of India (2) that the jurisdiction of the Civil Court  would  be  barred,  even if there  was  a  bona  fide dispute,  and that the bar under s. 22(d) was absolute,  and certain observations in Modern Mills Ltd. v.  Mangalvedhekar (3)  and A. B. Sarin v. B. C. Patil (4) were relied  on,  as supporting this contention.  Even if Mr. Seervai is right in his  contention  that  the law is  correctly  laid  down  in Bhagwat  Rai v. Union of India (2) and that the decision  in Simpalax Manufacturing Co. Ltd. v. Alla-Ud-Din(1) is  wrong, the  fact remains that claims in respect of unpaid wages  to which  the impugned Act applies must, in view of s. 1(6)  of the Wages Act, fall at least (1)  A.I.R. 1945 Lah.  195. (2)  I.L.R. 1953 Nag. 433. (4)  A.I.R. 1951 BOM. 423. (3)  A.I.R. 1950 Bom. 342. 145 1140 in part outside the purview of that Act, and the  protection afforded  by  s. 15 of that Act will not be  available  with reference thereto.    It  is next contended that even if the impugned Act  does not  protect the employer in respect of unpaid  wages  which fall outside the Wages Act, it should be upheld in so far as it relates to those claims which fall within the purview  of that  Act, as the bar of limitation under s. 15 of that  Act is  sufficient safeguard to the employer against being  made liable at the instance of the employees for wages which  had

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been paid to the Board.  And it is also contended that  even with reference to claims for unpaid wages which fall outside the  Wages Act, the impugned Act should be held to be  valid if  such  claims  are barred under  the  provisions  of  the Limitation Act.  In other words, the contention is that  the impugned Act should be upheld in respect of that portion  of the  unpaid wages the recovery of which by the employees  is barred by limitation whether under s. 15 of the Wages Act or the Limitation Act.    The impugned Act, it should be noted, merely enacts  that all  unpaid accumulations should be paid to the  Board.   It makes  no distinction between claims for unpaid wages  which are barred by limitation and those which are not so  barred. It  is contended for the respondents that when the  subject- matter  of a law comprehends distinct matters as to some  of which it is unconstitutional and bad, it should nevertheless be  upheld  as regards the others, if those  others  form  a distinct category, and that this principle applies not  only when  a classification into distinct categories  appears  on the  face of the law but also when it exists in fact.   Now, the  doctrine  of  severability  in  application  is   well- established  in our law (vide The State of Bombay v.  F.  N. Balsara (1), The State of Bombay v.The United Motors (India) Ltd.and R. M. D. Chamarbaugwalla v. Union of Indiaand the principles applicable have been stated fullyin Chamarbaugwalla’s  Case (3).  But assuming on the  basis  of the above autho- (1) [1951] S.C.R. 682.           (2) [1953] S.C.R.1069. (3)[1957] S.C.R. 930.                             1141 rities that we can confine the operation of the impugned Act to  those  claims  of  unpaid  wages  which  are  barred  by limitation,  the question still is whether the impugned  Act gives  a discharge to the employer even in respect of  those claims;  for,  as  already stated,  the  operation  of  Art. 19(1)(f) can be avoided only if it is established that there has  been a substitution of creditors, which can only be  if and   when  the  employer  gets  a  discharge   from   those obligations  to  the  employees.  The point  to  be  decided therefore is whether the effect of the bar of limitation  is to discharge the employer from liability to the employees.    It  has been already mentioned that when a  debt  becomes time-barred,  it  does  not  become  extinguished  but  only unenforceable  in  a court of law.  Indeed, it  is  on  that footing that there can be a statutory transfer of the  debts due  to the employees, and that is how the Board gets  title to them.  If then a debt subsists even after it is barred by limitation,  the employer does not get, in law, a  discharge therefrom.   The  modes  in  which  an  obligation  under  a contract becomes discharged are well-defined, and the bar of limitation  is not one of them.  The following  passages  in Anson’s  Law  of  Contract,  19th  Edition,  page  383,  are directly in point:      "  At  Common  Law  lapse  of  time  does  not   affect contractual  rights.   Such a right is of  a  permanent  and indestructible  character, unless either from the nature  of the  contract, or from its terms, it be limited in point  of duration.      "But   though  the  right  possesses   this   permanent character,  the  remedies  arising from  its  violation  are withdrawn  after a certain lapse of time;  interest  reipub- licae ut sit finis litium.  The remedies are barred,  though the right is not extinguished."      And if the law requires that a debtor should get a dis- charge  before he can be compelled to pay, that  requirement

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is  not  satisfied if he is merely told that in  the  normal course  he  is  not likely to be exposed to  action  by  the creditor.      That this distinction is not purely academical but. 1142 is of practical importance will be seen, when regard is  had to  the  provisions of the Industrial Disputes  Act.   Under that  Act, there is no period of limitation  prescribed  for referring  a dispute for adjudication by a  tribunal.   Even when a claim for wages falls within the purview of the Wages Act  and  an application under s. 15 of that  Act  would  be barred,  it  can  nevertheless give rise  to  an  industrial dispute  in respect of which action can be taken  under  the provisions  of the Industrial Disputes Act.  It was held  by the  Federal Court in Shamnagore Jute Factory Co. Ld. v.  S. M.  Modak  (1) that s. 22(d) of the Wages Act did  not  take away the power of the authorities to refer to a tribunal set up under the Industrial Disputes Act a claim which could  be made  under the Wages Act, as that section  had  application only  to  suits  and  did  not  exclude  other   proceedings permitted  by  law  for the enforcement of  payment.   If  a tribunal appointed under that Act can direct an employer  to make  payment of wages, it follows that the bar under s.  15 of the Wages Act does not give an absolute protection to the employer, and the same consequence must follow when the  bar of  limitation arises under the Limitation Act.  The  result therefore is that when an employer makes a payment under  s. 3(1) of the Act he gets no discharge from his obligation  to the  employees, even when the enforcement thereof is  barred by limitation.     The contention based on the provisions of the Wages  Act failing,  Mr. Seervai falls back on s. 56  of  the  Contract Act as furnishing a ground for holding that the employer  is discharged.  Para. (2) of s. 56 provides that,     "  a contract to do an act which, after the contract  is made,  becomes impossible, or by reason of some event  which the promisor could not prevent, unlawful, becomes void  when the act becomes impossible or unlawful."    It  is argued that by operation of s. 3 of  the  impugned Act,  the  performance of the contract by the  employer  has become impossible, and the contract has thereby (1)  [1949] F.C.R. 365.                             1143 become  void.  Section 56 of the Contract Act  embodies  the law relating to frustration of contracts, and the true scope of  that section was considered by this Court in  Satyabrata Ghose v. Mugneeram Bangur and Co. The position was thus stated by Mukherjea J.:    " In the large majority of cases however the doctrine  of frustration  is applied not on the ground that  the  parties themselves  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 purpose or  basis of a contract was frustrated by the intrusion or  occurrence of an unexpected 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 provision for discharge, because the parties did not  think about the matter at all nor could  possibly  have any intention regarding it. When such an event or change  of circumstances  occurs  which  is so  fundamental  as  to  be regarded by law as striking at the root of the contract as a

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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  conclusion  whether  the   changed circumstances   destroyed  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  obser- vations, and contends that when the contract of service  was entered  into between the employer and the  employees,  they could not have contemplated (I)  [1954] S.C.R. 310,323. 1144 that the Legislature would have intervened and required  the employer to pay the arrears of wages to the Board, and  that that is a supervening impossibility which brings s. 56  into play  and renders the contract void.  We are  not  satisfied that  the  performance of the contract of service  has  been rendered  impossible  by reason of s. 3(1) of  the  impugned Act.  But assuming that that is the position, what follows ? The  matter would then be governed by s. 65 of the  Contract Act,  which provides that when a contract becomes void,  any person  who has received any advantage 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 opinion 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 violation  of either Art. 19 (1) (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 choses 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. Maharajadhiraja                             1145 Sir Kameshwar Singh of Darbhanga (supra) at pages 942,  960- 961 and 1015 to 1018.  Now, as the Act takes over the rights of  the employees in respect of wages due to them even  when they  are  not  barred  without  making  any  provision  for compensation  of the same to them, it must at least to  that extent   be   held  to  be  unconstitutional,   whether   as contravening  Art.  19  (1)  (f)  or  Art.  31  (2)  it   is

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unnecessary to decide.     It 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 constitutionality  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  unaffected  by  it.  Let  us  assume  that  the appellant makes a payment to the Board under s. 3 (1) of the impugned   Act   on  the  footing  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  contract  must affect the rights of all the parties to the contract, and if it  is bad as regards one of them, it should be held  to  be bad  as  regards the others as well.  It is  unnecessary  to pursue  this question further, as we have held that the  Act is unconstitutional even as regards the appellant.     It  remains  to  deal with the contention  of  the  res- pondents that the impugned legislation is, in substance, one in  respect  of abandoned property, and that,  by  its  very nature,  it  cannot  be held to violate the  rights  of  any person  either under Art. 19 (1) (f) or Art. 31  (2).   That would  be  the  correct position if  the  character  of  the legislation  is what the respondents claim it to be, for  it is only a person who has some interest in property that  can complain that the 1146 impugned legislation invades that right whether it be  under Art.  19  (1)  (f) or Art. 31 (2), and if  it  is  abandoned property, ex hypothesi there is no one who has any  interest in  it.  But can the impugned Act be held to be  legislation with  respect  to  abandoned  property  ?   To  answer  this question,  it is necessary to examine the  basic  principles underlying  such a legislation, and ascertain whether  those are  the  principles  oil  which the  Act  is  framed.   The expression  "  abandoned  property  " or  to  use  the  more familiar  term "bona vacantia " comprises properties 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, Third Edition, Vol. 7, page 536, para. 1152, it  is stated that " the term bona vacantia is applied to things in which no one can claim a property and includes the residuary estate of persons dying intestate ". There is, however, this distinction  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  vacantia.  Vide Holdsworth’s History of  English  Law, Second  Edition,  Vol.  7, pages  495-496.   In  Connecticut Mutual  Life  Insurance Company v. Moore(1),  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 abandoned  property  enacts firstly provisions for the State conserving and safeguarding for  the benefit of the true owners property in  respect  of

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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     (I)   333 U.S. 541, 546; (1947) 92 L.Ed. 863, 869.                             1147 has  been the subject of numerous decisions in  the  Supreme Court  of  United  States.  In  Anderson  National  Bank  v. Luckett (1), the law related to Bank deposits.  It  provided that if moneys in deposit had not been demanded or  operated on, for a period of 10 years in the case of demand  deposits and 25 years in the case of non-demand deposits, they  might be  presumed to have been abandoned and the Banks  -were  to transfer 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 establish their rights, and  that it merely substituted the State in the place of the Bank  as their debtor.  The Court also held that it was " within  the Constitutional  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  abandoned  ".  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   preferred 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 beneficiary."    (1)    321 U.S. 233, 241; (1943) 88 L Ed. 692, 701 146 1148 In  Standard Oil Company v. New Jersey (1), the law  related to  shares and unpaid dividends, and provided for the  State taking them over, if they remained unclaimed for a period of 14  years.  There was a provision for notice to the  unknown owners by advertisement.  It was held following  Connecticut Mutual Life  Insurance Company v. Moore (supra) that the law was valid.     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 abandoment.   A  more  serious  objection  to  viewing   the legislation  as  one relating to abandoned  claims  is  that

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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  claims, 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 unconstitutional 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 employers to hand over to the Board the fines realised  from the  employees.   So  far as this  item  is  concerned,  the position of the employers is wholly    (1)    341 U.S. 428 ; (1950) 95 L.Ed. 1078,                             1149 different  from what it is as regards unpaid  accumulations. Section 8 of the Wages Act deals with the question of  fines which could be imposed by the employer, and it provides that they  should be entered in a separate 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 trustees,  and vests them in the Board, and  that,  further, while the beneficiaries under s. 8 of the Wages Act are  its own  employees,  under  s. 5(2) of  the  impugned  Act  they include  otherpersons  as  well.   There  might  have   been substance  in  the  complaint that the  appellant  had  been deprived  of its rights as trustee if it bad any  beneficial interest  in the fund.  But admittedly, 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 Shrinivas of  Bombay  v. The  Sholapur Spinning and Weaving Co. Ltd. (supra) or  such unreasonable  interference with rights to property, as  will infringe  Art.  19(1)(f).  It is argued with  some  emphasis that  in enlarging the circle of beneficiaries, the Act  has encroached on the rights of the employees of the  appellant. But then, the trust is the creation not of 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) and s. 3(2)(a) of  the impugned Act could be attacked as unconstitutional, and they must accordingly be held to be valid.    In  the result, we hold, in modification of the order  of the Court below, that the provisions of the impugned Act are unconstitutional  and  void in so far as they  relate  to  " unpaid accumulations", but that they are valid as regards  " fines "; and an appropriate writ will 1150 issue  against  the respondents in the terms  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.

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                              Appeal allowed in part.