S.SESHACHALAM & ORS.ETC. vs. S.SESHACHALAM .ETC.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLALTE JURISDICTION CIVIL APPEAL NOS. 11454-11459 OF 2014 (Arising out of S.L.P. (C) Nos.9068-73/2010) S.SESHACHALAM & ORS. ETC. ..Appellants Versus CHAIRMAN, BAR COUNCIL OF TAMIL NADU & ORS. ..Respondents WITH CIVIL APPEAL NO.11460 OF 2014 (Arising out of S.L.P. (C) No.34326/2012) THE ELDER LAWYERS’ ASSOCIATION & ORS. ..Appellants Versus STATE OF BIHAR & ANR. ..Respondents JUDGMENT J U D G M E N T R. BANUMATHI, J. Leave granted. 2. Whether proviso to Section 16 Explanation II (5) of Tamil Nadu Advocates’ Welfare Fund Act, 1987 denying the Page 1 payment of two lakh rupees to the kin of advocates receiving pension or gratuity or other terminal benefits would be violative of Article 14 of the Constitution of India and

did not have any rational basis are the points falling for consideration in these appeals. 3. Similar challenge is made to Section 1(3) of the Bihar State Advocates’ Welfare Fund Act 1983 which excludes the persons who have retired from service and are in receipt of retiral benefits from their employers from the purview of the Bihar State Advocates’ Welfare Fund Act. For convenience, appeals challenging the provisions of Tamil Nadu Advocates’ Welfare Fund Act are taken as lead case. JUDGMENT 4. The appellants are retired employees either from government service or other organisations qualified with law degree who have enrolled themselves as advocates after retiring from their respective services and now are said to be practising in courts. Challenging the impugned provision and Explanation II (5) of Section 16 of the Tamil Nadu 2 Page 2 Advocates’ Welfare Fund Act, the appellants filed writ petitions contending that the benefit of Welfare Fund Act is denied to the kin of advocates who are in receipt of pension

unreasonable and violative of Article 14 of the Constitution of India. 5. Learned single Judge of the Madras High Court allowed the batch of writ petitions filed by the retired officials who had enrolled themselves as advocates after their retirement. Learned single Judge struck down impugned proviso to Explanation II (5) of Section 16 holding that the same is violative of Article 14 of the Constitution of India. Aggrieved, Bar Council of Tamil Nadu and the JUDGMENT Government preferred appeals before the Division Bench which allowed the appeals and set aside the order of the learned single Judge. The Division Bench held “…..that the distinction made between the member advocates who enrolled and professed law profession from the beginning, and the advocates who joined law profession after 3 Page 3 retirement, viz., after completion of nearly 58 years of their life, for the purpose of conferring lump sum benefit….” is a reasonable classification and the said classification has a

Constitution of India. Challenging the same, the appellants have preferred these appeals by way of special leave. 6. Learned counsel for the appellants Mr. Harish Beeran contended that the denial of lump sum benefit based on a classification of advocates is violative of Article 14 of the Constitution of India. It was submitted that the differentiation between persons who enrolled as advocates after demitting office from the govt. service/organization and who enrolled as advocates and set up practice straight from JUDGMENT the law college, is discriminatory as there is no such distinction made in the Act while defining the term ‘ advocate ’ under Section 2(a) of the Act. It was further submitted that the pension and other benefits received are the statutory amounts paid to them for the services rendered to the previous employer and it is an earned 4 Page 4 benefit, and that cannot form the basis for denial of lump sum benefits. The appellants argued that the impugned proviso is repugnant and contradictory to Section 2(i) of the

India. 7. Mr. Pramod Swarup learned Senior Counsel for the appellants (Civil Appeal arising out of SLP (C) No.34326/2012) submitted that as per Section 1(3) of the Bihar State Advocates’ Welfare Fund Act, the persons who enrol themselves as advocates after retirement and are in receipt of retiral benefits are not permitted to take membership under the Act. It was contended that the artificial classification made amongst homogeneous group of JUDGMENT advocates and disentitling retired employees - advocates from becoming member of the welfare fund is discriminatory and unconstitutional. 8. Mr. L. Nageshwara Rao, learned ASG appearing for the State of Tamil Nadu contended that the object of Welfare Fund Act is to provide welfare or social security benefits to 5 Page 5 the advocates who are fully committed to the profession of law and in the event of their death, their legal heirs will be entitled to receive the lump sum welfare amount. The

classification and is founded on an intelligible differentia which is having a rational nexus with the objects sought to be achieved by the Act in question. 9. Mr. Rudreshwar Singh, learned counsel appearing for the State of Bihar submitted that the Welfare Fund Scheme is intended only for those young advocates who struggle from inception of their profession and not intended for the retired employees enrolled as advocates who receive pension and other terminal benefits from their previous JUDGMENT employers. Taking us through the Central legislation– Advocates’ Welfare Fund Act 2001 and the provisions of the Welfare Fund Act of other States, learned counsel submitted that those legislations do make a distinction amongst the advocates receiving pensionary benefits from their 6 Page 6 employers and those who set up the practice straight after completing the law degree. 10. We have carefully considered the submissions and

materials on record. 11. STATEMENT OF OBJECTS AND REASONS - THE ADVOCATES’ WELFARE FUND ACT, 2001: The Advocates’ Welfare Fund Act, 2001 enacted by the Parliament enjoins the appropriate Government to constitute a fund to be called the “Advocates’ Welfare Fund” with the object of providing social security in the form of financial assistance to junior lawyers and welfare scheme for indigent or disabled advocates. The statement and objects read as under:- JUDGMENT “Social security in the form of financial assistance to junior lawyers and welfare schemes for indigent or disabled advocates, has long been a matter of concern for the legal fraternity. Clause (a) of sub- section (2) of section 6 and clause (a) of sub-section (2) of section 7 of the Advocates Act, 1961, confer powers on State Bar Councils as well as the Bar Council of India, inter alia, to constitute through their rules one or more funds for the purpose of “giving financial assistance to organise welfare schemes for the indigent, disabled or other advocates”. Sub-section (3) of Section 6 and sub- section (3) of section 7 of the Advocates Act further 7 Page 7

2. All practicing advocates shall become members of the Fund on payment of an application fee and annual subscription. The Fund shall vest in and be held and applied by the Trustee Committee established by the appropriate Government. The Fund will, inter alia , be used for making ex gratia grant to a member of the Fund in case of a serious health problem, payment to a fixed amount on cessation of practice and in case of death of a member, to his nominee or legal heir, medical and educational facilities for the members and their dependents, purchase of books and for common facilities for advocates. The income accrued to the Fund, profits and gains shall be exempted from income tax. JUDGMENT 3. The Bill seeks to achieve the above object.” 12. It is with the same objects and purpose Tamil Nadu Advocates’ Welfare Fund Act 1987 (for short ‘Welfare 8 Page 8 Fund Act’) was also enacted. Some of the provisions of the Welfare Fund Act are relevant to be noted. Section 2(a) defines “Advocate” as under:-

Section 2(i) defines member of the Fund as under:- “2(i) “member of the Fund” means an advocate admitted to the benefits of the Fund and continuing to be a member thereof under the provisions of this Act.” Cessation of practice is defined in Section 2(e) which reads as under:- “2(e) “cessation of practice” means removal of the name of an advocate from the State roll under section 26-A of the Advocates Act, 1961 (Central Act 25 of 1961).” JUDGMENT 13. Section 3 of the Welfare Fund Act states that the Government shall constitute a fund called the Tamil Nadu Advocates’ Welfare Fund. Section 3 reads as under:- “3. Advocates Welfare Fund 9 Page 9 (1) The Government shall constitute a fund called the Tamil Nadu Advocates Welfare Fund. (2) There shall be credited to the Fund-

JUDGMENT (3) The sums specified in sub-section (2) shall be paid to, or collected by, such agencies, at such intervals and in such manner, and the accounts of the Fund shall be maintained in such manner, as may be prescribed.” Advocates’ Welfare Fund is administered by a Trustee Committee. As per the provisions of the Welfare Fund Act, the fund shall vest in and be held and administered by the Trustee Committee established under Section 4 of the Act. 1 Page 10 The functions of the Trustee Committee is enumerated in Section 9 of the Welfare Fund Act. 14. Section 16 of the Welfare Fund Act which is

reads as under:- “ 16. Payment of amount on cessation of practice (1) Every advocate who has been a member of the Fund for a period of not less than five years shall, on his cessation of practice, be paid an amount at the rate specified in the Schedule: (IA) “Notwithstanding anything contained in sub- section (1), every member of the Fund who has completed or completes twenty five years of practice as an advocate on the date coming into force of the Tamil Nadu Advocates Welfare Fund (Amendment) Act, 2000 shall, on completion of five years as a member of the Fund and on his cessation of practice, be paid a lump sum amount of one lakh rupees. (w.e.f. 1.2.2001) Provided that where the Trustee Committee is satisfied that a member of the Fund ceases to practice within a period of five years from the date of his admission as a member of Fund as a result of “any permanent physical or mental disability”, the Trustee Committee may pay the member of the Fund an amount at the rate specified in the Schedule: JUDGMENT Explanation I: For the purposes of calculating the number of years standing of a member of the Fund for the purpose of this sub-section, every four years of practice as an advocate before the admission of a member to the Fund shall be counted as one year’s standing and every year of practice over and above four years before such admission shall be counted 1 Page 11 equivalent to three months’ standing and the total number of years of standing so counted shall be added to the number of years of practice.

JUDGMENT Provided that if such member who, before his death, was in receipt of pension, gratuity or other terminal benefits from any State Government or Central Government or other authority or employer, his nominee or legal heir, as the case may be, shall not be entitled for the payment of the amount of two lakh rupees under this sub-section. (w.e.f. 1.2.2001) (6) Every member or his nominee or legal heir, as the case may be, shall apply, for payment out of the Fund, to the Trustee Committee, in such form, as may be prescribed. 1 Page 12

15. Explanation II (5) of Section 16 prior to Amendment 2001 stood as under:- Explanation II (5) “Where a member of the Fund dies within five years of his admission to the Fund, his nominee or legal heir, as the case may be, shall be paid an amount at the rate of one thousand rupees for each year of practice by the member of the Fund.” 16. By a careful reading of Section 16, it is evident that prior to 2001 amendment, Explanation II (5) of Section JUDGMENT 16 of the Welfare Fund Act contemplated that on the death of a member of the Fund within five years from the date of his admission to the Fund, his nominee or legal heirs was/were eligible for payment at the rate of one thousand rupees for each year of his practice. That was because under Section 16(1) of the Welfare Fund Act, the schedule payment is possible only if as an advocate he has completed 1 Page 13 five years as a member of the Fund. Explanation II (5) to Section 16 of the Welfare Fund Act stood amended with effect from 1.2.2001 as extracted above, as per which lump

membership of the Fund. After GO. Ms. 688 dated 19.9.2012, the above financial assistance of two lakh rupees payable to the nominee/legal heirs of the deceased advocates in terms of Section 16 Explanation II (5) has been enhanced to five lakh and twenty five thousand rupees. This lump sum of two lakh rupees (as per Amendment 2001) is denied to a member of a Fund who has enrolled himself after retirement from government service or any other organization who was in receipt of pension or other terminal JUDGMENT benefits. 17. Contention of the appellants is that as per definition of “advocate” in Section 2 (a) of the Welfare Fund Act, there cannot be a differentiation between the advocates. Reliance was placed upon Section 2(i) of the Welfare Fund Act which defines the term “member of the 1 Page 14 Fund” and it was submitted that when once the retired employees like the appellants have been admitted as members of the Fund, they should be treated equally with

classification is violative of Article 14 of the Constitution of India. 18. As per the scheme of the Welfare Fund Act, every advocate who has enrolled with the State Bar Council as per the Advocates Act 1961 would not automatically become a member of the Advocates’ Welfare Fund and it is only those advocates who applied to the Trustee Committee, can become member of the Advocates’ Welfare Fund. As per Section 15 of the Welfare Fund Act, only those who applied JUDGMENT on payment of membership of Rs.200/- towards application shall be admitted as a member of the Fund. It is thus not in dispute, not only the advocates who have enrolled with the Bar Council immediately after completion of their law degree, but also those who enrolled as advocates after their retirement from other employment may become the 1 Page 15 members of the Advocates’ Welfare Fund. It is only those advocates who have become the members of the Advocates’ Welfare Fund, are eligible for the benefits under the Welfare

of lump sum amount as per the impugned proviso. As per Section 16 (1) of the Act, every advocate who has been a member of the Fund for a period of not less than five years, on his cessation of practice, be paid an amount at the rate specified in the schedule. The proviso to sub-section (1) of Section 16 enables the Trustee Committee to pay an amount to a member of the Fund who ceases to practice within a period of five years from the date of his admission as a member. Thus, the persons who enrolled as advocates JUDGMENT after their retirement even though they are denied the benefit of lump sum payment under the impugned proviso, on cessation of their practice, they shall be entitled to the Welfare Fund at the rate specified in the schedule. The differentiation of the retired employee-advocates who have set up practice as advocates after demitting their office, who 1 Page 16 are in receipt of pension or other terminal benefits and the advocates who set up practice straight from the law college, in our considered view, appears to be rational and

19. Statement of Objects and Reasons of the Tamil Nadu Welfare Fund Act clearly states that the Welfare Fund is intended to provide welfare to the advocates and to provide them retirement benefits. The Objects and Reasons of Tamil Nadu Advocates’ Welfare fund Act reads as under:- STATEMENT OF OBJECTS AND REASONS Tamil Nadu Advocates Welfare Fund Act, 1987 (Tamil Nadu Act 49 of 1987) “The constitution of a Welfare Fund for the payment of retirement benefits to the advocates in the State of Tamil Nadu and for conferring on them the benefits connected therewith or incidental thereto has been engaging the attention of this Government for quite some time. The Government have decided to constitute a Fund called the Tamil Nadu Advocates Welfare Fund in the State to provide for payment of retirement benefits to the advocates in the State and for conferring on them the benefits connected therewith or incidental thereto.” (Underlining added) JUDGMENT 20. The main point falling for consideration is whether there is nexus between the object of the Act and denial of benefits of lump sum welfare fund to retired employees 1 Page 17 enrolled as advocates after their retirement under explanation II (5) of Section 16 of the Act. As noticed earlier, on cessation of practice, the members of the Welfare Fund

is denied is just a lump sum amount. It is an established principle that mere hardship caused to a group should not be a ground to strike down a law. 21. Article 14 of the Constitution of India states that “The State shall not deny to any person equality before the law of the equal protection of the laws within the territory of India” . Article 14 forbids class-legislation but it does not forbid reasonable classification. The classification however must not be “arbitrary, artificial or evasive” but must be JUDGMENT based on some real and substantial bearing, a just and reasonable relation to the object sought to be achieved by the legislation. Article 14 applies where equals are treated differently without any reasonable basis. But where equals and unequals are treated differently, Article 14 does not apply. Class legislation is that which makes an improper 1 Page 18 discrimination by conferring particular privileges upon a class of persons arbitrarily selected from a large number of persons all of whom stand in the same relation to the

reasonable distinction or substantial difference can be found justifying the inclusion of one and the exclusion of the other from such privilege. 22. While Article 14 forbids class legislation, it does not forbid reasonable classification of persons, objects, and transactions by the legislature for the purpose of achieving specific ends. But classification must not be “arbitrary, artificial or evasive”. It must always rest upon some real and substantial distinction bearing a just and reasonable relation JUDGMENT to the object sought to be achieved by the legislation. Classification to be reasonable must fulfil the following two conditions:- Firstly, the classification must be founded on the intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group. Secondly, the differentia must have a rational 1 Page 19 relation to the object sought to be achieved by the Act. The differentia which is the basis of the classification and the object of the Act are two distinct things. What is necessary

is no reasonable basis for a classification that legislation making such classification may be declared discriminatory. 23. In Special Courts Bill, 1978 (1979) 1 SCC 380, this Court referred to large number of decisions involving interpretation of Article 14 of the Constitution of India and summarized the principles. In the case of National Council for Teacher Education vs. Shri Shyam Shiksha Prashikshan Sansthan , (2011) 3 SCC 238, Justice Singhvi has elaborated the concept of ‘ Right to Equality’ by referring to chain of JUDGMENT judgments delivered by this Court and established principles viz. Union of India & Anr. vs. Parameswaran Match Works & Ors ., (1975) 1 SCC 305, Dr. Sushma Sharma & Ors. vs. State of Rajasthan & Ors., (1985) Supp. SCC 45, University Grants Commission vs. Sadhana Chaudhary & Ors., (1996) 10 SCC 536, Ramrao & Ors. vs. All India Backward Class Bank 2 Page 20 Employees Welfare Association & Ors., (2004) 2 SCC 76 and State of Punjab & Ors. vs. Amar Nath Goyal & Ors. , (2005) 6 SCC 754 etc.

considered the process of classification and what should be regarded as a class for purposes of legislation held in paras (58) and (70) as under:- “58. The Constitution permits the State to determine, by the process of classification, what should be regarded as a class for purposes of legislation and in relation to law enacted on a particular subject. There is bound to be some degree of inequality when there is segregation of one class from the other. However, such segregation must be rational and not artificial or evasive. In other words, the classification must not only be based on some qualities or characteristics, which are to be found in all persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. Differentia which is the basis of classification must be sound and must have reasonable relation to the object of the legislation. If the object itself is discriminatory, then explanation that classification is reasonable having rational relation to the object sought to be achieved is immaterial. JUDGMENT 70. Undoubtedly, every differentiation is not a discrimination but at the same time, differentiation must be founded on pertinent and real differences as distinguished from irrelevant and artificial ones. A simple physical grouping which separates one category from the other without any rational basis is not a sound or intelligible differentia. The separation or segregation must have a systematic relation and rational basis and the object of such segregation must not be discriminatory. Every public servant against whom there is reasonable suspicion of commission of crime or there are allegations of 2 Page 21 an offence under the PC Act, 1988 has to be treated equally and similarly under the law. Any distinction made between them on the basis of their status or position in service for the purposes of inquiry/investigation is nothing but an artificial one and offends Article 14.”

intelligible differentia between the classification of advocates who had set up practice straight after enrolment and other advocates who start their practice after demitting the office and are in receipt of pension and other benefits and whether the differentia has a nexus with the object of the Act. 26. The profession of law is a noble calling. The legal fraternity toils day and night to be successful in the profession. Although it is true that slowly working one’s way up is the norm in JUDGMENT any profession, including law, but initially young advocates have to remain in the queue for a prolonged period of time and struggle through greater hardships. Despite being extremely talented, a number of young lawyers hardly get proper opportunity or exposure in their profession. New entrants to the profession in the initial stages of the profession suffer with the meagre stipend which young lawyers may receive during their 2 Page 22 initial years, coupled with the absence of a legislation concerning this, they struggle to manage their food, lodging, transportation and other needs. Despite their valiant efforts, they are unable to

to make a name for themselves and achieve success in the profession. For the majority of the legal fraternity, everyday is a challenge. Despite the difficult times, the lawyer who sets up practice straight after enrolment, struggles to settle down himself in the profession. Some of the lawyers remain struggling throughout their lives yet choose to remain in the profession. It is something like “riding a bicycle uphill with the wind against one ”. 27. Contrariwise, the retired employees like the appellants JUDGMENT who are law graduates did not withstand the difficult times in the profession. They opted for some other lucrative job during their prime time of their life and lived a secured life. Others found some job and positioned themselves in a comfortable place of employment, chose to join evening college or attended part time classes and obtained law degree and having retired with 2 Page 23 comfortable retiral benefits, further securing their future, they enrol themselves as an advocate to practice. The retired employees have the substantial retiral benefits, gratuity apart

than their counter part lawyers who struggle through difficult times. 28. The various welfare fund schemes are in actuality intended for the benefit of those who are in the greatest need of them. The lawyers, straight after their enrolment, who join the legal profession with high hopes and expectations and dedicate their whole lives to the professions are the real deservers. Lawyers who enrol themselves after their retirement from government services and continue to receive pension and other JUDGMENT terminal benefits, who basically join this field in search of greener pastures in the evening of their lives cannot and should not be equated with those who have devoted their whole lives to the profession. For these retired persons, some amount of financial stability is ensured in view of the pension and terminal benefits and making them eligible for lump sum welfare fund under the 2 Page 24 Act would actually amount to double benefits. Therefore, in our considered view, the classification of lawyers into these two categories is a reasonable classification having a nexus with the object of the Act.

being placed differently than the class of lawyers who chose this profession as the sole means of their livelihood, it can reasonably be discerned that the retired persons form a separate class. As noticed earlier, the object of the Act is to provide for the constitution of a Welfare Fund for the benefit of advocates on cessation of practice. As per Section 3 (2) (d) any grant made by the Government to the welfare fund is one of the source of the Advocates' Welfare Fund. The retired employees are already in receipt of pension from the Government or other employer and to JUDGMENT make them get another retiral benefit from the Advocates’ Welfare Fund would amount to double benefit and they are rightly excluded from the benefit of the lump sum amount of welfare fund. 30. Section 28 of the Central legislation-Advocates’ Welfare Fund Act 2001 provides that no senior advocate or a person in 2 Page 25 receipt of pension from the Central Government or State Government shall be entitled to ex-gratia grant under Sections 19, 21 and 24 of the said Act. Thus, the Central Act as well as the

assistance from the State Government or the Central Government or some other employer in the form of terminal benefits and pension etc. Corresponding Acts of various States namely Kerala Advocates Welfare Fund Act (Section 15), Orissa Advocates Welfare Fund Act (Section 15) and Rajasthan Advocates Welfare Fund Act (Section 16) contain similar provisions making differentiation between advocates who enrolled themselves as advocates after demitting their office and the other class of advocates who enrolled as advocates straight from the law JUDGMENT college and set up the practice. We are unable to agree with the learned counsel that the distinction amongst the two class of advocates is unreasonable or irrational. 31. The Division Bench of the Madras High Court made meticulous analysis of various provisions of the Welfare Fund Act and referred to various decisions of this Court dealing with 2 Page 26 interpretation of Article 14 of the Constitution of India and rightly concluded that there is reasonable classification between the advocates who had set up practice after demitting their office

be right to say that the retired officials who joined legal profession constitute a separate class and the disentitlement of the benefit of lump sum welfare fund to this group of advocates cannot be said to be unreasonable. We do not find any infirmity in the impugned judgment of the Madras High Court and the appeals are liable to be dismissed accordingly. 32. Civil Appeal arising out of Special Leave Petition No. 34326/2012: Sub-section (2) of Section 1 of the Bihar State Advocates’ Welfare Fund Act makes it applicable over the whole JUDGMENT of the State of Bihar. Sub-section (3) of Section 1 of the Bihar State Advocates’ Welfare Fund Act excludes the persons who have enrolled themselves as advocates after their retirement and are in receipt of retiral benefits from the government or their employers from the purview of the Welfare Fund Act. Advocates Welfare Fund is enacted with the object of providing social 2 Page 27 security in the form of financial assistance to juniors and the welfare scheme for indigent or disabled advocates. As the appellants are already in receipt of pension from their employers,

The Division Bench of the Patna High Court applying its own decision in Kedar Nath Tiwari v. State of Bihar , 2011 (2) PLJR 401, rightly dismissed the writ petition and we do not find any infirmity in the impugned order and the appeal is liable to be dismissed. 33. In the result, all the appeals are dismissed. ………………………..J. (M.Y. Eqbal) JUDGMENT ………………………..J. (R. Banumathi) New Delhi; December 16, 2014 2 Page 28