TaxTMI 
TaxTMI 
2014 (12) TMI 1340
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the Bar straight after their law degree 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. 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 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 or gratuity or other terminal benefits from any State or Central Government or organization is arbitrary, unreasonable and vio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 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 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 learned senior Counsel contended that the distinction made between the advocates amounts to a reasonable 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 ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n territories and the States which do not have their own enactments on the subject, for constitution of "Advocates' Welfare Fund" by the appropriate Government. The Fund will, inter alia, be composed of contributions made by a State Bar Council, any voluntary donation or contribution by the Bar Council of India, advocates' associations, other associations or institutions or persons, any grant made by the appropriate Government, sums collected by way of sale of "Advocates' Welfare Fund Stamps". 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 inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Under Section 22. (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. 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 relevant for these appeals deals with the payment of amount on cessation of practice. After 2001 amendment, Section 16 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 co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment 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. (7) Where a person, who has been paid an amount Under Sub-section (1) or (1A) has been admitted as an advocate again Under Section 24 of the Advocates Act, 1961 (Central Act 25 of 1961), desires to be re-admitted to the Fund shall, on an application made in the same manner as specified in sections (1) or (1-A) as the case may be with interest calculated at the rate of twelve per cent per annum, be readmitted to the Fund. He shall not be entitled to payment of any amount from the Fund under this Act, during the period between the date of his cessation of practice and the date of re-admission w.e.f. 15.1.1996. 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 nomin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s' Welfare Fund. As per Section 15 of the Welfare Fund Act, only those who applied 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 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 Fund Act which may be the payment of schedule amount on cessation of practice in terms of Section 16(1) and payment 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. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 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 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 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 privilege granted and between those on whom the privilege is conferred whom and the persons not so favoured, no 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 sp....