TMI Blog2014 (12) TMI 1340X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The persons who enrolled as advocates 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 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 reasonable. The said classification, in our view, has a nexus with the object sought to be achieved. Statement of Objects and Reasons of the Tamil Nadu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons 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 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 stru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 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 employers. Taking us through the Central legislation-Advocates' Wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation 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 income tax. 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 Fund Act') was also enacted. Some of the provisions of the Welfare Fund Act are relevant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted 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 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Thus, the persons who enrolled as advocates 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 are in receipt of pension or other terminal benefits and the advocates who set up pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, 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 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 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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