Hindustan Times & Ors Vs. State of U.P.
& Anr [2002] Insc 457 (1 November 2002)
V.N.
Khare & S.B. Sinha. S.B. Sinha, J. :
By
reason of this petition under Article 32 of the Constitution of India, the writ
petitioners herein have questioned the validity of an order dated 24th
September, 1991 as also one dated 16th October, 1991 issued by the Special
Secretary, Government of Uttar Pradesh, Lucknow, whereby and whereunder a
direction had been issued to the effect that at the time of payment of bills
for publication of Government advertisements in all newspapers having a
circulation of more than 25,000 copies, 5% of the amount thereof, forming part
of a fund for the purpose of granting pension to the working journalists, would
be deducted.
Petitioner
No.1 herein is a company incorporated under the Companies Act and is engaged in
the business of publishing newspapers including 'The Hindustan Times'.
Petitioner No.2 is a shareholder of Petitioner No.1 and Petitioner No.3 is its
Director.
The
petitioners have questioned the legality/validity of the said orders, inter alia,
on the following grounds :-
1. The
impost, is not leviable either as a tax or as a fee having regard to the fact
that the legislative field in relation to the payment of retiral benefits to
the working journalists is covered by a Parliamentary Act known as the Working
Journalists and other Newspapers Employees (Conditions of Service) and
Miscellaneous Provisions Act, 1955 ('the said Act').
2. As
the State of Uttar
Pradesh had no
legislative competence, it could not have issued the impugned orders in
exercise of its power under Article 162 of the Constitution of India or
otherwise.
3.
Assuming, that welfare of the working journalists is a field falling within
Entry 24 of List III of the VIIth Schedule of the Constitution of India, any
State legislation would be the subject to the Central legislation and in that
view of the matter too, the impugned orders are ultra vires Article 14 of the
Constitution.
The
contention of the respondents, on the other hand, is that the scheme in
question was made upon obtaining suggestions from the managements of the
leading newspapers in terms whereof a beneficent measure for grant of pension
to the working journalists was taken and in the event the petitioners are not agreeable
thereto, they are free not to accept the offer of the respondents. In any
event, as issuance of advertisements is a matter of contract by and between the
State and the publishers of the newspapers, the petitioners cannot claim any
legal right in relation thereto.
The
matter relating to grant of pension to the accredited journalists is said to
have been under consideration of the Respondent-State for a number of years. A
Bill to the said effect was presented in the Vidhan Sabha and referred to the Select
Committee. However, following dissolution of the Vidhan Sabha, the said Bill
lapsed.
With a
view to give effect to the scheme, despite lapse of the said Bill, by reason of
the impugned executive instructions issued under Article 162 of the Constitution
of India, the Respondent No.1 upon inviting suggestions from several newspaper
publishers, made a scheme, known as the 'Pension and Social Security Scheme for
Full-time Journalists' the etc.; the relevant portions whereof are as under :-
"
(1)
This Scheme will be for full time working Journalists Group Scheme. In this no
individual Policy will be issued. Life Insurance Corporation will issue one
policy in favour of Director of Information.
(2)
The Scheme will be voluntary.
This
will be sharing Scheme in which 50% of the amount will be taken from member
journalists and the remaining 50% will be deposited by the State Government.
The amount of contribution on the basis of average will be divided into the
following three categories
2. The
following Journalists will be entitled to adopt the said scheme:-
(1)
These working Journalists who are regularly working for at least 5 years in
news papers agencies in Uttar Pradesh. The circulation of such newspapers
should be atleast 10000.
(2)
Those workers who are covered by the definition of Journalist and are in full
time service.
(5) If
any Journalist after paying instalment for continuous 10 years in Uttar Pradesh
under the Pension scheme is transferred to other States then he can voluntarily
continue this scheme and continue to contribute the instalments and during this
period he will have to contribute cent per cent instalments. If he returns to
Uttar Pradesh then from the date of his return to Uttar Pradesh he will be
entitled to get 50% contribution from the Government.
.
" By a letter dated 16th October, 1991 the Special Secretary of the First
Respondent communicated the following to the Director, Information and Public
Relations Department, Uttar Pradesh (Press Division)/Advertisement Division, Lucknow
:- "On the above subject drawing your attention to para 5 of the
Government order No. 460/Nineteen-1-91-32/77 dated 24th September, 1991 I have
been directed to state that for the implementation of the scheme the Governor
sanctions the deduction of 5% from bills for publicity/tender advertisement of
those papers/journals, besides the specified newspapers whose circulation is
over 25000. The said Government order will be deemed to be amended."
Pursuant to or in furtherance of the said communication, 5% of the amount from
the advertisement bill of the petitioners was deducted.
Admittedly
the petitioner objected thereto.
However
by a letter dated 9th April, 1992, the Editor/in charge Advertisement of
Information and Public Relation Department of the respondent wrote to the Chief
Advertisement Manager of Petitioner No.1, to the following effect :-
"Kindly refer to your letter dated 26.3.92.
In
this connection I have to inform you that deduction @5% from your advertisement
bills has been done in accordance with the government orders issued in this
regard. If you are not agreeable to this deduction as per government order then
it will not be possible to use your newspaper for government
advertisement." In the aforementioned premise, this writ petition has been
filed by the petitioner.
The
impugned order, as noticed hereinbefore, was apparently issued only because the
bill presented before the Vidhan Sabha in this behalf lapsed. The respondents
thus, sought to achieve the same purpose which it intended to do by reason of a
legislative enactment. The question posed in this writ petition must be viewed
from this angle also.
The
backdrop of formulation of the said scheme as also the impugned orders clearly
go to suggest that by reason thereof the respondents have exercised its
constitutional powers and the matter does not relate to a contract qua
contract.
The
benefits sought to be granted to the working journalists, indisputably, is
covered by Entry 92 of the VIIth Schedule of the Constitution, which reads thus
:- "92. Taxes on the sale or purchase of newspapers and on advertisements
published therein." The Parliament, as noticed hereinbefore, enacted the
said Act. It is also not in dispute that the matter relating to grant of
benefits under the said Act, is subject-matter of various reports/Awards of
wage boards including the Bachawat Award wherein the matter relating to payment
of pension to the working journalists was considered in the following terms :-
"Pension 6.89 Pension constitutes an important clement of wages and its importance
as a social security measure is well recognised the world over. Indeed, the
committee on Fair Wages (1949) categorically mentioned that living wages should
enable the worker to provide important misfortunes, including old age".
The Directive Principles of State Policy enshrined in the Constitution and the
Supreme Court verdicts fully support the position.
6.90
Though on strictu sensu construction of the definition of the term
"wages" in Section 2(rr) of the Industrial Disputes Act which becomes
applicable (i) newspaper employees by virtue of Section 2(g) of the Working
Journalists and other Newspaper Employees (Conditions of Service) and
Miscellaneous Provisions Act, 1955, there was some hesitation as to whether
provision of pension fell within the jurisdiction of the Wage Boards, the Wage
Boards on a thorough consideration of the question took a view that it did
Accordingly, the Questionnaire issued by the Wage Boards and its subsequent
proceedings continued to abide by this decision till the Finance Minister in
his Budget Speech on 29th February, 1988 came out with the following
announcement:
"Working
journalists have contributed a lot to the country by their intellectual toil,
and should be considered by the Parliament to provide a reasonable pension
scheme for them Government will be taking appropriate steps in this direction
after consulting all concerned".
6.91
This was followed by the appointment of an Expert Group by the Government
"to go into the question of providing a pension scheme for journalists as
well as non-journalist employees; of newspaper establishment". Thus the
scope got extended to non-journalists newspaper employees as well.
6.92
The above-mentioned budget speech and the order constituting Expert Group by
the Government was taken by the Wage Boards as a message not to proceed further
in the matter. Accordingly, on recommendations are being made in regard to
pension and the various statements on capacity to pay so not include any burden
that might fall on the newspaper establishments as a result of any pension
Scheme." It is, furthermore, not in dispute that no State legislation in
terms of Entry 24 of List II of the VIIth Schedule of the Constitution has been
enacted.
Entry
92 of List I of the VIIth Schedule provides for taxes on the sale or purchase
of newspapers and on advertisements published therein. Entry 55 of List II
authorizes the State to impose taxes on advertisements other than
advertisements published in the newspapers and advertisements broadcast by
radio or television.
On
advertisements published in the newspapers, no fee in respect thereto can be
imposed by the State Legislature, inasmuch as Entry 96 of List I and Entry 66
of List II makes it clear that the respective Legislatures have the requisite
legislative competence to legislate only in respect of any of the matters
contained in the lists.
As
noticed hereinbefore, the State of Uttar Pradesh intended to make a legislation covering the same field but
even if the same was to be made, it would have been subject to the
Parliamentary legislation unless assent of the President of India was obtained
in that behalf. The State Executive was, thus, denuded of any power in respect
of a matter with respect whereto the Parliament has power to make laws, as its
competence was limited only to the matters with respect to which the
Legislature of the State has the requisite legislative competence. Even
assuming that the matter relating to the welfare of the working journalists is
a field which falls within Entry 24 of the Concurrent List, unless and until a
legislation is made and assent of the President is obtained, the provisions of
1955 Act of the Working Journalists (Fixation of Rates and Wages) Act, 1958
would have prevailed over the State enactment.
Thus,
the directive of the State to the effect that 5% of the amount to be deducted
on the amount payable for publication of Government advertisements in all
newspapers having a circulation of more than 25,000 copies, would be part of
the fund meant to be used towards retiral benefits of the working journalists,
must be held to be bad in law. As the said Act, as also the Bachawat Award
specifically deal with the matter relating to pension scheme for journalists,
we have no hesitation in holding that the impugned orders were beyond the
legislative competence of the State.
In Sudhir
Chandra Sarkar v. Tata Iron & Steel Co. Ltd. & Ors. [(1984) 3 SCR 325],
it was held that the pension and gratuity are well-known measures of social
security. It was observed that the employer cannot have an absolute discretion
not to pay any gratuity even when it is earned. It is not the contention of the
respondents that the State had been delegated with any power to levy tax or
impose any fee. Article 162 of the Constitution is subject to the other provisions
contained therein.
By
reason of the impugned directives of the State, the petitioners have been
deprived of their right to property.
The
expression 'law', within the meaning Article 300A, would mean a Parliamentary
Act or an Act of the State Legislature or a statutory order having the force of
law.
In Bishambhar
Dayal Chandra Mohan & Ors. etc. v. State of Uttar Pradesh & Ors. etc. [(1982) 1 SCC 39], this Court held as under
:- "41. There still remains the question whether the seizure of wheat
amounts to deprivation of property without the authority of law. Article 300-A
provides that no person shall be deprived of his property save by authority of
law. The State Government cannot while taking recourse to the executive power
of the State under Article 162, deprive a person of his property. Such power
can be exercised only by authority of law and not by a mere executive fiat or
order. Article 162, as is clear from the opening words, is subject to other
provisions of the Constitution. It is, therefore, necessarily subject to
Article 300-A. The word "law" in the context of Article 300-A must
mean an Act of Parliament or of a State legislature, a rule, or a statutory
order, having the force of law, that is positive or State- made law." It
is not the contention of the respondents that any service is rendered to the
petitioners herein. It is also not the contention of the respondents that the
petitioners are bound to pay the amount in question by reason of their
statutory obligation to pay retiral benefits to the working journalists. It is
also not the case of the respondents that the petitioners herein have not been
discharging their statutory obligations in the matter of payment of retiral
benefits to the working journalists working in their own establishment in terms
of the provision of the Central Acts as well as in terms of the Bachawat Award.
The
term 'taxation' has been defined in Article 366 (28) of the Constitution of
India in the following terms :- "28. "taxation" includes the
imposition of any tax or impost, whether general or local or special, and
"tax" shall be construed accordingly;" The impost by reason of
the impugned orders may come within the purview of the aforesaid definition. See
Corporation of Calcutta v. Liberty Cinema [AIR 1965 SC
1107], Hoechst Pharmaceuticals Ltd. v. State of Bihar [(1983) 4 SCC 45] and Gasket Radiators (P) Ltd. v. E.S.I.
Corporation [(1985) 2 SCC 68].
The
question which is required to be posed and answered is as to whether the
petitioners herein can be directed to bear the burden although they have no
statutory liability in this behalf.
We may
at this juncture notice that a Constitution Bench of this Court in Koluthara
Exports Ltd. v. State of Kerala & Ors.{2002(2) SCC 459} has observed that
even if a State in exercise of its legislative power under Entry 23, List III
of VIIth Schedule of the Constitution of India can make a welfare legislation,
yet the burden of impost cannot be placed upon a person who is neither the
member of society nor the employer of a person who is member of such society.
It was held that :- "There can be no doubt that Entry 23 enables the State
Legislature to enact a law in respect of social security and social insurance
or dealing with employment and unemployment. The provisions of sub-section (4)
of Section 3 of the Act (quoted above) postulate social security and welfare
measures for the firshermen. The State can, therefore, justify its competence
under this entry. But, in our view, the State cannot in an Act under Entry 23
of List III, place the burden of an impost by way of contribution for giving
effect to the Act and the Scheme made thereunder for the social security and
social welfare of a section of society upon a person who is not a member of
such section of society nor an employer of a person who is a member of such
section of society. The burden of the impost may be placed only when there exists
the relationship of employer and employee between the contributor and the
beneficiary of the provision of the Act and the Scheme made thereunder."
The burden of the impost, thus, can be placed only when there exists
relationship of employer and employee between the contributor and the
beneficent of the provisions of the scheme. In the instant case, also, no such
relationship exists.
In any
event, the State cannot make any compulsory exaction from any citizen unless
there exists a specific provision of law operating in the field. In relation to
a compulsory payment , it is well-settled, there is no room for any intendment.
In Ahmedabad
Urban Development Authority v. Shardkumar Jayantikumar Pasawalla & Ors.
[(1992) 3 SCC 285] , it has been held as follows :- "7.After giving our
anxious consideration to the contentions raised by Mr Goswami, it appears to us
that in a fiscal matter it will not be proper to hold that even in the absence
of express provision, a delegated authority can impose tax or fee. In our view,
such power of imposition of tax and/or fee by delegated authority must be very
specific and there is no scope of implied authority for imposition of such tax
or fee. It appears to us that the delegated authority must act strictly within
the parameters of the authority delegated to it under the Act and it will not
be proper to bring the theory of implied intent or the concept of incidental
and ancillary power in the matter of exercise of fiscal power..." The
contention of Shri Verma, learned counsel appearing on behalf of the
respondents to the effect that the petitioners are at liberty not to accept any
advertisements issued by the respondents, may now be examined.
The
newspapers serve as a medium of exercise of freedom of speech. The right of its
shareholders to have a free press is a fundamental right.
In Sakal
Papers (P) Ltd. & Ors. v. Union of India [AIR 1962 SC 305], this Court held
as follows :- "34. We would consider this matter in another way also. The
advertisement revenue of a newspaper is proportionate to its circulation. Thus
the higher the circulation of a newspaper the larger would be its advertisement
revenue. So if a newspaper with a high circulation were to raise its price its
circulation would go down and this in turn would bring down also the
advertisement revenue.
That
would force the newspaper either to close down or to raise its price. Raising
the price further would affect the circulation still more and thus a vicious
cycle would set in which would ultimately end in the closure of the newspaper.
If, on the other hand, the space for advertisement is reduced the earnings of a
newspaper would go down and it would either have to run at a loss or close down
or raise its price. The object of the Act in regulating the space for
advertisements is sated to be to prevent 'unfair' competition. It is thus
directed against circulation of a newspaper. When a law is intended to bring
about this result there would be a direct interference with the right of
freedom of speech and expression guaranteed under Art.
19(1)(a)."
Advertisements in a newspaper have a direct nexus with its circulation.
In Tata
Press Ltd. v. Mahanagar Telephone Nigam Ltd. & Ors. [(1995) 5 SCC 139], it
was held as under :- "20. Advertising is considered to be the cornerstone
of our economic system. Low prices for consumers are dependent upon mass
production, mass production is dependent upon volume sales, and volume sales
are dependent upon advertising.
Apart
from the lifeline of the free economy in a democratic country, advertising can
be viewed as the lifeblood of free media, paying most of the costs and thus
making the media widely available. The newspaper industry obtains 60%/80% of
its revenue from advertising. Advertising pays a large portion of the costs of
supplying the public with newspaper.
For a
democratic press the advertising 'subsidy' in crucial. Without advertising, the
resources available for expenditure on the 'news' would decline, which may lead
to an erosion of quality and quantity. The cost of the 'news' to the public
would increase, thereby restricting its 'democratic' availability." It is
not in dispute that advertisements play important roll in the matter of revenue
of the newspapers.
This
Court in Bennett Coleman & Co. & Ors. etc. v. Union of India & Ors.
etc. [(1972) 2 SCC 788] observed as under :- "34. Publication means
dissemination and circulation. The press has to carry on its activity by
keeping in view the class of readers, the conditions of labour, price of
material, availability of advertisements, size of paper and the different kinds
of news comments and views and advertisements which are to be published and
circulated. The law which lays excessive and prohibitive burden which would
restrict the circulation of a newspaper will be saved by Article 19(2). If the
area of advertisement is restricted, price of paper goes up. If the price goes
up circulation will go down. This was held in Sakal Papers case (supra) to be
the direct consequence of curtailment of advertisement. The freedom of a
newspaper to publish any number of pages or to circulate it to any number of
persons has been held by this Court to be an integral part of the freedom of
speech and expression. This freedom is violated by placing restraints upon
something which is an essential part of that freedom. A restraint on the number
of pages, a restraint on circulation and a restraint on advertisements would
affect the fundamental rights under Article 19(1)(a) on the aspects of
propagation, publication and circulation.
43.
The various provisions of the newsprint import policy have been examined to
indicate as to how the petitioners' fundamental rights have been infringed by
the restrictions on page limit, prohibition against new newspapers and new
editions. The effect and consequence of the impugned policy upon the newspapers
is directly controlling the growth and circulation of newspapers. The direct
effect is the restriction upon circulation of newspapers. The direct effect is
upon growth of newspapers through pages. The direct effect is that newspapers
are deprived of their area of advertisement. The direct effect is that they are
exposed to financial loss. The direct effect is that freedom of speech and
expression is infringed.
45. It
is indisputable that by freedom of the press is meant the right of all citizens
to speak, publish and express their views. The freedom of the press embodies
the right of the people to read. The freedom of the press is not antithetical
to the right of the people to speak and express." It is neither in doubt
nor in dispute that for the purpose of meeting the costs of the newsprint as
also for meeting other financial liabilities which would include the liability
to pay wages, allowances and gratuity etc to the working journalists as also
liability to pay a reasonable profit to the shareholders vis--vis making the
newspapers available to the readers at a price at which they can afford to
purchase it, the petitioners have no other option but to collect more funds by
publishing commercial and other advertisements in the newspaper.
The
respondents being a State, cannot in view of the equality doctrine contained in
Article 14 of the Constitution of India, resort to the theory of "take it
or leave it". The bargaining power of the State and the newspapers in
matters of release of advertisements is unequal. Any unjust condition thrust
upon the petitioners by the State in such matters, in our considered opinion,
would attract the wrath of Article 14 of the Constitution of India as also
Section 23 of the Indian Contract Act. See Central Inland Water Transport
Corporation Limited & Anr. v. Brojo Nath Ganguly & Ors. etc. [(1986) 3
SCC 156] and Delhi Transport Corporation v. D.T.C. Mazdoor Congress & Ors. [AIR
1991 SC 101].
It is
trite that the state in all it activities must not act arbitrarily. Equity and
good conscience should be at the core of all governmental functions. It is now
well- settled that every executive action which operates to the prejudice of
any person must have the sanction of law. The executive cannot interfere with
the rights and liabilities of any person unless the legality thereof is
supportable in any court of law. The impugned action of the State does not
fulfill the aforementioned criteria.
We
are, therefore, of the considered view that the impugned orders dated 24th
September, 1991 and 16th October, 1991 are unconstitutional and void and must
be declared as such.
This
writ petition is, therefore, allowed. However, in the facts and circumstances
of the case, we make no order as to costs.
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