Bombay High Court
Rambhau Sakharam Nagre vs Tatke (D.G.) on 2 July, 1958
JUDGMENT Vyas, J.
1. These are applications under Art. 227 of the Constitution wherein the petitioners have prayed for the issue of an appropriate writ to set aside the order, dated 6 November 1957 of the authority appointed under the Minimum Wages Act. By the said order the authority held that the workers in certain beedi manufacturing concerns were not entitled to be paid at the revised rate of Rs. 2-2-0 per thousand beedies from 1 September 1956 to 15 December 1956. These applications raise common questions, and the questions are : (1) Is the issue of a notification by the State Government under S. 26, Sub-section (2) of the Minimum Wages Act, a quasi-judicial act or an administrative act.
(2) Even if it be an administrative act, could it be challenged as an arbitrary act, if only one party is heard before issuing the notification and no opportunity to be heard is given to the other side ?
2. These questions arise upon the following facts. The petitioner in Application No. 68 of 1958 is the president of the Sangamner Akola Beedi Kamgar Union. Petitioner 1 in Application No. 614 of 1958 is a legal practitioner at Sangamner and petitioner 2 is an official of the Sangamner Akola Beedi Mazdoor Sabha. The applicants in Application No. 614 of 1958 have been authorized in writing to act on behalf of the beedi workers. These petitioners (the applicants in Application Nos. 68 and 614 of 1958) filed applications before the authority appointed under the Minimum Wages Act, contending that they were paid less wages than what they were entitled to under the notification, dated 19 April 1955, issued by the State Government under S. 26, Sub-section (2) of the Act. The petitioners' case is that the Government of the State of Bombay, by a notification issued by them on 19 April 1955, fixed wages for workers in beedi manufacturing concerns in certain areas at the rate of Rs. 2-2-0 per thousand beedies. By the various notifications, including the notifications, dated 30 June 1955 and 28 June 1956, the beedi manufacturers in certain areas were exempted from the application of the Minimum Wages Act, 1948. This exemption was extended from time to time till 31 December 1956. The exemption however, was withdrawn or cancelled by the Government by a notification, dated 22 August 1956. The cancellation of the exemption was to be effective from 1 September 1956. The petitioners' contention is that consequent upon the withdrawal of the exemption, they became entitled to the wages at the rate of Rs. 2-2-0 per thousand beedies from 1 September 1956 to 31 December 1956. In these applications we are concerned only with the period from 1 September 1956 to 31 December 1956. The petitioners contend that notwithstanding this position, the owners of the beedi manufacturing concerns, who are respondents in in these applications, paid wages to them at the rate of Rs. 2 only per thousand beedies so far as the beedi industry at Sangamner was concerned and at the rate of Re. 1-15-0 only per thousand beedies so far as the beedi industry in the villages within seven miles of Sangamner and Akola was concerned. When this happened, the workers claimed difference between the wages which were due to them under the notification, dated 19 April 1955 and the wages that were actually paid to them by the employees and they made applications under S. 20 of the Act before the authority. The owners of the beedi manufacturing concerns submitted a written statement, wherein they raised contentions regarding the constitutionality of S. 3, Sub-section (3), Clause (a). Sub-clause (iv) of the Act and also the constitutionality of the notifications, dated 19 April 1955 and 22 August 1956. The authority negatived these contentions of the employers, but he substantially upheld one contention of theirs, viz., that the notification issued by the Government of the State of Bombay on 22 August 1956, withdrawing the exemption was issued "arbitrarily, dishonestly and in a manner which was contrary to the principles of natural justice." Consistently with this view which the authority took on the question of the validity of the notification, dated 22 August 1956, he held that the workers would not be entitled to wages in accordance with the notification, dated 19 April 1955, during the period from 1 September 1956 to 31 December 1956, since the exemption from the application of the Act would extend to 31 December 1956. It is against this finding of the authority that the present applications have been filed by the petitioners. Now, the questions regarding the constitutionality of S. 3, Sub-section (3), Clause (a), Sub-clause (iv) of the Act and also about the constitutionality of the notification issued by the State of Bombay on 19 April 1955, have been, decided by us in Special Civil Application No. 67 of 1958. So far as the present petitions are concerned, the question for consideration is about the validity of the notification issued by the Government of Bombay on 22 August 1956, withdrawing the exemption which had been previously granted by the State Government by notifications, dated 30 June 1955 and 28 June 1956. It is the contention of the petitioners that the withdrawal of exemption from the application of the Act by a notification of the State Government under Sub-section (2) of S. 26, was an administrative act of the Government, that it was not a judicial or a quasi-judicial act, and that, therefore, the rules of natural justice would not be attracted in this case and it was not necessary for the State Government to hear the parties, consider their representations, record their evidence, etc., before issuing the notification. On the other hand, the contention of the owners of the beedi manufacturing concerns is that the granting of exemption from the application of the Act and the withdrawal of the said exemption were quasi-judicial acts, and therefore, it was obligatory on the State Government to follow the rules of natural justice before issuing notifications in that connexion under Sub-section (2) of S. 26. Thus, a question arises whether the granting of an exemption from the application of the Act by a notification issued by the appropriate Government under S. 26, Sub-section 2 of the Act and the, subsequent withdrawal of the said exemption by a notification are quasi-judicial acts or administrative acts. It may be noted, and this is important, that in these applications we are not called upon to decide whether the initial fixing of minimum rates of wages and revision of those rates are quasi-judicial acts or administrative acts. The question is this : the minimum rates of wages having already been fixed under the Act, whether the grant of exemption from the application of the Act and the withdrawal of that exemption are quasi-judicial acts or administrative acts.
3. It would be convenient at this stage to set out the provisions of Sub-section (2) of S. 26 of the Minimum Wages Act, 1948. This is what the sub-section provides :
"The appropriate Government may, if for special reasons it thinks so fit, by notification in the official Gazette, direct that for such period as it may specify the provisions of this Act or any of them shall not apply to all or any class of employees employed in any scheduled employment or to any locality where there is carried on a scheduled employment."
4. The intention of the legislature must be gathered from the language used by the legislature and the words used by the legislature in Sub-section (2), viz., "may, if for special reasons it thinks so fit . . . direct" would clearly show that the Government was not required to adopt any particular procedure before notifying that the Act shall not apply to all or any class of employees employed in an scheduled employment or to any locality where there was carried on a scheduled employment. The legislature has left it to the discretion of the appropriate Government to grant the exemption if for special reasons it thinks fit to do so. What reasons should be considered special reasons for the exemption is left entirely to the appropriate Government to decide. It is for the Government to see whether the reasons which it considers special reasons are sufficient to justify the grant of the exemption. It would be appropriate in this context to turn to Ss. 5 and 6 of the Act. Section 5 prescribes a certain procedure which Government is required to follow in fixing minimum rates of wages. Section 6 lays down a procedure for the revision of minimum rates of wages. We are not suggesting that the legislature intended to import a judicial element in that procedure or that it intended that the Government should adopt a judicial approach in following that procedure. As I have stated, we are not called upon in this case to decide that question. All that we wish to point out is that in the matter of initial fixation of minimum rates of wages and revision of those rates, the legislature clearly intended that the Government must follow a certain procedure and expressed that intention by using appropriate words in Ss. 5 and 6. If the intention of the legislature in enacting Sub-section (2) of S. 26 had been to lay down that the Government, before granting exemption from the application of the Act, was required to follow a certain procedure, it would have used language to that effect. In that case it would not have used the words "may, if for special reasons it thinks so fit . . . . direct." Upon a proper construction of the language of Sub-section (2) of S. 26 which, in our view, is free from any ambiguity, it must follow that in granting exemption under this section the Government is not required to follow any particular procedure. It is not required to appoint an advisory committee, or publish its proposal, or invite objections in any other manner, or hear the parties, consider their representations, record evidence or weigh evidence, etc. The Government is the sole and absolute judge to decide in such manner as it considers fit whether there are special reasons which, in its judgment, would justify exemption. To the power which is conferred upon the appropriate Government by Sub-section (2) of S. 26 there is not attached any statutory obligation to follow any procedure or adopt any particular mode of approach. When the legislature leaves it to the executive authority to form an opinion whether it is or is not necessary to apply the provisions of the Act, as a condition precedent to the issue of a notification, it is a subjective satisfaction of the executive authority that a necessity does or does not exist for enforcing the Act. The formation of opinion on the matter whether it is necessary or not necessary to apply the Act, after the minimum rates of wages have already been fixed, to a particular locality or to a particular class of employees, in a scheduled employment, is a purely subjective process and a notification which is founded on such subjective process is a purely administrative act. As Mr. Justice Das observed in Province of Bombay v. K. S. Advani [(1950) S.C.R. 621; S.C. (1950) 53 Bom. L.R.I. (p. 705)] :
"It is well established that if the legislature simply confides the power of doing an act to a particular body if in the opinion of that body it is necessary or expedient to do it, then time act is purely an administrative, i.e., an executive act as opposed to a judicial or quasi-judicial act, and, in the absence of proof of bad faith, the Court has no jurisdiction to interfere with it and certainly not by the high prerogative writ of certiorari."
5. Here, in Sub-section (2) of S. 26 of the Minimum Wages Act, 1948, the expression used is "may, if for special reasons it thinks so fit . . . direct" and there is no doubt that this expression is analogous to the expressions such as "if it appears to", "if in the opinion of", "if so and so is satisfied." In Advani case Mr. Justice Das said that when such expressions were used in the body of the statute, discretion was confided by the legislature in a particular authority, and if an act was done in pursuance of that discretion, it could not be said to be a quasi-judicial or a judicial act, but must be held to be an administrative act. It is well-settled that the tests for deciding whether an act is a judicial or a quasi-judicial act or an administrative act are whether the authority taking the action has legal authority to determine questions affecting the rights of subjects and whether a duty is cast upon that authority to act judicially. In Province of Bombay v. K. S. Advani, Kania C.J., said (p. 633) : ". . . It seems to me that the true position is that when the law under which the authority is making a decision, itself requires a judicial approach, the decision will be quasi-judicial. Prescribed forms of procedure are not necessary to make an inquiry judisial, provided in coming to the decision the well-recognized principles of approach are required to be followed."
6. It would be interesting at this stage to compare the language of S. 3 of the Bombay Land Requisition Ordinance which came up for consideration in Advani case with the language of Sub-section (2) of S. 26 of the Minimum Wages Act, 1948. Section 3 of the Bombay Land Requisition Ordinance was in these words : "If in the opinion of the Provincial Government it is necessary or expedient to do so, the Provincial Government may, by order in writing, requisition any land for any public purpose, etc., etc.,"
7. I have stated above that Sub-section (2) of S. 26 provides :
"The appropriate Government may if for special reasons it thinks so fit, by notification in the official Gazette direct that for such period as it may specify the provisions of this Act or any of them shall not apply to all or any class of employees employed in any scheduled employment or to any locality where there is carried on a scheduled employment." In Advani case it was held that the opinion and satisfaction of the Provincial Government under S. 3 of the ordinance were subjective and that the action founded upon that subjective satisfaction was an administrative action. On the same principle, we must hold that the action taken by Government under Sub-section (2) of S. 26 of the Minimum Wages Act would also be an action founded upon a subjective opinion which the Government may form in the exercise of the discretion conferred upon it by the section and would, therefore, be an administrative action. While dealing with the point whether the action taken by Government under S. 3 of the Bombay Land Requisition Ordinance was quasi-judicial action or an executive action, Mr. Justice Fazl Ali in Advani case said that the test was whether there was any duty to decide judicially, and he observed that in the ordinance there was nothing to show that the Provincial Government had to decide the existence of a public purpose judicially or quasi-judicially. Likewise, in the Minimum Wages Act, there is nothing to show that the appropriate Government has to adopt a judicial approach in order to come to an opinion that it is not necessary to apply the provisions of the Act to all or any class of employees employed in any scheduled employment or to any locality where there is carried on a scheduled employment. In the same case (Advani case), Mr. Justice Mahajan said that the question whether an act was a judicial or quasi-judicial one or a purely executive act depended on the terms of the particular rule, the nature, the scope and effect of the particular power, in exercise of which the act might be done. Here, the nature and scope of the power conferred upon the appropriate Government under S. 26, Sub-section (2) of the Act leave no doubt that the power is an absolute power and the discretion conferred upon the appropriate Government is unfettered discretion. That being so, the notification issued under Sub-section (2) of S. 26 in pursuance of the power and discretion conferred upon the appropriate Government under that section would be an administrative act.
Mr. Kotwal for the owners of the beedi manufacturing concerns contends that the notification withdrawing the exemption from the application of the Act was a quasi-judicial act and, therefore, it was necessary for the State Government to conform to the principles of natural justice. Mr. Kotwal contends that the rules of natural justice were violated by the State Government in that the Government gave a hearing to Mr. Nagre only who was a representative of the employees and they did not give an opportunity to the employers to be heard in the matter. Mr. Kotwal says that the decision taken by Government to withdraw the exemption from the operation of the Act affected the rights of the parties. It made the Act applicable and thereby affected the employers adversely, making them liable to pay increased wages to the workers. That being so, says Mr. Kotwal the notification was a quasi-judicial act of the Government and it was obligatory upon the Government to observe the rules of natural justice before issuing the notification. In support of his contention, Mr. Kotwal has invited our attention to Sub-section (2a) of S. 26 which was added by Act XXVI of 1954. Sub-section (2a) provides : "The appropriate Government may, if it is of opinion that, having regard to the terms and conditions of service applicable to any class of employees in a scheduled employment generally or in a scheduled employment in a local area, it is not necessary to fix minimum wages in respect of such employees of that class as are in receipt of wages exceeding such limit as may be prescribed in this behalf, direct, by notification in the official Gazette and subject to such conditions, if any, as it may think fit to impose, that the provisions of this Act or any of them shall not apply in relation to such employees."
8. Mr. Kotwal contends that the legislature imported a judicial element in the procedure prescribed by Sub-section (2a), in that it made it obligatory upon the Government to pay adequate regard to the terms and conditions of service regulating relationship between the employers and the employees before coming to a conclusion whether it was necessary or not necessary to fix minimum wages in a particular area. Mr. Kotwal says that Sub-section (2) of S. 26 should not be severed from the rest of the Act and that we should have an "over-all picture " of the provisions contained in S. 5, S. 6, S. 10, Sub-section (2a) of S. 26 and other sections. Mr. Kotwal says that, upon an over-all picture of the entire Act being taken, it would appear that the intention of the legislature was that even in the matter of issuing a notification under Sub-section (2) of S. 26, regard should be had to the principles of natural justice and the approach to be adopted should be a judicial approach. In support of this contention, Mr. Kotwal has invited our attention to certain observations made by Mr. Justice Das in Advani case. The observations to which our attention is invited are these :
"What are the principles to be deduced from the two lines of cases I have referred to ? The principle, as I apprehend them, are :
(i) that if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes, arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act . . ."
9. It is to be noted, however, that in the present case, upon the date on which the notification withdrawing the exemption was issued by the Government of the State of Bombay, there was no dispute pending before the Government which arose out of a claim made by one party against the other party. That being so, the above observations in Advani case, to which Mr. Kotwal has referred us, would not assist his clients. We have no doubt, upon the plain language of Sub-section (2) of S. 26 and upon a consideration of the principles laid down by the Supreme Court in Advani case, that the power conferred by Sub-section (2) of S. 26 upon the appropriate Government by the legislature is an absolute power, that pursuant to the said power the appropriate Government is made the sole Judge for the purpose of forming an opinion, whether it is necessary or not necessary to apply the provisions of the Act in a particular area and that to that power there is not attached any statutory obligation to follow a particular procedure or adopt a particular approach. Accordingly, we must uphold Mr. Gokhale's contention that the notification, dated 22 August 1956, issued by the State Government, withdrawing the exemption previously granted by it under its notifications, dated 30 June 1955 and 28 June 1956, was not a quasi-judicial act, but was an administrative act and, therefore, it was not necessary for the State Government to conform to the principles of natural justice before issuing the notification.
10. Mr. Kotwal's next contention is that even if the notification withdrawing the exemption from the application of the Act was an administrative act of the State Government even so the said act was done in an arbitrary manner and, therefore, its validity could be challenged. In support of this contention, Mr. Kotwal has drawn our attention to a decision of the House of Lords in the Board of Education v. Rice [1911 A.C. 179.] It was a case under S. 7 of the Education Act, 1902. The duty of maintaining and keeping efficient a non-provided school was imposed by S. 7 of the Act, upon a local education authority. A local education authority refused to pay salaries to teachers in a non-provided school at the same rate at which it paid the teachers in provided schools. The managers of the non-provided school complained, and the Board of Education directed an inquiry, the result of which was a report that the local education authority had failed to maintain the school and keep it efficient. The questions required by S. 7, Sub-sec (3), of the Education Act to be determined by the Board of Education were : (1) Whether the local education authority had in fixing and paying the salaries of the teachers, fulfilled their duty under S. 7, Sub-sec (1); and (2) whether the salaries inserted in the teachers' agreements were reasonable in amount and ought to be paid by the authority or what salaries the authority ought to pay ?
11. The board purported to give its decision in a document which failed to deal with the matters in issue. It was held by the House of Lords that inasmuch as the board had not determined the questions, the decision must be quashed by certiorari, and a mandamus must issue commanding the board to determine the questions. In the course of his address to the House of Lords, Lord Loreburn, L.C., said :
"Comparatively recent statutes have extended, if they have not originated, the practice of imposing upon departments or officers of State the duty of deciding or determining questions of various kinds. In the present instance, as in many others, what comes for determination is sometimes a matter to be settled by discretion, involving no law. It will, I suppose, usually be of an administrative kind; but sometimes it will involve matter of law as well as matter of fact; or even depend upon matter of law alone. In such cases the Board of Education will have to ascertain the law and also to ascertain the facts. I need not add that in doing either they must act in good faith and fairly listen to both sides, for that is a duty lying upon every one who decides anything . . . . They (meaning thereby the Board of Education) can obtain information in any way they think best, always giving a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view."
12. The principle laid down in this case is that it is the duty of everyone who decides anything to give a fair hearing to both sides. Where there are two parties in a controversy, as in the present case where the parties are the employers and the employees, a fair opportunity must always be given to both of them for correcting or contradicting any relevant statement prejudicial to their view. In the present case it would appear that after the exemption from the application of the Act was granted by the State Government by its notifications, Mr. Nagre, a representative of the employees, met the authorities of the Government and discuseed the matter with them. The Government thereafter gave no opportunity to the employers to put their views before them. It was impossible for the employers to know what might have been stated by Mr. Nagre to the State Government. It is not improbable that the statements made by Mr. Nagre to the State Government might have been prejudicial to the interests of the employers, in which case it was but fair to give an opportunity to the employers to correct or contradict those statements. The State Government had to decide a question whether it was necessary or not necessary to withdraw the exemption already granted, and upon the principle laid down in Board of Education v. Rice it was the duty of the Government to hear the employers upon this point since a hearing had been given by them to a representative of the employees. Mr. Gokhale says that the principle laid down in the House of Lords case would not be attracted in the present case, since the Board of Education was in the nature of an arbitral tribunal, whereas the character conferred by Sub-sec (2) of S. 26 upon the appropriate Government is not that of an arbitral tribunal. Under Sub-sec (2) of S. 26, the State Government is made the sole judge of the question whether it is necessary or not necessary to apply the provisions of the Act, and that being so, says Mr. Gokhale, it was not the duty of the State Government to hear both the sides before forming a subjective opinion on the point. Even if it be assumed that the view which Mr. Gokhale takes of the decision in the House of Lords case is correct, even so it may be remembered that in the persent case one party (the employees) was heard by the State Government. It might have been a different matter if the Government had not heard either side. In that case, we might perhaps have accepted the contention of Mr. Gokhale and might have made a distinction between the House of Lords case and the present case. Here, however, since the Government did give a hearing to Mr. Nagre on behalf of the employees before issuing the notification of 22 August 1956, it was its duty in the interests of fairness and justice, to give a hearing to the other side also. But the other side was admittedly not heard. As the authority has pointed out in the course of his judgment, there was nothing to show prima facie that any change in the material facts had taken place so as to justify the withdrawal of the exemption. In these circumstances, the authority has given a finding that the notification issued by the Government on 22 August 1956 withdrawing the exemption, was issued arbitrarily. We see no reason why we should take a different view of the matter from the one taken by the authority. As the notification withdrawing the exemption was issued arbitrarily by the State Government in this case, we must uphold the contention of Mr. Kotwal pressed before us on behalf of the employers, the owners of the beedi manufacturing concerns, that it was an illegal and invalid notification. Once we come to this conclusion, we must confirm the finding of the authority that the employees would not be entitled to claim wages at the revised scales, that is to say, at the scales prescribed in the notification, dated 19 April 1955, during the period from 1 September 1956 to 31 December 1956.
13. There is one more point which was pressed before us by the learned advocate Mr. Nargolkar for the petitioner in Application No. 68 of 1958. Mr. Nargolkar says that the authority had no jurisdiction to decide the question of the legality or validity of the notification withdrawing the exemption and, therefore, the authority in holding that the notification, dated 22 August 1956, was arbitrarily issued, held something which he had no authority to hold. Mr. Kotwal on the other hand contends that this point, regarding jurisdiction of the authority, not having been taken before the authority himself, it is not open to the employees now in an application under Art. 227 of the Constitution to raise it for the first time. In support of this contention Mr. Kotwal has invited our attention to a decision of this Court in Gandhinagar Motor Transport Society v. State of Bombay . It was held by the learned Chief Justice and Mr. Justice Dixit in that case that before a question of jurisdiction of a tribunal could be raised on a petition under Arts. 226 and 227, objection to jurisdiction ought to have been taken before the tribunal whose order was being challenged. Mr. Nargolkar on the other hand has referred as to a decision in Municipal Corporation, Bombay v. Labour Appellate Tribunal [1957 - II L.L.J. 37], where a Division Bench of this Court consisting of Mr. Justice Shah and Mr. Justice Gokhale took the view that whether the tribunal did or did not transgress the limits of its jurisdiction could only be ascertained after the judgment was delivered by the tribunal and not before. The learned Judges said that it might appear a little presumptuous on the part of a litigant to remind a judicial tribunal that it would be wrong for it to transgress the restrictions imposed by the legislature upon its powers. Relying upon that case, Mr. Nargolkar says that the employees could not have anticipated, until the judgment was pronounced by the authority, that the authority would embark upon the decision on a point which it had no jurisdiction to decide. It is to be noted, however, that the expression of the view of this Court in Municipal Corporation. Bombay v. Labour Appellate Tribunal was limited expressly to the circumstances of that case. Mr. Justice Shah who delivered the judgment of the Bench said : "The principle of the case to which our attention has been invited has, in our judgment, no bearing whatever on this case", which would show that the principle laid down in Municipal Corporation, Bombay v. Labour Appellate Tribunal was limited to the facts of that particular case. Therefore, turning to the facts of the present case, it would appear that in the written statements filed by the owners of the beedi manufacturing concerns in the various applications made by the employees, the beedi owners contended that the notification issued by the State of Bombay withdrawing the exemption was an invalid notification because it was a notification issued arbitrarily and not in good faith. Not only was such a contention expressly taken by the employers, but evidence was also led by them to show that the cancellation of exemption was not done in good faith and that it was done in an arbitrary manner. Not only was evidence led by the employers to that effect, but when Mr. Nagre went into the witness-box, he was cross-examined with a view to show that the withdrawal of the exemption was not done in a bona fide way. That being so, it was amply brought to the notice of the employees that the authority was being called upon to decide about the legality and validity of the notification cancelling the exemption. In these circumstances, it was necessary for the employees to contend before the authority that what the employers were wanting him to decide, he had no jurisdiction under the Act to decide. In these particular circumstances of the present case, we must hold that the principle laid down by this Court in Gandhinagar Motor Transport v. State of Bombay, must govern the case. Since the contention about jurisdiction was not taken by the employees before the authority, we must uphold Mr. Kotwal's contention that it is not open to them to take this point now in an application under A. 227 of the Constitution.
14. In the result, both these Application Nos. 68 and 614 of 1958 fail and are rejected. No, order as to costs. We must put it on the record that the Court was greatly assisted by the able arguments of the learned advocate on both the sides.