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ORIGINAL JURISDICTION: Petition No. 102 of 1958. Petition under Art. 32 of the Constitution of India for enforcement of Fundamental Rights.

M. K. Nambiar, and S. N. Andley, for the petitioners. H. N. Sanyal, Additional Solicitor-General of India, M. P. Balagavgadhar Menon and Sardar Bahadur, for the respondents.

1961. April 14. The Judgment of the Court was delivered by GAJENDRAGADKAR, J.-The Government of Kerala( appointed a Committee in exercise of its powers conferred by cl. (a) of sub-s. (1) of s. 5 of the Minimum Wages Act, 1948 (Act XI of 1948) (hereafter called the Act), to hold enquiries and advise the Government in fixing minimum rates of wages in respect of employment in the tile industry and nominated eight persons to constitute the said Committee under s. 9 of the Act. This notification was published on August 14, 1957. The Committee made its report on March 30, 1958. The Government of Kerala then considered the report and issued a notification on May 12, 1958, prescribing minimum rates of wages as specified in the schedule annexed thereto. This notification was ordered to come into effect on May 26,1958. On that date the present petition was filed under Art. 32 by the nine petitioners who represent six tile factories in Feroke Kozhikode District, challenging the validity of the 'Act as well as the validity of the notification issued by the Government of Kerala. The State of Kerala is impleaded as respondent to the petition. The petitioners allege that the minimum wage rates fixed by the notification are very much above the level of what may be properly regarded as minimum wages and it was essential that before the impugned wage rates were prescribed the employers' capacity to pay should have been considered. Since this essential element had not been taken into account at all by the Committee as well as by the respondent the notification is ultra vires and inoperative. According to them the burden imposed by the notification is beyond the financial capacity of the industry in general and of their individual capacity in particular, and this is illustrated by the fact that nearly 62 tile factories in Trichur closed soon after the notification was published. The petitioners seek to challenge the validity of the Act on several grounds set out by them in clauses (a) to (g) of paragraph 21 of the petition. It is urged that the Act does not define what the minimum wage is to comprise or to comprehend and as such confers arbitrary authority on the appropriate Governments to impose unreasonable restrictions on the employers. 'The law conferring such arbitrary power is violative of Art. 19(1)(g) of the Constitution. Since the Act empowers the fixation of a wage which may disable or destroy the industry it cannot be said to be reasonable and as such is beyond the purview of Art. 19(1) and (6) of the Constitution. The Act does not lay down any reasonable procedure in the imposition of restrictions by fixation of minimum wage and so authorises any procedure to be adopted which may even violate the principles of natural justice. It is also alleged that the Act is discriminatory in effect inasmuch as it submits some industries to its arbitrary procedure in the matter of fixation of minimum wages and leaves other industries to the more orderly and regulated procedure of the Industrial Disputes Act. It is on these grounds that the validity of the Act is impugned.

The petitioners impugn the validity of the notification also for the same reasons. Besides, it is urged that the notification has in effect fixed not minimum wages but fair wages and so it was essential that the capacity of the employers to bear the burden proposed to be imposed ought to have been considered. Failure to consider this essential aspect of the matter has, it is urged, rendered the notification void. That in substance is the nature of the case set out by the petitioners in their present petition. The respondent has traversed all these allegations. It is urged that the validity of the Act is no longer open to challenge since the question is concluded by the decisions of this Court; and it is alleged that what the notification purports to do is to fix the minimum wage and no more and as such the capacity of the employer to pay such a minimum wage is irrelevant. It is further alleged that decisions of this Court have firmly established the principle that in the matter of fixing minimum wages the capacity of the employer to pay need not be considered and that if any employer is unable to pay what can be regarded as minimum wages to his employees he has no right to carry on his industry. It is further pointed out that out of 18 factories in Feroke only six factories have come to this Court and it is suggested that the grievance made by the petitioners that the wage rates fixed are beyond their capacity is not genuine or honest. The respondent also points out that the Committee appointed by it was a representative Committee and its report showed that it had considered the matter very carefully. Alternatively it is urged that the report of the said Committee would show that the capacity to pay had not been ignored by the Committee. The impact of the minimum wage, rate suggested by it had been considered by the Committee and so the Committee made its recommendations area-wise. In regard to the closure of factories in Trichur the respondent's case was that the said closure was not the result of financial inability of the factories to bear the burden but was probably actuated by political motives. The respondent also put in a general plea that in fact all the factories in the Kerala 'State except some of the factories in the Trichur area and one of the petitioners had implemented the notification without any objection or protest; and so it was argued that there was no substance in the grievance made by the petitioners. That in brief is the nature of the contentions raised by the respondent in reply to the petitioner's case.

There is, however, one aspect of this problem to which we must refer before we part with this case. It appears that soon after the notification was issued as many as 62 tile factories in Trichur closed their works and that led to unemployment of nearly 6,000 employees. In order to resolve the deadlock thus created the respondent referred the industrial dispute arising between the Trichur factories and their employees for industrial adjudication (I.D. 45 of 1958). On this reference an interim award was made and it was followed by a final award on September 26, 1960. Both the interim and the final awards were the result of settlement between the parties and the order passed by the tribunal shows that the respondent, acting, through its Labour Minister, "left aside the prestige of the Government, came to the scene and effected a settlement." Mr. Nambiar has strongly criticised the conduct of the respondent in permitting a departure from the notification in respect of 62 tile factories at Trichur contrary to the provisions of the Act, and in insisting upon its implementation in respect of the other parts of the State. His argument is two-fold. He suggests that the settlement reached between the parties in Trichur shows that the minimum prescribed by the notification was above the legally permissible minimum and beyond the capacity of the Trichur factories, and that would support his grievance that the rates prescribed are not the minimum but they are such above that level. We are not im- pressed by this argument. As we have already observed we would ordinarily refuse to consider the merits of the wage structure prescribed by the notification. Besides, the closure of the factories in Trichur may either be because the factories there found it difficult to pay the wage structure or may be for reasons other than industrial. We propose to express no opinion on that point because that is not a point in issue before us, and so the settlement can have no bearing on the fate of the present petition; but the other argument urged by Mr. Nambiar raises a serious question. Under the Act the notification has to apply to all the tile factories in the State and breach of the provisions of the notification is rendered penal under s. 22 of the Act. An agreement or contract contrary to the notification would be void under s. 25 of the Act. It is to be regretted that the respondent, acting through its Labour Minister, appears to have assisted in bringing about a settlement contrary to the terms of the Act. If the respon- dent thought that such a settlement was necessary in respect of Trichur factories it may consider the question of withdrawing the notification in respect of that area and in fairness may also reconsider the problem in respect of all the other areas and decide whether any modification. in the notification is required. It is not appropriate that the respondent should be associated, though indirectly, with the settlement which is in breach of the provisions of the Act. We would, therefore, suggest that the respondent should seriously consider this aspect of the matter and should not hesitate to do what may appear to be just, reasonable and fair on an objective consideration of the whole problem. In the result, the petition fails and is dismissed. There would be no order as to costs.