Indian Kanoon - Search engine for Indian Law

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.

Before dealing with the points raised by Mr. Nambiar on behalf of the petitioners it is necessary to refer very briefly to the material provisions of the Act. This Act was passed in 1948, because it was thought expedient to provide for fixing minimum rates of wages in certain employments. Under s. 3 the appropriate Government is empowered to fix mini. mum rates of wages in regard to employments as therein specified, and review the same at such intervals as specified by s. 3(1). Section 3(3) contemplates that in fixing or refixing minimum rates of wages different minimum rates of wages may be fixed for different scheduled employments, different classes of work in the same scheduled employments, adults, adolescents, children and apprentices, and different localities. Under s. 4 any minimum rate of wages fixed or revised may, inter alia, consist of a basic rate of wages and a special allowance at a rate to be adjusted, or a basic rate of wages with or without the cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rates where so authorised or an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions if any. Section 5 prescribes the procedure for fixing and revising minimum wages. It is under this section that a Committee was appointed by the respondent in the present case. Section 9 makes provision for the composition of the Committee. Such Committees have to consist of equal number of representatives of employers and employees and of independent persons not exceeding. one-third of the total number of members. Section 12(1) imposes on the employer the obligation to pay the minimum rates of wages prescribed under the Act. Section 22 provides for penalties for offences and s. 22A makes a general provision for punishment of offences not otherwise expressly provided for. Under s. 25 any contract or agreement whether made before or after the commencement of this Act which affects an employee's right to a minimum rate of wages prescribed under the Act shall be null and void so far as it purports to reduce the said minimum rate of wages. Section 27 empowers the appropriate Government, after giving notification as prescribed, to add to either part of the schedule any employment in respect of which it is of opinion that minimum rates should be fixed, and thereupon the schedule shall be deemed to be amended accordingly in regard to that State. In the case of The Edward Mills Co. Ltd., Beawar & Ors. v. The State of Ajmer (1), the validity of s. 27 of the Act was challenged on the ground of excessive delegation. it was urged that the Act prescribed no principles and laid down no standard which could furnish an intelligent guidance to the administrative (1) [1955] 1 S.C.R. 735.

were protected by the terms of cl. (6) of Art. 19. In repelling the argument of the employers' inability to meet the burden of the minimum wage rates it was observed that "the employers cannot be heard to complain if they are compelled to pay minimum wages to their labourers even though the labourers on account of their poverty and helplessness are willing to work on lesser wages, and that if individual employers might find it difficult to carry on business on the basis of minimum wages fixed under the Act that cannot be the reason for striking down the law itself as unreasonable. The inability of the employers may in many cases be due entirely to the economic conditions of those employers." It would thus be seen that these two decisions have firmly established the validity of the Act, and there can no longer be any doubt that in fixing the minimum wage rates as contemplated by the Act the hardship caused to individual employers or their inability to meet the burden has no relevance. Incidentally, it may be pointed out that in dealing with the minimum wage rate,,; intended to be pre- scribed by the Act Mukherjea, J., has in one place observed that the labourers should be secured adequate living wages. In the context it is clear that the learned Judge was not referring to living wages properly so-called but to the minimum wages with which alone the Act is concerned. In view of these two decisions we have not allowed Mr. Nambiar to raise any contentions against the validity of the Act. It is true that Mr. Nambiar attempted to argue that certain aspects of the matter on which he wished to rely had not been duly considered by the Court in Bijay Cotton Mills Ltd.'s case (1). In our opinion it is futile to attempt to reopen an issue which is clearly concluded by the decisions of this Court. Therefore, we will proceed to deal with the present petition, as we must, on the basis that the Act under which the Committee "-as appointed and the notification was ultimately issued is valid. We have already seen what the Act purports to achieve is to prevent exploitation of labour and for (1) [1955] 1 S.C.R. 752.

In the course of his judgment Bhagwati, J., who spoke for the Court, has elaborately considered several aspects of the concept of wage structure including the concept of minimum wage. The conclusion of the Fair Wage Committee as to the content of the minimum wage has been cited with approval (p.

83). Then a distinction has been drawn between a bare subsistence or minimum wage and a statutory minimum wage, and it is observed that the statutory minimum wage is the minimum which is prescribed by the statute and it may be higher than the bare subsistence or minimum wage providing for some measure of education, medical requirements and amenities (p. 84). This observation is followed by a discussion about the concept of fair wage; and in dealing with the said topic the Minimum Wages Act has also been referred to and it is stated that the Act was intended to provide for fixing minimum rates of wages in certain employments and the appropriate Government was thereby empowered to fix different minimum rates of wages as contemplated by s. 3(3). Then it is stated that whereas the bare minimum or subsistence wage would have to be fixed irrespective of the capacity of the industry to pay the minimum wage thus contemplated postulates the capacity of the industry to pay and no fixation of wages which ignores this essential factor of the capacity of the industry to pay could ever be supported. Mr. Nambiar contends that the last part of the observation refers to the minimum wage prescribed by the Act and it requires that before prescribing the said wage the capacity of the industry must be considered. We do not think that this argument is well founded. It would be noticed that in considering the distinction drawn between the minimum wage fixed by industrial adjudication and the minimum wage prescribed by a statute which is called statutory minimum it has been made clear that the latter can be higher than the bare subsistence or minimum wage and as such is different in kind from the industrial minimum wage. We do not think that the observation in question was intended to lay down the principle that whereas a minimum wage can be laid down by an industrial adjudication without reference to an employer's capacity to pay the same it cannot be fixed by a statute without considering the employer's capacity to pay. Such a conclusion would be plainly illogical and unreasonable. The observations on which Mr. Nambiar relies do not support the assumption made by him and were not intended to lay down any such rule. Cases are not unknown where statutes prescribe a minimum and it is plain from the relevant statutory provisions themselves that the minimum thus prescribed is not the economic or industrial minimum but contains several components which take the statutorily prescribed minimum near the level of the fair wage,and when that is the effect of the statutory provision capacity to pay may no doubt have to be considered. It was a statutory wage structure of this kind with which the Court was dealing in the case of Express Newspapers (Private) Ltd. (1), because s. 9 authorised the imposition of a wage structure very much above the level of the minimum wage and it is obvious that the observations made in the judgment cannot, and should not, be divorced from the context of the provisions with respect to which it was pronounced. Therefore, we feel no hesitation in reject- ing the argument that because the Act prescribes minimum wage rates it is necessary that the capacity of the employer to bear the burden of the said wage structure must be considered. The attack against the validity of the notification made on this ground must therefore fail.