Full Judgment Text
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PETITIONER:
STATE OF ASSAM & ANR.
Vs.
RESPONDENT:
BHARAT KALA BHANDAR LTD. & ORS.
DATE OF JUDGMENT:
07/04/1967
BENCH:
WANCHOO, K.N.
BENCH:
WANCHOO, K.N.
BHARGAVA, VISHISHTHA
MITTER, G.K.
CITATION:
1967 AIR 1766 1967 SCR (3) 490
ACT:
Defence of India Rules, 1962, r. 126AA(1) and (4)-
Notification under sub. r. (1)-When can be challenged-
Notification under sub. r. (4)-If could be issued on the
subjective satisfaction of Government-Procedure to be
followed-If notification could be made retrospective.
Under r. 126AA of the Defence of India Rules, 1962, the
Central or State Government may notify employments and
regulate wages and other conditions of service of persons
engaged in such notified employments, for securing public
safety and maintenance of supplies and services necessary to
the life of the community.
HEADNOTE:
On 26th September, 1964, the Governor of Assam notified
under r. 126AA(1) a large number of employments as he was of
opinion that they were essential for securing the public
safety and for maintaining Supplies and services necessary
to the life of the community, and under In (4) ordered
payment of rupees ten per mensem as ad hoc cost of living
allowance to certain workers in the notified employments.
On 4th November, 1964, he issued another notification under
sub r. (4) by which he ordered payment of 38.46 paise as ad
hoc cost of living allowance per day to persons engaged on
daily wages in the notified employments. The two
notifications under sub. r. (4) were issued to see that
there was a contented labour force during emergency. Though
the second notification was dated November 4, 1964, the
Labour Department of the State Government advised one of the
respondents to pay the amount retrospectively from September
26, 1964.
The respondents challenged the validity of the three
notifications by writ petitions in the High Court. The High
Court held -that :
(i) The notification under r. 126AA(1) was mala fide in law
and should be struck down, because, the conditions precedent
to the exercise of the power conferred by the rule, namely,
that the Governor should form the necessary opinion had not
been satisfied since; (a) both the purposes, namely public
safety and maintenance of supplies and services, were
mentioned as the basis of the notification without
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indicating which of the two purposes led the State
Government to issue the notification; (b) a large number of
employments were included in one notification; and (c) the
counter-affidavit of the State Government stated that the
notification was issued for purposes of "defence" also
though. the notification itself did not mention "defence",
thus showing that the Governor had not applied his mind.
(ii) The two notifications under r. 126AA(4) were also mala
fide in law and should be struck down because; (a) it was
not stated in the notifications nor was it shown how the
fixation of wages in the employments was necessary for the
purpose of securing public safety and for maintaining
supplies and services necessary to the life of the community
and (b) the notifications replaced proceedings under the
Minimum Wages Act which were taken in -respect of some of
the notified employments.
491
In appeal to this Court,
HELD: (i) The notification under r. 126AA(1) should be
upheld with respect to all employments except veneer mills.
[501 G]
A notification under r. 126AA(1) could be issued on the
subjective satisfaction of the Central or State Government
as to the various purposes mentioned in the sub-:rule, which
include securing public safety and maintenance of supplies
and services necessary to the life of the community. That
opinion could not be challenged in Court unless it was shown
to be mala fide, or that no reasonable person could come to
that conclusion with respect to the employments specified in
the notification. [499 D, F]
(a) The fact that the notification gave both purposes for
its issue did not show that the Governor did not apply his
mind to the conditions. When the Governor said that the
employments were included in the notification for two
purposes, he obviously held the opinion that the employments
were essential far both purposes, and, it was not necessary
for him to specify which of the employments were essential
for one purpose and which were essential for the other
purpose. Where certain employments are essential for the
maintenance of supplies and services necessary to the life
of the community, the Governor may very well come to the
conclusion that those employments are also necessary for
securing public safety, for, if supplies and services
necessary to the life of the community are not maintained,
there may be danger to public safety. [498 C-E; 500 E-F]
(b) There is nothing in r. 126AA(1) which prevents a
notification from being issued with -respect to any number
of employments, and the mere fact that a notification
included within it a large number of employments is no
ground for holding that the Governor did not apply his mind
to the conditions. [498 B-C]
(c) As regards the word "defence", it crept into the
counter-affidavit mechanically in reply to the petitioners’
contention using that word in some of the writ petitions.
But that should not have led the High Court to the
conclusion that the Government had no clear conception of
its powers, for, the High Court had only to see whether the
conditions were complied with at the time of the issue of
the notification. [499 B-C]
As regards veneer mills which carried on the process of
having finer wood on inferior wood for purposes of
beautifying furniture, it cannot be said by any ’reasonable
person to be essential for the maintenance of supplies and
services necessary to the life of the community and for
securing public safety. This Court could therefore strike
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down the notification with respect to veneer mills treating
the notification as so many single notifications each
relating to. an employment, rolled into one. [501 A-C]
(ii) The reasons given by the High Court for striking down
the two notifications under sub-r. (4) were erroneous,
because : (a) It was not necessary to recite in the
notification under sub-r. (4) that action was being taken
for the purpose of securing public safety and for main-
taining supplies and services necessary to the life of the
community. Nor does the sub-rule require that the
notification should show that the two purposes would in fact
be achieved by the provision made thereunder. [502 D-E]
(b) The power under the sub-rule is not for fixation of
minimum wages, but to regulate wages and is analogous to the
power of industrial tribunals. Therefore, the fact that
there is provision in the Minimum Wages Act for fixation of
minimum wages was no ground for holding that the power
exercised under sub-r. (4) was colourable. [502 F]
492
The two notifications should however be struck down,
because, before the Government exercises the power under
sub-rule (4), it should consult the interests concerned, as
the order is not to be passed merely on the subjective
satisfaction of the Government, even when there was an emer-
gency. [506 A-B]
Whether the power under a particular provision has to be
exercised purely on the subjective -satisfaction of
Government or other authority or has to be exercised subject
to some objective tests depends upon a number of factors.
The language of the Provisions the nature of the power
conferred and the purpose for which it has been conferred,
the circumstances and the manner of the exercise of power,
what things are affected by such exercise and how, and other
relevant factors in the context of the particular provision
may have to be considered in this behalf. The intention of
the legislature is primarily to be gathered from the
language used and where the language used is plain and
unambiguous, effect must be given to it and there is nothing
more to be said. But when the language is not clear all
these factors must be weighed to arrive at the final con-
clusion. [504 E-H]
The power under sub-r. (4) is of a far-reaching nature and
not only deals with wages but also with other conditions of
service, and, in an emergency may practically supersede all
industrial adjudication. It is unlikely that such wide
powers were conferred on the Government to be exercised
purely on its subjective satisfaction without even
consulting the interests concerned, specially, when the
language of the sub-rule is not plain and unambiguous
indicating that the power could be so exercised. The power,
no doubt, was intended to be exercised in an emergency and
decisions may have to be taken quickly and delay should be
avoided; even so, the Government should evolve some
procedure by which there would be some kind of collection of
data with the help of the interests concerned and some kind
of hearing or conference. The consultation should be
employment by employment, for, it may be that the needs of
every employment may not be the same. In the present case,
there was some indication that the notifications were not
issued arbitrarily but on the basis of a report submitted by
a sub-committee consisting of Government officials and
representatives of the employers and employees; but it was
not a consultation employment by employment, and therefore,
the consultation fell short of the legal -requirements. [505
D-H; 506 D-H; 507 F]
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Kumaon Motor Owners’ Union Ltd. v. The State of U.P. [1966]
2 S.C.R. 121, distinguished.
Further, as regards the second notification under r.
126AA(4) the Government could not and did not make it with
retrospective effect; and the Labour Department was in error
in writing to one of the respondent mills to make the
payments retrospectively. [502A-B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 2114 to
2134 of 1966.
Appeals from the judgment and order dated March 25, 1966 of
the Assam and Nagaland High Court in Civil Rule Nos. 104,
105, 147, 149, 150, 169, 170, 174, 175, 205, 206, 207, 237,
238, 246, 258, 259, 262, 263, 264 and 265 of 1965
respectively.
Purshottam Tricumdas and Naunit Lal, for the appellants (in
C. As. Nos. 2114-2120 of 1960).
493
Naunit Lal, for the appellants (in C. As. Nos. 2121-2117 of
1966).
H. R. Gokhale, Hareshwar Goswami, K. RaJendra Chaudhury
and K. R. Chaudhuri for respondent No. 1 (in C. As. Nos.
21142117 of 1966).
Vineet Kumar, for respondent No. 3 (in C. As. Nos. 2114 to
2120 of 1966).
I. M. Oberoi, S. K. Mehta and K. L. Mehta, for respondent
No. 1 (in C. A. No. 2118 of 1966).
Bishan Narain, Bhuvanesh Kumari, O. C. Mathur, for res-
pondent No. 1 (in C. As. Nos. 2119 and 2120 of 1966).
The Judgment of the Court was delivered by
Wanchoo, J. These are twenty-one appeals on certificates
granted by the High Court of Assam and Nagaland and will be
dealt with together as they raise common questions. Facts
necessary for present purposes may be briefly narrated. On
September 26, 1964, the Governor of Assam issued a
notification under r. 126-AA of the Defence of India Rules,
1962 (hereinafter referred to as the Rules). By this
notification he applied r. 126-AA to a large number of
employments as he was of opinion that the employments
notified were essential "for securing the public safety and
for maintaining supplies and services necessary to the life
of community". On the same day another notification was
issued under sub-r. (4) of r. 126-AA. By this
notification, the Governor ordered payment of ad hoc cost of
living allowance of Rs. 100/per mensem to all workers
drawing pay upto Rs. 400/- per mensem engaged in the
employments notified for purposes of sub-r. (1) of r. 126-
AA. Another notification was also issued on November 4,
1964 under sub-r. (4) by which the Governor ordered payment
of ad hoc cost of living allowance of 34.46 paisas per day
to all persons engaged on daily wage basis in the
employments which had been notified on September 26, 1964
for the purpose of r. 126-AA(1).
The validity of these three notifications was challenged by
writ petitions before the High Court by the respondents on
various grounds. It was first urged that r. 126-AA was a
case of excessive delegation and was therefore ultra vires.
The second contention was that r. 126-AA was beyond the
powers conferred under s. 3 of the Defence of India Act (No.
51 of 1962), and was bad on that account. Thirdly, it was
urged that the first notification under r. 126-AA (1) was
bad as conditions precedent to the exercise of the power
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conferred by that sub-rule had not been fulfilled inasmuch
as (a) the State Government had not formed the opinion
necessary before issuing the notification, and (b) no
reasonable man could have formed the opinion that
notification of various
494
employments mentioned in the schedule was necessary for
securing the public safety and for maintaining supplies and
services necessary to the life of community. Fourthly, it
was contended that the exercise of the power under sub-r.
(1) was colourable inasmuch as it was not exercised for the
purpose mentioned in the sub-rule but for extraneous
purposes on the ground that the notification did not show
how it was necessary to notify the employments indicated
therein for the purposes mentioned therein, the more so as
two purposes had been mentioned in the notification and it
did not appear which purpose applied to which employment.
Lastly, it was urged that the notification under sub-r. (1)
was mala fide. It was on these grounds that the
notification under sub-r. (1) was attacked.
The respondents also attacked the two notifications issued
under sub-r. (4) on three grounds. It was first urged that
the notifications fixing ad hoc cost of living allowance
were invalid as it was not stated therein that the
regulation of wages proposed under the notifications had any
connection with securing public safety and maintaining
supplies and services necessary to the life of community.
Nor was it shown that the two objects of r. 126-AA (1)
mentioned in the notification could be achieved by a general
notification of the type issued under sub-r. (4). Secondly,
it was urged that wages could be regulated under the Minimum
Wages Act (No. II of 1948), and in some cases steps bad
been taken to do so. Therefore, it was not open to take
recourse to r. 126-AA (4) to achieve the same purpose, as
the effect of the notification under sub-r. (4) was to
deprive the respondents of the right to place materials
before the committee empowered to fix minimum wages and it
was thus a colourable exercise of the power conferred by the
sub-rule. Thirdly, it was urged that these notifications
were also mala fide.
The High Court held that r. 126-AA was not a case of exces-
sive delegation of power. It also held that the rule was
within the power conferred under s. 3 of the Defence of
India Act. These two conclusions of the High Court are not
being challenged by either party before us and need not be
considered any further.
The High Court further held that the conditions precedent to
G the exercise of the power conferred by r. 126-AA had not
been complied with and therefore the notification under sub-
rule (1) was bad. The High Court was of the view that the
Governor did not form such opinion as was necessary before
the issue of the notification under sub-r. (1). Nor was it
shown that the employments included in the impugned
notification were essential for securing public safety and
for maintaining supplies and services necessary to the life
of community. The High Court also held that the exercise of
power under sub-rule (1) was colourable as it
495
was not shown that the employments mentioned in the
notification under sub-r. (1) were essential for securing
public safety and thus one of the purposes mentioned in the
notification was non-existent. As such it could not be
predicated as to which of the two purposes mentioned in the
notification led the State Government to issue the
notification and in consequence the notification under sub-
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r. (1) was invalid. Finally, the High Court held that the
notification under sub-r. (1) was mala fide in law, though
there was nothing to show that there were mala fides in fact
in the issue of the notification; presumably, the High Court
came to the conclusion that the notification, was mala fide
in law on the basis of its, view on the other points
indicated above.
As to the notifications under sub-r. (4) the High Court held
that they were invalid as it was neither stated in the
notifications nor was it shown how fixation of wages in the
employments included in the notification under sub-r. (1)
was necessary for the purposes of securing public safety and
for maintaining supplies and services necessary to the life
of community. The High Court also seems to have held that
these notifications were bad inasmuch as they replaced
proceedings under the Minimum Wages Act which had been taken
in respect of some of the employments included in the
notification under sub-r. (1), though the decision of the
High Court on this point is not quite clear. Finally, the
High Court held that the notifications under sub-r. (4) were
also mala fide. Here again there was no question of mala
fide on facts. The High Court seems to have held that the
notifications were mala fide in law, presumably on the view
it took on other points indicated above.
The result of these findings of the High Court was that the
High Court struck down the notification under sub-r. (1) and
the two notifications under sub-r. (4) of r. 126-AA. The
State of Assam then applied for and obtained certificates
from the High Court to appeal to this Court, and that is how
the matter has come up before us.
We shall first consider the notification under sub-rule (1)
However before we do so we should like to analyse the
provisions of r. 126-AA. Sub-rule (1) thereof lays down
what are essential services in the context of the emergency
which is the basis of the Defence of India Act and the
Rules. Under sub-rule (1) all employments under the Central
Government or the State Government are essential services.
In addition to these employments any employment or class of
employment which the Central Government or the State
Government, being of opinion that such employment or class
of employment is essential for securing the defence of India
and civil defence, the public safety, the maintenance of
public order, or the efficient conduct of military
operation, or for maintaining
496
supplies and services necessary to the life of the
community, declares by notification to be essential service,
becomes an employment within sub-rule (1) above. The
explanation to sub-rule (1) says that "employment" includes
employment of any nature, and whether paid or unpaid. Thus
there are three classes of employments which are treated as
essential services for purposes of sub-r. (1), namely, (i)
employments under the Central Government, (ii) employments
under the State Government, and (iii) any employment which
is declared by notification under sub-r. (1) to be essential
for the purposes mentioned therein.
Then comes sub-rule (2) which gives power to the Central
Government or the State Government to direct by general or
special order that any person or persons engaged in any
employment to which sub-rule (1) applies shall not depart
out of such area or areas as may be specified in such order.
An order under this sub-rule has to be published in such
manner as the Government making the order considered best
calculated to bring it to the notice of the persons affected
by the order. It will be seen that sub-rule(2) is
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consequential to sub-rule (1). It does not however apply of
its own force and the Central Government or the State
Government has to pass an order thereunder and the effect of
the order is that any person or persons engaged in any
employment to which sub-rule (1) applies cannot leave the
area or areas specified in the order. The object of sub-
rule (2) clearly is that in emergency persons employed in
essential services do not run away with the result that
essential services are brought to a stand-still with con-
sequent danger to community.
Then comes sub-rule (3). It applies to a person engaged in
any employment or class of employment and to an employer of
any person so engaged. So far as persons engaged are
concerned, subrule (3) lays down that if any person (a)
disobeys any lawful order given to him in the course of such
employment, (b) without reasonable excuse abandons any such
employment or absents himself from work, or (c) departs from
any area specified in an order under sub-rule (2) without
the consent of the authority making that order, he shall be.
deemed to have contravened this rule. As to the employer,
sub-rule (3) lays down that if any employer without
reasonable cause-(i) discontinues the employment of such
person, or (ii) by closing an establishment in which such
person is engaged causes the discontinuance of his
employment, he shall also be deemed to have contravened this
rule. Except for the part which depends upon the order
under sub-rule (2), sub-rule (3) comes into force by its own
terms and prohibits certain things in the cases both of
employer and employee in the essential services mentioned in
or notified under sub-r. (1). Thus sub-r. (3) is again
consequential to sub-r. (1).
497
Then we turn to sub-rule (4) with which we are particularly
concerned. It is in these terms :-
"The Central Government or the State
Government may by order regulate the wages and
other conditions of service of persons or of
any class of persons engaged in any employment
or class of employment to which this rule
applies."
It is again consequential to sub-rule (1) and the obvious
object of sub-rule (4) is to see that essential services are
maintained during an emergency and if it is necessary to
regulate wages and other conditions of service in that
behalf that can be done by an order by the Central
Government or the State Government. It also appears that as
sub-r. (3) prohibits employers and employees from doing
certain things, sub-r. (4) has been enacted to see that
there is a contented labour force during an emergency so
that essential services as specified in sub-rule (1) or
declared by a notification thereunder are maintained.
Then follows sub-rule (5) which lays down punishment for
contravention of any of the provisions contained in r. 126-
AA.
This analysis of r. 126-AA shows that it is a provision for
maintenance of essential services during an emergency, and
it is with that object that various powers are conferred on
the Central Government or the State Government including the
power of regulating wages and other conditions of service of
persons engaged in essential services indicated in sub-r.
(1) or declared to be such thereunder. It is with this
background of emergency that we have to construe the
provisions contained in sub-r. (1) and also sub-r. (4) with
which we are particularly concerned in the present appeals.
Turning first to stb-Rule (1), we have already indicated
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that this sub-rule by its own force declares all employments
under the Central Government or the State Government to be
essential services for its purposes. Besides these two
classes of employment,,, the Central Government or the State
Government has been given the power to declare other
employments also to be essential for the purpose of sub-rule
(1) and to be covered thereby. This the Central Government
or the State Government can do by notification, if it is of
opinion that such employment or class of employments is
essential for securing any of the purposes mentioned in the
sub-rule. It was Linder this power- that the Governor of
Assam issued the notification dated September 26, 1964 under
sub-rule- (1). The notification refers to a large number of
employments and states that the Governor of Assam was of
opinion that the employments specified there in were
essential for securing public -safety and for maintaining
supplies and services necessary to the Supp. CI/67-2
498
life of the community. The notification has been issued
under the authentication of the Joint Secretary to the
Government of Assam, Labour Department. As it stands the
notification is clearly in compliance with the provisions
contained in sub-r. (1) of r. ’126-AA. It is true that the
notification has included a large number of employments in
it; but we do not see why one notification may not be issued
with respect to any number of employments, though there can
be no objection to the Government issuing one notification
with respect to one employment only. The mere fact that a
notification includes within it a large number of employ-
ments is no ground for holding, as the High Court seems to
have held, that the Governor did not apply his mind to the
conditions precedent to the issue of the notification. Nor
do we think that the fact that the notification in question
gave two purposes for its ,issue. Damely, for securing
public safety and for maintaining supplies and services
necessary to the life of the community shows that the
Governor did not apply his mind to the conditions precedent
to the issue of the notification. Further when the Governor
says in the notification that the employments included
therein were essential for securing the public safety and
for maintaining supplies and services necessary to the life
of the community, he obviously holds the opinion that these
employments were essential for both purposes. It was not
therefore necessary for the Governor to specify which of the
employments were essential for the purpose of maintaining
supplies and services necessary to the life of the community
and which were essential for the purpose of securing public
safety. The notification, as it reads, indicates that in
the opinion of the Governor these employments were essential
for both purposes. We do not think therefore that the High
Court was right in holding that as the notification does not
show which employment was essential for which purpose, the
Governor had not applied his mind and the notification was
therefore colourable and mala fide in law.
We may also refer to a ground which was urged in the High
Court, namely, that the notification was issued for the
purposes of "defence" also as stated in the counter-
affidavit of the appellant, though the notification itself
did not mention "defence" at all. The High Court thus
thought that defence had been introduced in the counter-
affidavit as one of the grounds for making the declaration
while there was no mention of it in the notification itself,
and that also showed that there was no application of mind
by the Governor to the conditions precedent to the issue of
the notification under sub-r. (1). It appears that in some
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of the writ petitions "defence" was introduced by the
petitioners as a -round for the issue of the notification of
sub-r. (1); so in the reply of tile State the same ground
was mechanically repeated in the counteraffidavit without
carefully looking into ’the notification which had been
issued under sub-r. (1). It is because of this mechanical
499
introduction of defence by the State in the counter-
affidavit that the High Court has held that it showed that
the authority ha( equated public safety with defence and
that the Government misconceived its powers and had no clear
conception of the scope. and ambit thereof. There is no
doubt that the word "defence" came in the counter-affidavit
mechanically in reply to the introduction of the word
"defence" in many of the writ petitions. What the court has
to see is whether the conditions precedent were complied
with at the time of the issue of the notification. It is
unfortunate that in the counter-affidavit the word "defence"
was introduced mechanically in reply to what was said in the
writ petitions. But that in our opinion should not have led
the High Court to the. conclusion at which it has arrived,
namely, that the Government misconceived its powers and had
no clear conception of ’the scope. and ambit thereof. In
the circumstances we are inclined to attach no importance to
the introduction of the word "defence" in the counter-
affidavit filed on behalf of the State as it seems that that
word came in mechanically in reply to the introduction of
the word "defence" in some of the writ petitions.
It is clear that a notification under sub-r. (1) is
conditioned on the subjective satisfaction of the Central
Government or the State Government as to the various
purposes mentioned in sub-r. (1). The High Court was also
conscious of the fact that this subjective opinion was
generally speaking not justiciable and it was not open to a
court to see if the opinion of the authority was justified
by objective tests. The High Court was also conscious of
the fact that it was not open to the court to examine the
adequacy of the material on which the opinion rested.
Further the High Court also held that the reasonableness of
the opinion could not be examined by the court. This
statement of the law by the High Court is well-settled and
was accepted by the High Court. The High Court further held
that the validity of an order might be challenged on the
ground of mala fide and this again is well settled. The
High Court further stated that a court could examine whether
the, opinion was formed at all before the issue of the.
notification. To this again, there can be no exception.
Finally, the High Court held that it was open to the court
to see whether the opinion was relevant and germane to the
circumstance% which fell to be considered under the rule and
whether they were such as could possibly and rationally
support the conclusion drawn by the authority.
Having thus stated the law correctly, the High Court con-
sidered whether it could be said in this case that the
conditions precedent had been satisfied before the issue of
the notification under sub-r. (1) and came to the conclusion
that they were not satisfied, mainly because two purposes
were mentioned as the
500
basis of the notification and a large number of employments,
were included in one notification, as already pointed out by
us above. We are of opinion that both these grounds for
holding that the conditions precedent to the issue of the
notification under sub-r. (1) have not been fulfilled cannot
be sustained. As the notification reads, it shows that the
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employments mentioned therein were essential for both
purposes and this must be held to be the opinion of the
Governor. That opinion cannot in our view be challenged in
court unless it is shown to be mala fide or it is shown that
no reasonable man can come to that conclusion in the context
of the employments specified in the notification. We cannot
agree with the High Court that simply because a large number
of employments were mentioned in one notification that can
by itself show that the Governor had not applied his mind.
Nor can we agree with the High Court that because two
purposes were mentioned as the basis of the notification and
as there was nothing to show which employment referred to
which purpose, there is no formation of opinion. As we read
the notification it must be held that the Governor’s opinion
was formed with respect to the employments specified in the
notification on the basis of both the purpose, mentioned in
the notification. The only thing that the High Court could
see was whether considering the nature of the employments it
was impossible for any reasonable man to come to the
opinion. that those employments were essential for securing
public safety, and for maintaining supplies and services
necessary to the life of the community, and this has to be
judged in the context of are emergency. It seems to us that
where certain employments are essential for the maintenance
of supplies and services necessary to the life of the
community the Governor may very well come to the conclusion
that those employments are also necessary for securing
public safety, for if supplies and services necessary to the
life of community are not maintained, there may be danger to
public safety. In these circumstance-,; we cannot agree
with the High Court that the two purposes mentioned in the
notification have no nexus with the employments specified
therein, except in on case. We cannot also agree with the
High Court that no reason, able man could come to the
conclusion that the employment mentioned in the notification
were essential for the two purpose which were the basis of
the notification except again in the case of one employment.
We have looked through all the employments which are
included in the notification and it is enough say that
except in one case it cannot be said that no reasonably man
could come to the conclusion that those employments we,
essential for securing public safety and for maintaining
supplier and services necessary to the life of the
community.
The only exception we find is veneer mills. Veneering, v.
understand, is a process by which thin flat plates or slips
of file
501
wood or other suitable material are applied to other
inferior wood in cabinet work or similar other furniture.
In the Concise Oxford Dictionary, the word "veneer" means
cover (wood, furniture etc.) with thin coating of finer
wood, and that is the meaning which must be given to veneer
mills as entered at No. 5 of the notification for that entry
is "employment in plywood and veneer mills". Veneering, we
understand, is done for the purpose of beautifying furniture
etc. We fail to see how veneer mills which carry on this
process of laying finer wood on inferior wood for purposes
of beautifying furniture etc. can be said by any reasonable
man to be essential for the maintenance of supplies and
services necessary to the life of the community and for
securing- public safety. It is open to us to strike down
the notification tinder sub-r. (1) with respect to veneer
mills alone, for the present notification including a large
number of employments can be read to amount to so many
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single notifications, relating to each employment, rolled
into one. Therefore, as we see the notification under sub-
r. (1) we see no reason to hold that the Governor had not
applied his mind to the conditions precedent before he
issued the notification in question. We are also satisfied
except in the case of veneer mills that it cannot be said
that no reasonable man could have come to the conclusion
that the employments included in the notification were not
essential for securing public safety and for maintaining
supplies and services necessary to the life of the
community. In this view of the matter we cannot see how the
notification under sub-r. (1) can be said to be for any
extraneous purpose unconnected with the purposes mentioned
in the sub-rule; nor is there any reason to hold that the
employments mentioned in the notification (except one) were
not essential for securing public safety in addition to
maintenance of supplies and services necessary to the life
of the community. Nor do we see any reason to hold that the
notification under sub-rule (1) was mala fide. We have
already mentioned that there are no mala fides in fact and
we do not think there can be any question of any mala ride
in law in view of what we have said above. We therefore
uphold the notification under sub-rule (1) dated September
26, 1964 except in the case of veneer mills. We strike down
the notification only with respect to the veneer mills
mentioned it item 5 of the employments included therein.
We now come to the two notifications under sub-r. (4). In-
cidentally we, may mention that though the second
notification is dated November 4, 1964, the letter written
by the Department of Labour, Government of Assam, to the
Charduar Cotton Mills says that the cost of living allowance
for persons engaged on daily wages provided in the
notification of November 4, 1964 should be paid from
September 26, 1964. Now there is nothing in the
notification of November 4, 1964 to show that it was
retrospective,
502
and we cannot understand how the Department of Labour
advised the Mill in question to pay cost of living allowance
to persons engaged on daily wages from September 26, 1964,
which was the date of the notification under sub-r. (1).
Nor do we think that there is anything in sub-r. (4) which
authorises the Government to make an order thereunder with
retrospective effect.
But apart from this, we have to consider whether the two
notifications under sub-r. (4) are valid or not. The High
Court .struck them down on the ground that there was nothing
in the two notifications to show that it was necessary to
pay cost of living allowance which comes within the ambit of
the words "regulation of wages’ for purposes of securing
public safety and maintaining supplies and services
necessary to the fife of the community and that those
purposes would be achieved by the notification. The High
Court also seems to have struck down the notifications on
the ground that action should have been taken under the
Minimum Wages Act and thus the power exercised under sub-r.
(4) of r. 126-AA was a colourable exercise of power. For
these two reason, the High Court also held that the
notifications were mala fide in law, though there was
nothing to suggest that they were in fact mala fide. We
cannot agree with the High Court that it was necessary to
recite in the notifications under sub-r. (4) that action was
being taken thereunder for the purpose of securing public
safety and for maintaining supplies and services necessary
to the life of’ the community. Nor do we think that sub-r.
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(4) requires that notifications should show that the two
purposes would in fact be achieved by the provision made
thereunder. Further it is clear that the power under sub-r.
(4) is not for fixation of minimum wages. It is power to
regulate wages and this power is analogous to the power of
industrial tribunals and therefore the fact that there is
provision in the Minimum Wages Act for fixation of minimum
wages is no -round for holding that the power exercised by
sub-r. (4) must be colourable. The two reasons given by the
High Court for striking down the two notifications and hold-
ing them maala fide do not appear to us to be correct. But
this in our opinion is not the end of the matter.
The real question is whether the power under sub-r. (4) is a
power which can be exercised merely on the subjective
opinion of Government or whether sub-r. (4) requires
anything more. The notifications seem to proceed on the
view that powers exercised thereunder are entirely within
the subjective satisfaction of Government and it is that
view which we must examine now. It is true that this aspect
of the matter was not put forward in clear terms before the
High Court, but it so clearly arises that we have permitted
learned counsel for the respondents, when they raised this
aspect of the matter, to do so.
503
We have already indicated that the power conferred by sub-r.
(4) is consequential to the issue of a notification under
sub-r. (1), in case of employments other than those under
the Central Government or the State Government. Once the
notification under sub-r. (1) is issued, the Central
Government or the State Government has the power to regulate
the wages and other conditions of service of persons or any
class of persons engaged in any employment or class of
employment included in the notification, of course, the
wages and other conditions of service of Central Government
and State Government employees are also liable to be
regulated under sub-r. (4). But it is unnecessary to refer
to that aspect of the matter and what we say hereafter may
be taken to apply only to those employments which are
brought under r. 126AA by issue of a notification under sub-
r. (1) thereof.
The main argument on behalf of the respondents in this
behalf is that there is nothing in sub-r. (4) to show that
the regulation envisaged therein by an order depends
entirely on the subjective satisfaction of the Central
Government and the State Government. It is urged that sub-
r. (4) gives power to Government which is analogous to the
power of industrial tribunals and enables Government to
interfere with contractual relations between employers and
employees and even in many cases with relations between
employers and employees established by industrial awards.
It is therefore urged that when there is nothing express in
sub-r. (4) to show that the power thereunder can be
exercised merely on the subjective satisfaction of
Government it should be held that power thereunder can only
be exercised after consolation with employers and employees
concerned. On the other hand it is urged on behalf of the
appellant that these powers are meant to be exercised in a
real emergency and therefore though the powers conferred by
sub-rule (4) are analogous to the powers of industrial
tribunals they are still meant to be exercised on the
subjective satisfaction of Government. It is submitted that
in a real emergency it would not be possible for Government
to go through the elaborate procedure of industrial
tribunals, for a real emergency may require immediate
action.
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Learned counsel for the appellant also referred to certain
other provisions of the Rules where according to him there
was no express provision with respect to subjective
satisfaction and still the powers conferred thereunder were
intended to be exercised on subjective satisfaction of
Government. Particular reference in this connection is made
to Kumaon Motor Owners’ Union Limited v. The State of Uttar
Pradesh(1) and it was pointed out that in that case the
power conferred on the State Government under r. 131 (2)
(gg) and (i) was held to be exercisable on the subjective
satisfaction of Government. That case dealt with control of
road transport
(1966) 2 S.C.R. 121.
504
during emergency, which in our opinion stands on a different
footing- altogether from regulation of wages and other
conditions of service of employees. The particular
provisions considered in that case, provided for prohibition
and restriction of carriage of persons or goods by any
vehicle or class of vehicles, either generally or between
any particular places or on any particular route and making
of other provisions in relation to road transport. The
order in that case was passed in the interest of defence of
India, and civil defence prohibiting certain class of
vehicles from plying in certain areas near the Chinese
border with India. Considering the nature of the power
conferred and the purpose for which it was conferred and its
effect, this Court in the context of that provision held
that the rule envisaged subjective satisfaction of
Government. The present case however which deals with
regulation of wages and ,other conditions of service and has
a far-reaching effect on industrial relations based on
contracts or even on industrial awards stands on a different
footing altogether and cannot be governed by the ratio of
that case.
We do not think it necessary in the present appeals to
consider the various other rules to which reference has been
made. Nor would it be desirable to do so for those rules do
not arise for interpretation in the present appeals. We
propose therefore to confine ourselves to sub-r. (4) with
which alone we are concerned in these ,cases.
Now the question whether the power under a particular pro-
vision has to be exercised purely on the subjective
satisfaction of Government or- other authority or has to be
exercised subject to some objective tests depends upon a
number of factors. The language of the provision, the
nature of the power conferred and the purpose for which it
has been conferred, the circumstances and the manner of the
exercise of power, what things are affected by such exercise
and how, and other relevant factors, in the context of the
particular provision, may have to be considered in deter-
mining whether the power envisaged can be exercised merely
on the subjective satisfaction of Government or other
authority, or there are to be some objective tests before
the power can be exercised. The intention of the
legislature is primarily to be gathered from the
language used and where the language used is plain and
unambiguous, effect must be given to it and there is nothing
more to be said. But where the language is not clear, all
these factors must be weighed to arrive at the final
conclusion whether the power conferred depends entirely on
the subjective satisfaction of Government or the authority
concerned or there have to be some objective tests before
the power can be exercised. It is on the basis of these
principles that we have to decide whether sub-r. (4) gives
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power to Government to regulate wages and other conditions
of service purely on its subjective satisfaction.
505
We have already set out sub-r. (4) and a perusal of its
language will show that there is nothing in the words
themselves which plainly and unambiguously indicates that
the power exercised thereunder depends purely on the
subjective satisfaction of Government. It is true that sub-
r. (4) so far as it applies to employments other than those
of Government is consequential on a notification under sub-
r. (1). But that does not mean in the absence of express
in sub-r. (4) that the power exercised thereunder depends
purely on the subjective satisfaction of Government. We
have already indicated that the power under sub-r. (4) is
analogous to the power of industrial tribunals to decide
disputes between employers and employees. The result of the
exercise of the power under sub-r. (4) is to vary the
contractual relations between employers and employees
concerned in employments with respect to which a
notification under sub-r. (1) has been. issued. The effect
of the exercise of such power is to unsettle relations
between employers and employees which may be existing for a
long time and which may be the outcome either of contractual
relations or even of industrial awards. Sub-rule (4) not
only deals with wages but also with other conditions of
service and thus in a real emergency may practically
supersede all industrial adjudication. The power conferred
is thus of a far-reaching nature in the field of industrial
relations and may have the effect of disturbing all such
relations for the duration of a real emergency. The
question therefore arises whether in the absence of express
words in sub-r. (4) to indicate that the power is to be
exercised purely on the subjective satisfaction of
Government we should hold that an order under sub-r. (4)
call be passed purely on such subjective satisfaction. When
the effect of orders passed under sub-r. (4) can be so far-
reaching and so wide in its impact we would be loath to hold
that such wide and far-reaching powers were conferred on
Government to be exercised. purely on its subjective
satisfaction without even consulting the interests concerned
specially when the language is not plain and unambiguous and
there is no indication in the sub-rule itself that. the
power can be exercised purely on the subjective satisfaction
of Government. We are not unmindful of the fact that the
power under sub-r. (4) has to be exercised in a real
emergency. But the ambit of the power therein is analogous
to the power of industrial courts. The power under sub-r.
(4) may be exercised instead of referring industrial
disputes relating to wages and other condition., of service
to industrial tribunals. We are also not unmindful of the
fact that in a real emergency, decisions may have to be
taken quickly and delay inevitable in the elaborate
procedure provided for resolution of industrial disputes by
industrial tribunals may not be desirable. Even so in the
absence of express words in sub-r. (4) to show that the
power thereunder depends for its exercise entirely on the
subjective satisfaction of Government we would not be
506
prepared to hold that that is what sub-r. (4) indicates. We
have already said that the effect of sub-r. (4) is to
disturb settled industrial relations whether based on
contracts or on industrial awards, and it seems to us that
before Government exercises the power under sub-r. (4) it
should even in a real emergency consult the interests
concerned before taking action thereunder.
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It is not for us to indicate in detail what should be the
procedure adopted by Government in a real emergency to
consult the interests concerned, as that is a matter for
Government to evolve for itself. But we may indicate that
some kind of public notice to the particular interest,;
should be given indicating what the Government intends to do
and inviting representations from those interests and if
necessary calling for data from them and also giving an oral
hearing to the representatives of the interests concerned.
This does not mean that notice should be given to individual
employers or employees. Nor do we mean to say that this
consultation should be of the same amplitude as adjudication
by a quasi-judicial tribunal. It is not necessary that oral
evidence should lie taken and witnesses should be called,
examined and cross-exanamed and documents produced or called
for and arguments heard ’is if the matter was being tried by
a quasi-judicial tribunal. But .some kind of collection of
data with the help of the interests concemed and some kind
of hearing or conference with the interests concerned seems
to us to be the barest minimum necessary to enable
Government to exercise the power conferred under sub-r. (4),
for we have no doubt that this sub-rule does not intend that
Government should have power of the far-reaching nature
conferred there tinder purely on its subjective
satisfaction. Further if such consultation is necessary
under sub-r. (4) and it seems to us that it is necessary-
before an order can be passed thereunder, it would in our
opinion be more convenient to hold consultation employment
by employment, for it may be that needs of every employment
may not be the same. After such consultation and
consideration of data collected by Government itself as well
as supplied by the interests concerned, it would be open to
Government to pass an order under sub-r. (4) indicating that
it has considered the data and consulted the interests
concerned. We have indicated this procedure merely to
illustrate what we say; but it is for Government to evolve
such procedure as it considers will meet the needs of sub-r.
(4). Once it is clear, as we have no doubt that it is so,
that the order under sub-rule (4) is not to be passed merely
on the subjective satisfaction of Government, it seems to us
that even in a real emergency this consultative procedure
should not take long and should be over within a few weeks.
It has been urged on behalf of the appellant that though the
appellant’s contention has been that the power under sub-r.
(4) can be exercised purely on the subjective satisfaction
of Government,
507
in effect the Government had consulted the interests
concerned before issuing the two notifications under sub-r.
(4) and therefore the two notifications should be upheld.
In this connection, an affidavit was filed on behalf of the
appellant in this Court and the contention that there was
consultation is based on that affidavit. The facts stated
in that affidavit are these. Soon after the Chinese
invasion in 1962, the Labour Minister Assam called an
emergent meeting at Gauhati of the representatives of
employers and workmen. 49 persons including about 17
representatives of employers attended the meeting.
Unanimous resolutions were passed exhorting the employers
and workmen to keep industrial peace and it was resolved to
set up a Sub-Committee for the purpose of working out
details of a machinery to be set up for adjustment of D.A.
to neutralise any rise in the cost of living. A Sub-
Committee consisting of three officials, three
representatives of employers and three of workmen was set
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up. This Sub-Committee submitted its report in July 1964
and evolved a formula to neutralise any rise in working
class cost of living of workers getting a salary of Rs.
400/- or less. Complaints were received from Industrial
Workers Unions of Tinsukia and Kamrup Districts in 1963 and
1964 about rise in prices of essential commodities and
requests were made to Government to grant substantial
emergency allowance. Consequently after consultation with
the Director of Statistics on the rise in the cost of
living, the Government on a consideration of all this
material and the report of the Sub-Committee decided to
issue the notifications in questions ordering payment of ad
hoc cost of living allowance of Rs. 10/- per mensem to all
workers drawing upto Rs. 400/- per mensem whether monthly
rated or daily rated. This affidavit has been challenged on
behalf of the respondents; but accepting it as correct, it
still in our opinion fall& short of the consultation
necessary under sub-r. (4). As we have said already, the
consultation must be with the interests concerned including
employers and employees and should be employment by
employment, for needs of every employment may not be the
same. All that we may accept after considering the
affidavit filed on behalf of the appellant is that the
notifications in question were not issued entirely
arbitrarily but we do not think that the consultation to
which reference was made in the affidavit of the appellant
was enough for the purpose of sub-r. (4). We are therefore
of opinion that the two notifications should be struck down
and we do so, but for reasons different from those which
commended themselves to the High Court. We therefore partly
allow the appeals and uphold the notification under sub-r.
(1) except to veneer mills. The order of the High Court
striking down the notifications under sub-rule (4) is
upheld, though for different reasons. In the circumstances
we order parties to bear their own costs in all the appeals.
V.P.S. Appeals allowed
in part.,
508