Full Judgment Text
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PETITIONER:
CHANDRA BHAVAN BOARDING AND LODGING, BANGALORE
Vs.
RESPONDENT:
THE STATE OF MYSORE AND ANR.
DATE OF JUDGMENT:
29/09/1969
BENCH:
HEGDE, K.S.
BENCH:
HEGDE, K.S.
SIKRI, S.M.
MITTER, G.K.
RAY, A.N.
REDDY, P. JAGANMOHAN
CITATION:
1970 AIR 2042 1970 SCR (2) 600
1970 SCC (1) 43
CITATOR INFO :
R 1976 SC 490 (197)
R 1984 SC 326 (8)
D 1987 SC 71 (15)
R 1988 SC 686 (12)
ACT:
Minimum Wages Act, 1948 ss. 5(1)--Validity of--Power of
Government to fix minimum Wages either by method in s.
5(1)(a) or s. 5(1) (b) whether unguided-Power of
Government to fix minimum wages whether restrictive of trade
and business-Whether a quasi-judicial power requiring
compliance with rules of natural justice-Fixing different
rates of wages for different industries and zones whether
valid-Valuation of food supplied to workmen.
HEADNOTE:
Section 5(1) of the Minimum Wages Act, 1948 provides for the
fixation and revision of minimum wages in the scheduled
industries by the appropriate Government. Under s. 5(1)(a)
such fixation or revision is to be made after enquiry by a
committee or committees appointed for the purpose. Under s,
5(1)(b) the appropriate Government may by notification
publish its proposals in this regard and take its decision
after considering the representations of those affected. if
the Government adopts the latter method for revision of
wages, it has also before doing so to consult the Advisory
Board constituted under the Act. The State Government of
Mysore after following the method prescribed in s. 5(1) (b)
and after consulting the Advisory Board constituted under
s., 7 of the Act by notification in S.O. 1038 dated 1st
June, 1967 fixed the minimum wages for different classes of
employees in residential hostels and eating houses in the
State of Mysore. The appellant filed a writ petition in the
High Court questioning the validity of the notification and
failing there, appealed to this Court. The notification was
also challenged by a writ petition under Art. 32 of the
Constitution. It was urged on behalf of the appellant and
petitioners that the power given to the Government to choose
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between the methods provided in ss. 5(1) (a) and 5(1)(b) was
arbitrary and unguided; that the arbitrary power given to
the Central and State Governments to fix minimum wages was
violative of freedom of trade guaranteed in Art. 19(1)(f) of
the Constitution; that the State Government had not observed
the principles of natural justice in exercising its quasi-
judicial power of fixing minimum wages; and that it was
incumbent on Government to appoint a committee under S.
5(1)(a). The fixation of different rates of wages for
different industries and zones in the State was also
attacked. It was finally submitted that the valuation of
the food supplied to the workmen was without authority of
law and at an unreasonably low figure.
HELD : Procedural inequality if real and substantial is
within. the vice of Art 14. But if a power is given to an
authority to have recourse to different procedures under
different circumstances, that power cannot be considered an
arbitrary power. The power under s. 5(1) is given to the
State Government and not to any petty official. The State
Government can be, trusted to exercise that power to further
the purposes of the Act. [608 H-609 B]
Art. 43 of the Constitution as well ’as the Geneva
Convention of 1928 enjoin the State to secure to all workers
conditions of work ensuring a decent standard of life and
full enjoyment of leisure and social
601
and cultural opportunities. The fixing of the minimum wages
is !lust the first step in that direction. The concept of
minimum wage is likelY to undergo a change with the growth
of our economy and with the change in the standard of
living. It is not a static concept Its concomitants must
necessarily increase with the progress of the Society. It
is absolutely impossible for the legislature to undertake
the task of fixing minimum wages in respect of an industry
much less in respect of an employment. That process must
necessarily be left to the Government. [609 G-H; 610 A]
In respect of s. 5(1) the legislative policy has been laid
down with sufficient clearness. The Government is merely
charged with the duty of implementing that policy. Whether
under s. 5(1)(a) or under s. 5(1)(b) the procedure is only
for gathering the necessary information. The Government is
not bound by the advice of the committee appointed under s.
5(1)(a). Discretion to select one of the two procedures
prescribed for collecting the data is advisedly left to the
Government. The powers conferred on the Government cannot
be considered as either unguided or arbitrary. In the
present case the Government had before it the question of
fixing minimum wages for residential hotels and eating
houses since 1960 and therefore, it was reasonable to assume
that it had adequate material on the basis of which it could
formulate its proposals. Before publishing its proposals,
the Government bad consulted the advisory committee
constituted under s. 7. Under those circumstances it could
not be held that either the power conferred under s. 5(1)
was an arbitrary power or that the same had been arbitrarily
exercised. [610 B-G]
(ii) There was nothing to show that the minimum wages fixed
were basically wrong so as to adversely affect the industry
or even a small unit therein. If they do, then the industry
or the unit as the case may be has no right to exist.
Freedom of trade does not mean freedom to exploit. The
provisions of the Constitution are not erected as barriers’
to progress. It is a fallacy to think that in our
Constitution there are only rights and no duties There is no
conflict between Part III and Part IV of the Constitution
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which are complementary and supplemental to each other. The
hopes and aspirations aroused by the Constitution will be
the minimum needs of the lowest of our citizens are not met.
based on Art. 19(1) (f) raised in the present case could not
therefore succeed. [612 B-E]
(iii) The principles of natural justice are not embodied
rules. What particular rules of natural justice, if any,
should apply to a given case must depend to a great extent
on the facts and circumstances of that the framework of the
law under which the enquiry is held and the constitution of
the tribunal or body of persons appointed for the purpose.
Taking into consideration the provisions of the Minimum
Wages Act, the objective behind it, the purposes intended to
be achieved and the high authority on which power had been
conferred there could be no doubt that the procedure adopted
was adequate and effective. There was equally no doubt that
reasonable opportunity had been given to all the concerned
parties to represent their case. It could not be accepted
that the impugned order was vitiated because of the
Government’s failure to constitute a committee under s. 5(1)
(a). [612 H-613 C]
There was also no substance in the contention that the
Government was not competent to enhance the rate mentioned
in the proposals published. If it had power to reduce those
rates ’as desired by the employers, it necessarily followed
that it had power to enhance them, There was no merit in the
contention that the Government must go on publishing pro-
posals after proposals until a stage is reached where no
change whatsoever is necessary to be made in the last
proposal made. [613 C]
602
(iv) The contention that the Government has no power to fix
different minimum wages for different industries or in
different localities is no more available in view of this
Court’s decisions in M/s Bhaikusa Yamasa Kahatriya’s case.
The fixation of minimum wages depends on the prevailing
economic conditions, the cost of living in a place, the
nature of the work to be performed and the conditions in
which the work is performed. The contention that it was
impermissible for the Government to divide the State into
several zones was opposed to s. 3(3) as well as to the
scheme of the Act. [613 E]
On the basis of the material on record it could not be said
that the various zones had no rational basis. In
considering the Zones the relevant consideration is the cost
of living in a locality and not the cost of living
index.[613 F]
(v) On the facts of the case the contention relating to the
value of the food that may be supplied to an employee was
not merely petty but misconcived. The supply of meals to
workers, was only an option given and not a duty imposed on
the employer. Therefore the procedure prescribed in r. 21
of the rules framed under the Act was inapplicable to the
case. The supply of food was an amenity and the rule
applicable was therefore r. 22(2)(v).
[Question whether fixation of minimum wages is a quasi-
judicial act left open].
Suraj Mall Mohta and Co. v. A. V. Visvanatha Sastri and Anr.
[1955] 1 S.CR. 448; Unnichoyi and Ors v. State of Kerala
[1962] 1, S.C.R. 946; The Edward Mills Co. Ltd, Beawar and
Ors. v. The State of Ajmer and Anr. [1955] 1, S.C.R. 735;
Bijay Cotton Mills Ltd. v. The State of Ajmer [1955] 1
S.C.R. 752, A. K. Kraipak v. Union of India [1970] 1 S.C.R.
457; M/s Bhaikusa Yamasa Kahatriya v. Sangamner Akola Taluka
Bidi Kumgar Union [1963] Supp. 1 S.C.R. 524; referred to,
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JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1617 of
1967.
Appeal from the judgment and order dated September 18, 1967
of the Mysore High Court in Writ Petition No. 1417 of
1967 and Writ Petition No. 207 of 1967.
Petition under Art. 32 of the Constitution for the
enforcement of the fundamental rights.
A. K. Sen and R. Gopalakrishnan, for the appellant (in C.
A. No. 1 617 of 1967).
S. T. Desai, S. N. Prasad and R. B. Datar, for the
petitioners in W.P. No. 207 of 1967).
Niren De, Attorney-General, S. S. Javali and S. P. Nayar,
for respondents Nos. 1 and 2 (C.A. No. 1617 of 1967) and
respondent No. 1 (in W.P. No. 207 of 1967).
S. S. Khanduja, for respondent No. 2 (in W.P. No. 207 of
1967).
R. Gopalakrishnan, for the intervener (in W.P. No. 207 of
1967).
603
The Judgment of the Court was delivered by
Hegde, J. The above mentioned appeal by certificate as well
as the petition under Art. 32 of the Constitution raise
identical questions of law for decision. In both these
proceedings the validity of the notification issued by the
Government of Mysore in S.O. 1038 dated the 1st June 1967
fixing the minimum wages of different classes of employees
in residential hotels and eating houses the State of Mysore,
under the provisions of the Minimum Wages Act, 1948 (to be
hereinafter referred to as the Act) is called into question.
The Civil Appeal arises from the decision of the High Court
of Mysore rejecting the various contentions advanced on
behalf of some of the hotel owners questioning the validity
of the impugned notification. The writ petition is filed by
the All Mysore Hotels Association, Bangalore and the Madras
Woodlands Hotel raising those very contentions.
The impugned notification was challenged on several grounds
before the High Court but in this Court only some of those
grounds were pressed. The grounds urged in this Court are:
(1) Section 5(1) of the Act is violative of Art. 14 of the
Constitution as it confers unguided and uncontrolled
discretion on the Government to follow either of the
alternative procedures prescribed in cls. (a) and (b) of
that sub-section.
(2) The provisions of the Act are unconstitutional as they
confer arbitrary power without guidance to the Central and
the State Governments concerned to fix minimum rates of
wages and thus interfere with the freedom of trade
guaranteed under Art. 19(1)(g) of our Constitution.
(3) It was incumbent on the Government to appoint a com-
mittee under s. 5 (1) (a) of the Act to inquire into and
advise it in the matter of fixing minimum wages. Its
failure to do so has resulted in fixing minimum wages
arbitrarily.
(4) Fixing of minimum wages under the provisions of the Act
being a quasi-judicial act, the Government’s failure to
observe, the principles of natural justice has vitiated its
decision.
(5) It was not permissible for the Government to fix
different minimum wages in different industries.
(6) The division of the State into zones and fixing
different rates of minimum wages for different zones was
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impermissible under the Act.
(7) The division of the State into zones was not done on
any rational basis and,
L3Sup. CI./70-8
604
(8) The valuation of the food to be provided to the
employees is unreasonably low and the same was clone without
the authority of law.
The Act came to be enacted to give effect to the resolutions
passed by the minimum wages fixing Machinery Convention held
at Geneva in 1928. The relevant resolutions of the
Convention are embodied in Art. 223 to 228 of the
International Labour Code. The object of these resolutions
as stated in Art. 224 was to fix minimum wages in industries
"in which no arrangements exist for the effective regulation
of wages by collective agreements or otherwise and wages
are, exceptionally low". The central legislature enacted
the Act in 1948 and it came into force on March 15, 1948.
The long title to the Act says that it is an Act for fixing
minimum rates of wages for certain employments. The
preamble to the Act says that "it is expedient to provide
for fixing minimum rates of wages in certain employments".
Section 2 defines certain terms. Section 3 empowers the
appropriate government which expression is defined in s.
2(b) to fix the minimum rates of wages payable to the
employees employed in an employment specified in Part I or
in Part II of the Sch. and in any employment added to either
part in exercise of the powers granted under s. 27 of the
Act. Cl. (b) of S. 3 (2) empowers the appropriate
Government to review at such intervals as it may think fit,
such intervals not exceeding five years, minimum rates of
wages so fixed and revise the minimum rates, if necessary.
Sub-s. (3) of that section stipulates that in fixing or
revising minimum rates of wages under that section different
minimum rates of wages may be fixed in different scheduled
employments for different classes of work in the same
scheduled employment for adults, adolescents, children and
apprentices and for different localities. Section 4
prescribes the different methods in which the minimum rates
of wages can be fixed. Section 5 is important for our pre-
sent purpose. It reads thus :
"(1) In fixing minimum rates of wages in
respect of any scheduled employment for the
first time under this Act or in revising
minimum rates of wages so fixed, the
appropriate Government shall either-
(a) appoint as many committees and sub-
committees as it considers necessary to hold
enquiries and advise it in respect of such
fixation or revision, as the case may be, or
(b) by notification in the Official Gazette,
publish its proposals for the information of
persons likely to be affected thereby and
specify a date, not less than two months from
the date of the notification on which the
proposals will be taken into consideration.
60 5
(2) After considering the advice of the
committee or committees appointed under clause
(a) of sub-section (1) or as the case may be,
all representations received by it before the
date specified in the notification under
clause (b) of that sub-section, the
appropriate Government shall, by notification
in the Official Gazette, fix or, as the case
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may be, revise the minimum rates of wages in
respect of each scheduled employment, and
unless such notification otherwise provides,
it shall come into force on the expiry of
three months from the date of its issue :
Provided that where the appropriate Government
proposes to revise the minimum rates of wages
by the mode specified in clause (b) of sub-
section (1), the appropriate Government shall
consult the Advisory Board also."
Section 7 says that for the purpose of coordinating the work
of committees and sub-committees appointed under s. 5 and
for advising it generally in the matter of fixing and
revising the rates of wages, the appropriate Government
should appoint an Advisory Board. Section 8 provides for
the appointment of a Central Advisory Board. Section 9
prescribes the composition of the various committees and
sub-committees under s. 5 and the Advisory Boards under ss.
7 and 8. Section 1 1 authorises the appropriate Government
to fix wages in kind under certain circumstances and to fix
its value in terms of money. Section 12 stipulates that the
employer shall pay to every employee engaged in a scheduled
employment the minimum rates of wages fixed by the
notification. The other provisions of the Act except s. 27
are not relevant for our present purpose. Section 27 em-
powers the appropriate Government to add to either part of
the Sch. any employment in respect of which it is of opinion
that the minimum rates of wages should be fixed under the
Act.
The Sch. to the Act as it originally stood did not include
residential hotels and eating houses but they were brought
into part I of the Sch. by the State Government on June 18,
1959 in exercise of its powers under s. 27.
The State Government of Mysore fixed the minimum rates of
wages to different categories of employees in residential
hotels and eating houses situate within the municipal limits
of Bangalore, Mysore, Hubli, Mangalore and Belgaum as well
as in the area of the Kolar Gold Fields Sanitary Board as
per its notification published on June 16, 1960. That
notification was quashed by the High Court of Mysore on
November 10, 1961, at the instance of some of the
proprietors of residential hotels and eating houses in
proceedings under Art. 226 of the Constitution on the sole
ground
606
that as the notification in question applied only to certain
parts of the State and not to the whole of it, it was
invalid. A fresh notification under s. 5(1)(b) of the Act
containing certain proposals was issued by the State
Government for fixing minimum wages for different classes of
employees in residential hotels and eating houses, on
December 9, 1964 but no further action was taken on the
basis of that notification. On October 28, 1966, the State
Government after consulting the Mysore State Minimum Wages
Advisory Board published in the Official Gazette fresh
proposals under s. 5 (1 ) (b) for fixing minimum wages for
different categories of employees in residential hotels and
eating houses in the State. The parties affected were
called upon to submit their representations regarding those
proposals. Various representations from the interested
parties were received. Thereafter the Minister for Labour
summoned a meeting of the interested parties on April 27,
1967 for considering those proposals. That meeting was
attended by the representatives of the employers as well as
employees. It was also attended by the representatives of
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various hotel owners’ associations in the State. At the
meeting the employers ’representatives pleaded that the
minimum wages proposed to be fixed are excessive but the
representatives of the employees’ asserted that the proposed
rates are low and that they should be enhanced. After
considering the written as well as the oral representations
made by the concerned parties, the impugned notification was
issued. The minimum wages fixed under that notification is
somewhat higher than that proposed.
We have earlier referred to the circumstances under which
the Act came to be enacted as well as the objectives
intended to be achieved by the Act. In that context we may
also refer to a passage in the report of the Committee on
Fair Wages appointed by the Central Government. In
paragraph 8 of that report, it is observed :
"The demand for the fixation of the minimum
wage arose, in the first instance, out of the
clamour for the eradication of the evils of
"sweating". Thus in the early days, the
operation of the minimum wage legislation was
confined to employments which paid unduly low
wages. There has since been increasing demand
for the fixation of minimum wages so as to
cover even non-sweated industries,
particularly those in which labour is
unorganised or is only weakly organised. The
International Convention of 1928 prescribes
the setting up of minimum wage-fixing
machinery in industries in which "no ar-
rangements exist for the effective regulation
of wages by collective agreement or otherwise
and wages are exceptionally low". The Minimum
Wages Act passed by the
607
Indian Legislature last year was found
necessary on both these grounds.
In foreign countries, particularly Australia,
Newzealand, the United States of America and
Canada, where the national wealth is high, the
living wage forms the primary basis of the
minimum wage. In these countries there is not
much distinction between the two. The I.L.O.
monograph on the Minimum Wage-Fixing Machinery
contains the following passage on the subject
:
"The bases specified in various laws include
the living wage basis, and that of fixing
minimum wages in any trade in relation to the
wages paid to workers in the same trades in
other districts or in relation to the wages
paid to workers of similar grade in other
trades. There is a third important basis,
namely, the capacity of the individual
industry or of industry in general, which,
though sometimes not expressly mentioned in
minimum wage laws, must always be taken into
account in practice............ A close
relation exists between them. As a basis for
wage-fixing it would be valueless to make an
estimate of a living wage beyond the capacity
of industry to pay. Here capacity of industry
as a whole, and not of each separate industry
or branch is to be understood."
From this analysis of the bases of fixing of
the minimum wage, it will be seen that, as a
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rule, though the living wage is the target, it
has to be tempered, even in advanced
countries, by other considerations,
particularly the general level of wages in
other industries and the capacity of industry
to pay. This view has been accepted by the
Bombay Textile Labour Inquiry Committee which
says that "the living wage basis affords an
absolute external standard for the
determination of the minimum" and that "where
a living wage criterion has been used in the
giving of an award or the fixing of a wage,
the decision has always been tempered by other
considerations of a practical character."
In India, however, the level of the national
income is so low at present that it is
generally accepted that the country cannot
afford to prescribe by law a minimum wage
which would correspond to the concept of the
living wage as described in the preceding
paragraphs. What then should be the level of
minimum wages which can be sustained by the
present stage of the country’s economy ? Most
employers and some Provincial Governments
consider that the minimum wage can at pre-
608
sent be only a bare subsistence wage. In
fact, even one important all-India
organization of employees has suggested that
"a minimum wage is that wage which is
sufficient to cover the bare physical needs of
a worker and his family". Many others,
however, who have replied to our
questionnaire, consider that a minimum wage
should also provide for some other essential
requirements such as a minimum of education,
medical facilities and other amenities. We
consider that a minimum wage must provide not
merely for the bare sustenance of life but for
the preservation of the efficiency of the
worker. For this purpose, the, minimum wage
must also provide for some measure of
education, medical requirements and
amenities."
It is now convenient to examine the various contentions ad-
vanced on behalf of the appellant and the petitioners. It
was contended that S. 5(1) of the Act is violative of Art.
14 of the Constitution as it confers unguided and
uncontrolled discretion to the Government to follow either
of the two alternative procedures prescribed in that section
in the matter of fixing minimum wages. It was urged that
under cl. (a) of S. 5(1) the appropriate Government is
required to appoint a committee representing all interests
to hold a detailed enquiry regarding the concerned
employment before advising the Government in the matter of
fixing minimum wages but under cl. (b) of S. 5(1) all that
the appropriate Government need do is to publish by
notification in the Official Gazette its proposals for the
information of the persons likely to be affected by those
proposals and specify a. date not less than two months from
the date of the notification on which the proposals will be
taken into consideration. It was urged that if the
procedure prescribed in S. 5(1) (a) is adopted it would be
advantageous to the employers because in the committee to be
appointed, there will be the representatiVes of the
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employers who know the difficulties of the employers and
hence are in a position to acquaint their colleagues about
the same but if the procedure prescribed in S. 5(1)(b) is
followed, the affected parties can only submit their written
representations followed by some nominal oral representation
in a crowded meeting. While dealing with that topic,
assistance was sought from the rule laid down by this Court
in Surak Mall Mohta and Co. v. A. V. Visvanatha Sastri and
anr. (1) and the other decisions of this Court reiterating
that rule. It is true that this Court has firmly ruled that
the procedural inequality, if real and substantial is also
within the vice of Art. 14. But then, before a power can be
held to be bad the same should be an unguided and
unregulated one. But if a power is given to an authority to
have recourse to different pro-
(1) [1955] 1 S. C. R. 448.
609
cedures under different circumstances, that power cannot be
considered as an arbitrary power. It must also be
remembered that power under S. 5(1) is given to the State
Government and not to any petty official. The State
Government can be trusted to exercise that power to further
the purposes of the Act. It is not the law that the
guidance for the exercise of a power should be gatherable
from one of the provisions in the Act. It can be gathered
from the circumstances that led to the enactment of the law
in question i.e. the mischief that was intended to be,
remedied, the preamble to the Act or even from the scheme of
the Act.
We have earlier noticed the circumstances under which the
Act came to be enacted. Its main object is to prevent
sweated labour as well as exploitation of unorganised
labour. It proceeds on the basis that it is the duty of the
State to see that at least minimum wages are paid to the
employees irrespective of the capacity of the industry or
unit to pay the same. The mandate of Art. 43 of the
Constitution is that the State should endeavour to secure by
suitable legislation or economic Organisation or in any
other way, to all workers, agricultural, industrial or
otherwise, work, a living wage, conditions of work ensuring
a decent standard of life and full enjoyment of liesure and
social and cultural opportunities. The fixing of minimum
wages is just the first step in that direction. In course
of time the State has to- take many more steps to implement
that mandate. As seen earlier that resolutions of the
Geneva Convention of 1928, which had been accepted by this
country called upon the covenanting States to fix minimum
wages for the employees in employments where the labour is
unorganized or where the wages paid are low. Minimum wage
does not mean wage just sufficient for bare sustenance. At
present the conception of a minimum wage is a wage which is
somewhat intermediate to a wage which is just sufficient for
bare sustenance and a fair wage. That concept includes not
only the wage sufficient to meet the bare sustenance of an
employee and his family, it also includes expenses necessary
for his other primary needs such as medical expenses,
expenses to meet some education for his children, in some
cases transport charges etc.-see U. Unnichoyi and Ors. v.
State of Kerala(1). The concept of minimum wage is likely
to undergo a change with the growth of our economy, and with
the change in the standard of living. It is not a static
concept. Its concomitants must necessarily increase with
the progress of the society. It is likely to differ, from
place to place and from industry to industry. That is clear
from the provisions of the Act itself and is inherent in the
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very concept. That being the case it is absolutely
impossible for the legislature to undertake the task of fix-
ing minimum wages in respect of any industry much less in
respect of an employment. That process must necessarily be
left to the
(1) [1962] 1, SC.R. 946.
610
Government. Before minimum wages in any employment can be
fixed it will be necessary to collect considerable data.
That cannot be done by the legislature. It can be best done
by the Government. The legislature has determined the
legislative policy and formulated the same as a binding rule
of conduct. The legislative policy is enumerated with
sufficient clearness. The Government is merely charged with
the duty of implementing that policy. There is no basis for
saying that the legislature had abdicated any of its legis-
lative functions. The legislature has prescribed two
different procedures for collecting the necessary data, one
contained in s.5(1)(a) and the other in s. 5(1)(b). In
either case it is merely a procedure for gathering the
necessary information. The Government is not bound by the
advice given by the committee appointed under s. 5(1)(a).
Discretion to select one of the two procedures prescribed
for collecting the data is advisedly left to the Government.
In the case of a particular employment, the Government may
have sufficient data in its possession to enable it to
formulate proposals under s. 5 ( 1)(b). Therefore it may
not be necessary for it to constitute a committee to tender
advice to it but in the case of another employment it may
not be in possession of sufficient data. Therefore it might
be necessary for it to constitute a committee to collect the
data and tender its advice. If the Government is satisfied
that it has enough material before it to enable it to
proceed under s. 5 (1) (b) it can very well do so. Which
procedure should be adopted in any particular employment
depends on the nature of the employment and the information
the Government has in its possession about that employment.
Hence the powers conferred on the Government cannot be
considered as either unguided or arbitrary. In the, instant
case as seen earlier the question of fixing wages for the
various categories of employees in residential hotels and
eating houses was before the Government from 1960 and the
Government had taken various steps in that regard. It is
reasonable to assume that by the time the Government
published the proposals in pursuance of which the impugned
notification was issued it had before it adequate material
on the basis of which it could formulate its proposals.
Before publishing those proposals, the Government had
consulted the advisory committee constituted under s. 7.
Under those circumstances we are unable to accede to the
contention that either the power conferred under s. 5(1) is
an arbitrary power or that the same had been arbitrarily
exercised.
The validity of some of the provisions in the Act including
s. 5 came up for consideration by this Court in The Edward
Mills Co. Ltd., Beawar and Ors. v. The State of Ajmer and
Anr. (1) and in Bijay Cotton Mills Ltd. v. The State of
Ajmer(2). In the former case, it was observed that the
legislative policy is apparent on
(1). [1955] 1 S.C.R. 735.
(2). [1955] 1 S.C.R. 752,
611
the face of the enactment. What it aims at is the statutory
fixation of the minimum wages with a view to obviate the
chances of exploitation of labour. It is to carry out the
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purpose of the enactment that power has been given to the
appropriate Government to decide with reference to local
conditions whether it is desirable that minimum wage should
be fixed in regard to a particular trade or industry. In
the latter case, the validity of s. 5 was assailed on the
ground that it is violative of Art. 19 (1) (g). That
challenge was negatived by this Court. Dealing with s. 5
(1) this what the Court observed therein:
"As regards the procedure for the fixing of
minimum wages, the "appropriate Government"
has undoubtedly been given very large powers.
But it has to take into consideration, before
fixing wages, the advice of the committee if
one is appointed, or the representations on
his proposals made by persons who are likely
to be affected thereby. Consultation with
advisory bodies has been made obligatory on
all occasions of revision of minimum wages,
and section 8 of the Act provides for the
appointment of a Central Advisory Board for
the purpose of advising the Central as well as
the State Government both in the matter of
fixing and revision of minimum wages. Such
Central Advisory body is to act also as a
coordinating agent for coordinating the work
of the different advisory bodies. In the
committees or the advisory bodies the
employers and the employees have an equal
number of representatives and there are
certain independent members besides them who
are expected to take a fair and impartial view
of the matter. These provisions, in our
opinion, constitute an adequate safeguard
against any hasty or capricious decision by
the "appropriate Government". In suitable
cases the "appropriate Government" has also
been given the power of granting exemptions
from the operation of the provisions of this
Act."
It is true that in those cases the validity of s. 5 was not
challenged as being ultra vires Art. 14 of the Constitution.
But the observations quoted above afford an answer to the
plea that the power granted to the Government is an
arbitrary power.
It was complained that an examination of the various
proposals made by the Government ever since 1960 would
clearly show that the Government was out to fix fair wages
and not minimum wages. From stage to stage it has gone on
proposing higher and higher wages and under the impugned
notification the wages fixed are higher than those proposed.
We were told that if the prescribed
612
rates are sustained, the hotel industry would be crippled
and tile smaller units in that industry will be driven out
of the trade.
Our attention was not drawn to any material on record to
show that the minimum wages fixed are basically wrong.
Prima facie they appear to be reasonable. We are not
convinced that the rates prescribed would adversely affect
the industry of even a small unit therein. If they do, then
the industry or the unit as the case may be has no right to
exist. Freedom of trade does not mean freedom to exploit.
The provisions of the Constitution are not erected as the
barriers to progress. They provide a plan for orderly
progress towards the social order contemplated by the
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preamble to the Constitution. They do not permit any kind
of slavery, social, economic or political. It is a fallacy
to think that under our Constitution there are only rights
and no duties. While rights conferred under Part III are
fundamental, the directives given under Part IV are
fundamental in the governance of the country. We see no
conflict on the whole between the provisions contained in
Part III and Part IV. They are complementary and supplemen-
tary to each other. The provisions of Part IV enable the
legislatures and the Government to impose various duties on
the citizens. The provisions therein are deliberately made
elastic because the duties to be imposed on the citizens
depend on the extent to which the directive principles are
implemented. The mandate of the Constitution is to build a
welfare, society in which justice social, economical and
political shall inform all institutions of our national
life. The hopes and aspirations aroused by the Constitution
will be belied if the minimum needs of the lowest of our
citizens are not met.
It was urged on behalf of the hotel owners that the power
conferred to fix the minimum wage on the appropriate
Government under S. 5(1) is a quasi-judicial power and in
exercising that power, it was incumbent on the appropriate
Government to observe the principles of natural justice.
The Government having failed to observe those principles,
the fixation of wages made is liable to be struck down. It
is unnecessary for our present purpose to go into the
question whether the power given under the Act to fix mini-
mum wages is a quasi-judicial power or an administrative
power. As observed by this Court in A. K. Kraipak v. Union
of India(1), the dividing line between an administrative
power and quasi-judicial power is quite thin and is being
gradually obliterated. It is further observed therein that
principles of natural justice apply to the exercise of the
administrative powers as well. But those principles are not
embodied rules. What particular rule of natural justice, if
any, should apply to a given case must depend to a
(1) [1970] 1 S. C. 457.
613
great extent on the facts and circumstances of that case,
the framework of the law under which the enquiry is held and
the constitution of the tribunal or body of persons
appointed for the purpose.
Taking into consideration the provisions of the Act, the
objective behind the Act, the purposes intended to be
achieved and the high authority on whom the power is
conferred, we have no doubt that the procedure adopted was
adequate and effective. We have equally no doubt that
reasonable opportunity had been given to all the concerned
parties to represent their case. We are unable to agree
that the impugned order is vitiated because of the Govern-
ment’s failure to constitute a committee under s. 5(1)(a).
We see no substance in the contention that the Government is
not competent to enhance the rate of wages mentioned in the
proposals published. If it has power to reduce those rates,
as desired by the employers, it necessarily follows that it
has power to enhance them. There is no merit in the
contention that the Government must go on publishing
proposals after proposals until a stage is reached where no
change whatsoever is necessary to be made in the last
proposal made.
The contention that the Government has no power to fix
different minimum wages for different industries or in
different localities is no more available in view of the
decision of this Court in M/s. Bhaikusa Yamasa Kahatriya v.
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Sangamner Akola Taluka Bidi Kamgar Union(1). The fixation
of minimum wages depend on the prevailing economic
conditions, the cost of living in a place, the nature of the
work to be performed and the conditions in which the work is
performed. The contention that it was impermissible for the
Government to divide the State into several zones is opposed
to s. 3(3) as well as to the scheme of the Act.
On the basis of the material before us we are unable to say
that the various zones had not been made on any rational
basis. The Government has given good reasons in support of
the steps taken by it. Bangalore is the capital of the
State and Mangalore is a major port. Therefore they may
stand on a different footing. In matter like the
preparation of zones we have to trust the State Government
unless it is shown that collateral considerations have
influenced its decision. No such plea was taken. The
argument based on cost of living index showing that cost of
living index was higher in several other towns in the State
than Bangalore or Mangalore is not a well founded argument.
The cost of living is one thing, cost of living index is
another. What is relevant is the former and not the latter.
The latter depends on the base year, which is not the same
in all the towns and the prices of certain selected goods in
each of the towns concerned in the base year and thereafter
which again is likely to differ from town to town.
(1) [1953] Supp. 1 S.C.R. 524.
614
The contention relating to the value of the food that may be
supplied to the employee is not merely petty, it is
misconceived as well. For example the employers contend
that a minimum wage of Rs. 80/- per month in Bangalore and
Mangalore for a cleaner is excessive at the same time they
assert that the computation of the value of the food to be
supplied to him at Rs. 40/- per month is not adequate. They
fail to see the obvious contradictions in those pleas. In
fixing minimum wages, a family of three members has to be
taken into consideration. Further the food is not the only
item taken into consideration. ’We have earlier referred to
the other components of a minimum wage. Therefore if the
value of the food supplied has to be increased, minimum
wages also will have to be increased. Further the impugned
notification does not authorise under S. 11(2) the payment
of any portion of wages in kind. It merely says that if the
employer supplies free meals to any employee, he may deduct
the sum mentioned in the notification. It is only an option
given and not a duty imposed. Therefore the procedure
prescribed in rule 21 of the rules framed under the Act is
inapplicable to the facts of the case before us. The
relevant rule is rule 22 (2) (v) i.e. the valuation of an
amenity. We fail to see why the supplying of food is not an
amenity.
In the result the appeal and the writ petition fail. They
are dismissed with costs. Hearing fee one set. The owners
of residential hotels and eating houses are permitted to pay
the arrears of minimum wages accrued up till now within six
months from this date subject to the condition they pay
interest on those arrears from the due dates till payment at
6% per annum.
R.K.P.S. Appeal and petition
dismissed.
615