Full Judgment Text
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PETITIONER:
M/s. BHIKUSA YAMASA KAHATRIYA
Vs.
RESPONDENT:
SANGAMNER AKOLA TALUKA BIDIKAMGAR UNION
DATE OF JUDGMENT:
10/10/1962
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
SINHA, BHUVNESHWAR P.(CJ)
GAJENDRAGADKAR, P.B.
WANCHOO, K.N.
GUPTA, K.C. DAS
CITATION:
1963 AIR 806 1963 SCR Supl. (1) 524
CITATOR INFO :
R 1963 SC1591 (11)
R 1964 SC1260 (6)
F 1970 SC2042 (16)
R 1973 SC2634 (3,6)
R 1974 SC1044 (6)
ACT:
Minimum Wages-Statute delegating power to Government to fix
wages-If confers arbitrary and uncontrolled powers
Notification fixing minimum wages-Validity of-Notification
dates April 19, 1956, of Government of Bombay-Minimum Wages
Act, 1948(XI of 1948), s.3(3)(iv).
HEADNOTE:
Section 3(1) of the Minimum Wages Act, 1948, authorise the
appropriate. Government to fix rates of minimum was payable
to employees in the scheduled employments. Section 3(3)
(iv) authorises the government, in fixing or revising mini-
mum wages, to fix different minimum rates for differ
localities. By Notification dated April 19, 1955, the
Government of Bombay revised the minimum rates of wages for
work employed in the bidi manufactories and fixed for
localities Sangamner and Akola and places within seven miles
of the respective Municipal limits, a minimum rate of Rs.
2/2/-
525
making 1000 bidis. The appellant contended that s. 3 (3)
(iv) violated Arts. 14 and 19(1) (i) of the Constitution as
it conferred uncontrolled powers on the government enabling
it to discriminate between employers of different localities
which also affected their business, that the notification
also violated Art. 14 and that the notification was not
validly made as the Advisory Board had no representatives
of the employers on it.
Held, that s. 3 (3) (iv) of the Act was valid and that the
Notification was issued after compliance with the statutory
Provisions.
Section 3(3)(iv) does not delegate any arbitrary or un-
controlled power to the Government’ Having regard to the
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diversity of Conditions prevailing and the number of
industries covered by the Act, the Legislature could not fix
uniform rates for all the, industries and for all the
localities. Working out of the detailed, provisions
relating to minimum rates had from the very nature of the
legislation to be delegated to some authority By entrusting
to the State Government power to fix minimum wages for any
locality or localities the legislature has not striped
itself of its essential legislative power but has merely
entrusted ;in incidental function to it. The policy and the
principles for guidance in the exercise of the power are
inherent in the purpose and object of the Act, and in the
machinery erected for assisting the Government in marking
equitable adjustment of the conflicting claims of labour and
employers. If a statute does not make a classification
itself but leaves it to a responsible body to make it and
sets out the policy or principles for its guidance, the
statute cannot be struck down as infringing Art. 14.
Kathi Raning Rawat v. State of Saurashtra, [1952] S.C.R.
435, relied on.
The notification was promulgated after making a full enquiry
under the Act. The fixation of rates of wages and the
revision thereof was done after considering the reports of
the committees and sub-committees appointed in that behalf
and of the Advisory Committees and Board, and after giving
full consideration to the representations made by the
employers likely to be affected thereby. The fact that
there was no representative of the employers in the Advisory
Board did not affect the validity of the Notification as
there was no such statutory requirement. Besides the
function of the Board is merely to co-ordinate the work of
the Committees and subcommittees and to a vise Government
generally in the matter
526
of fixing and revising the minimum rates ; its function is
not to make any detailed investigation in’ any particular
industry.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 546 of 1961.
Appeal from the judgment and decree dated June 27 and 30,
1958 and November 28, 1958, of the Bombay High Court in
Special Civil Application No. 67 of 1958.
G. S. Pathak, J. B. Dadachanji, O. C. Mathur and Ravinder
Narain, for the appellants.
D. S. Nargolkar and K. R. Chaudhuri, for respondent No. 1.
S. B. Naik and K. R. Chaudhuri, for respondent No. 2.
N. S. Bindra and P. D. Menon, for respondents Nos. 3 and
4.
1962. October, 10. The judgment of the Court, was
delivered by
SHAH, J.-.M/s. Bhikusa Yamasa Kahatriya and M/s. Bastiram
Narayandas (owners of bidi factories at Sangamner in the
District of Ahmednagar) hereinafter referred to collectively
as ’the appellants’, moved the High Court of judicature at
Bombay under Art. 226 of the Constitution praying for a writ
or direction declaring s. 3(3)(iv) of the Minimum Wages Act,
1948, (XI of 1948) and a Notification dated April 19, 1955,
issued by the Government of Bombay in exercise of the
authority vested under the Act (,ultra vires, void and
illegal" because the said enactment and the Notification.
infringed the guarantee’. of equal protection of the laws,
and affected the. rights of the appellants to carry on their
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lawful business, and for an order declaring that the
appellants were not bound by the said Notification and were
not
527
liable to pay wages to the Bidi workers at the rates
prescribed by the Notification, and for consequential relief
The High Court dismissed the petition, for in their view, s.
3(3)(iv) of the Minimum Wages Act and the Notification dated
April 19, 1955, fixing minimum rates of wages for bidi
workers in the localities of Sangamner and Akola did not
violate the fundamental rights guaranteed by the
Constitution and that the State of Bombay had "in issuing
the Notification revising the rates of minimum wages
followed the procedure prescribed in that behalf by the
Act." Against the order, with certificate of fitness granted
by the High Court under Art. 133(1)(c) of the Constitution,
this appeal is preferred by the appellants.
The Minimum Wages Act, 1948, was enacted by the Parliament
to provide for fixing minimum rates of wages in certain
employments. The validity of the Act as it stood in the
year 1956 falls to be determined in this appeal. We will
therefore refer to the Act as it stood in the year 1956, and
will omit reference to amendments in the Act by enactments
since that year. Sub-section (1) of s. 3 authorises the
appropriate Government in the manner prescribed to fix
minimum wages payable to employees employed in employments
specified in parts I and II of the Schedule, for the whole
State or for a part of the State or for any specified class
or classes of such employment in the whole State or parts
thereof and to review at such intervals as the State thinks
fit the minimum rates of wages so fixed and to revise the
rates. By sub-S. (3) the State is authorised in fixing or
revising minimum rates of wages to fix-(a) different minimum
rates of wages for (i) different scheduled employments ;
(ii) different classes of work in the same scheduled
employment; (iii) adults, adolescents, children and
apprentices; (iv) different localities. Section 5 sub-s.
(1) prescribes the procedure for fixing and revising the
rates of Minimum wages,
528
It is provided in so far as it is material that "in fixing
minimum rates of wages in respect of any scheduled
employment x x x x x x x x or in revising minimum rates of
wages the appropriate Government shall either-(a) appoint as
many committees and subcommittees 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 informa-
tion of per-sons likely to be affected thereby and specify a
date, x x x x x x x x on which the proposals will be taken
into consideration." By sub-s. (2) the appropriate
Government is authorised to fix the minimum rates of wages
in respect of each scheduled employment after considering
the’ advice of the committee or sub-committee or the
representations received from persons interested. Section 6
empowers the appropriate Government to appoint Advisory
Committees and subcommittees to enquire into the conditions
prevailing in any scheduled, employment and to advice the
appropriate Government in making such revision in respect of
such employment. Section 7 authorises the appropriate
Government to appoint Advisory Boards’ for the purpose of
coordinating the work of the committees and Advisory
Committee and for advising the appropriate Government
generally in the matter of fixing and revising the minimum
rates of wages. Section 9 prescribes the composition of
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committees and Advisory Boards. Committees, Advisory
Committees and the Advisory Boards are to be nominated by
the appropriate Government and are to consist of persons
representing employers and employees in the scheduled
employments who are to be equal in number and independent
persons not exceeding one-third of its total number of
members. Section 10 prescribes the procedure to be followed
in the revision of minimum rates of wages. By s. 20 power
is conferred upon the appropriate Government to appoint
regional ’authorities to hear and decide claims ’arising out
of payment
529
of less than the minimum rates of wages to employees
employed in the localities. Section 26 empowers the
appropriate Government to direct that the provisions of the
Act or any of them shall not apply to all or any class of
employees employed in any scheduled employment or to any
locality where there is carried on a scheduled employment.
By s. 27 the appropriate Government is authorised to add to
either Part of the Schedule any employment in respect of
which the appropriate Government thinks that minimum rates
of wages should be fixed under the Act. "Employment in any
tobacco (including bidi-making) manufactory" is one of the
items in Part I of the Schedule to the Act.
In exercise of the powers conferred by s. 5 the Government
of Bombay by Resolution dated February 27, 1951, appointed a
Committee to hold enquiry and to advise the Government in
fixing minimum rates of wages in respect of employment "in
any tobacco (including Bidi-making) manufactory". The
Committee consisted of three employers’ representatives, an
equal number of employees’ representatives and an
independent chairman. On July 3, 1952, the Government of
Bombay appointed, in exercise of powers conferred under s.
6, a Committee to assist it in considering the question of
"revision of zoning" (and rates of wages, if necessary) made
under orders regarding minimum wages for employment in any
tobacco manufactory. An Advisory Board was also constituted
by Resolution dated October 3, 1953. The Committee invited
suggestions from the Labour Unions of employees in the
tobacco industry and also of the employers and submitted
their report to the Government of Bombay. A notification
operative from March 31, 1952, was thereafter issued in
exercise of the powers conferred by s. 3 (1) (a) of the
Minimum Wages Act by the Government of Bombay
after,considering the advice of the Committee, fixing
minimum rates of’ wages payable to workers
530
employed in different industries in Zones I to IV specified
in the Schedule appended thereto. Districts of Thana,
Ahmednagar, East Khandesh, West Khandesh Nasik, Poona,
Satara North, Kolaba and Dangs in the State of Bombay were
included in Zone III. In Zone III in the Bidi making
industry for making 1000 bidis a minimum rate "of Rs. 2/-
(without leaves)" was prescribed. By Notification dated
June 30, 1955, issued under s. 26(2) the Government of
Bombay directed that for a period of three months with
effect from July 1, 1955, the provisions of the Act shall
not apply to bidi makers employed in the bidi-making
industry in the localities of Sangamner and Akola and places
within seven miles of their respective Municipal limits.
This exemption was extended from time to time, till the end
of December 1956, but by Notification dated August 22, 1956,
the Government of Bombay cancelled the exemption with effect
from September 1, 1956, in respect of Sangamner and Akola
and places within seven miles of their respective Municipal
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limits. In the mean time by Notification dated April 19,
1955, the Government of Bombay after considering the report
of the Advisory Committee and after consultation with the
Advisory Board, revised the minimum rates of wages of
workers employed in the Bidi manufactories and fixed for the
localities of Sangamner and Akola and places within seven
miles of their respective Municipal limits, a minimum rate
of Rs. 2/2/- for making 1000 bidis. After the exemption
granted under s. 26(2) was cancelled workers employed in the
Bidi industry in Sangamner and Akola and places within seven
miles of their respective Municipal limits demanded wages at
the revised rates. The employers having failed to satisfy
their demands, applications were preferred by the workers
under s. 20 of the Minimum Wages Act to the Regional
authority appointed in that behalf. By order dated November
6, 1957, the authority under the Minimum Wages Act rejected
the contentions raised by the employers and held that the
workers
531
were entitled to wages, at the rates fixed by the Government
under the notification dated April. 19, 1955, as from
January 1, 1957, but not before that date. Aggrieved by
that decision the appellants applied to the High Court under
Art. 226 of the Constitution for writs declaring that the
provisions of s. 3(3) (iv) of the Minimum Wages Act which
authorised fixation of varying rates of minimum wages for
different localities, and the Notification dated April 19
1955, were discriminatory and void, for they infringed the
equal protection clause of the Constitution. The High Court
dismissed the petition. In this appeal counsel for the
appellants contends :-
(1) that s. 3(3)(iv) of the Minimum Wages
Act, 1948 confers arbitrary and uncontrolled
power upon the State Government to fix rates
of minimum wages in respect of certain
localities, and thereby enables the Government
to discriminate contrary to the equal
protection clause of the Constitution against
the employers carrying on their business in
those localities, and on that account the
exercise of the power so conferred also
amounts to imposing unreasonable restrictions
upon their right to carry on their business
under Art. 19(1) (f) of the Constitution;
(2) that the Notification dated April 19,
1955, is discriminatory and violates the
fundamental right of equality before law
guaranteed by the Constitution; and
(3) that ss. 5, 6, 7 and 9 were contravened
because the Committees were not validly cons-
tituted there being in the Advisory Board no
representatives of employers in the Bidi
industry, and therefore there was no lawful
revision of minimum wages under the
Notification dated April 19, 1955.
532
Section 3 of the Minimum Wages Act was impugned in this
Court on the plea that it infringed Art. 19(1)(f) of the
Constitution in Bijay Cotton Mills Ltd. v. The State of
Ajmer (1). Mukherjea, J., speaking for the Court in that
case observed that having regard to the scheme of the Act
and the purpose for which it was enacted, namely to secure
to workmen in the enjoyment of minimum wages and to protect
against exploitation it was necessary to put restraints upon
their freedom of contract and such restraints could not be
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regarded in any sense as unreasonable. In a recent
judgment of this Court in U. Unichoyi v. The State of
Kerala(2) it was observed that ""what the Minimum Wages Act
purports to achieve is to prevent exploitation of labour and
for that purpose authorises the appropriate Government to
take steps to prescribe minimum rates of wages in the
scheduled industries. In an under-developed country which
faces the problem of unemployment on a very large scale it
is not unlikely that labour may offer to work even on star-
vation wages. The policy of the Act is to prevent the
employment of such sweated labour in the interest of
general public and so in prescribing the minimum wage rates
the capacity of the employer need not be considered. What
is being prescribed is minimum wage rates which a welfare
State assumes every employer must pay before he employs
labour".
The plea that fixation of minimum rates by Notification
under s. 3 violates the fundamental freedom under Art.
19(1)(f) is in view of the decision of this Court not open
to be canvassed by the appellants. But it is urged that in
enacting s. 3(3)(iv) which conferred upon the State
authority to fix varying minimum rates of wages for
different localities, the Legislature gave no indication of
the matters to be taken into account for that purpose, and
entrusted the State with arbitrary and uncontrolled power,
exercise whereof was likely to result in discriminatory
treatment between different employers carrying on the
(1) [1955] 1 S. C. R. 752.
(2) [1962] 1 S. C. R. 946.
533
same business in contiguous localities. The Act undoubtedly
confers authority upon the appropriate Government to issue
notifications fixing and revising rates of minimum wages in
respect of diverse industries for the whole or part of the
State. Having regard to the diversity of conditions
prevailing and the number of industries covered by the Act
the Legislature could obviously not fix uniform minimum
rates of wages for all scheduled industries, or for all
localities in respect of individual industries. Working out
of detailed provisions relating to the minimum rates, the
advisability of fixing rates for different industries,
ascertainment of localities in which they were to be
applied, and the time when they were to be effective, and
fixation of time rate., piece rate, or guaranteed time rate
had from the very nature of the legislation to be delegated
to some authority. In considering the minimum rates of
wages for a locality diverse factors such as, basic rates of
wage., special allowance, economic climate of the locality,
necessity to prevent exploitation having regard to the
absence of Organisation amongst the workers, general
economic condition of the industrial development in the
area, adequacy of wages paid, and earnings in other
comparable employments and similar other matters would have
to be taken into account. Manifestly the Legislature could
not ascertain whether it was expedient to fix minimum wages
in respect of each scheduled industry for the entire
territory or for a part thereof and whether uniform or
varying rates should be fixed having regard to the
conditions prevailing in different localities. Again of
necessity different rates had to be fixed in respect of the
work performed by adults, adolescents, children and
apprentices.
The object and policy of the Legislature appear on the face
of the Act. The object of the Act is to prevent
exploitation of the workers, and for that purpose it aims at
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fixation of minimum wages which the employers must pay. The
Legislature undoubtedly
534
intended to apply the Act to those industries or localities
in which by reason of causes such as unorganized labour
or absence of machinery for regulation of wages, the wages
paid to workers were, in the light of the general level of
wages, and subsistence level, inadequate. Conditions of
labour vary,in different industries and from locality to
locality, and the expediency of fixing minimum wages, and
the’ rates thereof’ depends largely upon, diverse factors
which in their very nature are variable and can properly be
ascertained by the Government which is in charge of the
administration of the State. It is to carry out effectively
the purpose of this enactment that power has been given to
the appropriate Government to decide, with reference to
local conditions, whether it is desirable that minimum wages
should be fixed in regard to any scheduled trade or
industry, in any locality, and if it be deemed expedient to
do so, the rates at which the wages should be fixed in
respect of that industry in the locality. By entrusting
authority to the appropriate Government to determine the
minimum wages for any industry in any locality or generally,
the legislature has not divested itself of its authority,
nor has it conferred uncontrolled power upon the State
Government. The power conferred is subordinate and
accessory for carrying out the purpose and the policy of the
Act. By entrusting to the State Government power to fix
minimum wage for, any particular locality or localities the
Legislature-..has not stripped itself of its essential
legislative- power but has merely entrusted what is merely
an incidental function of making a distinction having regard
to the special circumstances prevailing in different
localities in the matter of fixation of rates of minimum
wages. Power to fix minimum rates of wages does not by
itself invest the appropriate Government with authority to
make unlawful discrimination between employers in different
industries. Selective application of a law according to the
exigencies where it is sanctioned, ordinarily results in
permissible
535
classification. Article 14 forbids class legislation but
does not prohibit reasonable classification. for the purpose
of legislation. If the basis of classification is indicated
expressly or by implication, by delegating the function of
working out the details of a scheme, according to the
objects of the statute and principles inherent therein, to a
body which has the means to do so at its command, the
legislation will not the exposed to the attack of
unconstitutionality. In other words, even if the statute
itself does not make a classification for the purpose of
applying its provisions, and leaves it to a responsible body
to select and classify persons, objects, transactions,
localities or things for special treatment, and sets out the
policy or principles for its guidance in the exercise of its
,authority in the matter of selection, the statute will not
be struck down as infringing Art. 14 of the Constitution.
This principle is well recognised: see Kathi Raning Rawat v.
The State of Saurashtra(1).
Let us now examine whether this Legislature has conferred an
uncontrolled or arbitrary power upon the Government without
laying down any municipal for its guidance in selecting
different rates for different localities in the fixation or
revision of the minimum rates of wages. The Legislature has
by s. 4 laid down what the minimum rated of wages is to
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consist of, and by s. 5 it has prescribed the procedure for
fixing minimum wages. An alternative procedure is provided
for making enquiry for fixing and revising the minimum
wages. The State Government may either appoint a Committee
or sub.committee to hold enquiry and advise it in respect of
such fixation or revision, as the case may be, or by
Notification in the Official Gazette publish its proposals
for the information of persons likely to be affected
thereby. After receiving the report of the Committee or the
representations made in respect of the proposals from
persons affected thereby the State Government may fix the
minimum rate; of wages.
(1) [1952] S. C. R. 435.
536
Advisory Committees to enquire into conditions prevailing in
any scheduled employment and to advise the Government in
making the revision, and an Advisory Board for the purpose
of co-ordinating the Work of committees appointed under ss.
5 and 6 and for advising the Government generally in the
matter of fixing and revising minimum rates of wages have
also to be constituted. Sections 5, 6 and 7 set up an
elaborate machinery for collecting and sifting materials,
for the purpose of ascertaining conditions prevailing in an
industry for fixing minimum wages and for revising the same.
By setting up this machinery the statute contemplated a full
investigation in the presence of interested persons by the
Committee and the Advisory Board presided over by
independent persons before it resolved upon either the
fixation of rates or revision of rates.- The charge that the
Legislature had entrusted to the Government an arbitrary and
uncontrolled power cannot reasonably be sustained. It is
true that power is conferred upon the Government to
determine the appropriate rates of minimum wages for
industries generally or in any locality. But the policy and
principles for the guidance in the exercise of this power
are inherent in the purpose and object of the Act, and in
the machinery erected for assisting the Government in making
an equitable adjustment of the conflicting claims of labour
and the employers. There is therefore no delegation of any
arbitrary and uncontrolled power to the Government.
The impugned Notification was promulgated after making a
full enquiry under the Act. It was after due consideration
of the report of the Committee that the rates were revised.
It appears that representations were made by the Nasik Bidi
manufacturers who were bracketed with the Bidi manufacturers
of Sangamner and Akola in Zone III in fixing rates,
requesting the Government to cancel the revised minimum wage
rate fixed under Notification
537
dated April 19, 1955, and to restore the old rate. Pending
consideration of these representations the Government which
had originally directed that the revised minimum rates of
wages were to come into operation from July 1, 1955,
postponed implementation of the revised rates, and directed
that exemption from the application of the Act may continue
for a further period of three months. Their representations
dated June 17, 1955, and September 9, 1955, referred to the
general economic depression, reduced buying capacity of
consumers, fall in the cost of living index, competition in
the market and the organised condition of labour, inability
of the industry to pay higher wages and the additional
economic burden such as increased trends of taxation. The
economic advantages sanctioned under the Factories Act and
bonus compensation, facilities under the Industrial Disputes
Act were also pressed into service to induce the Government
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not to bring into force the revised rates of minimum wages.
Fixation of rates of wages and the revision thereof were
manifestly preceded by a detailed survey and enquiry and the
rates were brought into force after full consideration of
the representations which were made by a section of the
employers concerned. It would be difficult in the
circumstances to hold that the Notification dated April 19,
1955, which fixed different rates of minimum wages for
different localities, was not based on intelligent
differential having a rational nexus with the object of the
Act, and thereby violated Art. 14. It is obvious that no
uncontrolled or arbitrary power was exercised by the
Government : it exercised power to fix the rates of minimum
wages after considering the reports of the Committees and
sub-committees appointed in that behalf and of the Advisory
Committees and Advisory Board formed for coordinating the
work of the Committees, and revised them after giving full
consideration to the representations made by the employers
likely to be affected thereby.
538
In regard to the contention that the.Notification dated
April 19, 1955, was invalid because in the for nation of
the Committees under s. 5 and the Advisory Committees under
s. 6 and the Advisory Board under s. 7, provisions of the
Act were contravened, no arguments were advanced and none
could be advanced. It appears that the Committees were
formed consistently with the provisions of s. 9 under the
chairmanship of a retired officer with considerable
judicial experience and the Advisory Committee appointed
wider s. 6 also consisted of three representatives of
employers and three representatives of employees presided
over by a chairman having experience of industrial disputes.
It was urged, however, that in the Advisory Board there was
no representative of the employers in the Bidi industry.
But the function of the Advisory Board under s. 7 is to co-
ordinate the work of the Committees and sub-committees under
ss. 5 and 6 and to advise the Government generally in the
matter of fixing and revising the minimum rates. The
function of the Board is not to make any detailed
investigation in any particular industry. That
investigation is contemplated to be made by the Committee
and the Advisory Committee. The Act does not require that
the Board should consist of representatives of any
particular scheduled industry. The Board is to consist of
representatives of employers and employees in the scheduled
employments, and such a Board was constituted. The Board
examined the reports of the Committee and the Advisory
Committee and even called upon the employers in the Bidi
industry to submit their representations. The Advisory
Board considered the representations and made its unanimous
recommendation on which the Notification dated April 19,
1955, was issued.
On a careful examination of the various provisions of the
Act and the machinery set up thereby we hold that s.
3(3)(iv) does not contravene Art. 19(1)(f)
539
of the Constitution nor does it infringe the equal pro-
tection clause of the Constitution; we also hold that the
Notification dated April 19, 1,955 did not violate Art. 14
of the Constitution. We are further of the view that the
constitution of the Committees and the Advisory Board did
not contravene the statutory provisions in that behalf
prescribed by the Legislature.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
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