1. Challenge to the validity of Section 3(3)(iv) of the Minimum Wages Act, 1948 and a notification fixing minimum wages for specific localities. (Para 1 , 3 )
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1962 Supreme(SC) 320
SUPREME COURT OF INDIA
10th October 1962.
B.P. SINHA, C.J.I., P.B. GAJENDRAGADKAR, K.N. WANCHOO, K.C. DAS GUPTA AND J.C. SHAH, JJ.
M/s Bhikusa Yamasa Kshatriya and another, Appellants
Versus
Sangamner Akola Taluka Bidi Kamgar Union and others. Respondents.
Civil Appeal No. 546 of 1961.
Advocates appeared
Mr. G. S. Pathak, Senior Advocate (M/s J. B. Dadachanji, O. C. Mathur and Ravinder Narain, Advocates of M/s. J. B. Dadachanji and Co. with him), for Appellants; M/s. D. S. Nargolkar and K. R. Chaudhuri, Advocates, for Respondent No. 1; M/s. S. B. Naik and K. R. Chaudhuri, Advocates, for Respondent No. 2; Mr. N. S. Bindra, Senior Advocate (Mr. P. D. Menon, Advocate, with him), for Respondents Nos. 3 and 4.
Advocates:
D.S.NARGOLKAR, G.S.PATHAK, J.B.DADACHAN, K.R.CHAUDHARY, N.S.BINDRA, O.C.MATHUR, P.D.MENON, Ravindra Narayan, S.B.Naik
D.S.NARGOLKAR, G.S.PATHAK, J.B.DADACHAN, K.R.CHAUDHARY, N.S.BINDRA, O.C.MATHUR, P.D.MENON, Ravindra Narayan, S.B.Naik
The power to fix different minimum wages for different localities under the Minimum Wages Act is a valid delegation of power and a reasonable classification under Article 14, aimed at preventing labour exploitation, and does not violate the fundamental right to carry on business.
Headnote:(A) Minimum Wages Act, 1948 - Section 3(3)(iv) - Constitution of India - Articles 14 and 19(1)(f) - Fixation of minimum wages for different localities - Validity of delegation of power - Reasonable classification - Prevention of exploitation of labour - The power to fix varying minimum rates of wages for different localities does not confer arbitrary or uncontrolled power upon the State Government, as the policy and principles for guidance are inherent in the object of the Act and the machinery provided for fixation and revision of wages. (Paras 4, 5, 6)
(B) Constitution of India - Article 14 - Reasonable classification vs. Class legislation - Selective application of a law according to exigencies, where sanctioned, results in permissible classification. 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, the legislation will not be exposed to the attack of unconstitutionality. (Para 5)
(C) Minimum Wages Act, 1948 - Sections 5, 6, 7, and 9 - Constitution of Committees and Advisory Boards - The function of the Advisory Board is to coordinate the work of committees and advise the Government generally in the matter of fixing and revising minimum rates; the Act does not require that the Board should consist of representatives of any particular scheduled industry. (Para 8)
Facts of the case:
Owners of factories in a specific industry challenged the validity of a notification fixing minimum wages for workers in certain localities. They contended that the statutory provision allowing different rates for different localities and the resulting notification were discriminatory, violated the right to equality and the right to carry on business, and that the advisory bodies were improperly constituted because the Advisory Board lacked representatives from their specific industry.
Findings of Court:
The court found that the Act aims to prevent the exploitation of labour and that the capacity of the employer is not a relevant consideration when prescribing minimum wages. The delegation of power to fix rates for different localities is an incidental function based on variable local conditions and is guided by the statutory machinery for enquiry. The notification was issued after following the prescribed procedure, including detailed surveys and consideration of representations.
Issues: Whether the provision allowing different minimum wages for different localities confers arbitrary power violating Articles 14 and 19(1)(f) of the Constitution, and whether the notification fixing such wages was discriminatory or issued by improperly constituted bodies.
Ratio Decidendi: The court ruled that fixing minimum wages is a reasonable restriction on the freedom of contract to prevent exploitation. The power to vary rates by locality is not arbitrary because it is guided by the Act's objective and the mandatory procedure of enquiry through committees and boards. Such classification is based on an intelligent differentia having a rational nexus with the object of the Act and is therefore not discriminatory under Article 14.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether Section 3(3)(iv) and the notification confer arbitrary power, violate equal protection and the right to carry on business, or result from improperly constituted committees. (Para 3 )
3. The Act's objective to prevent exploitation justifies restraints on contract; delegation of power to fix local rates is reasonable given diverse industrial conditions. (Para 4 , 5 , 6 , 7 )
4. Reasonable classification for fixing minimum wages based on local conditions does not violate equal protection if guided by the statute's objective to prevent exploitation. (Para 5 , 6 )
5. Appeal dismissed; Section 3(3)(iv) and the notification held valid. (Para 9 , 10 )
6. Does fixing different minimum wages for different localities violate the right to equality?
No. Article 14 prohibits class legislation but allows reasonable classification. Fixing varying rates based on local conditions to prevent exploitation is a permissible classification with a rational nexus to the Act's object. (Para 5 , 7 )
7. Does the Minimum Wages Act violate the fundamental right to carry on business?
No. Restraints on the freedom of contract to ensure minimum wages and prevent exploitation of labour are not considered unreasonable restrictions on the right to carry on business. (Para 4 )
8. Is the power to fix minimum wages for specific localities an uncontrolled delegation of legislative power?
No. The power is subordinate and accessory to the Act's purpose. The statute provides an elaborate machinery of committees and boards to ensure investigations, preventing arbitrary exercise of power. (Para 5 , 6 )
9. Must an Advisory Board under the Minimum Wages Act include representatives from every specific scheduled industry?
No. The Advisory Board's role is to coordinate and advise generally. Detailed industry-specific investigations are conducted by Committees and Advisory Committees, not the Board itself. (Para 8 )
Judgment
SHAH, J.: M/s. Bhikusa Yamsa Kshatriya and M/s. Bastiram Narayandas (owner 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, Xl 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 lawful business, and for an order declaring that the appellants were not bound by the said Notification and were not 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 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.
2. 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-sec. (1) prescribes the procedure for fixing and revising the rates of minimum wages. 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 or in revising minimum rates of wages 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, x xxxx 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 representation received from persons interested. Section 6 empowers the appropriate Government to appoint Advisory Committees and sub-committees to enquire into the conditions prevailing in any scheduled employment and to advise 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 co-ordinating the work of t
