K.K. Mathew, J.
1. There are four petitioners in this case. Petitioners 1 to 3 are said to represent the owners of tile factories in Feroke and Quilon areas and the 4th petitioner is M/s. Harrisons and Crossfield Ltd. The ownen of the tile factories, who are members of the 2nd petitioner, are mentioned in Paragraph 3, and the owners of the tile factories who are members of the 3rd petitioner, are mentioned in Paragraph 4 of the first affidavit filed in support of the writ petition. The petition has been filed for calling for the records in the matter of notification (Ext. P-l) dated 16th February 1965 issued by the 1st respondent under the provisions of Section 3(1)(b) of the Minimum Wages Act, 1948 (Central Act II of 1948) hereinafter referred to as the Act, read with Section 5(2) thereof, published in the Kerala Gazette dated 16-3-1965, and for quashing the notification. By Ext. P-l notification, the 1st respondent has revised the rates of minimum wages payable to workmen employed in the tile industry in the State. The scheme of the notification is to divide the State into three regions, namely the Quilon and Feroke area consisting of Quilon, Trivandrum, Kozhikode and Cannanore Districts; tha Alwaye area consisting of Emakulam, Alleppey and Kottayam Districts; and the Trichur area consisting of Trichur and Palghat Districts. Prior to Ext. P-l notification, the minimum wages in the title industry in the State were fixed by the notification dated 12th May 1958. Petitioners state that in respect of certain tile factories in the Feroke area the prevailing minimum wage rate has been fixed by the Industrial Tribunal, Ernakulam, in I. D. No. 17 of 1957. The Minimum wage notification of 1958 also divided the State into three areas, namely, the Quilon and Feroke area consisting of the Districts of Quilon, Kozhikode and Cannanore; the Alwaye area consisting of the Districts of Ernakulum, and Alleppey; and Trichur area consisting of the Districts of Trichur, Palghat, and Kottayam. The minimum wages fixed under that notification varied from area to area for the various categories of workers, but the dearness allowance fixed was uniform, namely, at the rate of one paisa for every two points of the costs of living index for each area in excess of 200 points. The managements of some of the tile factories in the Trichur District closed down their factories pleading inability to pay the minmum wages as fixed in that notification. Apparently to solve the deadlock, the dispute relating to the non-employment of the workers was referred for adjudication to the IndustrialTribunal Ernakulam, in I. D. No. 45 of 1998. The Industrial Tribunal, Ernakulam, passed an interim award on 27-6-1958 whereby the managements were ordered to pay 20 paise more than the pre-notification wages. While the adjudication was pending, an agreement was arrived at between the parties on 20-8-1960, on the basis of which a final award was passed on 26-9-1960. According to the terms of the said settlement, dear-ness allowance was fixed at one paisa for every two points in the cost of living index in excess of 200 points upto 400 points and this rate was to prevail irrespective of the rise upto 475 points'. It was also provided that for any rise from 476 points till 500 points, the dearness allowance was to be paid at the rate of 2 paise for every five points and if the cost of living index went beyond 500 points, the rate of clearness allowance will be determined by mutual consultation. In June 1962, another agreement was made between the employers and the representatives of workmen in the Trichur area, whereby workers were paid dearness allowance at the rate of one paise for every two points in the cost of living index in excess of 200 points upto 470 points, fixing the next slab at 495 points so that the workmen will be paid additional clearness allowance only if the cost of living index went beyond 495 points, and if and when the cost of riving index figures went beyond 495 points, the workmen will be paid one paisa for every point over 470 points. The rates of basic wages fixed by the Minimum Wage Notification of 1958 were also accepted. The managements of certain factories in the Feroke area filed petitions before the Supreme Court under Article 32 of the Constitution, challenging the validity of the Minimum Wages Act as well as the Notification. The judgment in the case is reported in Unichoyi v. State of Kerala 1961-1 Lab LJ 681: (AIR 1962 SC 12). The validity of the Act and the notification was upheld by the Supreme Court. In dealing with what transpired in the Trichur area after the publication of the notification, the Supreme Court observed.
'It is to be regretted that the respondent, acting through its Labour Minister appears to have assisted in bringing about a settlement contrary to the terms of the Act. If the respondent thought that a settlement was necessary in respect of Trichur factories, it may consider the question of withdrawing the Notification in respect of that area and in fairness may also reconsider the problem in respect of all other areas and decide whether any modification in the notification is required. It is not appropriate that the respondent should be associated, though indirectly, with tbe settlement which is in breach of the provisions of the Act. We would, therefore, suggest that the respondent should seriously consider this aspect of the matter and should not hesitate to do what may appear to be just, reasonable and fair on an objective consideration of the whole problem'.
It was apparently in pursuance of the above- said observations of the Supreme Court thatthe 1st respondent appointed a Committee under Section 5(1)(a) of the Minimum Wages Act 1948, on 16-12-1961. The Government in their letter dated 7-12-1962, informed the Chairman of the Committee that the Committee had been constituted in pursuance of the observations of the Supreme Court and that even though the reference to the Committee is for revision of the existing rates of wages, the revision to be effected will have to remove the existing anomalies. It was after considering the report of the above-said Committee that Government published Ext. P-l notification.
2. Petitioners submit that Ext. P-l notifiation is bad mainly on two grounds : (1) that in making the regional classification, relevant considerations having nexus to the object of the classification have been completely ignored and irrelevant factors alone were taken into account, and therefore, the notification offends Article 14 of the Constitution, and (2) that the provision in the notification superseding all existing awards fixing the wage rates is contrary to Section 3(2-A) of the Act.
3. Petitioners counsel submitted that there was no intelligible differentia for making the region-wise classification for fixing the minimum wages in the tile industry, and that if the reasons relied on for making the classification are those mentioned in the report of the Committee, Ext. R-1, then they are absolutely irrelevant and have no nexus to the object sought to be achieved by the Act. It may be recalled at this moment that Ext. R-2, the report of the Minimum Wages Committee, on the basis of which the notification of 1958 was issued, also recommended the division of the State into three regions and different rates of wages in these regions. Counsel submitted that although in the past the tile industry in the Feroke area and to a certain extent in the Quilon area depended on foreign markets, they can no longer depend on such markets. Relying upon the affidavit filed in support of the petition, counsel said that exports from Feroke area to places like Ceylon, Singapore and Malaya have declined. He also submitted that the capacity of the industry to pay is an irrelevant factor for fixing the minimum rate of wages and the Committee in having taken into account only irrelevant criteria like tbe capacity of the employers in the different regions to pay, for making the classification, the classification is bad. In this connection, counsel referred to the ruling in 1961-1-LLJ 631 at P 680: (AIR 1962 SC 12 at pp 16-37) to show that the capacity of the industry to pay is immaterial. Gajendragadkar C. J. observed as follows in the case:--
'We have already seen what the Act purports to achieve is to prevent exploitation of labour and for that purpose authorizes 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 starvation 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'.
In Standard Vacuum Refning Co. v. Its workmen 1961-1 Lab LJ 227 at p. 2-32: (AIR 1961 SC 805 at pp. 899-900). Gajendragadkar C. J. observed as follows:---
'It is because of this socio-economic aspect of the wage-structure that Industrial adjudication postulates that no employer can engage industrial labour unless he pays what may be regarded as the minimum basic wage. If he cannot pay such a wage, he has no right to engage labour, and no justification for carrying on his industry; in other words, in employment of sweated Labour which would he easily available to the employer in all undeveloped and even under-developed countries is ruled out oil the ground that the principle of supply and demand has lost its validity in the matter of employment of human labour, and that it is the duty of the society and the Welfare State to assure to every workman engaged in industrial operations the payment of what in the context of the times appears to be the basic minimum wage. This position is now universally recognised'.
Counsel argued that the only relevant factor to be taken into account for fixing minimum wages is the costs of living of the workers in the area.
4. The scheme of the Act may he summarised as follows :-- The Act was passed in 1948 because k was thought expedient to provide for fixing minimum rates of wages in certain employments. Under Section 3 the appropriate Government is empowered to fix minimum rates of wages in regard to employments as therein specified and review the same at such intervals specified by Section 3(1). Section 3(3) contemplates that in fixing or refixing minimum rates of wages different minimum rates of wages may be fixed for different scheduled employments, adults, adolescents, children and apprentices, and different localities. Under Section 4 any minimum rate of wages fixed or revised may, inter alia, consist of a basic rate of wages and a special allowance at a rate to be adjusted, or a basic rate of wages with or without the cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rates where so authorised or an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any. Section 5 prescribes the procedure for fixing and revising minimum wages. It is under this section that a committee was appointed by the respondent in the present case. Section 9 makes provision for the composition of the committee. Such committees have to consist of equal number of representatives of employers and employees and of independent persons not exceeding one third of the total number ot members. Section 12(1)imposes on the employer the obligation to pay the minimum rates of wages prescribed underthe Act. Section 22 provides for penalties for offences and Section 22A makes a general provision for punishment of offences not otherwise expressly provided for. Under Section 25 any contract or agreement whether made before or after the commencement of this Act which affects an employee's right to a minimum rate of wages prescribed under the Act shall be null and void so far. as it purports to reduce the said minimum rate of wages. Section 27 empowers the appropriate Government, after giving notification as prescribed, to add to either part of the schedule any employment in respect of which it is of opinion that minimum rates should be fixed, and thereupon the schedule shall be deemed to be amended accordingly in regard to that State.
5. Counsel submitted that although geographical classification is permissible and is contemplated by the provisions of Section 3 of the Act, in order to make such a classification, considerations having relation to the object sought to be achieved by the Act alone can be taken into account, and the only relevant factor in making the classification is the difference in the cost of living of the workers in the various regions, and not the capacity of the employers in the regions to pay the minimum wages. The principle on the basis of which a classification is to be made is no longer in dispute. In Ram Krishna Dalmia v. Justice Tendolkar, AIR 1958 SC 538 (547) it was observed :
'In order, however, in pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be found on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group, and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases, namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration.'
It is clear from Ext. R-l, the report of the Committee that they took into account the family budget and the needs of the workers as the primary considerations for fixing tbe minimum wages. In paragraph 13 of the report it is stated: -
This committee has also decided that the average family of a male worker should be taken to consist of three consumption units, viz., for himself, his wife and two children, that the minimum food requirement should be calculated on the basis of net intake of 2800 calories (as recommended by Dr. Aykroyd) and that other needs such as clothing, housing, fuel, lighting etc., should also be taken into account.' The family budget is worked out in accordance with the aforesaid norms. The Committee then addressed themselves to the question whether the fixation of the minimum wages should beon a State-wide basis or on regional basis. Although there was diversity of opinion, the majority of the Committee were of the view that the minimum wages should be fixed on a regional basis. , In paragraphs 51 and 52 of Ext. R-l report it is stated:
'The reasons which prompted the previous Committee to treat the Trichur area at the lowest level are given in paragraph 87 of their report as follows:
'Firstly the diversity in the conditions prevailing in different areas makes it inequitous to fix uniform rates of wages. The Tile Industry in the Trichur area is a small scale industry which cannot survive if the rate of wages fixed for highly mechanised units in other centres is made applicable to them also. In the present situation, when capital is one of the chief bottlenecks in the rapid industrialisation of the country, small scale industries have to be given all encouragements to come up. Secondly, the prevailing rates of wages in the Trichur area are considerably lower than in other centres and a sudden spurt in wages to a level with Quilon and Feroke would dislocate the cost-price structure and lead to the closing down of many factories. Thirdly, the market price of Ollur-Pudukad tiles is admittedly much lower than that of other centres and prices too can be raised only gradually. A sudden rise in prices to high levels may lead to a complete collapse of demand. Further the time is particularly inopportune for raising prices because of the severe competition of substitute roofings and the already visible signs of a slump in the industry.'
52. In spite of the lapse of about five years after the above report most of the above reasons arc valid even today. Due to historical factors and the economic conditions of the workers the wage, rates of workers in Tile Industry in the Trichur area were very low at the time of the Minimum Wages Notification of 1958 when compared with the rates in the Quilon asd Feroke areas The employers in the Trichur and Alwaye areas have not given effect to the 1958 Notification even now on the alleged ground of their inability to pay the minimum wages prescribed. No doubt there has been increase in wages as a result of settlement between the employers and the employees. But the rates given under the last settlement do not come up to the same level of rates prescribed under the notification. Quilon, Feroke and Alwaye are industrial centres where persons have scope for employment in other alternate industries whereas Trichur area has a rural set up where the only scope for alternate employment is in agriculture where the wage level is still lower. The quality and prices of titles in the Trichur area are also lower than those in the other areas. The proportionate increase in the price of titles in the Trichur area after the wages were raised does not also come to the same level as in other areas. In consideration of the special factors mentioned above and with a view to enable the industry in the Trichur and Alwaye areas to effect the transaction to a higher wage structuresmoothly we recommend that the minimum wages be fixed on a regional basis after dividing the Tile Industry into three regions as follows.' Paragraph 55 of Ext. R-l is as follows:--
'In recommending fixation of minimum wages on a regional basis we have fixed the same in such a way that the differences between region and region are less than the existing differences. This has been done with a view to remove the anomalies that exist in the wage structure from region to region in this small State of ours as far as possible and to have uniform rates of wages for the same work in the near future.'
Counsel for the petitioners submitted that there is nothing to show that the needs of the workers in the industry in the Trichur area are less than the needs of the workers in other areas or that the workload in the Trichur area is less than in the other areas, that in similar notifications the Madras and Mysore States did not make any regional classification for the purpose of fixing minimum wages, and that the Kerala Government have not fixed different minimum wages for different areas in the State in respect of other industries, that all the owners of tile factories in Feroke, Quilon and Trichur areas depend practically on the same market for the purpose of the sale of tiles, that 65 per cent of the total tiles are manufactured in the Trichur area and the quality of the tiles manufactured in the Trichur area is as good as those produced elsewhere in the State. As seen from the report the reasons which induced the Committee to fix the minimum wages at a lower rate in the Trichur area are that the tile industry in Trichur area is a small-scale industry, that the industry has not been mechanised, that the prevailing wage rate in the Trichur area is lower than in other areas, that the market price of the tiles produced in the Trichur area is less than the market price of tiles produced in the other areas, and that Feroke, Quilon and Alwaye are industrial centres whereas Trichur has a rural set up where the only scope for alternative employment is agriculture. Counsel submitted that it cannot be said that Quilon, Feroke and Alwaye are industrial centres, whereas Trichur is a rural area. He relied on the statistical report published by the State Government to show that there is no substance in the contention that Trichur is a rural area, whereas Quilon, Feroke and Alwaye are industrial centres. The second argument of petitioners' counsel was that under Section 3 (2A) the awards already passed fixing the wage rates will continue in force and that Ext. P-l notification cannot supersede the effect of those awards but as by the notification the Government superseded those awards, the notification is bad at least to that extent. In this connection, counsel submitted that the award passed in I. D. No. 17 of 1957 would govern the wage rate of such o the tile factories in the Feroke area as are bound by the award and that Ext. P-l notification cannot in any way supersede the operation of that award.
6. Mr. Balagangadhara Menon, appearing for the 1st respondent submitted that it is notopen to the petitioners to challenge the validity of Ext. P-l notification on the ground that the regional classification has not been made on an intelligent differentia germane to the object of the Act for the reason that the Committee have fully gone into this question and that they have taken into consideration only the relevant factors for making the region-wise classification. In order to substantiate his contention that the Committee and the Government took into consideration only relevant factors for making the classification, counsel referred to 'The Minimum Wage -- An International Survey' page 130, and submitted that in fixing the minimum wages for the different areas. Government can take into account not only the cost of living of the workers in the different areas but also other relevant circumstances. At page 130 of the monograph it is stated;
'It will be seen from this brief account ot minimum wage-fixing machinery in Great Britain that in no case has there been any clear statutory definition of the principles to be followed in determining the wages to be paid to ordinary workers. The Trade Boards Acts of 1909 and 1918 gave no guidance and imposed no restriction in this connection and the Agricultural Wages (Regulation) Acts of 1924 and 19S7 merely say: 'In fixing minimum rates a committee shall so far as practicable, secure for able-bodied men such wages as in the opinion of the committee are adequate to promote efficiency and to enable a man in an ordinary case to maintain himself and his family in accordance with such standard of comfort as may be reasonable in relation to the nature of his occupation.'
In practice the authorities responsible for fixing wages have taken into account a variety of considerations. One writer with long experience as chairman and member of Trade Boards has described their methods as follows:
'There are- broadly two considerations, which, subject to an estimate of the economic position and prospects of the trade, enter into the determination of wage rates. The basic consideration is the necessity of securing that every normal worker employed in the trade shall be paid a rate which, in a period of full employment, will yield a wage which avoids the reproach of 'sweating'--in other words, a wage on which at least maintenance is possible. There are therefore minima rates below which the wage ought not to be allowed to fall. The second point is that workers should be paid at rates more or less equivalent to the rates offered to workers in comparable occupations. But both these considerations operate within the general framework of the Board's estimate of the rate which the market conditions of the trade permit to pay.
There is little dispute about relevance ot these three criteria; but there may be a good deal of discussion as to the relative weight of the first and third. A rate fixed in accordance with the first Criterion must plainly be related to the general standard and cost of living. And it is admitted that a substantial movement of the index figure of the cost of living constitutes a prima facie case for a change of rates.If the change has been downwards, the workers may resist a corresponding deduction of rates on the grounds (a) that if costs are falling standards are rising, and (b) that the industry can afford to maintain the existing rate. On the other hand, when the cost of living has risen, the employers may resist an upward revision of wage rates on the ground that the industry cannot maintain its market if costs are raised by an increase of wages, and that therefore the increase in wages means either a reduction of business or an increased resort to the economies of machine production. In either case the net effect is a shrinkage in the employment of wage-earners and a worsening rather than an improvement of their position.
None of the contentions is without substance; but the precise weight of each of them is not susceptible of exact estimation. The decition has to be taken in the light of the best judgment which can be framed as to their relative importance. In the end, the only reasonable basis is that the nearer the Board can come to agreement the more likely is the decision to be right and a sensible Board works towards the production of the largest measure of agreement both as to fact and as to inference'.
In Bhikusa Yamasa Kshatriya v. S. A. T. B, Kamgar Union, AIR 1963 SC 806 (809) it is observed:---
'....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 Legislautre 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 locality 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, childrn and apprentices.'
7. It appears to me that the Committee did not go wrong in taking into considerationcircumstances such as the prevailing rate of wages in the Trichur area, that the tile industry in that area is a small scale industry that the market price of the tiles manufactured in Trichur area is less than the market price of tiles manufactured in Quilon and Feroke areas, and that Trichur area lias a rural set up, where the only scope for alternative employment is agriculture, whereas the other areas arc industrial centres, for fixing lower wage rates for the Trichur area. By Section 3 of the Act, Government are authorised to fix, if necessary, different minimum wages for different localities. I think, Ext. P-1 notification cannot be considered as bad for the reasons alleged.
8. Mr. T. C. N. Menon, appearing for some of the workers submitted that even assuming that there is a discrimination in fixing different wage rales for the different regions, stilt Ext. P-1 notification cannot be struck down. He said that the moment it is admitted that relevant considerations alone have been taken into account for fixing the minimum wages for the Quilon and Feroke areas, the fact that irrelevant factors have been taken into account lor fixing the minimum wages for the Trichur area would not entitle the petitioners, who represent only the employers in the Feroke and Quilon areas, to pray for striking down the whole notification. His argument was that since the minimum wages have been fixed correctly so far as Quilon and Feroke areas are concerned, the fact that they have been fixed for the Trichur area on the basis of irrelevant considerations should not induct this court to strike down the minimum wages correctly fixed for the Feroke and Quilon areas. I think, there is considerable force in that argument. Although the principle of equality may not be concerned with correctness or otherwise of the fixation of different rates of minimum wages for the various areas, this Court, when approached under Article 226 cannot shut its eyes to the effect of the order which it is asked to pass. If one wen; to strike down the whole notification, on the ground that it is discriminatory, the result would be that the minimum wages fixed on the correct basis for Quilon and Feroke areas would be struck down merely because of the fact that a wrong basis has been adopted for fixing the minimum wages for the Trichur area. Mr. T. C. N. Menon, submitted that equality before the law docs not mean that management can challenge the fixation of minimum wages on the correct basis for certain areas on the ground that a fixation on the wrong basis has been made for another area. Though there is considerable force in this submission I do not propose to express a concluded opinion on it. It is possible to view Ext. P-1 notification as three different notifications issued by Government. Under Section 3 (3) of the Act, it is open to Government to fix different minimum wages for different localities. Government could have issued a separate notification fixing the minimum wages for each of the areas taking into consideration the peculiar relevant features of the area.
9. It was submitted by Mr. T. C. tN. Menon that the petition is not maintainable onthe ground that all the workers who are entitled to the benefit of Ext. P-1 notification havenot been impleaded as parties to the writ petition. It would be rather strange if it were held that when a notification like the one in question is challenged all persons who have obtained some benefits under its provisions should be made parties. Fixing the minimum rate of wages is either subordinate legislation or an administrative act. I do not think that all the workers who stand to benefit by the notification are necessary parties to the writ petition.
10. As I have already indicated, the only point for decision in this rase is that for fixing a lower rate of minimum wages in the Trichur area, whether any irrelevant factors have been taken into consideration. A very responsible committee has gone into that question. All interests were represented in the Committee and the recommendation of the majority of the members of the Committee on the basis of the considerations adverted to for fixing a lower rate of minimum wages for the Trichur area, should not be upset by a doctrinaire approach to the problem. When the Legislature has visualised the possibility of fixing the minimum wages differently for various localities, the relative importance to be attached to the various circumstances germane to the fixation of the rate of minimum wages in each locality, should normally be left to the authority competent to fix the rates. There is a presumption that all the relevant factors necessary for making the classification have been adverted to and that the notification Ext. P-1 was validly issued (See Pacific States Box and Basket Co. v. S. T. White, (1935) 296 U.S. 176. The petitioners have not succeeded in showing that the classification in Ext. P-1 is not based on intelligible differentia.
11. As regards the argument that the award I. D. No. 17 of 1957 would not be superseded by the notification, although it purports to supersede the wage rates fixed under all the awards, it is only necessary to say, that the award in I. D. No. 17 of 1957 applies only to some of the tile factories in the Feroka area and that no employer from that area has come to this Court to challenge the notification. Petitioners 1 to 3 cannot ventilate the individual grievances of their members (See the decision in The Perumbavoor Merchant's Association v. The Pemmbavoor Municipal Council, 1966 Ker LJ 587. And the 4th petitioner has no tile factory in the Feroke area. So, the argument that under Section 3(2A) the direction in Ext. P-1 Notification that the rates of wages fixed in all awards will be superseded is bad does not arise for consideration.
12. I dismiss the petition but without anyorder as to costs.