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Shantilal Jethalal Vyas and ors. Vs. State of Gujarat and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtGujarat High Court
Decided On
Judge
Reported in(1971)12GLR221
AppellantShantilal Jethalal Vyas and ors.
RespondentState of Gujarat and anr.
Cases ReferredCommonwealth of Australia v. Bank of New South Wales
Excerpt:
.....that the advisory board did not contain a representative of any scheduled employment (d) that the minimum wages were not fixed in accordance with the cost of living index as required under the act, and (e) what has been fixed by the notification is a fair wage and not a minimum wage. under these circumstances, the first ground of challenge to the notification must fail. and the name of gokalbhai somabhai patel was recommended by the gujarat chamber of commerce. the second ground of challenge must also, therefore fail. we are satisfied from the averments in the affidavit-in-reply that the advisory board was properly constituted as required by the act and the satisfaction is all the greater because there is no affidavit-in-rejoinder denying these statements of fact in para 7 of the..........9 of the petition sets out this particular contention. it is mentioned therein that the minimum wages fixed by the impugned notification are higher than the minimum wages fixed in maharashtra and madhya pradesh or andhra pradesh for bidi workers and that because of the higher rates fixed by the impunged notification, the employers engaged in the bidi making industry in gujarat would have to pay higher charges and, therefore, their products would be costlier than the bidis manufactured in the state of maharashtra, madhya pradesh and andhra pradesh. it was therefore, contended that in the course of competition in the bidi trade, the goods produced in gujarat would be at a disadvantage and, therefore, it was contended that the provisions of article 301 were violated by the impugned.....
Judgment:

B.J. Divan, J.

1. The petitioners herein who are the members of the Gujarat Bidi Karkhana Owners' Association, have filed this petition on their own behalf and on behalf of the Bidi Manufacturers of the State of Gujarat; and in this petition they have challenged the Notification, dated May 7, 1965, issued by the Government of Gujarat, fixing minimum wages in the scheduled employment under the Minimum Wages Act, viz., employment in any tobacco (including Bidi making manufactory. The petitioners contend that for the various reasons which they have set out in the petition, this Notification is illegal and void and, therefore, they have prayed for a Writ of Mandamus or a Writ in the nature of Mandamus on the footing that the impugned Notification is ultra vires the Minimum Wages Act and also ultra vires the provisions of Articles 14 and 301 of the Constitution of India. They have further asked for a declaration and they have prayed for a writ of mandamus restraining the State Government, its agents and servants from implementing the impugned Notification. On May 23, 1962, acting under the powers conferred upon it by Section 9 of the Minimum Wages Act (hereinafter referred to as the Act), the Government of Gujarat appointed a Committee consisting of three persons, Madhavlal Shah, as the Chairman, Vijaykumar Trivedi, as representing Labour and Gokalbhai Patel, as representing employers in the scheduled employment shown at item No. 3 in the Schedule i.e., employment in any tobacco (including Bidi making) manufactory. This Committee submitted its report and thereafter the Gujarat Government considered the report. The Advisory Board set up under the Act was also consulted and thereafter revised minimum rates of wages as fixed by the earlier Notifications of the Government of Bombay prior to the bifurcation of the bilingual State of Bombay, were refixed.

2. At the hearing before us, Mr. Vakbaria, on behalf of the petitioners, submitted, firstly, that the impugned Notification was not issued in accordance with the provisions of Sections 3, 4, 5, 7 and 9 of the Act. He contended that there was a failure on the part of the Government to comply with the provisions of these sections inasmuch as (a) the Committee was not headed by an independent person (b) that there was no representation of employers on the Committee (c) that the Advisory Board did not contain a representative of any scheduled employment (d) that the minimum wages were not fixed in accordance with the cost of living index as required under the Act, and (e) what has been fixed by the Notification is a fair wage and not a minimum wage. The second submission of Mr. Vakharia was that the impugned Notification violates Article 14 of/the Constitution inasmuch as it discriminates between employers similarly situated. In this connection, the challenge was on the ground that the Notification has fixed zones for the purpose of payment of minimum wages and explanation 1 to the Schedule to the Notification by which zones 1 and 2 were fixed was violative of Article 14 inasmuch as the cities of Ahmedabad and Surat, which have very widely varying populations were grouped together in Zone No. 1 whereas cities which were more populated than Surat, namely, Baroda, Rajkot etc. were put together in Zone No. 2. The further contention on the ground of the alleged violation of Article 14 was that there was discrimination between employers supplying Bidi leaves and those who were not supplying Bidi leaves; and on this ground also there was violation of Article 14 of the Constitution. The third and the last submission urged by Mr. Vakharia was that the Notification in question violates Article 301 of the Constitution.

3. As regards the first submission of Mr. Vakharia, it may be pointed out that under Section 9 of the Act, it has been provided that each of the committees, sub-committees as if the Advisory Board shall consist of persons to be nominated by the appropriate Government representing employers and employees in the scheduled employments, who shall be equal in number, and independent persons not exceeding one-third of its total number of members; one of such independent persons shall be appointed the Chairman by the appropriate Government. Madhavlal Shah, who was appointed the Chairman of this Committee was, according to the averments in the petition an active Congress Worker and was a supporter of the party in power in the Gujarat State and, therefore, he could not be said to be an independent person, who could be appointed the Chairman of the Committee, which was appointed to make recommendations regarding the minimum wages. This point is now covered by a decision of a Division Bench of this Court in Digvijaysinhji Salt Works v. State XI G.L.R. 342. There the Division Bench of which I was a member, held after considering the different authorities on the point and also on examining the scheme of Section 9:

There should be equal number of members representing employers and employees in the scheduled employments and further independent persons not exceeding one third of the total number of members of the committee etc. are also appointed and the Chairman of the Committee or the Advisory Board as the case may be, has to be one of such independent persons. An independent person in this context means a person who is neither an employer nor an employee in the scheduled employments and it is in that sense that the words 'independent persons' have been used by the Legislature in Section 9. The true meaning of the word's 'independent person in Section 9 of the Act is that those persons must be independent of the other two classes, namely, persons representing employers and persons representing employees. The word 'independent' in that context cannot mean independent in the ordinary and wider acceptation of that arm as meaning not belonging to any party or group whatsoever; not being under obligation to anybody.

In view of this decision, it is clear that Madhavlal Shah, who was appointed as the Chairman, was an independent person in the sense that he was neither an employer nor an employee in the scheduled employment in question; and the affidavit-in-reply points out that Madhaval Shah was not connected with either the employers or the employees in the scheduled employment in question. Under these circumstances, the first ground of challenge to the Notification must fail.

4. It was next contended by Mr. Vakharia that there was no representative of employers in the scheduled employment in this Committee; but the affidavit-inreply in this case points out that the Gujarat Chamber of Commerce, Ahmedabad, also known as Gujarat Vepari Maha Mandal was asked lo recommend the name of an individual who would represent the interest of the employers in tobacco including Bidi making industry or employment; and the name of Gokalbhai Somabhai Patel was recommended by the Gujarat Chamber of Commerce. It has also been pointed out in para 5 of the affidavit-in-reply:

I say that the Gujarat Chamber of Commerce had more than 35 members both individual and Associations in the Tobacco and Bidi making industry as its members in 1962 when it made its nomination of Shri Gokalbhai Somabhai Patel.

It is clear, therefore, that Gokalbhai Somabhai Patel, who was connected with the tobacco trade, as admitted by the petitioners themselves, was, appointed as a representative of the employers of this particular scheduled employment. The second ground of challenge must also, therefore fail.

5. As regards the Advisory Board constituted under the provisions of the Act, the contention of the petitioners as set out in the petition is that though the Chairman of the Advisory Board was an independent person and though there were four representatives of employees in one or the other of the scheduled employments on the Advisory Board, none of the remaining four members of the Advisory Board was a representative of employers in any of the scheduled employments shown in the Schedule to the Act. In para 8 of the affidavit-in-reply the mode in which the four different individuals, who according to the Government were representatives of employers in the scheduled employments were nominated by the Government, has been set out. It has been pointed out that the practice adopted by the Government of India, when it constituted an Advisory Board in connection with the scheduled employments, for which the Government of India was the appropriate Government, was to constitute the Board by taking representatives of All India Organizations of Employers and Employees; which had a fairly large representation in the scheduled employments. It is the case of the Government as set out in para 7 of the affidavit-in-reply that at the time when the Advisory Board was constituted by the Government of Gujarat, it followed the precedent set by the Government of India and when it decided to constitute the State Minimum Wages Advisory Board, it made due enquiries regarding the Associations of Employers and Employees in the State which were sufficiently representatives of the different scheduled employments and after making such inquiries, the Government selected the following organizations of employers for representation on the State Advisory Board:

1. Gujarat Vepari Maha Mandal, Ahmedabad.

2. Faderation of Gujarat Mills & Industries, Baroda.

3. Saurashtra Chamber of Commerce, Bhavnagar.

4. Surat Chamber of Commerce, Surat.

It has been further pointed out that the Gujarat Chamber of Commerce i.e., Gujarat Vepari Maha Mandal had nominated Hitelal Bhagvati; that the Faderation of Gujarat Mills & Industries, Baroda, nominated Natverlal C. Parikh, who is also a practising Advocate, Pradhudas Ramji was nominated by Saurashtra Chamber of Commerce and C.G. Parikh was nominated by Surat Chamber of Commerce and it is under these circumstances that these four individuals came to be appointed on the Advisory Board; and it is the contention of the Government that each of these four individuals represents employers in the scheduled employments as required by Section 9 of the Act. We are satisfied from the averments in the affidavit-in-reply that the Advisory Board was properly constituted as required by the Act and the satisfaction is all the greater because there is no affidavit-in-rejoinder denying these statements of fact in para 7 of the affidavit-in-reply.

6. The next ground of attack under the first head of submission was that the minimum wages were not fixed in accordance with the cost of living index under the Act. It was also contended in the last head of the challenge under the first head of submission that what has been fixed is a fair wage and not a minimum wage and regarding both these grounds of challenge to the impugned Notification, it may be pointed out that nowhere are the criteria or the factors to be taken into consideration in fixing minimum wages have been laid down by any section of the Act. As the Supreme Court has pointed out in Workmen of the Gujarat Electricity Board, Baroda v. The Gujarat Electricity Board Baroda XI G.L.R. 241, there are three concepts of wages, viz. minimum wage, fair wage and living wage. In trying to keep true to the two points of social philosophy and economic necessities which vie for consideration, industrial adjudication has set for itself certain standards in the matter of wage fixation. At the bottom of the ladder, there is the minimum basic wage which the employer of any industrial labour must pay in order to be allowed to continue an industry. Above this is the fair wage, which may roughly be said to approximate to the need based minimum, in the sense of a wage which is 'adequate to cover the normal needs of the average employee regarded as a human being in a civilised society.' Above the fair wage is the 'living wage' a wage which will maintain the workman in the highest state of industrial efficiency, which will enable him to provide his family with all the material things which are needed for their health and physical well-being enough to enable him to qualify to discharge his duties as a citizen.

7. When one turns to the Notification in question, one finds that the rates, particularly regarding Bidi making, have been fixed on piece-rate basis and this is in Schedule I to the Notification. In Schedule II are the employees other than Bidi makers in this particular scheduled employment and for them, except for snuff-grinders, the minimum wages have been fixed per month. There are no averments in the petition anywhere to show as to how much a normal average worker working on the piece-rates fixed in Schedule I of the impugned Notification would earn in a month so as to enable us to ascertain whether what has been fixed by Schedule 1 of the Notification is a minimum wage or a fair wage. The Committee after considering all the different facts has made certain recommendations and on the basis of those recommendations of the Committee these minimum wages for the different zones have been fixed by the Government and it is difficult to say that the minimum wages mentioned in the Notification are a fair wage as distinguished from minimum wage. It is true that in Section 2(d) of the Act, cost of living index number has been defined in relation to employees in any scheduled employment in respect of which minimum rates of wages have been fixed but the cost of living index has to be borne in mind so far as the provisions of the Act are concerned at the time of fixing minimum wages for piece rate basis. There is cost of living index number which is a factor which must be taken into account by the authorities concerned at the time of fixing the minimum wages. Under these circumstances, for want of proper materials on the record of the case, it is not possible for us to accept Mr. Vakharia's contention that the minimum wages are not fixed in this case in a manner required to be fixed in accordance with the cost of living index under the Act or that what has been fixed by the Notification is a fair wage and not a minimum wage.

8. As regards the second submission of Mr. Vakharia based on the ground of discrimination and, therefore, alleged violation of Article 14, the affidavit-in-reply has pointed out that so far as the cities of Ahmedabad and Surat and surrounding areas are concerned, they have been properly included in Zone No. 1 and it has been pointed out in the report of the Committee, to which reference is made in the affidavit-in-reply that the wages paid to Bidi workers in the city of Surat were even higher at the time when the Committee made its report than the wages for similar Bidi workers in the city of Ahmedabad. The affidavit-in-reply has pointed out:

I say that the Committee has recommended the division of the State in four zones after taking into consideration the importance of various areas in the industrial field, the rates of wages paid to the employees in the scheduled employment at the time of the making of the report and the population of the various areas covered by the various Zones. I say that the Government of erstwhile State of Bombay by its Notification No. 2438/48 dated 19th April 1955 had also placed Ahmedabad and Surat and places within 7 miles of the respective Municipal limits in one Zone, the city of Baroda in another Zone. I say that while including various cities in a zone, merely population of the has not to be taken into consideration but other factors, such as importance of the place in the industry as well as the rates of wages paid to the employees in the scheduled industry at the time of the making of the report also require to be taken into consideration.

From the above materials set out in para 8 of the affidavit-in-reply, it is clear that there was a rational basis for making the classification that has been done in this particular case and this criterion is reliable to the object for which a classification has to be made for the purpose of fixing the minimum wages. The challenge to the Notification on this particular ground of division of areas into different zones must, therefore, fail.

9. In para 9 of the affidavit-in-reply it has been pointed out that in the State of Gujarat practically there is no system, as found by the Committee, of workers sup-plying Bidi leaves and, therefore, there was no discrimination between the employers supplying Bidi leaves and those not supplying Bidi leaves to their employees. Para 9 of the affidavit-in-reply points out that in Greater Bombay probably a system of the employer supplying Bidi leaves to the employee might be prevalent and that is why different rates in the case of employees where Bidi leaves were supplied and in case of employees where Bidi leaves were not supplied, were fixed for Bidi workers in Bombay. In the impugned Notification, in Clause 7 of the explanation, it has been mentioned that for the purposes of Schedule I, i.e., for Bidi workers, the minimum rates are to be paid to the employees where the Bidi leaves are to be supplied to the employees and this was done because it was found by the Committee that there was no system in Gujarat of the employees themselves bringing Bidi leaves for the purpose of rolling Bidis in the respective factory or respective place of work. Thus, it cannot be said that there is any discrimination by this Notification between the employers supplying Bidi leaves to their employees and those not supplying Bidi leaves. As a matter of fact, as set out in the affidavit-in-reply, there is no cause for making distinction or discrimination.

10. The last submission of Mr. Vakharia was based on the ground that the impugned Notification is violative of Article 301 of the Constitution, Para 9 of the petition sets out this particular contention. It is mentioned therein that the minimum wages fixed by the impugned Notification are higher than the minimum wages fixed in Maharashtra and Madhya Pradesh or Andhra Pradesh for Bidi workers and that because of the higher rates fixed by the impunged Notification, the employers engaged in the Bidi making Industry in Gujarat would have to pay higher charges and, therefore, their products would be costlier than the Bidis manufactured in the State of Maharashtra, Madhya Pradesh and Andhra Pradesh. It was therefore, contended that in the course of competition in the Bidi trade, the goods produced in Gujarat would be at a disadvantage and, therefore, it was contended that the provisions of Article 301 were violated by the impugned Notification.

11. While dealing with this contention based on Article 301 of the Constitution, it must be borne in mind that Mr. Vakharia does not challenge the vires of any of the sections of the Minimum Wages Act on the ground that it violates Article 301 of the Constitution. He also does not say that the impugned Notification is in excess of the power conferred upon the Government under the relevant sections of the Minimum Wages Act but his contention is that inasmuch as the effect of this Notification is to place Bidi-manufacturers in Gujarat at a disadvantage as compared with the Bidi manufacturers in the other States like Maharashtra, Madhya Pradesh and Andhra Pradesh, the freedom of trade and commerce guaranteed by Article 301 of the Constitution is interfered with and the impugned Notification thereby violates Article 301 of the Constitution.

12. In this connection, it may be pointed out that in Atiabari Tea Co. Ltd. v. State of Assam : [1961]1SCR809 Gajendragadkar J. (as he then was) delivering the judgment of the majority has pointed out at page 254 in para 51:

Thus considered we think it would be reasonable and proper to hold that restrictions freedom from which is guaranteed by Article 301, would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301. The argument that all taxes should be governed by Article 301 whether or not their impact on trade is immediate or mediate, direct or remote, adopts, in our opinion, an extreme approach which cannot be upheld. If the said argument is accepted it would mean for instance that even a legislative enactment prescribing the minimum wages to industrial employees may fall under Part XIII because in an economic sense an additional wage bill may indirectly affect trade or commerce. We are, therefore, satisfied that in determining the limit of the width and amplitude of the freedom guaranteed by Article 301 a rational and workable test to apply would be:

Does the impugned restriction operate directly or indirectly on trade or its movement? It is in the light of this test that we propose to examine the validity of the Act 'under scrutiny in the present proceedings.

This test laid down in Atiabari Tea Co.'s case (supra) was followed in Automobile Transport Ltd v. State of Rajasthan 0065/1962 : [1963]1SCR491 of the report, S.K. Das, J. delivering the judgment of the majority of the learned Judges has pointed out:

Even textually, we must ascertain the true meaning of the word 'free' occurring in A 301 From what burdens or restrictions if the freedom assured? This is a restion of vital importance even in the matter of construction. In Section 92 of the A stralian Constitution the expression used was 'absolutely free' and repeatedly the estion was posed as to what this freedom meant. We do not propose to recite the somewhat chequered history of the Australian decisions in respect of which Lord Pter after a review of the earlier cases, said in Commonwealth of Australia v. Bank of New South Wales 1950 A.C. 235 that in the 'labyrinth of cases decided under e 92 there was no golden thread'. What is more important for our purpose is that he expressed the view that two general propositions stood out from the decisions that regulation of trade, commerce and intercourse among the State is compatible with its absolute freedom and (ii) that Section 92 of the Australian Constitution is violated only when a legislative or executive act operates to restrict such trade, commerce and intercourse directly and immediately as distinct from creating some indirect or inconsequential impediment which may fairly be regarded as remote. Lord Porter admitted 'that in the application of these general propositions, in determining whether an enactment is regulatory or something more or whether a restriction is direct or only remote or incidental, there cannot fail to be differences of opinion'. It seems clear, however, that since 'the conception of freedom of trade commerce and intercourse in a community regulated by law presupposes some degree of restriction upon the individual, that freedom must necessarily be delimited by considerations of social orderliness.

Thus, over and above the test of direct and immediate as distinguished from indirect and mediate, there is the concept of consideration of social orderliness to be applied, while determining whether a particular provision violates the provision regarding freedom of trade and commerce and intercourse. The illustration given by Gajendragadkar J. in Aliabari Tea Co. 's case (supra) clearly shows that the provisions of law by which or under which minimum wages are fixed cannot be said to be direct or immediate interference with or restriction upon freedom of trade and commerce. From the point of view of social orderliness which was emphasized in Automobile Transport's case (supra) also, fixation of minimum wages is a measure to bring about social orderliness and on that ground also it cannot be said that the impugned Notification by which minimum wages were fixed was violative of Article 301 of the Constitution. In our opinion, the mere fact that Bidi manufacturers in the State of Gujarat would to a certain extent be required to pay higher wages than the Bidi manufacturers in other States like Maharashtra, Madhya Pradesh and Andhra Pradesh does not necessarily mean that there is any direct or immediate interference with or restriction upon the trade in Bidis. The effect of restriction, if any, is remote and mediate only and under these circumstances applying the tests laid down in Atiabari Tea Co. 's case (supra) and Automobile Transport's case (supra), we hold that there is no violation of the provision of Article 301 of the impugned Notification; and this ground of challenge to the impugned Notification must fail.

In the result, this Special Civil Application fails and is dismissed with costs. Rule is discharged.


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