Bidi, Bidi Leaves' and Tobacco
Merchants Association Vs. The State of Bombay  INSC 319 (15 November
GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA
CITATION: 1962 AIR 486 1962 SCR Supl. (1) 381
CITATOR INFO :
D 1969 SC1306 (9) E&R 1978 SC 694 (87)
Minimum Wages-Bidi industry Notification
fixing minimum wages, prescribing method for discarding of 'Chhat' bidis and
payment therefore- If ultra vires- -Doctrine of implied powers- Notification
No. MWA 1557 J dated June 11, 1948- Minimum Wages Act, 1948(11 of 1948), ss.
2(h) 3, 5, 20 and 21.
By s. 3 of the Minimum Wages Act, 1948, the
appropriate Government is authorised to fix minimum rates of wages for
employees in the Scheduled employments and s. 5 lays down the procedure for
fixing and revising such minimum wages. The State Government published a
notification dated June 11, 1958, fixing minimum rates of wages in respect of
employments in bidi making in the Vidarbha region. Clauses 1 and 2 of the
notification prescribed the minimum rates district wise and provided for higher
rates for making bidis known as 'Hatnakhun' in all the districts. Clauses 3 to
7 dealt with disputes between the employers and the employees as to how bad
bidis were to be discarded and in what proportion and as to the payment for
such discarded bidis. The appellant contended that cls. 3 to 7 of the
notification were ultra vires:
^ Held, that cls. 3 to 7 of the Notification
were outside the purview of the powers conferred upon the State Government 382
by s. 5 of the Act and were ultra vires. The provisions of the Act empowered
the Government only to fix minimum wages; they did not authorise it to make
rules for resolving the disputes regarding the rejection of bad bidis and
regarding the payments to be made for the rejected bidis.
The Act empowered the Government to fix the
remuneration payable to an employee if the other terms of the contract were
observed; it did not authorise the Government to vary the other terms.
Under the contract the employer was entitled
to decide which bidis to discard, and to retain such bidis and to pay only for
such bidis as were accepted by him. Clauses 3 to 7 of the notification
purported to modify these terms in material particulars and this was not within
the power conferred by the Act upon the Government.
Nor could these clauses be justified on the
basis of implied powers. The doctrine of implied powers could only be invoked
when it was found that a duty was imposed or a power conferred on an authority
buy a statute and it was further found that the duty could not be discharged or
the powers could not be exercised at all unless some auxiliary or incidental
power was assumed to exist. Even if cls. I and 2 would become ineffective
without cls. 3 to 7 being there that would not be a proper basis for invoking
the doctrine of implied powers. The definition of 'wages' in s. 2(h) of the Act
postulated the binding character of the other terms of the contract and brought
within the purview of the Act only the term relating to wages. By implication
the very basic concept of wages could not be ignored. By ss. 20 and 21 the Act
makes specific provision for the settlement of claims in regard to payment of
minimum wages and as such no powers could be implied in the Government to set
up a separate machinery to settle such disputes.
Further no power could be implied to make
cls. 1 and 2 of the notification effective: such power could only be implied if
it was necessary to make s. 5 of the Act itself effective.
Michael Fenton and James Fraser v. Jhon
Stephen Hompton, (1957-59) 117 R. R. 21, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 415-418 of 1960.
Appeals from the judgments and orders dated
September 23, 1958, of the Bombay High Court in Special Civil Applications Nos.
205 and 214 of 1958.
383 A. V. Viswanatha Sastri, S. P. Verma, S.
N. Andley, Rameshwar Nath and P. L. Vohra, for the appellants (in C. A. No. 415
A. S. Bodde and Ganapat Rai, for the
appellants (in C. A. No. 417 of 1960) and respondents (in C. A. No. 418/60).
H. R. Khanna and R. H. Dhebar, for the
appellants (in C. As. Nos. 416 and 418 of 1960) and respondent No. 1 (in C. As.
Nos. 415 and 417 of 1960).
A. G. Ratnaparkhi, for respondent No. 3 (in
C. A. No. 415 of 1960).
1961 November 15. The Judgment of the Court
was delivered by GAJENDRAGADKAR, J.-These four appeals consist of two sets of
cross appeals each and they arise from two petitions filed in the High Court of
Bombay at Nagpur challenging the validity of the notification dated June 11,
1958, issued by the State of Bombay, now represented by the State of
Maharashtra, under s. 5 of the Minimum Wages Act, 1948, ( 11 of 1948)
(hereafter called the Act.) The petitioners in Special Civil Application No. 205
of 1958 are the Bidi, Bidi Leaves and Tobacco Merchants' Association, Gondia
and two others, whereas the petitioners in Special Civil Application No. 214 of
1958 are Haji latif Ghani Kachhi and five others. The impugned notification
consists of seven clauses. By the majority decision of the High Court cls. 1 to
5 and the first part of cl. 6 are held to be intra vires, whereas the latter
part of cl. 6 and cl. 7 as well as the explanation added to it are held to be
ultra vires. The first part of the finding is Challenged by the petitioners in
the two writ petitions by their Civil Appeals Nos. 415 and 417 respectively,
while the latter part of the finding is challenged by the State of Maharashtra
in its Civil Appeals Nos. 416 and 418 respectively. Thus, Civil Appeals Nos.
415 and 416 are cross 384 appeals and Civil Appeals Nos. 417 and 418 are cross
appeals. These appeals have been brought to this Court with a certificate
granted by the High Court under Art. 132(1) of the Constitution. As will
presently appear the only point which calls for our decision in these appeals
is one relating to the validity of the impugned notification; and so the
certificate might well have been given under Art. 133 (1)(c) and not under Art.
132 (1) because the case does not involve a substantial question of law as to
the interpretation of the Constitution. For convenience we will refer to the
petitioners in the writ petitions as petitioners and the State of Maharashtra
as the respondent in these appeals.
The petitioners are bidi manufacturers in
different parts of the Vidarbha region and they employ a large number of
persons for the purpose of making bidis for them. It appears that the
Government of the State of Madhya Pradesh within whose jurisdiction Vidarbha
was then situated had fixed the minimum rates of wages in respect of employment
in tobacco (including bidi making) manufactories by issuing a notification on
January 11, 1951. This notification had purported to fix the minimum rates of
wages per 1000 bidis by reference to different localities in the State.
The rates thus fixed were inclusive of
dearness allowance or compensatory cost of living allowance and they varied from
place to place as specified in columns 2 to 4 of the notification respectively.
An Advisory Board was thereafter constituted by the said State in exercise of
the powers conferred on it by s. 7 of the Act.
Subsequently, in 1956 the said minimum rates
of wages were revised by a notification issued on February 23, 1956. As a
result of the State Reorganisation Act, 1956 (37 of 1956) the Vidarbha region
became part of the State of Bombay. After Vidarbha thus became a part of the
State of Bombay the Government of Bombay notified that the Advisory Board
appointed by the said Government 385 under s. 7 shall be the Advisory Board for
Vidarbha. This notification was issued on November 1, 1956. The Government of
Bombay then issued a notification publishing the draft of the notification
which was proposed to be issued under s. 5, sub-s. (2) read with cl. (b) of
sub-s. (1) of s. 5, and notice was thereby given to all the bidi manufacturers
that the said draft would be taken into consideration on or after March 1, 1957.
Thereafter the procedure prescribed by s. 5 was followed, an enquiry was held,
a report of the Advisory Board was received and finally the impugned
notification was issued on June 11, 1958.
It is the validity of the several clauses
contained in this notification that is challenged before us in the present
In their petitions the petitioners alleged
that cls. 3 to 7 of the notification were invalid and ultra vires the powers of
the respondent under ss. 3, 4 and 5 of the Act. According to them the respondent
had no power to make provision for deciding as to the extent to which
"chhat" will be permitted or directing the action to be taken by the
employer and employee relating to bad bidis.
Their contention was that the said clauses
purported to make provisions for the settlement of disputes between the
employer and the employee concerning an Industrial matter and were outside the
purview of the respondent's power under the relevant sections. They urged that
the different provisions of the notification were so interrelated that it was
difficult to dissociate one from the other and so it was necessary that the
notification as a whole should be quashed.
The respondent disputed the correctness of
the contentions raised by the petitioners. It urged that there were constant
disputes among bidi manufacturers and bidi workers regarding the minimum wages
fixed in the Vidarbha region and so the respondent thought it necessary to
institute 386 an enquiry into these complaints in order to decide whether it
was necessary to revise the minimum wages prescribed by the earlier
notification and the mode of determining those wages. It was only after a
comprehensive enquiry was held at which all parties were heard that the
respondent issued the notification in question.
Its case was that the minimum rates of wages
had been fixed on industry-cum-region wise basis and that cls. 3 to 7 were
intended to make the fixation of minimum rates of wages effective.
According to the respondent, the absence of
any rules regarding the exercise of the right of "chhat" by the
employers tends to deprive the bidi workers of their right of getting minimum
rates of wages, and so cls. 3 to 7 were deliberately introduced to make the
material provisions of the Act effective in their implementation.
These petitions were first heard by Mudholkar
and Kotval, JJ. Mudholkar, J. held that all the clauses in the impugned
notification were valid for, according to him, though the Act had not conferred
express powers on the respondent to prescribe the impugned clauses of the
notification yet the respondent could prescribe the said rules under the
doctorine of implied powers. Kotval, J., agreed that cls. 1 and 2 were valid
but he thought that even under the doctrine of implied powers the remaining
cls. 3 to 7 could not be sustained.
According to him the said clauses were,
however, severable from cls. 1 and 2 and so they should be struck down leaving
cls. 1 and 2 in tact. Since there was a difference of opinion between the two
learned judges the matter was referred to Tambe, J. He held that cls. 1 to 5
and the first part of cl. 6 were intra vires where as the latter part of cl. 6
and cl. 7 as well as the explanation added to it were ultra vires. After Mr.
Justice Tambe pronounced his judgment the matter was again referred to a
Division Bench, and the Division Bench, in accordance with the majority
opinion, has upheld the validity of cls. 1 to 5 and 387 the first part of cl. 6
and has struck down the latter part of cl. 6 as well as cl. 7 and its
explanation. It is against this decision that the petitioners and the
respondent have come to this Court with a certificate granted by the High Court
in that behalf.
Before dealing with the merits of the
controversy between the parties it would be relevant to refer to the material
provisions of the Act. The Act was passed in 1948 in order to provide for
fixing minimum rates of wages in certain employments. Its provisions apply to
the scheduled employment which expression under s. 2 (g) means an employment
specified in the schedule, or any process or branch of work forming part of
such employment. It is common-ground that employment in any tobacco (including
bidi making) manufactory is a scheduled employment under the schedule of the
Act. Section 2(h) defines wages and it prescribes inter alia, that wages means
all, remuneration capable of being expressed in terms of money which would, if
the terms of the contract of employment, express or implied, were fulfilled be
payable to a person employed in respect of his employment or of work done in
such employment, and includes house-rent allowance, but does not include the
items specified by cls.(i) to (v) of the said definition. Section 3 authorises
the appropriate Government to prescribe different minimum rates of wages for different
scheduled employments, different classes of work in the same scheduled
employments, adults, adolescents, children and apprentices and different
Under s. 4 are prescribed the components of
the minimum rates of wages. Section 5 provides for the procedure for fixing and
revising minimum wages.
Section 7 provides, inter alia, that minimum
wages payable under the Act shall be paid in cash. Under s. 12 an obligation is
imposed on the employer to pay every one of his employees engaged in the scheduled
employment wages at a rate 388 not less than the minimum rate of wages fixed by
the notification issued in that behalf. Section 12 (2) saves the application of
the provisions of the payment of wages Act. Section 20 authorises the
appropriate Government to appoint an authority to hear and decide for any
specified area all claims arising out of the payment of less than the minimum
rates of wages and other claims specified therein. The remaining sub-sections
of the said section prescribe the procedure for determining such claims. Under
s. 21 a single application can be made in respect of a number of employees who
wish to prefer a claim for the decision of the authority under s. 20. Section
22 prescribes penalties for the offences therein specified.
Section 22A provides that if any employer
contravenes any of the provisions of the Act or any rule or order made
thereunder he shall, if no other penalty is provided for such contravention, be
punishable with fine which may extend to five hundred rupees. Section 22B
provides, inter alia the manner in which Courts may take cognizance of a
complaint against any person for an offence committed under the Act. That in
brief is the scheme of the material provisions of the Act.
At this stage it would be necessary to read
the several clauses of the impugned notification :
"No. MWA. 1557-J. In exercise of the
powers conferred by sub-section (2) of section 5 read with clause (b) of
sub-section (1) of that section of the Minimum Wages Act, 1948 (XI of 1948) and
after consulting the Advisory Board and in supersession of the former
Government of Madhya Pradesh Labour Department Notification No. 564-451 XXIII,
dated 23rd February, 1956, the Government of Bombay hereby revise the minimum
rates of wages in respect of the employment in any tobacco (including bidi
making) manufactory in the Vidarbha region of the State of Bombay 389 as
mentioned in the Schedule hereto annexed and directs that this notification
shall come into force with effect from 1st July, 1958.
SCHEDULE Subject to the other provisions of
this Schedule, the revised minimum rates of wages payable to employees per
thousand bidis (when leaves are supplied by the employer) shall be as follows:
Area Revised rates in Rs.
(i) Nagpur District ...
1.69 (ii) Bhandara District ...
1.62 (iii) Chanda, Akola, Buldana, Yeotmal,
Amravati and Wardha District ...
2. For all bidis in which 7 chhataks or more
of tobacco mixture is used and for those bidis which are known as
"Hatnakun" bidis, there shall be an increase of 12 Naye Paise per
1000 bidis in the rates mentioned above in all the areas.
3. It shall be within the discretion of the
employer to decide which are "chhat" bidis or bad bidis, up to 5 per
cent of the bidis prepared by the employee. If the employer decided that any
bidis are "chhat" or bad, the "chhat" or bad bidis up to 5
per cent shall be destroyed forthwith by the employee and whatever tobacco is
recovered from them shall be retained by the employer.
If, however the employer wants to retain
these "chhat" or bad bidis, he shall pay full wages for the same to
4. If "chhat" or bad bidis are more
than 5 per cent, but less than 10 per cent, and if there is any dispute between
the employer 390 and the employee as to whether the '"chhat" or bad
bidis is done properly or not, equal number of representatives of the employer
and the employees shall inspect the "chhat" is done properly or not.
If there is any difference of opinion among the representatives of the two
sides, the majority opinion shall prevail. If the opinion is equally divided
and the employer wants to retain the "chhat" bidis, he shall pay
wages for "chhat" bidis between 5 per cent to 10 per cent at half the
rates fixed above. If the employee does not want to retain these bidis the employee
shall destroy them forthwith.
5. The employer shall nominate his
representatives and the employees shall elect their representatives.
6. In the case of "chhat" above 10
per cent., the employee shall be entitled to full wages. It shall, however, be
open to the employer to take suitable action against the employee if the
"chhat" is more than 10 per cent for 6 continuous working days in a
7. The "chhat" shall be made once
in a day only, at any premises within a distance of not more than 2 miles from
the premises where bidis are manufactured.
Explanation:-For the purpose of this Schedule
the expression "employer" includes his thekedar, contractor or agent
as the case may be.' The validity of cls. 1 and 2 is not in dispute.
The petitioners, however, contend that cls. 3
to 7 are outside the powers conferred on the respondent by the relevant
provisions of the Act and as such are invalid. It is common ground that even if
the impugned clauses are held to be ultra vires they are 391 severable from
cls. 1 and 2 so that the invalidity of the impugned clauses will not affect the
validity of the said two clauses and they will stand even if the other clauses
are struck down.
In determining the question about the
validity of the impugned clauses it is necessary to refer to two material
facts. The nature and scope of the terms of contract between the petitioners
and their employees are really not in dispute. It is alleged by the petitioners
that they employ a large number of persons for the purpose of making bidis for
them, that these persons are supplied with tendu leaves, tobacco and other
necessary materials, they take the said articles to their respective places
where they work and brings back the bidis prepared by them to the employer. The
employer then examines the bidis' accepts such of them as are found to have
been prepared according to the terms of the contract rejects such of them as
are found to be of poor quality and not prepared according to the terms of the
contract and pays for the bidis actually accepted. The respondent has not
traversed these allegations made by the petitioners. It admitted that the
workers are paid on piece-rate basis and the payment is made "on the basis
of bidis selected and accepted by the employer after rejecting certain portions
of bidis prepared by the workers". In fact the respondent has expressly
stated that "there is a recognised practice of making payment on the basis
of bidis accepted by employers as coming up to a certain standard of skill".
It is further admitted that the employers have insisted on their right in
principle of rejecting the sub-normal or sub- standard bidis prepared by the
employees. Thus, there is no doubt that under the terms of the contract the
workers are entitled to receive payment only for the bidis accepted by the
employers, and not for those 392 which are rejected. It is also not disputed
that the bidis which are rejected by the employers otherwise known as
"chhats" are retained by the employer though he refuses to take them
into account in the matter of payment to the workers on the ground that they do
not come up to the standard of skill or quality prescribed by the contract.
It also appears to be true that the employees
in this region have been protesting against improper rejection of the bidis by
They have contended that the employers reject
an unreasonably high proportion of bidis falsely dubbing them as of sub-normal
quality without paying anything to the workers for their labour spent in
rolling such rejected bidis. In its affidavit the respondent has emphasised
that as a result of to is method of discarding bidis on the ground that they
are of sub-standard quality bidis workers were deprived of the labour charges
for bidis which are rejected by their employers; and so it was urged that the
question of fixing maximum rates of wages for bidi workers necessarily involved
the question as to the quantum or percentage of such rejection which should be
permissible to the employer. According to the respondent the impugned
notification has purported to fix the minimum rates of wages after taking into
consideration the problem presented by the practice of discarding bidis and
paying wages to the workers only for such bidis as are accepted. In support of
the validity of the notification the respondent also relied on the fact that
the formula prescribed by the notification had been evolved after taking into
account the representations made both by the employers and the employees. In
fact, according to the respondent, this said formula represented a substantial
degree of agreement between the parties on this point.
It would thus be seen that on the two
material facts there is really no serious dispute between the 393 parties. The
respondent agrees that under the practice which must be taken to be consistent
with the implied terms of contract between the bidi manufacturer and his
employee, after the bidis are prepared by the employees and brought back to the
employer the employer has a right to examine the quality of the bidis, accept
only such as have come up to the standard prescribed by the contract and reject
the rest. The practice further justifies the payment of wages to the employees
only for the bidis actually accepted and not for those which are rejected
though the rejected bidis may be retained by the employer. On the other hand,
it is not, and cannot be seriously disputed by the petitioners that in some
cases this practice may work great hardship on the workers, and in every case
the workers do not get wages for the labour put by them in rolling the rejected
bidis. The main question which arises for our decision in the present appeals
is whether the injustice resulting from the practice of discarding bidis and
not making any payment for them to the workers can be checked, controlled and
regulated by the respondent by issuing a notification under the powers
conferred on it by s. 5 of the Act. If the relevant provisions of the Act
confer upon the respondent the power to check the evil against which the
workers complain then of course the validity of the impugned clauses would be
beyond challenge. If, on the other hand, the power to prescribe or revise
minimum rates of wages does not either expressly or by necessary implication
include the power to provide for the machinery to check the evil in question,
then the impugned clauses would be ultra vires however necessary it may be to
check and control the said evil in question.
In this connection let us broadly examine the
scope and effect of the impugned clauses. Clauses 1 and 2 prescribe the revived
minimum rates districtwise and provide for the payment of higher 394 Price for
the bidis known as Hatnakhun bidis in all and the said districts. These two
clauses are obviously valid and the petitioners have not disputed the conclusion
of the High Court in that behalf. Clauses 3 to 6 deal with the problem of the
that bidis or bidis which are rejected because they are bad. Clause 3 leaves it
to the discretion of the employer to decide which are chhat bidis up to 5
percent of the bidis prepared by the employees. This clause provides that the
bidis to rejected would be destroyed and tobacco recovered from them retained
by the employer; and it adds that if the employer wants to retain the rejected
bidis he shall pay full wages for the same to the employee. In other words
this, clause means that the employer may discard bidis up to 5 percent but if
he does not want to pay the workers for the said bidis he must destroy them.
That would show that the discretion exercised by him is honest and fair. If, on
the other hand, he wants to retain the said bidis that would mean that he
thinks that the bidis would find a market and in that case he must pay for them
on the basis that they are good bidis. On principle this provision may perhaps
not be open to any serious criticism and it is not unlikely that if the
notification had not made further detailed provisions by cls. 4 to 6 the
present dispute would not have been brought before the High Court. The
employers probably do not have a serious grievance against cl. 3 on the merits.
Clause 4 deals with cases where the rejection
may be more than 5 per cent but less than 10 per cent of total work produced by
the worker. In regard to this class of cases cl. 4 provides for a machinery to
deal with cases falling under it.
Representatives of the employers and
employees have to be appointed and they have to decide whether the work have
been properly done or not.
The decision would be according to the
opinion of the majority. If the opinion is equally divided 395 and the employer
wants to retain the chhat bidis, between 5 per cent to 10 per cent he shall pay
at half the rates fixed in cl. 1. If the employer does not want to retain them
the employees shall destroy them, The clause does not seem to provide for 3 7
case where the majority opinion may support the rejection between 5 per cent
and 10 percent; that is a lacuna in the clause. The only comment which can be
legitimately made against the clause on its merits is that the setting up of
the machinery for a kind of adjudication of the dispute between the employer
and the employee may, instead of solving the difficulties in actual working,
add to them.
That takes us to cl. 6. This clause has been
very severely criticised by the petitioners. It provides that in case of chhat
about 10 per cent the employees shall be entitled to full wages which means
that even if chhat above 10 per cent is made reasonably and for a proper cause
the employer has to pay for the discarded work as therein prescribed; the only
right given to the employer in such a case is to take suitable action against
the employee if the chhat is more than 10 per cent and that too for six
continuous working days in a calendar month. Prima facie this clause appears to
be unreasonable and unjust.
The explanation to cl. 7 is also criticised
by the petitioners because the thekedar, contractor or agent, who is appointed
by the employer would, if the explanation is valid, be liable to perform all
the obligations imposed on the employer by the relevant provisions of the Act
such as ss. 12 and 18. We have examined the broad features of the notification
and indicated the comment made on it by the petitioners for the purpose of
showing that on the merits some of the clauses do not appear to be fair and
just, but that is not the ground on which their validity can be or has been
challenged before us. The main argument in support of the challenge 396 rests
on the assumption that cls. 3 to 7 are all beyond the powers conferred on the
respondent by the relevant provisions of the Act; and it is this argument which
needs to be examined.
It is well settled that industrial
adjudication under the provisions of the Industrial Disputes Act, 1947(14 of
1947) is given wide powers and jurisdiction to make appropriate awards in determining
in industrial disputes brought before it. An award made in an industrial
adjudication may impose new obligations on the employer in the interest of
social justice and with a view to secure peace and harmony between the employer
and his workmen and full co-operation between them. Such an award may even
alter the terms of employment if it is thought fit and necessary to do so. In
deciding industrial disputes the jurisdiction of the tribunal is not confined
to the administration of justice in accordance with the law of contract.
Mukherjee, J., as he then was, has observed in The Bharat Bank Ltd., Delhi v.
Employees of the Bharat Bank Ltd., Delhi the tribunal "can confer rights
and privileges on either party which it considers reasonable and proper, though
they may not be within the terms of any existing agreement. It has not merely
to interpret or given effect to the contractual rights and obligations between
them which it considers essential for keeping industrial peace." since the
decision of the Federal Court in Western India Automobile Association v.
Industrial Tribunal, Bombay, it has been repeatedly held that the jurisdiction
of industrial tribunals if much wider and can be reasonably exercised in
deciding industrial disputes with the object of keeping industrial peace and
progress (Vide: Rohtas Industries, Ltd., v. Brijnandan Pandey; The Patna
Electric Supply Co. Ltd., Patna v. The Patna Electric Supply Workers Union.
Indeed, during the last ten years and more 397 industrial adjudication in this
country has made so much progress in determining industrial disputes arising
between industrial of different kind and their employee that the jurisdiction
and authority of industrial tribunals to deal with such disputes with the
object of ensuring social justice is no longer seriously disputed.
But, it is necessary to remember that no
claim can be made for such broad jurisdictional power by the respondent when it
purports to issue a notification under the provisions of the Act.
These powers and authority would necessarily
be conditioned by the relevant provisions under which it purports to act, and
the validity of the impugned notification must therefore be judged not by
general considerations of social justice or even considerations for introducing
industrial peace; they must be judged solely and exclusively by the test
prescribed by the provisions of the statute itself. It appears that in 1956
before Vidarbha became a part of the state of Bombay the State Government of
Madhdya Pradesh had made a comprehensive reference for the arbitration by the
State Industrial Court between the bidi manufacturers of Bhandara District and
their employee. In this dispute all the material issues arising from the
prevailing practice which authorised employers to reject chhat bidis had been
expressly referred for adjudication.
Subsequently, when the impugned notification
was issued the respondent apparently took the view that what could have been
achieved by reference to the arbitration of state Industrial Court may well be accomplished
by issuing a notification under s.
5 of the Act. It may be that there is
substance in the grievance made by the employees that the practice of rejecting
chhat bidis often leads to the injustice and deprives them of the wages
legitimately earned by them by rolling the said bidis and there can be no doubt
that if a comprehensive reference is made for the decision of 398 this
industrial dispute between the bidi manufacturers and their employees an award
may well be passed which will resolve this dispute;
but the question which falls for our decision
is whether the relevant provisions of the Act authorised the State Government
to make rules for the decision of the dispute in that behalf and for the
payment of minimum rate of wages on the basis of such decision? In our opinion,
the answer to this question has to be in the negative.
What is the extent of the authority conferred
on the respondent in fixing or revising minimum rates of the wages under the
relevant provisions of the Acts In dealing with this question we must
necessarily bear in mind the definition of the term "wages"
prescribed by s. 2(h). As we have already been the term "wages"
includes remuneration which would, if the terms of the contract of employment,
express or implied, were fulfilled, be payable to a person employed in respect
of his employment. In other words, the terms "wages" refers to
remuneration payable to the employee as a result of the terms of employment.
What would be the amount to which the employee is entitled if the other terms
of the contract are preferred ? That the question which has to be asked in
determining what the term "wages" means under (h). No doubt ss. 3, 4
and 5 authorised the appropriate Government to fix the minimum rates of wages.
In other words, if the wages fixed by a contract which is either express or
implied are found to be low authority is conferred on the appropriate
Government to increase them so as to bring them to the level of what the said
Government regards as the minimum wages in the particular scheduled employment
in the particular area concerned. This means that power is conferred on the
appropriate Government to modify one term of the contract express or implied
between the employer and the 399 employee and that is a term which has reference
to the payment of wages. If for a certain piece of work done by the employee
the employer has agreed to pay him either expressly or by implication a certain
amount of wages the appropriate Government can issue a notification and
prescribe that for the said work done under the contract the employer must pay
his employee a much higher rate of wages and the higher rate of wages thus
prescribed would be deemed to be the minimum rate of wages between the parties.
It would, however, be noticed that in defining
"wages" cl. 2(h) postulates that they would be payable if the other
terms of the contract of employment are fulfilled. That is to say, authorising
the fixation of minimum rates of wages the other terms of the contract of
employment have always to be fulfilled. The fulfillment of the other terms of
the contract is a condition precedent for the payment of wages as defined under
s. 2 (h) and it continues to be such a condition precedent even for the payment
of the minimum rates of wages fixed and prescribed by the appropriate
Government. The significance of the definition contained in s. 2(h) lies in the
fact that the, rate of wage may be increased but no change can be made in the
other terms of the contract. In other words, the Act operated on the other terms
of the Contract on the other terms of the contract between the employer and the
employee. That is the basic approach which must be adopted in determining the
scope and effect of the powers conferred on the appropriate Government by the
relevant provisions of the statute authorising it to prescribe fix or minimum
rates of wages or to revise them. What the appropriate Government is authorised
to do is to proscribe, fix or revise wages and wages are defined to be
remuneration payable to the employees if the terms of the contract of
employment, express or implied, were fulfilled.
400 This definition runs, as it inevitably
must, through the and the material provisions of the Act and its importance
cannot therefore be ignored.
Bearing this fact in mind let us examine the
impugned clauses of the notification. Clauses 1 and 2 clearly fall within the
purview of the power conferred on the respondent because they do no more than
prescribe the minimum rates of rates as therein specified; out cls. 3 to 7
clearly and unambiguously purport to deal with the terms of the contract
between the parties other than that relating to the remuneration. These clause
are obviously intended to deal with the dispute between the employers and their
employees as to how bidis should be discarded and in that proportion and what
should be the procedure to be followed in regard to the? payment for such
discarded bidis. In appreciating the true effect of these clauses it is
necessary to recall that the parties are agreed about the practice at present
prevailing which must be taken to represent the terms of the contract either
express or implied. According to the said practice the employer decides which
bidis should he discarded, he retains the discarded bidis and pays only for
such bidis as are accepted be him. It if plain that the impugned clauses of the
notification purport to modify these terms in material particulars and that and
be plainly outside the jurisdiction of the authority of the respondent.
It may well form the subject-matter of
reference for industrial adjudication but it cannot form the subject-matter of
a notification prescribing minimum rates of wages under ss. 3, 4 or 5. It is
conceded by the respondent that there is no express provision in the act, which
authorised the setting up of the machinery as prescribed by cls.
3 and 4 or for laying down the manner in
which the employer should make payment for the discarded bidis. It is, however,
strenuously urged that the validity of these clauses should be upheld on the
ground of the 401 implied power of the respondent; and that takes us to the
question as to the true scope and effect of the doctrine of implied power.
"One of the first principles of law with
regal to the effect of an enabling act", observes Craies, "is that if
a Legislature enables something to be done, it gives power at the same time by
necessary implication to do everything which is indispensable for the purpose
of carrying out the purposes in view(1)". The principle on which the
doctrine is based is contained in the legal maxim 'Quando lex aliquid concedit
concedere videtur et illud sine quo res ibsa ease non potest'. This maxim has
been thus translated by Broom thus: "whoever grants a thing is deemed also
to grant that without which the grant itself would be of no effect".
Dealing with this doctrine Pollock, C.B., observed in Michaely Fenton and James
Fraser v. John Stephen, Hempton "It becomes therefore all important to
consider the true import of this maxim, and the extent to which it has been
applied. After the fullest research which I have been able to bastow, I take
the matter to stand thus : Whenever anything is authorised, and especially if,
as matter of duty, required to be done by law, and it is found impossible to do
that thing unless something else not authorised in express terms be else done,
then that something will be supplied by necessary intendment." This
doctrine can be invoked in cases "where an Act confers a jurisdiction it
also confers by implication the power of doing all such acts, or employing such
means as are essentially necessary to its execution (3)." In other words,
the doctrine of implied powers can be legitimately invoked when it is found
that a duty has been imposed or a power conferred on an authority by a statute
and it is further found that the duty cannot be discharged or the power cannot
be exercised at all unless some 402 auxiliary or incidental power is assumed to
In such a case, in the absence of an implied
power the statute itself would become impossible of compliance. The
impossibility in question must be of a general nature as that the performance
of duty or the exercise of power is rendered impossible in all cases. It really
means that the statutory provision would become a dead-letter and cannot be
enforced unless a subsidiary power is implied. This position in regard to the
scope and effect of doctrine of implied powers is not seriously in dispute
before us. The parties are at issue, however, on the question as to whether the
doctrine of implied powers can help to validate the impugned clauses in the
The respondent strenuously contends that cls.
1 and 2 of the notification which have
prescribed the minimum rates of wages per 1000 bidis would become ineffective
unless cls. 3 to 7 supplement them. The argument is that by improper or
dishonest exercise of the power conferred on the employer by the contract of
employment to discard chhat bidis the employees would be cheated of their
legitimate due wages under cls. 1 and 2 and so, in order to make the provisions
of cls. 1 and 2 effective some subsidiary provisions had to be made for
settling the dispute between the employer and his workmen in regard to chhat
bidis. As we have already observed, the grievance made by the employees on the
score of improper rejection of bidis may in many cases be well-founded; but the
seriousness of the said grievance and the urgent necessity to meet it would
hardly be a proper basis for invoking the doctrine of implied power where the
provisions of the statute are quite clearly against the assumption of such
implied power. The definition of the term "wheres" postulates the
binding character of the other terms of the contract and brings within the
purview of the Act only one 403 term and that relates to wages and no other.
That being so, it is difficult to hold that by implication the very basic
concept of the term "wages" can be ignored and the other terms of the
contract can be dealt with by the notification issued under the relevant
provisions of the Act.
When the said other terms of the contract are
outside the scope of the Act altogether how could they be affected by the
notification under the Act under the doctrine of implied powers Besides, in
this connection it is also necessary to bear in mind the provisions of ss. 20
and 21 of the Act. These two sections provide for the settlement of claims made
by employees in regard to the payment of minimum rates of wages.
If for instance, good bidis are rejected by
the employer as chhat bidis improperly and without justification the employees
can make a claim in that behalf and the same would be tried under ss.
20 and 21. Therefore the Act has made a
specific provision for the enforcement and implementation of the minimum rates
of wages prescribed by notifications. The present notification purports to
ignore the said provisions and sets up a machinery to settle the said disputes.
Clauses 1 and 2 of the notification have prescribed the revised minimum rates
of wages. If, in the matter of payment of the said wages, any disputes arise
they must be left for adjudication by the authority prescribed by s. 20. That
is another reason why the doctrine of implied powers cannot be invoked in
support of the validity of the impugned clauses in the notification.
There is yet another consideration which is
relevant in dealing with the question about the implied powers. The doctrine of
implied power can be invoked where without the said power the material
provision of the Act would become impossible of enforcement. In the present 404
case all that s. 5 requires is the fixation of minimum rates of wages, and that
has been done by the notification by cls. 1 and 2. What the subsidiary clauses
purport to do is to make the enforcement of the fixed rate effective by
providing for a machinery to deal with the possible disputes arising between
the parties as a result of the practice of discarding chhat bidis.
In other words, cls. 1 and 2 fix the minimum
rates of wages and thus s. 5 has been complied with and enforced. The remaining
clauses purport to make the implementation of the provisions of cls. 1 and 2
effective. That is very different from giving effect to s. 5 itself. The
enforcement of the notification is clearly not the same thing as exercising the
power of fixing or revising the minimum rates of wages under s. 5. A Power may
be implied, if necessary, in discharging the duty imposed upon the appropriate
Government or in exercising the power conferred on the State Government in the
matter of fixing or revising the minimum rates of wages; but surely no power
can be implied for making effective the implementation of the notification
issued under the said power or in the discharge of the said duty. The purpose
of the Act cannot be said to have failed after the minimum rates of wages are
prescribed and notified. What may turn out to be ineffective is the provision
for payment of the said wages by reason of the rejection of good bidis; but
that is a matter of an industrial dispute which has to be adjudicated upon
under ss. 20 and 21 or under other provisions of the law. It is true that a
large section of the workers in the bidi trade is illiterate, uneducated and
unorganised; and there can be no doubt that their grievance on the ground of
improper rejection of the bidis deserves to be redressed, but, in our opinion,
the procedure adopted by the respondent in redressing the said grievance is
outside the scope of the Act, and therefore beyond the powers conferred on it
by s. 5. The proper remedy 405 in such a case may be to make a comprehensive
reference of the dispute to the competent industrial tribunal and invite the
tribunal to make a proper award in that behalf. We are, therefore, inclined to
take the view that cls. 3 to 7 which form an integral scheme are outside the
purview of the powers conferred on the respondent by s. 5 of the Act and must
therefore be declared to be ultra vires. It is common-ground that these clauses
are severable from cls. 1 and 2 and that their invalidity does not affect the
validity of the said two clauses.
In the result Civil Appeals Nos. 415 and 417
are allowed and Civil Appeals Nos. 416 and 418 are dismissed. Respondent to pay
the costs of the petitioners in Civil Appeals Nos. 415 and 417. One set of
C.A. Nos. 415, 417, allowed.
C.A. Nos. 416, 418 dismissed.