Chandra Bhavan Boarding and Lodging,
Bangalore Vs. The State of Mysore & ANR  INSC 263 (29 September 1969)
29/09/1969 HEGDE, K.S.
REDDY, P. JAGANMOHAN
CITATION: 1970 AIR 2042 1970 SCR (2) 600 1970
SCC (1) 43
R 1976 SC 490 (197) R 1984 SC 326 (8) D 1987
SC 71 (15) R 1988 SC 686 (12)
Minimum Wages Act, 1948 ss. 5(1)--Validity
of--Power of Government to fix minimum Wages either by method in s. 5(1)(a) or
s. 5(1) (b) whether unguided-Power of Government to fix minimum wages whether
restrictive of trade and business-Whether a quasi-judicial power requiring
compliance with rules of natural justice-Fixing different rates of wages for
different industries and zones whether valid-Valuation of food supplied to
Section 5(1) of the Minimum Wages Act, 1948
provides for the fixation and revision of minimum wages in the scheduled
industries by the appropriate Government. Under s. 5(1)(a) such fixation or
revision is to be made after enquiry by a committee or committees appointed for
the purpose. Under s, 5(1)(b) the appropriate Government may by notification
publish its proposals in this regard and take its decision after considering
the representations of those affected. if the Government adopts the latter
method for revision of wages, it has also before doing so to consult the Advisory
Board constituted under the Act. The State Government of Mysore after following
the method prescribed in s. 5(1) (b) and after consulting the Advisory Board
constituted under s., 7 of the Act by notification in S.O. 1038 dated 1st June,
1967 fixed the minimum wages for different classes of employees in residential
hostels and eating houses in the State of Mysore. The appellant filed a writ
petition in the High Court questioning the validity of the notification and
failing there, appealed to this Court. The notification was also challenged by
a writ petition under Art. 32 of the Constitution. It was urged on behalf of
the appellant and petitioners that the power given to the Government to choose
between the methods provided in ss. 5(1) (a) and 5(1)(b) was arbitrary and
unguided; that the arbitrary power given to the Central and State Governments
to fix minimum wages was violative of freedom of trade guaranteed in Art.
19(1)(f) of the Constitution; that the State Government had not observed the
principles of natural justice in exercising its quasijudicial power of fixing
minimum wages; and that it was incumbent on Government to appoint a committee
under S. 5(1)(a). The fixation of different rates of wages for different
industries and zones in the State was also attacked. It was finally submitted
that the valuation of the food supplied to the workmen was without authority of
law and at an unreasonably low figure.
HELD : Procedural inequality if real and
substantial is within. the vice of Art 14. But if a power is given to an
authority to have recourse to different procedures under different
circumstances, that power cannot be considered an arbitrary power. The power
under s. 5(1) is given to the State Government and not to any petty official.
The State Government can be, trusted to exercise that power to further the
purposes of the Act. [608 H-609 B] Art. 43 of the Constitution as well 'as the
Geneva Convention of 1928 enjoin the State to secure to all workers conditions
of work ensuring a decent standard of life and full enjoyment of leisure and
social 601 and cultural opportunities. The fixing of the minimum wages is !lust
the first step in that direction. The concept of minimum wage is likelY to
undergo a change with the growth of our economy and with the change in the
standard of living. It is not a static concept Its concomitants must
necessarily increase with the progress of the Society. It is absolutely
impossible for the legislature to undertake the task of fixing minimum wages in
respect of an industry much less in respect of an employment. That process must
necessarily be left to the Government. [609 G-H; 610 A] In respect of s. 5(1)
the legislative policy has been laid down with sufficient clearness. The
Government is merely charged with the duty of implementing that policy. Whether
under s. 5(1)(a) or under s. 5(1)(b) the procedure is only for gathering the
necessary information. The Government is not bound by the advice of the
committee appointed under s. 5(1)(a). Discretion to select one of the two
procedures prescribed for collecting the data is advisedly left to the
Government. The powers conferred on the Government cannot be considered as
either unguided or arbitrary. In the present case the Government had before it
the question of fixing minimum wages for residential hotels and eating houses
since 1960 and therefore, it was reasonable to assume that it had adequate
material on the basis of which it could formulate its proposals. Before
publishing its proposals, the Government bad consulted the advisory committee
constituted under s. 7. Under those circumstances it could not be held that
either the power conferred under s. 5(1) was an arbitrary power or that the
same had been arbitrarily exercised. [610 B-G] (ii) There was nothing to show
that the minimum wages fixed were basically wrong so as to adversely affect the
industry or even a small unit therein. If they do, then the industry or the
unit as the case may be has no right to exist.
Freedom of trade does not mean freedom to
exploit. The provisions of the Constitution are not erected as barriers' to
progress. It is a fallacy to think that in our Constitution there are only
rights and no duties There is no conflict between Part III and Part IV of the
Constitution which are complementary and supplemental to each other. The hopes
and aspirations aroused by the Constitution will be the minimum needs of the
lowest of our citizens are not met.
based on Art. 19(1) (f) raised in the present
case could not therefore succeed. [612 B-E] (iii) The principles of natural
justice are not embodied rules. What particular rules of natural justice, if
any, should apply to a given case must depend to a great extent on the facts
and circumstances of that the framework of the law under which the enquiry is
held and the constitution of the tribunal or body of persons appointed for the
Taking into consideration the provisions of
the Minimum Wages Act, the objective behind it, the purposes intended to be
achieved and the high authority on which power had been conferred there could
be no doubt that the procedure adopted was adequate and effective. There was
equally no doubt that reasonable opportunity had been given to all the
concerned parties to represent their case. It could not be accepted that the
impugned order was vitiated because of the Government's failure to constitute a
committee under s. 5(1) (a). [612 H-613 C] There was also no substance in the
contention that the Government was not competent to enhance the rate mentioned
in the proposals published. If it had power to reduce those rates 'as desired
by the employers, it necessarily followed that it had power to enhance them,
There was no merit in the contention that the Government must go on publishing
proposals after proposals until a stage is reached where no change whatsoever
is necessary to be made in the last proposal made. [613 C] 602 (iv) The
contention that the Government has no power to fix different minimum wages for
different industries or in different localities is no more available in view of
this Court's decisions in M/s Bhaikusa Yamasa Kahatriya's case.
The fixation of minimum wages depends on the
prevailing economic conditions, the cost of living in a place, the nature of
the work to be performed and the conditions in which the work is performed. The
contention that it was impermissible for the Government to divide the State
into several zones was opposed to s. 3(3) as well as to the scheme of the Act.
[613 E] On the basis of the material on record it could not be said that the
various zones had no rational basis. In considering the Zones the relevant
consideration is the cost of living in a locality and not the cost of living
index.[613 F] (v) On the facts of the case the contention relating to the value
of the food that may be supplied to an employee was not merely petty but
misconcived. The supply of meals to workers, was only an option given and not a
duty imposed on the employer. Therefore the procedure prescribed in r. 21 of
the rules framed under the Act was inapplicable to the case. The supply of food
was an amenity and the rule applicable was therefore r. 22(2)(v).
[Question whether fixation of minimum wages
is a quasijudicial act left open].
Suraj Mall Mohta and Co. v. A. V. Visvanatha
Sastri and Anr.  1 S.CR. 448; Unnichoyi and Ors v. State of Kerala 
1, S.C.R. 946; The Edward Mills Co. Ltd, Beawar and Ors. v. The State of Ajmer
and Anr.  1, S.C.R. 735;
Bijay Cotton Mills Ltd. v. The State of Ajmer
 1 S.C.R. 752, A. K. Kraipak v. Union of India  1 S.C.R.
457; M/s Bhaikusa Yamasa Kahatriya v.
Sangamner Akola Taluka Bidi Kumgar Union  Supp. 1 S.C.R. 524; referred
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 1617 of 1967.
Appeal from the judgment and order dated
September 18, 1967 of the Mysore High Court in Writ Petition No. 1417 of 1967
and Writ Petition No. 207 of 1967.
Petition under Art. 32 of the Constitution
for the enforcement of the fundamental rights.
A. K. Sen and R. Gopalakrishnan, for the
appellant (in C. A. No. 1 617 of 1967).
S. T. Desai, S. N. Prasad and R. B. Datar,
for the petitioners in W.P. No. 207 of 1967).
Niren De, Attorney-General, S. S. Javali and
S. P. Nayar, for respondents Nos. 1 and 2 (C.A. No. 1617 of 1967) and
respondent No. 1 (in W.P. No. 207 of 1967).
S. S. Khanduja, for respondent No. 2 (in W.P.
No. 207 of 1967).
R. Gopalakrishnan, for the intervener (in
W.P. No. 207 of 1967).
603 The Judgment of the Court was delivered
by Hegde, J. The above mentioned appeal by certificate as well as the petition
under Art. 32 of the Constitution raise identical questions of law for
decision. In both these proceedings the validity of the notification issued by
the Government of Mysore in S.O. 1038 dated the 1st June 1967 fixing the
minimum wages of different classes of employees in residential hotels and
eating houses the State of Mysore, under the provisions of the Minimum Wages
Act, 1948 (to be hereinafter referred to as the Act) is called into question.
The Civil Appeal arises from the decision of
the High Court of Mysore rejecting the various contentions advanced on behalf
of some of the hotel owners questioning the validity of the impugned
notification. The writ petition is filed by the All Mysore Hotels Association,
Bangalore and the Madras Woodlands Hotel raising those very contentions.
The impugned notification was challenged on
several grounds before the High Court but in this Court only some of those
grounds were pressed. The grounds urged in this Court are:
(1) Section 5(1) of the Act is violative of
Art. 14 of the Constitution as it confers unguided and uncontrolled discretion
on the Government to follow either of the alternative procedures prescribed in
cls. (a) and (b) of that sub-section.
(2) The provisions of the Act are
unconstitutional as they confer arbitrary power without guidance to the Central
and the State Governments concerned to fix minimum rates of wages and thus
interfere with the freedom of trade guaranteed under Art. 19(1)(g) of our
(3) It was incumbent on the Government to
appoint a committee under s. 5 (1) (a) of the Act to inquire into and advise it
in the matter of fixing minimum wages. Its failure to do so has resulted in
fixing minimum wages arbitrarily.
(4) Fixing of minimum wages under the
provisions of the Act being a quasi-judicial act, the Government's failure to
observe, the principles of natural justice has vitiated its decision.
(5) It was not permissible for the Government
to fix different minimum wages in different industries.
(6) The division of the State into zones and
fixing different rates of minimum wages for different zones was impermissible
under the Act.
(7) The division of the State into zones was
not done on any rational basis and, L3Sup. CI./70-8 604 (8) The valuation of
the food to be provided to the employees is unreasonably low and the same was
clone without the authority of law.
The Act came to be enacted to give effect to
the resolutions passed by the minimum wages fixing Machinery Convention held at
Geneva in 1928. The relevant resolutions of the Convention are embodied in Art.
223 to 228 of the International Labour Code. The object of these resolutions as
stated in Art. 224 was to fix minimum wages in industries "in which no
arrangements exist for the effective regulation of wages by collective
agreements or otherwise and wages are, exceptionally low". The central
legislature enacted the Act in 1948 and it came into force on March 15, 1948.
The long title to the Act says that it is an
Act for fixing minimum rates of wages for certain employments. The preamble to
the Act says that "it is expedient to provide for fixing minimum rates of
wages in certain employments".
Section 2 defines certain terms. Section 3
empowers the appropriate government which expression is defined in s.
2(b) to fix the minimum rates of wages
payable to the employees employed in an employment specified in Part I or in
Part II of the Sch. and in any employment added to either part in exercise of
the powers granted under s. 27 of the Act. Cl. (b) of S. 3 (2) empowers the
appropriate Government to review at such intervals as it may think fit, such
intervals not exceeding five years, minimum rates of wages so fixed and revise
the minimum rates, if necessary.
Sub-s. (3) of that section stipulates that in
fixing or revising minimum rates of wages under that section different minimum
rates of wages may be fixed in different scheduled employments for different
classes of work in the same scheduled employment for adults, adolescents,
children and apprentices and for different localities. Section 4 prescribes the
different methods in which the minimum rates of wages can be fixed. Section 5
is important for our present purpose. It reads thus :
"(1) In fixing minimum rates of wages in
respect of any scheduled employment for the first time under this Act or in
revising minimum rates of wages so fixed, the appropriate Government shall
either(a) appoint as many committees and subcommittees as it considers
necessary to hold enquiries and advise it in respect of such fixation or
revision, as the case may be, or (b) by notification in the Official Gazette,
publish its proposals for the information of persons likely to be affected
thereby and specify a date, not less than two months from the date of the
notification on which the proposals will be taken into consideration.
60 5 (2) After considering the advice of the
committee or committees appointed under clause (a) of sub-section (1) or as the
case may be, all representations received by it before the date specified in
the notification under clause (b) of that sub-section, the appropriate
Government shall, by notification in the Official Gazette, fix or, as the case
may be, revise the minimum rates of wages in respect of each scheduled
employment, and unless such notification otherwise provides, it shall come into
force on the expiry of three months from the date of its issue :
Provided that where the appropriate
Government proposes to revise the minimum rates of wages by the mode specified
in clause (b) of subsection (1), the appropriate Government shall consult the
Advisory Board also." Section 7 says that for the purpose of coordinating
the work of committees and sub-committees appointed under s. 5 and for advising
it generally in the matter of fixing and revising the rates of wages, the
appropriate Government should appoint an Advisory Board. Section 8 provides for
the appointment of a Central Advisory Board. Section 9 prescribes the
composition of the various committees and sub-committees under s. 5 and the
Advisory Boards under ss.
7 and 8. Section 1 1 authorises the
appropriate Government to fix wages in kind under certain circumstances and to
fix its value in terms of money. Section 12 stipulates that the employer shall
pay to every employee engaged in a scheduled employment the minimum rates of
wages fixed by the notification. The other provisions of the Act except s. 27
are not relevant for our present purpose. Section 27 empowers the appropriate
Government to add to either part of the Sch. any employment in respect of which
it is of opinion that the minimum rates of wages should be fixed under the Act.
The Sch. to the Act as it originally stood
did not include residential hotels and eating houses but they were brought into
part I of the Sch. by the State Government on June 18, 1959 in exercise of its
powers under s. 27.
The State Government of Mysore fixed the
minimum rates of wages to different categories of employees in residential
hotels and eating houses situate within the municipal limits of Bangalore,
Mysore, Hubli, Mangalore and Belgaum as well as in the area of the Kolar Gold
Fields Sanitary Board as per its notification published on June 16, 1960. That
notification was quashed by the High Court of Mysore on November 10, 1961, at
the instance of some of the proprietors of residential hotels and eating houses
in proceedings under Art. 226 of the Constitution on the sole ground 606 that
as the notification in question applied only to certain parts of the State and
not to the whole of it, it was invalid. A fresh notification under s. 5(1)(b)
of the Act containing certain proposals was issued by the State Government for
fixing minimum wages for different classes of employees in residential hotels
and eating houses, on December 9, 1964 but no further action was taken on the
basis of that notification. On October 28, 1966, the State Government after
consulting the Mysore State Minimum Wages Advisory Board published in the
Official Gazette fresh proposals under s. 5 (1 ) (b) for fixing minimum wages
for different categories of employees in residential hotels and eating houses
in the State. The parties affected were called upon to submit their
representations regarding those proposals. Various representations from the
interested parties were received. Thereafter the Minister for Labour summoned a
meeting of the interested parties on April 27, 1967 for considering those
proposals. That meeting was attended by the representatives of the employers as
well as employees. It was also attended by the representatives of various hotel
owners' associations in the State. At the meeting the employers
'representatives pleaded that the minimum wages proposed to be fixed are
excessive but the representatives of the employees' asserted that the proposed
rates are low and that they should be enhanced. After considering the written
as well as the oral representations made by the concerned parties, the impugned
notification was issued. The minimum wages fixed under that notification is
somewhat higher than that proposed.
We have earlier referred to the circumstances
under which the Act came to be enacted as well as the objectives intended to be
achieved by the Act. In that context we may also refer to a passage in the
report of the Committee on Fair Wages appointed by the Central Government. In
paragraph 8 of that report, it is observed :
"The demand for the fixation of the
minimum wage arose, in the first instance, out of the clamour for the
eradication of the evils of "sweating". Thus in the early days, the
operation of the minimum wage legislation was confined to employments which
paid unduly low wages. There has since been increasing demand for the fixation
of minimum wages so as to cover even non-sweated industries, particularly those
in which labour is unorganised or is only weakly organised. The International
Convention of 1928 prescribes the setting up of minimum wage-fixing machinery
in industries in which "no arrangements exist for the effective regulation
of wages by collective agreement or otherwise and wages are exceptionally
low". The Minimum Wages Act passed by the 607 Indian Legislature last year
was found necessary on both these grounds.
In foreign countries, particularly Australia,
Newzealand, the United States of America and Canada, where the national wealth
is high, the living wage forms the primary basis of the minimum wage. In these
countries there is not much distinction between the two. The I.L.O.
monograph on the Minimum Wage-Fixing
Machinery contains the following passage on the subject :
"The bases specified in various laws
include the living wage basis, and that of fixing minimum wages in any trade in
relation to the wages paid to workers in the same trades in other districts or
in relation to the wages paid to workers of similar grade in other trades.
There is a third important basis, namely, the capacity of the individual
industry or of industry in general, which, though sometimes not expressly
mentioned in minimum wage laws, must always be taken into account in
practice............ A close relation exists between them. As a basis for
wage-fixing it would be valueless to make an estimate of a living wage beyond
the capacity of industry to pay. Here capacity of industry as a whole, and not
of each separate industry or branch is to be understood." From this
analysis of the bases of fixing of the minimum wage, it will be seen that, as a
rule, though the living wage is the target, it has to be tempered, even in
advanced countries, by other considerations, particularly the general level of
wages in other industries and the capacity of industry to pay. This view has
been accepted by the Bombay Textile Labour Inquiry Committee which says that
"the living wage basis affords an absolute external standard for the
determination of the minimum" and that "where a living wage criterion
has been used in the giving of an award or the fixing of a wage, the decision
has always been tempered by other considerations of a practical
character." In India, however, the level of the national income is so low
at present that it is generally accepted that the country cannot afford to
prescribe by law a minimum wage which would correspond to the concept of the
living wage as described in the preceding paragraphs. What then should be the
level of minimum wages which can be sustained by the present stage of the
country's economy ? Most employers and some Provincial Governments consider
that the minimum wage can at pre608 sent be only a bare subsistence wage. In
fact, even one important all-India organization of employees has suggested that
"a minimum wage is that wage which is sufficient to cover the bare
physical needs of a worker and his family". Many others, however, who have
replied to our questionnaire, consider that a minimum wage should also provide
for some other essential requirements such as a minimum of education, medical
facilities and other amenities. We consider that a minimum wage must provide
not merely for the bare sustenance of life but for the preservation of the
efficiency of the worker. For this purpose, the, minimum wage must also provide
for some measure of education, medical requirements and amenities." It is
now convenient to examine the various contentions advanced on behalf of the
appellant and the petitioners. It was contended that S. 5(1) of the Act is
violative of Art.
14 of the Constitution as it confers unguided
and uncontrolled discretion to the Government to follow either of the two
alternative procedures prescribed in that section in the matter of fixing
minimum wages. It was urged that under cl. (a) of S. 5(1) the appropriate
Government is required to appoint a committee representing all interests to
hold a detailed enquiry regarding the concerned employment before advising the
Government in the matter of fixing minimum wages but under cl. (b) of S. 5(1)
all that the appropriate Government need do is to publish by notification in
the Official Gazette its proposals for the information of the persons likely to
be affected by those proposals and specify a. date not less than two months
from the date of the notification on which the proposals will be taken into
consideration. It was urged that if the procedure prescribed in S. 5(1) (a) is
adopted it would be advantageous to the employers because in the committee to
be appointed, there will be the representatiVes of the employers who know the
difficulties of the employers and hence are in a position to acquaint their
colleagues about the same but if the procedure prescribed in S. 5(1)(b) is
followed, the affected parties can only submit their written representations
followed by some nominal oral representation in a crowded meeting. While
dealing with that topic, assistance was sought from the rule laid down by this
Court in Surak Mall Mohta and Co. v. A. V. Visvanatha Sastri and anr. (1) and
the other decisions of this Court reiterating that rule. It is true that this
Court has firmly ruled that the procedural inequality, if real and substantial
is also within the vice of Art. 14. But then, before a power can be held to be
bad the same should be an unguided and unregulated one. But if a power is given
to an authority to have recourse to different pro(1)  1 S. C. R. 448.
609 cedures under different circumstances,
that power cannot be considered as an arbitrary power. It must also be
remembered that power under S. 5(1) is given to the State Government and not to
any petty official. The State Government can be trusted to exercise that power
to further the purposes of the Act. It is not the law that the guidance for the
exercise of a power should be gatherable from one of the provisions in the Act.
It can be gathered from the circumstances that led to the enactment of the law
in question i.e. the mischief that was intended to be, remedied, the preamble
to the Act or even from the scheme of the Act.
We have earlier noticed the circumstances
under which the Act came to be enacted. Its main object is to prevent sweated
labour as well as exploitation of unorganised labour. It proceeds on the basis
that it is the duty of the State to see that at least minimum wages are paid to
the employees irrespective of the capacity of the industry or unit to pay the
same. The mandate of Art. 43 of the Constitution is that the State should
endeavour to secure by suitable legislation or economic Organisation or in any other
way, to all workers, agricultural, industrial or otherwise, work, a living
wage, conditions of work ensuring a decent standard of life and full enjoyment
of liesure and social and cultural opportunities. The fixing of minimum wages
is just the first step in that direction. In course of time the State has totake
many more steps to implement that mandate. As seen earlier that resolutions of
the Geneva Convention of 1928, which had been accepted by this country called
upon the covenanting States to fix minimum wages for the employees in
employments where the labour is unorganized or where the wages paid are low.
Minimum wage does not mean wage just sufficient for bare sustenance. At present
the conception of a minimum wage is a wage which is somewhat intermediate to a
wage which is just sufficient for bare sustenance and a fair wage. That concept
includes not only the wage sufficient to meet the bare sustenance of an
employee and his family, it also includes expenses necessary for his other
primary needs such as medical expenses, expenses to meet some education for his
children, in some cases transport charges etc.-see U. Unnichoyi and Ors. v. State
of Kerala(1). The concept of minimum wage is likely to undergo a change with
the growth of our economy, and with the change in the standard of living. It is
not a static concept. Its concomitants must necessarily increase with the
progress of the society. It is likely to differ, from place to place and from
industry to industry. That is clear from the provisions of the Act itself and
is inherent in the very concept. That being the case it is absolutely
impossible for the legislature to undertake the task of fixing minimum wages in
respect of any industry much less in respect of an employment. That process
must necessarily be left to the (1)  1, SC.R. 946.
610 Government. Before minimum wages in any
employment can be fixed it will be necessary to collect considerable data.
That cannot be done by the legislature. It
can be best done by the Government. The legislature has determined the
legislative policy and formulated the same as a binding rule of conduct. The
legislative policy is enumerated with sufficient clearness. The Government is
merely charged with the duty of implementing that policy. There is no basis for
saying that the legislature had abdicated any of its legislative functions. The
legislature has prescribed two different procedures for collecting the
necessary data, one contained in s.5(1)(a) and the other in s. 5(1)(b). In
either case it is merely a procedure for gathering the necessary information.
The Government is not bound by the advice given by the committee appointed
under s. 5(1)(a).
Discretion to select one of the two
procedures prescribed for collecting the data is advisedly left to the
In the case of a particular employment, the
Government may have sufficient data in its possession to enable it to formulate
proposals under s. 5 ( 1)(b). Therefore it may not be necessary for it to
constitute a committee to tender advice to it but in the case of another
employment it may not be in possession of sufficient data. Therefore it might
be necessary for it to constitute a committee to collect the data and tender
its advice. If the Government is satisfied that it has enough material before
it to enable it to proceed under s. 5 (1) (b) it can very well do so. Which
procedure should be adopted in any particular employment depends on the nature
of the employment and the information the Government has in its possession
about that employment.
Hence the powers conferred on the Government
cannot be considered as either unguided or arbitrary. In the, instant case as
seen earlier the question of fixing wages for the various categories of
employees in residential hotels and eating houses was before the Government
from 1960 and the Government had taken various steps in that regard. It is
reasonable to assume that by the time the Government published the proposals in
pursuance of which the impugned notification was issued it had before it adequate
material on the basis of which it could formulate its proposals.
Before publishing those proposals, the
Government had consulted the advisory committee constituted under s. 7.
Under those circumstances we are unable to
accede to the contention that either the power conferred under s. 5(1) is an
arbitrary power or that the same had been arbitrarily exercised.
The validity of some of the provisions in the
Act including s. 5 came up for consideration by this Court in The Edward Mills
Co. Ltd., Beawar and Ors. v. The State of Ajmer and Anr. (1) and in Bijay
Cotton Mills Ltd. v. The State of Ajmer(2). In the former case, it was observed
that the legislative policy is apparent on (1).  1 S.C.R. 735.
(2).  1 S.C.R. 752, 611 the face of the
enactment. What it aims at is the statutory fixation of the minimum wages with
a view to obviate the chances of exploitation of labour. It is to carry out the
purpose of the enactment that power has been given to the appropriate
Government to decide with reference to local conditions whether it is desirable
that minimum wage should be fixed in regard to a particular trade or industry.
In the latter case, the validity of s. 5 was assailed on the ground that it is
violative of Art. 19 (1) (g). That challenge was negatived by this Court.
Dealing with s. 5 (1) this what the Court observed therein:
"As regards the procedure for the fixing
of minimum wages, the "appropriate Government" has undoubtedly been
given very large powers.
But it has to take into consideration, before
fixing wages, the advice of the committee if one is appointed, or the
representations on his proposals made by persons who are likely to be affected
thereby. Consultation with advisory bodies has been made obligatory on all
occasions of revision of minimum wages, and section 8 of the Act provides for
the appointment of a Central Advisory Board for the purpose of advising the
Central as well as the State Government both in the matter of fixing and
revision of minimum wages. Such Central Advisory body is to act also as a
coordinating agent for coordinating the work of the different advisory bodies.
In the committees or the advisory bodies the employers and the employees have
an equal number of representatives and there are certain independent members
besides them who are expected to take a fair and impartial view of the matter.
These provisions, in our opinion, constitute an adequate safeguard against any
hasty or capricious decision by the "appropriate Government". In
suitable cases the "appropriate Government" has also been given the
power of granting exemptions from the operation of the provisions of this
Act." It is true that in those cases the validity of s. 5 was not
challenged as being ultra vires Art. 14 of the Constitution.
But the observations quoted above afford an
answer to the plea that the power granted to the Government is an arbitrary
It was complained that an examination of the
various proposals made by the Government ever since 1960 would clearly show
that the Government was out to fix fair wages and not minimum wages. From stage
to stage it has gone on proposing higher and higher wages and under the
impugned notification the wages fixed are higher than those proposed.
We were told that if the prescribed 612 rates
are sustained, the hotel industry would be crippled and tile smaller units in
that industry will be driven out of the trade.
Our attention was not drawn to any material
on record to show that the minimum wages fixed are basically wrong.
Prima facie they appear to be reasonable. We
are not convinced that the rates prescribed would adversely affect the industry
of even a small unit therein. If they do, then the industry or the unit as the
case may be has no right to exist. Freedom of trade does not mean freedom to exploit.
The provisions of the Constitution are not
erected as the barriers to progress. They provide a plan for orderly progress
towards the social order contemplated by the preamble to the Constitution. They
do not permit any kind of slavery, social, economic or political. It is a
fallacy to think that under our Constitution there are only rights and no
duties. While rights conferred under Part III are fundamental, the directives
given under Part IV are fundamental in the governance of the country. We see no
conflict on the whole between the provisions contained in Part III and Part IV.
They are complementary and supplementary to each other. The provisions of Part
IV enable the legislatures and the Government to impose various duties on the
citizens. The provisions therein are deliberately made elastic because the
duties to be imposed on the citizens depend on the extent to which the
directive principles are implemented. The mandate of the Constitution is to
build a welfare, society in which justice social, economical and political
shall inform all institutions of our national life. The hopes and aspirations
aroused by the Constitution will be belied if the minimum needs of the lowest
of our citizens are not met.
It was urged on behalf of the hotel owners that
the power conferred to fix the minimum wage on the appropriate Government under
S. 5(1) is a quasi-judicial power and in exercising that power, it was
incumbent on the appropriate Government to observe the principles of natural
The Government having failed to observe those
principles, the fixation of wages made is liable to be struck down. It is
unnecessary for our present purpose to go into the question whether the power
given under the Act to fix minimum wages is a quasi-judicial power or an
administrative power. As observed by this Court in A. K. Kraipak v. Union of
India(1), the dividing line between an administrative power and quasi-judicial
power is quite thin and is being gradually obliterated. It is further observed
therein that principles of natural justice apply to the exercise of the
administrative powers as well. But those principles are not embodied rules.
What particular rule of natural justice, if any, should apply to a given case
must depend to a (1)  1 S. C. 457.
613 great extent on the facts and
circumstances of that case, the framework of the law under which the enquiry is
held and the constitution of the tribunal or body of persons appointed for the
Taking into consideration the provisions of
the Act, the objective behind the Act, the purposes intended to be achieved and
the high authority on whom the power is conferred, we have no doubt that the
procedure adopted was adequate and effective. We have equally no doubt that
reasonable opportunity had been given to all the concerned parties to represent
their case. We are unable to agree that the impugned order is vitiated because
of the Government's failure to constitute a committee under s. 5(1)(a).
We see no substance in the contention that
the Government is not competent to enhance the rate of wages mentioned in the
proposals published. If it has power to reduce those rates, as desired by the
employers, it necessarily follows that it has power to enhance them. There is
no merit in the contention that the Government must go on publishing proposals
after proposals until a stage is reached where no change whatsoever is
necessary to be made in the last proposal made.
The contention that the Government has no
power to fix different minimum wages for different industries or in different
localities is no more available in view of the decision of this Court in M/s.
Bhaikusa Yamasa Kahatriya v. Sangamner Akola Taluka Bidi Kamgar Union(1). The
fixation of minimum wages depend on the prevailing economic conditions, the cost
of living in a place, the nature of the work to be performed and the conditions
in which the work is performed. The contention that it was impermissible for
the Government to divide the State into several zones is opposed to s. 3(3) as
well as to the scheme of the Act.
On the basis of the material before us we are
unable to say that the various zones had not been made on any rational basis.
The Government has given good reasons in support of the steps taken by it.
Bangalore is the capital of the State and Mangalore is a major port. Therefore
they may stand on a different footing. In matter like the preparation of zones
we have to trust the State Government unless it is shown that collateral
considerations have influenced its decision. No such plea was taken. The
argument based on cost of living index showing that cost of living index was
higher in several other towns in the State than Bangalore or Mangalore is not a
well founded argument.
The cost of living is one thing, cost of
living index is another. What is relevant is the former and not the latter.
The latter depends on the base year, which is
not the same in all the towns and the prices of certain selected goods in each
of the towns concerned in the base year and thereafter which again is likely to
differ from town to town.
(1)  Supp. 1 S.C.R. 524.
614 The contention relating to the value of
the food that may be supplied to the employee is not merely petty, it is
misconceived as well. For example the employers contend that a minimum wage of
Rs. 80/per month in Bangalore and Mangalore for a cleaner is excessive at the
same time they assert that the computation of the value of the food to be
supplied to him at Rs. 40/per month is not adequate. They fail to see the
obvious contradictions in those pleas. In fixing minimum wages, a family of
three members has to be taken into consideration. Further the food is not the
only item taken into consideration. 'We have earlier referred to the other
components of a minimum wage. Therefore if the value of the food supplied has
to be increased, minimum wages also will have to be increased. Further the
impugned notification does not authorise under S. 11(2) the payment of any
portion of wages in kind. It merely says that if the employer supplies free meals
to any employee, he may deduct the sum mentioned in the notification. It is
only an option given and not a duty imposed. Therefore the procedure prescribed
in rule 21 of the rules framed under the Act is inapplicable to the facts of
the case before us. The relevant rule is rule 22 (2) (v) i.e. the valuation of
an amenity. We fail to see why the supplying of food is not an amenity.
In the result the appeal and the writ
petition fail. They are dismissed with costs. Hearing fee one set. The owners
of residential hotels and eating houses are permitted to pay the arrears of
minimum wages accrued up till now within six months from this date subject to
the condition they pay interest on those arrears from the due dates till
payment at 6% per annum.
R.K.P.S. Appeal and petition dismissed.