Bijay Cotton Mills Ltd. Vs. The State of
Ajmer  INSC 90 (14 October 1954)
AIYYAR, T.L. VENKATARAMA MAHAJAN, MEHAR CHAND
(CJ) BOSE, VIVIAN JAGANNADHADAS, B.
CITATION: 1955 AIR 33 1955 SCR (1) 752
CITATOR INFO :
R 1958 SC 328 (11) D 1960 SC 692 (7) R 1960
SC 923 (25) RF 1961 SC 977 (29) F 1962 SC 12 (11) R 1963 SC 806 (3) E 1963
SC1811 (104) RF 1967 SC 691 (66) RF 1969 SC 182 (8) R 1970 SC2042 (10)
Constitution of India, Arts. 19(1)(g),
19(6)-Minimum Wages Act (XI of 1948), ss. 3,4 and 5-Appropriate
Government-Fixing minimum rate of wages-Whether offends fundamental rights
guaranteed under Art. 19(1)(g).
The provisions of ss. 3, 4 and 5 of the
Minimum Wages Act (XI of 1948) empower the appropriate Government to fix the
minimum rate of wages in an industrial dispute between the employer and the
employed and it is a criminal offence not to pay the wages thus fixed under the
Held, that the restrictions imposed upon the
freedom of contract by the fixation of minimum rates of wages though they
interfere to some extent with the freedom of trade or business guaranteed under
Art. 19(1)(g) of the Constitution are not unreasonable and being imposed in the
interest of general public and with a view to carry out one of the Directive
Principles of State Policy as embodied in Art. 43 of the Constitution are
protected by the terms of el. (6) of Art. 19.
S. 1. Est. etc. v. The State of Madras,
(1954) 1 M.L.J.
518 referred to.
ORIGINAL JURISDICTION: Petitions Nos. 188 and
189 of 1954.
Under article 32 of the Constitution of India
for the enforcement of Fundamental Rights.
H. M. Seervai, J. B. Dadgchanji and Rajinder
Narain for petitioners.
C. K. Daphtary, Solicitor-General for India
(M.M. Kaul and P. G. Gokhale, with him) for respondent.
1954. October 14. The Judgment of the Court
was delivered by MUKHERJEA J.-We now take up the two connected petitions under
article 32 of the Constitution. In one of these petitions, to wit Petition No.
188, Shri Bijay Cotton Mills Ltd. (hereinafter called 'the company'), the
appellant in Civil Appeal No. 139 of 1954, figures as the petitioner, while the
other petition, to wit, 755 Petition No. 189, has been filed by a number of
employee working under it. To appreciate the contentions of Mr. Seervai, who
appears in support of both these petitions, it will be necessary to narrate a
few antecedent facts :
It appears that sometime in 1950 there was an
industrial dispute between the company and its labourers regarding enhancement
of wages and the dispute was referred by the Government of Ajmer to an.
Industrial Tribunal, by a notification dated the 1st December, 1950. The
tribunal made its award on the 27th November, 195 1, and held that "the
present earning capacity of the mill precludes the award of higher rates of
wages and higher dearness allowance." The employees took an appeal against
this award to the Appellate Tribunal. While this appeal was pending, the Chief
Commissioner, Ajmer, took steps for the fixation of minimum wages of labourers
in the textile industry within the State, under the provisions of the Minimum
Wages Act. A committee was formed, as has already been stated, on the 17th of
January, 1952, which submitted its report on the 4th of October, following and
on the 7th of October, 1952, the notification was issued fixing the minimum
rates of wages, against which writ petitions were filed by several textile
companies including the petitioner company. In the meantime however the appeal
filed by the labourers of the company proceeded, in the usual way, before the
The Appellate Tribunal sent the case back to
the Industrial Tribunal for further investigation and the latter made its final
award on the 8th of September, 1953, by which it rejected the basis upon which
minimum wages of Rs. 56 were fixed by the Chief Commissioner and fixed the
minimum wages including the dearness allowance at Rs. 35 only. The company
states in its petition that the minimum wages fixed by the State Government of Ajmer
is altogether prohibitory and it is not at all possible for the company to
carry on its business on payment of such wages. Accordingly the company closed
its mills on and from the 1st April, 1953.
There were about 1500 labourers working in
the mills of the company and since January, 1954, several hundreds of 754 them,
it is said, approached the managing authorities and requested them to open the
mills expressing their willingness to work at Rs. 35 as wages as fixed by the
Industrial Tribunal. Though the majority of workers were agreeable to work on
the wages fixed by the Industrial Tribunal, the company is unable to open the
mills by reason of the fact that the Minimum Wages Act makes it a criminal
offence not to pay the wages fixed under the Act. This being the position and
as the Minimum Wages Act stands in the way of the company's carrying on its
business, on terms agreed to between itself and its workers, Petition No. 188
of 1954 has been filed by the company challenging the constitutional validity
of the material provisions of the Minimum Wages Act itself. The workmen who are
willing to work at less than the minimum wages fixed by the State Government
have filed the other petition supporting all the allegations of the company.
Mr. Seervai, who appears- in support of both these petitions, has invited us to
hold that the material provisions of the Minimum Wages Act are illegal and
ultra vires by reason of their conflicting with the fundamental rights of the
employers and the employed guaranteed under article 19(1) (g) of the
Constitution and that they are not protected by clause (6) of that article.
It is contended by the learned counsel that
the Minimum Wages Act puts unreasonable restrictions upon the rights of the
employer in the sense that he is prevented from carrying on trade or business
unless he is prepared to pay minimum wages. The rights of the employees are
also restricted, inasmuch as they are -disabled from working in any trade or
industry on the terms agreed to between them and their employers. It is pointed
out that the provisions relating to the fixation of minimum wages are
unreasonable and arbitrary. The whole thing has been left to the unfettered
discretion of the "appropriate Government" and even when a committee
is appointed, the report or advice of such committee is not binding on the
Government. The decision of the committee is final and is not open to further
review or challenge in any Court of law. The learned counsel further says that
the restrictions put by the Act are altogether unreasonable 755 and even
oppressive with regard to one class of employers, who for purely economic
reasons are not able to pay the minimum wages but who have no intention to
exploit labour at all. In such cases the provisions of the Act have no reasonable
relation to the object which it has in view. We will examine these contentions
in their proper order.
It can scarcely be disputed that securing of
living wages to labourers which ensure not only bare physical subsistence but
also the maintenance of health and decency, is conducive to the general
interest of the public. This is one of the Directive Principles of State Policy
embodied in article 43 of our Constitution. It is well known that in 1928 there
was a Minimum Wages Fixing Machinery Convention held at Geneva and the
resolutions passed in that convention were embodied in the International Labour
Code. The Minimum Wages Act is said to have been passed with a view to give
effect to these resolutions (vide S. I. Est., etc. v. The State of Madras)(1). If
the labourers are to be secured in the enjoyment of minimum wages and they are
to be protected against exploitation by their employers, it is absolutely
necessary that restraints should be imposed upon their freedom of contract and
such restrictions cannot in any sense be said to be unreasonable. On the other
hand, the employers cannot be heard to complain if they are compelled to pay
minimum wages to their labourers even though the labourers, on account of their
poverty and helplessness, are willing to work on lesser wages.
We could not really appreciate the argument
of Mr. Seervai that the provisions of the Act are bound to affect harshly and
even oppressively a particular class of employers who for purely economic
reasons are unable to 'pay the minimum wages fixed by the authorities but have
absolutely no dishonest intention of exploiting their labourers. If it is in
the interest of the general public that the labourers should be secured
adequate living wages, the intentions of the employers whether good or bad are
really irrelevant. Individual employers might find it difficult to carry on the
business on the basis of the minimum wages fixed under the (1) (1954) 1 M.L.J.
756 Act but this must be due entirely to the
economic conditions of these particular employers. That cannot be a reason for
the striking' down the law itself as unreasonable.
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.
There is no provision undoubtedly for a
further review of the decision of the "appropriate Government", but
we do not think that by itself would make the provisions of the Act
unreasonable. In our opinion, the restrictions, though they interfere to some
extent with the freedom of trade or business guaranteed under article 19(1) (g)
of the Constitution, are reasonable and being imposed in the interest of the
general public are protected by the terms of clause (6) of article 19. The
result is that the petitions are dismissed. We make no order as to costs.