M.R.F.
Ltd. Vs. Inspector Kerala Govt. & Ors [1998] INSC 533 (11 November 1998)
S. Saghir
Ahmad, B.N. Kirpal. S. Saghir Ahmad, J.
The
classic Judgment of Patanjali Sastri, C.J. "in State of Madras vs. V. G.
Row. 1952 SCR 597 = AIR 1952 SC 196, has again to be referred to and relied
upon in this case to settle the controversy regarding the constitutional
validity of the Kerala Industrial Establishments (National and Festival
Holidays) (Amendment) Act, 1990 (for short, 'the Amending Act'.) which has
already been upheld by a Single Judge, and in appeal, by the Division Bench of
the Kerala High Court.
By the
Amending Act, national and festival holidays, fixed under the Principal Act,
namely, the Kerala Industrial Establishments (National and Festival Holidays) Act,
1958 (for short, 'the Parent Act') were altered. The national holidays' were
increased from three to four (with the addition of 2nd of October as Mahatma
Gandhi's Birthday) and festival holidays were increased from four to nine. The
total number of compulsory paid holidays were thus raised from seven to
thirteen. This alteration was challenge by the appellants on the ground that
the holidays, national and festival, so increased were violative of the
Fundamental Right guaranteed to them under Article l9(i)(g) to carry on their
trade, business or profession. It was also challenged en the ground of
arbitrariness as the contention was that the increase in the number of national
and festival holidays was wholly arbitrary, without there being any reasonable
basis for such increase which has compelled the appellants to pay to their labour
and other employees salary even for closed days on which they do not work.
Article
19(1)(g) provides as under:
"19.
Protection of certain rights regarding freedom of speech, etc.-(1) All citizens
shall have the right- (a) ...................................
(b)
...................................
(c)
...................................
(d)
...................................
(e)
...................................
(f)
...................................
(g) to
practice any profession, or to carry on any occupation, trade or
business." Sub-clause (6) of this Article provides as under:- "(6)
Nothing in sub-clause (g) of the said clause shall affect the operation of any
existing law in so far as it imposes, or prevent the State from making any law
imposing, in the interests of the general public, reasonable restrictions on
the exercise of the right conferred by the said sub-clause, and, in particular,
nothing in the said sub-clause shall affect the operation of any existing law
in so far as it relates to, or prevent the State from making any law relating
to (i) the professional or technical qualifications necessary for practising
any profession or carrying on any occupation, trade or business, or (ii) the
carrying on by the State, or by a corporation owned or controlled by the State,
of any trade, business, industry or service, whether to the exclusion, complete
or partial, of citizens or otherwise." Fundamental Rights guaranteed by Article
19 are the basic and natural Rights inherent in the citizen of a free country
but none of the seven Rights, guaranteed by Article 19(1), is an absolute Right
as each of the Rights is liable to be controlled, curtailed and regulated by
laws made by the State to the extent set out in Clauses (2) to (6) of the
Article. This is based on the old principle enunciated by this. Court 'that
"LIBERTY has to be limited in order to be
effectively possessed". Article 19, therefore, while guaranteeing some of
the most valued elements of LIBERTY to
every citizen, as Fundamental Rights, provides for their regulation for the
common good by the State imposing certain restrictions on their exercise.
Article
19(1 )(g) protects the freedom of each individual citizen to practice any
profession or carry on any occupation, trade or business. This is a right
distinct from Article 301 which relates to trade, commerce or intercourse both
with and within the State.
As
pointed out earlier, the Right under Article 19M)(g) is not absolute in terms
but is subject to reasonable restrictions contemplated by Clause (6) thereof.
The
test of reasonableness of restrictions was considered by this Court on several
occasions but all the decisions are not being referred to and only a few are mentioned
to make out the focal point on the basis of which we intend to dispose of this
case.
We
begin with an extract from, what is known as, the locus classicus, written down
by Patanjali Sastri, C.J., in the State of Madras vs. V. G. Row: 1952 SCR 597
=AIR 1952 SC 196 :
"It
is important in this context to bear in mind that the test of reasonableness,
wherever prescribed, should be applied to each individual statute impugned, and
no abstract standard, or general . pattern, of reasonableness can be laid down-as
applicable to all cases. The nature of the right alleged to have been
infringed, the underlying purpose of the restrictions imposed, the extent ana
urgency of the evil sought to be remedied thereby, the disproportion of the
imposition, the prevailing conditions at the time should all enter into the
judicial verdict. In evaluating such elusive factors and forming their own
conception of what is reasonable in all the circumstances of a given case, it
is inevitable that the social philosophy and the scale of values of the judges
participating in the decision should play an important part, and the limit to
their interference with Legislative judgment in such cases can only be dictated
by their sense of responsibility and self-restraint and the sobering reflection
that the Constitution is meant not only for people of their way of thinking but
for all, and that the majority of the elected representatives of the people
have, in authorising the imposition of the restrictions, considered them to be
reasonable. " This decision was followed in Mineral Development Ltd. vs.
State of Bihar. (1960) 2 SCR 609 = AIR 1960 SC
466, and it was laid down that the principles set out by Patanjali Sastri,
C.J., have to be considered and kept in view by the Courts in deciding whether
a particular Statute satisfies' the objective test of reasonableness.
The
observations of Patanjali Sastri, C.J., were again approved In Collector of
Customs, Madras vs. Nathella Sampathu Chetty.
(1962) 3 SCR 786 = AIR 1962 SC 316i Ayyangar, J. who wrote the Judgment
observed that though there were several decisions of this Court in which the
relative criteria were laid down to test the reasonableness of the restrictions
imposed under Clause (6) of Article 19, the passage from the Judgment of Patanjali
Sastri, C.J. in State of Madras vs. V.G. Row (supra), which we have already
extracted above, was held sufficient for the purpose of reference.
These
decisions were considered, discussed and followed in M/s Laxmi Khandsari vs.
State of U. P. & Ors., AIR 1981 SC 873 = 1981 (2) SCC 600.
In
examining the reasonableness of a statutory provision, whether it is violative
of the Fundamental Right guaranteed under Article 19, one cannot lose sight of
the Directive Principles of State Policy contained in Chapter IV of the
Constitution as was laid down by this Court in Saghir Ahmad vs. State of U.P.,
AIR 1954 SC728 = (1955) 1 SCR 707 as also in Mohd. Hanif Qureshi vs. State of Bihar. 1959 SCR 629 = AIR 1958 SC 731.
This
principle was also followed in Laxmi Khandsari's case (supra) in which the
reasonableness of restrictions imposed upon the fundamental Rights available
under Article 19 was examined on the grounds, amongst others, that they were
not violative of the Directive Principles of State Policy.
On a
conspectus of various decisions of this Court, the following principles are
clearly discernible (1) While considering the reasonableness of the
restrictions, the Court has to keep in mind the Directive Principles of State
Policy.
'2)
Restrictions must not be arbitrary or of an excessive nature so as to go beyond
the requirement of the interest of the general public.
3) In
order to judge the reasonableness of the restrictions, no abstract or general
pattern or a fixed principle can be laid down so as to be of universal application
and the same will vary from case to case as also with regard to changing
conditions, values of human life, social philosophy of the Constitution,
prevailing conditions and the surrounding circumstances.
(4) A
just. balance has to be struck between the restrictions imposed and the social
control envisaged by clause (6) of Article 19. .^-
(5)
Prevailing social values as also social needs which are intended to be
satisfied by restrictions have to be borne in mind. (See: State of U.P. vs. Kaushailiys,
(1964) 4 SCR 1002 = AIR 1964 Sp 416)
(6)
There must be a direct and proximate nexus or a reasonable connection between
the restrictions imposed and the object sought to be achieved. If there is a
direct nexus between the restrictions, and the object of the Act, then a strong
presumption in favour of the constitutionality of the Act will naturally arise.
(See: Kavalappara Kottarathil Kochuni @ Moopil Nayar vs. States of Madras and Kerala. (1960) 3 SCR 887 = AIR
1960 SC 1080; O.K. Ghosh vs. E.X. Joseph. (1963) Supp. (1) SCR 789 = AIR 1963
SC 812) Having regard to what has been set out above, we may now proceed to
consider the reasonableness of the restrictions imposed in the instant, case on
the right of the appellants to carry on their trade or business.
It may
be mentioned that the appellants do not. challenge the legislative competence,
in enacting the law by which the Parent Act was amended. What is contended is
that in altering the number of national and festival holidays and raising its
total number to thirteen from seven, the right to carry on trade and business
on six additional days has been taken away causing serious loss of production
apart from heavy financial liability of making payment of salary or wages to
the employees and labour for the closed days.
The
restriction placed on this right for keeping their industries closed on
national and festival holidays cannot be treated as reasonable within the
meaning of Clause (6) of Article 19. This, it is contended, is in contravention
of the right guaranteed to them under Article 19(1)(g).
The
Directive Principles of State Policy are not enforceable but are nevertheless
fundamental in the governance of the country and have to be applied by the
State in making the laws. They are essential articles of faith of the country
and as such the Legislature, the Executive and the Judiciary have to follow
them unless there is likely to be an infringement of any express provision of
the Constitution. They have to be regards as the "Wisdom" of the
Nation manifested in the "paramount" law of the country.
Article
43 of the Constitution provides as under :
"43.
Living wage, etc., for workers.-The state shall 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 leisure and
social and cultural opportunities and, in particular, the State shall endeavour
to promote cottage industries on an individual or co-operative basis in rural
areas." This Article enjoins the State to endeavour to secure to all
workers, be they agricultural, industrial or otherwise, a living wage and
proper conditions of work so as to assure to them a decent standard of life and
full enjoyment of leisure and social and cultural opportunities.
The
idea, therefore, is that the workers would not be compelled to work on all
days. While other employees may enjoy national and festival holidays, the
workers in an industry or an agricultural farm must work throughout and should
not avail of any holiday is not the philosophy of Article 43. As human beings
they are entitled to a period of rest which would enable them to fully enjoy
their leisure and participate in social and cultural activities. It was for
this reason that this Court in Manohar Lal vs. State of Punjab). (1961) 2 SCR
343 = AIR 1961 SC 418, upheld the compulsory closure of shop on one day. This
decision was followed in Ramdhandas vs. State of Punjab. (1962) 1 SCR 852 = AIR
1961 SC 1559 upholding the restriction placed on the opening and closing hours
of the shop. Both these decisions were followed in Collector of Customs,. Madras vs. Nathella Sampathu Chetty, AIR
1962 SC 316 = (1962) 3 SCR 786. These decisions were treated as social and
industrial welfare legislation. On the principles of this philosophy, this
Court has already upheld the provisions of the Industrial Disputes Act in Niemla
Textile Finish ins Mills Ltd. vs. 2nd Punjab Tribunal. AIR 1957 SC 329 = 1957
SCR 335; Minimum Wages Act in U. Unichoyi vs. State of Kerala. (1962) 1 SCR 946 = AIR 1962 SC 12;
Payment of Bonus Act in Jalan Trading Co. Pvt. Ltd. vs. P.M. Aney.
AIR
1979 SC 233 = 1979 (3) SCO 220 whereunder compulsory payment of minimum
statutory bonus even in the years of loss was held to be valid and reasonable
under Article 19(6) of the Constitution.
Coming
now to some decisions of the High Courts, we may mention that the Bombay High
Court in State of Bombay vs. V.M. Jawadekar, 62 Bombay Law Report 183, has
already upheld the provisions of Section 9(1) of the C.P. & Berar Shops and
Establishments Act, 1947 (as amended in 1955) which provided for compulsory
holidays for the employees and closing of shop. The Allahabad High Court in Matrumal
Sharma and another vs. The Chief Inspectors of Shops and Commercial
Establishments, V.P. Kanpur, AIR 1952 Allahabad 773, has upheld the validity of the U.P. Shops and Commercial
Establishments Act. The provisions of Mysore Shops and Establishments Act were
upheld in BabaJan Mir Zahiruddin vs. State of Mysore and another, AIR 1957.
Mysore
64; the provisions of Ajmer Shops and Establishments Act were upheld in Bhanwarlal
and others vs. State of Rajasthan and other, AIR 1959 Rajasthan 257; the
restrictions placed under Madras Shops and Establishments Act, 1947 were held
to be reasonable in Sadasivam vs. State of Madras, AIR 1957 Madras 144. So also
the Andhra Pradesh High Court in Grandhi Mangaraju, Manager, Brothers Shop and
Branches, Rajam, Srikakulam District vs. Assistant Labour Inspector. Srikakulam
and another, AIR 1959 A.P. 604 and a Full Bench of the Punjab and Haryana High
Court in Ram Chander Baru Ram vs. The State, AIR 1963 Punjab 148 have upheld
their local laws dealing with shops and commercial establishments.
It may
be pointed out that the State of Kerala in its counter-affidavit pleaded that
in order to introduce the amendments in the Parent Act by which the number of
the national and festival holidays were increased, the Government took into
consideration the change in social conditions, the developments in the-State
and the number 12 of holidays enjoyed by other sectors. It was pleaded that the
outlook towards labour has undergone a drastic change since the enactment of
the Parent Act in 1958. The contention of the appellants that the increase in
holidays would result in the loss Of production was refuted by the State on the
ground that the power to Increase production required healthy labour force.
Some recreation and rest would make the labour more fit and capable of doing
their work more efficiently and satisfactorily which would result in more
production. The Kerala Institute of Labour and Employment had already made a
study of paid holidays available to industrial workers in Kerala State in 1982
and after studying the conditions prevailing in about one hundred and eighty
public 'and private industrial establishments as to the national and festival
holidays available to their workers had published a report. As per the analysis
made in that report, it was noticed that the number of paid holidays available
to industrial workers in the public sector in Kerala ranged from seven to
twenty one days and in private sector, from seven to seventeen days.
It'
was also noticed that the Government of India had declared sixteen holidays
while Government of Kerala had declared eighteen holidays for the year 1990
which were repeated in 1991.
Having
regard to the factors enumerated in the counter-affidavit as also to the
Directive Principles of State Policy contained in Article 43, we are of the
opinion that the Act by which the national and festival holidays have been
Increased is fully constitutional ana does not, in any way, infringe the right
of the appellants to carry on their trade or business under Article 19(1 ) (g
). The compulsory closure of the industrial concern on national and festival
holidays cannot be treated as unreasonable. It is protected by Clause (6) of
Article 19 and, therefore, cannot be treated to be violative of the Fundamental
Right under Article 19(1)(g).
The
plea under Article 14 also cannot be entertained. The decision by legislative
amendment to raise the national and festival holidays is based upon relevant
material considered by the Government, including the fact that the holidays
allowed by the Central Government and other public sector undertakings were far
greater in number than those prescribed under the Act. As pointed out earlier
the Act is a social legislation to give effect to the Directive Principles of
State Policy contained in Article' 43 of the Constitution. The law so made
cannot be said to be arbitrary nor can it be struck down for being violative of
Article 14 of the Constitution.
Learned
counsel for the appellants contended that before raising the national and
festival holidays from their original number under the Parent Act, to the
number of days contemplated by the Amending Act, the industries or their
representatives should have been given an opportunity of hearing. This argument
is wholly untenable. Principles of natural justice cannot be imported in the
matter of 'legislative action. If the Legislature, in exercise of its plenary
power under Article 245 of the Constitution, proceeds to enact a law, those who
would be affected by that law cannot legally raise a grievance that before the
law was made, they should have been given an opportunity of hearing.
This
principle may, in limited cases, be invoked in the case of sub-ordinate
legislation Specially where the 'main legislation itself lays down that before
the sub-ordinate legislation is made, a public notice shall be given and
objections shall be invited as is usually the case, for example, in the making
of municipal byelaws. But the Principle Of Natural Justice,' including right of
hearing, cannot be invoked in the making of law either by the Parliament or by
the State Legislature.
No
other point was pressed before us. We, consequently, find no merit in this
appeal which "is dismissed but without any order as to costs.
Back
