1969 (9) TMI 113 - SC - Indian Laws

Constitutionality of Minimum Wages Act 1948 upheld, government's discretion affirmed

The Court upheld the constitutionality of the Minimum Wages Act, 1948, dismissing challenges related to Article 14 and Article 19(1)(g) of the ... - Issues Involved:1. Section 5(1) of the Minimum Wages Act, 1948 and Article 14 of the Constitution.2. Constitutionality of the Act concerning Article 19(1)(g).3. Necessity of appointing a committee under Section 5(1)(a) of the Act.4. Quasi-judicial nature of fixing minimum wages and principles of natural justice.5. Permissibility of fixing different minimum wages in different industries.6. Division of the State into zones for fixing different rates of minimum wages.7. Rational basis for the division of the State into zones.8. Valuation of food provided to employees.Detailed Analysis:1. Section 5(1) of the Minimum Wages Act, 1948 and Article 14 of the Constitution:The contention was that Section 5(1) of the Act is violative of Article 14 as it confers unguided and uncontrolled discretion on the Government to follow either of the alternative procedures prescribed in clauses (a) and (b). The Court held that the power under Section 5(1) is not arbitrary as the Government can be trusted to exercise that power to further the purposes of the Act. The legislative policy is clear, and the Government is merely charged with implementing that policy. Discretion to select one of the two procedures depends on the nature of the employment and the information the Government has in its possession.2. Constitutionality of the Act concerning Article 19(1)(g):The provisions of the Act were challenged as they allegedly interfered with the freedom of trade guaranteed under Article 19(1)(g). The Court reiterated that the Act aims to prevent the exploitation of unorganized labor and ensure minimum wages, which is a step towards fulfilling the mandate of Article 43 of the Constitution. The Act does not violate Article 19(1)(g) as the freedom of trade does not include the freedom to exploit.3. Necessity of appointing a committee under Section 5(1)(a) of the Act:It was argued that the Government must appoint a committee under Section 5(1)(a) to inquire and advise on fixing minimum wages. The Court held that the Government has the discretion to choose between the procedures in Section 5(1)(a) and Section 5(1)(b). The Government had sufficient data to proceed under Section 5(1)(b) and had consulted the advisory committee constituted under Section 7.4. Quasi-judicial nature of fixing minimum wages and principles of natural justice:The contention was that fixing minimum wages is a quasi-judicial act, and the Government failed to observe the principles of natural justice. The Court noted that whether the power is quasi-judicial or administrative, the principles of natural justice apply. However, the procedure adopted was adequate and effective, and reasonable opportunity was given to all concerned parties to represent their case.5. Permissibility of fixing different minimum wages in different industries:The argument that the Government cannot fix different minimum wages for different industries was dismissed. The Court referred to its earlier decision in M/s. Bhaikusa Yamasa Kahatriya v. Sangamner Akola Taluka Bidi Kamgar Union, which upheld the Government's power to fix different minimum wages based on varying economic conditions, cost of living, and nature of work.6. Division of the State into zones for fixing different rates of minimum wages:The division of the State into zones and fixing different rates of minimum wages for different zones was challenged. The Court held that such division is permissible under Section 3(3) and is consistent with the scheme of the Act. The Government's decision was based on rational considerations, such as the economic significance of Bangalore and Mangalore.7. Rational basis for the division of the State into zones:The Court found that the division into zones was done on a rational basis. The Government provided valid reasons for its decision, including the status of Bangalore as the state capital and Mangalore as a major port. The cost of living index was not the sole factor; other considerations were also relevant.8. Valuation of food provided to employees:The valuation of the food provided to employees was contested as unreasonably low. The Court found this argument petty and misconceived. The minimum wage calculation includes various components, not just food. The notification allowed employers to deduct the cost of meals provided, which was an option, not a duty. The relevant rule for valuation was Rule 22(2)(v), considering food as an amenity.Conclusion:The appeal and the writ petition were dismissed with costs. The Court permitted the owners of residential hotels and eating houses to pay the arrears of minimum wages within six months, subject to interest at 6% per annum.