PUNCHIRI BOAT SERVICE LTD Vs. STATE
LAWS(KER)-1955-3-8
HIGH COURT OF KERALA
Decided on March 15,1955

PUNCHIRI BOAT SERVICE LTD. Appellant
VERSUS
STATE Respondents

JUDGEMENT

- (1.) THESE are petitions presented by the proprietors of the Punchiri Boat Services Ltd. , Alleppey, P. M. Abraham & Sons Boat service, Alleppey, and the Indian Navigation Co. , Alleppey, respectively under art. 226 of the Constitution of India challenging the following notification marked Ext. A issued by the State of Travancore-Cochin, (No. L. I. 16322/53/dd dated 9th October 1954) fixing minimum wages for boat transport under the minimum Wages Act, 1948 (Central Act XI of 1948): "li. 16322/53/dd. 9th October 1954. In exercise of the powers conferred on them by Clause. (a)of Sub-s. 1 of S. 6 read with Clause. (iii) of Sub-s. (1) of S. 4 of the Minimum wages Act 1948 (Central Act XI of 1948) and after considering the advice of the committee appointed under Clause. (a) of Sub-s. (1) of S. 5 of the said Act, government hereby fix the minimum rates of wages, as specified in the schedule hereto annexed, which shall be payable to the classes of employees in the public Motor Transport mentioned thereunder. This notification shall come into force on and from 15. 10. 1954. Table:#1 Table:#2 N. B. 1. Adolescents 80% of the corresponding daily wages in all the categories. 2. Public Motor Transport Workers (Road Transport) shall be eligible for overtime rates for all work done exceeding 9 hours in a day or 48 hours a week. 3. Public Boat Transport Workers shall be eligible for overtime rates for all works done exceeding 16 hours in a 48 hour period or exceeding 48 hours in a week. By Order of His Highness the Raj Pramukh, K. Narayana menon, Add. Secretary to Government". The State is the first respondent in all the petitions. The other respondent in the second and third petitions who is the third and last respondent in the first is the Dist. Magistrate, Quilon, and the second respondent in the first petition is the District Magistrate, Kottayam, who are the authorities under the Act to investigate into the claims arising out of non-payment of the minimum wages fixed there-under. The Steam and Motor Boat crew Association, a registered union of workmen employed in the boats plying in the backwaters, was allowed to intervene. The Notification fixes minimum wages under three heads, namely, basic pay, dearness allowance and batta. The petitioners challenge only the validity of the inclusion of batta as a part of minimum wages and it is attacked on two grounds, first that it is ultra vires the powers of the State under the Act, and secondly, that it offends art. 19 (1) (g) of the Constitution as it is beyond the capacity of the employer to pay and its insistence would cripple and ultimately ruin the industry. In view of the decision of the Supreme Court in Bijaya Cotton Mills Ltd. v. State of Ajmeer (A. I. R. 1955 S. C. 33) - rendered on 14th October 1954 but not reported on the date of these applications, namely, 17th October 1954, the second point was not rightly pressed by petitioners' counsel in argument. Their lordships held that it is in the interests of the general public that the labourers should be secured adequate living wages and that if individual employers might find it difficult to carry on the business on the basis of the minimum wages fixed under the Act it must be due entirely to the economic conditions of those particular employers and that cannot be a reason for striking down the law itself, despite its standing justified by Clause. (6) of Art. 19, as unreasonable. The only point argued was the first and that concerns the question whether the State is entitled to enter over and above basic pay and dearness allowance, a third head, batta, to form a part of the minimum rate of wages under the Act.
(2.) THE Minimum Wages Act, XI of 1948, owes its origin to the "minimum Wages Fixing Machinery Convention" held at Geneva and its aim is to secure living wages to labourers in industries wherein sweated labour is prevalent with a chance of its exploitation. In the absence of an organisation for the effective regulation of wages such labour not being in a position to resist the threat or pursuasion of capital had to be protected by law. S. 5 (2) of the Act cast the duty on the appropriate Government to fix rates of wages in respect of each scheduled employment by notification in the official gazette. THE two sub-clauses of the first clause of that section provide alternative preliminaries to the making of the said notification. THE appointment of a committee to hold enquiries and advise the Government which advice is to be considered before fixing the minimum rate of wages is provided for in sub-Clause. (a) and an alternative is provided in sub-Clause. (b) which consists of the publication of proposals by Government inviting representations from those likely to be affected in which case those representations are to be considered before fixing the minimum rates of wages. S. 9 prescribes the constitution of the committee and enacts that it should consist of an equal number of persons representing the employers and employees and independent persons not exceeding one-third of the total number of members. THE Chairman of the Committee is to be nominated by the Government from the independents. A committee consisting of nine members was constituted in this case and they submitted a report paragraph 48 whereof relates to batta and reads as follows:- "48. (vi) Batta. THE nature of the Motor Transport industry is such that the operating staff will have to be away from their station of residence for the whole day and on certain occasions spend the night also outside. This necessitates in their taking meals outside their homes incurring extra expenditure. It is not fair to argue that the nature of their duties is such and that they should meet out of station expenses from their salaries. At the same time, the operating staff cannot expect to be fully compensated for all their expenses outside as it would cost them something to have their meals at home. It is only the additional expenses on meals, smoking and chewing that need be considered under 'batta'. It is somewhat similar to the daily allowance that Government servants receive when they go out of station. It need not be large enough to be a source of profit or extra income. Employers have recognised the need for some compensation and most of them have been paying batta distinctly as 'batta' or have included it in the daily wages where payment is made on trip basis. That State Transport Department pays 0-12-0 per day while some fleet operators pay as much as Rs. 1-8-0 and where stay overnight is involved such amount is even higher. In fact, in the case of employees under private operators batta has come to be regarded as part of 'pay' and hence some of the members of the Committee representing labour expressed the desire to include batta under 'allowance'. This is not practicable as the expenses naturally vary a good deal and depend upon the routes, times of operation and other factors. In the case of the boat crew, the out of station hours are generally much longer and batta is even more important. THE Alleppey industrial Tribunal referred to earlier has awarded a batta of 0-2-0 per hour. While the Committee felt it desirable that the minimum wages for the operating staff be fixed in the form of a basic pay plus a cost of living allowance, plus a batta, they were precluded from doing so under Section (2-h-iii and iv) of the Act which says that the term 'wages' does not include any travelling allowance or the value of any travelling concession and 'any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment'. By this the Act does not suggest that such sums to defray special expenses need not be paid to an employee but on contrary, it means that it cannot be set off against the wages and cannot therefore be included in wages and treated as an item for which a deduction can be made. We are therefore not including 'batta' in our recommended figures for Minimum Wages but would like to make it clear that we are not doing so not because we consider that such payment is not necessary but because the inclusion of such an obviously necessary payment under 'minimum Wages' is technically against the provisions of the Act. It is expected that all operating staff will be paid 'batta' which may however be limited to the actual 'extra' expenses entailed on the employee. At present, some of the employers are paying much more than the out of pocket expenses as they do not pay 'dearness allowance' separately. In our recommendation, since cost of living allowance is separately provided for as part of the minimum wages, a reduction in the total amount that is now being paid as 'batta' to the extent of the 'cost of living allowance' is only reasonable, provided the balance is sufficient to cover the extra expenses. We do not find any mention of 'batta' in the notification under the Minimum Wages fixed by the Madras and Mysore Governments and unfortunately there are no reports of the Minimum Wages Committee as no such committees were appointed. It has however been ascertained that batta is not included in their published minimum wages and it has also been ascertained by personal enquiries that the operating staff in the Mysore State get, 0-12-0 and in Madras State Rs. 1-2-0 as 'batta'. THE report of the Bombay Committee was available but unfortunately no mention of 'batta' is made anywhere in the Report, presumably because it is outside the scope of the Minimum Wages Act". THE impugned notification states that it was issued "after considering the advice of the Committee appointed under Clause. (a)of sub-s. (1) of S. 5 of the Act". THE advice of the committee and the notification that followed disagree in one particular and that is as regards batta. Whereas the committee advised the non-inclusion of batta in the minimum wages, the notification of the Government, contrary to the advice of the committee, includes batta as an item constituting minimum wages. It is true that the Government is not bound to accept the advice and act up to it. THEy are, however, bound to consider the advice before issuing the notification and the notification contains an express assurance of such consideration. If any part of the advice is not accepted one would naturally expect an expression of the reason therefor; but no such reason is forthcoming in this case and the state explains its absence by denying any deviation from the committee's advice and asserting in paragraph 6 of the counter-affidavit dated 19. 1. 1955 filed on behalf of the State. "it is true that the Minimum Wages Committee has understood the word batta in the sense in which it has been used by the petitioner. But it is respectfully submitted that the import of the word 'batta' and the purpose for which it is paid has not been correctly understood by the Minimum Wages Committee. In any event, the respondent has not used the word batta in the sense in which it has been understood by the Minimum Wages committee". THE contention urged on behalf of the State is that though batta as understood by the committee cannot form part of the minimum rate of wages to be fixed by the Government the expression as used in the notification does not mean that, but has a different connotation and means merely that it is a part of the first head 'basic wage' though it is entered in another and the third head with a different nomenclature. THE General Secretary of the Union in his counter-affidavit says: "4. THE report of the committee which has gone into the question of the minimum wage, has misunderstood the nature of the batta. As a matter of fact batta is only fixed as a piece rate in addition to the time rate". The expression'wages' is defined in S. 2, Clause. (h)thus: "'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 of work done in such employment, but does not include (1) the value of - (a) any house accommodation, supply of light, water, medical attendance; or (b) any other amenity or any service excluded by general or special order of the appropriate Government; (ii) any contribution paid by the employer to any Pension fund or Provident Fund or under any scheme of social insurance, (iii) any travelling allowance or the value of any travelling concession; (iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (v) any gratuity payable on discharge. " The positive portion of the definition is clarified in S. 4 which reads: "minimum rate of wages: (1) Any minimum rates of wages fixed or revised by the appropriate Government in respect of scheduled employments under S. 3 may consist of - (i) a basic rate of wages and a special allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the 'cost of living allowance'); or (ii) a basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect of supplies of essential commodities at concession rate, where so authorised; or (iii) an all inclusive rate allowing for the basic rate, the cost of living allowance, and the cash value of the concessions, if any. (2) The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rates shall be computed by the competent authority at such intervals and in accordance with such directions as may be specified or given by the appropriate government". There could be only three component parts in the minimum rate of wages, (1) basic rate of wages, (2) special allowance and (3)concessions in respect of supplies of essential commodities at concession rates, and fixation of minimum rate of wages may be in one or the other of the three modes envisaged in each of the sub clauses of the first clause in the section. The inclusion of batta as an item in the minimum rate of wages is not authorised by the section. The definition of wages read above excludes various items from the ambit of its operation. The third and fourth are " (3) any travelling allowance or the value of any travelling concession; (4) any sum paid to the person employed to defray the special expenses entailed on him by the nature of his employment". The notification (Ext. A) shows that in respect of road transport batta is payable the Driver, Conductor, Checker or Checking inspector, but not to No. 4, the Booking Clerk or Depot Clerk to No. 15, the fitter, to 22, the Asst. Fitter or to 25, Greaser. In Boat Transport batta is payable for all the four kinds of employees, Serang, Driver, Boat-master and lascars. The reason why batta is made payable in some cases and not in others is obviously that where batta is not playable the labour is done at a fixed placed whereas in instances where batta is payable the movement of the labourer is involved in the act of doing the work. The third item of exclusion read above, Travelling Allowance, would not apply to the case because that is an allowance given for the travel undertaken by a labourer for the purpose of performing his work at the journey. Exclusion No. 4 does apply to batta in the view of the Committee. There is much to commend that view because when the employee goes away from home he may have to incur special expenses in connection with his sustenance, occasioned by the nature of his employment which takes him away from his residence, the extent of the excess varying in proportion to the duration of the removal. Batta is made payable per day in the case of road and per running hour for boat transport. Even assuming that batta does not fall within the excluded 4th item it does not follow that its inclusion in the minimum rate of wages is justified because the definition does not purport to given an exhaustive catalogue of items excluded from its ambit, as in the case of S. 4 which prescribes the several heads which alone can form parts of the minimum rate of wages. The attempt of the State was, therefore, not to justify the award of batta as a separate but as coming within the first head, namely, basic pay, though it is shown as a separate head in the third column. The case set up by the Union conflicts with that of the State in that both the first and third columns are sought to be sustained as independent heads of minimum rates of wages as a combination of piece and time rates which is claimed to be permissible under the 2nd clause of the third section of the act. That clause however does not sustain the contention, as it enables the government to fix " (a) a minimum rate of wages for time work (here-in-after referred to as 'a minimum time rate'); (b) a minimum rate of wages for piece work (here-in-after referred to as 'a minimum piece rate'); (c) a minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis (here-in-after referred to as 'a guaranteed time rate'); (d) a minimum rate (whether a time rate or a piece rate)to apply in substitution for the minimum rate which would otherwise be applicable, in respect of overtime work done by employees (here-in-after referred to as 'overtime rate')"; and does not authorise the combination for concurrent operation of the piece and time rates. The expression 'batta' is not defined in the Act. The meaning given to that word in the Shorter Oxford English dictionary is "batta-Anglo-Ind-Orig. Subsistence money. Hence, extra pay during a campaign, and spec. An extra allowance which became a constant addition to the pay of officers serving in India". Chamber's Twentieth century Dictionary gives the following meaning: "batta.- an allowance in addition to ordinary pay; subsistence money (prob. Kanarese Bhatta, rice)". New English Dictionary by Murray gives the following meaning: "batta-Anglo-Ind. a. Indo Portugese bata prob. ad. Canarese Bhatta rice in the husk (also called by Europeans batty), which became, first with Portugese, a term for 'maintenance', 'allowance for maintenance'. (Cold. Yule) Orig. Subsistence money (given to soldiers in the field, witnesses, prisoners etc.), hence extra pay given to East Indian regiments when on a compaign, and spec. an extra allowance which grew in time to be a constant addition to the pay of officers serving in India". Batta is thus an extra payment over and above pay. Though that extra payment may be a common feature it does not form part of, but is outside and over and above, the pay. The only extras that could be added to the pay under the Act are the allowance and concessions contemplated in the first and second sub-clauses of the first clause of the 4th section. The counter-affidavit is sworn to by Sri. N. Kochukrishnan, Deputy Labour commissioner, Travancore-Cochin State. He does not say that he was in any way connected with the impugned notification or had any means of knowledge as to what was intended to be conveyed by the use of the expression 'batta' therein. Nor was he concerned in or connected with the deliberations of the Committee. How could he then swear that "the import of the word 'batta' and the purpose for which it is paid has not been correctly understood by the Minimum wages Committee. The assertion "in any event, the respondent has not used the word batta in the sense in which it has been understood by the Minimum wages Committee" in paragraph 6 of his affidavit passes comprehension. An affidavit by a person unable to swear to the facts and circumstances from his knowledge hardly serves any purpose and would not even be in proper form if the source of information is not, as in this case, indicated. When a notification like Ext. A issued by the Government is impugned, instead of the State seeking to support it in the manner attempted to be done by the counter-affidavit of the Deputy Labour Commissioner, whose competency is his office, an affidavit from a person like the Chief Secretary or the Additional Secretary to government in the know of relevant facts and circumstances should have been produced. But apart from this, and taking the counter-affidavit as merely indicative of the contentions urged on behalf of the State it is clear from the foregoing that the committee understood the expression in its proper and only meaning. Indeed it is not alleged by learned Government Pleader that the expression has ordinarily any other meaning than the one given in the dictionaries. The last attempt of the learned Government Pleader was the one which has been already indicated, namely, that the third column in Ext. A is really no separate head at all, but forms part and parcel of the first column 'basic pay'. In fact, this was the only way in which the inclusion of batta in the impugned notification was sought to be justified. It is not possible to regard the amount of batta as a part of the basic pay. This will be clear from a scrutiny of the notification itself. The second column 'dearness Allowance' is based upon the fist column 'basic pay'. Fora basic pay not exceeding Rs. 30, Dearness allowance is Rs. 22. If basic pay is above Rs. 30 Dearness Allowance is Rs. 25. There is no provision in Ext. A for increasing Dearness Allowance based on an increase in the basic pay on account of the addition of batta to the basic pay. Lascars, No. 4 in the Boat Transport Operating Staff, get a basic pay of Rs. 20 and a Dearness Allowance of Rs. 22. Batta at the rate of 1 anna 6 pies per running hour is payable to them. Suppose the batta in a particular month amounts to Rs. 15, then the basic pay would, according to the contention of the state, be Rs. 20 plus Rs. 15, i. e. , Rs. 35. Dearness Allowance, if the basic pay is Rs. 35, is Rs. 25 (See Nos. 1, 2 and 3 in the Boat Service Operating staff, Serang, Driver and Boatmaster ). In the absence of a provision for enhancing the dearness allowance of Lascars, No. 4 in that list, they would get only a dearness allowance limited to Rs. 22. This cannot be. Dearness allowance is variable and depends upon the amount of the basic pay. Should the basic pay be variable the dearness allowance should necessarily be so too. If as in this case the dearness allowance is fixed, it is inevitable that the basic pay should be fixed as well except for such margin as would not affect the dearness allowance. This process of reductio ad absurdam mathematically demonstrates the futility of the attempt of the Government Pleader whose endeavour is to give batta a place in the first head 'basic pay' in the notification. It follows that the inclusion of the head 'batta' by the State in the Notification Ext. A, issued by them under S. 5, Clause. (2) of the Act is ultra vires their powers and void. The fixation of minimum rates of wages in respect of any scheduled employment by the appropriate Government is, no doubt, an administrative Act which is final, (see A. I. R. 1955 Madras 45) and is not subject to judicial review on the question of the quantum of the wages fixed. If, however, the fixation by the Government is ultra vires their powers under the Act it admits of being so declared and corrected by the court under Art. 226 and/or 227 of the constitution. Indeed the jurisdiction of the Court to interfere if the act of the State is ultra vires the Act was not questioned before us. The vice in the notification does not consist in the quantum of the third head (batta) at all, but lies in its quality as an extra outside the permissible components of minimum rate of wages. If the amounts shown in the first head are deemed insufficient Government are free to fix them at whatever higher figure they find it. We, therefore, quash the notification dated 9th october 1954, Ext. A, which is impugned by the petitioners in so far as the third column therein, namely, batta is concerned and hold that batta does not and cannot form a component part of the minimum rate of wages which the government is authorised and enjoined to fix by S. 5 of the Act. The petitions succeed are allowed to this limited extent. Under the circumstances, we make no order for costs.
(3.) BY way of abundant caution, we add a note that our observations in this judgment are confined to the powers of Government to include batta as a separate head in fixing the minimum rates of wages under S. 5 of the Minimum Wages Act as no other matter is within our purview in these cases. Allowed.;


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