Decided on September 21,1961



- (1.) THE petitioner in this case is a company incorporated under the Indian Companies. Act and carries on business as a distributor of cinematographic films. The Minimum Wages Act, 1948' (II of 1948) (hereinafter referred to as the "said Act") is a Central Act to provide for the fixation of minimum rates of wages in certain employments. It came into operation from the 15th March, 1948. Under clause (g) of section 2, "scheduled employment" means an employment specified in the schedule to the Act or any process or branch of work forming part of such employment. Clause (h) defines "wages" to mean all remuneration, capable of being expressed in terms of money. Certain amenities however, specified therein, lave been excluded. Under clause (i), the word "employee" has been defined to mean any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed. Under section 3, the appropriate Government shall fix the minimum rates of wages payable to employees employed in a scheduled employment. It is not disputed that the appropriate Government in this cas3 is the State Government of West Bengal. In fixing and)or revising the minimum rates of wages, section 5 provides that the appropriate Government can proceed in two ways: The first is to appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision. The second method is to notify in the Official Gazette, its proposals, for the information of persons likely to be affected, so that they may make representations. After considering the advice of the committee or committees or such representations received by it, the appropriate Government may proceed to fix the minimum rates of wages. For the purpose of coordinating the work of such committees and sub-committees, the Government shall appoint an Advisory Board. Section 9 deals with the composition of committees. This is important in the present case and must be set out:- "each of the committees, subcommittees, and the Advisory Board shall consist of persons to be nominated by the appropriate Government representing employers and employees in the scheduled employments, who shall be equal in number, and independent persons not exceeding one-third of its total number of members; one of such independent persons shall be appointed the Chairman by the appropriate Government. " Section 11 provides that minimum wages payable under the Act shall be paid in cash, except where there is a custom to pay wages wholly or partly in kind, in which case the appropriate Government may authorise the payment thereof wholly or partly in kind. Clause (3) of section 11 provides that if the appropriate Government is of the opinion that provision should be made for the supply of essential commodities at concession rates, the appropriate Government may, by notification in the Official Gazette, authorise the provision of such supplies at concession rates. Clause (4) provides that the cash value of wages in kind and of concessions in respect of supplies of essential commodities at concession rates, shall be estimated in the prescribed manner. Section 12 lays down that where the minimum wages have been prescribed for any scheduled employment, the employer shall pay to every employee, wages at a rate not less than the minimum rate of wages so fixed for that class of employees, in that employment, without any deductions except as may be authorised, within such time and subject to such conditions as may be prescribed. Section 27 gives power to the appropriate Government to add to the schedule. It provides that the appropriate Government, after giving by notification in the Official Gazette not less than three months' notice of its intention so to do, may, by like notification, add to either Part of the Schedule, any employment in respect of which it is of opinion that minimum rates of wages should be fixed under the said Act. The original schedule in the said Act did not contain any heading relating to the cinema industry. In exercise of power under section 27 of the said Act, the State Government by notification dated 19th May, 1959 published in the Calcutta Gazette on the 4th June, 1959 added to Part I of the Schedule the heading- "cinema Industries", which thereupon became one of the scheduled employments. On the 8th January, 1960 by notification in the Official Gazette, the Government appointed an Advisory Committee. Three members were appointed as "independent persons". They are Shri S. M. Bhattacharyya, I. A. S. , Labor Commissioner, West Bengal as Chairman, and Shri S. R. Mookerjee, Deputy Labor Commissioner, West Bengal and Shri Abani Kumar Ghosh, M. L. A. , as members. Upon the purported advice of the said Advisory Committee, the appropriate Government published a notification dated 16th May, 1960 fixing the minimum rates of basic wages per month payable to- (1) employees employed in the cinema houses (exhibition) of the Cinema Industries in West Bengal (2) employees employed in the distributing units in the Cinema Industries in West Bengal and (3) employees employed in the production sides viz. , studios producing units and laboratories in West Bengal. As I shall presently show, this notification not only fixed the minimum rates of basic wages but also did various other things which are the subject matter of attack in this case. A copy of the notification is annexure 'a' to the petition. On 31st May, 1960 one Surendra Ranjan Sarkar and two others made an application to this Court under Art. 228 of the Constitution, inter-alia for a writ in the nature of mandamus calling upon the State of West Bengal to recall, annul or cancel the said notification dated 16th May, 1960. The said application was numbered as Matter No. 134 of 1960. There was an interim injunction prohibiting and restraining the respondents in that application from giving effect to the impugned notification so far as the petitioners were concerned in that Rule The result was that the State Government did not take any further steps pending the disposal of the Rule, to implement the said notification. On 9th June, 1961 permission was given to the petitioners in that application to withdraw the same with liberty to take other legal proceedings as they may be advised. This was because it was found that there were serious disputes as to facts. On the 11th July, 1961 a letter was written by the Deputy Labor Commissioner, West bengal, to various employers that the minimum rates of wages fixed by the Government in Notification dated 16th May, 1960 must be implemented with-it a fortnight. Thereafter, certain disputes were raised and it seems that the Labor Commissioner, the respondent No. 5, called a meeting of the respondents 2, 3 and 4. The respondent No. 2 is an association of employers and is registered under the Indian Companies Act. The respondent Nos. 3 and 4 are Trade Unions of the employees, registered under the Trade Union Act. On the 20th July, 1961 it is stated that an agreement was reached, a copy whereof is annexure C to the petition. It is stated that the appropriate Government was going to revise the notification on the basis of such agreement. I might point out here that section 25 of the said Act runs as follows:- "any contract or agreement, whether made before or after the commencement of this Act, whereby any employee either relinquishes or reduces his right to a minimum rate of wages or any privilege or concession accruing to him under this Act shall be null and void in so far as it purports to reduce the minimum rate of wages fixed under this Act. "
(2.) ALL parties have admitted before me that in view of this section, the so-called agreement is of no effect. Actually in this case, I am not concerned with the question as to whether the appropriate Government was going to revise the notification in accordance with the said agreement. What I have got to determine is as to whether the notification as published is in accordance with the provisions of law. This application was made and the Rule was issued on 3rd August, 1961. In this application, two points have been taken The first is that the Advisory Committee has not been properly constituted inasmuch as two of the so-called "independent persons" nominated by the State Government are not independent persons at all, but employees of Government. The second point that has been taken is that the notification fixing the minimum wages in the scheduled employment namely the "cinema Industries" is not in accordance with the provisions of the Act. As I have stated above, the composition of committees is to be made as provided for in section 9 of the said Act. The complaint is that two of the persons nominated by Government are Government servants, namely the Labor Commissioner and the Deputy Labor Commissioner, West Bengal. The question to be decided is as to whether these persons can be said to be "independent persons" within the meaning of the expression as used in paragraph 9 of the said Act. In order to consider this point, it will be necessary to clear the ground by referring to certain decisions laying down the legal position of an Advisory Committee.
(3.) THE first case is a decision of the Supreme Court-Edward Mills Co. Lid. , Beawar and Ors. v. State of Ajmer and Anr. (1) A. I. R. (1955), SC. 25. In that case, section 27 of the said Act was challenged as ultra vires. It will be remembered that section 27 gives power to the Central Government to add to the Schedule. It was held that the legislative policy was apparent on the face of the said Act. What it aimed at was the statutory fixation of minimum wages with a view to obviate the chance of exploitation of labor. The legislature intended to apply the Act not to all industries but to chose industries only where by reason of unorganised labor or the want of proper arrangement for effective regulation of wages or for other causes, the wages of laborers in a particular industry ware very low. It is with an eye to this fact that the list of trades had been drawn up in the schedule attached to the Act. but the list was not an exhaustive one and it was the policy of the Legislature not to lay down at once and for all time, to which Industry the Act should be applied. There was therefore no delegation of essential legislative functions. Speaking about the Committees appointed under section 5 of the said Act, Mukherjee J. held that such a Committee was only an Advisory Body and that the Government was not bound to accept any of its recommendations. It was held that mere procedural irregularities would not vitiate the final report fixing the minimum wages The next case cited is-Bijay Cotton Mills Ltd. and Ors. v. State of Ajmer (2) A. I. R. (1955) S. C. 33. It was held in that case that the material provisions of the Minimum Wages Act were not ultra vires of the Constitution, because the securing of living wages to laborers is conducted in the general interests of the public, and this was one of the Directive Principles of State Policy embodied in Art. 43 of the Constitution. Although the restrictions imposed by them, interfere to some extent with the freedom of trade and business guaranteed under Art. 19 (1) (g) of the Constitution, these restrictions are reasonable, and being imposed in the interest of the general public, are protected by clause (6) of Art. 19. Speaking about Advisory Committees, Mukherjee J. , said as follows:- "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 its 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 co-ordinating agent for co-ordinating 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 salfguard against any hasty or capricious decision by the 'appropriate Government'. ";

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