GAJENDRAGADKAR, - (1.) THE following Judgment of the court was delivered by
(2.) THESE four appeals consist of two sets of cross appeals each and they arise from two petitions filed in the High court of Bombay at Nagpur challenging the validity of the notification dated 11/06/1958, issued by the State of Bombay, now represented by the State of Maharashtra, under s. 5 of the Minimum Wages Act, 1948, ( 11 of 1948) (hereafter called the Act.) The petitioners in Special Civil Application No. 205 of 1958 are the Bidi, Bidi Leaves and Tobacco Merchants' Association, Gondia and two others, whereas the petitioners in Special Civil Application No. 214 of 1958 are Haji latif Ghani Kachhi and five others. The impugned notification consists of seven clauses. By the majority decision of the High court cls. 1 to 5 and the first part of cl. 6 are held to be intra vires, whereas the latter part of cl. 6 and cl. 7 as well as the explanation added to it are held to be ultra vires. The first part of the finding is Challenged by the petitioners in the two writ petitions by their Civil Appeals Nos. 415 and 417 respectively, while the latter part of the finding is challenged by the State of Maharashtra in its Civil Appeals Nos. 416 and 418 respectively. Thus, Civil Appeals Nos. 415 and 416 are cross appeals and Civil Appeals Nos. 417 and 418 are cross appeals. THESE appeals have been brought to this court with a certificate granted by the High court under Art. 132(1) of the Constitution. As will presently appear the only point which calls for our decision in these appeals is one relating to the validity of the impugned notification; and so the certificate might well have been given under Art. 133 (1)(c) and not under Art. 132 (1) because the case does not involve a substantial question of law as to the interpretation of the Constitution. For convenience we will refer to the petitioners in the writ petitions as petitioners and the State of Maharashtra as the respondent in these appeals. The petitioners are bidi manufacturers in different parts of the Vidarbha region and they employ a large number of persons for the purpose of making bidis for them. It appears that the government of the State of Madhya Pradesh within whose jurisdiction Vidarbha was then situated had fixed the minimum rates of wages in respect of employment in tobacco (including bidi making) manufactories by issuing a notification on 11/01/1951. This notification had purported to fix the minimum rates of wages per 1000 bidis by reference to different localities in the State. The rates thus fixed were inclusive of dearness allowance or compensatory cost of living allowance and they varied from place to place as specified in columns 2 to 4 of the notification respectively. An Advisory Board was thereafter constituted by the said State in exercise of the powers conferred on it by s. 7 of the Act. Subsequently, in 1956 the said minimum rates of wages were revised by a notification issued on 23/02/1956. As a result of the State Reorganisation Act, 1956 (37 of 1956) the Vidarbha region became part of the State of Bombay. After Vidarbha thus became a part of the State of Bombay the government of Bombay notified that the Advisory Board appointed by the said government under s. 7 shall be the Advisory Board for Vidarbha. This notification was issued on 1/11/1956. The government of Bombay then issued a notification publishing the draft of the notification which was proposed to be issued under s. 5, sub-s. (2) read with cl. (b) of sub-s. (1) of s. 5, and notice was thereby given to all the bidi manufacturers that the said draft would be taken into consideration on or after 1/03/1957. Thereafter the procedure prescribed by s. 5 was followed, an enquiry was held, a report of the Advisory Board was received and finally the impugned notification was issued on 11/06/1958. It is the validity of the several clauses contained in this notification that is challenged before us in the present appeals. In their petitions the petitioners alleged that cls. 3 to 7 of the notification were invalid and ultra vires the powers of the respondent under ss. 3, 4 and 5 of the Act. According to them the respondent had no power to make provision for deciding as to the extent to which 'chhat' will be permitted or directing the action to be taken by the employer and employee relating to bad bidis. Their contention was that the said clauses purported to make provisions for the settlement of disputes between the employer and the employee concerning an Industrial matter and were outside the purview of the respondent's power under the relevant sections. They urged that the different provisions of the notification were so interrelated that it was difficult to dissociate one from the other and so it was necessary that the notification as a whole should be quashed. The respondent disputed the correctness of the contentions raised by the petitioners. It urged that there were constant disputes among bidi manufacturers and bidi workers regarding the minimum wages fixed in the Vidarbha region and so the respondent thought it necessary to institute an enquiry into these complaints in order to decide whether it was necessary to revise the minimum wages prescribed by the earlier notification and the mode of determining those wages. It was only after a comprehensive enquiry was held at which all parties were heard that the respondent issued the notification in question. Its case was that the minimum rates of wages had been fixed on industry-cum-regionwise basis and that cls. 3 to 7 were intended to make the fixation of minimum rates of wages effective. According to the respondent, the absence of any rules regarding the exercise of the right of 'chhat' by the employers tends to deprive the bidi workers of their right of getting minimum rates of wages, and so cls. 3 to 7 were deliberately introduced to make the material provisions of the Act effective in their implementation. These petitions were first heard by Mudholkar and Kotval, JJ. Mudholkar, J. held that all the clauses in the impugned notification were valid for, according to him, though the Act had not conferred express powers on the respondent to prescribe the impugned clauses of the notification yet the respondent could prescribe the said rules under the doctorine of implied powers. Kotval, J., agreed that cls. 1 and 2 were valid but he thought that even under the doctrine of implied powers the remaining cls. 3 to 7 could not be sustained. According to him the said clauses were, however, severable from cls. 1 and 2 and so they should be struck down leaving cls. 1 and 2 in tact. Since there was a difference of opinion between the two learned judges the matter was referred to Tambe, J. He held that cls. 1 to 5 and the first part of cl. 6 were intra vires where as the latter part of cl. 6 and cl. 7 as well as the explanation added to it were ultra vires. After Mr. Justice Tambe pronounced his judgment the matter was again referred to a division bench, and the division bench, in accordance with the majority opinion, has upheld the validity of cls. 1 to 5 and the first part of cl. 6 and has struck down the latter part of cl. 6 as well as cl. 7 and its explanation. It is against this decision that the petitioners and the respondent have come to this court with a certificate granted by the High court in that behalf.
(3.) BEFORE dealing with the merits of the controversy between the parties it would be relevant to refer to the material provisions of the Act. The Act was passed in 1948 in order to provide for fixing minimum rates of wages in certain employments. Its provisions apply to the scheduled employment which expression under s. 2 (g) means an employment specified in the schedule, or any process or branch of work forming part of such employment. It is common-ground that employment in any tobacco (including bidi making) manufactory is a scheduled employment under the schedule of the Act. Section 2(h) defines wages and it prescribes inter alia, that 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 or of work done in such employment, and includes house-rent allowance, but does not include the items specified by cls.(i) to (v) of the said definition. Section 3 authorises the appropriate government to prescribe different minimum rates of wages for different scheduled employments, different classes of work in the same scheduled employments, adults, adolescents, children and apprentices and different localities. Under s. 4 are prescribed the components of the minimum rates of wages. Section 5 provides for the procedure for fixing and revising minimum wages. Section 7 provides, inter alia, that minimum wages payable under the Act shall be paid in cash. Under s. 12 an obligation is imposed on the employer to pay every one of his employees engaged in the scheduled employment wages at a rate not less than the minimum rate of wages fixed by the notification issued in that behalf. Section 12 (2) saves the application of the provisions of the payment of wages Act. Section 20 authorises the appropriate government to appoint an authority to hear and decide for any specified area all claims arising out of the payment of less than the minimum rates of wages and other claims specified therein. The remaining Ss. of the said section prescribe the procedure for determining such claims. Under s. 21 a single application can be made in respect of a number of employees who wish to prefer a claim for the decision of the authority under s. 20. Section 22 prescribes penalties for the offences therein specified. Section 22A provides that if any employer contravenes any of the provisions of the Act or any rule or order made thereunder he shall, if no other penalty is provided for such contravention, be punishable with fine which may extend to five hundred rupees. Section 22B provides, inter alia the manner in which courts may take cognizance of a complaint against any person for an offence committed under the Act. That in brief is the scheme of the material provisions of the Act. At this stage it would be necessary to read the several clauses of the impugned notification : 'No. MWA. 1557-J. In exercise of the powers conferred by Ss. (2) of section 5 read with clause (b) of Ss. (1) of that section of the Minimum Wages Act, 1948 (XI of 1948) and after consulting the Advisory Board and in supersession of the former government of Madhya Pradesh Labour Department Notification No. 564-451 XXIII, dated 23/02/1956, the government of Bombay hereby revise the minimum rates of wages in respect of the employment in any tobacco (including bidi making) manufactory in the Vidarbha region of the State of Bombay as mentioned in the Schedule hereto annexed and directs that this notification shall come into force with effect from 1/07/1958. SCHEDULE JUDGEMENT_486_AIR(SC)_1962Html1.htm 2. For all bidis in which 7 chhataks or more of tobacco mixture is used and for those bidis which are known as 'Hatnakun' bidis, there shall be an increase of 12 Naye Paise per 1000 bidis in the rates mentioned above in all the areas. 3. It shall be within the discretion of the employer to decide which are 'chhat' bidis or bad bidis, up to 5 per cent of the bidis prepared by the employee. If the employer decided that any bidis are 'chhat' or bad, the 'chhat' or bad bidis up to 5 per cent shall be destroyed forthwith by the employee and whatever tobacco is recovered from them shall be retained by the employer. If, however the employer wants to retain these 'chhat' or bad bidis, he shall pay full wages for the same to the employee. 4. If 'chhat' or bad bidis are more than 5 per cent, but less than 10 per cent, and if there is any dispute between the employer and the employee as to whether the ''chhat' or bad bidis is done properly or not, equal number of representatives of the employer and the employees shall inspect the 'chhat' is done properly or not. If there is any difference ofopinion amongthe representatives of the two sides, the majority opinion shall prevail. If the opinion is equally divided and the employer wants to retain the 'chhat' bidis, he shall pay wages for 'chhat' bidis between 5 per cent to 10 per cent at half the rates fixed above. If the employee does not want to retain these bidis the employee shall destroy them forthwith. 5. The employer shall nominate his representatives and the employees shall elect their representatives. 6. In the case of 'chhat' above 10 per cent., the employee shall be entitled to full wages. It shall, however, be open to the employer to take suitable action against the employee if the 'chhat' is more than 10 per cent for 6 continuous working days in a calendar month. 7. The 'chhat' shall be made once in a day only, at any premises within a distance of not more than 2 miles from the premises where bidis are manufactured. Explanation:-For the purpose of this Schedule the expression 'employer' includes his thekedar, contractor or agent as the case may be.' The validity of cls. 1 and 2 is not in dispute. The petitioners, however, contend that cls. 3 to 7 are outside the powers conferred on the respondent by the relevant provisions of the Act and as such are invalid. It is common ground that even if the impugned clauses are held to be ultra vires they are severable from cls. 1 and 2 so that the invalidity of the impugned clauses will not affect the validity of the said two clauses and they will stand even if the other clauses are struck down. In determining the question about the validity of the impugned clauses it is necessary to refer to two material facts. The nature and scope of the terms of contract between the petitioners and their employees are really not in dispute. It is alleged by the petitioners that they employ a large number of persons for the purpose of making bidis for them, that these persons are supplied with tendu leaves, tobacco and other necessary materials, they take the said articles to their respective places where they work and brings back the bidis prepared by them to the employer. The employer then examines the bidis' accepts such of them as are found to have been prepared according to the terms of the contract rejects such of them as are found to be of poor quality and not prepared according to the terms of the contract and pays for the bidis actually accepted. The respondent has not traversed these allegations made by the petitioners. It admitted that the workers are paid on piece-rate basis and the payment is made 'on the basis of bidis selected and accepted by the employer after rejecting certain portions of bidis prepared by the workers'. In fact the respondent has expressly stated that 'there is a recognised practice of making payment on the basis of bidis accepted by employers as coming up to a certain standard of skill'. It is further admitted that the employers have insisted on their right in principle of rejecting the sub-normal or substandard bidis prepared by the employees. Thus, there is no doubt that under the terms of the contract the workers are entitled to receive payment only for the bidis accepted by the employers, and not for those which are rejected. It is also not disputed that the bidis which are rejected by the employers otherwise known as 'chhats' are retained by the employer though he refuses to take them into account in the matter of payment to the workers on the ground that they do not come up to the standard of skill or quality prescribed by the contract. ;