STATE OF MADRAS Vs. RAMACHANDRA RAO
LAWS(APH)-1955-9-25
HIGH COURT OF ANDHRA PRADESH
Decided on September 21,1955

STATE OF MADRAS, (ANDHRA) BY COMMISSIONER OF LABOUR Appellant
VERSUS
P.V.RAMACHANDRA RAO Respondents

JUDGEMENT

Viswanatha Sastri, J. - (1.)This is an appeal against the judgment of Subba Rao J. (as he then was) quashing a notification of the State of Madras, published as Notification No. 117, G. O. M. No. 5257 (Development Department) in Part I of the Fort St. George Gazette dated 8-1-1951. The appellant before us is the State of Madras (now the State of Andhra) represented by the Commissioner of Labour. The contesting respondents are either the owners or contractors of Beedi factories at Kalahasti, Chittoor District. The Minimum Wages Act (Act XI of 1948) hereinafter referred as ' the Act' was passed by the Central Legislature in order to fix the minimum rates of wages for certain employments. It is unnecessary to reproduce the several provisions of the Act which have been extracted in the judgment of the learned Judge. Suffice it to say that the Act empowers the Government to issue a notification fixing the minimum rate of wages in respect of any of the employments specified in the schedule to the Act after considering the advice of committees appointed for the purpose. The minimum rate of wages fixed by the Government under the Act consists of two component parts, (a) the basic rate of wages and (b) the costs of living allowance.
(2.)The costs of living allowance depends upon and varies with the costs of living index notified by an authority designated as " the competent authority" by the Act " in respect of the scheduled employments." Under Section 4 of the Act, the Government has to fix the minimum rate of wages consisting of the basic rate and special allowance at a rate to be adjusted at such intervals and in such manner as the Government may direct to accoid as nearly as practicable with the variation in the costs of living index number applicable to the particular employees or workmen. By notificaiion No. 117 dated 5-1-1951 the Government fixed the minimum wages of workers in Beedi factories. The Notification was to come into force on 1-3-1951. Under the said Notification, the minimum wages fixed for employee? of Beedi factories consisted of (a) a basic wageof Rs. 1-2-0 per 1000 beedies rolled and (b) a minimum costs of living allowance in addition to the basic costs of living index. The validity of this notification has been assailed in this appeal. The Government issued a notification No. 1186 dated 21-12-1948 authorising the Economic Adviser to fix the cost of living indices for workers in respect of the employments specified in the schedule annexed to the Act. The Economic Adviser was publishing every month the cost of living indices numbers for low paid employees at the different muffasil urban centres in the State of Madras. On 4-12-1951 he issued a notification under the Act declaring the cost of living index numbers applicable to employees engaged in the employments specified in the Act in different muffasil centres for the month of October, 1951. On 24-12-1951 the Economic Adviser issued a statistical supplement published in the Fort. St. George Gazeue declaring that the costs of living index numbers for low paid employees ai different muffasil urban centres in the Madras State for the months of Match 1951 to November 1951 (both inclusive) published in the Fort St. George Gazeue shall he deemed to have been ascertained and declared by him under the Act and shall be applicable to the employees in the employments referred to in the schedule to the Act. It may be inferred from this notification dated 24-12-1951 that there was no prior notification declaring the cost of living index numbers for the months of March, 1951 to October 1931 in conformity with the provisions of the Act. It was apparently to fill up the omission that the aforesaid notification dated 24-12-1951 was issued giving it retrospective operation. On the strength of this notification, the workers claimed enhanced wages and this claim was resisted by the owners or contractors of beedi factories Two points were urged before us and before the learned Judge : (1) The Notification fixing the cost of living allowance without prescribing the manner of adjustment is not in conformity with the provisions of Sec. 4 (1) of the Act and has therefore no legal effect whatever. (2) The Notification of the Economic Adviser to the Government dated 24-12-1951 fixing the costs of living allowance depending upon the costs of living index number could not be enforced during the period from 1st March to 31st August, 1951, because the said index was not fixed by "competent auihority" under the Act and also because the notification could not be made to operate with retrospective effect. The learned Judge upheld both these objections of the owners and contractors of Beedi factories, to the validity of the notification. Section 4 (1) of the Act, in so far as it is relevant runs as follows:
"Sec. 4 (i) Any minimum rates of wages fixed or revised by the appropriate Government in respect of scheduled employments under Section 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 costs of living index number applicable to such workers (hereinafter referred to as the 'cost of living allowance')"
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(3.)The notification of the Government No. 117 dated 3-1-1951 does not specify in what manner and at what intervals the special allowance contemplated as payable by the Notification should be adjusted. Merely fixing a rate varying with the living index number without at the same time specifying the manner of adjustment or the intervals at which the adjustment has to be made is not a sufficient compliance with the terms of Sec. 4 (1) of the Act.
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