1967 (9) TMI 152 - HC - Indian Laws

Summary

Issues Involved:
1. Constitutionality of Section 5(1) of the Minimum Wages Act under Article 14.
2. Constitutionality of the Minimum Wages Act regarding arbitrary powers.
3. Justification for including the hotel industry in Part-I of the Schedule.
4. Proper constitution of the Advisory Board.
5. Necessity of appointing a Committee for fixation of minimum wages.
6. Whether fixation of minimum wages is a quasi-judicial act.
7. Consultation with the Advisory Board before fixing minimum wages.
8. Whether the rates fixed are minimum wages or fair/living wages.
9. Consideration of the capacity of the industry to pay.
10. Permissibility of dividing the State into zones for different rates of minimum wages.
11. Rational basis for division into zones.
12. Definitions of 'residential hotels' and 'eating houses' and categories of employees.
13. Different rates of minimum wages for adolescents, children, and apprentices.
14. Valuation of food provided to employees.
15. Consideration of other benefits like free lodging in fixing minimum wages.

Detailed Analysis:

I. Constitutionality of Section 5(1) of the Minimum Wages Act under Article 14:
The petitioners argued that Section 5(1) of the Act violates Article 14 by conferring unguided discretion to the Government to follow either of the procedures in Clauses (a) and (b). The court held that the discretion given to the Government is not unguided or uncontrolled. The Government must follow Clause (b) if it has enough material on hand; otherwise, it must appoint a Committee under Clause (a). The court found no violation of Article 14, emphasizing that the discretionary power is vested in a high authority, the Government, which is expected to use it reasonably.

II. Constitutionality of the Minimum Wages Act regarding arbitrary powers:
The petitioners contended that the Act confers arbitrary powers on the Government to fix minimum wages. The court referred to Supreme Court decisions, which held that the Act provides adequate safeguards against hasty or capricious decisions. The court concluded that the Act is not unconstitutional, but if the Government's fixation of minimum wages is arbitrary, it can be challenged.

III. Justification for including the hotel industry in Part-I of the Schedule:
The petitioners argued that the inclusion of the hotel industry in the Schedule was unjustified. The court noted that this contention was not raised earlier and that the inclusion was made in 1959 without challenge. The court found no material to support the claim that the hotel industry was well-organized and free from labor exploitation. The inclusion was upheld.

IV. Proper constitution of the Advisory Board:
The petitioners challenged the constitution of the Advisory Board, arguing that some members did not represent employers in scheduled employments. The court found that the members represented employers in scheduled industries, even if they were not employers themselves. The court also addressed whether Government officials could be considered independent persons, concluding that they could, given the advisory nature of the Board.

V. Necessity of appointing a Committee for fixation of minimum wages:
The petitioners argued that the Government should have appointed a Committee under Clause (a) of Section 5(1) due to the intricate nature of the hotel business. The court held that the Government had enough material and knowledge to proceed under Clause (b) without appointing a Committee, finding no abuse of discretion.

VI. Whether fixation of minimum wages is a quasi-judicial act:
The petitioners contended that fixation of minimum wages is a quasi-judicial act requiring adherence to principles of natural justice. The court disagreed, stating that the process is administrative, not quasi-judicial. The Government is not required to adjudicate rights but to determine minimum wages based on objective data.

VII. Consultation with the Advisory Board before fixing minimum wages:
The petitioners argued that the Advisory Board should have been consulted after publishing the proposals and receiving representations. The court found no requirement in the Act for such a sequence and held that the consultation before publishing proposals was sufficient.

VIII. Whether the rates fixed are minimum wages or fair/living wages:
The petitioners claimed that the rates fixed were not minimum wages but fair or living wages. The court referred to Supreme Court definitions and concluded that minimum wages include more than bare subsistence and are not limited to the employer's capacity to pay. The court found no evidence that the rates were above minimum wages.

IX. Consideration of the capacity of the industry to pay:
The petitioners argued that the Government should consider the industry's capacity to pay. The court reiterated that capacity to pay is irrelevant for minimum wages, which are intended to ensure a basic standard of living for workers.

X. Permissibility of dividing the State into zones for different rates of minimum wages:
The petitioners challenged the division of the State into zones. The court upheld the division, citing Section 3(3)(a)(iv) of the Act, which allows different rates for different localities.

XI. Rational basis for division into zones:
The petitioners argued that the classification into zones was arbitrary. The court found that factors like cost of living and economic conditions justified the classification. The inclusion of Mangalore in Zone 'A' was also upheld, despite challenges based on population and cost of living index figures.

XII. Definitions of 'residential hotels' and 'eating houses' and categories of employees:
The petitioners contended that the lack of definitions created ambiguity. The court held that the ordinary meanings of these terms were sufficient and that any disputes could be resolved by the Authority under Section 20 of the Act.

XIII. Different rates of minimum wages for adolescents, children, and apprentices:
The petitioners argued for different rates for these groups. The court agreed that the rates should not apply to children, adolescents certified to work as children, and apprentices, leaving it open for the Government to fix separate rates.

XIV. Valuation of food provided to employees:
The petitioners challenged the low valuation of food and the Government's authority to fix it. The court found the valuation reasonable and within the Government's power under the Act and Rules.

XV. Consideration of other benefits like free lodging in fixing minimum wages:
The petitioners argued for deductions for lodging and other amenities. The court held that such deductions are not permissible under the definition of wages in Section 2(h) of the Act.

Conclusion:
The petitions were dismissed except for the limited extent that the rates of minimum wages fixed by the impugned notification were declared as not applicable to children, adolescents certified to work as children, and apprentices. The Government was allowed to fix separate rates for these groups following the procedure under the Act.