M.R. Calla, J.
1. These 33 Special Civil Applications are directed against the Notifications issued under the Minimum Wages Act, 1948 fixing the minimum wages and involve common questions of law based on identical facts and, therefore, all these Special Civil Applications are decided by this common order.
2. Special Civil Application No. 12017 of 1994 is the first Special Civil Application filed on behalf of Ahmedabad Industrial and other Employers Union and others challenging the Notification dated March 21, 1994 issued by the Labour & Employment Department of the Government of Gujarat in exercise of powers conferred by sub-section (1) of Section 3 read with sub-section (2) of Section 5 and clause (i) of sub-section (1) of Section 4 of the Minimum Wages Act, 1948 (Act No. XI of 1948) fixing the minimum wages for the employees employed in any shop and commercial establishment under Entry No. 16 in Para I of the Schedule of the said Act in the whole of the State of Gujarat. In this matter Rule was issued on January 23, 1995. The other 32 Special Civil Applications have been filed in the year 1997 and they are directed against the Notifications dated April 25, 1997 issued by the Labour and Employment Department of the Government of Gujarat fixing the minimum wages under the aforesaid Minimum Wages Act in respect of different industries, viz., Industrial Engineering Establishments, Powerloom Industries and Textile Processing Industries, etc.
3. Petitioners in Special Civil Application No. 12017 of 1994 have come with the case that in the State of Gujarat the minimum wages for the establishments falling under the Schedule of employment and shops and commercial establishments were fixed by Notification dated December 7, 1983. Thereafter a draft Notification of the Schedule of employment of shops and commercial establishments was issued on October 20, 1989. By this Notification dated October 20, 1989 it was proposed by the appropriate Government to fix the minimum rates of wages at the rate of 6 ps. per point in place of 3 ps. which was existing at the time of the proposed draft Notification. The appropriate Government proposed to revise the minimum wages at the cost of living index number 700 in place of 400. At the time when draft Notification dated October 20, 1989 was issued, the cost of living index of Ahmedabad was 850. It is then stated that since the appropriate Government proposed the revised minimum rates of wages directly by 100 per cent, the objections were filed to this draft Notification and the petitioner - Association filed their objections to the said draft Notification. Appropriate Government constituted an Advisory Board to advise the Government in the matter of fixation and revision of minimum wages under Section 7 of the Act. It is alleged in the petition that the appropriate Government had not appointed any committee or sub-committee under clause (A) of sub-section (1) of Section 5 of the Act and no such committee had called for any information from the petitioners and no such committee had concluded any hearing or visited any of the establishments of the petitioner. After inviting objections appropriate Government issued the impugned Notification dated March 21, 1994 revising and fixing the rates of minimum wages of Scheduled employment of shops and commercial establishments in the whole State of Gujarat and in supersession of the rates revised under the Notification of Labour & Employment dated December 7, 1983. These revised minimum wages on the basis of the Notification dated December 7, 1983 were to take effect from March 21, 1994. It is alleged that by this notification dated March 21, 1994 the cost of living is sought to be neutralised at 133 per cent and that under the impugned notification dated March 21, 1994 the cost of living is sought to the neutralised at 133 per cent and that under the impugned notification the neutralisation had been increased to 400 points. It is also alleged that one of the members of the Advisory Board representing the employers had written a letter dated November 11, 1990 to Shri I. G. Thakore, the Chairman of the Advisory Board, stating therein that the Government had issued the draft Notification on the basis of consultation with the officers of the Statistics Department. The objection was to the effect that the draft Notification could be published only after consultation with the members of the Advisory Board and that objections received by the Government were to be produced before the Board and only thereafter the Board had to discuss the objections before sending its recommendation to the Government. It is further alleged that the Advisory Board in its meeting dated May 2/3, 1991 made an unanimous recommendation to retain the neutralisation at the rate of 3 ps., per point and it accordingly made recommendation for fixing the minimum wages. It has been submitted that the minimum wages fixed by the State Government vide Notification dated March 21, 1984 were at the rate much higher than what had been recommended by the Advisory Board unanimously. It has also been alleged that the impugned Notification had revised the minimum wages with retrospective effect. It has been further submitted that the Central Government had published a Notification revising the minimum wages in certain establishments vide Notification dated July 12, 1994. The Central Government had revised the dearness allowance at the rate of 11 Ps. for every 4 points beyond the consumer price index number 1281 for unskilled category of workers. It has also been submitted that there are no reasons or scientific calculation or any logic before prescribing the rate of dearness allowance at 4 ps. per point and that it was in violation of Art. 14 of the Constitution of India.
4. While the aforesaid Special Civil Application No. 12017 of 1994 was pending before this Court with the interim relief against the prosecution for alleged violation of the impugned notification, several Special Civil Applications, as numbered above, were filed in the year 1997 challenging the Notifications dated April 25, 1997 issued by the Labour & Employment Department with regard to the different industries as mentioned in the respective Notifications and such different Industries have filed separate petitions challenging such Notifications dated April 25, 1997 issued with regard to them. It has been alleged in Special Civil Application No. 3976 of 1997 and other Special Civil Applications that the Government had issued a draft notification on August 6, 1992 fixing/revising the rates of minimum wages and yet another notification with corrections had been issued on October 23, 1992. The petitioners and other employers filed objections to the draft Notification and as many as 3749 objections were filed from all over the State. It is alleged that the Government did not make any sample survey, nor did they undertake any rational exercise for increasing the multiplication factor for the calculation of dearness allowance from 3 ps. per point to 4 ps. per point which results in the neutralization of cost of living at 133 percent and the same was not permissible in the eye of law. The impugned Notification dated April 25, 1997 was to come into effect from May 1, 1997. Such notifications dated April 25, 1997 are under challenge in the various Special Civil Applications. In Special Civil Application No. 4111 of 1997 it has been stated that after the issue of the draft Notification the Board submitted its report to the Government in October 1996 and, thereafter, the impugned notification dated April 25, 1997 with regard to different industries were issued revising/fixing the minimum wages and the special allowances with effect from May 1, 1997. While reference has been made to few petitions only, the averments in the different petitions are almost identical and the basic challenge is to the Notifications, which have been issued in the years 1994 and 1997 as aforesaid, seeking to revise and fix the minimum wages with regard to Scheduled employment in shops and establishments and other industries, as have been briefly pointed out above.
5. It may also be mentioned that in Special Civil Application No. 3978 of 1997, Civil Application Nos. 6220, 7023, 7029 and 7144 of 1997 were moved by Jagrut Janta General Labour Union, Maha Gujarat Labour Union and Association of Trade Unions, Kamdar Akta Union and Harath J. Pagare and Thakorbhai Shah, General Secretary of Vadodara Kamdar Union respectively for being impleaded as parties. In Civil Application No. 6220 of 1997 Jagrut Janta General Labour Union was impleaded as respondent on July 8, 1997; in Civil Application No. 7023 of 1997 Maha Gujarat Labour Union and Association of Trade Unions were arrayed as respondent Nos. 5 and 6 on July 29, 1997; in Civil Application No. 7029 of 1997 Kamdar Akta Union and Harath J. Pagare were arrayed as respondents on July 30, 1997 and in Civil Application No. 7144 of 1997 Thakorbhai Shah, General Secretary of Vadodara Kamdar Union was arrayed as respondent on August 1, 1997.
6. In Special Civil Application No. 12017 of 1994 an affidavit-in-reply dated July 7, 1997 has been filed on behalf of the respondent-State of Gujarat stating therein that Section 5(1)(b) of the Minimum Wages Act provides that after the draft notification is issued, the Advisory Board shall be consulted. The draft notification dated October 20, 1989 was issued and 60 days time provided for objections and suggestions and after the receipt of objections/suggestions, the Government of Gujarat in Labour & Employment Department vide communication dated August 30, 1990 made a reference to the Gujarat State Minimum Wages Advisory Board. Gujarat State Minimum Wages Advisory Board sent their unanimous decision to the Government of Gujarat vide communication dated May 7, 1991 and thus the Advisory Board had been consulted. It has also been stated that by raising the point price from 3 ps. to 4 ps., in the special allowance there is no increase of 133 percent and such increase is only 33 percent. The Advisory Board was conscious of this and it has advised the Government to reduce the point price from 6 ps. to 4 ps., and whereas the point price was recommended to 4 ps. only, there is no question of violating any law. It has also been stated that cost of living index in 1960 was to be taken as the basic equivalent to 100. Presently, i.e., ending December 1994 the cost of living index is 1373, meaning thereby that the cost of living has been increased by 4 times and the special allowance has not been increased to that extent. It also means that the special allowance increase has not neutralised (sic) the increase in the cost of living by 100 percent. It has been further stated that in the Advisory Board's meeting held on May 2/3, 1991 unanimous decision was taken after considering the contentions and objections of all concerned including the objections of employers and their Associations. That in the draft notification dated October 20, 1989 the rate of 6 ps. per point was mentioned but the Advisory Board unanimously decided for 4 ps. per point in the meeting held an May 2/3, 1991 and the same was accepted by the Government and accordingly Notification dated March 21, 1994 was issued. It has been submitted in para 15 that the rate of special allowance was stated (sic) to be declared in addition to the basic wages from 1972 in the State of Gujarat and the prices of consumer items have almost doubled since 1972 and, therefore, it was necessary to change the rate of special allowance. To this affidavit-in-reply dated July 7, 1997, an affidavit-in-rejoinder dated July 28, 1997 has been filed on behalf of the petitioner-Association and the averments made in the reply have been sought to be contested.
7. In Special Civil Application No. 3976 to 3984 of 1997 Rule was issued on May 31, 1997 by common order and in one of these Special Civil Applications, i.e., Special Civil Application No. 3976 of 1997 an affidavit-in-reply dated July 21, 1997 has been filed by one Shri J. M. Parmar, Deputy Secretary, Labour & Employment Department stating that the Notification was published in conformity with the provisions of the law in Gujarat Government Gazette Para I-L, dated August 6, 1992. The Gujarat State Minimum Wages Advisory Board headed by Chairman was comprised of six members from employers side, six members from employees side and four members were independent persons. The said Board had gone through all representations, suggestions and objections and they had also moved into six cities of Gujarat State for further hearing and considering the suggestions and objections in person. As per the recommendations of the said Advisory Board, they were to calculate 15 ps. for every 5 points upto Index No. 800 and 20 ps. for every 5 points upto 1040. These recommendations were received by the Government Administration in October 1996. It has been then submitted that the Central Committee on minimum wages had taken into account far more than the Minimum Wages in 1957. The number of family has increased from three units to five units and consequently the minimum wages are higher than the existing one. It has also been submitted that the Advisory Board had made unanimous recommendations after considering objections and suggestions, recommended to calculate 15 ps. for every 5 point upto Index No. 800 and 20 ps. for every 5 point upto Index No. 1040. It has also been stated that the said Advisory Board had considered the factors enumerated by the Tripartite Committee of the Indian Labour Conference 1957, such as (1) food requirement, (2) clothing requirement, (3) housing (rent) and, (4) fuel, lighting and other miscellaneous expenses. After careful consideration of all the aspects, the Government of Gujarat in exercise of the powers conferred by sub-section (1) read with sub-section (2) of Section 5 and clause (1) of sub-section (1) of Section 5 of the Minimum Wages Act and after consulting the Board revised the minimum wages as fixed under the Government notification dated April 25, 1997 with effect from May 1, 1997 in respect of the employees employed in the scheduled employment in the whole of the State of Gujarat and accordingly these re-fixations were made so as to consist (a) the basic rates of wages as set out in the different columns of the schedule appended hereto in respect of zones specified in these columns as the basic rates payable by the day in such zones to the classes of the employees mentioned against them in different columns thereof, and (b) directs that so long as the notification is in force, the rates of such special allowance shall be adjusted by the Competent Authority at the interval of every six months commencing from October 1, and April 1, on the basis of the average cost of living index number for the preceding period of six months ending on June 30 and December 31 respectively in such manner that, (i) for the rise of every five points over the cost of living index number 1645 or over any such number which is greater than 1645 applicable to the employees in the said scheduled employment, special allowance payable in addition to the basic rates of wages shall be revised as 20 ps. per day and (ii) for the fall of every five points below any cost of living index which is not less than 1645 the special allowance shall be reduced at a rate of 20 ps., provided that the rates for the special allowance shall be first adjusted at the interval of the period of six months commencing from October 1, 1997.
8. It has then been stated that the Government had examined the issue in detail and the principal objections and suggestions made before the Advisory Board. The Advisory Board had carefully considered all the aspects including suggestions and representations for linking payments of minimum wages with productivity for prescribing minimum standards of productivity and the suggestion to consider attendant provision made under the Industrial Disputes Act and other provisions and liability of the employers under the various Acts. It is submitted that the Government and the Advisory Board had considered the norms laid down in the Tripartite Committee of the Indian Labour Conference, 1957 and that the increase in the ratio for the indices - that is - 2.2 for every year. If the same is considered then the minimum wages should have been fixed far more than Rs. 100/- for every employment. It has been then submitted that the wage declared by the Government under Notification dated April 25, 1997 is the "minimum wage" and not the 'fair wage'.
9. To this reply dated July 21, 1997 a rejoinder has been filed on behalf of the petitioner-Association on July 28, 1997 seeking to traverse the claim in the reply. A further affidavit dated August 11, 1997 was then filed by the President of the petitioner - Association. Both the parties have also filed documents together with reply. On behalf of the respondent-State of Gujarat an affidavit-in-sur-rejoinder dated August 13, 1997 was then filed stating therein that on the basis of the facts periodically calculated and presented from time to time by the Administration, the Government of Gujarat was appraised of the fact that as per the Government Notification dated December 7, 1983 the Government of Gujarat was called upon to decide the minimum wages after consultation with the Minimum Wages Board and accordingly decided the wages in accordance with law vide Government Notification dated December 7, 1983. That the proceedings were examined again in consultation with the Minimum Wages Board and, thereafter, in exercise of the powers conferred, the Government of Gujarat vide Notification dated October 20, 1989 decided to publish the draft Notification and the objections were invited. While framing the draft Notification facts reported to the Minimum Wages Board and pursuant to transmission and consideration of the facts, the Government of Gujarat considered it just and proper that it is necessary to re-examine the Minimum Wages structure which was prevalent pursuant to Government Notification dated December 7, 1983. It has been submitted that pursuant to the facts and figures, statistical data, economic statistics gathered on the basis of the prevalent position, as also on the basis of the disclosures made and reported in the Minimum Wages Board by the Bureau and to the Government, after considering all the objections and suggestions and representations of all concerned a Notification dated March 21, 1994 was issued concerning the shops and commercial establishments covered under the Entry No. 16 in Part-I of the Schedule to the said Act. It has also been submitted that the statistical figures and cost index and data collected by the expert body of the Bureau of Economics of the State of Gujarat transmitted all the facts and figures and looking to the facts and recommendations and suggestions, the administration and the Minimum Wages Board issued a letter to make their submissions and, thereafter, as per the data collected and presented suggestions and representations made to the Government of Gujarat, the Government examined the issue on the basis of material collected by the Administration including the calculations made by the expert body like Bureau of Economics. It has also been submitted that the rupee had devalued at the rate of 12 ps. in the year 1989 and at the same time, the subject-matter and foundation of 1983 and 1989 and statistics of the Bureau of Economics and Government of Gujarat based on purely mathematical calculation itself justifies the question of revision. The Minimum Wages Board came to the conclusion that after issue of the draft notification of 1992 issued on August 6, 1992 inviting objections and say of all concerned, the Minimum Wages Board, after considering the basic principle, came to the conclusion that minimum subsistence wage, i.e., the bare minimum wage concept is considered while examining the issue and it was recommended to the State of Gujarat to take appropriate decision. The Government Administration initiated decision making process on the basis of representations made by all concerned and after careful consideration of all the materials, facts and statistics, notification dated April 25, 1997 was issued for various establishments. It has also been submitted that the Board consisted of representatives representing the Management. They had full representation and they were also provided all the data and facts which had been gathered. After the expression of the opinion by the expert bodies, the decision was taken.
10. Details of the pleadings, as above, have been given so that the contentions raised by the parties may be considered in the context of such pleadings for their better and proper appreciation.
11. Mr. Clerk has argued the matter at length and has also filed written submissions dated September 30, 1997 to the following effect :-
(i) The fixation/revision of minimum wages under the impugned notification is arbitrary inasmuch as neither the State Government nor the Advisory Board has considered the relevant factors like components of minimum wages, prices of the commodities etc., and no data or facts and figures have been collected either by the Government or by the Advisory Board. Reference has been made to the Minutes of the Advisory Board.
(ii) While fixing the basic rate of minimum wages the State Government has merged the special allowance from the Consumer Price Index No. 800 to 1645 at the rate of 20 ps. for 5 points. The rate of 20 ps. was not in existence at all before May 1, 1997 and, therefore, the application of the said rate from any date prior to May 1, 1997 is retroactive.
(iii) As per the Consumer Price Index (C.P.I.) No. quoted by the State Government alongwith their affidavit-in-sur-rejoinder, the C.P.I. No. was 823 during the period January - June 1989 meaning thereby that the rate of 20 ps. per 5 points is applied by the Government from prior to January 1989 though the draft notification was issued only on August 6, 1992 and the final notification was issued on April 25, 1997 with effect from May 1, 1997.
(iv) That the draft notification proposed that special allowance will be calculated at 20 ps. per 5 points from C.P.I. No. 1040 or over any such number whereas the said rate has been applied from C.P.I. No. 800. Thus, the action of the Government is retroactive and even beyond the draft notification.
(v) Special allowance was not commenced from prospective date as per draft notification dated August 6, 1992 and, therefore, it was not open for the Government to apply the rate of 20 ps. per 5 point from C.P.I. No. 800 prevailing prior to January, 1989.
(vi) As per the Minutes of the Advisory Board dated May 2/3, 1991 the Advisory Board had admitted that at the rate of 15 ps. per 5 points the neutralisation was almost 100 percent. But the State Government did not disclose the basis for the rate of 15 ps. per 5 points to the Director of Economics and Statistics and the neutralisation at 15 ps. per 5 points has not been pointed out even to the Court. The rate or the multiplication factor based on the family unit of 2 adults and 2 children, making up 3 adults could not be altered without there being any justification and no justification has been given for the rate of 20 ps. per 5 points for calculation of special allowance.
(vii) At the rate of 20 ps. per 5 points the neutralisation is 33 percent above 100 percent, i.e., 133 percent whereas the neutralisation cannot exceed 100 percent.
(viii) As per the Minutes of the Advisory Board, the Advisory Board considered itself bound by the decision taken in respect of the Scheduled employment of shops and commercial establishments that the rate of 20 ps. per 5 points should be applied from C.P.I. No. 700, that there is non-application of mind with the Advisory Board and the Government to the most relevant and material considerations.
(ix) There was nothing on record to show that the factors of tripartite committee of the Indian Labour Conference, 1957 and the prices were considered.
(x) While referring to Special Civil Application Nos. 3986 of 1997 and 3985 of 1997, the Government had incorporated Clause (6) in the explanation in the impugned Notification whereas identical clause in the explanation was struck down by this Court in the case of Gujarat State Bakers Federation v. State of Gujarat, (1995-I-LLJ-1224) (Guj-DB). The inclusion of this clause again in the impugned notification is, therefore, null and void.
(xi) In respect of the determination of the rate of special allowance at 15 ps. 20 ps. per 5 points, no exercise was undertaken either by the Director of Economics and Statistics or by Advisory Board after 1989. The Government and the Board have accepted the rate of 20 ps. per 5 points as fait accompli in respect of the 50 Scheduled employment for which the impugned Notification had been issued. This shows the total non-application of mind by the Advisory Board as well as the Government.
(xii) The basis for working out the rate or the multiplication factor for calculating special allowance recommended by the Director of Economics and Statistics in its note dated October 7, 1989 is arbitrary.
(xiii) The basic minimum wages notified by the impugned notification are Rs. 13/- to Rs. 17/- which is higher than those proposed by the draft notification. There is no justification for notifying the basic rate of minimum wages far beyond even what was proposed by the draft Notification and recommended by the Advisory Board.
(xiv) 3749 objections have not been considered by the Advisory Board or by the Government.
( xv) Relevant factors such as food, clothing, shelter, etc., and their current prices etc., have not been considered.
12. While adopting and supporting the arguments raised and submissions made by Mr. Clerk, Mr. K. M. Patel, has based his case on the following grounds :-
(i) The Government and the Board have not examined and evaluated the need based minimum wages, i.e., the amount required for standard family consisting of 3 adults and the requirement of food, housing, clothing and miscellaneous expenses. The figures at random have been arbitrarily taken up, to increase the minimum wages.
(ii) No justification has been made in respect of adult, adolescent and children workers though statute itself provides guidelines for fixing the rate of minimum wages for adult, adolescent and children in Section 3(3)(a)(iii).
(iii) The Government and the Board have not taken into consideration the paying capacity of industry while revising the minimum wages.
(iv) The benefits which are available to the employees such as provident fund, family pension, gratuity, E.S.I., bonus, which take care of old age, medical requirements, festival expenses etc., have been overlooked and a financial burden has been imposed upon the industries to the extent of about 30 percent of the wages.
(v) As per condition No. 6 contained in the impugned Notification perquisites or facilities given to an employee shall not be withdrawn and no deduction shall be made in respect of such perquisites or facilities given to an employee after fixation of minimum wages and the special allowance is beyond the authority of the State Government.
(vi) In case of certain Units which provide free uniforms or books for education of children or reimbursement of the medical expenses partly or fully, could be withdrawn by the employer and the State Government could not take away this right to withdraw those facilities and perquisites.
(vii) Apprentice is a trainee or learner and he is not a person 'employed' and, therefore, he is not an employee within the meaning of Section 2(i) of the Act. The apprentices are only entitled to stipend during the period of training. The apprentices had not been declared as employees under the Act and having regard to their status as trainees they could not be declared or treated as 'employees'.
(viii) It was not open for the State Government to prescribe conditions such as contained in Clause 8 of the impugned Notification obliging the employer to pay 75 percent of the minimum wages for first three months and full minimum wages after three months since it amounts to abridging the contract of apprentices.
13. The learned Government Pleader Mr. P. G. Desai has argued with reference to Section 5 of the Minimum Wages Act and has submitted that the procedure for fixing and revising the minimum wages has been prescribed in Section 5 and accordingly the appropriate Government may appoint Committees or sub-Committees as it considers necessary to hold inquiries and advise it in respect of such fixation or revision as the case may be or by notification in the Official Gazette publish the proposal for the information of persons likely to be affected thereby and specify a date not less than two months from the date of the Notification on which the proposals will be taken into consideration. Under Section 5(2) after considering the advice of the Committee or Committees appointed under Clause (a) of sub-section (1) or as the case may be, all representations received by it before the date specified in the Notification under clause (b) of that sub-section, the appropriate Government has to issue notification in the Official Gazette so as to revise the minimum prescribed wages in respect of each Scheduled employment, and unless such notification otherwise provides it shall come into force on the expiry of three months from the date of its issue. The proviso under this section says that, where the minimum wages are to be revised by the mode specified in clause (b) of sub-section (1), the appropriate Government shall constitute the Advisory Board. Mr. Desai has Submitted that the Advisory Board was duly constituted by the Government and after following the procedure prescribed and after consultation and on the basis of advice of the Advisory Board, the decision was taken. It has also been submitted by Mr. Desai that the Notification was published, proposing the revision of wages and representations were invited from all concerned for which due time was given and after considering the objections and on the advice of the Advisory Board, the Government has taken the decision to revise the wages and accordingly the notifications were issued to which no exception can be taken as the procedure required to be followed for the purpose has been duly followed and the Advisory Board's report dated October 7, 1996 had been duly taken note of. He has submitted that the procedure has been followed, objections have been considered and there is no element of arbitrariness in taking the decision with regard to the revision of minimum wages. He has submitted that, it cannot be said that the neutralisation is more than 100%. He has referred to Section 3 of the Minimum Wages Act with regard to the fixing of the minimum rate of wages and the review of the same on such intervals and has also submitted that the minimum wages would include the special allowance. In this regard, he has made a reference to Section 4 of the Minimum Wages Act, dealing with the minimum rates of wages and has submitted that the minimum rates of wages fixed or revised may consist of basic rate of wages and special allowances at a rate to be adjusted at such intervals and in such manner as the Government may direct, to accord as nearly as practicable with the variation of the cost of living index principle applicable to such workers to be referred as cost of living allowances and; or the basic rate of wages without the cost of living allowances and the cash value of the concessions in respect of the supply of essential commodities at concessional rates and; or an all inclusive rate available for the basic rate, the cost of living allowances and the cash value of the concession. Under sub-section (2) of Section 4, the cost of living allowances and the cash value of the concession in respect of supply of essential commodities at concessional rate 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.
14. Mr. Shahani has laid stress on the concept of minimum wages and the considerations which are relevant for the purpose of fixing and revising the minimum wages and has also submitted that the rise in price, the improvement in the standard of living and the basic needs as also the devaluation of the rupee, have to be taken note of.
15. Mr. Chidambaram submitted that the cost of new components relevant for the purpose of minimum wages constitutes 25% of the total amount of minimum wages and in the present case the minimum wages which were earlier in force and which have been now revised do not work out a difference even upto 25% and it is only 19% to 20% and according to him, even with the aid of measures which have been now taken into consideration, the revised minimum wages are less than those which are required to be fixed in accordance with law. While referring to item No. 12 of the Chart filed by him on September 3, 1997, he has submitted that the increase is less than 10%. While referring to the recommendations of the Fifth Pay Commission, he has submitted that the minimum basic pay of lowest paid Government employee is Rs. 2,440/- per month, besides the D.A., House Rent Allowance, City Compensatory Allowance and Conveyance Allowance and they all put together, the minimum wages of the Central Government employee is worked out to be Rs. 3,000/- per month, that is, Rs. 100/- per day. He has submitted that this amount of Rs. 3,000/- per month or Rs. 100/- per day is besides the facilities of medical reimbursement, L.T.C. etc., and even the take home packet of Rs. 3,000/-, per month to the Central Government employee is under protest and the Government has now agreed to revise the same to something more and the same is likely to be revised at the rate of Rs. 3,500/- per month. He has also submitted that, so far as the private employers are concerned, there are certainly profit making employers, and unlike the Central Government, they are not guided by any social obligations, reservation requirements are also not applicable to them, they are not required to make recruitment through Employment Exchange, they are free to hire the best, there is no control of society over them, they are not answerable to the public in the sense in which the State is answerable, and therefore, they should be at the top of ladder in paying the adequate minimum wages. He has submitted that this concept was discussed by the Second Pay Commission and the Government expects only minimum efficiency, whereas the private employers expect high order of efficiency and yet there is no job security in the private employment and that there is exploitation of labour in the private employment and survival of the fittest prevails. He has also submitted that real neutralisation in cost of living is necessary to maintain the real wage. The real wage is the wage which answers the requirements pointed out by Tripartite Labour Conference of 1957. He has submitted that, from January 1989 onwards to May 1997, the Consumer Price Index has gone up from 774 to 1697. He has submitted that the notification is not on point to point basis and the rate of 15 ps. per 5 points was the earlier and now it is 20 ps. per 5 points. He has also argued that the real increase in the minimum wages would be 3 to 4 ps. per day, by merger of special allowance which was already given. He has submitted that there has been an erosion of money value. By special allowance, the neutralisation is not even 1% while special allowance is different from D.A.
16. Mr. Girish Patel started his argument with the International Labour Office Publication, "Minimum Wages fixing and Economic Development" and submitted that the term "minimum wage fixing" means the fixing of the rate or rates of the minimum wages by a process invoking the authority of the State. He has stressed the following purposes of minimum wage fixing :
(i) To eliminate the sweating of labour through very low wages and bad conditions of employment and, therefore, the State intervention to the falling of sweating of labour.
(ii) The general level of wages is too low to meet the needs of the workers and their families, or that it gives to workers only inequitable shares of the national income or it has failed to keep pace with increase in the cost of living.
(iii) A desire to eliminate unfair competition, the minimum wage fixing may thus be deemed to be in the interest of, and may be welcomed by, not only the workers who benefit from higher wages but also those employers who provide better wages and conditions.
(iv) The purpose of minimum wage fixing while serving as an instrument of a more general policy aiming at rapid growth and equitable distribution of the national income.
17. Mr. Girish Patel has also submitted that the new dimensions of Art. 21 as per the law developed by the Apex Court of this country include the right to live with human dignity and all essential elements of civilised life intrinsically connected with human dignity. He has submitted in an ironical expression that, to have money without dignity is possible, but to have dignity without money is a serious tragedy. He has submitted that if you pay wages less than the minimum wages, it is as good as bonded labour and would be a negation of the right to adequate things of livelihood, right to food, right to shelter as envisaged under Art. 39(a). He has also submitted that the Minimum Wages Act is a beneficial piece of legislation and, therefore, the approach of the Court should be to further the object and not to frustrate, thwart or defeat such object. He has referred to the components of new wages as have been considered by the Courts and has submitted that the cost of living index and cost of living are two different things and that there may be changes in the priority of components.
In the opinion of this Court, the questions, which require consideration, are as under :-
(i) Whether the procedure has been followed or not ?
(ii) Whether the objections were considered ?
(iii) Whether the Government had acted arbitrarily ?
18. From both the sides, series of decisions have been cited in support of their submissions. Before I deal with the submissions made on behalf of the parties, I may refer to certain well recognised principles and norms in the matter of wages and the situations on which the minimum wages are to be fixed and revised :
(1) In a welfare State, the State is no longer content to play the part of a passive onlooker and the State can only ill-afford the apathy with regard to the fixing of the minimum wages and the constitution of wage structures, so as to secure justice, social and economic which has an ideal place in the Preamble part of our Constitution.
(2) The different categories of wage structures may be described as living wage, fair wage and minimum wage at the subsistence level. The subsistence level varies from time to time and, therefore, the minimum wage must correspond to the subsistence level, a level at a given point of time.
(3) No industry has a right to exist unless it is able to pay its workmen at least a bare minimum wage.
(4) The employment of labour on static wages cannot be encouraged or favoured in the democratic set up of a welfare State as against the days of laissez faire.
(5) The bare subsistence or minimum wages is different from the statutory minimum wage, the former being a wage which would be sufficient to bare physical needs of a workman and his family, i.e., a wage which has got to be paid to the workman irrespective of the capacity to pay while the statutory minimum wage is a wage prescribed by the statute and it may be higher than the bare subsistence or minimum wage.
(6) In fixing the minimum wage rates as contemplated by the Act, the hardship caused to individual employer or its inability to meet the burden, has no relevance.
(7) The balance has to be struck between the demands of social justice which requires that the workmen should receive their proper share of the national income and the depletion which every increase in wages makes in the profits as this tends to divert capital from industry into other channels thought to be more profitable.
19. Besides this, as quoted in the case of Workmen v. Management of Reptakos & Brett Co. Ltd. (1992-I-LLJ-304) (SC) the following five norms for the purpose of fixation of the minimum wages were to be followed during the Second Five-Year plan as per the Wage Board which was declared by the Tripartite Committee of the Indian Labour Conference held in New Delhi in 1957 :
"(i) In calculating the minimum wage, the standard working class family should be taken to consist of 3 consumption units for one earner; the earnings of women, children and adolescents should be disregarded.
(ii) Minimum food requirement should be calculated on the basis of a net intake of calories, as recommended by Dr. Aykroyd for an average Indian adult of moderate activity.
(iii) Clothing requirements should be estimated at per capita consumption of 18 yards per annum which would give for the average workers' family of four, a total of 72 yards.
(iv) In respect of housing, the rent corresponding to the minimum area provided for under Government's Industrial Housing Scheme should be taken into consideration in fixing the minimum wage.
(v) Fuel, lighting and other "miscellaneous" items of expenditure should constitute 20% of the total minimum wage."
20. These norms were set out in the case of Standard Vacuum Refining Co. of India v. Its Workmen, reported in (1961-I-LLJ-227) (SC) and approved in Workmen v. Management of R.B. Co. Ltd. (supra) and in para 12 the Supreme Court has observed that the concept of "minimum wage" is no longer the same as it was in 1936. Even 1957 is way-behind. A worker's wage is no longer a contract between an employer and an employee. It has the force of collective bargaining under the labour laws. Each category of the wage structure has to be tested on the anvil of social justice which is the live-fibre of our society today. Keeping in view socio-economic aspect of the wage structure, the Supreme Court took the view that it is necessary to add the following additional component as a guide for fixing the minimum wage in the industry :
"Children education, medical requirement, minimum recreation including festivals, ceremonies and provision for old age, marriage etc. should further constitute 25% of the total minimum wage."
21. Series of decisions have been cited by the parties in support of their submission.
22. In Hydro (Engineers) Pvt. Ltd. v. Workmen (1969-I-LLJ-713) the Supreme Court held that the concept of minimum wage takes into account the prevailing cost of essential commodities and linking up scales of minimum wages with cost of hiring is not alien to concept of minimum wage. It has been held so with reference to Section 4.
23. In Indian Express Newspapers (P.) Ltd. v. Union of India (1995-I-LLJ-1132) (SC) the fixation of wage by considering gross revenue of establishment as a whole on all India basis by considering Financial capacity of establishment as a whole was held to be permissible.
24. In Killick Nixon Ltd. v. Kullick and Allied Companies Employees Union (1975-II-LLJ-53) the Supreme Court while dealing with the challenge to the Tribunal's award, considered the question as to whether should there be a ceiling on dearness allowance, laid down fourteen aspects in para 33 for the purpose and observed in para 34 that revision of dearness allowance is not the same thing as revision of wages.
25. In E.S.I. Corporation v. Tata Engineering and Locomotive Co. Ltd. (1976-I-LLJ-81) (SC) was a case under Employees State Insurance Act, 1948 and while considering as to whether a relationship of master and servant exists between the employer and apprentice, it was observed in Para 6, that an apprentice remains a learner and is not an employee.
26. In Devidas Nathuji Pedhekar v. The Regional P.F. Commissioner 1978 Lab.IC 533 it was held that, "Section 4 of the Minimum Wages Act deals with fixation of minimum rates of wages fixed or revised by the appropriate Government under Section 3 of the Act which might consist of basic rate of wages and a special allowance etc., as contemplated by sub-section (1)(i), (ii), (iii) and sub-section (2) of Section 4 of the Act. Therefore, this special allowance is also a part and parcel of the minimum rate of wages fixed or revised under the Minimum Wages Act. It is not in the nature of dearness allowance which is different and distinct from the pay, salary, or wages as normally understood."
27. In Arbuda Bhuvun A Tea Shop & Ors. v. State of Maharashtra & Ors. (1992-I-LLJ-807) (Bom) cited by Mr. Vasavada, the Bombay High Court took the view that when the final notification recites that representations received had been considered, it will have to be accepted that such consideration had taken place and that the recital represents what really transpired.
28. In Mumbai Kamgar Sabha & Ors. v. State of Maharashtra & Ors. (1992-I-LLJ-169) (Bom) on the facts of that case, the Bombay High Court had come to the conclusion that the task entrusted to the Committee was not to arrive at mutually acceptable figures, but to give a report which would be a reasoned one and therefore, acceptable and fit for being notified as the minimum wage for the employees engaged in shops and commercial establishments.
29. In Association of Planters of Kerala v. State (1996-II-LLJ-267) (Ker) it was held that statutes of declaratory nature are prima facie retrospective in operation. The Court found that by express words, viz., "otherwise provided" and by necessary implication read with Section 3(1)(b) the State is entitled to revise the minimum rates of wages retrospectively and fixation and revision of rates of wages and the enabling provisions are declaratory in nature. I respectfully agree with this reasoning and the contentions raised by Mr. Clerk about retrospective operation is hereby rejected.
30. In Hindustan Lever Ltd. v. B. N. Dongre 1995 AIR SC 817 it was held as under :
"Wages are among the major factors in the economic and social life of the working classes. Workers and their family depend almost entirely on wages to provide themselves with the three basic requirements of food, clothing and shelter. The other necessities of life like children's education, medical expenses etc. must also come out of the emoluments earned by the bread-winner. Workers are, therefore, concerned with the purchasing power of the pay-packet he receives for his toil. If the rise in the packet does not keep pace with the rise in prices of essentials the purchasing power of the pay-packet falls reducing the real wages leaving the workers and their families worse off. Therefore, if on account of inflation prices rise while the pay-packet remains frozen, real wages will fall sharply. This is what happens in periods of inflation. In order to prevent such a fall in real wages different methods are adopted to provide for the rise in prices. In the cost of living sliding scale systems the basic wages are automatically adjusted to price changes shown by the cost of living index. In this way the purchasing power of workers' wages is maintained to the extent possible and necessary. However, leap-frogging must be avoided."
31. In Air India Statutory Corporation v. United Labour Union (1997-I-LLJ-1113) (SC) was essentially a case with regard to Contract Labour (Regulation & Abolition) Act, 1970.
32. In Saurashtra Paper And Board Mills Pvt. Ltd., Rajkot v. State of Gujarat, 1992 (2) GLR 871 while referring to the provisions of Section 3(1-A) of the Act, the Court held that it was an enabling provision. The Court held that this provision does provide that the appropriate Government shall refrain from fixing minimum rates of wages in respect of any Scheduled employment in which there are in the whole State less than one thousand employees. The Court ultimately declined to issue any writ and the Rule was discharged.
33. In B. Y. Kshatriya v. S.A.T.B. Kamgar Union AIR 1963 SC 806 the challenge was thrown to the validity of Section 3(3)(iv) of the Minimum Wages Act and the Notification issued thereunder. The Supreme Court held the Section as well as the Notification to be valid.
34. In C.B. Boarding & Lodging v. State of Mysore AIR 1970 SC 2042 the Court held that the fixation of minimum wages depends on the prevailing economic conditions, the cost of living in a place, the nature of the work to be performed and the conditions in which the work is performed. The power conferred under Section 5(1) is not arbitrary or unguided and on the question of applicability of principles of natural justice it was held that what particular rule of natural justice, if any, should apply in a given case must depend to a great extent on the facts and circumstances of that case.
35. In Ministry of Labour & Rehabilitation v. Tiffin's B.A. & Pvt. Ltd. (1985-II-LLJ-412) the Supreme Court held that the Notifications fixing minimum wages are not to be lightly interfered with under Art. 226 on the ground of some irregularities in the constitution of the committee or in the procedure adopted by the committee. A Notification fixing minimum wages, in a country where wages are already minimal, should not be interfered with under Art. 226 except on the most substantial grounds. The legislation is a social welfare legislation undertaken to further the Directive Principles of State Policy and action taken pursuant to it cannot be struck down on mere technicalities.
36. The Karnataka High Court in the case of Karnataka Film Chamber of Commerce v. State of Karnataka, reported in (1987-I-LLJ-182) (Kant) has held that minimum wages may consist of basic wages and a special allowance to be adjusted with variation with increase or decrease in basic wages when question of neutralisation of cost of living arises by payment of dearness allowance. In para 28 it has been held that the Act is a beneficial piece of social legislation which protects the day-to-day living condition of the workers employed at the lowest level of wages in sweated labour. The Karnataka High Court has gone to the extent of observing that though the minimum wages are fixed statutorily, it does not measure up either to the fair wage or to the living wage and the Court should also take into consideration the C.P.I., i.e., Consumer Price Index which had gone from 470 in the year 1982 to 620 in the year 1986. The validity of Notification was upheld with certain words of caution to prevent future squabbles between the parties on the vexed question of neutralisation.
37. In Chhotanagpur C.C. Singhbhum C.C.I. v. Bihar State (1987-I-LLJ-275) (Pat) the fixation of variable dearness allowance under the Minimum Wages Notification exceeding 100% neutralization of cost of living index was considered and it was held that the fixing of variable dearness allowance in excess of 100% neutralisation of cost of living index is illegal.
38. Thus, having considered the submissions which have been made by the parties and having gone through the relevant cases and the ratio of the various Supreme Court decisions and the decisions of other High Courts and our own High Court, in the facts of the present case, I find that the procedure, which was required to be followed, has been followed by the Government. It cannot be said that in the instant case there was no data available with the Government before issuing the impugned Notification. The Advisory Board had been constituted. The Advisory Board was broad based with proper representation including that of independent persons. The Board had gone through the representations and the objections, which had been filed before it. It was not necessary for the Board to have dealt with and discussed each and every objection raised in such representations as if it was going to pass a judicial order so as to decide that the representations were considered and, therefore recommendations made by the Advisory Board and on the basis of the material which was available to it. It calculated 20 ps. for every 5 points upto Index No. 1040. These recommendations were received by the Government in October 1996 and thereafter they were submitted before the Central Committee on Minimum Wages. Merely because it considered that the number of family has increased from 3 units to 5 units it cannot be said that it had considered this factor in an unreasonable manner. Support to be extended to old and dependent parents cannot be lost sight of. The recommendations made by the Advisory Board were unanimous and the recommendations to calculate 15 ps. for every 5 points upto Index No. 800 and 20 ps. for every 5 points upto Index No. 1040 cannot be said to be unreasonable. The Committee has addressed itself to the relevant components and after careful consideration of all aspects, the Government has issued the impugned Notification. It cannot be said that the Committee has addressed itself to any such component, which it was not supposed to consider. The recommendations are based on relevant considerations. The rate of the special allowance had to be adjusted by the Competent Authority at the interval of every six months commencing from October 1 and April 1, on the basis of the average Cost of Living Index number for the preceding period of six months ending on June 30 and December 31, respectively in such manner that (i) for the rise of every 5 points over the cost of living Index No. 1645 or over any such number which is greater than 1645 applicable to the employees in the Scheduled employment, special allowance payable in addition to the basic rates of wages shall be revised as 20 ps. per day, and (ii) for the fall of every five points below any Cost of Living Index, which is not less than 1645, the special allowance shall be reduced at a rate of 20 ps. provided that the rates for special allowance shall be first adjusted at the interval of the period of 6 months commencing from October 1, 1997. In the factual background of this case, it is clear that no objection can be taken to the date from which the rates have been made applicable and argument of retrospectivity cannot be sustained. I also find that it is not at all a case of overneutralisation and it cannot be said that the minimum wages, which have been revised, constitute more than 100% neutralisation. The recommendations have been made on the basis of an approach and orientation that the statutory minimum wages must be reasonable and compatible with the relevant norms. It is settled that the paying capacity of the industry while revising the statutory minimum wage is not relevant. There is no question of making any distinction on the ground of adult, adolescent and children as sufficient guidelines in this regard already exist. Statutorily fixed minimum wages could mean minimum wages as interpreted by the Supreme Court with regard to the provisions of the Act and merely because the benefits of family pension or gratuity, festival bonus etc., are being paid, they cannot seek to reduce or substract or to make adjustment in the minimum wages and, therefore, it cannot be said that these things have been overlooked, including perquisites or facilities given to employees. It has already been considered that for the purpose of Minimum Wages Act, even an apprentice, may be a trainee or learner, has to be treated as a person "employed". I do not find any substance in the argument of Mr. K. M. Patel that it was not open for the State Government to prescribe conditions such as contained in clause (8) of the impugned Notification. The condition obliges the employer to pay 75% of the minimum wages for first three months and full minimum wages after three months. I do not find any infirmity or illegality in this condition. There is no question of abridging the contract of apprentices. Mr. K. M. Patel has argued that clause (6) of the impugned Notification could not be included in the Notification seeking to revise the minimum wages because it shows that certain perquisites or facilities, which had been given to the employees earlier, shall not be withdrawn. He has submitted that similar inclusion has earlier been held to be unlawful by this Court. He has also cited Bidi, Bidi Leaves & Tobacco Merchants' Association v. State of Bombay (1961-II-LLJ-663) (SC) and Gujarat State Bakers Federation & Ors. v. State of Gujarat (Supra). So far as this part is concerned, it is stated by Mr. Pate] that no representation was made to the Government. It, therefore, leaves it open for the petitioners, in case any of the petitioners is aggrieved, to make a representation before the Government so far as clause (6), i.e., the perquisites or facilities given to an employee shall not be withdrawn and no deduction shall be made in respect of such perquisites or facilities given to an employee after fixation of minimum rates of wages plus special allowance, is concerned and the Government may pass appropriate orders after hearing the concerned parties of both sides. But making of the representation or pendency of the representation would not be a ground for not implementing the Notification.
39. Thus, the Court finds that in the present case the procedure under the Act has been followed before revising the minimum wages, the objections bad been duly considered and the Government has not at all acted arbitrarily in revising and fixing the minimum wages through impugned Notifications. It is further found that basically and apparently the increase in minimum wages by way of revision through the impugned notifications is not at all substantial cannot be said to be unreasonable or inconsistent or at variance with any of the accepted norms - rather the same is in conformity with the settled norms and relevant components. The impugned Notifications seek to render substantial justice to both the sides and the challenge to these notifications is wholly misconceived and misplaced.
40. In any case, as has been recorded above, I do not find that the impugned Notifications in the instant case suffer from any illegality or infirmity so as to warrant any interference by this Court. The Supreme Court has already ruled that such Notifications are not to be interfered with lightly and besides the five components, which had been approved by the Supreme Court in 1960s, the Supreme Court itself has held in the year 1992 that there is an additional component. In the instant case, the increase has been made after at least eight years and more than eight years in certain cases and it can hardly be said to be a case in which there is any substantial ground for interfering with any of the impugned Notifications and, therefore, on the basis of principles discernible from the various judicial pronouncements, which have been enumerated in the earlier part of the order, all these Special Civil Applications deserve to be dismissed and the same are hereby dismissed. Rule in each of these Special Civil Applications is hereby discharged. Interim order, if any, stands vacated automatically forthwith in all these cases. No order as to costs.