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PETITIONER: BIDI, BIDI LEAVES’ AND TOBACCO MERCHANTSASSOCIATION

       Vs.

RESPONDENT: THE STATE OF BOMBAY

DATE OF JUDGMENT: 15/11/1961

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. SARKAR, A.K. WANCHOO, K.N. GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA

CITATION:  1962 AIR  486            1962 SCR  Supl. (1) 381  CITATOR INFO :  D          1969 SC1306  (9)  E&R        1978 SC 694  (87)

ACT:      Minimum  Wages-Bidi   industry   Notification fixing  minimum   wages,  prescribing  method  for discarding of ’Chhat’ bidis and payment therefore- If ultra  vires-   -Doctrine  of  implied  powers- Notification No.  MWA 1557  J dated June 11, 1948- Minimum Wages  Act, 1948(11  of 1948), ss. 2(h) 3, 5, 20 and 21.

HEADNOTE:      By s.  3 of  the Minimum Wages Act, 1948, the appropriate  Government   is  authorised   to  fix minimum  rates  of  wages  for  employees  in  the Scheduled employments  and  s.  5  lays  down  the procedure for  fixing and  revising  such  minimum wages.   The    State   Government   published   a notification dated  June 11,  1958, fixing minimum rates of  wages in  respect of employments in bidi making in  the Vidarbha region. Clauses 1 and 2 of the  notification  prescribed  the  minimum  rates district wise  and provided  for higher  rates for making bidis  known  as  ’Hatnakhun’  in  all  the districts. Clauses  3 to  7  dealt  with  disputes between the  employers and the employees as to how bad  bidis  were  to  be  discarded  and  in  what proportion  and   as  to   the  payment  for  such discarded bidis. The appellant contended that cls. 3 to 7 of the notification were ultra vires: ^      Held, that  cls. 3  to 7  of the Notification were outside  the purview  of the powers conferred upon the State Government 382 by s.  5 of  the Act  and were  ultra  vires.  The provisions of  the Act  empowered  the  Government only to  fix minimum wages; they did not authorise

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it  to  make  rules  for  resolving  the  disputes regarding the rejection of bad bidis and regarding the payments to be made for the rejected bidis.      The Act  empowered the  Government to fix the remuneration payable  to an  employee if the other terms of  the contract  were observed;  it did not authorise the  Government to vary the other terms. Under the  contract the  employer was  entitled to decide which  bidis to discard, and to retain such bidis and  to pay  only for  such  bidis  as  were accepted  by   him.  Clauses   3  to   7  of   the notification purported  to modify  these terms  in material particulars  and this  was not within the power conferred  by the  Act upon  the Government. Nor could  these clauses be justified on the basis of implied  powers. The doctrine of implied powers could only  be invoked  when it  was found  that a duty was  imposed  or  a  power  conferred  on  an authority buy  a statute  and it was further found that the  duty could  not  be  discharged  or  the powers could  not be  exercised at all unless some auxiliary  or  incidental  power  was  assumed  to exist.  Even   if  cls.   I  and  2  would  become ineffective without  cls. 3  to 7 being there that would not  be a  proper  basis  for  invoking  the doctrine of  implied  powers.  The  definition  of ’wages’ in  s. 2(h)  of  the  Act  postulated  the binding  character  of  the  other  terms  of  the contract and brought within the purview of the Act only the  term relating  to wages.  By implication the very  basic concept  of  wages  could  not  be ignored. By  ss. 20  and 21 the Act makes specific provision for  the settlement  of claims in regard to payment  of minimum wages and as such no powers could be  implied in  the Government  to set  up a separate  machinery   to  settle   such  disputes. Further no  power could  be implied to make cls. 1 and 2  of the  notification effective:  such power could only  be implied if it was necessary to make s. 5 of the Act itself effective.      Michael  Fenton  and  James  Fraser  v.  Jhon Stephen Hompton,  (1957-59) 117 R. R. 21, referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeals Nos. 415-418 of 1960.      Appeals from  the judgments  and orders dated September 23,  1958, of  the Bombay  High Court in Special Civil  Applications Nos.  205 and  214  of 1958. 383      A. V.  Viswanatha Sastri,  S. P. Verma, S. N. Andley, Rameshwar  Nath and  P. L.  Vohra, for the appellants (in C. A. No. 415 of 1960).      A.  S.   Bodde  and   Ganapat  Rai,  for  the appellants  (in   C.  A.  No.  417  of  1960)  and respondents (in C. A. No. 418/60).      H. R.  Khanna  and  R.  H.  Dhebar,  for  the appellants (in  C. As.  Nos. 416  and 418 of 1960) and respondent  No. 1  (in C. As. Nos. 415 and 417 of 1960).      A. G.  Ratnaparkhi, for  respondent No. 3 (in

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C. A. No. 415 of 1960).      1961 November  15. The  Judgment of the Court was delivered by      GAJENDRAGADKAR, J.-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  June 11,  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 384 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 January 11, 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

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wages were  revised by  a notification  issued  on February 23,  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 385 under  s.  7  shall  be  the  Advisory  Board  for Vidarbha. This notification was issued on November 1, 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  March  1, 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 June 11, 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 386 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

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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 387 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.      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

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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 388 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 sub-sections  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  sub-section   (2)  of      section 5 read with clause (b) of sub-section      (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 23rd  February, 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 389      as mentioned  in the  Schedule hereto annexed      and directs that this notification shall come      into force with effect from 1st July, 1958.                      SCHEDULE           Subject to  the other provisions of this      Schedule, the  revised minimum rates of wages      payable to employees per thousand bidis (when      leaves are supplied by the employer) shall be      as follows:                                               Area Revised rates in Rs.                   (i)      Nagpur   District   ... 1.69                (ii)      Bhandara   District   ... 1.62                       (iii)     Chanda,     Akola,                               Buldana,    Yeotmal,                  Amravati        and        Wardha             District                           ...

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1.56           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 390      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    of     opinion    among     the      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 391 severable from cls. 1 and 2 so that the invalidity

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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  sub- standard 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 392 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.      It also appears to be true that the employees in  this   region  have  been  protesting  against improper rejection  of the bidis by the employers. They have  contended that  the employers reject an unreasonably  high  proportion  of  bidis  falsely dubbing them  as  of  sub-normal  quality  without paying anything  to the  workers for  their labour spent in  rolling  such  rejected  bidis.  In  its affidavit the  respondent has emphasised that as a result of  to is method of discarding bidis on the ground that they are of sub-standard quality bidis workers were  deprived of  the labour  charges for bidis which  are rejected  by their employers; and so it  was  urged  that  the  question  of  fixing maximum  rates   of   wages   for   bidi   workers necessarily  involved   the  question  as  to  the quantum or  percentage  of  such  rejection  which

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should be  permissible to  the employer. According to the  respondent the  impugned notification  has purported to  fix the minimum rates of wages after taking into consideration the problem presented by the practice  of discarding bidis and paying wages to  the   workers  only  for  such  bidis  as  are accepted.  In  support  of  the  validity  of  the notification the  respondent also  relied  on  the fact  that   the   formula   prescribed   by   the notification had  been evolved  after taking  into account  the  representations  made  both  by  the employers and the employees. In fact, according to the respondent,  this said  formula represented  a substantial  degree   of  agreement   between  the parties on this point.      It  would  thus  be  seen  that  on  the  two material facts  there is really no serious dispute between the 393 parties. The  respondent  agrees  that  under  the practice which must be taken to be consistent with the implied  terms of  contract between  the  bidi manufacturer and his employee, after the bidis are prepared by  the employees and brought back to the employer the  employer has  a right to examine the quality of  the bidis,  accept only  such as  have come up to the standard prescribed by the contract and  reject   the  rest.   The  practice   further justifies the  payment of  wages to  the employees only for  the bidis  actually accepted and not for those which are rejected though the rejected bidis may be  retained by  the employer.  On  the  other hand, it  is not, and cannot be seriously disputed by  the   petitioners  that  in  some  cases  this practice may  work great  hardship on the workers, and in every case the workers do not get wages for the labour  put by  them in  rolling the  rejected bidis. The  main question  which  arises  for  our decision in  the present  appeals is  whether  the injustice   resulting   from   the   practice   of discarding bidis  and not  making any  payment for them to the workers can be checked, controlled and regulated  by   the  respondent   by   issuing   a notification under  the powers  conferred on it by s. 5 of the Act. If the relevant provisions of the Act confer  upon the respondent the power to check the evil  against which  the workers complain then of course  the validity  of the  impugned  clauses would be  beyond challenge. If, on the other hand, the power  to prescribe or revise minimum rates of wages does  not either  expressly or  by necessary implication include  the power  to provide for the machinery to  check the evil in question, then the impugned clauses  would  be  ultra  vires  however necessary it  may be to check and control the said evil in question.      In this connection let us broadly examine the scope and  effect of the impugned clauses. Clauses 1  and  2  prescribe  the  revived  minimum  rates districtwise and provide for the payment of higher 394 Price for  the bidis  known as  Hatnakhun bidis in all and  the said districts. These two clauses are obviously  valid  and  the  petitioners  have  not disputed the  conclusion of the High Court in that

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behalf. Clauses  3 to  6 deal  with the problem of the that bidis or bidis which are rejected because they are bad. Clause 3 leaves it to the discretion of the employer to decide which are chhat bidis up to  5   percent  of  the  bidis  prepared  by  the employees. This  clause provides that the bidis to rejected would  be destroyed and tobacco recovered from them  retained by  the employer;  and it adds that if  the employer wants to retain the rejected bidis he  shall pay full wages for the same to the employee. In  other words  this, clause means that the employer may discard bidis up to 5 percent but if he  does not  want to  pay the  workers for the said bidis  he must  destroy them. That would show that the discretion exercised by him is honest and fair. If,  on the  other hand,  he wants to retain the said bidis that would mean that he thinks that the bidis  would find a market and in that case he must pay  for them on the basis that they are good bidis. On principle this provision may perhaps not be open  to any  serious criticism  and it  is not unlikely that  if the  notification had  not  made further detailed  provisions by  cls. 4  to 6  the present dispute would not have been brought before the High Court. The employers probably do not have a serious grievance against cl. 3 on the merits.      Clause 4 deals with cases where the rejection may be  more than  5 per cent but less than 10 per cent of  total work  produced by  the  worker.  In regard to this class of cases cl. 4 provides for a machinery to  deal with  cases falling  under  it. Representatives of  the  employers  and  employees have to  be appointed  and  they  have  to  decide whether the  work have  been properly done or not. The decision  would be according to the opinion of the majority. If the opinion is equally divided 395 and the  employer wants to retain the chhat bidis, between 5  per cent to 10 per cent he shall pay at half the  rates fixed  in cl.  1. If  the employer does not  want to  retain them the employees shall destroy them,  The clause does not seem to provide for 3  7  case  where  the  majority  opinion  may support the  rejection between  5 per  cent and 10 percent; that  is a lacuna in the clause. The only comment which can be legitimately made against the clause on its merits is that the setting up of the machinery  for  a  kind  of  adjudication  of  the dispute between the employer and the employee may, instead of  solving  the  difficulties  in  actual working, add to them.      That takes  us to cl. 6. This clause has been very severely  criticised by  the petitioners.  It provides that  in case  of chhat about 10 per cent the employees  shall be  entitled  to  full  wages which means  that even  if chhat above 10 per cent is made  reasonably and  for a  proper  cause  the employer has  to pay  for the  discarded  work  as therein prescribed;  the only  right given  to the employer in such a case is to take suitable action against the  employee if the chhat is more than 10 per cent  and that  too for six continuous working days in  a calendar month. Prima facie this clause appears to be unreasonable and unjust.      The explanation  to cl.  7 is also criticised

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by   the   petitioners   because   the   thekedar, contractor or  agent,  who  is  appointed  by  the employer would,  if the  explanation is  valid, be liable to  perform all  the obligations imposed on the employer by the relevant provisions of the Act such as  ss. 12 and 18. We have examined the broad features of  the notification  and  indicated  the comment made  on it  by the  petitioners  for  the purpose of  showing that on the merits some of the clauses do  not appear  to be  fair and  just, but that is not the ground on which their validity can be or  has been  challenged before  us.  The  main argument in support of the challenge 396 rests on  the assumption  that cls. 3 to 7 are all beyond the  powers conferred  on the respondent by the relevant provisions of the Act; and it is this argument which needs to be examined.      It   is    well   settled   that   industrial adjudication   under   the   provisions   of   the Industrial Disputes Act, 1947(14 of 1947) is given wide powers  and jurisdiction  to make appropriate awards  in   determining  in  industrial  disputes brought before  it. An award made in an industrial adjudication may  impose new  obligations  on  the employer in  the interest  of social  justice  and with a  view to  secure peace  and harmony between the employer and his workmen and full co-operation between them.  Such an  award may  even alter  the terms of  employment if  it  is  thought  fit  and necessary  to   do  so.   In  deciding  industrial disputes the  jurisdiction of  the tribunal is not confined  to  the  administration  of  justice  in accordance with  the law  of contract.  Mukherjee, J., as  he then  was, has  observed in  The Bharat Bank Ltd.,  Delhi v.  Employees of the Bharat Bank Ltd., Delhi  the tribunal  "can confer  rights and privileges on  either  party  which  it  considers reasonable and  proper, though  they  may  not  be within the terms of any existing agreement. It has not merely  to interpret  or given  effect to  the contractual rights  and obligations  between  them which   it   considers   essential   for   keeping industrial  peace."  since  the  decision  of  the Federal  Court   in   Western   India   Automobile Association v. Industrial Tribunal, Bombay, it has been repeatedly  held  that  the  jurisdiction  of industrial tribunals  if much  wider  and  can  be reasonably  exercised   in   deciding   industrial disputes with  the object  of  keeping  industrial peace and progress (Vide: Rohtas Industries, Ltd., v. Brijnandan  Pandey; The  Patna Electric  Supply Co. Ltd.,  Patna  v.  The  Patna  Electric  Supply Workers Union.  Indeed, during  the last ten years and more 397 industrial adjudication  in this  country has made so  much   progress  in   determining   industrial disputes arising  between industrial  of different kind and  their employee that the jurisdiction and authority of  industrial tribunals  to  deal  with such disputes  with the  object of ensuring social justice is no longer seriously disputed.      But, it  is necessary  to  remember  that  no claim can  be made  for such  broad jurisdictional

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power by  the respondent when it purports to issue a notification  under the  provisions of  the Act. These powers  and authority  would necessarily  be conditioned by the relevant provisions under which it purports  to  act,  and  the  validity  of  the impugned notification must therefore be judged not by general  considerations of  social  justice  or even  considerations  for  introducing  industrial peace; they  must be judged solely and exclusively by the  test prescribed  by the  provisions of the statute itself.  It appears  that in  1956  before Vidarbha became  a part of the state of Bombay the State Government  of Madhdya  Pradesh had  made  a comprehensive reference for the arbitration by the State   Industrial    Court   between   the   bidi manufacturers  of   Bhandara  District  and  their employee. In  this dispute all the material issues arising  from   the  prevailing   practice   which authorised employers  to reject  chhat  bidis  had been   expressly    referred   for   adjudication. Subsequently, when  the impugned  notification was issued the  respondent apparently  took  the  view that what could have been achieved by reference to the arbitration of state Industrial Court may well be accomplished by issuing a notification under s. 5 of the Act. It may be that there is substance in the grievance  made  by  the  employees  that  the practice of  rejecting chhat  bidis often leads to the injustice  and  deprives  them  of  the  wages legitimately earned  by them  by rolling  the said bidis  and  there  can  be  no  doubt  that  if  a comprehensive reference  is made  for the decision of 398 this   industrial   dispute   between   the   bidi manufacturers and  their employees  an  award  may well be  passed which  will resolve  this dispute; but the  question which  falls for our decision is whether  the   relevant  provisions   of  the  Act authorised the  State Government to make rules for the decision of the dispute in that behalf and for the payment  of minimum rate of wages on the basis of such  decision? In  our opinion,  the answer to this question has to be in the negative.      What is the extent of the authority conferred on the  respondent in  fixing or  revising minimum rates of  the wages  under the relevant provisions of the  Acts In dealing with this question we must necessarily bear  in mind  the definition  of  the term "wages"  prescribed by  s. 2(h).  As we  have already   been    the   term    "wages"   includes remuneration 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.  In other  words,  the terms "wages"  refers to  remuneration payable  to the  employee   as  a   result  of  the  terms  of employment. What  would be the amount to which the employee is  entitled if  the other  terms of  the contract are  preferred ?  That the question which has to  be asked  in  determining  what  the  term "wages" means  under (h).  No doubt ss. 3, 4 and 5 authorised the  appropriate Government  to fix the minimum rates  of wages.  In other  words, if  the wages fixed  by a contract which is either express

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or implied  are  found  to  be  low  authority  is conferred  on   the  appropriate   Government   to increase them  so as to bring them to the level of what the  said Government  regards as  the minimum wages in  the particular  scheduled employment  in the particular  area concerned.  This  means  that power   is conferred on the appropriate Government to modify  one term  of the  contract  express  or implied between the employer and the 399 employee and that is a term which has reference to the payment  of wages.  If for  a certain piece of work done  by the employee the employer has agreed to pay  him either  expressly or  by implication a certain amount of wages the appropriate Government can issue  a notification  and prescribe  that for the said work done under the contract the employer must pay  his employee a much higher rate of wages and the higher rate of wages thus prescribed would be deemed  to be the minimum rate of wages between the parties.      It  would,   however,  be   noticed  that  in defining "wages"  cl. 2(h)  postulates  that  they would  be  payable  if  the  other  terms  of  the contract of  employment are  fulfilled. That is to say, authorising  the fixation of minimum rates of wages  the   other  terms   of  the   contract  of employment  have   always  to  be  fulfilled.  The fulfillment of  the other terms of the contract is a condition  precedent for the payment of wages as defined under s. 2 (h) and it continues to be such a condition  precedent even for the payment of the minimum rates of wages fixed and prescribed by the appropriate Government.  The significance  of  the definition contained  in s.  2(h) lies in the fact that the,  rate of  wage may  be increased  but no change can  be made  in the  other  terms  of  the contract. In  other words, the Act operated on the other terms  of the Contract on the other terms of the  contract   between  the   employer  and   the employee. That is the basic approach which must be adopted in determining the scope and effect of the powers conferred  on the appropriate Government by the relevant provisions of the statute authorising it to  prescribe fix  or minimum rates of wages or to revise them. What the appropriate Government is authorised to  do is  to proscribe,  fix or revise wages and  wages are  defined to  be  remuneration payable to  the employees  if  the  terms  of  the contract of  employment, express  or implied, were fulfilled. 400 This  definition  runs,  as  it  inevitably  must, through the and the material provisions of the Act and its importance cannot therefore be ignored.      Bearing this  fact in mind let us examine the impugned clauses  of the  notification. Clauses  1 and 2 clearly fall within the purview of the power conferred on  the respondent  because they  do  no more than  prescribe the minimum rates of rates as therein specified;  out cls.  3 to  7 clearly  and unambiguously purport  to deal  with the  terms of the contract  between the  parties other than that relating to  the remuneration.  These  clause  are obviously  intended   to  deal  with  the  dispute

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between the  employers and  their employees  as to how  bidis   should  be   discarded  and  in  that proportion and  what should be the procedure to be followed  in  regard  to  the?  payment  for  such discarded bidis.  In appreciating  the true effect of these  clauses it  is necessary  to recall that the parties  are  agreed  about  the  practice  at present  prevailing   which  must   be  taken   to represent the terms of the contract either express or implied.  According to  the said  practice  the employer decides  which bidis should he discarded, he retains  the discarded  bidis and pays only for such bidis  as are  accepted be  him. It  if plain that the  impugned  clauses  of  the  notification purport  to   modify  these   terms  in   material particulars and  that and  be plainly  outside the jurisdiction of  the authority  of the respondent. It may  well form  the subject-matter of reference for industrial adjudication but it cannot form the subject-matter  of   a  notification   prescribing minimum rates  of wages under ss. 3, 4 or 5. It is conceded  by  the  respondent  that  there  is  no express provision in the act, which authorised the setting up  of the machinery as prescribed by cls. 3 and 4 or for laying down the manner in which the employer should  make payment  for  the  discarded bidis. It  is, however, strenuously urged that the validity of  these clauses should be upheld on the ground of the 401 implied power of the respondent; and that takes us to the question as to the true scope and effect of the doctrine of implied power.      "One of  the first  principles  of  law  with regal to  the effect of an enabling act", observes Craies,  "is   that  if   a  Legislature   enables something to  be done,  it gives power at the same time by  necessary implication  to  do  everything which is indispensable for the purpose of carrying out the  purposes in  view(1)". The  principle  on which the  doctrine is  based is  contained in the legal maxim ’Quando lex aliquid concedit concedere videtur et  illud  sine  quo  res  ibsa  ease  non potest’. This  maxim has  been thus  translated by Broom thus: "whoever grants a thing is deemed also to grant that without which the grant itself would be of  no  effect".  Dealing  with  this  doctrine Pollock, C.B.,  observed in  Michaely  Fenton  and James Fraser  v. John Stephen, Hempton "It becomes therefore  all  important  to  consider  the  true import of  this maxim,  and the extent to which it has been applied. After the fullest research which I have  been able  to bastow, I take the matter to stand thus  : Whenever anything is authorised, and especially if,  as matter  of duty, required to be done by law, and it is found impossible to do that thing unless  something  else  not  authorised  in express terms  be else  done, then  that something will be  supplied by  necessary intendment."  This doctrine can  be invoked  in cases  "where an  Act confers  a   jurisdiction  it   also  confers   by implication the  power of  doing all such acts, or employing such  means as are essentially necessary to  its   execution  (3)."  In  other  words,  the doctrine of  implied powers  can  be  legitimately

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invoked   when it  is found  that a  duty has been imposed or  a power conferred on an authority by a statute and  it is  further found  that  the  duty cannot  be  discharged  or  the  power  cannot  be exercised at all unless some 402 auxiliary or incidental power is assumed to exist. In such a case, in the absence of an implied power the statute  itself  would  become  impossible  of compliance. The  impossibility in question must be of a  general nature  as that  the performance  of duty  or   the  exercise   of  power  is  rendered impossible in  all cases. It really means that the statutory provision would become a dead-letter and cannot be  enforced unless  a subsidiary  power is implied. This  position in regard to the scope and effect  of  doctrine  of  implied  powers  is  not seriously in dispute before us. The parties are at issue, however,  on the question as to whether the doctrine of  implied powers  can help  to validate the impugned clauses in the notification.      The respondent strenuously contends that cls. 1 and  2 of the notification which have prescribed the minimum  rates of  wages per  1000 bidis would become ineffective  unless cls.  3 to 7 supplement them.  The   argument  is   that  by  improper  or dishonest exercise  of the  power conferred on the employer by  the contract of employment to discard chhat bidis  the employees  would  be  cheated  of their legitimate  due wages under cls. 1 and 2 and so, in  order to make the provisions of cls. 1 and 2 effective  some subsidiary  provisions had to be made for settling the dispute between the employer and his  workmen in  regard to  chhat bidis. As we have already  observed, the  grievance made by the employees on  the score  of improper  rejection of bidis may  in many  cases be well-founded; but the seriousness of  the said  grievance and the urgent necessity to  meet it  would hardly  be  a  proper basis for  invoking the  doctrine of implied power where the  provisions of  the  statute  are  quite clearly against  the assumption  of  such  implied power.  The   definition  of   the  term  "wheres" postulates the  binding  character  of  the  other terms  of  the  contract  and  brings  within  the purview of the Act only one 403 term and  that relates to wages and no other. That being  so,   it  is  difficult  to  hold  that  by implication the  very basic  concept of  the  term "wages" can  be ignored and the other terms of the contract can  be dealt  with by  the  notification issued under  the relevant  provisions of the Act. When the  said other  terms of  the  contract  are outside the  scope of the Act altogether how could they be affected by the notification under the Act under the doctrine of implied powers      Besides,  in   this  connection  it  is  also necessary to bear in mind the provisions of ss. 20 and 21  of the Act. These two sections provide for the settlement  of claims  made  by  employees  in regard to  the payment  of minimum rates of wages. If for  instance, good  bidis are  rejected by the employer as  chhat bidis  improperly  and  without justification the  employees can  make a  claim in

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that behalf  and the same would be tried under ss. 20 and  21. Therefore  the Act has made a specific provision for  the enforcement  and implementation of  the  minimum  rates  of  wages  prescribed  by notifications. The  present notification  purports to ignore  the  said  provisions  and  sets  up  a machinery to  settle the  said disputes. Clauses 1 and 2  of the  notification  have  prescribed  the revised minimum  rates of wages. If, in the matter of payment  of the  said wages, any disputes arise they  must   be  left   for  adjudication  by  the authority prescribed  by s.  20. That  is  another reason why  the doctrine  of implied powers cannot be invoked  in support  of  the  validity  of  the impugned clauses in the notification.      There is  yet another  consideration which is relevant in  dealing with  the question  about the implied powers.  The doctrine of implied power can be  invoked  where  without  the  said  power  the material  provision   of  the   Act  would  become impossible of enforcement. In the present 404 case all  that s.  5 requires  is the  fixation of minimum rates  of wages, and that has been done by the  notification  by  cls.  1  and  2.  What  the subsidiary clauses  purport to  do is  to make the enforcement  of   the  fixed   rate  effective  by providing  for   a  machinery  to  deal  with  the possible disputes arising between the parties as a result of  the practice of discarding chhat bidis. In other words, cls. 1 and 2 fix the minimum rates of wages  and thus s. 5 has been complied with and enforced. The  remaining clauses  purport to  make the implementation of the provisions of cls. 1 and 2 effective.  That is  very different  from giving effect to  s. 5  itself. The  enforcement  of  the notification is  clearly not  the  same  thing  as exercising the  power of  fixing or  revising  the minimum rates  of wages under s. 5. A Power may be implied, if  necessary, in  discharging  the  duty imposed upon  the  appropriate  Government  or  in exercising  the   power  conferred  on  the  State Government in the matter of fixing or revising the minimum rates of wages; but surely no power can be implied for making effective the implementation of the notification issued under the said power or in the discharge of the said duty. The purpose of the Act cannot  be  said  to  have  failed  after  the minimum  rates   of  wages   are  prescribed   and notified. What  may turn  out to be ineffective is the provision  for payment  of the  said wages  by reason of the rejection of good bidis; but that is a matter  of an industrial dispute which has to be adjudicated upon  under ss.  20 and  21  or  under other provisions  of the  law. It  is true  that a large section  of the workers in the bidi trade is illiterate, uneducated  and unorganised; and there can be no doubt that their grievance on the ground of improper  rejection of the bidis deserves to be redressed, but,  in  our  opinion,  the  procedure adopted by  the respondent  in redressing the said grievance is  outside the  scope of  the Act,  and therefore beyond  the powers conferred on it by s. 5. The proper remedy 405

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in such  a case  may be  to make  a  comprehensive reference  of   the  dispute   to  the   competent industrial tribunal  and invite  the  tribunal  to make a  proper  award  in  that  behalf.  We  are, therefore, inclined  to take  the view that cls. 3 to 7 which form an integral scheme are outside the purview of  the powers conferred on the respondent by s.  5 of the Act and must therefore be declared to be  ultra vires. It is common-ground that these clauses are  severable from  cls. 1 and 2 and that their invalidity  does not  affect the validity of the said two clauses.      In the  result Civil Appeals Nos. 415 and 417 are allowed and Civil Appeals Nos. 416 and 418 are dismissed. Respondent  to pay  the  costs  of  the petitioners in Civil Appeals Nos. 415 and 417. One set of hearing cost.                       C.A. Nos. 415, 417, allowed.                      C.A. Nos. 416, 418 dismissed.