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CASE NO.: Appeal (civil)  4494 of 2000

PETITIONER: Lingegowd Detective & Security Chamber (P) Limited

RESPONDENT: Mysore Kirloskar Limited & Ors.

DATE OF JUDGMENT: 04/05/2006

BENCH: ARIJIT PASAYAT & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T [With C.A. Nos. 4495-4498 of 2000]

ARIJIT PASAYAT, J.

       Challenge in this appeal is to the legality of judgment  rendered by a Division Bench of the Karnataka High Court in  Writ Appeal Nos. 5887/1997 and 6105-6107/1997.  By the  impugned judgment, the order passed by a learned Single  Judge was set aside.

       Background facts, in a nutshell, are as follows:

       Aggrieved by the orders passed by the Authority under  The Minimum Wages Act, 1948 (in short ’the Act’), the  appellant\026Lingegowd Detective & Security Chamber (P) Limited  (appellant in C.A. No. 4497/2000) (in short ’Lingegowd’) filed a  writ petition praying for setting aside the orders on the ground  that since its establishment of providing security personnel to  various organization was not a scheduled employment as  detailed in the Schedule to the Act (hereinafter referred to as  the ’Schedule’) and as no specific Notification was issued in  that behalf, the impugned orders were without jurisdiction.  The writ petitions were allowed holding that the workmen of  Lingegowd were not entitled to grant of minimum wages.  However, taking into account the beneficial nature of the  provision, the learned Single Judge directed Mysore Kirloskar  Limited, (appellants in Civil Appeal Nos.4495-4498/2000,  hereinafter referred to as ’Mysore Kirloskar’) to pay a sum of  Rs.1,00,000/- as ex-gratia to the workmen as the principal  employer. The respondent-Chitradurga District Mazdoor  Sangha (Regd.) & Ors. (hereinafter referred to as the ’Mazdoor  Sangha’) filed writ appeals contending that the learned Single  Judge was not justified in his view regarding non-applicability  of the Act to the undertaking of Lingegowd which employed  several persons for rendering security services to the principal  employer i.e. Mysore Kirloskar. The Division Bench of the High  Court has held that where a person provides labour or services  to another for remuneration, which is less than the minimum  wages, the labour or services provided by him fell within the  scope and ambit of the words "forced labour" under Article 23  of the Constitution of India, 1950 (hereinafter referred to as  ’the Constitution’) and, therefore, the orders passed by the  Authority under the Act were not to be interfered with. It was  further held that since the principal employer’s activities were

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included in the list of Scheduled employments, under the  Schedule to the Act, there was no necessity of issuance of a  separate Notification with reference to the employment of  security staff procured through Lingegowd. Reliance was  placed on several decisions relating to the true essence of the  expression "right to life" as appearing in Article 21 of the  Constitution.

       In support of the appeals filed by Lingegowd, Mr. Dayan  Krishnan, learned counsel has submitted that the Division  Bench relied upon judgments which have no relevance to the  subject matter of dispute. In fact, the learned Single Judge  had analysed the basic issues in great detail and had come to  the right conclusion that Lingegowd had no liability.  It was  further submitted that the view of the learned Single Judge  was correct except to the extent that it was held that the  appellants had joint and several liability along with the  principal employer for payment of rupees one lakh to the  concerned employees.

       Mr. Rajesh Mahale, learned counsel appearing for Mysore  Kirloskar adopted the reasoning given by the High Court.   There is no appearance on behalf of the Sangh.          This Court had occasion to deal with the question  regarding the specified establishments. In Madhya Pradesh  Mineral Industry Association v. The Regional Labour  Commissioner, Jabalpur and Ors. (1960 (3) SCR 476), it was  observed as follows :

       "Before dealing with the vires of the  impugned notification it would be material to  examine the relevant provisions of the Act.   The Act has been passed to provide for  minimum rates of wages in certain  employments. Section 2(b) defines the  appropriate government as meaning, inter alia  (1) in relation to any scheduled employment  carried on by or under the Authority of the  Central Government or in relation to a mine  the Central Government, and (2) in relation to  any other scheduled employment the State  Government. It would thus appear that the  Legislature intended that the provisions of the  Act may in due course be extended to mines  and so it has prescribed that in respect thereof  the Central Government would be the  appropriate Government.  Section 2(e) defines  an employer as meaning, inter alia, any person  who employs whether directly or through  another person or whether on behalf of himself  or any other person one or more employees in  any scheduled employment in respect of which  minimum rates of wages have been fixed under  this Act. Section 2(g) defines scheduled  employment as meaning an employment  specified in the schedule or any process or  branch of work forming part of such  employment. Section 3 authorizes the  appropriate government to fix minimum rates  of wages in regard to the employments  specified in Parts I and II of the Schedule  respectively and prescribes the procedure in  that behalf.  Section 5 lays down the procedure  for the fixing and revising of minimum wages.  

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Section 5(2) provides that after following the  procedure prescribed by the said section the  appropriate government shall by notification in  the official gazette fix, or as the case may be,  revise the minimum rates of 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.  There is only one  more section which needs to be mentioned; i.e.  Section 27 which empowers the appropriate  government to add to either part of the  Schedule any employment in respect of which  it is of opinion that minimum rates of wages  should be fixed under this Act after following  the procedure prescribed by it, and the section  adds that after the notification is thus issued  the Schedule shall, in its application to the  State, be deemed to be amended accordingly.

       It is thus clear that the whole scheme of  the Act is intended to work in regard to the  employments specified in Part I and Part II of  the Schedule and the Legislature has wisely  left it to the appropriate government to decide  to what employments the Act should be  extended and in what areas. Section 5(2)  empowers the appropriate government to fix or  revise minimum wages in regard to any of the  employments in the Schedule to which the Act  applies.  This power can be exercised only if  the employment in question is specified in the  Schedule and the Act is therefore applicable to  it.  Section 27 confers a wider power on the  appropriate government, and in exercise of the  said power the appropriate government may  add an employment to the Schedule. The  nature and extent of the said two powers are  thus quite separate and distinct and there can  be no doubt that what can be done by the  appropriate government in exercise of its  power under Section 27 cannot be done by it  in exercise of its power under Section 5(2). It is  significant that the impugned notification has  been issued by the Madhya Pradesh  Government by virtue of the powers under  Section 5(2) of the Act which have been  delegated to it by the President in exercise of  his authority under Article 258 of the  Constitution.  The main argument urged by  Mr. Bobde is that the impugned notification is  ultra vires of Section 5(2) because stone- breaking and stone-crushing operations in  manganese mines do not fall under any of the  items in Part I of the Schedule.  The dispute  thus raised really lies within a very narrow  compass: Does employment in stone-breaking  or in stone-crushing operations carried on in  mines specified in the impugned notification  amount to employment in stone-breaking or  stone-crushing which is item 8 in Part I of the  Schedule to the Act? It is common ground that  the employment in question does not fall  under any other item in Part I."

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                                               (Underlined for emphasis)

       Again in M/s. Bhikusa Yamasa Kahatriya v. Sangamner  Akola Taluka Bidi Kamgar Union (1963(1) (Supp) SCR 524), it  was observed as follows:          "The object and policy of the Legislature  appear on the face of the Act.  The object of the  Act is to prevent exploitation of the workers,  and for that purpose it aims at fixation of  minimum wages which the employers must  pay. The Legislature undoubtedly intended to  apply the Act to those industries or localities in  which by reason of causes such as  unorganized labour or absence of machinery  for regulation of wages, the wages paid to  workers were, in the light of the general level of  wages, and subsistence level, inadequate.   Conditions of labour vary in different  industries and from locality to locality, and the  expediency of fixing minimum wages, and the  rates thereof depends largely upon diverse  factors which in their very nature are variable  and can properly be ascertained by the  Government which is in charge of the  administration of the State.  It is to carry out  effectively the purpose of this enactment that  power has been given to the appropriate  Government to decide, with reference to local  conditions, whether it is desirable that  minimum wages should be fixed in regard to  any scheduled trade or industry, in any  locality, and if it be deemed expedient to do so,  the rates at which the wages should be fixed in  respect of that industry in the locality.  By  entrusting authority to the appropriate  Government to determine the minimum wages  for any industry in any locality or generally,  the legislature has not divested itself of its  authority, nor has it conferred uncontrolled  power upon the State Government.  The power  conferred is subordinate and accessory for  carrying out the purpose and the policy of the  Act.  By entrusting to the State Government  power to fix minimum wage for any particular  locality or localities the Legislature has not  stripped itself of its essential legislative power  but has merely entrusted what is merely an  incidental function of making a distinction  having regard to the special circumstances  prevailing in different localities in the matter of  fixation of rates of minimum wages.  Power to  fix minimum rates of wages does not by itself  invest the appropriate Government with  authority to make unlawful discrimination  between employers in different industries.  Selective application of a law according to the  exigencies where it is sanctioned, ordinarily  results in permissible classification.  Article 14  forbids class legislation but does not prohibit  reasonable classification for the purpose of  legislation. If the basis of classification is  indicated expressly or by implication, by  delegating the function of  working out the  details of a scheme, according to the objects of

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the statute the principles inherent therein, to a  body which has the means to do so at its  command the legislation will not be exposed to  the attach of unconstitutionality,  in other  words, even if the statute itself does not make  a classification for the purpose of applying its  provisions, and leaves to a responsible body to  select and classify persons, objects,  transactions, localities or things for special  treatment, and sets out the policy or principles  for its guidance in the exercise of its authority  in the matter of selection, the statute will not  be struck down as infringing Article 14 of the  Constitution. This principle is well recognized."

                                       (Underlined for emphasis)          In Haryana Unrecognised  Schools’ Association  v. State  of Haryana (1996(4) SCC 225), it was observed as follows :

       "There cannot be any dispute with the  proposition that while construing the  provisions of a statute like Minimum Wages  Act a beneficial interpretation has to be  preferred which advances the object of the Act.  But nevertheless it has to be borne in mind  that the beneficial interpretation should relate  only to those employments which are intended  to be covered by the Act and not to others.   Section 3 of the Act provides that the  appropriate Government shall, in the manner  hereinafter provided fix the minimum rates of  wages payable to employees employed in an  employment specified in Part I or Part II of the  Schedule and in an employment added to  either part by notification under Section 27.   The expression ’employee’ has been defined in  Section 2(i) of the Act thus :

       "Employee" means any person who  is employed for hire or reward to do any  work, skilled or unskilled, manual or  clerical, in a scheduled employment in  respect of which minimum rates of wages  have been fixed; and includes an out- worker to whom any articles or materials  are given out by another person to be  made up, cleaned, washed, altered,  ornamented, finished, repaired, adapted  or otherwise processed for sale for the  purpose of the trade or business of that  other person where the process is to be  carried out either in the home of the out- worker or in some other premises not  being premises under the control and  management of that other person; and  also includes an employee declared to be  an employee by the appropriate  Government; but  does not include any  member of the Armed Forces of the  Union."

       Section 27 enables the State Government  to add to either part of the schedule any  employment in respect of which it is of the

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opinion that minimum rates of wages should  be fixed under the Act.  Section 27 reads thus:

       "The appropriate Government, after  giving by notification in the Official  Gazette not less than three months’  notice of its intention so to do may, by  like notification add to either part of the  Schedule any employment in respect of  which it is of opinion that minimum rates  of wages should be fixed under this Act,  and thereupon the Schedule shall in its  application to the State be deemed to be  amended accordingly.

A combined reading of the aforesaid  provisions as well as the object of the  legislation as indicated earlier makes it  explicitly clear that the State Government  can add to either part of the Schedule  any employment where persons are  employed for hire or reward to do any  work skilled or unskilled, manual or  clerical.  If the persons employed do not  do the work of any skilled or unskilled or  of a manual or clerical nature then it  would not be possible for the State  Government to include such an  employment in the Schedule in exercise  of power under Section 27 of the Act.   Since the teachers of an educational  institution are not employed to do any  skilled or unskilled or manual or clerical  work and, therefore, could not be held to  be an employee under Section 2(i) of the  Act, it is beyond the competence of the  State Government to bring them under  the purview of the Act by adding the  employment in education institution in  the Schedule in exercise of power under  Section 27 of the Act.   This Court while  examining the question whether the  teachers employed in a school are  workmen under the Industrial Disputes  Act had observed in A. Sundarambal v.  Govt. of Goa, Daman & Diu. (SCC P. 48  para 10)."

(Underlined for emphasis)

In this case, it was held that the Statute cannot be  extended to those not intended to be covered by the Statute  concerned.  It was, however, noted that Section 27 enables the  State Government to power to add to that part of the Schedule  any employment in respect of which it is of the opinion that  minimum rates of wages should be fixed under the Act.

In Patel Ishwerbhai Prahladbhai etc.etc. Vs. The Taluka  Development Officer and Ors. (AIR 1983 SC 336), it was  observed at paragraph -7 as follows:

"Section 3 of the Minimum Wages Act,  1948 provides for he appropriate Government,  in the manner provided in the Act, fixing  minimum rates of wages payable to employees

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employed in an employment specified in Part I  and Part II of the Schedule and in any other  employment added to either Part by  notification under Section 27 of the Act subject  to the proviso to Section 3(1)(A) and has power  to review at such intervals as it thinks fit, such  intervals not exceeding 5 years, the minimum  rates of wages so fixed and revise the  minimum rates, if necessary, subject to the  proviso to clause (b) of sub-section (1) of  Section3. Section 2(i) of the Act defines  "employee" as meaning  "any person who is  employed for hire  or reward to do any work,  skilled or unskilled, manual or clerical, in a  scheduled employment in respect of which  minimum rates of wages have been fixed and  includes an out worker\005.." "Employer"  is  defined in Section 2(e) of the Act as "any  person who employees, whether directly or  through another person, or whether on behalf  of himself or any other person, one or more  employees in any scheduled employment in  respect of which minimum wages have been  fixed under the Act and includes, except in  sub-section (3) of Section 26".   (i)\005\005(ii)\005\005.(iii) in any scheduled employment  under any local authority in respect of which  minimum rates of wages have been fixed under  the Act, the person appointed by such  authority for the supervision and control of the  employees or where no employee is so  appointed, the Chief Executive Officer of the  local authority; and (iv) in any other case  where there is carried on any scheduled  employment in respect of which minimum  rates of wages have been fixed under the Act,  any person responsible to the owner for the  supervision and control of the employees or for  the payment of wages\005."  We are not  concerned in these appeals with Section 26(3)  of the Act.  Section 2(g) defines "scheduled  employment" as meaning "an employment  specified in the Schedule or any process or  branch of work forming part of such  employment".  "Employment under any local  authority" is item 6 in the Schedule of the Act."

The learned Single Judge was, therefore, justified in his  view that the appellant\026Lingegowd had no liability to pay the  minimum wages. The detective services do not form part of the  scheduled employment as detailed in the Schedule.  It was  also justified in holding that there was no employee-employer  relationship so far as the appellant\026Mysore Kirloskar and the  concerned workmen are concerned. The Division Bench  unfortunately did not address itself to the relevant aspects and  referred to the decision in People’s Union for Democratic  Rights & Ors.  v.  Union of India & Ors.  (AIR 1982 SC 1473)  which was rendered on a totally different context.

Though the Division Bench referred to the provisions of  the Contract Labour (Regulation and Abolition) Act, 1970 ( in  short ’the Contract Labour Act’), the same has no relevance so  far as the present dispute is concerned.

Therefore, the order of the learned Single Judge is

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restored and that of the Division Bench is set aside.  It is made  clear that Mysore Kirloskar having not challenged learned  Single Judge’s order, is required to make the payment, as  directed by learned Single Judge.  Since the learned Single  Judge had held that Lingegowd was not required to pay the  minimum wages, as the nature of services rendered by it was  not a schedule employment, the question of it having joint and  several liability to pay a sum of Rs.1,00,000/- along with  Mysore Kirloskar can not arise.  The payment shall be made, if  not already made, by Mysore Kirloskar within a period of six  weeks from today. The appeals are allowed to the aforesaid extent.  No  costs.