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PETITIONER: STATE OF RAJASTHAN & ANOTHER

       Vs.

RESPONDENT: HARI RAM NATHWANI & ORS.

DATE OF JUDGMENT03/09/1975

BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. ALAGIRISWAMI, A. GOSWAMI, P.K.

CITATION:  1976 AIR  277            1976 SCR  (1) 641  1975 SCC  (2) 517  CITATOR INFO :  D          1985 SC1391  (2)

ACT:      Minimum Wages.  Act (11  of 1948) ss. 5(C)(e), 7 and 9- Appointment  of   "government  officers  on  committees  and Advisory  Board  as  independent  members-Propriety-Advisory Board   appointing   its   own   sub-committees-Propriety-S. 5(1)(a), scope of.

HEADNOTE:      Section 5(1)  of the  Minimum Wages  Act 1948, provides two types of procedure for fixing and revising minimum wages in respect  of any  scheduled employment. Section 7 provides for the  appointment of an Advisory- Board. If the procedure provided in  s.5(1) (a)  is followed  consultation with  the Advisory Board  is not  u-required while  it is mandatory in case the  procedure in  cl. (b)  is followed. Under cl. (a), the Government  can  appoint  as  many  Committees  or  sub- committees as  it considers  necessary to hold inquiries and advise it in respect of such fixation or revision. Section 9 requires  that   every  committee,  sub  committee  and  the Advisory Board  shall consist  of representatives  of    the employers and  employees in  equal numbers  and  independent persons, whose  number shall  not exceed  1/3 of  the  total number of  members. One  of the independent persons shall be appointed Chairman. [643 G-644 F]      In the  present case  the State Government followed the procedure under  cl.  (a)  and  appointed  a  committee  for revising the  wages with respect to employment in Mica Mines which  is  a  scheduled  employment  under  the    Act.  The committee consisted  of five  members, two representative of the employers,.  two of  the employes  and a  Professor  of’ Economics of  a Government college as an independent member. It submitted  its report  to the  Government. The Government referred the matter to the Advisory Board which consisted of 21 members,  8 representatives  of the  employers. 8  of the employees and  5 government officers as independent members. The Advisory Board appointed a sub committee to further into matter. In  the sub-committee  were taken  same persons  who were, not  members of  the Advisory Board. The sub committee made  its  recommendations  and  the  Advisory  Board  after

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considering those  recommendations also submitted its report and the  State Government accepted it with slight variations and fixed  minimum wages  by a  notification. The respondent challenged its  validity and  the High  Court struck it down holding that, (i) the constitution of The Wage Committee and the Advisory  Board was  not  valid  because  the  economics professor and  the 5  government member were not independent members,  (ii)   the  Board   had  exceeded  its  power.  in appointing a  sub-committee. and.  (iii) the Board committed an   illegality    in   taking    into   consideration   its recommendations  while   submitting  its   report   to   the Government.      Allowing the appeal to this Court, ^      HELD :(1)  It may  be  that  in  certain  circumstances persons who  are in  service of’ the Government may cease to have an  independent character  if the  question  arises  of fixation of minimum wages in a scheduled employment. In. the case of  fixation of minimum wages in a scheduled employment in which  the Government  is  directly  interested,  whether Government servants  can come in the category of independent members in  addition to  the Government  officer who come on the Board  or Committee  as representatives of the employers is a  matter which  has to  be considered  in an appropriate case. But  in the  instant case the constitution of the Wage Committee or  the Advisory  Board was  not bad as Government was not  an employer  in the  Mica Mines in respect of which minimum wages were fixed. [646 A E]      The State  of Andhra  Pradesh v.  Narayana Velur  Beedi Manufacturing   Factory   and others     [1973] I Labour Law Journal, 476, followed. 642      (2) The Advisory Board can device its own procedure and collect  information   by  appointment   of   sub-committees consisting only  of some  of its  members. But  the Advisory Board has  no power  to appoint  a rival subcommittee to the one  appointed   by  the   Government  and   take  in   such subcommittee, persons  who are  not members  of the Board as was  done  in  this  case.  Therefore.  the  Advisory  Board committed an  irregularity in  appointing the  sub-committee and taking into consideration its report. [646 E-G]      (3)  But   it  does   not  follow   that  the  impugned notification based upon the report of the Advisory Board was bad even is the irregularity is assumed to be an illegality. The recommendations  made by the Board even on consideration of the  report of  its sub-committee  was only  that of  the Advisor   Board. Since the procedure was under s. 5(1)(a) it was not  mandatory for Government to take the opinion of the Advisory Board  at all. Therefore, the impugned notification and the proceedings pursuant to it cannot be quashed [646 G- 647 B]      Gulamahamed  Tarasaheb,   a   Bidi   factory   by   its proprietors Shamrao  and   other v.  State   of Bombay  and’ others A.I.R.. 1962 Bombay 97 referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1800 of 1969.      Appeal by  special leave  from the  Judgment and  order dated the 25th January., 1967 of the Rajasthan High Court in D.B. Civil Writ Petition No. 406 of l 966.      S. M. Jain, for the appellant.      The Judgment of the Court was delivered by

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    UNTWALIA, J.-The  hearing of  this appeal  filed by the State of  Rajasthan and  another by  special leave proceeded ex-parte against  the respondents.  After examining  all the pros and  cons of  the dispute  involved in this appeal with the assistance  of the learned counsel for the appellants we have come  to the  conclusion  that  the  appeal  should  be allowed.      From time  to time the Government of Rajasthan fixed or revised the minimum rates of wages for employees in the Mica Mines throughout  the State  of Rajasthan under section 5(2) of the  Minimum Wages  Act, 1948-Central  Act  11  of  1948- hereinafter. called  the Act.  The employment  in  the  Mica Mines is  a  scheduled  employment  within  the  meaning  of section 2(g)  of the  Act. Eventually  the minimum  rates of wages were  fixed by  the Government by a notification dated the 31  July, 1965,  the validity of which was challenged in the Rajasthan  High Court  by several  employers in the Mica Mines in Civil Writ No. 406/1966 and 15 other writs. Several proceedings  initiated   on  the   basis  of   the  impugned notification were  also challenged by the employers. A Bench of the  Rajasthan High  Court allowed the writ applications, quashed the  impugned notification and the proceedings taken in pursuance  thereof. This  appeal arises out of Civil Writ No. 406/1966 in which the employer is respondent no. 1.      The notification  dated  31-7-1965  was  challenged  on several rounds and we will be concerned with some of them in this appeal.  The relevant  facts arc these. For the purpose of  revising   the  minimum   wages  fixed  by  the  earlier notification  dated   the  24th-April,   1959,   The   State Government in  the  first  instance  appointed  a  Committee consisting of  five members  on  the  17th  May.  1962.  The constitution of the 643 Committee was,  however, revised  by notification  dated the 26th  November,  1962.  This  committee  consisted  of  five members,  two   representatives  of   the   employers,   two representatives of  the employees  and one  Professor K.  S. Mathur, Head  of the Department of Economics Degree College, Ajmer. The  last was  taken as  an independent member of the committee. It  submitted its  report to  the Government. The matter was  referred by the Government to the Advisory Board constituted under  section 9  of the  Act. It appears that a Sub-committed as  appointed by the Advisory Board to go into the matter  further and  to consider the report of the  Wage Committee appointed  earlier by  the government  on the 26th November,  1962’.  In  the  Sub-committee  were  taken  some persons who were not members of the Advisory Board. The Sub- committee also  submitted is  report to  the Advisory  Board which consisted of 21 members, 8 employers’ representatives, a  employees’  representatives  and  S  Government  officers appointed  in  the  category  of  independent  members.  The proceedings of the Board dated the 7th May, 1965 showed that it considered  the recommendations of the Wage Committee and the Sub-committee  and then  submitted its report containing its recommendations  of the  wage  structure  suggesting  an alternative scale  of minimum wages according as the linking of Dearness  Allowance with  the consumer-price-indices. The State Government  accepted the wage structure recommended by the Board  but with  slight variation  in the  matter of the linking basis  with  Dearness  Allowance  and  made  it  all inclusive rates of minimum wages per month.      The learned  Acting Chief Justice of the Rajasthan High Court who  delivered the  leading judgment in the case, on a consideration of the various divergent decisions of the High Courts came  to the  conclusion that the constitution of the

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Wage Committee  was  not  valid  as  the  Professor  of  the Government College  was not an independent member. Similarly the constitution  of the  Advisory Board was also bad as the five Government  officers on  the Board could not be said to be independent  members. He  was also  of the  view that the Board had  exceeded to  power in  appointing a Sub-committee add committed an illegality in taking into consideration its report while  making recommendations  to the Government. The other learned  Judge with  some amount  of  reservation  and diffidence agreed  to the  order  proposed  by  the  learned Acting Chief  Justice.  It  may  be  stated  here  that  the fixation of  the minimum ware ill the notification dated the 31st July, 1965 was also challenged before the High Court on certain grounds  relating to  the merits of the fixation but the High Court has over-ruled such objections.      Section 5  of the Act provides the procedure for fixing and revising  minimum wages  in  respect  of  any  scheduled employment. There  are two  types of  procedure indicated in clauses (a)  and (b)  of sub-section  (1). Obviously  in the present case  the procedure followed was the one provided in clause (a).  We shall now read sub-section (2) of  section 5 with the proviso appended thereto:           "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 644      date specified  in the notification under clause (b) of      that sub  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:           Provided that  where  the  appropriate  Government      proposes to  revise the  minimum rates  of wages by the      mode specified  in clause  (b) of  sub-section (1), the      appropriate Government shall consult the Advisory Board      also " It would  be noticed that the power to fix the minimum wages is the  Government. Under  clause (e) of sub-section (1) the Government can appoint as many committees and sub-committees do it considers necessary to hold enquiries and advise it in respect of  such fixation  or  revision  of  minimum  wares. Section 7 of the Act says:           "For the  purpose of  co-ordinating  the  work  of      committees and sub-committees appointed under section 5      and advising  the appropriate  Government generally  in      the matter  of fixing  and revising  minimum  rates  of      wages, the  appropriate  Government  shall  appoint  an      Advisory Board." If  the  procedure  provided  in  clause  (a)  is  followed, consolation with the Advisory Board is not required in terms but is  resorted  to  while  it  is  mandatory  in  case  of procedure (b). Section 9 provides:           "Each of  the committees,  sub-committees and  the      Advisory Board shall consist of persons to be nominated      by the  appropriate Government  representing  employers      and employees  in the  scheduled employments, who shall      be  equal   in  number,  and  independent  persons  not      exceeding one-third of its total number of members; one      of such  independent persons  shall  be  appointed  the      Chairman by the appropriate Government." The question  as to  whether a  Government officer  could be

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appointed on  Committee., Sub-committee  to or  the Advisory Board as  an independent  person came  up for  consideration before the  various High  Courts. Majority  of them took the view that  it could  be so. A few High Court, however took a contrary view.  In the  judgment under appeal the High Court or Rajasthan  has fallen  in the  line of  the minority. But recently be point has been set at rest by a decision of this Court in  The State  of Andhra  Pradesh v.  Narayana   Velur Beedi Manufacturing  Factory and others (1) . We consider it appropriate to quote the whole of graph 10 or that judgment:           "In our judgment the view which has prevailed with      the Majority  of the High Courts must be sustained. The      committee or  the advisory board can only tender advice      which is not binding on the government While fixing the      minimum wages (1) [1973] 1 Labour Law Journal 476 645      or revising  the same as the case may be of course, the      Government is  expected, particularly  in  the  present      democratic set  up, to  take that advice seriously into      consideration and  act on  it but it is not bound to do      so.  The   language  of  s.  9  does  not  contain  any      indication whatsoever that persons in the employment of      the Government  would be  excluded from the category of      independent persons.  These words have essentially been      employed in  contradistinction  to  representatives  of      employers and employees. In other words, apart from the      representatives of employers and employees there should      be persons  who should  be independent of them. It does      not follow  that persons  in the service an employee of      the Government  were meant  to  be  excluded  and  they      cannot be regarded as independent persons vis-a-vis the      representatives of  the employers  and employees. Apart      from this the presence of high Government officials who      may have actual working knowledge about the problems of      employers and  employee  can  afford  a  good  deal  of      guidance and assistance in formulating the advice which      is to  be  tendered  under  S.  9  to  the  appropriate      Government. It  may be  that in  certain  circumstances      such per  sons who are in the service of the Government      may cease  to have  an  independent  character  if  the      question arise  of  fixation  of  minimum  wages  in  a      scheduled   employment   in   which   the   appropriate      Government is directly interested. It would, therefore,      depend upon  the facts  of each particular case whether      the persons  who have  been appointed  from out  of the      class  of   independent  persons  can  be  regarded  as      independent or  not. But the mere fact that they happen      to be  Government officials or Government servants will      not  divest   them  of  the  character  of  independent      persons.  We  are  not  impressed  with  the  reasoning      adopted that  a Government official will have a bias or      that he  may favour  the policy  which the  appropriate      Government may  be inclined to adopt because when he is      a member  of an  advisory  committee  or  board  he  is      expected to  give an  impartial and  independent advice      and not  merely carry  out what  the Government  may be      inclined to  do. Government  officials are  responsible      persons and it cannot be said that they are not capable      of taking a detached and impartial view. The  learned   Acting  Chief   Justice  of  the  High  Court considered many  of such decisions of the High Courts in his judgment and posed a question "Suppose, the Government is an employer in  the particular  scheduled employment  for which wages are  sought to  be fixed under the Act. employment for

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be postulated  in  such  a  case  that  an  officer  of  the Government can    property  appointed  as  an  ‘independent’ person on  any of  the statutory  bodies  in  question?"  An answer in  the negative  was given.  He then  said  "I  need hardly add  in this connection that if the Government be not an employer  in any  of the  scheduled employments, there II would be  no objection  to the  Government officers  of  the requisite  calibre   and  experience   being  appointed   as independent persons  within the meaning of the section". But thinking that  in the  list of  the scheduled employment are included "employments such as public motor transport. 646 and construction  and  maintenance  of  roads  and  building operations and   may be, for aught we know, in certain other employments also"  in  which  the  State  Government  is  an employer and  the Advisory  Board constituted  is meant  for advising the  Government in  those employments  also he held the constitution  of the  Advisory Board  to be  bad. In the extract which we have given. above from the decision of this Court a  sentence is  to be  found resembling  the  line  of thinking of the learned Acting Chief Justice. This Court has said "It may be that in certain 1 circumstances such persons who are  in the  service of the Government may cease to have an independent  character if the question arises of fixation of minimum  wages in  a scheduled  employment in  which  the appropriate Government  is directly interested" The question as to  whether in  such a  situation  a  Government  officer appointed on  the Board  or a  Committee can  be said  to be independent  member  or  not  will  have  to  be  cautiously considered when an appropriate occasion arises for the same. After all,  even in such cases the final authority fixing or revising the  minimum wages in a scheduled employment is the Government. (Government officers can undoubtedly come on the Board or  the Committee as representatives of the employers. Whether in  such a  situation more  Government servants  can come in  the  category  of  the  independent  members  is  a question which  is open  to serious debate and doubt. But in the instant  case on the authority of this Court it is clear that the  constitution of  either the  Wage Committee or the Advisory Board  Was not  bad, is  the Government  was not an employer in  the Mica  Mines in  respect of which employment only  minimum   wages  were   fixed  by   revision  in   the notification dated the 31st July, 1965.      No procedure  has been  prescribed in the Act as to the method which  the Advisory  Board is  to adopt before making its recommendations  to the  State Government. It can devise its  own   procedure  and   collect  some   informations  by appointment of  a sub-committee  consisting only  of some of its members  as was  the case  in the decision of the Bombay High Court  in Gulamhamed  Tarasaheb, a  Bidi Factory by its proprietors Shamrao  and  others  v.  State  of  Bombay  and others(1). But  surely the  Advisory Board  has no  power to appoint a  rival sub-  I. Committee  to the one appointed by the Government and take in such subcommittee persons who are not members  of the  Board, as  was done in this case. There is, therefore, no doubt that the Advisory Board committed an irregularity in  taking into consideration the report of the sub-committee invalidly appointed by it. Does it necessarily follow from  this that the impugned notification dated 31-7- 1965 based  upon the  report of  the Advisory Board which in its turn had taken into consideration not only the report of the Committee  appointed by  the Government but also that of the sub-committee  appointed by  the  Board  is  bad?  on  a careful consideration  of the  matter we  give our answer in the negative. The irregularity, even characterising it as an

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illegality, committed  by the  Advisory Board in taking into consideration the  report of  the sub-committee was not such as to  nullify its  recommendation contained  in its report, or, in  any event,  the final  decision  of  the  Government contained  in   the  impugned   notification.  It   must  be remembered that  the procedure followed in this case was the one provided in section 5(1)      (1) A.I.R.. 1962 Bombay 97. 647 (a) in which case it was not mandatory for the Government to take the  opinion of  the  Advisory\Board.  After  all,  the recommendations made  by the  Board even on consideration of the report  of the  Sub-committee along  with  that  of  the Committee was  the advice  of the  Board. The Government did accept it but accepted it after some modification. In such a situation we  do not think that the notification dated 31-7- 1965 deserves  invalidation. It  follows as a corollary that the proceedings  started pursuant to the notification cannot also be quashed.      In the  result we  allow this  appeal, set  aside.  the judgment and  order  of  the  High  Court  and  dismiss  the connected writ  application filed by respondent No. 1. Since he has not appeared there will be no order as to costs. V.P.S.                                       Appeal allowed. 648