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(1955) 1 SCR 752 : AIR 1955 SC 33 : (1955) 1 LLJ 129

In the Supreme Court of India

(BEFORE M.C. MAHAJAN, C.J. AND B.K. MUKHERJEA, VIVIAN BOSE, B.
JAGANNADHADAS AND T.L. VENKATARAMA AYYAR, JJ.)

Petition No. 188 of 1954

BIJAY COTTON MILLS LTD. … Petitioner;
Versus
STATE OF AJMER … Respondent.
And
Petition No. 189 of 1954
RAM NATH SINGH AND FOUR OTHERS …
Petitioners;
Versus
STATE OF AJMER … Respondent.
Petition Nos. 188 and 189 of 1954* , decided on October 14, 1954
Advocates who appeared in this case:
H.M. Seervai, J.B. Dadachanji and Rajinder Narain, Advocates, for
Petitioners;
C.K. Daphtary, Solicitor-General for India (M.M. Kaul and P.G.
Gokhale, Advocates, with him), for Respondent.
The Judgment of the Court was delivered by
B.K. MUKHERJEA, J.— We now take up the two connected petitions
under Article 32 of the Constitution. In one of these petitions, to wit,
Petition No. 188, Shri Bijay Cotton Mills Ltd. (hereinafter called “the
company”), the appellant in Civil Appeal No. 139 of 1954, figures as
the petitioner, while the other petition, to wit, Petition No. 189 has
been filed by a number of employee working under it. To appreciate the
contentions of Mr Seervai, who appears in support of both these
petitions it will be necessary to narrate a few antecedent facts:
2. It appears that sometime in 1950 there was an industrial dispute
between the company and its labourers regarding enhancement of
wages and the dispute was referred by the Government of Ajmer to an
Industrial Tribunal, by a notification dated 1st December, 1950. The
tribunal made its award on 27th November, 1951 and held that “the
present earning capacity of the mill precludes the award of higher rates
of wages and higher dearness allowance”. The employees took an
appeal against this award to the Appellate Tribunal. While this appeal
was pending, the Chief Commissioner, Ajmer took steps for the fixation
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of minimum wages of labourers in the textile industry within the State,

under the provisions of the Minimum Wages Act. A committee was
formed, as has already been stated, on 17th of January, 1952, which
submitted its report on the 4th of October, following and on 7th of
October, 1952, the notification was issued fixing the minimum rates of
wages, against which writ petitions were filed by several textile
companies including the petitioner company. In the meantime however
the appeal filed by the labourers of the company proceeded, in the
usual way, before the Appellate Tribunal. The Appellate Tribunal sent
the case back to the Industrial Tribunal for further investigation and the
latter made its final award on 8th of September, 1953, by which it
rejected the basis upon which minimum wages of Rs 56 were fixed by
the Chief Commissioner and fixed the minimum wages including the
dearness allowance at Rs 35 only. The company states in its petition
that the minimum wages fixed by the State Government of Ajmer is
altogether prohibitory and it is not at all possible for the company to
carry on its business on payment of such wages. Accordingly the
company closed its mills on and from 1st April, 1953. There were about
1500 labourers working in the mills of the company and since January
1954, several hundreds of them, it is said, approached the managing
authorities and requested them to open the mills expressing their
willingness to work at Rs 35 as wages as fixed by the Industrial
Tribunal. Though the majority of workers were agreeable to work on the
wages fixed by the Industrial Tribunal, the company is unable to open
the mills by reason of the fact that the Minimum Wages Act makes it a
criminal offence not to pay the wages fixed under the Act. This being
the position and as the Minimum Wages Act stands in the way of the
company's carrying on its business, on terms agreed to between itself
and its workers, Petition No. 188 of 1954 has been filed by the
company challenging the constitutional validity of the material
provisions of the Minimum Wages Act itself. The workmen who are
willing to work at less than the minimum wages fixed by the State
Government have filed the other petition supporting all the allegations
of the company. Mr Seervai, who appears in support of both these
petitions, has invited us to hold that the material provisions of the
Minimum Wages Act are illegal and ultra vires by reason of their
conflicting with the fundamental rights of the employers and the
employed guaranteed under Article 19(1)(g) of the Constitution and
that they are not protected by clause (6) of that article.
3. It is contended by the learned counsel that the Minimum Wages
Act puts unreasonable restrictions upon the rights of the employer in
the sense that he is prevented from carrying on trade or business
unless he is prepared to pay minimum wages. The rights of the
employees are also restricted, inasmuch as they are disabled from
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working in any trade or industry on the terms agreed to between them

and their employers. It is pointed out that the provisions relating to the
fixation of minimum wages are unreasonable and arbitrary. The whole
thing has been left to the unfettered discretion of the “appropriate
Government” and even when a committee is appointed, the report or
advice of such committee is not binding on the Government. The
decision of the committee is final and is not open to further review or
challenge in any Court of law. The learned counsel further says that the
restrictions put by the Act are altogether unreasonable and even
oppressive with regard to one class of employers, who for purely
economic reasons are not able to pay the minimum wages but who
have no intention to exploit labour at all. In such cases the provisions
of the Act have no reasonable relation to the object which it has in
view. We will examine these contentions in their proper order.
4. It can scarcely be disputed that securing of living wages to
labourers which ensure not only bare physical subsistence but also the
maintenance of health and decency, is conducive to the general interest
of the public. This is one of the Directive Principles of State Policy
embodied in Article 43 of our Constitution. It is well known that in 1928
there was a Minimum Wages Fixing Machinery Convention held at
Geneva and the resolutions passed in that convention were embodied in
the International Labour Code. The Minimum Wages Act is said to have
been passed with a view to give effect to these resolutions1 . If the
labourers are to be secured in the enjoyment of minimum wages and
they are to be protected against exploitation by their employers, it is
absolutely necessary that restraints should be imposed upon their
freedom of contract and such restrictions cannot in any sense be said to
be unreasonable. On the other hand, the employers cannot be heard to
complain if they are compelled to pay minimum wages to their
labourers even though the labourers, on account of their poverty and
helplessness are willing to work on lesser wages.
5. We could not really appreciate the argument of Mr Seervai that
the provisions of the Act are bound to affect harshly and even
oppressively a particular class of employers who for purely economic
reasons are unable to pay the minimum wages fixed by the authorities
but have absolutely no dishonest intention of exploiting their labourers.
If it is in the interest of the general public that the labourers should be
secured adequate living wages, the intentions of the employers whether
good or bad are really irrelevant. Individual employers might find it
difficult to carry on the business on the basis of the minimum wages
fixed under the Act but this must be due entirely to the economic
conditions of these particular employers. That cannot be a reason for
the striking down the law itself as unreasonable.
6. As regards the procedure for the fixing of minimum wages, the
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“appropriate Government” has undoubtedly been given very large

powers. But it has to take into consideration, before fixing wages, the
advice of the committee if one is appointed, or the representations on
his proposals made by persons who are likely to be affected thereby.
Consultation with advisory bodies has been made obligatory on all
occasions of revision of minimum wages, and Section 8 of the Act
provides for the appointment of a Central Advisory Board for the
purpose of advising the Central as well as the State Government both
in the matter of fixing and revision of minimum wages. Such Central
Advisory body is to act also as a coordinating agent for coordinating the
work of the different advisory bodies. In the committees or the advisory
bodies the employers and the employees have an equal number of
representatives and there are certain independent members besides
them who are expected to take a fair and impartial view of the matter.
These provisions, in our opinion, constitute an adequate safeguard
against any hasty or capricious decision by the “appropriate
Government”. In suitable cases the “appropriate Government” has also
been given the power of granting exemptions from the operation of the
provisions of this Act. There is no provision undoubtedly for a further
review of the decision of the “appropriate Government”, but we do not
think that by itself would make the provisions of the Act unreasonable.
In our opinion, the restrictions, though they interfere to some extent
with the freedom of trade or business guaranteed under Article 19(1)
(g) of the Constitution, are reasonable and being imposed in the
interest of the general public are protected by the terms of clause (6) of
Article 19. The result is that the petitions are dismissed. We make no
order as to costs.
———
* Under Article 32 of the Constitution of India for the Enforcement of Fundamental Rights

1
Vide SI Est etc. v. State of Madras, (1954) 1 MLJ 518 at page 521

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