Case: Bidi, Bidi Leaves Vs. The State Of Bombay

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 11 of 1948 (hereafter called the Act). The petitioners in Special Civil Application No. 205 of 1951 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 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.2. 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 wages were revised by a notification issued on February 23, 1956. As a result of the State Re-organisation 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 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 suit-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.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 doctrine of implied powers. Kotval, J. agreed that Clauses 1 and 2 were vaild 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 intact. 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 whereas 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 the first part of Cl. 6 and his 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.

Reasoning:
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 which are rejected. It is also not disputed that the bidis which are rejected by the employer, 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 is well settled that industrial adjudication under the provisions of the Industrial Disputes Act 14 of 1947 is given wide powers and jurisdiction to make appropriate awards in determining 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. As Mukherjea, J., as he then was, has observed in Bharat Bank Ltd., Delhi v. Employees of Bharat Bank Ltd. Delhi, 1950 SCR 459     at p. 513 : (AIR 1950 SC 188   at. p. 209) 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 give 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, AIR 1949 FC 111 :1949 FCR 321 it has been repeatedly held that the jurisdiction of industrial tribunals is 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, 1956 SCR 800  : (S) AIR 1957 SC 1  ), Patna Electric supply Co. Ltd., Patna v. Patna Electric Supply Workers Union, 1959 Supp. (2) SCR 761: (AIR 1959 SC 1035  )). Indeed, during the last ten years and more industrial adjudication in this country has made so much progress in determining industrial disputes arising between industries of different kinds and their employees that the jurisdiction and authority of industrial tribunals to deal with such disputes with the object of ensuring social justice is no longer seriouslywould be the amount to which the employee is entitled if the other terms of the contract are performed ? That is the question which has to be asked in determining what the term "wages" means under S. 2(h). No doubt Ss. 3, 4 and 5 authorise the appropriate Government to fix the minimum rates of wages. In other words, if the wages fixed by a contract which is either express or implied are found to below 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 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.The significance of the definition contained in S. 2(h) lies in the fact that the rate of wages may be increased but no change can be made in the other terms of the contract. In other words, the Act operated on the wages and does not operate 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 minimum rates of wages or to revise them. What the appropriate Government is authorised to do is to prescribe, 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. This definition runs, as it inevitably must, through the material provisions of the Act and its importance cannot therefore beother words, the doctrine of implied powers can be legitimately 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 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 so 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 the 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.Besides, in this connection it is also necessary to bear in mind the provisions of Ss. 20-21 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 employee can make a claim in that behalf and the same would be tried under Ss. 20-21.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 prescribed the revised minimum rates of wages. It, 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 theis 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 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.