Case: Narottamdas Vs. State of Madhya Pradesh &amp; Others

The appellant is the Manager of a Bidi counting and labelling factory of M/s. Mohanlal Hargovindas, Jabalpur, who are engaged in the trade of purchase and sale of Bidi in the State of Madhya Pradesh and other States of India. In 1951 the State of Madhya Pradesh fixed rates of minimum wages payable to workmen engaged in Bidi making manufactories. This was, done in accordance with the provisions of the Minimum Wages Act, 1948, (Central Act 11 of 1948). These rates of Minimum Wages were revised in the year 1956 by a notification of the Madhya Pradesh Government dated the 23rd February 1956. New rates of minimum wages for workmen engaged in the Bidi making manufactories were notified by the Madhya Pradesh Government by a notification dated the 30th December, 1958. The notification directed that these rates would come into force from January 1, 1959. The validity of this notification was however successfully challenged by the present appellant before the Madhya Pradesh High Court.*To meet the situation the Madhya Pradesh Legislature enacted the Minimum Wages (Madhya Pradesh Amendment and Validation) Act, 1961 - Madhya Pradesh Act (No. 23 of 1961). Section 31A which was introduced by this Act into the Central Act (No. 11 of 1948) provided that the rates of Minimum Wages fixed or revised under the notification of the 30th December 1958 "shall be and shall always be deemed to have been validly fixed and revised and shall be deemed to have come into force on the date mentioned in the said notification, notwithstanding any judicial decision to the contrary or any defect or irregularity in the constitution of the Advisory Board under S. 7 of the principal Act read with S. 9 thereof or publication of the notification in the Gazette or non-compliance with any other requirement of law and shall not be called in question in any court merely on the ground that there was failure to comply with the provisions of the principal Act."*Reported in AIR 1961 Madh. Pra. 182 - Ed.2. The appellant and some other Bidi manufactories of Madhya Pradesh challenged the validity of this Act before the High Court by petitions under Art. 226 of the Constitution. The High Court allowed the applications,*struck down S. 31A as invalid and restrained the Government from enforcing the section and from giving effect to the impugned notification dated the 30th December, 1958.*Reported in AIR 1962 Madh. Pra. 342 - Ed3. The High Court gave its decision on the 2nd May, 1962. On the 21st June, 1962 the Madhya Pradesh Ordinance No. 4 of 1962 was passed fixing rates of minimum wages retrospectively. The Ordinance was later replaced by an Act, the Madhya Pradesh Minimum Wages Fixation Act, 1962. On the 5th October, 1962, the appellant made an application to the High Court of Madhya Pradesh under Art. 226 and Art. 227 of the Constitution challenging the validity of this Act and praying for a declaration that the Act is ultra vires, void and inoperative and a writ in the nature of mandamus restraining the State of Madhya Pradesh and the other respondents from giving effect to or enforcing the provisions of the Act. The High Court has held that the Act is valid and has disallowed his application. Against that decision the present appeal has been preferred.

Court's reasoning:
We can find no substance in this argument. The definition of expression used in an Act with reference to other Act is a well-known device in legislative practice generally adopted for the sake of brevity. The definition would remain effective even after the other Act with reference to which the definition was given ceases to exist. This fact of defining expressions in an Act with reference to some other Act cannot therefore have the effect of making this Act dependent on such otherwe read the section we find that it merely fixed wages in respect of certain employments at the rates mentioned in the Table appended to the Act. We are informed that the rates mentioned in the Table are identical with the rates mentioned in the notification dated the 30th December, 1958. The effect of enactment of S. 3 would therefore be the same as if the notification of 1958 had been that this Act has validated or that even it seeks to validate the 30th December, 1958. On the face of it the Legislature was fixing for itself the minimum rates of wages in certain scheduled employments. That is stated in the preamble and is plain from S. 3 itself. The fact that rates mentioned in the Table appended to the Act happened to be the same as rates fixed elsewhere cannot reasonably justify a conclusion that the validation of the old rates was being effected. Independent legislation does not cease to be so, merely because it effect is the same as it would have been if a validating Act had been passed. The contention that this Act was not independent legislation cannot therefore be accepted.Nor is it possible to accept the argument that the Act is an unreasonable restriction on the appellants fundamental rights under Art. 19(1)(f) and (g) of the Constitution. Restriction there undoubtedly is, but we are not satisfied that the restriction is unreasonable. Section 3 of the Act makes the new rates of wages effective from January 1, 1959. Section 4 makes the various provisions of the Central Act No. 11 of 1948 available for revision and enforcement of the rates as specified in S. 3. The consequence is that if an employer does not pay the rates as specified, an application may be made under S. 20 of the Act 11 of 1948 to enforce such payment. He will be liable also to prosecution and penalties under S. 22 of the Act. What according to the learned Counsel makes the Act unreasonable is that such application can be made and such prosecution and penalties can be imposed even in respect of the past period - from 1st January, 1959 upto the date of the Act. How is it possible for the employer it is urged, to pay such arrears which might amount in many cases to considerable sums of money when the accounts for the past years had been closed, profits had been distributed and the available surplus had either been spent or invested in other ways.It is not also possible to accept the picture presented by Mr. Setalvad of the employers financial difficulties in making payment for the past period as a fair representation of the true facts. For practically the entire period from the 1st April, 1959 to the date of the present Act the employers had before them the provisions of what purported to be a good law requiring them to pay at these very rates. As good businessmen they are expected to have made provisions for payments on those very rates, even though they intended to challenge the validity of the previous Act and ultimately succeeded in that attempt. We are not prepared to believe that such provisions are not generally made. The hardship which according to Mr. Setalvad, the employers would have to face in making the payments for the past periods is, in our judgment, more imaginary than real.If the legal position were as urged by the learned Counsel, that S. 3 made the new rates of wages for the past period payable on January 1, 1950 or the apprehension that the employer might be made to pay heavy compensation may well be true. Another consequence of that legal position would be that the employer would also be liable to prosecution under S. 22 of the Act for his omission to pay on January 1, 1959 the rates which were fixed first by the Ordinance and then by the impugned Act. We are satisfied however that S. 3 of the impugned Act does not make the new rates of wages payable on the 1st January, 1959. The words used are ............. "and it is hereby enacted that the said minimum rates of wages shall be payable by the employer in the said scheduled employments and be enforceable against him with effect from the 1st January 1959, as if the provisions herein contained have been in force at all material times." By these words, it is urged on behalf of the appellant, the Legislature not only made the Minimum wages effective from the 1st January, 1959 but also made them payable on that date for the past period. In other words, the sentence is sought to be read as saying - "the said minimum rates of wages shall be payable by the employer in the said scheduled employments with effect from 1st January, 1959 and shall be enforceable against him with effect from 1st January, 1959." If that had been the intention of the Legislature the appropriate words to use would have been "the said minimum rates of wages shall be payable by the employer in the said scheduled employments and enforceable against him with effect from 1st January, 1959."No purpose would be served by the word "be" before the word "enforceable" if the phrase "with effect from the 1st January, 1959" was intended to apply both to "payable" and to "enforceable". The very fact that the Legislature took care to say "be enforceable in the latter part of he sentence shows clearly that while it was intended that new rates would be enforceable against the employer with effect from the 1st January, 1959 no date was being prescribed by S. 3 as the date on which it became payable.15. An examination of S. 4 of the Act further makes it clear beyond any reasonable doubt that it was the intention of the Legislature that new became payable only on the 21st June, 1962, the date of the publication of the Ordinance which was later replaced by the Act. Section 4 makes applicable to the minimum rates of wages as fixed by S. 3, the provisions of S. 4A and S. 5 of the Minimum Wages Act (Act 11 of 1948), that is, the provisions as regards the revision in future of the rates fixed by the impugned Act, and of Ss. 12 to 30A. Among the sections thus included is therefore S. 20 which prescribes the procedure for claims arising out of payment of less than the minimum rates of wages. The first proviso to sub-sec. (2) of S. 20 prescribes a period of limitation within which an application on such claims has to be made. The period prescribed is one year from the date on which the minimum wages became payable. It was thus necessary for the Legislature when giving retrospective effect to the rates fixed by S. 3 of the impugned Act to indicate the date on which the new rates would become payable.The above provision that "the period of one year referred to in the first proviso to sub-sec. (2) of S. 20 of the said Act shall be counted with effect from the 21st June, 1962" is a clear statement of the Legislatures intention that it is on the 21st June, 1962 that the rates which had become enforceable under S. 3 with effect from 1st January, 1959 became payable. That is how the High Court has construed the section and in our judgment that construction is correct. The appellants apprehension that he might be made liable for payment of compensation under S. 20(3) or to prosecution under S. 22 of the Minimum Wages Act 1948, (Act 11 of 1948) as a result of the mere passing of the Act is therefore groundless.It is clear that the duty to pay at these rates arose only on and from the 21st June, 1962 and no liability to pay compensation under S. 20(3) or to prosecution under S. 22 ofthe Minimum Wages Act, 1948 would arise if payment was made on the 21st June,there is no doubt a theoretical possibility of such a thing happening, the risk appears to us practically non-existent. It is to be noticed that it is discretionary with the minimum wage authority to make an order for payment of compensation. It is very unlikely that the authority will in the use of his discretion make an order for payment of compensation when he finds that the employer has made the payment within a few days after the 21st June, 1962. The risk of prosecution under S. 22 because of failure to pay exactly on the 21st June, 1962 is even less. Such prosecution, it may be pointed out, will be entertained by courts only after an application under S. 20 as regards the facts had been made and partly succeeded and the appropriate government or an officer authorised by it has sanctioned the making of a complaint. It does not appear to us likely that prosecution will be launched because of failure to pay exactly on the 21st June, 1962. The contention that S. 3 and S. 4 of the impugned Act impose unreasonable restrictions on the appellants fundamental rights must therefore be rejected.19. The last ground urged in support of the appeal, viz., that the impugned Act contravenes Art. 20(1) of the Constitution, is based on the assumption that the new rates of wages became payable on the 1st January, 1959 even as regards the past. If that assumption were correct it would no doubt be also correct to say that the combined effect of Ss. 3 and 4 of the impugned Act was to make the employer liable to conviction for offences for violation of a law which was not in force at the time of the commission of the act charged.We have already held however that on a proper construction of Ss. 3 and 4, the new rates of wages for the past period become payable not on the 1st January, 1959 on the 21st June, 1962. The attack on the validity of the sections on the ground of Art. 20(1) of the Constitution therefore fails.