I96I

SUPREME COURT REPORTS

UNION OF INDIA AND OTHERS

(1961)

MAHARAJA KRISHNAGARH MILLS LTD.

(IN LIQUIDATION) . . (B. P. SINHA., C.J., s. K. DAS, A. K. SARKAR, N. RAJAGOFALAAYYANGARand J. R.MunHOLKARJJ.)

Cotton Excise Duty-Agreement between Pre>ident and Raj Pramukh of Part B State-Right of Union to collect arrears of such duty payable to the State-Constitution of India, Arts. 2771 278.

The question for determination in the appeal was whether the Union of India was entitled to levy and recover arrears of excise duty on cotton cl.0th for the period April 1, 1949, to March 31, 1950, payable by the respondent, a cloth mill in the State of Rajasthan, under the Rajasthan Excise Duties Ordinance, 1949 After the coming into force of the Indian Constitution and the extension of the Central Excise and Salt Act, 1944, and the rules framed thereunder to the State of Rajasthan by s. II of the Finance Act of 1950, the duty in respect of cloth manufactured on and from April l, 1950, became payable under that Act. The appellant Union., however, claimed that as a result of the agreement entered into on February 25, 1950, by the President of India with the Rajpramukh of Rajasthan 11nder Art. 278 and Art. 295 of the Constitqtion, the Union of India became entitled as from April l, f950, lo claim and recover all arrears of excise duties which the State of Rajasthan was entitled to recover from the respondent before the Central Excise and Salt Act, 1944, was extended to Rajasthan. Notice having been accordingly served on the respondent demanding payment of the outstanding amount of Rs. l,36,551-12 as payable by it, it moved the High Court under Art. 226 of the Constitution. On a reference by the Division Bench which heard the matter in the first instance, the Full Bench finding in favour of the respondent held that Art. 277 was a complete refutation of the said claim by the Union and Art. 278 and the said agreement were overridden by it.

Held, that the provisions of Arts. 277 and 278 of the Constitution, properly construed, leave no manner of doubt that Art. 277 was in the nature of a saving provision, subject in terms to the provisions of. Art. 278, permitting the States to levy a tax or duty which, after the Constitution could be levied only by the centre. But Art. 277 had to yield place to any agreement in respect of such taxes and duties made.between the Union Government and the Government of a Part B State under Art. 278.

Since there could not be the least doubt in the instant case that the agreement between the President and the Rajpramukh of Rajasthan conceded to the Union the right to levy and collect the arrears of the cotton excise duty in Rajasthan, the High Court was wrong in taking a contrary view of the matter.

• ;- j

) • ' •

...

C1v1L APPELLATE JURISDICTION: Civil Appeal No. 252 of 1956.

Appeal from the judgment and decree dated September 29, 1953, of the Rajasthan High Court (Jaipur Bench) in Civil Writ Application No. 28 of 1951. .

Gopal Singh and T. M. Sen, for the appellants.

S. N. Andley, J.B. Dadachanji and P. L. Vohra, for the respondent.

1961. January 19. The Judgment of the Court was delivered by

SINH~, C. J.-This appeal on a certificate granted by the Jaipur Bench of the High Court of Judicature for Rajasthan that "the case involves a substantial question of law as to the interpretation of Arts. 277, 278, 294 and 295 of the Constitution of India and the case is a fit one for appeal to the Supreme Court under Art. 132(1) and also under Art. 133(l)(c) of the Constitution of India" is directed against the judgment dated September 29, 1953, of the High Court of Judicature for Ra.jastha.n at Jaipur to the effect that the appellant, the Union of India., was not entitled to levy and recover arrears of excise duty on cotton cloth for the period April 1, 1949, to March 31, 1950, from the respondent, the Mahara.ja. Krishnagarh Mills Ltd.

The facts of this case, which have not been in dispute at any stage of the proceedings, may shortly be stated as follows. The respondent is a cloth mill located in Krishna.garb in District Jaipur in the State of Rajasthan. It had a stock of manufactured cloth on April I, 1949, and also manufactured cloth during the period, April 1, 1949, and March 31, 1950. In respect of such cloth an excise duty became payable under the Rajasthan Excise Duties Ordinance, 1949 (XXV of 1949), at rates set forth in the schedule to the Ordinance. The sum of Rs. 1,56,291 odd became pa.ya.hie on that account out of which only a. sum of Rs. 19,739 odd was paid to the Government of Ra.jasthan, thus leaving the sum of Rs. 1,36,551 odd outstanding against the respondent. After the Indian Constitution ca.me into effect, the Central Excise and

U nio" of I"4ia

Maltaraja Kf'iJlusagMA

Mills Lil.

Sinha C.J.

. ' '---:· / '/ -

[1961]

,'._: I -·•- ~-- - - ', ·,;.zo6~ - , Salt , Act, 1944, and the rules framed thereun\ler were u ··{1~ ·~ exierided t<l'the State ofRajasthari 'by"s.:ll 11)fthe

 "' 0 ":. -- "',_ Finance Act of 1950. Hence, the duty became payable _, M'.1taraja :•'in'. respect of the. cloth'. manufactured, on 'and from

.. KrisAnat••A ' 'April I,' 1950;' under the provisions of th&t Act..

The Mills Lid. ' appellant 'Claimed' that as a.' result'. ortoe itgneiiient

between the -Government 'of India and the State of.

Sinlta C.J. . Rajasthan, to be noticed hereinafter in detail, a1id of

. _) , ,, .. '

/ I ,,_;

., the Co.:.stitution, :the. Union of Indfa became entitled _. _ to. realise_ the.arrears of the excise dutyin respect'.of

. , the ,, cloth ; manufactured by the. respondent , before . April" I, 1950: ., In enforcement of that: claim. the Superintendent of Central Excise,, Jaipur," served 'a 1• ritic~ atd February)6;. ~~51;. on.: t~11'-; respofi.dent · demandmg 'payment of the outstandmg amount of :. Rs~· 1,36,551 cdd. The•resporident-thereupon 'filed a ·,:writ petition hi the High'Court of Rajasthani Jaipur, under Art~'226 ofthe !Constitution against '(I) tlie Union:of'.India;-(2) the Central Board of Revenue, Delhi, (3) the Collector of Central Excise .for Rajas- .. than;' Delhi,'_ and (4) tlie : Superintendent. 'of Central

~Excise,· Jaipur; 'who arethe :appellants' before us, praying: for a writ of prohibition.against'.tliem pro- . hiiting them from hnposing;' levying or collectillg

. ; any tax or dbty by way of exciBe as 'also for r ii.ny

appropriate direction; order or writ.' Th'e writ petition 'was 'founded ::on' the' contentions that .. the notice'of . . 'demand served upon the respondent as aforesaid. was '.illegal and unauthorised on the ground.(l) that_ the (Central· Government had rio jurisdiction to levy any

.tax\beforli January 26,: 11950, (2):that 'the Central ., Excise and Salt Aot :.was not• in force in.RajasthD.n before 'April l, .1950, and (3) that without the_ appli- ·.cation of the rules framed by the Central. Go•ernment • .under s. 37 .of the Central Excise arid Salt Act,"1944, tp 'Rajasthan no duty'. could be imposed, levied or collect- -ed and those rules were made applicable to Raja.sthan only onDecemberJ6, 1950:,; .. .''. .· ..... :id'<. :.: :· ": -. 'On behalf of the "appellants, who, were he_ res'pon~-

- .en ts '; in,· te. High '_Court, it• was contende, d that it was

. not correct to _say that the: rules framed under 11~'37 .. 1'-:.~:Fl ,:,_,· '~- ;,.1~ .. r _•. ,: .... :-· ·~ '';· ·J;-.i!l ·, __ ... ,;_•;;;:-~-~:.,:~~::;') !>:-:-f r_,:_~·~: r f:::' J'-~

•·.~ <•; J_-~ ~::.;_;_A 'j_: 01 ,"'"~i.:; ~:=:~·-:r-·~) . .

3 .S.C.R.

SUPREME COURT REPORTS 527 t of tile Central Excise and Salt' Act, 1944, were made applicable to the State of Rajasthan by virtue of the notification dated December 16, 1950, and it was asserted. that those rules . became applicable to the State of Ra.ja.sthan with effect from April l, 1950, as a result of s. 11 of the Finance Act, 1950. It was also contended that by virtue of s. 3 of Ra.ja.sthan Excise Duties Ordinance (XXV of 1949) promulgated by ilis Highness the Rajpramukh of Raja.sthan on September 5, 1949, excise duty was levied on cloth and •other articles produced and manufactured in Ra.jaatha.n on and after April 1, 1949, at the rates set forth in the first schedule of the said Ordinance. It was also contended that in pursuance of Arts. 278 and 295 of the Constitution the President of India hap entered into an agreement with the Rajpramukh of, Rajasthan on February 25, 1950, whereby the pal-ties agreed to accept the recommendations of the Indian States Fina.nee Enquiry Committee, 1948-49, contained in part I of its report., read with chapters I, II .and III of part II of its report, in so far as they applied to the State of Ra.ja.stha.n together with the recommendations cont'ained in Chapter VIII of pa.rt II of the said report. By virtue of the said agreement the Union of India became entitled to claim and recover all excise duties, whether assessed or unas110ssed, which the State ofRaja.stha.n was entitled to recover from the respondent as from April 1, 1949, before the Central Excise and Salt Act, 1944, was extended to the State of Rajastha.n, as aforesaid.

The m11otter was first heard by a Bench consisting of Ranawat and Sharma, , JJ., which, in view of the importance of the points involved in the case, referred the following two points for decision by a larger Bench by its judgment dated November 5, 1951:

" I. Whether by virtue of Articles 278, 279 and 295 of the Constitution of India and the agreement 11ntered into between the President of India and the Rajpramukh of Raje.sthan on the 25th of February, 1950, the Uni9n Qf •Indi,:Js. entitled to. levy and recover arr.ear11of&xc~ dfity on cloth held in stock or manufactured before the 1st of April, 19501 . . .

z961

Union of India

Maharaja K, islusagiirll

Mills L<d.

Sinha C.].

Union of India

Maharaja Krishnagark Mills Ltd.

Sinha C.J.

in case excise duty thereon was payable to the State of Rajasthan under the provisions of the Rajasthan Excise Duties Ordinance No. 25 of 1949?

2. Whether the publication of the Government notification by which the Jaipur ExciAe Rules were adopted under the provisions of the Rajasthan Excise Ordinance was sufficient publication within the meaning of s. 28 of the Rajasthan Excise Duties Ordinance No. 25 of 1949, and whether the publication of the aforesaid notification should be deemed to have been properly authenticated by authentication of the publication of the Ordinance. If not, whether want of authentication would have the effect of invalidating the said Excise Rules ? " The case was then heard by a Full Bench consisting of Wanchoo, C.J., Ranawat and Dave, JJ. The judgment of the Court was delivered by the learned Chief Justice on November 24, 1952, in substance upholding the contentions raised on behalf of the petitioner before the High Court, now respondent. The High Court came to the conclusion that Art. 277 of the Constitution was a complete answer to the claim of the Government of India to collect the dues in question for any period anterior to April 1, 1950. This conclusion was based on the reasoning that the agreement aforesaid betrween the Government of India and the Government of Rajasthan was in effect overridden by Art. 277 and that the agreement contemplated by Art. 278 was in respect of a duty which was leviable by the Government of India. By virtue of Art. 277 of the Constitution cotton excise duty was actually leviable by the State of Rajasthan up to March 31, 1950, because Parliament made the contrary provision only from April 1, 1950. Therefore, it was further observed by the High Court that the effect of Art. 277 on Art. 278 of the Constitution was that cotton excise duty could not be said to be leviable by the Government of India so far as the State of Rajasthan was concerned up to March 31, 1950. In view of that conclusion it was further held that the right to collect the arrears of excise duty in question could not b0 held to have bee11 transferred to the Union of Indi&

3S.C.R.

SUPREME COURT REPOR'fS 529

' f' by virtue of the agreement aforesaid of February 25,

1950. The first question referred to the Full Bench was thus anwered in favour of the petitioner in the High Court. The second question relating to the publication and authentication of the Excise Rules was also answered in favour of the petitioner, now respondent. The High Court held that the Hindi Gazette relied upon on behalf of the Government gid not contain any authentication of the Rules and did not show by whose authority they had been published. This conclusion wa& based on the ground that the contention raised on behalf of the Government that the publication in the Gazette and the authentication therein did not only apply to the Ordinance but covered the Rules also, was not correct. The answers given by the Full Bench to the questions referred to it by the Divi3ion Bench were returned to the Bench concerned anrl. the Bench, in pursuance of the opinion of the Full Bench, ordered by its iudgment dated September 29, 1953, that "a direct.ion be issued against the opposite party not to recover from the petitioner the amount of RA- 1,36,551-12 as per their notice of demand of the 16th of February, 1950. The petitioner shall get costs of this petition from the respondents." The Union of India applied for and obtained the necessary certificate, as quoted above, from the High Court of Ra.jasthan. That is how the matter is before this Court.

It is manifest that if the opinion of the Full Bench on the second question referred to as to the publication and authentication of the Rules is correct, then no other question will arise for determination by this

Court. If the Rules under the Rajasthan Excise Duties Ordinance, XXV of 1949, had not been properly promulgated and authenticated, then the Ordinance by itself could not be sufficient for the levy and collection of the tax sought to be i'mposed. It is, therefore, necessary for us first.to determine that con-., t.roversy. At the outset, it may be mentioned that the writ petition filed by the respondent in the High Court under Art. 226 of t•he Constitution did not allege any facts bearing on this part of the controversy.

Union of India

J.'v!.aharaja Krishnagarh

A-Iit:s Ltd.

Sinha C.J.

Union of India v. ,'!fr•h1iraja

Irishnagarh

Mills Ltd.

Sinha( •. ].

I '[1961] SUP:i; tEME COURT REPORTS

Thus, there was no foundation laid in the pleadings for a contention that the Rules aforesaid had not been promulgated on a. proper authentication. As already indicated, the petition was founded only on the la.ck of power in the Union Government to levy and collect the excise duty with reference to the provisions of the Central Excise and Sa.It Act of 1944 and the Rules framed thereunder. There is no reference to the provisions of Ordinance XXV of 1949 promulgated by the Ra.jastha.n Government. It was only in the reply to the writ petition ma.de by the respondent in the High Court that reliance was placed upon the said Ordinance and the Rules framed thereunder. We do'not.find any plea.dings, or any petition by way of amendment of the plea.dings, in the record of this case raising the contention that the Rules framed under the Ordinance a.fores1•id had not been promulgated on' a proper authentication. The High Court, therefore, on the face of the plea.dings, was not justified in permitting the petitioner before it to raise this contention, but our decision need not be rested on the, lack of plea.dings only. We have examined .the Ra.ja.sthan Gazette, the Hindi version of which is entitled Rajaatha11 Raj Patra published by authority of the Ra.jasthan ' Goverament dated Ma.rgashii'sa. Krishna. 7, Saturday, Samvat 2006, containing the notification dated Jaipur, September 15, 1949, the preamble of which states that Shrin.an Rajpramukh had made and promulgated the following Ordinance which was being published for the information of the public and it purports to have been authenticated by the Law Secretary, Sanyukta. Rajas. than Sarkar. Under that authentication follows the Ordinance, XXV of 1949, dated September 5, 1949.

The Ordinance goes to the end of page 169 and from the next page 170 ending with page 172 appear the Rules. They begin with the declaration which may be translated as follows :

" In exercise of the powers conferred under ss. 5 and 26 of the Raja.stha.n Excise Duties Ordinance of 1949 the Raja.sthan Government orders that till new Rules a.re framed under the aaid Ordinance, 'the ; Rules framed under the Jaipur Exe~ -Duties Aot ·

of 1945 known as the Jaipur Excise Duty Rules of 1945 will be in force throughout the whole of Rajas. than with necessary modifications and for this purpose will be treated as made under the 'Rajasthan Ordinance." It would thus appear that the authentication by the L; i.w Secretary appearing on t, he first page of the Gazette as aforesaid was intended to govern not only the Ordinance in question but also the Rules which had been promulgated thereunder. Apparently, s. 28 of the Ordinance which ran-

" All rules made and notificatiow1 issued under this Ordinance shall be made and issued by publication in the Rajasthan Gazette. All such Htles and notifications shall thereupon have effect as if enacted in this Ordinance"- was understood to au.thorise such a . mode of pr9. mµlgation and authentication. Theauthority that promulgated the rule having intended the signature of the Law Secretary appearing at the beginning of the publication as an authentication of thtl rules, we are of opinion that the formal requirements of s. 8 (2) of the Ordinance V of 1949 were satisfied.

Whether the authentication appears in the beginning of the notification or at the end of it is not material so long as it is clear .on a reference to the· publication in the Gazette that he matter is substantially covered by the authentication, whether appearing at the beginning or the end of the notification. The High -Court, therefore, was in error in coming to the conclusion that the authentication coveredthe Ordinance proper without the Rules framed thereunder. The correct conclusion from the record as it stands is that the authentication covers the entire notificat!on including both the Ordinance proper arid the R1iii)s framed thereunder which became partii of the Statute.

· In view of this concltlsion it becomes neoessary now to examine the ratio of the decision of the High Court on the first question referred to it, namely, th-e authority of the Union of India to realise the arrears of the duty in question. It is clear in view of our conclusion

Mahan•h J{risht1a.1;.,,"

J1l rl/s J, td.

Sinha C.].

Union of India

Maharaja Krishnagarh

Mills Lid.

Sinha C.J.

that the Ordinance and the Rules framed thereunder have been properly promulgated in the Official Gazette, that the Government of Hajasthan was entitled to levy and collect the duty of excise in respect of cotton cloth from the respondent. As a matter of fact, the respondent appears to ha.ve paid about Rs. 19,739 odd out of the duty payable by it to t, hat Government.

The remaining amount for which the notice of demand had been issued by the official of the Government of India. was certainly payable to the Government of Rajasthan. We have, therefore, to consider whethar the Government of India by any process of law stepped into the shoes of the Rajas than Government in respect of the arrears aforesaid.

In this connection reliance was placed on the agreement between the President of India ar.d the Rajpramukh of Rajasthan dated February 25, 1950. The relevant provisions of the agreement are these:

" Whereas provision is made by Articles 278, 291, 295 and 306 of the Constitution of Jnrlia for certain matters to be governed by agreements b11tween the Government of India and the Government of a State specified in Part B of the First Schedule to the Constitution .......... ..

Now, theefore, the President of India and the Rajpramukh of P.ajasthan have entered into the following agreement, namely:- The recommendations of the Indian States Finance Enquiry Committee, 1948-49 (hereafter referred to as the Committee) contained in Part I of its Report read with Chapters I, II and III of Part 11 of its Report in so far as they apply to the State of Rajasthan (hereafter referred to as the State) together with the recommendations contained in Chapter VIII of Part II of the Report, are accepted by the Parties hereto, subject to the following modifications, namely, ......... " The modific<'tions are not material to this case. The agreemenl, thus incorporates as terms of the agreement the report of the Cummittee, the relevant portion of which is in these terms:-

l t

" With effect from the prescribed date, the Centre will take over all ' federal ' sources of Revenue and all ' federal' items of expenditure in State together with the administration of the Departments concerned. The Centre must also.take over all current outstandings (including pending assessments, refunds, and arrears), liabilities, claims, etc., and all productive and unproductive capital assets connected with these Departments." It is common ground that "federal sources of revenue" include the duty of excise in question. It is also clear that all outstanding dues from assessees including pending assessments and arrears have been by the terms of the agreement made over to the Centre. This agreement, as the preamble itself indicates, has been tnade in accordiJ, nce with the. provisions of Arts. 278 anrl 295 of the Constitution. The relevant portions of Art. 278 are aB 'under:- . "278. (1) Notwithstanding anything in this Constitution, the Government of India may, subject to the provisions of clause (2), enter into an agreement with the Government of a State specified in Part B of the First Schedule with respect to- ( a) the levy and collection of any tax or duty ieviable by the Government of India in such State an.d for the distribution of the proceeds thereof otherwise than .in accordance with the provisions of . this Chapter;...... . · and, when an agreement is so entered into, the provisions of this Chapter shall in relation to such State have effect subject to the terms of such agreement." It is noteworthy that the provisions of Art. 278 over. ride pro tanto other provisions of the Constitution including Art. 277 and the ter.ms of the agreement override the provisions of the Chapter, namely, Chapter I of Part XII. In this Chapter are contained Arts. 264 to 291.

Thus, on a oonst,, ruction of the provisions of Arts. 277 and 278, it is clear that in the absence of any agreement between the Government of India and the Government of a State specified in Part B, duties of customs which immediately before

Uaion of India v. , Mallaraja Krishnagarh

Mills Ltd.

Sinha C.J,

Union of India v.

Maharaja Krishnagarh Mills Ltd.

Sinha C.].

SUPREME COURT HEI UE1'S (1961]

the commencement of the Constitution were being lawfully levied by the Government of such a State continue to be levied by that State until provision to the contrary is made by Parliament by law, notwithstanding that such a duty is mentioned in the Union List. Article 277, therefore, is in the nature of a saving provision permitting the States to levy a tax or a duty which, after the Constitution, could be levied only by the Centre. But Art. 277 must yield to any agreement made between the Government of India and the Government of a State in Part B in rspect of such taxes or duties, etc. The provision to the contrary contemplated by Art. 277 was made by the Finance Act, XXV of 1950, s. 11, which extended the Central Excise and Salt Act, 1944, along with other Acts to the whole of India except the State of Jammu and Kashmir. But that section has effect only from April 1, 1950, and therefore does not apply to th'e arrears of duty of excise now in controversy. The agreement envisaged by Art. 278 was entered into as aforesaid on February 25, 1950.

That agreement conceded to the Centre the right to levy and collect the arrears of the d•.tty in question.

The reasons given by the High Court for the conclusion that in spite of Art. 278 read with the agreement aforesaid, the Union Government was not entitled to realise the arrears are-(1) that the agreement does not contain any specific provision about levy and collectiqn of cotton excise duty in Rajasthan, (2) that the mere approval in the agreement of the principles set out in the report is not enough in view of Art. 277 which made a distinctly different provision from that contemplated in the report and (3) that the agreement co, uld be only with respect to a duty which was leviable by the Government of India. In our opinion, none of these reasons afortisaid can stand in the way of the Union of India. Though the agreement does not in terms refer to levy and collection of cotton excise duty in Rajasthan, it is clear that the agreement has to be read with the relevant portions of the report quoted above. So read, there cannot be the least doubt that cotton exois~ duty in Rajasthan, as a " federal

l t

3 S.C.R.

SUPREME COURT REfORTS 535 ' source of revenue," is also covered'by the agreement.

Nor is it correct to say that the agreement read with the report is not enough to override the provisions of Art. 277. The agreement read with Art. 278, as already indicated, in terms, overrides the provisions of Art. 277. The only other reason which weighed with the High Court in getting over the terms of Art. 278 cannot alo hold good. That a duty of the kind now in controversy on the date of the agreement after coming into force of the Constitution is leviable only by the Government of India even in respect of the State of Rajasthan is clear beyond all doubt. The Union List only, namely, entry 84, in the Seventh Schedule, authorises the levy and collection of the duty in question.

Neither the State List, List II, nor the Concurrent List, List III, contains any such authorisation. It is true that Art. 277 has saved, for the time being, until Parliament made a provision to the contrary, the power of the State of Rajasthan to levy such a duty, but that is only a saving provision, in terms subject to the provisions of Art. 278. Thus, the combined operation of Arts. 277 and 278 read with the agreement vests the power of levy and collection of the duty in the Union of India. It is only in the absence of an agreement like the one we have in this case that the Rajasthan Government could continue to levy and collect the duty in quedtion. The agreement between the two Governments completely displaced the operation of Art. 277 in regard inter alia to the levy of this duty so far as the State of Rajasthan is concerned. It is clear, therefore, that the High Court was in error in holding that Art. 277 was any answer to the claim of the Government of India and should override the provisions of Art. 278 read with the agreement. On a proper construction of these provisions, in our opinion, the result is just to the contrary. In this view of the matter, it is not necessary to consider the other arguments advanced on behalf of the appellants, whether Art. 295 should prevail over Art. 277.

For the reasons aforesaid, this appeal is allowed and the decision of the High Court set aside. The result

~ '

Union of India v.

Maharaja Krishnagarh

Mills Ltd.

Sinha C.j.

Union of India v.

MaharaJa Krishnagarh

i-. Mills Ltd.

Sinha C.J.

January 20.

is that the writ petition filed by the respondent in the High Court stands dismissed with costs here and in the High Court.

Appeal allowed.

STANDARD VACUUM REFINING CO. OF INDIA v.

ITS WORKMEN AND ANOTHER. (P. B. GAJENDRAGADKAR, K. N. WANCHoo and K. c. DAS GUPTA, JJ .. ) Industrial dispute-Bonus-Living Wage, determination of.

The workmen claimed bonus for the year 1956 equivalent to nine months' total earnings on the ground that the employers had admitted their capacity to pay and that there was a big gap between the wage actually received and the living wage. The employers contended that they were paying the workmen a living wage and they were not entitled to any bonus. The employers relying mainly on the Report of the Textile Labour Committee, 1940, contended that if the living wage in 1940, i.e., R, s. 55/· was multiplied by 3·5 (due to rise in prices) it gave Rs. 192·50 as the living wage in 1956 and they were paying their workmen at a higher rate. The workmen relied on the recommendations of the Indian Labour Conference, 1957, to show that Rs. 209·70 approximat.ed to the standard of the need-based minimum wage and that the average. wag:e paid by the employers was nothing more than this. The Tribunal held that the wages paid were fair but that there was still a gap between the actual wage and the living wage and awarded bonus equivalent to five months' basic wages.

Held, that the employers had failed to establish that they were paying a living wage to the workmen. In construing wage structure the considerations of right and wrong, propriety and impropriety, fairness and unfairness are also taken into account to some extent. As the social conscience of the general community becomes more alive and active, as the welfare policy of the State takes a more dynamic form, as the national economy progresses from stage to stage, and as under the growing strength of the trade union movement collective bargaining enters the field, wage structure ceases to be a purely arithmetical problem.

Wages are usually divided into three broad categories: the basic rninin1um wage, the falr wage and the living \vage.

The concept of these three wages cannot be described in definite words as their contents are elastic and vary from time to time and fro111 place to place. The concept. of a living wage js not a static concept; it is expanding and the number of its constituents and their