STATE OF ANDHRA PRADESH versus NARAYANA VELUR BEEDI MANUFACTURING FACTORY & OTHERS

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STATE OF ANDHRA PRADESH v. NARAYANA VELUR BEEDI MANUFACTURING FACTORY & OTHERS March 26, 1973 [A. N. GROVER, K. K. MATHEW AND A. K. MUKHERJEA, JJ.1 Minimum Wages Act, 1948, s. 9-'Independent persons'-[/

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The appellant-Government passed an order revising ~inimum wages in the Bidi industry. It was based on the recommendat10n of a Com mittee of six members consisting df persons representing employers and employees "!'d the Chief I~~r and Deputy Chief Insp~tor of Fac tories. Section 9 of the Mm1mum Wages Act, 1948, rcqu1res that the Committee shall consist of an equal number of repiesentati\'es of the employer and the employees and of Independent persons not exceeding one third of its total number. On the question whether the two Govern ment officials could be regarded as independent persons,

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HELD : The mere fact that they happened to be Government officials or Government servants will not divest them of the character of indepen dent persons. [76Jq

The language <if s. 9 does not contain any indication that persons in tile employment of the Government would be excluded from the category of 'independent persons'. These words have essentially been employed In in contradistinction to representatives of employers and employees. other words, apart from the representatives of employers and employees there should be persons who should be independent of them. [760G-HJ Further, the presence of high government officials, who may have actual working knowledge about the problems · of employers and em ployees can afford a good deal of guidance and assistance in formulating the advice which is to be tendered. It may be that in .certain circumstances .such persons may cease to have an independent character. iC!he quettion of fixation of mininium wages in an employment in which the appropiblte Government is directly interested, ari.es. . It would therefore depend upon the facts <if each particular case whether the penons who have been appointed could be regarded as independent or not. It is not correct to say that a Government official will have a bias onhat he may favour the policy which the appropriate Government may be inclined to adopt, be cause, when he is a member of an Advisory "Committee he is expected-to give an impartial and independent advice and not merely carry out what ~e Government may be incHncd to do. Government . officials are respon sible persons and are capable of takin~. a detached and impartial vie\\',

[760H; 761A-E) Jaswan.t Ra! Beri & Others v. State of Punjab & another, A.LR. 1958 Pun). 425, D. M. S, Rao & Others v. The State of Kera/a & A"'?ther, A.LR. 1963 Kerala 115, Bengal Motion Pictures Employees Unwn, C<icutta v. Kohinoor .Pictures Private Ltd. & Ors. A.LR. 1964 Cal. 619, .Ramkrlshna Ramnath Nagpu' & Another v. The State of Maharasht;a & Anorber, A.LR. 1964 Born. 51, Chandrabhave Boarding and Lodging & Others v. Stcte of Mysore, A.LR. 1968 Mys. 156 and P. Gangadharan Pillai v. State of Kera/a & Others A.LR. 1968 Kerala 218, approved.

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756

SUPREME COURT REPORTS

[1973] 3 S.C.R.

Norotamdas Harjivandas v. P. V. Gourikar,

Inspector, Minimum Wages, A.LR. 1961 M.B. 182 a;nd Kohinoor Pictures (Private) Ltd. v. State of West Bengal & Others, (1961] 2 L.L.J. 741, over ruled.

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1659

to 1662 of 1967.

Appeals by certificate from the judgment and order dated January 31, 1964 of the Andhra Pradesh High Court at Hyderabad in Writ Petition Nos. 337 /63, 746/62, 735/62 and 807 /62, respectively.

P. Ram Reddy and A. V. V. Nair, for the appellant.

M. C. Chagla, H. K. Puri and 'Niranjana Shah, for the res pondents (in C. A. No. 1659) respondents 1 to 10, 12 to 14, 16 and 19 to 29 (in C.A. No. 1660), Respondent No. 1 (in C.A. No. 1661) and Respondents Nos. 1 to 5 (in C.A. No. 1662).

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The Judgment of the Court was delivered by

GROVER, J .-The sole question which has to be decided in these appeals by certificate from a judgment of the Andhra Pra desh High Court is the meaning of the word "independent" in s. 9 of the Minimum Wages Act, 1948, hereinafter called the "Act".

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The Act was enacted to provide for fixing the minimum rates of wages in certain employments. Section 2 gives the definition of various expressions. Clauses (e) (h) and (i) give the mean ing of the words "employer", "wages'' and "employee" respectively. Section 3 provides for fixing of the minimum rates of wages by the appropriate government and their review at certain intervals. Section 5 gives the procedure for fixing and revising minimum wage<s. Section 5 reads : -

s. 5 ( 1 ) "In fixing minimum rates of wages in res pect of any scheduled employment for the first time under this Act or in revising minimum rates of wages so fixed, the appropriate government shall either-

( a) appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision, as the case may be, or

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(b) . by notification in the Official Gazette, publish its proposals for the information of persons likely to be affected thereby and specify a date not less than two months from the date of the notification, on which the proposals will be taken into consideration.

( 2) After considering the advice of the committee or committees appointed under clause (a) of sub-section

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A.P. STATE v. BEED! MFG. FACTORY (Grover, J.)

757

( 1) or as the case may be, all representations received by it before the date specified in the notification under clause (b) of that sub-section, the appropriate govern ment 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 .......................... "

Section 9 relates to composition of committees etc. and is in these terms:

S.9. "Each of the committees, sub-committees and the Advisory Board shall consist of persons to be nomi representing nated by the appropriate Government 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 Government Order which was challenged related to the revision of minimum wages in the Bidi industry. It was based on the recommendation of a committee consisting of six m'~nbers •. two of whom were Chief Inspector of Factories, Hyderabad, and Deputy Chief Inspector of Factories, Hyderabad; the former being the Chairman. These two officers were to be on the committees from among the category of independent persons mentioned in s. 9. The whole controversy has centered on the question whether the aforesaid two officers could be regarded as independent per sons. There are a number of decisions of the High Courts. In majority of them, namely, Jaswant Rai Beri & Others v. State of Punjab & Another;('') D. M. S. Rao & Others v. The State of Kera/a & Another,(') Bengal Motion Pictures Employees Union, Calcutta v. Kohinqor Pictures Private Ltd. & Others;(') Ram krishna Ramnath Nagpur & Another v. The State of Maharashtra & Another;(') Chandrabhava Boarding & Lodging and Others v. State of Mysore(') and P. Gangadharan Pillai v. State of Kera/a & Others, ( 6 ) it has been held that the mere fact that a person happens to be i government servant or that he is an officer, he does not cease to be an independent person within the meaning of s. 9. The only two decisions in which a contrary view has been taken are Narottamdas Harjivandas v. P. V. Gowarikar, Inspector,

(l) A.1.R. 1958 Punj. 425. (3) A.LR. 1964 Cal. 519. (5) A.l.R. 1968 Mys. 156.

16-L761Sup.C.l. /73

(2) A.LR. 1963 Kerala 115. (4) A.LR. 1964 Bom. 51. (6) A.l.R. 1968 Kerala 218.

758

SUPREME COURT REPORTS

[ 1973] 3 S.C.R.

Minimum Wages(') and Kohinoor Pictures (Private) Ltd. v. State of West Bengal & Others;(') the latter is a judgment of the learned single Judge of the Calcutta High Court. It may be men tioned. that in the judgment under appeal the Andhra Pradesh High Court has also taken the same view as the Madhya Pradesh court.

~.1e reasoning of Bishan Narain J .. in the l'unjab case is quite simple. The leai:ned Judge considered that in the context of s. 9 an independent person means· a person who is neither an employer nor an employee in the employment for which minimum wages are to be fixed, The presence of independent persons is necessary to safeguard the interests of those whose requirements are met by In a welfare State, according to him, it is the trade concerned. the business of the Government to create conditions wherein pri vate employers can carry on their trade profitably as long as the workmen are not exploited. In such circumstances the appoint ment of a Labour Commissioner, who is conversant with the employment conditions, cannot be objected to on the ground that In the first Kera la case C. A. he was not an independent -person. Vaidialingam J .. as he then was, gave some additional reasons for supporting the view of Bishan-Narain J. He referred to s. 2(i) of the Industrial Disputes Act 194 7 for illustrating that a person shall be deemed to be independent for the nurnose of his anl'oint ment as Chairman or other members of a Board. Court or Tribu nal if he was unconnected with the industrial dispute referred to such Board, Court or Tribunal or with any industry directly effected by such dispute. This is what the learned Judge observed with reference to the provisions of s. 9 :

"When it speaks of persons to be nominated by the Government to the committee representing employers and employees in the scheduled employments and also of nominating an "independent person", in my view, the object of the enactment is that the "independent person" should be who has nothing to do with the em ployers or employees in the scheduled employment in question. It may that under particular circumstances, when an industry, in which the State Government as an employer may also be vitally interested and in which case it can be considered to be an employer, it may not be proper to nominate an official the committee treating him as an independent member".

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A division bench of the Calcutta High Court consisting of Bose C. J. and G. K. Mitter J .. as he then was, in Bengal Motion Pic tures Employees Union v. Kohinoor Pictures P. Ltd.(") referred

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(t) A.T.R. 1961 M.P. IR2.

(3) A.1.R. 1964 Cal. 519.

(2) 1961 2 LL.I. 741.

A.P. STATE v. BEED! MFG. FACTORY (Grover, J.)

759

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to the legislative policy underlying the enactment of the Act. What is aimed at is the statutory fixatiOn of minimum wages with a view to obviating the chances of exploitation of labour. Such being the main object it was natural to expect that the Government would seek the assistance of persons who were well conversant with the conditions of labour, industrial competition, profits from the industry and various other relevant factors which are to be It could hardly . be considered in fixing the minimum wages. doubted tbat persons like the Labour Commissibner or the Deputy Labour Commissioner are most suitable persons to be consulted for the purpose. The other reason given in the Calcutta ~·ase was similar to the one which prevailed with Bishan Narain J., -in the In the Bombay case the Division Bench referred to Punjab case. certain rules framed under s. 30 of the Act by the Government of Bombay. According to Rule 4 provision was made for terms of office of members of the Board and a distinction was made in sub rules 2 and 3 between the non-official member and the official member of the Board. From the scheme of the rules it was in ferred that even Government officials were contemplated tci fall within the category of "independent persons". It is unnecessary to refer to the other decisions which favour the majority view.

In the Madhya.Pradesh case P. V. Dixit, C.J., delivering the judgment of the Bench said that the expression "independent persons" did not mean persons who were independent ·only of employers and employees in the scheduled employment and in cluded officials. The ordinary connotation of the word "indepen dent person", it was pointed out, is of a person who is not depen dent on any body, authority or organisation and who is able to form his own opinion without any control or guidance of any It appears that in this case the learned Judges outside agency. were infiuenced by the consideration that the State is actively interested in the wage earners and in the matter of fixation of minimum wages. That precluded Government officials from fall' ing within the class of independent persons provided for by s. 9. In Kohinoor Pictures case(') a learned single judge while appre ciating that the advisory committees constituted under 5 read with s. 9 of the Act have a purely advisory function, took the view that the appropriate Government in fixing the minimum rates of wages was not at all a disinterested person. · He also took into considera tion the interest which the Government may have in fixing the minimum wa~es. According to him the fixation of minimum wages is an operation compelling the employer to make a payment whether he wishes it or not and in· most cases contrary to his wishe~. Three partie1 are involved in such compulsory fixation. the employed. If namely, the Government, the employer and --(I-) il9611 2 L.LT.741·. -

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760

SUPREME COURT REPORTS

[1973] 3 S.C.R.

the advisory committee is really to consist of independent persons they should be independent of all the three categories.

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Mr. Chagla for the respondents has relied a great deal on the dictionary meanings of the word "independent" as given fn Shorter Oxford English Dictionary. One of the principal meaning given is "not depending upon the authority of another; not in position n of subordination; not subject to external control or rule". Accord· ing to Mr. Chagla a Government official cannot be regarded as independent because he is to depend upon the authority of the government and is in position of subordination and is subject to external control. It has been strenuously urged that the whole object of having an advisory committee is to get an opinion or advice in the matter of fixing of miniinum wages. The committee has to consist of representatives of employers and the employees in the scheduled employment who have to be equal in number. The presence of independent persons not exceeding one third of the total number of members is necessary to ensure that a proper balance is maintained between the view of the representa tives of the employers and government official and, in particular, one associated either with labour or factories in his official capacity is brought into the com mittee he is likely to be biased in his views for various reasons. He may know the policy of the government or he may himself have participated in the formulation of that policy. · He may have certain prediliction because of special knowledge obtained by him E while setving in a department which is connected with labour or industry. All these matters would divest him of the character of an independent person.

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In our judgment the view which has prevailed with the majo- rity of the High Courts must be sustained. The committee or the F advisory board can only tender advise which is not binding on the government while fixing the minimum wages or revising the same as the case may be. Of course the government is expected, partii cularly in the present· democratic set up, to 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 whatso ever that persons in the employment of the government would be G excluded from the category of independent persons. These words have essentially been employed in contradistiction to representa tives of employers and employees. In other words, apart from the representatives of employers and employees there should be It does not follow persons who should be independent of them. that persons in the service or employ of the government were H meant to be excluded and they cannot be regarded as independent persons vis-a-vis the representatives of the employers and em pleyees. Apart from this the presence of high government officials.

A.P. STATE v. BEED! MFG. FACTORY (Grover, J.)

761

who may have actual working knowledge about the problems of employers and employees can afford a good deal of guidance and ·assistance in formulating the advice which is to be tendered under ~. 9 to the appropriate government It may be that in certain circumstances such persons who are in the service of the govern- ment 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. 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 pei:sons 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 to adopt because when he is a member of an advisory inclined committee or board he is expected to give an impartial and independent advice and not merely carry out what the Govern ment may be inclinded to do. Government officials are respon sible persons and it cannot be said that they are not capable of taking a detached and impartial view_

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' For the reasons given above the appeals are allowed and the .

judgment of the High Court is hereby set aside. As other matters E · were left un~ecided in the writ petitions c;>ut of which these appeals have arisen the case shall go back to the High Court for disposal in accordance with Jaw. Costs shall abide the event.

V.P.S.

Appeals allowed.

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