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Secunderabad Club v. State Of Andhra Pradesh

Andhra Pradesh High Court

Apr 5, 1996

Judgment

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Factual and Procedural Background

These writ appeals arise from a common judgment of a Single Judge in a batch of writ petitions. The appellants had challenged various final notifications issued by the Government of Andhra Pradesh under Sections 3(1) and 5(2) of the Minimum Wages Act, 1948 (referred to in the opinion as the Act), which revised minimum rates of wages for various categories of employees specified in Part I of the Schedule.

The Single Judge classified the impugned notifications into three groups:

Group A: notifications providing for an all‑inclusive minimum rate as contemplated under S. 4(1)(iii) of the Act;
Group B: notifications providing for minimum rates consisting of basic wage plus cost of living allowance for the period from 1 Jan 1989 or 1 Jul 1989 up to the date of publication of the final notification, and payable from the date of publication of the final notification; and
Group C: notifications providing for minimum rates consisting of basic wage and cost of living allowance from the date of publication of the final notification and payable from that date.

After considering affidavits, counter‑affidavits and oral arguments, the Single Judge:

dismissed the writ petitions challenging notifications in Groups A and C; and
with respect to Group B notifications, struck down the mode of computation of the cost of living allowance (which had been tied to specific Consumer Price Index reference points as on certain dates) and directed the Government of Andhra Pradesh to revise the mode of computation and publish the revision in the Official Gazette within four months from receipt of the order.

Aggrieved by that judgment of the Single Judge, the appellants filed these writ appeals. The appeal court heard submissions from appellants' counsel and the Government pleader and delivered the opinion summarized here.

Legal Issues Presented

Whether Section 5 of the Minimum Wages Act is constitutionally valid.
Whether the Government was obliged to follow the procedure in S. 5(1)(a) (appointment of committees to hold inquiries) rather than S. 5(1)(b) (publication of proposals and consideration of representations) when fixing minimum wages.
Whether the draft and final notifications and the procedure followed in fixing minimum wages (including zonal classification and the authority issuing the notification) were contrary to law or otherwise invalid.
Whether the Advisory Board was properly constituted and discharged its duties under the Act.
Whether the Government could introduce or compute a cost of living allowance (COLA) as part of minimum wages and, relatedly, whether the particular mode of computation used in Group B notifications was lawful.
Whether inclusion of shops and commercial establishments in Part I of the Schedule was improper.

Arguments of the Parties

Appellants' Arguments

Section 5 of the Act is ultra vires the Constitution (a bald contention without further material, as described in the opinion).
The Government should have followed the procedure in S. 5(1)(a) (appoint a committee to hold inquiries) and not S. 5(1)(b); accordingly, the procedure actually followed was invalid and deprived employers of a mandatory hearing.
The Advisory Board was not constituted in conformity with S. 9 (there was alleged lack of representation from employers and employees of each category).
The Advisory Board failed to discharge its duties satisfactorily.
The Act should not extend to scheduled employments whose employees can form organisations to bargain wages.
The rates fixed exceeded fair wages; the Government could not fix higher minimum wages than those indicated in the draft notification.
The division of the State into two zones (from earlier four) was arbitrary and unjustified because of differing price index changes in zones.
No specific date was mentioned in the draft notification for consideration of objections/representations.
Introduction of a cost of living allowance in minimum wages was impermissible (argued to be proper only for fair or living wages), and its inclusion amounted to double payment in view of earlier revisions and index considerations.
Inclusion of shops and commercial establishments in Part I of the Schedule was improper.

Respondents' (Government and Trade Unions) Arguments

The constitutional validity of S. 5 has already been upheld by the Supreme Court and therefore S. 5 is valid.
The composition of the Advisory Board conforms with the Act; the Government considered the Advisory Board report but was not bound by it.
The Government considered representations and other material independently in fixing minimum rates of wages; the question of additional hearing did not arise where representations had been considered.
The rates fixed were proper and non‑discriminatory.
The Minimum Wages Act expressly permits payment of a cost of living allowance; minimum wages without such allowance would be inadequate for survival.
The Government was empowered to fix different rates for different localities and to classify localities into zones under S. 3(3).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Chandra Bhavan Boarding and Lodging v. State of Mysore [1970-II L.L.J 403]	That S. 5(1)(a) and S. 5(1)(b) provide two alternative procedures for gathering data and the Government has discretion to choose either; Government is not bound by committee advice.	The court relied on this decision to hold that the Government was not obliged to follow S. 5(1)(a) and that the procedure followed under S. 5(1)(b) was permissible and lawful in the present case.
Bijay Cotton Mills Ltd. v. State Of Ajmer [A.I.R 1955 S.C 33]	Upheld constitutional validity of Sections 3 and 4 of the Minimum Wages Act.	Referenced to support the validity of statutory provisions (Ss. 3 and 4) relied upon by the Government in fixing minimum wages.
B.Y. Kshatriya v. S.A.T.B. Kamgar Union [A.I.R 1963 S.C 806]	Principles concerning Advisory Board function and validation of aspects of the Act.	Used to support that the Advisory Board's role is not to make a detailed investigation in each industry and that representation need not be from every scheduled employment so long as there is nexus between representatives and scheduled employments; accordingly, the Advisory Board's composition was not irregular.
Express Newspaper Ltd. v. Union of India [A.I.R 1958 S.C 578]	Relied upon by appellants for proposition that employer's paying capacity must be considered while fixing minimum wages.	The court noted the appellants' reliance on this decision but concluded (in light of subsequent authority) that paying capacity need not be considered when fixing minimum wages under the Act.
U. Unichoyi v. State of Kerala [A.I.R 1962 S.C 12]	Refused the principle that an employer's capacity to pay must be considered when prescribing statutory minimum wages.	The court relied on this decision to reject the appellants' contention that employers' capacity to pay should have been considered in fixing minimum wages.
Hydro (Engineers) Pvt. Ltd. v. Workmen [A.I.R 1969 S.C 180]	Reiterated Unichoyi: capacity of the employer need not be considered while prescribing minimum wages.	The court cited this decision to reinforce that the State assumes every employer must pay the statutory minimum wage and that capacity is not a limiting factor.
Basti Ram v. State [A.I.R 1969 A.P 227]	Draft proposals are tentative; representations can contemplate both enhancement and reduction.	The court relied on this holding to reject the contention that the Government could not fix higher rates than those published in the draft notification.
T.G. Lakshmaiah Setty and Sons v. State of Andhra Pradesh [1981 L.&I.C 690]	If employees seek higher rates in representations and the State adopts higher rates, that is not to be faulted.	The court cited this decision to support its view that final fixation of higher minimum wages than proposed in the draft is permissible when adopted after representations and consideration.
Division Bench decision in Writ Petitions Nos. 1364, 1514, 3751 of 1976 and 818 of 1977 (Andhra Pradesh)	Specifying a date for consideration in the draft notification is not mandatory where the draft states proposals will be considered after two months and objections before that date will be taken into account; there is substantial compliance with S. 5(1)(b).	The court relied on this Division Bench authority to hold that absence of a specific date for consideration of objections in the draft notification did not render the notification invalid.

Court's Reasoning and Analysis

The court conducted a step‑by‑step legal analysis restricted to the materials and authorities placed before it:

On the procedure under S. 5: The court observed that S. 5(1) provides two alternative procedures (S.5(1)(a) committee inquiries and S.5(1)(b) publication of proposals and consideration of representations) and that the statute vests discretion in the Government to adopt either procedure. The court relied on Chandra Bhavan Boarding and Lodging to emphasize that the Government is not bound to constitute a committee in every case and may proceed under S.5(1)(b) where it has sufficient material. Applying that principle, the court held that the Government's procedure (draft notification, calling for objections, appointment of advisory committee and consideration of the committee's report) was not contrary to S.5(1).
On constitutional validity of S. 5 and related provisions: The court noted earlier Supreme Court decisions upholding the constitutional validity of Sections 3 and 4 (Bijay Cotton Mills; Kshatriya) and observed that certain procedural challenges lacked supporting material. The court therefore rejected the bare contention that Section 5 is unconstitutional.
On the nature and aim of minimum wages: The court analyzed the objects of the Minimum Wages Act and the relevance of Directive Principles (Arts. 38, 39(e), 42, 43). It explained that minimum wages are intended to provide sustenance and maintenance and to preserve worker efficiency; interpreting "minimum wages" as a mere bare subsistence wage would frustrate the statute and the Directive Principles. The court used these constitutional and policy considerations to support a broad reading of the concept of minimum wages (i.e., that COLA and a living standard are pertinent).
On employer capacity to pay: The court addressed the appellants' reliance on Express Newspaper for the proposition that employer paying capacity must be considered. It pointed to Unichoyi and Hydro (Engineers) decisions, which refused that principle, and concluded that paying capacity need not be taken into account when fixing statutory minimum wages.
On the Advisory Board composition and functioning: The court reviewed the constitution of the Advisory Board (one chairman, nine employers' reps, nine employees' reps, two independent members and special invitees) and, noting that the appellants had not challenged its constitution, relied on Kshatriya to conclude there was no irregularity. The court emphasized that representatives need not come from each scheduled employment but must have nexus with the scheduled employments; further the Advisory Board had conducted inquiries and taken evidence which was considered by the Government.
On zonal classification and competence of authority: The court rejected the appellants' claim that reduction of four zones into two was arbitrary, observing S. 3(3) empowers the Government to fix different rates for different localities. The court also rejected the contention that the notification was not issued by a competent authority, noting the Government considered the Advisory Board report and other materials and was not bound to follow the Commissioner of Labour's recommendations.
On procedural particulars in the draft notification (date for consideration): The court found that the draft stated proposals would be considered after two months and that objections received before that date would be taken into consideration. The court relied on a Division Bench decision of the Andhra Pradesh High Court (cited by number) holding that specifying a date is not mandatory where there is such two month provision, and concluded the omission did not cause prejudice.
On power to fix higher rates than draft notification: The court observed the draft was issued on 27 Aug 1989 and the final notification on 6 Mar 1991 (an 18 month gap). Taking the intervening increase in cost of living into account, the Government fixed higher wages. The court relied on C.B. Boarding & Lodging and regional decisions (Basti Ram; T.G. Lakshmaiah Setty) to hold that final enhancement is permissible and not impermissible merely because the draft listed lower figures.
On cost of living allowance (COLA): The court analyzed S. 4(1) and S. 4(2), noting that the Act expressly contemplates minimum rates of wages may include a cost of living allowance computed by the competent authority. The court held the introduction of COLA in the impugned notifications was lawful and consistent with the statutory scheme. The court also rejected the contention that COLA amounted to double payment, observing inflationary pressures and the legislative purpose of ensuring wages permit minimum standards of life.
On inclusion of shops and commercial establishments: The court noted that shops and commercial establishments had been included in Part I by a Government Order dated 29 December 1970 and that this inclusion had not been challenged for twenty‑five years; minimum wages for those employees had been revised repeatedly since. No material was produced to displace their inclusion, and the court rejected the contention.
On the Single Judge's classification and disposition: The court accepted the Single Judge’s approach in classifying notifications into Groups A, B and C, and accepted the Single Judge's orders dismissing challenges to Groups A and C notifications while upholding the Single Judge's intervention as to Group B computation (i.e., striking down the specific mode of computation for COLA in Group B and directing the Government to revise it).

Holding and Implications

Holding: THE WRIT APPEALS ARE DISMISSED.

Implications and direct effects:

The judgment of the Single Judge was upheld in respect of notifications classified in Groups A and C (the appeals challenging those notifications were dismissed).
The Single Judge's order in relation to Group B notifications — which struck down the specific mode of computation of the cost of living allowance tied to particular index reference points and directed the Government to revise the mode of computation and publish it within four months — was not disturbed by this Court (the Court found no reason to interfere with that aspect of the Single Judge's judgment).
The court held that the Government validly exercised discretion under S. 5(1) to proceed under the published proposals route (S. 5(1)(b)), that the Advisory Board was validly constituted and had performed its function, and that the inclusion of COLA in minimum wages is permitted by the Act.
No costs were awarded (the appeals were dismissed and the opinion expressly states "No costs").
The opinion does not purport to lay down any new principle of law beyond affirming and applying existing authorities (the decision primarily applies established precedents and statutory interpretation to the facts before the court).

Show all summary ...

Bhaskar Rao, J.:— These writ appeals arise out of the common judgment of the Single Judge passed in a batch of writ petitions. The appellants here in filed the writ petitions challenging various final notifications issued in exercise of power conferred under Ss. 3(1) and 5(2) of the Minimum Wages Act, 1945 (sic. 1948) (for short the Act), by the Government of Andhra Pradesh revising the minimum rates of wages payable to various categories of employees in different establishments as specified in Part I of the Schedule.

2. The main contentions that were raised by the appellants are Section 5 of the Act is ultra vires the Constitution; an opportunity of hearing was not given to the employers before issuance of final notification under S. 5(2) of the Act, which is mandatory; constitution of the Advisory Board under S. 7 of the Act is not in consonance with the pro visions of S. 9 of the Act and the Advisory Board failed to discharge its duties; the provisions of the Act cannot be extended to the scheduled employments, the employees of which can form organisations for bargaining their wages; the rates of wages fixed in the impugned notifications are more than fair wages as the Government cannot fix higher rates of minimum wages than those prescribed in the draft notification issued under S. 5(1)(b) of the Act, etc. On behalf of the respondents, the Government Pleader defended the impugned notifications as valid on the grounds that the constitutional validity of S. 5 of the Act has already been upheld by the Supreme Court, composition of the Advisory Board is in consonance with the provisions of the Act, the Government considered the matter independently while fixing the minimum rates of wages apart from the report of the Advisory Board and the question of further opportunity of hearing to be given to the employers does not arise when their representations were considered and the rates of minimum wages fixed by the Government are proper and not discriminatory.

3. The Single Judge classified the impugned notifications into three groups:

(1) Group A consisting of notifications providing that payment of minimum rates of wages consisting of and all inclusive rate as contemplated under S. 4(1)(iii) of the Act;

(2) Group B consisting of notifications providing for payments of minimum rates of wages consisting of basic wage and cost of living allowance for the period from January 1, 1989 or July 1, 1989, as the case may be, up to the date of publication of final notification and payable from the date of publication of the final notification; And

(3) Group C containing notifications providing for payment of minimum rates of wages consisting of basic wage and cost of living allowance from the date of publication of final notification and payable from that date.

The learned Single Judge after elaborately considering the affidavits filed in support of the writ petitions, counter-affidavits and hearing the arguments of both sides, dismissed the writ petitions which contain the notifications falling under Groups A and C. Regarding the writ petitions covered by Group B notifications, he struck down the mode of computation of cost of living allowance providing for payment of cost of living allowances for any rise in consumer price index over and above 166 points (base year 1982 = 100), as on January 1, 1989 and 169 points (base year 1982 = 100) as on July 1, 1989, and directed the Government of Andhra Pradesh to revise the mode of computation of cost of living allowances in accordance with the law and publish the same in the Official Gazette within four months from the date of receipt of the order. Aggrieved by the said judgment of the learned Single Judge, these writ appeals are filed.

4. The learned counsel for the appellants submitted that the procedure followed by the Government in fixing the minimum rates of wages is not valid as it ought to have followed the procedure prescribed in S. 5(1)(a) of the Act, that the draft and final notifications are not in conformity with the principles laid down by the Court and are not issued by the competent authority and so they are without jurisdiction and that fixation of minimum rates of wages by reducing four zones into two is bad as there will be difference in the increase of price index of each zone.

5. Fixation of minimum rate of wages for scheduled employments is provided for the Minimum Wages Act, 1948. Definitions are provided in S. 2 of the Act. “Cost of living index number” has been defined in S. 2(d) as under:

“‘Cost of living index number’ in relation to employees in any scheduled employment in respect of which minimum rates of wages have been fixed means the index number, ascertained and declared by the competent authority by notification in the Official Gazette to be the cost of living index number applicable to employees in such employment.”

Section 2(g) defines “scheduled employment” as under:

“An employment specified in the schedule or any process or any branch of work forming part of such employment.”

“Wages” are defined in S. 2(h) to be:

“All remuneration, capable of being expressed in terms of money, which would if the terms of the contract of employment, express or implied, were fulfilled be payable to a person employed in respect of his employment or of work done in such employment, and includes house rent allowance but does not include—

(i) the value of—

(a) any house accommodation, supply of light, water, medical attendance; or

(b) any other amenity or any service excluded by general or special order of the appropriate Government;

(ii) any contribution paid by the employer to any pension fund or provident fund or under any scheme of social insurance;

(iii) any travelling allowance or the value of any travelling concession;

(iv) any sum paid to the person employed to defray special expenses entitled on him by the nature of his employment; or

(v) any gratuity payable on discharge.”

Section 3 of the Act empowers the appropriate Government to fix minimum rates of wages payable to employees employed in an employment specified in Part I or Part II of the Schedule and in an employment added to either part by notification under S. 27. Section 4 of the Act envisages that minimum rates of wages fixed or revised by the appropriate Government under S. 3 may consist of basic rate of wages and special allowances or basic rate of wages with or without the cost of living allowance or an all inclusive rate allowing for the basic rate, the cost of living allowance. The procedure for fixing and revising minimum wages has been dealt with under S. 5 of the Act. Under S. 5(1)(a), the Government shall appoint committee to hold inquiries and advise in respect of fixation or revision of minimum wages or as per S. 5(1)(b) publish proposals of minimum wages in the gazette for the information of persons likely to be affected by specifying a date, not less than two months from the date of notification, on which the proposal will be taken into consideration. After receipt of representations or the report of the advisory committee, the Government by notification fix or revise the minimum rates of wages in respect of each scheduled employment. Section 7 of the Act empowers to the Government to appoint an Advisory Board Section 9 deals with the composition of committees. Section 12 contemplates for payment of minimum rates of wages.

6. The point to be decided is whether the procedure followed by the Government in revising the minimum rates of wages in respect of the scheduled employments mentioned in the impugned notifications, is contrary to the procedure prescribed in S. 5(1) of the Act.

7. Leading the arguments on behalf of the appellants, Sri Amancharla Krishna Murthy, contended that the Government in fixing the minimum rates of wages added the cost of living allowance to the wages fixed taking the cost of living index into registration that the Government ought to have appointed a Committee to conduct inquiry and had the committee been appointed and opportunity could have been given to the appellants, they could have filed representations and put forth their case and that the action of the Government is vitiated as appointment of advisory committee is contrary to S. 5(1)(a) of the Act.

8. Section 5 of the Act empowers the Government to have recourse to the procedure prescribed either in S. 5(1)(a) or S. 5(1) (b), in fixing minimum rates of wages in respect of scheduled employments. It is a fact that S. 5(1)(a) envisages appointment of committees or sub-committees to hold inquiries and advise the Government in respect of fixation or revision of minimum wages of scheduled employments. Section 5(1)(b) contemplates the Government to publish the proposals in Official Gazette for information of persons likely to be affected so as to enable them to file their representations and to appoint an advisory committee. It is not prescribed that it is obligatory on the part of the Government to follow a particular procedure in case of fixation or revision of minimum rate of wages. On the other hand, discretion is given to the Government to adopt any one of the procedures. The two procedures prescribed under S. 5 are for the purpose of collecting material by appointment of advisory committee and giving opportunity to the employers and employees for fixation or revision of wages. When the Act has not contemplated the Government to follow a particular procedure, the same cannot be read into it, which amounts to restricting the power of the Government. The contention of the learned counsel for the appellants that the Government ought to have followed the procedure laid down under S. 5(1)(a) and not the procedure laid down under S. 5(1)(b) cannot be entertained in view of the decision of the Supreme Court in Chandra Bhavan Boarding and Lodging v. State of Mysore [1970-II L.L.J 403], wherein its was held:

“… The Legislature has prescribed two different procedures for collecting the necessary data, one contained in S. 5(1)(a) and the other in S. 5(1)(b), In either case it is merely a procedure for gathering the necessary information. The Government is not bound by the advice given by the committee appointed under S. 5(1)(a). Discretion to select one of the two procedures prescribed for collecting the data is advisedly left to the Government. In the case of a particular employment, the Government may have sufficient data in its possession to enable it to formulate proposals under S. 5(1)(b). Therefore, it may not be necessary for it to constitute a committee to tender advice to it but in the case of another employment it may not be in possession of sufficient data Therefore, it might be necessary for it to constitute a committee to collect the data and then tender it advice. If the Government is satisfied that it has enough material before it to enable it to proceed under S. 5(1)(b), it can very well do so. Which procedure should be adopted in any particular employment depends on the nature of the employment and the information the Government has in its possession about that employment. Hence, the powers conferred on the Government cannot be considered as either unguided of arbitrary….”

In respect of the present case, it cannot be denied that there was material in the form of notifications issued earlier in respect of same scheduled employments. It cannot therefore, be said that the procedure followed by the Government in issuing draft notifications, calling for objections from the employers and employees and appointing advisory committee is not proper and is in any way contrary to S. 5(1) of the Act. It has to be noticed that the constitutional validity of Ss. 3 and 4 of the Act has been upheld by the Supreme Court in Bijay Cotton Mills Ltd. v. State Of Ajmer [A.I.R 1955 S.C 33] and B.Y Kshatriya v. S.A.T.B Kamgar Union [A.I.R 1963 S.C 806]. Except the bald contention that S. 5 is unconstitutional, no other material is placed to show that how S. 5 is unconstitutional. Section 5 provides for the procedure to be followed for fixing or revising minimum wages. The procedures are upheld as proper and valid according to the decisions of the Supreme Court. We, therefore, do not accede to the contention of the learned counsel for the appellants that the Government ought to have appointed a committee as contemplated under S. 5(1)(a) of the Act and the procedure followed as envisaged under S. 5(1)(b) is illegal.

9. It is secondly contended that the draft and final notifications issued by the Government are not in conformity with the principles laid down by the Courts as minimum rates of wages are not properly fixed.

10. In the present case, the Government followed the procedure prescribed in S. 5(1) (b) of the Act, which is not in dispute. It is submitted that since the wages fixed are not bare or minimum, fixation of wages in the name of minimum wages is bad. The learned counsel relied on the decision of the Supreme Court in Express Newspaper, Ltd. v. Union of India [A.I.R 1958 S.C 578].

11. It is to be noticed that the Minimum Wages Act, 1948, is a pre-constitutional enactment. The object of the Act is to provide social justice to the workmen employed in the scheduled employment by prescribing minimum rates of wages. The minimum rates of wages should be fixed in respect of scheduled employments keeping the twin objects of providing sustenance and maintenance of the worker and his family and preserving his efficiency as a worker in view. Though the Directive Principles of State Policy enshrined in the constitution are not enforceable by any Court, but the State shall apply these principles in making laws in the governance of the country. According to Arts. 38, 39(e), 42 and 43 of the Constitution, the State shall direct its policy towards securing that the citizens have the right to an adequate means to livelihood, that there is equal pay for equal work for both men and women and that the health and strength of workers are not abused Article 42 provides that the State shall make provision for securing just and humane conditions of work and for maternity relief. The State shall endeavour to secure by suitable legislation to all workers a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. The preamble of the Constitution coupled with the directive principles constitutes the conscience of the Constitution. One of the aims of the Directive Principles of State Policy is to ameliorate the socio-economic conditions of the working class. At some times, the directive principles may violate some fundamental rights, then they have to be read as reasonable restrictions on the fundamental rights as contemplated under Art. 19 of the Constitution. Minimum wages as envisaged in the Act have to be interpreted so that the workers and their families could lead a minimum standard of life in a developing country like ours. The State has to provide such amenities through welfare legislations. If the words “minimum wages” are interpreted as bare minimum wages sufficient for the livelihood and not for any other need, it amounts to forcing the labourer to work under substandard conditions ignoring his other requirements such as clothing, health, maintenance of children and family members. The Constitution guarantees fundamental right of education to all the children of the employees and the expenses to educate the children have to be met from the earnings of the employee. Therefore, the contention that the minimum wages are fair or living wages only is not tenable.

12. It would be relevant to look at the conditions governing wage, life and other social aspects of workers, which are delineated in Shukra Neeti, an ancient treatise. The English translation of which is

“Wages to be considered as fair must be sufficient to procure the necessities of life from out of the wages. The wage of an employee should therefore be a fair wage, so as to enable him to procure all the necessary requirements of life. (Sukra Niti II, 805-806).

By payment of very low wages, employees (of the king) are likely to become his enemies and they are also likely to become plunderers of treasuries and cause harassment to the general public.” (Sukra Niti II, 807-808).

13. The above principles lay down the concept of wages to be paid to the employees and they are as modern as provided in a labour legislation of a welfare State. It is to be noticed that in ancient India labour welfare provisions were very much existing and being implemented and the spirit of Directive Principles of State Policy are akin to the worker wage policy of ancient India. The Courts, therefore, while interpreting the provisions of labour legislations have to be guided by the Directive Principles of State Policy.

14. Coming to the decision cited by the learned counsel for the appellants in Express Newspaper case (vide supra) for the proposition that the capacity of the employer has to be taken into consideration while fixing or revising the rates of minimum wages, a Constitution Bench of the Supreme Court in U. Unichoyi v. State of Kerala [A.I.R 1962 S.C 12], refused to accept the principle that the capacity of the employer has to be taken into consideration because the Act prescribed minimum wages rates.

15. In view of the above discussion, the contention of the learned counsel for the appellants that paying capacity and other factors of the employer have to be taken into consideration cannot be countenanced to. The view that was expressed by the Supreme Court in Unichovi case (vide supra), has been reiterated in Hydro (Engineers) Pvt. Ltd. v. Workmen [A.I.R 1969 S.C 180], and approved the observations made in Unichovi case (vide supra), that while prescribing the minimum wage rates, the capacity of the employer need not be considered as the State assumes that every employer must pay the minimum wage before he employs labour.

16. In the present case, the Advisory Board has conducted enquiry, examined witnesses on behalf of the employer and the employees and submitted its report. The Government considered the report and other material and arrived at particular figures to be fixed as minimum rates of wages. It is settled principle of law that when the Government after considering relevant data and report of advisory committee revises or fixes minimum wages, the same will not be interfered with sitting as appellate authority while exercising power of judicial review.

17. It is thirdly contended by the learned counsel for the appellants that the constitution of the Advisory Board is not proper since it was not constituted as per the mandate of S. 9 of the Act and there was no representation from the employers and employees of each category of employment.

18. The Advisory Board was reconstituted vide G.O.Ms No. 115, dated November 21, 1990, consisting of a Chairman, nine employers” representatives, nine employees' representatives and two independent members and special invitees. It has to be noticed that the appellants did not question the constitution of the Advisory Board. With regard to the composition of the Advisory Board the Supreme Court in Kshatriya v. S.A.T.B Kamgar Union (vide supra), observed that the function of the board is not to make detailed investigation in any particular industry but it shall consist of representatives of employers and employees in the scheduled employments. Thus, there is no irregularity in the composition of Advisory Board in the case on hand. It is settled principle of law that it is not mandatory that from every scheduled employment there must be one representative, but there must be nexus between representatives and the scheduled employments. We, therefore, cannot accede to the above contention.

19. With regard to the contention of the appellants that the Advisory Board has failed to discharge its duties satisfactorily, we must at the outset say that the High Court while exercising the power of judicial review under Art. 226 of the Constitution is not sitting as appellate body. Further, the Advisory Board conducted detailed enquiry by examining witnesses on behalf of the employers and the employees and trade-unions and submitted its report to the Government. The proceedings of the Advisory Board meetings manifestly show that the Advisory Board did take the view expressed by the representatives of the employers and the employees in to consideration. We, therefore, see no force in the above contention.

20. It is fifthly contended by the learned counsel for the appellants that the provisions of the Act cannot be extended to the employees who can form themselves into an organisation to bargain for their wages. This contention is also not tenable in view of the fact that the Government followed the prescribed procedure while fixing minimum wages and that the constitutional validity of the Act or the schedule of employments has (sic. not) been challenged. Apart from it, it will be difficult for the labour unions to bargain for the wages from time to time and reap fruits immediately without fail as done by the Government by discharging it statutory duty.

21. The learned counsel for the appellants attacked the division of the State into two zones as arbitrary and submitted that the shops and commercial establishments of towns and villages cannot be equated with those located in municipalities-Except the argument, no material is produced before us in support of it. The classification made by the Government is proper and the above contention does not sustain since S. 3(3) empowers the Government to fix or revise different rates of wages for different scheduled employments, classes of work and localities.

22. The next contention of the learned counsel for the appellants is that no date is mentioned in the notification for consideration of objections/representations received from the employers and others and that therefore the notification is bad.

23. In the notification issued, it is mentioned that notice is given that the draft will be taken into consideration after two months from the date on which the gazette has been made public and that the objections received before the said date will be considered. Thus, it is clear from the above that objections or suggestions will have to be filed within two months, which will be considered after two months. Merely because no date is given for consideration of objections or suggestions, no prejudice would be caused to the persons who filed their objections. In an identical situation, a Division Bench of this Court in Writ Petitions Nos. 1364, 1514, 3751 of 1976 and 818 of 1977, held:

“Having considered all the circumstances in the case carefully we are unable to accept the contention of the petitioners that the provision regarding specification of a date is mandatory and as the draft notification has not specified the date it is illegal. On the other hand, in providing that the proposals will be considered after two months and ail objections received before that date will be taken into consideration, there has been a substantial compliance with the provision of S. 5(1)(b)”

Therefore, we do not see any force in the above said contention.

24. The other contention of the learned counsel for the appellants is that higher rates of minimum wages cannot be fixed than those published in the draft notification.

25. It has to be noticed that the draft notification was issued on August 27, 1989, and the final notification was issued on March 6, 1991, after consideration of objections/suggestions and the report of the advisory committee. Thus, there is a gap of 18 months time between the two notifications. Taking the increase of cost of living from the date of draft notification to the date of final notification into consideration, the authorities fixed the wages. In C.B Boarding and Lodging case (vide supra), the Supreme Court held that if the Government has the power to reduce the rates of wages as desired by the employers, then it has the power to enhance them also. In Basti Ram v. State [A.I.R 1969 A.P 227], this Court held:

“Draft proposals are only tentative and representations are received not merely from the employers but also from the employees…. Any representations made by the parties must contemplate and take into account possible enhancement or reduction…”

A Division Bench of this Court in T.G Lakshmaiah Setty and Sons v. State of Andhra Pradesh [1981 L.&I.C 690], held that if the employees had exercised their right to represent and ask for higher wages and if eventually the State authorities had adopted higher rates of minimum wages, that cannot be found fault with. We, therefore, reject this contention of the appellants.

26. the further contention of the learned counsel for the appellants that the notification is not valid since it is not issued by competent authority is also not tenable in view of the fact that the Government after considering the report of the Advisory Board and taking all aspects into consideration fixed the minimum rates of wages and issued the notification accordingly. It cannot be said that the Government was influenced by the recommendations of the Commissioner of Labour, who was then assigned the status of ex officio Principal Secretary to Government, because his recommendations are not binding on the Government.

27. The learned counsel for the appellants contended that introduction of payment of cost of living allowance to the employees under the impugned notification is bad as the same is not permissible in payment of minimum wages but is permissible in cases of payment of fair or living wages.

28. Counsel appearing for the trade unions and the Government contended that the introduction of payment of cost of living allowance by the Government is correct since the Minimum Wages Act specifically provides for payment of the same and the minimum wages without cost of living allowance are no wages at all as the employees will not be able to survive without it.

29. The question that has to be decided is whether introduction of cost of living allowance in revision of minimum wages is illegal.

30. Section 3 of the Act empowers the Government to fix minimum rates of wages from time to time. While fixing minimum rates of wages, different minimum rates of wages can be fixed for different scheduled employments, for different classes of works in the same scheduled employment and for different localities. Section 4 of the Act lays down the elements consisting of minimum rates of wages and it reads:

“(1) Any minimum rate of wages fixed or revised by the appropriate Government in respect of scheduled employment under S. 3 may consist of—

(i) a basic rate of wages and a special allowance at a rate to be adjusted at such interval and in such manner appropriate Government may direct to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the cost of living allowance); or

(ii) a basic rate of wages with or without the cost of living allowance and the cash value of the concession in respect of supplies of essential commodities at concession rates, where so authorised; or

(iii) an all inclusive rate allowing for the basic rates the cost of living allowance and the cash value of the concession, if any.

(2) The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rates shall be computed by the competent authority at such intervals and in accordance with such direction as may be specified or given by the appropriate Government.”

31. Thus, the Government is empowered to introduce the cost of living allowance and the competent authority has to compute the same and the cash value of concessions for supply of essential commodities. Cost of living allowance introduced under the impugned notification cannot be said to be illegal or bad since it is in accordance with the mandate of law. One should not forget that the cost of living allowance is paid along with the wages to neutralise the inflation rate and increase in prices of commodities. There is no bar in the Act for payment of cost of living allowance, (but whereas) S. 4 of the Act clearly lays down that cost of living allowance has to be paid to the employees irrespective of minimum rate of wages. We are, therefore, not able to agree with the contention of the learned counsel of the appellants and the learned Single Judge gave cogent reasons in this behalf, with which we are not able to disagree.

32. The contention of the learned counsel for the appellants that introduction of payment of cost of living allowance amounts to double payment as wages were revised earlier the price index number and increase in prices were taken into consideration, cannot be countenanced for the reason that the prices are increasing in geometrical progression and the labourer of a factory or industry or establishment must be able to lead a minimum life with his family members. Otherwise, the wages paid cannot be said to be wages at all.

33. Lastly, the learned counsel or the appellants contended that inclusion of shops and commercial establishments in Part I of the Schedule to the Act is bad. This contention is also not tenable as GO. Ms. No. 1949, dated December 29, 1970, whereby shops and commercial establishments to Part I of the Schedule to the Act, has not been challenged at any time during the last twenty-five years and that after issuance of the said Government order minimum wages for the employees of shops and commercial establishments have been revised for a number of times. Further, no other material is produced in support of the contention to show as to why the inclusion is not proper.

34. For the aforesaid reasons, we see no reasons to interfere with the judgment of the learned Single Judge as no grounds are made out in these appeals for interference. The writ appeals are dismissed accordingly. No costs.