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T.R Sukumaran And Others v. State Of Tamil Nadu
Factual and Procedural Background
This batch of writ petitions challenges the validity of a notification issued under clause (a) of sub-section (1) of section 3 and sub-section (2) of section 5 of the Minimum Wages Act, 1948, published in the Tamil Nadu Government Gazette Extraordinary dated 31st December, 1976. The notification fixed minimum rates of wages for employees in hotels and restaurants across three zones—zone ‘A’, zone ‘B’, and zone ‘C’—based on geographic divisions within the State. Zone ‘A’ included Madras and Madurai Corporations and special grade municipalities of Coimbatore, Salem, and Tiruchirapalli; Zone ‘B’ comprised other municipalities; Zone ‘C’ covered all areas outside corporations and municipalities. The petitioners, operating hotels and restaurants within Madurai and the special grade municipalities, contended that grouping these areas with Madras under zone ‘A’ was arbitrary and unconstitutional. They argued that the socioeconomic and administrative conditions in Madurai, Coimbatore, Salem, and Tiruchirapalli differ significantly from those in Madras, rendering the classification irrational.
Legal Issues Presented
- Whether the classification of the corporation area of Madurai and the special grade municipalities of Coimbatore, Salem, and Tiruchirapalli together with the corporation area of Madras under zone ‘A’ for fixing minimum wages is arbitrary and unconstitutional.
- Whether the fixation of minimum wages by the State Government without considering uniform price fixation under the Fixation and Display of Prices of Food Stuffs Order, 1976, affects the validity of the notification.
- Whether the writ petitions are maintainable in the absence of impleading the employees or their representatives as parties.
Arguments of the Parties
Petitioners' Arguments
- The clubbing of Madurai corporation and the special grade municipalities of Coimbatore, Salem, and Tiruchirapalli with Madras corporation under zone ‘A’ is arbitrary and unconstitutional.
- The socioeconomic conditions and administrative classifications of these areas differ significantly from Madras, making the classification illogical.
- The Central Government and other statutory bodies classify these towns differently for allowances and pay scales, which contradicts the State Government’s grouping.
- The rate and tax structures between the corporation and special grade municipalities differ, undermining the rationale for uniform minimum wages.
- The fixation of prices under the Food Stuffs Order, 1976, which applies uniformly statewide, was not taken into account by the Government when fixing minimum wages.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Chandra Bhavan Boarding and Lodging v. State of Mysore | Principle that classification for fixing minimum wages must be rational and based on relevant factors; equality does not imply identity. | The Court relied on this precedent to uphold the State Government's rational grouping of areas into zones for fixing minimum wages despite minor differences within the grouped areas. |
Court's Reasoning and Analysis
The Court emphasized that the fundamental purpose of the notification was to fix minimum wages sufficient for an employee to sustain himself and continue working in the industry. The Court noted that considerations such as the employer’s profit or loss are irrelevant to this determination, referencing the Supreme Court’s established view that an employer unable to pay minimum wages may close business. The Court found the State Government’s classification into three zones to be rational and intelligible, based primarily on the cost of living in the respective areas, which justifies higher minimum wages in zone ‘A’ areas. Minor differences within zone ‘A’ were deemed insignificant and insufficient to constitute arbitrariness or denial of equality, as equality in law does not require absolute identity. The Court rejected the petitioners’ reliance on other classifications by the Central Government and statutory bodies as irrelevant to the purpose of fixing minimum wages. Further, the Court held that the uniform price fixation of foodstuffs under the 1976 order did not impact the zoning for minimum wages. Finally, the Court noted a procedural defect: the petitioners had not impleaded employees or their representatives, who would be the truly affected parties, thus barring relief in their favor.
Holding and Implications
The writ petitions are dismissed.
The Court’s decision upholds the validity of the State Government’s notification fixing minimum wages by zoning areas based on cost of living considerations, reinforcing the principle that classifications for minimum wage fixation must be rational and need not be identical in all respects. The dismissal also highlights the procedural requirement of impleading affected parties in such petitions. The ruling does not establish new precedent but affirms established legal principles concerning minimum wages and classification rationality.
Ismail, J.:— This batch of writ petitions challenges the validity of the notification issued under clause (a) of sub-section (1) of section 3 and sub section (2) of section 5 of the Minimum Wages Act, 1948, published in the Tamil Nadu Government Gazette Extraordinary dated 31st December, 1976. Under this notification the State Government fixed minimum rates of wages for employees in hotels and restaurants with reference to different categories of employees working therein. For the purpose of fixing the minimum rates of wages, the Government divided the State into three zones, zone ‘A’ zone- ‘B’ and zone ‘C’ and prescribed different rates of wages both on monthly basis and on daily basis. Zone ‘A’ comprises of Madras and Madurai Corporations and special grade municipalities of Coimbatore, Salem and Tiruchirapalli. Zone ‘B’ comprises of other municipalities. Zone ‘C’ comprises of all areas other than corporations and municipalities. The petitioners herein are all persons carrying on business in hotels and restaurants in the areas within the Madurai and the special grade municipalities of Coimbatore, Salem and Tiruchirapalli. Their simple contention is that the clubbing of the corporation area of Madurai and the muncipal areas of Coimbatore, Salem and Tiruchirapalli with the corporation area of Madras under zone ‘A’ is arbitrary and unconstitutional. According to them, the conditions prevalent within the corporation area of Madras bears no analogy to or equality within the conditions prevailing within the corporation area of Madurai and municipal areas Coimbatore, Salem and Tiruchirapalli and, therefore, the Government committed an unconstitutionality in clubbing the special grade municipal areas of Coinbatore, Salem and Tiruchirapalli and the area of the corporation of Madurai with the area of corporation of Madras. The attack on this classification has been put forward on the following ground as stated in paragraph 15(a) of the affidavit filed in support of writ petition No. 300 of 1977:
“The Central Government have classified the towns of Coimbatore and Trichy and Madurai as ‘B-1’ and ‘B-2’ class areas respectively for the purpose of payment of City Compensatory Allowance to its employees while Salem has been classified as Class ‘C’ area. The City of Madras alone is considered to be in class ‘A’ area for this purpose. The Banking award has also classified the Cities of Coimbatore, Salem and Madurai and Trichy as Class ‘B’ area, for the purpose of scales of pay of employees in Banking Industry. The State of Tamil Nadu have classified the Towns of Coimbatore, Madurai, Trichy and Salem as Class ‘B’ area. Hence the inclusion of Hotels and Restaurants situated in special grade municipalities of Salem, Coimbatore and Trichy in ‘A’ Zone along with City of Madras is arbitrary and illogical on the face of it. The rate and tax structure of the Corporation on the one hand and the special grade municipalities on the other hand are entirely different. To include all the Hotels irrespective of their turnover, size and labour force situated in Madurai, Salem, Trichy and Coimbatore with those in City of Madras for the purpose of fixation of minimum rates of wages is arbitrary and is based on irrelevant grounds and factors which are not germane. For the purpose of Urban, Ceiling all the other Cities except Madras in the State of Tamilnadu fall in the Category ‘C’.”
2. We are of the opinion that the said ground urged by the petitioners herein is not sound, having regard to what the Government have actually done.
3. It should not be forgotten that the impugned notification in the present case has only fixed the minimum wages and for the purpose of fixing the minimum wages, the only thing relevant is, what should be the minimum emolument an employee should receive for the purpose of keeping himself alive and working in an industry. What profits a particular employer will make and whether his profits will be reduced or decreased by the payment of minimum wages are totally irrelevant because long ago the Supreme Court has taken the view that having regard to the concept of minimum wages, if an employer is not able to pay such minimum wages, to his employees, as fixed by the Government, he can as well close his business itself. Having regard to this significant and special feature pertaining to the concept of minimum wages, we are of the opinion that the only consideration relevant for fixation of minimum wages is the necessity to pay certain minimum emoluments to an employee to enable him to live and work in the industry concerned. With reference to that concept, what the Central Government have done in dividing the various cities etc., as mentioned in the affidavit extracted above does not have any real relevancy.
4. On the other hand, the grouping which the State Government have done proceeds on a rational and intelligible basis, inasmuch as they have grouped the two Corporations and the special grade municipalities in one category, the other municipalities in another category, the areas not coming within either of the two categories mentioned above in the third category. This is not only logical but has relevancy to the question which they were considering. The cost of living in a particular area will certainly have a bearing on the minimum wages to be fixed for the area and it is indisputable that in all the areas brought within the scope of zone ‘A’, the cost of living is higher than what is prevailing in the area zone ‘B’ or zone ‘C’ It may be, as between different areas grouped under zone ‘A’ itself, there may be very minor and insignificant variations, but the challenge to the notification on the ground of arbitrariness and want of or denial of equality ought not to be considered on the basis of such trivial, insignificant and minor differences that may be present as between the different areas included in one category, because equality is not identity. It may be said that even with regard to the same town or village, there will be defferences as between different localities depending upon the status of the people who live and reside in a particular locality and their occupation and economic position. It cannot be and it is not the argument of the petitioners that in view of the feature mentioned above, there cannot be the same rate of minimum wages for a whole village or town but there should be different rates of minimum wages for the different localities in the same town or village. If one is permitted to go on making these types of distinctions between the areas in question, there will be no end to this and no notification at all can ever be made in respect of an industry and minimum rate of wages will have to be fixed for each establishment individually and separately, as no two establishments are likely to be identical. Having regard to these features, we are clearly of the opinion that there is no substance in the contention of the learned counsel for the petitioners that the classification is arbitrary and unconstitutional. This view of ours derives strength and support from the decision of the Supreme Court in Chandra Bhavan Boarding and Lodging v. State of Mysore (1).
5. The learned counsel for the petitioners then contended that the Government have not taken into account the fact that the prices of the articles sold by the petitioners had been statutorily fixed under the Fixation and Display of Prices of Food Stuffs Order, 1976, as modified by G.O Ms. No. 256 Food, dated 8th October, 1976. It is admitted that the said order fixed the prices on a uniform basis all over the State. If so, that has no relevancy to the challenge now made by the petitioners to the zoning of the defferent areas for the purpose of fixation of minimum wages in the present case.
6. Under those circumstances, the writ petitions fail and they are dismissed.
7. We may also point out that the writ petitions are liable to be dismissed on a very narrow ground as well. The petitioners have not impleaded the respective employees or the representatives of the employees as parties to the writ petitions. In the event of the petitioners succeeding in the writ petitions, the persons who will be really affected will be the employees and they have not been impleaded as parties and, in their absence, no relief can be given to the petitioners herein. We are referring to this as an additional ground for dismissing the writ petitions. There will be no order as to costs.
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