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1985 DIGILAW 1133 (ALL)

Sakti Auto Values and Engineering Company Ltd. v. State of U. P

1985-11-25

A.S.SRIVASTAVA, R.M.SAHAI

body1985
JUDGMENT R.M. Sahai, J. - Various engineering establishments employing more than 50 but less than 250 workmen have filed these petitions for quashing notification issued by State Government on 26th September, 1980 in exercise of power under Section 3 (b) of U.P. Industrial Disputes Act fixing minimum wage of skilled and un-skilled employees as invalid since conditions precedent for exercise of power, namely, emergency and that also as a short measure was non-existent. 2. Due to growth of various engineering industries all over country the Central Government appointed Wage Board in 1964 which submitted its report in 1968 classifying establishments in A, B, C and D, on the basis of workmen employed by them and recommended for categorisation of workmen, grades and scale. In February, 1970 State Government convened a Tripartite Conference to ascertain views of employers and workmen but no unanimity was arrived. Consequently it issued a notification in July, 1970 under Section 3 (b) implementing recommendations of Central Wage Board fixing wages for employees in engineering industries with modification to suit the prevailing conditions. It categorised workmen, their scales of pay, fixed dearness allowance and other allowances and also the phased manner in which the provision of notification were to be implemented. The scale of pay of various workmen was fixed as under : Unskilled Semi-skilled Skilled A. 105/- 120/- 150/- B. 111/- 128/- 160/- C. 120/- 138/- 174/- D. 132/- 152/- 192/- 3. In 1974 Government directed the establishments to pay interim variable dearness allowance at rate of Rs. 30/- and 40/- per month for skilled and semi-skilled employees by all establishments employing more than 50 and less than 250 workmen over and above the fixed dearness allowance payable under notification issued in 1970. In 1977 Additional dearness allowance amounting to Rs. 20/- to Rs. 25/- depending on number of workmen employed was sanctioned by Government. In 1979 Government called a Tripatite Conference to consider revision of wages and dearness allowance in respect of employees working in these industries. No settlement was arrived. In 1980 the impugned order was issued by the Government. In Preamble to the order it is stated that there has been no increase in wages since 1977 which was creating dissatisfaction amongst the employees and was likely to effect production. No settlement was arrived. In 1980 the impugned order was issued by the Government. In Preamble to the order it is stated that there has been no increase in wages since 1977 which was creating dissatisfaction amongst the employees and was likely to effect production. And no decision could be arrived at in the Conference in 1979 whereas price-index was going up by every day, therefore, it was decided by the Government to check the dissatisfaction in the employees. And in all those establishments which were employing more than 50 persons should pay additional wages at 47.25 paise per month from September, 1980. Clause 2 of the order provided that in case any establishment had granted any adhoc, increment on basis of agreement or settlement then that shall not be taken into account. In other words Rs. 41.25 paise shall be paid over and above whatever was agreed between employees and employers. Clause 3 of the G.O. provided that minimum wages for different kind of establishment after September, 1980 should be :- Unskilled Semi-skilled Skilled A. 50 - 250 231 - 25 251 - 25 291 - 25 B. 251 - 500 251 - 25 273 - 25 317 - 25 C. 501 - 1000 266 - 25 290 - 25 338 - 25 D. 1500 & above 277 - 25 303 - 92 357 - 25 It further provided that employees in Nagar Mahapalika, Kanpur shall be entitled to daily allowance etc. as was being paid to them earlier. Provision for payment of variable D. A. at the rate of Rs. (sic) on the basis of cost of living index for every increase of cost of living above 381 points was also made. Clause 5 excluded those establishments which were already paying more than what was provided in the order. The duration of this G.O. by Clause 7 was provided to be one year. 4. Various submissions were advanced by learned counsel appearing in these petitions attacking mainly the notification and condition imposed by Clause 2 of it. In respect of notification it was urged that in absence of any emergency exercise of power under Section 3 (b) of the Act was ultra vires. Reliance was placed on Basti Sugar Mills v. State, AIR 1961 SC 420 . and State of U.P. v. Prem Spitting and Waving Mills Co., 1973 ALJ 65. In respect of notification it was urged that in absence of any emergency exercise of power under Section 3 (b) of the Act was ultra vires. Reliance was placed on Basti Sugar Mills v. State, AIR 1961 SC 420 . and State of U.P. v. Prem Spitting and Waving Mills Co., 1973 ALJ 65. Learned Counsel vehemently criticised attempt of Government of fixing wages year after year by taking recourse to notification under Section 3 (b). It was urged that such exercise of power has been criticised by this Court in Krishna Kumar v. Prescribed Authority, 1975 ALJ 262. and U.P. State Road Transport Corporation v. State of U.P., 1978 Labour and Industrial Cases 354. Learned counsel urged that there being ample provisions in Section 6-B for conciliation and adjudication exercise of power under Section 3 (b) was colourable. It was pointed out that the revision of wages has been taking place by notification issued since last 15 year without affording any opportunity to the employer which was contrary to the act and spirit of fixation of wages. Learned Counsel urged that mere repetition of requirement mentioned in section itself could not furnish material for exercise of power. In respect of Clause 2 it was submitted that the Government acted arbitrarily in directing that the establishment shall not be able to just ad hoc increases given by it without taking into account the agreement entered between the employer and employee from time to time granting incentive to compensate for the raising price index. It was urged that Clause 2 was discriminatory as it benefited those employers who had not granted any incentive or benefit and denied wages to the employees in proportion to the rise of price index with those employers who have kept in mind the Directive Principle of Constitution and were guided by the welfare policy. It was also submitted that Clause 2 was discriminatory with Clause 5 which excluded those establishments which were paying more than the wages fixed by notification. According to learned counsel if an employer was paying Re. 1 more than the minimum provided in notification than provisions of the notification did not apply whereas another employer who was paying Re. 1 less was subjected to payment of not only additional wages as provided but also incentive granted by it from time to time. According to learned counsel if an employer was paying Re. 1 more than the minimum provided in notification than provisions of the notification did not apply whereas another employer who was paying Re. 1 less was subjected to payment of not only additional wages as provided but also incentive granted by it from time to time. In the counter-affidavit validity of above notification and Clause 2 has been defended mainly on the power granted to State Government under Section 3 (b). Even in respect of the attack on Clause 2 no attempt has been made to furnish any material from which it could be gathered that condition was imposed due to any exigency of situation. It is also claimed that existence of emergency was not necessary for exercise of power. 5. In Basti Sugar Mills case it was held that power under Section 3 (b) could be exercised in emergency. This decision has been consistently followed by this Court. In Prem Spinning and Veaving case it was observed : "In our opinion the construction placed upon clause (b) in the Supreme Court in Basti Sugar Mill's case still holds good and the State Government can exercise the power conferred by clause (b) only as a temporary measure and in cases of an acute emergency where mere resort to power to refer for adjudication may be inadequate to meet the situation.". Decisions need not be multiplied. 6. In the notification the reason disclosed for exercise of power was the notice for strike given by employees of engineering establishment from various area. It has been held in Laxmi Trading Co. v. State, 1973 ALJ 486. that it can furnish material on which the Government can arrive at a conclusion, that grave emergency has arisen. The submission, therefore, that there was no emergency cannot be accepted. Nor is there any merit in submission that it was not as a temporary measure. Clause-7 itself made it effective for one year only. Even assuming the exercise of power was bad and was not strictly in accordance with law, this Court should not exercise its equity jurisdiction in socioeconomic measures on procedural or technical irregularities. Wages in industrial establishments all over the country have normally been below minimum. The Government had to intervene time and again on behalf of the workmen. Even assuming the exercise of power was bad and was not strictly in accordance with law, this Court should not exercise its equity jurisdiction in socioeconomic measures on procedural or technical irregularities. Wages in industrial establishments all over the country have normally been below minimum. The Government had to intervene time and again on behalf of the workmen. One of the directive principles which every State is expected to achieve under Article 43 of Constitution of India is to secure for all workers a living wage. Therefore, any policy directed towards achieving this goal should not be lightly interfered. Moreover no foundation has been laid to demonstrate that fixation of minimum wages by the notification was beyond price index. In fact wages for different categories had been fixed in 1970. Since then the Government sanctioned increase in dearness allowance twice once in 1974 and then in 1977. The price rise during this period and thereafter is well known to be mentioned. The notification was issued in 1980. After 1977 there was steep rise in price, therefore, it was necessary to correlate it with increase in wages. Since there was dis-satisfaction and threat of strike the Government instead of raising dearness allowance, fixed the minimum wages. Wo do not find that in doing so it committed any error of law. Therefore, even if there would have been any error, although there is none, the notification is not liable to be quashed. 7. Before examining the second submission namely invalidity of Clause-2 it may be mentioned that most of the petitions have been filed by those establishments which have in pursuance of earlier notification and policy entered into agreement with employees and had given them ad hoc increase in wages to ward off effect of rising price-index and avoid unrest. It is not disputed that in most of the agreements it was mentioned that part of increase was liable to adjustment when the Government fixed the wage's. Bat. what is claimed is that such agreements could not prevent the Government from imposing the impugned condition. That such condition could be imposed in the order cannot be seriously disputed. The main question is if the condition is unreasonable or discriminatory. For that it is necessary to refer to the reasons unfolded in the order for its issuance. what is claimed is that such agreements could not prevent the Government from imposing the impugned condition. That such condition could be imposed in the order cannot be seriously disputed. The main question is if the condition is unreasonable or discriminatory. For that it is necessary to refer to the reasons unfolded in the order for its issuance. In the preamble it is mentioned that there has been no increase in wages since 1977 whereas consumer price index had been moving up continuously resulting in dissatisfaction amongst workmen abut their basic wages and consequent deterioration in production which could not be resolved in Tripartite Conference, 1979, therefore, the Government in order to get over these difficulties and for efficiency and better production resolved to fix the minimum wages as given in the order.. The objective, therefore, was to remove dissatisfaction amongst work-men by fixing minimum wages. And that was die by providing different wage, for different workmen in different category of establishment, Fixation of minimum wages as seen earlier was not only necessary but justified. But what was the rationale for directing that increase by agreement entered earlier shall not be adjusted. After all the Government cannot keep on issuing notifications every day. It has to do on existence of certain conditions mentioned in the section and after complying certain procedure. This is a time consuming process. It could no tope with fast rise in price index. Therefore, employers in most of the industries appear to have agreed for was in wages subject to adjustment in the minimum wages fixed by Government. It was healthy practice resorted to by employers to keep efficiency of employees, given them their due and keep the production up. Even after fixing of minimum wages the Government could impose condition as mentioned in Clause-2 but there must be justification for it. None has been disclosed in the counter-affidavit. What has been averred that Government has power to impose such disclosed in the counter affidavit. What has been averred that Government conditions. No one can dispute it. But it is a power conferred on Government of a welfare State to arm it to regulate affairs in such a manner as to achieve social and economic benefits in general. It has to maintain fair balance, while exercising this power, in relation to various sections of society reasonably. No one can dispute it. But it is a power conferred on Government of a welfare State to arm it to regulate affairs in such a manner as to achieve social and economic benefits in general. It has to maintain fair balance, while exercising this power, in relation to various sections of society reasonably. Statutory power must be exercised with care and scrupulous attention to the true purpose for which it is conferred and for reasons which are relevant and proper. Mere existence of power is not sufficient. Its exercise had to be justified. But unfortunately in substance it is only affiance of power forgetting that every power conferred by Statute carried on implied prohibition of being reasonable. In absence of any material to justify imposition of this condition which prima facie does not achieve the purpose of fixing minimum wages it has to be struck down as unreasonable. 8. In the result these petitions succeed and are allowed in part. Notification, dated 28th September, 1980 is held to be valid. But its condition which debars the establishments from adjusting any increase in wages granted by the employer whether under any settlement or voluntarily prior to 28th September, 1980 is struck down. But in these establishments where even after adjustment the work-man is found to be getting more than the minimum fixed by the notification it shall be continued to be paid to him. Parties shall bear